Johnson v. Johnson

WIEAND, Judge:

David E. Johnson and Pamela K. Johnson were married on August 18, 1966, separated in August, 1983 and divorced on May 24, 1985. The divorce was bifurcated, and after a decree had been entered, hearings were held on the related economic claims. On March 19,1986, the trial court entered a decree distributing fifty-five (55%) percent of the marital property, amounting to $609,435.75, to wife.¹ The balance of $498,629.59 was awarded to husband. The court also awarded wife counsel fees in the amount of five thousand ($5,000.00) dollars. Husband filed post-trial motions, which were denied. He then appealed.

In evaluating an equitable distribution scheme, our scope of review is limited. An appellate court will not reverse an order determining equitable distribution absent an abuse of discretion by the trial court. Diamond v. Diamond, 360 Pa.Super. 101, 105, 519 A.2d 1012, 1014 (1986); Campbell v. Campbell, 357 Pa.Super. 483, 489, 516 A.2d 363, 366 (1986); Morschhauser v. Morschhauser, 357 Pa.Super. 339, 346, 516 A.2d 10, 13 (1986); Bold v. Bold, 358 Pa.Super. 7, 10, 516 A.2d 741, 742 (1986); Ganong v. Ganong, 355 Pa.Super. 483, 490, 513 A.2d 1024, 1028 (1986); Winters v. Winters, 355 Pa.Super. 64, 69, 512 A.2d 1211, 1214 (1986); Brown v. Brown, 352 Pa.Super. 267, 270, 507 A.2d 1223, 1224 (1986); LaBuda v. LaBuda, 349 Pa.Super. 524, 528, 503 A.2d 971, 974 (1986).

‘Under this standard, we do not usurp the hearing court’s duty as factfinder. Rather, we apply the legislative guidelines of the Divorce Code to the record to determine whether or not the hearing court has abused its discretion.’ Barnhart v. Barnhart, 343 Pa.Super. 234, 237, 494 A.2d 443, 444 (1985); Semasek v. Semasek, 331 Pa.Super. 1, 6, 479 A.2d 1047, 1050 (1984). ‘An abuse of discretion is not found lightly, but only upon a showing of clear and convincing evidence____ However, an abuse of discretion will be found by this Court if the trial court failed to follow proper legal procedure or misapplied the law.’ Braderman v. Braderman, 339 Pa.Super. 185, 190, 488 A.2d 613, 615 (1985).

Sergi v. Sergi, 351 Pa.Super. 588, 591, 506 A.2d 928, 930 (1986).

Three years prior to the marriage, husband purchased a flour and animal feed business known as Clinton-dale Mills for $24,000.00. The trial court found that at the time of separation in August, 1983, the value of the business had increased to $600,000.00.² The difference, or $576,000.00, was determined by the court to be marital property subject to equitable distribution. This was proper and in accord with this Court’s decision in Sergi v. Sergi, supra. See: Anthony v. Anthony, 355 Pa.Super. 589, 595, 514 A.2d 91, 94 (1986).

Appellant contends, however, that the trial court committed an abuse of discretion when it gave no weight to “[t]he contribution ... of each party in the acquisition, preservation, depreciation or appreciation of the marital property” as required by Section 401(d)(7) of the Divorce Code.³ We disagree.

Section 401(d) directs that in fashioning a decree of equitable distribution, a hearing court shall consider all relevant factors, including 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.

23 P.S. § 401(d). The record in the instant case discloses that the trial court considered and gave weight to the following: (1) that the marriage was of rather long duration; (2) that it was wife’s first marriage but husband’s second marriage;⁴ (3) that the parties were the same age and in good health; (4) that both parties were protected by adequate medical and retirement benefits; (5) that wife had supported husband with her earnings during the early years of the marriage; (6) that wife had contributed to the accumulation of marital assets as wife and homemaker; (7) that wife’s income as an elementary school teacher was approximately $23,000.00 per year and was not likely to be increased substantially in future years; (8) that husband was self-employed as the owner of Clintondale Mills and, although then drawing a salary of $24,000.00 per year, enjoyed a greater potential than wife for increased earnings and the accumulation of assets; (9) that the parties had enjoyed an upper middle class lifestyle; and (10) that wife required a greater share of marital assets in order to continue to enjoy the lifestyle to which she had become accustomed.

The evidence showed that Clintondale Mills, which had been purchased by husband prior to marriage, was incorporated on November 1, 1978. All stock was thereafter held in husband’s name; he alone managed the business as president of the corporation. Although wife became the nominal secretary/treasurer of the corporation, the evidence is clear that she did not participate actively in the business or in the regular conduct of corporate affairs, nor was she paid a salary. Because of husband’s business acumen and hard work, Clintondale Mills prospered and expanded. As a result, the marital assets also grew in value, and the parties achieved a comfortable lifestyle. The trial court, although it took husband’s contribution to the growth of the business into consideration, concluded that “no weight [should] be given to either party in this regard.” It is this statement, appearing at page 11 of the trial court’s opinion, which the husband-appellant assigns as error.

Section 401(d)(7) requires only that a hearing court be aware of and consider the contribution of each party to the “acquisition, preservation, depreciation or appreciation” of marital property. The “weight” to be given to this consideration, as well as all other considerations, is to be determined primarily in the discretion of the trial court. See: Sergi v. Sergi, supra 351 Pa.Super. at 600, 506 A.2d at 934. In the instant case, the trial court did consider husband’s contribution to the acquisition and appreciation of the marital property but concluded that this fact alone was entitled to no weight. Perhaps, as the author of the concurring opinion concludes, the trial court set off wife’s contribution as a homemaker against husband’s contribution in enhancing the value of the business. Although we may have assigned greater significance to husband’s contribution to the business than did the trial court, it cannot be said that the trial court’s consideration of this factor was an abuse of discretion.

In determining the propriety of an award of counsel fees, we also utilize an abuse of discretion standard of review. Miller v. Miller, 352 Pa.Super. 432, 443, 508 A.2d 550, 556 (1986); Pangallo v. Pangallo, 329 Pa.Super. 25, 31, 477 A.2d 885, 888 (1984); Prozzoly v. Prozzoly, 327 Pa.Super. 326, 331, 475 A.2d 820, 823 (1984); Ruth v. Ruth, 316 Pa.Super. 282, 285, 462 A.2d 1351, 1352-1353 (1983). However, counsel fees are not awarded to either spouse automatically. Diamond v. Diamond, supra, 360 Pa.Superior Ct. at 116, 519 A.2d at 1019. “Actual need must be shown in order to justify an award.” Dech v. Dech, 342 Pa.Super. 17, 23, 492 A.2d 41, 44 (1985), citing Hoover v. Hoover, 288 Pa.Super. 159, 161-162, 431 A.2d 337, 338 (1981). Counsel fees are appropriate when necessary to put the parties “on a par” in defending their rights or in allowing a dependent spouse to maintain or defend an action for divorce. See: Miller v. Miller, supra 352 Pa.Super. at 442, 508 A.2d at 556; Dech v. Dech, supra; Young v. Young, 274 Pa.Super. 298, 302, 418 A.2d 415, 417 (1980).

The record in the instant case fails to disclose any facts to support a finding that an award of counsel fees to wife was necessary to enable her to achieve “par” in protecting her rights in this action. Her counsel fees were in the amount of $16,518.21. She incurred additional expense in the amount of $27,435.20, which was attributable to the hiring of accountants, appraisers and expert witnesses. A request for interim counsel fees was denied during the pendency of the proceedings, and wife thereafter paid the sum of eight thousand ($8,000.00) dollars on account. She subsequently paid an additional sum of eight thousand ($8,000.00) dollars from marital assets. Wife is steadily employed at an annual salary of $23,000.00 and receives, in addition, rental income of one thousand ($1,000.00) dollars per month ($12,000.00 per year). Finally, she will receive $213,206.49 in relatively liquid assets under the decree of equitable distribution, plus annual payments of approximately sixty thousand ($60,000.00) dollars per year for fifteen years. Under these circumstances, wife failed to establish any need for her husband to contribute to the payment of her counsel fees. To award counsel fees when no need existed was an abuse of discretion. Cf. Vajda v. Vajda, 337 Pa.Super. 573, 487 A.2d 409 (1985).

The order of the trial court is modified by eliminating therefrom the award of counsel fees. As so modified, the order determining economic rights is affirmed.

BECK, J., filed a concurring opinion.

1 . This amount was payable as follows:

(1) The sum of $213,206.49, consisting of relatively liquid assets, was payable immediately;

(2) Credit was given for $10,848.17 because of husband’s assumption of notes payable; and

(3) The balance of $385,381.09 was payable in equal monthly installments over a fifteen year period, with interest computed at the rate of ten (10%) percent per annum.

2 . Wife’s evidence was that the business at separation had a value of $725,000.00. Husband did not offer expert testimony regarding the value of the business, but his own testimony placed a value on the business of approximately $209,000.00.

3 . 23 P.S. § 401(d). Act of April 2, 1980, P.L. 63, No. 26, § 401, effective July 1, 1980.

4 . Husband's first wife, together with his children, had been killed in an automobile accident.