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HomeMy WebLinkAbout08-5421C r BERNARD C. FARRELL, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. Of ? °Z, CIVIL TERM Defendant IN DIVORCE NOTICE TO DEFEND AND CLAIM RIGHTS You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take prompt action. You are warned that if you fail to do so, the case will proceed without you and a decree of divorce or annulment may be entered against you for any claim or relief requested in these papers by the Plaintiff. You may lose money or property or other rights important to you, including custody or visitation of your children. When the ground for the divorce is indignities or irretrievable breakdown of the marriage, you may request marriage counseling. A list of marriage counselors is available in the Office of the Prothonotary at Cumberland County Courthouse, Carlisle, Cumberland County, Pennsylvania, 17013. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, Pennsylvania 17013 Phone: (717) 249-3166 or (800) 990-9108 BERNARD C. FARRELL, Plaintiff V. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : CIVIL ACTION -LAW : NO. 0 P 5"'1 3-/ CIVIL TERM IN DIVORCE COMPLAINT IN DIVORCE NO FAULT 1. Plaintiff is Bernard C. Farrell, an adult individual currently residing at 530 Doubling Gap Road, Newville, Cumberland County, Pennsylvania. 2. Defendant is Patricia M. Farrell, an adult individual whose current residence is 530 Doubling Gap Road, Newville, Cumberland County, Pennsylvania. 3. Plaintiff is a bonafide resident of the Commonwealth of Pennsylvania and has been so for at least six months immediately previous to the filing of this Complaint. 4. Plaintiff and Defendant were married on August 16, 1973, in Newton, New Jersey. 5. There have been no other prior actions for divorce or annulment between the parties. 6. Neither the Plaintiff nor the Defendant are members of the United States Armed Forces or its Allies. 7. Plaintiff has been advised of the availability of counseling and the right to request that the Court require the parties to participate in counseling. Knowing this, Plaintiff does not desire that the Court require the parties to participate in counseling. 8. Plaintiff and Defendant are citizens of the United States of America. 9. The parties' marriage is irretrievably broken. 10. Plaintiff desires a divorce based upon the belief that the Defendant will, ninety (90) days from the date of service of this Complaint, consent to this divorce. WHEREFORE, Plaintiff requests your Honorable Court to enter a divorce pursuant to 23 P.S. Section 3301(c) of the Domestic Relations Code. Respectfully submitted, L. ffie, Esquire At orney r Plaintiff GRIFFI & ASSOCIATES 200 North Hanover Street Carlisle, PA 17013 (717) 243-5551 (800) 347-5552 VERIFICATION I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsifications to authorities. DATE: B D C. FARRELL ? j ? ? ? ? ?., ? w ?° ?, ?, c\" ..,. BERNARD C. FARRELL, Plaintiff V. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 CIVIL TERM IN DIVORCE ACCEPTANCE OF SERVICE 1 5LA I, Samuel L. Andes, Esquire acknowledge that on SeTfembe----, 2008, I received a true and correct copy of the Complaint in Divorce filed in the above captioned action and acknowledge that I am authorized to do so on behalf of my client, Patricia M. Farrell. Date: '+4' zi, g 1 L. Ande , Esquire PO Box 168 Lemoyne, PA 17043 ?? C7 r0 cxa r T H', .4 T -? ± t, 2019 FEB -2 4. TV BERNARD C. LL Plaintiff ?. VS. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 CIVIL TERM IN DIVORCE DEFENDANT'S PETITION FOR ECONOMIC RELIEF AND NOW comes the above-named Defendant, by her attorney, Samuel L. Andes, and makes the following Petition for Economic Relief: COUNT I - EQUITABLE DISTRIBUTION 1. During the course of the marriage, the parties have acquired numerous items of property, both real and personal, which are held in joint names and in the individual names of each of the parties hereto. WHEREFORE, Defendant prays this Honorable Court, after requiring full disclosure by the Plaintiff, to equitably divide the property, both real and personal, owned by the parties hereto as marital property. COUNT II - ALIMONY 2. Defendant lacks sufficient property to provide for her reasonable needs in accordance with the standard of living of the parties established during the marriage. 3. Defendant is unable to support herself in accordance with the standard of living of the parties established during the marriage through appropriate employment. 4. The Plaintiff is employed and enjoys a substantial income from which he is able to contribute to the support and maintenance of Defendant and to pay her alimony in accordance with the Divorce Code of Pennsylvania. Pe--(- j94kt 3 -?'U9s WHEREFORE, Defendant prays this Honorable Court to enter an Order awarding Defendant from Plaintiff permanent alimony in such sums as are reasonable and adequate to support and maintain Defendant in the station of life to which she has become accustomed during the marriage. COUNT III - ALIMONY PENDENTE LITE 5. Defendant is without sufficient income to support and maintain herself during the pendency of this action. 6. Plaintiff enjoys a substantial income and is well able to contribute to the support and maintenance of Defendant during the course of this action. WHEREFORE, Defendant prays this Honorable Court to order Plaintiff to pay her reasonable alimony pendente lite during the pendency of this action. COUNT IV - COUNSEL FEES AND EXPENSES 7. Defendant is without sufficient funds to retain counsel to represent her in this matter. 8. Without competent counsel, Defendant cannot adequately prosecute her claims against Plaintiff and cannot adequately litigate her rights in this matter. 9. Plaintiff enjoys a substantial income and is well able to bear the expense of Defendant's attorney and the expenses of this litigation. WHEREFORE, Defendant prays this Honorable Court to order Plaintiff to pay the legal fees and expenses incurred by Defendant in the litigation of this action. S L. Andes Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unworn falsification to authorities). Date: PA CIA M. YO&ELL BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF-, Plaintiff CUMBERLAND COUNTY, PENNSIVAZZA ? - -n -? V. CIVIL ACTION -LAW == c °' ' ?? PATRICIA M. FARRELL > -v NO. 08-5421 CIVIL TERM, , Defendant , IN DIVORCE - N , ' MOTION FOR APPOINTMENT OF MASTER -? BERNARD C. FARRELL (Plaintiff) (Defer), moves the court to appoint a master with respect to the following claims: (X) Divorce (X) Distribution of Property () Annulment ( ) Support (X) Alimony (X) Counsel Fees (X) Alimony Pendente Lite (X) Costs and Expenses and in support of the motion states: (1) Discovery is complete as to the claims (s) for which the appointment of a master is requested. (2) The defendant (has) (hasno ) appeared in the action (personally) (by her attorney, Samuel Andes, Esquire). (3) The Statutory ground(s) for divorce (i-s) (are) 33? 01(c). (3) Delete the inapplicable paragraph(s): a. The aetion is not eeatested-. b. An agreement has been reached with respect to the following claims: N/A C. The action is contested with respect to the following claims: All of the above except divorce. (4) The action (des) (does not involve) complex issues of law or fact. (5) The hearing is expected to take two hetffs) (days). (7) Additional information, if any, relevant to the motion: None Date: er-e?_ - T lai ff) (Defer) ORDER APPOINTING MASTER AND NOW, , 20 , appointed master with respect to the following claims: By the Court: Esquire is J. 1 VLF i I LU (u BERNARD C. FARRELL, Plaintiff V. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OR-3- CUMBERLAND COUNTY, PENNSI•VAA !- -*, n rn CIVIL ACTION - LAW o, NO. 08-5421 CIVIL TERM IN DIVORCE z` r: '. .. MOTION FOR APPOINTMENT OF MASTER u a r T- 4 BERNARD C. FARRELL (Plaintiff) (Defendmoves the court to appoint a master with respect to the following claims: (X) Divorce (X) Distribution of Property O Annulment ( ) Support (X) Alimony (X) Counsel Fees (X) Alimony Pendente Lite (X) Costs and Expenses and in support of the motion states: (1) Discovery is complete as to the claims (s) for which the appointment of a master is requested. (2) The defendant (has) (leas-met) appeared in the action (personally) (by her attorney, Samuel Andes, Esquire). (3) The Statutory ground(s) for divorce (is) (are) 3301 (c). (3) Delete the inapplicable paragraph(s): The t' is net ea teste b. An agreement has been reached with respect to the following claims: N/A C. The action is contested with respect to the following claims: All of the above except divorce. (4) The action (inv4ves) (does not involve) complex issues of law or fact. (5) The hearing is expected to take two (ls) (days). (7) Additional information, if any, relevant to the motion: None Date: t lai ff) (Oe€endat) - jM ORDER APPOINTING MASTER - AND NOW, v4P 20 / 0 E 12o,6!LT 5L C/<6-/Z Esquire is appointed master with respect tot e following claims: ,4s us1g-,b A-6o?6 C-5 01vs rK.-Lt ry? By the Court: Qu'l s. a - .2-l1Q /t0 s''') BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA VS. CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE W NOTICE ~= -' If you wish to deny any of t he statements set forth in the attached affidavit, Diu must fib a counter-affidavit within twenty days after this Affidavit has been served on you or -< the statements will be admitted. AFFIDAVIT UNDER §3301(d) OF THE DIVORCE CODE 1. The parties to this action separated on or about May 1, 2008 and have continued to live separate and apart since that time. 2. The marriage is irretrievable broken. 3. I understand that I may lose rights concerning alimony, division of property, lawyer's fees or expenses if I do not claim them before a divorce is granted. I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsifications to authorities. DATE: * Z7 lv BERNARD C. FARRELL BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA vs. : CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE CERTIFICATE OF SERVICE I, Bradley L. Griffie, Esquire hereby certify that I did, the 9`h day of June, 2010, cause a copy of Plaintiff's Affidavit Under §3301(d) of the Divorce Code to be served upon the Defendant, Patricia M. Farrell, by serving her attorney of record by first class mail, postage prepaid, at the following address: Samuel L. Andes, Esquire PO Box 168 Lemoyne, PA 17043 DATE: (Og ? 6j"orVy riffi , squire for P aintiff rat ?.. _ 'r,i R t. ? C? C7 `r BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA hJ vs. CIVIL ACTION - LAWa - PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM J Defendant IN DIVORCE PETITION FOR BIFURCATION AND SPECIAL RELIEF AND RULE TO SHOW CAUSE AND NOW comes Petitioner, Bernard C. Farrell, by and through his counsel of record, Bradley L. Griffie, Esquire, and petitions the Court as follows: 1. Your Petitioner is the above named Plaintiff, Bernard C. Farrell, an adult individual currently residing at 905 Center Road, Newville, Cumberland County, Pennsylvania. 2. Your Respondent is the above named Defendant, Patricia M. Farrell, an adult individual with a current mailing address of Post Office Box 141, Layton, New Jersey, 07851. 3. Plaintiff initiated the within proceedings through the filing of a Complaint in Divorce on September 11, 2008, following the parties' separation on or about May 1, 2008. 4. Plaintiff has filed an Affidavit under §3301(d) claiming that the parties have been separated since on or about May 1, 2008, which Affidavit was filed on May 28, 2010 and served on or about June 10, 2010. 5. Respondent has not denied the parties separated on or about May 1, 2008. 6. Respondent has not denied, through any pleadings or proceedings, that the parties' marriage is irretrievably broken now that they have been separated for in excess of two (2) years. 7. The parties have substantial liquid assets and real estate, including rental real estate, over which each party has individual control. 8. Petitioner filed a Motion for Appointment of Master in these proceedings on February 16, 2010, and E. Robert Elicker, II, Esquire, was appointed as Master in this case. 9. Despite several meetings with the Master, a Master's hearing has not yet been scheduled. 10. The Master has indicated at least one preliminary hearing will be held regarding valuing and distributing a corporation in which the parties are both members, before a final Master's hearing is scheduled. 11. Respondent has raised the issue of marital misconduct and it is anticipated the Master, as is his practice, will schedule a separate hearing on this matter prior to the final Master's hearing. 12. The parties have moved on with their lives in many respects, with Respondent physically moving to the Philadelphia area. 13. It is in the best interest of both parties to allow the divorce to be concluded at this time while the Master continues to deal with the collateral economic issues in the divorce. 14. Approving a bifurcation of the divorce and allowing a Decree to be entered will have no adverse impact upon either party. BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE CERTIFICATE OF SERVICE I, Bradley L. Griffie, Esquire hereby certify that I did, the $ day of February, 2011, cause a copy of Plaintiff's Petition for Bifurcation and Special Relief to be served upon the Defendant, Patricia M. Farrell, by serving her attorney of record by first class mail, postage prepaid, at the following address: Samuel L. Andes, Esquire PO Box 168 Lemoyne, PA 17043 DATE: ?ti_ ;L! G fie, Esquire y f Plaintiff/Petitioner AGREEMENT THIS AGREEMENT is made this day of , 2008, and is by and between: PATRICIA S. FARRELL, hereinafter referred to as "Wife"; and BERNARD C. FARRELL, hereinafter referred to as "Husband." WITNESSETH: WHEREAS, Husband and Wife are married and are the owners and operators of a corporation that operates veterinary medical facilities in Pennsylvania. They have reached agreement for temporary financial arrangements with regard to that business and the financial support of Wife and want to have that agreement reduced to writing for their mutual protection. Accordingly, they hereby agree as follows: 1. Husband shall pay to Wife one-half of his salary from Farrell Veterinary Associates, Inc., net only of federal, state and local income taxes and Social Security and Medicare taxes. He shall pay that sum to her every two weeks, as he is paid by the corporation and the payments shall commence with his first pay in the month of September, 2008. The parties agree, however, that any disability or work income received by Wife during the time that she is receiving one half of Husband's salary pursuant to this Paragraph, will be credited to Husband's obligation under this Paragraph and will reduce the payments he is required to make by the amount of such disability or work income. 2. Wife shall continue to receive thirty-eight (38%) percent of the profits from Farrell Veterinary Associates, Inc. Her share of the profits will be paid to her before any bonus payments to employees, any increases in salary, any increase in payroll expenses, and any capital expenditures or other expenses in excess of Five Thousand ($5,000.00) Dollars, unless Wife agrees to such expenses or items prior to their being paid. Wife will receive a monthly draw against her share of the profits and that monthly draw will not be less than the monthly draw against profits distributed to Husband on a monthly basis. At the end of the year, the profits of the corporation will be calculated and, after payment of the matters set forth in Paragraph 3 hereof, those profits will be distributed so that Wife receives her full thirty-eight (38%) percent share of them. Wife agrees that the corporation shall pay the cost of installation of a HVAC or Geo-thermal heating and cooling system for the Newville Hospital, at a cost not to exceed $30,000.00, from the profits generated by the corporation for 2008 before those profits are divided. The parties will agree upon compensation to Wife for the cost of such improvements later, if Wife ceases owning her -1- Exhibit "A": r interest in the corporation as part of any eventual settlement or agreement between the parties. 3. The said corporation shall pay, as an advance against both Husband's and Wife's share of the profits, the following expenses for the benefit of Wife: A. The monthly installment on the loan which encumbers the title to her 2008 BMW X3 automobile; and B. The cost of insurance on the automobile; and C. The charges and fees for the cell phone used by Wife. These costs will be advanced by the corporation and deducted or otherwise recovered equally from the share of the profits generated by the corporation distributed to Husband and Wife at the end of the corporation's fiscal year. 4. Husband shall pay the fees and premiums required to continue the present health insurance on Wife. In addition, Husband will pay 50% of all professional fees, including psychiatric, psychological, and counseling fees, for Wife's current counseling and therapy program that are not covered by insurance. 5. Wife shall remain a shareholder, director, and officer of Farrell Veterinary Associates, Inc. As such, she will be entitled to receive all information regarding the operation of the corporation and its various businesses. There shall be no change in the officers, directors, or shareholders of the corporation, no expenditures of $5,000 or more other than in the ordinary course of business, and no increase in the corporation's debts without Wife's prior written consent. 6. Other than as set forth in Paragraph 5 above, Wife hereby resigns her employment by said corporation, effective 31 August 2008. 7. This agreement shall remain in full force and effect until such time as it is modified by the mutual agreement of the parties expressed in writing. The parties acknowledge that this is not intended as a full or final resolution of the economic issues arising out of their marriage and any potential divorce action against them, and agree to continue to exchange information in an effort to resolve all economic issues arising out of their marriage and any potential or eventual divorce. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year first above written. Dated: -711 Dated: Bernard C. Farrell Patricia S. Farrell -2- FARRELL BERNARD C IN THE COURT OF COMMON PLEAS OF , . Plaintiff CUMBERLAND COUNTY, PENNSYLVAN IA S. == vs. CIVIL ACTION - LAW ' c ' -vim t:? ca FARRELL PATRICIA M NO. 08-5421 CIVIL TERM ? ; -Y, -? , . Defendant IN DIVORCE 3 J `T1 ORDER OF COURT x1? AND NOW this /rti day of 01' , 2011, upon presentation and consideration of the within Petition for Bifurcation and Special Relief and Rule to Show Cause, a Rule is issued upon the Respondent to show cause, if any she has, as to why the request made by the Petitioner for bifurcation and termination or vacating of the parties' Agreement of September 19, 2008, should not be granted. Rule returnable z. o days after service by first class mail postage prepaid upon counsel of record for the Respondent. cc: Bradley L. Griffie, Esquire Attorney for Plaintiff/Petitioner Samuel L. Andes, Esquire Attorney for Defendant/Respondent p y BY THE COURT, I T i , P!A -2 P 2: 4 %10 t ?MBERLAND COUNTY FEP!' SYLVANIA BERNARD C. FARRELL, ) IN THE COURT OF COMMON Plaintiff ) PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. ) CIVIL ACTION - LAW PATRICIA M. FARRELL, ) NO. 08-5421 CIVIL TERM Defendant ) IN DIVORCE NOTICE TO PLAINTIFF NAMED HEREIN: YOU ARE HEREBY NOTIFIED TO RESPOND TO THE ENCLOSED ANSWER AND NEW MATTER COUNTERCLAIM WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A DEFAULT JUDGMENT MAY BE ENTERED AGAINST YOU. Date: 1 March 2011 r?-?Q Samuel L. Andes Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 BERNARD C. FARRELL, Plaintiff VS. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 CIVIL TERM IN DIVORCE DEFENDANT'S ANSWER TO PLAINTIFF'S PETITION FOR BIFURCATION AND SPECIAL RELIEF AND NOW comes the above-named Defendant, by her attorney, Samuel L. Andes, and makes the following Answer with New Matter to Plaintiff's Petition: 1. Admitted 2. Admitted. 3. Admitted 4. Admitted. 5. Admitted. 6. Admitted. 7. Denied as stated. Although it is acknowledged that the parties have substantial financial assets, a substantial portion of those are retirement assets which are not liquid. The parties also own substantial real estate holdings, which are not liquid and at least two of them are necessary for the continued operation of the corporation in which they both own an interest. By far the most valuable asset owned by the parties is their interest in the corporation which owns and operates the veterinary clinic which previously employed both of them and which is now in the control of Plaintiff. Defendant denies that she has individual control over the corporation. 8. Admitted. 9. Admitted. By way of further answer, Defendant incorporates herein the averments set out in her New Matter. 10. Admitted. Defendant incorporates herein, by reference, the averments set out in her New Matter. 11. Denied as stated. Plaintiff has acknowledged and admitted his marital misconduct and it is anticipated that the parties will not need a separate hearing to establish his adulterous affair with another woman during the marriage. Defendant does not believe a special hearing will be required to establish Plaintiff's misconduct. 12. Denied. Defendant has not been able to return to full time or gainful employment. She has left this area because of her embarrassment over the breakup of the marriage, her loss of employment b y the corporation owned by the parties, and a restrictive covenant between her and the corporation that has prevented her from working in the Cumberland County area. She continues to receive therapy for the emotional and psychological problems caused by the breakup of the marriage and the loss of her career. Defendant has not able to "move on" with her life. 13. Denied. Until such time as the parties know what assets they will receive and what incomes they will have, it is premature to terminate the marriage. 14. Denied. Plaintiff has shown very little interest in advancing the resolution of this case. Granting him a bifurcation now will remove what legal incentive he has to conclude the matter and, therefore, will operate to the distinct disadvantage of Defendant. 15. Admitted. 16. Denied as stated. Defendant does not know what Plaintiff "anticipated" but does not believe that Plaintiff expected that the divorce would be quickly resolved as he now avers. 17. Denied as stated. The divorce action has not languished and, in fact, the parties have devoted significant time to obtaining appraisals and exchanging financial information and attempting to negotiate a resolution of some of the complicated issues in the case. Defendant denies that she has refused to secure appropriate employment and avers that, because of the emotional and psychological problems caused by the breakup of the marriage, and the loss of her employment by the corporation in which she owns an interest, and her resulting treatment and therapy, she has not been able to obtain adequate employment to meet her financial needs. 18. Denied. Plaintiff is not paying any more under the agreement of 19 September 2008 than he would be required to pay to or share with Defendant if the parties were still residing together. Plaintiff has not suffered a "tremendous financial hardship" because of that agreement. Defendant incorporates herein, by reference, the averments set out in her New Matter. 19. Admitted. WHEREFORE, Defendant prays this court to deny Plaintiff s Petition for Bifurcation and Special Relief. NEW MATTER By way of further answer to Plaintiff's Petition, Defendant sets out the following New Matter: 20. The most significant asset in this case is a corporation owned by Plaintiff and Defendant and a third veterinarian which operates the veterinary practice created by the parties during the marriage. Plaintiff and Defendant each own 38% of that corporation. 21. The corporation generates virtually all of the income available to the parties, either in the form of salaries or rents paid to Plaintiff and Defendant for real estate which they own in their individual names and which is leased to the corporation as locations for their veterinary practice. 22. The corporation which owns the veterinary practice has been appraised at a value of approximately $1.5 million dollars. 23. In addition to the corporation, the parties own several tracts of real estate. Two of the most valuable of those tracts are improved with veterinary clinics which are leased, long term, to the corporation owned by Plaintiff and Defendant and a third veterinarian. 24. At the time when Defendant learned of Plaintiff s adulterous relationship with another woman, Defendant became extremely distraught and upset. As a result, she has been receiving psychological and psychiatric therapy and care every since. 25. Because of the potential turmoil in the veterinary practice caused by the breakup of the marriage of Plaintiff and Defendant, Plaintiff and the third owner of the corporation asked Defendant to leave employment of the corporation and not come to the corporation's offices or clinics. 26. Defendant honored the request of Plaintiff and the third owner of the corporation i and withdrew from employment by the corporation in September of 2008. At that time, to persuade Defendant to voluntarily leave the employment of the corporation, Plaintiff entered into the agreement of 19 September 2008 which is attached to Plaintiff's Petition. Without that agreement, Defendant would not have left employment by the corporation and would have insisted on continuing to work and draw her salary and other benefits. is 27. Since leaving the corporation, Defendant has not been able to hold full time gainful employment. She continues to be treated for the psychological and emotional effects of the j breakup of the marriage and her discovery of Plaintiff s adulterous relationship. 28. The agreement of 19 September 2008 expressly provides, in Paragraph 7, that the agreement shall remain "in full force and effect until such time as it is modified by the mutual I agreement of the parties expressed in writing." r 29. Defendant has not agreed to modify, revoke, or cancel the agreement of 19 i September 2008. 30. The resolution of the economic issues in this case are complicated by several factors, which include: A. The value of the parties' interest in the corporation and the apparent s inability or unwillingness of Plaintiff to purchase Defendant's interest in the corporation. B. The existence of agreements among the owners of the corporation i which Plaintiff contends dictate how the interest of Plaintiff and Defendant in the G corporation should be divided or distributed and Defendant's belief that the parties' interest in the corporation must be divided in the divorce action pursuant to the Divorce Code. C. A substantial portion of the real estate owned by the parties is occupied and used exclusively by the corporation and Plaintiff has expressed an unwillingness or inability to purchase or otherwise acquire Defendant's interest in those properties. As a result, the parties have been considering long-term leases for the property but Defendant is not certain such leases will provide her with sufficient security for her interest in those properties. D. Defendant's inability to hold full time employment in her field of education and experience and her resulting financial dependence upon Plaintiff. 31. The parties have held two conferences with the Master to discuss the issues in the case. Although they have not resolved all of those issues, Defendant feels they have made progress in that direction and that further proceedings before the Master, both in the form of conferences and hearings, will be required before this matter can be concluded. 32. If the case is bifurcated at this time, Defendant will suffer significant prejudice because Plaintiff's incentive to get the matter resolved now will disappear, Defendant is likely to be without health insurance coverage and will lose a portion of the COBRA benefit time period, and will run the risk of additional legal and adverse consequences to the entry of a final decree in divorce. WHEREFORE, Defendant prays this court to deny Plaintiff's Petition and let this matter proceed before the Master in the normal course of such proceedings. Samuel L. An es Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to authorities). Date: PA CIA M. F L CERTIFICATE OF SERVICE I hereby certify that I served an original of the foregoing document upon counsel for the Plaintiff by regular mail, postage prepaid, addressed as follows: Bradley L. Griffie, Esquire 200 North Hanover Street Carlisle, PA 17013 Date: 1 March 2011 ?. Amy Mjlarkins Secretary for Samuel L. Andes BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW =rn PATRICIA M. FARRELL, N0.08-5421 CIVIL TERM Defendant IN DIVORCE v,r ._ ? o -aca ANSWER TO NEW MATTER° =C) CDc as ' - 20. Admitted in part and denied in part. All statements set forth in paragr 0 r ¢°t admitted except for the suggestion that the corporation owned partially by the parties is the "most significant asset in the case". It is averred, rather, that it is "a" significant asset, but along with the parties' substantial retirement benefits, real estate and other assets, the parties' share of the net value of the Corporation is not necessarily the most significant asset. 21. Denied. It is denied that the corporation generates virtually all of the income available to the parties. It is admitted that the corporation produces salaries for the performance of veterinarian services by the parties and produces income through rents. It is further admitted that Plaintiff, essentially, is totally dependent upon the corporation for all of his income. It is denied that the Defendant is dependent upon the Corporation for her income, in that she has chosen to move from the area and has the same educational background and work skills as does Plaintiff, such that Defendant could become fully and gainfully employed as a veterinarian, either individually through establishing another business, or as an employee with a veterinarian practice, if she chose to work fulltime. It is further averred that Defendant has begun some limited employment in her field, but chooses to work extremely limited hours. It is further averred that Defendant has moved a great distance from her current employment in Media, Pennsylvania, choosing to move to New Jersey. It is further averred that Defendant is living rent free and mortgage free in her home. 22. Denied as stated. While the corporation has most recently been appraised at a value of approximately $1.5 million dollars, that averment is incomplete in that the evaluation did not include indebtedness of the corporation in excess of $400,000.00. Further, even 38% of the net value of the corporation is not a true reflection of the parties' interest in the corporation as they are tied to a Partnership Agreement which clearly dictates the benefit to which any of the three partners are entitled under circumstances where they sell or transfer their interest in the corporation. It is further averred that Defendant and her legal counsel drafted the parties' Partnership Agreement. 23. Admitted. 24. Denied as stated. It is admitted that, for a substantial period of time prior to the parties' physical separation, the parties' marriage was broken and the parties maintained an extremely limited marital relationship, although they resided within the same home. It is further admitted that Plaintiff became involved with another individual prior to the parties' physical separation. It is admitted that when Plaintiff indicated he was going to pursue a divorce because of the fact that the parties had not had a marital relationship for many years, the Defendant became upset. It is further admitted that Defendant has sought, and received, psychological and/or psychiatric therapy and care. It is further stated, however, that Defendant has been engaged in psychological and psychiatric therapy and care for in excess of 20 years and that the care she is receiving was not precipitated by the parties' separation or Defendant's claim of Plaintiff being involved in an adulterous relationship. 25. Denied. It is denied that because of the potential turmoil in the veterinary practice caused by the breakup of the marriage of Plaintiff and Defendant, Plaintiff and the third owner of the corporation asked Defendant to leave employment of the corporation and not come to the corporation's offices or clinics. It is averred, rather, that for an extended period of time, Defendant's failure to properly engage herself in the operation of the business of the corporation had a negative impact upon the operation of the business, and upon the employees of the business, such that Plaintiff and the third party owner of the corporation had contemplated for an extended period of time how to ask Defendant to refrain from involving herself, even to the limited amount she was involving herself, in the operation of the corporation. It is further averred that for several years prior to the parties' physical separation, Defendant was producing less than TWO (2%) PERCENT of the gross income for the three members of the corporation. It is further averred that the physical separation of Plaintiff and Defendant simply provided an opportune time for Plaintiff and the third party owner of the corporation to approach Defendant about completely terminating her involvement with the corporation. 26. Admitted in part and denied in part. The first sentence of paragraph 26 is essentially correct in that Defendant withdrew from employment by the corporation in September of 2008. It is denied that this was solely done as Defendant "honoring" the request of Plaintiff and the third party owner of the corporation, but, rather, this was an agreement of the three partners of the corporation for many reasons. It is further admitted that Plaintiff entered into the agreement of September 19, 2008 which was attached to Plaintiff's Petition, which provided for Plaintiff to provide Defendant with support pending the resolution of the parties' divorce proceedings. It is denied that this was done to persuade Defendant to voluntarily leave employment with the corporation in that Defendant had not been fully engaged in employment with the corporation for an extended period of years and the physical leave from the employment of the corporation was simply an acknowledgement of what had occurred many years prior. It is denied that Defendant would not have left employment by the corporation, or would have insisted on continuing to work and draw her salary and benefits, without the agreement in that Plaintiff and the third party owner of the corporation had the option of proceeding through other aspects of the parties' Partnership Agreement to remove Defendant from the corporation had they so chosen. It is further averred that Defendant continues to receive benefits from the corporation. 27. Denied. It is denied that since leaving the corporation Defendant has not been able to hold fulltime gainful employment. It is averred, rather, that Defendant has chosen to not hold fulltime gainful employment, but only to work part-time in minimal employment situations. It is further denied that Defendant continues to be treated for psychological and emotional effects of the breakup of the marriage and her discovery of Plaintiff's adulterous relationship in that Defendant has been engaged in psychological and psychiatric treatment for many, many years, which did not previously affect her ability to work, although she chose, for many years, to not fully engage in her employment with the corporation. 28. Admitted. It is further admitted that the document speaks for itself. 29. Admitted. 30. A. Admitted in part and denied in part. It is admitted that the value of the parties' interest in the corporation has been complicated, but reason for the complication is that Defendant has attempted to override the terms of the three partners of the corporation's Partnership Agreement and the terms of the buy-out or purchase of Defendant's interest in the corporation under the terms of the Partnership Agreement, through pursuing a division of the partnership through the divorce, which Plaintiff submits is clearly inappropriate. It is further averred that Defendant and her legal counsel drafted the Partnership Agreement at issue. It is further averred that this is an effort on Defendant's part to create complications in the resolution of the divorce proceedings and to create additional delay in a final resolution of this divorce. B. Admitted in part and denied in part. While the statements set forth in sub- paragraph 30 B are accurate,, it is submitted that these are not complicated factors, but an effort on Defendant's part to override or overrule the terms of the Partnership Agreement executed by the parties hereto and the third party owner of the corporation, which clearly dictate how any of the three parties would be treated in the event of their removal or withdrawal of the corporation. C. Admitted in part and denied in part. It is submitted that the issues set forth in sub-paragraph 30 C are not complicating factors, but aspects of the separation and prospective divorce that would be dealt with in this case by the Divorce Master in the same manner that it is being dealt with in every case. D. Denied. It is denied that the averment set forth in paragraph 30 D are complicating factors to the resolution of this case, particularly in that Defendant chooses to not hold fulltime employment, but rather work part- time in an area of her field of expertise that provides limited income. It is further averred that Defendant has income from rental of the Holly Pike property, the rental of one of the farms formerly owned jointly by the parties and from shareholder's payments. 31. Admitted in part and denied in part. It is admitted that two conferences have been held with the Divorce Master. It is admitted that there has been some progress in the resolution of the case, but that this progress has been extremely limited. It is further admitted that there will be additional conferences and hearings in this matter, most likely resolving the case in its entirety through a comprehensive Master's hearing. It is further averred that Defendant has simply refused to negotiate a resolution of this case, and had delayed many months in responding to a comprehensive proposal that Plaintiff submitted to her. 32. Denied. It is denied that if the case is bifurcated at this time, Defendant will suffer significant prejudice. It is denied that a bifurcation would remove incentives for Plaintiff to resolve this matter in that Plaintiff is the only party who is aggressively trying to pursue this matter through resolution by negotiation or by litigation. It is denied that Defendant is likely to be without health insurance coverage, or she will lose a portion of her COBRA benefit time period, or that she will run the risk of additional legal and adverse consequences as the result of the entry of a final Decree in Divorce. WHEREFORE, Plaintiff requests your Honorable Court to bifurcate the divorce and allow the parties to secure a no-fault Divorce Decree at this time and that the Court terminate or vacate the parties' Agreement of September 19, 2008. Respectfully submitted, y I Griffie, Esquire Attorney for Plaintiff ID #34349 200 North Hanover Street Carlisle, PA 17013 (717) 243-5551 (800) 347-5552 VERIFICATION I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unworn falsifications to authorities. DATE: 111,4(( BERNA . F LL BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA VS. : CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE CERTIFICATE OF SERVICE 7W I, Bradley L. Griffie, Esquire hereby certify that I did, the L day of April, 2011, cause a copy of the within Answer to New Matter to be served upon the Defendant, Patricia M. Farrell, by serving her attorney of record by first class mail, postage prepaid, at the following address: Samuel L. Andes, Esquire PO Box 168 Lemoyne, PA 17043 DATE: . G 'fie, Esquire orney for Plaintiff r EL - :r ?° iUC THs Pi k? T HTT , l `' 2-5 11 KAY -2 A, ill 10: i ? 111BEfZi.Afl } U r I PENNSY! V N1 , BERNARD C. FARRELL, Plaintiff vs. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 CIVIL TERM IN DIVORCE DEFENDANT'S PETITION TO ENFORCE SUPPORT AGREEMENT AND NOW comes the above-named Defendant, by her attorney, Samuel L. Andes, and petitions the court to enforce a support agreement between the parties, based upon the following: 1. The Petitioner herein is the Defendant, Patricia S. Farrell ("Wife"). The Respondent herein is the Plaintiff, Bernard C. Farrell ("Husband"). 2. The parties are Husband and Wife and, during their marriage, they created and were the primary owners and operators of a corporation, Farrell Veterinary Associates, Inc., which operates two veterinary medical facilities in Cumberland County. 3. In the Spring of 2008, Wife learned that Husband was engaged in an adulterous affair with another woman. 4. Husband's affair, which continued after Wife's discovery of it, caused considerable turmoil and upset between the parties. Those problems extended into the workplace at the Veterinary hospitals operated by the parties. 5. Because of the problems between Husband and Wife, Husband and the third owner of the Veterinary corporation, Todd Hasco, asked Wife to cease working at the Veterinary facilities. Wife agreed to do that only on the condition that she and Husband had an agreement in place to provide for her financial support and to provide her with her continuing benefits from ownership in the corporation. 6. As a result of the above, Husband and Wife entered into an Agreement dated 19 September 2008 which was intended to provide for Wife's support and her continued receipt of benefits from her ownership in the corporation during the parties' separation. A copy of that Agreement is attached hereto and marked as Exhibit A. 7. Wife has performed her obligations under the Agreement and done whatever the Agreement required of her in a timely and proper fashion. 8. Husband has breached the Agreement and failed to perform his obligations under that in several ways, which include: A. Husband failed to pay Wife her full share of his salary from the corporation as required by Paragraph 1 of the Agreement. B. Husband failed to pay and distribute to Wife her full share of the profits from the corporation as required by Paragraph 2 of the Agreement. C. Husband has failed to pay one half of all professional fees, including psychiatric, psychological, and counseling fees, for Wife's current counseling and therapy program beyond that covered by the health insurance Husband has provided to Wife, all in violation of Paragraph 4 of the Agreement. D. Husband has failed to make any payments to Wife, including one half of his salary payments as required by Paragraph 1 of the said Agreement, since December of 2010. 9. Defendant, by his conduct as outlined above, has breached the Agreement and, by doing so, has caused Wife significant financial harm and injury. 10. Prior orders in this case have been entered by the Honorable Kevin A. Hess. 11. Husband does not concur in Wife's request for relief as set out in this Petition. WHEREFORE, Defendant prays this court to enforce the terms of the Agreement between the parties dated 19 September 2008 by requiring Plaintiff to make all payments due and owing under that Agreement immediately . Date: c SZ?-aLL'rlh Samuel L. Andes Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to authorities). Date: /g] 11 / PATRICIA S. F CERTIFICATE OF SERVICE I hereby certify that I served an original of the foregoing document upon counsel for the Plaintiff by regular mail, postage prepaid, addressed as follows: Bradley L. Griffie, Esquire 200 North Hanover Street Carlisle, PA 17013 Date: 27 April 2011 Amy arkins Secretary for Samuel L. Andes '0? K EXHIBIT A l v'r Y AGREEMENT THIS AGREEMENT is made this day of , 2008, and is by and between: PATRICIA S. FARRELL, hereinafter referred to as "Wife"; and BERNARD C. FARRELL, hereinafter referred to as "Husband." WITNESSETH: WHEREAS, Husband and Wife are married and are the owners and operators of a corporation that operates veterinary medical facilities in Pennsylvania. They have reached agreement for temporary financial arrangements with regard to that business and the financial support of Wife and want to have that agreement reduced to writing for their mutual protection. Accordingly, they hereby agree as follows: 1. Husband shall pay to Wife one-half of his salary from Farrell Veterinary Associates, Inc., net only of federal, state and local income taxes and Social Security and Medicare taxes. He shall pay that sum to her every two weeks, as he is paid by the corporation and the payments shall commence with his first pay in the month of September, 2008. The parties agree, however, that any disability or work income received by Wife during the time that she is receiving one half ofHusband's salary pursuant to this Paragraph, will be credited to Husband's obligation under this Paragraph and will reduce the payments he is required to make by the amount of such disability or work income. 2. Wife shall continue to receive thirty-eight (38%) percent of the profits from Farrell Veterinary Associates, Inc. Her share ofthe profits will be paid to her before any bonus payments to employees, any increases in salary, any increase in payroll expenses, and any capital expenditures or other expenses in excess of Five Thousand ($5,000.00) Dollars, unless Wife agrees to such expenses or items prior to their being paid. Wife will receive a monthly draw against her share of the profits and that monthly draw will not be less than the monthly draw against profits distributed to Husband on a monthly basis. At the end of the year, the profits of the corporation will be calculated and, after payment of the matters set forth in Paragraph 3 hereof, those profits will be distributed so that Wife receives her full thirty-eight (38%) percent share of them. Wife agrees that the corporation shall pay the cost of installation of a HVAC or Geo-thermal heating and cooling system for the Newville Hospital, at a cost not to exceed $30,000.00, from the profits generated by the corporation for 2008 before those profits are divided. The parties will agree upon compensation to Wife for the cost of such improvements later, if Wife ceases owning her interest in the corporation as part of any eventual settlement or agreement between the parties. 3. The said corporation shall pay, as an advance against both Husband's and Wife's share of the profits, the following expenses for the benefit of Wife: A. The monthly installment on the loan which encumbers the title to her 2008 BMW X3 automobile; and B. The cost of insurance on the automobile; and C. The charges and fees for the cell phone used by Wife. These costs will be advanced by the corporation and deducted or otherwise recovered equally from the share of the profits generated by the corporation distributed to Husband and Wife at the end of the corporation's fiscal year. 4. Husband shall pay the fees and premiums required to continue the present health insurance on Wife. In addition, Husband will pay 50% of all professional fees, including psychiatric, psychological, and counseling fees, for Wife's current counseling and therapy program that are not covered by insurance. 5. Wife shall remain a shareholder, director, and officer of Farrell Veterinary Associates, Inc. As such, she will be entitled to receive all information regarding the operation of the corporation and its various businesses. There shall be no change in the officers, directors, or shareholders of the corporation, no expenditures of $5,000 or more other than in the ordinary course of business, and no increase in the corporation's debts without Wife's prior written consent. 6. Other than as set forth in Paragraph 5 above, Wife hereby resigns her employment by said corporation, effective 31 August 2008. 7. This agreement shall remain in frill force and effect until such time as it is modified by the mutual agreement of the parties expressed in writing. The parties acknowledge that this is not intended as a full or final resolution of the economic issues arising out of their marriage and any potential divorce action against them, and agree to continue to exchange information in an effort to resolve all economic issues arising out of their marriage and any potential or eventual divorce. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year first above written. Dated: 7AVAY, Dated: Bernard C. Farrell Patricia S. Farrell -2- t , 4 r ? C3J ERLAlb[) EN111SY11-VA I BERNARD C. FARRELL, Plaintiff VS. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 CIVIL TERM PATRICIA M. FARRELL, Defendant IN DIVORCE ORDER OF COURT AND NOW this 1 ` day of 2011, upon consideration of the attached Petition, a Rule is hereby issued upon the Plaintiff, to show cause, if any he has, why the relief requested in the Petition should not be granted. The Rule shall be served upon Plaintiff s attorney of record by regular mail and shall be returnable 2 o days from date of service. Distribution /Bradley L. Griffie, Esquire (Attorney for Plaintiff) 200 North Hanover Street, Carlisle, PA 17013 Samuel L. Andes, Esquire (Attorney for Defendant) 525 North 12t' Street, P.O. Box 168, Lemoyne, Pa 17043 BY THE COURT, FILED-OF' F I CE'-, THE 20 11 JUN 21 AM 10: 1 S ` UMBER! At4D COI N- PENNSYL` AA 1I BERNARD C. FARRELL, ) Plaintiff ) vs. ) PATRICIA M. FARRELL, ) Defendant ) IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 08-5421 CIVIL TERM CIVIL ACTION - LAW STIPULATION OF THE PARTIES AND COUNSEL AND NOW come the above-named parties and their counsel, and stipulate and agree as follows: 1. Bernard C. Farrell was involved in a romantic and sexual affair with a married woman named Vicki Cromer for a period of more than three years prior to April of 2008. 2. Bernard C. Farrell concealed the existence of his relationship with Ms. Cromer from his wife, Patricia M. Farrell. 3. When confronted and questioned by Patricia M. Farrell about reports she had heard about his extramarital affair with Vicki Cromer, Bernard C. Farrell finally admitted to Patricia M. Farrell, in April of 2008, that he had been conducting such an affair. IN WITNESS WHEREOF the parties and counsel have executed this Stipulation to be filed with the court as part of the divorce action pending between them this 10A day of Tun 4 2010. Plaintiff - &JQ 03 Samuel L. Andes Attorney for Defendant Bernard C. Farrell Plaintiff Patricia M. FarrW. Defendant BERNARD C. FARRELL, Plaintiff VS. PATRICIA S. FARRELL, VMD, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW aao?-- 5yd( NO. 4 CIVIL TERM ORDER OF COURT AND NOW this Afsl day of 20 /off , upon the Motion of the Defendant, a hearing is hereby schedul d on Defendant's Motion to Enforce Support Agreement. The hearing will be held before the undersigned in Court Room No. of the Cumberland County Courthouse in Carlisle, Pennsylvania, commencing ato? ?llU o'clock m. on the 154 day of `??1? 20L,2__. BY THE COURT, M C17 -- .T. M e.: A aM J C:j -CL .; M, Distribution: C -0 Bradley L. Griffie, Esquire (Attorney for Plaintiff) 200 North Hanover, Street, Carlisle, PA 17013 ? Samuel L. Andes, Esquire (Attorney for Defendant) 525 North 12 Street, P.O. Box 168, Lemoyne, PA 17043 th v) BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION -LAW PATRICIA S. FARRELL, VMD, NO. 2008-5421 CIVIL TERM Defendant IN DIVORCE ORDER OF COURT AND NOW, this 6' day of February, 2012, upon the Motion of Plaintiff, a hearing is hereby scheduled on Plaintiff's Motion, Petition for Bifurcation and Special Relief. The hearing will be held before the undersigned in Court Room No. 4 of the Cumberland County Courthouse in Carlisle, Pennsylvania, commencing at 2:00 p.m. on Thursday, the 15th day of March, 2012. BY THE COURT, Kevin Al Hess, P.J. Cc: Bradley L. Griffie, Esquire Attorney for Plaintiff Samuel L. Andes, Esquire Attorney for Defendant x? C_j ,?, M ? a BERNARD C. FARRELL, Plaintiff vs. PATRICIA S. FARRELL, VMD, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 2008-5421 CIVIL IN RE: DEFENDANT'S MOTION TO ENFORCE SUPPORT AGREEMENT AND PLAINTIFF'S PETITION FOR BIFURCATION AND SPECIAL RELIEF ORDER AND NOW, this "S' , day of March, 2012, this matter having been called for hearing and following conference with counsel in Chambers, it is ordered and directed that: 1. The plaintiff, Bernard C. Farrell, will pay to the defendant, Patricia S. Farrell, the sum of $20,943.65 no later than April 5, 2012. This payment will satisfy her claims for additional payments from his salary for the years 2010 and 2011 as raised in the instant petition. 2. The plaintiff, Bernard C. Farrell, shall cause the corporation, Farrell Veterinary Associates, to pay to Patricia S. Farrell, the sum of $17,986.98 on or before April 5, 2012. That payment shall constitute the balance owed to Patricia S. Farrell for her thirty-eight percent (38%) share of the profits of that corporation for tax year 2010 and shall satisfy her claims for those payments as raised in the instant petition. 3. Patricia S. Farrell or her counsel shall submit to Bernard C. Farrell or his counsel copies of medical bills and a spreadsheet of Patricia S. Farrell's medical expenses not reimbursed by insurance for the years 2009 and 2010. Those documents will be submitted to him within thirty (30) days of this order and he shall have thirty (30) days thereafter to review those so the parties, through their counsel, can . reach agreement on the amount, if any, that Bernard C. Farrell owes Patricia S. Farrell for reimbursement of fifty percent (50%) of her medical expenses for the years 2009 and 2010. If the parties are not able to resolve this, either party can move this court for further proceedings on the instant petition. In addition to the medical bills and invoices, Patricia S. Farrell shall provide copies of any insurance documents she has regarding those medical bills at the same time she provides the medical bills. 4. This leaves open issues of medical reimbursement to Patricia S. Farrell for calendar year 2011 and payment to Patricia S. Farrell for thirty-eight percent (38%) of the profit of Farrell Veterinary Associates for 2011. If the parties are not able to resolve those matters through counsel, either party may move the court for further proceedings on the instant petition. 5. The request of Bernard C. Farrell to void or terminate the agreement between the parties of September 19, 2008, is DENIED. 6. The petition of Bernard C. Farrell to bifurcate these proceedings, in light of the fact that there is a hearing before the Master in approximately thirty (30) days, is DENIED. BY THE COURT, ft. fI. Hess, P. J maje,4 -311&11 ;L c a Y,, MW r _Vrn -<> oG <c :r -T; co ?'. 41i- Bradley Griffie, Esquire For the Plaintiff Samuel Andes, Esquire For the Defendant :rlm ALL-?"'C17?.?'t HE POTi1U ;0 1 AM 9: 13 CUMBERLAND COUNt"( PENNSYLVANIA BERNARD C. FARRELL, Plaintiff V. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVAI : CIVIL ACTION -LAW NO. 08-5421 CIVIL TERM IN DIVORCE AFFIDAVIT OF CONSENT 1. A Complaint in Divorce under §3301 (c) of the Divorce Code was filed September 11, 2008, and served on October 1, 2008 on Defendant's attorney record, Samuel L. Andes, Esquire. 2. The marriage of Plaintiff and Defendant is irretrievably broken and ninety days have elapsed from the date of filing and service of the Complaint. 3. I consent to the entry of a final Decree of Divorce after service of notice intention to request entry of the decree. I VERIFY THAT THE STATEMENTS MADE IN THE FOREGOING AFFIDA ARE TRUE AND CORRECT. I UNDERSTAND THAT FALSE STATEMENTS HER ARE MADE SUBJECT TO THE PENALTIES OF 18 Pa.C.S. §4904 RELATING UNSWORN FALSIFICATION TO AUTHORITIES. DATE: BERNARD C. FARRELL, Plaintiff V F*, 1 !s?- Xr 3 ti. 01 2511 4001W 0- AM 9. 13 PENNS LVA? A C 'Y BERNARD C. FARRELL, Plaintiff V. PATRICIA M. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVAI : CIVIL ACTION -LAW NO. 08-5421 CIVIL TERM IN DIVORCE WAIVER OF NOTICE OF INTENTION TO REQUEST THE ENTRY OF A DIVORCE DECREE UNDER 43301(c) OF THE DIVORCE CODE 1. I consent to the entry of a final decree in divorce without notice. 2. I understand that I may lose rights concerning alimony, division of lawyer's fees or expenses if I do not claim them before a divorce is granted. 3. I understand that I will not be divorced until a divorce decree is entered by Court and that a copy of the decree will be sent to me immediately after it is with the Prothonotary. I VERIFY THAT THE STATEMENTS MADE IN THE FOREGOING AFFIDAVI ARE TRUE AND CORRECT. I UNDERSTAND THAT FALSE STATEMENTS HEREI ARE MADE SUBJECT TO THE PENALTIES OF 18 Pa.C.S. §4904 RELATING T UNSWORN FALSIFICATION TO AUTHORITIES. DATE: B ARD C. FARRELL, Plaintiff BERNARD C. FARRELL, Plaintiff IN THE COURT OF COMMON PLEAS F CUMBERLAND COUNTY PENNSYL ' ' , -0 V. CIVIL ACTION - LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM r , Defendant IN DIVORCE ' AFFIDAVIT OF CONSENT 1. A Complaint in Divorce under §3301 (c) of the Divorce Code was filed n September 11, 2008, and served on October 1, 2008 on Defendant's attorney ?f record, Samuel L. Andes, Esquire. 2. The marriage of Plaintiff and Defendant is irretrievably broken and ninety days have elapsed from the date of filing and service of the Complaint. 3. I consent to the entry of a final Decree of Divorce after service of notice intention to request entry of the decree. I VERIFY THAT THE STATEMENTS MADE IN THE FOREGOING AFFIDA ARE TRUE AND CORRECT. I UNDERSTAND THAT FALSE STATEMENTS HER ARE MADE SUBJECT TO THE PENALTIES OF 18 Pa.C.S. §4904 RELATING UNSWORN FALSIFICATION TO AUTHORITIES. DATE: 7/3 / //,z PA M. FARRELL, Defendant BERNARD C. FARRELL, Plaintiff V. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVAT : CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE 3 I 2. 3. r?•t! m WAIVER OF NOTICE OF INTENTION TO REOUE9 THE ENTRY OF A DIVORCE DECREE n ?- UNDER 43301(c) OF THE DIVORCE CODE I consent to the entry of a final decree in divorce without notice. I understand that I may lose rights concerning alimony, division of r7- o ?a 220 lawyer's fees or expenses if I do not claim them before a divorce is granted. I understand that I will not be divorced until a divorce decree is entered by Court and that a copy of the decree will be sent to me immediately after it is f with the Prothonotary. I VERIFY THAT THE STATEMENTS MADE IN THE FOREGOING AFFIDAVI ARE TRUE AND CORRECT. I UNDERSTAND THAT FALSE STATEMENTS HEREI ARE MADE SUBJECT TO THE PENALTIES OF 18 Pa.C.S. §4904 RELATING T UNSWORN FALSIFICATION TO AUTHORITIES. DATE: 77 ? // Z PAT CIA M. FARREL efendant BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUM BERLAND COUNTY, PENNSYLVANIA N0. 08 - 5421 CIVIL ~. C .~~. PATRICIA M. FARRELL, ~,~ ~ ~r Defendant IN DIVORCE ~~ .,~ ~~' ~~ +c:~ D r-, x'' 3c .~ ~~,.. NOTICE OF FILING OF MASTER' S REPORT~.~ ~ ~.:' _ ~:.`= ---~ w <- ;~ .. The report of the Master has been filed this date and copies have been sent with this notice to counsel of record the parties. In accordance with P.R.C.P. 1920.55 within twenty (20) days after the mailing of this notice and report exceptions day be filed to the report by any party. If no exceptions are filed within the twenty (20) day period, the Court shall receive the report, and if approved, shall enter a final decree in accordance with the recommendations contained in the repot. Date: 8/17/12 E. Robert Elicker, II Divorce Master NOTE: If exceptions are filed, file the original with the Prothonotary and a copy with the Master's office. At that time, the party filing the exceptions should notify the court reporter in the Master's office so arrangements can be made for a transcript. Upon completion of the transcript and receipt of payment, the entire file will be returned to the Prothonotary's office for transmittal to the Court at time of argument on the exceptions. If no exceptions are filed, counsel shall prepare an order of Court consistent with the recommendations and provide a proposed order of Court to the Master. Counsel shall also prepare and provide with the proposed order of Court a praecipe* to the Prothonotary directing the Prothonotary to submit the case to the Court for final disposition. The Master will then transfer the file with the proposed order of Court and praecipe to the Prothonotary's Office for docketing and transmittal by the Prothonotary to the Court. * Form available in the Prothonotary's office and the Master's office. (NOT the praecipe to transmit the record form as set out in P.R.C.P. 1920.73(b).) BERNARD C. FARRELL, Plaintiff vs. PATRICIA M. FARRELL, Defendant • IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW N0. 08- 5421 CIVIL IN DIVORCE 1~1STER'S REPORT ~, ~. ~ .:n ~~ 17 ~ 1"l -.C ~} ., ~~ c~ „~ .. ~ ~,,. ~ -=3 a =~ '. (~~ --; ;.,a _~ ~, :, Proceedings (September 8, 2011 and July 31, 2012) held before E. Robert Elicker, II, Divorce Master at 9 North Hanover Street, Carlisle, PA 17013 both days commencing at 9:00 a.m. APPEARANCES: Bradley L. Griffie Attorney for Plaintiff Samuel L. Andes Attorney for Plaintiff • • PROCEDURAL HISTORY The action was commenced by the filing of a complaint in divorce on September 11, 2008. The complaint raised grounds for divorce of irretrievable breakdown of the marriage. No economic claims were raised in the complaint. However, on February 2, 2010, the Defendant wife filed a petition for economic relief raising claims for equitable distribution, alimony, alimony pendente lite, and counsel fees and expenses. The matters before the Master continued from March 2010 through the date of the fmal hearing on July 31, 2012. Included in the Master's proceedings were conferences with counsel and conferences with counsel and the parties. The conferences were held without much success in resolving issues inasmuch as the husband has had an ongoing lawsuit pending with other counsel relating to interests in the corporation, which consists of the veterinarian business of which both parties are involved. A hearing date was set for September 8, 2011, at which time we heard testimony from the parties and also from an expert who testified by telephone relating to the value of the veterinary practice. Also made part of the record was a deposition from a Dr. John Mira relating to wife's health condition. Issues continued to be discussed through conferences and meetings but to no conclusion of the matters pending. Consequently, a hearing was scheduled for July 31, 2012, to complete the testimony and finalize the record. A hearing had been scheduled for May 10, 2011, for testimony on the issue of marital misconduct as it related to wife's alimony claim. However, the hearing was not held and instead husband signed a stipulation which is made part of the record • • admitting a romantic and sexual relationship with a woman for more than three yeazs prior to the parties' sepazation. The hearing on July 31, 2012, went forwazd as scheduled and the record was closed. Counsel asked for a few days to submit findings and a proposed suggestion of how the assets should be distributed. It is noted that at the time of the hearing the lawsuit pending with relation to the corporate issues affecting the corporation of the veterinary business was still pending with no resolution in sight. Some years ago, attorney for husband asked the Master to defer doing anything in the divorce case until the litigation with respect to the corporation was completed. However, the Master refused to wait and indicated that the divorce case should go forward regazdless of what was happening with the pending corporation lawsuit. The resolution of that lawsuit may have been helpful, it is admitted, but because there has been no finalization of those proceedings, and they aze still pending, the Master does not feel that he made an incorrect decision in moving forwazd with the divorce issues. This action began in 2008, and an indefinite delay did not seem to be in the best interest of justice for either party waiting for a decision in the corporate litigation. The record was closed on July 31, 2012, and the Master proceeded to prepare his report and recommendations. STIPULATIONS As previously noted the parties entered into a stipulation with counsel on June 10, 2010, relating to the marital misconduct of husband wherein he admitted 2 • involvement with another woman for a period of more than three yeazs. The stipulation is made part of the report and record. There was also a stipulation placed on the record as a Joint Exhibit No. 1 which identified certain items of property with values. The stipulation was agreed to by counsel with some adjustments made during the course of the hearing. For instance, the Simple IRA number of $209,654.56 was increased by $1,788.00. The household furnishings in the amount of $20,934.00 were reduced by a wagon value of $1,600.00 and jewelry in the amount of $2,675.00. Otherwise, all the numbers were agreed to as set forth in the original prepazed document and represent the date of sepazation values of the assets. The adjustments, as noted, were also agreed to. Finally, the parties agreed that the value of the corporation was $1,446,000.00. FINDINGS OF FACTS 1. The parties were married on August 16, 1973, in Newton, New Jersey. They are the natural parents of three children, all of whom aze emancipated. 2. According to husband, the parties sepazated at the end of Mazch 2008; according to wife, the parties sepazated at the end of May 2008. The date of sepazation did not make significant impact on valuation and the one asset that did have some issue relating to the date of separation, the Simple IRA, was adjusted on the stipulation sheet. 3. Both parties graduated with a BS from Penn State and the University of Pennsylvania Veterinary School and entered into a veterinary practice. Husband basically limited his practice to lazge anunals and wife limited her practice to small animals. After two yeazs of practicing outside of Pennsylvania, the parties moved to the Newville azea and began a successful veterinary practice which they engaged in for many yeazs. 4. The marriage went into a state of dissolution when wife found out about husband's three-yeaz affair with another woman. By that time, wife had limited'. her • • practice and was essentially doing management for the company. She was also dealing with health issues relating to depression and bi-polar disease as well as dealing with the family issues involving raising the children and taking caze of the home. 5. Husband's decision to retire June 1, 2012, was based on health consideration, his age and his inability to engage in the physical requirements of being a veterinarian of large animals. Husband does continue to engage in a small practice which is limited to what he feels he is physically able to do. His income involves social security payments in the amount of $1,807.00 per month, rent from one of the buildings paid by thie corporation in the amount of $4,000.00 per month. Each of the parties draws a stipend from the corporation monthly of around $4,000.00. Husband also indicated that because he is taking social security he cannot earn much more than $1,200.00 per month as income. 6. Wife is planning to take her social security in November 2012 and her piayment will be around $1,447.00. She also has rent from one of the building in the amaunt of $4,500.00 per month, a draw from the corporation monthly similaz to husband's, and earnings from apart-time position with her brother's veterinary practice in Sussex County, New Jersey, wherein she makes azound $13,000.00 annually. Wife alsp receives about $1,200.00 per yeaz from an investment. 7. Each of the pazties has 38 shazes of the veterinary corporation and another veterinarian has 24 shazes. 8. On a joint credit cazd wife chazged expenses for plastic surgery in an amount of azound $18,000.00. Husband objects to making those payments out of the joint business funds. 9. The parties have each received vehicles, husband a truck and trailer and wife a BMW. There is an issue that because of an agreement that wife ultimately ended up having the cost of her BMW deducted from any corporate profits. However, because of the uncertainty of the value and the cost of each of the parties' vehicles, the Mauer is going to leave the vehicles with each of the parties without any adjustments. 10. Wife testified that she did not get credit for a joint tax return refund wherein a sum of $18,000.00 was to be applied towazd the next year's taxes. Husband gox the full benefit of that amount, and husband is requested by wife to reimburse wife $9,Ob0.00 for the tax benefit which wife did not receive. It is noted that one-half of the chazges for wife's plastic surgery to which husband claims as an involuntary contribution is $9,000.00. 11. Wife has aone-quarter interest in farm land in New Jersey in Sandyston Township. After testimony from expert appraisers the value of the property is set at $375,000.00 total with the shaze of wife, which is aone-quarter interest, being set at $93,750.00. 4 12. Husband used joint funds to pay approximately $158,000.00 for two of the children for college loans and expenses. Wife objected to the payment based on the fact that the children were post-graduate students and wife wants to be reimbursed for a portion of the payment made by husband. Wife claims that she did not agree and testified that she told husband she did not want to make the payment because the childrenn should take caze of their own post-graduate loans; however, husband paid the loans and wife in some background cooperation did participate in the payment of the funds. The Master is not going to ask husband for reimbursement nor is he going to suggest that the parties ask the children to make reimbursement for the monies they received for their college education. The Master points out that the pazties have helped all the children throughout the course of their young lives in getting established and getting an education amd this assistance was essentially based on the fact that not only do the pazties caze about the children's education but also had the financial means to make substantial contributions. 13. There are no marital debts that must be allocated. Husband, however, does have post-sepazation debts for a property with a mortgage payment of azound $3,000;00 per month and two lines of credit on which he is paying a total of $1,000.00 per month for a total of $4,000.00 per month. 14. Wife is currently obtaining her medical insurance which is paid for by the corporation in the total amount of $1,100.00 per month for both husband and wife. Upon the dissolution of the marriage and the entry of a divorce decree, wife's costs for her medical insurance will be azound $750.00 per month. CONCLUSION OF LAW On July 31, 2012, both parties signed affidavits of consent and waivers of notice of intention to request entry of divorce decree. Therefore, the divorce can proceed under Section 3301(c) of the Domestic Relations Code. The decree should preserve for potential further litigation wife's claim for alimony consistent with the Master's findings and recommendation as hereinafter set forth. 5 • • EQUITABLE DISTRIBUTION ANALYSIS OF THE FACTORS UNDER SECTION 3502(a) OF THE DOMESTIC RELATIONS CODE 1. The parties were married in August 1973 and separated in the spring of X008 for a total number of years of 35 plus a 4 to 5 yeaz period following the separation towazd finally accomplishing a settlement and fmal decree in divorce. The parties were in a long-term marital relationship. 2. Neither party was previously married. 3. Both parties aze around 62 yeazs of age. Both described health issues. Wife discussed her problems with bi-polaz illness and depression which affect her ability to work full-time. This information regazding her health was substantiated by the deposition of Dr. Mira and continues to the present. Husband has retired because of his physical inability to conduct a large animal practice requiring the strength and physicality necessary to carry out his profession. He complains of back pain and shoulder pain resulting from years of a physically demanding job. The incomes of the parties, as previously stated in the findings of fact, relate to small amounts of income they each earn as veterinarians as well as income which will be received by wife from social security and is currently being received by husband from social security. They also receive rent payments from two properties the parties own as well as draws from the corporation. Wife does have some income from a small investment in the amount of $1,200.00 per yeaz. Husband does have the potential for taking income from other resources but has not yet done so which would include IRA investments. Wife also has resources from which she can draw funds. 4. Both parties contributed to their education by borrowing money and working to improve their earnings. 5. Because of the station of life of the parties with regazd to their employment situation, it is unlikely that they will have the opportunity to acquire lazge future acquisition of assets. The incomes that they have will hopefully be sufficient to maintain their current lifestyle. 6. The sources of income of the parties aze from earnings, social security, rental payments and draws from a corporation monthly. They have to pay for their own benefits and as previously noted, upon the divorce, the corporation will not be paying wife's medical insurance which she will have to pay in the amount of $750.00 pier month. 6 • • 7. Both parties were able to save a substantial amount of money from their hazd work derived from prior income over the yeazs. Neither party is chazged with dissipating any of the assets or depreciating those assets to the detriment of the other party. While husband worked full-time during the marriage, wife assumed part-time practice duties and assisted with managerial duties for the company as well as contributing to the home duties as a homemaker. 8. The value of property set apart to each party is fairly substantial and will be further analyzed in the recommendations of the Master. 9. The standazd living of the parties both agreed was "good". 10. The economic circumstances of each party at the time of division of the marital assets aze sufficient to maintain their lifestyles and to provide for their individual needs. 10.1, 10.2 No tax ramifications have been considered with regazd to the distribution of the assets. Specifically with the sale of stock of the corporation and with some of the real estate there aze going to be capital gain ramifications but they have not been precisely addressed in the testimony. Mention has been made of these possible tax ramif cations but because of the uncertainty as to how the corporation is going to be dissolved and/or sold, no definitive analysis can be made regazding the tax ramification issues. 11. Neither of the parties will be serving as the custodian of any dependent minor children. DISCUSSION EQUITABLE DISTRIBUTION Based on the stipulations, the findings of facts, and the analysis of the factors under Section 3502(a) of the Domestic Relations Code, the Master believes that the assets of the parties should be distributed 50% to husband and 50% to wife. Both of the parties aze coming out of the practice of veterinary medicine on a more or less equal basis as a result of the assets which they have accumulated over the course of their lifetime and work. The incomes of the parties have been discussed previously, and it does not appeaz that either party has any substantial income or the 7 • ability to earn substantial income over and above the other party's income. Currently, the parties aze on a fairly equal basis with income. The recommendations of the Master will take into account assets which each of the parties have and make a distribution based on a division and distribution of those assets as shown on the stipulation of the parties with adjustments as well as some additional findings regarding the real estate in New Jersey as well as some credits for the income tax refund which husband received totally to the detriment of wife and wife's plastic surgery charges to the financial detriment of husband. The Master is not going to make any recommendation with regard to the corporation. Although the parties have agreed to a value for the corporation, the Master is not using that value in the list of assets to determine a total value of the marital estate. The corporation is going to be left in its current status. The Master does not feel that it is appropriate for him to direct that either wife's shares or husband's shares should be transferred to the other party. The parties should stand as the owners of their respective shares in dealing with any prospective sales of the corporation or dissolution of the corporation which is not, of course, the most desirable resolution. However, both parties have neglected to take any bold action with regard to trying to find a buyer or have discussions with the potential buyer who happens to be another veterinarian in the practice. The parties seem to be just letting the whole matter sit in limbo and aze not actively pursuing a final resolution of their corporate interests. Both parties talk about "when the corporation is sold" they will have certain assets to use and will be free of the operation of the corporation at that time. However, based on what has been testified to and what has been presented, the Master is of the opinion that not only are the parties not • • making any concerted effort to resolve the corporate interests, and perhaps expect that the divorce court is going to make some final decisions relating to the corporation. This is not the case, and the Master is going to leave it in the hands of the parties to determine the way in which the corporation will be sold and the details of that sale. Also, upon the parties resolving how they wish to deal with their corporate interests, they will have a better idea what the tax consequences will be to each of them relating to the sale of the corporation and other income derived from the corporation to their individual benefit. Wife's position is that her shares should be transferred to husband. Husband does not want the shazes because he does not feel that he wants to incur the cost of capital gain as part of his obligation nor reduce the value of other assets he will receive by the value of wife's shazes. Husband has not in any sense been actively trying to sell the company. He has testified that he has no discussion with anyone about a sale. Further, the pending lawsuit, which has been going on for a number of yeazs to resolve the corporation issues, has not gone anywhere towazd settling or finalizing any corporate matters. On the contrary, wife does not want husband's interest in the corporation for basically the same reasons and further she does not want to operate the corporation. Since neither party wants to maintain their interest in the corporation and wishes to dispose of their shazes, the Master is giving them an opportunity now to actively pursue a resolution of the interest of each of them in the corporation. Husband had indicated in testimony that some time ago an offer was made to wife to purchase her shazes but as the Master recalls, there was no follow-up or no serious negotiations resulting from that offer. The matter continued, therefore, to stand in an unsettled state. 9 • When the corporation issues are resolved, the parties will then have the benefit of knowing what the tax consequences are. They can negotiate their own sales prices and they can also determine if the leases, which they have on the buildings as a result of their negotiations with the new buyer, will continue and will provide income to them. The Master's recommendations will address all of the other assets, credits and adjustments that were testified to at the hearing. RECOMMENDATIONS EQUITABLE DISTRIBUTION No distribution of the corporate value or shares of the corporation is being made as discussed by the Master. The recommendation is that each party continues to own 38 shares and can dispose of those shares as they choose. The payment of the college costs/loans of the children shall stand without any charges against husband to wife's benefit. Husband shall retain the tax refund credited to him for future taxes. Wife shall not reimburse husband for any costs for her plastic surgery procedures. Each party will keep his or her vehicle (husband truck and trailer; wife BMW) free of any claims by the other party. Each party will sign any and all documents necessary to effectuate any transfers as required to accomplish distribution of assets as recommended herein. The assets and values of assets which the Master will include in his recommendations as to distribution are as follows: 10 • • 530 Doubling Gap Road, Newville, Pennsylvania 721,000.00 905 Center Drive, Newville, Pennsylvania 611,000.00 1243 Holly Pike, Cazlisle, Pennsylvania 605,000.00 108 Cazlisle Road, Newville, Pennsylvania 418,000.00 New York mountain land 54,667.00 IRA Rollover account 559,149.00 Simple IRA 211,353.00 IRA Rollover account 417,420.00 Simple IRA 129,679.00 Household furnishings (husband) 14,395.00 Farm equipment 18,760.00 Household furnishings (wife) - 2 locations 16,659.00 Mass Mutual Life Insurance policy 50,348.00 New Jersey real estate, Sandyston Township 93.750.00 TOTAL $3,921,180.00 50% _ $1,960,590.00 DISTRIBUITON OF MARITAL PROPERTY TO WIFE 530 Doubling Gap Road, Newville, Pennsylvania 721,000.001 1243 Holly Pike, Cazlisle, Pennsylvania 605,000.00 New Jersey property, Sandyston Township 93,750.00 Household furnishings (2 locations) 16,659.00 Although wife sold the property and netted less than $721,000.00, the Master is using the stipulated value which represents the date of separation value. Conversely if wife had realized more than the stipulated value at sale, that value would not have been used either. 11 • Mass Mutual Life Insurance policy 50,348.00 IRA Rollover account 417,420.00 Simple IR.A 129.679.00 TOTAL $2,033,856.00 Wife's excess of share of marital estate $73,266.00 The IRA Rollover account of $417,420.00 shall be reduced by $73,266.00 so wife shall receive $344,154.00 and $73,266.00 shall be rolled over to husband. The rollover to husband shall equalize the distribution of the marital assets. DISTRIBUTION OF MARITAL PROPERTY TO HUSBAND 905 Center Drive, Newville, Pennsylvania 611,000.00 108 Carlisle Road, Newville, Pennsylvania 418,000.00 New York mountain land 54,667.00 IRA Rollover account 559,149.00 Simple IRA 211,353.00 Household furnishings 14,395.00 Farm equipment 18.760.00 TOTAL $1,887,324.00 Husband's shortfall is $ 73,266.00 12 DISCUSSION ALIMONY • Wife has a claim pending for alimony. We have had a review of the incomes of the parties as well as an analysis of what each of the parties aze goinig to get pursuant to the equitable distribution of the assets other than the corporation. We do expect that in addition to those assets that they will receive from the recommended distribution by the Master they will also ultimately receive some substantial benefit from the sale of their shares in the corporation. The Master recognizes that there are various factors which affect.. the alimony claim in this case, not only the income issues and asset issues but also the allegation by wife of marital misconduct by husband to which husband has stipulated. Currently, the Master is not going to consider any of the factors regazding an alimony claim until such time as the incomes of the parties aze more established and their expenses aze more defined. For instance, we do not know at this time whether the leases, which the parties hold on the buildings which they own, aze going to continue and whether or not they will receive income from those leases. We know that more specifically when a final decision is made regazding the disposition of the corporation. Wife has not yet begun to receive her social security payment but intends to do so in November, at which time we will have precise information about her actually receiving a monthly benefit. Currently, the parties each earn a small amount of income from their practices as well as income from the leases, a payout monthly from the company, and social security benefits payable to husband. These income benefits may change significantly by the beginning of 2013. Since both have other substantial assets, until the 13 • • alimony issue is finally resolved, they can, if necessary, draw on those assets to supplement income as needed. However, based on the current incomes of the parties, that does not appear to be necessary. Consequently, the Master is going to defer making a fmal recommendation on wife's claim for alimony until such time as matters relating to the corporation and other income issues are more specific and defined. RECOMMENDATION ALIMONY The Master does intend to keep the alimony claim alive for the purposes of further review in the future and recommends that husband shall pay to wife the sum of $1.00 per month. The alimony claim can be revisited upon application of either party to modify or terminate the Master's recommendation herein. DISCUSSION AND RECOMMENDATION COUNSEL FEES AND EXPENSES There was no testimony relating to wife's claim for counsel fees and costs. Consequently, the recommendation of the Master is that wife's claim for counsel fees and 14 • costs is denied, and since no testimony was offered specifically relating to the claim, the claim is deemed to have been withdrawn. Respectfully submitted, ~~~ E. Robert Elicker, II Divorce Master 15 _ n _ BERNARD C. FARRELL, Plaintiff vs. ~~' THE ~~td~i~~~j~~ ,, ~A~ 2~t2 SEP -t~ AFt 9~ 53 e~~ ~~°v e€~uN~~ ~` ' ~ ~E~ IN THE COURT OF CO PLEAS OF CUMBERL~' COUNTY, PENNSYLV, CIVIL ACTION -LAW NO. 08-5421 CIVIL PATRICIA M. FARRELL, Defendant IN DIVORCE AND NOW comes the above-named Defendant, by her attorney, Samuel L. petitions the court for further action to enforce the support agreement between the upon the following: 1. The Petitioner herein is the Defendant. The Respondent herein is the 2. The parties separated in 2008 and, at about the time of their separation, sign Agreement, dated 19 September 2008 which provided for the payment by Plaintiff of v sums to Defendant. That Agreement was a subject of a prior Petition to Enforce filed Defendant in May of 201 1. Attached hereto, and marked as EXHIBIT A, is a copy of Petition which has attached to it a copy of the Agreement. 3. This court, by the Honorable Kevin A. Hess, entered an order dated 15 which addressed and resolved some of the issues raised by Defendant's Petition to ~~, copy of that order is attached hereto and marked as EXHIBIT B. 4. The parties have not been able to resolve the remaining issues relating to the enforcement of the Agreement of 19 September 2008. 5. Prior orders in this matter have been entered by the Honorable Kevin A. Hes; 6. Plaintiff does not concur in the relief requested in this Petition. I ~ ON and based an the 2012, . A rr _ __ __ _ ___ __ _ ___ ___ ~_ __ _ ~ WHEREFORE, Defendant prays this court to award her the relief requested in foregoing portions of this Petition. COUNT I -PAYMENT FOR DEFENDANT'S PORTION OF PROFITS 7. The averments set forth in the foregoing Paragraphs are incorporated herein b reference. 8. In 2011, Farrell Veterinary Associates generated a profit of $279,898.00 as c nfirme~ by the federal income tax return filed by the corporation, a copy of which is attached her to and marked as EXHIBIT C. 9. Defendant's 38% share of the profits of the corporation for 2011 is $106,361. 0, of which she received payment from the corporation of $47,857.00. Those figures are con irmec by a copy of the K-1 Schedule issued to the Defendant by the corporation for 2011, a co y of which is attached hereto and marked as EXHIBIT D. 10. Defendant is owed, and has not yet been paid, the remaining portion of her s are of the profits of the corporation in the amount of $58,504.00, plus interest from and after 1 April 2012. WHEREFORE, Defendant prays this court to order and direct Plaintiff to pay hE cause the corporation to pay her, the sum of $58,504.00, plus interest from and after 15 , 2012 within thirty (30) days of the date of this court's order. COUNT II -REIMBURSEMENT OF MEDICAi~ EXPENSES 11. The averments set forth in the foregoing Paragraphs are incorporated herein 1 or reference. 12. In this court's order of 15 March 2012, it ordered Defendant to submit medical statements and a spreadsheet to Plaintiff, setting out the amount of medical reimbursed by insurance for the years 2009 and 2010. Those documents were Plaintiff s counsel on 21 March 2012. 13. The court's order provided that Plaintiff would have thirty (30) days to documents to determine the 50% of the unreimbursed expenses that Plaintiff owed to Plaintiff has not responded to the documents submitted b y Defendant and the owed to Defendant has not been paid. 14. One half of Defendant's unreimbursed medical expenses for the years 2009 2010 is $5,231.92. Plaintiff owes Defendant that amount pursuant to the terms of the Agreement entered into them in September of 2008. WHEREFORE, Defendant asks this court to order and compel Plaintiff to pay sum of $5,231.92, plus interest on that sum after 30 Apri12012. COUNT III -PAYMENT OF SALARY 15. The averments set forth in the foregoing paragraphs of this Petition are herein by reference. of Zses not to v those the 16. Pursuant to the 2008 Agreement, Plaintiff is to pay Defendant one half of hi~ salary from Farrell Veterinary Associates, Inc., net only of federal, state, and local income social security and medicare taxes and also reduced by disability or work income Defendant. 17. Plaintiff has made no payment of his salary to Defendant during calendar To date, he has not provided information about his salary from Farrell Veterinary and by 2012. Inc. in 2012. -1! _.._ __ _. _. -_ ___.. 18. Defendant is employed by the Animal Hospital of Sussex County, Inc. and e through 31 May 2012, net salary of $4,903.49. That represents her only earned income 19. Despite repeated demands on behalf of Defendant, Plaintiff has not provide. information about his salary and has not made the payment of his salary which is owed 1 Defendant under the terms of the September 2008 Agreement. WHEREFORE, Defendant prays this court to compel Plaintiff to account accur his salary income in 2012 through the endo f May and to pay the amount owed to Defen pursuant to the September 2008 Agreement from that salary immediately. Samuel L. Andes Attorney for Defendant Supreme Court ID # 17225 525 North 12~' Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 2012. for I verify that the statements made in this document are true and correct. I under any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 falsification to authorities). Date: ~ ` ~9-/~i Patricia M. Farrell that ~~ CERTIFICATE OF SERVICE I hereby certify that I served an original of the foregoing document upon counsel Plaintiff herein by regular mail, postage prepaid, addressed as follows: Bradley L. Griffie, Esquire 200 North Hanover Street Carlisle, PA 17013 Date: ~ ~ ~~ Amy M. kins Secretary for Samuel L. Andes the T EXHIBIT A ii BERNARD C. FARRELL, Plaintiff vs. PATRICIA M. FARRELL, Defendant C;r 7H~ PRO ~ NOtiOTr'~i'~i`' 201 i ~IAY -2 ~M 10~ 07 CUMBERLA~iO COUId~~t PENt~SYLYANIA IN THE COURT OF COMMOr PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW NO. 08-5421 CIVIL TERM IN DIVORCE DEFENDANT'S PETITION TO ENFORCE SUPPORT AGREEMENT AND NOW comes the above-named Defendant, by her attorney, Samuel L. Andes, ~ petitions the court to enforce a support agreement between the parties, based upon the follo~ 1. The Petitioner herein is the Defendant, Patricia S. Farrell ("Wife"). The Respo~ herein is the Plaintiff, Bernard C. Farrell ("Husband"). 2. The parties are Husband and Wife and, during their marriage, they created and the primary owners and operators of a corporation, Farrell Veterinary Associates, Inc., wh operates two veterinary medical facilities in Cumberland County. 3. In the Spring of 2008, Wife learned that Husband was engaged in an adulterot affair with another woman. 4. Husband's affair, which continued after Wife's discovery of it, caused consider turmoil and upset between the parties. Those problems extended into the workplace at the Veterinary hospitals operated by the parties. 5. Because of the problems between Husband and Wife, Husband and the third o~ of the Veterinary corporation, Todd Hasco, asked Wife to cease working at the Veterinary facilities. Wife agreed to do that only on the condition that she and Husband had an agreen in place to provide for her financial support and to provide her with her continuing benefit from ownership in the corporation. 6. As a result of the above, Husband and Wife entered into an Agreement dated 1 September 2008 which was intended to provide for Wife's support and her continued recei~t of benefits from her ownership in the corporation during the parties' sepazation. A copy of Agreement is attached hereto and marked as Exhibit A. 7. Wife has performed her obligations under the Agreement and dane whatever Agreement required of her in a timely and proper fashion. 8. Husband has breached the Agreement and failed to perform his obligations und~r that in several ways, which include: A. Husband failed to pay Wife her full shaze of his salazy from the required by Paragraph 1 of the Agreement. B. Husband failed to pay and distribute to Wife her full share of the profits from the corporation as required by Pazagraph 2 of the Agreement. C. Husband has failed to pay one half of all professional fees, including psychiatric, psychological, and counseling fees, for Wife's current counseling and therapy program beyond that covered by the health insurance Husband has provided to Wife, all in violation of Paragraph 4 of the Agreement. D. as Husband has failed to make any payments to Wife, including one half o~ his salary payments as required by Paragraph 1 of the said Agreement, since December 2010. 9. Defendant, by his conduct as outlined above, has breached the Agreement and, l doing so, has caused Wife significant financial harm and injury. 10. Prior orders in this case have been entered by the Honorable Kevin A. Hess. 11. Husband does not concur in Wife's request for relief as set out in this Petition. iI WHEREFORE, Defendant prays this court to enforce the terms of the Agreement between the parties dated 19 September 2008 by requiring Plaintiff to make all payments and owing under that Agreement immediately . Date: y-~ ~''`(' Samuel L. Andes Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I unde any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 falsification to authorities). Date: ~-'a-1 ~ 1 / ~ PATRICIA S. F. CERTIFICATE OF SERVICE I hereby certify that I served an original of the foregoing document upon counsel for Plaintiff by regular mail, postage prepaid, addressed as follows: Bradley L. Griffie, Esquire 200 North Hanover Street Carlisle, PA 17013 Date: 27 Apri12011 Amy for Samuel L. Andes EXHIBIT f~. AGREEMENT TffiS AGREEMENT is made this ~~ day of 2008, and is by an between: PATRICIA S. FARRELL, hereinafter referred to as "Wife"; and BERNARD C. FARRELL, hereinafter referred to as "Husband." WITNESSETH: WHEREAS, Husband and Wife are married and are the owners and operators of a corporation that operates veterinary medical facilities in Pennsylvania. They have reached agreement for temporary financial arrangements with regard to that business and the financial support of Wife and want to have th agreement reduced to writing for their mutual protection. Accordingly, they hereby agree as follows: 1. Husband shall pay to Wife one-half of his salary from Farrell Veterinary Associates, Inc., net only of federal, state and local income taxes and Social Security and Medicare taxes. He shall pay that sum to her every two weeks, as he is paid by the corporation and thepayments shall commence with his first pay in the month of September, 2008. The parties agree, however, that any disability or wo~ic incom received by Wife during the time that she is receiving one half ofHusband's salary pursuant to this Paragraph, will be credited to Husband's obligation under this Paragraph and will reduce the payments h is required to make by the amount of such disability or work income. 2. Wife shall continue to receive thirty-eight (38%}percent of theprofits from Farrell Veterin Associates, Inc. Her share ofthe profits will be paid to her before any bonus payments to employees, . any increases in salary, any increase in payroll expenses, and any capital expenditures ar other expenses excess of Five Thousand ($5,000.00) Dollars, unless Wife agrees to such expenses or items prior to their being paid. Wife will receive a monthly draw against her share of the profits and that monthly draw will not be less than the monthly draw against profits distributed to Husband on a monthly basis. At the end o the year, the profits of the corporation will be calculated and, after payment of the matters set forth in Paragraph 3 hereof, those profits will be distributed so that Wife receives her full thirty-eight (38%) percent share of them. Wife agrees that the corporation shall pay the cost of installation of a HVAC or Geo-thermal heating and cooling system for the Ne~wville Hospital, at a cost not to exceed $30,000.00, from the profits generated by the corporation for 2008 before those profits are divided. The parties will agree upon compensation to Wife for the cost of such improvements later, if Wife ceases owning her -1- interest in the corporation as part of any eventual settlement or agreement between the parties. ,® 3. The said corporation shall pay, as an advance agiinst both Husband's and Wife's share of profits, the following expenses for the benef t of Wife: A. The monthly installment on the loan which encumhers the title to her 2008 BMW X3 automobile; and B. The cost of insurance on the automobile; and C. The charges and fees for the cell phone used by Wife. These costs will be advanced by the corporation and deducted or otherwise recovered equally from the share of the profits generated by the corporation distributed to Husband and Wife at the end of the corporation's fiscal year. 4. Husband shall pay the fees and premiums required to continue the present health insurance o: Wife. In addition, Husband will pay 50% of all professional fees, including psychiatric, psychological, and counseling fees, for Wife's current counseling and therapyprogram that are not covered by insurana 5. Wife shall remain a shareholder, director, and officer of Fan ell Veterinary Associates, Inc. t such, she will be entitled to receive all information regarding the operation of the corporation and its various businesses. There shall be no change in the officers, directors, or shareholders of the corporation. no expenditures of $5,000 or more other than in the ordinary course of business, and no increase in the corporation's debts without Wife's prior written consent. 6. Other than as set forth in Paragraph 5 above, Wife hereby resigns her employment by said corporation, effective 31 August 2008. 7. This agreement shall remain in full force and effect until such time as it is modified by the mutual agreement of the parties expressed in writing. The par-ties acknowledge that this is not intended a full or final resolution of the economic issues arising out of their marriage and anypotentiaT divorce action against them, and agree to continue to exchange information in an effort to resolve all economic issues arising out of their marriage and any potential or eventual divorce. I1~T WITNESS ~VII[)E~®I", the parties hereto have set their hands and seals the day and year fir above written. Dated: ` Y ~~ Dated: / 0~ C. Fan-ell ., Patricia S. Farrell -2- EXHIBIT B 7 BERNARD C. FARRELL, Plaintiff vs. PATRICIA S. FARRELL, VMD, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION =LAW N0.2008-5421 CIVIL IN RE: DEFENDANT' S MOTION TO ENFORCE SUPPORT AGREEMENT AND PLAINTIFF'S PET~TiON FOR BIFURCATION AND SPECIAL RELIEF ORDER AND NOW, this ~ S , day of March, 2012, this matter having been called for hearing and following conference with counsel in Chambers, it is ordered and directed that: 1. The plaintiff, Bernard C. Farrell, will pay to the defendant, Patricia S. Farrell, the sum of $20,943.65 no later than April 5, 201,2. This payment will satisfy her claims for additional payments from his salary for the yeazs 2010 and 2011 as raised in the instant petition. 2. The plaintiff, Bernard C. Farrell, shall cause the corporation, Farrell Veterinary Associates, to pay to Patricia S. Farrell, the sum of $17,986.98 on or before April 5, 2012. That payment shall constitute the balance owed to Patricia S. Farrell for her thirty-eight percent (38%) share of the profits of that corporation for tax year 2010 and-shall satisfy her claims for those payments as raised in the instant petition. 3. Patricia S. Farrell or her counsel shall submit to Bernard C. Farrell or his counsel copies of medical bills and a spreadsheet of Patricia S. Farrell's medical expenses not reimbursed by insurance for the yeazs 2009 and 2010. Those documents will be submitted to lure within thirty (30) days of this order and lie shy have thirty {39) days thereafter to review those so the parties, through their counsel, can .reach agreement on the amount, if any, that Bernard C. Farrell owes Patricia S. Farrell for reimbursement of fifty percent (50%) of her medical expenses for the years 2009 and 2010. If the parties are not able to resolve this, either party can move this court for further proceedings on the instant petition. In addition to the medical bills and invoices, Patricia S. Farrell shall provide copies of any insurance documents she has regarding those medical bills at the same tune she provides the medical bills. 4. This leaves open issues of medical reimbursement to Patricia S. Farrell for calendar year 2011 and payment to Patricia S. Farrell for thirty-eight percent (38%) of the profit of Farrell Veterinary Associates for 2011. If the parties are not able to resolve those matters through counsel, either party may move the court for further proceedings on the instant petition. 5. The request of Bernard C. Farrell to void or terminate the agreement between the parties of September 19, 2008, is DENIED. 6. The petition of Bernard C. Farrell to bifurcate these proceedings, in light of the fact that there is a hearing before the Master in approximately thirty (30) days, is DENIED. BY THE COURT, ~ Q ~ _ ____--~- - _ --- -- -- -- _.__ _-___.---.~_ ........_ ~ .__~. ~ ,- __ _. , -~.,.r.--. -.;~. . .._.....~~~_ ~~ ~ x ~ Ke ' .Hess, P. J:~ r~-Z +~ ° ' <~ : - ~~ - x,. = ~, z . c - o TRUE COPY I=ROM RECOR -Z-; -- r'' in Testimony whereof, I here unto set my hati~ 4D and the seal of said Co r~sie, Pa. u rt ~ C a / ,~~ ~ ~~~ ''~ ,,, 7hfs 1~daY ~ _.e'~L... ~ ~~ Prothonotary ®~~ ~~~ . Bradley Griffie, Esquire For the Plaintiff Samuel Andes, Esquire For the Defendant :rlm EXHIB ~T C Form 1120S U.S. Income Tax Return for an S Corporation OMB No. 1 5-0,30 ' ,rn„ Treasury intend Revenue Service - Do not flls this form unle~ the corporatlon has filed or Is attaching Form 2553 t0 elect t0 be an S corporation. - $ee rate IntitfuCtbrls. Q For calendar r 2011 or tax q etectbn drM 1/1/2000 Name FARRELL VETERINARY ASSOCIATES INC D EmpioYer ltimrtlllcatlon 25-1851 umber B euek~ss Y c~ m„>ber ~~ ~~ TYPE ~ Number, street, and room or wise no. H a P.O. box, see instructions. 108 CARLISLE ROAD E Data incorporated 12/16/1 541940 PRINT City or town State ZIP code F Total easels (see s) c Cltedc if Sch. Ir43 attad,ed ^ 7 9 128 G is the corporation elecGrtg to be an S corporation beginning with this tax year? ^Yes 0 No If "Yes," attach Form 2553 if not a H Check if: (1) ^ Final return (2) ^ Name change (3) ^ Address change (4) ^ Amended return (5) ^ S election termination or I Enter the number of sharahoders who were shareholders dart a part of the tax year - ready filed evocation 3 CautMn. Include ¢rade or tWSbless income and nos on lines 1a 2f. See the lnstrucHons for more lnfor rr-stlon . 1a Merchant card and thin!-party payments. For 2011, enter -0- . 1a 0 b Gross receipts or sales not reported on line 1a (see instructions) . 1b 1 771 172 c Total. Add ones 1 a and 1 b . 1c 1 771 172 d Returns and allowances plus any other adjustments (see instructions) . id 1 768 E C e Sutttract line 1d from line 1c . 1e 1 7 9 404 ~ 2 Cost of goods sold (attach Form 1125-A) 2 4 608 3 Gross profit. SubUad line 2 from line 1e 3 1 796 4 Net gain (bss) from Form 4797, Part 11, line 17 (attach For-n 4797) 4 5 Other income (loss) (see instruuctions-attach statement) S . . . . . . . . . . . . . . . . . . . . . . . 6 Totsi income Add lines 3 thro 5 - 6 1 796 7 Compensation of officers . 7 1 071 .~ °- 8 Salaries and wages (less employment credits) 8 4 7 282 E 9 Repairs and maintenance 9 9 207 ~~ 10 Bad debts 10 ~, 11 Rents 11 1 2000 0 12 Taxes and licenses 12 2 955 ~ 13 Interest 13 5 239 14 Depreciation not domed on Form 1125-A or elsewhere on return (attach Fom- 4562) 14 8 163 ~ 15 Depletion (Do not deduct ell and gas depletion.) 15 ~: 16 Advertising 16 0 404 ~ 17 Pension, profd-sharing, etc., plans 17 6 716 C : 18 Employee benefit programs 18 7 703 . ~ 19 Other deductions (attach statement) 1 1 11 158 ~ 20 Total dedutdlorts. Add lines 7 through 19 - 20 1 898 a 21 ordMa naa incatw Icss Subtract line 20 from line 8 . 9 898 22a F~ccess net passive income or LIFO recapture tax (see inshuctions) . 22a b Tax from Sd,edule D (Form 1120S) 22b c Add lines 22a and 22b (see insttvctions foradd/tional taxes) 22c 0 E 23a 2011 estimated tax payments and 2010 overpayment credited to 2011. 23a ~ b Tax deposited with Form 7004 23b a c Credit for federal tax paid on fuels (attach Form 4136) 23c d Add lines 23a through 23c 23d 0 >K 24 Estimated tax penalty (see instrucBons). Check if Form 2220 is attached . . -^ 24 ~ 25 Amount oMrod. If line 23d is smaller than fhe total of lines 22c and 24, enter amount owed . 25 0 26 Overpayment. If Nrte 23d is larger than the total of lines 22c and 24, enter amount overpaid . 25 0 27 Eller amount from Nrrte 26 Crodked to 2012 estimated tax - Rptunded - Z7 0 Under pendtles of perjury, i declare that I nave exerNrtsd ads return. r,auryng acoompanykq sdtedules and staterrtertts, std ro the best a my Ivtowla ano over K b tn,s. c rracC Sign Here ~a complete. Dederdion of preparer (other then te~ayeq is ones on dl intamatlon of vrtdch preperer nes any iv,owieaDe. , ~ ,PRESIDENT s aanl~ Date Tula May the 1RS dbcues tHs wph the proparer shown be i6°e1ne~0""l~ ^X m es ^ No Paid PrinVType preparers name E. H LAND Preparers signature Date 4!7/2012 CtMdt O ff ~-~WoY~ PTIN P007257 Preparer Firm's name - JAMES E. HOLLAND CPA Flrrn's EIN - 25-1768200 Use Only Firm's address - 7 WEST MAIN STREET Phone no. 717 763-6890 City SHIREMANSTOWN State PA zIP ooh 17011 For Paperwor k Reduction Act Notice. see separate Instructions. Form 1205 t2o, n (HTA) ' Fkum 1t20S (20tt) FARRELL VETERINARY ASSOCIATES INC _ i '~ 25-1851994 F~pe 2 Other Infortna#ion see instructions Yes No 1 Check accounting method: a ^X Cash b ^ Accrual c ^ Other (specify) - •----------------- --- 2 See the instructions and enter the: a Business activity - ANIMAL HOSPITAL _ _ _ _ _ _ _ b Product or service - VETERINARY SVCS 3 At the end of the tax year, did the corporation own, dir+ecty or indirecty, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 287(c).) If "Yes," attach a statement showing: (a) name and employer identification number (EIN), (b) percentage owned, and (c) 'rf 10096 owned, was a qualified subchapter S subsidiary electior- made? . X 4 Has this corporation filed, or is lt required to file, Form 8818, Material Advisor Disclosure Statement, to provide information on any reportable transaction? . X 5 Check this box if the corporation issued pubpcy offered debt instruments with original issue discount - ^ If checked, the corporation may have to file Form 8281, Information Retum for Publicly Offered Original Issue Discount Instruments. 6 If the corporation: (a) was a C corporation before lt elected to be an S corporation or the corporatan acquired an asset with a basis determir-ed by reference to the basis of the asset (or the basis of arty other property) in the hands of a C corporation and (b) has net unrealized built-in gain in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years(see ~' instructions) . - $ -------------------------------------- ---- 7 Enter the accumulated earnings and profits of the corporation at the end of the tax year. $ • _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ` 8 Are the corporation's total receipts (see instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If "Yes "the corporation is not required to complete Schedules L and M-1. X 9 During the tax year, was a qualified subchapter S subsidiary election terminated or revoked? If "Yes "see insin~ctions . X 10 a Did the corporation make any payments in 2011 that would require lt to file Form(s) 1099 (see instructions)? . X ' tfie file or wRl lt file au red Forms 1099? . X 3h ers' Pro Rata Share Items Total amount 1 Ordinary business income (loss) (Page 1, line 21) 1 279 8 2 Net rental real estate income (loss) (attach Fonn 8825) 2 3a Other gross rental income (loss) 3a b Expenses from other rental activities (attach statement) 3b , c Other net rental income (loss). Subtract line 3b from line 3a 3c h C 4 Interest income 4 44 5 Dividends: a Ordinary dividends . !-a m p b Qualified dividends . 5b 8 Royalties. B ~ 7 Net short-term capltal gain (bss) (attach Schedule D (Form f 120S)) . 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) . 8a b Collectibles (2896) gain poss) . 8b c Unrecaptured section 1250 gain (attach statement) . Sc 9 Net section 1231 gain (loss) (attach Form 4797) . 8 10 Other income f see instrrrctJons . T - 10 Form 'I'I 20.~ (2011) Fnnr 11?04 (20111 t:eRRGI 1 VFTRRINORV ACCCIC:IATFR INr` __ i ?5-1 dt51 A9d {Peas 3 Shareholdsre' Pro Rata Share Items COntkt Total amourrt ~ 11 Section 179 deduction (attach Form 4562) 11 6 21 ° 12a Contritwtions . 12a 1 13 ~ b Investment interest expense . 12b (2) Amount - c Section 59(e)(2) expenditures (1) Type - 1 .------- ----___--- d Other deductions (see insMxtlor-s) . .Type j ----- 12d 13a Low-income housing credit (section 42(j)(5)) 13a b Lorv-income housing credit (other) . 13b c Qualified rehabilitation expenditures (rental real estate) (attach Fonn 3468) 13c ~ d Other rental real estate credits (see Instructions) . .Type - ---------------- ----------- 13d V - e Other rental credits (see instnrctions) . .Type - 13e ---------------------------- f Alcohol and cellulosic biofuel fuels credit (attach Fo-m 6478) 13f g Other credits (see instructions) . .Type - 1 14a Name of courrtry or U.S. possession - --------------------------------------------- b Gross income from all sources 14b c Gross income sourced at shareholder level 1Ac _ Foreign gross income sourced at corporate level d Passive category 14d ~ c e General category 14e ~ f Other (attach statement) . 14f Deductions allocated and apportioned at shareholder level ~ g Interest expense 1 °' ppontioned at corporate level ro foreign source income Deductions albcaled and a g ' LL i Passive category . 741 j General category 1 k Other (attach statement) . 14k Other infomtatron 1 Total foregn taxes (check one): - ~ Paid ~ Accrued 141 m Reduction in taxes avaNable for credit (attach statement) 14m n Oti~er foreign tax information (attach statement) 15a Post-1988 depreciation adjustment . 1lfa __ -1 85 • ~ ~ b Adjusted gain or loss . 1lib E g c Depletion (other than oil and gas) . 15c ~~~ d ON, gas, and geothermal properties-gross income . 1ldd Q5 a e ON, gas, and geothermal properties-deductions . 15a ~,., ...................... f Other AMT items (attach statement) . 1!d! 16a Tax-exempt interest income 16a ~~ b Othertax-exempt income 1Rb ~~~ c Nondeductible expenses 16c 7 0 '~ d Distributions (attach statement if required) (see instructions) . 16d 125 1 °~ a Repa meet of loans from shareholders . 18a ~ 0 17a investment income 17a _ 4 2 b Investment expenses 17b id fr m c umulated earnin s and rofds Di id d di ib t ti 17 ~ g p en ons pa o a x c v s r u c ~ d Other items and amounts (attach statement) c° ° o m ~ 18 Incomelloss reconciliation. Combine the amounts on lines 1 through 10 in the far right ~ = column. From tine result, subtract the sum of the amour>ts on Imes 11 12d and 141. 18 272 1 Form 11205 (2011) Form tt2os (2oi1) FARRELL VETERINARY ASSOCI ATES INC 25-1851994 age 4 Balance Shasta per Books Beginning of tax year End of bax year Assets (a) (b) (c) (d) t Cash rv ' r'- .-~ ~ _ - 110 747 19 679 ` 2a Trade notes and arxourrts receivable „. _ : ~= b Less allowance for bad debts 0 0 3 Inventories 66 422 7 214 4 U.S. government obligations t ~. 5 Tax-exempt securdies (see instructions) 8 Other current assets (attach statement) -;~- 4000 000 7 Loans to shareholders 38 488 6 105 8 Mortgage and real estate loans - 9 Other investments (attach statement) ~- - 10a Buildings and other depredable assets 803 372 , _.; 657 ~ _. b Less acrxrrrailated depredation 406 630 394 742 433 006 40 651 11a Depletable assets .-,:,t- r. ~, .:i~ • w - ,:: . b Less accumulated depletion 0 0 12 Land (net of any amortization) '~ ' 13a Intangible assets (amortizable only) 9053 ~u ~,m,., , -. Q ~ _., 9053 . .~, ~;,;; b Less accurriulated amortization 2 818 6 235 574 479 14 Other assets (attach statement} . r ~` _. ~ 15 Total assets t, 62 614 75 128 Llabllities and Shareholders' Equily ~' ' ,~. _ ._ ., 16 Accounts payable ~ ;_~,, 17 Moriages, notes, bonds payable in less tl-an 1 year ~, y 18 Other current liabilities (attach statement) . 148 597 19 Loans from shareholders ,~ , ' _ , 20 Mortgages, notes, bonds payable in 1 yea a more . '- "'` 381 340 37 115 21 Other Nabilities (attach statement) - 22 Capital stock 5000 000 23 Additional paid-in capital ' r 24 Retained earnings 234126 416 25 Adjustrrrents to shareholders' equity (attach statement) . 28 Less cost of treasury stock 27 Total ~ and shareholders' equity 620 614 75 128 Reconciliation of Income (Loss ) per Books tMth Income (Loss) per Return Note. Sdredule M-3 required instead of Schedule M-1 if total assets are $10 migion or more-see instnx2ions 1 Net income (loss) per books 272 231 5 Income recorded an books tlrts year rat induded 2 Income induded on Sdiedule K, lines 1, 2, 3c, 4, on Sdredule K lines 1 tlrrou~ 10 (item¢e): 5a, 6, 7, 8a, 9, and 10, not recorded on books this aTax-exempt interest $ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 3 F~cpenses record on books this year not 6 Deduddons induded on Schedule K, lines included on Schedule K, lines 1 through 12 1 through 12 and 141, not charged and 141(itemize): against book income this year (itemize): a Depredation $ --------------------------• a Depredation $ -------------____-- b Travel and entertainment $ 760 0 -- - -- - - ---- • 760 7 Addiines 5 and 8 0 --------------------- -- - ---- - - 4 3 272 991 8 Incarne loss S~edrle me t . Lkie 4 Wre 7 . 2 2991 Analysis of Accumulated Adjustments Account, Outer A djustments Account, and Shareholders' Undistributed Taxable Income Previo Taxed see ins tructions (a) Aaximulated (b) OM-er adjustments (c) Sharstaldsra' until adjustments account account taxable income y taxed 1 Balance at beginning of tax year 234 126 2 Ordinary income from page 1, line 21 279 898 3 Other additions 442 4 Loss from page 1, tine 21 5 Other reduddons 8 109 6 Combine lines 1 through 5 506 357 0 0 7 Distributions other than dividend distributions 125 941 0 0 8 Balance at end of tax year. subtract Nne 7 from Gne 6 380 416 0 0 Form 7 7 ZO (2011) i i 67,111 Final K 1 Antsnd ed K 1 OMB No. 1 130 Schedule K-1 (Form 11205) Department of the Treasury For cedar year 2011. or tax 1 Ordinary business kaonte pose) 13 Crodks Internal Revenue Service year beginning ,2011 106 361 ending , 20 2 ~ nxdal ~ eskrae t"0°ne ~) ' s Share of Income, Deductions, Shareholder 3 Other r~ rental income (loss) riredit'Sr. ~. ~ SM back Of form and saparab IrnfrucfJOns. 4 Interest income n~ , u ~ 168 A Corporation's employer idenilficafbn number Sa Ordinary dividends 5-1851994 B Corporation's name, addross, city, state, and ZIP code 6b Qualified dividends 14 Forepn transactions 8 Royalties ARRELL VETERINARY ASSOCIATES INC 108 CARLISLE ROAD 7 Net short-te"" eapkal gain p°es) EWVILLE PA 17241 C IRS CerNer whero corporation tied return 8a Net long-temr capital gain pons) 1 Sb CoBedibles (28%) gain pose) D Shareholder's identifykrg number Shareholder'. 1 ~ Unrecaptured section 1250 gain 178-40-3616 E Shareholders name, address, city, state, and ZIP code 9 Net section 1231 gain (loss) BERNARD C FARRELL 10 other income pose) 18 Atiemmative rrdnimrsn tax (A items 5 CENTER ROAD A -705 EVWILLE, PA 17241 F Strarohdder's percentage of stock ownership for tax year. 38.000000% ~ ~ ~~ ~~ `'' ~~ 11 Section 179 deduction 16 16ems afiecWg sharehoMer 2 362 C 289 12 Olherdeductions A 432 D 47 858 ., c O m ur ~ 17 Otirer information $ A 168 `See attached statt~rrten t for a dditional infotmatio . For Paperwork Rsdrrctlon Act Notfcs, see bntna:tlons for Form 11205. (HTA) Sche~rN K-1 (Form 1 ZOS)2011 Sdredule K 1 (Form 1120S) 2011 BERNARD C FARRELL 178-4a This list Merttlfles ttie codas used on Schedule K-1 for aU shareholders and provides summarized reporting gtfomtation for shareholders ttrllo fNe Form 1040. For detailed reporting and fllhlg irtfortnation, seethe separate Shareholder's Insgvctions for Schedule K-1 and the instructions for your income tax return. Orditary brph»ts inconw (loss). Determine whether the income (loss) is passive or narpassive and enter on your roWm as idloavs: Passive loss Passive income Nonpatsive bss Nonpassive income 2. Net rtrkti rwl estate incorrrt (loss) 3. Other net rental insane (loss) Report on See tl» Shareholders Instructions Sdredule E, Iine 28, cdumn (g) Sdredute E, tine 28, cdumn (h) Sdreduk: E, Nr-e 28, cdumn 0) See the Sharohddera Instructions Net income Schedule E, line 28, cdumn (g) Net loss Seethe Sharelaklers Instructions 4. IrKtrsst income Fonn 1040, line 8a 6a. OrdNrary tHvidtnds Forth 1040, line 9a 6b. QwlNltd dividends Form 1040, line 9b 6. Rayaltlas Schedule E, line 3b 7. Nat slam-bamr capMal gain (lots) Schedule D, lirro 5 Bor. Ntt long-Itnn capktl gain (loss) Schedule D, line 12 8b. Collectlblts (2ti7L) gaM (bss) 28% Rate Gain Worksheet, line 4 (Sdredule D instructions) 8c. Unrscapturtd stctbn 1260 gain See the Sherohdders Instnrctions 8. Ntt stWOn 1231 gain (loss) See the Sharehdders Insln~fons 10. Other irreorns (bas) Code A Other portfd'a income (loss) See the Shareholders Instnrctions B Invduntary cometsions See the Sherohdder's Instnxtiona C Sec. 1258 oadracls 6 atreddlos Form 6781, line 1 D Mining exploration costs recapture See Pub. 535 E Otirer income (bss) See the Shareholders Instructions 11. Stctioa 178 deductlon See the Shareholders Instnx:tions 12. Ofhtr dtductlons A Cash contributions (50%) B Cash contributions (30%) C Notrcash oawibutions (50%) D Nonrash contributions (30%) See the Shareholders E Captal gain property to a 50% Instnictiorrs orgar-izatiar (~°b) F Capital gain property (20%) G Caritributions (100%) H Investrrratt interest expense Form 4952, line 1 1 Deductions-{ovally income Schedule E, Ikie 19 J Sedicn 59(ex2) expendtures See the Shareholders Instructions K Dedudions~ortfoib (2% flow) Sdredub A, tine 23 L Deductions--porMdio (other} Schedule A, line 28 M Proproductive perbd expenses Seethe Sherehddera Instructions N Cormrrtrcial rovitatization deduction from rer-~ real estate activities See Form 8582 instructions O Reforestation expanse deduction See the Shareholders Instructions P DornestiC production activities information See Form 8903 instructions Q Qualified production activities income Form 8903, line 7b R Empk>yers Form W-2 wages Forth 8903, line 17 S Ofhx deductlons See the Sharehdders Instnictiona 13. Credks A Low-insane housing asdk (section 420x5)) from pre-2008 baNdnga B Low-Gxome housing crodk (other) from pre-2008 buidfnps C Low-incwne hooting aedit (secton 420x5)) from post-2007 butidfngs See the Sharehdders D Low-in~me housing cradle (dher) Instructions from port-2007 btNdinga E Qualified rehebNkatbn expenditures (rental real estate) F Otlrer ronW real estate credits G Other rental a+edils H Undistribubd capital gains cxedk Form 1040, line 71, box a I Alcohol and cellubsic biofuel fuels caedk J Wbrk opportunity aedk See the Sharehoders K Disabled access cradle Instrections L Empowamrent zone and renewal community employment cxedk Code Report on M Crodk for increasing research activities See the SheretwMers N Credk for employer soaal secrrrky and Medicare taxes See the Sharehoders Instn O Backup wkhhdding Forth 1040, line 82 P Other credits See tiie Shareholders Instn 14. Foreign traraactiorrs A Name of country or U.S. a B P n Gross insane from ell sources Fonn 1116, Part I C Gross irrcoma sourcxd at shareholder level Foreign gross income sourced at corporeAs level D Passive category 1 E General category r Fonn 1116, Part I F Other J Dectrdions alocated and apportioned at shareholder level G Interest expense Form 1116, Part I H Otl>er Form 1116, Part I DeducrYons allocated and apportaned at corporate level to foreign sa income 1 Passive category J Ger>erel Category Form 11113, Pert I K Other ONrerirHormation L Tofd foreign taxes paid Fonn 1118, Part II M Told foreign taxes accrued Form 1116, Part II N Reduction in taxes available for cxedk Form 1118, line 12 O Foreign tradirp gross receipts Form 8873 P ExbatxritotW krcorrre exctusbn Form 8873 Q Other foreign transactions See the Sharetoklers Instr 76. Albmativt rMnNnran tax (ANTI IOtrrrs A Pad-1988 deprociation adjustment See the B Adjusted gain w loss Sharehodera C Depletion (other than oN & gas) D ON, gas, 8 geotlrennal~roas kxarrre Instructiars and E ON, gas. & geothertnaF-~dedudions the Instructions for F Ofhsr AMT items Form 6251 18. kerns al[tcting shareholder Basle A Tax-exempt interest income Form 1040, line 8b B 08rsr tax~xempt income C Nondeductible expenses See the Sharehdd~ D Dletributions Instructions E Repayment of loans from sharetfolders 17. Other Nrfoorutlon A Investment insane Forth 4952, line 4a B Investment expenses Form 4952, line 5 C QuMified rehabiifation expenditures (other then rend real estate) See tine Sharoholdera Instr D Basis c/energy property See the Shareholders Insh E Recapture of low-income housing credit (ssctlon 420x5)) Form 8811, line 8 F Recapturo Mlow-income housing aedk (other) Form 8611, line 8 G Recaphue of investment cradle See Form 4255 H Recaptures of other aedits See the Sharohdders Inat I Look-back intereat~ompleted laig-tens corttrecxs See Fonn 8697 J LaOc-bads interest-income forerrest rtletilod See Form 8868 K Dispositions d property with section 179 deductlona L Recaptrrre of secton 179 M deduction Section 453(1x3) infortnetion N Sectiion 453A(c) information O Sedbrr 1260(b) irNomxtion P Interest atiocable to production See the Sharehold expendtures Instructions Q CCF ronqualdied withdrawals R Depleton infortnafbn--oN and gas S Amortisation of reforestation t T cos a Section 108(i) intormation U Otlver intortnation - _~ _,. BERNARD C FARRELL 178-40-3616 K-1 Statement (Sch K-1, Form 1120S) Line 12 -Deductions A Code A -Cash contributions (50%) A Line 15 -AMT Items A Code A -Post-1986 depreciation adjustment . . A - Line 16 -items affecting shareholder basis C Code C -Nondeductible expenses . . C D Code D -Distributions . . D 47 Line 17 -Other Information A Code A - Investment in~me . A __ _~ 6? 111 Final K-1 ~ Amend ed K 1 OMB No. 1 5-0130 Schedule K-1 ~,~ C~IJ ~ ~ (Form 11205) of tine Treasury For c~endar year 2011, or tax Internal Revenue Service 1 Ordinary bush-esa pxorne (bas) 1 E Credits year beginning , 2011 106 361 ending 20 2 Net rental real estab trcome (bss) ' Shareholder s Share of income, Deductions, 3 Olher net rental Income (bss) Credits, etc. - s« bsCk of form and separate instrucfiora. 4 Interest Income ` 168 A Corporetlon's empbyer identiRcetion number 8s Ordinary dividends 5-1851994 B Corporation's name, address, city, state, and ZIP code 6b Qualified dividends 14 Foreign trensadbns 8 RoyaMies FARRELL VETERINARY ASSOCIATES INC 108 CARLISLE ROAD 7 Net short-tern capital gab pose) EWVILLE PA 17241 C IRS Center vvhsre corporation filed return 8a Net long-term capital gain (loss) i 1 8b CoUeetiblea (28%) gain pose) D Sharohdder's identiybg number Shareholder. 2 ~ Unreraptured section 1250 gain 155-42-8634 E Sharoholder's name, address, sty, state, and ZIP code 8 Net section 1231 gain (bss) PATRICIA S FARRELL 10 other Income pose) 15 ApemaMre rt~hnun tax (A flame 30 DOUBLING GAP ROAD A -706 NEWVILLE, PA 17241 F snarer,ader: percentage a Stow ownership for tax year. 38.000000% ti 11 Section 178 deduction 18 Items afiedhp straretakler 2 361 C 289 12 Other deductions A 431 D 47 857 c O ~ 17 Other infortnetion `o A 168 * See attached statement for a dditional informatio . For Paperwork Reductlon Act Notlce, sae Instructions for Form 11203. (HTA) SchsduN K-1 (Form 1 20S) 2011 K-1 (Form 11205) 2011 PATRICIA S F. This Itat ideftdfles the codes used on Schedule K-1 for all shareholders and provides summarized reporting Infofntatlon for shareholdere who file Fonn 1040. For detailed reporting and filing information, see the separate Shareholder's Instructlorw for Schedule K-1 and the Instrut#ions for your Income tax return. 1. Ortlinary bushtass fncorrw (leas). Detsrtnirre whether the income (bss) is passive or nonpassive and enter on your return as folbws: Repoli on Passve loss See tite Shareholders Insinxdions Passive income Sctredub E, Iine 28, cdurm (g) Nonpassive bsa Schedule E, line 28, edumn (h) Nonpassive income Sdredub E, Ikre 28, cdumn U~ 2. Net rsrrtal rNd estate Income (bss) See the Sharehoders Instructions 3. OfMr net rental Income (loss) Net income Schedub E, line 28, cdumn (g) Net loss See the Sharehodera Instructions 4. Intargt income Forth 1040, line 8a 6a. Ordintry divWsnds Form 1040, I'me 9a 6b. laraNifsd dividends Forth 1040, I'rne 9b 6. RoyalWs Schedub E, line 3b 7. Nat short~emt capital gain (bss) Sdtedub D, line 5 Sa. Net long-tarn capNal gain (foss) Schedule D, line 12 8b. CdNctibNs (2ifX) gent (loss) 28% Rata Gain Worksheet, line 4 (Schedule D institrctions) 8c. Urrrseaptured section 1260 gain See the Shareholder's Instructions 8. Nat settler 1231 gain (loss) See the Sharehodera Instructions 10. Other income (loss) Code A Otibr portfdio income (bas) See the Shareholders Instnrctions B Invduntary r~nversions See tire Shareholders Inatnrdiona C Sec. 1256 contracts 8 strad~a Form 6781, Tine 1 D Minwp exploration its recapture See Pub. 535 E Other irrcorrre (loss) See the Sharehoders Instnx:tions 11. 8sctlon 178 deduction See the Shareholder's Instructions 12. OfJhsr dsdrrctlons A Cash contributions (50%) B Cash contributions (30%) C Nonaah contributions (SO%) D Norxatsh contributions (30%) See the Shareholders E Capital Oat properly to a 50% Instructions organizelbn (30%) F Capital gain property (20%) G Contrtbutions(100%) H Investment interest expanse Forth 4952, Tine 1 I Dedudbns-royalty income Schedub E, line 19 J Sedbrr 59(ax2) expenditures See the Shareholders Instructions K Deducionb-porffdb (2% floor) Schedwe A, line 23 L Deductions-porCdb (Oher) SchedWe A, line 28 M Proprodrrctive period expenses See the Sharehoders Inslnrctiona N Commercial revitalization deduction from rental real estate activities See Form 8582 instrudiars O Reforestation expense deducton See tlts Shareholders Instructions P Domestic production activities infomwtion See Farm 8903 instructions Q Quaiiflsd production attiivtiies income Forth 8903, line 7b R Employers Form W-2 wages Forrn 8903, line 17 3 Other deductions See the Shareholders Instructions 13. Credits A Low-income housirp credit (section 42(jx5)) from pre-2008 buidings B Low-income housing credit (other) from pre-2008 buidings C Low-income housing txedR (section 42(x5)) from pat-2007 buildings Seethe Shareholders D Low-income housing credit (other) Instructions from post-2007 buidings E Qualified rehabilftatbn expenditures (rontal real estate) F Other rontal real estate aedits G Otter re-Nal oredits H Undistributed capital gains credk Form 1040, tiros 71, box a 1 Alcohol and cetiubsic biofuel fuels credit J Work opportunity uedk See the Shareholders K Disabbd access oredit Instructions L Empowerment zone and renewal community empbyment credit Code Report on M Crodit for increasing research activities See the Shareholders Inatn N Crodit for employer soaal searrity and Medicaro taxes See the Sharohdders Instn O Backup withholding Forth 1040, line 62 P Otirer oredits Seethe Sharehdders Instn 14. Foroipn transactlons A Name of country or U.S. Pbn B Gras income horn aN sources Form 1116, Part I C Groan income sourced at sharehol~r level Foraigrr gross irrcorrre savrved at corporate level D Passhro ry E General category Form 1116, Part I F Other Deductions aNocared and apportioned et sharelroMsrlevel G Interost expense Form 1118, Part I H Other Forth 1118, Psrt I Dedrx;tions albcated and apportioned at corporate IeveJ tb foreign so income I Passive category J General category Forth 1116, Part I K Other Otirerirrlormafion L Total foropn taxes paid Fonn 1118, Part II M Total taeign taxes accrued Form 1118, Part II N Reduction in taxes avaNable for credk Forth 1116,1'me 12 O Foreign trading gross receipts Form 6873 P Extratertitorial incorrre exdusfon Forth 8873 Q Other forepn irensactions See the Shareholders Instr 75. Albrnatlw rrrfrrfmum fax (AMT) (bms A Pat-1986 depredation ad)ustmeM See ~ B Adjusted gain or Iota Shareholders C Depletion (otlter than oil 8 gas) D Oil, gas, 8 geothermal-dross fr~orne Instructions and E Oil, gas, 8 geotliermaH-deductions the Instnrctiais for F Otirer AMT items Form 6251 16. Items athctirrg shareholder bast A Tax~rrompt interest income Form 1040, line 8b B OMer tax-ezampt income C Norrdedudible expenses See the Sharehdd D D~ibutia>s Instnrctons E Repayment of bans from sharetroldera 17. OfMr infomrafbn A investrrrertt income Form 4952, line 4a B Investment expenses Forth 4952, line 5 C QuelrYfed rehabiitation expenditures (other 0-an rental real estate) See the Sherehaldera Inst D Basis of energy property See tite Shareholders Inat E Rscapturo of low-incortb houslrg credit {section 42(jxb)) Forth 8611, line 6 F Recapturo of low-income housing gedR (other Form 8811, line S G Recapture of investment credit See Faro 4255 H Recapturo of other oredits See the Shareholders Inst I Look-back ineeres4-completed long-bnn contracts See Fomn 8687 J Lode-back interest-income forecast metitod See Forth 8888 K Dispositions of property with sectbn 178 dedrrdbns L Recapture of ser~ion 179 deduction M Section 453(1x3) inforrrration N Section 453A(c) inforrtratbn O 5ectfon i260(b) information P Inffireat agocabb 7o productbn See the Sharehdc expendiures Inatnrctbns Q CCF nonquatifled withdrawals R Depbtbn klfortnetion-oi and gas S Amortization of reforestation cats T Section 108(1) information U Other information PATRICIA S FARRELL 155-42-8634 K-1 Stat~nerrt Sch K-1 Form 1120S Line 12 - f~eductions A Code A -Cash contributions (50%) A 4 1 Line 15 -AMT Items A Code A -Post-1986 deprecation adjustment . . A - Line 16 -Items affecting shareholder basis C Code C -Nondeductible expenses . . C 9 D Code D -Distributions . . D 47 7 Line 17 -Other Information A Code A -Investment income . A 1 _ i_ Final K 1 ~ Anrsnda d K-1 OMB No. 1 130 Schedule K-1 ~~ii (~l~J ~ ~ (Form 11205) Departrnent of the Treasury For calendar year 2011, or tax 1 O-d~rY busMess harts pose) 13 Cry Intemel Revenue Service year beginning , 2011 67 176 ending 20 2 Net rental real estate Y>come pose) ' s Share of Income, Deductions, Shareholc~t 3 other net rontat income poaa> Credits, star. - s.. back of torn, and ssparaa lrratructions. 4 Ingest income 106 A Corporation's employer idetttiticetion number Sa Ordinary dividends 5-1851994 B Corporation's name, address, city, date, and ZIP code tib (]ualdled dividends 14 Foreign transactions 6 Royakias ARRELL VETERINARY ASSOCIATES INC 108 CARLISLE ROAD 7 Net short-term capital gain (bss) EWVILLE PA 17241 C IRS Center vdrare corporationfied rotum Sa Net long-termcrepiW gain pose) i 13 8b Collectibles (2896) gain (loss) ~ ~~; s D SharchoWers identifying number Shareholder: 3 ~ Unrecaptured section 1250 gain 190-54-5587 E Sharetwlders name, address, city, state, end ZIP code 9 Net section 1231 gain (bas) ODD M HASCO 10 other income pose) 16 ANemetive minNdxn tax (A i~ 183 GOODYEAR ROAD A -446 ARLISLE, PA 17015 F Sharehddefs percentage of stock ownership for tax year. 24.000000% 11 Section 179 deduction 16 Items alferSrg shaieholdar 1 491 C 182 12 Other deductiars A 272 D 30 226 r 0 ~ 77 otherintonnation `o A 106 * See attached statemen t for a dditional informatio . For Paperwork Rsductlon Act Wotlce, sea InstrucUorrs for Form 11205. (~A) Schedule K-1 (Form 1 205)2011 Thb Ilst Iderkllles Me codes used on 8ddedule K-1 for all shareholders and provides starlmarFied roporting b~ornNttion for shareholders who f)N Form 1040. For detalied reporting and filing IMormation, see the separate Shareholders Instructlorta for Schedule K-1 and the InstructiorM for your Income tax return. Ordinary btrshfest Inconw (bas). Determine whether the income (loss) is passive or nonpassive and enter on your return sa fonows: Report on Passive loss See the Sharohokbrs Instructions Passive income Sdtedub E, line 28, cdumn (g) Nonpeaaive loss Scttedub E, line 28, cdumn (h) Nonpassive income Schedub E, line 28. cdumn Q) Nat rerrfal rsd esters incortw (loss) See the Sharoholder's Instructions 3. Ofhsr net rental incarrs (bss) Net income Net bss 4. IntanrN Income tra. Ordinary dividends 6b. QwNflsd dhidsnds 6. Roysltlas 7. Wst short-8enn capital t~afn (bss) 8a. Net bhp-isnn Capital gsM puss) 8b. Co1lscUblas (28%) gab pees) 8C. 9. 10. 11. 12. 13. Uruscsptwsd ssCtlat 1260 gain Net ssCUon 1251 9sb pees) Otlar Incorrrs (loss) Code A Other portfdio irtoorrte (loss) B Invdurrtary conversions C Sec. 1258 contracts & straddes D Mining exploration costs recapture E 08ter incarrte (lose) SsCtlon 178 ~ductlon Otlnr dsductlons A Cash contributions (50%) B Cash corttributiorta (30%) C Noncoatt contributions (50%) D Noncash corttributiorts (30%) E Capitd gain property to a 50% organization (30%) F Capital gain property (20%) G Contributiorta (100%) H Investment ltUrest expense 1 Dedudi0ns--royally ncome J section 59(eX2) expsndihtroa K (2% floor) L ~ (other) M Proproductive period expenses N Commerdd rovitetiratiort deduction from rortfd real estate adhrriba O Reforestation experae deduction P Dorttestk production actlvilbs infortnetion Q Qualified pt»ductiort a income R Employers Fonn W-2 wages 8 Other deductions Crodits A Law-income houairg credk (section 42(jX5)) from pre-2008 bundirgs B Law-income housing credk (other) from pre-2008 bindings C Lovv-income bowing credk (section 42(jXb)) from post-2007 bindings D Low-income Mousing aedk (other) from pold-2007 bundinga E Quditied rohsWlkation expenditures (ronW red estate) F Otdter rental real estate credits G Other rontal credts H Undistributed capi~ gains cxedk I Aloha and cellubsic biofuel fuels credk J Wbrk opportunity credk K Disabled access credk L Empowenrtertt zone and renewal community employment credk Schedule E, Ilte 28, cdumn (g) See the Shereholdera Instructions Form 1040, line 8a Forth 1040, line 9a Form 1040, line 9b Sdtedule E, line 3b Schedule D, line 5 Sdtedib D, line 12 28% Rate Gain Worksheet, line 4 (Sdtedule D inatrtxtions) see the Shareholders Instnxdions See the Sharehokbrs Instrtxtiions See the Shareholders Instructions See the Shareholders Instructions Forrn 8781, line 1 See Pub. 535 See the Shareholder's Insinx3ions See the Shareholders Instructions Sea the Shareholders Insfructiorts Fenn 4952, line 1 Schedub E, line 19 see the Shantltoldera lnstntctiorts Schedub A, line 23 Schedub A, line 28 See the Shareholders Instructions See Form 8582 instructions See the Shareholders Instructions See Fonn 8903 instructions Form 8903, line 7b Fenn 8803, line 17 Seethe Shareholders Instructions See tite Sharohdders Instructions Forth 1040, line 71, box a seethe Shareholders Instructions Code Report on M Credkforincroasingresearch activities See the Shareholders Instru N Credk for employer sodd security and Medicaro tatoes See the Sharehdders Instru O Badurp withholding Form 1040, Ifne 62 P Oher tandits See the Shareholders Instru 14. Foreign transactbns A Name of country or U.S. possession B Gross inrarrte from ati sources Form 1116, Part I C Gross ltconte sourced at sharottolder level Foreign gross income sourced at corporate oval D Passive category E Generel category Form 1116, Part I F Other DeduC6ats ellocefed and apportioned at shanrfaidsr oval G Irtberest expense Form 1118, Part I H Other Form 1116, Part I i7ediclions alioceted and apportioned at corporate letroi ro ro-eign sa income 1 Passive category J General category Form 1118, Part I K Other Ottrerin/ormetxt-r L Totd foropn taxes paid Form 1118, Part II M Total foroign taxes accrued Form 1118, Part II N Reduction in taxes avanabb for pedk Form 1118, line 12 O Foreign trading gross rocaipts Form 8873 P Extrabrritorid income exclusion Forth 8873 Q Other foreign tnttnasdlons See the Shareholders Inatr 15. AlbrtralFw minimum tax (Anti) Ibms A Post-1988 depredatiort ad)ustrrtant See ~ B Adjusted gakr or loss 5harehddera C Depletion (other Otan on 8 gas) Instructions and D On, gas, 8 gsotltennal-gross income E On, gas, & geoMermd-dedix2ions the Instnxdions fa F Otlter AMT items Form 8251 18. kerns at-sctlng shsnhoWar basb A Tax-exempt inbrest income Form 1040, line 8b B Other tax-ezemptincorne C Nondeductibb expenses See the Sharehold D Distributions Instructions E Repayment of loans from shareholders 17. Ofhsrinforrtptlon A Imvestment income Form 4952, line 4a B Invasbnsrtt expenses Form 4952, lute 5 C QualMied rshabilkafion expendtures (other than rerdal real estate) See ifie Shareholder's Irtst D Basis or eneryy property See the Shareholders Inst E Reppture of low-incortte housing aedk (section 42(jX5)) Form 8811, line 8 F Rcapturo of low-income housing credit (other) Fonn 8811, line 8 G RecapWro of investrnent txedk See Forth 4255 H Recaph-ro of other Credka See the Shareholders Insl 1 Look-back interest---completed kxtg•bemt oontracta See Forth 8897 J loMc-bade interest-income forecast method See Forth 8888 K Disposdtiorta of property with section 179 dedudiona L Recaptiiro of section 179 deduction M Ssdion 453(1X3) ltiamstion N Section 453A(c) iMorrttatiort O Section 1280(b) irttorrnatbn P Interost dlogbb to production See the Sharedtot expenddWrea Instructbns 4 CCF nonqudifbd wititdrowals R Depetion inionnatlon--oN ar-d gas S Amortization of reforestation costs T Section 108(1) information U Cdher inforrrtation T _ TODD M HASCO 190-545587 K-1 Statement (Sch K-1, Form 1120S) Line 12 -Deductions A Code A -Cash contributions (50%) A Line 15 -AMT Items A Code A -Post-1986 depreciation adjustment . . A _ Line 16 -Items affecting shareholder basis C Code C -Nondeductible expenses . . C _ D Code D -Distributions . . D Line 17 -Other Information A Code A -Investment income . A ' ~ Fom,1125-A (December 2011) DeparlmeM a are treasury InMmel Rerenue Service Name Cost of Goods Sold - Attach to Form 1120, 1120-C, 1120.F,11203,1065, and 1066-8. OMB No. Employer identl6catlon 1 inventory at beginning of year . ~ o0 4~ 2 Purchases . 2 413 3 Cost of labor . 3 4 Additional section 263A costs (attach sdledule) . 4 5 Other costs (attach schedule) . 5 8 Total. Add lines 1 through 5 . 6 479 t3 7 Inventory at end of year . 7 79 21 8 Cost of goods soW. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the appropriate line of your tax return (see instructions) . 8 400 9 a Check all methods used for valuing dosing inventory: (i) ^ Cost (i-) ^X Lower of cost or market (ii-) ^ Other (Speary method used and attach explanation.) - b Check if there was a writedown of subnormal goods . - ^ c Check ff the LIFO inventory method was adopted this tax year for any goods (if diedced, attach Form 970) . - ^ d If the LIFO inventory method was used for this tax year, enter amount of dosing irnentory computed under LIFO . 8d e If properly is produced or acquired for resale, do the rules of section 21i3A appy to the corporation? . ^ Yes X No f Was there any change in determining quantities, cost, or valuations between opening and closing irnentory? If "Yes "attach explanation . ^ Yes X No For Papervrork Rsductlon Act Notk:e, see instructions. Form 1125-A~ (12-2011) (Flrn> Depreciation and Amortization OMB No. 545-0172 Forrn 4562 oepsnn~ or the treasury InOxrW Revenue Service Igg) (Including Information on Listed Property) - gap lnatructlong, - Attach to our tau fstum. ~ Attachme r>ce 179 Name(s) shown on return F BINARY ASSOCIATES INC Business or activity to which this form relates 1120S -ANIMAL HOSPITAL Identlfying number 25-1851994 Election To Expense Certain Property Under Section 179 Nob: H you have any HsEed property, complete Part V belfo-e you complete Part 1. 1 Maximum mount (see instructions) 1 500 000 2 Total cost of section 179 property placed in service (see instructions). 2 21 750 3 Threshold cwt of section 179 property before reduction in Limitation (see instructions) . 3 2000 000 4 Reduction. in limitation. Subtract line 3 from line 2. If zero or less, enter -0- 4 0 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing ............................. arateil :see instructions ..... 5 500 000 6 (~) DesaiPtla- d Pr'oP~Y (b) Cost (business use only) (c) EleGed coat Sees. ~ 6214 6214 7 Listed Property. Enter the amount from line 29 7 8 Total elected cyst of section 179 property. Add amounts in column (c), lines 6 and 7 8 6 214 9 Tentative deduction. Enter the smaller of line 5 or line 8 8 6 214 10 Carryover of disallowed deduction from line 13 of your 2010 Form 4562. 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) . 11 467 276 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 . 12 6 214 13 Ca over of disallowed deduction to 2012. Add lines 9 and 10 less line 12 . - 13 0 not use Part N or Part 111 below for listed .Instead use Part V. reciatlan Allowance and Other De reciation Do not include listed See instruct ns. 14 Speaal depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see insVuctions) . ~ 14 15 Property subject to section 168(f)(1) election . 15 16 indudi ACRS 16 312 MACiZS cation Do not include listed r See instructions. . Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2011 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accourrts, check here 17 . -^ 10 127 Section B -Assets Placed in servi ce Dunn 2011 Tax Yea r Usi the General fatbn m (a) Classification of property (b) Month end Year placed in service (c) Basis for depreciation (twsinessrnvestmentuee oNy-aee inatrudions) (d) Recovery ~~ (a) Convention (~ Method (g) deduction 18 a 3-year p b 5-year p c 7-year prUpert r ~ ~ ~ d 10. r ~ e 15- r ~} i~ ~' f 20- ear ~'~' rir ': , 25- ear' ,,:: x: ' `:~~ 25 rs. SJL h Residential rental 27.5 rs. MM S/L 27.5 rs. MM S/L i Nonresidential real 39 rs. MM S/L r MM S/L section C - Asset P laced in Service Durln 2011 Tax Year Usin trite A lternative cation t ern 20 a Class life ~ ~ S~ 4a. r 40 rs. MM S/L Summa See instru ctions. 21 Listed pr+operiy. Enter amount from line 28 21 7 724 22 Total. Add amounts from line 12, lines 14 through 17, tines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and Scorporations -see instructions . 22 18163 23 For assets shown above and placed in service during the current year, enter the portion .................. of the basis attributable to section 263A costs 23 For Paperwork Reducton Act Notice, see separate Instructions. (-t'rA) FO 4562 (2011) Listed Property (Include automobiles, certain other vehicles, certain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete oM 24a 24b columns a throe h c of Section A all of Section B and Section C if licable. Car_Hnn e1Ln.welst~n and ~thrar Infermstinn /CauNen~ Sae the inshvctions for limits for nassanaer automobiles- 1 24a Do you have evidence to support the businesslinvestment use claimed? ^X Yes ^No 24b If "Yes," is the evidence written? QX Y ~No 18) Ib) I°) (d) t•) lfl (9) TYPe of P~rtY Date PIS investmxit use Cost or otfrer beats (b~i~sineas/ Irnreahnent Recovery Method/ (list vehw~es tirsq in service PDs use ~Y) period Convention 25 Special depreciation allowance for qualified listed property placed in service during the tax ear and used more than 50°~6 in a ualified business use see instructions 25 Ih) Deprscietion EI deduction 1~ section 179 cost 26 P used mor e than 5096 in a ualified bus iness use: 2002 SILVERADO 11/12/2001 100.00% 15845 11 091 5 200DB - HY 2006 FORD F-150 PICK 10126/2006 100. 25 744 25 744 5 200D6 - HY 1483 2007 SILVERADO 6/4/2007 100.00% 28 859 28 859 5 200D6 - HY 3 325 27 P used 50% or less in a ualified business use: 2008 GMC SIERRA 7 912011 50.00% 31 071 15536 5 S/L - HY 1554 2010 CHEVY TRUCK B 7/9/2010 50.00% 13 621 6 811 5 S/L - HY 1362 S/L - 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 28 7 724 ............... 29 Add amounts in column i line 26. Enter here and on line 7 a e 1 29 0 Section B-Information on Use of Vehicles Complete this setsiort for vet>ides used by a sole proprietor, partner, or other "more than 5% owner," or related person. If you provided vehicles to your employees, first answer the questions in Section C to see ff you meet an exception to Completing this section for those vehicles. 30 Total businessfinvestment miles driven during the year (do not include commuting miles) . (s) Veh'~cle 1 Ib) vehicle 2 (c) vehicle 3 (d) Vehicle a (®) vehicle 5 5 521 (f) ehide 6 31 Total commuting miles driven during the year . 32 Total other personal (noncommuting) miles driven 5 521 33 Total miles driven during the year. Add lines 30 through 32 11 042 34 Was the vehicle available for personal use Yes No Yes No Yes No Yes No Yes No Y No during off-0uty hours? 35 Was the vehicle used primarily by a more than 5% owner or related person? 36 Is another v!ehicae available for rsonal use? Section C-Questions for Employers Who Provide Vehicles for Use by Their Employsrs Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related rsons see instructions . 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, Y No by Your employees? 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instnxtions for vehicles used by corporate officers, directors, or 1 % or more owners 38 Do you treat ail use of vehicles by employees as personal use? . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? 41 Do you meet Ute requiremertts c~nnceming quai'fied automobile demonstration use? (See instructions.) Nobs: N ynarr answer to 37, 38, 39, 40, or 41 is 'Yes, " ~ not complete Sedlon B for the coven3d vehkks. Amort~ation la) Description of costs (b) Date amortization ~~ (c) Amatizabie amount (d) Code section ie- Arttlonora P If) forthisyesr 42 Amortization of costs that ins duri our 2 011 tax ear see instructions 43 Amortization of costs that began before your 2011 tax year 43 756 44 Total. Add amounts in column .See the instructions for where to re rt 44 756 Fo 4562 (2011) Foy 7~~~ Application for Automatic Extension of Time To File Certain ', Business Income Tax, Information, and Other Returns (Rev. November 2011) OMBNo. 1 5-0233 Department a the Treasury - Flle a separate applk:aNon for each return. Irriernal ReverKre Sarvba - $ee se fat! in<trUCtkfna. Name ~~ FARRELL VETERINARY ASSOCIATES INC 25-1851994 Print Number, street, and room or suits no. (If P.O. boX see inatructionsJ or Type 108 CARLISLE ROAD City, town, state, and ZIP code (If a foreign addross, enter cky, province or state, and country (fellow the country's practice for entering postal code)). NEWVILLE PA 17241 . #~ for sxbmslon tM des dabs of the -etu-n for ttdrkdf the extension -s M+ed See inatrtrctlons before thfs form. Automatic S-Month Extension 1a Enter the form code for the return that this application is for (see below) . . Application Form Application F rm k For: Code b F ode Form 1065 ~ - ~~:~ ' `, ~' Form 1041 trust 05 Automatic 6-Month Extension b Enter the form kxxie for the r+etum that this applic ation is for (see below) . 25 Application Form Application orm Is For: Code h For: Form 706-6 D 01 ,'~ ; , t : ;L: ~ ~; Fomt 1120-PC 21 Form 1 1 k estate onl 03 ,~ .„ , , ' Form 1120-FiElT 23 Form 1041-QFT O7 zrr ~~ '~;~. Form 11205 25 F 1065-8 10 ' - ~ i =~.. _ F O A 27 Forth 1120 12 Y= ~ ~ r F~~ a c'~ '~ _ .. F 8613 28 Form 1120 15 :;~ ., "~ ~ ~~ ",_~~` ~~i.: ~ Fonn8831 32 Form 1120-H 17 F ~~, - c ~, ~,~4. ~~ ~ -¢ F 8924 35 Form 1120-ND 19 2 If the organization is a foreign corporation that does not have an office or place of business in the United States, check here . - ^ 3 If the organization is a corporation and is the common parent of a group that intends to file a consobdated return, check here - ^ If checked, attach a schedule, listing the name, address, and Employer Identification Number (EIN) for each member vexed b this irdtion. Ail Filers Must Com late This Part 4 If the organization is a corporation or partnership that qualifies under Regulations section 1.6081-5, check here . . - ^ 5a The application is for calendar year 20.11 , or tax year beginning _ _ _ _ _ _ _ _ _ _ _ _, 20 _ _ _ _. ,and ending 20 _ _ _ _ . b Short tax year. If this tax year is less than 12 months, check the reason: ^ Initial return ^ Final return ^ Change in acxounting period ^ Consolidated return to filed 6 Tentative total tax . 6 0 7 Total payments and credits (see instructions) . 7 0 8 Balance due. Subtract line 7 from line 6 see instructions 8 0 For Privacy Act and Paperwork Reduction Act Notice, see separate Instructions. Form 7004 (R . ~ ~-20t 1) (MA1 EXHIBIT D OepMbnaM of the Treasury For plandary~ 2011, or tax 1 O-~Y bins trrorne ~) 13 Croats internal Revaaie Service ,2011 108 381 yeaf bspirrdng en~ng . 20 2 Ibt tMrel real estate i~oome (bal Shareholder's Share of Income, Deductions, 3 ~„~,~,;,,~„~) Cr+eclits, t8~#C. - see bade of torn and separab irubraetlems. 4 Inoerest income ,; ~,,~ 168 .. ~ _ , A f ert~pioyer ~ r is Orcbnary dividends 5-18514 B Corporafien's narrfe, mess, GtY. ataM. and ZIP code 6b Qualified dividends 14 Foreign baeteaetlorte 6 Ram ARRELL VETERINARY ASSOCIATES INC 108 C~eRLISLE ROAD 7 Net s~o~-term ` o~n (toss) E1M/ILLE PA 17241 C IRS Canter where oorpaatiort filled rettrn 8a Net bng-term capipl Hain (toes) y~c ~. 8b Ce/ecl~ica (2896) gain (bss) ,,. _ . ~ Starer!toideta idenlKying nurturer Shareholder. 2 ~ Unrecapbxed sec8o^ 126° gain 155-42-8834 E StamattoWer's name. ~drees. cAy. state. and ZIP Code 8 Net saciion 1231 gain (loss) ATRICIA S FARRELL 10 Other Income (loss) 16 ANernabre aininwm taac (Mm' 30 DOUBLING GAP ROAD A -706 EVWILLE, PA 17241 F Shareholders percentage of stock oNrtierstdp for taz year . 38.000000% 11 12 A .~ e O ' m w ~_ ti. For Pape>.work Reductlon Act Notice, sea InsMeetlons tar Form 11205. (FlTA) 16 17 1 Otlter h-forma6on `See attached statemertt for additional irrformatiott. SchoduM K 1 (Perm 11 ~ 2011 J sctredr~e K 1 (Fawn t 7208) 2011 PATRICIA S FAF2REL,L 155-42-8634 Pa0e 2 This ~ fdatNitiaa iha codas ttawd on 8t:hedule K-1 for aN sMaroholdus and provides stanmarix~d rBportltq U~otngHon tar starehddets who fNe Fomt 1W0. For disddNd t»portlrp and t))lttp tntormatlon. see the separate 8ttarehotdet's )r-atrttctions for Sdtsdule K-1 and tM Mstructiorta for your income tax return. Cass Report on 1. Ordbary bnsieesee lercwrrs pats). Detsrrrrirre whe0rer the income (loss} fs M Cradle for research paastve a rtor>persshre and enter on your retrim as toAoNre: aCdvities See the Sharotatder`a I a Repat an N Credit (Or enrploysr social Passive laze Seethe Slaretrolder's klstruCtieres seCtxity slid UASdice<e taxes Seethe Shareltelders 1 Passive treoorne 3Cleedtrie !ti Arre 28, coMrrn (~ O Backup w111VaWing Form 104D, Arre 82 bas SctredWe E, Ana 28, edam (h) P OD+sr d~er8ts See Ore SherehoWer's I s t~rollp/alsive N'r00rlfle SGttedule E. IH1e 28, Cokrtn ~ 14. ROrelgn katsaetions 2 Nst rwMal red sews irrcorees pose) Seethe Sneretrokter's Mazbtzdlons A Name of a• U.S. 1. Otlea eat rsertal Ireeorres pass j po»ssston Wd income Sclteduk t" Ikre 28, c~karvr (~ B Gross k-corrre tram aA saaars Fam 1118. Part 1 Nat loss seethe Sfgaeltoldsrs Inatntctiars C Gross keoome sourced at 4. IrNtsrwt incoreto Fam 1d/0, IGte 8a alawdrotder level Sa. Orrueeary divNNnds Fam 7040. Ana 9a far sipvt gross lnoorrrs sanrasd at co~omte level 6b. QuaN1iW dvidends Forth 1040. Arrs 9b D Passive Category 6. RayaNMS Sdwdule E, Ana 3b E General category Fam 1118, Part 1 7. Net strort~eren CapkM gstet (loss) Sctrsdule D, Ana 5 F Oreer 8a. Nst arp1EN gain pats) Scttedufe D, Ana 12 Deduc6orts aalcatsd arrd apportioned at~/eveJ 8b. CdlsctlbMs (Zd%) ydn pals) 28X Rats Gain Workstreet, Ana 4 G kebresl expense Fam 1718, Part i (SCtledub D iratrreCtions) H Otlter Form 7778, Part 1 8e. Urrrscaplra~ed ssdlon 1260 gstn See ihs Sharefroids{s IrastruCtions DeducCons atbcatsd and apportioned et cavporele bust ro rore/gn 9. Nst seetion 1231 gtdee pats) Seethe Stiwehotders Instructions Mc orne 70. OtMr inconrs (loss) i Passive category Cale J General p11eQ0[y Fam 11 t8, Part I A ODex poAfol'a ercome (loss) See the Sleareholdee's Instnrctions K Ober B InvohsNary arerveraiorzs See tits Sharetrolders Irratr7rctiorts Other trdiorrnsBcn C Sea 1258 ooretracis t: alraddbs Fam 8781, Ibre t L Total teases paid Fam 1118, Part 11 0 hMrrip exporaUan costs recx•plure See Pub. 635 M Total taeign 7soaes earned Forth 1118, Part II E Olhar ireoetrrs (loss) Seethe &rerelroidsrs trzstrudbns N tteduCtion in cleats evsAeibh ror 11. Sedwet 179 dsderetlon Seethe ~s Mtstruetiona credit Fam 1118, line 12 12 OtMr dsdeteYorts 0 Foreign trading prose rece+pls Fain 6873 A Cash aorrtribrAiorts (507L) P Erctrslsrtilorial inaxrrs ezdusion Form 6673 B Cash ~ (3076) R OBrer tbrsign trararadforrs See Ore Stwrrsleolder's I C Naegstl oorNAbn6or-s (50%j 16. ANsmatlw rrtloYntrm tax (AMT) Items D Pbreaulr coedeibe6ores (30'k) See the 8taudwldera A Pos1:t988 deprodation adjwtrrrent Sse the E Capital gain property to a 50% hrstructiars B Adjestb qak- a• loss SMrottolders C DapMlion (other fleece a7 & gas) ~ end F Capital ~ Pr~h (2076} D OA, gss, & gsztMwrmal-gross Yeeonre G Coretrlbtetiona (100%) E 06, gas, 6 ~uctiorrs the 47strrrdfornz for H Investrnent interest expense Form 4952, Ana 1 F O6rerAMT Aterrts Fam 8261 I DeducBons--royalty 6tcome SclfeduN E, IYx 19 16. Msms Nlsrtlng sharrl-Oldsr brads J Ser2lote 5g(e)(2) expenditrses See the SltareholdePS Y>atrrrctiorn A Tax-exarnpt YMarest kaxxrre Form t 040, line ~ K Dsductlons-porMdb (2% Iborj Schedule A, Ana 23 B ODwsr teoaaxeiript kN:ome L OeOuctlora--poAfoio (dfa~ Schedule A, 6ne 28 C NondeduCdble axpsrasaa Sse 6w Slwehdda' M Proprodudive period axperwss See the SAvehdder•s Instructions D Di~brr8orta Instructions N Cpla7tereid rovr'tslizattae deduction E Repayment of loans trap from rM11td reel eWleactivitisa See Fomn 8582Instructions ~terMtoWers 0 Reforestation sxpenW OBdrwYlon See Oro Shareteoldsrs Instrudkrw 1T. Odrsr irtior7natiore P 'DorrrssOC production activities A kfveWrrerrt ktcoerre Form 4952, Ana 4a intorrtralbre See Fam 6903 ira<trtrctiars B krveetrrratK expenses Fam 4952, line 5 O Qua80ed prodzrctiort aC4Vdile inaxne Form 8903. fats 7b C Ousltlbd rattabi~n expenditures R Employer's Fam W 2 wages Form 8903, are 17 (o0rx than rental rml sstatej See tits Sltaratt0ldsr's S OCrer deductions See Ore Stusrdedder's instruc8ons D Basic of sharpy propstty Seethe Stesratedder's 13. Credit E Reaplufr of low•Moorres tqusing A LorAwnooma frorzeirrg credit (section eredk (ssdfon 42Qj(6)) Form X71, Igre e 42(D(5)j troth P~2~ b F Repiphus of bw-irroome parsing B Low-tnoane Irotreartp pelt (other) pedlt (o9re5 Fam 8811, Ana 8 ern P+e-2~ bu8r9reps G Reapture of invsatrresnt erndrt See Fam 4256 C Low•inoenee taxrsNeg psdt (section H Recsptzrn Of dher credits See the Sf>enfalder's 42(p(Sj) item pWt-?A07 tru9tlings See the Strareholder's I I.DOk~back iettsraE-axnpleted D Low-income houskeg Credlt (dMfj Instruc8ons kxrg~term contacts See Fonn 8~7 'from past-2007 buildings J Look•6ea;k interest-Moorne E QuaA/sd retlabikaUon experrrkwrea torsCmt rrre0rod See Fam 8888 (rental red estate) K Dbpoeitiaes d property with F Other roelW real estate section 179 dedudbra< G Outer (astral pewits L Recapture d sedlar 178 H Undistritidsd gpifal gains trer6t Fam 1040, fine 71, bar a dedurdlon I Alcohol end Ce6lzbsic 6iotirel M Section 453(1)(3} trKornzatlon 2~ b t J Wale opporturaty r;redH Seethe Sharotrolder's O Sectiar 1 ~ i Monnation K Disahied ee0e~ CrerFt Mstrucdons P krtetest saocabM tb productlon Seethe L Empeweurrieret zone erid renewal axparidisaes Instructlons comrtnrnily empbyrnent CredR D CCF nortgtrtlHlsd wtilydrawals R Depktbri irdomwtlorr-oli and gas 8 Antortlzation of reforestation Costs T Section 708(4 inrortneti0rt U ODiar kNOrrnatiai r PATRICIA S FARRELL ~ 55-42-8634 K-1 Statement (Sch K 1, Form 1120S) Line 12 -Deductions A Code A -Cash contritwtions (50%) . . A Line 15 - AIIAT Items A Code A -Post-1886 depreciation adjustment . A _, Line 16 -Items affecting shareholder basis C Code C - NondedudiWe expem:es . C _ D Code D -Distributions . D _ Line 17 -Other Ir>formation A Code A - Investmeirt income . . A _ Income Items 1 Ordinary itx;ome from trade or business activities 1 106,361 2 Net income from rental real estate activities 2 0 3 Net income from other rental activities 3 0 4 Interest 4 168 5 Ordinary dividends 5 0 6 Royalties 6 0 7 Net short-teen capital gain 7 0 8 ' Net long-term capitat gain 8 0 9 Net section 1231 gain . 9 0 10 Other income . 10 0 11 Tax-exempt interest income 11 0 12 Other tax-exempt income 12 0 Tout income items 106 29 Loss and Expense items 1 Ordinary loss from trade or business activities 1 0 2 `Net loss from rental real estate activities 2 0 3 Net loss from other rental activities 3 0 4 Net short-term capital loss 4 0 5 Net lang-term capital loss 5 0 6 Net section 1231 bss f3 0 7 Other loss 7 0 8 Section 179 expense deduction 8 2,361 9 Charitable contributions 9 431 10 Irnestment interest expense . 10 0 11 ~ Section 59(e}(2) expenditures 11 0 12 Other deductions 12 0 13 Total foreign taxes . . . t3 0 14 Canytarward of prior losses . 14 0 Total loss and expense items 2 92 Nondeductible Expense Items 1 Nondeductible expenses . 1 289 2 Carryfonuard of prior nondeductible expenses . 2 0 Total nondeductible expense items . 89 .Loss Carryovers 1 Loss items 1 0 2 Nondeductible expense items 2 0 ,. Form 112os Shareholder's Basis Statement 201 Note to Shareholder. Keep for your records Shareholders name Shareholder. 2 PATRICIA S FARRELL S Corporation's nears FARRELL VETERINARY ASSOCIATES !NC identifying Number 155.42 Empkryer ID Number 25'1851994 Summary Beginning Balance Increases Decreases Distnbutions Ending Balance Stock 88167 106 529 3 081 47 7 143 7 Loan 0 0 0 Total 88167 108 529 30$1 47 857 143 7 Election ^Check if special ordering election under Reg. Section 1.1367-1(g) has been made. Stock Basis ear sfodc basis innin of 1 Be 1 88 1 7 g y g ital contributions 2 Ca 2 0 p 3 Other increases 3 0 4 • income items 4 108 9 3 Add lines 1 through 4 5 194 B B Other decreases 6 0 7 Distributions (not to exceed the sum of line 5 and line 6) 7 47 8 7 Distributions in excess of basis 8 Subtract the sum of tine 6 and tine 7 from line 5 (if zero or less enter O) . 0 8 148 8 9 9 B X Loss iterras (not to exceed line 8) OR Nondeductible expenses (not to exceed tine 8) . 9 2 9 10 Subtract line 9 from line 8 10 146 11. BNondeductible expenses (not to exceed litre 10) OR X Loss items (not to exceed line 10) . 11 2 7 12 Subtract line 11 from line 10 12 143 7 13 Loan basis restoration 13 0 14 End of year stock basis (subtract {ire 13 from line 12) 14 143 7 Loan Balalnce 1 Beginning of year loan balance 1 0 2 Current year loans to corporation 2 0 Loan repayments 3 3 0 . 4 End of year loan balance 4 0 Loan Basis 1 Beginning of year loan basis 1 0 2 Loan basis restoration 2 0 3 Current year loans to corporation 3 0 4 Add lines 1 through 3. 4 0 5 Loan repayments (not to exceed line 4) 5 0 6 Other Decreases . 6 0 7 • Su btract the sum of tine 5 and B from line 4. 7 0 8 B X Exc~s loss items (not to exceed line 7) OR Excess nondeductible expense items (not to exceed line 7) . 8 0 9 Subtract line 8 from line 7 9 0 10 B X Excess rwndedudible expense items (rwt to exceed line 9) OR Excess loss items (not to exceed tine 9) . 10 0 11 End of year loan basis (subtract tine 10 from fine 8) ~ ~ BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff/Respondent CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. OS-5421 CIVIL TERM PATRICIA M. FARRELL, Defendant/Petitioner IN DIVORCE IN RE: MOTION TO RECONSIDER ORDER OF COURT AND NOW, this 21st day of November, 2012, the matter of the Defendant's Petition for Reconsideration, which was originally scheduled for a hearing on October 12, 2012, and continued until November 21, 2012, the matter having been called for a hearing by agreement of the parties and their counsel, we hereby refer Defendant's Exceptions to the Master's Report to Argument Court to be scheduled once the Master's transcript has been filed. The matter is to be listed by the parties. By the Court, Bradley L. Griffie, Esquire For the Plaintiff/Respondent '~ Samuel L. Andes, Esquire For the Defendant/Petitioner :vae ~~~ t ; C°` ~.,, c~~-, -~ -? ,,; J - ~ ~~ ~ ~ ~.n r"" rv :J: ~- ~ ~ ~., -~- - ~ _ _ r.. a - :~N .. ,$~ ,_b,:, I~ 1,~~~ l des ~v' C~ ~~ ~~~~ p~ BERNARD C. FARRELL, ) Plaintiff ) VS. ) IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 PATRICIA S. FARRELL, ) Defendant ) IN DIVORCE NOTICE 'TO PLAINTIFF NAMED HEREIN: YOU ARE HEREBY NOTIFIED TO RESPOND TO THE ENCLOSED NEW MATTER WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A DEFAULT JUDGMENT MAY BE ENTERED AGAINST YOU. Date: rP4r"-.,0r14c6 0" Samuel L. Andes Attorney for Defendant Supreme Court ID 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 y so T14 I 1Z . I ONO 14. Zr r2 r A ,,r 19 ERL AD H11: 27 PENNSYL OUNT Y BERNARD C. FARRELL, Plaintiff vs. PATRICIA S. FARRELL, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5421 IN DIVORCE ANSWER OF DEFENDANT PATRICIA S. FARRELL TO PLAINTIFF'S PETITION FOR BIFURCATION AND NOW comes the above-named Defendant, by her attorney, Samuel L. Andes, and makes the following Answer to Plaintiff s Petition for Bifurcation: 1 through 4. Admitted. 5. Admitted with clarification. The affidavits of consents and waivers of notice were filed with the understanding that they would not be utilized by the court to conclude the divorce until the court was in a position to resolve all of the economic issues by a final order for economic relief. 6 through 13. Admitted. 14. Denied. By granting reconsideration of both the decree and the exceptions to the Master's report, this court established that the final decree in divorce is not final and is subject of further action by this court. 15. Denied as stated. Entering the final decree in divorce at this time may prejudice Defendant's right to pursue an appeal to the appellate courts of Pennsylvania in the event that she is dissatisfied by action taken on her exceptions to the Master's report. 16. Admitted. WHEREFORE, Defendant prays this court to dismiss Plaintiff's Petition for Bifurcation or, in the alternative, to grant the relief requested in her New Matter. NEW MATTER By way of further answer, Defendant sets forth the following New Matter: 17. Defendant is concerned that entry of a final decree in divorce in this matter, or the other relief requested in Plaintiff's Petition for Bifurcation, may prevent her from pursuing an appeal to the appellate courts of Pennsylvania in the event that she is not satisfied with the final resolution of the economic issues which are currently pending before the court in her exceptions to the Master's report. 18. If the parties can agree, and this court will order, that the bifurcation shall not prevent Defendant's right to appeal any of the economic issues still pending because of Defendant's exceptions to the Master's report, the court may enter a decree bifurcating the case and granting Plaintiff his divorce decree. WHEREFORE, Defendant prays this court to enter the attached order to resolve the matters raised in Plaintiffs Petition for Bifurcation or, in the alternative, to deny Plaintiffs Petition for Bifurcation. S L. Ande Attorney for Defendant Supreme Court ID # 17225 525 North 1211 Street P.O. Box 168 Lemoyne, Pa 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to authorities). Date: 20 SAMUEL L. NDES CERTIFICATE OF SERVICE I hereby certify that I served an original of the foregoing document upon counsel for the Plaintiff herein by regular mail, postage prepaid, addressed as follows: Bradley L. Griffie, Esquire 200 North Hanover Street Carlisle, PA 17013 Date: 18 December 2012 Amy M. Parkins Secretary for Samuel L. Andes BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA vs. : CIVIL ACTION -LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant IN DIVORCE CERTIFICATE OF SERVICE I, Bradley L. Griffie, Esquire hereby certify that I did, the 18"' day of December, 2012, cause a copy of an Order of Court and Rule to Show Cause, dated December 14, 2012, to be served upon the Defendant, Patricia M. Farrell, by serving her attorney of record by first class mail, postage prepaid, at the following address: Samuel L. Andes, Esquire PO BOX 168 Lemoyne, PA 17043 DATE: .)? ) 10 t _ PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next `?' Argument Court.) -- CZ CAPTION OF CASE (entire caption must be stated in full) BERNARD C. FARRELL, vs. PATRICIA M. FARRELL, Uri i No. 08-5421 Civil Term 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Exceptions to Divore Master's Report and Recommendations 2. Identify all counsel who will argue cases: (a) for plaintiffs: Bradley L. GriffieEsquire (Name and Address) 200 N. Hanover Street, Carlisle, PA 17013 (b) for defendants: Samuel L. Andes, Esquire (Name and Address) PO Box 168, Lemoyne, PA 17043 3. 1 will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: Attorneyfor Plain-h# Date: ? - Ab -12 N INSTRUCTIONS: 1. Original and two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 14 days prior to argument. 3. The responding party shall file their brief 7 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. , 19. r7S C# ?fbo6 e6 IV f-A l,eu, L (5rr+x?, Print your me BERNARD C. FARRELL, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION- LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant. IN DIVORCE IN RE: DEFENDANT'S EXCEPTIONS TO DIVORCE MASTER'S REPORT BEFORE HESS AND PECK ORDER AND NOW, this -2-/ ' day of June, 2013, the exceptions of the Defendant, Patricia Farrell, are dismissed and the recommendations of the Master, filed September 5, 2012, are herewith made a final order of Court. BY THE COURT, Kevin ess, P.J. r �adley L. Griffie, Esquire = - For the Plaintiff ; _71 ,Samuel L. Andes; Esquire a c`z' 1114 For the Defendant c:a <' E. Robert Elicker, II, Esquire Divorce Master �s Am �� BERNARD C. FARRELL, IN THE COURT OF COMMON PLEAS OF Plaintiff, CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION- LAW PATRICIA M. FARRELL, NO. 08-5421 CIVIL TERM Defendant. IN DIVORCE IN RE: DEFENDANT'S EXCEPTIONS TO DIVORCE MASTER'S REPORT BEFORE HESS AND PECK' OPINION AND ORDER OF THE COURT For disposition in the present bifurcated divorce case are exceptions to the Divorce Master's Report filed by the Defendant, Patricia M. Farrell. (Defendant's Exceptions to Master's Report, filed September 5, 2012). The Divorce Master filed his report recommending that the assets of the parties should be distributed fifty-fifty with adjustments made regarding some of the assets. (Master's Report, filed August 17, 2012).2 Judge Masland has recused himself from this case. 2 The exceptions of the Defendant read as follows: 1. The Master made findings about the Plaintiffs alleged medical condition,and the Plaintiffs claim that those medical conditions limited his ability to work as a veterinary,without competent evidence and without expert evidence on the subj ect. 2. The Master erroneously concluded that Plaintiffs decision to retire from the practice of veterinary medicine, announced on the eve of the final Master's hearing,,was a genuine decision based upon Plaintiffs medical and physical condition and was not an effort to avoid his obligations to the Defendant. 3. The Master erroneously failed to assign Plaintiff an earning capacity based upon his ability to practice veterinary medicine.The Master erroneously concluded that the Plaintiff was not able to perform large animal veterinary work when the testimony made it clear that Plaintiff continued to do the type of work following his alleged"retirement"from Farrell Veterinary Associates. 4. The Master charged Defendant with the expense she incurred for surgery following the parties'separation but overlooked the substantial cash withdrawals made by Plaintiff from various marital accounts,for his personal use and benefit,at approximately the same time.As a result,the Master overcharged Wife with the receipt of marital assets or the creation of martial debts. 5. The Master failed to take into account the monies Plaintiff removed from joint accounts shortly prior to and following separation and devoted to his personal use and benefit. 6. The Master failed to award Defendant monies she contributed to joint tax return deposits which were unilaterally taken by Plaintiff and used for his sole benefit.The deposits resulted in Plaintiff receiving tax benefits in the amount of $20,642.00 and Defendant is entitled to 50%of that benefit. 7. The Master failed to charge Plaintiff with receipt of approximately$158,000.00 which he received from a joint marital account.The master erroneously granted Plaintiff a credit for those funds,finding that Plaintiff used them to pay student loans incurred by two of the parties'three children in graduate school,over the objection of Defendant,who did As directed during oral argument on April 5, 2013, and consistent with C.C.R.P. 1028(c)(6), the Defendant has waived or consolidated her exceptions so that there are but three remaining issues: (1)whether the Master erred in not accounting for the the cost of selling the Doubling Gap Road property when making equitable distribution; (2) whether the Master erred in allowing the Plaintiff to retain the entire benefit of the 2008 tax refund; and , (3) whether the Master erred in finding that the Plaintiff retired for health reasons. For the reasons stated in this opinion, Defendant's exceptions will be denied. Plaintiff, Bernard C. Farrell, resides at 905 Center Road,Newville, Pennsylvania 17241. (Notes of Testimony, 54, In Re: Transcript of Proceedings Hearing, July 31. 2012 (hereinafter "N.T._, July 8. 2012")). Defendant, Patricia M. Farrell, resides at 44 Bevans Road, Layton, New Jersey 07851. (N.T. 151, July 31, 2012). Plaintiff and Defendant were married in 1973. (N.T. 32, Sept. 8, 2011). Plaintiff and Defendant both graduated from veterinary school in 1976. (N.T. 33, Sept. 8, 2011). In 1978,the two started a veterinary practice that was later incorporated, Farrell Veterinary Associates, Inc. (hereinafter"Corporation"). (N.T. 32-33, Sept. not consent to the expenditure of funds in that fashion.In fact,the evidence demonstrated that,to the contrary,those payments were made over Defendant's objections. 8. The maser failed to take into account the substantial expenses incurred by Defendant in the sale of her farm property,as required by the statutory factors. 9. The Master erroneously allowed Plaintiff to submit an appraisal and offer testimony on the value of Farrell Veterinary Associates,Inc.after the Master conducted a hearing at which he took testimony on the value of the business from Defendant's expert.The Master thus violated his own directives by permitting Plaintiff to introduce evidence as to the value of the corporation after the record was closed on that subject. 10. The Master erroneously failed to make proper disposition of the parties'ownership interest in Farrell Veterinary Associates,Inc.,a corporation which both of them own.In doing so,the Master erroneously failed to award to Plaintiff, Wife's interest in the corporation.By doing so,the Master left the parties engaged in that business and left Defendant at the mercy of Plaintiff and the third shareholder,both of whom have interests adverse to those of the Defendant. 11. The Master's final report is inconsistent with statements he made and guidance he made to the parties regarding the disposition of the corporation in prior conferences and proceedings before the Master. 12. The Master failed to charge the Plaintiff with receipt of a motor vehicle and a horse trailer which he received from the corporation,Farrell Veterinary Associates,Inc.,in which he subsequently sold or traded in for his benefit. 13. The Master erroneously charged the Defendant with receipt of a motor vehicle from the corporation for which she paid by receiving less of the profit distributions from the corporation pursuant to an agreement that parties signed in September of 2008. 14. The Master's findings that the parties'standard of living during the marriage was"good"is inadequate given the undisputed testimony before the Master about the expensive vacations and other expenditures by the parties on their lifestyle(Defendant's Exceptions to Masters Report and Recommendation,filed Sept.5,2012). 2 8, 2011). The Defendant focused her practice on small animals while the Plaintiff focused on large animals. (N.T. 61-62, July 31, 2012). Around 1986, the Defendant was treated for depression, and later, bi-polar disease; as a result, she reduced her appointments and managerial services to part-time. (N.T. 36-40, Sept. 8, 2011). The Corporation continued to grow, and a third partner was added, Dr. Hasco. (N.T. 71-72, July 31, 2012). The Farrells each owned 38% of the Corporation, and Dr. Hasco owned 24%. (N.T. 71, July 31, 2012). The Defendant found out that the Plaintiff was having a long-term affair in early 2008, and the parties separated soon after. (N.T. 42, Sept. 8, 2011). After that time,the Defendant's mental state worsened and she spent less time in Pennsylvania; as a result, for all practical purposes, her work in the Corporation stopped. (N.T. 42-45, 56 Sept. 8, 2011). The Plaintiff filed a Divorce Complaint in September of 2008. The divorce did not move forward for some time. During that interim period,the Plaintiff and Defendant would both deposit funds into a joint checking account. (N.T. 100, July 31, 2012). Both parties used that account to pay for day-to-day expenses. (N.T. 100-01, July 31, 2012). The Defendant also paid for approximately $18,000 of plastic surgery through that account. (N.T. 99- 100, July 31, 2012). During the interim period, the Plaintiff and Defendant filed a 2008 joint tax return. (N.T. 165, July 31, 2012). The 2008 return resulted in a refund of$18,364 for federal tax and $2,278 for state tax that was to be applied to 2009 taxes. (N.T. 166, 2012). The Plaintiff and Defendant did not file a joint tax return in 2009, and the Plaintiff was credited with the entire 2008 refund. (N.T. 166, 2012). 3 In February of 2010,the Defendant filed a Petition for Economic Relief. The Master was appointed and a hearing was held on September 8, 2011. A final hearing was later held on July 31, 2012. The Plaintiff and Defendant were able to accumulate a substantial amount of assets; as such,the hearings before the Master generated a substantial record. However,the distribution process was somewhat simplified because,before the Defendant learned of the affair,the Plaintiff and Defendant met with an attorney for estate planning purposes and distributed various properties that they acquired. (N.T. 66, 133, 146, July 31, 2012). As a result, one of the properties that the Defendant maintained was the property referred to as the Doubling Gap Road residence. (N.T. 66, July 31, 2012). Initially,the Defendant used this property as a residence; however,the Defendant then rented the property since she was spending most of her time outside the area. (N.T. 104, July 21, 2012;N.T. 44, Sept. 8, 2011). During the proceedings with the Master,the parties stipulated to the values of their various properties, including a value of $721,000 for the Doubling Gap Road residence. (Joint Exhibit No. 1). Before the final hearing, the Defendant sold the Doubling Gap Road residence and cleared less than the stipulated value after taking repairs, commissions, and transfer taxes into consideration. (N.T. 163-65, July 21, 2012). The Defendant testified that she spent$55,102.38 liquidating the residence. (N.T. 164-65, July 31, 2012). Though the parties were still married at the time the property was sold, the husband was never involved in the transaction as the deed was only in the Defendant's name.(N.T. 176-77, July 31, 2012). Additionally,before the final Divorce Master hearing,the Plaintiff retired. (N.T. 755 82-83, July 31, 2012). At the final hearing,the Plaintiff testified that he had started the process to collect social security. (N.T. 56, July 31, 2012). The Plaintiff cited the physical demands of a large 4 animal practice as the reason for his retirement. (N.T. 82, July 31, 2012). The Plaintiff testified that five years beforehand, when he ruptured a disk in his back,he first considered retiring at the age of 62. He told Dr. Hasco of his retirement plans three years before the fact. (N.T. 84-85, July 31, 2012). The Plaintiff does continue to work part time for the Corporation, picking and choosing jobs that are not physically stressful; however,he cannot earn more than approximately $1,220 a month without offsetting his social security. (N.T. 56, July 31, 2012). The Defendant testified that she also planned on collecting social security in the months following the final hearing. (N.T. 177, July 31, 2012). When reviewing a divorce master's report,the report and recommendations are advisory only. Rensch v. Rensch, 381 A.2d 925, 926 (Pa. Super. 1977). "[T]he trial court is required to make an independent review of the report and recommendations to determine whether they are appropriate."Kohl v. Kohl, 564 A.2d 222, 224 (Pa. Super. 1989) (citing Goodman v. Goodman, 544 A.2d 1033 (Pa. Super. 1988)). However, "[t]he report of the master is entitled to great consideration in that he has heard and seen the witnesses, and it should not be lightly disregarded."Rothrock v. Rothrock, 765 A.2d 400, 404 (Pa. Super. 2000). Pursuant to 23 Pa.C.S.A. § 3502(a) (10.2), the expense associated with liquidating an asset is a relevant factor in the equitable division of marital property. "Adjustment in the value of a residence for expenses associated with a contemplated sale may be an appropriate consideration in some equitable distribution cases. We neither forbid nor require the practice." Zeigler v. Zeigler, 530 A.2d 445, 447 (Pa. Super. 1987). First, the Defendant contends that the Master should have subtracted the costs associated with selling the property at 530 Dublin Gap Road from the stipulated value in determining the figure used to distribute assets. We disagree. The parties had previously 5 stipulated to the value of the property. We recognize that adjusting the value of a property for liquidation expenses may be appropriate in some cases. Here, however, the Defendant chose to sell the property even though she could have kept it and collected rental income,just as she did with other properties. The Plaintiff should not be forced to absorb the cost of a financial decision not forced upon the Defendant. As stated above, the Plaintiff did not participate in the sale of the property even though the couple was still married at the time. Next, the Defendant takes issue with the Plaintiff retaining the entire benefit from the 2008 tax refund. There is no dispute that the Defendant was entitled to half of the refund. However, the Master did not ignore this issue. Instead, the Master offset the portion of the tax refund that the Defendant was due by the portion of the plastic surgery that the Plaintiff paid for under protest through the joint account. Both parties may have used the joint account for questionable expenditures; however, the plastic surgery is the most exceptional item supported by the record. We find no error in the Master's offset of these amounts. Finally, we are not persuaded by the Defendant's argument that the Master erred in finding that the Plaintiff retired based on health considerations. The Plaintiff testified that he first considered retirement five years beforehand when he ruptured a disc in his back. Further, he testified that he told the third partner of his retirement plans three years ago. The Master was in the best position to evaluate the credibility of such testimony. In any event, it is entirely reasonable that an individual with sufficient retirement funds would choose to retire from physically demanding work at the age of 62. 6 ORDER AND NOW, this 7-1 day of June, 2013, the exceptions of the Defendant, Patricia Farrell, are dismissed and the recommendations of the Master, filed September 5, 2012, are herewith made a final order of Court. BY THE COURT, Kevin . Hess, P.J. Bradley L. Griffie, Esquire For the Plaintiff Samuel L. Andes, Esquire For the Defendant E. Robert Elicker, II, Esquire Divorce Master Arn 7 1 FRO 3 SEP 27 F�i 1: L! of F rr� g�- NUN cUMBERL-NU C OU'N i ,,i, PENNSYLVANIA BERNARD C. FARRELL, ) IN THE COURT OF COMMON Plaintiff ) PLEAS OF CUMBERLAND ) COUNTY, PENNSYLVANIA ) vs. ) CIVIL ACTION - LAW ji ) NO. 08-5421 CIVIL TERM 1 11 PATRICIA M. FARRELL, ) Defendant ) IN DIVORCE STIPULATION I AND NOW, this 07 elday of S ,�e...1 S U , 2013, the undersigned, as counsel for the above-named parties, hereby stipulate and agree that the court shall enter the I1 11 attached Domestic Relations Order for rollover of Individual Retirement Account funds to implement one of the provisions of the Master's recommendation in this matter and to conclude the division of marital assets and claims. fI ' ie, Esquire "At eey for 'laintiff • %A 111 71911-'L. Andes, so s ire 11 Attorney for Defendant 1111 11 9 3 OCT -$ H I I: 'I, -I213ERLAND UU'.( ; •, PENNSYLVANIA BERNARD C. FARRELL, ) IN THE COURT OF COMMON Plaintiff ) PLEAS OF CUMBERLAND ) COUNTY, PENNSYLVANIA) vs. ) CIVIL ACTION - LAW ) ) NO. 08-5421 CIVIL TERM !i PATRICIA M. FARRELL, ) PRIOR JUDGE: KEVIN A. HESS Defendant ) IN DIVORCE E DOMESTIC RELATIONS ORDER FOR ROLLOVER OF INDIVIDUAL RETIREMENT ACCOUNT FUNDS AND NOW, this r day of 7ch W , 2013, to implement the (I provisions for the equitable distribution of marital property, we hereby order and direct as follows: ' 1. Vanguard Funds shall transfer assets and funds having a value of$73,266.00 from 11 the Individual Retirement Account of the Defendant Patricia M. Farrell, into an Individual Retirement Account in the name of the Plaintiff Bernard C. Farrell. 2. The transfer shall be made from the Individual Retirement Account held in the name of Patricia M. Farrell, being Individual Retirement Account No. 09919190617, and shall include II assets from the following Vanguard funds: Fund Name Fund Amount to be Number Transferred Vanguard Total Bond Market Index (VBTLX) 0584 $73,266.00 3. The assets transferred pursuant to this Order shall be transferred into the following 1 Individual Retirement Account in the name of the Plaintiff Bernard C. Farrell: Vanguard Individual Retirement Account No. 09937038832, Fund Number 0030. 4. The transfer of assets pursuant to this Order shall be made as soon as practical after receipt of a certified copy of this Order by Vanguard Funds. 5. The court will retain jurisdiction of this matter to apply, administer, and enforce this order as necessary. BY THE COURT, J. 1 Distribution: ✓Bradley L. Griffie, Esquire (Attorney for Plaintiff) 200 North Hanover Street, Carlisle, PA 17013 Samuel L. Andes, Esquire (Attorney for Defendant) 525 North 12th Street, P.O. Box 168, Lemoyne, Pa 17043 et es 02bi'LL /b/E3// 1 fi J i \ 1 7 L i c s 1 1. • '•€3SEP27 PH I: 4b CUMBERLAriu PENNSYLVANIA BERNARD C. FARRELL, ) IN THE COURT OF COMMON Plaintiff ) PLEAS OF CUMBERLAND ) COUNTY, PENNSYLVANIA ) vs. ) CIVIL ACTION - LAW ) ) NO. 08-5421 CIVIL TERM PATRICIA M. FARRELL, ) Defendant ) IN DIVORCE STIPULATION AND NOW, this 2 el of 5e, .•vt 1, , 2013, the undersigned, as counsel for the above-named parties, hereby stipulate and agree that the court shall enter the attached Domestic Relations Order for rollover of Individual Retirement Account funds to implement one of the provisions of the Master's recommendation in this matter and to conclude the division of marital assets and claims. i %! i�% ( ie, Esquire A ey for 'laintiff a L. Andes, s ire Attorney for Defendant