J-A23027-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

RENEE L. REGULA IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellant

v.

ANDREW S. REGULA

Appellee No. 1396 WDA 2014

Appeal from the Order August 4, 2014

In the Court of Common Pleas of Allegheny County

Family Court at No(s): FD 08-004511-006

BEFORE: GANTMAN, P.J., LAZARUS, J., and MUSMANNO, J.

MEMORANDUM BY LAZARUS, J.: FILED NOVEMBER 25, 2015

Renee Regula (“Wife”) appeals from the August 4, 2014 order the 

Court of Common Pleas of Allegheny County distributing the parties’ marital 

property and ordering Andrew S. Regula (“Husband”) to pay Wife alimony 

and counsel fees. After our review, we affirm in part and reverse in part. 

The parties were married in 1999 and separated in 2009. Husband, 

age 43, and Wife, age 44, are the parents of one minor child, born in 2006.1 

Husband is employed in medical equipment sales at Medtronic; he earns in 

excess of $250,000 per year. Wife had worked as a hairstylist earning 

____________________________________________

1 Wife has primary custody of the parties’ child, who attends a charter school 

in the city of Pittsburgh.
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approximately $51,000 per year, but reduced her hours when the parties’ 

child was born. She has not worked since 2011.2 

From the date of separation, Husband enjoyed exclusive occupancy of 

the marital home. His girlfriend moved into the marital home one month 

after the parties separated. In September 2011, Husband ceased paying the 

mortgage, real estate taxes and homeowner’s insurance ($2,551.58 

monthly). At the time of the hearing before the Special Master, the marital 

residence was in foreclosure. However, the court issued a stay and the 

property eventually sold for $427,000. Wife received net proceeds of the 

sale for purposes of paying off a tax lien related to the liquidation of her IRA, 

which left her with $164 from the sale. 

The Master recommended a 60/40 distribution in favor of Wife. The 

Master found Husband was in possession of, or benefited from, the 

following:

Merit Medical 401(k): $ 98,442

Marital Home: Fair Market Rental ($77,700) 

Dissipation ($57,975) $135,675

Household Goods/Furniture: $ 10,000

TOTAL BENEFIT TO HUSBAND $244,117 

The Master found Wife was in possession of, or benefited from, the 

following: 

____________________________________________

2 Wife was assigned an earning capacity of $26,707, which she has not 

challenged 
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Pathfinder Federal Credit Union: $ 19,450

American Funds IRA $ 38,599

House proceeds: $ 10,425

 TOTAL $ 68,474

Less liabilities: 

Chase Credit Card: $ 8,806

2011 Tax lien on IRA proceeds: $10,261

 TOTAL - $19,067

TOTAL BENEFIT TO WIFE: $49,407

Thus, the Master determined that the marital estate totaled $293,524, 

($244,117+$49,407), that Wife was entitled to 60% of the marital estate, or 

$176,114.40, and, therefore, Husband must pay Wife $126,707.40 

($126,707.40+$49,407=$176,114.40).3 The Master noted that Husband 

enjoys retirement benefits, medical benefits, car subsidies, and other 

perquisites of his employment, and he has significantly greater sources of 

income and is in a better position than Wife to acquire future capital assets. 

The Master also noted that both parties are in good health, and that 

Wife has primary custody of the parties’ child. The Master recommended 

Husband pay 88% of the child’s tuition and extra-curricular activities costs, 

____________________________________________

3 The Master determined Husband took out $40,000 in loans from the Merit 

Medical IRA during the parties’ separation, without Wife’s consent, and, in 

January 2010, he liquidated the account. Husband’s 401(k) and Wife’s IRA 

were both depleted at the time of the hearing.
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and that he pay Wife $2,000 in alimony each month for two years and 

$10,000 in counsel fees. Both parties filed exceptions. 

The trial court, in an order dated August 4, 2014, granted in part and 

denied in part the parties’ exceptions, reducing the value of Husband’s Merit 

Medical 401(k) from $98,442 to $48,827, reducing the fair rental credit from 

$77,000 to $38,500, and ordering Husband to pay $300 each month toward 

arrears. The court also determined that Husband was not responsible for 

private school tuition. 

Wife filed this timely appeal, and she raises the following claims for 

our review: 

1. The trial court entered an erroneous finding and 

committed an abuse of discretion in determining that 

the marital value of Husband’s Merit Medical 401(k) is 

$48,827, and not $98,442 as recommended by the 

Master;

2. The trial court entered an erroneous finding and 

committed an abuse of discretion in denying Wife’s 

Cross Exception to the Master’s Report #2, which 

asserted that $42,250.00, of capital gains realized by 

Husband from his investment of marital funds derived 

from Merit Medical 401(k) withdrawals, should have 

been identified as marital property and therefore 

included as subject to equitable distribution;

3. The trial court entered an erroneous finding and 

committed an abuse of discretion in determining that 

the fair market value of the rental credit assigned to 

Husband be set at $38,500, or one-half of $77,700 as 

had been determined by the Master. 

Our standard of review is well settled:
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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 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.

Biese v. Biese, 979 A.2d 892, 895 (Pa. Super. 2009); see also Morgante 

v. Morgante, 119 A.3d 382 (Pa. Super. 2015). Under section 3502(a) of 

the Divorce Code, 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.” 23 Pa.C.S.A. § 3502(a). 

Moreover, it is within the province of the trial court to weigh the evidence 

and determine credibility; this Court will not reverse those determinations so 

long as they are supported by the evidence. Childress v. Bogosian, 12 

A.3d 448, 455–56 (Pa. Super. 2011) (internal citations omitted). 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 
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of credibility of witnesses, because the master has the opportunity to 

observe and assess the behavior and demeanor of the parties. Id.

In her first claim, Wife argues that the court erred in concluding that 

the marital value of Husband’s 401(k) is $48,827, and not $98,442 as 

determined by the Master. The trial court determined that Husband testified 

that, prior to separation, he withdrew $30,000 from the Merit Medical 401(k) 

for home repairs in order to prepare the home for sale. He also testified that 

he liquidated the account and was taxed $19,615 on the withdrawal.4 Wife 

offered no evidence to contradict this testimony. The court, therefore, 

accepted Husband’s unrebutted testimony and determined that Husband’s 

401(k) was properly valued at $48,827 ($98,442 less the marital loan of 

$30,000 and less the federal income tax liability of $19,615). 

In determining the value of marital property, the court must rely on 

the evidence submitted by both parties, and it is free to accept all, part, or 

none of the testimony as to the true and correct value of property. Smith 

v. Smith, 653 A.2d 1259, 1265-66 (Pa. Super. 1995); Aletto v. Aletto, 

537 A.2d 1383 (Pa. Super. 1988). Further, “[w]here the evidence offered by 

one party is uncontradicted, the court may adopt this value although the 

resulting valuation would have been different if more accurate and complete 

____________________________________________

4 See 23 Pa.C.S.A. § 3502(a)(10.1)(federal, state and local tax ramifications 

associated with each asset to be divided, distributed or assigned, is a 

relevant consideration in equitable distribution determination). 
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evidence had been presented.” Holland v. Holland, 588 A.2d 58, 60 (Pa. 

Super. 1991); see also Anzalone v. Anzalone, 835 A.2d 773, 784 (Pa. 

Super. 2003). In the instant case, the trial court did not abuse its discretion 

in accepting Husband’s unrefuted testimony with respect to the Merit Medical 

401(k). 

Next, Wife argues that the trial court erred or abused its discretion in 

failing to include as marital property $42,250 in capital gain realized from 

the investment of funds Husband withdrew, post-separation, from his Merit 

Medical 401(k) account. Husband testified that he liquidated his 401(k) 

account and received $44,365.89; he invested $35,955 and made a profit of 

$42,250, which he included on his tax return as capital gain. The capital 

gain was not included in the marital assets subject to distribution. 

Wife contends, “[c]learly, the capital gain was directly generated as a 

result of investments made with marital funds[.]” Appellant’s Brief, at 17. 

She argues that this gain is “property acquired in exchange for marital 

assets” and is marital property under 23 Pa.C.S.A. § 3501(a)(4),5and, 

therefore, should have been subject to equitable distribution. Her argument, 

____________________________________________

5

(a) General rule.--As used in this chapter, “marital property” means all 

property acquired by either party during the marriage and the increase in 

value of any nonmarital property acquired pursuant to paragraphs (1) and 

(3) as measured and determined under subsection (a.1). However, marital 

property does not include: . . . (4) Property acquired after final separation 

until the date of divorce, except for property acquired in exchange for 

marital assets. 23 Pa.C.S.A. § 3501(a)(4) (emphasis added). 
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however, has as its premise the fact that the profit was made from the use 

of marital funds. This is not what the court, or the Master, determined. The 

Master’s report states: “[I]n 2010, Husband earned $177,423/yr. plus 

capital gains of $42,250 from non-marital stock options.” Master’s Report 

and Recommendation, 12/17/13 at 3 n.5 (emphasis added). The trial court 

agreed with the Master’s report and recommendation, stating that these 

capital gains were “were from non-marital stock options and thus not marital 

property.” Trial Court Opinion, 11/3/14, at 5-6. The fact that the court 

went on to state that “[p]ost-separation gains from investments on his 

marital portion of the 401(k) do not constitute property acquired in 

exchange for marital assets[]” does not, as Wife argues, constitute a 

manifest error of law. Though not artfully stated, the court’s use of the term 

“marital portion” clearly referred to the non-marital stock options. We find 

no error or abuse of discretion. Childress, supra; Biese, supra.

Finally, Wife argues that the court erred and abused its discretion in 

decreasing the fair rental value of the marital home from $77,000 to 

$38,500. We agree.

The spouse who is out of possession must be compensated for his or 

her rights and interests in the marital property. Schmidt v. Krug, 624 A.2d 

183 (Pa. Super. 1993); Trembach v. Trembach, 615 A.2d 33, 37 (Pa. 

Super. 1992); Hutnik v. Hutnik, 535 A.2d 151, 154 (Pa. Super. 1987). 

Here, the parties purchased the marital home in January 2009; Wife and the 

parties’ child moved out the following month. Husband’s girlfriend moved in 
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with him shortly after Wife left, and she remained in the house with him until 

the house sold in June 2013. Wife made claims for fair rental value, as well 

as for dissipation of the asset.

The Master determined that the net proceeds realized from the sale of 

the house “were negatively impacted by the penalties, interest and costs 

associated with Husband’s failure to pay the expenses of the house during 

his residence therein and the mortgage foreclosure expenses.” Master’s 

Report, supra, at 3. Wife’s expert real estate appraiser, Matt Stepanovich, 

opined that the fair rental value of the property (5 bedrooms/3.5 

bathrooms) was $3,700 per month. The Master determined Stepanovich 

was credible. Thus, since Wife was out of possession for 21 months after

Husband ceased paying the mortgage, the benefit to Husband was $77,700 

($3,700 x 21 = $77,700). Based on the 60/40 split, the Master 

recommended Wife be awarded $46,620. 

In his exceptions, Husband argued that Wife was not entitled to any 

rental credit since she vacated the new house after only 36 days, leaving 

him with all the obligations. However, the Master calculated the fair rental 

value for the 21 months that Husband did not meet those obligations. 

Master’s Report, supra at 5. 

The trial court states that the Master “gave Wife credit of $77,700, or 

100%, of the fair market rental value[.]” Trial Court Opinion, supra at 6. It 

then went on to explain the four-step procedure for determining whether the 
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dispossessed party is entitled to a credit for the fair rental value of jointly 

held marital property against a party in possession:

1. dispossessed party is entitled to credit, provided there are 

no equitable defenses;

2. rental credit is based upon and limited by extent of parties’ 

interest in the property (generally 1⁄2);

3. fair rental value is limited to the time party is dispossessed 

and other party is in actual or constructive possession;

4. party in possession is entitled to credit for payments made 

to maintain the property

Trembach v. Trembach, 615 A.2d 33, 37 (Pa. Super. 1992). 

After our review, we remand for a recalculation. Although we agree 

with the trial court’s statement that Wife was not entitled to 100% of the fair 

rental value, the Master awarded Wife 60% of that value ($46,620), as the 

fair rental value of $77,700 was included as an asset in the marital estate. 

Further, when the trial court reduced the value by half, to $38,850, it did 

not, as far as we can tell from the court’s August 4, 2014 order and its 

opinion, effectuate a one-half credit to Wife. If that value was simply 

plugged into the prior $77,700 value, then Wife is not receiving the credit 

she is due. The general rule is that the dispossessed party is entitled to a 

credit for the fair rental value of jointly held marital property against a party 

in possession of that property, provided that there are no equitable defenses 

to the credit. Trembach, supra. The proper methodology for granting the 

dispossessed spouse a credit for rental value is to deduct Wife’s share of the 

rental value, here, $38,850, from Husband’s ultimate distribution of the 
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marital estate. See Butler v. Butler, 621 A.2d 659 (Pa. Super. 1993), 

aff'd in part, rev'd in part on other grounds, 663 A.2d 148 (Pa. 1995). See

also 23 Pa.C.S.A. § 3502(a)(7).

Further, that value represents foregone revenue; it is not a marital 

asset. Including it in the marital estate artificially inflates the value of the 

marital estate and awards Husband 40% of that value. Here, Husband was 

in exclusive possession and did not financially maintain the residence for 

those 21 months on which the value was based. Therefore, not only is 

Husband not entitled to a portion of that value (which occurred here), he is 

not entitled to any deductions in Wife’s credit because he did not financially 

maintain the former marital residence for those 21 months. Cf. Ressler v. 

Ressler, 644 A.2d 753, (Pa. Super. 1994) (awarding wife $5,600 as fair 

rental value for time wife was out of possession, without deductions for 

payments husband made on loan secured by marital residence, was not 

abuse of discretion where payments were not on original mortgage, but on 

home equity loan taken out to enable husband to purchase new vehicle). 

Further, contrary to the court’s statement that Wife was “awarded 

$47,957 for dissipation,” Trial Court Opinion, supra at 7, that amount as 

well was included in marital assets prior to the 60/40 equitable distribution 

split. 

For these reasons, the order is affirmed in part, reversed in part, and 

remanded for recalculation. The court of common pleas is directed to carry 
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out what limited proceedings it deems necessary to settle the issues of fair 

rental value and dissipation and to enter an appropriate order.

Affirmed in part; reversed in part and remanded. Jurisdiction 

relinquished. 

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 11/25/2015