Nuttall v. Nuttall

• Decision Date: 17 July 1989
• Citation: 562 A.2d 841,386 Pa.Super. 148
• Parties: Margaret NUTTALL, Appellee, v. Robert NUTTALL, Appellant. 271 PHILA. 1988
• Court: Pennsylvania Superior Court

Page 841

562 A.2d 841

386 Pa.Super. 148

Margaret NUTTALL, Appellee, v. Robert NUTTALL, Appellant.

271 PHILA. 1988

Superior Court of Pennsylvania.

Submitted Nov. 15, 1988.

Filed July 17, 1989.

Francis X. Nolan, Philadelphia, for appellant.

Neil Hurowitz, King of Prussia, for appellee.

Before OLSZEWSKI, BECK and JOHNSON, JJ.

OLSZEWSKI, Judge:

This is an appeal from a final decree denying appellant's exceptions. Appellant raises five issues for our review: (1) whether the 1980 Divorce Code violates the due process clause of the United States Constitution; (2) whether the 1980 Divorce Code is unconstitutional under the contract clause of the Pennsylvania and United States constitutions when applied to properties which appellant intentionally took title as a tenant by the entirety or in his individual name; (3) whether the trial court erred in denying appellant credit for monies spent to preserve marital assets and reduce marital debt; (4) whether the trial court erred in awarding alimony to appellee; and (5) whether the trial court erred in awarding partial counsel fees to appellee. For the reasons below, we affirm.

On November 31, 1981, appellee-wife instituted an action under the 1980 Divorce Code, seeking a divorce, equitable distribution, alimony, alimony pendente lite, child support, counsel fees, costs and expenses. Subsequently, the parties entered into a stipulation providing for a bifurcated divorce and, on November 5, 1982, the bifurcated divorce decree was entered. Following a hearing on the remaining economic claims, a master filed a report and recommendation. Both parties timely filed exceptions to the master's report. Thereafter, hearings de novo were conducted. On May 20, 1986, the trial court entered its decree nisi. Appellant filed exceptions to the decree nisi. ¹ On December 11, 1987, a final decree, amending the previous adjudication and order, was entered by the trial court. This appeal followed.

Appellant first maintains that retroactive application of the 1980 Divorce Code violates the due process clause of the United States Constitution. ² Appellant asserts:

In denying Mr. Nuttall's point on this issue, the trial court relied upon Bacchetta v. Bacchetta, 498 Pa. 227 (1982), which admittedly is contra defendant's position. However, we believe that Bacchetta was decided improperly and should be reversed.

Appellant's brief at 16. As an intermediate appellate court, we cannot accept appellant's invitation to reverse a majority decision of a higher appellate court. In Bacchetta, the majority of the Supreme Court held that property acquired during the marriage but before the effective date of the 1980 Divorce Code is "marital property," subject to the equitable distribution provisions of the Code upon termination of the marriage. In Krenzelak v. Krenzelak, 503 Pa. 373, 469 A.2d 987 (1983), the majority of the Supreme Court acknowledged the validity of Bacchetta by distinguishing Bacchetta from circumstances where the equitable distribution provisions of the 1980 Code are applied to defeat the vested property rights of a transferee who is not a party to the divorce action and who has acquired these rights prior to the enactment and effective date of the Code. Most recently, the Supreme Court in Sutliff v. Sutliff, 518 Pa. 378, 543 A.2d 534 (1988), reaffirmed the Bacchetta decision by denying husband's claim that the equitable distributions of the Divorce Code cannot be constitutionally applied to property rights which vested prior to the Code's effective date. It is apparent from the foregoing decisions that Bacchetta continues to be the law in Pennsylvania. Accordingly, as an intermediate appellate court, we are bound to follow it.

Second, appellant argues that the 1980 Divorce Code is unconstitutional under the contract clause of the United States and Pennsylvania constitutions. ³ Specifically, appellant maintains that the retroactive application of the equitable distribution provisions of the 1980 Divorce Code to properties held by the parties as tenants by the entireties and to property held in appellant's individual name impairs his contractual rights by: (1) altering his bargained-for consideration involved in the purchase of property; and (2) changing his intention in entering into agreements of sale of property. ⁴ In the instant case, the trial court held that the marital assets included:

1. The marital home in Huntingdon Valley, Lower Moreland Township, Montgomery County, Pennsylvania, which was purchased during the marriage and has a value of $117,500.00.

2. A one-fourth interest in a property in Brigantine, New Jersey, purchased during the marriage, the interest having a value of $77,000.00.

3. A bar and restaurant which is in husband's name alone but which was purchased during the marriage, having a total value of $81,000.00. This business (including the liquor license) and real estate was purchased by husband with an inheritance from his parents of approximately $40,000.00. The market value therefore is $41,000.00.

Amended adjudication and order at 3 (emphasis in original). Furthermore, the trial court distributed the aforementioned assets as follows:

1. The marital residence at 1488 Greenwalt Lane, Huntingdon Valley, Pennsylvania and the Brigantine property shall be put up for sale immediately and wife-plaintiff shall receive sixty (60%) percent of the net proceeds from the sale of these two properties and the husband-defendant shall receive forty (40%) percent of the net proceeds.

2. The premises and restaurant business (including the liquor license) at 3rd and Spencer Avenue shall be put up for sale immediately. Husband shall reserve the first Forty Thousand ($40,000.00) Dollars of the net proceeds. The remaining balance from the sale of this property shall be distributed sixty (60%) percent to wife-plaintiff and forty (40%) to husband-defendant. (The first $40,000.00 represents the husband-defendant's inheritance from his parents which was invested in this business and real estate.)

Amended adjudication and order at 8. According to the deed to the marital residence the parties took the property as tenants by the entireties. In addition, the record indicates that a one-fourth interest of the Brigantine shore property is held by the parties as tenants by the entireties, ⁵ and the bar and restaurant is held in appellant's name alone.

Generally, the contract clauses of the United States and Pennsylvania constitutions prevent impairment of the parties' contractual rights from subsequent legislation. See Flanagan, 515 Pa. at 268, 528 A.2d at 137. However, like property rights, contract rights are not absolute and, therefore, are subject to the reasonable exercise of the state's police power. See PruneYard Shopping Center v. Robins, 447 U.S. 74, 84, 100 S.Ct. 2035, 2042, 64 L.Ed.2d 741 (1980). In Keystone Bituminous Coal Association v. Nicholas DeBenedictis, 480 U.S. 470, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987), the United States Supreme Court explained:

[I]t is to be accepted as commonplace, that the Contract Clause does not operate to obliterate the police power of the states. "... [T]he interdiction of statutes impairing the obligation of contracts does not prevent the State from exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public, though contracts previously entered into between individuals may thereby be affected. This power, which in its various ramifications is known as the police power, is an exercise of the sovereign right of the Government to protect the lives, health, morals, comfort and general welfare of the people, and is paramount to any rights under contracts between individuals." Manigault v. Springs, 199 U.S. 473, 480 [26 S.Ct. 127, 130, 50 L.Ed. 274].

Id. at 503, 107 S.Ct. 1232, 1251, 94 L.Ed.2d 472, 500; accord, DePaul v. Kauffman, 441 Pa. 386, 399, 272 A.2d 500, 507 (1971).

As stated earlier, our Supreme Court, in Bacchetta, held that the equitable distribution provision applied to property acquired prior to the effective date of the Code, and that this application did not constitute an unconstitutional deprivation of property without due process of law. In reaching this decision, the Court construed the provisions as presenting a permissible regulation of the marital relationship pursuant to the state's police power. The Bacchetta Court observed:

Prior to the enactment of the Divorce Code, in many marriages a nonworking spouse contributed years of service to the family, but did not realize any significant gain. Thus, upon divorce, nonworking spouses, who frequently had no marketable skills, were left with few, if any assets of their own and faced the risk of becoming public charges. By providing for the distribution of property acquired during the marriage, the Divorce Code permits the correction of the economic injustices which often arose under former law and allows nonworking spouses to become self-supporting with the least financial hardship possible.

Bacchetta, 498 Pa. 227, 232, 445 A.2d 1194, 1197. The Court further noted:

Where, as here and in most cases for years to come, the parties were married before the enactment of the Divorce Code, it would be unreasonable to interpret the Divorce Code as providing for equitable distribution of only that property acquired after the Code's effective date. Such an interpretation would impose the unmanageable burden on courts and litigants of determining which properties were acquired before, and which after, the effective date of the Code. Such an interpretation would also substantially deny the benefits of the Divorce Code to spouses in marriages in existence at the time of the Code's enactment, thereby prolonging for a least a generation the very inequity the Legislature sought to remedy.

Id. at 231, 445 A.2d at 1196. In addition, the Supreme Court found the provisions to be "carefully tailored" to achieve...