Bacchetta v. Bacchetta

OPINION OF THE COURT

ROBERTS, Justice.

This is an action for divorce governed by Pennsylvania’s new Divorce Code, Act of April 2, 1980, P.L. 63, § 101 et seq., 23 P.S. § 101 et seq. (Supp.1981) (effective July 1, 1980). The Court of Common Pleas of Chester County refused the request of appellant Lena Troiani Bacchetta, pursuant to section 401(d) of the Code, for equitable distribution of property acquired before the Code’s effective date on the belief that the requested distribution would unconstitutionally deprive appellee Vincent Louis Bacchetta of his property rights. Upon application of appellant, this Court assumed plenary jurisdiction. We conclude that the Legislature’s clear direction that all property acquired during the marriage of the parties shall be subject to the equitable distribution provision of the Divorce Code is a constitutionally permissible exercise of the Legislature’s authority to regulate the marital relationship. Hence we reverse and remand for proceedings consistent with this opinion.^*

I

The language of the Divorce Code makes clear that in actions governed by the Code all “provisions of the act,” including those relating to the equitable distribution of marital property, shall apply.¹

“Marital property” subject to equitable distribution includes “all property acquired by either party during the marriage.” 23 P.S. § 401(e). There is no basis in the statute to qualify this legislative mandate by restricting the applicability of the equitable distribution requirement to only that marital property acquired after July 1, 1980, the effective date of the Code. Indeed, of the seven specific exceptions to the equitable distribution provision, none demonstrates the slightest legislative intention that the date of acquisition during marriage shall be at all relevant.²

Moreover, the stated purpose of the new Divorce Code is to deal effectively with the “realities of the matrimonial experience” by giving “primary consideration to the welfare of the family,” “mitigating] the harm to spouses and their children caused by the legal dissolution of the marriage,” and effectuating “economic justice” as well as “a fair and just determination and settlement of . . . property rights.” 23 P.S. § 102(a). Where, as here and in most cases for years to come, the parties were married before the enactment of the Divorce Code, it would be unreasonable to interpret the Divorce Code as providing for equitable distribution of only that property acquired after the Code’s effective date. Such an interpretation would impose the unmanageable burden on courts and litigants of determining which properties were acquired before, and which after, the effective date of the Code. Such an interpretation would also substantially deny the benefits of the Divorce Code to spouses in marriages in existence at the time of the Code’s enactment, thereby prolonging for at least a generation the very inequity the Legislature sought to remedy. In view of the stated purposes of the Code, it must be concluded that the Legislature’s definition of marital property as “all property acquired by either party during the marriage” includes property acquired before the effective date of the Code.

II

The trial court properly recognized that the equitable distribution provision of the Divorce Code applies to all property acquired during the marriage without regard to the Code’s effective date. However, the trial court erroneously held that, under Willcox v. Penn Mutual Life Insurance Co., 357 Pa. 581, 55 A.2d 521 (1947), such an application of the equitable distribution provision is unconstitutional.

Willcox considered the constitutionality of those provisions of the Community Property Law of 1947 designed to confer upon Pennsylvania spouses a federal income tax advantage similar to that enjoyed in states which already had community property laws. The Community Property Law deemed the income from properties acquired and owned by one spouse prior to the Law’s effective date to be the common property of both spouses.³ The statute applied to all marriages, and automatically bestowed upon each spouse an “undivided one-half interest” in income from property owned separately by the other spouse. This Court concluded that this automatic bestowal of a one-half interest in separate property of another was an unconstitutional deprivation of property, in violation of due process.

In enacting the equitable distribution provision of the Divorce Code, the Legislature sought to accomplish far different objectives than were sought in enacting the Community Property Law. Prior to the enactment of the Divorce Code, in many marriages a nonworking spouse contributed years of service to the family, but did not realize any significant economic gain. Thus, upon divorce, nonworking spouses, who frequently had no marketable skills, were left with few, if any assets of their own and faced the risk of becoming public charges. By providing for the distribution of property acquired during the marriage, the Divorce Code permits the correction of the economic injustices which often arose under former law and allows nonworking spouses to become self-supporting with the least financial hardship possible.

The objective of providing for orderly transition upon the dissolution of marriages is manifestly within the Legislature’s broad control over the marital relationship:

“Marriage, as creating the most important relation in life, as having more to do with the morals and civilization of a people than any other institution, has always been subject to the control of the legislature. That body prescribes the age at which parties may contract to marry, the procedure or form essential to constitute marriage, the duties and obligations it creates, its effects upon the property rights of both, present and prospective, and the acts which may constitute grounds for its dissolution.”

Maynard v. Hill, 125 U.S. 190, 205, 8 S.Ct. 723, 726, 31 L.Ed. 654 (1888). As Willcox itself recognized, it is within the Legislature’s prerogative in exercising the police power to provide for the distribution of property upon divorce. See 357 Pa. at 593, 55 A.2d at 527.

“ ‘[Neither] property rights nor contract rights are absolute .... Equally fundamental with the private right is that of the public to regulate it in the common interest.’ ” PruneYard Shopping Center v. Robins, 447 U.S. 74, 84, 100 S.Ct. 2035, 2042, 64 L.Ed.2d 741 (1980), quoting Nebbia v. New York, 291 U.S. 502, 523, 54 S.Ct. 505, 510-11, 78 L.Ed. 940 (1934). That public right, the “police power,”

“is one of the ‘most essential powers of government . . . . ’ Hadacheck v. Sebastian, 239 U.S. 394, 410, 36 S.Ct. 143, 145, 60 L.Ed. 348 (1915). * * * The police power is fundamental because it enables ‘civil society’ to respond in an appropriate and effective fashion to changing political, economic, and social circumstances, and thus to maintain its vitality and order. See, e.g., Mugler v. Kansas, 123 U.S. 623, 668, 8 S.Ct. 273, 301, 31 L.Ed. 205 (1887). ‘The police power of the state [must therefore be] ... as comprehensive as the demands of society require under the circumstances.’ [Commonwealth v. Barnes & Tucker, 472 Pa. 115, 126, 371 A.2d 461, 467 (1977) (Barnes & Tucker II).] * * * Indeed, it is the state’s least limitable power. See Hadacheck v. Sebastian, supra, at 410, 36 S.Ct. at 145.”

National Wood Preservers, Inc. v. Commonwealth of Pennsylvania, Dep’t of Environmental Resources, 489 Pa. 221, 231, 414 A.2d 37, 42 (footnote omitted), appeal dismissed for want of substantial federal question, 449 U.S. 803, 101 S.Ct. 47, 66 L.Ed.2d 7 (1980).

Due process requires that an exercise of the police power “ ‘shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the objective sought to be [obtained.]’ ” Prune-Yard Shopping Center v. Robins, supra, 447 U.S. at 84, 100 S.Ct. at 2042, quoting Nebbia v. New York, supra, 291 U.S. at 525, 54 S.Ct. at 511. Accord, National Wood Preservers, Inc. v. Commonwealth of Pennsylvania, Dep’t of Environmental Resources, supra, 489 Pa. at 232-33, 414 A.2d at 43; DePaul v. Kauffman, 441 Pa. 386, 394, 272 A.2d 500, 504 (1971). Here, the means selected by the Legislature to mitigate the economic harms upon divorce unquestionably withstand constitutional scrutiny.

As in other jurisdictions, equitable distribution occurs only upon divorce, when the need for economic assistance to the spouse with lesser resources is real and immediate. See Kujawinski v. Kujawinski, 71 Ill.2d 563, 17 Ill.Dec. 801, 376 N.E.2d 1382 (1978); Fournier v. Fournier, 376 A.2d 100 (Me.1977); Rothman v. Rothman, 65 N.J. 219, 320 A.2d 496 (1974). The Code mandates that marital property be distributed “in such proportions as the court deems just after considering all relevant factors.” 23 P.S. § 401(d). As the Supreme Court of New Jersey has observed, such a court-order distribution “must by its terms be ‘equitable.’ ” Rothman v. Rothman, supra, 65 N.J. at 230, 320 A.2d at 502. Specifically excluded from property subject to distribution is that property which a party has “sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the time proceedings for the divorce are commenced.” 23 P.S. § 401(e)(5). See also id. at § 401(e)(7) (property excluded to extent encumbered in good faith for value).

To aid the court in the exercise of its equitable discretion, the Legislature has provided ten specific factors for the court’s consideration:

“(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)(1)-(10). A party claiming that the court should take into account one of the above factors must of course establish the relevance of the factor to the particular case. And in exercising its discretion, the court is required to set forth the “reason or reasons for the distribution ordered.” 23 P.S. § 404. This provision not only serves to enhance the rationality of decisionmaking but also permits effective appellate review. Cf. Commonwealth v. Riggins, 474 Pa. 115, 377 A.2d 140 (1977) (court required to articulate reasons for sentence). Thus, equitable distribution of property acquired during the marriage occurs only upon divorce, only in cases where it is justified, and only in amounts warranted by the facts.

Because this effective, carefully tailored provision unquestionably applies to marital property acquired before the Code’s effective date, and because such an application is constitutional, the order of the Court of Common Pleas of Chester County is reversed and the record remanded to the trial court for proceedings consistent with this opinion.⁴

Order reversed and record remanded.

NIX, J., files a dissenting opinion. FLAHERTY, J., files a dissenting opinion in which LARSEN, J., joins.

* This case was reassigned to this writer on April 26, 1982.

1 . Section 103 of the Code provides:

“The provisions of this act shall apply to all cases, whether the cause for divorce or annulment arose prior or subsequent to enactment of this act. The provisions of this act shall not affect any suit or action pending, but the same may be proceeded with and concluded either under the laws in existence when such suit or action was instituted, notwithstanding the repeal of such laws by this act, or, upon application granted, under the provisions of this act. The provisions of this act shall not apply to any case in which a decree has been rendered prior to the effective date of the act.”

23 P.S. § 103.

2 . Section 401 exempts from “marital property”:

“(1) Property acquired in exchange for property acquired prior to the marriage except for the increase in value during the marriage.

(2) Property excluded by valid agreement of the parties entered into before, during or after the marriage.

(3) Property acquired by gift, bequest, devise or descent except for the increase in value during the marriage.

(4) Property acquired after separation until the date of divorce, provided however, if the parties separate and reconcile, all property acquired subsequent to the final separation until their divorce.

(5) Property which a party has sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the time proceedings for the divorce are commenced.

(6) Veterans’ benefits exempt from attachment, levy or seizure pursuant to [38 U.S.C. § 3101] except for those benefits received by a veteran where such veteran has waived a portion of his military retirement pay in order to receive Veteran’s Compensation.

(7) Property to the extent to which such property has been mortgaged or otherwise encumbered in good faith for value, prior to the time proceedings for the divorce are commenced.”

23 P.S. §§ 401(e)(l)-(7).

3 . In a community property state, half of the income earned by one spouse could be reported on the separate tax return of the other spouse. After the enactment of the Community Property Law of 1947, Congress provided for the same result in all non-community property states by adjusting the income tax rate structure applied to spouses filing joint returns. See Stanley & Kilcullen, Federal Income Tax Law § 1, p. 2-2 (1975).

4 . We do not address appellant’s claims that the trial court abused its discretion in awarding an allegedly insufficient amount of alimony and that the trial court improperly determined that, for purposes of 23 P.S. § 401(e)(4), the parties had become “separated.” If an appeal is taken following the trial court’s determination upon remand, appellant may, of course, renew these claims.