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CARLENE S. SUTLIFF v. GREGORY L. SUTLIFF AND FRED K. COLLINS (07/09/87)

decided: July 9, 1987.

CARLENE S. SUTLIFF, APPELLANT,
v.
GREGORY L. SUTLIFF AND FRED K. COLLINS, APPELLEES. CARLENE S. SUTLIFF, APPELLEE, V. GREGORY L. SUTLIFF AND FRED K. COLLINS, APPELLANTS. COMMONWEALTH EX REL. CARLENE S. SUTLIFF, APPELLEE, V. GREGORY L. SUTLIFF, APPELLANT (TWO CASES)



Appeal from Order of Superior Court Entered January 30, 1985 at No. 2423 Philadelphia 1982, Affirming Order of the Court v. of Common Pleas of Cumberland County Entered August 5, 1982 at No. 107 Orphans 1982 339 Pa. Superior Ct. 523, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson,*fn* Zappala and Papadakos, JJ. McDermott, J., concurs in the result and files a Concurring Opinion. Nix, C.j., files a Concurring and Dissenting Opinion. Larsen, J., files a Dissenting Opinion in which Flaherty, J., joins.

Author: Hutchinson

[ 515 Pa. Page 397]

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

These consolidated appeals by allowance arise out of a support action for minors begun in Cumberland County Common Pleas and a subsequent action to remove and surcharge the custodians of the minors' funds after the custodians had applied the minors' funds to discharge the support obligation of one of the custodians.

The issues presented for our review concern the use of property given under the Pennsylvania Uniform Gifts to Minors Act (UGMA), 20 Pa.C.S. §§ 5301-10, specifically, whether such funds should be considered by the court in fashioning a support order and whether they may be used to fulfill a parent's support obligation. A threshold issue here is whether Common Pleas had jurisdiction to modify support orders which were on appeal to allow credit for the custodial distributions. Since the modification involved the

[ 515 Pa. Page 398]

    issue on appeal, we hold it did not.*fn1 On the merits,*fn2 we hold that a parent's obligation to support minor children is independent of the minor's assets. UGMA funds may not be used to fulfill the parent's support obligation where the parent has sufficient means to discharge it himself. Upon determining that the parent has sufficient funds to reasonably support the minor without seriously depriving himself or other persons to whom he has a similar obligation, the court should not thereafter consider the minor's funds in setting the support obligation. This is not to say that a custodian cannot, as a fiduciary, exercise his statutory discretion in certain circumstances to distribute custodial funds for a minor's support in addition to those due from the parent. However, where the parent is also custodian, his dual obligation comes into conflict. In such case, he may not credit his custodial distribution against his support obligation. In the event of a dispute over the extent of his parental obligation, the parent custodian is removable at Common Pleas' discretion on petition by or on behalf of the child.

Gregory L. Sutliff (father) and Carlene S. Sutliff (mother) were married in 1960; they had four children. At the time of the couple's separation in 1981 only the three youngest, Kimberly, Julia and Laura, were minors. The father owns and operates a successful car dealership in the Harrisburg area. His net worth is approximately $3,000,000 and he earns in excess of $130,000 per year. The mother is an

[ 515 Pa. Page 399]

    emergency room physician. She works part time and earns $26,000 per year. She claims that she cannot work full time because that would prevent her from properly raising the children.

The father and his parents gave substantial assets to the children under the UGMA. The children's aggregate accounts contained cash, stocks and bonds worth over $466,000. These assets were divided equally among the children. Father is the custodian of those assets given by his parents; Fred K. Collins, the father's business associate, is custodian of those assets given by the father.

In November, 1981 the mother filed a petition for support for herself and the three minor children. An interim support order providing $400.00 per week exclusively for the support of the minor children was entered against the father. Collins and he used the UGMA funds to fulfill up to 75% of the support obligation.

The mother then filed a suit alleging misuse of the children's custodial funds by the father and Collins. She sought a full accounting and their removal as custodians. She also sought to surcharge the custodians for any UGMA funds spent to discharge the father's support obligation.

Cumberland County Common Pleas, Orphans' Court Division, held that the custodians could use the children's UGMA funds to fulfill the father's support obligation to the children. The court relied on statutory language which gives the custodian broad discretion in expending UGMA funds.

§ 5305. Duties and powers of custodian

(b) The custodian shall pay over to the minor for expenditure by him or expend for the minor's benefit so much of or all the custodial property as the custodian deems advisable for the support, maintenance, education and benefit of the minor, in the manner, at the time or times, and to the extent that the custodian, in his discretion, deems suitable and proper, with or without court

[ 515 Pa. Page 400]

    order, with or without regard to the duty of himself or of any other person to support the minor, or his ability to do so, and with or without regard to any other income or property of the minor, which may be applicable or available for any such purpose.

20 Pa.C.S. § 5305(b). The court did not limit the amount of custodial funds that the father and Collins could use to discharge the father's support obligation. Mother appealed this order.

Subsequently, Common Pleas entered a final support order which required the father to pay $600.00 per week for support of the minor children.*fn3 In reaching its decision on support, the court considered, among other factors, the assets and income of the father and the mother, housing expense and prior standard of living. The court stated that it had previously resolved the issue of the availability of the children's UGMA assets to fulfill the father's child support obligation. It stated that "[t]here is no doubt that [father] ...


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