Hervert, J. v. Hervert, F. ( 2015 )

J-A35027-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JANIE HERVERT, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
FRANK HERVERT,
Appellee No. 293 WDA 2014
Appeal from the Order entered January 30, 2014,
in the Court of Common Pleas of Allegheny County,
Family Court, at No(s): FD01-8871-004
BEFORE: BENDER, P.J.E., BOWES, and ALLEN, JJ.
MEMORANDUM BY ALLEN, J.: FILED JANUARY 05, 2015
Janie Hervert (“Wife”) appeals from the trial court’s order granting in
part and denying in part her exceptions to the trial court’s prior order
modifying and reducing Wife’s alimony payment from Frank Hervert
(“Husband”). We affirm.
The trial court summarized the pertinent facts and procedural history
as follows:
Divorce litigation in this case began in 2001 on the
issues of support and equitable distribution. In late 2003,
a two-day trial before the Honorable Lawrence W. Kaplan
was held to resolve the economic claims. Judge Kaplan
entered an order on April 28, 2004, which provided among
other things a permanent alimony award in favor of [Wife]
in the amount of $2,500 per month. The award, though
permanent, was nevertheless modifiable upon a showing of
a substantial and continuing change of circumstances.
See Order of Court, dated April 28, 2004. In May 2012,
[Husband], at the age of 64, was laid off. He testified at
trial that he was provided with one year of severance pay,
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which ended in May 2013. At that time, since he was
almost 66 years old, he decided to retire. In May 2013,
[Husband] petitioned the Court to modify the alimony
award. This Court set the matter in front of a hearing
officer, which ultimately culminated in a one-half day trial
on October 25, 2013. [The trial court temporarily reduced
the alimony award to $1,250.00 per month pending the
hearing before the hearing officer. See Order of Court,
dated May 31, 2013.] At the trial, the Hearing Officer
reduced the permanent alimony award to $650 per month
and set the payments to cease in April 2016 (or sooner if
[Wife] retires, receives social security or social security
disability, remarries or cohabitates, or if [Husband] dies).
See Hearing Officer’s Recommendation and Summary,
dated November 1, 2013.
[Wife] filed exceptions. . . . At the exceptions
argument, this Court agreed that by the terms of the
original order, the [alimony] award, although modifiable,
was nevertheless intended to be permanent. [Wife]
correctly emphasized the permanency of Judge Kaplan’s
award. Thus, this Court held that the now-reduced
alimony of $650 [per month] shall remain in effect, absent
another substantial and continuing change in
circumstances. See Order of Court, dated January 30,
2014. The Court granted [Wife’s] only properly filed
exception.
Trial Court Opinion, 4/21/14 (footnote omitted). This timely appeal
followed. Both Wife and the trial court have complied with Pa.R.A.P. 1925.
Wife raises the following issues:
I. The trial court erred in finding that Husband provided a
substantial change of circumstances that warranted a
reduction in alimony payments.
II. Husband did not meet his burden of providing
substantial change of circumstances given that he was the
moving party.
III. The trial court erred in reducing Wife’s budget.
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IV. The trial court erred in not providing Wife alimony in
an amount which met the trial court’s calculation of her
reasonable budget.
See Wife’s Brief at i.1
The pertinent statutory authority for modifying an alimony award is as
follows:
(e) Modification and termination.—An order entered
pursuant to this section is subject to further order of the
court upon changed circumstances of either party of a
substantial and continuing nature whereupon the order
may be modified, suspended, terminated or reinstituted or
a new order made. Any further order shall apply only to
payments accruing subsequent to the petition for the
requested relief. Remarriage of the party receiving
alimony shall terminate the award of alimony.
23 Pa.C.S.A. § 3701(e).
Our standard of review is well settled:
The role of an appellate court in reviewing alimony
orders is limited; we review only to determine whether
there has been an error of law or an abuse of discretion by
the trial court. Absent an abuse of discretion or
insufficient evidence to sustain the support order, this
Court will not interfere with the broad discretion afforded
the trial court. An abuse of discretion is more than an
error of judgment; it occurs if the judgment is manifestly
unreasonable or is the result of prejudice, bias or ill-will.
____________________________________________
1
Wife’s brief does not contain a separate statement of questions involved.
See Pa.R.A.P. 2116(a). We have listed Wife’s issues from her table of
contents, and have reordered them for ease of discussion.
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Willoughby v. Willoughby, 862 A.2d 654, 656 (Pa. Super. 2004) (citations
omitted). Moreover, a hearing officer’s report and recommendation,
“although only advisory, is to be given the fullest consideration, particularly
on the question of credibility of witnesses, because the [hearing officer] has
the opportunity to observe and assess the behavior and demeanor of the
parties.” Moran v. Moran, 839 A.2d 1091, 1095 (Pa. Super. 2003)
(citation omitted).
In her first two issues, Wife asserts that the trial court erred in
modifying her alimony amount because Husband, as the moving party, failed
to meet his burden of establishing a substantial and continuing change of
circumstances. We disagree.
This Court has long held:
Pennsylvania case law clearly establishes that
retirement can serve as the basis for the changed
circumstances of a substantial and continuing nature
necessary to modify an alimony award. In [Lee v. Lee,
507 A.2d 862 (Pa. Super. 1986)], we found that the [trial]
court erred when it refused to consider the changed
financial circumstances of the [husband] brought about by
forced, early retirement. [Id.] at 865. In [Mazzei v.
Mazzei, 480 A.2d 1111 (Pa. Super. 1984)], we alluded to
the fact that voluntary retirement can also constitute
changed circumstances of a substantial and continuing
nature. [Id. at 1117 n.6].
McFadden v. McFadden, 563 A.2d 180, 183 (Pa. Super. 1989). Thus, in
McFadden, we held that the trial court “abused its discretion in refusing to
consider the changed financial circumstances of [the husband] brought
about by [his] voluntary retirement.” Id. (footnote omitted).
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In rejecting Wife’s claim, the trial court reasoned:
In the instant case, [Husband’s] company apparently
terminated his position in May, 2012. Though there might
be a bit more to this “termination” – that is, whether he
was asked to retire – the following is uncontested.
[Husband] worked for [the] same organization for 45
years. The company gave [Husband] a severance package
so long as he did not work for a competitor and forwent
any potential legal claims as a result of the termination.
The severance amounted to a year’s worth of base salary,
which expired in June 2013. [Husband] also has health
issues, including coronary heart disease. He also had two
stents put in his heart, neck surgery, cataract surgery[,]
and he has had kidney stones. At the time of the hearing,
[Husband] was 66. For those reasons, when his severance
expired, [Husband] decided to retire instead of looking for
a new job.
[Wife] does not argue that [Husband’s] retirement was
questionable, but rather that his financial circumstance has
not changed and thus no modification is warranted. But
the change in [Husband’s] financial circumstance is as
obvious as it is clear. At the time of the equitable
distribution and the original alimony award, [Husband’s]
income was $137,000 per year. The Hearing Officer
concluded that in retirement, [Husband] will receive two
sources of income: social security and a mandatory
distribution that he must take each year from the
individual retirement account that [Husband] inherited
from his late mother. Those sources of income are
expected to total $33,577 per year. [Husband’s] monthly
social security benefit is $2,477.20 less $104.90 for
medical insurance premiums. [Husband] testified that he
did not know what he planned on withdrawing from his
retirement account, so the Hearing Officer properly
attributed him a $3,000 per month withdrawal in light of
his life expectancy of 17 years. In any event, [Husband]
will realize roughly $100,000 less per year than when the
original alimony order was created.
As to why this is not a change in circumstances, [Wife]
essentially argues that [Husband] has enough retirement
savings to support himself and her. [Husband’s] holdings
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are comprised of one Ameriprise account valued at
$941,000. This account includes $362,000 awarded to
[Husband] in equitable distribution. The difference is
comprised of post-separation earnings and his inheritance,
now figured to be $96,085. [Wife] argues that since
[Husband] did not know exactly how much he was
planning on withdrawing from his retirement nor the rate
of return on his holdings, then [Husband] has not met his
burden of proof showing a substantial and continuing
change of circumstances.
This argument is anemic. As to the issue of rate of
return, no explicit testimony was offered nor did the
Hearing Officer create a formula. There was some talk
amongst the attorneys during [Wife’s] motion for nonsuit
that a hypothetical 4% rate could be used. Still, this rate
would not make up for [Husband’s] lack of income now
that he is retired. In [Wife’s] best case scenario, where
there is a 6% rate of return on all of [Husband’s] holdings
and assets, [Husband’s] post-retirement income would be
$88,000 per year, which is still $50,000 less than
[Husband’s] income at the time of the [original alimony]
award. But even so, [Husband] properly met his burden of
proof and the Hearing Officer properly denied [Wife’s]
motion for nonsuit.
Trial Court Opinion, 4/21/14, at 4-6 (citations omitted). Our review of the
record supports the trial court’s conclusion that Husband met his burden of
proof.
Wife’s claims to the contrary are unavailing. She asserts Husband
failed “to meet his burden of proving how, if at all, his income stream would
be affected” by his retirement. Wife’s Brief at 10. Wife further alleges that,
“[i]n reality, [Husband] was merely simply substituting (1) source of income
for another presumably because he could afford to.” Wife’s Brief at 10.
According to Wife, “[Husband] cannot rest on the mere happening of an
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event like retirement when he is sitting on a million dollars and keeping it
from the court’s sight.” Id. at 11.
As recognized by the trial court, supra, Wife does not contest
Husband’s decision to retire as a basis for modification of alimony, but rather
contests the court’s decision to adopt the Hearing Officer’s reduction in the
alimony amount. The above explanation by the trial court refutes Wife’s
assertions. Initially, we cannot disturb the credibility determinations.
Moran, supra. Moreover, Wife takes Husband’s testimony out of context
when she asserts that Husband testified “he would not be withdrawing from
his retirement accounts [sic], but instead he wanted to leave it to his heirs
or his new wife, whose retirement he also shares.” Wife’s Brief at 9.
Husband actually testified: “But when I put that money in [Ameriprise], my
whole reason for doing that is to make sure that I have enough money to
live for the rest of my life and hopefully money left over to will to my
children when I die. I don’t want to use it all up, only what I have to.” N.T.,
10/25/13, at 56. Clearly Husband’s prior $2,500.00 monthly alimony
obligation to Wife would contribute to depleting Husband’s retirement
account.
Finally, we reject Wife’s assertion that, even considering the
calculations made by the hearing officer and the trial court, “it would let
[Husband] die a millionaire while [Wife,] who only holds a job paying $12.50
per hour that provides no retirement benefit at all, will not be able to meet
her reasonable needs after a 31-year marriage.” Wife’s Brief at 9. This
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contention ignores the fact that in equitable distribution the trial court
awarded Wife the marital portion of Husband’s pension in an amount close to
one-quarter of a million dollars. See Trial Court Order, 4/28/04.
Wife’s remaining claims involve the trial court’s treatment of her
monthly budget when calculating her reasonable needs. Wife first asserts
that the hearing officer and trial court erred in reducing and or eliminating
certain listed expenses from her monthly budget. According to Wife, these
expenses “should not have been removed from the budget without
explanation and certainly without insulting references, which make no sense
and have no place in any court order.” Wife’s Brief at 14. Wife next claims
that the trial court erred in not awarding her alimony in an amount that
would meet her “reasonable budget,” as determined by the Hearing Officer
and adopted by the trial court. Id. at 7. According to Wife:
The testimony at the [alimony] modification hearing did
not stray from historical facts and perspectives of the
parties since Equitable Distribution. [Wife] due to her age,
health, station, vocation skills, and employability, was not
employed for a number of years after the divorce. Also, in
the past several years, she had been working as a
receptionist for an insurance agent with earnings of
approximately $12.50 per hour according to the Trial
Court.
Id. at 8. Wife further asserts that the trial court erred “in looking to [Wife’s]
marital Equitable Distribution funds to consider her alimony needs.” Id.
(footnote omitted).
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The trial court explained its reductions in Wife’s monthly expenses,
and supported its reduced alimony award as follows:
The parties’ divorce was final in 2005. Therefore, it
would be inappropriate for this Court to somehow equate
Wife’s current reasonable needs with the needs of a
spouse litigating a divorce action. This Court is not in a
position[,as in equitable distribution,] where it must
ensure the equities of a newly dependent spouse searching
for means to defend herself in divorce court.
***
After hearing testimony, the Court came to a rather
large departure from what [Wife] felt were her reasonable
needs. . . . At trial the Hearing Officer properly found that
[Wife] was living far beyond her means, and that her
budget expenses were “over-inflated” and more of a “wish-
list.” By way of example, the Hearing Officer noted in the
summary that [Wife’s] decision to reside in the large
marital house and her shopping habits were unreasonable.
Consequently, the Hearing Officer reduced [Wife’s]
proposed budget.
This Court opines that the Hearing Officer acted well
within her discretion and reiterates the aforementioned
consideration this Court must give to the credibility
findings of masters and hearing officers. To be sure, in
finding that [Wife’s] needs were unreasonable, the Hearing
Officer necessarily had to find that [Wife’s] testimony was
not credible, at least in part. There is ample evidence to
support this conclusion. The relevant testimony can be
found between pages 79 and 103 of the [10/25/13]
transcript. [Wife’s] proposed budget was admitted as
Exhibit D.
[Wife] stated that she spends $600 per month on food,
household products and sundries. Naturally this expense
is for [Wife] only, as the alimony award would have been
terminated if she cohabitated. Wife spends $250 per
month on clothes, because she works the front desk at
work and must be presentable. For that same reason, she
spends $175 per month at the beauty salon.
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[Wife] testified that she bought a 2002 Volvo from her
son. At first she testified that she was making car
payments to him. What [Wife] meant to say, apparently,
was that she planned on paying her son for the car. Son
apparently “sold” [Wife] the car five years ago, but [she]
has never had to make payments until now. The Hearing
Officer nevertheless allotted $200 per month for car
payments even though she noted that it might not be a
current expense. It is reasonable to allot money for the
maybe-phantom car payment, because [Wife] also testified
that the car has a lot of maintenance expenses. [Wife]
testified that she spends on average $190 per month on
repairs. She spends $146.50 for car insurance. [Wife]
claims that she spends $240 per month on gas even
though she works full time and is only a ten minute’s drive
from her office. [Wife’s] proposed budget includes the
$100 per month that she allegedly sets aside for replacing
her current car.
[Wife] allots $50 a month for household help, but she
does not have a cleaning person. The $600 per year
expense accounts for her neighbor raking leaves. But it
does not account for tractor repair or lawn care. Home
repairs are also a trouble area. [Wife] anticipates that she
will need $250 per month for home maintenance. Two
furnaces need to be replaced. The roof leaks, the pool
needs to be lined and there is a tree that needs to be cut
down. There is also trash pick-up. [Wife] said that she
does not want to sell the house for fear that it would
exacerbate her depression. The house’s outstanding
mortgage is $60,000 with ten years left. The 2013
Allegheny County assessment listed the house’s fair
market value to be $234,700.
There are still other questionable expenses. [Wife]
budgeted $120 per month for general entertainment and
$30 for magazines. [Wife] spends on average $15 a
month for dry cleaning. Wife spends $150 per month on
gifts; $250 per month is apportioned for vacations. Cross-
examination revealed that [Wife] routinely spends two to
three thousand dollars on gifts and donations per year.
[Wife] anticipates that she will spend $15 per month
replenishing her bank checks. And although the budget,
reasonable or unreasonable, is very detailed, [Wife]
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includes a catchall “other” category in the amount of
$743.66 per month.
The Hearing Officer reduced [Wife’s] budget to
[$3,696.90] per month and listed specific itemizations.
While the Court agreed that [Wife’s] budget was
unreasonable, indefinite alimony is still required and so
this Court departed from the Hearing Officer’s
recommendation. [Wife] is 63 years old. [Wife] is being
treated for depression. She also has physical ailments.
She suffers from post-polio syndrome, which brings on
bouts of extreme fatigue. Steps and balance pose certain
problems.
On the other hand, the Hearing Officer correctly noted
that [Wife] has done nothing to increase her job skills
since the parties separated in 2000. One year, [Wife]
testified that she did not work at all because she was too
depressed. It is telling that [Wife’s] proposed budget
($6,300 per month) is only two-hundred dollars below
what she submitted at the original alimony hearing. Judge
Kaplan explicitly found the amount to be unreasonable as
well.
Lastly, [Wife] alleges that the Court erred in finding that
she can make up for any shortfall in her budget by
withdrawing from her IRA. Indeed, [Wife] has already
done this. [Wife] testified that her IRA account contained
$240,826.52 at the time of trial, of which $40,000 was
liquidity. In other words, even if [Wife] found herself in
need of an emergency fund, she would still have access to
a fair amount of her IRA penalty-free. Because this Court
disagreed with the Hearing Officer’s recommendation that
the alimony award should terminate in two years, this
Court does not feel compelled to adopt wholesale the
Hearing Officer’s rationale that [Wife] can dip into her IRA
to make up any shortfall.
Put another way, it is [Wife’s] stance that the Hearing
Officer supposedly felt that [her] budgetary needs could be
met by draining her retirement account. This Court does
not agree with [Wife’s] read on the [Hearing Officer’s]
summary and recommendation[.] . . . Because this Court
determined that [Wife’s] award should continue
indefinitely, [Wife’s] position that the Court believes the
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IRA is an appropriate budgetary remedy loses its bite.
Now that [Wife’s alimony] award will continue
[indefinitely], the likelihood that [Wife] will need to utilize
an emergency fund will continue to be low.
Trial Court Opinion, 4/21/14, at 6-10 (citations omitted).
After careful review, we conclude that the record supports the trial
court’s conclusions. In support of her argument to the contrary, Wife argues
“law of the case” and refers to certain statements made in 2004 by Judge
Kaplan when equitably distributing the marital estate. See Wife’s Brief at 7-
10. As acknowledged by the trial court, supra, Judge Kaplan’s statements
were made ten years earlier in the parties’ divorce action. Our review of
Judge Kaplan’s opinion supporting his equitable distribution order reflects
that he “simply did not find Wife’s testimony credible as to her reasonable
needs,” because “[t]hese kind of budgetary excess are simply inconsistent
with the credible testimony of the parties’ lifestyle established during the
marriage and/or are inconsistent with the net monthly incomes generated by
these parties.” Trial Court Opinion, 11/4/04, at 6.
Finally, our review of the record supports Husband’s averment that the
reduced alimony amount calculated by the Hearing Officer, and adopted in
part by the trial court, results in a scenario where each party will have to
“withdraw a similar percentage form his/her retirement to meet each party’s
. . . reasonable needs.” Husband’s Brief at 8. Given these circumstances,
we conclude that the trial court’s reduction of the monthly alimony award to
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Wife constitutes neither an error of law nor an abuse of discretion. We
therefore affirm the trial court’s order.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/5/2015
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