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HomeMy WebLinkAbout2006-6222 Civil HOLLY R. BOSSERT : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : SHAWN P. LILLEY : 06-6222 CIVIL TERM IN RE: EQUITABLE DISTRIBUTION OPINION AND ORDER OF COURT Bayley, J., April 2, 2009:-- Petitioner, Shawn P. Lilley, and respondent, Holly R. Bossert, were married on 1 June 17, 2000. They were divorced on February 27, 2007. Their Property Settlement Agreement dated November 1, 2006 was incorporated into the divorce decree but not merged therein. Paragraph 32 of the integrated Agreement provides: FINANCIAL DISCLOSURE : The parties confirm that they have relied on the completeness and substantial accuracy of the financial disclosure of the other as an inducement to the execution of this Agreement. The parties acknowledge that there has been no formal discovery conducted in their pending divorce action and that neither party has filed an Inventory and Appraisement as required by Section 3505(b) of the Pennsylvania Divorce Code. Notwithstanding the foregoing, the rights of either party to pursue a claim for equitable distribution, pursuant any interest owned by the other to the Pennsylvania Divorce Code, of party in an asset of any nature at any time prior to the date of execution of this Agreement that was not disclosed to the other party or his or her counsel prior to the date of the within Agreement is In the event that either party, at any time expressly reserved. hereafter, discovers such an undisclosed asset, that party shall have the right to petition the Court of Common Pleas of Cumberland County to make equitable distribution of said asset. The non-disclosing party shall be responsible for payment of counsel fees, costs or expenses incurred by the other party in __________ 1 For ease of reference we will still refer to the parties as husband and wife. 06-6222 CIVIL TERM seeking equitable distribution of said asset. Notwithstanding the foregoing, the Agreement shall in all other respects remain in full force and effect. (Emphasis added.) Wife is a horse enthusiast. In the fall of 2004, she and husband agreed to purchase a horse named Madaket which she affectionately called Snoopy. The purchase was to be financed with a home equity loan of $50,000. The parties agreed that when the horse was sold they would split any profit. We find as a fact that at the time of the agreement the parties did not clearly define what “profit” meant. To husband it meant the sale price of the horse less commissions. To wife it meant the sale price of the horse less commissions and expenses. Snoopy was purchased for $42,000 with a $4,000 commission paid to Jill Shull. The remaining $4,000 from the home equity loan was placed in a joint account and utilized by the parties for their household expenses. Snoopy is a show horse. Wife entered Snoopy in horseshows up and down the east coast from as far north as Vermont and as far south as Florida. Presenting at horseshows is a tried and true method of increasing a horse’s value. It worked. In January 2006 wife sold Snoopy for $150,000 from which a $15,000 commission was paid to Jill Shull and a $10,000 commission to Sandra Ruiz. From the proceeds wife gave husband $50,000. Husband testified that he asked her what the horse sold for and she said she did not make any money. Wife testified that she told him that there was no profit. -2- 06-6222 CIVIL TERM The Property Settlement Agreement dated November 1, 2006, required a future payment by husband to wife of $35,000. Shortly before that payment was to be made someone told husband that Snoopy had sold for $90,000. On January 29, 2007, when husband and wife went to a conference to finalize the settlement, husband presented her with a document stating: Per our subsequent conversation in mid November, you stated that you paid Jill Shull $25,000 commission for the sale of the horse. The agreement between you and I was that we would split the profits from the purchase and sale of “Snoopy.” This summer you gave me a $50,000 personal check to pay off the home equity loan used to purchase Snoopy. Therefore: $90,000 Sale Price $25,000 Jill Shull Commission $50,000 Purchase loan Equals $15,000 Total Profit $15,000 divided by 2 equals $7,500 which is my share of the profit. Because I found out you lied after I signed the Divorce Settlement, I am legally entitled to $7,500 as part of the division of equity in our divorce. At this point you can accept the $27,500 check attached as payment in full for our divorce settlement. If you cash the attached check, you agree to accept $27,500 as final payment in lieu of $35,000 under the divorce settlement and you will make no further claims against me. Otherwise, you can choose not to cash the $27,500 settlement check attached and sue for $35,000. I will not sue Holly Bossert. Husband and wife negotiated. They crossed out the three places on the document that set forth “$27,500,” and changed them to $30,000. They both signed the document and husband paid $30,000 to wife. Subsequently, someone told husband that Snoopy was actually sold for $150,000. That resulted in his filing the -3- 06-6222 CIVIL TERM within petition pursuant to Paragraph 32 of the Property Settlement Agreement, seeking equitable distribution of one-half of the profit from the sale of Snoopy. Wife testified at a hearing on March 23, 2009, and admitted she sold Snoopy for $150,000 and that she knew that the document she signed which set forth a sale price of $90,000 was not true. Husband seeks an equitable award of $42,500 plus punitive damages and attorney fees. Wife maintains that husband should not receive any award, or in the alternative in determining the profit that was to be split from the sale of Snoopy, her expenses should be deducted. She introduced evidence that those expenses paid by 2 checks from her account and her credit card totaled $46,072. While riding and showing horses are wife’s hobby which she undoubtedly gained pleasure from, the purchase of Snoopy with husband was a business proposition. In determining the profit from the sale, accepting husband’s position by excluding wife’s costs and expenses in increasing its value would provide him a windfall. Wife’s interest in the profit from the sale of Snoopy in January 2006 was an asset secured prior to the date of the execution of the Property Settlement Agreement on November 1, 2006, which she did not disclose to husband. When final settlement was reached on January 29, 2007, wife again failed to disclosure the profit she made on the sale of Snoopy. Thereafter, husband’s ability to seek an award of equitable distribution of that asset __________ 2 Those expenses included the considerable amount of money that it routinely takes to board and maintain a horse plus all of her costs with respect to the horseshows that -4- 06-6222 CIVIL TERM pursuant to Paragraph 32 of the Property Settlement Agreement because of her continuing non-disclosure and outright misrepresentation is not affected by his agreement at that time not to sue her. We find that the amount wife owed husband following the sale of Snoopy was one-half of the profits based on the sale price of Snoopy less commissions and costs and expenses calculated as follows. Sale Price $150,000 Cost of Snoopy $42,000 Commission $4,000 to Jill Shull Commissions at sale Sandra Ruiz $10,000 Equi-Comp (Jill Shull) $15,000 Expenses Paid by checks $42,340 Paid by credit card $3,372 Total costs and expenses $116,712 $33,288 Profit $16,644 One-half of profit due husband Less $5,000 husband deducted from financial obligation under the Marital Settlement Agreement $5,000 $11,644 Difference owed husband she entered Snoopy in. -5- 06-6222 CIVIL TERM Given wife’s conduct, we are satisfied that an equitable distribution of assets pursuant to the Property Settlement Agreement of November 1, 2006, should be supplemented by an award to husband of $9,644. This amount reflects half of the profit due him from the sale of Snoopy, $11,644, less $2,000 - half of the $4,000 used for the benefit of both parties for household expenses - that remained from the $50,000 home equity loan after the purchase. As wife repaid husband $50,000 from the proceeds of the sale that was borrowed on the home equity loan, equity requires half of that amount, $2,000, which benefited husband to be deducted from his half of the profits from the sale. Equity does not require deducting the whole $4,000 because the $50,000 payment was part of her deception to conceal from him the fact that she had sold Snoopy for $150,000 thereby depriving him of one-half of the profits. In addition, husband has incurred $3,200 in counsel fees in seeking this award. Pursuant to Paragraph 32 of the Property Settlement Agreement, he is entitled to an award of those fees. Punitive damages are not recoverable in equitable distribution. ORDER OF COURT IT IS ORDERED AND NOW, this day of April, 2009, that within fifteen days of this date Holly R. Bossert shall pay Shawn P. Lilley $12,844. By the Court, Edgar B. Bayley, J. -6- 06-6222 CIVIL TERM Michael A. Scherer, Esquire For Holly R. Bossert Samuel L. Andes, Esquire For Shawn P. Lilley :sal -7- HOLLY R. BOSSERT : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : SHAWN P. LILLEY : 06-6222 CIVIL TERM IN RE: EQUITABLE DISTRIBUTION ORDER OF COURT IT IS ORDERED AND NOW, this day of April, 2009, that within fifteen days of this date Holly R. Bossert shall pay Shawn P. Lilley $12,844. By the Court, Edgar B. Bayley, J. Michael A. Scherer, Esquire For Holly R. Bossert Samuel L. Andes, Esquire For Shawn P. Lilley :sal