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HomeMy WebLinkAbout2001-4676 Civil JUDITH KUNTZ-MISLlTSKI, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. RICHARD P. MISLlTSKY, DEFENDANT 01-4676 CIVIL TERM IN RE: EXCEPTION OF HUSBAND TO DIVORCE MASTER'S REPORT BEFORE BAYLEY. J. AND HESS. J. OPINION AND ORDER OF COURT Bayley, J., April 5, 2007:-- Judith Kuntz-Mislitski and Richard P. Mislitsky, were married on September 4, 1983. They separated on August 6, 2001. They have a daughter in college. Another daughter is a senior in high school. Husband pays wife $585 per month child support.1 He pays her $632 per month alimony pendente lite. An order of APL has been in effect since November 2001. On August 31, 2006, husband and wife entered into an economic settlement resolving all issues except wife's claim for alimony and counsel fees. The economic settlement distributed the marital estate as follows: TO HUSBAND TO WIFE RETIREMENT ACCOUNTS $92,293.51 $228,749.84 CASH ACCOUNTS $142,926.48 $191,568.63 1 The youngest daughter is eighteen so the child support will terminate when she graduates in June, 2007. 01-4676 CIVIL TERM EQUITY IN REAL ESTATE $86,615.902 00 MISCELLANEOUS PROPERTY (NON-LIQUID) $9,010.00 TOTAL $330,845.89 $7,395.00 $427,713.47 The estate totaled $758,559.36, of which wife received 56.4 percent and husband 43.6 percent. Cumberland County Divorce Master filed a report recommending that husband pay wife alimony in the amount of $1 ,200 per month with: The amount and duration of alimony being subject to modification and termination on petition of either party as allowed under Section 3701 (e) of the Domestic Relations Code. Specific termination provisions in the Domestic Relations Code will also apply. The Master recommended that husband pay $5,000 toward wife's counsel fees. Husband filed exceptions to the Master's Report. They were briefed and argued on February 28, 2007. 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. . .. "[W]e 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.) Husband filed several exceptions to the Master's Report which need to be 2 There are two properties. One with a market value of $25,000 without a lien. The other, which is the former marital residence where husband lives, has a market value of $130,000 with a lien of $68,384.10, for a net value of $61 ,615.90. -2- 01-4676 CIVIL TERM addressed before specifically reviewing his challenge to the recommendations for alimony and counsel fees. Husband maintains that he was denied due process because the record supports a finding that the Master prejudged a decision to award alimony for an indefinite period in a pre-determined amount. We have reviewed the record and it does not support such a finding. Husband further maintains that he was denied due process because he was not allowed to refute wife's claim that she alone bore the expense of the oldest daughter's college education. Wife did not make such a claim. To the contrary, she testified to the amount she has paid, and husband testified as to the amount he has paid. Husband's payments are significantly more than wife's. Husband maintains that he was precluded from being allowed to present testimony regarding wife's claim for counsel fees. There was no unreasonable limitation on the time he was allocated for that purpose. Husband further maintains that the Master prevented him from testifying on how a loss of clients will have an impact on his future earnings. He placed his tax returns into the record for 2003, 2004 and 2005. He testified that his earnings for 2006 will generally be in the same range as in recent years. He has an established earning capacity. What his earnings mayor may not be in the future depending on whatever contingencies occur is speculative and not relevant. Husband maintains that he was denied an opportunity to present additional testimony concerning his physical condition and its potential effect on his future earning capacity. To the contrary, he testified specifically to numerous ills. The evidence, -3- 01-4676 CIVIL TERM however, was that such conditions have not affected his earning capacity. What may or may not occur in the future is speculative and not relevant. Husband further maintains that he was restricted in cross-examining wife, who is a teacher, regarding why it should be necessary for her to work summers and part-time during the school year. Whether wife chooses to work during her vacations is strictly up to her. Evidence of her current earnings from her full-time employment is part of the record and that was what was relevant. Husband also maintains that he was prevented from testifying as to the specific nature of his business debts totaling $16,000. He did testify that he had a line of credit for his business from which he had drawn $16,000. He also wanted to produce testimony that the marital home he received in equitable distribution needs repairs. Such evidence was not relevant on the issue of alimony or counsel fees. ALIMONY The Domestic Relations Code at 23 PaC.S. Section 3102(a)(6), set forth the following legislative finding of intent, and the policy of the Commonwealth to: Effectuate economic justice between parties who are divorced or separated and grant or withhold alimony according to the actual need and ability to pay of the parties and insure a fair and just determination and settlement of their property rights. In Smith v. Smith, 904 A.2d 15 (Pa Super. 2006), the Superior Court of Pennsylvania stated: [T]he purpose of alimony is to ensure that the reasonable needs of the person who is unable to support himself or herself through appropriate -4- 01-4676 CIVIL TERM employment, are met. 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. The Divorce Code dictates that in determining the nature, amount, duration, and manner of payment of alimony, the court must consider all relevant factors, including those statutorily prescribed for at 23 PaC.S. S 3701. In Isralsky v. Isralsky, 824 A.2d 1178 (Pa Super. 2003), the Court stated: The law is also clear that, "The purpose of alimony is not to reward one party and to punish the other, but rather to ensure that the reasonable needs of the person who is unable to support himself or herself through appropriate employment, are met." Twilla v. Twilla, 445 PaSuper. 86, 664 A.2d 1020, 1022 (1995) (quotation omitted). In determining the nature, amount, duration and manner of payment of alimony, the court must consider all relevant factors, including those statutorily prescribed for at 23 PaC.S.A. S 3701, Alimony, (b) Relevant Factors (1 )-(17). "'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.'" Twilla, supra, 664 A.2d at 1022 quoting Per/berger v. Per/berger, 426 PaSuper. 245, 626 A.2d 1186, 1203 (1993), appeal denied, 536 Pa 628, 637 A.2d 289 (1993). Plitka v. Plitka, 714 A.2d 1067, 1069 (PaSuper. 1998). The Domestic Relations Code at 23 PaC.S. Section 3701 provides: (a) General Rule.-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) lists seventeen factors to be considered among "all relevant factors" when "determining whether alimony is necessary and in determining the nature, amount, duration and manner of payment of alimony. . . ." We make the following Section 3701 analysis. -5- 01-4676 CIVIL TERM 1. THE RELATIVE EARNINGS AND EARNING CAPACITY OF THE PARTIES. Husband is a self-employed lawyer whose income fluctuates. His earning capacity is not static, but is reflected by his earnings reported on the following federal tax returns. In 2003, he had net business income after all business deductions of $92,098. Federal tax of $21 ,461 and Social Security tax of $6,507, totaled $27,968.3 After paying state tax of $3,121 and local tax of $975, totaling $4,096, his net was $60,052 or $5,004 per month. In 2004, he had net business income after all business deductions of $133,023. Federal tax of $29,164 and Social Security tax of $7,232, totaled $36,396.4 After paying state tax of $4,148 and local tax of $1 ,296, totaling $5,444, his net was $91,183, or $7,599 per month. In 2005, he had net business income after all business deductions of $114,230. Federal tax of $25,446 and Social Security tax of $7,110, totaled $32,556.5 After paying state tax of $3,545 and local tax of $1,107, totaling $4,652, his net was $77,022, or $6,419 per month.6 3 He reduced his Federal Income tax by a contribution into a retirement plan of $12,839 and an alimony payment of $7,579. He had additional rental income of $3,929. 4 He reduced his Federal Income tax by a contribution into a retirement plan of $15,000 and an alimony payment of $7,584. He reduced his taxable income by a loss on rental real estate of $5,573. 5 He reduced his Federal Income tax by a contribution into a retirement plan of $11 ,253 and an alimony payment of $6,952. He reduced his taxable income by a capital gain loss of $1 ,247, and a loss on rental real estate of $5,462. 6 As previously noted, husband testified that he expected his income to be in the same general range in 2006. -6- 01-4676 CIVIL TERM Wife is a high school teacher. She is working at earning capacity. Her annual gross income is $45,812.7 Most recently her bi-weekly net is $976.10, increased by $38 bi-weekly to $1,014.10 as a result of a $2,000 education credit that translates into a monthly net income of $2,197.22 with the education credit, and $2114.88 without the credit. 2. THE AGES AND THE PHYSICAL, MENTAL AND EMOTIONAL CONDITIONS OF THE PARTIES. Husband is age 53 and wife is age 49. Husband testified that he has a longstanding back problem with arthritis into the shoulder and cervical spine, depression, attention deficit disorder, and a sleep disorder. He suffered subarachnoid hemorrhages in the brain in 1977 and 1987. He takes several medications. There is no evidence that his earning capacity has been reduced to date because of these conditions. Wife testified that the divorce has taken a toll on her nerves which she described as "shot." She does not, however, take any medications. Her nerves have not affected her current earning capacity. 3. THE SOURCES OF INCOME OF BOTH PARTIES, BUT NOT LIMITED TO, MEDICAL, RETIREMENT, INSURANCE OR OTHER BENEFITS. Wife is a school teacher whose employer provides these benefits. She contributes $87 per month for her medical coverage which has some deductibles, and she contributes toward her retirement. Husband is a self-employed lawyer. He has 7 This includes a recently received raise of $6,539 a year when she earned a Master's Degree. -7- 01-4676 CIVIL TERM been covered by wife's medical plan. Upon a divorce, COBRA payments are anticipated to be $382. That does not include vision and dental coverage which husband believes will raise the cost to approximately $450 a month. He has been contributing significant amounts each year into a retirement plan. 4. THE EXPECTANCIES AND INHERITANCES OF THE PARTIES. None. 5. THE DURATION OF THE MARRIAGE. Twenty-three and a half years. They have been separated a little over five and a half years. 6. THE CONTRIBUTION BY ONE PARTY TO THE EDUCATION, TRAINING OR INCREASED EARNING POWER OF THE OTHER PARTY. Minimal. 7. THE EXTENT TO WHICH THE EARNING POWER, EXPENSES OR FINANCIAL OBLIGATIONS OF A PARTY WILL BE AFFECTED BY REASON OF SERVING AS THE CUSTODIAN OF A MINOR CHILD. The youngest daughter has reached her majority and will graduate from high school in June, 2007. 8. THE STANDARD OF LIVING OF THE PARTIES ESTABLISHED DURING THE MARRIAGE. A comfortable upper middle-class standard. -8- 01-4676 CIVIL TERM 9. THE RELATIVE EDUCATION OF THE PARTIES AND THE TIME NECESSARY TO ACQUIRE SUFFICIENT EDUCATION OR TRAINING TO ENABLE THE PARTY SEEKING ALIMONY TO FIND APPROPRIATE EMPLOYMENT. Husband has a law degree and wife has a master's degree which is what they need to continue their chosen careers. 10. THE RELATIVE ASSETS AND LIABILITIES OF THE PARTIES. Wife received $427,713 in marital assets. Of this amount, $191,568 was in cash accounts. She owns a townhouse, which is mortgaged. She testified that she used a $40,000 non-interest loan from her father to make the purchase. She testified that she accumulated $11,000 in credit card debt which she intends to payoff with her settlement proceeds. She testified that she incurred a total of $47,000 in legal fees involving all aspects of her breakup with husband. Husband received $330,845 in marital assets. Of this amount, $142,926 was in cash accounts. He has a mortgage on the former marital residence where he lives. He testified to having $16,000 in business debt. It appears that both parties have cosigned for some college loans for their oldest daughter who is attending Penn State University. 11. THE PROPERTY BROUGHT TO THE MARRIAGE BY EITHER PARTY. Husband brought approximately $50,000 into the marriage which was used to purchase a home. -9- 01-4676 CIVIL TERM 12. THE CONTRIBUTION OF A SPOUSE AS HOMEMAKER. Wife stayed home with the children until the youngest daughter started first grade. Both participated in raising their children. 13. THE RELATIVE NEEDS OF THE PARTIES. Considering wife's income, child support and APL, and her debt, wife testified she has been living from paycheck to paycheck. The record supports her testimony. Husband has substantially more net income than wife. He will shortly be relieved of his child support payment and, upon the entry of a decree in divorce, will be relieved of his APL payment. 14. THE MARTIAL MISCONDUCT OF EITHER OF THE PARTIES DURING THE MARRIAGE. THE MARITAL MISCONDUCT OF EITHER OF THE PARTIES FROM THE DATE OF FINAL SEPARATION SHALL NOT BE CONSIDERED BY THE COURT IN ITS DETERMINATIONS RELATIVE TO ALIMONY; EXCEPT THAT THE COURT SHALL CONSIDER THE ABUSE OF ONE PARTY BY THE OTHER PARTY. AS USED IN THIS PARAGRAPH "ABUSE" SHALL HAVE THE MEANING GIVEN TO IT UNDER SECTION 6102 (RELATING TO DEFINITIONS). None. 15. THE FEDERAL, STATE AND LOCAL TAX RAMIFICATIONS OF THE ALIMONY AWARD. For federal tax purposes, any award of alimony paid by husband to wife will be deductible to him and taxable to her. 16. WHETHER THE PARTY SEEKING ALIMONY LACKS SUFFICIENT PROPERTY, INCLUDING, BUT NOT LIMITED TO, PROPERTY DISTRIBUTED UNDER CHAPTER 35 (RELATING TO PROPERTY RIGHTS, TO PROVIDE FOR THE PARTY'S REASONABLE NEEDS). Wife is forty-nine years old. Her property, which includes the property she -10- 01-4676 CIVIL TERM received in distribution, will not alone be sufficient to provide her current reasonable needs without additional income. 17. WHETHER THE PARTY SEEKING ALIMONY IS INCAPABLE OF SELF- SUPPORT THROUGH APPROPRIATE EMPLOYMENT. With the loss of APL, wife will not have sufficient income from employment for self-support at this time. CONCLUSION Weighing 9l! of the Section 3701 (b) factors, including a finding that wife is not now able to meet her reasonable needs at this time through her appropriate employment in accordance with the lifestyle and standard of living established during the long marriage, and recognizing that wife and husband have received substantial property in equitable distribution, and considering husband's significantly higher earning capacity as it relates to his ability to pay, and to effectuate economic justice in accordance to the actual ability to pay, we will award wife $600 per month in alimony limited to three years. COUNSEL FEES In Schenk v. Schenk, 880 A.2d 633 (Pa Super. 2005), the Superior Court stated that alimony pendente lite is designed to help a dependent spouse to have the financial resources to litigate a divorce proceeding in relationship to the economic resources available to each spouse. The Domestic Relations Code at 23 PaC.S. Section 3702 provides: -11- 01-4676 CIVIL TERM In proper cases, upon petition, the court may allow a spouse reasonable alimony pendente lite, spousal support and reasonable counsel fees and expenses. . .. (Emphasis added.) In Jacobs v. Jacobs, 884 A.2d 301 (Pa Super. 2005), the Superior Court stated: Counsel fees are awarded at the trial court's discretion. .. Marra v. Marra, 831 A.2d 1183 (PaSuper.2003). Factors to consider in such an award are the payor's ability to pay, the requesting party's financial resources, the value of the services rendered, and the distribution of property at equitable distribution. Anzalone v. Anzalone, 835 A.2 773 (PaSuper.2003). In the present case, the Master concluded that husband had, to a certain extent, delayed the proceedings as he "[c]ertainly could have been more forthcoming in his determination to resolve the issues between the parties." The Master further concluded that wife was in need of contribution toward her considerable counsel fees totaling $46,000. We have reviewed the record and do not believe that the conduct of husband warrants a requirement for him to contribute to wife's counsel fees. Considering the financial status of each party, their financial resources, the value of the services rendered to wife, the distribution of marital property to her, the substantial alimony pendente lite since November 2001, and that she is being awarded alimony, her claim for counsel fees will be denied. ORDER OF COURT AND NOW, this day of April, 2007, IT IS ORDERED: (1) The current order of alimony pendente lite payable by husband to wife, IS VACATED. -12- 01-4676 CIVIL TERM (2) Wife IS AWARDED ALIMONY payable by husband in the amount of $600 per month limited to three years. This alimony shall be paid through the Domestic Relations Office of Cumberland County. (3) Wife's claim for counsel fees, IS DENIED. By the Court, Edgar B. Bayley, J. Courtney K. Powell, Esquire Box 650 Hershey, PA 17033 For Plaintiff Nathan Wolf, Esquire 10 West High Street Carlisle, PA 17013 F or Defendant :sal -13- JUDITH KUNTZ-MISLlTSKI, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. RICHARD P. MISLlTSKY, DEFENDANT 01-4676 CIVIL TERM IN RE: EXCEPTION OF HUSBAND TO DIVORCE MASTER'S REPORT BEFORE BAYLEY. J. AND HESS. J. ORDER OF COURT AND NOW, this day of April, 2007, IT IS ORDERED: (1) The current order of alimony pendente lite payable by husband to wife, IS VACATED. (2) Wife IS AWARDED ALIMONY payable by husband in the amount of $600 per month limited to three years. This alimony shall be paid through the Domestic Relations Office of Cumberland County. (3) Wife's claim for counsel fees, IS DENIED. By the Court, Edgar B. Bayley, J. 01-4676 CIVIL TERM Courtney K. Powell, Esquire Box 650 Hershey, PA 17033 For Plaintiff Nathan Wolf, Esquire 10 West High Street Carlisle, PA 17013 F or Defendant Domestic Relations Office :sal -2-