95 A.3d 53 (Del.Fa. 2013), CN11-04649, Danberger v. Danberger

Docket Nº:CN11-04649
Citation:95 A.3d 53
Opinion Judge:HONORABLE ROBERT BURTON COONIN, JUDGE.
Party Name:JANE P. DANBERGER[*], Petitioner, v. DARYL A. DANBERGER, Respondent Petition No. 11-29330
Case Date:December 09, 2013
Court:Family Court of Delaware
 
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95 A.3d 53 (Del.Fa. 2013)

JANE P. DANBERGER [*] , Petitioner,

v.

DARYL A. DANBERGER, Respondent

No. CN11-04649

Petition No. 11-29330

Family Court of Delaware, New Castle

December 9, 2013

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[Copyrighted Material Omitted]

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OPINION

HONORABLE ROBERT BURTON COONIN, JUDGE.

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Decision on Motion to Dismiss and for Sanctions

Before the HONORABLE ROBERT BURTON COONIN, JUDGE Of The Family Court of the State of Delaware:

NATURE OF THE PROCEEDINGS

This is the Court's decision on a Motion to Dismiss and for Sanctions or in the Alternative for an Adverse Inference and for Sanctions (hereinafter " Sanctions Motion" ) filed on April 30, 2013 by Jane P. Danberger (hereinafter " Wife" ), who is represented by Leslie B. Spoltore, Esquire, against her former husband, Daryl A. Danberger (hereinafter " Husband" ), who is represented by David C. Gagne, Esquire. The parties are divorced and matters ancillary to the divorce are pending before the Court. The Sanctions Motion alleges Husband destroyed material evidence. Specifically it is alleged that, following the parties' separation and divorce, Husband destroyed documents that were in a filing cabinet located in the marital home, without authorization or notice to Wife. Wife claims that the documents destroyed by Husband supported her position that her advertising company, Danberger Associates, Inc., is a premarital asset, which should be excluded from equitable division in the ancillary proceeding. Wife's Motion for Sanctions requested a default judgment, whereby Husband's claim that Danberger Associates, Inc. is a marital asset would be dismissed. Alternatively, the Motion for Sanctions prayed for an adverse inference that had the materials not been destroyed, they would have supported Wife's contention that the business was premarital. Additionally, the Motion for Sanctions sought an award of attorneys' fees. The Court held a hearing on this matter on July 1, 2013 and October 15, 2013 to consider whether Husband's alleged destruction of evidence occurred and, if so, whether sanctions were appropriate.

PROCEDURAL HISTORY

The parties were married on June 10, 1984. Wife filed a Petition for Divorce on September 2, 2011. In her Petition for Divorce, Wife alleges that the parties separated in March of 2010. Husband filed an Answer to the Petition for Divorce in which he claims the parties did not separate until July 1, 2011. A final Divorce Decree was entered on January 26, 2012. The Court retained jurisdiction over matters ancillary to the divorce, namely, property division, permanent alimony, counsel fees, and court costs. For the purposes of this motion, the Court need not determine when the parties separated, because the parties agree that Husband's alleged destruction of documents occurred in February or March of 2012, after the parties had both separated and the divorce granted.

Wife is the president and sole shareholder of a branding, advertising, and marketing agency in corporate form currently named Danberger Associates, Inc. It is

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Wife's position that Danberger Associates, Inc. is not subject to property division, because the corporation was initially funded by the transfer of assets from a premarital sole proprietorship.1 Husband argues that Danberger Associates, Inc. is a marital asset, created during the marriage, and therefore is subject to property division. Pursuant to a Scheduling Order entered on December 28, 2012, the Court determined that it would be in the interest of judicial economy to hold a separate evidentiary hearing prior to the final ancillary hearing to determine whether Danberger Associates, Inc. is a marital asset. The Court's decision on the issue of whether the corporation is a marital asset is the subject of a separate decision of the Court.

Wife filed the instant Motion for Sanctions on April 30, 2013. Wife's Motion for Sanctions averred that there was a filing cabinet located in the marital home, which, among other things, contained tax records and documents which establish the existence of her premarital business. Wife argued that these documents would support her contention that Danberger Associates, Inc. is a premarital asset, because it was solely funded by the assets of a premarital sole proprietorship and that prior to the marriage, she was engaged in this business as a sole proprietorship before incorporating it. Wife did not retrieve the filing cabinet or its contents when she left the martial home in October 2011. At a deposition held on March 26, 2013, Husband admitted that he destroyed documents contained in the filing cabinet sometime in February or March of 2012, after the parties separated and the divorce decree was issued. However, Husband claimed that the only documents destroyed were bank statements from a closed joint checking account that were in the filing cabinet, an assertion disputed by Wife. Wife gained access to the martial home on April 4, 2013 and discovered that the filing cabinet was empty, with the exception of a few electrical cords and some scraps of paper. The Motion for Sanctions asks the Court to grant a default judgment, whereby, Husband's claim that Danberger Associates, Inc. is a marital asset would be dismissed. Alternatively, the Motion for Sanctions requests that the Court apply an adverse inference against Husband, whereby the Court would presume that the destroyed evidence would have supported Wife's claim that Danberger Associates, Inc. should be held to be a non-marital asset.

On May 10, 2013, Husband filed an Answer to the Motion for Sanctions. Husband denied destroying any evidence that would have been relevant to the ancillary proceedings and asked the Court to deny the Motion for Sanctions.

A hearing was held on July 1, 2013 to consider the Motion for Sanctions, but due to time constraints the hearing recessed and resumed on October 15, 2013, prior to the evidentiary hearing regarding whether the current corporation, Danberger Associates, Inc., as it exists today should be considered a marital asset subject to division.

FINDINGS OF FACT

The Court will not restate all of the testimony and evidence presented at the hearing but will note some of the relevant evidence in support of its findings.

Wife graduated from Lehigh University in 1980 with a bachelor's degree in journalism and science writing. She initially

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worked at Wilmington Trust from July to October of 1980 and was later employed at Sonobond from October 1980 to October 1981 as Writer and Project Manager. Between 1981 and 1984, Wife worked for the Krell Corporation, a professional placement agency, where she provided marketing, advertising, and technical writing services to DuPont and several other businesses. Sometime in late 1983 and early 1984, Wife claims that she began to perform freelance advertising and marketing work out of her apartment under the monikers of " The Technical Writers" and " The Copywriters." Wife testified that she created a sole proprietorship in 1984 to perform freelance marketing and advertising work, which later transferred all of its assets and liabilities to create Danberger Associates, Inc., a corporation incorporated in 1986.

According to Wife's testimony, close to the time she started her sole proprietorship, Wife began keeping all of her important records, including tax returns and supporting business documents in a filing cabinet in her apartment. Wife's father apparently instructed her that it is important to keep careful and complete personal and business records. Wife claims that there were many key documents kept in the filing cabinet including tax returns and supporting documents, mortgage statements, and paperwork from a loan that her father had cosigned in 1983 to help her start her freelance business, and various other business and personal records. Wife admitted that now, almost thirty years later, she could no longer be sure what specific documents were kept in the filing cabinet, but she believed that some of the documents were from before her marriage.

The parties were married on June 10, 1984. Prior to their marriage, the parties did not cohabit, have a joint bank account, or otherwise comingle funds. Husband and Wife initially lived in the Chateau Orleans Apartment Complex in Wilmington. In 1986 the parties moved to 819 Malcom Road in Chadds Ford, Pennsylvania. When the...

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