McCleary, L. v. McCleary, R. ( 2017 )

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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37
LAURA J. MCCLEARY, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
ROGER L. MCCLEARY, :
:
Appellee : No. 1457 WDA 2016
Appeal from the Order Entered September 27, 2016
in the Court of Common Pleas of Clarion County
Civil Division at No(s): 549 C.D. 2012
BEFORE: BENDER, P.J.E., BOWES, and STRASSBURGER,* JJ.
MEMORANDUM BY STRASSBURGER, J.: FILED SEPTEMBER 27, 2017
Laura J. McCleary (Wife) appeals from the order entered September
27, 2016, which decreed that she and Roger L. McCleary (Husband) are
divorced, and inter alia, ordered equitable distribution of the marital
property, denied Wife’s request for counsel fees, and directed the parties to
cash savings bonds for the benefit of their minor son. We affirm in part,
vacate in part, and remand for proceedings consistent with this
memorandum.
Wife and Husband married in 2005 and separated in 2012. This was
the first marriage for Wife, age 44. Husband is 57 and had two previous
marriages. Wife and Husband resided together at their marital residence in
Shippenville, Pennsylvania until their separation in 2012. During their
*Retired Senior Judge assigned to the Superior Court.
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marriage, Wife and Husband had one child, W.M. (Son), born in 2008. The
parties share 50/50 custody of Son.
Wife filed a complaint in divorce on June 7, 2012, seeking equitable
distribution of the parties’ marital assets, alimony, alimony pendente lite,
counsel fees, costs, and expenses. After three hearings before a master, the
master issued a report on May 5, 2016, which recommended that Husband
receive marital equity of $50,230.34, or 54% of the total, and Wife receive
$42,737.37, or 46% of the total. Master’s Report, 5/5/2016, at 1. Although
Husband received a larger portion of the marital assets, the master also
recommended that Husband take on almost all of the parties’ marital debt,
including the mortgage and home equity loan on the residence where Wife
resides. Id. at 18-20.
The parties have a significant disparity in their incomes. Husband,
who has a high school education, has been employed at Columbia Gas since
1991. At the time of the final hearing before the master, his employment as
a plant service specialist yielded a net monthly income of $3,958.62. Wife,
who has an associate’s degree from Dubois Business College, was employed
for 20 years as an administrative assistant to the president of an insurance
company, until she was laid off in 2014. Wife’s net monthly income while
she was employed in 2014 was $1,275.26. In February or March 2015, Wife
began employment as a self-employed house cleaner, earning $842.36 a
month in gross income. The master determined that Wife has failed to
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locate “appropriate employment fitting her education and experience” and
has the capacity to earn a net monthly income of $1,275.26. Master’s
Report, 5/5/2016, at 4. Nevertheless, the master acknowledged that even if
Wife finds appropriate employment, Husband’s income greatly exceeds
Wife’s earning capacity, and she has a more limited ability to acquire new
assets.1 Id. at 17-18, 23.
Regarding Wife’s request for counsel fees and expenses, the master
recommended the following.
Wife has requested counsel fees and expenses in this matter.
Husband does not have the ability to pay for Wife’s counsel fees
given the proposed distribution and being responsible for
practically all of the outstanding marital debt. Husband also has
substantial attorney’s fees. Wife will have sufficient resources
given the proposed distribution to pay for her own attorney’s
fees. Neither of the parties objected to the counsel fees, their
reasonableness or the value of the services. Counsel fees should
not be awarded as there is no need.
Husband shall pay the [m]aster’s fee and [c]ourt reporter fees
related to this proceeding. His superior income, financial assets
and ability to acquire assets in the future allow him to best carry
the burden of these costs.
Master’s Report, 5/5/2016, at 25.
1
The master recommended denial of Wife’s request for alimony, finding,
inter alia, that Wife is capable of self-support through appropriate
employment and that she will have sufficient resources to maintain and
meet her needs as she did prior to the parties’ relatively short marriage,
especially since she will not be responsible for the mortgage or home equity
loan for the home where she resides. The master also determined that,
notwithstanding Husband’s larger salary and receipt of most of the marital
assets, Husband cannot afford to pay alimony due to his responsibility for
the vast majority of the marital debt. Id. at 24.
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The master also noted that Wife is custodian for an already-existing
bank account at Clarion County Community Bank. The master deemed this
account to be non-marital property, as Son is a beneficiary of this account
under the Pennsylvania Uniform Transfers to Minors Act (PUTMA), 20 Pa.C.S.
§§ 5301–5310. The master found that Wife and Son jointly own savings
bonds valued at $2,000, which were a gift to Son, but the savings bonds are
currently in Husband’s possession. Master’s Report, 5/5/2016, at 13. The
master recommended that the savings bonds “be cashed and deposited into
the Clarion County Community Bank account under [PUTMA].” Id. at 20.
Wife timely filed numerous exceptions to the recommendation of the
master, and on August 31, 2016, the trial court issued an opinion denying all
of the Wife’s exceptions, except one not at issue on appeal, and entered an
order modifying the master’s recommendation consistent with its opinion.
On the same date, the trial court entered a decree in divorce. Wife timely
filed a notice of appeal and concise statement of errors complained of on
appeal. Wife sets forth two 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
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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,
[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 asks us to determine whether the trial court abused
its discretion by denying her request for counsel fees.2 The trial court stated
the following in denying Wife’s request.
Wife’s argument in support of this exception consists primarily of
an assertion that Husband’s superior financial position entitles
her to the payment of attorney[s’] fees. The master reasonably
found that Wife did not present a showing of need, which is the
relevant inquiry as to counsel fees, rather than solely Husband’s
ability to pay. Moreover, the court’s review of the record and
master’s report supports the master’s conclusion that Husband
should not have to pay Wife’s counsel fees, which significantly
exceed his own, due to his already existing obligation to pay his
own attorney’s fees and all of the master’s costs, as well as
2
The master determined that Wife’s attorneys’ fees totaled $30,186.18 and
Husband’s totaled $14,959.38. Master’s Report, 5/5/2016, at 14. Neither
party objected to the other’s fees as unreasonable. Id.
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Wife’s wrongdoing in perpetrating an act of domestic violence
upon Husband. Therefore, this exception will be denied.
Trial Court Opinion and Order, 8/31/2016, at 3 (unnecessary capitalization
omitted; references to parties altered).
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
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).
We have held “[t]he simple fact that one spouse earns more than the
other does not automatically entitle the dependent spouse to receive counsel
fees or expenses. Rather, there must be a showing that the spouse who
earns less needs the relief in order to adequately defend his or her rights.”
Nemoto v. Nemoto, 620 A.2d 1216, 1222 (Pa. Super. 1993) (citation
omitted). The trial court may consider the parties’ improved financial
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position after the equitable distribution award, even if the spouses still have
a significant disparity in income. Ganong v. Ganong, 513 A.2d 1024, 1029
(Pa. Super. 1986) (affirming denial of counsel fees despite three to one
income disparity between the parties).
Wife argues that she demonstrated sufficient need for assignment of
her counsel fees to Husband due to the disparity in the parties’ incomes,
noting the master’s determination that Husband was better suited to pay the
costs of the master and court reporter based upon his “superior income,
financial assets, and ability to acquire assets in the future….” Id. at 13
(citing Master’s Report, 5/5/2015, at 25). She also points to her testimony
regarding her financial inability to pay her own health insurance, her need to
obtain a cash advance on two credit cards to pay $2,100 towards her
attorneys’ fees and for money to live, and her eligibility for assistance to pay
her utilities. Wife’s Brief at 12-13. Wife argues that the assets she obtained
through equitable distribution are mostly not liquid, whereas Husband has
liquid assets to draw upon. Id. Finally, Wife asserts that it was improper for
the trial court to have considered the domestic violence Wife perpetrated
against Husband when affirming the master’s recommendation to deny
Wife’s request for counsel fees.3 Id. at 13.
3
Wife also asserts one other argument that we dispose of here. She claims
baldly that she is entitled to attorneys’ fees because Husband protracted the
litigation by denying the existence of a defined benefit plan up until the last
day of testimony. Id. A party to an equitable distribution action may be
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The issue of whether Wife is entitled to counsel fees is a close call. We
recognize, as the master did, that even if Wife works to her full capacity, she
has a limited ability to acquire new assets, and Husband’s income still
greatly exceeds Wife’s earning capacity. Additionally, while the equitable
distribution award gives Wife certain assets, as she points out, most of these
assets are not liquid. The facts suggest that the parties may not be “on a
‘par’ with one another as to cash available for counsel fees….” Litmans v.
Litmans, 673 A.2d 382, 390–91 (Pa. Super. 1996) (citing Perlberger v.
Perlberger, 626 A.2d 1186 (Pa. Super. 1993)).
On the other hand, the master and the trial court determined that
Husband does not have the ability to pay Wife’s counsel fees on top of his
own because Husband is burdened with almost all of the marital debt and
other costs of litigation. Furthermore, although Wife argues that her
financial need to be relieved of counsel fees is demonstrated by her
awarded counsel fees when another party engages in dilatory, obdurate, or
vexatious conduct during the pendency of a matter. Verholek v. Verholek,
741 A.2d 792, 799 (Pa. Super. 1999) (citing 42 Pa.C.S. § 2503(7)).
However, Wife did not include this issue in her exceptions to the master’s
report. See Wife’s Exceptions to Master’s Report, 5/25/2016, at ¶ 11
(alleging the denial of counsel fees was improper because Wife established
need and Husband’s ability to pay). Because it was neither presented to nor
addressed by the trial court, Wife has waived this theory. See Nagle v.
Nagle, 799 A.2d 812, 821 (Pa. Super. 2002) (holding that a party waived
his claim because his exceptions presented a different argument to the trial
court). Even if Wife had preserved her objection to the denial of counsel
fees based on this theory, the citations Wife provides to the record, without
more, do not compel the conclusion that husband engaged in dilatory,
obdurate, or vexatious conduct.
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incurrence of post-separation credit card debt, the master specifically found
“Wife’s testimony that after separation she was required to cash in her IRA,
refinance her vehicle and incur credit card debt to live [to] not [be]
credible.” Master’s Award, 5/5/2016, at 6 (emphasis added).
Specifically, the master assigned an earning capacity to Wife of
$1,275.26, and determined that prior to the parties’ marriage, Wife was able
to meet her reasonable needs, including paying the mortgage on her
residence, with income of $1,275.26 a month. Id. In 2013, Wife refinanced
her vehicle and took out a loan from her life insurance policy despite
receiving $1,275.26 a month in income from her employment plus child
support, and not being responsible for the mortgage because Husband was
paying it. Id. In 2014 and 2015, although Wife had been laid off, she was
still receiving other sources of income ($1,275.26 a month in salary for part
of 2014, unemployment compensation in 2014, $842.36 a month in salary
starting in 2015, and child and spousal support in both years in the amounts
of $428.06 and $566.00 per month, respectively), and Husband was paying
almost all of the marital debt, including the mortgage on Wife’s residence.
Id. at 6-7. The master determined Wife could meet her reasonable
expenses without receiving $23,235.00 from her IRA, which was more than
she earned in a year when she had been employed at the insurance
company. Id. at 7. He also found the second distribution from her IRA in
the amount of $2,800 and loans from her credit card in the amount of
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$4741.10 to be unnecessary. Id. at 7. Additionally, in 2015, Wife had to
pay $9,959.21 to Husband in restitution for his medical bills caused by her
violence towards him, which was not a part of Wife’s ordinary living
expenses. Id.
Thus, there are competing considerations in this case regarding the
factors described in Teodorski, and if the trial court had confined its
analysis to these factors, we would be constrained to conclude that the trial
court acted within its discretion in denying Wife’s request for counsel fees.
However, an examination of the trial court’s decision plainly shows that the
trial court impermissibly considered Wife’s domestic violence against
Husband when ruling upon Wife’s counsel fee request. As Wife correctly
observes, unlike the statutory alimony factors which explicitly list marital
misconduct as a factor the trial court may consider, the statutory provision
regarding assignment of counsel fees does not mention marital misconduct.
Compare 23 Pa.C.S. § 3701(b)(14) with 23 Pa.C.S. § 3702. Furthermore,
the cases construing the Divorce Code have not listed wrongdoing against
another party as a factor for consideration. See, e.g., Teodorski, 857 A.2d
at 201. In fact, this Court has stated that “[t]he purpose of an award of
counsel fees is not to punish one spouse [or] to reward the other.” Hoover
v. Hoover, 431 A.2d 337, 338 (Pa. Super. 1981). Therefore, we conclude
that the trial court committed reversible error in basing its counsel fee
determination in part upon an impermissible factor.
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In Wife’s second issue, she asks us to decide whether the trial court
abused its discretion by directing that the savings bonds held jointly
between Wife and Son be cashed and deposited into the Clarion County
Community Bank savings account, which designated Son as a beneficiary
under PUTMA.
In denying Wife’s exception, the trial court stated that
[t]he record supports the conclusion that the master directed
that these savings bonds be removed from Wife’s name and
deposited in [Son’s] name only so as to remove the possibility
that Wife could cash the bonds out for her own benefit and
disrupt the equitable distribution scheme crafted by the master.
In the absence of any legal authority as to why this is improper,
the court finds this conclusion reasonable, and will deny this
exception.
Trial Court Opinion and Order, 8/31/2016, at 3 (unnecessary capitalization
omitted; references to parties altered).
Wife has failed to develop any meaningful argument on appeal as to
why the trial court’s ruling was an abuse of discretion. Not only did Wife’s
exception to the master’s recommendation regarding the savings bond not
contain any legal authority, other than noting that the bonds had not
matured, Wife’s exception was devoid of analysis as to why the master
allegedly erred. See Wife’s Exceptions to Master’s Report, 5/25/2016, at
¶ 16. In her brief, Wife faults the trial court for not making any findings
regarding the financial impact of cashing the bonds, but Wife did not present
evidence on this issue. The only testimony regarding the bonds comes from
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Husband, who testified that he estimated their worth to be approximately
$2,000, that Wife’s relatives gifted the bonds to Son, that the names of Wife
and Son are on the bonds, and that the bond certificates are located in
Husband’s filing cabinet. Master’s Report, 5/5/2016, at 13 (citing N.T.,
11/17/2015, at 149-50). Wife also alludes to the possibility that the bonds
could be Son’s property under PUTMA and exempt from equitable
distribution, see Wife’s Brief at 15 (“[Wife] submits the savings bonds could
very well meet the requirements of [PUTMA] and therefore, be the minor’s
property and not subject to the trial court’s determination in the equitable
distribution scheme.”), but Wife fails to set forth the requirements of PUTMA
or apply the requirements to the bonds at issue. Finally, although Wife
notes correctly that Husband has possession of the bonds, thereby limiting
Wife’s ability to cash them, Wife fails to convince us that the trial court’s
direction to cash the bonds to ensure that Son receives them was outside of
its discretion. Accordingly, Wife’s second issue does not merit relief.
Based on the foregoing, we vacate the portion of the trial court’s order
denying Wife’s request for counsel fees and remand for the trial court to re-
evaluate Wife’s request for counsel fees pursuant to the factors described in
Teodorski without consideration of her marital misconduct against
Husband. Because Wife has failed to convince us that the trial court abused
its discretion in adopting the recommendations of the master regarding
cashing of the bonds, we affirm that portion of the trial court’s order.
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Order affirmed in part and vacated in part. Case remanded to the trial
court for proceedings consistent with this memorandum. Jurisdiction
relinquished.
PJE Bender joins.
Judge Bowes files a dissenting statement.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/27/2017
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