Focht v. Focht

• Decision Date: 23 November 2011
• Citation: 32 A.3d 668
• Parties: Justin E. FOCHT, Appellee v. Tracy L. FOCHT, Appellant.
• Court: Pennsylvania Supreme Court

32 A.3d 668

Justin E. FOCHT, Appellee

v.Tracy L. FOCHT, Appellant.

Supreme Court of Pennsylvania.

Argued April 13, 2011.Decided Nov. 23, 2011.

Scott Charles Painter, Law Office of Scott C. Painter, P.C., Wyomissing, for Tracy L. Focht.

Byron Michael Yatron, Reading, for Justin E. Focht.

BEFORE: CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.

OPINION

Justice McCAFFERY.

In this case, we interpret a provision of the Pennsylvania Divorce Code ¹ to establish when a cause of action in negligence accrues for purposes of determining whether the settlement proceeds are marital property. Because the Superior Court erred in its interpretation of the relevant statutory provision, we reverse.

On April 1, 1999, Justin E. Focht (hereinafter “Appellee”) sustained a serious injury in an accident at the Family Grand Prix Raceway (hereinafter “Raceway”) in Leesport, PA. Approximately two weeks later, Appellee and his then-wife Tracy L. Focht (hereinafter “Appellant”) retained an attorney to represent them in their respective claims of personal injury and loss of consortium. The Fochts filed suit against the Raceway on September 8, 2000, and the case was settled on November 23, 2004, for a total of $410,000. After payment of attorney's fees and other expenses, Appellee and Appellant received, respectively, $231,618 and $14,784 from the settlement.

Between the dates of the accident and the settlement, specifically on August 1, 2001, the parties separated by mutual consent. Appellee filed a divorce complaint in February 2004, and a divorce decree was entered on January 23, 2009.

During the first year after the settlement of his personal injury suit, by which time the Fochts had separated, Appellee spent his entire portion of the settlement proceeds. He expended some of the proceeds for the purchase of a residence,² and then shortly after this purchase, he used the residence to secure a mortgage. Subsequently, when Appellee ceased making mortgage payments, foreclosure proceedings were commenced against him. Pursuant to an agreement with the mortgagee, Appellee sold the residence in 2007 to avoid foreclosure. After payment of the settlement charges, mortgage, taxes, attorney's fees, and expenses for repairs, Appellee recovered only $60,206 from the sale of the residence. This sum of money is the focus of the instant dispute.

During the parties' lengthy divorce proceedings, it became apparent that the only asset involved was the settlement award from the lawsuit. The special master assigned to the parties' divorce case determined that all of the settlement proceeds were marital property, subject to equitable distribution. The special master further concluded that Appellant and Appellee were entitled to, respectively, 25% and 75% of the settlement proceeds. Based on this conclusion and after determining the amount that each party had already received, the master calculated that, of the $60,206 that remained from the settlement proceeds, Appellant was entitled to $44,617 and Appellee was entitled to $15,589. The trial court affirmed the decision of the special master.

The parties cross-appealed the equitable distribution order to the Superior Court. Based on its conclusion that the trial court had erred by including the settlement proceeds in the marital estate, the Superior Court vacated the equitable distribution order.³ Focht v. Focht, 990 A.2d 59 (Pa.Super.2009) (Table). As its rationale for this decision, the Superior Court relied solely on the fact that settlement in the negligence suit had been reached after the parties' final separation.

Appellant filed a petition for allowance of appeal in this Court, asserting that the Superior Court's determination conflicted with this Court's precedential decision in Drake v. Drake, 555 Pa. 481, 725 A.2d 717, 722 (1999). We granted Appellant's petition to consider when a cause of action or claim accrues for purposes of determining whether it is marital property pursuant to 23 Pa.C.S. § 3501(a)(8). Focht v. Focht, 606 Pa. 505, 1 A.3d 867 (2010).

The definition of marital property is set forth in the Divorce Code. The issue before us involves the interpretation of this statutory definition, which, like all statutory interpretation, is a pure question of law. Accordingly, our standard of review is de novo and our scope is plenary. St. Elizabeth's Child Care Center v. Department of Public Welfare, 600 Pa. 131, 963 A.2d 1274, 1276 (2009). The object of all statutory interpretation is to ascertain and effectuate the intention of the General Assembly, giving effect, if possible, to all provisions of the statute. 1 Pa.C.S. § 1921(a). In general, the best indication of legislative intent is the plain language of a statute. Malt Beverages Distributors Ass'n v. Pennsylvania Liquor Control Board, 601 Pa. 449, 974 A.2d 1144, 1149 (2009). “When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S. § 1921(b). Words of the statute are to be construed according to their “common and approved usage; but technical words and phrases and such others as have acquired a peculiar and appropriate meaning ... shall be construed according to such peculiar and appropriate meaning....” 1 Pa.C.S. § 1903(a).

The statutory definition of marital property is broad, encompassing “all property acquired by either party during the marriage.” 23 Pa.C.S. § 3501(a). The statute presumes that property acquired during the marriage is “marital.” Drake v. Drake, 555 Pa. 481, 725 A.2d 717, 722 (1999). However, there are eight exceptions to this presumption, which set forth classifications of property that are not considered “marital,” including the following:

[M]arital property does not include:

(1) Property acquired prior to marriage....

* * *

(4) Property acquired after final separation until the date of divorce....

* * *

(8) Any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment was received.

23 Pa.C.S. § 3501(a) (emphasis added).

With regard to subsection 3501(a)(8), interpretation hinges on the meaning of the word “accrue.” There is no statutory definition of accrue. A general legal definition is the following:

To come into existence as an enforceable claim or right; to arise plaintiff's cause of action for silicosis did not accrue until the plaintiff knew or had reason to know of the disease>.

Black's Law Dictionary, 8th Ed. (2004).

The above legal dictionary definition is consistent with this Court's long-established, historical understanding, as expressed in Bell v. Brady, 346 Pa. 666, 31 A.2d 547, 549 (1943), a case involving application of the statute of limitations, that “a cause of action accrues only when one has the right to institute a suit.” (Emphasis added). Reiterating the same basic principle, this Court has very recently stated that, “[g]enerally, a statute of limitations period begins to run when a cause of action accrues; i.e., when an injury is inflicted and the corresponding right to institute a suit for damages arises.” Gleason v. Borough of Moosic, 15 A.3d 479, 484 (Pa.2011) (emphasis added).

We have explained these well-settled principles in more detail as follows:

The Judicial Code provides in pertinent part that limitations periods are computed from the time the cause of action accrued. 42 Pa.C.S. § 5502(a). In Pennsylvania, a cause of action accrues when the plaintiff could have first maintained the action to a successful conclusion. Thus, we have stated that the statute of limitations begins to run as soon as the right to institute and maintain a suit arises. Generally speaking, in a suit to recover damages for personal injuries, this right arises when the injury is inflicted..... Once a cause of action has accrued and the prescribed statutory period has run, an injured party is barred from bringing his cause of action.

Fine v. Checcio, 582 Pa. 253, 870 A.2d 850, 857 (2005) (emphases added); see also Wilson v. El–Daief, 600 Pa. 161, 964 A.2d 354, 361 (2009) (citing Fine, supra, as reflective of “the general rule that a cause of action accrues, and thus the applicable limitations period begins to run, when an injury is inflicted”) (emphasis added).

Subsection 3501(a)(8) must be interpreted in the context of this well-established understanding of the concept of accrual of a cause of action. Thus, when a cause of action accrues ( i.e., when an injury has been inflicted, leading to the right to institute and pursue a suit for damages) after the date of marriage and before the date of final separation, then any settlement proceeds resolving that cause of action are marital property, regardless of when the settlement actually occurs. 23 Pa.C.S. § 3501(a)(8). Although the statute does not explicitly mention causes of action or claims that accrue during a marriage, prior cases from this Court or the Superior Court have addressed such circumstances.

In Drake, supra, the contested proceeds comprised a commutation award in a workers' compensation claim, and the question was whether the award was marital property pursuant to subsection 3501(a)(8). The Drake parties were married when, in July 1985, husband sustained a work-related injury. He filed a workers' compensation petition shortly thereafter and began receiving biweekly benefits. In April 1988, his status changed to partial disability, but he continued to receive benefits until December 7, 1989, when his benefits were terminated. Then, in October 1990, husband and his employer entered a supplemental, commutation agreement, under which husband would receive a single, lump-sum award to compensate him fully for eight and one-half years of partial disability, beginning on December 7, 1989, the agreed-upon effective date of his partial disability. Id. at 719. Approximately three...