DOLLARS IN DIVORCE - 2006
2006 and Late 2005 Appellate Court Decisions
Involving Support and Divorce
Mary Cushing Doherty, Esquire
High Swartz LLP
610-275-0700
During the past year in Pennsylvania, lawyers and litigants are testing the waters of new Support Guidelines and Amendments to the Divorce Code. The Guidelines published in late September, 2005, have been in effect since the end of January, 2006. The Divorce Code Amendments, in the works for 10 years passed in late 2005. The new issues triggered by these statutory and rule changes are now being litigated and few cases specifically address the changes. More clarification will emerge in the year ahead.
The cases of note below primarily revolve around the issues of earning and earning capacity. Accountants and tax advisors continue to be important to the lawyers that tackle the tough cases. In Chapman-Rolle v. Rolle, (cited below), issued February 10, 2006, the doctor-husband failed in one of his more interesting arguments, the change in his tax status post-divorce and the difference between federally tax sheltered alimony and the state tax. The appellate court rejected these tax issues on appeal. At the trial level, the husband did not provide the expert testimony or the law to support his argument that his tax status would change post-divorce. The companionship between the lawyer and the accountant is key in order to present both the legal analysis and the calculations to the court for determination on the trial level and review by the Superior Court.
As an added bonus, two interesting cases have issued this year on grandparents rights. These are outside the realm of the economic issues under the support and divorce law. Many grandparents are willing to sacrifice personal savings in order to pursue the chance to have partial custody with the grandchildren whose parents are separated, divorced or have died. For the grandparents reading this outline, take note.
I. TRUST FUNDS AND CHILD SUPPORT
Ricco v. Novitski, 874 A.2d 75 (Pa.Super. 2005), decided May 10, 2005.
Father was not allowed a downward deviation from his guideline child support obligation. The parties' son suffered from profound mental and physical disabilities. An award from a medical malpractice settlement was placed in a Special Needs Disability Trust for the specified purpose to supplement the son's primary sources of support. Mother, who was employed as a teacher received $500 per month from the trust. When their second son was emancipated from the Order, Father sought a reduction in support. The initial recommendation was a downward deviation. After hearing, the Trial Court decided to release Father altogether from his child support obligation in light of the funds available to Mother from the Special Needs Disability Trust. On appeal, the Superior Court reversed.
The Superior Court found there is no authority to eliminate a Father's obligation. In this case, Father had an ability to pay. Mother made about $41,000 as a full-time teacher; Father made $43,000, self-employed. The Court noted that Father should not be allowed to evade his support obligation through the use of trust funds, even though Father is not custodian of the assets of the trust. See Sutliff v. Sutliff, 528 A.2d 1318 (Pa. 1987). The Superior Court found that as a matter of law and public policy, support obligations may not be underwritten by a Special Needs Disability Trust. Assets should not be depleted unless a Father is genuinely unable to contribute to the child's reasonable needs. The trust was established to provide for the child's supplemental needs as a disabled person, and the trust assets should not be used as a resource to excuse Father's primary support obligation. In fact, Father is indirectly benefiting because he will not have to provide additional support to meet the child's special needs which could have triggered an upward deviation from the Support Guidelines. Accordingly, the Guidelines would not allow either a release of obligation or a reduction in obligation, except where a Father's income would drop below the threshold in the Rules of $550 per month income if he had to pay support.
II. EARNINGS/EARNING CAPACITY
Baehr v. Baehr, 889 A.2d 1240 (Pa.Super. 2005), decided December 15, 2005.
Father's July, 2003 Petition for Modification resulted in an Order in March, 2004 that Mother's earning capacity was $750 per month, and Father's earning capacity was $5,000 per month. Litigation concluded in February, 2005, and the appeal was filed in March, 2005. A decision issued by the Superior Court in December, 2005.
In this case, Father and Mother had been back and forth to court to review support. During the 2004 trial, the court took a fresh look at Mother's income and earning capacity. In prior hearings, her earning capacity was set at $1,000, but upon close analysis, the Trial Court decided to assign to Mother an earning capacity of $750 per month, $50 higher than her actual history of earnings. The Superior Court affirmed, finding that the Trial Court had the latitude to set earnings and earning capacity based on the facts and circumstances at the time of trial. The Trial Court was not bound by an earlier Stipulation which were not borne out by the current facts.
Father had sought reductions in support over the years. In contrast to Mother, who had minimal work experience and modest training, Father had a twelve-year history in the information technology field. He had a Bachelor's Degree and several certifications. Prior to being laid off in July, 2003, Father had earned $60,000 in salary for five years plus bonuses, with gross earnings between $80,000 and $90,000 per year. After the lay off, he began working for his brother and his income dropped to about $30,000 per year. The Trial Court properly set Father's earning capacity at $60,000 per year, $3,604 net per month.
A third issue arose regarding medical insurance. Father had provided healthcare through his employment, and when he began working for his brother, he lost coverage. The Court ordered Mother to maintain coverage and Father to contribute. Father objected because he claimed he could maintain the medical insurance coverage. The Trial Court found no proof, and the Superior Court affirmed.
Chapman-Rolle v. Rolle, 893 A.2d 770 (Pa.Super. 2006), decided February 15, 2006.
In a case that every accountant should study with the lawyer preparing for trial, the Superior Court chastised the recipient's analysis of her business deductions, and the payor's failure to prove his change in tax status.
Here the doctor-Mother appealed on the basis the trial court failed to deduct her business expenses from her income. The Superior Court acknowledged that Trial Court accepted Mother's analysis of her income and business expenses. Since the case involved a Melzer analysis, after Mother calculated her net income, she deducted her business expenses as part of her support needs. Since her percentage contribution to child support was based on her net income after her reasonable expenses, the fact that business expenses were counted as legitimate needs, rather than deducted from gross income, resulted in the same net amount after taxes and valid support expenses. The Superior Court observed that to deduct business expenses from her income, as well as reducing available income as budget items would have been double-dipping.
The doctor-Father appealed on the basis the court failed to consider the income shift due to his alimony payments. Once he was divorced and his alimony payments were deducted from his income and added to Mother's income, the proportionate contribution to child support would change. Father also claimed the Trial Court failed to revise his post-divorce tax status as a single person. He asked the Appellate Court to review his net income on the basis of state taxes on earnings which were paid as alimony. As for Father's argument that the Trial Court failed to recognize the income shift, the Superior Court disagreed and found the income shift was contemplated by the court below. As for the post-divorce tax analysis, the Appellate Court noted that Father failed to cite the basis for his tax arguments, so those arguments were waived. Parties must provide the Court with a revised tax analysis which is supported by law.
Finally, neither party presented an allocation of expenses between parent and children for their Melzer analysis. The Superior Court recognized that the children's needs, although they could have been gleaned, had not been specifically argued. In this instance, the Superior Court remanded for such allocation and a more complete analysis by the Trial Court.
The case is also interesting as an example of the various levels of child support. For blocks of time, the child support obligation moved up and down depending upon the children's need for tuition, child care, etc., prompting the Court to make a new calculation at each turn of events.
Berry v. Berry, 898 A.2d 1100 (Pa.Super. 2006), decided June 2, 2006.
Father, a twelve-year employee of KPMG, was terminated by the firm in June, 2004, less than five months after he filed for divorce in late January, 2004. Father claimed the date of separation was several months earlier, and Mother argued it was no sooner than January, 2004. Father received severance from KPMG in the amount of $306,250 gross based on seven months prior base pay. In addition, he received his accrual account, which was described as undistributed income previously earned, totaling $109,002 gross. By July, 2004, Father was working at Parente Randolph, LLC.
Mother had filed for support in May, 2004, and the Trial Court included in Father's income both the severance and the accrual account payments. Mother argued that the severance and accrual account payments were marital assets. She would receive a much more significant share of those funds in equitable distribution than she would receive in her award of alimony pendente lite. After child support needs are met, 30% of the Father's excess income is paid as alimony pendente lite, taxable to Mother if she files a separate return that year.
The Superior Court noted that the accrual account funds were in Father's capital account in 2002, long before the earliest claimed date of separation in late 2003. Pre-separation funds must be treated as marital assets, and should not have been included in Father's 2004 income. As for the severance pay, the Superior Court scrutinized the basis for the severance. Since the KPMG by-laws stated that the severance payment was to replace post-separation earnings, the Superior Court upheld the Trial Court's determination to include the severance in 2004 income.
Accountants should read with interest the Superior Court's detailed analysis of Husband's deductions from income. The Court cited the presentation of the expert, a CPA. The expert had simply deducted mandatory pension, unreimbursed business expenses, mandatory PAC contributions and loan principal payments. A legal analysis was not provided by the accountant, and should be argued by the lawyer. The Court only allowed the deduction for mandatory pension payments. Mother argued that Father failed to "prove" that they were mandatory, but in this instance, the Court noted Mother failed to rebut Father's statement that the pension was mandatory.
III. REASONABLE AND NECESSARY EXPENSES
Howland v. Howland, 900 A.2d 922 (Pa.Super. 2006), decided May 25, 2006.
Father, a psychiatrist, withdrew from seeing his sons two years after the parties separated to spare his sons the effects of the Father's poor relationship with Mother. Two of the four boys had special needs, including serious behavioral problems. Mother made all decisions regarding their care and treatment. Mother consulted with professionals, including psychologists and psychiatrists regarding appropriate school placement. When Mother decided to place the boys in out-of-state residential facilities in Utah and New Mexico, at a combined cost of $7,735 per month, Mother went to court to seek Father's contribution to these programs as special medical expenses. The Trial Court found that Father, who earned $261,000 per year could afford his share, 77%, or $5,955 per month. In addition, Father was obligated to pay alimony and other child support expenses.
On review, the Superior Court found no evidence that Mother had thoroughly considered any facilities, including other residential treatment, available in Pennsylvania, or available at a lesser expense. The one child's doctor recommended he be closer to home to include the family in therapy. The Superior Court determined that the Trial Court failed to consider the reasonableness of out-of-state boarding school expenses, or whether the burden on the obligor would be excessive. Father was working two jobs to meet all obligations. (Other child support was $2,673 per month; alimony was $3,000.) The cost of the private boarding facilities was found to be excessive and confiscatory.
The Superior Court found the Trial Court had failed to attribute to Mother an earning capacity based on full-time employment in the fields in which she was trained. The matter was reversed and remanded.
IV. SUPPORT MODIFICATION
Belcher v. Belcher, Sr., 887 A.2d 253 (Pa.Super. 2005), decided October 31, 2005.
After a Master's hearing, Mother's Petition to Modify Support was dismissed by the Trial Court who found Mother had failed to show change of circumstances. The party seeking modification has the burden to establish that current conditions differ and the Trial Court felt Mother failed to meet the burden. The Superior Court reversed on appeal.
It was irrefutable that when the parties signed their divorce settlement agreement, Mother was to be allowed to return to use her fully equipped beauty salon at the marital home without the payment of rent. Immediately after signing the agreement, Father removed all of the equipment so that Mother could not operate the business, in violation of the agreement and triggering a clear basis for change in circumstances. The Trial Court secondarily concluded that Father's actions did not affect Mother's earning capacity. On appeal, it was noted that once re-equipped, Wife's business still could not be operated without payment of rent, therefore, Father had forced a change of circumstances which would reduce Mother's earning potential. The matter was remanded to the Trial Court to recalculate support based on the facts as presented at the original master's hearing.
V. SUPPORT ENFORCEMENT/CONTEMPT
Godfrey v. Godfrey, 894 A.2d 776 (Pa.Super. 2006), decided February 28, 2006.
While the Superior Court upheld an Order for Contempt for Father's failure to appear when notified of an enforcement hearing, the other Orders were vacated. The Trial Court had ordered that in order to purge himself of contempt, Father must turn over his tax refund, and must obtain employment. On appeal, it was determined that Father had no present ability to turn over a tax refund check since there had been no tax withholding at his prior employment where he worked "under the table". Finding a job could not be a purge requirement. The lower court had also required a bond, which the Appellate Court vacated as punitive for lack of present ability to pay.
VI. EQUITABLE DISTRIBUTION/ALIMONY
Marshall v. State Employees Retirement System, 887 A.2d 351 (Pa.Cmwlth. 2005), decided November 23, 2005.
Husband, who was terminated from employment at Penn State University for theft of services, was thereafter divorced from Wife. The Trial Court entered a pension division order, (DRO), awarding Wife 50% of Husband's lump sum payment and 50% of his monthly annuity payment from the State Employees Retirement System (SERS) Pension. Later that year, Husband was sentenced for his theft and was ordered to make restitution to Penn State. He assigned all sums to which he was entitled from SERS to Penn State to satisfy that obligation.
Although Husband and Wife believed that Wife would still receive her half distribution, in fact, SERS paid the entire lump sum, over $107,000, to Penn State. SERS did divide the monthly annuity payment of just over $3,300 equally between Penn State and Wife. Although the Retirement Code for Pennsylvania lacks express language to determine the priority between the claim by the Commonwealth and the claim of a member's alternate payee, the Retirement Code provides that an alternate payee's rights are derivative of the member's rights. In this case, the alternate payee cannot receive an amount of greater value than the member would have received. It appears that Wife should thank her lucky stars that she received one-half of the monthly annuity.
Wang v. Feng, 888 A.2d 882 (Pa.Super. 2005), decided December 13, 2005.
The parties moved from China to the United States, where Husband, a surgeon in China, hoped to become an oncologist. They moved from New York to Florida to Pittsburgh, while Husband completed his residency and oncology fellowship. Over a period of 15 years, Wife was the primary or sole bread winner. Although Wife received a Masters Degree, she was never able to pursue employment due to the moves. After Husband completed his degrees, he left the marital residence and filed for divorce. The marital estate was under $58,000. Wife received an award of the entire marital estate, plus $83,830 representing equitable reimbursement for the dollar-for-dollar amount by which Wife out-earned Husband from 1990 to 1994. The Appellate Court found no abuse of discretion in the Trial Court's creative resolution. The Court cited the Divorce Code that recognition should be given for a spouse's contribution to education, training or increased earning capacity of the other spouse. In this instance the marital estate was insufficient to compensate Wife for her contribution to Husband's increased earning power. The lump sum obligation was upheld.
This is a case often cited, and rarely followed. Masters and trial judges will not find this extraordinary relief in most cases, but in the right case this is an important precedent.
Smith v. Smith, 904 A.2d 30 (Pa.Super. 2006), decided July 14, 2006.
In a nice summary of some of the common themes in equitable distribution, alimony and counsel fee cases, the Superior Court affirmed portions of the Trial Court's decision and overturned others to be remanded.
Wife disputed the date of valuation of Husband's business. The Superior Court defended the Trial Court's decision to value as of a date reasonably close to the time of distribution.
Wife objected to the alimony determination on the basis that the Trial Court did not include in Husband's income the money he was diverting through his paramour's trucking business. The Trial Court and the Appellate Court found that Wife failed to prove the diversion of income from Husband's business to the paramour's business, or indirect receipt of income through the paramour. The Superior Court did remand, however, due to the failure of the Trial Court to clearly consider the tax impact of the alimony award. The Appellate Court also noted there was no lower court record to document the reasonable needs of Wife. It was unclear whether the alimony payment, after taxes, would meet those needs.
Wife contended the Trial Court unfairly failed to award counsel fees, but that was affirmed as the Trial Court has discretion to award counsel fees on a case-by-case basis.
Husband appealed claiming that the court unfairly included in the marital value of his business his personal (professional) goodwill. The Superior Court surmised that Wife's expert report, which did include goodwill, likely attributed most of the goodwill to enterprise rather than personal goodwill. Without a clear discussion in the record, the matter was remanded for determination of whether some goodwill was professional/personal, which should be excluded from the marital value.
The Superior Court recognized that upon remand, the Trial Court may find that a different scheme of equitable distribution would become necessary.
VII. DATE OF SEPARATION/COUNSEL FEES
McCoy v. McCoy, 888 A.2d 906 (Pa.Super. 2005), decided December 13, 2005.
This case is significant because it anticipated a change in the law now reflected in the Divorce Code Amendments. If there is interim equitable distribution of marital assets is an award of counsel fees appropriate? In addition, it addresses the oft-litigated issue of date of separation.
Wife filed for divorce November 20, 2002, after Husband discovered Wife had committed infidelity in October, 2002. Husband argued that the date of separation occurred in 1996 when the parties began living in separate bedrooms. The Trial Court found the parties appeared to be a married couple until the infidelity was discovered and the divorce complaint was filed. During the intervening years, the parties took vacations as a family, attended church together, shared finances, filed joint tax returns, etc. The Trial Court found the presumption of separation at the date of filing of the Divorce Complaint had not been overcome. The parties had held themselves out as husband and wife, and neither manifested an intent to dissolve the marriage prior to Wife filing for divorce. Accordingly, the date of separation was confirmed at November, 2002. The Superior Court affirmed.
During the pendency of the litigation, the parties received advances in anticipation of equitable distribution. Husband received sole title and occupancy of the marital residence, and Wife received $50,000 cash plus $25,000 from Husband's retirement account. The Trial Court accepted the recommendation of the Divorce Master awarding equal division of the marital estate plus $5,000 to be paid by Husband to Wife on account of counsel fees. Husband protested the counsel fee award since Wife had liquid assets during the pendency of the litigation by way of the cash distribution. The Court noted that notwithstanding cash available, Wife had met her burden at trial that it was appropriate for Wife to receive counsel fees. The Superior Court confirmed that the purpose of an award of counsel fees is to promote the fair administration of justice and to enable a dependent spouse to maintain a divorce action without being placed at a disadvantage. Wife argued the cash advance was necessary for Wife to secure replacement housing for herself and the children after Husband received the marital residence. Acknowledging this to be a "close case", the award of counsel fees was affirmed.
VIII. PROPERTY SETTLEMENT AGREEMENTS
Wade v. Huston, 877 A.2d 464 (Pa.Super. 2005), decided June 8, 2005.
In 1989 the parties signed a property settlement agreement (PSA) which provided that Wife would be allowed to remain in the marital home with the children until she chose to sell it. In the PSA, it was agreed that Husband would receive half of the net proceeds when the house was sold. In 1991, Wife decided to refinance the home, and Husband cooperated with the refinance by signing the deed to Wife so the new mortgage would be in her name alone. In 2002, when the house was placed on the market and sold, Wife refused to pay Husband one-half of the net proceeds. The Trial Court ordered Wife to comply with the terms of the PSA. Wife claimed the 1991 deed acted as a modification of the PSA. The Superior Court, following the Trial Court, disagreed with Wife and held that the doctrine of merger did not apply. The marital PSA was a contract that bound Wife who owed Husband one-half of the net proceeds from the sale of the home.
Herzog v. Herzog, 887 A.2d 313 (Pa.Super. 2005) decided November 21, 2005.
This case serves as a lesson to all lawyers to draft property settlement agreements with specificity and reasonable parameters outlined. In this case, the parties signed a settlement agreement that required Husband to provide Wife a modular home of Wife's choice, as well as various amenities, the specifics of which were to be determined by Wife. Husband purchased the modular home selected by Wife at a cost of $75,000. Then Wife directed certain improvements totaling an additional $35,000. Wife eventually engaged a contractor and expanded her vision for the modular home. She sought improvements totaling $2.3 million, including $893,000 worth of fencing and $950,000 worth of landscaping. Husband filed for special relief and Wife filed for contempt. The Trial Court found that Husband was required to construct a replacement modular home with a cost of approximately $150,000 total. The court maintained that under the principle fundamental to contract law, every contract has an implied term of fair dealing. The Superior Court agreed that Husband had the right to enforce the contract according to his reasonable expectations, and the Trial Court committed no error in doing so.
Chen v. Chen, 893 A.2d 87 (Pa. 2006), decided March 20, 2006.
After the Trial Court and the Superior Court allowed a daughter to intervene for enforcement of a property settlement agreement (PSA), the Supreme Court reversed. Wife had been primary custodian of the parties' minor daughter, and Husband was obligated to pay Wife support plus incremental increases based on increased earnings from the time of execution of the agreement. Before the daughter turned 18, Wife filed a petition to collect arrears under the PSA. After turning 18, the daughter filed a petition to intervene and sought standing as the intended third-party beneficiary of the PSA. The Supreme Court found that since the daughter was never intended to receive the child support payments directly, Husband was obligated to pay support to Wife, and it was up to Wife to exercise her discretion as to how to best use the support funds for the care of their daughter. The Supreme Court relied both of the law of contracts and public policy considerations. It did not want to open a Pandora's box, allowing children to sue their parents challenging their parents' compliance with the terms of the agreement.
Stamerro v. Stamerro, 889 A.2d 1251 (Pa.Super. 2005), decided December 21, 2005.
In the instant case, Husband sought to modify his contractual alimony obligation under the parties' divorce settlement. The terms of the parties agreement for post-divorce alimony provided that alimony was non-modifiable unless Husband's income was greater than $600,000 or less than $200,000 in any given year. Husband submitted that the agreement did not contemplate earning capacity, voluntary reduction of income, proof of change of circumstances or the Divorce Code definition of alimony as a basis for modifying his obligation. The Court recognized that marital settlement agreements are private undertakings. This agreement which was incorporated but not merged in the decree is governed by the law of contracts and cannot be modified by the Court in the absence of a specific provision in the agreement for judicial modification. The Trial Court is bound to ascertain the intent of the parties from the writing itself. If the writing is unclear, the court may consider the parties' outward and objective manifestations of ascent as opposed to subjective intentions. The Court further noted that every contract imposes upon each party as duty of good faith and fair dealing in its performance and enforcement.
The Trial Court made a factual analysis of Husband's "income" as the term is used in the Domestic Relations Code. During the year in question, Husband was an independent contractor for his new wife's company. Husband submitted an expense statement showing that his monthly living expenses were over $210,000 per year. The Trial Court did not find that Husband met his threshold burden to prove gross income below $200,000. The Superior Court affirmed. Husband should not be allowed to evade the spirit or abuse the terms of the agreement by unilaterally or voluntarily reducing his income. To prevent injustice, the Trial Court properly imputed this requirement into the contract.
In Re O'Brien, 898 A.2d 1075 (Pa.Super. 2006), decided April 26, 2006.
Husband and Wife married each other after each had children of prior marriages. After moving to a retirement community, they executed a post-nuptial agreement to preserve their estates for their respective children. Husband agreed to execute a will specifically providing that if he predeceased Wife, Wife would receive the earnings on all of Husband's assets for the remainder of her life, as well as a jointly owned mutual fund worth $100,000, and that the mutual funds, trust income plus principle if needed would constitute sufficient funds to provide for Wife's needs. The parties later separated.
Thereafter, Husband twice executed replacement wills, both of which gave Wife the life estate as income beneficiary, but made other significant changes reducing the financial protection originally promised. In addition, after separation, Husband liquidated the mutual funds and gave Wife half without explaining to Wife that that money was half of the mutual funds which she was to receive in their entirety.
Wife filed for divorce and before the final decree, Husband died. When Wife sought to take her elective share against Husband's estate, the executrix, (Husband's daughter), challenged Wife's election based on the Agreement. The Trial Court found, and the Superior Court affirmed, that the Agreement was not binding on Wife.
Wife's receipt of the $100,000 mutual fund in its entirety was an essential component of the Agreement. When Husband liquidated that asset and split the proceeds, he destroyed the consideration for the original Agreement. Wife's acceptance of one-half the proceeds did not ratify Husband's actions, as there was no evidence that Wife knew the source of the funds. Ratification could not occur without clear knowledge and acquiescence. Furthermore, the subsequent wills executed by Husband constituted further breach of the Agreement. The subsequent wills changed the manner in which Wife was to receive the income from the estate. Husband no longer provided for principal payments in the event Wife's health failed and he did not leave designated personal property to Wife. Those will provisions in the original Agreement, once modified by Husband were found to be detrimental and constituted breach of the Agreement. The consideration and the Agreement failed. Wife, therefore, had every right to take her elective share against the estate.
Stackhouse v. Zaretsky, 900 A.2d 383 (Pa.Super. 2006), decided May 12, 2006.
Husband and Wife appealed the Trial Court's interpretation of their prenuptial and postnuptial agreements. After the initial trial, the case was appealed to the Superior Court and was remanded for reconsideration due to a critical change in the law. After the second analysis by the Trial Court, both parties appealed again.
Ignoring the advice of friends and lawyers, the parties signed a do-it-yourself prenuptial agreement in front of their guests at their wedding. Two years later, they signed a postnuptial agreement. In the instant appeal, the Superior Court noted that under Stoner v. Stoner, 819 A.2d 529, (Pa. 2003), the Supreme Court directed that trial courts need not require a determination as to whether an agreement is reasonable. Nor need there be a determination that both parties understood the legal rights being relinquished. Both of these parties' agreements addressed in detail the parties' separate assets. The sanctity of the separate assets in each party's sole name and control should not be superceded by any other provisions in law. Wife strenuously argued that she was only waiving her claims in the event of death. The broad language in the agreements contradicted that. In addition, there was general language regarding waiving all economic rights.
The first trial court noted that whereas separate property rights had been discussed at length, other rights were not specified, such as equitable distribution of joint property, alimony, alimony pendente lite and counsel fee claims under the Divorce Code. After the second trial, an award of alimony pendente lite ended as of the decision, June, 2005. In addition, that court awarded counsel fees incurred previously.
The Superior Court ruled that under Stoner, the broad waiver language was sufficient and should bind the parties. The Superior Court would not reverse an award of alimony pendente lite and counsel fees which were entered in June, 2005, when the validity of the Agreement and the interpretation of the Agreement was concluded. It appears that the interim relief of alimony pendente lite and pre-decree counsel fees may be awarded with some latitude. In general the parties will be bound by their agreements, even those poorly drafted, as seen in this case.
Johnson v. Johnson, --- A.2d ---, 2006 WL 2589787 (Pa.Super. 2006), decided September 11, 2006.
The Johnsons were previously before the Superior Court, and their case history was reported at 864 A.2d 1224 (Pa.Super. 2004), decided December 21, 2004. In that instance, the Superior Court found that the Trial Court had reduced Husband's monthly payment under an award for "equitable reimbursement" to such a low monthly amount that it would take too long for Husband to satisfy his debt. The Trial Court's Order constituted forfeiture, and the Superior Court reversed.
After the first appeal, Wife learned Husband and his current wife sold their vacation home in Vermont, and filed seeking to collect her judgment from the proceeds of the sale of the home. The Vermont court dismissed Wife's case. When Wife was unable to attach the proceeds of the vacation property, as well as proceeds of the sale of Oppenheimer funds, an appeal was taken.
The Superior Court agreed with the lower court that the proceeds of the sale of the Vermont vacation property, an entireties property, retained their entireties character and were not subject to the claims by a credit of one of the co-owners. In contrast, the Oppenheimer funds may have been sold in Husband's name alone, and without the protection of entireties ownership and could have been subject to the claims of Wife. Since the lower court failed to create a record to determine definitively whether the funds were owned as tenants by the entireties, the matter was remanded. As an aside, Wife is currently receiving 40% of Husband's income on the twenty-year-old equitable distribution award, which income is now based on his SSI award.
IX. GRANDPARENTS VISITATION/NON-ECONOMIC ISSUES
Little-Stepp v. Cancilla, 896 A.2d 647 (Pa.Super. 2006), decided March 31, 2006.
Under Pennsylvania law, physical custody rights, including partial custody and visitation spring from the parent-child relationship. Caselaw has developed to identify the custodial rights of certain third parties. In the case of grandparents, there is a statutory provision, the Grandparent Visitation Act, giving grandparents the right to seek partial custody/visitation when the natural parents are separated, divorced or one is deceased. In this case, the grandmother had adopted the father of the child in question. Father did not live with Mother or the child. The paternal grandparent sought partial custody under the statute providing for grandparent visitation. The Trial Court found the paternal grandparent by adoption had no standing, as the caselaw constrained the Court to interpret the statute as referring only to a biological grandparent. On appeal, the Superior Court reversed and found that the adoptive paternal grandmother has the same rights and responsibilities of the natural parent. Therefore, the adoptive grandparent shall be given standing under the statute.
Hiller v. Fausey, --- A.2d ---, 2005 WL 2419026 (Pa. 2006), decided August 22, 2006.
The Supreme Court granted allocatur to determine the constitutionality of the Trial Court's application of the Grandparent Visitation Act. The Superior Court held the Trial Court's application was constitutional, and the Supreme Court affirmed.
The child's maternal grandmother sought partial custody under the statute after the death of her daughter, Mother to the child. After Mother's death, Father had abruptly denied maternal Grandmother contact with the child. After trial, the court granted Grandmother partial custody one weekend per month and one week in the summer. In compliance with the United States Supreme Court Decision Troxel v. Granville, 530 U.S. 57 (2000), the Trial Court applied the presumption that a fit parent acts in the child's best interests. The Trial Court properly noted that the grandparent seeking partial custody carries the burden of proof. The Trial Court specifically analyzed and found that it would be in the child's best interest to maintain contact with Mother's side of the family. Father argued that Grandmother's involvement would interfere with his relationship with the child because of the animosity between Grandmother and Father. The Court found no evidence that Grandmother expressed animosity toward Father or expressed negative feelings about Father to the child. Thereby, the Trial Court properly granted partial custody to Grandmother.
Father argued that in addition to the requirements of the Grandparent Visitation Act, particularly Section 5311, a grandparent must demonstrate that a child will suffer harm as a result of the denial of visitation or partial custody. The Supreme Court noted that the Pennsylvania statute does not require a specific finding of harm, and the Supreme Court rejected the requirement that grandparents demonstrate harm as a condition precedent to a grant of visitation or partial custody. Such a requirement would set the bar too high, vitiating the purpose of the statute and its policy, which is to assure the continued contact between grandchildren and grandparents when a parent is deceased, divorced or separated. The language of the statute, combined with the presumption that parents act in the best interest of the child sufficiently protect the fundamental rights of parents without requiring any additional demonstration of unfitness or specific requirement of harm or potential. The statute, as applied, meets the requirements of Troxel.
