HomeMy WebLinkAbout1994-5250 Civil
KIMBERLY N. ORTENZIO, : IN THE COURT OF COMMON PLEAS OF
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
:
vs. : NO. 94-5250 CIVIL
: CIVIL ACTION - LAW
JOHN M. ORTENZIO, :
Defendant :
IN RE: MOTION TO ENFORCE ORDER
BEFORE HESS, J.
OPINION AND ORDER
The parties in this action were married on November 15, 1986. They have three children,
a daughter and two sons. The parties separated in June of 1994, two months after the birth of
their third child. In September of 1994, the mother filed a complaint in divorce. This set in
motion litigation which has been nothing short of epic in its proportion. We will not belabor the
entire procedural history but will touch on it as it relates to the issues before us.
The most recent round of hearings in this case has its genesis in a remand from the
Superior Court. In its opinion, filed November 22, 2004, the Superior Court first deals with the
father’s support obligation under the parties’ agreements. We had terminated the support
obligation, finding that the former marital residence was no longer the children’s “primary
residence” and because of the change in the father’s financial circumstances. Satisfied that the
evidence did not support these findings, the Superior Court concluded that we erred in allowing
any downward modification of Mr. Ortenzio’s support obligation. Finding no merit in the
father’s position concerning child support, the Superior Court went on to conclude that we also
erred in not awarding Mrs. Ortenzio attorney’s fees.
NO. 94-5250 CIVIL
The Superior Court also took issue with our conclusion that certain cost-of-living
adjustments had been overlooked in 1995. An agreement of the parties, dated February 6, 1992,
provided for payments of alimony and child support in paragraphs 5 and 6, respectively. In
paragraph 18, the agreement provided for cost-of-living adjustments as follows:
In the case of a monthly payment under paragraph
5 or 6, the “cost of living adjustment” is the
percentage (if any) by which
the average of the Consumer Price Index
for the twelve-month period ending on
October 31 of the odd-numbered year most
recently preceding the month in which
the payment is to be made
exceeds
the average of the Consumer Price Index
for the twelve-month period ending on
1991
October 31, . (emphasis added)
Agreement, P. 17. Following their separation, the parties entered into another agreement which
purported to be a “clarification, modification, ratification and confirmation” of the existing
property settlement agreement. This latter agreement was entered into on October 23, 1995. It
provided for an initial cost-of-living adjustment in accordance with the previous agreement of
the parties. When no cost-of-living adjustment for the period ending October 31, 1995, was
made, we concluded that it had been overlooked. The Superior Court determined that our
conclusion was not correct, stating:
Next, Father disputes that a COLA to the parties’
agreements was overlooked in 1995. Father asserts
the parties executed their 1995 agreement with the
intent to modify and clarify their 1992 agreement.
Father contends the support provisions in the 1995
agreement were increased in accordance with the
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NO. 94-5250 CIVIL
cost of living (“COLA”) formula provided in ¶ 18
of the 1992 agreement. Pursuant to ¶ 18, the
COLA would be calculated by October 31 of the
subsequent odd-numbered years. Father insists the
increases included within the 1995 agreement
obviated the need for a COLA adjustment
immediately following the execution of that
agreement, as the 1995 agreement was executed on
October 23, 1995. In light of the significant
increases provided for in the 1995 agreement itself,
Father maintains it is unreasonable to expect these
amounts would be subject to recalculation within
eight days.
Additionally, in 1997, 1999, and 2001, the parties,
their accountants, and their attorneys operated
under the assumption that the first COLA
adjustment would occur in 1997. In all the years
following 1995, no one challenged or repudiated
the calculations, until Mother’s current counsel
decided the 1995 adjustment had been overlooked,
all subsequent calculations had been miscalculated
accordingly, and the shortfall was subject to
collection. Father submits the 1995 settlement, all
of the subsequent calculations, and his payments
throughout the relevant period were all consistent
with the shared understanding that there would be
no additional COLA adjustment in 1995. Father
concludes the court erred in finding that a COLA
adjustment in 1995 was overlooked and that
determination should be reversed, as the
subsequent actions of the parties and their counsel
prove otherwise. We agree.
Superior Court Opinion, filed November 22, 2004, pp. 43-44.
The plaintiff is now before the court contending that the 1997 COLA adjustment was
miscalculated by Certified Public Accountant Patrick Moirin. Specifically, plaintiff contends
that Mr. Moirin failed to consider the change in the consumer price index from October 1995 to
October 1996. It is further her position that, because of this miscalculation, there has been a
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NO. 94-5250 CIVIL
shortfall in alimony and child support for the past ten (10) years of more than $400,000 when
interest is included.
The plaintiff takes the position that revisiting the COLA adjustment issue is appropriate
because the Superior Court’s opinion sets a “base line” from which calculations can now more
appropriately be made. We are unable to locate, in the Superior Court opinion, any such
conclusion. If there is a “base line” in this case, it seems to us that it is October 31, 1991, and
not some date in 1995. This is because the 1992 agreement of the parties clearly states that 1991
is the relevant year from which to calculate the COLA adjustment.
In concluding that a 1995 COLA adjustment was not overlooked, the Superior Court
accepted the father’s position that the increases included in the 1995 agreement “obviated the
need for a COLA readjustment a mere eight days later.” The Court goes on to recognize that the
1995 agreement increased a lump-sum payment to the mother and increased her initial alimony
and child support payments. The Court concluded that “[i]n summary, the 1995 agreement
modified the 1992 agreement and also allowed for significant increases in support consistent
not
with the 1992 COLA provision.” Superior Court Opinion, p. 44. The Superior Court does
say that the 1992 COLA provisions were, themselves, modified.
An expert for the plaintiff, James A. Smeltzer, C.P.A., was specifically asked about this
matter during our recent hearings. In discussing a calculation by Charles M. Chubb, C.P.A.,
made on February 12, 2002, Mr. Smeltzer questions Mr. Chubb’s starting point.
Q. In your calculations rather than going back to
October 31, 1991, base line, you are going back to
what base line?
A. We are going back to 1995, which is the
Superior Court’s decision. So, again, I think this is
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NO. 94-5250 CIVIL
based on that decision
somewhat . We used that
as the index. And then moved the index forward
based on that decision
because it was considered
a modification of the agreement at that particular
point in time.
N.T. 26 (emphasis added). To the extent that Mr. Smeltzer’s figures are based on an assumption
that the 1992 COLA agreement was modified by the 1995 agreement and/or that the Superior
Court so opined, his calculations are erroneous.
Even if we were given proper figures to recalculate the past COLAs in this case, we
would not be inclined to do so. As noted by the Superior Court:
Moreover, we have allowed Mother to rest on the
subsequent performance
parties’ to enforce
Father’s child support obligation under the parties’
agreement. We see no logical reason to deviate
from that approach with respect to the COLA
adjustments over the years.
Up until this most recent attempt to recalculate child support and alimony based on cost of
living, the COLA adjustments have been made by accountants retained by the plaintiff. The
increases requested have been dutifully paid by the defendant. We will not disturb the pattern
established by the parties absent more compelling evidence to do so.
We now turn to the question of the remand of this case, by the Superior Court, for an
award of attorney’s fees. In that regard, our instructions are as follows:
We remand this issue to the trial court for the
reconsideration of Mother’s request for reasonable
counsel fees and costs, since Father’s April 29,
2002 complaint for child support, consistent with
the cited legal principles.
Superior Court Opinion, p. 42.
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NO. 94-5250 CIVIL
The Superior Court opinion containing this directive was filed on November 22, 2004.
Counsel fees are awardable at least through and including this date. We note that there was
further litigation in the appellate courts including an unsuccessful attempt to obtain a review by
the Supreme Court. There was also our subsequent hearing in which billing statements were
produced and expert testimony was adduced concerning the reasonableness of plaintiff’s counsel
fees.
In describing the conduct of the defendant leading to its award of counsel fees, the
Superior Court stated that:
His subsequent unilateral disregard for the
agreement caused Mother to incur additional
counsel fees and counsel while she defended
Father’s support action, and prosecuted her Petition
for Special Relief to enforce the agreement and
defended Father’s counterclaims, including this
appeal. Mother had no option but to prepare
for/and defend against Father’s actions. Mother
would not have incurred her recent counsel fees in
this matter, but for Father’s one-sided financial
decisions and litigation tactics.
Opinion, pp. 41-42.
According to exhibits proffered by the plaintiff, legal fees totaled almost $60,000 through
the May 30, 2003, order. The defendant requested reargument before the Superior Court and
then filed a Petition for Allowance of Appeal to the Supreme Court. This was denied. Legal
fees incurred in the Superior Court exceeded $37,000. Proceedings in the Supreme Court
exceeded $30,000. Altogether, the plaintiff claims total legal fees of more than $238,000. Since
the remand of his case, however, more than half of the time has been spent in an attempt to
recalculate the COLA. In fact, very little time was devoted to the calculation of attorney’s fees.
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NO. 94-5250 CIVIL
As we review the billing statements filed in this case, we believe, also, that the time expended
has been, simply put, excessive. Because of our disposition of the COLA issue, we also do not
believe that it is appropriate to reimburse the plaintiff for fees paid to accountants. We conclude
that $115,000 is an appropriate figure for an award of counsel fees and that figure will be
reflected in our order.
Another issue in this case, involves Mr. Ortenzio’s contention that he should not be
required to pay child support for Lauren because she now attends college. The brief of the
plaintiff appropriately summarizes the operative paragraphs of the agreements between the
parties. The February 6, 1992, agreement provided:
2. Disposition of primary residence in the event
of divorce. In the event the parties become
divorced, John and Kim agree that Kim shall
continue to have the right to occupy the house that
constituted their last joint primary residence prior
to divorce or separation (the “Property”), until the
earliest to occur of (i) such time as their youngest
(ii) one year after the
child attains age 25,
graduation of their youngest child from a four
year undergraduate college,
(iii) such time as
Kim ceases to occupy the Property, with Kim and
John’s children, as her and their primary residence
or (iv) Kim’s death.
Plaintiff’s Exhibit 2, ¶ (emphasis added). At the time the 1992 Agreement was made, the parties
resided at Marlin Ridge. February 6, 1992 Agreement, Plaintiff’s Exhibit 2, p.2.
Paragraph 5 of the Agreement provided for payments to Kim upon divorce as follows:
5. Payments from John to Kim upon divorce.
In the event the parties become divorced, John
shall pay to Kim the lump sum of Two Hundred
He shall also
Fifty Thousand Dollars ($250,000).
pay to her the sum of Five Thousand Dollars
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NO. 94-5250 CIVIL
($5,000) per month until such time as Kim’s
right to occupy the property referred to in
Paragraph 2 of this Agreement terminates
pursuant to the provisions of that Paragraph.
Plaintiff’s Exhibit 2, ¶5, pp. 5-6 (emphasis added).
Paragraph 6 provides for the payment of child support and college expenses as follows:
6. Child Support and College Expenses. In the
event the parties become divorced:
(a) John shall pay to Kim the sum of Two
Thousand Dollars ($2,000) per month as child
respect to each of their children
support with
whose primary residence is with Kim until such
time as the child attains age 21
; and
also
(b) John shall assume responsibility for
the reasonable expenses of each of the children’s
college education, provided that he is consulted in
connection with the child’s educational plans and
consents to them (which consent shall not be
unreasonably withheld).
The payments under this paragraph 6 shall be in
addition to any payments for which John is
responsible under the terms of paragraphs 2 and 5.
Plaintiff’s Exhibit 2, ¶6, p. 7 (emphasis added).
The October 23, 1995 Clarification, Modification, Ratification and Confirmation
Property Settlement Agreement modified and clarified the above provisions as follows:
The February 6, 1992 Agreement shall be modified and clarified in the
following respects:
(a) Paragraph 2(a)(iii) shall be clarified to
provide that occurrence set forth there shall be
interpreted as “… such time as Kim ceases to
occupy the property, with Kim and John’s children
or any one of them as her and their primary
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NO. 94-5250 CIVIL
residence.” The balance of Paragraph 2 shall
remain unchanged.
Plaintiffs Exhibit 3, ¶3, pp. 3-4.
The defendant advances the argument that since Lauren now spends most of her time in
State College, her “primary residence” is no longer with her mother. In addition, he notes that
his payment of the expenses of Lauren’s college education are considerable. He advances the
legal argument that the contract language is ambiguous and that the only reasonable
interpretation of the contract is that the parties did not intend that Mr. Ortenzio pay both child
support and the expenses of college. In the usual child support case, that would be the expected
interpretation. In this case, however, we believe that the intention of the parties was otherwise.
The agreement, providing for the payment of child support until “the child attains age
twenty-one,” clearly contemplates that child support was payable even though the child was in
also
college. The agreement provides that, in addition to paying child support, “John shall
assume responsibility for the reasonable expenses of each of the children’s college
education.”
We agree with the proposition set forth in the plaintiff’s brief that the parties,
clearly, contemplated that their children would attend college, that Ms. Ortenzio would remain in
the “primary residence” at Marlin Ridge while they attended college, and that child support
would continue for each child until they reached age twenty-one, including a period of time
when they may be attending college, and that Mr. Ortenzio would pay the reasonable college
expenses. This interpretation is consistent with Ms. Ortenzio’s testimony that the underlying
intent and purpose of the agreement was to provide amply for her and the children so that they
would have no concerns financially. This included the payment of child support while each child
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NO. 94-5250 CIVIL
attended college so she would continue to have ample financial resources available for the
benefit of the children.
Moreover, we agree with the plaintiff’s legal analysis of appellate case law in this area.
In Wiegand v. Wiegand, 37 A.2d 492 (Pa. 1944), the Supreme Court considered a case where the
defendant husband was “a man of large means.” The separation agreement between the husband
and wife provided for the payment of college expenses as well as child support during the
children’s minority (which at that time was age twenty-one years). The Supreme Court held that
the father was liable to pay college expenses in addition to the full monthly support provided for
in the contract. The Supreme Court noted:
The clauses of this contract we are called upon to
construe were drawn for the benefit of the minor
children of the parties to the contract. We should
adopt that interpretation which, under all the
circumstances of the case, ascribes the most
reasonable, probable, and natural conduct to the
parties.
Id. at 494. The Supreme Court went on to say:
In the fourth clause, the Defendant contemplates
the Plaintiff “is to maintain a home large enough to
accommodate the four children.” Such an
establishment cannot be dismantled in part or
diminished in size while each child is away at
school. This the Defendant recognizes, for he
provides it shall continue “during the minority of
each of the said minor children.” He further
provided for their schooling in the fifth clause, but
said nothing therein about any deductions for the
maintenance of the home during this period. It is
clear he intended a home to exist as any family
would maintain it for the benefit of their children,
except he, the father, would not be present therein.
He only provides for a deduction when his
expenses are increased by their addition to his own
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NO. 94-5250 CIVIL
household; had he felt it should have been
otherwise, he would have as readily expressed it in
the contract. The court properly construed these
clauses of the contract and allowed the Plaintiff
payment for full maintenance while Mary Rita was
in school.
Id. at 495.
In the case of Townsend v. Townsend, 446 A.2d 630 (Pa.Super. 1982), the Superior Court
cited Wiegand in affirming the trial court’s decision that the husband was not entitled to offset
child support payments against college expenses where the agreement provided for child support
during college and also for the payment of college expenses. In so holding, the Court
emphasized the importance of the fact that the mother would maintain a family home for the
children even while they were away at college. We believe that a similar situation pertains here
and that the Ortenzios contemplated that the mother would provide a home for the children at
Marlin Ridge at the same time that they were attending college. Accordingly, we will direct that
the defendant pay child support for Lauren until she reaches the age of twenty-one years.
Finally, the defendant contends that he is to receive a credit against his alimony
obligation equal to the plaintiff’s husband’s share of the fair market rental value of the former
marital residence. As the defendant observes in his brief, the 1992 agreement provides that the
plaintiff has a right to occupy the house that constituted the parties last joint primary residence
in the event of a divorce. The agreement is silent concerning the presence of any other persons
other than the plaintiff and the parties’ children residing at the address. The defendant goes on to
contend that the reasonable interpretation of the 1992 agreement requires the court to impose a
fair rental value of $1,250.00 per month, representing one-half of the fair market rental value of
the former marital residence, against any outstanding alimony obligation and any future alimony
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NO. 94-5250 CIVIL
obligations defendant owes plaintiff. We fail to understand how we can interpret nonexistent
language nor do we, otherwise, know of any legal authority to grant the relief which the
defendant requests.
ORDER
AND NOW, this day of June, 2008, it is ordered and directed that:
1. The request of the plaintiff to recalculate COLA adjustments for alimony and child
support is DENIED.
2. It is ordered and directed that the defendant pay child support for his daughter,
Lauren, until she reaches the age of twenty-one years.
3. The defendant shall pay to the plaintiff attorney’s fees in the amount of $115,000.00.
4. To the extent that this order results in a calculation of arrearages for alimony and/or
child support, any such arrearages not paid within thirty (30) days will accrue interest at the rate
of six percent (6%) per annum from and after August 25, 2008.
BY THE COURT,
_______________________________
Kevin A. Hess, J.
Delano Lantz, Esquire
For the Plaintiff
Jordan Cunningham, Esquire
For the Defendant
:rlm
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KIMBERLY N. ORTENZIO, : IN THE COURT OF COMMON PLEAS OF
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
:
vs. : NO. 94-5250 CIVIL
: CIVIL ACTION - LAW
JOHN M. ORTENZIO, :
Defendant :
IN RE: MOTION TO ENFORCE ORDER
BEFORE HESS, J.
ORDER
th
AND NOW, this 27 day of June, 2008, it is ordered and directed that:
1. The request of the plaintiff to recalculate COLA adjustments for alimony and child
support is DENIED.
2. It is ordered and directed that the defendant pay child support for his daughter,
Lauren, until she reaches the age of twenty-one years.
3. The defendant shall pay to the plaintiff attorney’s fees in the amount of $115,000.00.
4. To the extent that this order results in a calculation of arrearages for alimony and/or
child support, any such arrearages not paid within thirty (30) days will accrue interest at the rate
of six percent (6%) per annum from and after August 25, 2008.
BY THE COURT,
_______________________________
Kevin A. Hess, J.
Delano Lantz, Esquire
For the Plaintiff
Jordan Cunningham, Esquire
For the Defendant
:rlm