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Home My WebLink About2005-3643 Civil 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. 1 In this bifurcated divorce case, where the parties were divorced in 2009, 2 economic claims remain pending before the Cumberland County Divorce Master 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 3 distribution. 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 4 The parties were married on August 31, 1996, separated on December 23, 56 2001, became parties to the present divorce action on July 15, 2005, and were 7 divorced on January 13, 2009. Prior to their divorce, and without benefit of a 1 Decree in Divorce, Jan. 13, 2009. 2 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 8 liabilities. 9 In this regard, two pieces of jointly-owned marital real estate were 10 conveyed, upon a recitation of nominal consideration, by them on January 12, 11 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 12 mortgage debt on one of the properties. Unfortunately, a failure of consideration with respect to Defendant’s obligation occurred, in that she failed to effect 13 Plaintiff’s removal from the mortgage and note secured by the mortgage. This 14 failure was not attributable to Plaintiff, and was material from his point of 15 view. 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. 10 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 th AND NOW, this 26 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. Duffie, 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 6 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 th AND NOW, this 26 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, _________________ J. Wesley Oler, Jr., J. E. Robert Elicker, II, Esq. Divorce Master Mark C. Duffie, 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