Zacherl, C. v. Zacherl, T. ( 2015 )

J-A07028-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CRAIG A. ZACHERL IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
TINA E. ZACHERL
Appellee No. 1524 WDA 2014
Appeal from the Decree September 8, 2014
In the Court of Common Pleas of Clarion County
Civil Division at No(s): 1505 CD 2009
BEFORE: BENDER, P.J.E., LAZARUS, J., and MUNDY, J.
MEMORANDUM BY LAZARUS, J.: FILED JULY 13, 2015
Craig A. Zacherl (“Husband”) appeals from the final decree in divorce,
entered September 8, 2014, relating to the equitable distribution of the
marital property between Husband and Tina E. Zacherl (“Wife”). After our
review, we affirm.
The parties were married on July 28, 2001, and they separated on
September 8, 2009. Husband filed for divorce on November 2, 2009. The
parties have three minor children.1 Wife subsequently filed a counterclaim,
seeking a no-fault divorce, alimony, alimony pendente lite, counsel fees and
costs. A Divorce Master was appointed and, following a hearing on February
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1
Child custody issues are pending before the trial court in an ancillary
proceeding. Husband pays Wife monthly child support in the amount of
$897.00.
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20, 2014, the Master filed a report and recommendation. Both parties filed
exceptions, and the Honorable Paul H. Millin issued an order that sustained
in part both parties’ exceptions.
Husband appealed, and he raises one issue for our review:
Did the trial court abuse its discretion and commit an error of
law in its application of section 3501(a.1) of the Divorce Code
(23 Pa.C.S.A. § 3501(a.1)) when it calculated a decrease in
value of [Husband’s] nonmarital real estate and failed to offset
the full amount of the marital mortgage debts against the
marital increase in value of the [Husband’s] nonmarital real
estate?
The trial court set forth the relevant facts as follows:
The former marital home located at 1153 Route 157,
Venus, Washington Township, Clarion County, was owned by the
Husband prior to the date of marriage. As of the date of
marriage the marital home consisted of real estate with a mobile
home, with an estimated market value of $147,900.
Subsequent to the marriage, a house was constructed and the
fair market value of the home and property at time of separation
was $408,600. Therefore the increase in value was $260,700.
The record reflects that the parties stipulated that the appraised
increase in value of the marital home and real estate for
purposes of distribution was $260,700. The parties further
stipulated that the balance owed on the [F]irst United National
Bank mortgage for the marital home as of the date of separation
for purposes of distribution was $196,680.38. The parties
further stipulated that the balance owed on the Citizens Bank
mortgage on the marital home as of the date of separation for
purposes of distribution was $113,070.06. Subtracting the
indebtedness of $310,558.44 from the increase in value of
$260,700 the master determined that the former marital real
estate had equity of $-49,858.44.[2] This valuation was not
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2
Fair market value of marital home at date of marriage - $147,900.00
Fair market value of marital home/property at separation- $408,600.00
Increase in value (parties stipulated)- $260,700.00
Balance owed on two mortgages (parties stipulated) - $310,558.44
Equity (negative) - -$ 49,858.44
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challenged by the husband at the time the husband filed
exceptions to the master’s report. It was the wife who excepted
to the master utilizing the negative value of the marital
residence to offset the value of marital property coming to the
wife. One could argue that the full increase in value of the
former marital residence of $260,700 should be utilized subject
to the indebtedness being assumed by the husband subtracted
separately, but the husband made no exception to the manner in
which the master calculated that value. This court sustained the
wife’s exception to the master’s report only to change the finding
of the master utilizing a negative value for the non-marital
property, as the negative value may not be used to offset the
value of other assets according to the statute.
Trial Court Opinion, 10/21/14, at 3-4 (emphasis added).
The relevant statute, 23 Pa.C.S.A. § 3501(a.1) provides:
(a.1) Measuring and determining the increase in
value of nonmarital property. – The increase in value of
any non-marital property acquired pursuant to subsection
(a)(1) and (3) shall be measured from the date of
marriage or later acquisition date to either the date of final
separation or the date as close to the hearing on equitable
distribution as possible, whichever date results in a lesser
increase. Any decrease in value of the non-marital
property of a party shall be offset against any
increase in value of the non-marital property of that
party. However, a decrease in value of the non-marital
property of the party shall not be offset against any
increase in value of the non-marital property of the other
party or against any other marital property subject to
equitable distribution.
23 Pa.C.S.A. § 3501(a.1) (emphasis added).
Here, the marital home was owned by Husband prior to the marriage.
The property, therefore, is nonmarital property. The increase in the value of
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that nonmarital property during the marriage is marital property. See 23
Pa.C.S.A. § 3501(a)(1).3
After apportioning assets and debts, the Master found Husband had a
net equity of $48,266.17, and Wife had a net equity of $15,562.64. Thus,
the total equity was $63,828.81. Although both mortgages are marital
debts, the Master assigned both mortgage debts to Husband, as well as the
increase in value of the marital home.
Using a 50/50 distribution, the Master determined that each party
should receive $31,914.40 ($63,282.81 ÷ 2). Because Wife’s equity was
less than one-third of Husband’s, $15,562.64 as compared to $63,828.81,
the Master recommended that Wife be entitled to an additional $16,351.76
to effect an equal distribution.
Wife filed exceptions to the Master’s use of the negative value of the
marital home to offset the value of the marital property coming to Wife. The
trial court, in disposing of exceptions, agreed with Wife that the “decrease in
value of the nonmarital property of the party shall not be offset against any
increase in value of the nonmarital property of the other party or against
any other marital property subject to equitable division.” 23 Pa.C.S.A. §
3501(a.1). Since the decrease was in Husband’s nonmarital property, as
assigned by the Master, that decrease could not be offset against “any other
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3
Wife’s name was never added to the property deed.
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marital property subject to equitable division.” Id. It could only be offset
against the increase in value of Husband’s nonmarital property.
A trial court has broad discretion when fashioning an award of
equitable distribution. Dalrymple v. Kilishek, 920 A.2d 1275, 1280 (Pa.
Super. 2007). Our standard of review when assessing the propriety of an
equitable distribution order is “whether the trial court abused its discretion
by a misapplication of the law or failure to follow proper legal procedure.”
Smith v. Smith, 904 A.2d 15, 19 (Pa. Super. 2006) (citation omitted). A
finding of an abuse of discretion requires a showing of clear and convincing
evidence. Id.This Court will not find an “abuse of discretion” unless the law
has been “overridden or misapplied or the judgment exercised”
was “manifestly unreasonable, or the result of partiality,
prejudice, bias, or ill will, as shown by the evidence in the
certified record.” Wang v. Feng, 888 A.2d 882, 887 (Pa. Super.
2005). In determining the propriety of an equitable distribution
award, courts must consider the distribution scheme as a whole.
Id. “[W]e measure the circumstances of the case against the
objective of effectuating economic justice between the parties
and achieving a just determination of their property rights.”
Schenk v. Schenk, 880 A.2d 633, 639 (Pa. Super. 2005)
(citation omitted).
Biese v. Biese, 979 A.2d 892, 895 (Pa. Super. 2009). See also Childress
v. Bogosian, 12 A.3d 448 (Pa. Super. 2011).
As the comment to subsection (a.1) explains, the offset language in
the second sentence (highlighted above), “ensures that only the net increase
in value of all of a party’s nonmarital property is considered part of the
marital estate.” 23 Pa.C.S.A. § 3501 - Jt. St. Govt. Comm. Comment –
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2004. To calculate the net increase in the value of nonmarital property, “the
increases in value of a party’s nonmarital assets are offset by the decreases
in value of that party’s nonmarital assets.” Id. (emphasis added). That is
what the trial court did in this case.
We agree with Wife that in order to effect economic justice between
the parties here, the court properly determined Wife should not be
responsible for the mortgage debt associated with Husband’s nonmarital
property. 23 Pa.C.S.A. § 3502. This Court has noted that it is “within the
trial court's discretion to credit marital expenses to one of the parties and
take such credit into account when dividing marital property.” Winters v.
Winters, [512 A.2d 1211, 1216 (Pa. Super. 1986). See also Biese, supra(assigning half of credit card debt to wife was not required by master’s goal
of 50/50 split of the marital estate); Hicks v. Kubit, 758 A.2d 202, 204 (Pa.
Super. 2000) (debt characterization as “marital” is not necessarily
determinative of which party is liable for its satisfaction).
Here, the Master attributed all of the increase in value of the property
(marital asset) and all of the mortgage debt (marital debt) to Husband. The
trial court, in granting Wife’s exception, changed the negative equity in the
home, - $49,858.44, to “0” in Wife’s column, resulting in an additional
distribution of $41,280.98 to Wife.4 In doing so, the court relied on section
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4
The court noted in its order, which amended the Master’s Report, that
assets available for distribution equaled $113,687.25, and that a 50/50
(Footnote Continued Next Page)
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3501(a.1). We agree that this was appropriate under the statute and within
the court’s discretion. See Biese, supra; Winters, supra.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/13/15
_______________________
(Footnote Continued)
distribution resulted in $56,843.62 for each party. Since Wife had already
received a distribution of $15,562.64, she was due an additional
$41,280.98.
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