J-A08012-17

2017 PA Super 169

KATHY M. CARNEY

v.

DONALD R. CARNEY 

Appellant

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 2474 EDA 2016

Appeal from the Decree July 1, 2016

In the Court of Common Pleas of Monroe County 

Domestic Relations at No(s): No. 793DR10 7123CV10

BEFORE: PANELLA, J., LAZARUS, J., and STEVENS, P.J.E.*

OPINION BY STEVENS, P.J.E.: FILED MAY 31, 2017

This is the second appeal to this Court in the divorce proceedings of 

Appellant Donald R. Carney (“Husband”) and Appellee Kathy M. Carney 

(“Wife”). After remand, Husband again appeals the trial court’s order of 

equitable distribution, arguing inter alia, that the trial court abused its 

discretion in valuing the business Husband established during the parties’ 

marriage and in modifying Wife’s alimony pendente lite (“APL”) award. We 

affirm in part, reverse in part, and remand for proceedings consistent with

this opinion.

The parties married on April 3, 1986; after twenty-three years of 

marriage, the parties separated on February 5, 2010. No children were born 

of the marriage. During the marriage, Husband founded Brothers Auto 

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*

Former Justice specially assigned to the Superior Court.
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Transport (“Brothers”), a company that picks up new and used vehicles and 

transports them throughout the country. As of the date of the parties’ 

separation, Brothers was a thriving business with average gross sales of 

approximately $9 million each year and a fleet of forty trucks. 

At one point, Wife worked at Brothers, assisting with administrative 

tasks. Wife’s highest level of education was finishing eleventh grade. Wife 

no longer works due to health problems, including rheumatoid arthritis, 

lupus, and Raynaud’s Syndrome, which affects her hands. Wife is 

responsible for the care of her elderly mother and her intellectually disabled 

brother. Following the parties’ separation, Husband was required to pay 

Wife $4,942.00 each month in APL and also pay for her health insurance.

In the equitable distribution proceedings of the divorce litigation, the 

key disputed issue was the valuation of the trucking business. Each party 

retained two separate experts: 1) an asset valuation expert to value 

Brothers’ trucks, trailers, and other tangible property, and 2) a business 

valuation expert to calculate the overall value of the business itself. We 

note the parties also offered revised valuations of Brothers’ assets and its 

overall value.1 Husband’s experts employed an income-based approach and 

valued Brothers at $1,000,000.00. Wife’s experts employed an asset-based 

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1 We note that Wife’s original asset valuation expert died suddenly before 

the master’s hearing. After Wife retained a second asset valuation expert to 

testify, she revised her valuation of Brothers to incorporate the new expert’s 

valuation of Brothers’ truck fleet.
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approach and valued Brothers at $1,978,328.00. On June 20, 2012, the 

Divorce Master issued a report and recommendation, finding Wife’s valuation 

experts to be credible and Wife’s proposed valuation for Brothers to be most 

reliable. However, the Master never explicitly stated in his report the 

specific value he adopted for Brothers.

Husband filed exceptions to the Master’s determination regarding the 

valuation of Brothers. The trial court adopted the Master’s recommendation 

to use Wife’s proposed value for Brothers, but did not explicitly value the 

business in its discussion of this specific issue. However, in its decision, the 

trial court later indicates that it valued Brothers at $3,336,134. On February 

15, 2013, the trial court entered a final divorce decree that incorporated the 

property division.

On appeal, this Court found the trial court’s valuation of Brothers was 

“wholly unsupported by the record” as that specific figure was never offered 

by Wife’s expert as a proposed value for Brothers, but instead was a 

proposed valuation of the truck fleet that did not account for the company’s 

liabilities and obligations. Carney v. Carney, 843 EDA 2013, at *6 

(Pa.Super. November 19, 2013) (unpublished memorandum). Moreover, 

Wife had withdrawn that figure from consideration after retaining her asset 

valuation expert and submitting revised valuations. As a result, this Court 

found that the trial court had abused its discretion in valuing Brothers, which 

in turn, affected the overall equitable distribution award. Thus, this Court 

remanded the case, directing the trial court to revisit the issue of Brothers’ 
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valuation and reconsider the entire equitable distribution award in light of 

this new value.

After remand, the parties stipulated that the trial court could evaluate 

all equitable distribution issues based upon testimony and evidence 

presented at the previous evidentiary hearings. In addition, Wife filed a 

petition to modify her APL award. On January 25, 2016, the trial court held 

a hearing to allow the parties to introduce additional evidence to supplement 

the record. 

On July 1, 2016, the trial court entered an order and opinion setting 

forth its equitable distribution award that divided the marital estate in a 

50/50 ratio. The trial court found Wife’s valuation experts most credible and 

adopted their valuation of Brothers at $1,978,328.00. To avoid the 

liquidation of Brothers, the trial court distributed the auto carrier business 

solely to Husband. To equalize this distribution, the trial court awarded the 

marital residence (valued at $100,400.00)2and the marital 401(k) account 

(valued at $331,620.00) to Wife and ordered Husband to pay Wife 

$6,761.95 each month, interest free, for ten years. The trial court also 

divided less valuable assets among the parties. Moreover, the trial court 

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2 While the marital residence has a fair market value of approximately 

$244,400.00, it is encumbered by a lien of approximately $150,000.00, 

which was utilized by the parties in 2006 to add improvements to the 

property, including a garage, a putting green, a pool, a pool house, a 

gazebo, two waterfalls, and landscaping.
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granted Wife’s petition to modify APL and increased her award to $12,000 

each month. Husband filed a timely appeal and a concise statement of 

errors complained of on appeal.

Husband raises the following issues for our review:

1. Did the lower court commit an error of law and/or abuse its 

discretion by accepting Wife’s expert’s “calculated value” of 

the marital business which relied upon an adjusted asset 

approach rather than a fair market value which considers the 

ongoing concern of the marital business?

2. Did the trial court commit an error of law and/or abuse its 

discretion in failing to tax effect the value of the marital 

business?

3. Did the trial court commit an error of law and/or abuse its 

discretion by entering an equitable distribution award 

calculated upon an improper value of the marital business?

4. Did the trial court commit an error of law and/or abuse its 

discretion by awarding alimony pendente lite to Wife based 

upon Husband’s post-separation income without considering 

Wife’s needs?

Husband’s Brief, at 4.

Our standard of review in reviewing a trial court’s equitable 

distribution order is as follows:

[a] trial court has broad discretion when fashioning an award of 

equitable distribution. Our standard of review when assessing 

the propriety of an order effectuating the equitable distribution 

of marital property is whether the trial court abused its 

discretion by a misapplication of the law or failure to follow 

proper legal procedure. We do not lightly find an abuse of 

discretion, which requires a showing of clear and convincing 

evidence. This Court will not find an “abuse of discretion” unless 

the law has been overridden or misapplied or the judgment 

exercised was manifestly unreasonable, or the result of 
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partiality, prejudice, bias, or ill will, as shown by the evidence in 

the certified record. In determining the propriety of an equitable 

distribution award, courts must consider the distribution scheme 

as a whole. We measure the circumstances of the case against 

the objective of effectuating economic justice between the 

parties and achieving a just determination of their property 

rights.

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. We are also aware that a master's report and 

recommendation, although only advisory, is to be given the 

fullest consideration, particularly on the question of credibility of 

witnesses, because the master has the opportunity to observe 

and assess the behavior and demeanor of the parties.

Morgante v. Morgante, 119 A.3d 382, 386–87 (Pa.Super. 2015) (quoting 

Childress v. Bogosian, 12 A.3d 448, 455–56 (Pa.Super. 2011)) (internal 

citations and quotation marks omitted).

First, Husband challenges the trial court’s decision to adopt Wife’s 

experts’ methods for the valuation of Brothers. Specifically, Husband argues 

that his experts provided a more accurate valuation of Brothers using an 

income-based method, which he characterizes as a generally accepted 

standard of business valuation. Husband criticizes Wife’s experts for using 

an asset-based methodology, which Husband characterizes as a subjective 

methodology that did not assess the fair market value of the business.

We begin by emphasizing that “[t]he Divorce Code does not set forth a 

specific method for valuing assets, and consistent with our standard of 

review, the trial court is afforded great discretion in fashioning an equitable 

distribution order which achieves economic justice.” Mundy v. Mundy, 151 
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A.3d 230, 236 (Pa.Super. 2016) (citation omitted). In valuing marital 

assets, “[t]he trial court must exercise discretion and rely on the estimates, 

inventories, records of purchase prices, and appraisals submitted by both 

parties.” Smith v. Smith, 904 A.2d 15, 21–22 (Pa.Super. 2006). However, 

this Court has consistently held that, “[i]n determining the value of marital 

property, the court is free to accept all, part or none of the evidence as to 

the true and correct value of the property.” Mundy, 151 A.3d at 236 

(quoting Smith, 904 A.2d at 22).

While Husband argues that the trial court should have viewed his 

experts’ testimony utilizing an income based valuation as the preferred 

valuation, we decline to adopt this protocol as the exclusive method for 

determining business valuation. Our precedent requires that the trial court 

be given great discretion to evaluate the parties’ valuation methods and 

determine which is most reliable. Similarly, although Husband criticizes the 

testimony of Wife’s expert witnesses who utilized a different asset-based 

valuation method, Husband is asking this Court to substitute his viewpoint 

for the credibility findings of the divorce master and the trial court. We 

reiterate that we defer to the factfinders’ discretion in weighing the evidence 

and assessing the credibility of the witnesses.

Moreover, we reject Husband’s suggestion that Wife’s experts’ 

valuation method was inadequate to accurately calculate the value of the 

parties’ trucking business. Wife’s business valuation expert, David E. 

Coffman, CPA, ABV, CFF, CVA, who is a certified public accountant as well as 
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certified business evaluator by the American Institute of CPAs, testified as to 

his extensive experience, having valued approximately 500 businesses, 

including five or six trucking companies. Coffman discussed various 

methods of valuation and explained that he felt an asset-based valuation 

method would most accurately calculate Brothers’ valuation as the trucking 

company’s fleet of auto carrier trucks was particularly valuable and would 

hold its value. When asked why he did not use an income-based approach 

as employed by Husband’s experts, Coffman rejected that approach as he 

explained that it tends to overvalue companies by not accounting for 

whether that business is actually operating efficiently.

While Husband asserts that Wife’s experts failed to account for the 

business’s fair market value, this argument is belied by the record. Coffman 

provided a thorough explanation of how he analyzed comparable market 

sales by utilizing a database for the specialized freight trucking industry 

which reported on actual sales of auto carrier truck fleet businesses. In 

addition, Coffman performed his own valuation of the truck fleet by 

consulting objective market data for each of the individual trucks in the fleet. 

After accounting for depreciation of the operating equipment over time, 

Coffman calculated the fleet value to be approximately $3.376 million.

Coffman’s valuation of the truck fleet was consistent with the valuation 

of Wife’s asset-valuation expert, Barry Rudiger, owner of East Coast Truck & 

Trailer, a company with annual sales of auto transport trucks of $35 million 

and a truck inventory worth $7 million. The divorce master was “extremely 
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impressed” by Rudiger’s expertise and his “methodical” valuation method in 

using objective data from NADA guide resources to value each truck in 

Brothers’ fleet with their specific Vehicle Identification Number (VIN). 

Master’s Report, 6/20/12, at 7. Consistent with our precedent above, the 

trial court was free to give weight to the master’s report, particularly with 

respect to witness credibility, as the master had the opportunity to observe 

and assess the behavior and demeanor of the parties. Morgante, supra. 

As the trial court’s findings are supported by the evidence, we cannot find 

that the trial court abused its discretion in adopting Wife’s valuation method 

for the Brothers auto transport business.

Second, Husband argues that the trial court erred in refusing to 

consider the tax effect of awarding the parties’ auto transport business 

solely to Husband. The trial court summarily dismissed this argument, 

explaining that it was not required to apply a tax effect value to any of the 

marital assets as there was no evidence that the parties intended to sell any 

of the assets. Trial Court Opinion, 7/1/16, at 11, n. 3. As a result, the trial 

court assigned the entire trucking business to Husband and equalized this 

distribution by requiring Husband to compensate Wife through a monthly 

payment of $6,761.95 each month, interest free, for ten years. This 

calculation was based on Husband’s receipt of the full equity value of 

Brothers without consideration of costs associated with a potential sale of 

the business. 
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The Divorce Code lists eleven relevant factors in an equitable 

distribution analysis, including the expenses associated with the sale of each 

marital asset. 23 Pa.C.S.A. § 3502(a). Section 3502(a) provides, in 

pertinent part:

3502. Equitable division of marital property

(a) General rule.—Upon the request of either party in an action 

for divorce or annulment, the court shall 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. The court may consider each 

marital asset or group of assets independently and apply a 

different percentage to each marital asset or group of assets. 

Factors which are relevant to the equitable division of marital 

property include the following:

* * *

(10.1) The Federal, State and local tax ramifications associated 

with each asset to be divided, distributed or assigned, which 

ramifications need not be immediate and certain.

(10.2) The expense of sale, transfer or liquidation associated 

with a particular asset, which expense need not be 

immediate and certain.

23 Pa.C.S. § 3502(a)(10.1), (10.2) (emphases added).

In an analogous case, Balicki v. Balicki, 4 A.3d 654 (Pa.Super. 

2010), this Court upheld the trial court’s equitable distribution order which 

deducted sale expenses and tax ramifications from the valuation of a 

husband's insurance agency business before assigning the asset solely to the 

husband. Consistent with the statutory language in Section 3502, this Court 

rejected the argument that the sale expenses and tax ramifications 
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associated with the sale, transfer, or liquidation of a marital asset are only 

relevant in an equitable distribution determination if a sale of the asset is 

likely. Specifically, this Court provided that:

[this argument] violates the clear directive from the legislature 

to consider the tax ramifications and expense of sale, which 

“need not be immediate and certain.” ... It is crystal clear that 

the Legislature intended to stop the practice of the lower courts 

analyzing the prospect of sale of an asset [.] ... We believe the 

Legislature intends the assets simply be given the value they 

would have at distribution after deducting every expense 

necessary to achieve liquidation[.]...

Wife also argues, correctly, that the statute requires us only to 

consider the tax ramifications and expense of sale along with 

numerous other listed factors, but the Divorce Code does not 

make a deduction for them mandatory. However, when we 

consider the tax ramifications and expense of sale associated 

with the marital interest in the insurance agency, we are 

convinced that deducting them is the fair and just method for 

valuing the insurance agency. Pursuant to our Equitable 

Distribution Award, Wife will receive $405,557 cash, without any 

tax consequences or other expense. This will be the largest asset 

that Wife will receive. The marital interest in the insurance 

agency is the largest asset Husband will receive, but it is a much 

different type of asset than cash. Husband cannot properly 

convert the marital interest in the insurance agency to cash 

without finding a potential purchaser, negotiating a written 

agreement containing the terms and conditions of the sale, 

consummating the sale and then paying income tax due as a 

result of the sale. Husband may incur expense of sale other than 

income tax, such as a broker's commission, finder's fee, attorney 

fees and accountant fees. Hence, Wife will have access at no 

cost to her largest asset, cash, while Husband's access to the 

cash value of his largest asset involves a potentially difficult and 

clearly costly process. Therefore, deducting the tax ramifications 

and expense of sale from the marital value of the insurance 

agency is certainly a fair way to divide this asset[.]
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Id. at 663–64 (citations omitted). Moreover, the Balicki Court also pointed 

out that the husband might be forced to sell the insurance agency, given his 

court-ordered obligation to make a large cash payment to his wife within one 

year. See id.

In the same manner, the equitable distribution order in this case 

provides Husband with the entire auto transport business, which cannot be 

converted to cash without significant expenses associated with the sale 

process. In comparison, Wife will receive monthly payments of cash without 

equivalent expenses. While the trial court avoided considering the tax 

implications and expense of Husband’s need to sell Brothers in the future, 

this Court clearly held in Balicki that the expenses and tax ramifications 

associated with the sale of a marital asset is a relevant consideration 

whether a sale is likely or not. See id. at 663; see also 23 Pa.C.S. § 

3502(a)(10.1), (10.2). Therefore, the trial court erred in failing to consider 

evidence related to the potential sale of the auto transport business before 

assigning the asset to Husband. Accordingly, we remand this matter to the 

trial court for a hearing limited to the issue of expenses associated with the 

potential sale of Brothers, and we direct the court to reevaluate the entire 

equitable distribution award (including the cash payment to Wife) in light of 

the evidence presented.

Lastly, Husband argues that the trial court erred in modifying Wife’s 

APL award. Specifically, Husband claims that the trial court’s award is much 

greater than Wife’s actual needs and results in a “windfall” to Wife. 
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We review APL awards under an abuse of discretion standard. 

Haentjens v. Haentjens, 860 A.2d 1056, 1062 (Pa.Super. 

2004). APL is “an order for temporary support granted to a 

spouse during the pendency of a divorce or annulment 

proceeding.” 23 Pa.C.S.A. § 3103. APL “is designed to help the 

dependent spouse maintain the standard of living enjoyed while 

living with the independent spouse.” Litmans v. Litmans, 449 

Pa.Super. 209, 673 A.2d 382, 389 (1996). Also, and perhaps 

more importantly, “APL is based on the need of one party to 

have equal financial resources to pursue a divorce proceeding 

when, in theory, the other party has major assets which are the 

financial sinews of domestic warfare.” Id. at 388. APL is thus 

not dependent on the status of the party as being a spouse or 

being remarried but is based, rather, on the state of the 

litigation. DeMasi v. DeMasi, 408 Pa.Super. 414, 597 A.2d 

101, 104–105 (1991). Alimony, in contrast, is terminated upon 

remarriage or cohabitation. Id. at 104–105; see also 23 

Pa.C.S.A. § 3706. Since, however, the purpose of APL is to 

provide the dependent spouse equal standing during the course 

of the divorce proceeding, it does not come with the “sanction” 

of Section 3706. DeMasi, at 104–105. “APL focuses on the 

ability of the individual who receives the APL during the course 

of the litigation to defend her/himself, and the only issue is 

whether the amount is reasonable for the purpose, which turns 

on the economic resources available to the spouse.” Haentjens,

at 1062; see also DeMasi, at 105.

Childress, 12 A.3d at 463 (quoting Schenk v. Schenk, 880 A.2d 633, 644–

45 (Pa.Super. 2005)).3

Moreover, in reviewing a party’s request for a modification of the APL 

award, courts must consider the following:

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3 This Court has emphasized that a dependent spouse may continue to 

receive APL through an appeal (including any remand) concerning matters of 

equitable distribution until a final order has been entered. Schenk v. 

Schenk, 880 A.2d 633, 647 (Pa.Super. 2005).
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In ruling on a claim for alimony pendente lite, the court should 

consider the following factors: the ability of the other party to 

pay; the separate estate and income of the petitioning party; 

and the character, situation, and surroundings of the parties.” An 

award of alimony pendente lite may be modified or vacated by a 

change in circumstances.... It is the burden of the party seeking 

to modify an order of support to show by competent evidence 

that a change of circumstances justifies a modification. 

Childress, 12 A.3d at 463 (quoting Busse v. Busse, 921 A.2d 1248, 1255 

(Pa.Super. 2015) (internal citations omitted)).

In light of this precedent, we find the trial court’s modification of Wife’s 

APL award was justified by competent evidence. Wife testified that her sole 

income is the APL award, which was previously set at $4,942.00 each 

month. However, Wife argues that this award is inadequate to meet her 

needs as her monthly expenses are approximately $5,800.00 each month. 

In comparison, Wife’s expert, Mr. Coffman, reviewed Husband’s financial 

information and calculated his 2014 annual net income to be $680,352.00 

(monthly net income of $56,969.00). Although the trial court noted that the 

support guideline formula in Pa.R.C.P. 1910.16-4 suggested that Wife be 

awarded $22,227.00 in APL each month, it found this amount was excessive 

under the circumstances as Wife did not testify to any additional expenses or 

needs. Instead, the trial court modified Wife’s APL award to $12,000.00 

each month, which it deemed appropriate to allow Wife to live independently 

and to provide her with the resources to litigate this divorce action. As we 

find this award to be reasonable, we reject Husband’s claim that the trial 

court abused its discretion in modifying Wife’s APL award.
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For the foregoing reasons, we affirm the trial court's decree in all 

respects except for its failure to account for the tax ramifications and 

expenses associated with the potential sale of Husband’s auto transport 

business. Upon remand, we direct the trial court to hold a hearing, within 

sixty days, limited to the issue of expenses associated with the potential sale 

of Brothers, and to reevaluate the entire equitable distribution scheme, 

including the cash distribution to Wife.

Decree affirmed in part and reversed in part. Case remanded for 

proceedings in accordance with this decision. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 5/31/2017
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