Anzalone v. Anzalone

• Decision Date: 28 October 2003
• Citation: 835 A.2d 773
• Parties: Jessie ANZALONE, Appellee, v. James ANZALONE, Appellant.
• Court: Pennsylvania Superior Court

835 A.2d 773

Jessie ANZALONE, Appellee, v. James ANZALONE, Appellant.

Superior Court of Pennsylvania.

Submitted July 21, 2003.

Filed October 28, 2003.

Kimberly D. Borland, Wilkes-Barre, for appellant.

Theodore R. Laputka, Jr., Hazelton, for appellee.

Before: KLEIN, BENDER and TAMILIA, JJ.

BENDER, J.

¶ 1 James Anzalone (Husband) appeals from the November 19, 2002 order that entered the final divorce decree ending his marriage to Jessie Anzalone (Wife). Husband raises numerous issues concerning the valuation and equitable distribution of the parties' marital estate, and the denial of attorney's fees. We affirm in part, vacate in part, and remand for recalculations in accordance with the directives contained within this opinion.

¶ 2 On February 20, 1996, Wife filed a complaint in divorce and the matter was presented to a Master, who after three days of hearings issued a report and recommendations regarding equitable distribution of the marital property, counsel fees and costs. Husband filed exceptions that were denied by the trial court by order, dated November 5, 2002. In the November 5th order, the court decreed the adoption of the Master's report and, subsequently, on November 19, 2002, issued the final divorce decree dissolving the parties' marriage.¹ This appeal followed.

¶ 3 Initially, we first set out the facts we have gleaned from the Master's report,² which contains a discussion of the evidence presented in the context of the eleven factors provided in section 3502(a) of the Divorce Code, 23 Pa.C.S. § 3502(a).³ The parties, neither of whom had been previously married, were married on November 13, 1971, and separated on February 14, 1996, after more than 24 years of marriage. They are the parents of four children, who have all reached the age of majority. Wife is in good health and has taught at a private school, presently earning $36,000.00 per year. Wife has a retirement plan with TIAA/CREF. Husband, who at the time of the Master's hearing was 56 years old, is an attorney who earlier in his career worked for a public defender's office and then established his own practice. In November 1994, Husband admitted himself into an inpatient alcohol rehabilitation program and as a result he experienced a decrease in clients in his law practice. In December 1995, Husband underwent cardiac bypass surgery, and subsequently, he closed his law practice. Husband's federal income tax return for the year 2000 indicated gross income of $9,239.00. Husband has had medical insurance coverage through Wife's employment for which he pays $289.00 per month. Husband testified that although he has sought employment as an attorney, he has been unable to secure such employment. Neither party presented evidence of extraordinary expenses or needs. Nor did either party claim contribution to the educational training or increased earnings of the other party.

¶ 4 With regard to the fifth factor under section 3502(a), the Master concluded that both parties will have an opportunity to acquire future assets and income, relying on Husband's earning power as an attorney and on Wife's non-marital assets, inheritance and employment. The Master also found that both parties contributed to the household and child rearing responsibilities. However, the Master recognized that "the parties had difficulty paying their usual living expenses resulting in repeated requests to Wife's father for financial assistance." Master's report, 2/6/02, at 7. The Master also found that "the acquisition of most of the property subject to the claim for equitable distribution was obtained through gifts made by Wife's grandmother and parents to Wife and to the parties." Id. Moreover, concerning the contribution or dissipation in the acquisition of marital property, as per the seventh factor under section 3502(a), the Master found:

With respect to preserving marital assets during the marriage, the Master finds that Wife expended sixty-nine thousand two hundred thirty eight dollars ($69,238.00) of her non-marital money to pay marital debts. Wife pledged stock that she received as a gift from her family as collateral for two loans with PNC Bank. In order to satisfy its loan, PNC Bank in 1995 took Wife's non-marital stock which was valued at $46,238.75. Additionally, the Master finds that Wife transferred twenty-three thousand dollars ($23,000.00) from her non-marital PNC Savings Account as payment on the marital loans from Wife's father.

After the parties separated, Wife preserved the marital residence by making repairs and paying the real estate taxes, homeowner's insurance, lawn-care and snow removal. Wife paid approximately $3,561.00 in real estate taxes. Wife paid $5,439.00 to repair the bathroom. Wife purchased and installed seven windows. Wife paid approximately $1,000.00 per year for homeowner's insurance. Wife paid approximately $1,500.00 per year for lawn care.

Husband testified that he also paid real estate taxes and produced Exhibits D-11 and D-12. Said Exhibits are a July 16, 1996 cashier's check stub made payable to Luzerne County Treasurer in the amount of $1,724.40 and the Treasurer's receipt for said payment.

The Master concludes that Wife rather than Husband expended her non-marital money to preserve marital assets. Master's report at 7-8 (citations to the record omitted).

¶ 5 Specifically, with regard to the marital property, the Master discussed the issues relating to the marital home, which was purchased on January 30, 1975, from Wife's family for $28,000.00. The house is situated on 1.3 acres and is described as a 1½ story caretaker's cottage with an addition. The main section of the house is in good condition, but the addition is in such a deplorable state that the parties and their experts concurred that the addition should be demolished. The Master set forth an extensive description of the property based on the parties' testimony. She also discussed in detail the testimony provided by the parties' experts, crediting Wife's expert's opinion that the property's fair market value as of May 15, 2001, was $90,000.00. Husband's expert opined that the fair market value was $200,000.00 as of June 8, 1999. Although the Master recognized that both experts were experienced appraisers, she based her credibility determination on the fact that Wife's expert had extensive experience with sales of homes in the community where the house was located as opposed to Husband's expert who had never before appraised a home in Luzerne County. The Master recommended that the real estate be awarded to Wife. She also denied Husband's request for rental credit for the time Wife occupied the marital residence following separation "in light of the fact that [Wife] maintained the real estate, paid real estate taxes, homeowner's insurance, lawn care and snow removal and that she used her non-marital money to pay marital debts." Id. at 14.

¶ 6 The Master next discussed the increase in value of stock titled in the name of Wife, a portion of which is stock in W.H. Conyngham & Co., Inc. (Conyngham Company), a family-owned company. Based on Wife's father's testimony, the Master found that the stock was gifted to Wife by her father and her grandmother and, thus, the base value of the stock was non-marital property. The Master relied on testimony from Wife's expert rather than Husband's expert to determine the increase in value of the stocks that represented the marital portion. She found Wife's expert, who worked for Management Planning, Inc., the entity that had performed economic and financial analysis for the Conyngham Company since 1963, to be credible because he utilized "financial statements, considered the performance of the company since the last analysis, and interviewed management to learn what has happened behind the numbers and to obtain other key data and information that are not contained in the financial statements." Id. at 16. To further explain her decision not to credit Husband's expert, the Master cited testimony wherein Husband's expert acknowledged that he had not viewed the Conyngham Company's financial statements, the real estate or stores, and had not met with anyone from the company or Management Planning.

¶ 7 Specifically, Wife's expert provided a per-share value for the voting stock at $45.22, and a value for the non-voting shares at $42.96, as of December 31, 1994. Wife's expert also provided values as of December 31, 1997, i.e., $57.65 per voting share and $54.77 per non-voting share. Husband's expert also provided valuation as of December 31, 1997, of $107.39 per voting share and $102.02 per non-voting share. As part of the findings in regard to these assets, the Master concluded that, although the parties separated in February of 1996, neither expert gave values as of that date. Therefore, the Master concluded that economic justice would be achieved by using Wife's expert's values as of the December 31, 1997 date minus the gift basis arriving at a value of $76,835.50 for the Conyngham Company stock subject to the equitable distribution claim.

¶ 8 As for other stock titled in Wife's name, the Master calculated the marital portion as of January 28, 2002. She used the value as of that date minus the gift basis arriving at the sum of $37,863.93 as the increase in value subject to the equitable distribution claim. The Master then totaled the value of the stock for distribution purposes ($76,835.00 + $37,863.93 = $114,699.43) and subtracted the marital liability owed to Wife's father ($114,699.43-$79,474.51 = $35,224.92). Dividing that sum in half, the Master determined that $17,612.46 was the gross amount due Husband from the increase in value of Wife's non-marital stock. Further, subtracting 20% for capital gains taxes, the Master awarded to Husband the sum of $14,090.00, representing his share of the increase in value of Wife's non-marital stock.

¶ 9 Additionally, the Master determined that an insurance check in the amount of $5,153.62...