Katz, S. v. Katz, J.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SUSAN KATZ, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
JAMES R. KATZ,
Appellant No. 1653 WDA 2015
Appeal from the Order October 9, 2015
In the Court of Common Pleas of Allegheny County
Family Court at No(s): FD03-000652-008
SUSAN KATZ, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
JAMES R. KATZ,
Appellee No. 1723 WDA 2015
Appeal from the Order October 9, 2015
In the Court of Common Pleas of Allegheny County
Family Court at No(s): FD03-000652-008
SUSAN KATZ, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
JAMES R. KATZ,
Appellant No. 123 WDA 2015
J-A16007-16
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Appeal from the Order December 17, 2014
In the Court of Common Pleas of Allegheny County
Family Court at No(s): FD03-000652-008
SUSAN KATZ, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
JAMES R. KATZ,
Appellee No. 390 WDA 2015
Appeal from the Decree December 17, 2014
In the Court of Common Pleas of Allegheny County
Family Court at No(s): FD03-000652-008
BEFORE: SHOGAN, OLSON, and STRASSBURGER,* JJ.
MEMORANDUM BY SHOGAN, J.: FILED NOVEMBER 03, 2016
James R. Katz (“Husband”) and Susan Katz (“Wife”) filed cross-appeals
from a final divorce decree. For the reasons that follow, we remand on the
limited issues relating to the Coventry Estates shareholder loan,1 the
unexplained $48,500 attributed to Husband,2 and the reduction of Wife’s
attorney’s fees by $35,857.3 In all other respects, we affirm.
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
1
Issue 2 in Wife’s Appeal at 390 WDA 2015.
2
Issue 12 in Husband’s Appeal at 123 WDA 2015.
3
Issue 1 in Wife’s Appeal at 1723 WDA 2015.
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In appeal numbers 123 and 390 WDA 2015, Husband and Wife filed
cross-appeals from the final December 17, 2014 divorce decree. In those
appeals, the parties raised matters relating to the trial court’s 2012 rulings
on exceptions and cross-exceptions to the Recommendations of the Special
Master (“Master”). In appeal numbers 1653 and 1723 WDA 2015, the
parties filed cross-appeals from the limited issue of enforcement of an order
of counsel fees initially recommended in the Master’s Report and
Recommendation dated May 18, 2011 (“Initial Master’s Report”), ordered by
the trial court on September 18, 2015, and clarified on October 9, 2015.
Therein, the court assessed liability for attorney fees and costs incurred in a
separate civil action filed against Husband, Enclave Community Services
Assoc. v. James R. Katz, GD-11-006476, Allegheny County, 7/18/16
(“Enclave Lawsuit”).
Facts and Procedural History
The Master, in her initial report, provided the background for this suit,
as follows:
The parties hereto were married on October 10, 1981[,]
and separated[4] on May 6, 2003.5 It was a first marriage for
each. Both parties have college degrees. Husband’s is from
Boston University and Wife’s is from Chatham College.6 Wife
was born [in May of 1956,] and is currently 57 [sic] years of
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4
At separation, both parties filed protection from abuse petitions against
each other.
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age. Husband was born in January 1953 and is currently 58
years of age. One daughter was born during the marriage. She
is an adult. Both parties came into the marriage with
considerable assets, namely stocks,7 bonds, cash, and in
Husband’s case, a house. Each of the parties maintained their
own investment accounts and bank accounts throughout the
marriage. Each was able to invest his or her annual gifts from
parents into their own investment accounts. The parties had one
joint account into which Wife would deposit her paycheck and
Husband would deposit funds from the Pittsburgh Land Company
rentals and Enclave sale proceeds. Husband would pay the
parties[’] personal expenses from that account.
5
This date was agreed upon by the parties’ prior counsel.
In actuality, Wife and Husband continued to reside in the
marital residence estranged from one another until 2007
when Wife could stand it no longer and moved out.
6
Wife testified that she had several Master’s level courses,
but never obtained an advanced degree.
7
Husband’s Father and Uncle founded Papercraft
Corporation, which went public prior to the parties’
marriage. Husband received stock, which will be
addressed later in this report.
* * *
Both Husband and Wife are from well-to-do families. Each
has one sibling. Throughout the marriage, each was regularly
gifted with money from both their own and one another’s
parents. Money was loaned, parents acted as guarantors on
loans, provided luxurious vacations,8 dinners out, luxury
automobiles complete with car insurance, repairs and gas cards,
medical/hospitalization insurance,9 school fees for the parties’
daughter, as well as college fees, and other benefits too
numerous to list. This largesse has enabled them to acquire a
significant marital estate, which is now the subject of bitter
dispute.
8
Annual 2-week vacation to Hawaii with Wife’s parents,
and annual Thanksgiving vacations in New York with
Husband’s parents.
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9
Wife’s medical insurance is currently being paid out of
her Father’s Orphan’s Court Estate.
Initial Master’s Report, 5/18/11, at 3.
Wife filed a complaint in divorce on November 19, 2003, and Husband
filed claims in divorce on January 2, 2004. They divorced on December 17,
2014. The trial court described the case as “long running and extremely
litigious,” noting that the transcripts are “rife with examples of non-
productive, even juvenile, behavior on the part of both of these educated
and sophisticated people. This behavior complicated what was already a
very complex case.” Trial Court Opinion, 8/10/15, at 2, 3 (footnotes
omitted). As noted by the Master, both parties come from wealthy families
that have contributed financially to the parties. The multi-million-dollar
marital estate is comprised of “real estate, including the marital home, four
apartment buildings, and a large real estate development in Fox Chapel and
Indiana Township, called The Enclave.” Id. There are also a number of
developed and undeveloped lots. “The real estate was managed through the
marital business entity known as The Pittsburgh Land Company. Another
entity, Coventry Estates, was formed to build the homes in The Enclave.”
Id.
The initial Master’s equitable-distribution hearings took place
November 13–15, 2010, and February 22–24, 2011. A substantial amount
of time was spent taking testimony regarding the parties’ jewelry. It was
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appraised prior to the hearing, (“appraised jewelry”), and the parties
stipulated to its value. The Master was to determine whether it was marital
property and to whom it would be awarded. Additionally, both parties
asserted that there was a great deal of missing jewelry (“Missing Jewelry”)
and both denied knowing where it was located.5
The Master pointedly commented on the credibility of the parties. The
Master stated:
Before addressing additional specific assets and making
her Recommendation, the Master wishes to comment on the
credibility or lack thereof she found in various witnesses, as well
as their actions post-separation. Husband was frequently not
credible. He didn’t remember what was inconvenient for
him . . . to remember, but had a clear memory of those things
beneficial to his position. He avers that he has no knowledge of
trusts to which he was at one time trustee and evinced no
curiosity in and obtained no information regarding his Father’s
estate when he died. He frequently contradicted himself and
had to back track when documentation was brought to his
attention. He failed to provide information on current Trust
assets and never voluntarily produced evidence regarding a
post-separation business that he started using funds that would
rightly have belonged to either The Enclave or Coventry Estates.
In addition, Husband used the rental income and proceeds from
sales as his own personal funding source. It was determined
that he has submitted personal expenses which have been
covered for him even after the Receiver was appointed.
Husband employed reputable and experienced counsel, yet
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5
The Master credited Wife with $272,290 worth of the appraised jewelry
and Husband with $33,038. She recommended that if any of the Missing
Jewelry should be found, “it is to be appraised and the recipient shall either
credit the other party with 50% of the value if money remains owing, or if
not, pay the other party 50% of the value.” Initial Master’s Report, 5/18/11,
at 10.
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continued in persevering on his own view of his rights on issues
that would have been explained to him by his counsel, both
current and former.
Wife was far more credible as she willingly testified
when she did not know something. Wife engaged the services of
Mr. Braebender to collect, analyze, and explain the financial
situation of both Husband and Wife as of the dates of marriage
and separation. She hired reputable and credible appraisers.
The Master did not get the impression that Wife was skewing her
testimony, but was being straightforward. Wife received no
financial benefit from any of the assets controlled by Husband
during the marriage, other than the preservation of those assets
which now benefit both of them. On the other hand, she is now
liable on legal fees and other expenses as a result of Husband’s
behaviors. She received no alimony pendent lite or initial
counsel fees.
Initial Master’s Report, 5/18/11, at 5–6 (footnote omitted) (emphasis
added).
In the Initial Master’s Report regarding equitable distribution, the
Master recommended that Husband be responsible for “100% of the
litigation costs and expenses” related to the Enclave Lawsuit, and that
Husband and Wife contribute seventy-five percent and twenty-five percent,
respectively, (or sixty-five percent and thirty-five percent—there is a
discrepancy in the Report), toward any damages that may be awarded in the
Enclave Lawsuit. Initial Master’s Report, 5/18/11, at 12–13. The Master
also recommended that Husband and Wife be awarded six lots each of The
Enclave properties and two each of the remaining rental properties. Id. at
14. Overall, the Master recommended a fifty/fifty equitable distribution.
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Following the filing of the Initial Master’s Report, both parties filed
motions to open the record to present additional testimony. The trial court,
on August 3, 2011, entered an order permitting some of the evidence to be
re-examined by the Master to ascertain whether the record should be re-
opened and granted an extension of time to file exceptions to the Initial
Master’s Report. On August 30, 2011, the Master filed a Supplemental
Report (“Supplemental Master’s Report”). Wife filed exceptions on
September 16, 2011, and Husband filed cross-exceptions on September 27,
2011.
In October of 2011, Husband notified the trial court that he had
“discovered” a safety deposit box, which Wife had not disclosed during the
hearings. Husband allegedly had attempted to enter the box on
December 23, 2010, after the first three days of the hearing before the
Master, but before the second three days of the Master’s hearing. Neither
party told the Master or the trial court about the safety deposit box prior to
October of 2011. The box ultimately was drilled open in the parties’
presence, and it contained the Missing Jewelry, which was appraised at
$74,367.05.
On January 18, 2012, Husband again filed a motion to open the record
to present evidence of an inheritance Wife allegedly received upon her
Father’s death, both of which occurred after the Master’s hearing. The trial
court denied the motion. Order, 1/20/12.
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Argument occurred on the parties’ exceptions to the Initial and
Supplemental Master’s Reports on April 25, 2012. On June 26, 2012, the
trial court “partially remanded the case to the Master for recalculation to
address the distribution of two large lots in The Enclave which were omitted,
apparently inadvertently,” from the Initial Master’s Report. Trial Court
Opinion, 8/10/15, at 5. No additional testimony was to be taken and no
hearing date was ordered.
At the request of the parties, the trial court held a conciliation on
October 30, 2012, to resolve some of the issues raised in exceptions, as well
as other issues between the parties, including the distribution of the Missing
Jewelry. Thereafter, the trial court entered an order dated November 5,
2012, which, inter alia:
again remanded this matter to the Master to determine three
issues:
1. the distribution of the “missing” jewelry,
2. the appropriate interest to be added to the
outstanding equalization payment owed by Husband
to Wife in equitable distribution, and
3. both parties’ requests for counsel fees.
Trial Court Opinion, 8/10/15, at 6 (footnote omitted). The November 5,
2012 order also addressed the apportionment of costs incurred or to be
incurred in developing Old Indian Trail, a road through The Enclave, by
dividing them equally between the parties. Id.
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The remanded Master’s hearing on the above three issues was held on
July 31, 2013. The Master issued a Report and Recommendation on
August 5, 2013, and amended it on August 30, 2013 (“Amended Master’s
Report”). The Master found that neither party was credible regarding the
Missing Jewelry, determined that two items of the Missing Jewelry belonged
to the parties’ daughter, and she subtracted that amount. The Master
granted Husband a fifty percent credit of $36,078.53 from the equalization
payment he owed to Wife. Trial Court Opinion, 8/10/15, at 6. The Master
also addressed issues two and three above on remand.
Both parties filed exceptions, which the trial court addressed in an
order filed on February 20, 2014. Both parties appealed; the parties and the
trial court complied with Pa.R.A.P. 1925.
Appeals at 123 and 390 WDA 2015
Issues
In the appeal at 390 WDA 2015, Wife raises the following two issues:
1. Did the Trial Court err as a matter of law, and abuse its
discretion, in awarding Husband [an] equitable distribution
credit for the value of Wife’s non-marital personal property—
including, but not limited to jewelry—upon Husband’s return
of same to her?
2. Did the Trial Court err as a matter of law, and abuse its
discretion, in failing to recognize, as part of the marital
estate, post-separation loans/advancements to Husband
from Coventry Estates, a marital business entity controlled
by Husband?
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Wife’s Brief at 13.
In the appeal at 123 WDA 2015, Husband raises the following twelve
issues:
1. The trial court erred in failing to credit Husband for his work
on the marital entities for the years 2010 and 2011 until the
receiver removed Husband from his position working for the
entities, despite having attributed to Husband credit for his work
from the parties’ separation through 2009.
2. The trial court erred in its wording of the November 5, 2012
Order of Court because it is ambiguous as to whether it requires
Husband to pay for one-half of the engineering fee or one-half of
the engineering fee and one-half of the development of Old
Indian Trail.
3. The trial court erred in its November 5, 2012 Order of Court
by requiring Husband to bear the burden of one-half of the
engineering study and the completion of Old Indian Trail in
Enclave Phase III because all Phase III properties were awarded
to Wife and Wife was responsible for the payment of expenses
for her property pursuant to the orders of court dated
November 7, 2011 and July 12, 2012.
4. Assuming, arguendo, Husband had any responsibility to bear
the burden of one half of the engineering study and the
completion of Old Indian Trail in Enclave Phase III the trial court
erred and denied Husband due process by not scheduling a
hearing on the matter insofar as there was a factual dispute
regarding to whom Old Indian Trail provided a benefit.
5. The trial court erred in ruling that Husband was responsible
for 100 percent of the litigation costs incurred in the Enclave
Community Services Association v. James R. Katz action, and in
attributing only 25 percent of the damages to Wife, despite the
Enclave suing Husband for homeowners’ dues owed on
properties equally divided between Husband and Wife.
6. The trial court erred in failing to equally split the parties’
respective Global Market settlement proceeds on the basis that
they each were awarded an amount to compensate them for
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their actual loss because the loss was incurred during the
marriage and therefore is a marital asset subject to equitable
distribution.
7. The trial court erred in failing to equitably divide the Distinct
Coatings debt, a marital debt, to the parties.
8. The trial court erred in denying Husband’s motion to
supplement record after Wife’s father died, thus creating a
certainty that Wife would receive approximately two million
dollars, despite the parties’ separate estate being speculative at
the time of trial and an important factor in the parties’ equitable
distribution award.
9. The trial court erred in failing to appropriately find which
jewelry was marital and which jewelry was non-marital, given
Husband’s photographs and receipts for jewelry [W]ife claimed
was non-marital and Husband’s detailed documentation related
to the jewelry.
10. After over seventy thousand dollars of “missing jewelry” was
discovered, the trial court erred in affirming the [M]aster’s
decision to admit evidence related to inherited or non–marital
property given that the trial court’s prior ruling on June 25, 2012
(affirming the [M]aster’s original decision) is a final order of
court and cannot be modified.
11. The trial court erred regarding [W]ife’s “missing jewelry” by
failing to grant Husband counsel fees despite the [M]aster
finding [W]ife incredible in stating she forgot about the safe
deposit box when she had entered the safe deposit box more
than sixty times and [H]usband’s key was locked inside,
precluding him from accessing the “missing jewelry.”
12. The trial court erred by attributing to Husband $48,500
which was unsupported by the evidence, not addressed by the
trial court, and neither counsel could identify its source.
Husband’s Brief at 14–15.
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Standard of Review
In reviewing awards of equitable distribution, we are guided by the
following:
A trial court has broad discretion when fashioning an award of
equitable distribution. Dalrymple v. Kilishek, 920 A.2d 1275,
1280 (Pa. Super. 2007). Our standard of review when assessing
the propriety of an order effectuating the equitable distribution
of marital property is “whether the trial court abused its
discretion by a misapplication of the law or failure to follow
proper legal procedure.” Smith v. Smith, 904 A.2d 15, 19 (Pa.
Super. 2006) (citation omitted). We do not lightly find an abuse
of discretion, which requires a showing of clear and convincing
evidence. Id. This Court will not find an “abuse of discretion”
unless the law has been “overridden or misapplied or the
judgment exercised” was “manifestly unreasonable, or the result
of partiality, prejudice, bias, or ill will, as shown by the evidence
in the certified record.” Wang v. Feng, 888 A.2d 882, 887 (Pa.
Super. 2005). In determining the propriety of an equitable
distribution award, courts must consider the distribution scheme
as a whole. Id. “[W]e 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.” Schenk v. Schenk, 880 A.2d 633, 639 (Pa. Super.
2005) (citation omitted).
Biese v. Biese, 979 A.2d 892, 895 (Pa. Super. 2009). “An abuse of
discretion is not found lightly, but only upon a showing of clear and
convincing evidence.” Yuhas v. Yuhas, 79 A.3d 700, 704 (Pa. Super.
2013) (en banc). Moreover, it is within the province of the trial court to
weigh the evidence and decide credibility, and this Court will not reverse
those determinations as long as they are supported by the evidence.
Sternlicht v. Sternlicht, 822 A.2d 732, 742 (Pa. Super. 2003). We are
also aware that “a master’s report and recommendation, although only
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advisory, is to be given the fullest consideration, particularly on the question
of credibility of witnesses, because the master has the opportunity to
observe and assess the behavior and demeanor of the parties.” Childress
v. Bogosian, 12 A.3d 448, 455-456 (Pa. Super. 2011).
Wife’s Appeal at 390 WDA 2015
Wife first argues that the trial court erred in upholding the Master’s
recommendation giving Husband a credit for the return of any of Wife’s non-
marital personal property (jewelry). Wife’s Brief at 20. Wife asserts that
the Master correctly awarded each party his respective marital and non-
marital jewelry and correctly excluded the value of the non-marital pieces of
both parties in the total amounts attributed to each of them. Id. at 21.
Wife suggests the error occurred when Husband was given a credit for fifty
percent of the appraised value of the Missing Jewelry against any
outstanding debt Husband owed to Wife. Id. Wife maintains that the
Divorce Code does not permit the grant of credit which essentially converts
Wife’s non-marital property into marital property and posits that:
[b]y allowing Husband to be credited with 50% of the value of
the non-marital items returned to Wife, the Trial Court is,
essentially, assigning each returned non-marital asset a marital
value to be divided. The result of the Master’s Recommendation
is an obvious misapplication of the law, as the Divorce Code does
not support or allow a party to be granted a credit for the value
of non-marital property, against the value of marital property.
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Wife’s Brief at 23. In support, Wife cites Biese, 979 A.2d at 897 (holding
that under the Divorce Code, the value of the marital residence at the time
of Master’s hearing, not the higher value at the time of separation, should
have been used to determine increase in value); and Childress, 12 A.3d at
459) (holding that because the market value of the husband’s retirement
accounts declined between the date of separation and the date of a hearing,
a portion of the husband’s post-separation contributions was reduced and
cannot be credited to the husband).
The trial court found Wife to be incredible on the issue of the Missing
Jewelry. Trial Court Opinion, 8/10/15, at 20. “Credibility determinations are
within the sole province of the trial court, which this Court may not disturb
on appeal.” Busse v. Busse, 921 A.2d 1248, 1256 (Pa. Super. 2007). The
trial court agreed with the Master and found the Master’s August 30, 2013
Report in which she returned the value of the Missing Jewelry “to be the
most equitable [result] under the circumstances.” Trial Court Opinion,
8/10/15, at 21. Husband essentially asserts the trial court’s position.
Husband’s Brief at 75–76.
Regarding this issue, the trial court stated:
[T]he jewelry was found by Husband in the midst of the six days
of trial but he did not bring it to anyone’s attention until after
trial. His motives for not doing so remain unknown. What Wife
expected to gain by concealing the jewelry is also unknown,
though it can be inferred by her actions that she intended to
simply keep this jewelry out of equitable distribution. What is
known without question, however, is that Wife entered
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the safe deposit box many times and that it held close to
$75,000.00 worth of jewelry which she claims to have
simply forgotten.
I do not find Wife credible on this issue. I do not find
it credible that she would have forgotten the existence of the
safety deposit box which held the “missing” jewelry. But she,
upon its discovery, remembers in great detail which pieces were
marital and which were not. Although the Master’s first report of
August 5, 2013 backed out the value of the pieces she found to
be non-marital, the Master then, I believe rightfully, in her
August 30, 2013 Amended Report, returned the value of those
pieces in order to comport with her original ruling. She then
credited Husband for 50% of all the “missing” jewelry, except
pieces clearly belonging to the parties’ daughter, which was in
keeping with her original recommendation[.]
I agree with the Master that Wife should not be rewarded
for her lack of good faith. As both parties behaved shamefully
regarding this item, I find the Master’s scheme of distribution to
be the most equitable under the circumstances and it should not
be disturbed. Additionally, as the original Recommendation
contemplated this result and neither side objected to it, I did not
disturb it.
Trial Court Opinion, 8/10/15, at 20–21 (emphases added).
Wife fails to refute, or indeed acknowledge, the credibility
determination at the core of this issue. Wife’s Brief at 20–24. As credibility
determinations are within the sole province of the trial court, we conclude
this issue lacks merit. Busse, 921 A.2d at 1256.
Wife’s second issue asserts that the trial court erred and abused its
discretion “in failing to recognize, as part of the marital estate, post-
separation loans/advancements to Husband from Coventry Estates.” Wife’s
Brief at 25. Wife maintains the trial court erred in sustaining Husband’s
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cross-exception (g) and failing to attribute to Husband receipt of a post-
separation shareholder loan from the parties’ marital interest in Coventry
Estates. Wife states that originally, the Master attributed this loan to
Husband. The Master had explained:
During the marriage, Husband started a general contractor
construction company that he called Coventry Estates. The
purpose of the company was to act as the general contractor for
houses built at The Enclave. Husband would engage the
contractors and sub-contractors needed to build the new owner’s
house. Eventually, there were so many disputes with the buyers
and contractors that Husband ceased operating Coventry
Estates. Prior to doing so, though, he took out $330,734 in a
“shareholder loan.” Then he ceased operations. The Master
finds that 50% of that shareholder loan should have been
paid to Wife.
Initial Master’s Report, 5/18/11, at 9 (initial emphasis in original; second
emphasis added). Thus, in her recommended equitable distribution order,
the Master attributed to Wife “Interest in Coventry Estates-
(50%/2009/$330,734 shareholder loan) . . . .” Initial Master’s Report,
5/18/11, at 14. Wife, obviously, agreed that the Master correctly charged
Husband with receiving $330,734 from the marital business, Coventry
Estates, and therefore, properly attributed it to him as part of the marital
estate.
Husband disagreed and asserted his disagreement in his cross-
exception (g), which stated as follows:
g) The Master failed in attributing to Husband monies from
Coventry [Estates, an entity formed to build homes for The
Enclave,] as a shareholder loan when, in fact, same were merely
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an accounting recap to close Coventry’s business and Husband
received no distribution nor was any attributed to him by Mr.
Brabender[, who was Wife’s expert regarding the value of the
real estate business,] who conducted a comprehensive analysis
of these distributions and whose determination [the Master]
accepted. Neither party sought, nor included in any pretrial
statement or any document, the suggestion that Husband
receive this amount, or any amount, for Coventry in 2009.
Husband’s Cross-Exceptions to Master’s Recommendation, 9/27/11, at
unnumbered 2. In explaining the basis of his cross-exception (g), Husband
avers that “the Master apparently mistook a $330,734 closing entry on a tax
return—a paper transaction—as evidence of additional cash flow.”
Husband’s Brief at 77.
The trial court sustained Husband’s cross-exception (g) without any
comment on June 26, 2012. Order, 6/26/12, at 4. Wife maintains that
“[a]s a result, Husband received $330,734 of marital funds without
accounting for it in the 50/50 distribution of assets found by the Master and
the [t]rial [c]ourt to be due to Wife.” Wife’s Brief at 27 (citing Initial
Master’s Report, 5/18/11, at 14). Thus, Wife contends that the trial court
erred in sustaining cross-exception (g). Wife’s Brief at 27.
Moreover, despite the fact that the trial court sustained Husband’s
cross-exception (g) in the June 26, 2012 order, Wife suggests that it now
appears that the trial court is “reversing its June 2[6], 2012 ruling in which it
originally sustained Husband’s cross-exception (g).” Wife’s Brief at 29. In
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support of this contention, Wife references the trial court’s Rule 1925 opinion
dated August 10, 2015. Therein, the trial court stated:
In her original recommendation, the Master attributed
each party with $165,367—representing [one-]half of the
Coventry Estates shareholder loan that Husband took. (5/18/11
Master’s report, p 14–15)[.]10 As the Coventry entity was
marital, and Husband took the shareholder loan to his own use,
dividing that loan in half is appropriate and was not error, as
50% of those loans was charged to Husband.
10
This is also where [the] Master distributes the
$48,500.00 in personal expenses paid on behalf of
Husband which cannot be accounted for and which I
suggested for remand.
Trial Court Opinion, 8/10/15, at 21.
Husband maintains that the trial court and Wife are mistaken. He
suggests, “While it is the case that the trial court [now] opines that ‘dividing
the [$330,734] loan in half is appropriate and was not error,’ that
presupposes the existence of such a loan, for which there was absolutely no
evidence, and which neither party had claimed was an asset until the
Master’s fortuitous error fell into Wife’s lap.” Husband’s Brief at 79
(emphasis in original).
We agree with Wife that there is a discrepancy in the record; it does
appear that the trial court initially sustained Husband’s cross-exception (g),
whereas now, in its opinion pursuant to Pa.R.A.P. 1925, the trial court noted
that “dividing that loan in half is appropriate and was not error, as 50% of
those loans was charged to Husband.” Trial Court Opinion, 8/10/15, at 21.
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Further, the trial court ties this issue to another of Husband’s claims,
discussed infra, that the trial court urges we remand. We agree, and will
remand this issue to the trial court as well.
Husband’s Appeal at 123 WDA 2015
Husband first argues6 that the trial court erred in failing to credit
Husband for his work on the marital entities for the years 2010 and 2011
until the court-appointed Receiver7 removed Husband from his position
working for the Entities. During the equitable distribution trial, Wife
____________________________________________
6
Husband’s first issue in his brief was labeled Issue (J) in his Pa.R.A.P.
1925(b) statement.
7
Wife apparently sought the appointment of a Receiver on January 4, 2010.
Wife alleged, inter alia, that Husband’s tax returns—which allegedly had not
been filed for many years until Husband was compelled to do so by court
order—revealed that he had made shareholder loans to himself in excess of
$570,000. On January 27, 2010, the trial court appointed Kirk B. Burkley,
Esquire, and the Bernstein Law Firm, P.C. (“Receiver”) as the Receiver of
Pittsburgh Land Company and Coventry Estates, Inc. (the “Entities”).
Husband attempted to remove the Receiver in 2010; the trial court denied
the motions on June 16, 2010, and December 13, 2010. The trial court
terminated the receivership on November 7, 2011, following the completion
of the parties’ equitable distribution trial. On December 14, 2011, Husband
filed claims against the Receiver. The Receiver moved for summary
judgment on November 5, 2012, and the trial court granted same on
May 15, 2013. Husband appealed to this Court. We affirmed the grant of
summary judgment and rejected Husband’s challenges to the trial court’s
appointment of the Receiver and procedures related thereto on
September 3, 2014. Katz v. Katz, 107 A.3d 218, 1014 WDA 2013 (Pa.
Super. filed September 3, 2014). Our Supreme Court denied Husband’s
petition for allowance of appeal. Katz v. Katz, 109 A.3d 680 (Pa., filed
February 4, 2015).
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presented a report by her expert, Richard Brabender, regarding the Entities
that included an appraisal of their marital and non-marital components.
Husband’s Brief at 37. Husband acknowledges that he accepted the
propriety of the report. Id.The Master had adopted Mr. Brabender’s analysis of the funds
Husband withdrew from the Entities versus the expenses Husband paid.
Husband’s argument on this issue includes seven pages of “the work he did”
regarding the Entities. Husband’s Brief at 39–45. Husband suggests that
the trial court misunderstood his argument, id. at 46 and 47, and maintains
that he should be credited with the “imputed salary amount” through the
date the properties “were actually, finally, divided.” Id. at 47.
Wife counters that once Husband no longer had exclusive control over
the Entities due to the Receiver’s appointment, there is no support for the
claim that Husband should continue to receive a salary. Wife’s Reply Brief at
31. Wife asserts that Husband failed to provide any financial information
regarding his operation of the Entities in 2010 and 2011 other than the
Receiver’s testimony that Husband performed some day-to-day duties. Id.
at 32. Wife maintains that the Receiver concluded Husband’s involvement
had a negative impact “on the preservation of the [Entities’] assets.” Id. at
33. Finally, Wife posits that Husband waived any argument regarding
additional payment of funds because the trial court terminated the
receivership by order dated November 7, 2011. The November 7, 2011
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order required that any claims of, or against, the Receiver were to be filed
with the trial court within thirty days. Order, 11/7/11. Wife contends that in
his claims against the Receiver filed on December 14, 2011, Husband failed
to raise any issue related to Husband’s salary. Wife’s Reply Brief at 33.
Thus, Wife argues waiver. Id.
Husband’s argument on this issue appears to be that he should be
credited for work performed in 2010 and 2011, which is two years beyond
the scope of Mr. Brabender’s expert report. We do not agree and rely on the
trial court’s disposition of this issue. The trial court stated:
The Receiver was in place in 2010 and 2011, the years for
which Husband is seeking “credit” for work performed. It was
clear from the information provided during the Receivership, that
Husband more than adequately compensated himself prior to the
Receiver taking over running the business. Throughout the time
that the Receiver was in place, Husband complained that the
Receiver was destroying the business. It was clear to me, to the
Master, and ultimately to the Superior Court at 1014 WDA 2013,
that the appointment of the Receiver was a necessary protection
for the marital estate.
Had the business entities been allowed to remain in
Husband’s control, unchecked by the Receiver’s oversight, I
believe the value of the businesses would have declined,
resulting in a depleted estate to divide.
As such, I declined to further reward Husband with an
additional salary for attempting to carry out what I found to be a
systematic and purposeful depletion of the estate.
Trial Court Opinion, 8/10/15, at 16–17. Thus, we conclude this issue lacks
merit.
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We address Husband’s issues two through four together as they relate
to an order dated November 5, 2012, and docketed on November 7, 2012
(hereinafter “November 7, 2012 order”). In issue two, Husband asserts that
paragraph four of the order is ambiguous. Paragraph four provides as
follows:
4. All costs related to the cost of the required engineering study
required by Fox Chapel Borough regarding development east of
Fox Chapel Road and necessary completion of Old Indian Trail
and facilities for Enclave development fronting Lots 307, 308,
312, and 313, are to be borne equally by the parties as the
development of the Enclave as a whole benefits each.
Order, 11/7/12, at ¶ 4. Husband asserts the clause is ambiguous because:
it may either designate that the parties are to share equally in
the required engineering study, which study concerns
development east of Fox Chapel Road and which concerns
necessary completion of Old Indian Trail and Facilities for
Enclave development, or it may designate that the parties are to
equally bear the cost of the engineering study, and development
of Old Indian Trail.
Husband’s Brief at 48–49 (emphasis in original). He suggests that the trial
court’s explanation that “the parties are to split the costs for both the
engineering study and the completion of the road” is a post-facto
justification that does not “square with the evidence of record.” Husband’s
Brief at 49; Trial Court Opinion, 8/10/15, at 9.
Husband fails to clearly identify the evidence he suggests is
inconsistent. “When deficiencies in a brief hinder our ability to conduct
meaningful appellate review, we may dismiss the appeal entirely or find
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certain issues to be waived. Pa.R.A.P. 2101. It is not this Court’s
responsibility to comb through the record seeking the factual underpinnings
of [a party’s] claim.” Irwin Union Nat. Bank & Trust Co. v. Famous, 4
A.3d 1099, 1103 (Pa. Super. 2010) (citation omitted). Additionally,
Husband makes his bald, unsupported claims without any reference to the
record. The failure to support bald assertions with sufficient citation to legal
authority impedes meaningful review of his claims. Commonwealth v.
Rompilla, 983 A.2d 1207, 1210 (Pa. 2009); Stimmler v. Chestnut Hill
Hosp., 981 A.2d 145, 153 n.9 (Pa. 2009) (stating that argument portion of
brief must contain “sufficient citation to the record . . . .”). Thus, issue two
is waived.
Even if not waived, the claim lacks merit. We have reviewed the
orders in question and find no ambiguity. Read in context, the November 7,
2012 order provides that both parties equally bear the costs for the
engineering study and the development costs for Old Indian Trail. Any other
interpretation strains logic.
In issue three, Husband suggests that the trial court’s November 7,
2011 order, which terminated the receivership, the November 7, 2012 order,
and the July 12, 2012 order,8 which directed that “each party is to pay all
____________________________________________
8
While the trial court dated the order June 7, 2012, it was not filed and
docketed until July 12, 2012. Thus, in keeping with our practice to identify
(Footnote Continued Next Page)
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bills related to the propert[ies] that were awarded by the Master” are
inconsistent. Husband’s Brief at 52; Order, 7/12/12; Order, 11/7/11. Wife
disagrees and suggests that Husband improperly is citing to earlier court
orders that do not apply. Wife’s Reply Brief at 40.
Initially, we note that Husband’s argument on this issue is confusing
and convoluted. Husband quotes extensively and even attributes the trial
court as the source on one occasion but never identifies the documents he is
quoting. Husband’s Brief at 50, 51. Moreover, we observe that the
November 7, 2012 order on which Husband relies states that “[a]ny terms of
this Order which are in conflict with previous Orders shall supersede the
previous Orders.” Order, 11/7/12, at ¶ 5. Accordingly, per the proviso of
the November 7, 2012 order quoted above, the trial court ensured that any
conflict in prior orders was rectified. Husband’s third issue fails.
In issue four, Husband maintains that the trial court erred by not
holding a hearing regarding an August, 2012 engineering study and the
completion of Old Indian Trail in phase III of The Enclave. Husband’s Brief
at 52. Wife responds that she brought these matters before the trial court in
her Petition for Clarification of the Parties’ Responsibilities Regarding Enclave
Costs. Wife’s Reply Brief at 21. She maintains that Husband filed no
_______________________
(Footnote Continued)
items in the certified record by their filing dates, we refer to the date of this
order as July 12, 2012.
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responsive pleading and did not request a hearing on the issue. Id. Our
review of the record supports this claim.
Husband fails to assert the place in the record where he requested a
hearing on the matter. “It is not this Court’s responsibility to comb through
the record seeking the factual underpinnings of [an appellant’s] claim.”
Irwin Union Nat. Bank & Trust Co., 4 A.3d at 1103. Husband’s failure to
request a hearing dispels his complaint that the trial court failed to hold one.
“On appeal, we will not consider assignments of error that were not brought
to the tribunal’s attention at a time at which the error could have been
corrected or the alleged prejudice could have been mitigated.” Tindall v.
Friedman, 970 A.2d 1159, 1174 (Pa. Super. 2009). “In this jurisdiction one
must object to errors, improprieties or irregularities at the earliest possible
stage of the adjudicatory process to afford the jurist hearing the case the
first occasion to remedy the wrong and possibly avoid an unnecessary
appeal to complain of the matter.” State Farm Mutual v. Dill, 108 A.3d
882, 885 (Pa. Super. 2015) (en banc) (citations omitted), appeal denied,
116 A.3d 605 (Pa. 2015). We thus find issue four waived.
Finally, regarding all three issues relating to the November 7, 2012
order, we additionally rely on the trial court’s explanation in rejecting
Husband’s claims. The court stated:
Both parties are responsible for the costs related to the
individual lots they were awarded. The completion of the Old
Indian Trail benefits the entirety of The Enclave and is therefore
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a benefit to both, so the cost for the road is appropriately borne
by both. I see no factual dispute.
Likewise, there is no conflict with the Orders of
November 7, 2011 and [July 12,] 2012. In those two [o]rders,
the parties are ordered to bear the costs related to the lots they
were awarded in equitable distribution. What Husband attempts
to do is parse out which parts of the road benefit which lots most
and come up with another scheme to assign the cost. The
objective of the Divorce Code is to effectuate economic justice
between the parties, not mathematical perfection to the square
foot measurement.
Accordingly, as the equal division of these costs is the
most equitable method of distributing these costs, my
November [7], 2012 [o]rder should stand.
Trial Court Opinion, 8/10/15, at 10.
Husband’s fifth issue relates to the Enclave Lawsuit, the separate civil
action filed against Husband by the Enclave Homeowners’ Association
(“Association”) on April 26, 2011, for monetary damages for assessments
allegedly not paid to the Association, breach of contract, and other related
claims. Wife explains that on June 2, 2011, Husband filed a praecipe to join
Wife as an additional defendant in the lawsuit. After two failed attempts to
effectuate service, Wife was joined on May 3, 2013. Wife’s Reply Brief at
21; N.T., 2/12/15, at 57–58, 71–73, 76. Husband asserts that because Wife
now owns some of the land, she should equally bear the cost of defense of
the suit and be responsible for the resultant damages. Husband’s Brief at
54–55.
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Wife responds that the suit against Husband by the Association
occurred prior to 2010, which is before the time Wife was awarded any
ownership interest in the properties at issue. Wife’s Reply Brief at 42.
Moreover, she points out that the Enclave Lawsuit plaintiffs made no claims
against Wife in the lawsuit. Id. at 43. She maintains that her “later receipt
of property implicated in the lawsuit does not make her equally responsible
for the prior actions of Husband . . . .” Id. at 44.
The Master recommended that because “Wife had no decision-making
authority or input into the relationship between Husband and the
[Association],” Husband should be “responsible for 100% of the litigation
costs and expenses.” Initial Master’s Report, 5/18/11, at 12–13. Regarding
the possibility that the Association might prevail in its claims, the Master
recommended that “Wife contribute 25% of the damages and Husband 75%
of the damages assessed, as he was in charge of the Enclave management
and activity throughout.” Id. at 13.
In response to Husband’s exception on this issue, the trial court
stated:
If The Enclave lawsuit had been filed solely for
homeowner’s dues alleged to be owed, Husband’s argument
might have merit. To the contrary, however, the lawsuit against
Husband also asserts breach of contract and misrepresentation
claims which are directed to Husband as a developer, not merely
as a homeowner. Wife was excluded from any dealings
regarding the development of The Enclave, which was solely
managed by Husband. The lawsuit filed by the Association
arises from dealings with Husband, not Wife.
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I found that the Master divided the responsibility for
damages in an equitable fashion, reflecting the fact that Wife has
been awarded some of these properties and will benefit from
them. As for costs of the litigation, I also found attributing all of
the costs to Husband is a fair result, considering Wife had no
part in any dealings with the Association.
Trial Court Opinion, 8/10/15, at 15–16 (emphasis in original). We find no
error or abuse of discretion by the trial court on this issue.
Husband next argues that the trial court erred “in failing to equally
split the parties’ respective Global Market settlement proceeds on the basis
that they each were awarded an amount to compensate them for their actual
loss because the loss was incurred during the marriage and therefore is a
marital asset subject to equitable distribution.” Husband’s Brief at 58.
Apparently, the parties instituted legal action related to securities fraud, and
Wife received $100,700 and Husband received $70,060 post separation.
Once again, Husband fails to cite to the record and improperly includes
references to findings without citation. Such a practice impedes this Court’s
ability to review the record. The claim is waived. Irwin Union Nat. Bank
& Trust Co., 4 A.3d at 1103.
Even if not waived, the issue is meritless. The trial court explained
that the Master distributed the parties’ various accounts and did not “count”
the settlements which the parties received from their lawsuit to compensate
them for losses from their investments in Global Markets because “the
amounts received were in proportion to their individual losses.” Trial Court
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Opinion, 8/10/15, at 13. Husband acknowledges that while this may be
true, it was error because the amounts were received with regard to
investments the parties made during the marriage and thus, were marital
property. Husband’s Brief at 58. He maintains the trial court should have
“equalized those investments, or equalized those awarded and divided them
equally between the parties, in accordance with the intended overall [fifty-
fifty] equitable distribution scheme.” Id. at 59.
Wife responds that the trial court did not err. She maintains that
Husband’s argument ignores the fact that, even assuming that the
settlement proceeds were found to be marital assets, the trial court has the
discretion to “consider each marital asset or group of assets independently
and apply a different percentage to each marital asset or group of assets.”
Wife’s Reply Brief at 46 (citing 23 Pa.C.S. § 3502(a)). Wife suggests that
Husband’s argument appears to be that the trial court is constrained to
divide all assets and debts of the parties equally, rather than equitably,
which is incorrect. Wife’s Reply Brief at 46.
Wife also maintains that Husband ignores the fact that the source of
the funds used by both parties to make their respective investments—which
ultimately gave rise to the cause of action—were non-marital funds. Wife’s
Reply Brief at 46. While Wife “credibly testified that she received a check
from her father which she immediately invested in the subject investment
portfolios, and that Husband made his investments with money from his
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separate personal accounts and the parties’ daughter’s accounts,” Husband
did not present any evidence to the contrary. Id. Wife asserts that the trial
court deemed her testimony credible. Id.
The trial court held:
Husband received $71,060.00 and Wife received $100,700.00 in
damages from the Global Markets lawsuit. Husband complains
that it was error not to split the proceeds equally. Husband fails
to note that both parties invested in Global Markets using their
own non-marital funds. Wife’s investment was made with funds
she was given by her Father specifically for that investment
purpose. Husband likewise used his non-marital funds and,
according to Wife’s testimony, also used funds belonging to the
parties’ daughter. The testimony on this issue was credible. I
found it entirely appropriate, therefore, that the settlement
amounts received be treated as non-marital since they arose
from investments made with non-marital funds.
Trial Court Opinion, 8/10/15, at 14. We will not reweigh the trial court’s
credibility determination. Thus, this issue lacks merit. Busse, 921 A.2d at
1256.
Husband’s seventh issue avers that the trial court erred in failing to
equitably divide the “Distinct Coatings” debt. The Master did not address
this debt in her initial recommendation, and the trial court dismissed
Husband’s exception regarding the omission. The Distinct Coatings lawsuit
was filed against Pittsburgh Land Company by a painting subcontractor
seeking $25,000. Husband asserts that the debt actually related to
Coventry Estates, and he contends that Wife should bear some of the
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responsibility for any damages for which he is found liable because it is a
marital debt of the parties. Husband’s Brief at 59–60.
Wife responds that Husband failed to present any additional evidence
of this debt, including the exact amount of the debt, the date on which the
debt was incurred, the reason for the dispute with the subcontractor, or any
evidence as to why it should be considered a marital debt. Wife’s Reply Brief
at 47. Wife further asserts that even if the debt existed, the trial court
correctly noted that Wife, having no involvement in the Entities’ operations,
should not be responsible for any potential damages. Id. Wife maintains
that she put no money or labor into Coventry Estates post-separation, and in
fact, was “shut out of these entities by Husband.” Id.The trial court concluded that because Wife was effectively “out of the
picture” regarding any of the operations of Pittsburgh Land Company and
Coventry Estates, it did not find it appropriate that Wife “be saddled with
any potential damages found due to a sub-contractor to which Coventry was
obligated.” Trial Court Opinion, 8/10/15, at 19. “Wife was not a party to
the contract, and had no opportunity to exercise any responsibility over the
carrying out of the contract. As such, it was equitable that she not be
responsible for any resulting damages.” Id. This conclusion by the trial
court does not represent error or an abuse of discretion.
Husband argues in issue eight that the trial court erred in denying
Husband’s motion to supplement the record after Wife’s father died.
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Husband avers that as of the equitable distribution hearing, Wife’s father,
who was incapacitated, was “worth” $3,500,000 to $4,000,000, was
intestate, and Wife and her brother were the only heirs. Husband’s Brief at
60. “By January 18, 2012, Wife’s father had died,” and although exceptions
had been filed, the trial court had not ruled on them. Id. at 60–61. On that
date, Husband presented a motion to supplement the record, averring that
Wife had inherited two million dollars, and based on Hutnik v. Hutnik, 535
A.2d 151 (Pa. Super. 1987), and Solomon v. Solomon, 611 A.2d 686 (Pa.
1992), “an expectancy that is ‘contingent’ is not properly considerable by a
court in equitable distribution, but where the right is ‘vested,’ that is
something that the court may consider.” Husband’s Brief at 61.
Wife responds that Husband has waived this issue by failing to file a
cross-exception to the Master’s determination “that the separate estate
which either party may inherit from his or her family would be retained by
each as his or her sole and separate property, and thus would not affect the
ultimate distribution of assets.” Wife’s Reply Brief at 48 (citing Pa.R.C.P.
1920.55-2(b) (matters not covered by exceptions are deemed waived)).
In her recommendation, the Master stated, “Both of these parties have
expectancies from their families. Neither provided the Master with details.
Each shall retain all right, title and interest in any and all expectancies,
inheritances and gifts made to him or her from their respective families.”
Initial Master's Report, 5/18/11, at 19. We agree with Wife that Husband
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has waived this issue by failing to file a cross-exception to the Master’s
determination on the issue. Pa.R.C.P. 1920.55-2(b).
In the alternative, Wife responds that the Master did not err in
weighing the evidence as she did. Wife’s Brief at 48. Wife underscores that
the Master properly considered the parties’ separate estates and potential
inheritances, in that the Divorce Code provides that the parties’
opportunities for future acquisition of capital assets and income is a relevant
factor for the court. Id. at 49 (citing 23 Pa.C.S. §3502(a)(5) (the parties’
opportunities for future acquisition of capital assets and income is a relevant
factor to the equitable division of marital property.)). Wife points out that in
considering the parties’ potential inheritances, “the Master found that neither
instance should alter the distribution scheme she recommended.” Wife’s
Reply Brief at 49. Wife avers that Solomon is not applicable to the instant
case because there was no analysis regarding whether or how a party’s
receipt of the corpus of a trust would factor into an equitable distribution
scheme. She also maintains that Hutnik actually supports the trial court’s
ruling because in that case, as here, the master considered the expectancies
of both parties and noted that because neither party provided details to the
court, no further consideration would be given to them in the distribution
scheme. Wife’s Reply Brief at 49-50.
In addressing this issue, the trial court explained that both parties
come from significant wealth. The trial court acknowledged Wife’s
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inheritance at her Father’s death. Trial Court Opinion, 8/10/15, at 17. The
trial court indicated that the Master had reported that Husband, as well,
came from a wealthy family and was, at one time, a trustee of family trusts
from his wealthy family. In explaining this fact, the Master stated:
[Husband] avers that he has no knowledge of trusts to which he
was at one time trustee, evinced no curiosity in and obtained no
information regarding his Father’s estate when he died. He
frequently contradicted himself and had to backtrack when
documentation was brought to his attention. He failed to
provide information on current trust assets ... Husband was
frequently not credible. He didn’t remember what was
inconvenient for him not to remember, but had a clear memory
of those things beneficial to his position.
Initial Master’s Report, 5/18/11, at 5.
The trial court further explained as follows:
By failing to produce documents and otherwise
demonstrate what his separate estate is or what his expectancy
is, Husband made it impossible for the Master and this [c]ourt to
know if he was being truthful about it. I am left to speculate
with regard to Husband’s separate estate. What is known is that
his father was one of the two founders of Papercraft Corporation,
and that his family was very generous to Husband during the
marriage. I am aware that Husband has only one sibling. I find
it unlikely that Husband has no separate estate or no expectancy
in a significant estate.
The separate estates of the parties [are] but one factor of
many to be considered in equitable distribution of the marital-
estate. The Master divided the marital estate equally. I adopted
that distribution and would have done so with or without the
information regarding Wife’s inheritance or Husband’s. Both
parties have very significant assets of their own and both
received substantial marital assets, some income producing.
Of note, Wife’s Father contributed over $800,000.00 to the
development of The Enclave and paid over $700,000.00 to
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contractors who worked at The Enclave (11/17/2010 TR. p. 86).9
Accordingly, Husband has benefited substantially from the
wealth of Wife’s family, as well as his own. The contribution of
Wife’s father increased the value of the marital estate. As noted
by the Master, The Enclave may not have been completed
without that family contribution. Both parties leave this
marriage as wealthy individuals. Excluding the separate estates
of the parties and distributing the estate 50/50 was completely
appropriate and there was no need to supplement the record.
9
Husband initially claimed this $800,000.00 was a
gift and that there was no obligation to repay it.
Subsequently a promissory note was found in the file
of his former counsel (who had received it apparently
from Husband) at which point Husband
“remembered” the loan. Civil litigation was initiated
by Wife’s Father's estate to recover this loan.
Should the lawsuit be successful, liability is to be
borne by both parties equally for repayment. Even
with repayment, the benefit derived increased the
marital estate value by allowing for the development
and preservation of The Enclave.
Trial Court Opinion, 8/10/15, at 18–19. The trial court’s explanation on this
issue is compelling. The trial court did not err in refusing to supplement the
record.
Husband next asserts that the trial court erred in failing to determine
which jewelry was marital property and which jewelry was non-marital
property. Like most of Husband’s issues, it is difficult to ascertain Husband’s
precise complaint. It appears Husband is assailing the Master’s credibility
findings concerning the parties’ testimony regarding the jewelry because
those credibility findings allegedly contradict Husband’s documentary
evidence. Husband’s Brief at 64. The claim also assails the Master’s award
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of two pieces of jewelry to the parties’ daughter, Danielle. Id. The two
pieces were assessed at $2,210, and Husband maintains that because Wife
never proved she actually delivered the jewelry to Danielle, it should have
been attributed to Wife. Id. at 66.
Wife underscores the Master’s conclusion that “Husband was
frequently not credible. He didn’t remember what was inconvenient for him
not to remember, but had a clear memory of those things beneficial to his
position. He frequently contradicted himself and had to back track when
documentation was brought to his attention.” Wife’s Reply Brief at 53
(quoting Initial Master’s Report, 5/18/11, at 5). Wife maintains that some of
the receipts Husband produced were as old as 1982, hence the value would
be inaccurate, and he failed to produce evidence that the pieces existed or
were in Wife’s possession at the time of separation. Id. at 53. As to the
remand hearing regarding the Missing Jewelry, Wife explains that Husband
agreed on the record that two of the missing pieces belonged to Danielle.
Id. at 54 (citing N.T., 7/31/13, at 59). Thus, the Master entered a
recommendation consistent with both parties’ testimony. Wife’s Reply Brief
at 54.
We examined the record and reject Husband’s contention. The
findings Husband complains about are based upon credibility determinations
that were within the purview of the court. Husband acknowledges as much.
Husband’s Brief at 64. Moreover, we reject outright Husband’s claim that
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because Wife never proved she actually delivered the jewelry to Danielle, it
should have been attributed to Wife. Indeed, Husband fails to support the
allegation. As it was within the province of the trial court to weigh the
evidence and decide credibility, and Husband’s argument does not convince
us that those determinations are unsupported by the evidence, we will not
reverse them. Sternlicht, 822 A.2d at 742.
In his tenth issue, Husband avers that after over seventy thousand
dollars of Missing Jewelry was discovered, the trial court erred in affirming
the Master’s decision to admit evidence related to inherited or non–marital
property “given that the trial court’s prior ruling on June 25, 2012 (affirming
the [M]aster’s original decision) is a final order of court and cannot be
modified.” Husband’s Brief at 66. This issue relates to the Master’s
recommendation that if any of the Missing Jewelry would be found, it was to
be appraised, and the recipient “shall either credit the other party with 50%
of the appraised value if money remains owing, or if not, pay the other party
50% of the appraised value.” Initial Master’s Report, 5/18/11, at 10.
Husband asserts that because Wife did not file an exception regarding the
Master’s recommendation, she could not thereafter complain that certain
items of the Missing Jewelry were non-marital property. Husband’s Brief at
67.
Wife responds that the Master did not initially determine that all of the
Missing Jewelry indeed was marital; therefore, it was appropriate for the
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Master to permit Wife’s testimony at the subsequent remand hearing on
July 31, 2013, regarding whether the Missing Jewelry was marital or non-
marital property. Wife’s Reply Brief at 55. She also suggests that even if
there was error, in light of the value of Danielle’s jewelry ($2,210) out of the
total ($568,000), it is de minimus. Id. at 56 (citing Trial Court Opinion,
8/10/15, at 13).
The trial court pointed out that the Master deducted only $2,210, the
value of jewelry that both parties conceded belonged to their daughter. The
trial court thus concluded that because both parties agreed the pieces did
not belong to either of them, the deduction was appropriate. Trial Court
Opinion, 8/10/15, at 13. The court further opined that even if the deduction
were error, “it is so deminimus as to be harmless.” Id. We agree. We find
no impropriety in this deduction as we consider the distribution scheme, as
we must, as a whole. Wang, 888 A.2d at 887.
Husband’s eleventh issue asserts that the trial court erred regarding
Wife’s Missing Jewelry by failing to grant Husband counsel fees in light of the
Master’s conclusion that Wife was not credible when she stated that she
forgot about the safe deposit box. Husband’s Brief at 68. Husband points
out that Wife “entered the safe deposit box more than sixty times and
[H]usband’s key was locked inside, precluding him from accessing the
‘missing jewelry.’” Id. Husband states that the trial court previously
awarded Husband $1500 based upon Wife’s conduct regarding the Missing
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Jewelry, which Wife still had not paid. Id. at 69. Husband urges that “[i]n
the event [the trial court] defers her decision until argument on the parties’
exceptions, Husband requests an additional $1,500.” Id. Without pertinent
comment, Husband cites Rhoades v. Pryce, 874 A.2d 148, 154 (Pa. Super.
2005).
Wife maintains that both parties’ claims for counsel fees were denied
by the Master in her Amended Master’s Report of August 30, 2013. Wife’s
Brief at 57. While she disputes the denial of her own request for counsel
fees, Wife indicates she has not asserted this claim on appeal due to the
Master’s discretion to award or deny counsel fees. Id. Wife contends that
Husband’s claim on this issue ignores the Master’s credibility determinations
regarding Husband’s behavior. Id. at 58.
The Master noted that the parties disputed who was responsible for
the failure to produce the jewelry in discovery for appraisal when the parties’
other jewelry was provided. Amended Master’s Report, 8/30/13, at 1. Wife
last entered the box in 2005, when she removed the jewelry “she wanted,”
and allegedly forgot about the jewelry remaining. Id. at 2. The Master
determined that Wife was not credible regarding her claim that she forgot
about the safety deposit box’s existence by pointing out that it contained
“heirloom pieces she had received from her Mother and gifted items that
belonged to the parties’ daughter.” Id. The Master further explained that
Husband “discovered” the box in December of 2010, but he failed to bring it
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to “Wife’s attention, his attorney’s attention, the [c]ourt’s attention, or the
Master’s attention at the time of the initial hearings” in November of 2010
and February of 2011. Id. The Master concluded as follows:
The Master finds that each of these parties was
operating in less than good faith with the hope or
expectation that she or he might be able to score a windfall of
some sort. The Master recommends that the jewelry and
contents in the box be distributed to Wife and that she
pay/credit Husband with the value of the jewelry and coins
contained therein, with certain exceptions. First, the two
undisputed items that each believes was gifted to their
daughter . . . . The value of those two items is $2,210. [A]fter
further consideration, it is recommended that Husband be
granted a credit of $36,078.53 against any money that remains
owing by him to Wife.
Id. at 3 (emphasis added). Regarding the counsel fees, the Master
recommended as follows:
Wife is requesting counsel fees in the amount of $16,843.25
based on her perception of Husband’s obdurate, vexatious and
willful behavior. Husband is requesting counsel fees and costs of
$8,659.87 for the same reasons. . . .
The parties hereto are both suspicious of and angry at one
another. Because of the long history attendant to the divorce,
neither can cooperate on even the most basic level. Both parties
went to [c]ourt over and over, presenting [m]otion after
[m]otion, to get even the most basic of things accomplished.
The Master recommends that each of the parties be responsible
for his or her own counsel fees, costs and expenses.
Amended Master’s Report, 8/30/13, at 4 (footnote omitted).
In addressing this issue, the trial court stated as follows:
I disagree with Husband’s complaint . . . that he should
have been awarded attorney fees. The costs involved in the
resolution of this aspect of the case were caused by the actions
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of both parties. I find that Wife concealed the existence of the
box and Husband concealed his discovery of it, both of which
unnecessarily prolonged the litigation.7 I, accordingly, agreed
with the Master that each party should be responsible for their
own counsel fees.
7
A series of motions were filed by both parties
regarding opening the box, having the jewelry
appraised, transporting it, etc.
Trial Court Opinion, 8/10/15, at 13 (internal citations omitted). An award of
counsel fees is within the discretion of the trial court, and we may reverse
only upon a finding of abuse of that discretion. Marra v. Marra, 831 A.2d
1183, 1188 (Pa. Super. 2003). We are unconvinced that the trial court
abused its discretion on this issue; thus, we find that it lacks merit.
Husband’s final issue in his appeal at this docket number asserts the
trial court erred by attributing to Husband $48,500, which was unsupported
by the evidence, not addressed by the trial court, and neither counsel could
identify its source. Husband’s Brief at 70. Because the trial court has
requested a remand on this issue, Husband has abandoned this issue in his
brief.
“The Master found Husband to have paid himself $48,500 from
Coventry Estates . . . for personal expenses.” Trial Court Opinion, 8/10/15,
at 14. Wife asserts that the Master correctly attributed the $48,500 to
Husband in the Initial Master’s Report. Wife’s Reply Brief at 59. The trial
court stated as follows:
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Husband raised this issue in his exceptions to the Master’s
Report. I dismissed the exception. In her brief in response to
Husband’s exceptions, . . . Wife argued that this amount must be
considered together with the $75,000.00 which the Receiver
testified he spent on Husband’s personal expenses. Wife noted
that “perhaps” the $48,500.00 represents a discounted portion
of the $75,000.00.
While Wife may very well be correct, it is not clear from
the record that this was the Master’s reasoning. Court orders
should not be based on a guess. It is not clear from a review of
the record where the sum of $48,500.00 came from. While this
is a relatively small sum in light of the size of the estate, it is not
insignificant and Husband should not be forced to speculate as to
why this amount was attributed to him. This matter should have
been remanded by me to the Master for clarification.
Accordingly, this discrete issue should be remanded for
clarification.
Trial Court Opinion, 8/10/15, at 14–15. Because the trial court is unable to
explain the source of the $48,500 attributed to Husband, we are constrained
to remand this issue for clarification per the trial court’s request.
Appeals at 1653 and 1723 WDA 2015
Facts and Procedural History
As noted, these cross-appeals relate to enforcement of that portion of
the Initial Master’s Report filed May 18, 2011, assessing liability for
attorney’s fees and costs incurred in the separate civil action filed against
Husband, the Enclave Lawsuit, as ordered on September 18, 2015, and
clarified on October 9, 2015. We have explained that The Enclave is a
substantial real estate development and was a major marital asset
distributed between the parties, with each party receiving certain lots within
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The Enclave. “The Homeowner’s Association filed suit against Husband only,
alleging, inter alia, that Husband did not meet his obligations as developer of
The Enclave, did not pay the appropriate Enclave assessments, breached his
contract, and engaged in misrepresentation.” Trial Court Opinion, 1/29/16,
at 3. The Enclave’s lots were distributed on November 7, 2011. The
distribution order set forth that each party was responsible for the costs and
expenses related to the individual lots he or she received in equitable
distribution. Order, 11/7/11, at 1.
The Master determined the marital nature of potential liability and
costs incurred in the Enclave Lawsuit. The Master found Husband one
hundred percent responsible for costs of litigation in the Enclave Lawsuit and
further recommended that Wife be responsible for twenty-five percent of any
damages ultimately assessed in the suit. Trial Court Opinion, 1/29/16, at 3;
Initial Master’s Report, 5/18/11, at 19.
The trial court explained the ensuing history as follows: “The Master
based her Recommendation in this regard on her determination that, though
the suit arose from events which occurred during marriage, Wife had ‘no
decision making authority or input into the relationship between Husband
and the homeowner’s association.’” Trial Court Opinion, 1/29/16, at 3–4
(quoting Initial Master’s Report, 5/18/11, at 12–13). The trial court
continued:
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In June of 2011, Husband filed a Praecipe for a Writ to Join
Wife as Additional Defendant in the Enclave [L]awsuit; but did
not serve her with a summons until November of 2012. Wife
hired the [law] firm . . . in July of 2012 to represent her in the
lawsuit and Husband’s 2252 Complaint was ultimately filed in
May of 2013 (TR. p. 42, 57-58). Prior to the 2252 Complaint
being filed, Wife settled with the Homeowner’s Association in
November of 2012, paying the assessments due on the lots she
had been awarded in equitable distribution. The Association
agreed to not block future sales or seek further damages from
Wife.
At the time of the Master’s Recommendation, the
Homeowners Association and Husband were the only parties in
the subject lawsuit. Husband then joined Wife and,
subsequently, the Borough of Fox Chapel intervened. Wife
cross-claimed against Fox Chapel. Husband’s claims against
Wife in the lawsuit remain pending. (TR. p. 78-79).
Wife incurred substantial fees in the litigation. In her
August 26, 2014 Petition for Enforcement, Wife requested
$133,000.00 in fees be awarded and a “mechanism” be
established by which she would collect all future fees on a
monthly basis, without hearing or review. Husband filed a Reply
and Counterclaim, asserting reimbursements were due to him
from Wife. [The trial court] referred the parties to the Master,
preserving, both parties’ claims for attorney fees. The Master’s
hearing was held February 12, 2015. Wife’s attorney in the
Enclave [L]awsuit, . . . Husband, and the parties’ respective
domestic attorneys testified.
Essentially, Wife’s position at the Master’s hearing was
that, since Husband had joined her to the Enclave [L]awsuit, he
should be responsible for any and all fees she incurred to . . .
her attorneys in the lawsuit. Husband’s position was that he
could not be responsible for any of Wife’s fees since the lawsuit
had expanded to include additional parties (including Wife who
he himself had joined), becoming a “different” lawsuit than that
initially contemplated by the Master.
On March 4, 2015, the Master recommended that Husband
pay Wife all of the $159,960.00 in fees introduced through her
counsel. The Master also awarded Wife $6,500.00 in fees for
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Husband’s non-compliance with her discovery [“Enclave Master’s
Report”]. Both parties filed exceptions.
Trial Court Opinion, 1/29/16, at 4–5 (footnote omitted).
The trial court heard oral argument on exceptions. By order dated
September 18, 2015, and filed on September 22, 2015, the trial court
reduced the attorney’s fees Husband owed Wife by $35,857 and limited
Wife’s obligation for potential liability in the Enclave Lawsuit to December of
2010. Wife requested reconsideration, and the trial court “corrected
mistakes in the percentage and extent of Wife’s liability and made clear that
Wife was not precluded from requesting future fees incurred in the
litigation.” Trial Court Opinion, 1/29/16, at 5. Both parties appealed; the
parties and the trial court complied with Pa.R.A.P. 1925.
Issues
In the appeal at 1723 WDA 2015, Wife raises the following single
issue:
1. Did the Trial Court err as a matter of law, and abuse its
discretion, in failing to properly enforce its June 25, 2012 Order
of Court—which adopted the May 18, 2011 Master’s Report and
Recommendation wherein Husband was found to be 100%
responsible for the “litigation costs and expenses” in the civil
matter filed against Husband at GD 11-006476 [The Enclave
Lawsuit]—in its finding, which was manifestly unreasonable and
against the weight of the evidence, that certain counsel fees
($35,857) incurred by Wife were unrelated to the civil matter [in
The Enclave Lawsuit]?
Wife’s Brief at 6.
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In the appeal at 1653 WDA 2015, Husband raises the following nine
issues:
1. The trial court erred in affirming the Master’s award to
Wife of her counsel fees on the Homeowners’ Association
lawsuit, as Wife failed to raise a claim for counsel fees during or
after the equitable distribution trial; however, Husband, on the
other hand, did raise a claim for reimbursement of his counsel
fees for which Master Ferber determined he was solely
responsible.
2. The trial court erred in only reducing the amount of
counsel fees awarded to Wife by Husband by $35,857.00, where
the fees do not relate to the homeowner’s action filed against
Husband at the time of the Master’s Report and
Recommendation dated May 18, 2011, as the Master’s Report
could not have contemplated the action pursuant to which [Wife]
incurred substantial counsel fees, because it did not exist as of
the date of the Report and Recommendation.
3. The trial court erred in affirming the Master’s award of
counsel fees because the original Master’s Report decision was
based on Husband incurring counsel fees in the matter over
which Wife had no control, but Wife is now a party, has her own
counsel, and has even filed her own claims in the action giving
her complete control over her own counsel fees.
4. The trial court erred in affirming the Master’s award to
Wife of counsel fees after Wife settled the homeowner’s suit.
5. The trial court erred in affirming the Master’s award of
counsel fees to [Wife’s counsel] because Husband had a good
faith dispute over whether he was responsible for Wife’s counsel
fees.
6. The trial court erred in affirming the Master’s award to
Wife of $6,500.00 for a discovery dispute on which Husband
prevailed, and because the additional $6,500.00 award: (1) was
not specifically requested, and (2) is a double dip to the extent it
was awarded to [Wife’s counsel] in its claim for counsel fees on
the Homeowner’s Association matter.
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7. The trial court erred in reversing the Master’s
recommendation that Wife’s share of any damages awarded in
the Enclave civil suit “be calculated only for that percentage of
damages accrued prior to December 31, 2012” instead of prior
to December 31, 2010.
8. The trial erred on Reconsideration of the September 18,
2015 Order by permitting Wife to seek or request payment of, or
reimbursement for, counsel fees and costs incurred by her after
January 31, 2015 in connection with the civil suit at GD 11-
006476—effectively writing Wife a “blank” check to incur counsel
fees ad infinitum and ad absurdum.
9. The trial erred on Reconsideration of the September 18,
2015 Order by reversing the Master’s recommendation that Wife
be allocated responsibility for 35%, rather than 25% of the
damages assessed in the civil action.
Husband’s Brief at 8–10.
Wife’s Appeal at 1723 WDA 20159
Wife’s single complaint is that the trial court failed to properly enforce
its June 25, 2012 order, which adopted the May 18, 2011 Initial Master’s
Report. Wife’s Brief at 15. The Master had found that Husband was
100 percent responsible for the litigation costs and expenses in the Enclave
Lawsuit. The trial court upheld that finding in its June 25, 2012 order
denying Husband’s exception to the Master’s recommendation. When Wife
____________________________________________
9
Wife erroneously references, without explanation, citations to the certified
record as “3/4/16 T.T.” followed by a page number, suggesting to this Court
a hearing was held on 3/4/16. Such inattention to detail is inexcusable. The
hearing in the matter occurred February 12, 2015, and “3/4/16” was the
date of the relevant Master’s report.
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sought enforcement of that order, the Master awarded Wife all of the counsel
fees, costs, and expenses she incurred in the Enclave Lawsuit, through
January 31, 2015, which totaled $159,960.62. The trial court reversed the
Master’s finding, in part, and reduced Wife’s award by $35,857 to
$124,103.62. Order, 9/22/15, at unnumbered 1.10 In pertinent part, the
order provides as follows:
I find that it was reasonable for Husband to be held liable for
Wife’s attorney fees in [the Enclave Lawsuit] to which Husband
joined her. . . . It is unclear from [Wife’s counsel’s] bills that all
of the work performed by her firm was with regard to Wife’s
liability in [the Enclave Lawsuit]. In fact, many of the bill entries
are clearly related to other matters. Husband should not be held
liable for all of the bills submitted. The fact that [Wife’s
attorney’s] firm listed all of the work under the same billing code
does not, in and of itself, mean that all of that work
was . . . related to the [Enclave L]awsuit. Billing for the firm’s
lien against Wife to protect its outstanding invoices, and billing
related to lot sales are not appropriately assessed to Husband.
Wife took her Lots in equitable distribution as they were at the
time of distribution, including any and all liens and
encumbrances.
Id.Wife maintained that as a direct result of the litigation pending against
Husband, she was unable to sell the real estate lots that had been awarded
to her in equitable distribution. Wife’s Brief at 13. On appeal, Wife contends
that because the Enclave Lawsuit was the “sole cause of the costs” she
____________________________________________
10
While the order was dated September 18, 2015, it was not filed until
September 22, 2015.
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incurred, the trial court’s disallowance of any portion of the fees “results in a
forfeiture of the value of Wife’s property awarded to her in equitable
distribution.” Id. Wife asserts the trial court failed to specify the fees it
disallowed in both its September 22, 2015 order and January 29, 2016
opinion,11 and alleges it is impossible to recreate how the court arrived at
the amount of fees it disallowed. Wife’s Brief at 19.
Wife also avers that the trial court’s action in reducing credited counsel
fees amounts to “an inappropriate reversal of the credibility finding by the
Master, who actually heard testimony of [Darlene Nowak, Wife’s attorney,]
the only witness on the substantive issues related to the counsel fee award.”
Wife’s Brief at 22. Wife maintains there is no evidence in the record to
support such a finding, nor any evidence in the record to contradict
Ms. Nowak’s testimony. Id. at 24. Wife avers that the Master—the only
trier of fact to actually observe the witness—found Ms. Nowak to be credible.
Id. at 22–23. Thus, Wife maintains that the trial court erred and abused its
discretion in not awarding Wife all of the fees submitted to the Master, which
totaled $159,960.62 as of January 31, 2015.
Except in two instances, Husband relies on his brief in support of his
cross-appeal at 1653 WDA 2015 for his responsive argument to Wife’s claim.
____________________________________________
11
We assume Wife’s reference to “the January 16, 2016 opinion” is a
typographical error, as the relevant trial court opinion was dated and
docketed on January 29, 2016.
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Husband’s Brief at 44. Thus, to the extent we refer to Husband’s response
on this issue, we necessarily address some of the issues Husband raised in
his cross-appeal. Husband’s two responses asserted here are: 1) Wife failed
to meet her burden of proof regarding her entitlement to the fees, and
2) Wife’s claim that the Enclave Lawsuit impacted the sale of her properties
lacks merit. Husband’s Brief at 45–46.
As reproduced above, the trial court stated that it was unclear from
Wife’s counsel’s bills that all of the work performed by her firm related to
Wife’s liability in the Enclave Lawsuit. The trial court further indicated that
many of the bill entries were “clearly related to other matters.” Order,
9/22/15, at unnumbered 1. That order, however, failed to identify which
bills the court disallowed. Thus, we turn to the trial court’s Pa.R.A.P.
1925(a) opinion.
The trial court reiterated that while Husband was determined to be
responsible for 100 percent of the fees generated in the Enclave Lawsuit
because he brought Wife into the suit unnecessarily, that fact did not compel
Husband to be liable “for any and all fees that Wife incurs relative to her lots
in [T]he Enclave.” Trial Court Opinion, 1/29/16, at 11. The trial court
opined that when Wife received her Enclave lots, she received them “with all
of their encumbrances, and she was aware of that fact and the complications
it could cause her when she wanted to sell her lots.” Id. at 11–12. The trial
court explained:
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Here, Wife attempts to burden Husband with costs that
any real estate owner faces. She submitted her attorney,
Darlene Nowak’s bills into evidence. I did not credit Nowack’s
[sic] testimony that all entries on her invoices were related to
The Enclave [L]awsuit. The bills included entries for drafting
Agreements of Sale, attending closings, work on a completely
separate lawsuit, and even the drafting a Complaint in
Confession of Judgment against Wife by the . . . [law]firm to
protect its fees. I do not find any basis on which to attribute
these bills to Husband.”
Id. at 12 (internal citations omitted).
We previously determined in Husband’s issue five in his cross-appeal
at 390 WDA 2015 that the trial court did not abuse its discretion or err in
determining that because Wife was excluded from any dealings regarding
the development of The Enclave, which was solely managed by Husband, the
Master was correct in attributing all of the costs of litigation related to the
Enclave Lawsuit to Husband. We further concluded therein that the trial
court divided the responsibility for damages in an equitable fashion.
Similarly, we conclude, as did the trial court, that it was therefore
reasonable for Husband to be held liable for Wife’s attorney fees in the
Enclave Lawsuit. Thus, any of Husband’s issues in his appeal related to the
propriety of this conclusion are rejected.
In the present claim asserted by Wife, however, we are unable to
determine whether the trial court properly reduced the amount of fees owed
by Husband by $35,857. The trial court’s explanation, noted supra, while
seemingly reasonable, fails to notate the items eliminated and lacks specific
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reference to testimony supporting the court’s conclusions. While we have
reviewed the testimony referenced by the trial court, we note that the
parties did not refer to the Exhibits included in the record, and the trial court
has failed to identify the particular bills that it eliminated. For this reason,
we are compelled to remand this matter to the trial court.
Husband’s Appeal in 1653 WDA 2015
Husband’s first five issues relate to the propriety of the award of
counsel fees to Wife relating to the Enclave Lawsuit. We have determined
that fees properly were awarded with the exception of the trial court’s
disallowance of fees that we cannot ascertain in the record. Moreover, we
previously concluded the trial court properly found that Wife’s involvement in
the Enclave Lawsuit was solely due to Husband’s action in joining her as an
additional defendant in that matter. For this reason, Husband’s issues one
through five are rejected as meritless.
Husband’s sixth issue avers that the trial court erred in affirming the
Master’s separate award to Wife of $6,500 for a discovery dispute, in which
Husband prevailed, because the additional $6,500 award: (1) was not
specifically requested, and (2) is a “double dip” to the extent it was awarded
to Wife’s counsel in her claim for counsel fees in the Enclave Lawsuit.
Husband’s Brief at 34.
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The Master recommended $6,500 in counsel fees due to Husband’s
non-compliance with discovery. The Master explained that Husband “was
not forthcoming with answers to discovery and that his assertions in his
Reply and Counterclaim increased Wife’s legal fees.” Master’s Enclave
Report, 3/4/15, at 4.
Wife responds that when she presented her Petition for Enforcement of
fees, Husband averred that a hearing and discovery were necessary, given
the claims. Wife did not ask the Court for a hearing or discovery. Wife
contends that she propounded discovery, but received no documentation
whatsoever from Husband. Wife’s Reply Brief at 27. Thereafter, Husband
attempted to withdraw his claims, stating that he discovered he does not
have a claim “at this time.” Id. at 27. Thus, Wife asserts that Husband
withdrew his claims only after Wife was forced to seek legal counsel. She
argues this was vexatious behavior by Husband. Id. at 28.
It appears the trial court imposed fees pursuant to 42 Pa.C.S. § 2503,
which provides, in pertinent part, as follows:
§ 2503. Right of participants to receive counsel fees
The following participants shall be entitled to a reasonable
counsel fee as part of the taxable costs of the matter:
* * *
(7) Any participant who is awarded counsel fees as a sanction
against another participant for dilatory, obdurate or vexatious
conduct during the pendency of a matter.
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We have stated:
Section 2503(7) is a statutory provision enabling a participant to
receive reasonable counsel fees when another participant
engages in dilatory, obdurate or vexatious conduct during the
pendency of a matter. In re Estate of Liscio, 432 Pa.Super.
440, 638 A.2d 1019 (1994). . . . Moreover, “it is well-settled that
this Court will not reverse the trial court on its decision to award
counsel fees absent an abuse of discretion.” O’Connell v.
O’Connell, 409 Pa.Super. 25, 597 A.2d 643, 647 (1991)
(citation omitted).
Bonds v. Bonds, 689 A.2d 275, 279–280 (Pa. Super. 1997). See Kulp v.
Hrivnak, 765 A.2d 796, 800 (Pa. Super. 2000) (trial court award of
attorneys’ fees affirmed where lower court found the appellants’ conduct
dilatory, obdurate, and vexatious). Cf. Busse, 921 A.2d at 1258 (no abuse
of discretion for award of counsel fees where the husband prolonged the
already extensive litigation, he was not forthcoming with information the
wife requested, and the wife incurred counsel fees as a result of the
husband’s conduct).
In rejecting Husband’s claim, we rely on the trial court’s resolution of
the issue, as follows:
I affirmed the Master’s award of fees because I found
Husband’s behavior vexatious. Husband, in his Reply and
Counterclaim to Wife’s Petition for Enforcement, asserted he was
owed reimbursement from Wife for payments made pursuant to
three marital obligations distributed in the Master’s May 18,
2011 Report and Recommendation. First, Wife was to pay 50%
of any potential award in a separate 2003 lawsuit filed against
the parties . . . regarding money lent to the parties by Wife’s
Father (“the Fryer lawsuit”). Second, there was an outstanding
marital bill from Reed Smith; Third was Wife’s 25% liability for
any potential award in the The Enclave [L]awsuit.
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After receiving Husband’s Counterclaim, Wife propounded
discovery on Husband regarding his allegations that she owed
him reimbursement for payments made. Husband did not
comply with the discovery and Wife prepared a Motion to
Compel. Husband withdrew his claims, with my permission,
stating that “upon investigation, Husband has discovered he
does not have a claim at this time.” Husband was correct: he
did not have a claim. He had paid nothing on any of these
matters which would have entitled him to reimbursement.
By raising claims, which he knew or should have known
were invalid, Husband caused Wife to unnecessarily incur fees
defending against those claims. He withdrew the claims, but
only after the legal work had been done and bills incurred by
Wife.
I do not find Husband’s claim that this was an
innocent mistake credible. I do not believe Husband could
have had a reasonable belief he was entitled to reimbursement
when he had made no payments on any of these matters. I
found this behavior vexatious as it “had no basis in law or fact
and served the sole purpose of causing annoyance.” See,
Thunberg v. Straus, 682 A.2d 295 (Pa. 1996).
Trial Court Opinion, 1/29/16, at 9–10 (emphasis added). We defer to the
trial court’s credibility determination, Busse, 921 A.2d at 1256, and concur
with the court’s conclusion that Husband’s behavior was vexatious. Id.;
Kulp, 765 A.2d at 800.
Husband’s seventh issue is that the trial court erred in reversing the
Master’s recommendation that Wife’s share of any damages awarded in the
Enclave Lawsuit “be calculated only for that percentage of damages accrued
prior to December 31, 2012” rather than prior to December 31, 2010.
Husband’s Brief at 38. Husband asserts that the Master’s choice of
December 31, 2012, as the date before which Wife was responsible for
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damages awarded in the Enclave Lawsuit was correct. Wife responds that
the Master made a typographical error in the date, and it should have been
December 31, 2010, as determined by the trial court. Wife’s Reply Brief at
29–30.
We reject this issue based upon the trial court’s reasoning:
I found the Master either misunderstood the time period
covered by the lawsuit or, alternatively, there was a
typographical error. The Enclave [L]awsuit ends with 2010. As
Wife was held responsible for a percentage of any potential
damages awarded, it follows that her liability would end at 2010.
Additionally, the lots were distributed in 2011. It would be
illogical for Wife’s liability for Husband’s lots to continue after the
properties were distributed.
Trial Court Opinion, 1/29/16, at 10.
Next, Husband submits that the trial erred on reconsideration of the
September 22, 2015 order by permitting Wife to request reimbursement for
counsel fees and costs incurred by her after January 31, 2015, in connection
with the Enclave Lawsuit, “effectively writing Wife a “blank” check to incur
counsel fees ad infinitum and ad absurdum.” Husband’s Brief at 40.
Husband suggests Wife prematurely filed a petition for enforcement, thereby
prejudicing Husband. Id. at 40.
This issue relates to the Master’s failure to address whether Wife could
seek additional fees incurred after January 31, 2015. At the time of the
February 12, 2015 hearing, the Enclave Lawsuit remained pending. N.T.,
2/12/15, at 67–68. At that hearing, Wife presented her claim for fees
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incurred through January 31, 2015. Id. at Wife’s Exhibits 20–21.
Attorney Nowak testified that although the trial had taken place in August,
2014, no decision had been made because the trial court desired testimony
from a court-appointed expert. Id. at 67. The March 4, 2015 Enclave
Master’s Report did not address whether Wife could seek additional fees
incurred after January 31, 2015. Given that the litigation continued, the trial
court did not abuse its discretion in reconsidering its prior dismissal of Wife’s
cross-exception, thereby permitting Wife to seek relief to recoup additional
fees, if necessary. The trial court stated as follows:
Again, Husband brought Wife into the lawsuit. Until that
lawsuit is concluded, Wife could very well incur valid legal fees,
which should be Husband’s responsibility. My
decision . . . merely gives [Wife] a methodology to come into
court should she need to enforce her rights. . . . Wife’s rights
extend only to fees which arise in The Enclave litigation.
Trial Court Opinion, 1/29/16, at 11. Husband does not convince us that the
trial court’s conclusion on this issue was an abuse of discretion.
Finally, Husband asserts that the trial court erred on reconsideration of
the September 22, 2015 order in reversing the Master’s recommendation
that Wife be allocated responsibility for thirty-five percent, rather than
twenty-five percent, of the damages assessed in the Enclave Lawsuit.
Husband’s Brief at 42. Husband explained that in “the May 18, 2011
Master’s Report, the Master recommended on pages 11–12 that Wife be
responsible for 25% of the damages; however, in the recommendation
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section, on page 19, the Master stated that Wife shall be responsible for
35% of the damages.” Husband’s Brief at 42–43. Wife filed an exception to
this discrepancy, and the trial court corrected the mistake, concluding: “[I]t
was clear that [the Master] determined Wife should be responsible for 25%,
as she assigned Husband with 75%. She then mistakenly typed 35%, a
mistake carried over to her March 4, 2015 Recommendation. I simply
corrected that error.” Trial Court Opinion, 1/29/16, at 10.
We have reviewed the record and concur with the trial court. Further,
we note multiple documents filed by Husband in which he himself asserted
that the Master had assessed Wife’s responsibility for damages at twenty-
five percent. See, e.g., Husband’s Cross-Exceptions to the Initial Master’s
Report, 9/27/11, at ¶ z. The trial court did not err in correcting this obvious
mistake.
For all of these reasons, we conclude that the trial court did not err or
abuse its discretion in equitably distributing the marital estate, and we
remand on the discreet issues relating to the Coventry Estates shareholder
loan, the unexplained $48,500 attributed to Husband, and the reduction of
Wife’s attorney’s fees by $35,857 as explained herein.
Decree affirmed in part; case remanded for proceedings consistent
with this Memorandum. Jurisdiction relinquished.
Judge Olson joins the Memorandum.
Judge Strassburger files a Concurring and Dissenting Memorandum.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/3/2016
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