Loading...
HomeMy WebLinkAbout96-4561 civil termROXANNE BALKOVIC, IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. KENNETH J. BALKOVlC, DEFENDANT 96-4561 CIVIL TERM IN RE: EXCEPTIONS TO DIVORCE MASTER'S REPORTS BEFORE BAYLEY, J. AND GUIDO, J. ECONOMIC ORDER AND NOW, this ~ day of August, 2000, having entered a divorce decree on June 27, 2000, the following economic order is entered. (1) Roxanne Balkovic is awarded the following marital property: Apartment buildings on 11th Street, New Cumberland, Pennsylvania Merrill Lynch IRA (Husband) Merrill Lynch IRA (Wife) Prudential Securities IRA (Husband) Prudential Securities IRA (Wife) Husband's profit sharing trust with Fidelity Investments 401(k) with Avis Teletech Installations, Inc. 96-4561 CIVIL TERM Proceeds from the sale of the Yorktown Road tracts (2) Kenneth J. Balkovic is awarded the following marital property: $Cona Road, Mechanicsburg, Pennsylvania Building at 704 Bridge Street New Cumberland, Pennsylvania Bal Com, Inc. Mellon Bank checking account Mutual Properties bank account (3) Any increase or decrease in the current values as assigned in this opinion to liquid assets constituting marital property shall be reconciled forty-five percent to Kenneth J. Balkovic and fifty-five percent to Roxanne Balkovic. (4) Roxanne Balkovic shall pay all taxes due on the sale of the Yorktown Road tracts the proceeds of which have been assigned to her with a credit from Kenneth Balkovic for his share of the taxes. (5) Kenneth J. Balkovic shall pay Roxanne Balkovic directly $500,000 within sixty days of a final economic order. (6) Kenneth J. Balkovic shall pay Roxanne Balkovic directly $295,886 in equal monthly installments amortized over a period of five years at simple interest of six percent per annum, the payments to start on the thirtieth day following a final economic order. 96-4561 CIVIL TERM (7) Alimony pendente lite to Roxanne Balkovic is vacated on the date this economic order becomes final. (8) Roxanne Balkovic is awarded indefinite alimony in the amount of $10,000 per month, effective the day this economic order becomes final, which Kenneth J. Balkovic shall pay through the Domestic Relations Office. (9) The net proceeds from the sale of a Century Drive property shall be distributed fifty-five percent to Roxanne Balkovic and forty-five percent to Kenneth J. Balkovic. Kenneth J. Balkovic shall pay fifty-five percent and Roxanne Balkovic forty- five percent of the tax due on the sale. (10) The parties shall sign all documents necessary to effectuate this economic order when it becomes final. By the Court~ Edgar B. Bayley, J. Howard B. Krug, Esquire For Plaintiff Samuel L. Andes, Esquire For Defendant Domestic Relations Office :saa ROXANNE BALKOVIC, IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. KENNETH J. BALKOVIC, DEFENDANT 96-4561 CIVIL TERM IN RE: EXCEPTIONS TO DIVORCE MASTER'S REPORTS BEFORE BAYLEY, J, AND GUIDO, J, DIVORCE AND ECONOMIC ORDER Bayley, J,, August 9, 2000:-- Plaintiff, Roxanne Balkovic, filed this complaint in divorce against defendant, Kenneth J. Balkovic, on August '14, '1996. A Divorce Master filed a report and supplemental report on the parties' economic dispute. A plethora of cross-exceptions were filed to the report and husband filed exceptions to the supplemental report. Roxanne Balkovic, age 47, and Kenneth Balkovic, age 50, were married on June 26, '1976. It is wife's second marriage and husband's first marriage. They separated on December 3, '1996. They have two children, Tara, age 19, born November 1, 1980, who is a freshman at Elizabethtown College, and Adam, age 14, born January 26, 1986, who is a student at St. Joseph's School in Mechanicsburg. Both children lived with husband after their parents' separation. Wife lives alone in a condominium in Mechanicsburg, Cumberland County. Husband now lives with his son in the marital residence, 3 Cona Road, Mechanicsburg, which the parties have stipulated shall be distributed to husband. 96-4561 CIVIL TERM Wife completed the eleventh grade. She graduated from beauty school and was a licensed cosmetologist. She worked in that capacity until she became pregnant with Tara. She is currently unemployed but looking for work. Her earning capacity is approximately $1,500 a month. Wife received alimony pendente lite until August 1, 1999, in the amount of $10,300 per month. The APL was increased to $12,500 a month effective September 1, 1999. While wife suffers from some anxiety and takes medication for a reflux condition, she is capable of full employment. Husband is the owner of Bal Com, Inc., a subchapter S Corporation. Bal Com, Inc., is a broker of cable installation services. Husband has a Bachelor of Science degree. In 1998, his monthly net income was approximately $36,000. In 1999, his monthly net income was between $42,000 and $44,000. He is in good health. The Master valued the marital property at $4,186,658.10, consisting of the following? 3 Cona Road, Mechanicsburg, Pennsylvania (marital residence with market value of $587,500.00 less the mortgage balance as of 7~9~99 of $78,317.00) $ 509,183.00 Building at 704 Bridge Street New Cumberland, Pennsylvania (property where husband operates his business) $ 83,560.00 Apartment buildings on 11'h Street, New Cumberland, Pennsylvania $ 54,541.00 ~ Personal and household items have been divided and were not appraised. -2- 96-4561 CIVIL TERM Bal Com, Inc. $2,000,000.00 Teletech Installations, Inc. $ 665,000.002 Merrill Lynch IRA (Husband) $ 161,654.00 Merrill Lynch IRA (Wife) $ 31,628.47 Prudential Securities IRA (Husband) $ 12,252.00 Prudential Securities IRA (Wife) $ 11,338.80 Husband's profit sharing trust with Fidelity Investments $ 644,357.93 Mellon Bank checking account $ 1,970.00 Mutual Properties bank account $ 10,873.00 401(k) with Avis $ 300.00 TOTAL $4,186,658.10 In addition, two commercial tracts of land on Yorktown Road in Fairview Township, York County, have been sold. The parties stipulated that the net proceeds from these properties shall be distributed in conformity with the distribution percentages of the marital estate. The Yorktown Road properties realized net proceeds of 170,331. 2 This asset has been dissipated. See discussion under heading Teletech Installations, Inc., infra. -3- 96-4561 CIVIL TERM Federal and Pennsylvania capital gain taxes on this sale will total $12,094.3 The net after taxes will be $158,237. A Century Drive property was listed for sale for $240,000 in January, 1997. After no offers were received, the property was relisted for $198,000. The parties believe that the property will sell for something between $150,000 and $185,000. There is no mortgage. A realtor's fee should be eight percent with a transfer tax of one percent with some nominal closing costs. The tax basis is $48,000. The difference between the net proceeds and the tax base, $48,000, will be subject to federal and state taxes totaling 22.8 percent. Using these figures it is estimated that the parties will net after taxes between $116,322,4 and $140,910." The Master recommended that the marital property be distributed fifty-five percent to wife and forty-five percent to husband. He recommended that wife be awarded alimony in the amount of $10,000 a month for an indefinite period. Because wife had received $58,000 in cash distributions from Teletech Installations, Inc., which 3 Husband and wife have both received extensions for filing their 1999 federal and state income tax returns. 4 $150,000- 9% = $136,500 $136,500 - $48,000 = - $20,178 $88,500 $116,322 x 22.8% $20,178 ~ $185,000 - 9% = $168,350 $168,350 - $48,000 = - $27,440 $120,350 $140,g10 X 22.8% $27,440 -4- 96-4561 CIVIL TERM she used for the payment of counsel fees and experts, the Master recommended that she not be awarded additional counsel fees and expenses. In Tagnani v. Tagnani, 439 Pa. Super. 596 (1995), the Superior Court of Pennsylvania stated: Notwithstanding the fact that the Master observes and hears the testimony of the witnesses, the trial court is not bound by the master's recommendations. 'In reviewing the trial court's determination, we must keep in mind that the court was free to accept or reject the parties' testimony.' 'Although the master's report is entitled to great weight, that final responsibility for making the [equitable] distribution [of property] rests with the court.' (Citations omitted.) We will refer only to those exceptions to the Master's reports as are necessary to frame issues that we believe require analysis in making our own economic order. BAL COM, INC. Each party called an expert witness to offer opinions as to the value of Bal Com, Inc. Wife's expert, James Smeltzer, testified that the value of the corporation as of the parties' separation, which was in August, 1996, was $2,750,000. He concluded that the value of the corporation at the end of 1997, which was the date closest to the date of the Master's hearing, was $3,500,000. Husband's expert, Bruce J. Brown, was of the opinion that the value of the corporation at the time of separation was $1,570,000, and the value at the end of 1997 was $1,900,000. The Master used the date of separation in setting a value of Bal Com, Inc., at $2,000,000. He concluded that: [t]he business is largely dependent on the efforts of husband and a few key personnel; therefore, the Master believes that any work product and -5- 96-4561 CIVIL TERM effort following the date of separation should accrue to the benefit of husband, not wife. We are satisfied that this approach was correct. McNaughton v. McNaught°n, 412 Pa. Super. 409 (1992). As set forth in Smith v. Smith, 653 A.2d 1259 (Pa. Super. 1995), the Superior Court of Pennsylvania stated: [w]hen valuing a closely held business which is largely controlled by one spouse during the period of separation, it may be appropriate to value the business as of the date of separation. Wife maintains that the opinion of her expert, concerning the value of Bal Com, Inc., should be accepted, noting among other things that husband's appraiser: (1) wrongfully considered non-existent corporation-level income taxes, (2) undervalued weighted average earnings by not deleting unusually Iow 1993 earnings,6 (3) failed to adequately consider receivables, that were in large part collectable, in analyzing the considerations necessary for a purchaser to finance the purchase of the corporation, (4) failed to account for $100,000 in income to Bal Com, Inc., carried as an expense by Teletech, and (5) incorrectly emphasized potential problems in the industry in discounting the value of Bal Com, Inc. Husband maintains that the opinion of his expert as to the value of Bal Com, Inc., should be accepted, noting among other things that: (1) it was proper to apply a capitalization rate to after-tax earnings, and (2) wife's appraiser improperly declined to apply a marketability discount to the corporation. 6 Corporate earnings in 1993 were $33,000, while in 1994 they were $300,000, in 1995 they were $600,000, and in 1996 they were $500,000. Sales have steadily increased through this period. -6- 96-4561 CIVIL TERM The income of Bal Com Inc., a subchapter S Corporation, is not taxed at the corporate level. Earnings are reflected on the income tax return of husband, the owner. The income of other types of corporations is taxed at a corporate rate and then distributed to shareholders as dividends, which are taxed again as personal income. Capitalization rates are usually applied to after-tax earnings when valuing a corporation. In valuing a subchapter S Corporation, there is a difference of opinion in the appraisal profession as to how to treat the tax status. Some appraisers believe federal income taxes should be computed regardless of whether the corporation is a taxpaying entity, while others believe that such taxes should not be computed. There is no majority opinion of the method of dealing with this issue. Wife argues that the election of her expert not to impute nonexistent taxes to Bal Com, Inc., when applying a capitalization rate, makes sense in this particular case because husband would not discount the selling price, and a buyer would be willing to pay more for Bal Com given its favorable S Corporation tax status. In this case, we believe generally that this approach is more appropriate in determining what a willing buyer would pay a willing seller when neither is under a compulsion to buy or sell and when both have reasonable knowledge of all relevant facts. We also believe that the husband's experts use of the unusually Iow 1993 earnings in arriving at weighted average earnings was not appropriate. On the other hand, we believe that wife's appraiser did not adequately consider a marketability discount in reaching his value of the corporation. Considering the qualifications of the expert witnesses, the strengths and weaknesses of their opinions, and weighing all of 96-4561 CIVIL TERM the conflicting testimony, we find that the value of Bal Com, Inc., on the date of the parties' separation was $2,300,000. TELETECH INSTALLATIONS, INC. In 1995, before the parties' separated, Bal Com, Inc., had extensive work in the Baltimore-Washington area. However, the formation of a minority-owned corporation was necessary to maintain this business and secure new business in that geographical area. Husband, therefore, had wife (a minority) form a new corporation Teletech Installations, Inc., in April, 1995. Wife was sole stockholder, director, and officer of the corporation. Notwithstanding, she served as a figurehead of Teletech, which husband operated until the parties separated in August, 1996. The Master found that the value of Teletech as of the date of separation was $665,000.7 After their separation, wife took an active role in the operation of Teletech, but the corporation unfortunately went out of business. Both husband and wife blame the other for the dissipation of this marital asset. The Master took extensive testimony on this issue. The Master found that: [t]his asset could have been of substantial value but that wife, through her conduct, her attitude and her failure to cooperate with husband on a business level to continue the successful operation of the business, caused the business to fail. Following the separation, wife appeared to be more concerned about being deprived of the money withdrawn from Teletech, Inc., for the childrens' college education than about husband being paid for services he and Bal Corn, Inc., were rendering to Teletech, Inc., than she was in managing and seeking entrepreneurial assistance in preserving the business opportunities the company was developing. 7 That was the valuation assigned to Teletech by wife's expert James Smeltzer. Husband did not take an exception to this value. -8- 96-4561 CIVIL TERM Wife's attitude went from indifference to being vindictive. The marriage issues overwhelmed good judgment in trying to preserve this asset. Wife takes exception to this finding and further maintains that the record supports a finding that it was husband's conduct that dissipated the assets of the corporation. This issue involved determinations as to the credibility of the witnesses and the weight of the evidence, and while we are not bound in accepting the Master's determination as to credibility, Herwig v. Herwig, 279 Pa. Super. 65 (1980), we have reviewed the record and are satisfied that the Master's conclusion that wife's conduct dissipated the value of Teletech is supported by credible evidence. The Master setting that value at $665,000 as of the date of separation was correct. In Smith v. Smith, 653 A.2d 1259 (Pa. Super. 1995), the Superior Court stated that: [i]n situations where one spouse consumes or disposes of marital assets following separation without the other spouse's consent, it may be more equitable to value the marital asset as of the date of separation. Notwithstanding, the Master in making a recommendation as to the equitable distribution of marital assets assigned one-half of the value of Teletech as of the date of separation to wife, $332,500, and one-half, $332,500, to husband. The Master noted that: Teletech, Inc., no longer exists as a viable corporation. During the course of its existence and through the throes of its demise, both parties and the parties' children benefited from withdrawals from the corporation accounts. Consequently, the Master is assessing ~ of the value of the corporation to each party. A marital asset dissipated by one party is properly assigned to that party's share -9- 96-4561 CIVIL TERM of the marital estate for purposes of equitable distribution. LaBuda ¥. LaBuda, 349 Pa. Super. 524 (1986). There is no support for the Master's recommendation that the value of Teletech, which wife dissipated, should be assigned equally to the parties. The fact that both husband and wife, and thus their children, derived benefits from the substantial income produced by Teletech does not alter the fact that wife's conduct dissipated the total value of the asset. Wife still maintains that $100,000 removed by husband from Teletech and placed in a custodial account for the children's education should be subtracted from the value of the corporation. The fallacy in this argument is that the $100,000 was removed well before the parties' separation and thus prior to the value assigned to Teletech by wife's own expert as of the date of separation. Accordingly, since wife dissipated a marital asset valued at $665,000, we will, pursuant to LaBuda, assign that amount to her share of the marital estate. EQUITABLE DIVISION OF MARITAL PROPERTY - SECTION 3502(a) ANALYSIS Pursuant to the Divorce Code at 23 Pa.C.S. Section 3502(a): (1) The parties lived together for almost twenty and one-half years. They have been separated for almost three and one-half years. (2) This is a first marriage for husband and second marriage for wife. (3) Wife is forty-seven years of age. She is currently unemployed but looking for work. Her skills are limited. Her earning capacity is approximately $1,500 a month. She receives alimony pendente lite of $12,500 a month. She suffers from some anxiety -10- 96-4561 CIVIL TERM and takes medication for a reflux condition, but is capable of full employment. Wife's separate estate includes a Vanguard account of approximately $17,000 and a $5,000 certificate of deposit. Wife has no substantial liabilities. For her to continue in her station in life requires considerable financial assistance from her husband. Husband is fifty years old and is in good health. He is president of Bal Com, Inc., which provides him extraordinary income. His unique skills have allowed him to develop this company which has prospered in a niche of the cable television industry. His separate estate includes a Prudential annuity of approximately $513,000. He has no substantial liabilities. Husband's substantial income has allowed him to continue to meet all of his needs. (4) Wife has not directly contributed to husband's education, training or increased earning power. Husband made wife president and sole stockholder of Teletech Installations, Inc., an asset of considerable value which she dissipated. (5) Husband has a substantial capacity for future acquisitions of capital assets and income. Wife has limited income capacity and little capacity for future acquisition of capital assets. (6) The sources of income of both parties are that income that they may earn from employment, the benefits derived from that employment, any investment of the marital assets they are awarded, and investments from non-marital assets. (7) Husband contributed substantially to the acquisition of the marital estate through his business enterprises. Wife made a major contribution as a homemaker. -11- 96-4561 CIVIL TERM Wife, however dissipated a major asset, Teletech Installations, Inc., that was provided to her by husband. (8) The value of the property set apart to each party will be that property they each receive from the marital estate plus wife's small nonmarital assets and husband's substantial nonmarital assets. (9) The parties are wealthy. They lived well and within their means. (10) At the time of distribution of marital assets, the economic circumstances of the parties will be based on their respective earnings and benefits from any employment, the assets each is awarded, and their nonmarital assets. (11) Husband is the custodian of Adam, age 14, a dependent minor child. Wife does not pay child support for Adam. Husband is paying, from an education fund, the costs of the parties' adult child Tara, age 19, to attend Elizabethtown College where she is a freshman. The fund was created when husband withdrew from Bal Com, Inc., $10,000 in 1993, $50,000 in 1994, and $100,000 in 1995. He further withdrew $100,000 from Teletech in 1996. Based upon all of the evidence and this Section 3502(a) analysis, we, as did the Master, conclude that the marital property should be distributed fifty-five percent to wife and forty-five percent to husband. The total value of the marital estate is $4,656,989 of which wife's share is $2,561,344 and husband's share is $2,095,645. This includes the net proceeds of $170,331 from the sale of the Yorktown Road tracts without payment of taxes. It does not include the Century Drive tract, which the parties have agreed shall -12- 96-4561 CIVIL TERM be distributed pursuant to the division of marital property herein. We agree with the pragmatic scheme of distribution recommended by the Master except that our scheme will include an assignment to wife of the proceeds from the sale of the Yorktown Road tracts. MARITAL PROPERTY ASSIGNED TO WIFE Apartment buildings on 11th Street, New Cumberland, Pennsylvania $ 54,541 Merrill Lynch IRA (Husband) $ 161,654 Merrill Lynch IRA (Wife) $ 31,628 Prudential Securities IRA (Husband) $ 12,252 Prudential Securities IRA (Wife) $ 11,339 Husband's profit sharing trust with Fidelity Investments $ 644,358 401(k) with Avis $ 300 Teletech Installations, Inc. $ 665,000 Proceeds from sale of the Yorktown Road tracts $ 170,331 TOTAL $1,75'1,403 -13- 96-4561 CIVIL TERM MARITAL ASSETS ASSIGNED TO HUSBAND 3 Cona Road, Mechanicsburg, Pennsylvania $ 509,183 Building at 704 Bridge Street New Cumberland, Pennsylvania $ 83,560 Bal Com, Inc. $2,300,000 Mellon Bank checking account $ 1,970 Mutual Properties bank account $ 10,873 TOTAL $2,905,586 Total to husband and wife $4,656,989 The marital assets to be distributed to husband total $1,154,183 more than the marital assets to be distributed to wife. ($2,905,586 minus $1,751,403). The Master found that husband is entitled to a credit of $20,705.85 toward a payment he made on a note on the lot where the marital home is located? Because we are assigning the total net proceeds of $170,331 from the sale of the Yorktown Road tracts to wife, she will have to declare the gain on the sales on her tax returns and pay a total tax of $12,094. She is therefore entitled to a credit from husband of fifty-five percent of the amount of the tax which is $6,651. Accordingly, the computations are: Wife is awarded marital property totaling: $2,561,344 8 The payoff on the note was $46,013. The Master gave husband credit for forty-five percent of the amount of the payoff, the reverse of the distribution percentages. Neither party took exception to that calculation. -14- 96-4561 CIVIL TERM Wife is assigned marital property valued at: $1,751,403 Husband is awarded marital property property: $2,095,645 Husband is assigned marital property valued at: $2,905,586 Shortfall of wife's share of the marital property owed to her by husband: $ 809,941 Minus credit to husband for payment on note: - $20,706 Amount owed by husband to wife: $ 789,235 Plus credit to wife for tax she will pay on the Yorktown Road tracts: + $6,651 Shortfall owed by husband to wife: $ 795,886 The Master recommended that $553,384 of the shortfall in the distribution of marital property due wife from husband should be paid to her in cash within sixty days of a final order with the balance amortized over ten years at simple interest of five percent per annum? Wife only excepted to this form of distribution arguing that it is erroneously founded upon husband having a net monthly income of $34,000, which has now been established to be between $42,000 and $44,000. She suggests that any pay out of money due to her should be over five years with interest at twelve percent 9 This shortfall using the valuations arrived by the Master was $1,054,089.81, while the shortfall using our valuations and assignments of property is $795,886. -15- 96-4561 CIVIL TERM per annum,l° We will require husband to pay wife $500,000 within sixty days of a final order with the balance of $295,886 in monthly installments starting thirty days after the date of a final order, amortized over five years at simple interest of six percent per annum. ALIMONY -- SECTION 3701 (b) ANALYSIS The Divorce Code at 23 Pa.C.S. Section 3701(a) provides as a general rule that, "Where a divorce decree has been entered, the court may allow alimony, as it deems reasonable, to either party only if it finds that alimony is necessary." Subsection (b) provides that, "in determining whether alimony is necessary and in determining the nature, amount, duration and manner of payment of alimony, the court shall consider all relevant factors, including..." seventeen specific factors that are set forth in this section. Subsection (c) provides that "The court in ordering alimony shall determine the duration of the order, which may be for a definite or an indefinite period of time which is reasonable under the circumstances." Alimony is based upon reasonable needs in accordance with the lifestyle and standard of living established by the parties during the marriage, as well as the payor's ability to pay. Perlberger v. Perlberger, 426 Pa. Super. 245 (1993). Pursuant to Section 3701(b) of the Divorce Code: (1) Husband has extraordinary earning capacity. In 1999, his monthly net income was between $42,000 and $44,000. Wife has limited earning capacity of lo Husband did not object to the Master's recommendation on how he is to pay the shortfall due wife. -16- 96-4561 CIVIL TERM approximately $1,500 per month. (2) Wife is 47 years old and husband is 50 years old. Wife suffers from some anxiety and takes medication for a reflux condition. Husband is in good health. (3) The sources of income of both parties are that income that they may earn from employment, the benefits derived from that employment, the income from investing the marital assets they are awarded, and their non-marital assets. Husband will easily be able to prepare for his retirement. He already has a Prudential annuity with a value of approximately $513,000. Wife has no retirement benefits. Following a divorce, to the extent she feels it is necessary, she will have to provide for her own medical insurance. (4) Neither party has an expectation of significant inheritances. (5) This marriage, in which the parties lived together for over twenty and a half years, is of significant duration in the heart of their lives. Wife did not contribute to the education and training of husband. She made a major contribution as a homemaker while husband pursued business opportunities. He went from earning between $50,000 and $60,000 per year during the mid-1980s to his current substantial income. (6) Husband made wife president of Teletech Installations, Inc., a company of substantial value, which produced significant income. Wife dissipated that marital asset. (7) Husband's substantial earnings, his expenses, and financial obligations will not be significantly affected by his being the custodian of the parties' minor child, Adam, -17- 96-4561 CIVIL TERM age 14. Wife is not paying child support for Adam, whose expenses will not adversely effect her. (8) The parties are wealthy. They live well and within their means. (9) Both parties will have significant assets following the entry of an order of equitable distribution of their marital property. (10) Neither party has significant liabilities. (11) Neither party brought a significant amount of property into the marriage. (12) Wife made a significant contribution as a homemaker. (13) Husband's needs can be easily taken care of by his substantial income. Wife will have a significant need for financial assistance to maintain her standard of living. (14) Marital misconduct is not a factor. (15) Alimony will be taxable to wife and deductible to husband. (16) Wife will lack sufficient property to provide for her reasonable needs. (17) Wife is not capable of adequate self-support through appropriate employment. In his supplemental report, the Master extensively reviewed the circumstances involving the parties during the course of their marriage. Based on all of the evidence and our Section 3701(b) analysis, we accept the Master's recommendation that wife be awarded indefinite alimony in the amount of $10,000 a month. This is an amount that is necessary and reasonable. -18- 96-4561 CIVIL TERM COUNSEL FEES AND EXPENSES The purpose of an award of counsel fees is to promote fair administration of justice by enabling the dependent spouse to maintain or defend the divorce action without being placed at a financial disadvantage; the parties must be on par with each other. Perlberger v. Perlberger, supra. Counsel fees are awarded based on the facts of each case and the factors to be considered include the payor's ability to pay, the requesting party's financial resources, the value of the services rendered, and the property received in equitable distribution. Id. In most cases each party's financial circumstance will ultimately dictate whether an award of counsel fees is appropriate. Id. The Master noted that wife received $58,000 in cash from Teletech, Inc. for counsel fees and experts. He concluded that considering the distribution of marital property to wife and an award of alimony, she is able to pay the balance of any fees and costs, which may be due for litigation in this court. Additionally, the Master recommended that each party pay their counsel fees and expenses and neither party filed an exception to this recommendation. We will accept the Master's recommendation and not make any award of counsel fees and expenses. This economic order will become final after thirty days if no appeal is filed. Pa. Rule of Appellate Procedure 903(a). If an appeal is filed, the order, if it is not changed by an appellate court, will become final only pursuant to the Pennsylvania Rules of Appellate Procedure. Accordingly, we will order that the award of alimony shall commence on the day this economic order is final. We will continue the current order of -19- 96-4561 CIVIL TERM alimony pendente lite until that day. DeMasi v. DeMa$i, 408 Pa. Super. 414 (1991). If there is an appeal, wife will not, during the duration thereof, have access to the marital property awarded to her and will be in need of alimony pendente lite to continue the litigation. Jayne v. Jayne, 663 A.2d 169 (Pa. Super. 1995). For the foregoing reasons, the following economic order is entered." ECONOMIC ORDER AND NOW, this. (~ day of August, 2000, having entered a divorce decree on June 27, 2000, the following economic order is entered. (1) Roxanne Balkovic is awarded the following marital property: Apartment buildings on 11th Street, New Cumberland, Pennsylvania Merrill Lynch IRA (Husband) Merrill Lynch IRA (Wife) Prudential Securities IRA (Husband) Prudential Securities IRA (Wife) Husband's profit sharing trust with Fidelity Investments "The economic order and this opinion replaces the economic order entered on June 27, 2000, and the opinion in support of that order, which was vacated by an order of July 19, 2000, because of a miscalculation as to the amount of the proceeds realized from the sale of the Yorktown Road tractS. -20- 96-4561 CIVIL TERM 401(k) with Avis Teletech Installations, Inc. Proceeds from the sale of the Yorktown Road tracts (2) Kenneth J. Balkovic is awarded the following marital property: 3 Cona Road, Mechanicsburg, Pennsylvania Building at 704 Bridge Street New Cumberland, Pennsylvania Bal Com, Inc. Mellon Bank checking account Mutual Properties bank account (3) Any increase or decrease in the current values as assigned in this opinion to liquid assets constituting marital property shall be reconciled forty-five percent to Kenneth J. Balkovic and fifty-five percent to Roxanne Balkovic. (4) Roxanne Balkovic shall pay all taxes due on the sale of the Yorktown Road tracts the proceeds of which have been assigned to her with a credit from Kenneth Balkovic for his share of the taxes. (5) Kenneth J. Balkovic shall pay Roxanne Balkovic directly $500,000 within sixty days of a final economic order. (6) Kenneth J. Balkovic shall pay Roxanne Balkovic directly $295,886 in equal monthly installments amortized over a period of five years at simple interest of six -21- 96-4561 CIVIL TERM percent per annum, the payments to start on the thirtieth day following a final economic order. (7) Alimony pendente lite to Roxanne Balkovic is vacated on the date this economic order becomes final. (8) Roxanne Balkovic is awarded indefinite alimony in the amount of $10,000 per month, effective the day this economic order becomes final, which Kenneth J. Balkovic shall pay through the Domestic Relations Office. (9) The net proceeds from the sale of a Century Drive property shall be distributed fifty-five percent to Roxanne Balkovic and forty-five percent to Kenneth J. Balkovic. Kenneth J. Balkovic shall pay fifty-five percent and Roxanne Balkovic forty- five percent of the tax due on the sale. (10) The parties shall sign all documents necessary to effectuate this economic order when it becomes final. Edgar B. B~yl~yv, J'N.(. Howard B. Krug, Esquire ~ For Plaintiff Samuel L. Andes, Esquire For Defendant Domestic Relations Office :saa -22-