Scott, H. v. Hoffman, G.

J-A04042-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HARRY LUKE SCOTT : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
GRACE MARIE HOFFMAN, :
:
Appellant : No. 619 EDA 2019
Appeal from the Decree Entered January 9, 2019
In the Court of Common Pleas of Montgomery County
Domestic Relations at No(s): No. 08-09260
HARRY LUKE SCOTT, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
GRACE MARIE HOFFMAN : No. 621 EDA 2019
Appeal from the Decree Entered January 9, 2019
In the Court of Common Pleas of Montgomery County
Domestic Relations at No(s): No. 08-09260
BEFORE: PANELLA, P.J., McCAFFERY, J., and STRASSBURGER, J.*
MEMORANDUM BY PANELLA, P.J.: Filed: May 7, 2020
Harry Luke Scott (“Husband”) appeals, and Grace Marie Hoffman
(“Wife”) cross-appeals, the final equitable distribution and alimony pendente
lite (“APL”) order entered on December 26, 2018, by the Court of Common
Pleas of Montgomery County. We affirm all but one aspect of that order which
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A04042-20
relates to the valuation of Husband’s pre-marital interest in one of his
businesses. As to that one aspect, we reverse and remand for calculations,
and a corresponding disposition, consistent with this memorandum.
Husband and Wife began living together in 1997 and had a child in 1999.
They were married on October 8, 2004. The parties separated on January 15,
2008, and Husband filed for divorce in April of that same year. The parties
have subsequently “engaged in extensive litigation before numerous Judges,
Support Masters and Custody Conciliators” for, at this point, almost twelve
years. Trial Court Opinion, 9/3/19, at 1.
The longevity of the litigation is due in large part to a discovery process
that can fairly be described as combative and exhausting. The trial court
provided a detailed recitation of the discovery process in its opinion, see Trial
Court Opinion, 9/3/19, at 3 -17, but summarized the process as follows:
A review of the record of the history of this matter,
prior to the assignment of the matter to the
undersigned, reflects an extraordinary discovery
process that transpired over many years and involved
many Judges previously assigned to the case. In
summary, there is a strong impression of the
proverbial game of ‘cat and mouse’ in terms of what
financial information/documentation Husband would
voluntary produce with numerous discovery Orders,
and contempt Orders related thereto, entered over
the years.
Most prominent of the Orders is an eight (8) page
Order from October 22, 2013 in which Judge Garrettt
D. Page directed, after a hearing, that Husband’s
failure to comply would result in an immediate bench
warrant for Husband’s arrest and remand to custody
of Montgomery County Correctional Facility ‘until such
-2-
J-A04042-20
time as full and complete discovery responses were
provided or up to six months.’ The same Order also
provided for the payment of $270,000 in counsel
fees/sanctions. In the thirty (30) years of experience
in family court matters by the undersigned, these
extremely drastic types of results in discovery
skirmishes is quite extraordinary.
Trial Court Opinion, 12/26/18, at 20.
The discovery process culminated in a three-day protracted hearing on
Wife’s exceptions to the Hearing Master’s equitable distribution report entered
on July 7, 2017 and the parties’ exceptions to the Support Master’s APL report
entered on November 6, 2017. At the hearing, Wife testified that she worked
as a hairdresser until 2008, when she closed her salon due to a “nervous
breakdown” stemming from her separation from Husband. See N.T. Hearing
on Exceptions to Equitable Distribution Report, 12/11/17, at 202. According
to the trial court, because of her health issues, Wife’s “prospects of
employment at her prior level is [not] a reasonable expectation.” Trial Court
Opinion, 9/3/19, at 2. Her 2016 tax return reflected an overall negative
income of - $3,024.
Meanwhile, there was testimony at the hearing that Husband has a
separate, non-marital estate in the range of three million dollars. His main
sources of income are his snow removal business, Global Management, Inc.,
d/b/a Cenova (“Cenova”), and a portfolio of 30 residential rental properties.
According to Husband’s 2016 tax return, he has an annual income of $752,
255.
-3-
J-A04042-20
Perhaps not surprisingly, “nearly every single asset was disputed by the
parties as to their value (and dates of value), and even their status as marital
or non-marital assets” at the hearing. Trial Court Opinion, 9/3/19, at 26.
Husband and Wife each offered different values for all but one of the real
estate properties involved. Both parties also presented differing expert
testimony on the fair market value of Cenova as well as their own appraiser
to support their significantly different valuation of the former marital
residence.
Following the hearing, the court directed the parties to file post-hearing
submissions. “Due to the complexity of Husband’s real estate interests (with
ten (10) plus years of various acquisitions, transfers, and valuation dates) and
a lack of testimony on many of them,” the court also directed the parties to
file a joint side-by-side summary of the real estate at issue. Trial Court
Opinion, 9/13/19, at 18 n.16. The summary was to list each party’s respective
asserted value of the property at issue and a brief description of the dispute
over the property’s value.
The parties did not comply. Instead, Husband and Wife each submitted
their own version of a side-by-side summary of the realty properties, which
“imposed a burden on the [trial] Court to expend significant time and effort in
order to painstakingly plow through and reconcile the various values.” Trial
Court Opinion, 12/26/18, at 3.
-4-
J-A04042-20
On December 26, 2018, the trial court entered its final equitable
distribution and APL order, accompanied by a twenty-six page opinion in
support of that order. In the order, the trial court determined that the total
value of the marital estate was $2,300,064. The court awarded 55% of the
marital assets to Wife, and the remaining 45% to Husband. The court denied
Husband’s APL exceptions and granted Wife’s APL exceptions, and directed
Husband to pay monthly APL arrears in the amount of $19,515 for the time
period of July 13, 2016 through September 14, 2017 and then in the amount
of $21,023 from September 15, 2017 through the date of the order.1 The court
also denied Wife’s petition for alimony and directed Husband to pay $75,000
to Wife for counsel fees.
The trial court issued a divorce decree on January 9, 2019. Wife filed a
notice of appeal on February 5, 2019 and Husband filed his 11 days later.2
Both parties appealed the divorce decree and the December 26, 2018
equitable distribution and APL order. Wife also appealed an order entered by
the Court of Common Pleas of Montgomery County on February 25, 2016 and
Husband appealed an order by that same court dated August 11, 2017. The
____________________________________________
1 The difference in the amount of APL during the two periods is due to the fact
that Husband had physical custody of his and Wife’s child and was entitled to
a child support offset until September 14, 2017, when the child turned 18.
2 Under the Rules of Appellate Procedure, Husband is considered the
designated appellant and Wife is considered the designated cross-appellant
in this appeal. See Pa.R.A.P. 2136.
-5-
J-A04042-20
trial court directed the parties to file concise statements of matters complained
of on appeal pursuant to Pa.R.A.P. 1925(b) and subsequently issued its fifty-
seven page opinion pursuant to Pa.R.A.P. 1925(a) on September 3, 2019.
For ease of discussion, we will address the parties’ equitable distribution
issues first.3
In an action for divorce, the “court shall equitably divide, distribute or
assign, in kind or otherwise, the marital property between the parties without
regard to marital misconduct in such manner as the court deems just after
considering all relevant factors.” 23 Pa.C.S.A § 3502(a). Marital property
generally includes all property acquired by either party during the marriage
and the increase in value of certain non-marital property during the marriage.
See id. at § 3501(a). “The trial court has the authority to divide the award as
the equities presented in the particular case may require.” Mercatell v.
Mercatell, 854 A.2d 609, 611 (Pa. Super. 2004) (citation omitted). “Equitable
distribution does not presume an equal division of marital property and the
goal of economic justice will often dictate otherwise.” Id. at 612.
____________________________________________
3 The trial court outlined the full list of Husband’s, and then Wife’s, issues over
the course of four pages of its opinion. See Trial Court Opinion, 9/3/19, at 20-
23. While this Court typically addresses issues in the order presented by the
appellant, it made more sense to not only divide the issues in this appeal and
cross-appeal by subject (equitable distribution and APL), but to address the
issues in the appeal and cross-appeal on a particular order or particular asset
at the same time.
-6-
J-A04042-20
“When reviewing the records of the proceedings, [this Court is] guided
by the fact that trial courts have broad powers to effectuate justice.” Murphy
v. Murphy, 599 A.2d 647, 653 (Pa. Super. 1991). Given these broad powers,
we will disturb a trial court’s equitable distribution of marital property only
upon a finding that the trial court has abused its discretion. See id. “An abuse
of discretion is not found lightly, but only upon a showing of clear and
convincing evidence” that the trial court misapplied the law or failed to follow
proper legal procedure. Smith v. Smith, 904 A.2d 15, 18 (Pa. Super. 2006).
Here, the trial court faced the arduous task of valuing dozens of assets
in highly contested circumstances. Regarding the valuation of assets, this
Court has stated:
The Divorce Code does not set forth a specific method
for valuing assets, and consistent with our standard of
review, the trial court is afforded great discretion in
fashioning an equitable distribution order which
achieves economic justice. In valuing marital assets,
the trial court must exercise discretion and rely on the
estimates, inventories, records of purchase prices and
appraisals submitted by both parties. … [T]he court is
free to accept all, part or none of the evidence as to
the true and correct value of the property.
Carney v. Carney, 167 A.3d 127, 131-32 (Pa. Super. 2017)(citations
omitted).
Both Husband and Wife challenge the trial court’s valuation, treatment
and characterization of individual assets in its overall equitable distribution
award. Before addressing those individual claims as to specific assets, we first
-7-
J-A04042-20
consider Wife’s broader claim that the trial court abused its discretion by only
awarding her 55% of the marital assets. This claim fails.
The Divorce Code lists several factors the trial court must consider when
fashioning equitable distribution awards. Those factors include: the length of
the marriage; any prior marriages; age, health, skills and employability of the
parties; sources of income and needs of the parties; contributions of one party
to the increased earning power of the other party; opportunity of each party
for future acquisitions of assets or income; contribution or dissipation of each
party to the acquisition, depreciation or appreciation of marital property; value
of each party’s separate property; standard of living established during the
marriage; economic circumstances of each party; and whether the party will
be serving as custodian of any children. See 23 Pa.C.S.A. § 3502 (a)(1-11)
[“Section 3502(a)”]. The weight these statutory factors are given depends on
the facts of each case and is within the court’s discretion. See Mercatell, 854
A.2d at 611. When determining whether the trial court abused its discretion,
this Court must “look at the distribution as a whole, in light of the trial court’s
overall application of the factors enumerated at Section 3502(a).” Id. at 612.
The trial court’s opinion below contained specific findings as to each of
the factors listed in Section 3502(a). See Trial Court Opinion, 12/26/18, at
14-19. The court noted that the parties’ marriage of three years and three
months was not long but that they had been together for seven years prior to
their marriage and had a child together. The court also found the parties to
-8-
J-A04042-20
have great disparity in their earnings and earning capacity, with Husband
having an annual income of $752,255 in 2016 and wife having an overall
negative income for the same year.
In determining the employability and opportunity for future acquisitions
of capital assets and income of each party, the court noted that Wife’s health
issues significantly affected her prospects. The court found that Husband, in
contrast, was clearly in a better position of being able to acquire future income
and assets. To that end, the court noted that Husband had a non-marital
estate in excess of three million dollars, whereas Wife’s non-marital estate
consisted only of a $255,000 residence that was a gift from her parents.
Following its analysis, the trial court found that a disproportionate distribution,
with Wife receiving 55%, was necessary to accomplish economic justice.
Wife now essentially asserts that the trial court should have granted her
more than 55% of the marital estate, though she does not identify that
percentage. In rejecting this claim below, the trial court first found that it
could not “even begin to appropriately address” Wife’s issue as she had
completely failed to explain how she believed the trial court had erred by
awarding her 55%. Trial Court Opinion, 9/3/19, at 26.
Wife’s brief to this Court does not fare much better. It appears that Wife
is arguing that the trial court did not properly weigh the statutory equitable
distribution factors because if it had, according to Wife, it would be clear that
a 55%-45% split was not a just division of the marital estate. In particular,
-9-
J-A04042-20
Wife seems to argue that the trial court did not place sufficient emphasis on
the parties’ disparate economic situations.
Contrary to Wife’s claims, as noted above, the trial court clearly
considered the parties’ different economic realities. In fact, the court
specifically stated that both the health, sources of income and employability
factor as well as the opportunity for future acquisition of capital assets and
income factor “weighed heavily in favor of Wife.” Trial Court Opinion,
12/26/18, at 14-16. In the end, the trial court comprehensively went through
the statutory factors and based on those factors, fashioned a distribution
award that, in its discretion, achieved the most economic justice. Wife has
simply not shown that the trial court abused that discretion.
Turning to the valuation of the individual assets, Husband first argues
that the trial court did not properly calculate the marital increase in value of
his pre-marital ownership interest in Cenova. We are constrained to agree.
At the outset, we are mindful that “the valuation of Husband’s business
and significant real estate interests ha[s] been rendered extremely
challenging” in light of “the inordinate delay in the proceedings.” Trial Court
Opinion, 12/26/18, at 3. In selecting the date of valuation for purposes of
determining the fair market value of a marital asset, the court must choose a
date of valuation that best works economic justice between the parties. See
Smith, 904 A.2d at 18.
- 10 -
J-A04042-20
Since a business’s value may be subject to great fluctuation, the date
selected is generally close to the date of distribution rather than the date of
separation. See id. at 18-19. There are, however, limited circumstances when
it is more appropriate to value marital property as of the date of separation.
See id. at 19 (citations omitted). In addition, when a party brings separate
property into a marriage, only the increase in value of the property during the
marriage is considered marital property. See Mundy v. Mundy, 151 A.3d
230, 236 (Pa. Super. 2016).
Here, Husband had a 16.67% interest in Cenova at the date of the
parties’ marriage in 2004. During the marriage, in 2006, Husband’s interest
in Cenova increased by an additional 33.33% so that by the time of the parties’
separation in 2008 and the equitable distribution hearing in 2017, Husband
owned 50% of the company.
Both Husband and Wife presented extensive expert testimony on the
fair market value of Cenova, including its value at the time of marriage (2004),
at the date of separation (2008) and at the time of the equitable distribution
hearing (2017 - although these calculations were actually based on Cenova’s
2016 financials, the last full year for which Cenova’s financials were available).
Although both of the experts utilized the same income approach, they arrived
at drastically disparate values. Husband’s expert valued Cenova at $1,747,000
at the time of marriage, $1,839,000 at the time of separation and $3,152,000
at the time of the hearing. Wife’s expert valued Cenova at $1,346,923 at the
- 11 -
J-A04042-20
time of marriage, $2,730,410 at the time of separation and $7,230,224 at the
time of the hearing.
The experts also both assigned differing values to Husband’s 16.67%
pre-marital ownership interest in Cenova at the time of marriage, at the time
of separation and at the time of the hearing. Husband’s expert valued
Husband’s 16.67% ownership interest at $197,918 as of the date of marriage,
$208,420 as of the date of separation and $357,598 as of the date of the
hearing. See Business Valuation Report of Steven Juska, 4/28/17, at 20; N.T.
Hearing on Exceptions to Equitable Distribution Report, 12/6/17, at 68-69.
Wife’s expert, meanwhile, valued the 16.67% ownership interest at $224,532
as of the date of marriage, $327,715 as of the date of separation and
$867,800 as of the date of the hearing. See Business Valuation Report of
David Glusman, 5/16/17, at 2.
Both experts also assigned a different business valuation discount for
the minority interest and lack of marketability. See Trial Court Opinion,
12/26/18, at 6 (explaining that when determining the value of a business, it
is “appropriate to discount the value of a business for the lack of control that
a minority owner has over the company (minority interest) and for
marketability (the timing with which an interest in the business could be
sold)”). Husband’s expert assigned a 35% valuation discount whereas Wife’s
expert assigned a 28% valuation discount.
- 12 -
J-A04042-20
In the end, the trial court accepted the overall equity value of Cenova
to be $3,152,000 - the value as of the date of the hearing offered by Husband’s
expert - and accepted the 28% valuation discount advanced by Wife’s expert.
To reach the final marital value of Husband’s ownership interest in Cenova,
the court first reduced the $3,152,000 value by 50% to arrive at Husband’s
50% ownership interest of $1,576,000. It then deducted the valuation
discount of 28%, or the equivalent of $441,280. Lastly, the court subtracted
the value of Husband’s 16.67% pre-marital ownership interest at the time of
marriage that Husband’s expert had offered ($197, 918). For clarity, the court
provided the following calculation in its opinion:
$3,152,000 100% Equity Value
÷ 2
$1,576,000 50% ownership
- 441,280 Valuation discount of 28%
- 197,918 Value of Husband’s pre-marital interest
$936,802 Value of Husband’s interest as of 12/31/16
See Trial Court Opinion, 9/3/19, at 43. Accordingly, the court determined the
marital value of Husband’s ownership interest in Cenova to be $936,802.
Husband does not dispute that the trial court was free to use the
$3,152,000 figure to ascertain the value of the 33% interest he obtained in
Cenova during the marriage. Husband’s issue with the court’s calculation
stems from the way in which the court treated his 16.67% pre-marital
- 13 -
J-A04042-20
ownership interest in Cenova. The parties agree that Husband acquired this
interest prior to marriage, and that it is therefore not marital property. As
such, only the increase in value of the 16.67% interest during the marriage is
marital property. See Mundy, 151 A.3d at 236. The Divorce Code specifically
addresses how to measure and determine the increase in value of non-marital
property:
The increase in value of any nonmarital property …
shall be measured from the date of marriage or later
acquisition date to either the date of final separation
or the date as close to the hearing on equitable
distribution as possible, whichever date results in a
lesser increase.
23 Pa.C.S.A. § 3501(a.1) (emphasis added).
Relying on Section 3501 (a.1), Husband argues that by “utilizing only
the value of Cenova as of December 31, 2016, and applying that value to
Husband’s entire [50 percent] ownership interest, including the 16.6[7]
percent pre-marital ownership interest, [the court improperly] failed to make
a determination as to the date of separation value of Husband’s pre-marital
ownership interest in Cenova.” Husband’s Brief at 33. We agree.
As Husband points out, the language of Section 3501(a.1) clearly
required the trial court to determine both the increase of the value of
Husband’s 16.67 % interest in Cenova from the date of the marriage to the
date of separation as well as the increase of its value from the date of marriage
to the date of the hearing. The court was then required, pursuant to Section
3501(a.1), to select the lesser figure from those determinations and use that
- 14 -
J-A04042-20
figure in its calculation of the marital estate. The court did not do this here
and we agree with Husband that, under Section 3501 (a.1), it was error for it
not to do so.
While not cited by Husband, we note that this Court’s case law supports
this conclusion. In Biese v. Biese, 979 A.2d 892 (Pa. Super. 2009), the
husband owned the marital residence prior to the marriage and it was
therefore deemed to be non-marital property. In determining the increase in
value of the marital residence for purposes of equitable distribution, the trial
court used the value of the marital residence at the time of separation and not
its lesser value at the time of the equitable distribution hearing before the
Master. This Court held the trial court erred by doing so and stated:
The statutory language [of Section 3501(a.1)] cannot
be read as intending anything other than the lesser of
the valuations at separation vis-à-vis the time of the
Master’s hearing be used when establishing the
increase in value of the non-marital property.
Id. at 899.
In rejecting Husband’s claim below, the trial court indicated that it had
not committed any error because it had deducted the value of Husband’s pre-
marital interest ($197,928) from the total marital value of Cenova. However,
the value of the pre-marital interest used by the court was what Husband’s
expert had estimated Husband’s 16.67% interest was worth as of the date of
the marriage and it therefore did not in any way address the requirement
imposed by Section 3501(a.1). The value of Husband’s pre-marital ownership
interest at the date of the marriage will have to be deducted from any
- 15 -
J-A04042-20
calculation of the marital value of Husband’s total ownership interest,
regardless of what the increase in value of Husband’s 16.67% pre-marital
ownership interest during the marriage is determined to be.
Based on all of the above, we are compelled to remand to the trial court
to calculate the increase of value of Husband’s pre-marital 16.67% ownership
interest in accordance with the dictates of Section 3501(a.1). We acknowledge
that doing so only extends the life of a prolonged litigation that has already
expended so many resources, including those of the court. We also
acknowledge that this recalculation may ultimately have the effect of
significantly altering the total value of the marital estate.4 As such, we
recognize that the trial court, in its discretion, may determine that the new
calculation of the marital estate requires it to revise the equitable distribution
award as a whole, including the percentage of the marital estate to which each
party is entitled.
Next, Husband maintains that the trial court abused its discretion by
including the property at Black Walnut Lane, the parties’ former marital
residence, in the marital estate. Specifically, Husband contends it was error
____________________________________________
4 By way of example, Husband calculated the increase in value of the 16.67%
ownership interest using his expert’s valuation of Cenova at the time of the
hearing and calculated it to have a $180,171 increase in value. He then did
the same calculation but used his expert’s valuation of Cenova at the date of
separation and calculated the 16.67% ownership interest to have only a
$22,674 increase in value. See Husband’s Brief at 35-36. The trial court, of
course, is free to exercise its reasonable discretion in determining the
appropriate values to use to calculate the increase in value of the 16.67%
interest.
- 16 -
J-A04042-20
to include the property in the marital estate because it was purchased prior to
the marriage and was titled in Husband’s name alone. This claim fails.
In rejecting this claim below, the trial court explained:
By testimony borne out at trial, both parties agreed
that they acquired property prior to the marriage,
located at [] North Warner Lane, which was jointly
owned property (albeit purchased prior to marriage).
The parties then jointly refinanced the North Warner
Lane property in 2002 for $170,000, which was then
used toward the acquisition and construction of the
marital residence at [] Black Walnut Lane. In 2003,
the North Warner Lane property was sold and
produced $100,000 in proceeds which were likewise
used toward the marital residence.
Despite the acquisition date and the titling of the
property in Husband’s name, equity mandated that
Wife receive consideration of a portion of the value of
this asset via equitable distribution, as Wife credibly
testified that she transferred her interest in the North
Warner Lane property/proceeds toward the
acquisition of the [] Black Walnut Lane property with
the expectation that it would be their ‘joint’ residence
(along with their minor child).
The Court weighed all the equitable arguments from
both parties and assigned a value of $270,000
(representing the amounts paid for the acquisition of
the property from the equity/proceeds of their jointly
owned Warner Road residence) in the marital estate.
Trial Court Opinion, 9/3/19, at 44-45.
We agree with Wife that, in essence, the trial court found that “equity
required the parties to be entitled to a portion of the joint funds used to
purchase and construct [the Black Walnut Lane] property prior to marriage.”
- 17 -
J-A04042-20
Wife’s Brief at 20. We also agree with Wife that the trial court did not abuse
its discretion by doing so under the circumstances of this case.
Wife also raises her own issue relating to the trial court’s valuation of
the Black Walnut Lane property, which seems perplexing in light of her
previous position stated above. Wife asserts, with little explanation, that the
trial court erred by not including the reduction of the mortgage principal paid
down during the marriage as an increase in value of the Black Walnut Lane
property. We agree with the trial court that Wife has waived this claim.
The trial court found that Wife did not raise this issue until her post-trial
findings of fact/brief, and then did so only in the vaguest of ways.5 The trial
court also found that Wife did not offer any testimony or evidence about the
mortgage payments.
Wife argues in her appellate brief to this Court that the evidence
regarding the mortgage payments was in the record because Husband had
submitted the mortgage statements showing a reduction in the balance of the
mortgage as exhibits. However, Wife does not direct this Court to any place
in the record where she raised a sufficiently developed argument that, based
on those documents that Husband submitted as exhibits, the reduction of the
mortgage should have been included as an increase of value in the Black
Walnut Lane Property. We agree with the trial court that Wife did not properly
____________________________________________
5Wife’s findings of fact/brief merely references the mortgage reduction in its
conclusive paragraph on the Black Walnut Lane Property Section, which makes
an alternative claim regarding the minimal marital value of the property. See
Wife’s Findings of Fact/Brief, 3/29/18, at 8.
- 18 -
J-A04042-20
raise this issue and it is therefore, waived. See Commonwealth v. Love,
896 A.2d 1276, 1287 (Pa. Super. 2006) (stating that arguments which are not
sufficiently developed are waived).
Husband argues next that the trial court erred by finding that the 50%
ownership interest he acquired in certain properties from a lawsuit filed during
the marriage was not excludable as marital property pursuant to 23 Pa. C.S.A.
§ 3501(a)(1). This claim also fails.
Section 3501(b) of the Divorce Code provides that “all real or personal
property acquired by either party during the marriage is presumed to be
marital property regardless of whether the title is held individually or by the
parties in some form of co-ownership.” 23 Pa.C.S.A. § 3501(b). However,
Section 3501(b) also provides that this presumption can be overcome by a
showing that the property was acquired by a method listed in subsection (a)
of the Code. One of those methods is found at Section 3501(a)(1), which
states that marital property excludes any “property acquired in exchange for
property acquired prior to the marriage.” Id. at § 3501(a)(1).
Husband argues this exclusion applies to the interest in properties he
obtained as part of a lawsuit. By way of background, at the time of his
marriage, Husband owned a 50% interest in certain rental properties with his
former business partner, Robert Perry. Husband testified at the hearing that
in 2006, he discovered that Perry had sold several of those jointly owned
properties without Husband’s knowledge and pocketed the proceeds from
- 19 -
J-A04042-20
those unauthorized sales. In response, Husband filed a lawsuit against Perry
in July of 2006, while he was still married to Wife.
The parties reached a settlement agreement in the matter in 2007,
again, while Husband was still married to Wife. As part of that agreement,
Husband acquired Perry’s 50% ownership interest in seven of their jointly
owned properties that Perry had not sold, which made Husband the 100%
owner of those properties (“Perry Litigation Properties”).6 The trial court
classified the additional 50% interest that Husband had acquired in each of
these Perry Litigation Properties as marital property because Husband had
obtained that interest as part of a settlement reached in a lawsuit filed during
the marriage.
In his brief to this Court, Husband acknowledges that these
circumstances create a presumption that the additional 50% interest in each
of the Perry Litigation Properties is marital property. See Husband’s Brief at
44. Husband maintains, however, that this interest constitutes property
acquired in exchange for property acquired prior to marriage and is therefore
non-marital property under Section 3501(a)(1). Specifically, Husband argues
that this exception is applicable here because he released his pre-marital
ownership interest in the properties Perry had sold without his knowledge in
____________________________________________
6 The trial court identified those properties as: 113 Osborne Street, 1221
Markley Street, 425-427 Markley Street, 440 E. Marshall Street, 714 Astor
Street, 826 and 922 W. Main Street. With the exception of the Osborne Street
property, which is in Philadelphia, the properties are in Norristown.
- 20 -
J-A04042-20
exchange for the additional 50% ownership interest in the Perry Litigation
Properties. We do not agree.
We first note that Husband could not have released or exchanged his
ownership interest in the properties Perry had sold because that interest
ceased to exist once Perry sold those properties. This was, of course, the basis
for Husband’s lawsuit. As Wife argues, and the trial court found, it was only
because Husband filed this lawsuit in an effort to recoup his losses that he was
able to obtain the additional 50% ownership interest in the Perry Litigation
Properties.7 He simply did not obtain that interest as the result of an exchange
within the meaning of Section 3501(a)(1). See Trial Court Opinion, 9/3/19, at
50 (“The fact that Husband initiated a lawsuit against Mr. Perry which resulted
in Mr. Perry’s relinquishment of his interest in real property strongly supports
the Court’s finding that the Properties were not, as Husband claims, acquired
in exchange for property acquired prior to the marriage.”).
Moreover, as Wife notes, Husband’s argument that the settlement was
a clean exchange of his pre-marital interest in one set of properties for the
interest in another set does not account for the fact that Husband agreed to
pay Perry $100,000 as part of the settlement. See So-Ordered Stipulation and
Agreement of Settlement, 12/18/07, at 6. Wife also asserts that Husband’s
argument is further muddied by the fact that the properties Perry sold were
____________________________________________
7 In fact, Husband testified that he only settled for the additional 50% interest
in the Perry Litigation Properties because Perry did not “have any money” and
“you can’t get blood from a stone.” N.T. Hearing on Exceptions to Equitable
Distribution Report, 12/11/17, at 95.
- 21 -
J-A04042-20
rental properties and any rental income from those properties, along with any
increase in value of Husband’s pre-marital interest in the Perry Litigation
Properties, during the marriage was marital property. In any event, as the
trial court stated:
The fact remains that Husband accrued a cause of
action against Mr. Perry, during the marriage, over the
mishandling of several investment Properties. This
ultimately resulted in a settlement, also during the
marriage, with Mr. Perry paying Husband in the form
of signing over his interest in the Perry Litigation
Properties.
Trial Court Opinion, 9/3/19, at 48.
Therefore, the trial court found that the additional 50% interest was
marital property and Husband had not overcome the presumption that the
interest was marital property by establishing that he had acquired it by way
of an exchange as contemplated by Section 3501(a)(1). We see no abuse of
discretion in this determination. We also point out that, for equity purposes,
the trial court deducted Husband’s post-separation payment of legal fees and
transfer taxes necessitated by the litigation from the overall value of the Perry
Litigation Properties. No relief is due on this claim.
Wife raises the final two issues regarding the trial court’s equitable
distribution award. She first claims that the trial court abused its discretion by
denying her motion in limine seeking to preclude Husband from offering any
evidence at the equitable distribution hearing to support his claim that certain
properties were not marital property. Wife essentially contends that previous
- 22 -
J-A04042-20
orders entered by Judge Garrett Page and Judge Thomas Delricci precluded
Husband from offering this evidence as a sanction for his failure to comply
with Wife’s discovery requests. This claim warrants no relief.
As a threshold matter, we agree with the trial court that Wife has failed
to sufficiently develop her claim on multiple levels. Wife baldly announces that
the “Rule of Coordinate Jurisdiction undoubtedly applies to this issue,” and
appears to argue that this is so because the trial court’s denial of her motion
in limine was in “direct contradiction to numerous court orders previously
entered in this matter.” Wife’s Brief at 47. However, just as she failed to do
below, Wife does not identify those orders in her brief to this Court. Instead,
Wife refers this Court generally to her entire brief regarding her motion in
limine. That brief, in turn, does little to clarify Wife’s claim. “It is not this
Court’s responsibility to comb through the record seeking the factual
underpinnings of [the appellant’s] claim.” Krauss v. Trane U.S. Inc., 104
A.3d 556, 584 (Pa. Super. 2014). This is especially true when the record is
as voluminous as the one in the instant case.
Moreover, while Wife’s motion in limine brief does quote from the
October 22, 2013, March 21, 2014, and July 31, 2014 sanction/discovery
orders issued by Judge Page, which certainly contain preclusion sanctions, the
trial court found that those orders failed to specify with any clarity which
- 23 -
J-A04042-20
particular assets were the subject of the preclusion.8 As the trial court
observed, there was no “one, comprehensive Order that indicated what, in
fact, was to be ‘precluded’.” Trial Court Opinion, 9/3/19, at 32. The court
therefore found that it simply could not parse out exactly which assets Wife
believed Husband should have been precluded from arguing were non-marital.
See Trial Court Opinion, 9/3/19, at 32 (“Wife took the ‘kitchen sink’ approach
by arguing that Husband should be precluded from introducing any and all
evidence or testimony regarding the equitable distribution matter.”).
Wife contends in her brief to this Court that she provided a list of 19
rental properties Husband bought post-separation and a list of eight bank
accounts in her motion in limine brief. She argues Husband should have been
precluded from arguing those assets were not marital property. However, Wife
makes no argument at all regarding the bank accounts, and her argument
regarding the 19 properties purchased by Husband post-separation is sparse
at best. See Love, 896 A.2d at 1287 (stating that arguments which are not
sufficiently developed are waived).
____________________________________________
8 The October 22, 2013 order stated that the court would “enter an order
precluding [Husband] from introducing any evidence or testimony, whether in
support of his position or against [Wife’s] position … related to the economic
issues” if Husband failed to comply with the discovery directives in that order.
Trial Court Order, 10/22/13, at 7. Similar to the March 21, 2014 order, the
July 31, 2014 order provided that Husband was to be “sanctioned by
preclusion from introducing any evidence or testimony, either in support of
his position or against [Wife’s] position as to all discovery documents
previously ordered, and which have not been produced by the time limits
herein stated.” Trial Court Order, 7/31/14, at 5.
- 24 -
J-A04042-20
In any event, the court below found that Judge Arthur Tilson, the judge
assigned to the case after Judge Page, indicated in a discovery hearing that
Husband had provided sufficient information on the acquisition of these 19
properties. See N.T. Wife’s Exceptions/Discovery Issues Hearing, 6/29/16, at
76-81. Then, in an order issued the same day as that hearing, Judge Tilson
denied Wife’s request for any additional information as to the source of the
funds used to purchase those properties. See Trial Court Order, 6/29/16, at
1. In light of all of the above, Wife has simply not established that the trial
court abused its discretion in denying her motion in limine. See
Commonwealth v. Noll, 662 A.2d 1123, 1125 (Pa. Super. 1995) (stating
that the ruling on a motion in limine, like all evidentiary rulings, is committed
to the sound discretion of the trial court).
In the final issue regarding the equitable distribution award, Wife argues
that the trial court abused its discretion by not including the real properties at
DeKalb Street and Green Street, both in Norristown, and Krams Street in
Philadelphia as well as “Husband’s business bank accounts” as marital
property for purposes of equitable distribution. We are in full agreement with
the trial court that Wife has also waived this issue.
In finding this issue waived below, the trial court first noted that the
only document related to the above-listed properties introduced at the hearing
was a copy of the deed to Krams Street, which was dated after the parties’
separation. Other than that deed, “there were no Exhibits entered of record
for any of the within properties and a review of the record reflects that there
- 25 -
J-A04042-20
was no testimony elicited on these properties throughout the three day
protracted Hearing.” Trial Court Opinion, 9/3/19, at 40.
Wife argues, however, that she presented evidence of these properties
in her “post-hearing filings.” In support of this assertion, Wife generally cites
to the entirety of her post-hearing findings of fact/brief. She does not pinpoint
any specific part of that brief where she refers to these properties, their value
or any exhibits supporting that value, much less to where she referred to those
properties during the hearing. The only place Wife mentions the properties,
as the trial court noted, is in her post-hearing side-by-side summary of
properties. In that summary, Wife presumptively lists the properties as marital
and assigns a proposed value to them without any support, documentation or
reference to the record whatsoever. This claim is waived. See Love, 896 A.2d
at 1287.
Wife’s claim that the trial court should have included “Husband’s
business bank accounts” as marital property is also waived. Her entire claim
regarding the bank accounts is as follows:
During the hearing before the Trial Court, Wife
introduced numerous bank statements, which
Husband stated belonged to his businesses, Brown
Street Investments, HLS Investments, and Allegheny
Property Investments, which were all started during
the marriage (R. 1358a-1369a; 1402a). Husband did
not provide any evidence or testimony to overcome
the presumption that these accounts are marital
property. Therefore, there is no question that the Trial
Court committed an error of law when it failed to
include any and all bank accounts, introduced at the
- 26 -
J-A04042-20
hearing, that belonged to Husband’s businesses
during the marriage as marital property.
Wife’s Brief at 78.
This argument clearly suffers from the same defects as the one Wife
presented to the trial court. As the trial court stated, “since Wife does not even
put forth one specific account or an amount for the Court’s consideration on
[this] issue, the Court is without the slightest direction to even speculate as
to which accounts or amounts Wife takes issue with their exclusion.” Trial
Court Opinion, 9/3/19, at 41. Wife likewise fails to direct this Court in any
meaningful way, and her claim is therefore, waived. See Kraus, 104 A.3d at
584 (stating that it is not this Court’s responsibility to comb through the record
to find the factual underpinnings supporting a claim).
We now turn to the parties’ claims regarding Wife’s award of APL. We
note at the outset that “[t]he parties have litigated over everything including
…APL/Spousal Support since 2008.” Trial Court Opinion, 12/26/18, at 19. As
such, even an abbreviated history of the APL award in this case becomes
involved.
Wife has received APL since April of 2008. On September 2, 2014,
Husband filed a motion to terminate spousal support. Eight days later, on
September 10, 2014, Wife filed a petition to increase APL, seeking a
retroactive increase in APL on the basis that Husband had failed to inform her
of his increase in income beginning in 2010 (“petition to retroactively increase
APL”). Following a hearing, Judge Tilson granted Husband’s motion and
terminated “spousal support” in an order dated February 25, 2016. The order
- 27 -
J-A04042-20
did so on the basis that the “parties were only married for approximately 4
years and 4 months” with Wife receiving “spousal support for approximately
four times that amount of time.” Trial Court Order, 2/25/16, at 1.9 The order
also denied Wife’s petition to retroactively increase APL.
In turn, Wife filed a complaint for APL on July 13, 2016. Husband
eventually filed a motion for summary judgment on that complaint. The trial
court below denied Husband’s motion for summary judgment but granted
Wife’s request to reinstate her APL in an order dated August 11, 2017. In that
order, the trial court directed Domestic Relations to schedule proceedings to
determine the amount of Wife’s APL but reserved the right to make any credits
or adjustments to the APL amount in its final award. See Trial Court Order,
8/11/17, at 3-4.
Following those proceedings, the Support Master issued a recommended
report regarding Wife’s APL on November 6, 2017. The report reinstated Wife’s
APL retroactively to July 13, 2016, the date Wife filed her complaint for APL.
For purposes of calculating the amount of APL, Wife’s counsel, in an effort to
avoid any potential issues at equitable distribution, asked the Support Master
to rely on a monthly income for Husband that was lower than the net monthly
____________________________________________
9As Wife points out, the parties were actually only married for three years
and three months and Wife had at that point received APL for closer to eight
years, and not 17 years as the order indicated.
- 28 -
J-A04042-20
income of $53,731 reflected in Husband’s 2016 tax return.10 The Master’s
report therefore based its calculations for APL on a net monthly income of
$15,506.10 for Husband and a net monthly income of $1,174.17 for Wife, and
recommended that Wife receive APL in the amount of $5,072.89 from July 13,
2016 to September 14, 2017 and in the amount of $5,750.28 from September
15, 2017 onward.11 The report also stated that “allocation for all other income
…. is reserved for equitable distribution.” Findings of Fact, 11/6/17, at 2. Both
parties filed exceptions to the report and those exceptions were consolidated
with those filed by Wife in the equitable distribution matter.
Following the three-day hearing on those exceptions, the court issued
its December 16, 2018 order directing Husband to pay increased APL
payments to Wife retroactively to the date she filed her APL complaint. Based
on Husband’s actual 2016 income, which was $53,731 per month, the court
set the APL at the amount of $19,515 per month for the July 13, 2016 -
September 14, 2017 period and at the amount of $21,023 per month effective
____________________________________________
10 This information is in the notes of testimony from the Support Master’s
Hearing on October 6, 2017, which Husband has included in the reproduced
record. It does not appear that the notes of testimony from this hearing are
in the certified record. However, there is no challenge to this information
and the Master’s report, which is part of the certified record, specifically
notes that “Wife asked that not all of Husband’s income as shown on his
2016 tax return be included as part of his net income available for support.”
Findings of Fact, 11/6/17, at 2.
11Again, the difference in the amount of APL during the two periods is due to
the fact that Husband had physical custody of his and Wife’s child and was
entitled to a child support offset until September 14, 2017, when the child
turned 18.
- 29 -
J-A04042-20
September 15, 2017 through the date of the December 16, 2018 order. Both
Husband and Wife now appeal varying aspects of the court’s APL order. Wife
also appeals the February 25, 2016 order terminating APL and Husband
appeals the August 11, 2017 order reinstating APL.
APL is an order for temporary support of a spouse during the pendency
of divorce proceedings. See 23 Pa.C.S.A. § 3103. APL is “based on the need
of one party to have equal financial resources to pursue a divorce proceeding
when, in theory, the other party has major assets which are the financial
sinews of domestic warfare.” DeMasi v. DeMasi, 597 A.2d 101, 104 (Pa.
Super. 1991). “APL focuses on the ability of the individual who receives the
APL during the course of litigation to defend her/himself, and the only issue is
whether the amount is reasonable for that purpose, which turns on the
economic resources available to the spouse.” Id. at 105.
APL is also “designed to help the dependent spouse maintain the
standard of living enjoyed while living with the independent spouse.” Litmans
v. Litmans, 673 A.2d 382, 389 (Pa. Super. 1996) (citation omitted).
Therefore, in calculating the amount of APL, the court should consider the
ability of the other party to pay, the separate estate and income of the
applicant and the character, situation and surroundings of the parties. See id.The amount awarded is within the sound discretion of the trial court. See id.
at 388.
APL is based on the state of the litigation. See DeMasi, 597 A.2d at
104. As such, APL typically proceeds through the course of the litigation and
- 30 -
J-A04042-20
ends at the award of the divorce decree, which is also the point when equitable
distribution has been determined. See id. However, APL will generally
continue throughout the appeal process on matters of equitable distribution
and any remand until a final order has been entered. See id.Wife first argues that Judge Tilson’s February 25, 2016 order
erroneously denied her petition to retroactively increase APL and erroneously
terminated “spousal support,” even though only an order for APL was in effect.
This claim warrants no relief. 12
As Wife notes, the trial court did not specifically address the retroactivity
issue in its September 3, 2019 opinion. However, the court did address it in
its December 26, 2018 opinion in support of its equitable distribution and APL
order entered on that same date. In that opinion, the trial court acknowledged
Wife’s argument in her petition to retroactively increase APL that she was
entitled to an increase in APL retroactive to 2010 when unbeknownst to her,
Husband’s income had increased. The court noted, however, that Judge
Tilson’s February 25, 2016 order had specifically denied Wife’s petition to
retroactively increase APL.
The court then found that it was precluded from disturbing Judge
Tilson’s ruling denying Wife’s petition to retroactively increase APL by the
____________________________________________
12 Wife also summarily asserts that the February 25, 2016 order unjustly
denied her petition to increase APL - prospectively from the date of her petition
- but she does not sufficiently develop her argument. This claim is waived.
See Love, 896 A.2d at 1287 (stating that claim is waived if it is not sufficiently
developed).
- 31 -
J-A04042-20
coordinate jurisdiction rule, which prohibits judges of coordinate jurisdiction
from overruling each other’s decisions in the same case. See Ryan v.
Berman, 813 A.2d 792, 795 (Pa. 2002). The trial court recognized that it
could depart from the rule only in exceptional circumstances, such as when
the prior ruling was clearly erroneous and would create a manifest injustice if
followed. Id.13 Finding that neither was true regarding Judge Tilson’s ruling
denying Wife’s petition to retroactively increase APL, the court below
concluded that the coordinate jurisdiction rule barred it from making any
changes to Wife’s APL retroactive to 2010.
Wife does not address the trial court’s decision on the coordinate
jurisdiction rule. She does essentially argue, however, that Judge Tilson’s
order regarding his denial of her petition to retroactively increase APL was
clearly erroneous. Specifically, Wife claims her APL order should have been
modified retroactively pursuant to 23 Pa. C.S.A. § 4352(e). We disagree.
Section 4352(e) of the Divorce Code governs the retroactive
modification of support orders and states that retroactive modification of a
support order is to date back only to the date of a pending petition for
modification. However, Section 4352(e) also provides an exception to this
rule, namely that:
____________________________________________
13 Although not mentioned by the trial court, departure from the coordinate
jurisdiction rule is also allowed when there has been an intervening change in
the controlling law or a substantial change in the facts or evidence giving rise
to the dispute in the matter. Id. There is no argument that these
circumstances are present here.
- 32 -
J-A04042-20
Modification may be applied to an earlier period if the
petitioner was precluded from filing a petition for
modification by reason of a … misrepresentation of
another party or other compelling reason and if the
petitioner, when no longer precluded, promptly filed a
petition.
Id.
Wife argues that this section applies here because Husband did not
timely notify her or Domestic Relations, as he was required to do, of his
significant increases in income from 2010 forward. While Wife acknowledges
that Husband did produce his 2010 and 2011 personal tax returns as part of
five binders of discovery he delivered to Wife’s counsel on December 6, 2013,
Wife’s counsel did not discover those tax returns until July of 2014. Wife
subsequently filed her petition to retroactively increase APL on September 10,
2014.
Based on this timeline, Judge Tilson found that Wife had not filed her
petition to retroactively increase APL promptly, as the statute requires. We
see no error in Judge Tilson’s determination, especially in light of the fact that
the determination of whether a modification petition has been filed promptly
turns on the facts and circumstances of each case. See Krebs v. Krebs, 944
A.2d 768, 775 (Pa. Super. 2008).
Therefore, Wife has not established that Judge Tilson’s denial of her
petition to retroactively increase APL was clearly erroneous. As such, we would
find Wife was not entitled to any relief even if she had challenged the trial
court’s conclusion that the coordinate jurisdiction rule barred it from disturbing
Judge Tilson’s denial of her petition to retroactively increase APL.
- 33 -
J-A04042-20
The trial court, however, arrived at a different conclusion when
considering whether Judge Tilson erred by terminating Wife’s APL
completely.14 In maintaining that it had properly reinstated Wife’s APL in its
August 11, 2017 order after Judge Tilson had terminated it, the court
explained:
[T]he Court notes that the litigation in this matter has
been significant and ongoing, with seven hundred,
forty-six (746) docket entries as of the date of this
Opinion. By the time that support was terminated in
February 2016, the actual equitable distribution
proceedings were just getting underway, with
numerous experts and numerous days of hearings
anticipated. As such, the Court properly exercised its
authority to reinstate APL for Wife going forward due
to a clear need for sufficient funds to continue to
litigate the matter, as the purpose of [APL] is based
on the need of one party to have equal financial
resources to pursue the divorce proceedings, when, in
theory, the other party has major assets which are the
financial sinews of domestic warfare. … Husband
clearly holds the upper hand financially in the matter.
…
As such, the undersigned entered the August 11, 2017
Order which directed the payment of APL
notwithstanding the fact that spousal support was
otherwise terminated during the pendency of the
divorce proceedings.
____________________________________________
14 We recognize that Judge Tilson’s February 25, 2016 order terminated
“spousal support” when Wife was actually receiving APL. The trial court noted
that this prompted the parties to engage in a “maelstrom focused primarily on
semantics: whether the February 25, 2016 order terminated “APL” or “spousal
support.” Trial Court Opinion, 9/3/19, at 35. The parties continue to argue
about this issue in their briefs to this Court. However, it is clear that Judge
Tilson’s order was directing the termination of APL, as that was the only (non-
child) support order in effect at the time.
- 34 -
J-A04042-20
Trial Court Opinion, 9/3/19, at 36 (footnote omitted).
Husband argues that the coordinate jurisdiction rule - just as it had with
Judge Tilson’s ruling regarding Wife’s petition to retroactively increase APL –
barred the trial court from entering an order reinstating Wife’s APL after Judge
Tilson had terminated it. The trial court disagreed. The court stated that it was
mindful of the purpose of the coordinate jurisdiction rule and once again
recognized that a departure from the rule is allowed only in such exceptional
circumstances as where the prior ruling was clearly erroneous and would
create a manifest injustice. In finding those circumstances present here, the
court stated:
As mentioned [above], there is a huge discrepancy in
the parties’ resources and income, largely in
Husband’s favor. Despite this and the fact that the
parties were still in the midst of a contentious
equitable distribution battle, Judge Tilson’s February
25, 2016 Order terminated spousal support for Wife.
Id. at 52. The court then went on to say that “to deny Wife the ability to
continue to receive APL during the pendency of the divorce proceedings (and
prior to receiving any assets via equitable distribution), would be clearly
inequitable.” Id.
Husband makes much of the fact that the court did not use the words
“clearly erroneous” and “manifest injustice” in its reasoning. We do not agree
that the court’s choice of words negates its clear conclusion that the
circumstances in the instant case warranted a departure from the coordinate
- 35 -
J-A04042-20
jurisdiction rule and that it had therefore properly reinstated Wife’s APL during
the litigation. We see no abuse of discretion in the court’s determination and
therefore, no relief is due.15
Husband raises the final two claims regarding APL. He first maintains
that, because this case meets the definition for a high-income APL case, the
court was required to conduct an analysis regarding Wife’s reasonable needs
before assigning a final APL amount. In support of his claim, Husband relies
on Hanrahan v. Bakker, 186 A.3d 958 (Pa. 2018), which held that the finder-
of-fact must conduct a reasonable needs analysis in child support cases that
are considered high-income pursuant to the high-income support guidelines.
This claim fails.
As a threshold issue, Wife argues that Husband has waived this claim as
he never requested a deviation from the guidelines or asked the trial court at
any point to conduct a reasonable needs analysis. Husband counters that he
did not waive his claim because he could not have raised the issue regarding
a reasonable needs analysis at any time before this appeal. According to
Husband, the issue did not become relevant until the trial court sua sponte
attributed a monthly income of $53,731 to Husband in its December 26, 2018
____________________________________________
15 In her cross-appeal, Wife essentially argues that the February 25, 2016
order improperly terminated her APL because that termination was based
solely on the court’s consideration of the length of the receipt of her APL as
compared to the length of the marriage. Wife’s argument, in the first instance,
is not well developed. In any event, there is no need to address the merits of
Wife’s claim in light of our conclusion that the trial court did not abuse its
discretion in reinstating Wife’s APL on the basis that the February 25, 2016
order had improperly terminated it.
- 36 -
J-A04042-20
order, turning his case into a high-income one as defined by the high-income
support guidelines. See Pa.R.C.P. 1910.16-3.1(b) (defining a high-income APL
case as one where the parties’ combined monthly income is in excess of
$30,000).
Husband, however, was undoubtedly aware that his 2016 tax return
showed a monthly income of $53,731. While it is true that the Support Master
did not assign that full amount to Husband, Husband was also aware that the
Master’s report stated that allocation of other income had been reserved for
equitable distribution and that the trial court had specifically reserved the right
to make changes to the final APL award. Indeed, Husband “acknowledges that
[the trial court] did have the power, sua sponte to conduct [its] own income
calculations.” Husband’s Reply Brief at 44. Under these circumstances, it was
incumbent upon Husband to notify the trial court that it was his position that
the trial court must conduct a reasonable needs analysis before calculating
APL using any monthly amount in the high-income range.
This is especially true because the Supreme Court has specifically
instructed finders-of-fact not to conduct a reasonable needs analysis in APL
cases. As Husband acknowledges, our Supreme Court held in Mascaro v.
Mascaro, 803 A.2d 1186, 1195 (Pa. 2002), that the reasonable needs of a
spouse are not a proper consideration in APL cases. Husband points out,
however, that Mascaro was decided prior to the adoption of the high-income
support guidelines at Rule 1910.16-3.1, a fact the Hanrahan Court
acknowledged in a footnote. See Hanrahan, 186 A.3d at 975 n.24. Husband
- 37 -
J-A04042-20
maintains that this acknowledgment in the footnote signifies the Supreme
Court’s intent to have all high-income cases covered by the high-income
support guidelines, including APL, be subject to a reasonable needs analysis.
We do not agree.
The footnote in Hanrahan merely served to distinguish that case, which
involved child support, from Mascaro, which involved APL. It is clear from
even a quick reading of Hanrahan that the focus of the Hanrahan Court was
solely on child support in high-income cases. In particular, when analyzing
whether a reasonable needs analysis was necessary in high-income child
support cases, the Court first looked to the Income Shares Model, which forms
the basis for Pennsylvania’s child support guidelines and schedules. The Court
explained that the Income Shares Model is based on economic studies that
ensure that the standard child support award is actually “tied to the reasonable
needs of children living in standard income households.” Hanrahan, 186 A.3d
at 973. The Court then noted that the same economic data is not available for
high-income child support cases and found that it was thereby necessary for
courts to conduct its own discrete analysis of the reasonable needs of a child
in those cases. See id. At 976.
The footnote in Hanrahan made clear that “the Income Shares Model
relates only to child support and bears no relation to the APL/spousal support
guidelines.” Id. at 975 n.24, citing Mascaro, 803 A.2d at 1193 (stating that
the Income Shares Model is not relevant to the APL/spousal support
guidelines). Therefore, the rationale behind Hanrahan’s holding is inapposite
- 38 -
J-A04042-20
to APL cases. Based on these circumstances, we do not agree with Husband
that the footnote in Hanrahan had the effect of overruling Mascaro, which
plainly held that “[w]hile the reasonable needs of a child are paramount in a
high-income child support matter, the reasonable needs of a spouse are not a
proper consideration when calculating spousal support or APL.” Mascaro, 803
A.2d at 1195. Accordingly, even if Husband properly preserved his claim, it
would offer him no basis for relief under Mascaro.
In the final claim regarding APL, Husband essentially argues that the
trial court abused its discretion by awarding Wife an amount of APL that did
not reasonably relate to her ability to defend herself during the divorce
litigation. This final claim fails.
In support of his claim, Husband notes that the trial court found that
“APL is not based on the applicant’s reasonable needs [but] … ‘focuses on the
ability of the individual who receives APL during the course of litigation to
defend herself.’” Husband”s Brief at 64-65, quoting Trial Court Opinion,
9/3/19, at 54-55. With that purpose in mind, Husband argues that the trial
court’s award of APL to Wife in the amount of $19,515/$21,023 was
unreasonable given that he had already paid “virtually 100% of Wife’s counsel
fees.” Husband’s Brief at 67. In making this argument, Husband points to
payments he had already made to Wife’s counsel, including the “$395,000
payment of attorney fees required by Judge Page’s order of July 31, 2014.”
Id. at 66.
- 39 -
J-A04042-20
Wife argues, without further explanation, that this $395,000 was not
payment for counsel fees but rather was awarded to her as a sanction for
Husband’s ongoing failure to comply with Wife’s discovery requests. This
argument does not account for the fact that the trial court found, albeit for
purposes of what Husband owed in counsel fees and not in the context of his
argument here regarding APL, that the $395,000 Husband paid as sanctions
for his non-compliance was available for Wife to use for counsel fees. See Trial
Court Opinion, 12/26/18, at 25 (“While the sanctions payment was related to
non-compliance with discovery, and was in addition to the payment of counsel
fees at the time, the amount was available to Wife to apply towards” counsel
fees.). Wife does not address, much less challenge, the trial court’s ruling in
this regard and we therefore cannot disturb it. However, we would note that
we find it a bit disingenuous for Husband to argue that the money he paid as
a penalty for his repeated refusal to comply with discovery orders should now
benefit him by reducing the amount of APL he owes to Wife to litigate the
matter his chronic non-compliance only served to prolong.
In any event, as even Husband recognizes, the amount of APL is not
simply based on attorney fees. Rather, it is meant to put the parties on equal
footing during the litigation and in doing so, the court is to consider the ability
of the other party to pay, the separate estate and income of the applicant and
the character, situation and surroundings of the parties. See Litmans, 673
A.2d at 389. Based on these factors, the purpose behind APL, and the
circumstances of this case, we see no abuse of discretion in the trial court’s
- 40 -
J-A04042-20
award of APL to Wife. See id. at 388 (stating that the determination regarding
the amount of APL to be awarded is within the sound discretion of the trial
court).
In sum, then, as for the trial court’s December 26, 2018 order regarding
equitable distribution, we affirm all but the aspect of that order which involved
the calculation of the marital value of Husband’s ownership interest in Cenova.
As to that aspect, we remand to the trial court to calculate the increase of
value in Husband’s 16.67% pre-marital ownership interest in Cenova, and
fashion a corresponding equitable distribution award, in accordance with this
opinion. In regards to APL, we affirm the December 26, 2018 order insofar as
it granted Wife’s exceptions to APL and denied Husband’s exceptions to APL.
We affirm the February 25, 2016 order, except to the extent that it terminated
Wife’s APL. We affirm the trial court’s August 11, 2017 order reinstating APL.
Jurisdiction relinguished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/7/20
- 41 -