A recent Pennsylvania Superior Court decision considers: (a) whether a father’s child support obligation is limited by a settlement agreement; and (b) whether the court should assign an earning capacity to a mother who provides full time care for a special needs child.
Morgan v. Morgan, 2014 PA Super 176 (Pa.Super.2014)
Mother and Father in this case were divorced, and settled their economic claims by written agreement in Maryland in 2003. The marital settlement agreement contained provisions for alimony and child support, which were fixed until July 1, 2007. The settlement agreement was incorporated, but not merged, in the decree in divorce.
In 2007, Father registered the settlement agreement in Franklin County and petitioned for modification of alimony. Mother responded with a petition to increase the alimony. Four years of litigation ensued, including a Superior Court appeal and remand. During the second appeal, subsequent to the remand, Father threatened to stop paying support for the special needs child, who was over 18 years old. Mother filed a petition to modify child support, and the trial court learned that Father had falsified his tax returns and income records. This resulted in an extensive discovery period and a retroactive modification of child support, back to 2007 when Father registered the settlement agreement.
The action finally came to trial in 2012, in which the trial court modified the support obligation retroactively and awarded Mother $128,526 in legal fees. The Court imputed Mother with a full time earning capacity, based upon the testimony of Father’s vocational expert, and denied a 25% upward deviation from the guidelines based on the minimal time that Father spent with the child.
Father initiated a Superior Court appeal, arguing that the trial court lacked jurisdiction to modify the child support provisions of a settlement agreement that was incorporated, but not merged, in the divorce decree. The Superior Court disagreed:
The Divorce Code specifically provides that regardless of whether an agreement between parties is merged or incorporated into the divorce decree, “[a] provision of an agreement regarding child support, visitation or custody shall be subject to modification by the court upon a showing of changed circumstances.” 23 Pa.C.S.A. § 3105(b); see also McClain, 872 A.2d at 862-63.
Thus, the Court held that the child support obligation was not limited by the terms of the settlement contract.
Mother filed a cross-appeal, raising several issues. First, Mother argued that the trial court should not have assigned her an earning capacity because child care expenses were likely to consume her earnings. The trial court had reasoned that Mother’s child care expenses were too speculative to be quantified until Mother actually began to work. The trial court could not predict how many hours Mother would be in the office or commuting. But more importantly, Mother had not reconciled how she was handling child care currently when she was unavailable to provide care “due to her extensive work with Democratic politics” and when studying for her Ph.D. degree outside of the home. Tacitly, the trial court was skeptical about Mother’s need for child care to work, when she apparently didn’t need child care to pursue politics and study at the university.
Secondly, Mother disputed the trial court’s finding that she could earn $80,500 per year after a 12 year absence from the workforce. The Superior Court noted that Father’s vocational expert had cited a range of salaries, and he testified that Mother could earn the upper end of the range after a few years back to work. The Superior Court vacated the trial court’s finding, which was the upper end of the scale, especially since the trial court applied that earning capacity to the entire retroactive period, which was five years prior to the hearing.
Finally, Mother argued that the trial court should have awarded a 25% upward deviation from the support guidelines, because Father almost never visited the unemancipated child. The trial court had reasoned that Father had no legal recourse to see the child more often, since custody laws did not apply, and Mother had once refused to allow Father to visit. Under an “abuse of discretion” standard, the Superior Court affirmed.
 Prior to the 1988 Divorce Code amendments, Pennsylvania law distinguished between agreements that were merged into the divorce decree, giving power to the courts to modify the agreement; and those that were merely incorporated, prohibiting the courts from modifying. See, Nicholson v. Combs, 550 Pa. 23, 703 A.2d 407 (1997); Brown v. Hall, 495 Pa. 635, 435 A.2d 859 (1981); Jones v. Jones, 651 A.2d 157 (Pa. Super. 1994). In 1988, the Legislature revised 23 Pa.C.S.A. § 3105(b), which eliminated this distinction.