Yuhas v. Yuhas

• Decision Date: 28 October 2013
• Citation: 79 A.3d 700,2013 PA Super 283
• Parties: Mary Kathryn Nentwig YUHAS, Appellant v. Thomas Richard YUHAS, Appellee.
• Court: Pennsylvania Superior Court

79 A.3d 700

2013 PA Super 283

Mary Kathryn Nentwig YUHAS, Appellant

v.Thomas Richard YUHAS, Appellee.

Superior Court of Pennsylvania.

Argued Aug. 13, 2013.

Filed Oct. 28, 2013.

Thomas H. Tropp, Philadelphia, for appellant.

Robert I. Whitelaw, Philadelphia, for appellee.

BEFORE: BENDER, P.J., GANTMAN, J., PANELLA, J., DONOHUE, J., SHOGAN, J., LAZARUS, J., MUNDY, J., OTT, J., and WECHT, J.

OPINION BY BENDER, P.J.

Mary Kathryn Nentwig Yuhas (Wife) appeals from the trial court's order of June 6, 2011, denying her exceptions to the Master's Report and Recommendation (Master's Report), dated February 8, 2011, and ordering that the monthly disability insurance payments received by Thomas Richard Yuhas (Husband) after October 1, 2007, are not to be considered marital property under the analysis in Drake v. Drake, 555 Pa. 481, 725 A.2d 717 (1999). ¹ Following our review, we affirm.

The facts underlying this case are generally not in dispute. Husband and Wife were married on June 4, 1988, and separated on July 20, 2007.² At the time the trial court issued its opinion, the parties were both 51 years old. Wife worked as a nurse anesthetist. Husband, who was a board certified vascular surgeon, had practiced for 13 years before undergoing surgery for carpal tunnel syndrome. The surgery left him unable to operate.

The “Disability Income Policy” at the heart of this matter was issued in late 1988 shortly after Husband and Wife's marriage. The premiums were paid by the parties from their personal funds from late in 1988 until April 1993 and then in August 1993, November 2006 and April 2007. All other premium payments were paid through Husband's medical practice. Husband applied for benefits under the policy in April of 2007 and was approved for those benefits in late July of 2007. He received a lump sum retroactive payment of $71,000 covering the period from January 2007 to July 30, 2007. The parties agreed that this payment was marital property. After that date, Husband received monthly disability checks for $10,200. These monthly payments are contingent upon proof of Husband's continuing disability, i.e., his inability to work at his former occupation as a surgeon.³

Wife filed a complaint in divorce on October 8, 2007, and the Master was appointed. Following a hearing held on September 14, 2009, the Master determined that all of Husband's monthly disability benefits were marital property pursuant to the Supreme Court's Drake decision. Husband filed exceptions, and by order issued March 22, 2010, the trial court sustained Husband's exception to the Master's Report concerning the characterization of the monthly disability payments. In the March 22nd order, the trial court stated that “[w]e find that any monthly disability insurance payments received by [Husband] starting on the date of the first six-month renewal after the parties' separation on July 20, 2007 are income but are not marital property.” Trial Court Order, 3/22/10, at ¶ 1. The court further explained:

In determining whether disability insurance payments constitute marital property, the court must “look only to the timing of the right to receive [the payments].” Drake v. Drake, 555 Pa. 481, 489–99, 725 A.2d 717, 725–26 (1999) (citing 23 Pa.C.S.A. § 3501(a)(8)). Here, Husband's disability payments “are not guaranteed but renewable every six months.” Master's Report, 11/20/09, at 16 (citing N.T., 9/14/09, at 37). Therefore, Husband's right to receive disability payments terminates and re-accrues, if at all, every six months.

Id. at 1 n. 1. The trial court then remanded the matter to the Master for additional proceedings relative to the disability payment and an issue concerning Husband's earning capacity. Following the hearing, the Master issued a Supplemental Report on February 8, 2011, incorporating the trial court's directive that the monthly disability payments received after September 2007 are to be deemed income and not marital property.

Wife filed exceptions to the Master's Supplemental Report, which were overruled by the trial court's June 6, 2011 order that is presently the subject of this appeal. The June 6th order provided the following explanation of the court's reasoning for determining that Husband's monthly disability payments are income and not marital property:

[Husband] applied for disability in April, 2007, three months before the parties separated on July 20, 2007. N.T. 10/6/10, p. 6. His application was approved on July 18, 2007. Id.; Exhibit J–2, 10/6/10. The payments which accrued before the parties separated are clearly marital property. The issue presented to us is whether all of the future payments [Husband] may receive are also marital property. We conclude, after reviewing the facts of this case and the applicable law, that they are not marital property.

The Supreme Court has instructed us in Drake that the Pennsylvania Divorce Code, 23 Pa.C.S.A. § 3101 et seq., requires a case by case determination which looks at the timing of the payments under the “mechanistic” method rather than an “analytic” method, which looks more to the purpose of the award. It is important to note that the Drake court was dealing with a lump sum payment under a commuted workers' compensation award. The commuted amount was agreed to and binding during the marriage and before the date of separation.

We have read the Disability Policy, Exhibit D–2, 9/14/09, the 2008 “Reservation of Rights” letter from the insurance company, Exhibit D–3, 9/14/09, and [Husband's] testimony about them, N.T., 9/14/09, p. 37, N.T. 10/6/19, pp. 180–81, which makes clear that the payments are not guaranteed but are now renewable every year based on the insurance company's right to continuing evaluation of [Husband's] condition.

The letter notes the disability is claimed to arise from numbness in his left hand and fingers coupled with back pain from degenerative disk disease, which precludes him [sic] standing for more than two hours and lifting more than 50 pounds. The letter went on to advise that this is an “ongoing claim” and the insurance company has a right to require periodic examinations and proof that the disability continues. The letter insisted on additional and continuing documentation. The payments were being made under a “reservation of rights” and repayment could be demanded under some conditions.

[Husband's] condition appears to be something other than a single traumatic event or illness which can be pinpointed in time and duration. The payments he receives are subject to review of his condition which could change for the better or the worse. Unlike the facts in Drake, only the payments [Husband] received in August 2007 and September 2007 accrued prior to the parties' separation in July, 2007. (The insurance policy at that time had a two[-]month renewal period.) All other payments were conditional, and did not accrue prior to the parties' separation. Accordingly, any disability payments made on or after October 1, 2007, are not marital property.

Trial Court Order, 6/6/11, at 1–2 n. 1.

Wife filed the instant appeal and questions whether the trial court erred in concluding that the disability payments received by Husband after the date of separation should not be considered marital property. See Wife's brief at 5. Generally, in addressing the type of issue raised in this appeal, we are guided by the following:

Our standard of review in assessing the propriety of a marital property distribution is whether the trial court abused its discretion by a misapplication of the law or failure to follow proper legal procedure. An abuse of discretion is not found lightly, but only upon a showing of clear and convincing evidence.

McCoy v. McCoy, 888 A.2d 906, 908 (Pa.Super.2005) (citations omitted). Moreover, it is within the province of the trial court to weigh the evidence and decide credibility and this Court will not reverse those determinations so long as they are supported by the evidence. Sternlicht v. Sternlicht, 822 A.2d 732, 742 (Pa.Super.2003), aff'd,583 Pa. 149, 876 A.2d 904 (2005).

Wife acknowledges that “[t]he disability payments are paid subject to continuing proof of loss” and that “now once a year, Husband is examined by his doctor who then completes a form and says that Husband has the same condition and that he cannot operate.” Wife's brief at 10–11, ¶¶ 8, 9. However, Wife argues that the law as set forth in Drake and in Focht v. Focht, 613 Pa. 48, 32 A.3d 668 (2011), controls the outcome of the question raised in this appeal. Specifically, Wife points out that Husband became totally disabled prior to the parties' date of separation and that he applied for and was approved to receive the disability benefits prior to separation. Therefore, Wife contends that “Husband's right to receive the disability payments accrued prior to the parties' date of separation” and, therefore, those payments should be considered marital property. Wife's brief at 12. Moreover, Wife asserts that the trial court's conclusion that Husband's right to the disability payment terminates and re-accrues, if at all, once a year is not supported by Husband's testimony or in the language of the disability policy.

To address Wife's argument, we first examine the pertinent statutory language that is the basis for the decisions in both Drake and Focht, which is found in section 3501(a) of the Divorce Code. That section defines marital property as “all property acquired by either party during the marriage.” 23 Pa.C.S. § 3501(a). Moreover, “[t]he statute presumes that property acquired during the marriage is ‘marital.’ ” Focht, 32 A.3d at 670 (citing Drake ). The Focht opinion also recognizes that section 3501(a) lists exceptions to the presumption, namely, that property acquired prior to marriage or after separation is not considered marital property. See23 Pa.C.S. § 3501(a)(1), (4). Additionally, Focht identifies subsection (8), another classification of property that is not considered...