Williams, K v. Williams, D. ( 2017 )

J-A27014-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KEITH WILLIAMS IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
DAWN WILLIAMS
Appellant No. 430 EDA 2016
Appeal from the Decree Entered December 29, 2015
In the Court of Common Pleas of Wayne County
Civil Division at No(s): 409-2013-DR
BEFORE: PANELLA, J., LAZARUS, J., and FITZGERALD, J.*
MEMORANDUM BY PANELLA, J. FILED FEBRUARY 13, 2017
Appellant, Dawn Williams (“Wife”), appeals from the decree that
divorced her from Keith Williams (“Husband”). Wife contends that the trial
court erred in applying the parties’ ante nuptial agreement. After careful
review, we affirm.
A detailed factual history is unnecessary given the issues raised by
Wife. By way of summary, Wife purchased the marital home from her father
in May 2008, and the parties began living there immediately, even though
they did not marry until August 6, 2011. The property was titled in Wife’s
name alone, and Wife is identified as the sole borrower on the mortgage. It
is undisputed that Wife intended for the property to remain solely hers, as
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*
Former Justice specially assigned to the Superior Court.
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she desired for it to remain with her family. To further this goal, the parties
entered into an ante nuptial agreement in July 2011. Neither party
challenges the validity or enforceability of this agreement.
Under the agreement, the parties agreed that all property at the time
of marriage would remain the personal property of the respective parties.
Absent any property acquired jointly post-marriage, there would be no
marital property to distribute upon divorce. The sole exception concerned
the marital home.
With respect to the marital home, the agreement provides that the
home will remain Wife’s property, but that Husband’s financial contributions
to the parties’ equity in the home would remain his own personalty. To
effectuate this arrangement, the agreement sets forth a formula for
determining Husband’s share of the equity in the home. Under the formula,
Husband’s down payment and subsequent contributions to the mortgage
payments would be divided by the total down payment and mortgage
payments made by the parties to determine a percentage share. This
percentage would then be multiplied by the appraised market value of the
home at the time of divorce or separation.
The parties separated in June 2013, and Husband filed for divorce in
July 2013. The parties disagreed on the amount due to Husband under the
agreement, and proceeded to litigate their dispute before a divorce master.
After two hearings, the master entered a recommendation that Wife pay
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$98,957.17 to Husband pursuant to the agreement. Wife filed exceptions,
which the trial court denied. The court then entered an order and decree in
divorce. This timely appeal followed.
On appeal, Wife purports to raise three issues with the trial court’s
order. However, upon review, all of Wife’s issues are challenges to the trial
court’s application of the agreement’s formula for calculating the value of
Husband’s equity in the marital home. See Appellant’s Brief, at 20 (“There
appears to be a very precise meeting of the minds of the parties regarding
the ESSA mortgage. Both are responsible for one-half of it.”); 23-24 (“The
Master … errs in ignoring the law and finding entirely in favor of Husband,
giving Husband credit for non-marital mortgage principal reduction.”); 25
(“Wife … maintains that the entire agreement calls for Husband to be
responsible for ONE-HALF of the ESSA mortgage.”).1 Thus, all of Wife’s
issues raise issues of law concerning the interpretation of the ante nuptial
agreement.
We construe ante nuptial agreements in accordance with standard
contract principles, with exceptions not relevant here. See Estate of
Kendall, 982 A.2d 525, 534 (Pa. Super. 2009). Thus, the paramount
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1
Thus, while portions of Wife’s third argument reference principles of
equitable distribution, she concedes that the agreement is controlling on this
issue. Even if she had not conceded this point, we would have concluded
that the agreement explicitly precluded application of equitable
considerations in distributing the property.
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concern is to give effect to the intent of parties. See Raiken v. Mellon, 582
A.2d 11, 13 (Pa. Super. 1990). Consequently, terms in the agreement that
are clear and unambiguous are to be given effect without reference to
matters outside the contract. See id. “[A]bsent fraud, misrepresentation or
duress, spouses should be held to the terms of their agreements.” Lugg v.
Lugg, 64 A.3d 1109, 1112 (Pa.Super.2013) (citations omitted).
The ante nuptial agreement in this matter provides that
Each of the parties hereby agree that all of the property of any
nature real, personal or mixed, wherever situate, belonging to
either party hereto prior to the contemplated marriage, as set
forth on the attached Exhibits A and B, or any property into
which the same may be exchanged, converted, invested or
reinvested from time to time, and interest, income, dividends,
rents and profits that may be received from or with respect to
said property or that may in time accrue, or result in any
manner from increase in value thereon, including any increase in
value due to the labor or efforts of either party shall be and
remain forever his and her separate property respectively and
each party shall, during his or her lifetime, keep and retain sole
ownership, management, control, enjoyment and power of
disposal of such property, free and clear of any claim by the
other at any time. The parties further agree that none of such
property shall be deemed to be marital property as that term is
defined in the Pennsylvania Domestic Relations Act or in the law
of any other jurisdiction, nor shall it be deemed community
property as that term is defined in any community property
jurisdiction.
Agreement, 7/21/11, ¶ 6. The marital home is listed in Exhibit A as Wife’s
property, and is not listed in Exhibit B as Husband’s property. In contrast,
both parties list one-half of the mortgage for the marital residence as a
liability in their respective exhibits.
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Regarding the payment due to Husband upon dissolution of the
marriage for his investment in the marital home, the agreement provides:
Keith Williams will be entitled to be paid a sum of money equal
to a percentage of the then fair market value calculated as
follows:
Keith’s Portion
($42,900 + (Principal Reductions from Mortgage Contributions)
= Keith’s portion;
Dawn’s Portion
($389,296) + (Principal Reduction from Mortgage Contributions)
= Dawn’s portion
Payment to Keith = Keith’s portion ÷ (Dawn’s portion + Keith’s
portion) × the Appraised Market Value.
By way of illustration, assume the Fair Market Value is $500,000
and Keith Williams and Dawn F. Hazlett each contributed
$17,100 in Principal Reduction. Keith’s percentage would be
$60,000 ÷ $466,396 or (12.8646%). Keith Williams would be
entitled to a payment of (12.8646 × $500,000) = $64,323.00.
Receipt of such payment would constitute a full release of any
claim by Keith Williams.
Id., at ¶ 12.
Wife first argues that the trial court failed to properly deduct
Husband’s liability for the mortgage from the calculation. At the conclusion
of her first argument, she asserts that the agreement provides that Husband
is responsible for one-half of the outstanding balance of the mortgage. See
Appellant’s Brief, at 20. However, in her third argument, Wife concedes that
deducting one-half of the mortgage balance from Husband’s payment “is
something the parties likely did not intend.” Id., at 27.
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It is clear that the explicit calculation contained in paragraph 12 of the
agreement does not reference Husband’s mortgage obligation at all.
Furthermore, it is undisputed that Wife is the only borrower listed on the
mortgage, and Husband is not on the deed. The agreement provides in
paragraph 6 that the marital residence is not to be considered marital
property subject to equitable distribution, but rather is to remain Wife’s sole
property.
The only evidence supporting Wife’s position is Husband’s listing of
one-half of the mortgage as a liability in his exhibit. However, even Wife
does not argue that the parties intended to hold Husband liable for one-half
of the mortgage. While exhibit B creates ambiguity in this regard, the
ambiguity is easily resolved through reference to common sense and the
rest of the agreement.
The parties intended for Husband’s financial contributions to the
martial home to be treated as an investment. To that end, he was to receive
his share of the downpayment, $42,900, plus credit for the amount the
mortgage principal was reduced through his contributions. Furthermore, the
agreement provides that Husband is entitled to a proportional share of any
increase in the value of the marital home during the marriage using the
Appraised Market Value term in the formula. Husband does not receive any
credit for his mortgage payments to the extent that they were applied to
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interest. Nor did he ever explicitly agree to be liable for the mortgage on the
marital residence.
In return for this investment, Husband received no ownership rights in
the marital residence. Thus, the agreement treats Husband as a passive
investor in the marital residence, akin to an investor who purchases a minor
position in a publicly traded company. Such an investor owns merely a right
to realize any possible gain or loss from his investment.
Wife’s proposed calculation has no basis in the agreement. As noted,
she concedes that the parties did not intend for Husband to be liable for one-
half of the mortgage. Rather, she argues in her third issue that Husband
should be liable for a proportion of the mortgage equal to the ratio of
Husband’s contributions to Wife’s contributions, or approximately 13%.
However, the agreement does not contain any provision that could arguably
support Wife’s preferred interpretation.
As such, we agree with the trial court that the only reasonable
construction of the agreement does not assign Husband any liability for the
remaining balance of the mortgage. Wife’s argument to the contrary merits
no relief. This disposes of Wife’s first and third issues on appeal.
In the alternative, Wife contends that the trial court erred by including
pre-marital mortgage payment contributions made by Husband in calculating
the payout. However, paragraph 12 provides that Husband “continues to
provide 50% of the monthly mortgage payments” and that “the investment
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of [Husband] will remain as personalty.” (emphasis supplied). Furthermore,
the explicit formula, as set forth above, contains the term “(Principal
Reductions from Mortgage Contributions)” and not “(Principal Reductions
from Marital Mortgage Contributions)”. Finally, Wife does not provide any
logical reason why the parties would have intended the pre-marital
contributions to be treated differently from the contributions made during
marriage. Therefore, we conclude that this argument also merits no relief.
Decree affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/13/2017
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