Wyatt, T. v. Wyatt, B. ( 2015 )

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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37
THOMAS D. WYATT, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
BARBARA ANN WYATT, :
:
Appellant : No. 1228 MDA 2013
Appeal from the Order Entered July 10, 2013,
in the Court of Common Pleas of Perry County,
Civil Division, at No(s): 2007-206
BEFORE: SHOGAN, WECHT, and STRASSBURGER,* JJ.
MEMORANDUM BY STRASSBURGER, J.: FILED JUNE 11, 2015
Barbara Ann Wyatt (Wife) appeals from the order entered July 10,
2013, which decreed that she and Thomas D. Wyatt (Husband) are divorced,
and ordered equitable distribution of the marital property. We affirm in part,
vacate in part, and remand for the trial court to enter an order consistent
with this memorandum.
Husband and Wife married in 1970 and separated in 2006.1 During
this lengthy marriage, which was the first for both parties, the parties
obtained a number of marital assets. At the time of the master’s hearing,
Husband was 62-years-old and employed as an engineer by Amtrak earning
1
The parties have maintained separate households since 2001, with
Husband living in a home in Pennsylvania (the Duncannon property) and
Wife living in the former marital residence, purchased in 1973, in New Jersey
(the New Jersey property). Notably, the New Jersey property’s mortgage
was paid off with funds Husband inherited from his father.
*Retired Senior Judge assigned to the Superior Court.
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$101,000 per year. At the same time, Wife was 61-years-old and employed
part-time in the health care industry earning $31,397 per year. For the
majority of the marriage, Wife stayed home to raise the parties’ two, now
adult, children, although she held brief stints of employment in her field from
1986 to 1989 and again from 1991 to 1999.
The parties resided together in the New Jersey property until
Husband’s employment with Amtrak was transferred to Pennsylvania. The
parties then purchased the Duncannon property together in early 2000 and
performed significant renovations. After Wife’s mother died in 2004, it is
stipulated that Wife used $107,765.37 of her inheritance to satisfy the
mortgage on that residence. Husband signed a promissory note confirming
that he was responsible for repaying that amount to Wife.
As a long-time railroad employee, Husband acquired a pension and
other retirement benefits. In addition to the real estate, the parties
possessed various antiques and collectibles, memorabilia, a classic car, and
a substantial clock and watch collection.
Husband filed a complaint in divorce on August 20, 2007, seeking
equitable distribution of the parties’ marital assets.2 After a hearing before a
2
Wife filed a separate action for spousal support, which was intensely
litigated throughout 2007 and 2008. At the time of the master’s hearing,
Husband was paying Wife $1,150 per month in support, and had already
paid Wife $57,957.50 between 2007 and 2012.
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master, the master issued a report on March 7, 2012, which included the
following recommendation with respect to equitable distribution.
The Master recommends that the marital assets of the parties
total $887,593 excluding Husband’s Tier I Benefit of his railroad
Pension and Wife’s spousal Tier I Benefit. The Master
recommends that the marital liabilities total $12,720. The
Master recommends that Husband borrowed from Wife non-
marital inheritance monies in the amount of $107,765 which
Husband shall repay to Wife as hereinafter set forth. Based on
the above discussed factors, the Master recommends that
Husband receive [f]orty-five (45%) percent of the assets and
Wife receive [f]ifty-five (55%) percent of the assets and the
parties share equally in the repayment of the $12,720 debt in
the manner hereinafter set forth[.]
Report and Recommendation of Master (Master’s Report), at § IV(D).
With respect to alimony, the master recommended the following.
Wife is receiving 55% of the marital estate worth $488,176 and
is responsible for $6,996 in marital debt for a net distribution of
$481,180. Of this amount, most of the assets are tied to
retirement benefits that she can begin collecting at age 62. Wife
can begin collecting at least $1,215 Tier I spousal benefit two
years from the date of the divorce unless her own social security
benefits are greater. Wife will receive full retirement benefits if
she waits until her full retirement age of 66. Wife has non-
marital assets of approximately $142,000, most of which will be
available to her within 60 days of the final order relating to
equitable distribution.
***
The Master recommends an alimony award to be paid by
Husband to Wife of $1,150 per month for a period of 24 months
from the date of the divorce decree[.]
Id. at § V(B).
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Additionally, the master also recommended that each party pay his or
her own counsel fees. Wife timely filed numerous exceptions to the
recommendation of the master, and on June 7, 2013, the trial court entered
an order modifying the master’s recommendation in part. Specifically, the
trial court adjusted Husband’s alimony payment to Wife by increasing it from
$1,150 to $1,350 per month, but decreasing the number of months from 24
to 18. Order, 6/7/2013, at ¶ B.
On July 10, 2013, the trial court entered a decree in divorce, which
incorporated the June 7, 2013 order. Wife timely filed a notice of appeal and
concise statement of errors complained of on appeal. Wife sets forth
numerous issues for our consideration, which we review mindful of the
following principles.
It is well established that absent an abuse of discretion on the
part of the trial court, we will not reverse an award of equitable
distribution. [In addition,] when reviewing the record of the
proceedings, we are guided by the fact that trial courts have
broad equitable powers to effectuate [economic] justice and we
will find an abuse of discretion only if the trial court misapplied
the laws or failed to follow proper legal procedures. [Further,]
the finder of fact is free to believe all, part, or none of the
evidence and the Superior Court will not disturb the credibility
determinations of the court below.
Lee v. Lee, 978 A.2d 380, 382-83 (Pa. Super. 2009) (quoting Anzalone v.
Anzalone, 835 A.2d 773, 780 (Pa. Super. 2003)).
Moreover,
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[w]e do not evaluate the propriety of the distribution order upon
our agreement with the court[’s] actions nor do we find a basis
for reversal in the court’s application of a single factor. Rather,
we look at the distribution as a whole, in light of the court’s
overall application of the [23 Pa.C.S.A. § 3502(a)] factors [for
consideration in awarding equitable distribution]. If we fail to
find an abuse of discretion, the [o]rder must stand. The trial
court has the authority to divide the award as the equities
presented in the particular case may require.
Childress v. Bogosian, 12 A.3d 448, 462 (Pa. Super. 2011) (internal
citations and quotations omitted).
Wife’s first issue concerns the distribution of Husband’s Amtrak
pension benefit. Wife complains that the trial court erred in confirming the
master’s recommendation in awarding a portion of Husband’s Tier 2 railroad
retirement defined benefit plan utilizing an immediate offset method. Wife’s
Brief at 20-23.
The immediate offset method awards other assets in lieu
of pension benefits; receipt occurs at the time of the distribution
hearing, even for pensions only receivable in the future. This
method is impractical where the parties do not have enough
assets to offset the pension award. When the value of the
employee-spouse’s pension far exceeds the value of the other
marital property, the deferred distribution method must be used.
The deferred distribution method requires the court to
reserve jurisdiction and allocate benefits when they mature or
enter pay status. It is the preferred means of dividing unvested
pension benefits which may never actually be received by the
employee-spouse due to contingencies such as early termination
or death. Present value figures are not used; rather, only the
coverture fraction is applied to the benefits when they enter pay
status.
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Both distribution methods are recognized and acceptable
ways to distribute the marital portion of pension benefits. The
trial court has discretion in choosing the more appropriate
means,… and must balance the advantages and disadvantages of
each distribution method according to the facts of each case, in
order to determine which method best effects economic justice
between the parties.
Cohenour v. Cohenour, 696 A.2d 201, 205 (Pa. Super. 1997)
(internal citations and quotations omitted).
With respect to the Tier 2 benefit, the master set forth the following.
“[T]he present value of Husband’s Tier 2 benefit is $178,931 or $1,791.37
per month at retirement.” Master’s Report at § IV(A)(4). The master
recommended, and the trial court accepted, that Husband be awarded the
full amount. Id. at § IV(D)(1).
Wife contends this was error, and that this particular marital asset
should be treated separately and differently from other marital assets. She
argues that rather than being a true lump sum, this asset will provide
Husband a guaranteed monthly benefit until death, “while the other
retirement vehicles, namely the taxable defined contribution plan and
annuity, leaves its owner questioning how much to withdraw, where to
invest funds, and constantly reviewing marketing conditions.” Wife’s Brief at
21-22. She contends this is an onerous burden for a 61-year-old woman.
Id. at 22. Presumably, Wife contends the trial court should have utilized the
deferred distribution method to ensure that she, too, would receive a
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guaranteed monthly payment, rather than the immediate offset method, for
Husband’s pension.3
First, we observe that Wife cites no case law in support of her position
that the master and trial court erred in utilizing the immediate offset
method. Moreover, no factor favoring the deferred distribution method is
present in this case. The parties stipulated to the present value of the
benefit, and there is no issue as to forfeiture as Husband has clearly vested
in this retirement. Moreover, there were sufficient assets in the marital
estate to offset the award of the benefit to Husband. See, e.g. Hunsinger
v. Hunsinger, 554 A.2d 89 (Pa. Super. 1989) (holding that where pension
rights have vested, the value is undisputed, and the parties have enough
assets to offset the pension award, trial court did not err in using immediate
offset method); Miller v. Miller, 577 A.2d 205, 209 (Pa. Super. 1990)
(providing that immediate offset method was appropriate because “[i]t gave
finality to the matter and there was sufficient property other than the
pension to render the more cumbersome deferred distribution method
unnecessary”). Accordingly, we hold the trial court did not err in accepting
the master’s recommendation in awarding this benefit to Husband.
3
Wife does not take issue with the fact that Husband was awarded the full
amount in equitable distribution as a portion of his 45% share; rather, she
appears to be concerned about her financial stability by not receiving some
guaranteed monthly amount. However, Wife is still going to receive her Tier
I benefit and/or social security benefit to ensure a monthly income stream.
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Wife also contends the trial court erred in affirming the master’s
recommendation to treat the promissory note of $107,765 by Husband to
Wife as a deduction from the equity in the Duncannon property. Wife’s Brief
at 32-34. With respect to this asset, the master concluded that the parties
have a joint interest in the property and it is valued at $250,000. Because
Husband owed Wife the $107,765 that was used to pay off the mortgage for
that property, the master directed Husband to take out a mortgage for
$107,765 within 60 days in order to pay the full amount to Wife.4 Wife
contends that the master should have used a January 2012 mortgage payoff
balance in valuing the Duncannon property, rather than the April 2003
number, because the promissory note was a “separate, non-marital debt
owed by Husband to Wife.” Wife’s Brief at 34.
The Divorce Code does not contain a specific method for valuing
assets. The trial court must exercise its discretion and rely on
the estimates, inventories, records of purchase prices, and
appraisals submitted by the parties. The court is free to accept
all, none, or portions of the testimony regarding the true and
correct value of property. Additionally, the court may reject
evidence offered by both parties in favor of its own valuation
method.
Verholek v. Verholek, 741 A.2d 792, 796 (Pa. Super. 1999) (en banc).
Additionally, as we have stated previously, “[t]he trial court has the
authority to divide the award as the equities presented in the particular case
4
Because Wife was assigned half of the marital debt due to a home equity
line of credit, this amount was reduced to $101,405.
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may require.” Childress, 12 A.3d at 462. Instantly, Husband used his
inheritance from his father to pay off the mortgage on the New Jersey
property, and Wife was awarded this property in equitable distribution.
Moreover, had Wife not utilized the inheritance to pay off the Duncannon
mortgage, then there is no question that the mortgage would have been
considered marital debt, and some portion would have been deducted from
Wife’s assets. Accordingly, we conclude that the trial court did not abuse its
discretion in accepting the master’s recommendation on this valuation.
Wife also argues that the trial court erred in affirming the master’s
recommendation with respect to Husband’s Amtrak back pay. Wife’s Brief at
34-37. The master set forth this issue as follows.
The parties stipulate that Husband received Amtrak back pay of
$9,388.90 in 2008 and $14,033.33 in 2009. The parties further
agree that Wife received from Husband a lump sum payment of
$9,220 through a DRS spousal support action. The parties
disagree as to whether the back pay was already dealt with as
part of an agreement during a spousal support de novo hearing
and therefore, not available for equitable distribution or if it was
set aside as an equitable distribution issue to be decided at a
later point.
Master’s Report, at § IV(A)(6).
The master then summarized the relevant testimony from the hearing.
Husband’s former counsel, Todd Hough, Esquire, testified
that he was present during the negotiations concerning the
retroactive pay and that the settlement included the inclusion of
the back pay and the advance of $2,500 for equitable
distribution. He testified that there was no agreement to have
the retroactive pay determined during equitable distribution.
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Several letters from both counsel were admitted which support
Husband’s argument that the retroactive pay was dealt with
during the support settlement.
Id.
“Wife argues that the $9,220.00 payment she received from Husband
was paid to her for arrearages due and owing to her under the parties’
pending support case and that it had nothing to do with an equitable division
of Husband’s back wage payments.” Wife’s Brief at 35. Wife’s CPA, Gayle
Bolinger, testified that “she was specifically instructed to deduct these back
wage lump sum payments from Husband’s gross wages for 2008 and 2009,
as those two payments were to be reserved for equitable distribution
purposes.” Id. Thus, Wife argues that Attorney Hough’s testimony is “not
credible.” Id. at 36.
It is well-settled that “the finder of fact is free to believe all, part, or
none of the evidence and the Superior Court will not disturb the credibility
determinations of the court below.” Lee, 978 A.2d at 383. Instantly, the
master credited the testimony of Attorney Hough, which was supported by
documentary evidence, and we will not disturb that on appeal. Accordingly,
Wife is not entitled to relief on this issue.
Wife also argues that the trial court erred by having each party pay his
or her own attorneys’ fees. Wife’s Brief at 28-32. The master summarized
the testimony as follows.
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Wife testified that she has incurred $140,389.98 in counsel
fees and costs. She spent $7,082 on an accounting expert to
assist her counsel in reaching a settlement on spousal support
and back pay issues. She spent $6,799 on an expert to value
the Railroad Memorabilia which had a total value of $36,593,
$11,576 of which was determined to be pre-marital. She spent
$662.25 on transcript costs of De Novo Hearings and another
$368.75 for the transcript of Husband’s Deposition. Her counsel
fees from her first attorney totaled $48,297.23 and attorneys[’]
fees from her second counsel total $75,635. These counsel fees
did not include preparation or representation at the second or
third day of testimony at the Master’s Hearing. Wife testified
that Husband failed to cooperate which resulted in additional
attorneys[’] fees. She is requesting that Husband pay for ½ of
her counsel fees.
Husband testified that he has incurred counsel fees of
$45,717.50 and costs of $3,291.45 as of 12/31/11. Husband
testified that he has consistently cooperated in trying to settle
the divorce issues. His position is that Wife has consistently
dismissed his valuations and insisted on expert valuations which
came close to what Husband had already suggested was the
value of the asset. Further, Husband argues that Wife has taken
untenable positions on issues such as the IOU and the back pay
which caused Husband to incur additional [attorneys’] fees.
The Master finds that Husband did not cause Wife to incur
additional counsel fees and costs. The Master further finds that
Wife has incurred excessive [attorneys’] fees and costs due to
her insistence on pursuing the valuation of the marital property
of limited value.
The Master recommends that each party pay [his or her]
own [attorneys’] fees and costs.
Master’s Report, at ¶ VI.
We review an award of counsel fees mindful of the following.
We will reverse a determination of counsel fees and costs
only for an abuse of discretion. The purpose of an award of
counsel fees is to promote fair administration of justice by
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enabling the dependent spouse to maintain or defend the divorce
action without being placed at a financial disadvantage; the
parties must be “on par” with one another.
***
Counsel fees are awarded based on the facts of each case
after a review of all the relevant factors. These factors include
the payor’s ability to pay, the requesting party’s financial
resources, the value of the services rendered, and the property
received in equitable distribution. Counsel fees are awarded only
upon a showing of need. Further, in determining whether the
court has abused its discretion, we do not usurp the court’s duty
as fact finder.
Teodorski v. Teodorski, 857 A.2d 194, 201 (Pa. Super. 2004) (internal
quotations and citations omitted).
Wife argues that the trial court did not consider the income disparity,
Wife’s struggle to find part-time employment, as well as the fact that “in
order to maintain ‘equal litigation footing’ with Husband, Wife had to
liquidate nearly all of the investment funds she received through an
inheritance from her deceased Mother in order to satisfy expert witness
fees….” Wife’s Brief at 29-30. Wife also argues that the “unique and
substantial collection pieces in the Duncannon [property,]” for which
Husband provided “only minimal valuations[,]” caused her to have to hire
“three separate experts in the fields of antique clock and watch valuation,
vintage automobile valuations, and railroad train collectible and memorabilia
valuation.” Id. at 30. Additionally, Wife had to get orders of court to get
dates for these appraisals. She contends that “[e]xpecting a 61 year old
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woman who was working only part-time and earning 1/3 of Husband’s
income, to satisfy all of the expert costs and expenses was neither equitable
[n]or just.” Id. at 32.
Husband responds that in addition to the findings of the trial court that
Wife’s conduct was the cause of excessive fees and costs, the record also
established that Wife’s attorneys were double-billing. “Two experienced
domestic relations attorneys represented Wife jointly and attended property
inspections, conferences with the court, and the Master[’]s hearing itself at
full double rates.” Husband’s Brief at 13.
Husband’s contentions are supported by the record. Wife offered the
following examples in testimony in response to questions from Husband’s
counsel at the master’s hearing.5
Q. So on that date we had two lawyers meeting with Mr. Wagner
in Carlisle; correct?
A. That is what it shows here.
Q. Okay. And you were billed for both their times, were you
not?
A. Yes.
***
Q. Would you look at June 10th, 2010, please, near the top of
the page?
5
The bills reflected Lawyer: 1 and Lawyer: 41. It was determined that
Lawyer :1 was Attorney Serratelli and Lawyer: 41 was Attorney Boyanowski.
N.T., 2/13/2012, at 185.
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A. (Witness complies.)
Q. Lawyer: 1, 4 hours times $250.00. That was meeting with
client on that date.
Also on June 10th, Lawyer: 41, 4 hours time[s] $250.00,
meeting with client and [Attorney Serratelli].
***
Q. …So you met with both of them at the same time?
A. Yes.
Q. And you were billed $2,000.00 for that meeting?
A. Yes.
N.T., 2/13/2012, at 186-87.
Because the findings of the master are supported by the record, we
conclude the trial court did not abuse its discretion in ordering each party to
be responsible for its own counsel fees. Accordingly, Wife is not entitled to
relief on this issue.
Wife also contends the trial court erred by decreasing the term of her
alimony award. Wife’s Brief at 24-28. Wife contends that this was error
because she is not eligible to receive her full retirement benefits until she
turns 66, on December 31, 2016.
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 abuse of discretion by the trial court. Absent
an abuse of discretion or insufficient evidence to sustain the
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support order, this Court will not interfere with the broad
discretion afforded the trial court.
Likewise: The purpose of alimony is not to reward one
party and to punish the other, but rather to ensure that the
reasonable needs of the person who is unable to support himself
or herself through appropriate employment, are met. In
determining the nature, amount, duration and manner of
payment of alimony, the court must consider all relevant factors,
including those statutorily prescribed for at 23 Pa.C.S.A. § 3701.
Alimony is based upon reasonable needs in accordance with the
lifestyle and standard of living established by the parties during
the marriage, as well as the payor’s ability to pay.
Dalrymple v. Kilishek, 920 A.2d 1275, 1278-79 (Pa. Super. 2007)
(internal citations and quotations omitted).
Instantly, the master evaluated the factors set forth in 23 Pa.C.S.
§ 3701 and concluded that Wife should receive alimony payments for 24
months after the divorce is final. Wife filed an exception to this
recommendation and asked the trial court to increase the term of her
alimony. However, the trial court instead decreased the term by six months,
but increased payments by $200 per month, which still left Wife with less
money overall.6 The trial court provided no rationale for this modification.
Moreover, Wife has been receiving $1,150 per month from Husband for
years; the parties have a large income disparity; and, the marriage was
lengthy. Accordingly, we hold that the trial court abused its discretion as to
6
The trial court’s order resulted in a net decrease in alimony to Wife of
$3,300.
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the issue of alimony; thus, we vacate that portion of the order and remand
to the trial court for reconsideration.
Finally, Wife contends that the trial court committed an error of law
and abused its discretion by forcing Wife to pay the master’s fees and costs
if she chose to file exceptions. Wife’s Brief at 37-38. The master ordered
Husband to pay all fees and costs associated with the master. However, the
master also stated that if “Wife filed exceptions, she shall pay the remaining
Master’s fees and costs of $4,355 and shall be reimbursed by Husband
within 30 days of the filing of the Master’s Report.” Master’s Report, at § VII.
Wife did file exceptions and paid the associated costs, but was
reimbursed timely by Husband. Thus, the issue is moot, and we will not
review it. However, we do point out that based upon the master’s finding
that “Husband is in a better position to pay the Master’s fees and costs[,]” it
was inequitable to require Wife to front the costs in the event she filed
exceptions. Master’s Report, at § VII.
Order affirmed in part and vacated in part. Case remanded to the trial
court for entry of an order consistent with this memorandum. Jurisdiction
relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/11/2015
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