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HomeMy WebLinkAbout05-3642RITE AID CORPORATION, Vs. PALM CLD{, LLC, Plaintiff, Defendants. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 05-3642 CIVIL TERM COMPLAINT JURY TRIAL DEMANDED AFFIDAVIT OF SERVICE PURSUANT TO PA. R.C.P. 405 COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN SS: THE UNDERSIGNED, Justin G. Weber, being duly sworn according to law, does depose and say as follows: I am a competent adult and an attorney duly admitted to the Bar of the Supreme Court of the Commonwealth of Pennsylvania, having Attorney Identification Number 89266; 2. On July 22, 2005, I caused the Complaint to be served upon the defendant by the mailing of a true and correct copy to the defendant by United States certified mail, return receipt requested, postage prepaid, addressed as follows: Palm Clix, LLC, Attn: Legal Department, 460 West 34`h Street, New York, NY 10001 ("Service Address"). 3. I received the return receipt on August 3, 2005, indicating that the Complaint was delivered to and accepted at the Service Address by or on behalf of the defendant, thereby completing service pursuant to Pa. R.C.P. 403. The original return receipt signed by or on behalf of the defendant is attached hereto as Exhibit "A". )--) 1?? Bf n . Downey (PA 59891) Ju G. Weber (PA 89266) PEPPER HAMILTON LLP 200 One Keystone Plaza North Front and Market Streets Post Office Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 Attorneys for Plaintiff Date: August 9, 2005 Cleveland Brothers Equipment Co., Inc. SWORN TO AND SUBSCRIBED BEFORE ME THIS q71-?4DAY OF AUGUST, 2005. Notary P lic My Commission Expires: WNW Seel OfHertsbu D&# rg, wV E57 w"424,2006 wwfw, Penns000 n Of Nadies ¦ Complete Items 1, 2, and 3. Also complete A. tore hem 4 if Restricted Delivery is desired. 7 ? Agent ¦ Print your name and address on the reverse ? Addaesee so that we can return the card to you. B. Receives ¦ Attach this card to the back of the mailpiece, by Footed Name) a of Delivery or on the front if space perks. 1. Article Addressed to: D. is doNery acurene dllerent (turn hem 1? ? Yes If YES, enter delivery address below: ? No Palm Clix, LLC Attn: Legal Department 460 West 34th Street New York, NY 10001 2. Artic (Aar PS For 3. Ice Type erteed Mlall ? Express Mail ? Regiaterecl %4Qetum Recelpt forwilfemm lse. ? Insured M1111 ? C.O.D. 4. Restricted Delivery? (Ebbs Fee) ? Yes 102595-01-M-2509 CERTIFICATE OF SERVICE I hereby certify that on August 9, 2005, a copy of the foregoing document was served by United States mail, first class postage prepaid, addressed as follows: Palm Clix, LLC Attn: Legal Department 460 West 34th Street New York, NY 10001 Justi G. Weber (PA 89266) ^ h.l a 'il _ C C` RITE AID CORPORATION, vs. PALM CLIX, LLC, Plaintiff, Defendants. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. rY - 3&Y-1. COMPLAINT JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. 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, PA 17013 Telephone: (717) 249-3166 RITE AID CORPORATION, VS. PALM CLIX, LLC, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW Plaintiff, NO. OS -3ly.),_ COMPLAINT JURY TRIAL DEMANDED Defendants. COMPLAINT Plaintiff Rite Aid Corporation ("Rite Aid"), by its undersigned attorneys, files this Complaint alleging as follows: PARTIES Rite Aid is Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, PA 17011. 2. On information and belief, defendant Palm Clix, LLC ("Palm Clix") is a Delaware limited liability corporation with a principal office at 460 West 34th Street, New York, NY 10001. JURISDICTION 3. This court has jurisdiction pursuant to 42 Pa.C.S. §931(a). 4. Venue in this Court is proper because the property or a part of the property which is the subject matter of the action is located in Cumberland County. 5. Venue in this Court is proper because the cause of action arose in Cumberland County and a transaction or occurrence took place out of which the cause of action arose in Cumberland County. 6. In addition, venue in this Court is required due to a valid forum selection clause in the Guaranteed Sales Agreement, executed by Palm Clix and Rite Aid in February of 2004, that provides, "[a]ny lawsuit brought with regard to this Guaranteed Sales Agreement ("GSA") will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania." A true and correct copy of the GSA is attached to this Complaint as Exhibit A. RELEVANT FACTS Rite Aid is one of the largest drug store chains in the nation, operating approximately 3400 stores in 30 states and the District of Columbia. 8. At all times relevant to this Complaint, Palm Clix was involved in the distribution of digital cameras. 9. In February 2004, Rite Aid and Palm Clix, entered into the GSA, a valid and enforceable contract, which provided that Palm Clix's products would be distributed and sold by Rite Aid. 10. In February 2004, Rite Aid and Palm Clix entered into a Rite Aid Returns Agreement ("Returns Agreement") which provided the manner in which Palm Clix's products could be returned to Palm Clix. A true and correct copy of the Returns Agreement, a valid and enforceable written contract, is attached to this Complaint as Exhibit B. 11. The GSA provides that Palm Clix will accept returned goods in "as-is" condition. 12. The GSA provides that all returns are at risk of Palm Clix. 13. As of April 2005, Palm Clix's account with Rite Aid has a $186,530.68 negative balance, which is expected to grow after all returns are processed and other account charge backs applied. -2- 14. Returns to Palm Clix continue to be processed through Rite Aid's return systems. 15. As of the date of the filing of this Complaint, Palm Clix is in breach of the GSA and the Returns Agreement (and related account contracts and agreements) because it refuses to pay Rite Aid the negative balance on its account. COUNTI BREACH OF CONTRACT Rite Aid vs. Palm Clix 16. Rite Aid incorporates the averments in paragraphs 1 through 16 above as if fully set forth herein. 17. As noted above, in February, 2004, Rite Aid and Palm Clix entered into the GSA and the Returns Agreement, valid and enforceable written agreements under which Rite Aid agreed to consider Palm Clix's products for sale in it stores and Palm Clix agreed, inter alia, to guarantee the sale of Palm Clix's products to Rite Aid at both Customer Service Centers and retail levels. 18. The GSA and the Returns Agreement grant Rite Aid the authority to return unsaleable product to Palm Clix at its sole discretion and at Palm Clix's sole risk. 19. Despite repeated requests, Palm Clix refuses to pay the negative account balance of $186,530.68 to Rite Aid. 20. Rite Aid has performed all conditions precedent under the GSA, Returns Agreement, and all related agreements under the account. 21. Palm Clix is in breach of the GSA and Returns Agreement because it has failed to pay the negative balance on its account. -3- 22. As of January 31, 2005, Rite Aid has suffered damages in excess of $186,530.68, an amount that will increase as additional returns are processed, due to the breaches of Palm Clix. WHEREFORE, Rite Aid requests judgment in an amount in excess of $186,530.68, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II UNJUST ENRICHMENT Rite Aid vs. Palm Clix 23. Rite Aid incorporates the averments in paragraphs 1 through 22 above as if fully set forth herein. 24. In the event Palm Clix contends no contractual relationship exists, Rite Aid is entitled to recover the outstanding amounts to prevent Palm Clix from being unjustly enriched. 25. Rite Aid has a reasonable expectation to be paid the negative balance. 26. Palm Clix reasonably should have expected to pay for all charges accruing under the GSA and Returns Agreement. 27. Society's reasonable expectations of persons and property would be defeated by permitting Palm Clix not to pay. 28. In the event the GSA and Returns Agreement are deemed to be unenforceable, Rite Aid has no adequate remedy at law. 29. Rite Aid is entitled to collect the outstanding balance, plus interest, from Palm Clix under the doctrine of unjust enrichment. -4- WHEREFORE, Rite Aid requests judgment in its favor and against Palm Clix in an amount in excess of $186,530.68, plus interest, costs and all other amounts deemed appropriate by the Court. AN P. DOWNEY PA 59891 JUSTIN G. WEBER PA 89266 Pepper Hamilton LLP 200 One Keystone Plaza North Front and Market streets P.O. Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 (Telephone) (717) 238-0575 (Facsimile) downeyb@pepperlaw.com weberj@pepperlaw.com Date: Z 111,57 Attorneys for Plaintiff Rite Aid Corporation -5- VERIFICATION James Comitale signs this Verification on behalf of Rite Aid Corporation, and does hereby verify that the foregoing Complaint was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unswom falsification to authorities. Date: July4 2005 IB: N%756 vI (22N 0MDOQ Revised February, 03 RITE AID CORPORATION GUARANTEED SALES AGREEMENT Rite Aid will consider Vendor's product(s) for distribution and sale under the terns and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new entry into its mix, as well as in consideration of the mutual premises contained herein, the parties agree as follows: Vendor will guarantee the sale of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole discretion (it being understood by Vendor that Rite Aid may terminate this Agreement in its sole discretion at any time, for any reason whatsoever) following the date if the Vendor's first delivery of product(s) to Rite Aid (the "Review Period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). During the Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts (including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. If at the end of the Review Period, Rite Aid determines, in its sole discretion, that the Vendor's product(s) is not selling at an acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to require a cash payment, as described in paragraph (3) below. The foregoing rights are not exclusive. At the end of the Review Period, Rite Aid may terminate this Agreement, place the Vendor on Rite Aid's customary payment terms, or extend the Rev;clx Period as Rite Aid, in its sole discretion, so desires. 3. If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. Vendor's payment to Rite Aid shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has returned the product(s). 4. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, less any and all cash discounts or other debit amounts due to Rite Aid. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite Aid's rights and remedies under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the terms and conditions of the Agreement and any of the foregoing documents, this Agreement will govern. 6. The parties agree that Pennsylvania law governs this Agreement not withstanding its conflicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania. 7. The parties specifically agree that 13 Pa. C.S.A. §2326 & 2327(b) are inapplicable and that Vendor will accept returned goods in their "as-is" condition. 8. All returns are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success in your endeavor to provide a product that is unique. Please allow Rite Aid to assist your in your distribution needs by arranging for a duly authorized officer to sign and date this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. Vendor: 6&0- S o S S By: ?, Authonzed Si e Date: ?A?rw { `f Revised February 2003 Title: ?K?z c V(Cc ??IE3?OET i Authorized Signature Date: 2 0O L( j' 01V 4 Company Name: RITE AID RETURNS AGREEMENT x t_C. C. Contact Name: Phone0 Q/-1 o?-17 9S2 S Fax# / 0 /3 Vendor Number. E-Mad Address: 13 S 0S s ?' n1 C / / K, coin Inwice. ((.ore L 3 ?{ ST 1`4dw U oR1C 4 /r oOol Shipping Address: L460 W, :?Y - Si Ai?w ?jof'r-o N4 o f Category Manager: 5-7??/r L V f.' Associate Cateqory Manager. TERMS OF AGREEMENT: A. Unsaleable Merchandise 1. All vendors will be charged the following processing fees for damaged, defective, outdated, and discontinued goods. These fees are based on the findings from the Joint Industry Task Force Study (JIR): DPC (Direct Product Cos]) $0.085 Post Damage $0.111 Ops through Scan: $0.101 $0.297 2. All vendors must determine a method of disposition for their unsaleable products. Based on the CODE/DESCRIPTIONS listed below, the vendor representative will check (X) the method hMer company has authorized Rile Aid to use. The additional charge, shown In 0 at the end of the description, will be added to the charges above. CODE DESCRIPTION WIR COST) COPT Scan and disposition Is left up to the discretion of Rite Aid ($0.020)• DONA _ Scan and donate ($0.030) ROPT _ Scan, Hold, Vendor Review/Center Option ($0.127) RDON _ Scan, Hold, Vendor Review, Donate ($0.137) RTAK Scan, Hold, Vendor Review, Take ($0.174) RSHP Scan, Hold, Vendor Review, Ship ($0.188) Note: All Vendor Review merchandise will be held for 21 days after invoice date for review. At that time if not reviewed, orW no decision has been provided by the manufacturer the product will be disposed of at the discretion of Rite Aid SHBK Scan and ship back to vendor ($0.180) o i e S OPEN RA# REQUIRED WITH THIS OPTION RA# 0) Rev 07/22/03 Rile Aid Retums Agreement page 2 3. All products will be billed at Rite Aid's list cost+ JIR billing factors (DPC, Post Damage Handling, Rec Charges, Disposition Charges) unless otherwise agreed to in writing by Rite Aid Corporation. Vendor billing is not to exceed 130% of Rite Aid's list cost. 4. All changes to policies must be in writing to Rite Aid Corporation. Approved policy changes will take effect within 30 days following their approval. 5. All vendors will agree to forward a copy of their current national policy regarding reclamation to be reviewed by Rite Aid Corporation. This will be sent to: Rite Aid Corporation 30 Hunter Lane Camp HIN, PA 17011 Attention: Manager, Front End Returns 8. Recall Merchandise ='Please note: The dispositions on page 122 NOT apply to recalls. A separate agreement MUST be filled out for all recalls at the time the recaN is being activated. This allows a vendor to have a separate disposition on recalls than they have on damaged and outdated returns. The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and acceptance of the above agreement. .2//,, Signature (Vendor p entative) Date edam >< Company Rev 07/22/03 izz V r-? c.;o ?Jl L=? C7J C.J cn 0 T a Y L1? T ,j r ::7 ?i1 RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS Plaintiff, CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. NO. 05-3642 CIVIL TERM PALM CLIX, LLC, Defendants. JURY TRIAL DEMANDED PRAECIPE FOR ENTRY OF DEFAULT JUDGMENT To The Prothonotary: Please enter judgment of default in favor of Plaintiff Rite Aid Corporation and against Defendant PALM CLIX, LLC, for defendant's failure to plead to the complaint in this action within the required time. The complaint contains a notice to defend within 20 days from the date of service thereof. Defendant was served with the complaint on August 3, 2005, and the defendant's answer was due to be filed on August 23, 2005. Attached as Exhibit A is a copy of plaintiff's Notice of Intention to File Praecipe for Entry of Default Judgment, which I certify was mailed by regular mail to the defendant at its last know address on September 6, 2005, which is at least 10 days prior to the filing of this Praecipe. Please assess damages in an amount in excess of $186,530.68, plus interest and costs, being the damages assessed in the complaint. RI N P. DOWNEY (PA 59891) TIN G. WEBER (PA 89266) Pepper Hamilton LLP 200 One Keystone Plaza North Front and Market Streets Post Office Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 (717) 238-0575 (Fax) Attorneys for Plaintiff Date: September 21, 2005 Rite Aid Corporation FA RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION - LAW VS. : NO. 05-3642 CIVIL TERM PALM CLIX, LLC, Defendants. JURY TRIAL DEMANDED NOTICE OF INTENTION TO FILE PRAECIPE FOR ENTRY OF DEFAULT JUDGMENT TO: Palm Clix, LLC 460 West 34 h Street, New York, NY 10001 DATE OF NOTICE: September 6, 2005 IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY AN ATTORNEY AND FILED IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A 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 CAN PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 ,'Bri P. Downey (PA 59891) stin G. Weber (PA 89266) PEPPER HAMILTON LLP 200 One Keystone Plaza North Front and Market Streets Post Office Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 (717) 238-0575 Date: September 6, 2005 Attorneys for Plaintiff Rite Aid Corporation RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION - LAW VS. NO. 05-3642 CIVIL TERM PALM CLIX, LLC, Defendants. JURY TRIAL DEMANDED AVISO IMPORTANTE A: Palm Clix, LLC 460 West 34`x' Street, New York, NY 10001 FECHA DEL AVISO: 6 Septembre 2005 USTED ESTA EN REBELDIA PORQUE HA FALLADO DE TOMAR LA ACCION REQUERIDA EN ESTE CASO. A MENOS QUE USTED TOME ACCION DENTRO DE LOS PRIMEROS DIEZ (10) DIAS DE LA FECHA DE ESTE AVISO, SE PUEDE DICTAR UN FALLO EN CONTRA SUYA SIN LLEVARSE A CABO UNA VISTA Y USTED USTED PUEDE PERDER SU PROPIEDAD Y OTROS DERECHOS IMPORTANTES. USTED DEBE LLEVAR ESTE DOCUMENTO INMEDIATAMENT A SU ABOGADO. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGAR UNO, VAYA O LLAME LA OFFICINA ABAJO INDICADA PARA QUE LE INFORMEN DONDE PUEDE CONSEGUIR AYUDA LEGAL. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 TELEPHONE: (717) 249-3166 t Date: September 6, 2005 17??" XCL-2 L Z1_ Bria . Downey (PA 59891) Justin G. Weber (PA 89266) PEPPER HAMILTON LLP 200 One Keystone Plaza North Front and Market Streets Post Office Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 (717) 238-0575 Attorneys for Plaintiff Rite Aid Corporation CERTIFICATE OF SERVICE I hereby certify that on September 6, 2005, I served a copy of the foregoing Notice of Intention to File Praecipe for Entry of Default Judgment on Defendant by United States Mail, First-Class, postage prepaid, addressed as follows: Palm Clix, LLC 460 West 34`h Street New York, NY 10001 Jus n G. Weber (PA 89266) r CERTIFICATE OF SERVICE I hereby certify that on SeptemberX, 2005, I served a copy of the foregoing Praecipe for Entry of Default Judgment on Defendant by United States Mail, first class postage prepaid, addressed as follows: Palm Clix, LLC 460 West 34th Street New York, NY 10001 J tin G. Weber (PA 89266) F v i RITE AID CORPORATION, vs. PALM CLIX, LLC, To: Palm Clix, LLC 460 West 34th Street New York, NY 10001 IN THE COURT OF COMMON PLEAS Plaintiff, CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW : NO. 05-3642 CIVIL TERM Defendants. JURY TRIAL DEMANDED NOTICE OF ENTRY OF JUDGMENT Pursuant to the requirements of Pa.R.C.P. No. 236, you are hereby notified that on September a 0', 2005, judgment by default was entered against you in the sum of $186,530.68, plus interest and costs. Date: c- ?o -,-T /1V ?G 10 Prothonotary Counsel for Plaintiff certifies that the name and address of the proper party/person to receive this notice is: Palm Clix, LLC 460 West 34th Street New York, NY 1001 RITE AID CORPORATION, Plaintiff, vs. PALM CLIX LLC, Defendant. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 05-3642 CIVIL TERM JURY TRIAL DEMANDED PRAECIPE TO ISSUE WRIT OF EXECUTION TO THE PROTHONOTARY: Please issue the writ of execution in the above matter: (1) directed to the Sheriff of Philadelphia County; (2) against Palm Clix LLC, defendant; and (3) against JP Morgan Private Bank, garnishee; (4) and enter this writ in the judgment index: (a) against Palm Clix LLC, defendant, and (b) against JP Morgan Private Bank, as garnishee, as a lis pendens against real property of the defendant in the name of the garnishee as follows: NONE. (5) attach the following property of the defendant in the possession of JP Morgan Private Bank, as garnishee: All balances in all deposit, checking or NOW accounts or any other money or property owed to defendant, by or in the custody or control of JP Morgan Private Bank or its agents, including accounts, monies or property held or owned by Palm Clix LLC. (6) Together with: Amount Due $186,530.68 Interest 9/22/05-12/7/05 @ $30.6625/day $2,299.68 Costs Dated: December 7, 2005 Attorneys for Plaintiff ALL- an P. Downey (PA 59891) stin G. Weber (PA 89266) PEPPER HAMILTON LLP 200 One Keystone Plaza North Front and Market Streets Post Office Box 1 181 Harrisburg, PA 17108-1181 (717) 255-1155 (717) 238-0575 (Fax) webetjg@pepperlaw.com HB_ #101663 v1 (26FZO1 LDOC) I V ?n {l w w C C ? G ?q Cr? ?2 0 v2 `? D O C C O l :J WRIT OF EXECUTION and/or ATTACHMENT COMMONWEALTH OF PENNSYLVANIA) NO 05-3642 Civil COUNTY OF CUMBERLAND) CIVIL ACTION - LAW TO THE SHERIFF OF PHILADELPHIA COUNTY: To satisfy the debt, interest and costs due RITE AID CORPORATION, Plaintiff (s) From PALM CLIX LLC, 460 W 34Th ST., NEW YORK, NY 10001 (1) You are directed to levy upon the property of the defendant (s)and to sell (2) You are also directed to attach the property of the defendant(s) not levied upon in the possession of JP MORGAN PRIVATE BANK, ONE LIBERTY PLACE, 1650 MARKET STREET, 5To FLOOR, PHILADELPHIA, PA 19103 - ALL BALANCES IN ALL DEPOSIT, CHECKING OR NOW ACCOUNTS OR ANY OTHER MONEY OR PROPERTY OWED TO DEFENDANT, BY OR IN THE CUSTODY OR CONTROL OF JP MORGAN PRIVATE BANK OR ITS AGENTS, INCLUDING ACCOUNTS, MONIES OR PROPERTY HELD OR OWNED BY PALM CLIX LLC GARNISHEE(S) as follows: and to notify the garnishee(s) that: (a) an attachment has been issued; (b) the garnishee(s) is enjoined from paying any debt to or for the account of the defendant (s) and from delivering any property of the defendant (s) or otherwise disposing thereof; (3) If property of the defendant(s) not levied upon an subject to attachment is found in the possession of anyone other than a named garnishee, you are directed to notify him/her that he/she has been added as a garnishee and is enjoined as above stated. Amount Due $186,530.68 L.L. $30 Interest 9/22/05 - 12/7/05 @ $30.6625/DAY - $2,299.68 Any's Comm % Due Prothy $1.00 Arty Paid $82.50 Other Costs Plaintiff Paid Date: DECEMBER 8, 2005 (Seal) Deputy REQUESTING PARTY: Name JUSTIN G. WEBER, ESQUIRE Address: PEPPER HAMILTON LLP 200 ONE KEYSTONE PLAZA NORTH FRONT AND MARKET STREETS POST OFFICE BOX 1181 HARRISBURG, PA 17108-1181 Attorney for: PLAINTIFF Telephone: 717-255-1155 Supreme Court ID No. 89266 MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff NO.OS -.34, V3 Co' Lt 4 V. CIVIL ACTION - LAW ANN H. KELLY, IN DIVORCE Defendant 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 may proceed without you and a decree of divorce or annulment may be entered against you by the court. A judgment may also be entered against you for any other claim or relief requested in these pages 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 the Cumberland County Courthouse, Carlisle, Pennsylvania. IF YOU DO NOT FILE A CLAIM FOR ALIMONY, DIVISION OF PROPERTY, LAWYER'S FEES OR EXPENSES BEFORE THE DIVORCE OR ANNULMENT IS GRANTED, YOU MAY LOSE THE RIGHT TO CLAIM ANY OF THEM. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 17013 Telephone: (717) 249-3166 MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : n No. D S -,3?t13 t vL F! V. CIVIL ACTION - LAW ANN H. KELLY, IN DIVORCE Defendant COMPLAINT IN DIVORCE UNDER.63301(c) OR 63301(d) OF THE DIVORCE CODE AND NOW, this / I day of July, 2005, comes the Plaintiff, MICHAEL R. KELLY., and files this Complaint for Divorce, and in support thereof avers as follows: 1. The Plaintiff is MICHAEL R. KELLY, an adult individual who currently resides at 810 Charlotte Way, #101, Enola, Cumberland County, Pennsylvania. Plaintiff's Social Security Number is 136-56-0469. 2. The Defendant is ANN H. KELLY, an adult individual who currently resides at 439 South York Street, Mechanicsburg, Cumberland County, Pennsylvania. Defendant's Social Security Number is 173-52- 5217. 3. The Plaintiff and Defendant were married on August 30, 1996, in Mechanicsburg, Pennsylvania. 4. The Plaintiff and Defendant have been bona fide residents of the Commonwealth of Pennsylvania at least six (6) months immediately prior to the filing of this Complaint. 5. There has been no prior action for divorce or annulment of marriage between the parties in this or any other jurisdiction. 6. The marriage is irretrievably broken. 7, The parties were separated on or about December 27, 2001 8. The Plaintiff has been advised of the availability of marriage counseling and he may have the right to request that the Court require the parties to participate in counseling. WHEREFORE, the Plaintiff respectfully requests that your Honorable Court enter a decree of divorce under §3301(c) or §3301(d) of the Divorce Code. Respectfully submitted, JOHNSON, DUFFIE, STEWART By: Duffie, zsaass VERIFICATION I, MICHAEL R. KELLY, verify that the statements made in this Complaint for Divorce are true and correct to the best of my knowledge, information and belief. I understand that false statements made herein are made subject to the penalties of 18 Pa.C.S.A. §4904, relating to unsworn falsification to authorities. Date: 1 1q Q -r Michael R. Kelly ? ? C ? , ,? ;-, Y ?.. .,C ? _ ? f?; ? a 1 _ ?? - ?; ;? ? ? - -., ?, ?-L - , w Johnson, Duffle, Stewart & Weidner By: Mark C. Duffie, Esquire I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 mcd@jdsw.com Attorneys for Plaintiff MICHAEL R. KELLY, Plaintiff V. ANN H. KELLY, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL ACTION - LAW Defendant IN DIVORCE PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: Kindly reinstate the Complaint filed by the Plaintiff on July 18, 2005, in the above- captioned action. Dated: Y/W/l JOHNSON, DUFFIE,?STEEWART IDNER By. ?c_(?J _ .?' ark C. Duffie :259006 N C; use cc-- ,'? c; ?:= Jan j ? co Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie, Esquire I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 mcd@jdsw.com Attorneys for Plaintiff MICHAEL R. KELLY, Plaintiff V. ANN H. KELLY, Defendant PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: IN DIVORCE Kindly reinstate the Complaint filed by the Plaintiff on July 18, 2005, in the above- captioned action. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL ACTION - LAW JOHNSON,DU C. Duffie Dated: 1111110s- 263084 ?L r' s, ', c? ?_.- r:? _.. ra ,,,?? ? N -. c. >. `,,?1 : ? : 'i -- t SHERIFF'S RETURN - NOT SERVED CASE NO: 2005-03643 P COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND KELLY MICHAEL R VS KELLY ANN H R. Thomas Kline Sheriff , who being duly sworn according to law, says, that he made a diligent search and inquiry for the within named DEFENDANT to wit: KELLY ANN H but was unable to locate Her in his bailiwick. He therefore returns the COMPLAINT - DIVORCE NOT SERVED , as to the within named DEFENDANT KELLY ANN H YORK STREET MECHANICSBURG, PA 17055 MANY ATTEMPTS WERE MADE. LAST ATTEMPT, DEPUTY SAW DEFENDANT TURN OFF LIGHT AND LEAVE ROOM. SHE WOULD NOT ANSWER DOOR. Sheriff's Costs: So answers: Docketing 18 .00 Service 38 .40 -? Postage .37 R. Thomas Kline Surcharge 10 .00 Sheriff of Cumberland County .00 66 .77 JOHNSON DUFFIE STEWART WEIDNER 12/28/2005 Sworn and subscribed to before me this /o " day of cl? o2-ubL A. D. Prothonotary MICHAEL R. KELLY, Plaintiff V. ANN H. KELLY, Defendant NO. 05-3643 CIVIL ACTION - LAW IN DIVORCE ACCEPTANCE OF SERVICE I, ANN H. KELLY, hereby accept service and acknowledge receipt of the Complaint in Divorce filed on July 18, 2005 by the Plaintiff in the above-captioned divorce action. I received the Complaint on .3 2005, by First Class U.S. Mail. Date: t xl_? kJ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY. PENNSYLVANIA ANN H. KELLY, Defendant :254503 u., 0 MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 05-3643 ANN H. KELLY, Defendant CIVIL ACTION - LAW 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 may proceed without you and a decree of divorce or annulment may be entered against you by the court. A judgment may also be entered against you for any other claim or relief requested in these pages 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 the Cumberland County Courthouse, Carlisle, Pennsylvania. IF YOU DO NOT FILE A CLAIM FOR ALIMONY, DIVISION OF PROPERTY, LAWYER'S FEES OR EXPENSES BEFORE THE DIVORCE OR ANNULMENT IS GRANTED, YOU MAY LOSE THE RIGHT TO CLAIM ANY OF THEM. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 17013 Telephone: (717) 249-3166 s MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 05-3643 ANN H. KELLY, CIVIL ACTION - LAW Defendant IN DIVORCE AMENDED COMPLAINT IN DIVORCE UNDER -43301(c) OR -43301(d) OF THE DIVORCE CODE COUNTI AND NOW, this day of April, 2007, comes the Plaintiff, MICHAEL R. KELLY., and files this Amended Complaint for Divorce and in support thereof avers as follows: 1. The Plaintiff is MICHAEL R. KELLY, an adult individual who currently resides at 810 Charlotte Way, #101, Enola, Cumberland County, Pennsylvania. 2. The Defendant is ANN H. KELLY, an adult individual who currently resides at 439 South York Street, Mechanicsburg, Cumberland County, Pennsylvania. 3. The Plaintiff and Defendant were married on August 30, 1996, in Mechanicsburg, Pennsylvania. 4. The Plaintiff and Defendant have been bona fide residents of the Commonwealth of Pennsylvania at least six (6) months immediately prior to the filing of this Complaint. 5. There has been no prior action for divorce or annulment of marriage between the parties in this or any other jurisdiction. 6. The marriage is irretrievably broken. 7. The parties were separated on or about December 27, 2001. 8. The Plaintiff has been advised of the availability of marriage counseling and he may have the right to request that the Court require the parties to participate in counseling. WHEREFORE, the Plaintiff respectfully requests that your Honorable Court enter a decree of divorce under §3301(c) or §3301(d) of the Divorce Code. COUNT II EQUITABLE DISTRIBUTION 9. Plaintiff incorporates herein by reference, the allegations set forth in paragraphs 1- 8 inclusive of the Complaint as if the same were set forth herein in length. 10. The Plaintiff and Defendant have legally and beneficially acquired certain real and personal property during the marriage. WHEREFORE, the Plaintiff respectfully requests this Honorable Court equitably divide all marital property. Respectfully submitted, JOHNSON, DUFFIE, STEWART & WEIDNER ark C. Duffie, :275545 VERIFICATION I, MICHAEL R. KELLY, verify that the statements made in this Complaint for Divorce are true and correct to the best of my knowledge, information and belief. I understand that false statements made herein are made subject to the penalties of 18 Pa.C.S.A. §4904, relating to unsworn falsification to authorities. Date: -3- V V ` MICHAEL R. KELLY CERTIFICATE OF SERVICE AND NOW, this Aay of April , 2007, the undersigned does hereby certify that she did this date serve a copy of the foregoing Amended Divorce Complaint upon the other party of record by causing same to be deposited in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Theresa Barrett Male, Esquire 513 North Second Street Harrisburg, PA 17101-1058 JOHNSON, DUFFIE, STEWART & WEIDNER yr1T. ¦ O ? c w o ? irn Theresa Barrett Male Supreme Court # 46439 513 North Second Street Harrisburg, PA 17101 (717) 233-3220 tbm@tbmesquire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant NO. 05-3643 Civil Term CIVIL ACTION - DIVORCE AFFIDAVIT OF CONSENT 1. A complaint in divorce under § 3301(c) of the Divorce Code was filed on July 18, 2005. 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. 1 consent to the entry of a final decree of divorce after service of notice of intention to request entry of the decree. 0 k,- A I verify that the statements made in this affidavit are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unsworn falsification to authorities. Dated: , 2007 2 co t r Theresa Barrett Male Supreme Court # 46439 513 North Second Street Harrisburg, PA 17101 (717) 233-3220 tbm@tbmesquire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant NO. 05-3643 Civil Term CIVIL ACTION - DIVORCE WAIVER OF NOTICE OF INTENTION TO REQUEST ENTRY OF A DIVORCE DECREE UNDER § 3301(c) OF THE DIVORCE CODE 1. 1 consent to the entry of a final decree of divorce without notice. 2. 1 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. 3. 1 understand that I will not be divorced until a divorce decree is entered by the Court and that a copy of the decree will be sent to me immediately after it is filed with the prothonotary. 0 f . I*- I verify that the statements made in this affidavit are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unsworn falsification to authorities. Date: 6 )/ , 2007 2 CD C-0 , r v Theresa Barrett Male Supreme Court # 46439 513 North Second Street Harrisburg, PA 17101 (717) 233-3220 tbm@tbmesquire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant NO. 05-3643 Civil Term CIVIL ACTION - DIVORCE NOTICE If you wish to deny any of the statements set forth in this affidavit, you must file a counter-affidavit within twenty days after this affidavit has been served on you or the statements will be admitted. DEFENDANT'S AFFIDAVIT UNDER SECTION 3301(d) OF THE DIVORCE CODE 1. The parties to this action separated on March 28, 2001 and have continued to live separate and apart for a period of at least two years. 2. The marriage is irretrievably broken. 1 1 understand that I may lose rights concerning alimony, division of property; .layer's -fees or Eimenses if ! do rwi claim them before a _divmne is nrante I verify that the statements made in this affidavit are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa_ C.S. § 4904 relating to unsworn falsification to authorities. Ann H. Kelly 4 r.,? (y ?? ? _- .. •-,.,? ? ? ?? '? f.... r 4Y,1 -: f _, .,. Y _ P 4..,) ._ ++ ; i i ^I ..J' ?".' .?.? ? ? "? O , Wr 14% Theresa Barrett Male Supreme Court # 46439 513 North Second Street Harrisburg, PA 17101 (717) 233-3220 tbm@tbmesquire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant CIVIL ACTION - DIVORCE NOTICE If you wish to deny any of the statements set forth in this affidavit, you must file a counter-affidavit within twenty days after this affidavit has been served on you or the statements will be admitted. DEFENDANT'S CORRECTED AFFIDAVIT UNDER SECTION 3301(d) OF THE DIVORCE CODE 1. The parties to this action separated on December 28, 2001 and have continued to live separate and apart for a period of at least two years. NO. 05-3643 Civil Term 2. The marriage is irretrievably broken. 0. . A 3. 1 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 this affidavit are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. Date: -12007 2 '?.? =?? _- _.,? .? ??? -,_s. -,? ;? ?J -r r ,? , ?- ?' •-?, ;}; ?,= ,J? ?°? CD Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, PA 17101 (717) 233-3220 tbm@tbmesauire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE DEFENDANT'S MOTION FOR APPOINTMENT OF MASTER Ann H. Kelly, Defendant, aka A. Hillary Kelly, moves the court to appoint a master with respect to the following claims: x Divorce Annulment Alimony Alimony Pendente Lite and in support of the motion states: x Distribution of Property Support Counsel Fees Costs and Expenses (1) Discovery is complete as to the claims for which the appointment of a master is requested. (2) The non-moving party has appeared in this action by his attorney, Mark C Duffie, Esquire. (3) The statutory grounds for divorce is section 3301(c) of the Divorce Code. (4) Delete the inapplicable paragraph(s): (a) The action is uncontested. (b) . (c) The action is contested with respect to the following claims: equitable distribution. (5) The action involves complex issues of law and fact. (6) The hearing is expected to take 2 days. (7) Additional information, if any, relevant to the motion: Movant is the debtor in a Chapter 13 bankruptcy proceeding. The automatic stay has been lifted for the purposes of this divorce actin . Date: December , 2007 Attorney for Defendant AND NOW, December , 2007, E. Robert Elicker, 11, Esquire, is appointed master with respect to the following claims: divorce, equitable distribution. BY THE COURT: J. MOVING PARTY Ann H. Kelly Attorney's Information Theresa Barrett Male, Esquire Andrea Hudak Duffy, Esquire 513 North Second Street Harrisburg, PA 17101-1058 717-233-3220 tbm@tbmesquire.com NON-MOVING PARTY Michael R. Kelly Plaintiff's Information Mark C. Duffie, Esquire 301 Market Street Post Office Box 109 Lemoyne, PA 17043-0109 717-761-4540 mcd@idsw.com 2 r -. PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by first-class mail addressed as follows: Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff a&Q-1m ?6?t Theresa Barrett Male, q ire Supreme Court # 46439 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Counsel for Defendant Date: December 10, 2007 - _ C 3 f` -71 (3) The statutory grounds for divorce is section 3301(c) of the Divorce Code. (4) Delete the inapplicable paragraph(s): (a) The action is uncontested. (b) An agFeement has beeF1 Feaehed With Fespeet to the following el (c) The action is contested with respect to the following claims: equitable distribution. (5) The action involves complex issues of law and fact. (6) The hearing is expected to take 2 days. (7) Additional information, if any, relevant to the motion: Movant is the debtor in a Chapter 13 bankruptcy proceeding. The automatic stay has been lifted for the purposes of this divorce actio . Date: December , 2007-+ Attorney for Defendant AND NOW, December 43 a , 2007, E. Robert Elicker, II, Esquire, is appointed master with respect to the following claims: divorce, equitable distribution. MOVING PARTY Ann H. Kelly Attorney's Information /Th"eresa Barrett Male, Esquire Andrea Hudak Duffy, Esquire 513 North Second Street Harrisburg, PA 17101-1058 717-233-3220 tbm@tbmesquire.com BY THE COURT: J. NON-MOVING PARTY Michael R. Kelly P intiff's Information /(Mark C. Duffie, Esquire 301 Market Street Post Office Box 109 Lemoyne, PA 17043-0109 7-17 7G1 it Mnn ?^s ?_ r?..? `?=' ?. S . >,' r - ? ?:? - ,_? __ !, j [ _ _ ? -_ il.,? ? ,`... ?.' .. LL" ?? !?a .. ? i`w;) C?,f (?,? Law Office of Theresa Barrett Mate Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, 10 # 60910 513 North Second St., Harrisburg, PA 17101 (717) 233-3220 tbma-tbmesguire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. : NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE INVENTORY OF DEFENDANT Defendant files the following inventory of all property owned or possessed by either party at the time this action was commenced and all property transferred within the preceding three years. Defendant verges that the statements made in this inventory are true and correct. Defendant understands that false statements herein are made subject to the penalties of 18 Pa. G.S. § 4904, relating to unsworn falsification to authorities. ASSETS OF THE PARTIES Defendant marks on the list below those items applicable to the case at bar and itemizes the assets on the following pages. X 1 Real Property X 2 Motor Vehicles X 3 Stocks, bonds, securities and options 4 Certificates of deposit X 5 Checking accounts, cash 6 Savings accounts, money market and savings certificates X 7 Contents of safe deposit boxes 8 Trusts Life insurance policies (indicate face value, cash surrender value and current 9 beneficiaries) 10 Annuities 11 Gifts X 12 Inheritance 13 Patents, copyrights, inventions, royalties 14 Personal property outside the home Businesses (list all owners, including percentage of ownership, and 15 officer/director positions held by a party with a company) Employment termination benefits - severance pay, workman's compensation 16 claim/award 17 Profit sharing plans 18 Pension plans (indicate employee contribution and date plan vests 19 Retirement plans, Individual Retirement Accounts 20 Disability payments 21 Litigation claims (matured and unmatured) 22 Military/V.A. benefits 23 Education benefits 24 Debts due, including loans, mortgages held Household furnishings and personalty (include as a total category and attach X 25 itemized list if distribution of such assets is in dispute) 26 Other 2 r MARITAL PROPERTY Defendant lists all marital property in which either or both spouses have a legal or equitable interest individually or with any other person as of the date this action was commenced: Item Number Description of Property 2 2000 Ford Expedition 3 Increased value, if any, of pre-marital AMP stock 3 Increased value, if any, of pre-marital DDBT stock 3 Increased value, if any, of pre-marital bonds 5 Commerce Bank checking account 26 Miscellaneous Personalty Name of All Owners Joint Wife Wife Wife Joint Joint 3 NON-MARITAL PROPERTY Defendant lists all property in which a spouse has a legal or equitable interest which is claimed to be excluded from marital property: Item Number Description of Property 1 439 S York St., Mechanicsburg 1 11306 Second St., Stone Harbor 2 1994 Dodge Ram Van 250 3 AMP stock 3 DDBT stock 3 Bonds 5 Commerce Bank checking 12 Cash 26 Personal Property Reason for Exclusion Post-sep transfer by H Post-sep transfer by H Post-sep transfer by H Pre-marital asset of W Pre-marital asset of W Pre-marital asset of W Post-sep asset of W Inheritance (W) Gifts (W) 4 PROPERTY TRANSFERRED Item Number Description of Property Date of Transfer Consideration Transferee 1 439 S York St., Mechanicsburg 01/12/05 See * Wife 11306 Second St., Stone Harbor 01/12/05 See * Wife 2 1994 Dodge Ram Van B250 1/12/2005 0.00 Wife 5 Commerce Bank checking 2004 None Closed * Wife owned both pieces of real estate before the parties married. During the marriage, she put Husband's name on the deeds. In 2001, the parties filed a joint bankruptcy petition, which the court dismissed. In 2002, the parties agreed that Wife would file a Chapter 13 petition and assume all marital debt. In consideration, Husband agreed to transfer to Wife his right, title and interest in and to the Mechanicsburg and the Stone Harbor real estate. Wife is still in Chapter 13. 5 LIABILITIES Item Number Description of Property Names of All Creditors Names of All Debtors 439 S York St mortgage Bank of America Joint Will supplement .. PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by first-class mail addressed as follows: Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff IL&4'c? Theresa Barrett Male, Esquire Supreme Court # 46439 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Counsel for Defendant Date: February 1, 2008 .733 r C ? 'fi . t Johnson, Duffie, Stewart & Weidner By: Mark C. Duffle I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717)761-4:540 MICHAEL R. KELLY, Plaintiff/Petitioner V. ANN H. KELLY, Defendant/Respondent. Attorneys for Plaintiff/Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-2 CIVIL ACTION - LAW IN DIVORCE PETITION FOR SPECIAL RELIEF PURSUANT TO Pa.R.C.P. 1920.43 AND NOW, the Plaintiff/Petitioner, Michael R. Kelly, by and through his attorneys, Johnson, Duffie, Stewart & Weidner, files this Petition for Special Relief Pursuant to Pa.R.C.P. 1920.43 and in support thereof supports as follows: 1. The parties were married on August 31, 1996. The Plaintiff/Petitioner herein filed a Complaint in Divorce on July 18, 2005. Said Complaint was reinstated on September 19, 2005 and served upon Defendant. 2. Respondent resides in the marital residence, as she has throughout the parties' separation. 3. Respondent filed Chapter 13 Bankruptcy on December 4, 2003 at 1:03-bk-07166 in the U. S. Bankruptcy Court for the Middle District of Pennsylvania. 4. Petitioner requested and received a lift of stay from the Bankruptcy court. 5. Respondent collects child support and receives an additional amount of support for a mortgage contribution to the marital residence located at 439 S. York Street, Mechanicsburg, Pennsylvania (hereinafter "marital residence"). 6. Respondent receives rental income from a rental property at 11306 Second Avenue, Stone Harbor New Jersey (hereinafter "Stone Harbor property") 7. The parties are scheduled to appear before the Divorce Master for hearing on August 12, 2008. 8. Petitioner recently learned that the marital residence was listed for sheriff's sale to be held on September 25, 2008, due to unpaid taxes in the amount of eight thousand six hundred ninety eight ($8698) dollars. 9. Petitioner recently learned that Respondent had been in default of her bankruptcy plan again and a Motion to Dismiss for material default had been filed by the Trustee, which was later withdrawn after her default was cured. 10. Petitioner recently learned that the mortgage lender on the marital residence and the taxing authority on the Stone Harbor property have each sought relief from the bankruptcy stay due to Respondent's non-payment. 11. It is believed and therefore averred that Respondent owes in excess of seventeen thousand seventeen dollars ($17,000), plus interest and penalties for the tax years 2005, 2006,and 2007, as of June 11, 2008 to the borough of Stone Harbor for taxes on the Stone Harbor property. 12. The vast majority of the value of the marital estate subject to equitable distribution is contained in the Stone Harbor property and the marital residence. 13. The Stone Harbor property, which is not encumbered by a mortgage, was appraised at $2.2 million on February 5, 2007. 14. The marital residence was appraised at $285,000 on September 13, 2007 and is subject to a mortgage which is part of her bankruptcy. 15. Respondent has the affirmative duty to maintain and protect the value of the marital estate, which she has failed to do by failing to make payments due on the taxes for both properties and the mortgage on the marital residence. 16. The hearing for the Stone Harbor Borough request to lift the stay in the bankruptcy court is scheduled for August 5, 2008. 17. Petitioner wants to protect the marital residence and the Stone Harbor property from tax sale and foreclosure. 18. Petitioner believes, and therefore avers, that Respondent will not be able to obtain a mortgage or otherwise obtain funds sufficient to satisfy the proceeds due to the Respondent in this matter without the sale of the real estate. 19. Petitioner has incurred counsel fees in the preparation and presentation of this Petition by reason of dilatory, obdurate and vexatious Respondent's conduct. 20. Respondent refused to sell either property when the question was raised at the prehearing conference before the Divorce Master. Therefore, Petitioner represents that he reasonably expects this Petition will be contested. WHEREFORE, the Plaintiff/Petitioner requests this Honorable Court enter an Order a. Subject to the approval of the Bankruptcy court, directing the parties list the aforementioned real estate for sale within ten days, b. Subject to the approval of the Bankruptcy court, directing the prompt satisfaction of the liens against the property by the Respondent, C. Subject to the approval of the Bankruptcy court, directing escrow of the remaining funds pending the final outcome of the equitable distribution of the marital property. d. Directing Respondent to pay Petitioner's reasonable counsel fees to be deducted from her share of the proceeds of the sale of the real estate. e. Alternatively, schedule a hearing with respect to said requested relief as well as further relief as this Court deems just. Respectfully submitted, JOHNSON, DUFFIE, STEWART & WEIDNER (fit' By: Mark C. Duffie VERIFICATION I, Mark C. Duffie, attorney for Michael R. Kelly, hereby certify that the matters asserted herein constitute matters of record, legal arguments and matters within the direct knowledge of counsel. The statements contained herein are true and correct to the best of the knowledge of the undersigned. This verification is made pursuant to the pr?4ions,cf 18 Pa.C.S.A. §4904. Mark C. Duffie Date: 7 15 ID $ CERTIFICATE OF SERVICE AND NOW, this day of July, 2008, the undersigned does hereby certify that he did this date serve a copy of the foregoing upon the other counsel of record by causing same to be placed in facsimile and to be deposited in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Theresa Barrett Male 513 N. Second Street Harrisburg, PA 17101 Bryan J. Tyler, Esquire 3621 North Front Street Harrisburg, PA 17110 Kelly M. Knight, Esquire 2320 North Front Street Harrisburg, PA 17110 By: JOHNSON, DUFFIE, 5TI=,YNART & WEIDNER Mark C. Duffie 339523 Johnson, Duffle, Stewart & Weidner By: Mark C. Duffle I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff/Petitioner V. ANN H. KELLY, Defendant/Respondent. Attorneys for Plaintiff/Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3543 3 4 y3 CIVIL ACTION - LAW IN DIVORCE AMENDMENT TO PETITION FOR SPECIAL RELIEF Pursuant to Cumberland County Local Rule 208.3(a)(2) and/or Rule 208.3(a)(9), the undersigned hereby amends the Petition for Special Relief as follows: 1. No Judge in Cumberland County has ruled upon any matter in the above- captioned divorce. 2. On numerous occasions in the past, the undersigned counsel for the Petition her sought the Agreement of opposing counsel with respect to the relief requested and the underlying Petition for Special Relief to which opposing counsel has not concurred. Respectfully submitted, JOHNSON, DUE STEWART W IDNER By: , ? (?/f Mark C. Duffie CERTIFICATE OF SERVICE AND NOW, this 1st day of August, 2008, the undersigned does hereby certify that he did this date serve a copy of the foregoing upon the other counsel of record by causing same to be placed in facsimile and to be deposited in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Theresa Barrett Male 513 N. Second Street Harrisburg, PA 17101 Bryan J. Tyler, Esquire 3621 North Front Street Harrisburg, PA 17110 Kelly M. Knight, Esquire 2320 North Front Street Harrisburg, PA 17110 JOHNSON, DUFFIE, STEWART & WEIDNER By: ! . Cassandra T. Rosenbau :340105 q cs? JUL 2 9 2008 0 Johnson, Duffle, Stewart & Weidner By: Mark C. Duffle I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff/Petitioner V. ANN H. KELLY, Defendant/Respondent. CIVIL ACTION - LAW IN DIVORCE ORDER 4,6 AND NOW, this dq of ?r200$, pur uan t9 th Petition for Special Relief 2 h 2?++ l Sa.cci -iLc Pursuant to Pa.R.C.P. 1920.43, it- A , 2008 at 2 f O d p /n, in courtroom of the Cumberland County Courthouse, One Courthouse Square, Carlisle, PA 17013. BY THE COURT: Attorneys for Plaintiff/Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 05--%qs NO. ,663543 9/ J. Distribution: ark C. Duffie, Esq., P. O. Box 109, Letfioyne, PA 17043 ?heresa Barrett Male, Esq., 513 N. Second Street, Harrisburg, PA 17101 an J. Tyler, Esq., 3621 North Front Street, Harrisburg, PA 17110 Kelly M. Knight, Esq., 2320 North Front Street, Harrisburg, PA 17110 V TO 1 -091H jr Johnson, Duffle, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiff/Petitioner MICHAEL R. KELLY, Plaintiff/Petitioner V. ANN H. KELLY, Defendant/Respondent. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA 3(? q3 NO. 05-?Er43-- CIVIL ACTION - LAW IN DIVORCE PRAECIPE TO WITHDRAW PETITION FOR SPECIAL RELIEF PURSUANT TO Pa.R.C.P. 1920.43 Respectfully submitted, JOHNSON, DUFFIE, STE T & WEIDNER By: VVd Mark C. Duffle I.D. No. 75906 301 Market Stree P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 TO THE PROTHONOTARY: Kindly withdraw Plaintiffs, Michael R. Kelly, Petition for Special Relief Pursuant to Pa.R.C.P. 1920.43 from the above captioned docket number. CERTIFICATE OF SERVICE AND NOW, this 'Il day of August, 2008, the undersigned does hereby certify that he did this date serve a copy of the foregoing Praecipe upon all parties or counsel of record by depositing a copy of the same in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Theresa Barrett Male 513 N. Second Street Harrisburg, PA 17101 Bryan J. Tyler, Esquire 3621 North Front Street Harrisburg, PA 17110 Kelly M. Knight, Esquire 2320 North Front Street Harrisburg, PA 17110 JOHNSON, By. Mark & WEIDNER :342765 ?':? ?._ -- ? ?? cr ` c1 i_ '=? ?,n °cY r,? a r4' .. `f -a ,._, t.? -C MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW ANN H. KELLY, Defendant NO. 05-3643 CIVIL TERM ORDER OF COURT AND NOW, this 9"' day of September, 2008, upon consideration of the Praecipe To Withdraw Petition for Special Relief Pursuant to Pa. R.C.P. 1920.43, filed in the above matter on August 29, 2008, the hearing previously scheduled for September 2, 2008, is cancelled. /Mark C. Duffie, Esq. 301 Market Street P.O. Box 109 Lemoyne, PA 17043 Attorney for Plaintiff /Theresa Barrett Male, Esq. 513 N. Second Street Harrisburg, PA 17101 /Attorney for Defendant ? Bryan J. Tyler, Esq. 3621 North Front Street Harrisburg, PA 17110 /Kelly M. Knight, Esq. 2320 North Front Street Harrisburg, PA 17110 BY THE COURT, a ' /,, J. esley Oler, Jr., J. 0071 `e s M;P-L L :rc -? ., _ ,?:,? ? ,??;?,?._ ?? ?? ???-??,.a Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second St., Harrisburg, PA 17101 (717) 233-3220 tb_?tbmesquire.com Counsel for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant NO. 05-3643 Civil Term CIVIL ACTION - DIVORCE PETITION RAISING ADDITIONAL ECONOMIC CLAIMS PURSUANT TO RULE 1920.13(b)(2) Count I - Alimony 1. Defendant lacks sufficient assets to provide for her reasonable needs and is unable to support herself fully through employment. 2. Plaintiff has sufficient assets and income to provide continuing support for Defendant. Wherefore, Defendant requests the Court to enter an Order granting her alimony. Count II -Alimony Pendente Lite, Counsel Fees, Costs and Expenses 3. Defendant lacks sufficient assets to provide for her reasonable needs and is unable to support herself fully through employment. 4. Plaintiff has sufficient assets and income to provide continuing support for Defendant. 5. Defendant has retained counsel to pursue this action and has agreed to pay her attorney a reasonable fee. 6. Defendant lacks sufficient funds to meet the costs and expenses of pursuing this action, including counsel fees and the costs to retain experts to value the marital assets. 7. Plaintiff has sufficient assets and income to provide alimony pendente lite, counsel fees, costs and expenses for Defendant. Wherefore, Defendant requests the Court to enter an Order awarding her alimony pendente lite, counsel fees, costs and expenses. Law Office of Theresa Barrett Male z Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Attorneys for Defendant Date: November 1 2008 2 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. § 4904, relating to unsworn falsification to authorities. Ann H. Kelly Date: *,)L- PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by facsimile and first-class mail addressed as follows: Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff (Divorce) Elizabeth S. Beckley, Esquire Beckley & Madden 212 North Third Street, P.O. Box 11998 Harrisburg, PA 17108-1998 Attorneys for Defendant (Support) Law Office of Theresa Barrett Male By: ,/ham ?r Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Attorneys for Defendant in Divorce Action Attorneys for Plaintiff in Support Action Date: November , 2008 `J '? C '} rv • C.` _} a x-? ?' ti ? f ??' ?- ? ? _ ? ., ?? .._) ??? ;: ;?J a` • • ANN H. KELLY, :IN THE COURT OF COMMON PLEAS OF Plaintiff :CUMBERLAND COUNTS.', PENNSYLVANIA V. :DOMESTIC RELATIONS SECTION MICHAEL R. KELLY, :PACSES NO. 220104415 Defendant :DOCKET NO. 300 SUPPORT 2002 MICHAEL R. KELLY, :IN THE COURT OF COMMON PLEAS OF Plaintiff/Respondent :CUMBERLAND COUNTY, PENNSYLVANIA V. :DOMESTIC RELATIONS SECTION ANN H. KELLY, Defendant/Petitioner :DOCKET NO. 05-3643 IN RE: KELLY v. KELLY Proceedings held before Michael R. Rundle, Support Master Cumberland County Domestic Relations Office 9 North Hanover Street Carlisle, Pennsylvania on November 17, 2008, in the Support Master's Hearing Room APPEARANCES: THERESA BARRETT MALE, ESQUIRE For the Plaintiff ELIZABETH S. BECKLEY, ESQUIRE For the Defendant • 1 We are here in the matter of Ann H. Kelly versus 2 Michael R. Kelly, case docketed to 300 Support 2002, and 3 also to the case of Michael R. Kelly versus Ann H. Kelly, 4 divorce action docketed to 05-3643 Civil Term. 5 The Wife is present represented by counsel, 6 Theresa Barrett Male, Esquire. The Defendant is present 7 represented by counsel, Elizabeth S. Beckley, Esquire. 8 The matter is scheduled before me on the 9 Wife's claim for spousal support and also on the Wife's 10 claim for alimony pendente lite in the divorce action. 11 Counsel have reached an agreement to have an 12 order entered in which the Wife's Complaint for spousal 13 support will be withdrawn and her claim for alimony pendente 14 lite and alimony will be -- dismissed with prejudice or 15 withdrawn? 16 MS. MALE: Withdrawn with prejudice. 17 THE MASTER: Withdrawn with prejudice. Such 18 an order will be prepared. In addition, counsel wish to 19 place on the record certain other items with respect to the 20 divorce action. 21 You may proceed, Ms. Male. 22 MS. MALE: Thank you. 23 In consideration for Wife's withdraw with 24 prejudice of the claims just referenced by the Master, 25 Husband has agreed to bifurcate the divorce proceeding. The 2 • • 1 intention is to have the parties divorced by the end of this 2 month, that is by November 30, 2008. Wife's counsel will 3 prepare all the necessary paperwork including the order for 4 bifurcation and the divorce decree. Husband's equitable 5 distribution claim raised in the divorce action is 6 preserved, and that claim includes his claim for 7 distribution of his interests, if any, in two pieces of real 8 estate, one in Mechanicsburg, Cumberland County, and one in 9 Stone Harbor, New Jersey. That claim includes the increased 10 value of those properties. Those arguments are preserved. 11 Husband's argument in the divorce action with respect to the 12 mortgage contribution also is preserved. In addition, 13 however, the order entered March 3rd, 2008, for the support 14 of the parties' two children shall remain in full force and 15 effect and that includes the mortgage contribution which 16 Husband currently is making as part of that order. 17 Off the record for one second. 18 THE MASTER: Yes. 19 (A brief discussion was held off the record.) 20 Back on the record. 21 While off the record parties have agreed that 22 the claim for spousal support filed by the Wife is being 23 withdrawn with prejudice. Additionally, the child support 24 order to include that portion representing a mortgage 25 contribution will remain in full force and effect. 3 ! • 1 Does that include everything now, counsel? 2 MS. MALE: Yes, it does. 3 MS. BECKLEY: Yes. 4 THE MASTER: An order will be entered for 5 your benefit in the divorce action. This short transcript 6 will be transcribed by my reporter and delivered to you. 7 MS. MALE: Thank you very much, Mr. Rundle. 8 MS. BECKLEY: Thank you. 9 THE MASTER: We are done. 10 (Whereupon, the hearing was adjourned at 9:09 a.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 • i CERTIFICATION I hereby certify that the proceedings are contained fully and accurately in the notes taken by me on the above cause and that this is a correct transcript of same. (1, F- o Vicky A. Ebersole Official Stenographer The foregoing record of the proceedings on the hearing of the within matter is hereby approved and directed to be filed. l?ov???v 1`?420?? Date i2 Michael R. Rundle Support Master 5 ra , C? w =£ 4. r? - ANN H. KELLY, Plaintiff V. MICHAEL R. KELLY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA DOMESTIC RELATIONS SECTION PACSES NO. 220104415 DOCKET NO. 300 SUPPORT 2002 MICHAEL R. KELLY, : IN THE COURT OF COMMON PLEAS OF Plaintiff/Respondent: CUMBERLAND COUNTY, PENNSYLVANIA V. : DOMESTIC RELATIONS SECTION ANN H. KELLY, Defendant/Petitioner: DOCKET NO. 05-3643 CIVIL TERM ORDER OF COURT AND NOW, this 17th day of November, 2008, this matter having been scheduled for a hearing de novo before the Support Master on the Wife's claims for spousal support and alimony pendente lite, and the parties having reached an agreement on all outstanding issues, upon recommendation of the Master it is ordered and decreed as follows: 1. The Wife's Complaint for spousal support is withdrawn with prejudice. 2. The child support order previously entered on March 3, 2008 shall remain in full force and effect in its entirety. 3. The Wife's claim for alimony and alimony pendente lite is withdrawn with prejudice. By the Court, 14 evin A. Hess, J. Cc: Ann H. Kelly Michael R. Kelly Theresa Barrett Male, Esquire For the Defendant/Petitioner Elizabeth S. Beckley, Esquire For the Plaintiff/Respondent DRO ?= ?° ?:, cx? n `?C i t'! ? .. :? t? ?' -? "r? •ti =? f!`I " ? ' WSJ' ""Ks Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff V. ANN. H. KELLY, Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL TERM CIVIL ACTION - LAW IN DIVORCE Defendant AFFIDAVIT OF CONSENT 1. A Complaint in Divorce under Section 3301(c) of the Divorce Code was filed on or about July 18, 2005. 2. The marriage of Plaintiff and Defendant is irretrievably broken and ninety days have elapsed from the date of filing and service the Complaint. 3. 1 consent to the entry of a final Decree of Divorce after service of notice of intention to request entry of the Decree. WAIVER QF NOTICF OF INTENTION TO REQUEST ENTRY OF A DIVORgg ?€,f?REE UNDER SECTION 33Q1(c) OF THE DIVORCE CODE 1. I consent to the entry of a final Decree of Divorce without notice. 2. 1 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. 3. 1 understand that I will not be divorced until a Divorce Decree is entered by the Court and that a copy of the Decree will be sent to me immediately after it is filed with the Prothonotary. I verify that the statements made above are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unsworn falsification to authorities. Date:___ MICHAEL R. KELLY Plaintiff 1' 1 Po Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff V. ANN. H. KELLY, Defendant Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL TERM CIVIL ACTION - LAW IN DIVORCE AFFIDAVIT OF CONSENT 1. A Complaint in Divorce under Section 3301(c) of the Divorce Code was filed on or about July 18, 2005. 2. The marriage of Plaintiff and Defendant is irretrievably broken and ninety days have elapsed from the date of filing and service the Complaint. 3. 1 consent to the entry of a final Decree of Divorce after service of notice of intention to request entry of the Decree. WAIVER OF NOTICE OF INTENTION TO REQUEST ENTRY OF A DIVORCE DECREE UNDER SECTION 3309(c) OF THE DIVORCE CODE 1. I consent to the entry of a final Decree of Divorce without notice. 2. 1 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. 3. 1 understand that I will not be divorced until a Divorce Decree is entered by the Court and that a copy of the Decree will be sent to me immediately after it is filed with the Prothonotary. I verify that the statements made above are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C. S. § 4904 relating to unsworn falsification to authorities. Date: '/? J-04? 254503 rn • „r JAN ' 3 20094 Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbmCcDtbmesguire.com Attorneys for Defendant COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff : V. NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE ORDER FOR BIFURCATION T ?J7 Zovi AND NOW, Neyem ; 966, upon agreement of the parties, the Court ORDERS and DECREES: 1. The Court shall retain jurisdiction over all economic claims for which a final order has not been entered. All issues of equitable distribution of marital property, counsel fees, costs and expenses between the part ies shall survive the decree in divorce. The .? ... parties' economic rights shall not be impaired or diminished by any event, including but not limited to the death of either party or the marriage of either party. • 0% 2. Each party is enjoined from disposing of, encumbering, dissipating, selling, or otherwise alienating any assets in the parties' individual or joint names, regardless of whether they are deemed "marital assets," except as may be agreed by the parties in writing, or by court order, or as specifically set forth herein, until final economic resolution of all issues. 3. Pending entry of an order resolving all economic issues, if either party remarries, the marrying party shall enter into a prenuptial agreement with his or her intended spouse. In the prenuptial agreement, the intended spouse shall waive any and all rights to so much of the parties' marital property as is ultimately awarded to the other party by final order of court determining the economic claims incident to the divorce action. The prenuptial agreement shall provide specifically that the intended spouse sign, after marriage, any documents required by this Court, including any documents required under ERISA or the Retirement Equity Act to effectuate the purposes of this Order. The marrying party shall provide counsel for the non-marrying party with a copy of the applicable portions of the prenuptial. agreement which confirm this paragraph, and the signature page of the agreement itself. The marrying party's failure to execute such prenuptial agreement prior to a remarriage shall constitute a waiver of that party's rights in and to any marital property. 4. In the event of the death of either party prior to the entry of afinal Order resolving all economic claims herein, such claims shall be determined in accordance with the Divorce Code, 23 Pa. C.S. § 3101 et seq., pursuant to 23 Pa. C.S. § 3323 (d and neither the surviving party nor the personal representative of the estate of the 2 deceased party shall be prohibited from introducing any relevant and otherwise admissible evidence in support of or in opposition to such claims by the provisions of the Dead Man's Act, 42 Pa. C.S. § 5930. 5. The parties' marital property shall be held in custodia legis after entry of the divorce decree, including any and all rights which either party may have under ERISA, the Retirement Equity Act of 1984, and the Internal Revenue Code. Distribution: Mark C. Duffle, Esq., 301 Market St., P.O. Box 109, Lemoyne, PA 17034-0109 C" Theresa Barrett Male, Esq., 513 N. Second St., Harrisburg, PA 17010-1058 op y -_?-?.= 3 BY THE COURT: ? O IF-I 4r-n IN THE COURT OF COMMON PLEAS MICHAEL R. KELLY CUMBERLAND COUNTY, PENNSYLVANIA VS. CIVIL DIVISION ANN H. KELLY NO. 2005-3643 CIVIL TERM PRAECIPE TO TRANSNUT RECORD To the Prothonotary: Transmit the record, together with the following information to the court for entry of a divorce decree: 1. Ground for divorce: Irretrievable breakdown under 3301 (c) x3MA*f €AWAV tf4P&• (Strike out inapplicable section) 2. Date and manner of service of the complaint: September 23, 2005 Sherif f 3. Complete either paragraph (a) or (b). a. Date of execution of the affidavit of consent required by 3301 (c) of the Divorce code: by plaintiff January 7 , 2009 ; by defendant January 7. 2005 b. (1) Date of execution of the affidavit required by 3301 (d) of the Divorce Code: (2) Date of filing and service of the plaintiffs affidavit upon the respondent: 4. Related claims pending: Equitable Distribution 5. Complete either (a) or (b) a. Date and manner of service of the notice of intention to file praecipe to transmit record, a copy of which is attached: b. Date of plaintiffs Waiver of Notice in 3301 (c) Divorce was filed with the prothonotary: January 13, 2009 Date defendant's Waiver of Notice in 3301 (c) divorce was filed with the Prothonotary: January 13, 2009 Attorney for P ' tiff's c;. ? ??` ?t?_. ? ? W ,...?s . 7 to 1= 'E "'L2 - ' _; C. . .?' C:.:. ? ? MICHAEL R. KELLY V. ANN H. KELLY IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 DIVORCE DECREE AND NOW, Stn , 12, , it is ordered and decreed that MICHAEL R. KELLY , plaintiff, and ANN H. KELLY , defendant, are divorced from the bonds of matrimony. Any existing spousal support order shall hereafter be deemed an order for alimony pendente lite if any economic claims remain pending. The court retains jurisdiction of any claims raised by the parties to this action for which a final order has not yet been entered. Those claims are as follows: (If no claims remain indicate "None.") Equitable Distribution By the Court. ??? ?? .. ?? , ,, ?'`,,. Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbm _tbmesQuire.com Attorneys for Defendant COURT OF COMMON OF PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff/Respondent V. NO. 05-3643 Civil Term ANN H. KELLY Defendant/Movant CIVIL ACTION - DIVORCE DEFENDANT'S MOTION FOR RULING ON DEEDS 1. Plaintiff/Respondent Michael R. Kelly ("Husband") instituted this action on 11 July 18, 2005 by filing a non-economic complaint in divorce. 2. On April 10, 2007, Husband filed an amended complaint raising a claim for equitable distribution of marital property. 3. On December 12, 2007, Defendant/Movant Ann H. Kelly ("Wife"), a/k/a A. Hilary Kelly, f/k/a A. Hilary Payne and Ann H. Payne, filed a motion for appointment of the master on December 12, 2007. 4. After appointment by the court, Special Divorce Master E. Robert Elicker, II, Esquire directed the parties to submit memoranda of law regarding certain transfers of real estate which are at issue in this case. 5. Thereafter, the Master held hearings at which the parties and a representative from Bank of America testified. A copy of the transcript from the August 12, 2008 hearing at which the parties testified is attached as Exhibit 1 ("N.T. 08/12/08") 6. This action was bifurcated on consent, and a Decree in Divorce was entered on January 13, 2009. 7. Wife is filing this motion at the direction of the Master. Facts Not in Dispute - General 8. The parties were married on August 31, 1996. 9. On December 11, 2001, the parties filed a Chapter 13 bankruptcy petition in the United States District Court for the Middle District of Pennsylvania, docketed to In re: Michael Robert Kelly and Ann Hilary Kelly 1:01-bk-06562-MDF. 10. Wife and Husband separated on December 28, 2001. 11. The parties' joint bankruptcy proceeding was dismissed on March 18, 2003. 12. On December 4, 2003, Wife filed a Chapter 13 bankruptcy petition, docketed to In re: A. Hilary Kellv #1:03-bk-07166-MDF. 13. On December 12, 2003, Wife filed her Chapter 13 summary of schedules, which identified debts totaling $168,936.56. 14. The Chapter 13 liabilities did not include debts which Wife satisfied outside the bankruptcy proceeding. N.T. 08/12/08 at 37-38. 2 15. On August 12, 2008, prior to the Master taking testimony regarding the circumstances underlying the parties' execution of the deeds, Wife placed on the record her objection to the proceeding. N.T. 08/12/08 at 6-10. 16. On September 3, 2008, Wife's Chapter 13 bankruptcy was closed. Facts Not in Dispute - Mechanicsburg Property 17. On November 20, 1986, A. Hilary Payne acquired an interest in improved real estate located at 138 West Green Street, Mechanicsburg, Cumberland County, Pennsylvania ("Green Street"). 18. By deed dated May 9, 1995, A. Hilary Payne acquired an interest in improved real estate located at 439 South York Street, Mechanicsburg, Cumberland County, Pennsylvania ("Mechanicsburg property").' 19. The purchase price of the Mechanicsburg property was $128,000. 20. On April 9, 1996, A. Hilary Payne conveyed the Mechanicsburg property to Michael R. Kelly and Ann Hilary Payne.2 21. By deed dated July 26, 1996, A. Hilary Payne conveyed Green Street to Lisa A. Rynard. The deed was recorded on May 15, 1995. Also recorded on May 15, 1995 were two mortgages between A. Hilary Payne and Dauphin Deposit Bank & Trust Company ("DDB&T") for $126,000. One mortgage was recorded against Green Street, and the other was recorded against the Mechanicsburg property. The mortgage against Green Street was satisfied on May 10, 1996. The mortgage against the Mechanicsburg property was satisfied on July 10, 1996. 2 On the same date, Eastern Mortgage Services, Inc. recorded a mortgage against the Mechanicsburg property for $132,000 in the names of Ann Hilary Payne and Michael R. Kelly. Eastern thereafter assigned the mortgage to NationsBanc Mortgage Corp. 3 22. On March 13, 1998, the parties secured a collateral mortgage with Fulton Bank in the amount of $21,388.20.3 23. By deed dated January 12, 2003, A. Hilary Payne Kelly and Michael R. Kelly granted and conveyed their interest in the Mechanicsburg property to A. Hilary Payne Kelly ("Mechanicsburg deed") 24. The Mechanicsburg deed provides in part that the grantors have conveyed to the grantee the Mechanicsburg property TOGETHER with all and singular the tenements, hereditament and appurtenances to the same belonging, or in anywise appertaining, and the revisions and reversions, remainder and remainders, rents, issues and profits thereof; AND ALSO all the estate, right, title, equity, of the said party of the first part, of, in, to or out of the said premises, and every part and parcel thereof. TO HAVE AND TO HOLD the said premises, with all and singular the appurtenances, unto the said party of the second part, her heirs and assigns, to and for the only proper use and behoof of said party of the second part, her heirs and assigns forever. AND the said party of the first part, his successors and assigns, does by these presents, covenant, grant and agree to and with the said party of the second part, her heirs and assigns, that the said party of the first part, its successors and assigns, all and singular the hereditament and premises herein above described and granted, or mentioned and intended so to be, with the appurtenances unto the said party of the second part, her heirs and assigns, against the said party of the first part, his successors and assigns, and against all and every other person or persons, whomever, lawfully claiming or to claim the same or any part thereof, shall and will, by these presents, WARRANT AND FOREVER DEFEND. 25. Attorney Brian Tyler prepared this deed. N.T. 08/12/08 at 28. 3 On October 28, 2003, Fulton Bank recorded its satisfaction piece on this mortgage. 4 Facts Not in Dispute - Stone Harbor Property 26. By deed dated July 1, 1994, Dauphin Deposit Bank and Trust Company ("DDB&T"), Executor under the Last Will and Testament of Frank Payne, II, granted and conveyed to A. Hilary Payne and Marian N. Payne4, improved real estate located at 304 88th Street, Stone Harbor, Cape May County, New Jersey ("Stone Harbor property") 27. By deed dated March 10, 1999, A. Hilary Payne Kelly f/k/a A. Hilary Payne, and Marian N. Payne, conveyed the Stone Harbor property to A. Hilary Payne Kelly and Michael R. Kelly, wife and husband. 28. By deed dated January 12, 20035, A. Hilary Payne Kelly and Michael R. Kelly granted and conveyed their interest in the Stone Harbor property to A. Hilary Payne Kelly ("Stone Harbor deed") 29. The Stone Harbor deed provides in part that the grantors have conveyed to the grantee the Stone Harbor property TOGETHER with all and singular the tenements, hereditament and appurtenances to the same belonging, or in anywise appertaining, and the revisions and reversions, remainder and remainders, rents, issues and profits thereof; AND ALSO all the estate, right, title, equity, of the said party of the first part, of, in, to or out of the said premises, and every part and parcel thereof. 4 Marian Payne is Wife's sister. 5 On the recorded deed, the date was changed from January 12, 2003 to January 12, 2005. There is no record evidence as to why. But see N.T. 08/12/08 at 4-5, at which Husband's counsel stated: "I would like to add one thing to that. The date of the deed to the Stone Harbor property appears to have been changed from January 12, 2003 to January 12, 2005. There is a five written across the three on the face of the deed as well as on the acknowledgement from the notary where that date was also January 12, 2005. 1 just wanted to enter that as a stipulation because I am not sure what the legal impact would be at this point. We will see - I'll enter testimony from my client as to when he recollects having signed the deed as well. Husband, however, did not testify about this. Wife, however, testified that the parties signed this deed and the deed to the Mechanicsburg property on January 12, 2003 at AAA on Route 114. N.T. 08/12/08 at 28. 5 TO HAVE AND TO HOLD the said premises, with all and singular the appurtenances, unto the said party of the second part, her heirs and assigns, to and for the only proper use and behoof of said party of the second part, her heirs and assigns forever. AND the said party of the first part, his successors and assigns, does by these presents, covenant, grant and agree to and with the said party of the second part, her heirs and assigns, that the said party of the first part, its successors and assigns, all and singular the hereditament and premises herein above described and granted, or mentioned and intended so to be, with the appurtenances unto the said party of the second part, her heirs and assigns, against the said party of the first part, his successors and assigns, and against all and every other person or persons, whomever, lawfully claiming or to claim the same or any part thereof, shall and will, by these presents, WARRANT AND FOREVER DEFEND. 30. Attorney Brian Tyler prepared this deed. N.T. 08/12/08 at 28. Issue for Resolution 31. Husband asserts that the Mechanicsburg and the Stone Harbor properties are marital assets, notwithstanding his execution of the deeds after the parties separated. 32. Wife maintains that Husband relinquished all his right, title and interest in and to the Mechanicsburg and the Stone Harbor properties when he executed the deeds. 33. The deeds are clear and unambiguous. 34. Husband has neither pleaded nor asserted fraud, accident or mistake in his execution of the deeds to the Mechanicsburg and the Stone Harbor properties. 35. Under well-settled law, "[i] the absence of fraud, accident or mistake, the nature and quantity of the real estate interest conveyed must be ascertained from the deed itself and cannot be shown by parol." Wysinski v. Mazzotta, 325 Pa. Super. 128, 132, 472 A.2d 680, 682-83 (1984). 6 36. The Master took testimony to "find out about any agreements or underlying understandings that these parties had on [Husband's] signature on these two deeds." N.T. 08/12/08 at 44. 37. The Master erred in taking any testimony regarding execution of the deeds because the "nature and quantity of the real estate conveyed must be ascertained from the [deeds themselves]" and cannot be shown by parol evidence. See Wysinski, supra. See also Makozy v. Makozy, 874 A.2d 1160, 1169 (Pa. Super. 2005), citing Kadel v. McMonigle, 425 Pa. Super. 253, 624 A.2d 1056, 1061 (1993) (Statute of Frauds generally bars introduction of evidence of oral agreement modifying a deed which on its face transfers land in fee simple). Wherefore, Defendant moves the Court to find that the deeds at issue conveyed to Defendant all of Plaintiff's right, title and interest in and to the real estate, and to enter an order directing the master to exclude the real estate from equitable distribution. La ffice of T resa Barr tt Male Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID# 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Attorneys for Defendant Date: April 3, 2009 7 Exhibit 1 MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW VS. NO. 05 - 3643 CIVIL ANN H. KELLY, Defendant IN DIVORCE TRANSCRIPT OF PROCEEDINGS Proceedings held before E. Robert Elicker, II, Divorce Master 9 North Hanover Street, Carlisle, PA 17013 proceedings held on August 12, 2008 commencing at 9:00 a.m. APPEARANCES: Mark C. Duffie Attorney for Plaintiff Theresa Barrett Male Attorney for Defendant ?1 SEP 0 9 2008 I?? 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INDEX TO WITNESSES FOR THE PLAINTIFF Michael Robert Kelly Michael Robert Kelly, :recalled on rebuttal FOR THE DEFENDANT Ann Hilary Payne Kelly DIRECT CROSS REDIRECT RECROSS 10 47 19 1 34 45 1 INDEX TO EXHIBITS 2 3 4 FOR THE PLAINTIFF MARKED 5 No. 1 - summary of schedules 39 6 7 FOR THE DEFENDANT 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ADMITTED 2 1 THE MASTER: Today is Tuesday, August 12, 2 2008. This is the date set for a hearing regarding 3 transfer of real estate from husband to wife of two 4 properties. Counsel are going to put a stipulation on the 5 record identifying the properties and certain dates which 6 are helpful in trying to resolve this issue regarding the 7 underlying reason for husband's transfer. The Master 8 understands that wife's attorney does not believe this 9 hearing is appropriate because of various legal issues 10 involving the parol evidence rule and statute of frauds, and 11 she will interpose her objection in a few minutes on the 12 record. 13 The Master is going to identify the parties 14 and attorneys present today. Present for the wife, Ann H. 15 Kelly is attorney Theresa Barrett Male, and present for the 16 husband, Michael R. Kelly is Mark C. Duffie. 17 Ms. Male, would you identify the stipulation 18 regarding certain dates that you have discussed with Mr. 19 Duffie and put that stipulation on the record? 20 MS. MALE: Yes. There are two properties at 21 issue. I'll start with the property in Stone Harbor, New 22 Jersey. The property in Stone Harbor was deeded to wife 23 and her sister on July 1, 1994, under the Last Will and 24 Testament of wife's father, Frank Payne, II. 25 The other property in Mechanicsburg, at 439 3 1 South York Street, wife acquired that property in her own 2 name on May 9, 1995. On April 9, 1996, wife placed her 3 then fiancee on the deed to the Mechanicsburg property. The 4 parties married on 8/31/96. 5 On March 10, 1999, wife and her sister 6 executed a deed transferring their interest in the Stone 7 Harbor property to wife and husband. The parties then 8 separated on 12/28/2001 and on January 12, 2003, wife and 9 husband executed deeds transferring their interest in both 10 pieces of real estate to wife. 11 The Stone Harbor property deed was recorded 12 on January 14, 2005. The Mechanicsburg property deed was 13 recorded on May 26, 2005. 14 THE MASTER: Do you agree with that, Mr. 15 Duffie? 16 MR. DUFFIE: Did we have the date on the 17 Stone Harbor deed? 18 MS. MALE: I did. 19 MR. DUFFIE: As both being January 12, 2003? 20 MS. MALE: Yes. 21 MR. DUFFIE: I would just like to add one 22 thing to that. The date of the deed to the Stone Harbor 23 property appears to have been changed from January 12, 2003, 24 to January 12, 2005. There is a five written across the 25 three on the face of the deed as well as on the 4 1 acknowledgement from the notary where that date was also 2 January 12, 2005. I just want to enter that as a 3 stipulation because I am not sure what the legal impact 4 would be at this point. We will see -- I'll enter testimony 5 from my client as to when he recollects having signed the 6 deed as well. 7 THE MASTER: According to attorney Male this 8 hearing is not required because of her legal issues that she 9 has raised. The Master, however, has required counsel to 10 appear today to have testimony on the underlying 11 circumstances surrounding husband's transfer of the two 12 properties back to wife. Attorney Male is going to 13 interpose her objection on the record which the Master has 14 already told her that he is going to overrule but will allow 15 her to make her objection. 16 It is suggested by the Master that following 17 this testimony counsel contact the Court Administrator's 18 office to have this matter placed on the argument list so 19 the Court can hear the arguments of counsel as to whether or 20 not this hearing was appropriate. 21 The purpose of getting a ruling on this issue 22 is to allow counsel to know whether or not they should go 23 forward to have three appraisals on each of the properties 24 as required under the rules to show increase in value. If 25 those appraisals are not necessary, based on the Court's 5 1 ruling, then the parties will have saved a considerable sum 2 of money in acquiring these appraisals. Otherwise, if we go 3 forward with increase in value testimony, then we will have 4 to :have appraisals and we will have another hearing in the 5 Master's office to allow each of the parties to present 6 their expert witnesses regarding the valuation of the 7 properties on the particular dates indicated. 8 We are going to start today with the 9 testimony of Mr. Kelly. 10 (A discussion was held off the record.) 11 THE MASTER: The Master understands, after 12 discussion with counsel, that there is no issue with respect 13 to grounds for divorce. Wife has filed an affidavit under 14 Section 3301(d) and the parties may subsequently sign 15 consents to agree to the divorce under the 3301(c) section. 16 We are going to start with the testimony of 17 Mr. Kelly and then wife can respond to his allegations and 18 we will then adjourn and have the record transcribed and let 19 counsel proceed as we have previously suggested. 20 MS. MALE: Can I put my objection on the 21 record? 22 THE MASTER: Ms. Male has reminded me that 23 she wants to put her objection on the record. I will let 24 her do that. 25 MS. MALE: Prior to today's proceedings the 6 1 Master had given the parties an opportunity to file a 2 memorandum of law in support of our respective positions and 3 as i have indicated in the memorandum filed with the 4 Master's office that under Pennsylvania law the nature and 5 quantity of an interest in real estate conveyed must be 6 ascertained from the deed itself. It can't be shown by 7 parol evidence. In this particular incidence, the deeds are 8 clear and unambiguous on their face. They evidence a 9 transfer of the parties' interest in both parcels of real 10 estate into wife's name alone. Based on the case law cited 11 in the memorandum that I filed and in addition the statute 12 of frauds, which bars introduction of evidence of any oral 13 agreement to modify a deed, which on its face transfers land 14 in fee simple, we object to having this hearing in order to 15 take any testimony which would contradict the face of the 16 deed. 17 THE MASTER: As I understand your argument, 18 just so we are clear, the bottom line would be that there 19 would be no hearing and that the properties would stay in 20 wife's name free of any interest of husband? 21 MS. MALE: That's correct. 22 THE MASTER: Mr. Duffie, did you want to 23 respond and then I'll make my ruling, which I already told 24 you what I am going to do anyway. 25 MR. DUFFIE: With respect to the statute of 7 1 frauds and parol evidence that was previously set forth, 2 statute of frauds and parol evidence prohibits additional or 3 parol evidence when the nature or quality of the title is in 4 dispute. In this case, I don't think the nature or quality 5 or consideration of the title is particularly in dispute; 6 it's the underlying agreement surrounding this that is 7 particularly in dispute. The case law that has developed 8 with respect to these types of factual scenarios makes no 9 mention of parol evidence. In fact, when you are looking at 10 the divorce code and you are looking for a valid agreement 11 as an exclusion to the marital estate, the Court really 12 looks at the underlying agreement behind the title, be it a 13 deed; be it a car title, or whatever it might be. The 14 statute of frauds argument that I set forth in my brief is 15 really not a statute of frauds argument that has been set 16 forth by wife's counsel, and I'll get into that more 17 shortly. 18 Simply stated, this particular case focuses 19 directly on the divorce code and whether or not there was a 20 valid agreement. The case law, again, that was cited by 21 both parties in their memorandums, clearly supports that. 22 The reason why the Courts have not included this type of 23 evidence, parol evidence, is because parol evidence, as 24 stated in the memorandum, set forth in wife's counsel -- 25 parol evidence is inadmissible to show a contemporaneous 8 1 oral agreement which, if made, would normally have been 2 contained in the parties' written.agreement. In this case, 3 you have never seen a deed that has marital settlement terms 4 in it so certainly you can't expect, what we are talking 5 about here today, to be contained within the corners of a 6 deed. That is why the Courts have acted the way they have 7 in similar factual scenarios. 8 THE MASTER: Okay. 9 MS. MALE: Just one additional comment on 10 that. In the first place, I have seen deeds which have 11 carved out marital interest that there is a pending divorce 12 proceeding, that is for starters. And secondly, husband 13 says in his memorandum that even if there -- and this is a 14 quote from -- well, it is not paginated but it is the last 15 page of his memorandum -- (reading) Even if there was an 16 agreement between the parties with respect to the real 17 estate and Mr. Kelly's marital interests, the agreement 18 would fall under the Statute of Frauds. And that is because 19 you cannot bring in evidence to contradict the plan terms of 20 the deed on its face. 21 THE MASTER: Hopefully you will have a chance 22 to make these arguments extensively before a panel of three 23 judges who will make a finding. I appreciate your comments 24 on the record. They will be helpful to the Court to at 25 leas- identify the issue that we have presented here and, as 9 1 indicated, I am overruling Ms. Male's objection to this 2 hearing. We are now going to proceed with the testimony of 3 Mr. Kelly. I would ask that he be sworn, please. 4 Whereupon, MICHAEL ROBERT KELLY, having been 5 duly sworn, testified as follows: 6 DIRECT EXAMINATION 7 BY MR. DUFFIE: 8 Q Mr. Kelly, can you, please, state your full 9 name for the record? 10 A Michael Robert Kelly. 11 Q And where do you currently reside? 12 A 810 Charlotte Way, Unit 101, Enola, PA 13 17025. 14 Q Are you currently employed? 15 A Yes. 16 Q Where are you employed? 17 A Hollywood Casino, Grantville. 18 Q You've heard some discussion with respect to 19 the properties at issue. We entered a stipulation with 20 respect to the deeds, date of separation, date of divorce -- 21 I'm sorry -- date of separation, date of marriage. Prior to 22 marriage, can you tell us what led to you having been placed 23 on the deed for the Mechanicsburg property? 24 A We had been living at a house that Hilary had 25 owned on Green Street and we found a house -- the 439 South 10 1 York Street house. We feel in love with it and decided to 2 purchase it together. 3 Q Now, the original deed, when she purchased 4 it, was in her name alone, correct? 5 A I think she took a line of credit at the time 6 until we got a mortgage. 7 THE MASTER: Well, that didn't answer the 8 question. It was in her name alone? 9 THE WITNESS: Yes. 10 BY MR. DUFFIE: 11 Q And the reason for that having been in her 12 name alone was? 13 A Through a line of credit until we could 14 secure a mortgage. 15 Q So more convenient at the time for her to -- 16 MS. MALE: Objection to the leading question, 17 Mr. Duffie. 18 BY MR. DUFFIE: 19 Q Why was it -- was it a credit issue? 20 A There is always a credit issue. My credit 21 hadn't been the best at the time. We were cleaning up my 22 credit and she had had the money available to do it as a 23 line of credit until we got the mortgage. 24 Q But you stated that you found the house 25 together? 11 1 A Correct. 2 Q When you bought the house you moved in 3 together? 4 A Correct. 5 Q Okay. You also heard a date earlier on with 6 respect to the property in Stone Harbor. That was titled in 7 your name, I believe, on March 10, 1999. Can you tell us 8 what the facts and circumstances were relating to that 9 particular transaction? 10 A When Hilary and her sister had separated a 11 couple of the houses in Stone Harbor, Hilary's was -- it was 12 going -- the house in question was going to transfer to her. 13 Since we were married, we transferred it and she put me on 14 the deed at that time. 15 Q At the time, do you recall any other 16 circumstances as to why that went in to both names other the 17 fact that you were married? 18 A We were married so we put it in both of our 19 names because we were together. 20 Q Okay. Now, following separation, can you 21 tell us a little bit initially about what discussions you 22 had pertaining to these two properties in transferring title 23 back into Hilary's name alone, initially after separation? 24 A Well, after separation I was in a big money 25 crunch. I had been living with my parents, trying to get 12 1 things back on track, new job, Domestic Relations, so I had 2 a little bit of money to work with but I certainly, for the 3 children's sake and my own, I didn't want to be living at 4 their house forever. I needed to repair my credit. I 5 needed to be able to may be secure a mortgage some day and 6 move forward. 7 Q Did you initially approach Hilary about 8 transferring title back into her name? 9 A I wanted her to sell, if she needed to, that 10 house in Mechanicsburg, to refinance, whatever she needed to 11 do. If she needed to refinance it, she could refinance it 12 and get me off that mortgage so that I could move along. 13 There was no way with the money that I was making at the 14 time that I could have another house. I'm already on one 15 mortgage. How could I possibly get another one? It was 16 just impossible -- it is just impossible for me to move on. 17 I'm struggling with it to this day. 18 Q So -- were you the one who initiated the 19 conversations with respect to this? 20 A Yes. 21 Q And at first was she receptive to this idea? 22 A I don't think. I think it took a while. I 23 think it took a period of time to it came to fruition, 24 whether she wanted to move on or do something. Her plan was 25 to go ahead and do something on her own. 13 1 Q You said it took some time to come to 2 fruition. Once it came to fruition, what were the 3 discussions or understandings that the two of you had? 4 A That she was going to refinance me off the 5 mortgage; that she would be able to -- she would be able to 6 fix her finances, get herself under control, either buy a 7 smaller house, do something, down size on her side and that 8 would take me off the mortgage. And then me not being on 9 the Stone Harbor deed she could use that as collateral to 10 secure loans or anything she needed, so that I could be 11 taken off -- she could get -- refinance that and take me off 12 the house in Mechanicsburg. 13 Q Were the payments on the Mechanicsburg's 14 property mortgage being made on time? 15 A I don't believe they were. My portion of it 16 through Domestic Relations was always paid on time but I 17 don't believe on her side that she was paying the mortgage. 18 Q Were you experiencing additional credit 19 problems because of this nonpayment of the mortgage on the 20 marital home? 21 A Oh, without a doubt. My credit always 22 suffers. It always shows 180 days plus late. My credit is 23 very low at this time and it's never gotten better. 24 Q Is this primarily a result of you still being 25 on that mortgage? 14 1 A I'm still on that mortgage. 2 Q And the mortgage that you are referring to is 3 on the York Street property? 4 A On the York Street property. 5 Q And you said you were still on the mortgage; 6 is that correct? 7 A Yes. 8 THE MASTER: Let me understand -- just to 9 interpose a question. You signed the property over with the 10 understanding that you would be off the mortgage? 11 THE WITNESS: Correct. 12 THE MASTER: Now, what happened that you are 13 still on the mortgage? 14 THE WITNESS: I wish I knew. I don't know 15 why I am still there. She was supposed to take me off that 16 mortgage. She was supposed to refinance the house to get me 17 off that mortgage. 18 THE MASTER: And was the signing over of the 19 Stone Harbor property kind of bundled into this, that if she 20 got her name on that property, she would be able to 21 refinance -- 22 THE WITNESS: It was going to free up capital 23 for her to refinance, to pay off her debts, do anything she 24 needed to do -- I was no longer holding her up from moving 25 forward. Then she was going to allow me off the mortgage so 15 1 that I can move forward. 2 BY THE MASTER: 3 Q And you are still on the mortgage? 4 A Correct. 5 Q And you don't know what happened? 6 A No. 7 BY MR. DUFFIE: 8 Q Other than the issues you were having with 9 the credit, which you have related to us, and the fact that 10 you didn't -- you were unable to borrow money to purchase a 11 home of your own, was there any other motivations for you to 12 secure a property of your own? 13 MS. MALE: Objection as to relevance to this 14 particular hearing? Mr. Elicker, you said you just wanted 15 to hear testimony on the -- 16 THE MASTER: I think he already said that he 17 didn't want to live with his parents forever and he has 18 children and he wanted to have a place for his children, and 19 I think that's fair to ask that question. Let's not get 20 further into any other details, but that question is fine. 21 I'll overrule your objection. 22 THE WITNESS: That is exactly right. I have 23 the two children. I want to have a place for them to live. 24 I want to get a house in the Mechanicsburg School District 25 so that I am still in the same district as they are. Right 16 1 now I am not in the school district. I want to be in the 2 school district. I need to be closer. I need for them to 3 be able to go to school from my house also; just to have a 4 place to live, that they can come to that's not my parent's 5 house. It's a house that they have to live in. Nothing 6 huge; just modest. 7 THE MASTER: Are you still living with your 8 parents? 9 THE WITNESS: No. 10 THE MASTER: You have an apartment? 11 THE WITNESS: I live with a fiancee. 12 THE MASTER: Okay. 13 THE WITNESS: Soon to be fiancee. 14 BY MR. DUFFIE: 15 Q Are you currently making a mortgage 16 contribution through the Cumberland County Domestic 17 Relations? 18 A Yes, I am. 19 Q Do you recall when that mortgage contribution 20 began? 21 A It would have been in August of 102, I 22 believe. 23 Q Since the time you initially began paying it, 24 was there ever a modification made to that order? 25 A Yes, it was modified this year. 17 1 Q Do you recall what month this year? 2 A I believe it was March. 3 MR. DUFFIE: That's all I have at this time. 4 THE MASTER: I just have a question about this 5 mortgage contribution. Was it your understanding that if 6 this would have happened the way you thought it was going to 7 happen, you wouldn't be making any mortgage payments? 8 THE WITNESS: I would no longer be making a 9 mortgage contribution? Well, that was up to Domestic 10 Relations. I thought that -- the plan was that I would be 11 able to secure my own mortgage. With Domestic Relations, if 12 they would have deemed that I needed to make that payment, I 13 would have made a payment. I've always made whatever 14 payments they have instructed me to. 15 THE MASTER: But you didn't have the 16 understanding that if all this happened the way you thought 17 it was going to happen; that is, the refinancing, you 18 signing over the properties, especially the Stone Harbor 19 property where she would have some credit available, that 20 you would be free of this mortgage obligation? 21 THE WITNESS: I mean, if Domestics said no, I 22 mean -- I never assumed that. 23 THE MASTER: Because the mortgage still 24 existed and you were required to make a contribution on the 25 Mechanicsburg property? 18 1 THE WITNESS: Yes, I am. 2 THE MASTER: Okay. Cross-examine. 3 MS. MALE: I have no questions for Mr. Kelly 4 at this time. I may decide to ask him a few questions after 5 I put my clien t on. 6 THE MASTER: Do you have any other witnesses, 7 Mr. Duffie? 8 MR. DUFFIE: No, I don't. 9 THE MASTER: All right. We will swear Mrs. 10 Kelly, please. 11 Whereupon, ANN HILARY PAYNE KELLY, having 12 been duly sworn, testified as follows: 13 DIRECT EXAMINATION 14 BY MS. MALE: 15 Q Please state your full name for the record. 16 A Ann Hilary Payne Kelly 17 Q How is Hilary spelled? 18 A H-i-1-a-r-y. 19 Q Where do you live currently? 20 A 439 South York Street in Mechanicsburg. 21 Q Who lives there with you? 22 A My two boys. 23 Q And what are their names and ages. 24 A Spencer Payne Kelly. He is 11 and Hansen, 25 H-a-n-s-e-n, Michael Kelly, and he is 8. 19 1 Q Let's talk a little bit about the 2 Mechanicsburg property first. We've already stipulated that 3 you acquired that in May of 1995, before you and Mr. Kelly 4 were married. What were the circumstances under which you 5 purchased that property? 6 A Well, when we found the house I was -- I had 7 currently owned a home on Green Street and I took a line of 8 credit against -- my father had recently passed away and I 9 had money in the bank. The bank that was holding my trust 10 allowed me to take a line of credit against that money that 11 they were holding in my trust and use that to secure funds 12 so we could purchase this house. 13 I made double mortgage payments on the York 14 Street property, where I currently live now, and the Green 15 Street property and I made those double mortgage payments 16 until the Green Street property sold. Then the proceeds 17 from that sale went into the down payment for the York 18 Street property. Then we refinanced together. 19 Q Let's back up just a minute. Roughly what 20 year did you acquire Green Street? 21 A I had been there for 11 or 12 years prior to 22 leaving -- 23 Q So some time in the earlier 80s? 24 A I'm sort of thinking it was '83. 25 Q Did Michael Kelly contribute any monies 20 1 toward your Green Street property in terms of your purchase 2 of it? 3 A No. 4 Q When you sold Green Street, was that prior to 5 when you and Mr. Kelly were married? 6 A Yes. 7 Q And do you remember how much in way of 8 proceeds from Green Street you had to invest in the York 9 Street property? 10 A It was right around ninety thousand. 11 Q When you were making the double mortgage 12 payments that you just mentioned on Green Street and on York 13 Street, was Mr. Kelly making any of those payments? 14 A No. The money came out of my trust. 15 Q Was Mr. Kelly living with you at Green Street 16 while you were making the double payments? 17 A Yes. 18 Q Let's move up to April of 1996, a few months 19 before you and Mr. Kelly were married. We stipulated to the 20 fact that you placed his name on the York Street property. 21 Why was it in your name initially? 22 A Well, because Mike's credit was bad and 23 because I had the cash on hand in my trust at Dauphin 24 Deposit, at the time, and they were the ones that gave me 25 the line of credit. 21 1 Q And was there any reason beyond those reasons 2 as to why your name was on the deed to York Street 3 initially? 4 A No. I had the funds. Mike didn't own 5 anything and that was, you know, the only way I could make 6 that deal happen. 7 Q What changed between May of '95, when your 8 name went on the York Street property and April of '96 when 9 you put his name on there? What changed in your 10 circumstances to put his name on the deed? 11 A We were getting married and, you know, we 12 were just going to start our life there. 13 Q At the time that you put Mr. Kelly's name on 14 the York Street property deed, did he give you any money 15 towards the property? 16 A No. 17 Q Was there any other property that changed 18 hands between you in connection with you putting his name on 19 the property? 20 A No. 21 Q The two of you then were married August 31 of 22 '96, right? 23 A That's correct. 24 Q And you separated we have stipulated to 25 December 28 of '01? 22 1 A Yes. 2 Q What was happening with the two of you around 3 the time that you separated, and I am talking about 4 financially, what were the financial circumstances? 5 A Oh, things were very bad and very tense. We 6 had gone through the -- shortly after Spencer was born -- 7 Q What year was that? 8 A In '96. Mike had quit his job at Coke and 9 then, I think, the following year he went to work with 10 Vartan for a brief time or Parvin. I can't remember. It 11 was one of the two, but his employment was very sporadic and 12 I had gone through all the money that my father had left me. 13 I had cashed in all my life -- I had received all the cash 14 value from my life insurance policies. I had cashed in 15 everything that I had to keep us a float and avoid losing 16 both of the houses. 17 Q Let me just back up for just a second here. 18 You said that you went through all the money that your dad 19 had given to you? 20 A Yes. 21 Q How much money are you talking about? 22 A $125,000.00. 23 Q And what did you use that money for? 24 A Most of it went into renovating and updating 25 the 'fork Street property and the rest of it we just lived on 23 1 since Mike wasn't -- neither one of us was working, and we 2 had Spencer. 3 Q Why was he not working? 4 A He quit Coke because he felt that his safety 5 was in jeopardy with the route that they had given him. 6 When he worked for Parvin he worked for them for a brief 7 time before he got fired and Vartan, I don't remember what 8 happened over there but he wasn't there very long either. 9 Q Your second child, Hansen, what year was he 10 born? 11 A '99. November 26, 1999. 12 MR. DUFFIE: I would like to object. Do we 13 need all of this? 14 THE MASTER: I think it's fair to let her 15 testify as to what happened to her money. 16 BY MS. MALE: 17 Q Your son Spencer, what year was he born? 18 A Spencer? 19 Q I'm sorry. Hansen. 20 A 1999. 21 Q In that same year, March 10th of '99, you and 22 your sister transferred your interest in the Stone Harbor 23 property to you and Mike, tell us about the circumstances 24 surrounding that transfer? 25 A Well, when my father passed away he had two 24 1 properties in Stone Harbor. One was near the beach; one was 2 near the bay. My sister wanted to buy a -- she was living 3 in Seattle and she wanted to buy a house out there and she 4 needed the proceeds from one of those two properties in 5 order to buy a house out there. We decided to -- I said I 6 would never agree to sell the property down near the beach 7 and we had an agreement that she would take one house and I 8 would take the other. She took the bay house and sold it 9 and we transferred -- I took the beach house and I put it in 10 both of our names -- in Mike's and my name then because I 11 wanted to be able to provide for our family. This was our, 12 you know, nest egg; this was what was going to take care of 13 us in our old age; this was what was going to take care of 14 our kids and put them through college, and Mike didn't have 15 anything to provide, any kind of security for us so I put 16 the house in both of our names to provide for us down the 17 road if something, God forbid, should happen to me, so that 18 Mike and the kids would be taken care of. 19 Q By the time the two of you separated in 2001, 20 his name was on both the Mechanicsburg and the Stone Harbor 21 property? 22 A Yes. 23 Q What was happening in terms of financial 24 circumstances around the time the two of you separated? 25 A Well, about three or four weeks before Mike 25 1 was removed from the house, Mike and I had gone to see 2 Dorothy Mott and filed a Chapter 13 because we just got so 3 far behind on all of our bills that we just -- there was no 4 other way out and I didn't want to sell the properties 5 because I wanted to hold on to them to take care of us down 6 the road and to take care of the kids and so I filed a 7 Chapter -- we filed a Chapter 13 and that was at the 8 beginning of 12/01 and then we split up late in the month. 9 Q Why was it necessary to file the Chapter 13 10 in -- 11 THE MASTER: I don't think we need to get 12 into the financial situation. It was obviously necessary 13 and why, I don't think that's relevant to this. 14 MS. MALE: All right. 15 BY MS. MALE: 16 Q What happened with the Chapter 13 that the 17 two of you filed? 18 A It got dismissed -- well, the reason it got 19 dismissed was because Mike and I had an agreement that I 20 would take all the debt and he would sign off on the houses 21 and we would get divorced. It was just going to be clean 22 and easy and we were just going to, you know, not drag this 23 out. I went ahead and met with Brian Tyler, my bankruptcy 24 attorney, and he got the Chapter 13 dismissed through Dorie 25 and we took out another Chapter 13 in my name only to 26 1 support all of our marital debt and then Mike signed off on 2 the properties and then nothing happened from there. Mike 3 and I had an agreement that I would -- he wanted his name 4 off the mortgage and I didn't have any problem doing that. 5 I totally agreed. 6 My mortgage company, Bank of America, told 7 me that for $100.00 they would do an assumption and they 8 would remove Mike's name and Mike's social security number 9 off of the loan. He was unwilling to do that. I even tried 10 to refinance but because I was in Chapter 13 I was not 11 eligible for any kind of a reasonable rate plus the balance 12 that. was on my Chapter 13 had to be rolled into the 13 principal for the refinance. The last rate that they told 14 me, that I have on paper is 10.34, then they told me it went 15 up to 14, and my mortgage payments were just going to be 16 outrageous. 17 I called Bank of America back and they said 18 to me, for $100.00, you know, we will get Mike's name off 19 the mortgage and his social security and he will be free and 20 clear of any of that debt. I mentioned it to Mike on 21 several occasions throughout the years and he wouldn't agree 22 to it. I could not get a loan against either one of the 23 houses because they were tied up in this divorce as well as 24 the :fact that I don't have a job. 25 The mortgage company that I worked with said 27 1 that my rental income was not a guaranteed income and that 2 was another reason the interest rate was going to be so 3 high. They also said that I needed to be two years out of 4 the Chapter 13 before I would be eligible for a reasonable 5 rate. My rate on the house right now is 6.25% and I can 6 keep that and my loan mortgage payment per month as long as 7 Mike would agree to sign the assumption letter. He would be 8 free and clear of all debt and responsibility. 9 Q Let me back up for just a minute. Do you 10 know when -- the joint Chapter 13 that you filed with him, 11 do you know when that was dismissed? 12 A March of '02, I think. I don't know. 13 Q The deeds that he signed transferring his 14 interest in both properties to you, who prepared those 15 deeds? 16 A Brian Tyler, the bankruptcy attorney. 17 Q And can you tell me about the circumstances 18 under which the two of you met on January 12 of '03 to sign 19 the deeds, what was the conversation the two of you had? 20 A I was going to take all of the marital debt. 21 He was going to sign off on the properties. We were going 22 to get divorced and that was it. We met at Triple A on 23 Route 114 and we signed the documents and that was that. I 24 filed them at the courthouse and drove to New Jersey the 25 next day, since the kids and I were going away for the 28 1 weekend, and I filed the deed down there then. 2 Q Now, when did you file the Chapter 13 in your 3 own name? 4 A Let's see that would be in '02 or '03. It's 5 paid off now. I've satisfied all the marital debt. 6 Q When he signed the deeds, was there any -- 7 did you have any understanding from him that he wanted 8 anything out of either property? 9 A No. It was, you take the debt, I'll sign off 10 on the properties, get my name off the mortgage, done deal. 11 They were yours -- that house at the beach was yours. It 12 was in your family and that's where it should stay. Mike 13 made that comment in front of quite a few people. 14 Q He testified a little while ago that he 15 didn't know why his name was still on the mortgage on the 16 York: Street property. Have you had conversations with him 17 over the years as to why his name is still on the mortgage? 18 A Absolutely. I've discussed that assumption 19 with. him for at least two years. 20 Q Have you received letters that I have sent to 21 Mr. Duffie regarding the refinance issue? 22 A Yes. 23 Q And were the problems with respect to 24 refinancing while you were in a Chapter 13? 25 A Um-hum. Yeah. 29 1 Q Mr. Kelly said that he has always made any 2 payments that DR has said to make. True or not true? 3 A Domestic Relations? 4 Q Yes. 5 A His support payments were timely until last 6 November when he switched jobs and did not inform Domestic 7 Relations nor myself that he was changing jobs, and at the 8 height of heating oil season, I did not receive any child 9 support for a month. He could have given me advance notice 10 that he was leaving a job and I might be without child 11 support. That was in November and then it was sporadic in 12 December and then in January I went another month without 13 receiving child support. It's been sporadic since then. 14 Sometimes it is two weeks; sometimes it is three weeks. 15 THE MASTER: Now, is that child support tied 16 in with the mortgage contribution that he is making? 17 THE WITNESS: That is how Mr. Carothers set 18 it up, yes. 19 THE MASTER: Okay. So part of that child 20 support is payment on account of a mortgage obligation? 21 MS. MALE: Yes 22 BY MS. MALE: 23 Q From the time that you put his name on the 24 deed to the York Street property, did he make any mortgage 25 payments? 30 1 A Well, our funds were joint but Mike's income 2 was little to none and, you know, I was -- we were setting 3 up at the flea markets or I was cashing in my life insurance 4 policies, the money that was -- the money that I had left in 5 my trust. 6 Q How much did you cash out of your life 7 insurance policies to live on? 8 A I think there was eight thousand on one and 9 five on another. Plus we had the rental income coming in 10 from the beach? 11 Q From the Stone Harbor property? 12 A My mother helped us out tremendously. 13 Q What kind of help did your mom give you? 14 A Financial support. She would buy groceries. 15 She would cash in CDs to help us make ends meet or to pay 16 our bills. 17 Q During the periods of time when he was -- 18 during the periods of time when Mr. Kelly was out of work, 19 how did you manage to make the mortgage payments and 20 maintain yourself and the kids? 21 A Well, it was whatever we could liquidate -- 22 whatever I could liquidate, and my mother. 23 Q Okay. How about his contributions to the 24 Stone Harbor property, did he make any financial 25 contributions to that during the period of time that his 31 1 name was on the deed? 2 A No. The rental income went back into paying 3 the bills and paying the taxes and, no -- he put some elbow 4 grease in down there but that was about it. 5 I don't think that Mike worked the last 6 couple of years that we were married. 7 (A discussion held off the record.) 8 MS. MALE: I am going to mark these? 9 THE MASTER: Have you shown Mr. Duffie -- 10 MR. DUFFIE: I don't know how this is 11 relevant. 12 THE MASTER: What is it? I don't even know 13 what: we are doing. 14 MR. DUFFIE: It is a social security 15 statement of contribution. 16 THE MASTER: What is it? 17 MS. MALE: It's a social security statement 18 which confirms -- 19 THE MASTER: That's not relevant. I don't 20 want to get into all of this financial -- we are here on a 21 specific issue about why the deeds were transferred -- 22 MS. MALE: That goes to the whole question of 23 why they were transferred. 24 THE MASTER: His social security -- 25 MS. MALE: In terms of his lack of earnings, 32 1 absolutely it does. 2 THE MASTER: I don't follow that. I'm going 3 to sustain the objection. I don't think we need to get into 4 his lack of earnings. She said he didn't work. She said 5 that they had to liquidate assets. Her mother helped. I 6 think that is enough of that testimony right now. It 7 certainly goes later if we get into it to the question of 8 percentage of distribution of any marital estate. I think 9 that is relevant because it goes to contribution but right 10 now I don't think we need to do that. 11 MS. MALE: Okay. 12 BY MS. MALE: 13 Q When the two of you met to sign the deeds in 14 '03, to the two properties, did Mr. Kelly make any comments 15 to you about the fact that he expected to have any interest 16 in either one of these properties? 17 A Absolutely not. It was, I take the debt, he 18 signs off on the deeds, done deal, get my name off the 19 mortgage and that was -- that was the deal all along. We 20 were just going to keep it simple. We were trying to avoid 21 all of this, the lengthy, drawn out divorce and how 22 expensive it was going to be with legal fees. We just -- we 23 had an agreement. I take the debt, he signs off, I get his 24 name off, done deal. 25 MS. MALE: I have no other questions at this 33 1 t im.e . 2 THE MASTER: Cross-examine. 3 CROSS EXAMINATION 4 BY MR. DUFFIE: 5 Q I understand what you're saying with respect 6 to the agreement but I am confused because you say that the 7 deal was that you take all the debt if he signs off the 8 houses, well, what debt have you assumed? 9 A Credit card debt. Mike didn't work. There 10 was a lot of credit card debt. The mortgage payments had 11 fallen behind. The car payments had fallen behind. There 12 was $75,000.00 worth of debt and I -- we paid off some of 13 it. The balance was right around $60,000.00 which went into 14 the Chapter 13 that I filed individually and I do not recall 15 what it was when we filed jointly with Dorie Mott in 12/01. 16 It was utilities, credit cards, mortgage payments, taxes, 17 the car. It was everything, absolutely everything. 18 Q But what about the mortgage. You said you 19 were not able to refinance the mortgage although these were 20 signed over in January of 2003, you filed your individual 21 Chapter 13 in 2003, correct? 22 A I don't know what the exact date is. You 23 would have to look on the Chapter 13. 24 Q Did you file it after January 13, 2003? 25 A You would have to look at the documents. I 34 1 don't know what the exact date is. 2 Q Did you ever make any attempt to refinance 3 the property? 4 A Yes, I did. 5 Q You indicated that you had an interest rate 6 available to you of 10.34%, was that right? 7 A Yeah. Something around that. 8 Q Was that part of the reason why you didn't 9 refinance because of the interest rate being too high? 10 A Yes, and also Bank of America said for 11 $100.00 I could get Mike's name and social security number 12 off that and avoid any refinancing fees or anything. 13 Q So you're telling us that for $100.00 Mr. 14 Kelly refused to have everything taken care of like it was 15 supposed to have originally been taken care of? 16 A That's correct. 17 Q Was it the $100.00 that we didn't have or was 18 it -- 19 A I was more than willing to do it. It was 20 Mike that would not agree. And the Bank of America needs a 21 divorce decree and the Chapter 13 satisfied in order to 22 process the assumption and Mike and I had an agreement. 23 Q Okay. So you needed to have -- in order to 24 have the assumption -- now, it's not just the hundred bucks 25 -- you had to have a divorce decree and you had to have a 35 1 notice of discharge from your Chapter 13 bankruptcy, which 2 you are still in? 3 A Well, they just told me about the discharge 4 of the Chapter 13 two weeks ago. But before, all they said 5 was that they needed $100.00 and they would process the 6 assumption fee. Now, I spoke to two different people at 7 Bank of America and they gave me two different requirements 8 that they needed. 9 When I had originally spoke with Bank of 10 America about performing the assumption and I mentioned it 11 to Mike, he said he didn't want to do that because he wanted 12 his past credit blemishes erased off his credit report and I 13 couldn't get him to understand that it doesn't work that 14 way. He said that he would have to speak to somebody about 15 it, about signing the assumption, and then he said he 16 wouldn't do it. 17 THE MASTER: What about the divorce decree, 18 though, that was part of the release? 19 THE WITNESS: Yes. They just mentioned that 20 to me. When I had originally spoke to them about the 21 assumption, they said that the divorce had to be final for 22 them to do that. Even when I spoke to the bank at the beach 23 about refinancing, they would not even give me a loan for 24 $10,000.00 because the properties were tied up in a divorce. 25 Just last week they told me about the Chapter 13 and I had 36 1 told them that it had been satisfied. Brian Tyler said that 2 it would be 60 days until we had a discharge order. 3 BY MR. DUFFIE: 4 Q I have a copy which we will enter for the 5 eventual hearing, but I would like to ask you a couple of 6 questions with respect to your bankruptcy -- 7 MS. MALE: Are you going to mark this into 8 evidence? 9 MR. DUFFIE: I would like to ask her a 10 general question first and then I'll mark it. She testified 11 earlier that she had $75,000.00 of other debt or other 12 obligations that you assumed in the bankruptcy, in your 13 individual bankruptcy; is that correct? 14 THE WITNESS: There was approximately -- 15 there was around $75,000.00 total debt. Some of it was 16 satisfied privately between myself and -- this was after 17 Mike left -- between myself and some of the credit card 18 companies. And then the balance went into the Chapter 13. 19 Some of debtors allowed me to make a partial payment on the 20 balance due and then they sent me -- I'm sorry, what is it? 21 A 1099 for the balance? 22 MS. MALE: I don't know. 23 THE WITNESS: They allowed me to make a 24 partial payment on the debt and then they sent me a 1099 25 for, you know, whatever they wrote off. That was quite a 37 1 sizable chunk. I mean Mike walked away debt free. He was 2 supposed to sign of f on the houses and I would take care of 3 everything. 4 BY MR. DUFFIE: 5 Q Well, that didn't happen because Mike is not 6 debt free. Mike is getting killed. 7 MS. MALE: Objection to the comment. 8 MR. DUFFIE: I'm sorry. 9 THE MASTER: Would you like to strike that? 10 MS. MALE: Yes, I do. 11 THE MASTER: We will strike that. 12 BY MR. DUFFIE: 13 Q I would like to introduce a summary of the 14 schedules for your individual bankruptcy petition filed 15 December 2003, if I may. 16 THE MASTER: Can I ask for an offer? 17 MR. DUFFIE: Simply offering it to rebut the 18 testimony of Hilary with respect to what debt was assumed. 19 There was only one debt on the bankruptcy as far as 20 discharging through the bankruptcy. Then I have additional 21 documentation with respect to the fact that she -- well, 22 I'll address that w hen the time comes. 23 THE MASTER: All right. We will mark that. 24 MR. DUFFIE: I ask that that be marked as 25 Plaintiff's Exhibit No. 1. 38 1 (Whereupon, Plaintiff's Exhibit No. 1 was 2 marked for i dentification.) 3 BY MR. DUFFI E: 4 Q Mrs. Kelly, would you identify what that is, 5 please? 6 A I have to get my glasses. Okay. What am I 7 looking at? 8 Q Can you identify what that is, please? 9 A Summary of schedules. 10 Q Is that your summary of schedules that was 11 attached to your bankruptcy petition in 2003? 12 A I don't know. We would have to compare it to 13 what I have. Is that my -- I guess that is my single case 14 number becau se Mike's name is not on there, correct? 15 Q Under the liability column, what liabilities 16 can you iden tify? 17 MS. MALE: I'm going to object to the fact -- 18 the document speaks for itself. 19 MR. DUFFIE: Okay. Well, then simply 20 identify it as being what it is, summary of schedules, and 21 tell me what the list of liabilities include. 22 THE MASTER: Now, we are getting into the same 23 area that sh e wanted to -- 24 MS. MALE: That's exactly right. 25 THE MASTER -- and I said, no, let's wait, 39 1 because it goes to really a factor -- if we finally have an 2 asset then we get into factors and distribution, 3 percentages. Let's just admit it and then we will just 4 leave it at that. 5 MS. MALE: I would like an opportunity to see 6 whether it is the full and complete document. 7 THE MASTER: Why don't we offer it subject to 8 your objection at a later time. I am just going to admit it 9 for the purpose of what it says on its face and if we need 10 to have testimony about it later, we will. 11 MS. MALE: That is fine. She has already 12 testified that there was debt that she satisfied outside the 13 plan. 14 THE MASTER: I understand that. You can 15 identify it as part of the Chapter 13 or all of the Chapter 16 13 documents. Let's move on here. 17 BY MR. DUFFIE: 18 Q With respect to the refinancing the property, 19 you. said that there was an assumption available to you 20 through Bank of America under certain terms? 21 A Um-hum. 22 Q I just want to understand when you were 23 talking about this 10.34%, did you have the opportunity to 24 refinance the mortgage on the York Street property at 10.34% 25 in your own name? 40 1 A Yes. 2 Q And you didn't do it? 3 A Well, now wait. I had -- option one was the 4 company that I was dealing with, down in Lancaster. The 5 original rate was nine. This went on for almost three 6 months and then they came back at that 10.340. They called 7 me again -- I would have to go back and look at my emails -- 8 then it jumped to, like, 14 and then they said they would 9 not go through with the loan because my income was not 10 guaranteed; because it was a rental property and they didn't 11 know -- there was just no guarantee. 12 Is the answer to your question yes or no, I 13 do not recall. I do recall what they had told me was I had 14 to take the balance -- it went on for three months and they 15 were just jerking my chain. It was one week they could do 16 and the next week they couldn't do it. I had to pay for the 17 appraisal and then they wouldn't do it. It was just -- it 18 went back and forth and back and forth and back and forth. 19 The last thing I remember, they called me and 20 said it was up to 14% and they didn't want to -- they were 21 on the offense about it because the rental wasn't a 22 guaranteed income. Then I went back to Bank of America and 23 they said, for $100.00 you can take his name off of there. 24 THE MASTER: And a divorce decree? 25 THE WITNESS: Right. 41 1 BY MR. DUFFIE: 2 Q You currently have it at six and a quarter? 3 A Something right around there, yes. 4 Q And you are making payments to Bank of 5 America for the mortgage, correct? 6 A Yes, correct. 7 Q In addition to the bankruptcy payments you 8 are making under 13, correct? 9 A No. Everything is paid off. 10 Q Oh, the 13 is done? 11 A Yes. 12 Q It's been discharged? 13 MS. MALE: No. 14 MR. DUFFIE: Can we go off the record for a 15 second? 16 (Whereupon, a discussion was held off the 17 record.) 18 THE MASTER: Mrs. Kelly, just explain what is 19 happening now with the bankruptcy. 20 THE WITNESS: I made my final payment on the 21 Chapter 13 and Brian Tyler, my bankruptcy attorney, is aware 22 of that and he said, as soon as -- he said it takes 23 approximately 60 days for them to process the discharge 24 papers. He has been tracking my payments all along and the 25 mortgage is paid through August, and the taxes are all paid. 42 1 BY MR. DUFFIE: 2 Q Did you pay all the taxes on the Stone Harbor 3 property? 4 A Yes. 5 Q Do you recall how much that was? 6 A $21,000.00. 7 Q Okay. Let me get back up then to this 8 mortgage. Y ou currently have a mortgage at 6.250. You may 9 or may not h ave had a higher interest rate available to you 10 to refinance yourself under certain conditions, correct? 11 A Correct. 12 Q Why then are you enjoying -- obviously you 13 are enjoying a 6.25 as opposed to 10.34 or whatever it might 14 be, correct? It is a lower payment? 15 A It didn't make any sense to go through all 16 that routine and refinance at a higher rate and have to take 17 the balance of my Chapter 13 and roll it into the principal 18 for when $10 0.00 I could have his name off that mortgage. 19 MS. MALE: You don't need to roll your eyes, 20 Mr. Kelly. If you have something to say you can say that 21 later on in response to your attorney's question. 22 MR. KELLY: You roll your eyes. 23 MS. MALE: I'm not a party here. 24 MR. KELLY: Don't attack me. 25 MR. DUFFIE: Hold on. 43 1 BY MR. DUFFIE: 2 Q Why then did you request and receive mortgage 3 contributions through the Domestic Relations Office -- 4 MS. MALE: I object to that as a matter of 5 law. He has an obligation to support his children and as a 6 matter of law child support includes the mortgage 7 contribution. 8 THE MASTER: We are really getting out of the 9 context of the purpose of this hearing. We are really here 10 to find out about any agreement or underlying understandings 11 that these parties had on his signature on these two deeds. 12 I don't think all of this testimony right now is really 13 relevant to that issue. She said pretty specifically, I 14 take the debt, you sign the deeds, and we are finished, we 15 get divorced. He says, he wanted his name off the mortgage. 16 Then there is an issue here about why his name isn't off the 17 mortgage and she said for $100.00 and a divorce decree -- 18 now I am just reiterating -- for $100.00 and a divorce 19 decree, we can get him removed, but we don't have a decree. 20 Now, he can respond to that in rebuttal, but 21 I think that's the box we are in right now. We are not 22 going off into these other areas. I think that is for a 23 later hearing if we find that there is an asset here. So 24 let's get back on track here. Do you have any other 25 questions about her agreement with him? 44 1 MR. DUFFIE: No. I would just like to 2 recall Mr. Kelly. 3 THE MASTER: In rebuttal? 4 MR. DUFFIE: Yes. 5 THE MASTER: She is your witness. Before we 6 do the rebuttal, did you have any redirect? 7 MS. MALE: Yes, a couple of questions. 8 REDIRECT EXAMINATION 9 BY MS. MALE: 10 Q After you filed your individual Chapter 13 11 plan, you have to get approval from the bankruptcy court to 12 make any changes with respect to the properties? 13 A You mean as far as taking Mike's name off of 14 it? 15 Q No. In terms of refinancing the debt on the 16 York Street property? 17 A I'm sorry. Can you ask me that again? 18 Q Yes. Did you need to get permission from the 19 bankruptcy court to refinance that mortgage on York Street? 20 A No, I did not at that time because it wasn't 21 -- my attempts of refinancing were not going through but 22 when I spoke to Brian Tyler the other day and he gave me my 23 final payoff to the Chapter 13, I said, should I just go 24 ahead and pay this off now or should I just, you know, let 25 it run its course for the next three months and he said, if 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you pay it off now, Mr. DeHart will not have to get involved in your financing. THE MASTER: Let's leave it at that. We don't need anymore testimony on the bankruptcy. Are you finished with this witness? MS. MALE: No. BY MS. MALE: Q As far as the divorce is concerned, why have you not been divorced as yet? A Because Mike will not agree to it. Q Have you approached him about bifurcating the the divorce? A Absolutely. Q Has he refused to do that? A For eight years. Q He is the Plaintiff in these proceedings; is that right? Did he file for the Master or did you? A I don't remember. I just want this over with. It has been dragging on for eight years. I took debt. He signed off. It should be a done deal. For $100.00 I can have his name off the mortgage and we can go on our merry way. This is just so long and drawn out. It has been so expensive. It has just taken it's toll on Mike. It's taken its toll on me. It's taken its toll on our kids. It just, I mean, eight years. It is just ridiculous. 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE MASTER: I agree it's been a long time. Why it's been that way, I can't pass judgment on that right now. Are you finished? MS. MALE: I'm finished now. THE MASTER: Do you want to recall Mr. Kelly? MR. DUFFIE: Just briefly. THE MASTER: Fine. MICHAEL R. KELLY, recalled a witness. DIRECT EXAMINATION BY MR. DUFFIE: Q Mr. Kelly, can you tell us about the $100.00 assumption, what is going on with that? A $100.00 assumption -- if there were conditions on an assumption that I wasn't going to get out of anyway, that is going to take years and years and I was presented with an idea that an assumption will not work. It will not improve my situation. There was more involved to it than that. It would still have been four or five years down the line. I mean, how is that beneficial? Q Now, you heard some testimony from Mrs. Kelly with respect to the agreement that was allegedly made with respect to this property. Can you characterize the agreement -- initially you testified, take me off the mortgage for transfer of title, was there more to it then just take me off the mortgage for transfer of title? 47 1 A I'm sorry. Can you repeat that? 2 Q Mrs. Kelly testified that the agreement was, 3 I'1:1 take all of the debt and you transfer the titles. 4 Earlier you said, well, I'll transfer the titles but the 5 most important thing to you was basically get me off the 6 mor-gage on York Street. Were there other debts involved 7 with your discussions when it came to it? 8 A I wanted off for the reasons that I stated. 9 She never wanted to sell the house or anything along those 10 lines. If there were more debts -- she was going to assume 11 the debts so that she could file it as a Chapter 13 and not 12 sell the properties at that time. I don't know what her 13 true motivations were. My motivation was I needed to move 14 forward. She said she was going to go ahead and do that. 15 Q Okay. You spoke with her about this 16 assumption versus refinancing at some point? 17 A If it was an assumption, it was $100.00. 18 Q Would you have paid $100.00 to take care of 19 this problem? 20 A Oh, my God, yes. 21 Q Would you have paid $100.00 to take care of 22 the problem and get divorced a long time ago? 23 A Years ago to be done with her. 24 THE MASTER: Off the record. 25 (Whereupon, a discussion was held off the 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 record.) THE MASTER: Are we finished for today? MR. DUFFIE: I think we are good for today. THE MASTER: We have adjourned and concluded the testimony of the parties presently with respect to the issue identified. We are going to have the parties and counsel subpoena a representative from Bank of America to ask Bank of America what its requirements are in order to allow Mr. Kelly to be removed from the mortgage obligation. (Whereupon, Court adjourned at 10:37 a.m.) 49 1 2 3 4 CERTIFICATION 5 I hereby certify that the proceedings are 6 contained fully and accurately in the notes taken by me on 7 the abovecause and that this is a correct transcript of 8 same. 9 10 11 12 13 Traci J. Colyer Official Stenographer 14 The foregoing record of the proceedings on 15 thE? hearing of the within matter is hereby approved and 16 directed to be filed. 17 18 `S??ttia g 19 D ate 20 21 22 23 24 25 E. Robert Elicker, II Divorce Master 50 PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by first-class mail addressed as follows: E. Robert Elicker, Esquire Office of the Divorce Master 9 North Hanover Street Carlisle, PA 17013 Divorce Master Mark C. Duffie, Esquire Johnson, Duffle, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff Theresa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID# 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Attorneys for Defendant Date: April 6, 2009 (.:,` i_s ; L3 j,.,_._. .y .... 2003 APR -6 Ail : Z 4 GUP? i_ '_A Py MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW ANN H. KELLY, Defendant NO. 05-3643 CIVIL TERM IN RE: DEFENDANT'S MOTION FOR RULING ON DEEDS ORDER OF COURT AND NOW, this 30th day of May, 2009, upon consideration of Defendant's Motion for Ruling on Deeds, a hearing is scheduled for Thursday, July 23, 2009, at 2:00 p.m., in Courtroom No. 1, Cumberland County Courthouse, Carlisle, Pennsylvania. BY THE COURT, Mark C. Duffle, Esq. P.O. Box 109 Lemoyne, PA 17043-0109 Attorney for Plaintiff ? Theresa Barrett Male, Esq. Andrea Hudak Duffy, Esq. 513 North Second Street Harrisburg, PA 17101-1058 Attorneys for Defendant :rc l 3a/0 y A,, I'L C-4C,p CeS Ma Ck o r' G C *? 1.T:'al QE 8-,V 6 u3Z t}? ? r Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff V. ANN H. KELLY, Defendant Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL TERM CIVIL ACTION - LAW IN DIVORCE MOTION FOR CONTINUANCE AND NOW, comes the Plaintiff, Michael R. Kelly, by and through his counsel, Johnson, Duffie, Stewart & Weidner, in the above referenced matter, and files this Motion for Continuance in which the following is a statement: 1. The following Defendant's Motion for Ruling on deeds, a hearing was scheduled for Thursday, July 23, 2009, at 2:00 p.m. in Courtroom #1. A true and correct copy of the Order scheduling said hearing is attached hereto and incorporated hereto as Exhibit A. 2. The Plaintiff is unavailable during the week of July 20, 2009. 3. Counsel for the parties have agreed that the hearing of July 23, 2009, at 2:00 p.m. be continued and ask the Court to reschedule the hearing at a time when both parties may attend. 4. Judge Oler's chambers has been informed that this Motion for Continuance, with concurrence of counsel, would be forthcoming. WHEREFORE, Plaintiff, Michael R. Kelly, respectfully requests this Honorable Court to grant a continuance of the July 23, 2009, hearing before Judge Oler. JOHNSON, DUFFIlf.OSTEWAX7 , WEIDNER By: DATE: 1141 ? 09 Mark C. Duffle, quire Attorney I.D. No. 06 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Telephone (717) 761-4540 Attorneys for Plaintiff :371987 CERTIFICATE OF SERVICE AND NOW, this 21st day of July, 2009, the undersigned does hereby certify that he did this date serve a copy of the foregoing Motion upon all parties or counsel of record by depositing a copy of the same in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Theresa Barrett Male 513 N. Second Street Harrisburg, PA 17101 JOHNSON, DUF E, ART & WEIDNER By: Mark C. Duffie :371987 Fl (F THE MR TP`"QTAFY 2009 JUL 21 Psi l : 2" j k?V JUL 2120096. MICHAEL R. KELLY, Plaintiff V. ANN H. KELLY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL TERM CIVIL ACTION - LAW IN DIVORCE ORDER AND NOW, this day of July, 2009, upon consideration of the Plaintiffs Motion for Continuance, the hearing scheduled for July 23, 2009, at 2:00 p.m. is continued. The hearing shall be held on GLa,0,4 , 2009, at :.36, o'clock Q, m. in Courtroom No. ?_. By the Court: Distribution: Mar Duffle, Esquire, Market Street, Lemoyne, PA 17043 eresa Barrett Male, squire, 513 N. Second Street, Harrisburg, PA 17101 J ?-aim y OF THE- P r±'' v"AARY 2009 JUL 22 Psi 1: 5 b PE,it. VA NIA Law Office of Theresa Barrett Wale Theresa Barrett Male, Esquire, ID # 46439 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbrndMtbmesquire.com Attorneys for Defendant COURT OF COMMON OF PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE PETITION FOR LEAVE TO WITHDRAW AS COUNSEL 1. Defendant retained Petitioner to represent her in this action, and signed a retention agreement. 2. Petitioner's representation of Defendant has resulted in, and will continue to result in, an unreasonable financial burden to Petitioner. 3. Defendant has failed substantially to fulfill an obligation to Petitioner regarding Petitioner's services and has been given reasonable warning that Petitioner will withdraw unless the obligation is fulled. r ? 4. Professional considerations require termination of the representation. 5. On August 4, 2009, Petitioner contacted Mark C. Duffle, Esquire, counsel for Plaintiff, and asked whether or not he concurred with this motion. Despite repeated requests for confirmation of his position, Mr. Duffle did not respond until August 13, 2009, when he advised that his client does not object to this petition "provided no delays will occur with respect to the 10/26 hearing." 6. This matter was previously assigned to Judge Oler regarding miscellaneous matters. Wherefore, Petitioner respectfully requests the court to grant her Petition to withdraw as counsel for Defendant. Respectfully Submitted, 1??L7t? A - h esa Barrett Male, Esquire Supreme Court # 46439 513 North Second Street Harrisburg, PA 17101 717-233-3220 Petitioner Date: August 13, 2009 2 1% . PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by first-class mail addressed as follows: Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff Ann H. Kelly 439 South York Street Mechanicsburg, PA 17055 Defendant Llgs?c? -I 12-10 he sa Barrett Male, Esquire, ID # 46439 pt ndrea Hudak Duffy, Esquire, 113# 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Attorneys for Defendant Date: August 13, 2009 r " t 4 ?M r Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbrna-tbrnesgu i re. corn Attorneys for Defendant COURT OF COMMON OF PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE ORDER AND NOW, August 0 , 2009, upon consideration of the foregoing petition, the Court ISSUES a Rule on plaintiff and defendant to show cause why the petitioner is not entitled to the relief requested. The Rule is returnable within ten (10) days of service. BY THE COURT: Distribution: ? rk C. Duffie, Esquire, P.O. Box 109, Lemoyne, PA 17043-0109 resa Barrett Male, Esquire, 513 N. Second St., Harrisburg, PA 17101-1058 Ann H. Kelly, 439 S. York Street, Mechanicsburg, PA 17055 t1ES, y eaLL?L 2 OF THE R :" ' O)TARY 2009 AUG 1$ Ph 12: O? 1 P-.. 1,V SYLViAt, `. Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbrnAtbmesauire.corn Petitioner COURT OF COMMON OF PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. NO. 05-3643 Civil Term ANN H. KELLY Defendant CIVIL ACTION - DIVORCE MOTION TO MAKE RULE ABSOLUTE 1. On August 14, 2009, Petitioner filed a petition for leave to withdraw as counsel for defendant in this proceeding. 2. On August 17, 2009, this Court issued a Rule, returnable ten (10) days from the date of service, which Petitioner served on plaintiff and defendant on August 19, 2009. 3. The return date has passed without answer by either plaintiff or defendant. Wherefore, Petitioner requests the Court to make the rule absolute and to grant her petition for leave to withdraw as counsel for Defendant in this action. Law Office of Theresa Barrett Male By: &'IZ Th resa Barrett Male, Esquire, ID # 46439 Andrea Hudak Duffy, Esquire, ID # 60910 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Petitioner Date: September Z. , 2009 2 PROOF OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the persons and in the manner indicated below which service satisfies the requirements of Pa. R.C.P. 440: Service by first-class mail addressed as follows: Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street, P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff Ann H. Kelly 439 South York Street Mechanicsburg, PA 17055 Defendant Theresa Barrett Male, Esquire, ID # 46439 513 North Second Street Harrisburg, Pennsylvania 17101 (717) 233-3220 Petitioner Date: September Z., , 2009 ,1 THERESA BARRETT MALE ........ -_. _.......... _._..._ - -......... _._............ ---_._.._-_---- - COUNSELOR AT LAW Curtis R. Long, Prothonotary Office of the Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 Re: Kelly v. Kelly (# M3643 Civil Termy.- Dear Mr. Long: ANDREA HUDAK DUFFY, ESQUIRE SUSAN C. APPLEBY, PARALEGAL sca4fbmesquire. com JONATHAN J. MALE, LEGAL ASSISTANT September 2, 2009 Enclosed are the original and one (1) copy of the motion to make rule absolute and three (3) additional copies of the order. Please: 1. File the original. 2. Route to Judge Oler for disposition. 3. Return the time-stamped copy of the motion to counsel in the enclosed envelope. 4. Return one (1) certified copy of the order to counsel and defendant in the enclosed envelopes. Thank you for your assistance. Please call me if you have any questions. SCA/ Enclosures Cc: Mark C. Duffie, Esquire (w/enc) Ann H. Kelly (w/enc) Sincerely, Susan C. Appleby, Paralegal 513 NORTH SECOND STREET, HARRISBURG, PENNSYLVANIA 17101-1058 TEL: 717-233-3220 • FAX: 717-233-6862 • WWW.TBMESQUIRE.COM 1 .- Law Office of Theresa Barrett Male Theresa Barrett Male, Esquire, ID # 46439 513 North Second Street Harrisburg, PA 17101-1058 (717) 233-3220 tbm tbmesguire.com Petitioner COURT OF COMMON OF PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MICHAEL R. KELLY Plaintiff V. ANN H. KELLY Defendant NO. 05-3643 Civil Term CIVIL ACTION - DIVORCE ORDER AND NOW, September , 2009, the Court GRANTS Theresa Barrett Male, Esquire, leave to withdraw as counsel for Defendant in this proceeding. BY THE COURT: ; %j J esley Oler, Jr., udge Wbution: ' L/M .,ark C. Duffle, Esquire, P.O. Box 109, Lemoyne, PA 17043-0109 eBarrett Male, Esquire, 513 N. Second St., Harrisburg, PA 17101-1058 n H. Kelly, 439 S. York Street, Mechanicsburg, PA 17055 e pits rr?c? 4/$/0p R M-OHFI 1E OF THE PMMNOTMY 2W SEP -a IN 11: 39 CUMBE;;L •4i? COUNTY PBOSYLVANA V4 in the Court of Common Pleas of n VS. Cumberland County, Pennsylvania No. Civil. M -C= To Prothonotary 19 Attorney for Plaintiff !? ° 3 v 7 _I 7 - c,-7 % 'SS-%7 «- No Term, 19 ?ONYMY OF 1K 2M OCT ZA AM 9: 39 PKn I? COUNN Filed vs. PRAECIPE 19 Atty. MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA v CIVIL ACTION - LAW ANN H. KELLY, Defendant 05-3643 CIVIL TERM IN RE: DEFENDANT'S MOTION FOR RULING ON DEEDS ORDER OF COURT AND NOW, this 26th day of October, 2009, upon consideration of Defendant's Motion for Ruling on Deeds, and following a conference in chambers with counsel for the Plaintiff in the person of Mark C. Duffie, Esquire, and counsel for Defendant in the person of Emily Hoffman, Esquire, the hearing in this matter is rescheduled for Thursday, November 12, 2009, at 1:30 p.m., in Courtroom Number 1, Cumberland County Courthouse, Carlisle, Pennsylvania. The purpose of this continuance is to facilitate the familiarity of Defendant's counsel with the case, and to facilitate the possibility of a settlement in the matter. By the Court, Mark C. Duffie, Esquire P.O. Box 109 Lemoyne, PA 17043-0109 For Plaintiff Emily Hoffman, Esquire 105 N. Front Street P.O. Box 11475 Harrisburg, PA 17108 :mae // t £s rna 0,;z 1,/& rrYA OF THE PROTHONOTARY 2009 OCT 26 Phi 2: 29 P NNS`(LV.`?.i 'A MICHAEL R. KELLY, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW ANN H. KELLY, Defendant 05-3643 CIVIL TERM ORDER OF COURT AND NOW, this 12th day of November, 2009, upon consideration of Defendant's Motion for Ruling on Deeds, and following a hearing, the record is declared closed and the matter is taken under advisement. Pursuant to a request of counsel, briefs shall be due on or before Friday, December 4, 2009. It is noted that neither counsel has requested that the notes of testimony from today's proceeding be transcribed and filed. Mark C. Duffie, Esquire P.O. Box 109 Lemoyne, PA 17043-0109 For the Plaintiff Emily Hoffman, Esquire 105 N. Front Street P.O. Box 11475 Harrisburg, PA 17108 For the Defendant ??; ?-?- 4 // a2 3--0? 4-7 pcb By the Court, FILED-:YFICE OF THE PROTHONOTARY 2009 NOV 23 QM 11: 5 5 4.1 1? Lf .. V PENNSYLVANIA Johnson, Duffle, Stewart & Weidner By: Mark C. Duffle I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 MICHAEL R. KELLY, Plaintiff/Petitioner V. ANN H. KELLY, Defendant/Respondent. Attorneys for Plaintiff/Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 05-3643 CIVIL ACTION - LAW IN DIVORCE PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR RULING ON DEEDS AND SUPPORTING BRIEF 1-4. Admitted. 5. Admitted in part; denied in part. It is admitted that the Master held hearings at which the parties and a representative from the Bank of America testified. It is denied in that the transcript attached to Defendant's Motion does not include the transcript from the second hearing wherein the representative from the Bank of America testified. A true and correct copy of the transcript from the hearing dated January 7, 2009 is attached hereto and incorporated herein as Exhibit A. 6-9. Admitted. 10. Denied. Wife and husband separated on December 26, 2001. 11-32. Admitted. 33. Denied. 34. Denied. Husband has pleaded before the Divorce Master that a unilateral or mutual mistake took place in conjunction with the execution of the deeds for the Mechanicsburg and Stone Harbor properties. 35. Denied. The averments set forth in Paragraph 35 are conclusions of law to which no responsive pleading is required. To the extent one is required the same is denied. 36. Admitted. 37. Denied. The averments set forth in Paragraph 37 are conclusions of law to which no responsive pleading is required. To the extent one is required the same is denied. WHEREFORE, the Plaintiff requests this Honorable Court to find that the Mechanicsburg and Stone Harbor properties are marital property subject to equitable distribution and direct the matter be referred back to the Office of the Divorce Master to effect such distribution. BRIEF IN SUPPORT OF PLAINTIFF'S POSITION WITH RESPECT TO MARITAL PROPERnWQUITABLE DISTRIBUTION ISSUE • WHETHER THE PARCELS OF REAL PROPERTY LOCATED IN MECHANICSBURG AND STONE HARBOR ARE MARITAL PROPERTY SUBJECT TO EQUITABLE DISTRIBUTION UNDER THE DIVORCE CODE? • Suggested Answer: Yes. The Divorce Code, Section 3501 sets forth the general rule with respect to "marital property." a. General Rule. - As used in this chapter, "marital property' means all property acquired by either party during the marriage and the increase in value of any non-marital property acquired pursuant to Paragraphs (1) and (3) as measured and determined under subsection (a.1). However, marital property does not include: (1) Property acquired prior to marriage or property acquired in exchange for property acquired prior to the marriage. (2) Property excluded by valid agreement of the parties entered into before, during or after the marriage. (3) Property acquired by gift, except between spouses, bequest, devise or descent or property acquired in exchange for such property. (a.1) Measuring and determining the increase and value of non-marital property. - The increase and value of any non-marital property acquired pursuant to subsection (a)(1) and (3) shall be measured from the date of marriage or later acquisition date to either the date of final separation or the date as close to the hearing on equitable distribution as possible, whichever date results in a lesser increase. (b) Presumption. All real or personal property acquired by either party during a marriage is presumed to be marital property whether title is held individually or by the parties in some form of co-ownership such as joint tenancy, tenancy in common or tenancy by the entirety. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a). In the case at hand, Mr. Kelly executed two Deeds from he and Mrs. Kelly to Mrs. Kelly. The two properties at issue are a Stone Harbor beach home and the marital home located on South York Street in Mechanicsburg. Mrs. Kelly acquired the York Street property in Mechanicsburg on May 9, 1995. On April 9, 1996, prior to marriage, the South York Street property was transferred into the names of Mr. and Mrs. Kelly. The parties were married on August 31, 1996 and separated on December 26, 2001. On January 12, 2003, Mr. and Mrs. Kelly placed the South York Street property in Mrs. Kelly's name alone. Mrs. Kelly inherited the beach house, located at 11306 Second Avenue, Stone Harbor, New Jersey, prior to marriage. On March 10, 1999, while married, Mrs. Kelly transferred the property into both her and her husband's name. On January 12, 2003, the Stone Harbor property was returned to Mrs. Kelly's name alone, via deed. While there are two different properties, the facts and circumstances surrounding the titling and re-titling of these properties are one in the same. The parties separated on or about December 26, 2001. Mrs. Kelly was having a problem paying her bills and in fact filed bankruptcy on two occasions. Her most recent filing was a Chapter 13 in December of 2003. Mr. Kelly was attempting to avoid credit problems and was desirous of being removed from the mortgage on the marital home. Due to Mrs. Kelly's payment delinquencies, Mr. Kelly's credit was deteriorating. In order to re-establish his credit, he wanted to purchase a new home while removing his name from the marital home's mortgage. He was not able to qualify for another mortgage unless he was removed from the mortgage encumbering the marital home. He approached Mrs. Kelly on a number of occasions asking her to refinance the marital home in her name only, which she repeatedly refused. Finally, Mrs. Kelly agreed to remove him from the mortgage, but he would have to execute a Deed placing the properties in her name only. He in fact executed and delivered the Deeds. However, Mrs. Kelly failed to refinance the marital home. Mr. Kelly remains a mortgagor on the marital home. It was not his intent to relinquish his marital rights to the properties. Rather, his intent was to re-establish his credit, purchase a home of his own, and allow Mrs. Kelly to refinance the properties to catch up on some financial obligations. Mrs. Kelly did not refinance the property. She sought and received additional support for the mortgage on the marital residence as provided under Pa.R.C.P.1910.16-6(e). Mrs. Kelly continues to receive this allocation of additional expenses under the newly increased Order in the amount of $527.14 per month. Judicial estoppel is a doctrine that prohibits a party from taking a position in a subsequent judicial proceeding that is inconsistent with the party's position in a prior judicial proceeding. Widener University v. Estate of Boetlner, 726 A.2d 1059, 1062 (Pa. Super 1999). Therefore, she is estopped from asserting that the real estate is nonmarital in equitable distribution after seeking and receiving additional monthly support for a mortgage contribution since August 7, 2002. Mrs. Kelly cannot claim it as a marital asset to be preserved through support court and deny its marital nature before the Divorce Master in equitable distribution. A very persuasive case addressing this issue was decided in Mercer County. In the case of Fox v. Fox, 22 Pa.D.&C.3d 1, Judge Fomelli addressed this situation. In the Fox case, the Court made the following findings of fact: • Mr. Fox conveyed a parcel of real estate to Mrs. Fox during their marriage. • The date prior to executing the Deed, both Mr. and Mrs. Fox went to an attorney to have the Deed prepared, closed their existing joint bank accounts, and each opened their own separate checking accounts with the understanding that each was to pay their own bills out of their individual accounts. • Mr. Fox requested that the real estate be put in his wife's name solely even after having been told by the attorney that if he signed the Deed he would lose all right and claim to the real estate if there was a divorce and would have no further interest in the real estate. Mr. Fox responded that was fine as long as he received the truck and it was their wishes that the house be her property and the truck be his property. Mr. Fox also stated that the truck was essentially the same value as the house. • At the time the Deed was prepared, the parties agreed that their respective responsibilities were from that time forward as to the payment of bills for the house and the truck, viz that Mrs. Fox was to pay the bills for the house and Mr. Fox was to pay the bills for the track. • After the real estate was deeded to Mrs. Fox, she paid and has continued to pay to date all expenses, upkeep, utilities, taxes, insurance and mortgage payments on the real estate. • Approximately eight months later, the parties separated. In the Fox case, Mrs. Fox's position was that the real estate should be excluded under the valid agreement exception to 23 Pa.C.S. § 3501(a)(2 ). The legislature, in Section 3501 of the Divorce Code, has created a rebuttable presumption of marital property. The characterization of the burden of overcoming that presumption rests on the party who is asserting an exception thereunder. 23 P.S. §3501(b); Fox v. Fox, 22 Pa.D.&C.3d 6. Therefore, in our case, the statutory presumption would shift the burden on Mrs. Kelly to show that the increase in value of the real estate should be excluded from marital property by "valid agreement of the parties entered into [before], during, [or after] the marriage." In Fox, the Court required proof rebutting the presumption to be established by clear and convincing evidence and not merely proof by a preponderance of the evidence. See, Sutliff v. Sutliff, 522 A.2d 1144, 361 Pa. Super 504. Judge Fomelli in the Fox case reasoned that the requirement of clear and convincing evidence to overcome the presumption of marital property is consistent with the statutory scheme of the Divorce Code. Fox. at 8. The legislature's intention by the Code is to effect economic justice between the parties and ensure fair and just determination and settlement of their property. 23 P.S. 102(a)(6). The presumption that the increase in value of the property is marital and therefore subject to the equitable distribution schemes of the Code reflects the legislative intent and it should not be defeated by less than clear and convincing evidence of an exception. Id. "This burden of proof also recognizes the realities of the marriage relationship and helps insure that the confidence and trust ordinarily arising from the marital relationship has not been abused. The burden of proving one of the seven exceptions to marital property should require a clear showing of the nature and circumstances of the transaction." Dzierski Estate, 449 Pa. 285; 296 A.2d 716, 718 (1972). Further, the Fox Court reasoned that the burden of proof by clear and convincing evidence is appropriate because title to property may be placed or transferred into the name of only one spouse for a number of reasons unrelated to an intent or desire to exclude it from marital property. Id. at 9. The Court went on to further recognize that property may be titled in one name for a number of reasons such as tax considerations, estate planning, or for business reasons, with no intent to exclude it from marital property. Id Therefore, Judge Fornelli indicated that the Plaintiff, even in light of the executed Deed, had to establish by clear and convincing evidence that the real estate was excluded by valid agreement of the parties. Id In the Fox case, Mrs. Fox met her burden. It was evident that the parties reached an Agreement before the attorney with respect to the house and the truck as well as separate bank accounts. Mrs. Fox was to be responsible for all the bills and expenses associated with ownership of the home and Mr. Fox was to be responsible for the bills and expenses associated with ownership of the truck. After having received the advice of the attorney, it was clear by signing the Deed that Mr. Fox intended to extinguish all of his interest in the property. In our case, the motivation behind executing the Deeds is clear. Mr. Kelly was desirous of purchasing his own home and clearing up his credit. The signing of the Deeds was not part of a general agreement for dividing property, but simply done to allow Mrs. Kelly the opportunity to refinance the mortgage using the equity in the properties to clear up some bills and allow Mr. Kelly to repair his credit. Further, Mrs. Kelly's position denying the characterization of the real estate as marital property fails under the Statute of Frauds. Even if there was an agreement between the parties with respect to the real estate and Mr. Kelly's marital interests, the agreement would fail under the Statute of Frauds. Conveyances of freehold interests in land not put in writing, and signed by the parties are of no effect other than a lease or estate at will. 33 P.S. §1. Even if this Court were to believe Mrs. Kelly's attempts show an agreement between the parties, Mrs. Kelly never followed through on any part of what she was to have accomplished (i.e., refinancing the home and removing Mr. Kelly from the marital mortgage). In fact, Mrs. Kelly went even further, in receiving a mortgage contribution as an addition to her child support order from Mr. Kelly, further evidencing the intent of both parties that these property were to remain marital. Mrs. Kelly is now estopped from asserting otherwise. Respectfully submitted, JOHNSON, DUFFIE, STEWART & WEIDNER Duffie :380993 CERTIFICATE OF SERVICE AND NOW, this 4th day of December, 2009, the undersigned does hereby certify that she did this date serve a copy of the foregoing Plaintiff's Response to Defendant's Motion for Ruling on Deeds and Supporting Brief upon Defendant's counsel by causing same to be deposited in the United States Mail, first class postage prepaid, at Carlisle, Pennsylvania, addressed as follows: Emily Long Hoffman, Esquire 105 N. Front Street PO Box 11475 Harrisburg, PA 17108-1475 JOHNSON, DUFFIE, STEWART & WEIDNER By: 4- // :71`. L. Kitner MICHAEL R. KELLY IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW VS. NO. 05 - 3643 CIVIL ANN H. KELLY, Defendant IN DIVORCE TRANSCRIPT OF PROCEEDINGS Proceedings held before E. Robert Elicker, II, Divorce Master 9 North Hanover Street, Carlisle, PA 17013 proceedings held on January 7, 2009 commencing at 1:30 p.m. APPEARANCES: Mark C. Duffie Attorney for Plaintiff Theresa Barrett Male Attorney for Defendant 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FOR THE PLAINTIFF JACQUELINE TOBOLSKI FOR THE DEFENDANT REBUTTAL INDEX TO WITNESSES DIRECT CROSS REDIRECT RECROSS 3 14 21 22 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FOR THE PLAINTIFF Ex. No. 2 FOR THE DEFENDANT Ex. No. 1 Ex. No. 2 INDEX TO EXHIBITS MARKED ADMITTED 11 - - 10 - - 10 - - 2 1 THE MASTER: We are going to have you sworn 2 as a witness. 3 (Telephonic testimony.) 4 Whereupon, JACQUELINE TOBOLSKI, having been 5 duly sworn, testified as follows: 6 DIRECT EXAMINATION 7 BY MR. DUFFIE: 8 Q Ma'am, can you pronounce your last name for 9 me one more time? 10 A Tobolski. You can call me Jackie. 11 Q Okay. Thank you. Jackie, good afternoon. 12 We are going to ask you a couple of questions with respect 13 to the file that we received with respect to Mr. and Mrs. 14 Kelly and their loan with Bank of America, and do you have a 15 copy of that file in front of you? 16 A We have documents that were produced in 17 request, yes. 18 Q The documents that were produced in request, 19 is that the entire file that you have with respect to these 20 parties? 21 A Yes. 22 Q Okay. You have received and reviewed the 23 transcript from the prior Master's hearing dated August 12, 24 2008? 25 A Briefly, yes. 3 1 Q Can I direct your attention to Page 27 of 2 that transcript, do you have that handy? 3 A Yes. 4 Q Can you just briefly describe -- we were 5 referring a lot in the transcript about a loan assumption, 6 can you describe what is involved with a loan assumption 7 from your standpoint? 8 A A loan assumption would be where a borrower 9 would be approached by an interested -- for purposes of this 10 discussion, purchaser who was not able to potentially 11 qualify or would need to qualify in some means to take over 12 payments and possession of a property. 13 Q Okay. With respect to a marital situation, 14 if one spouse was going to assume a loan that was in the 15 name of both spouses prior to that, would those same 16 standards still apply? 17 A Yes. 18 Q Okay. Currently if you received a phone 19 call from one spouse looking to assume a loan, a loan of 20 both spouses, what are your current requirements with 21 respect to that assumption? 22 A We would need a written request from them 23 with regards to the request for the assumption and then some 24 explanation with regards to the release of the other party. 25 Q That would initiate the process, correct? 4 1 A Right. 2 Q Okay. Once you received that written request 3 and explanation, what would be step two in approving such an 4 assumption? 5 A Well, step two would be looking at the 6 current disposition of the account and its current standing 7 and then a response back regarding the requirements that 8 would be necessary or any documentation that would be 9 necessary to complete the assumption. 10 Q Now, let's assume that you look at the 11 disposition of the account, and I assume when you say 12 disposition, you mean the payment history and that kind of 13 thing, correct? 14 A Part of it, yes. 15 Q So when you look at the account and it looks 16 like it is a good account, you know, payment history is 17 solid, what are some of the requirements or standards that 18 you would look at beyond that? 19 A Well, beyond that we would look at the 20 disposition of the account given if it is current or if 21 there is any other pending legal activity on the account, 22 and once we do that, then we would respond accordingly 23 depending on the disposition. If there is no legal pending 24 activity, we would respond with the required information 25 that is necessary to process the assumption. If there is 5 1 any kind of pending activity, then it may prohibit, in those 2 cases, the processing of the assumption. 3 Q And when you say pending activity, give me an 4 example of that? 5 A Possibly bankruptcy. 6 Q So you're indicating that a bankruptcy may -- 7 are you indicating that a bankruptcy may or will prohibit 8 further processing of the assumption? 9 A Will prohibit. 10 Q Okay. What about delinquencies, would that 11 prohibit? 12 A Actually it shouldn't in the sense that the 13 person that is assuming it would be the person that would 14 have to qualify to take over that responsibility. 15 Q Okay. So then once you get to the point 16 where you are beyond the initial evaluation, then you are 17 looking at credit; is that correct? 18 A Yes. 19 Q So can you generally just, you know, if -- we 20 received some conflicting reports or, I guess, criteria with 21 respect to assumption. Can you summarize just for us if 22 some one wants to assume or make a request to assume a loan, 23 one spouse from both spouses, what would be the criteria 24 generally? 25 A I don't know that I understand the question 6 1 as it relates to criteria. 2 Q Okay. Well, I think we have been through a 3 couple of them. I just want to see if we have missed any. 4 You indicated that, for example, the biggest one that you 5 have indicated is if there was a bankruptcy. So I guess, 6 one of the criteria would be then there must be no current 7 bankruptcy. I mean, are there any other standard criteria 8 that you have with respect to evaluating assumption request? 9 A I'm not sure I understand the question. 10 Q Okay. For example, we received some 11 indications or letters and e-mails from Bank of America or 12 some of it's related entities, indicating that an assumption 13 would require a payment history to have 12 on time monthly 14 payments, it must be owned or occupied, there must be no 15 current bankruptcy, there must be, you know, a proper debt 16 to income ratio, must qualify for credit. Am I indicating 17 things that you would review when you are processing an 18 assumption? 19 A Yes. 20 Q What about the cost of an assumption? If 21 someone was to call you today and they qualified under these 22 criteria, what is the cost involved with this? 23 A With regards to the expense or the fee 24 associated with the assumption -- 25 Q Yeah. What would be my out-of-pocket here if 7 1 I needed to do an assumption? 2 A Typically it is a flat fee. And off the top 3 of my head, I can't attest to what the cost would be for the 4 qualifying assumption versus an un-qualifying assumption. 5 Q Are there different fees? Let me ask you 6 this question. We had received an e-mail from it looks like 7 a related entity. It is called Hillsboro Mortgage 8 Fulfillment, Consumer Real Estate Hillsboro Mortgage 9 Fulfillment, an individual by the name of Susie Clayton. In 10 her letter -- it's an e-mail -- she indicates that there is 11 a $250.00 application fee and if approved, which would be 12 your qualified assumption, there is a closing fee of six 13 fifty. Does that sound like it is accurate? 14 A Is there a document that you are referring 15 to? 16 Q It's in an e-mail. For clarification, am I 17 to assume that this is the e-mail that's from Mrs. Kelly 18 dated August 14, 2008, at the very top of the exhibit? 19 A That's correct. 20 Q Thank you. So, I guess, then my question is 21 what is set forth in that e-mail from Susie Clayton, is that 22 an accurate representation of the requirements for an 23 assumption of a loan? 24 A Yes. 25 Q Now, let me direct your attention to another 8 1 letter that came under that same correspondence from 2 attorney Male, a letter dated August 5, 2008, and that looks 3 like it is just generically signed as Bank of America 4 Assumption Department. Do you have a copy of that before 5 you? 6 A Just for clarification, again, this is part 7 of the December 8 package that was sent? 8 Q Correct. 9 A And the letter is dated August 5, 2008, and 10 it is signed Bank of America Assumption Department? 11 Q Yes. 12 A Yes, I do have that in front of me. 13 Q I'm looking at the criteria set forth in this 14 letter versus the one that we just reviewed in the e-mail. 15 Why is there such differences or is this one dated August 16 5th that preliminary criteria you look at before you get 17 into the ones that I outlined in the'e-mail? 18 A This would be the preliminary criteria upon 19 first contact inquiring of the assumption. 20 Q Okay. So that is what you refer to when you 21 said written request and -- so that's step one; that's the 22 general information you referred to initially? Then once 23 you get by that step, then you look at the criteria set 24 forth in the e-mail of Susie Clayton, correct? 25 A Yes. 9 1 Q Okay. 2 THE MASTER: Do you want to mark those for 3 the record? 4 (Whereupon, Defendant's Exhibit No. 1 and 2 5 were marked for identification.) 6 (Whereupon, a discussion was held off the 7 record.) 8 BY MR. DUFFIE: 9 Q Jackie, I want to direct your attention, 10 again, to Defendant's Exhibit No. 2, there is a sentence in 11 there that indicates that an assumption does not release any 12 of the original mortgagors from liability under the terms of 13 the original note; is that a correct reflection of your 14 policy? 15 A With regards to the language and context in 16 which this discussion is, yes. 17 Q Okay. So then, in that case, Mr. Kelly, who 18 is the party presumably that was going to be released under 19 the assumption, would still be liable under the note, 20 correct? 21 A Yes. 22 Q Let me direct your attention now to the file 23 that you sent us. Have you had the chance to review that 24 file in detail? 25 A No, but very briefly though. 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. DUFFIE: Can we go off the report for a moment? THE MASTER: Off the record. (Whereupon, a discussion was held off the record.) THE MASTER: You will stipulate that that packet, which is Plaintiff's Exhibit No. 2 -- tell us what your stipulation is. MR. DUFFIE: I would ask that we stipulate that there is nothing in Plaintiff's 2, the file produced pursuant to the subpoena, relating to a request for an assumption of mortgage. THE MASTER: And your response, Ms. Male? MS. MALE: I stipulate to that so long as we were not including in that stipulation any of the information in here related to the bankruptcy petition because there are certain things in here that I think really bear on this assumption issue. THE MASTER: All right. We will just leave it that way. We will just leave the stipulation as stated by counsel so we can move on with this witness. MR. DUFFIE: I have nothing further at this time. (Whereupon, Plaintiff's Exhibit No. 2 was marked for identification.) 11 1 THE MASTER: I was specifically interested in 2 how she would respond -- Jackie would respond to the 3 testimony on Page 27 of the last hearing. So if you want to 4 take that up or do you want me to take that up. It doesn't 5 matter. You represent the husband and maybe you want to ask 6 the witness if she has read this testimony. 7 BY MR. DUFFIE: 8 Q Jackie, do you have the Page 27 of the 9 transcript before you? 10 A Yes. 11 Q In there, beginning on Line 6, Mrs. Kelly 12 indicates (reading) that my mortgage company, Bank of 13 America, told me that for $100.00 they would do an 14 assumption and they would remove Mike's name and Mike's 15 social security number off the loan. Is that an accurate 16 statement? To your knowledge, is that an accurate 17 statement? 18 MS. MALE: I have an objection to the form of 19 the question. 20 BY MR. DUFFIE: 21 Q Is it possible -- 22 MS. MALE: I mean, because -- let me finish 23 my objection. 24 THE MASTER: Let's put the objection on 25 because it seems to me it should be a simple question. The 12 1 record states, which he reads, is that an accurate statement 2 in the record that she has made? Go ahead and place your 3 objection on the record. 4 MS. MALE: Mrs. Kelly didn't speak to this 5 person. 6 MS. KELLY: Can I please say something? 7 MS. MALE: No, you cannot. 8 THE MASTER: It says my mortgage company, 9 Bank of America. This is Bank of America on the telephone 10 right now. This says (reading) my mortgage company, Bank of 11 America, told me for $100.00 they would do an assumption and 12 they would remove Mike's name. Now, the question is: Is 13 that an accurate statement? Jackie, did you hear that, what 14 I said? 15 THE WITNESS: I did. 16 THE MASTER: Now, is that an accurate 17 statement, the statement is in the record? 18 THE WITNESS: I don't know. 19 THE MASTER: Pardon me. 20 THE WITNESS: I don't know. 21 BY THE MASTER: 22 Q You don't know what? 23 A I don't know if it is an accurate statement. 24 It is the testimony that was recorded at the time of the 25 transcript. 13 1 Q No. I am asking you, if we send you $100.00, 2 can we get Mr. Kell y's name off the mortgage? That's what 3 that testimony is from Mrs. Kelly. 4 MS. MALE: That's a different question than 5 asking if this is accurate. 6 THE MASTER: All right. 7 MR. DUFFIE: Let's rephrase it. 8 THE MASTER: Okay. Counsel rephrase the 9 question. 10 BY MR. DUFFIE: 11 Q If we sent you $100.00, could you remove 12 Mike's name and social security number from the loan? 13 A No. 14 THE MASTER: What would you need to do that, 15 to remove his name from the loan? 16 THE WITNESS: We would need to follow the 17 processes outlined in Exhibit No. 1. 18 THE MASTER: Which we have already discussed, 19 correct? 20 THE WITNESS: Yes. 21 MR. DUFFIE: I have nothing further. 22 THE MASTER: Ms. Male, cross-examine. 23 CROSS EXAMINATION 24 BY MS. MALE: 25 Q Ms. Toboski, my name is Theresa Male. I 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 represent Hilary Kelly who is one of mortgagors here, can you tell me what your title or position is with Bank of America, please? A I am assistant vice-president. Q And is that in the Assumption Department or some other area? A It is in an area called legal analyst. Q Okay. Have you ever had any communications personally with Mrs. Kelly? A No. Q How is it that you are the one handling the questions as opposed to Jackie Panaro, the manager from the Assumption Department? A Again, by virtue of my title, I am a legal analyst. I work on escalated and defensive matters involving Bank of America. I work with our outside counsel and our inhouse counsel. Q So in the normal course of your duties you are not reviewing assumption requests; is that right? A Yes. Q If Mrs. Kelly spoke with someone on the phone regarding an assumption, would you have, in your file, any confirmation of that? A Yes. Q Can you tell me where that confirmation is? 15 1 A Any conversations would be indicated on notes 2 in the consolidated notes log. 3 Q What is the consolidated notes log? 4 A It is a reference or just something that is 5 simply stated -- it's consolidated comments that are typed 6 or keyed in on accounts, and any telephonic or written 7 inquiries would be logged in or noted in that area by 8 various departments, such as the Assumption Department. 9 Q And is that -- this consolidated notes log, 10 is that part of this packet that you produced for Mr. 11 Duffie? 12 A Yes. 13 Q Can you tell me what the consolidated notes 14 log indicates? 15 A It would be in date order and it would be the 16 oldest information at the bottom of the page and the most 17 recent information at the top of the page, and the dates 18 would be on the left-hand side. At the top of the page, it 19 would say just that, the consolidated notes log. 20 Q Do you know how far back in this packet that 21 might be? 22 A I don't. 23 Q All right. While I'm trying to find that, 24 let me ask you this. You don't have any information in the 25 file that contradicts what Mrs. Kelly was told by one of 16 1 your agents; that is, there was $100.00 fee for the 2 assumption; is that right? 3 A Exhibit 1 references the fees associated and 4 the process with regards to the assumption. 5 Q And that is as of 2008, correct? 6 A Yes. 7 Q So you don't have any information regarding 8 what those fees and the process would have been in 2003 as 9 an example? 10 A Correct. 11 Q or 2004 or 2005 or any year prior to 2008; is 12 that right? 13 A Yes. 14 Q Okay. So it's very possible that back in 15 2003 or 2004 the fee was $100.00; is that right? 16 A I don't know. 17 Q Okay. But you don't know what that fee is 18 as of today, right? 19 A The fee is as indicated in Exhibit No. 1. 20 Q But I mean in terms of what the fee structure 21 was in prior years, you don't know what that would be? 22 A No. 23 Q Okay. If a Bank of America customer back in 24 2003 or 2004 had contact with the bank, either locally or in 25 some other area, regarding assumption of mortgage, would all 17 1 of those contacts be part of this consolidated notes log? 2 A If it was with a branch, no. 3 Q So any contacts she had with her branch would 4 not be part of the consolidated notes log; is that correct? 5 A Yes. 6 Q The only notes in this consolidated notes log 7 would be those that would be directed at the Assumption 8 Department itself, up in New York? 9 A It would be directed with regards to the 10 Servicing Department through New York, correct. 11 Q So other than what's in what you produced for 12 Mr. Duffie, you have no way of knowing or recreating any of 13 the communications that Mrs. Kelly had with her local branch 14 with respect to assuming the mortgage between 2003 and 2008; 15 is that right?? 16 A Right. 17 Q And as things stand today, in order for Mrs. 18 Kelly to be in a position to assume the mortgage, what is 19 contained in Susie Clayton's e-mail, which has been marked 20 D-1, is the process that has to take place; is that correct? 21 A Yes. 22 Q Okay. And that includes a final decree of 23 divorce or property settlement agreement; is that right? 24 A Yes. 25 Q And to whom is the -- who gets this 18 1 application physically? In other words, if she was going to 2 fill out an application to do this assumption, where does 3 she go to get the application and how is that handled? 4 A She would be able to contact the 1-800 5 customer service number and they would be able to connect 6 her with the right parties to do that. 7 Q Are those parties in your Assumption 8 Department? 9 A Yes. 10 Q What is the connection between your 11 Assumption Department and the Consumer Real Estate Hillsboro 12 Mortgage Fulfillment office that generated D-1? 13 A They are part of our Assumption Department. 14 Q Okay. In response to Mr. Duffie's -- one of 15 his questions, you indicated that Mr. Kelly would still be 16 liable under the note if the mortgage is assumed; is that 17 right? 18 A If the mortgage is assumed and the person 19 remaining on the loan does not go through a formal 20 qualifying process, then, yes, Mr. Kelly would still be 21 liable. 22 Q All right. Then tell me the difference 23 between a qualifying process and a non-qualifying process? 24 A Distinctively, if there was an assumption 25 done and the party assuming the loan and remaining on the 19 1 loan did not -- that party would have to qualify to take on 2 that financial responsibility in order for the other party 3 to be released from any financial responsibility or 4 obligation. 5 Q Okay. And what is the non-qualifying? 6 A Non-qualifying would be if there was a name 7 change, if there was someone who was on the loan with a 8 married name and would be changing their name back to their 9 maiden name or in certain incidences, in the event of a 10 death. 11 Q Well, if you could look at D-2, this letter 12 that was generated from Bank of America, August 5th, this 13 says that if Mrs. Kelly wants to remove her husband from the 14 loan, she would need to send a request with a final divorce 15 decree; is that what you are referring to as a 16 non-qualifying assumption, that his name would be taken off 17 the mortgage liability but not off the note? 18 A Correct; that would be considered 19 non-qualifying. 20 Q The other way is the qualifying which is 21 what's referenced in D-1, correct? 22 A Yes. 23 Q D-1 refers to qualifying and D-2 is the 24 non-qualifying? 25 A Yes. 20 1 Q If Mrs. Kelly qualifies under the steps set 2 out in D-1 then Mr. Kelly would be relieved from all 3 responsibility from the note; is that right?? 4 A Yes. 5 Q If she doesn't qualify under the steps in 6 D-1, she can still have a non-qualifying assumption in which 7 his name is removed from the mortgage, correct? 8 A Once the bankruptcy is dismissed, yes. 9 Q Now, what would be the fee associated with 10 the non-qualifying assumption that is referenced in D-2? 11 A I don't know. 12 Q Okay. And I have just one other question, 13 ma'am, just as far as the Page 27 of the transcript that Mr. 14 Duffie had asked you about earlier, you don't have any 15 independent information regarding this $100.00 fee or 16 anything else regarding that assumption that Mrs. Kelly 17 would have received from someone other than your Assumption 18 Department; is that right? 19 A I don't know. 20 MS. MALE: I have no other questions. Thank 21 you. 22 THE MASTER: Mr. Duffie. 23 MR. DUFFIE: Just one or two follow-ups, 24 quickly. 25 REDIRECT EXAMINATION 21 1 BY MR. DUFFIE: 2 Q Jackie, you indicated that you were unaware 3 of what the fees may have been historically with respect to 4 the assumption process but were the other terms and 5 conditions consistent from 2003 forward? 6 A Yes. 7 Q And with respect to the communication with a 8 local branch, are you aware of any Bank of America branches 9 in Pennsylvania? 10 A I don't know. 11 Q You don't have any information if there are 12 any local branches? 13 A If there are or are not. I don't know. I 14 don't believe so. 15 MR. DUFFIE: Thank you very much. That's all 16 I have. 17 MS. MALE: That raised another question for 18 me. 19 RECROSS EXAMINATION 20 BY MR. MALE: 21 Q As far as Mr. Duffie's question about the 22 other terms being consistent, just so we are clear about 23 this, you're talking about two separate things, the 24 non-qualifying assumption and the qualifying assumption, are 25 those two processes the same from 103, '04 and so on as they 22 1 are today? 2 A Yes. 3 Q So the only thing you don't know about would 4 be the fees that would be associated with one or the other 5 of those separate processes, right? 6 A Yes. 7 Q And as far as your consolidated notes log 8 goes, if there are contacts with Hillsboro Mortgage 9 Fulfillment, are those part of your consolidated notes log? 10 A Any comments with regards to the assumption 11 processing would be in those comments. 12 Q So is that yes, if there was contact between 13 Mrs. Kelly and someone from Hillsboro, that would be part of 14 your consolidated notes log? 15 A If there was communication, yes. 16 Q And that happens all of the time that someone 17 calls in to Bank of America on a mortgage? 18 A I'm not sure I understand the question. 19 Q If a customer makes a phone call to Bank of 20 America, are you saying that all of those calls are reduced 21 to a telephonic summary? 22 A There is an electronic indication on the 23 consolidated notes log, yes. 24 Q And how would someone outside the bank read 25 those or understand what they are? It's not a code? 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A No. Q It's plain English; they are not coded? A They are not coded. The author of the notation may abbreviate but they are in the English language. Q Okay. MS. MALE: Thank you. THE MASTER: Mr. Duffie, do you have any other questions? MR. DUFFIE: Nothing further. THE MASTER: Thank you, Jackie. We appreciate your time. We are going to hang up and if you have any further questions of counsel, you have their addresses and phone numbers. Thank you. (Whereupon, Court concluded at 2:25 p.m.) 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CERTIFICATION I hereby certify that the proceedings are contained fully and accurately in the notes taken by me on the abovecause and that this is a correct transcript of same. Traci J. Colyer Official Stenographer The foregoing record of the proceedings on the hearing of the within matter is hereby approved and directed to be filed. 3o Zoo`1 Date E. Robert Elicker, II Divorce Master 25 [? r nv 2,309 GE': -4 iU A' '4l ?s? MICHAEL R. KELLY, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION-LAW ANN H. KELLY, Defendant : No. 05-3643 CIVIL TERM IN RE: DEFENDANT'S MOTION FOR RULING ON DEEDS BEFORE OLER, J. ORDER OF COURT AND NOW, this 26th day of January, 2010, following a hearing held on November 12, 2009, on Defendant's Motion for Ruling on Deeds, and for the reasons stated in the accompanying opinion, the real properties referenced therein are deemed to be marital property subject to equitable distribution, and the matter is remanded to the Cumberland County Divorce Master for further proceedings consistent with this order. BY THE COURT, E. Robert Elicker, II, Esq Divorce Master ,/ Mark C. Duffie, Esq. P.O. Box 109 Lemoyne, PA 17043-0109 Attorney for Plaintiff ..I?mily Hoffman, Esq. 105 N. Front Street P.O. Box 11475 Harrisburg, PA 17108 Attorney for Defendant Cp(£s 'en.41E1.LC ?M a' n r, _ r MICHAEL R. KELLY, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION-LAW ANN H. KELLY, Defendant : No. 05-3643 CIVIL TERM IN RE: DEFENDANT'S MOTION FOR RULING ON DEEDS BEFORE OLER, J. OPINION and ORDER OF COURT OLER, J., January 26, 2010. In this bifurcated divorce case, where the parties were divorced in 2009,1 economic claims remain pending before the Cumberland County Divorce Master2 and an issue has arisen as to whether two pieces of real estate owned by Defendant wife should be deemed to be marital property for purposes of equitable distribution.3 A hearing was held on the issue by the court on November 12, 2009. For the reasons stated in this opinion, the properties will be deemed to be marital property, subject to equitable distribution. STATEMENT OF FACTS The parties were married on August 31, 1996,4 separated on December 23, 2001,5 became parties to the present divorce action on July 15, 2005,6 and were . Prior to their divorce, and without benefit of a divorced on January 13, 20097 ' Decree in Divorce, Jan. 13, 2009. z Plaintiff's Exhibit 1, Hearing, Nov. 12, 2009 (hereinafter Pl.'s Ex. 1). 3 See Defendant's Motion for Ruling on Deeds, filed Apr. 6, 2009; Plaintiff's Response to Defendant's Motion for Ruling on Deeds, filed Dec. 4, 2009. 4 Notes of Testimony 5-7, Hearing, Nov. 12, 2009 (hereinafter N.T. _, Hearing, Nov. 12, 2009); see Defendant's Motion for Ruling on Deeds ¶8, filed Apr. 6, 2009; Plaintiff's Response to Defendant's Motion for Ruling on Deeds, filed Dec. 4, 2009. 5 N.T. 9, Hearing, Nov. 12., 2009. 6 Complaint, filed July 18, 2005. 7 Decree in Divorce, Jan. 13, 2009. formal marital settlement agreement, they attempted to divide up their assets and liabilities.8 In this regard, two pieces of jointly-owned marital real estate9 were conveyed, upon a recitation of nominal consideration, 10 by them on January 12, 2003, and January 12, 2005, respectively, to Defendant wife," in return for which Defendant was to arrange for her assumption of all marital debts, including a mortgage debt on one of the properties.12 Unfortunately, a failure of consideration with respect to Defendant's obligation occurred, in that she failed to effect Plaintiff's removal from the mortgage and note secured by the mortgage. 13 This failure was not attributable to Plaintiff, 14 and was material from his point of view. 15 DISCUSSION Statement of Law Failure of consideration/parol evidence rule. In contract law pertaining to deeds, actual consideration and a failure thereof may be shown by parol evidence where nominal consideration has been recited. West Chester & P.R.R. v. Broomall, 1 Sadler 587, 3 A. 444 (1886) (parol agreement as to real consideration for transfer 8 N.T. 10-11, Hearing, Nov. 12, 2009. 9 N.T. 5-7, Hearing, Nov. 12, 2009. The parties stipulated to a set of facts regarding the history of the two pieces of real estate subject to the instant action: Defendant acquired a property in Mechanicsburg, Pennsylvania, by deed dated May 9, 1995. Defendant transferred the Mechanicsburg Property into the names of both Defendant and Plaintiff on April 9, 1996. By deed dated July 1, 1994, Plaintiff and her sister received a property in Stone Harbor, New Jersey, through their father's Will. By deed dated March 10, 1999, Plaintiff and her sister conveyed the Stone Harbor property to Plaintiff and Defendant, wife and husband. " Plaintiff s Exhibit 3, filed Nov. 12, 2009 (hereinafter Pl.'s Ex. 3); Plaintiff's Exhibit 5, Hearing, Nov. 12, 2009 (hereinafter Pl.'s Ex. 5). 11 Pl.'s Ex. 3; Pl.'s Ex. 5. 12 N.T. 10-12, 23-24, Hearing, Nov. 12, 2009. 13 N.T. 15, Hearing, Nov. 12, 2009; Pl.'s Ex. 1, p.15. 14 N.T. 26, Hearing, Nov. 12, 2009; Pl.'s Ex. 1, p.28. 15 N.T. 23, Hearing, Nov. 12, 2009; Pl.'s Ex. 1, pp. 13-19. 2 of land held admissible notwithstanding existence of deed reciting consideration of one dollar). In such a case, an oral promise of consideration for an amount other than that recited in the deed is viewed as not necessarily contradicting, altering or varying the terms of the deed. See Dudek v. Bigley, 4 Pa. D. & C.3d 92, 1977 WL 329 (Lawrence Co. 1977). In a proper case, parol evidence can be admitted even to contradict the written expression of consideration in a deed. See Scientific Living, Inc. v. Hohensee, 440 Pa. 280, 288, 270 A.2d 216, 220-21 (1970); Henry v. Zurfich, 203 Pa. 440, 450, 53 A. 243, 246 (1902). "[P]arol evidence [is not admissible] or permitted to contradict or vary the written covenants [in a deed], in the absence of fraud or mistake, but this rule does not apply to parol evidence to vary or contradict the written expression of the consideration." Henry v. Zurllieh, 203 Pa. 440, 450, 53 A. 243, 246 (1902). "Failure of consideration goes to the heart of any claim based on an agreement and is thus always available as a defense to that claim." M.N.C. Corp. v. Mount Lebanon Medical Center, Inc., 510 Pa. 490, 495, 509 A.2d 1256, 1259 (1986). Marital property and equitable distribution. Under Section 3501(b) of the Divorce Code, it is provided that [a]ll real or personal property acquired by either party during the marriage is presumed to be marital property regardless of whether title is held individually or by the parties in some form of co-ownership as joint tenancy, tenancy in common or tenancy by the entirety. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a) [of this section]. Act of December 19, 1990, P.L. 1240, §2, as amended, 23 Pa. C.S. §3501(b) (2009 Supp.). An exception to this general rule is "[p]roperty excluded by valid agreement of the parties entered into before, during or after the marriage." Id. §3501(a). The Pennsylvania Supreme Court has held that proof of such an exception is to be by a preponderance of the evidence. Sutliff v. Sutliff, 518 Pa. 378, 385, 543 A.2d 534, 538 (1988). 3 One of the purposes of the Divorce Code is to "[e]ffectuate economic justice between parties who are divorced or separated ... and insure a fair and just determination and settlement of their property rights." Act of December 19, 1990, P.L. 1240, §2, 23 Pa. C.S. §3102(a)(6). In this regard, upon request marital property is to be equitably divided, distributed or assigned by the court "in such proportions and in such manner as the court deems just." Id. §3502(a). The equity of such a division is a matter entrusted to the sound discretion of the trial court. Budnick v. Budnick, 419 Pa. Super. 172-76, 615 A.2d 80-82 (1992). Application of Law to Facts In the present case, Defendant wife claims that the marital properties in question were excluded from the marital estate by a valid agreement executed between the parties during the marriage. Parol evidence, in the form of her testimony, tended to support her claim, notwithstanding the deeds' silence as to such an agreement and the absence of a formal marital settlement agreement indicating such an agreement. However, an affirmative defense to this claim, also supported by admissible parol evidence, was in the court's view proven by Defendant, in the form of a failure of consideration. Under these circumstances, Defendant's claim that the properties should be excluded from the category of marital property for purposes of equitable distribution can not be accepted. The many equities in her favor which she argues, however, can be considered in a determination of the equitable distribution of the marital estate. For the foregoing reasons, the following order will be entered: ORDER OF COURT AND NOW, this 26th day of January, 2010, following a hearing held on November 12, 2009, on Defendant's Motion for Ruling on Deeds, and for the reasons stated in the accompanying opinion, the real properties referenced therein are deemed to be marital property subject to equitable distribution, and the matter 4 is remanded to the Cumberland County Divorce Master for further proceedings consistent with this order. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. E. Robert Elicker, II, Esq. Divorce Master Mark C. Duffle, Esq. P.O. Box 109 Lemoyne, PA 17043-0109 Attorney for Plaintiff Emily Hoffman, Esq. 105 N. Front Street P.O. Box 11475 Harrisburg, PA 17108 Attorney for Defendant 5 - s Emily Long Hoffman, Esquire Attorney I.D. #66307 255 Market St. Millersburg, PA 17061 (717) 979-8849 Attorney for Defendant Michael R. Kelly, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIP a v G, ; V. NO: 05 - 3643 = co ll _ s cn Ann H. Ke y, Defendant Civil Term G brn z DEFENDANT'S MOTION FOR RECONSIDERATION Rule 1930.2 of the Pennsylvania Rules of Civil Procedure allows the Court to reconsider its decision in Domestic Relations matters. Defendant requests reconsideration for the reasons that follow: I. The marital settlement agreement reached by the parties had sufficient consideration due to Wife's payment of the marital debts and thus the real property is excluded as marital property. In this case, this Honorable Court found that the parties reached an Agreement concerning distribution of marital property but found that the Agreement tacked sufficient consideration due to Wife's inability to refinance the loan. The parties' testimony revealed that Husband signed the deeds over to Wife pursuant to their marital settlement agreement which provided that Wife would keep the properties and the debt. N.T. 8/12/08 at 15; N.T. 11/12/09 at 27 and N.T. 11/12/09 at 23. In eliance thereto, the parties terminated the previously filed joint bankruptcy petition and Wife filed for chapter 13 bankruptcy in her name only and assumed all of the marital debt. N.T. 11/12/09 at 10; N.T. 8/12/08 at 26, 28, 29, 33, 37 - 38. This did not include marital debt that Wife paid for out of bankruptcy. Husband did not file for equitable distribution until April 10, 2007, which was 2 years after he filed a divorce and four years after Wife paid down marital debt thorough bankruptcy. In Fox v. Fox, 22 Pa.D. & C. 1 (1982), the Court concluded that Wife met her burden and established by clear and convincing evidence that the real estate was excluded by valid agreement of the parties. The parties reached an Agreement with respect to the distribution of the house and truck as well as separate bank accounts. Mrs. Fox was to be responsible for all the bills and expenses associated with ownership of the home and Mr. Fox was to be responsible for the bills and expenses associated with ownership for the truck. It was clear by signing the Deed that Mr. Fox intended to extinguish all of his interest in the property. Likewise, in this case, Mr. Kelly signed the deeds and Mrs. Kelly paid on all the debts. A very slight advantage to one party or a trifling inconvenience to the other is sufficient consideration. Bayne v. Proctoe & Gamble Distributing Co., 87 Pa. Super. 195, at page 201. Where parties are competent to contract, the law will not measure the adequacy of the advantage. Id. In this case Wife's payment of the marital debts was sufficient consideration. Wife requests that this Honorable Court take judicial notice that the parties' bankruptcy action and the economic downturn in the 1990's made refinancing a virtual impossibility. Thus, Wife requests that this Court find that the agreement did not fail for lack of consideration. It is believed that at originally, the parties did not intend that the removal of Husband's name from the mortgages to invalidate their agreement. WHEREFORE, Wife requests that this Honorable Court 1) schedule a hearing to elicit further evidence concerning the issue of consideration in this matter. R tfully submitted, _ _6 Emily Long Hoffman Attorney for Defendant February 5, 2010 Emily Long Hoffrnan, Esquire Attorney I.D. #66307 Attorney for Plaintiff 255 Market St. Millersburg, PA 17061 (717)979-8849 CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the attached document on Plaintiff by first class U.S. mail as addressed below: Mark C. Duffle, Esquire P.O. Box 109 Lemoyne, PA 17043 By: ^ ?. t?V Emily Long Hoffman Sup. Ct. I.D. # 66307 255 Market St. Millersburg, PA 17061 (717) 979-8849 Date: 2/5/2010