Wagner v. Antkowiak (In re Wagner)
| Decision Date | 16 January 2020 |
| Docket Number | Case No. 17-11252-TPA |
| Citation | 612 B.R. 298 |
| Parties | IN RE: Rowena V. WAGNER, Debtor Rowena V. Wagner, Movant v. Michael Antkowiak, Bernard Wagner, et al., Respondents |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
Kenneth M. Steinberg, Esq. for the Movant
John Nagurney, Esq., for Respondent Bernard Wagner1
Presently before the Court for determination, is the allocation of the marital property as between the Debtor, Rowena Wagner ("Wife"), and her husband Bernard Wagner ("Husband"), who is also a bankruptcy debtor in his own separate case filed at Case No. 10-19934-TPA. This Opinion will also address any remaining issues still pending in the adversary proceeding of Wagner v. Wagner , Adv. No. 19-1001-TPA as the two matters are inextricably intertwined and were tried together. Now that trial has concluded, all post trial filings are complete, the Parties have been granted a divorce, and the major asset held by the Parties has recently been liquidated, this matter is ripe for decision.
The Court finds that it has "related to" jurisdiction over this matter because the determination of the allocation of marital property will have a direct impact on the extent of the property of the estate in both Wife's and Husband's cases. See, 28 U.S.C. § 1334(a) , In re Topfer , 587 B.R. 622, 628 (Bankr. M.D. Pa. 2018) ().
As to whether the marital property allocation process constitutes a "core" proceeding, the answer to that is less clear.
This matter does not appear to be a "core" proceeding under any of the various subsections of 28 U.S.C. § 157(b)(2) , which constitute a non-exclusive list of core proceedings. Such a finding would be consistent with the finding of the court in Topfer, supra. On the other hand, Husband has affirmatively asserted that he believes this is a core matter under both 28 U.S.C. § 157(b)(2)(A) () and 28 U.S.C. § 157(b)(2)(O) (), and Wife agrees. See , Doc. Nos. 190, 195, and Adv. Doc. Nos. 1, 15. While not conclusive, both Parties also agree that the Court has jurisdiction in this matter, Id. In any event, even if the matter is deemed non-core, the Parties appear to have nonetheless consented to the entry of a final judgment by this Court as authorized by 11 U.S.C. § 157(c)(2) . Id. The Court therefore finds that it has the jurisdiction to enter a final judgment in this matter.2
The Parties were married on July 14, 1994, in Virginia.3 They lived together thereafter until September 9, 2016, when Wife left the marital residence located in Cochranton, Pa. Husband initiated a divorce action in the Court of Common Pleas of Crawford County on March 9, 2017, which included a claim for equitable distribution. See , Wagner v. Wagner , No. 2017-92-V ("Husband's Divorce Action"). Wife filed her bankruptcy case on November 28, 2017, to forestall a sheriff sale that had been scheduled on the marital residence, a farm property of approximately 100 acres located in Cochranton, Pa. (for convenience, the Court will hereinafter refer to this property as "the Farm").
On May 21, 2018, Husband filed a motion for relief from stay in Wife's bankruptcy case, seeking relief so that he could proceed with Husband's Divorce Action, including equitable distribution. When the matter came to the attention of the Court it initially granted conditional relief from stay, but when over the course of several months it became apparent that Husband's Divorce Action was moving at "glacial speed," and that resolution of the issue of the allocation of marital property between the Parties was necessary for Wife's bankruptcy case to be concluded, the Court set a firm deadline for Husband's Divorce Action to be substantially resolved, or the equitable distribution issue would be referred to mediation in the Bankruptcy Court. If the mediation process failed, the Court made clear to the Parties, it would make the necessary allocation of marital property.
The above-referenced deadline passed with no progress in Husband's Divorce Action, and a subsequent attempt at mediation having failed. In the meantime, Husband filed his own bankruptcy case on January 16, 2019. Eventually, in April of 2019, a trial on the marital property allocation matter was scheduled by the Court for April 24, 2019. A few days before the scheduled trial, Husband attempted to have Husband's Divorce Action dismissed in an obvious effort to thwart this Court's ability to make a marital property allocation, apparently based on the premise that the Court would be unable to do so if there was no divorce action pending in state court. Wife quickly countered by filing her own divorce action in state court on April 15, 2019. See , Wagner v. Wagner , No. FD 2019-1385 ("Wife's Divorce Action"). Husband was served with a copy of the complaint in that case on April 16, 2019.
Both Husband's Divorce Action and Wife's Divorce Action are open and pending. The Court was recently informed by way of a Status Report filed by Wife's attorney at Doc. No. 301 that both divorce cases pending in Crawford County, PA, were assigned to Senior Judge H. William White. On December 2, 2019, Judge White consolidated those cases, bifurcated them as between the divorce claims and the claims for equitable distribution, and entered a decree of divorce dissolving the marital relationship.4 A copy of the December 19, 2019 Findings of Fact and Order/Decree entered by Judge White were filed on the docket in this case on December 27, 2019 at Doc. No. 308, and they do indeed confirm the accuracy of what was stated in the Status Report filed at Doc. No. 301.
At the time of trial in this Court, it was learned that Wife holds a Masters Degree earned during the marriage and has been employed for about seven years as a teacher by the Crawford Central School District. She earns a gross salary of approximately $4,500 per month and a net, after payroll deductions, of approximately $3,200.5 She has as dependents two teenaged sons, children of the marriage who have apparently been residing with her since the separation. In addition to her income from employment, Wife testified that she receives $600 per month for each of these dependent children from Social Security. No evidence was presented as to any child support from Husband. Wife has a pension through her employment, and as of the September 9, 2016 date of separation, it was valued at $84,238.93.
Husband is 75 years old, significantly older than Wife. He has been residing alone at the Farm since the date of separation. He receives Social Security income of $1,194 each month and also receives some income from a dog breeding business which has been ongoing for an extensive period of time, extending back before the date of separation. Husband had also been receiving rental income from some acreage of the Farm that he leased out beginning in 2017 and continuing through this year, as well as some gas royalties. The Farm was recently sold as part of the bankruptcy cases and no further such rent or royalties will be forthcoming. Husband continues to reside at the Farm following the sale, the buyer having agreed to carve out the actual residence itself and some surrounding acreage to lease back to Husband for 20 years on what obviously involves extremely favorable terms.
Additional details concerning the Parties will be discussed as necessary in the remainder of this Opinion.
Since what the Court will be doing here is tantamount to the equitable distribution process under the law of divorce, the Court will look to the applicable law of Pennsylvania in that regard for guidance in fashioning a fair allocation of the marital property of the Parties.
In an action for divorce or annulment, the Court must first determine what is marital property, and then apply the relevant factors for equitable distribution. Smith v. Smith 749A.2d 921 (Pa Super 2000). "Marital property" is defined generally in 23 Pa.C.S.A. § 3501(a) as all property acquired by either party during the marriage, and the increase in value during the marriage of certain non-marital property, with a number of exceptions. All real and personal property acquired by either party during the marriage is presumed to be marital property, regardless whether the title is held individually or by the parties in some form of co-ownership. 23 Pa.C.S.A. § 3501(b) .
Once the universe of marital property has been determined, the Court's task under Pennsylvania law is to "equitably divide, distribute or assign, in-kind or otherwise, the marital property between the parties without regard to marital misconduct in such percentages and in such manner as the court deems just after considering all relevant factors." 23 Pa. C.S.A. § 3502(a) . The statute goes on to give a non-exclusive, non-exhaustive list of factors that may be considered. Before turning to a discussion of the marital property involved in this case and an allocation thereof, the Court will make a detour to discuss an important point as to how it viewed the evidence that was presented.
The two key witnesses at the trial of this matter were the Parties themselves. Their testimony agreed on many relevant points, but where they disagreed, and where there is no other documentary or testimonial evidence of record to help the Court determine what actually occurred, the Court is necessarily faced with making an assessment of the credibility of the Parties. In that regard, the Court will state bluntly that it found Wife to be generally a more credible witness than Husband. That conclusion is based not only on the trial testimony...
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