Waterstone, D. v. Waterstone, K. ( 2014 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DANIEL WATERSTONE IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
KATHLEEN WATERSTONE
Appellant No. 444 MDA 2014
Appeal from the Decree February 7, 2014
In the Court of Common Pleas of Lackawanna County
Civil Division at No(s): 40916-2008
BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.
MEMORANDUM BY JENKINS, J.: FILED NOVEMBER 13, 2014
Kathleen Waterstone (“Wife”) appeals from the equitable distribution
award entered on March 15, 2013, in the Lackawanna County Court of
Common Pleas following entry of a final divorce decree on February 7, 2014.
The trial court awarded Wife sixty percent of the marital and non-marital
assets, and allocated to Wife forty percent of the marital debt. It further
awarded Daniel Waterstone (“Husband”) forty percent of the marital and
non-marital assets, and allocated to Husband sixty percent of the marital
debt. The court denied Wife’s request for counsel fees and ordered Husband
to pay alimony to Wife in the amount of five hundred dollars per month for a
period of five years post-divorce. We affirm.
The trial court set forth the factual and procedural history as follows:
[T]he parties were married on August 28, 1996 in Las Vegas,
State of Nevada. There were no children born to this marriage.
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[Husband] filed a [c]omplaint in [d]ivorce on July 21, 2008 in
Lackawanna County, Pennsylvania. On January 4, 2010, [Wife]
filed and [a]nswer and [c]ounterclaim to [Husband’s]
[c]omplaint, setting forth a claim for alimony. Discovery was
conducted and in due course the divorce was petitioned for the
appointment of a Master. An [o]rder appointing a divorce
Master, to wit: Honorable Carlon M. O’Malley, was entered on
August 16, 2010. On November 29, 2011, a Master’s hearing
was conducted.
At the time of the hearing, [Husband] was fifty-six (56)
years old, in good health and employed in the State of Vermont,
earning approximately $84,000.00 annually, plus bonuses.
[Husband] earned a Bachelor’s Degree in mechanical
engineering in 1979 and a Master’s Degree in engineering in
1986. During the marriage, [Husband] was the primary
breadwinner and paid the normal household bills and expenses.
At the time of the Master’s hearing, [Wife] was sixty-seven
(67) years old and a retired homemaker. [Wife] has a monthly
$654.00 income from her Social Security, a monthly $50.00
TIAA Kreff payment and a monthly $152.60 payment from her
first husband’s pension, for a total monthly income of $856.66.
[Wife], who possesses a high school diploma, has a sporadic
work history, having left the job market in 1970 during her first
marriage, and reentering again in 1990 following her first
divorce, and working through 1998 in a series of temporary
secretarial jobs.
[Wife] suffers from health issues, including but not limited
to osteoporosis, significant bone loss in her hips and spine and
irritable bowel syndrome. In the past two (2) years, [Wife] has
had three (3) surgeries. During the course of the marriage,
[Wife] relocated with [Husband], as a result of his change of
jobs, three (3) times, from New Jersey to Rhode Island in 1997;
from Rhode Island to Lowville, NY in 1997; and from Lowville,
NY to Old Forge, PA in 2003.
During the parties’ marriage, [Wife] received two (2)
inheritances, one from her Mother in 2000 in the amount of
approximately $100,000.00 and a second from her Father in
2006 in the amount of approximately $40,000.00. [Wife] kept
the inheritances in separate accounts from [Husband], except for
the contribution of one-half of the down payment and closing
costs for the marital home located in Old Forge, Pennsylvania, a
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financial gift to [Husband] and a trip to Alaska. [Wife] testified
the monies received from her mother’s inheritance are almost
depleted since it [sic] was used for living expenses. As to her
father’s inheritance, [Wife] testified she used the money to
purchase a 2007 Toyota Corolla, which was titled solely in her
name, and placed the remainder of the funds in a [c]ertificate of
[d]eposit.
Upon mutual agreement of the parties, the parties
maintained separate accounts during the marriage, with the
exception of a joint M&T checking account. Following their
separation, the parties sold the marital home on July 24, 2009
for $179,000.00, and realized a net profit of $38,515.83.
Besides the net proceeds from the sale of the marital residence,
there is $2,396.19 in joint marital assets, comprised of a TD
Ameritrade Check and stock account, three (3) Amica checks,
and the M&T checking account.
[Husband] possessed two (2) investment accounts during
the course of the marriage, namely a TD Ameritrade IRA with a
date of separation value of $85,000.00; and a John Hancock
Venture Annuity with a date of separation value of $13,379.00.
There was no testimony from either party as to the date these
accounts were started, or how much they may have increased or
decreased during the course of the marriage. [Husband] did
withdraw funds from these retirement accounts to pay on the
mortgage on the marital home for a period of seven (7) months,
totaling $7,700.00, following the parties separation. [Husband]
allowed some the funds to cover his living expenses, searching
for new employment and relocating to Vermont for his new
position.
The marital debt consists of three (3) credit cards,
acquired during the marriage, all in the [Husband’s] name and
used primarily by [Husband]. The debt consists of a HSBC
Master Card with a balance of $5,000.00, USAA Master Card with
a balance of $16,000.00 and Cabela's Visa Card with a balance
of $5,000.00. [Husband] testified that he used the credit cards
for work on his vehicles, with the exception of $5,000.00 which
he used to fund a new roof for the marital residence. [Wife]
testified that [Husband] used the credit cards for gambling
purposes as well.
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On or about August 22, 2012 the Master issued his Report
and Recommendations, wherein the following recommendations
were entered:
(1) as to the marital assets, [Husband] was awarded 40%,
totaling $16,364.80, and [Wife] was awarded 60%,
totaling $24,547.22;
(2) as to the non-marital assets, [Husband] was awarded
40%, totaling $36,271.60, and [Wife] received 60%,
totaling $54,407.40;
(3) as to the marital debt, [Husband] be allocated 80%,
totaling $20,800.00, and [Wife] be allocated the remaining
20%, totaling $5,200.00;
(4) [Wife] was awarded alimony in the amount of
$2,000.00 per month for eight (8) years following the
entry of the Divorce Decree; and
(5) [Wife] was awarded $5,000.00 in counsel fees.
[Husband] filed exceptions to the Master's Report and
Recommendations on August 31, arguing:
(1) the Master erred in not recommending a 50/50 split of
the marital property to the parties;
(2) the Master erred in recommending that [Husband] be
awarded 40% of the marital assets and consequently
[Wife] be awarded 60% of the marital assets as this was
not the most appropriate way to effectuate economic
justice between the parties;
(3) the Master erred in not taking into account [Wife’s]
substantial inheritances as well as the lump sum payment
of approximately $29,400.00 due to the pension from her
first husband;
(4) the Master erred in finding that [Wife] gave up her
career to become a homemaker and take care of Plaintiffs
day-to-day needs. [Wife] removed herself from the work
force in 1998 and while she suffers from some health
ailments is not disabled;
(5) the Master erred in not taking into account that [Wife]
was verbally abusive towards [Husband] for the last five
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(5) years of the marriage, and was emotionally abusive
towards [Husband] for the last three (3) years;
(6) the Master erred in recommending that 80% of the
marital debt be allocated to the [Husband];
(7) the Master erred in not recommending a credit in the
amount of $10,000.00 for the 2007 Toyota Corolla that
[Wife] retained;
(8) the Master erred in recommending alimony;
(9) the Master erred in recommending alimony in the
amount a $2,000.00 for a period of eight (8) years;
(10) the Master erred in recommending alimony in light of
the equitable distribution award, with the entire scheme
being not the best method of effectuating economic justice
between the parties;
(11) the Master erred in recommending counsel fees in the
amount of $5,000.00 where [Wife] offered no showing of
need nor was their testimony of services rendered; and
(12) the Master erred in recommending counsel fees in
light of the equitable distribution scheme and alimony as
the equitable distribution and alimony will more than
provide for [Wife’s] ability to pay her counsel fees.
Accordingly, the matter was scheduled for oral argument
in front of [the trial court] on January 17, 2013. Following oral
argument, the [c]ourt requested a settlement conference, which
was conducted on February 8, 2013.
Trial Ct. Op., 3/15/13, at 1-5.
The parties were unable to resolve their issues at the settlement
conference. Therefore, the trial court considered the exceptions raised by
Husband. The trial court denied most of Husband’s exceptions. It found,
however that: (1) the marital debt should be distributed as sixty percent to
Husband and forty percent to Wife; (2) Wife was entitled to alimony only in
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the amount of $500.00 per month for five years; and (3) Wife was not
entitled to an award of counsel fees. This timely appeal followed.1
Wife presents the following issues for our review:
1. Whether the [t]rial [c]ourt abused its discretion by not
adopting the Master’s [r]ecommendation to divide the marital
debt eight (80%) percent to [ ] Husband and twenty (20%) to
[ ] Wife?
2. Whether the [t]rial [c]ourt abused its discretion by dividing
the marital debt sixty (60%) percent to [ ] Husband and forty
(40%) to [ ] Wife?
3. Whether the [t]rial [c]ourt below abused its discretion by
not adopting the Master’s [r]ecommendation to award [ ] Wife
alimony in the amount of two thousand ($2,000) dollars per
month for a period of eight (8) years?
4. Whether the [t]rial [c]ourt abused its discretion in
awarding [ ] Wife alimony in the amount of five hundred
($500.00) dollars per month for a period of five (5) years?
5. Whether the [t]rial [c]ourt abused its discretion by not
adopting the Master’s [r]ecommendation to award [ ] Wife
counsel fees in the amount of five thousand ($5,000.00) dollars?
6. Whether the [t]rial [c]ourt abused its discretion by not
awarding any counsel fees to [ ] Wife?
Wife’s Brief at 6 (issues reordered for ease of disposition).
Wife’s first and second issues are interrelated, therefore, we address
them together. In these issues, Wife essentially challenges the trial court’s
modification of the Master’s recommendation as to the distribution of the
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1
The trial court did not order Wife to file a Statement of Errors Complained
of on Appeal pursuant to Pa.R.A.P. 1925.
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marital debt. Specifically, Wife claims the court erred in concluding that all
of the parties’ debt should be characterized as marital debt. Wife’s Brief at
10. Wife avers that all but $5,000.00 of the parties’ debt was, in fact, debt
attributable to Husband only and incurred by him to pay for repairs on two
cars owned by him, and for gambling at casinos. Id. Wife argues that the
court’s award does not effectuate economic justice because the disparity of
the income between the parties necessitates that Wife be given a larger
share of the marital property to support herself and it is “unreasonable to
take away part of that equitable distribution of assets to pay a portion of
debt that has solely benefitted [Husband].” Id. at 11.
A “trial court has broad discretion in fashioning equitable distribution
awards.” Teodorski v. Teodorski, 857 A.2d 194, 199 (Pa. Super. 2004).
This Court “will overturn an award only for an abuse of that discretion.” Id.Pursuant to the Divorce Code, the trial court:
Shall . . . equitably divide, distribute or assign, in kind or
otherwise, the marital property between the parties in such
proportions and in such manner as the court deems just after
considering all relevant factors . . . .
Id. (quoting 23 Pa.C.S. § 3502(a)). In assessing the propriety of an
equitable distribution scheme:
[O]ur standard of review is whether the trial court, by
misapplication of the law or failure to follow proper legal
procedure, abused its discretion. Specifically, we measure the
circumstances of the case, and the conclusions drawn by the trial
court therefrom, against the provisions of 23 P.S. § 402(d) [now
23 Pa.C.S. § 3502(a)] and the avowed objectives of the Divorce
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Code, that is, to effectuate economic justice between the parties
and insure a fair and just determination of their property rights.
Id.
Pursuant to 23 Pa.C.S. § 3502, the factors which are relevant to the
equitable division of marital property include the following:
(1) The length of the marriage.
(2) Any prior marriage of either party.
(3) The age, health, station, amount and sources of income,
vocational skills, employability, estate, liabilities and needs of
each of the parties.
(4) The contribution by one party to the education, training or
increased earning power of the other party.
(5) The opportunity of each party for future acquisitions of
capital assets and income.
(6) The sources of income of both parties, including, but not
limited to, medical, retirement, insurance or other benefits.
(7) The contribution or dissipation of each party in the
acquisition, preservation, depreciation or appreciation of the
marital property, including the contribution of a party as
homemaker.
(8) The value of the property set apart to each party.
(9) The standard of living of the parties established during the
marriage.
(10) The economic circumstances of each party at the time the
division of property is to become effective.
(10.1) The Federal, State and local tax ramifications associated
with each asset to be divided, distributed or assigned, which
ramifications need not be immediate and certain.
(10.2) The expense of sale, transfer or liquidation associated
with a particular asset, which expense need not be immediate
and certain.
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(11) Whether the party will be serving as the custodian of any
dependent minor children.
23 Pa.C.S. § 3502(a).
Further, “[i]n determining the propriety of an equitable distribution
award, courts must consider the distribution scheme as a whole.” Biese v.
Biese, 979 A.2d 892, 895 (Pa. Super. 2009).
We conclude Wife’s first and second issues must fail. Our review of
the trial court’s opinion reveals that the trial court considered the Section
3502 factors when reviewing the Master’s recommendation and in response
to Husband’s exceptions. See Trial Ct. Op. at 1-4, 7-11. With respect to
allocation of the marital debt, the trial court noted it was aware that
Husband incurred the “majority of the marital debt.” Id. at 10. However, it
also correctly noted that because the debt was incurred during the marriage
it is subject to inclusion in the equitable distribution scheme. Id.
Accordingly, in order to effectuate economic justice, the trial court
determined that Wife “should assume a greater share of the marital debt
than initially recommended by the Master in order to offset [Wife’s]
disproportionate share of the marital estate.” Id. The trial court did not
abuse its discretion in taking into consideration the entire equitable
distribution scheme—including its division of the marital assets—in
determining the percentage of the marital debt to allocate to Wife. See
Teodorski, 857 A.2d at 199; Biese, 979 A.2d at 895.
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We next address Wife’s third and fourth issues together, as they are
also interrelated. Wife claims the trial court abused its discretion in not
adopting the Master’s recommendation that she be awarded alimony in the
amount of $2,000.00 per month for eight years and instead awarding her
$500.00 per month for five years. Wife’s Brief at 11-16. She claims that
this downward modification constitutes an abuse of discretion because the
trial court failed to consider that much of the equitable distribution award to
wife is comprised of money that may not be readily available to Wife or may
be further reduced by taxes or penalties. Id. at 12. Specifically, Wife notes
she was awarded funds from Husband’s “IRA which cannot be reached until
[Husband] reaches a certain age and an Annuity, which also may be
restricted” and that both sources of income may be subject to income tax.
Id. Next, Wife argues that the trial court misapplied the law by considering
the support guidelines, Pa.R.C.P. 1910.16-6(e), when it determined the
amount of alimony to award Wife. Id. at 12-13. Last, Wife claims the court
erred in neglecting to consider Wife’s expenses, including real estate taxes,
homeowner’s insurance, utilities, food, and health insurance, and in failing to
reach economic justice between the parties, when fashioning her alimony
award. Id. at 13-16. Wife is not entitled to relief.
We review an award of alimony for an abuse of discretion. See
Teodorski, 857 A.2d at 200. Pursuant to 23 Pa.C.S. § 3701, courts should
consider the following factors in determining an alimony award:
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(b) Factors relevant.--In determining whether alimony is
necessary and in determining the nature, amount, duration and
manner of payment of alimony, the court shall consider all
relevant factors, including:
(1) The relative earnings and earning capacities of the
parties.
(2) The ages and the physical, mental and emotional
conditions of the parties.
(3) The sources of income of both parties, including, but
not limited to, medical, retirement, insurance or other
benefits.
(4) The expectancies and inheritances of the parties.
(5) The duration of the marriage.
(6) The contribution by one party to the education, training
or increased earning power of the other party.
(7) The extent to which the earning power, expenses or
financial obligations of a party will be affected by reason of
serving as the custodian of a minor child.
(8) The standard of living of the parties established during
the marriage.
(9) The relative education of the parties and the time
necessary to acquire sufficient education or training to
enable the party seeking alimony to find appropriate
employment.
(10) The relative assets and liabilities of the parties.
(11) The property brought to the marriage by either party.
(12) The contribution of a spouse as homemaker.
(13) The relative needs of the parties.
(14) The marital misconduct of either of the parties during
the marriage. The marital misconduct of either of the
parties from the date of final separation shall not be
considered by the court in its determinations relative to
alimony, except that the court shall consider the abuse of
one party by the other party. As used in this paragraph,
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“abuse” shall have the meaning given to it under section
6102 (relating to definitions).
(15) The Federal, State and local tax ramifications of the
alimony award.
(16) Whether the party seeking alimony lacks sufficient
property, including, but not limited to, property distributed
under Chapter 35 (relating to property rights), to provide
for the party's reasonable needs.
(17) Whether the party seeking alimony is incapable of
self-support through appropriate employment.
23 Pa.C.S. § 3701(b).
In addressing Husband’s exceptions to the Master’s report and
concluding that the Master’s recommendation with respect to alimony should
be modified downward, the trial court opined:
The Master’s finding of the award of alimony was based upon
[Husband’s] greater earning capacity, [Wife’s] health ailments,
the amount of time [Wife] has been removed from the
workforce, the length of the marriage, [Wife’]s contribution to
the earning power of [Husband] as a homemaker, the disparity
of education between the parties and the upper middle class
standard of living during the marriage compared to Wife’s
standard of living post-separation of poverty level, earning
$10,300.00 per year on Social Security and pension.
The record reflects that the Master considered the
statutory factors delineated in Section 3701 pertaining to
alimony, including but not limited to the parties’ earnings and
earning capacities, the physical condition of the parties, the
parties’ sources of income, the duration of the marriage and the
parties’ standard of living during the marriage.
[Wife] is 67 years old and suffers from health ailments.
[Wife], who possesses a high school diploma, had a sporadic
work history, having left the job market in 1970 during her first
marriage, and reentering again in 1990 following her divorce,
and working through 1998 in a series of temporary secretarial
jobs. [Wife] has been out of the workforce for the past fourteen
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(14) years since the parties agreed that [Wife] would be a full-
time homemaker. The record clearly supports that [Wife] is
unable to reenter the workforce and support herself through
appropriate employment.
However, this [c]ourt does not accept the Master’s finding
as to the amount of the award and duration. The recommended
award far surpasses [Wife’s] reasonable needs as determined by
her monthly expenses. The equitable distribution scheme
provides that [Wife] is to receive $63,354.62, after deducting
her modified percentage of the martial debt allocation.
Additionally, [Wife] has a total monthly net income of $856.66
and is expected to realize approximately $29,400.00 from her
first husband’s pension.
[Wife] testified that her monthly expenses include living
expenses and a mortgage payment in the amount of $344.00
per month for a home she purchased post-separation.
Generally, one’s monthly mortgage payment should not exceed
28% of his/her gross monthly income. This debt-to-income
ratio, often used by mortgage lenders, is reflected in
Pennsylvania support law. Pursuant to Pa.R.C.P. 1910-16.6(e),
if the obligee is living in the marital residence and the mortgage
payment exceeds 25% of the obligee’s net income, the court
may direct the obligor to assume 50% of the excess amount as
part of the total support award.
Applying these principles, 28% of [Wife’s] net monthly
income is $239.68 and 25% is $214.00. Therefore [Wife’s]
monthly mortgage payment of $344.00 per month exceeds the
recommended 28% and/or 25% of [Wife’s] monthly income.
In conclusion, alimony is warranted to meet [Wife’s]
reasonable needs. However, given the expectancies and
inheritances of [Wife] and the relative assets of [Wife], the
recommended amount and duration of alimony shall be
decreased to $500.00 per month for five (5) years. This
modification is based upon the reasonable needs of [Wife] in
accordance with the lifestyle and standard of living established
by the parties during the marriage, the length of the marriage,
the distribution of assets, as well as the payor’s ability to pay.
Trial Ct. Op. at 12-13.
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The trial court did not abuse its discretion in determining that, though
Wife was entitled to an award of alimony, the Master’s recommended award
was excessive. In fashioning its award, the trial court thoroughly considered
the relevant Section 3701 factors and its mandate to ensure Wife’s
reasonable needs are met. See Teodorski, 857 A.2d at 200. To the extent
Wife claims the trial court erroneously relied on Pa.R.C.P. 1910-16.6(e) in
calculating the support award, we disagree. The trial court’s opinion merely
reflects that it considered the debt-to-income ratio calculation commonly
used by mortgage lenders, and reflected in Pennsylvania support law, as one
factor in ascertaining Wife’s reasonable support requirements.
For Wife’s last two issues she claims the trial court abused its
discretion granting Husband’s exceptions to the Master’s recommendation
that Wife be awarded $5,000.00 for counsel fees, based on the trial court’s
determination that no value had been established. Wife’s Brief at 16. Wife
claims the Master, “who had first hand knowledge and observation of the
work product produced and the effort put into the case by the attorneys,
made a determination of the value” and “weighed the evidence and the
credibility regarding the claims.” Id. at 17. Wife’s claims do not merit
relief.
This Court reverses a determination of counsel fees only for an abuse
of discretion. Anzalone v. Anzalone, 835 A.2d 773, 786 (Pa. Super.
2003). “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
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pay, the requesting party's financial resources, the value of the services
rendered, and the property received in equitable distribution.” Id. Further,
courts award counsel fees “only upon a showing of need.” Id. This Court
has found documentation of the amount of counsel fees incurred and
services performed “is required because a factor to consider in an award of
counsel fees is the ‘value of the services rendered.’” Id.The trial court concluded that Wife was not entitled to counsel fees
because evidence of the value of the services rendered to her is not
contained in the record. Trial Ct. Op. at 14. Our review of the record
confirms that Wife did not offer any evidence—written or testimonial—of the
value of the services her attorney performed during the course of this
matter, as is required in order for a party to be awarded counsel fees. See
Anzalone, 835 A.2d at 786. Accordingly, Wife’s fifth and sixth issues fail.
Decree affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/13/2014
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