Estate of: Weinberg, Z., Appeal of: Weinberg, M.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ESTATE OF: ZOE M. WEINBERG, A IN THE SUPERIOR COURT OF
MINOR PENNSYLVANIA
APPEAL OF: MATTHEW DAVID
WEINBERG
No. 1448 EDA 2014
Appeal from the Order of February 18, 2014
In the Court of Common Pleas of Montgomery County
Orphans’ Court at No.: 2013-X0876
BEFORE: GANTMAN, P.J., WECHT, J., and JENKINS, J.
MEMORANDUM BY WECHT, J.: FILED DECEMBER 10, 2014
Matthew David Weinberg (“Father”) appeals the February 18, 2014
order that confirmed the accounting of Zoe M. Weinberg’s (“Child”)
Pennsylvania Uniform Transfers to Minors Act (“UTMA”) account and
dismissed his objections thereto. We affirm.
Father and Michelle Weinberg (“Mother”) separated in December 2008
and divorced in August 2012. They shared physical custody of Child, who
was born in December 2005. In 2006, Mother opened a savings account for
Child, which is the UTMA account at issue.
On February 26, 2013, Father filed a petition for an accounting of
Child’s UTMA account and to remove Mother as the custodian of the
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account.1 Father alleged that Mother had removed money from the account
and used it for improper purposes. Father sought an accounting, asked to
be named the new custodian of the account, and requested counsel fees in
connection with the petition. In her answer to the petition, Mother denied
Father’s allegations and asserted that she only withdrew funds from the
account for the benefit of Child when Mother’s own funds were depleted.
Mother also asserted that she replenished the funds when she was able to do
so.
On May 3, 2013, the orphans’ court ordered Mother to file an
accounting of her administration of the UTMA account. Mother filed her
accounting. Father objected. On November 19, 2013, the orphans’ court
conducted a hearing on the accounting and Father’s objections.
Following the hearing, on February 18, 2014, the court confirmed
Mother’s accounting. The orphans’ court summarized the hearing and
procedural history as follows:
The account covers the period from December 26, 2006 through
July 2, 2013, and shows a balance of principal and income in the
amount of $15,001.25, composed of cash.
The account was filed pursuant to Section 5319 of the [Probate,
Estates, and Fiduciaries] Code, as directed in this Court’s order
dated May 3, 2013. The custodianship continues.
All parties having or claiming any interest in the custodial
property of whom the accountant has notice are stated to have
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1
Father also sought an accounting of a second account. The order as it
relates to that account has not been appealed.
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received written notice of the audit in conformity with the rules
of court.
The instant objections were filed by [Father]. The accountant is
[Mother. Child] is now 8 years old. The parents separated in
December of 2008 and spent four years litigating their divorce,
support and custody issues. The battle now continues in this
Court. In his objections, [Father] contends [Mother] spent the
funds in their daughter’s account improperly.
At the hearing, [Mother] testified that she and [Father] have
joint legal and physical custody over [Child]. She listed various
expenditures incurred by her in repairing and maintaining the
marital residence after the couple separated and before its sale.
She testified that [Father] paid support, initially, in varying
amounts voluntarily and later pursuant to an agreed order
entered in the Chester County Court of Common Pleas. [Father]
is currently obligated to pay $686.00 per month in child support.
[Mother] stated that she is a social worker for the School District
of Jenkintown and earns approximately $28,000 per year.
Regarding the account at issue, [Mother] stated that she funded
it with $25.00 in 2006. She produced a spread sheet showing
deposits to and withdrawals from the account. She also
produced a spread sheet showing hundreds of expenditures for
clothes, toys, furniture, camp tuition, groceries, entertainment,
gas, family therapy, etc., between 2006 and 2013. The
expenditures on the later spread sheet were cross-referenced on
the spread sheet with deposits and withdrawals. The majority of
the deposits were from [Mother’s] own funds; a few deposits
represented gifts to [Child] from other family members.
[Mother] explained that, even though she was using UTMA funds
for [Child’s] benefit, she tried to replenish the account with her
own money when she could. As an example, she withdrew
$7,279 [] from her 401(k) pension account established at a
former job and deposited most of it into the UTMA account.
[Mother] opined that [Father] sought to compel her to file this
account as a way to be relieved of his child support obligation.
In response to questions from the Court, [Mother] clarified that
the source of the deposits shown on the spread sheet was her
own funds, except for one $12,000 gift from [Father’s] mother
and some other family gifts over the years.
During cross-examination, [Mother] acknowledged that the July
23, 2012 consent order filed in Chester County obligated
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[Father] to pay her $800 per month, in addition to the $686 for
[Child], and that she has received these payments in a timely
fashion. She stated that [Father] refused to pay for camp for
[Child], even though the consent order directed him to do so.
She denied that [Father] gave her any cash between the time
they separated and when the support order went into effect.
She stated that [Father] lent her money to pay real estate taxes
during that period. Regarding a $7,000 withdrawal from the
account on April 26, 2011, [Mother] described this as a “balance
transfer” she received on a new credit card, the proceeds of
which she withdrew immediately and deposited into her own
checking account. [Mother] stated her legal bills for the divorce
proceedings totaled approximately $50,000, which she charged
on her credit cards. She estimated the legal cost for the current
litigation to be $11,000.
Counsel for [Mother] then cross-examined [Father]. This
testimony established only that the couple fought over
everything, including visitation rights to the family dog.
[Mother] rested and [Father] was called to testify by his counsel.
He testified that most of [Child’s] preschool tuition was paid by
his mother, not from the UTMA funds. He testified about a
Quicken spread sheet he prepared relating to his checking
account transactions for the period from January 3, 2009 to May
2, 2012. The spreadsheet reflected transfers to and for the
benefit of [Mother] and [Child], including payments for home
maintenance, utilities, taxes, health care, clothes and school
costs. Also introduced was a sheet with a breakdown by
category of these expenses totaling $152,217.73.
[Mother] testified on rebuttal. She denied receiving the total
amount alleged to have been paid by [Father] . . . .
Order and Memorandum, 2/18/2014, at 2-5 (citations to notes of testimony
omitted).
Following the hearing, the orphans’ court dismissed Father’s
objections, denied his request to be appointed custodian, and denied both
parties’ requests for counsel fees. On March 10, 2014, Father filed
exceptions to the February 18, 2014 order. On March 20, 2014, Mother filed
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cross-exceptions. On April 10, 2014, the orphans’ court dismissed both the
exceptions and cross-exceptions.
On May 12, 2014, Father filed a notice of appeal. 2 The orphans’ court
did not order, and Father did not file, a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b). The court did not
file a Pa.R.A.P. 1925(a) opinion, and instead relied upon the memorandum
and accompanying February 18, 2014 order.
Father raises four issues for our review:
I. Whether the auditing court erred in finding that Mother
was permitted to invade [Child’s] UTMA account because
Mother did not have the ability to use her own funds to
support [Child].
II. Whether the auditing court erred in failing to grant Father’s
petition for removal of [Mother] and return of the funds
and in dismissing Father’s objections to the accounting in
that the court’s findings were not supported by the
evidence.
III. Whether the auditing court erred by failing to make a
finding that the expenditures benefited [Child].
IV. Whether the auditing court erred [in] finding that Father
was motivated to pursue this matter in part to harass
Mother.
Father’s Brief at 4.
Our standard of review is well settled:
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2
May 10, 2014, the thirtieth day following the order becoming final, fell
on a Saturday. Therefore, Father’s May 12, 2014 notice of appeal, filed on
the following Monday, was timely.
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As an appellate court we can modify an Orphans’ Court decree
only if the findings upon which the decree rests are unsupported
by competent or adequate evidence or if there has been an error
of law, an abuse of discretion or a capricious disbelief of
competent evidence. The test to be applied is not whether we,
the reviewing court, would have reached the same result, but
whether a judicial mind, after considering the evidence as a
whole, could reasonably have reached the same conclusion.
In re Gumpher, 840 A.2d 318, 321 (Pa. Super. 2003).
As a custodial account, Child’s account is controlled by the
Pennsylvania UTMA. That act establishes the duties of a custodian and
provides that a custodian’s standard of care is one “that would be observed
by a prudent person dealing with property of another.” 20 Pa.C.S.A. § 5312.
The Act also outlines the permissible uses of the minor’s property by the
custodian as follows:
(a) Without court order. – A custodian may deliver or pay to
the minor or expend for the minor’s benefit so much of the
custodial property as the custodian considers advisable for the
use and benefit of the minor, without court order and without
regard to:
(1) the duty or ability of the custodian personally or of any
other person to support the minor; or
(2) any other income or property of the minor which may
be applicable or available for that purpose.
(b) With court order. – On petition of an interested person or
the minor if the minor has attained 14 years of age, the court
may order the custodian to deliver or pay to the minor or expend
for the minor’s benefit so much of the custodial property as the
court considers advisable for the use and benefit of the minor.
(c) Obligation of support not affected. – A delivery, payment
or expenditure under this section is in addition to, not in
substitution for, and does not affect any obligation of a person to
support the minor.
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20 Pa.C.S.A. § 5314.
In Sutliff, our Supreme Court observed that
the ... legal obligation of parents is to provide for the
reasonable expenses of raising the child. Indeed, parents
have a duty to support their minor children even if it
causes them some hardship. The cost of raising children is
a function of several factors including custom, the
children’s needs and the parents’ financial status. [The
purpose of child support is] to provide for more than bare
necessities. [The] Superior Court has consistently held
that a parent’s support duty is not affected by a minor
child’s own means or earning potential.
Sutliff v. Sutliff, 528 A.2d 1318 1322 (Pa. 1987) (citations
omitted). In Perlberger v. Perlberger, this Court noted “that
the principles espoused by our Supreme Court [in Sutliff] are
both instructive and applicable here, where wife, though not a
support obligor, is subject to the general duty to support her
children.” 626 A.2d 1186, 1201 (Pa. Super. 1993) (emphasis
added). In Sternlicht, this Court held that
[a] custodian abuses his discretion and acts improperly if
he expends funds from [an UTMA] account for the purpose
of fulfilling his support obligation in lieu of making the
payments out of his own income and assets, where the
parent has sufficient financial means to discharge it
himself. [UTMA] accounts may not be used for support
before the parents expend their own resources.
Sternlicht v. Sternlicht, 822 A.2d 732, 741 (Pa. Super. 2003).
The plural “parents” in the last sentence of that passage makes
clear that the principle expressed applies not just to non-
custodial support obligors, but to both parents, without regard to
marital or custodial status. Thus, reading Sutliff, Sternlicht,
and Perlberger together, we find that Section 5314’s provision
that [UTMA] “use and benefit” expenditures are “in addition to,
and not in substitution for, any parental support obligation”
applies to the more amorphous “support obligations” of the
custodial parent as well as those of the “support obligor.”
Gumpher, 840 A.2d at 324 (citations modified).
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In his first challenge, Father contends that the orphans’ court erred by
allowing Mother to use UTMA funds for everyday support and by finding that
Mother did not have her own funds available for Child’s support. Father
argues that, because another court in support proceedings found that
Mother had a certain earning capacity, the orphans’ court could not find that
Mother had a lower income available to her. Father also alleges that the
evidence did not support the orphans’ court’s determinations. Father asserts
that Mother’s testimony regarding her lack of personal funds was not
credible. Father’s Brief at 10-16.
Our decisional law is clear that UTMA funds cannot be used to meet a
parent’s child support obligation. See Sutliff, 528 A.2d at 1324 (holding
that parent’s support obligation could not be satisfied through use of
children’s custodial accounts when father had sufficient personal funds to
meet children’s needs); Sternlicht, 822 A.2d at 740 (holding that father
could not use child’s UTMA funds to purchase a new house when there was
no evidence that house was for the use and benefit of child). However,
when a parent cannot provide for the child through the parent’s assets, the
child’s funds may be used. See Gumpher, 840 A.2d at 324 (holding that
mother must demonstrate that her assets were exhausted before invading
child’s UTMA account); Sternlicht, 822 A.2d at 741 (remanding for inquiry
into whether father could pay child’s private school tuition from father’s
assets). Nothing in this case law indicates that the court must look beyond
Mother’s actual assets or consider Mother’s hypothetical earning capacity.
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Here, Mother claimed that she did not have the funds that were
required to support Child. Notes of Testimony (“N.T.”), 11/19/2013, at 136,
162. The orphans’ court found that Mother only used Child’s funds when she
had no other means by which to pay Child’s expenses. T.C.O. at 6. The
court specifically credited Mother’s testimony. “Because the Orphans’ Court
sits as the fact-finder, it determines the credibility of the witnesses and, on
review, we will not reverse its credibility determinations absent an abuse of
that discretion.” In re Estate of Harper, 975 A.2d 1155, 1159 (Pa. Super.
2009). Based upon that testimony, the orphans’ court determined that
Mother did not invade Child’s UTMA account unless her funds were
exhausted. Our review of the record finds support for the court’s credibility
determinations. There was no abuse of discretion.
In his second issue, Father also challenges the court’s credibility
determinations and fact-finding. Father asserts that Mother’s exhibits were
contradictory and that her lists of withdrawals from the UTMA account and
expenditures on behalf of Child were inconsistent. Father’s Brief at 17-19.
Mother’s counsel provided argument and Mother was cross-examined
extensively regarding her expenditures for Child and the differences between
her list of withdrawals from the UTMA account and her list of expenditures
for Child’s benefit. N.T. at 85-106, 109-11. While there were discrepancies,
Mother provided explanations for them. For example, some receipts had
deteriorated or were illegible and were not included in the list of
expenditures. Mother also testified that some of the differences arose
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because she kept some cash on hand for incidentals, like tipping child care
employees and making cash payments for home repairs. Id. at 75, 103.
The orphans’ court found this testimony to be credible. Because there is
record support for these findings, we find no abuse of discretion.
Father next claims that the orphans’ court failed to make a specific
finding that Mother’s expenditures were for the use and benefit of Child.
Instead, Father claims that Mother used these funds for everyday living
expenses and for Mother’s benefit. Father’s Brief at 20-21.
As noted above, UTMA “accounts may not be used for support before
the parents expend their own resources.” Gumpher, 840 A.2d at 324
(quoting Sternlicht, 822 A.2d at 741). In Perlberger, 626 A.2d at 1200,
we considered whether a mother could invade her children’s custodial
accounts for various expenses such as lessons for the children, tutoring,
taxes, trips, entertainment, medical bills, child care, and food. Although we
ultimately remanded the case because of an incomplete record, we
nonetheless held that the determining factors were whether the
expenditures were for the children’s benefit and whether they were
reasonable.3 Id. at 1202.
Here, the court did not make an explicit finding that the expenditures
were for the use and benefit of Child. However, there is no requirement that
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3
We also noted that certain expenses, such as legal bills and the wife’s
individual therapy, were not for the benefit of the children. Id.
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the court use that “magic language.” Instead, the orphans’ court recognized
that prior decisional law allowed for the use of UTMA funds, even for
everyday expenses, when a parent had exhausted his or her own resources
and the funds were used reasonably for the child’s benefit. T.C.O. at 5-6.
By citing this law, the orphans’ court implicitly found that Mother’s use of the
funds was for Child’s benefit. The orphans’ court found Mother’s testimony
about the availability of her own resources and her use of the UTMA funds
credible. Id. at 6. Again, as the record supports these findings, the
orphans’ court did not abuse its discretion.
Finally, Father argues that the orphans’ court erred in finding that he
was motivated partially to harass Mother. Father contends that the only way
the court could have reached this conclusion was to consider testimony from
Mother that Father successfully objected to as non-responsive or irrelevant.
Father asserts that he brought this action only to seek an accounting of
Child’s UTMA account. Father’s Brief at 21-23.
Because both sides sought counsel fees, the court was required to
examine the parties’ intent and actions during the litigation. To impose fees
under 42 Pa.C.S.A. § 2503(7) or (9), the court must make a specific finding
of dilatory, obdurate, vexatious, or arbitrary conduct or bad faith. Yeager
v. Kavic, 765 A.2d 812, 815 (Pa. Super. 2000); see 42 Pa.C.S.A.
§ 2503(7), (9) (permitting an award of counsel fees for “dilatory, obdurate
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or vexatious conduct” during the pendency of a matter or for conduct in
commencing a matter that was “arbitrary, vexatious or in bad faith”).4
Further, such an award can be based upon a court’s credibility
determinations. M.C. v. R.W., 580 A.2d 1124, 1127 (Pa. Super. 1990),
overruled on other grounds by G.B. v. M.M.B., 670 A.2d 714 (Pa. Super.
1996) (en banc).
Father testified that he never asked Mother for an informal accounting
before filing the demand for one with the court. N.T. at 188. Father
admitted that he had access to the bank statements from both of Child’s
accounts prior to initiating this litigation. Further, Father admitted that he
sought an accounting for the second account even though the bank
statements showed an initial deposit and no subsequent withdrawals. Id. at
189. Based in part upon this testimony, the orphans’ court found that “it
appears [Father] was motivated to pursue this matter in equal parts to
harass his ex-wife and to protect [Child’s] assets.” T.C.O. at 6. However,
this finding played no role in the final order. While the court questioned the
purity of Father’s motives, it did not award counsel fees or otherwise
sanction Father because it did not find that Father acted solely with frivolous
or vexatious intent. Id. The court’s conclusion regarding Father’s intent is
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4
Father sought counsel fees pursuant to 42 Pa.C.S.A. § 2503(7) in his
petition for an accounting, and Mother sought counsel fees pursuant to 42
Pa.C.S.A. §§ 2503(7) and (9) in her answer and counterclaim.
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not at odds with the record and it had no discernable impact upon the final
order. We find no abuse of discretion.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/10/2014
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