Opinion
293 EDA 2021
11-19-2021
HEATHER L. TRAPASSO v. JOSEPH G. TRAPASSO Appellant
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Decree Entered March 17, 2021 In the Court of Common Pleas of Northampton County Civil Division at No(s): No. C-48-CV-2013-03559
BEFORE: KUNSELMAN, J., NICHOLS, J., and KING, J.
MEMORANDUM
NICHOLS, J.
Joseph G. Trapasso (Husband) appeals from the decree divorcing Husband and Heather L. Trapasso (Wife). Husband challenges the valuation of marital property and the award of alimony pendente lite (APL) to Wife. We affirm based on the trial court's opinion.
We state the facts as presented in the master's report, which was adopted by the trial court:
The parties were married on September 25, 2004. The parties separated on April 18, 2013. There were no children resulting from the marriage and this was the first marriage for both parties. Wife was 47 years old at the date of the hearing. There was no testimony regarding any medical issues. During the marriage, Wife obtained a degree in nursing as well as a master's degree. Based upon her prior work experience and her education, Wife developed a specialized career as a medical writer. In this occupation, Wife contracts with various pharmaceutical companies to assist them in preparing and editing documents which are then submitted to "health authorities" for approval. These health authorities are typically governmental agencies both domestic and international.1
During the marriage, Wife established her business, Rite Idea Enterprises ("Rite Idea"), for which she is the sole employee. Rite Idea has few hard assets, consisting mainly of office equipment utilized by Wife, and the value of this entity is almost entirely Wife's expertise, goodwill, and professional reputation. Wife operated Rite Idea from a home office at 1658 Briarwood Circle ("Briarwood Home"), the marital residence.
As of the date of the hearing, Wife was earning in excess of $390,000 annually through Rite Idea. Despite her large salary, Wife had failed to amass the expected level of savings, assets, or retirement plans. The testimony revealed that during the marriage, Wife would spend lavishly on luxury items. Fortunately for Wife, she will continue to command a substantial salary post-divorce. Her strong earning ability will allow her to support her reasonable needs, continue her upper-class lifestyle, while also amassing retirement and savings accounts for the future. As an example of Wife's current financial abilities, after the date of separation, she purchased her own home and is now building equity in this asset. Her high income is also aided by the likely additional working years Wife will have over [H]usband due to her being ten years younger.
Husband was 58 years old at the date of the [hearing]. There was no testimony regarding any medical issues. Husband is a licensed physician, specifically in oncology, currently employed by St. Luke's Physician Group ("SLPG"). At the time of the hearing, Husband was earning over $500,000 annually. Husband completed his training and education prior to the date of marriage and was a partner within the medical practice then known as Urology Specialists of the Lehigh Valley, P.C. ("USLV").
In 2017, well after separation, USLV was bought out by SLPG in a purchase agreement that included a price for USLV itself as well as employment agreements for the shareholder-physicians of USLV. . . . In contrast to Wife, Husband lives a frugal lifestyle. As a result, Husband has amassed considerable savings and retirement assets. He will continue to earn a substantial salary thus enabling him to continue to support himself, meet all his reasonable needs, and continue to set funds aside for the future. Additionally, Husband has a number of non-marital assets and thus, considerable savings beyond the marital estate divided within this report.2
During the marriage, the parties maintained individual banking and credit card accounts and indeed much of their financial lives remained separate. Husband was primarily responsible for the home expenses of the couple. Husband paid the mortgage and real estate taxes on the Briarwood Home, the utility bills, entertainment expenses, and travel. Husband also supported Wife's efforts to increase her earning potential by loaning her funds for school and providing support typical within a marriage. It was uncontradicted that Wife did pay Husband back for all the sums he loaned her for education. Wife was responsible for the expenses pertaining to their show dogs, which were not insignificant. There was testimony that Wife would take charge of various renovation projects on the marital home and that she would also contribute to these projects financially. These projects, however, seem to have done little to increase the equity in the Briarwood Home. . . .
Husband has remained at the Briarwood Home and all ownership documents and any financial obligations on the same are in his name alone. The home was purchased immediately prior to the marriage by Husband. . . .
At the date of the hearing, both parties commanded substantial salaries. During the marriage, however, this was not always the case. In fact, Wife's income increased dramatically during the marriage as Rite Idea became a successful business. At one point during the marriage, Wife out-earned Husband's salary from USLV.Master's Report, 3/20/20, at 3-7; see also Order, 1/4/21 (adopting, as modified, the master's report).
Each party filed exceptions to the master's report, which the trial court resolved on January 4, 2021. See Order, 1/4/21. The trial court did not immediately file a divorce decree. On February 3, 2021, Husband filed a premature notice of appeal from the trial court's January 4, 2021 order. The 3 trial court subsequently filed a divorce decree on March 17, 2021. Decree, 3/17/21.
This Court held that Husband's appeal is properly us. See Order, 4/9/21 (stating that "upon [this Court's] docket review, and after [this Court's] receipt of an updated trial court docket evincing that the divorce decree was entered on the trial court docket on March 17, 2021, this appeal will be treated as timely filed" (citations omitted)); see also Campbell v. Campbell, 516 A.2d 363, 366 (Pa. Super. 1986) (en banc) (holding that an appeal filed before the trial court enters a final decree is "rendered final by the entry of a decree in divorce" (footnote omitted)).
Meanwhile, on February 10, 2021, the trial court ordered Husband to comply with Pa.R.A.P. 1925(b), and service occurred on February 11, 2021. Order, 2/10/21; Docket. On March 8, 2021, the trial court docketed Husband's Rule 1925(b) statement, which was dated March 3, 2021.
Attached to Husband's Rule 1925(b) statement was a completed United States Postal Service Form 3817, which reflects a service date of March 3, 2021. Because Husband complied with Rule 1925(b)(1), which permits the use of USPS Form 3817, we therefore conclude that Husband timely filed his court-ordered Rule 1925(b) statement.
Husband raises the following issues:
1. Did the [trial] court err in adopting the master's recommendation that the decrease in value of [Husband's] pre-marital property was limited to $52,000.00 as opposed to $263,000.00 that existed on date of separation and had zero value on date of distribution and a negative value of another $125,000.00 on date of distribution, contrary to the mandates of [23 Pa.C.S. § 3501(a.1)?].
2. Did the [trial] court err in adopting the master's recommendation that [Wife] was entitled to additional growth of [Husband's] pre-marital property after the date of separation where that growth resulted in a greater amount of the increase in [Husband's] marital property, contrary to [23 Pa.C.S. § 3501(a.1)]?4
3. Did the [trial] court err in granting and extending alimony pendente lite to [Wife] where she consistently earned a [substantial] income, at times greater than Husband, and produced no evidence as to "need"[?]Husband's Brief at 3.
In support of his first issue, Husband argues that the trial court erred in calculating the value of his USLV interest. Id. at 10. By way of background, the parties stipulated that the value of Husband's USLV interest on the date of marriage was $52,695, and the value on the date of separation was $236,734. R.R. at 18a-19a. On the date of the parties' distribution hearing, however, the value of Husband's USLV interest was $0, and Husband had to pay a further $125,000 to complete the sale of USLV. Id. at 328a-30a. The trial court held that Husband lost $52,695 and that he was entitled to offset that loss against any increase in the value of his other nonmarital property. See, e.g., Trial Ct. Op., 1/4/21, at 12-13.
We may cite to the reproduced record for the parties' convenience.
On appeal, Husband disagrees with the "start" date used to calculate the value of his USLV interest. Specifically, instead of using the date-of-marriage valuation of $52,695, Husband argues that the trial court should have used the date-of-separation value of $236,734. Husband's Brief at 11. Husband therefore reasons that the value of his USLV interest was negative $361,734, which represents the complete loss of $236,734, plus the additional 5 $125,000 he paid. Id. at 10-11. Husband asserts that under 23 Pa.C.S. § 3501(a.1), any decrease in the value of any nonmarital property "can be used as an offset." Id. at 11.
Wife counters that Section 3501(a.1) states that the "start" date must be the date of marriage. Wife's Brief at 2. Wife therefore reasons that Husband's maximum loss is $52,695, i.e., the date-of-marriage value of Husband's USLV interest. Id. at 4.
The trial court addressed this issue as follows:
Upon review, we find no error of law or abuse of discretion in the Master's determination of the marital value of Husband's interest in USLV. The Master properly assessed the credibility of Husband's expert witness, Mr. LeMaster, and credited his testimony that the sale of USLV allowed the four shareholders, including Husband, to satisfy more than three million dollars in outstanding corporate debt, wind down the business, and begin instead working as employees of St. Luke's. The Master reasonably found that the value of Husband's interest in USLV was, at the time of the hearings, zero dollars. Because the stipulated value at the time of the parties' marriage was $52,695, and because the Master is directed by law to the use the lesser of the value at the time of separation or the value at the time of the hearing, the Master properly found a decrease in value of $52,695 to serve as an offset against the gains of other pre-marital assets.Trial Ct. Op., 1/4/21, at 13, 24 (stating that the "Master's Report directly addresses [Husband's] argument that his loss should be much higher, more than $300,000, by noting that no such loss was proven at the hearing. We agree that the record does not support a decrease in value in excess of $52,695"); Master's Report, 3/20/20, at 15 n.7 (stating that "[w]hile Husband maintains in his post hearing letter brief that he is entitled to a credit for a 6 decrease in the amount of $361,734[, ] this sum was not proven at the hearing nor was the argument and math used within Husband's brief persuasive as to that figure").
The standard of review follows:
Our standard of review when assessing the propriety of an order effectuating the equitable distribution of marital property is whether the trial court abused its discretion by a misapplication of the law or failure to follow proper legal procedure. We do not lightly find an abuse of discretion, which requires a showing of clear and convincing evidence. This court will not find an abuse of discretion unless the law has been overridden or misapplied or the judgment exercised was manifestly unreasonable, or the result of partiality, prejudice, bias, or ill will, as shown by the evidence in the certified record. In determining the propriety of an equitable distribution award, courts must consider the distribution scheme as a whole. We measure the circumstances of the case against the objective of effectuating economic justice between the parties and achieving a just determination of their property rights.
Moreover, it is within the province of the trial court to weigh the evidence and decide credibility and this court will not reverse those determinations so long as they are supported by the evidence. We are also aware that 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.Goodwin v. Goodwin, 244 A.3d 453, 458 (Pa. Super. 2020) (citations omitted and formatting altered), appeal granted, ___A.3d ___, 2021 WL 4204802 (Pa. filed Sept. Sept. 16, 2021).
With respect to the valuation of marital property in "effectuating the equitable distribution of marital property," id., courts are guided by Section 3501(a.1) of the Domestic Relations Code: 7
(a.1) Measuring and determining the increase in value of nonmarital property.-The increase in value of any nonmarital property acquired pursuant to subsection (a)(1) and (3) shall be measured from the date of marriage or later acquisition date to either the date of final separation or the date as close to the hearing on equitable distribution as possible, whichever date results in a lesser increase. Any decrease in value of the nonmarital property of a party shall be offset against any increase in value of the nonmarital property of that party. However, a decrease in value of the nonmarital property of a party shall not be offset against any increase in value of the nonmarital property of the other party or against any other marital property subject to equitable division.23 Pa.C.S. § 3501(a.1).
"While the Divorce Code does not require a specific methodology for assessing an asset's value, it is beyond peradventure that the chosen methodology must represent an accounting of the asset's total value." Mundy v. Mundy, 151 A.3d 230, 237 (Pa. Super. 2016).
Thus, the trial court must exercise discretion and rely on the estimates, inventories, records of purchase prices, and appraisals submitted by both parties. When determining the value of marital property, the court is free to accept all, part or none of the evidence as to the true and correct value of the property. Where the evidence offered by one party is uncontradicted, the court may adopt this value even though the resulting valuation would have been different if more accurate and complete evidence had been presented. A trial court does not abuse its discretion in adopting the only valuation submitted by the parties.Biese v. Biese, 979 A.2d 892, 897 (Pa. Super. 2009) (citations omitted and formatting altered).
Instantly, Section 3501(a.1) requires using the parties' date of marriage as the initial "start" date for determining any increase in the value of Husband's USLV interest. See 23 Pa.C.S. § 3501(a.1) (stating that "[t]he 8 increase in value of any nonmarital property . . . shall be measured from the date of marriage"). The parties stipulated that the value of Husband's USLV interest was $52,695 on the date of the parties' marriage, and therefore, the trial court did not abuse its discretion. See Biese, 979 A.2d at 897.
To the extent Husband challenges the calculation of the loss, Husband did not establish any abuse of discretion by the trial court because Husband's proposed loss value uses the date-of-separation value but Section 3501(a.1) requires using the parties' date of marriage as the initial "start" date. See id. Regardless, even if the trial court could use the date-of-separation value as the "start" date, we agree with the trial court that it did not abuse its discretion by holding that Husband failed to establish the proposed loss value at the hearing because it was well within the trial court's discretion to "accept all, part or none of the evidence as to the true and correct value of the property." See id. The trial court acted within its discretion to reject Husband's proposed loss value and accept Wife's proposed loss value. See id.
In support of his second issue, Husband argues that the trial court erred by adopting the master's figures for the increase in value of the marital portion of two of his non-marital properties. Husband's Brief at 13. By way of background, Jonathan Cramer, Wife's valuation expert, testified that he excluded postseparation contributions and payments in calculating the value of the marital portions of the properties in question. R.R. at 200a. Mr. Cramer testified that he did his best to separate the marital from the nonmarital 9 contributions, but he did not have all of the required financial statements. Id. at 180a, 219a-20a.
Husband cross-examined Mr. Cramer as follows:
[Husband's counsel]. And you're aware that that statement that all nonmarital -- marital assets such as this, that the increase in value, for purposes of equitable distribution, is to be either the date of final separation or the date as close to the hearing on equitable distribution as possible, whichever date results in a lesser increase?
[Mr. Cramer]. Correct. And I didn't know -- you quoted from my report, but you didn't say the last sentence of the paragraph. I have noted the limitation of that report, and I say, [i]f historical statements had been made available to me to allow the calculation the way you're describing it, I would amend the report. But I was not provided with necessary statements to do the exact calculation that you're referring to.
[Husband's counsel]. But your calculation would still be -- would still result in a value that is greater than the value of the date of separation; correct?
[Mr. Cramer]. Correct, because I'd be including earnings on the marital contributions. Contributions made into the account during the marriage, in my opinion, are marital property and should include earnings postseparation. I do agree with you that the increase in value of nonmarital property, which would be the premarital balance, should be cut off at the date of separation, if that provides for a lesser increase than as of the current date. But we don't have statements from 2004, 2013, so I can't make the calculation in accordance with the letter of the law. This is the best I can do with what I have.R.R. at 213a-15a. In other words, because Mr. Cramer did not have statements post-dating the parties' date of separation, he could not calculate an alternative figure. See id. 10
On appeal, Husband argues that the trial court should have considered only "the increase in value of the non-marital property [up] to the date of separation [and] not any increase in value of any portion of the non-marital asset as of the date of the [equitable distribution] hearing." Husband's Brief at 18. Husband emphasizes that "Section 3501(a.1) is explicit that the marital portion of a non-marital asset is to be calculated from the date of marriage to the date of separation, only." Id. at 19.
In Wife's view, Husband "had the burden to provide sufficient credible evidence" of any nonmarital asset. Wife's Brief at 4. Regardless, Wife argues that her marital asset valuations omitted "any growth . . . after the date of separation" and any "post-separation contributions and any growth on those contributions." Id. at 6.
We have previously set forth the applicable law above. In relevant part, as quoted above, "the court is free to accept all, part or none of the evidence as to the true and correct value of the property." Biese, 979 A.2d at 897 (citation omitted).
Instantly, as stated, Section 3501(a.1) provides that the "increase in value of [the marital portion of] any nonmarital property . . . shall be measured from the date of marriage . . . to either the date of final separation or the date as close to the hearing on equitable distribution as possible, whichever date results in a lesser increase." See 23 Pa.C.S. § 3501(a.1). Therefore, to the extent Husband argues that the date of separation is the 11 only permissible date, Husband is incorrect. See id. Further, to the extent Husband's argument can be construed as a challenge to the calculation of the value, the trial "court [was] free to accept all, part, or none of the evidence as to the true and correct value" of the increase in value of any nonmarital property. See Biese, 979 A.2d at 892. The parties presented different values for the calculation of marital assets. Husband presented one set of values, which used the date of separation as the end point for his marital assets calculation, and Wife presented her set of values, which used the same date of separation. See R.R. at 200a (reflecting Mr. Cramer's testimony that he did not include post-separation contributions and payments); id. at 213a-15a (reflecting Mr. Cramer's testimony that he could not calculate any post-separation figures). Upon careful review of the parties' arguments, the record, and the trial court's opinion, we agree with and adopt the trial court's reasoning that it did not abuse its discretion in accepting Wife's values based on its analysis and review of the record. See Biese, 979 A.2d at 897.
Lastly, Husband argues the trial court erred in awarding APL to Wife, specifically thirty months of APL for a total of $75,660. Husband's Brief at 20, 23-24. In Husband's view, Wife failed to present "relevant evidence" of her "circumstances or her 'need' with regard to lifestyle or the cost of the divorce litigation." Id. at 20. Husband emphasizes that Wife earned over $345,000 in 2013 (when the parties separated), over $440,000 in 2014, and over $283,000 in 2016. Id. at 22. Because Wife failed to establish her burden of 12 proof for APL, Husband asserts that he improperly paid her thirty months of APL, totaling $75,660. Id. at 23-24.
Wife counters that Husband misstates the burden of proof. Wife's Brief at 9. Wife explains that the guideline support amount is presumed correct and that Husband was required to establish error in the guideline support amount. Id.
The standard of review for a grant of APL follows:
If an order of APL is bolstered by competent evidence, the order will not be reversed absent an abuse of discretion by the trial court. Further, in ruling on a claim for alimony pendente lite, the court should consider the following factors: the ability of the other party to pay; the separate estate and income of the petitioning party; and the character, situation, and surroundings of the parties.Strauss v. Strauss, 27 A.3d 233, 236 (Pa. Super. 2011) (citations omitted and formatting altered); see also 23 Pa.C.S. §§ 3702, 4322. "The guideline support amount is presumed to be the correct support amount." Ileiwat v. Labadi, 233 A.3d 853, 863 (Pa. Super. 2020) (emphasis and citation omitted). Because the guideline support amount is presumed correct, the burden is on the person opposing the APL amount "to produce evidence to persuade the fact-finder that the guideline amount was unjust or inappropriate, and that deviation was warranted under the statutory factors." Id. (citations omitted). An argument that the APL recipient does not "need the guideline amount to meet [the recipient's] expenses has been soundly rejected by this Court." Id. (citation omitted and formatting altered). 13
After careful review of the record, the parties' briefs, and the trial court's opinion, we affirm this issue based on the trial court's reasoning. See Trial Ct. Op., 3/31/21, at 9-15. We agree with the trial court that it did not abuse its discretion as the record supports the calculation of the APL amount, and this Court has rejected Husband's argument that Wife must establish a need for APL. See Labadi, 233 A.3d at 863; Strauss, 27 A.3d at 236. For these reasons, we affirm the decree on the basis of the trial court's opinion.
Decree affirmed.
Judgment Entered.