Zeigler v. Zeigler

• Decision Date: 17 August 1987
• Docket Number: No. 00801,00801
• Citation: 365 Pa.Super. 545,530 A.2d 445
• Court: Pennsylvania Superior Court
• Parties: Ronald P. ZEIGLER v. Sallie C. ZEIGLER, Appellant. Hsbg. 1986.

Page 445

530 A.2d 445

365 Pa.Super. 545

Ronald P. ZEIGLER v. Sallie C. ZEIGLER, Appellant.

No. 00801 Hsbg. 1986.

Superior Court of Pennsylvania.

Argued June 10, 1987.

Filed Aug. 17, 1987.

John C. Howett, Jr., Harrisburg, for appellant.

Samuel Andes, Lemoyne, for appellee.

Before CIRILLO, President Judge, and OLSZEWSKI and HESTER, JJ.

HESTER, Judge:

This is an appeal from a final decree of divorce which disposed of ancillary claims of equitable distribution, alimony, and counsel fees. The wife, appellant, challenges the economic aspects of the trial court's disposition. We hold that there was no reversible error, and affirm the orders in question.

The parties were married in 1962, had one child, now an adult, and separated in October, 1982, when appellee left the marital residence to live with his paramour. Following the institution of divorce proceedings, a hearing was held before a master who filed a report and recommendation. Both parties filed exceptions to the report. The court held an additional hearing on the valuation of the two major marital assets: husband's pension and the marital residence.

Before disposition of the exceptions to the master's report, appellant petitioned for an injunction to prevent her husband from using marital funds to purchase a house with his paramour. Without ruling on the petition, the court entered a divorce decree and equitable distribution order on August 29, 1986. In response to appellant's motion for post-trial relief, the trial court rescinded the August 29 order on September 15, 1986. Thereafter, on December 9, 1986, the court entered an order making a slight modification in the August 29 order, but otherwise reinstating it. On the same date, the court entered orders denying appellant's petition for injunctive relief and appellee's motion for post-trial relief. This timely appeal is from the orders of December 9, 1986.

Appellant raises five issues. She argues that the trial court erred in: 1) establishing a value for the marital residence higher than the evidence justified, 2) refusing to impose a constructive trust pursuant to her application for special relief, 3) allowing additional testimony following the master's hearing concerning the value of husband's pension, 4) denying appellant's motion to strike appellee's late -filed motion for post-trial relief, and 5) denying her claim for alimony.

The first issue is whether the court erred in its valuation of the marital residence. Expert testimony at the master's hearing on October 11, 1984, established a value of $75,000 at the time of separation and $80,000 at the time of the hearing. The trial court, relying on Sergi v. Sergi, 351 Pa.Super. 588, 506 A.2d 928 (1986), ordered a hearing to update the valuation testimony which had been presented to the master in 1984, in order to value the property as near to the time of distribution as possible. Based on the expert testimony presented on January 15, 1986, the court used a value of $84,000 in making equitable distribution of the marital property.

Appellant objects to this value for two reasons. First she claims that the entire post-separation increase in value resulted from her efforts through physical maintenance and payment of mortgage, taxes, insurance and other expenses. She thus regards the court's use of the later value of $84,000 to be an abuse of discretion, for it gives appellee the benefit of an increase in value to which he did not contribute.

We do not agree with appellant's argument. Sergi v. Sergi, id. at 593-94, 506 A.2d at 931, suggests that a later valuation date will ordinarily be most equitable in order to prevent a distribution based on stale financial data. We regard the trial court's approach to be a proper exercise of its discretion. Although appellant made the mortgage payments during the period of separation, the court's equitable distribution order requires appellee to reimburse her in the amount of $8,000 for those mortgage payments. Moreover, appellant had the benefit of exclusive occupancy of the premises during the separation.

Appellant's second objection to the value of $84,000 for the marital residence is that she intends to sell the house immediately and move to more modest quarters. She argues that the value of the residence should be reduced by expenses of sale to reflect its true value to her, for purposes of equitable distribution. Moreover, she asks this court to establish a rule that, in all cases where the recipient of a marital residence intends to sell it immediately, its value for equitable distribution should be reduced by a seven percent realtor's commission and a one percent realty transfer tax.

The rationale for such a rule has been explained by the Honorable Clarence C. Morrison.

[E]ven if neither party contemplated selling the home, the costs of sale must still be deducted. Valuation is nothing more than a function of what the home is worth if it were to be presently sold; therefore, the costs of achieving that value should be considered. Moreover, any number of events could occur that would require the home to be sold at virtually any time. Thus, the Master did not err by including costs of sale in the net equity of the marital home.

Thrush v. Thrush, No. 1314 S. 1981, slip opinion at 3 (Dauphin County, September 21, 1984), aff'd per curiam 341 Pa.Super. 628, 491 A.2d 927 (1985), petition for allowance of appeal denied (Pa. July 25, 1985).

We decline to adopt such a rule for all cases, or even for all cases in which an immediate sale is intended. First, such an intention is not easily susceptible of proof. More importantly, the proper amount to deduct for costs of sale would be a matter of speculation. Although it is common practice to employ the services of a realtor in selling a home, it is not uncommon for an owner to undertake a sale without the assistance of a realtor. In the latter instances, no commission is involved. Moreover, although a commission of seven percent is common, it is by no means universal. Similarly, although realty transfer taxes are routinely split equally between buyer and seller, the practice is not universal.

Adjustment in the value of a residence for expenses associated with a contemplated sale may be an appropriate consideration in some equitable distribution cases. We neither forbid nor require the practice. In this case, however, we hold that the trial court's refusal to deduct the costs of sale was a proper exercise of its discretion. The record does not establish the expenses incident to the contemplated sale with sufficient specificity to require that such expenses be deducted.

The second issue is whether the court should have imposed a constructive trust pursuant to appellant's application for special relief. This claim arose when appellant learned during the separation that appellee intended to use marital funds to purchase a residence jointly with Sherry Small. Appellant's attorney promptly applied for equitable relief on October 9, 1985, attempting to forestall the purchase. Hearing was set for November 6, 1985. Prior to the hearing, however, the purchase was made on October 28, 1985, and the residence was titled in Sherry Small's name alone, though appellee had contributed marital funds toward the downpayment. The trial court held that appellee had acted deceptively and improperly, falsifying documents to use marital funds to purchase the house, yet the court declined to impose a constructive trust on the new residence. Instead, the court ordered appellee to make cash payments to appellant in the amount of the funds improperly diverted towards the purchase, as well as appellant's counsel fees incurred in seeking equitable relief.

Appellant argues that this disposition was an abuse of discretion by the trial court, for it permitted appellee to remove liquid assets from the distributable estate which was already overburdened with non-liquid assets, notably the marital residence and appellee's pension. Appellant believes the court was obligated to exercise its equitable power by declaring a constructive trust on the real estate so as to provide security for the repayment of the cash appellee had removed from the funds available for equitable distribution.

We hold that the trial court's refusal to provide equitable relief was a proper exercise of its discretion. Equitable relief, of course, is not appropriate if there is an adequate remedy at law. We agree with the trial court that the statutory remedy, reimbursement through distribution of marital property, was adequate in this case.

Significantly, the adequacy of the legal remedy is not measured by the success or failure of a legal claim. Rather, in deciding whether a remedy is adequate, it is the remedy itself, and not its possible lack of success, that is the determining factor. The fact that the statutory remedy may not be successful in realizing the fruits of a recovery at law, on account of the defendants' insolvency, is not, of itself, a basis for equitable intervention.

Chartiers Valley School District v. Virginia Mansions Apartments, Inc., 340 Pa.Super. 285, 294-95, 489 A.2d 1381, 1386-87 (1985). We therefore reject appellant's second argument.

The next issue is whether the court erred in permitting additional testimony as to the value of appellee's pension rather than accepting the master's valuation which had been based on uncontradicted competent evidence offered through the report of appellant's expert at the master's hearing. The trial court deemed additional testimony to be necessary due to the master's uncertainty as to whether the expert's valuation had been reduced to present value. Master's report, 5/14/85, at 9. Appellant argues that the expert's report clearly indicated that the value was given as of October, 1982, the date of separation, that the court's scheduling of another hearing was unnecessary and erroneous, that the second hearing put the parties to needless expense and...