## Facts

- Unmarried parents had one child (born 2002); paternity was acknowledged shortly after birth, and a support action followed.
- A prior support order required Father to pay monthly support plus a percentage of unreimbursed medical expenses; that order was affirmed in earlier appellate proceedings.
- Mother enrolled the child in a private preschool in 2005 and a related pre-kindergarten program in 2006; Father disagreed with private schooling but initially contributed voluntarily toward tuition.
- In 2006, an interim support order set monthly support and included a specific amount for private-school tuition.
- A support master recommended an increase to address private-school tuition; Father filed exceptions disputing (a) inclusion of tuition and (b) components of his income calculation, including stock-option proceeds, valuation of personal use of an employer-provided vehicle, and treatment of employer contributions to retirement/stock accounts.
- The trial court dismissed Father’s exceptions and left the support order in place; Father appealed.

## Issues

1. Whether the trial court abused its discretion by treating private-school tuition as an extraordinary expense included in Father’s child-support obligation over Father’s objection.
2. Whether the trial court erred in calculating Father’s income by (a) including a one-time stock-option exercise as recurring income, (b) improperly valuing perquisite income from personal use of an employer-provided vehicle, and (c) including employer contributions to retirement/stock accounts without adjusting for withdrawal penalties.

## Decision

- The Superior Court vacated the support order and remanded for recalculation.
- The court held the trial court erred by including a one-time stock-option exercise in Father’s ongoing income.
- The court held the trial court erred in its method of valuing perquisite income from Father’s personal use of a company-provided vehicle.
- The court held the trial court erred by including gross employer contributions to Father’s retirement/stock accounts without accounting for withdrawal penalties affecting actual availability.
- The court concluded private-school tuition may be treated as an extraordinary expense when supported by evidence of the child’s interests and the parents’ financial circumstances, but the tuition component had to be revisited after correcting income figures.

## Legal Principles

- Child-support determinations are reviewed for abuse of discretion; legal misapplication in computing income warrants reversal.
- Private-school tuition is not automatic support, but may be awarded as an extraordinary expense when justified by the child’s welfare and the obligor’s ability to pay.
- Ongoing support should reflect actual, recurring financial resources; nonrecurring, one-time gains (such as a single stock-option exercise) should not be treated as recurring income for future-year support without a legally sound basis.
- Employer-provided perquisites may be included as income to the extent they confer personal economic benefit; valuation must distinguish personal from business use.
- Amounts treated as income must reflect practical availability; when employer contributions to retirement/stock accounts are included, the calculation must account for material penalties tied to accessing those funds.

## Conclusion

The Superior Court vacated and remanded because the support calculation overstated Father’s income by treating nonrecurring stock-option proceeds as recurring income, misvaluing a vehicle perquisite, and ignoring withdrawal penalties on employer-funded retirement/stock contributions, while recognizing that private-school tuition can qualify as an extraordinary expense if supported by the record.


Murphy v. McDermott, 979 A.2d 373 (Pa. Super. Ct. 2009)