Wallace, A. v. Wallace, R. ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
AMY WALLACE : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
RICKIE P. WALLACE AND DAVID :
DURKOVIC AND DONNA DURKOVIC :
: No. 1432 EDA 2021
:
APPEAL OF: RICKIE P. WALLACE :
Appeal from the Order Entered June 18, 2021
In the Court of Common Pleas of Wayne County Civil Division at No(s):
2014-30077
BEFORE: OLSON, J., DUBOW, J., and KING, J.
MEMORANDUM BY DUBOW, J.: FILED AUGUST 11, 2022
Rickie P. Wallace (“Husband”) appeals from the June 18, 2021 Order
entered in the Wayne County Court of Common Pleas that, upon remand from
this Court, found, inter alia, that Amy Wallace (“Wife”) did not dissipate
marital property. Upon review, we affirm.
The relevant factual and procedural history is as follows. Husband and
Wife married in 1993. During the marriage, the parties jointly owned Wallace
Tractor and Equipment, Inc. (“Wallace Tractor”), which sold and serviced
tractors and construction equipment, and was operated on land owned by
Wife’s parents (collectively, “the Durkovics”), who are joined in this case as
indispensable parties. The Durkovics also operated a self-storage business on
the property named Mt. Cobb Self-Storage. During the marriage, Wife
assumed responsibility for managing her parent’s storage business and
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incorporated a new entity, Double DW, to collect rental fees from storage
customers. Wife was the only corporate officer listed in the articles of
incorporation and the collected rental fees amounted to approximately $5,700
per month. On or around January 1, 2010, the Durkovics entered into a lease
purchase agreement with Double DW. Under the agreement, the Durkovics
leased the property where Wallace Tractor and the storage business were
located to Double DW. In return, Double DW agreed to pay the Durkovics
$3,794.75 per month for 20 years, plus taxes and insurance on the property.
At the end of the lease period, Double DW would own the property. The lease
purchase agreement contained confession of judgment provisions and
specifically provided that all payments would be retained by the property
owners, i.e., the Durkovics, if Double DW did not purchase the property in
accordance with the terms of the agreement, including if Double DW defaulted
on monthly payments.
From 2010 to 2015, Double DW complied with monthly payments.
During this time, however, Wallace Tractor began to have poor financial
performance, and Double DW loaned money to Wallace Tractor to keep it
afloat. Wife filed for divorce in February 2014. Husband relocated to Florida
for several months in 2015 and left Wife to deal with the businesses, which
were continuing to have financial issues. In January 2016, Double DW ceased
making monthly payments on the lease purchase agreement. On March 28,
2016, Wife entered into a termination of the lease purchase agreement with
the Durkovics.
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Husband and Wife were divorced on October 13, 2018, and the equitable
distribution order determined that Husband did not have an interest in Double
DW and, therefore, it was not marital property. On appeal, this Court
concluded that Double DW was, in fact, marital property, and remanded for
the trial court to determine whether Wife dissipated Husband’s interest in
Double DW and what effect, if any, such finding has on the equitable
distribution of the marital estate. Upon remand, the trial court found that
Wife did not dissipate marital property, added Double DW back into the marital
estate for equitable distribution, and ordered Husband to receive $8,395.30
in rental payments received by Double DW after Wife and the Durkovics
terminated the lease purchase agreement.
Husband timely appealed. Husband filed a Pa.R.A.P 1925(b) statement.
The trial court relied on its June 18, 2021 Opinion and Order in lieu of a Rule
1925(a) opinion.
Husband raises a sole issue for our review:
Whether the trial court abused its discretion and/or erred, as a
matter of law, in determining that Wife did not dissipate a marital
asset when she unilaterally terminated the Lease Purchase
Agreement held by Double DW without Appellant’s knowledge or
consent, thereby allowing valuable real estate and a profitable
business to be returned to her parents without consideration or it
being factored in for purposes of equitable distribution?
Husband’s Br. at 2.
It is well established that our standard of review for a challenge to an
equitable distribution order is limited, and this Court will not reverse an award
of equitable distribution absent an abuse of discretion. Lee v. Lee, 978 A.2d
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380, 382 (Pa. Super. 2009). “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[.]” Id. (citation omitted). “An abuse
of discretion is not found lightly, but only upon a showing of clear and
convincing evidence” that the trial court misapplied the law or failed to follow
proper legal procedure. Smith v. Smith, 904 A.2d 15, 18 (Pa. Super. 2006)
(citation omitted). In addition, “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 382 (citation omitted).
In fashioning an equitable distribution award, the trial court is required
to consider, at the very least, the enumerated factors set forth in 23 Pa.C.S.
§ 3502(a)(1)-(11). Wang v. Feng, 888 A.2d 882, 888 (Pa. Super. 2005).
However, this court has noted that, “[t]here is no simple formula by which to
divide marital property. The method of distribution derives from the facts of
the individual case.” Id. (citations omitted). “The list of factors [enumerated
in Section 3502(a)] serves as a guideline for consideration, although the list
is neither exhaustive nor specific as to the weight to be given the various
factors. Thus, the court has flexibility of method and concomitantly assumes
responsibility in rendering its decisions.” Id. (citations omitted). “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) (citation omitted). This Court “do[es] not evaluate the propriety
of the distribution order upon our agreement with the court’s actions nor do
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we find a basis for reversal in the court’s application of a single factor.” Id.(citations omitted). Rather, it is well-settled that we “must consider the
distribution scheme as a whole.” Biese v. Biese, 979 A.2d 892, 895 (Pa.
Super. 2009) (citation omitted). “We 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.” Id. (citation omitted).
Relevant to this case, the Divorce Code states that “the court shall
equitably divide, distribute or assign, in kind or otherwise, the marital property
between the parties without regard to marital misconduct in such percentages
and in such manner as the court deems just after considering all relevant
factors,” including:
(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.
23 Pa.C.S. § 3502(a)(7).
Instantly, Husband avers that the trial court abused its discretion when
it found that Wife did not dissipate the marital asset Double DW. Husband’s
Br. at 9. Husband argues that the trial court should have considered that Wife
terminated the lease purchase agreement without his knowledge or consent,
thereby depriving Husband of a substantial economic benefit in the form of
valuable real estate, a profitable business, and loss of the $272,222 that the
couple had previously paid in principal and interest towards the lease purchase
agreement. Id. at 8. Husband asserts that those assets should have been
included in the equitable distribution scheme but, instead, Wife returned those
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assets to her parents, the Durkovics. Id. at 9. Essentially, Husband conflates
the value of the Double DW asset with the value of the real property that was
the subject of the lease purchase agreement and argues that Wife dissipated
marital assets when Double DW ceased payments on the lease purchase
agreement.
Here, the trial court credited Wife’s testimony that Wallace Tractor had
severe financial difficulties between 2015 and 2016 and that she attempted to
preserve the Double DW asset while also attempting to preserve Wallace
Tractor, another marital asset, by comingling funds and making monetary
advances to Wallace Tractor until both were no longer financially solvent. The
trial court opined:
This [c]ourt finds that Wife did not dissipate the Double DW asset.
Rather, she attempted to preserve the Double DW asset while also
attempting to preserve the parties’ marital asset of Wallace
Tractor []. At the Master’s Hearing, Wife testified that instead of
having enough money in the Double DW checking account to pay
the rent for her lease-purchase agreement, she comingled the
funds and made advances into Wallace Tractor’s checking
account. Further, she testified that, at times, when there was
monthly rent [income] in excess of the lease-purchase agreement
she utilized those funds to sustain Wallace Tractor. Wife also
testified that Wallace Tractor had severe financial difficulties
between 2015 and 2016 and Double DW either wrote a check or
swiped its debit card into Wallace Tractor’s account.
Opinion and Order, dated 6/18/21, at 1-2 (internal citations omitted). In
contrast, the trial court found that Husband did not preserve or attempt to
preserve either the Double DW or Wallace Tractor asset:
At no time did Husband preserve or attempt to preserve either
Double DW or Wallace Tractor especially when Wallace Tractor
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was experiencing financial difficulties. Rather, Husband lived in
Florida for a majority of this time. Husband was President of
Wallace Tractor and he claimed that he was unaware of the
financial situation because Wife’s main role was selling and
bookkeeping. Husband mainly handled the sales and service and
oversight aspect of the business. Also, Husband testified that
despite his role as the President of the company, he was not aware
of the extent of financial turmoil facing Wallace Tractor.
Id. at 2. Our review of the record supports the trial court’s findings. We
decline to usurp the trial court’s credibility determinations or reweigh the
evidence. Accordingly, we find no abuse of discretion.
Husband cites Naddeo v. Naddeo, 626 A.2d 608 (Pa. Super. 1993),
Barnhart v. Barnhart, 494 A.2d 443 (Pa. Super. 1985), and Nagle v. Nagle,
799 A.2d 812 (Pa. Super. 2002), to support his argument that Wife dissipated
a marital asset. However, we remain unpersuaded as these cases are easily
distinguished from the instant case.
In Nadeo, this Court concluded that a husband dissipated a marital
asset when husband voluntarily dissolved his profitable law firm partnership
of eighteen years after he separated from his wife and shortly before an
equitable distribution hearing. 626 A.2d at 612. In Barnhart, this Court
determined that the full value of husband’s pension was marital property
subject to equitable distribution, despite the fact husband withdrew all the
funds to pay for living expenses and the pension did not exist at the time the
divorce complaint was filed. 494 A.2d at 445-46. In Nagle, this court found
that a husband dissipated marital funds when he transferred a majority stock
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ownership interest in a thriving corporation to his son for no consideration
approximately three months after his Wife filed for divorce. 799 A.2d at 814.
Instantly, unlike the spouses in Nadeo, Barnhadt, and Nagle, Wife
used funds from Double DW to pay debts incurred by another marital asset,
Wallace Tractor, in an attempt preserve both marital assets. Further, unlike
the instant case, none of the cited cases involve the termination of a lease
purchase agreement. Here, the lease purchase agreement contained
confession of judgment provisions and specifically provided that all payments
would be retained by the property owners if the property was not purchased
in accordance with the terms of the agreement. More than two years after
the commencement of this divorce action, Double DW was unable to timely
make all required lease-related payments, prompting the Durkovics to
terminate the lease purchase agreement and retain the leased property.
Husband fails to recognize that the property that was the subject of the lease
purchase agreement was never actually owned by Husband and Wife.
In conclusion, the record supports the trial court’s finding that Wife did
not dissipate marital assets and, on the contrary, attempted to preserve
marital assets. We decline to usurp the trial court’s credibility determinations
or reweigh the evidence. Accordingly, we find no abuse of discretion.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/11/2022
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