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Home My WebLink About2007-6668 KATHLEEN J. GARRETT, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : RICHARD H. GARRETT, : DEFENDANT : 07-6668 CIVIL TERM IN RE: PLAINTIFF’S EXCEPTIONS TO THE DIVORCE MASTER’S REPORT AND DEFENDANT’S EXCEPTIONS TO THE DIVORCE MASTER’S REPORT BEFORE OLER, J., GUIDO, J. AND MASLAND, J. OPINION AND ORDER OF COURT Masland, J., June 29, 2011:-- Before the court are the exceptions to the divorce master's report filed by both Plaintiff, Kathleen J. Garrett (Wife) and Defendant, Richard H. Garrett (Husband). After extensive briefing by the parties and argument en banc, we now overrule both parties' exceptions and endorse the master's report in all respects. I. Facts During the course of the parties' lengthy marriage, they operated an electronic component supply company. For many years, the business was successful and afforded the parties a substantial income and accumulated assets, including a valuable home and investments in cash and annuities. Due to foreign competition, the business soured and ultimately had to be shuttered. After the close of the business, Husband attempted a new electronics venture but that was ultimately unsuccessful. Eventually, he settled into a career in real estate. Unfortunately, Husband earned only a fraction of his previous 07-6668 CIVIL TERM income in his new career. Even more unfortunately, throughout the entire period of time from the winding down of the original business to the parties' separation, they maintained their lavish lifestyle, including an exclusive residence, luxury automobiles, and other amenities. To finance their lifestyle, Husband proceeded to liquidate virtually all of the parties' accumulated assets. In doing so, he had exclusive control of the parties' purse strings and kept shoddy documentation of his expenditures on the parties' behalf. By the time of the parties’ separation and the initiation of divorce proceedings, the marital estate had been reduced to a shadow of its former self. The parties now litigate over the remains. II. Discussion After proceedings before a Divorce Master, the Master concluded that Husband had expended the vast majority of the marital estate to maintain the parties' previous lifestyle. In the absence of evidence to contradict the majority of Husband's account, the Master largely accepted Husband's contention that he expended the funds for the benefit of the marital estate. However, the Master did find that Husband could provide no explanation for the disposition of one savings account and therefore concluded that Husband had derived the majority of the benefit from that account and included it in the calculation of the remaining marital estate. Both parties take exceptions to the Master's Report. Wife, in a 45-page brief, takes exception to every aspect of the Master's Report, but for the finding that the previously mentioned savings account should be imputed to the marital estate. In her brief, she takes the opportunity to essentially present the facts of -2- 07-6668 CIVIL TERM her entire case a second time. For his part, Husband argues the Master erred regarding the savings account imputed to the marital estate. For the following reasons, we overrule both parties' exceptions and endorse the Master's Report in every respect. A. Wife's Exceptions At the outset, we note "a master's report and recommendation, although only advisory, is to be given the fullest consideration, particularly on the question of credibility of witnesses, because the master has the opportunity to observe and assess the behavior and demeanor of the parties." Moran v. Moran, 839 A.2d 1091, 1095 (Pa. Super. 2003). In the instant case, where we are largely without a paper trail to document Husband's disposition of the martial estate, we must rely almost exclusively on the Master's estimation of Husband's credibility. Ultimately, lacking exhaustive documentation of Husband's disposition of the marital estate, the Master accepted Husband's accounting of his July 2007 expenditures and utilized these figures to extrapolate a rough annual expenditure figure. Implicit in this approach is a limited credibility determination in Husband's favor. We emphasize the word "limited," as the Master noted, "the Master is very suspicious of how [H]usband handled the marital assets, nevertheless, he is at the same loss as [W]ife to try to account for how the marital estate was spent." Master's Report, March 2, 2010 at 5. What the Master did find credible was Husband's basic explanation that he spent the bulk of the martial assets trying to maintain the expensive lifestyle the couple had enjoyed prior to the downfall of Husband's business. This credible explanation, coupled with the absence of -3- 07-6668 CIVIL TERM countervailing evidence, led the Master to rely on Husband's July 2007 accounting to form the basis for his award of equitable distribution. We agree with the approach and conclude that Husband’s credible testimony, coupled with the lack of evidence to the contrary, establish that Husband spent the vast majority of the parties’ assets for the benefit of the marital estate, subject to the liabilities described in the Master’s Report. B. Husband's Exceptions The Master did, however, find one asset that neither party was able to account for, a Commerce Bank savings account in the amount of $103,000.00. Because neither party could explain the disposition of those funds, and Husband was, at all times, in control of the assets, the Master presumed Husband benefited from the use of those funds more than Wife. Accordingly, in the interest of justice, the Master included the value of the vanished account in the calculation of the marital assets subject to a 50/50 split between the parties. We endorse this finding as well. As before, the Master had to base his finding on a combination of credibility determinations and the lack or presence of some evidence. Here, we endorse the Master's finding because, (1) it is undisputed that Husband was in exclusive control of the missing funds; (2) neither party could provide an explanation for the disposition of the funds; and (3) the Master found Husband's claimed ignorance of the disposition of the funds to be not credible. As such, the value of the savings account was properly imputed to the marital estate. -4- 07-6668 CIVIL TERM III. Conclusion Based on the Master’s credibility determinations and Husband’s accounting of the parties’ monthly expenses, we now overrule both parties’ exceptions in all respects. ORDER OF COURT AND NOW, this day of June, 2011, the Plaintiff’s exceptions to OVERRULED. the Divorce Master’s Report are The Defendant’s exceptions to the OVERRULED. Divorce Master’s Report are By the Court, Albert H. Masland, J. Jordan D. Cunningham, Esquire For Plaintiff Samuel L. Andes, Esquire For Defendant :saa -5- KATHLEEN J. GARRETT, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : RICHARD H. GARRETT, : DEFENDANT : 07-6668 CIVIL TERM SUPPLEMENTAL DECREE RESPECTING EQUITABLE DISTRIBUTION AND NOW, this day of June, 2011, it is ordered and decreed that: (1) Plaintiff shall receive the UBS IRA, valued at $22,481.06; (2) Plaintiff shall receive all the escrow proceeds from the sale of the parties' house and mortgage and homeowners' insurance refunds, in the amount of $69,077.10; (3) Plaintiff shall receive the 2001 Mercedes Sedan; (4) Defendant shall pay Plaintiff the sum of $9,008.42 within 60 days of this decree; (5) Defendant shall receive the 2007 Lexus trade-in value. By the Court, Albert H. Masland, J. Jordan D. Cunningham, Esquire For Plaintiff Samuel L. Andes, Esquire For Defendant :saa KATHLEEN J. GARRETT, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : RICHARD H. GARRETT, : DEFENDANT : 07-6668 CIVIL TERM SUPPLEMENTAL DECREE RESPECTING COUNSEL FEES AND COSTS AND NOW, this day of June, 2011, it is ordered and decreed DENIED that Defendant's request for counsel fees and costs is . By the Court, Albert H. Masland, J. Jordan D. Cunningham, Esquire For Plaintiff Samuel L. Andes, Esquire For Defendant :saa KATHLEEN J. GARRETT, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : RICHARD H. GARRETT, : DEFENDANT : 07-6668 CIVIL TERM IN RE: PLAINTIFF’S EXCEPTIONS TO THE DIVORCE MASTER’S REPORT AND DEFENDANT’S EXCEPTIONS TO THE DIVORCE MASTER’S REPORT BEFORE OLER, J., GUIDO, J. AND MASLAND, J. ORDER OF COURT AND NOW, this day of June, 2011, the Plaintiff’s exceptions to OVERRULED. the Divorce Master’s Report are The Defendant’s exceptions to the OVERRULED. Divorce Master’s Report are By the Court, Albert H. Masland, J. Jordan D. Cunningham, Esquire For Plaintiff Samuel L. Andes, Esquire For Defendant :saa