Court Opinion

ID: 2816934
Source: CourtListenerOpinion
Date Created: 2015-07-14 19:30:53.362063+00
Date Added: 2024-06-11T12:18:39.133244
License: Public Domain

J-A09033-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JANE ELLEN WEISMAN                             IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                        Appellant

                   v.

MICHAEL PAUL WEISMAN

                        Appellee               Nos. 1471 EDA 2014, 1472
                                               EDA 2014, 1473 EDA 2014,
                                                     1474 EDA 2014

Appeal from the Orders Entered May 15, 2013, August 8, 2013, and April 7,
            2014, and from the Decree Entered March 26, 2014
           In the Court of Common Pleas of Montgomery County
                   Domestic Relations at No: 99-08626

BEFORE: BOWES, DONOHUE, and STABILE, JJ.

MEMORANDUM BY STABILE, J.:                           FILED JULY 14, 2015

     Appellant, Jane Ellen Weisman, appeals from the trial court’s March

26, 2014 divorce decree. That decree rendered final the trial court’s orders

of May 15, 2013, August 8, 2013, which also are on appeal.         In addition,

Appellant appeals from the trial court’s April 7, 2014 order directing her to

pay counsel fees. We affirm in part, vacate in part, and remand.

     Appellant, Jane Ellen Weisman, and Appellee, Michal Paul Weisman,

wed in 1968 and separated in 1999. Appellee filed a complaint in divorce in

May of 1999. The trial court offered the following summary of the pertinent

facts and procedural history:

         In 1983, during the marriage, [Appellee] formed the
     company PRN Healthcare Services (“PRN”), which included two
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     separate entities to handle skilled nursing through Medicare and
     unskilled custodial, companion care respectively.        PRN was
     located at 121 Coulter Avenue in Ardmore, Pennsylvania. In
     2001, after the parties had separated and initiated divorce
     proceedings, PRN defaulted on a business loan that has listed
     the marital residence of the [parties] as collateral. This resulted
     in the foreclosure sale and loss of the property, which at that
     point, had been Appellant’s residence. [Appellee] later took out
     a $100,000.00 loan from the Small Business Administration
     (“SBA Loan”) and occasionally loaned personal funds to cover
     the business costs of PRN.

            In 2006, [Appellee], as president and sole shareholder,
     ceased operations of PRN.         Around this time, Harold Hutt
     [(“Hutt”)] founded and incorporated [Reliance Home Healthcare,
     Inc.], a company in the business of unskilled home health care.
     While the eventual office location of Reliance was recovering
     from a fire, Reliance initiated business in the same office as PRN.
     Reliance hired all of PRN’s employees, including [Appellee] in the
     role of administrator, and took on many of PRN’s service
     providers and patients. Shortly thereafter, Reliance moved to 7
     East Lancaster Avenue in Ardmore, Pennsylvania. [Appellee]
     continues to work for Reliance in a part-time capacity.

            The convoluted and contentious procedural history of this
     case began in earnest on September 27, 2006 when Appellant
     filed a Petition for Special Relief. After several years of amicable
     support arrangements, this Court granted the petition and the
     parties reached an agreement on September 20, 2007, requiring
     [Appellee] to provide Appellant with monthly APL payments of
     $2,400.00, health insurance, and reimbursement for medical
     expenses up to $50.00 per month. In response to a petition for
     bifurcation, this court issued its Order of May 1, 2008, which
     continued the APL mandated in the prior order ‘without
     reduction, until the final resolution of all equitable distribution,
     alimony and related issues raised in the divorce action.’

            After almost two years of lull in the litigation, Appellant
     filed a motion for contempt […] alleging that [Appellee] was
     failing to make adequate payments. In response, [Appellee]
     filed a motion to modify the existing APL order on September 27,
     2010 alleging a change in circumstances in relation to the
     income of the parties. Subsequently, the Domestic Relations
     Office (“DRO”) held a hearing, and the Support Conference

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      Officer issued a report finding that [Appellee] had failed to meet
      his obligations. This report also stated that the APL order of May
      1, 2008 was ‘not modifiable’ on its face. Accordingly, in [an]
      Order of February 10, 2012, this Court denied [Appellee’s]
      petition to modify the APL order.

            For [Appellee’s] failure to fulfill his obligations, this Court
      issued a bench warrant for his arrest on October 11, 2011 and
      held him in contempt[….]        On June 6, 2012, the Support
      Conference Officer in the DRO again found [Appellee] bound by
      the original APL order.

            The DRO then issued its Master’s Report and
      Recommendation upon Equitable Distribution, Alimony, Counsel
      Fees, and Costs of October 26, 2012, reporting its assessment of
      the case at that stage of the litigation. Of note, the report
      stated ‘[Appellant] claims that [Appellee] dissipated PRN.
      However … there is no evidence [Appellee] dissipated this asset.
      On the contrary, the overwhelming evidence suggests that the
      business was failing, could not be sold and resulted in the parties
      being left with significant debt.’ The DRO then considered ‘the
      length of marriage and current earnings of the parties’ and
      recommended ‘that [Appellee] pay alimony to [Appellant] in the
      amount of $1,000.00 per month for a period of five years,’
      noting that the duration of the award would not be modifiable,
      but the amount would be, ‘based upon any change in the parties’
      income.’ Additionally, the report recommended a denial of all
      claims for counsel fees.

            Undeterred, Appellant continued in her quest of discovery.
      Accordingly, this Court issued orders for discovery on February
      1, 2013, requiring documents related to PRN and Reliance; on
      May 15, 2013, requiring, inter alia, testimony from [Appellee]
      and [Hutt] for three hours and two hours, respectively; on May
      24, 2013, requiring additional testimony from [Hutt] and Erica
      Benning, another PRN and Reliance employee. This Court finally
      concluded the fact finding of the case with the Order of March
      26, 2014, finding no connection between PRN and Reliance.
      Thus, on April 7, 2014, this Court ordered Appellant to pay
      attorney’s fees for [Appellee] and Reliance.

Trial Court Opinion, 6/27/14, at 1-4.

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      “We note that our standard in reviewing the propriety of equitable

distribution   awards     is   broad:   we    will   not   disturb   a   trial   court’s

determinations absent an abuse of discretion, that is, if the trial court failed

to follow proper legal procedures or misapplied the law.”            Osial v. Cook,

803 A.2d 209, 213 (Pa. Super. 2002). “Nor will we usurp the trial court’s

duty as factfinder.” Id. “The test in any equity matter is not whether we

would have reached the same result on the evidence presented, but whether

the judge’s conclusions can be reasonably drawn from the evidence.”                 Id.

The goal of equitable distribution is to “[e]ffectuate economic justice

between the parties[.]” 23 Pa.C.S.A. § 3102(a)(6). Section 3502(a) of the

Divorce Code sets forth factors relevant to achieving economic justice. 23

Pa.C.S.A. § 3502(a).

      Appellant first asserts the trial court erred in finding no connection

between PRN and Reliance.          Appellant believes Reliance and PRN are not

distinct companies, and that Reliance is the continuation of PRN under a

different name. As such, Appellant believes Reliance is marital property and

she is entitled to a portion of its assets.      The trial court has discretion to

determine whether an asset is part of the marital estate and therefore

subject to equitable distribution. Fishman v. Fishman, 805 A.2d 576, 578

(Pa. Super. 2002). The goodwill of a business is a marital asset subject to

equitable distribution.        Solomon v. Solomon, 611 A.2d 686, 691 (Pa.

1992); Baker v. Baker, 861 A.2d 298, 303 (Pa. Super. 2004), appeal

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denied, 918 A.2d 741 (Pa. 2007). In Gioia v. Gioia, 555 A.2d 1330, 1334-

35 (Pa. Super. 1989), this Court held that a husband’s 50% interest in a

corporate successor to his former partnership was a marital asset.

       Appellant relies on the continuity of the employees, client base, and

services rendered by PRN and Reliance. Appellant also notes the business

immediately became profitable under Hutt, even though Hutt had no

experience in the industry. Such was not possible, according to Appellant,

absent the ongoing goodwill of PRN and its employees and caregivers.

       On December 12, 2013, Appellee and Hutt testified at a hearing

concerning    Appellant’s   exceptions     to   the   master’s    report     and

recommendations. Appellee testified that when PRN closed it had no assets,

no line of credit, and that its sales income was not sufficient to meet payroll.

N.T. Hearing, 12/10/13, at 52-53.     State law prohibited PRN from leaving

patients without care, so PRN referred them to Reliance, a new company set

up by Hutt. Id. at 54. Friends Life Care, from which PRN received most of

its patient referrals, had a choice of referring PRN’s existing patients to

Reliance or any other appropriate organization.       Id. at 53-54.    Appellee

informed Friends Life Care that PRN was going out of business.         Reliance

contacted PRN staff and gave them the option of joining Reliance, thus

creating continuity of care for the patients. Id. at 56. The caregivers were

independent contractors who often worked for several companies.            Id. at

103.   Reliance hired Appellee as an administrator, because his experience

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allowed Reliance to obtain a license to perform its work.        Id. at 58.   In

summary, Appellee testified that PRN was financially insolvent, and that the

transfer of most of its patients and staff to Reliance proved the most

advantageous way to treat the patients, who received continuity of care

from familiar caregivers.

       Hutt testified that Reliance received its first patients as referrals from

Friends Life Care because PRN was going out of business and the patients

were in need of caregivers.      Id. at 179.    Hutt wanted to create a new

company with a new name because PRN was known for its skilled care

entity, which closed prior to PRN Healthcare Services.         Id. at 182.    In

several months during Reliance’s first two years of operation, Hutt did not

take a paycheck because the company could not afford it. Id. at 190-91.

Reliance was not profitable in 2007, its first full year of business.     Id. at

198.

       The trial court credited the testimony of Appellee and Hutt and on that

basis rejected Appellant’s theory that Reliance simply continued the business

of PRN under another name. We understand Appellant’s concerns, given the

substantial overlap of employees and clientele between the two companies.

The record supports Appellant’s assertions that Reliance maintained the

same telephone number as PRN, and that Reliance, at its inception,

advertised itself on its website as serving the local community for nearly

three decades—the length of time PRN had been in business.

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      Regardless, our standard of review requires us to affirm the trial court

absent an abuse of discretion or misapplication of the law. The trial court

afforded Appellant a lengthy opportunity to take discovery in support of her

exception to the master’s report and recommendation.               Despite this,

Appellant’s appellate argument amounts to an attack on the credibility of

Appellee and Hutt.    We observe that an expert report on the valuation of

PRN—in particular its goodwill or going concern value—would have been

useful to the trial court and to this Court in assessing the legitimacy of

Appellant’s claim.    See Butler v. Butler, 633 A.2d 148 (Pa. 1995).

Appellant did not procure the services of an expert witness.        Absent such

evidence, we are left with facts, summarized above, indicating that PRN was

in debt, went out of business, and that Hutt created Reliance to serve a

clientele PRN left behind.      We believe the trial court acted within its

discretion and did not commit legal error in finding that Reliance is not a

marital asset. Appellant’s first assertion of error does not merit relief.

      Appellant next asserts that, after the parties separated, Appellee

received $427,000.00 from PRN in the form of loans repaid to shareholders.

Appellant further asserts that Reliance, as successor corporation, is liable for

this debt.     Appellant argues Reliance assumed the liabilities of its

predecessor in this case because Reliance is simply a continuation of PRN.

The merit of Appellant’s second argument depends entirely on her success in

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the first.   Since we have rejected Appellant’s first assertion of error, the

second one necessarily fails.

      Appellant’s third argument is that the trial court erred in modifying a

non-modifiable alimony pendente lite (“APL”) order. According to Appellant,

the parties agreed to the trial court’s May 1, 2008 APL order, which required

Appellee to pay $2,400.00 per month “without reduction” and provide health

care coverage.      Order, 5/1/08, at ¶ 1.      Statutory law forbids court

modification of an APL agreement. 23 Pa.C.S.A. § 3105(c) (“In the absence

of a specific provision to the contrary appearing in the agreement, a

provision regarding […] alimony pendente lite […] shall not be subject to

modification by the court.”).    Court-awarded APL, on the other hand, is

subject to modification if circumstances change. Childress v. Bogosian, 12

A.3d 448, 463 (Pa. Super. 2011).

      The record reflects a September 20, 2007 order directing Appellee to

provide $2,400.00 in APL, $50.00 per month in unreimbursed medical

expenses, and health insurance.      Order, 9/20/07, at ¶¶ 1-3.    The court

entered that order without prejudice to a subsequent petition to modify. Id.

at ¶ 4. The May 1, 2008 order, as noted above, provided for the payments

specified in the September 20, 2007 order to continue “without reduction,

until the final resolution of all equitable distribution, alimony and related

issues raised in the divorce action are resolved by agreement or final order.”

Order, 5/1/08, at ¶ 1.    The May 1, 2008 order also required Appellee to

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continue to provide health insurance to Appellant and to obtain insurance on

his life with a death benefit to Appellant of $100,000.00.      Id. at ¶ 2-3.

Paragraph 4 provides as follows:

           Upon providing documentation of compliance with
      paragraphs 2 and 3 above to [Appellant’s] counsel, [Appellee]
      may request entry of an order bifurcating the action in divorce
      which shall be entered, unless [Appellant] files an objection to
      same based on non-compliance with paragraphs 2 and 3.

Id. at ¶ 4.   Appellant asserts Appellee agreed to entry of this order in

exchange for Appellant’s consent to his petition to bifurcate the divorce

proceeding. Appellant’s Brief at 36-37. Appellee’s Brief is silent on whether

he agreed to the order. The conference that preceded entry of the May 1,

2008 order is not of record.

      The trial court addressed this issue as follows:

            The parties stipulated on February 21, 2013 that
      Appellant’s health insurance plan was canceled in May of 2011.
      She obtained a new plan, which was terminated for non-
      payment of premiums that December. On February 21, 2012,
      this Court held [Appellee] in contempt and ordered him to pay
      for the plan to be reinstated. This order further attached his
      wages to cover the costs. Appellant’s health insurance plan was
      again terminated for non-payment that June, and on July 9,
      2013, this Court again held [Appellee] in contempt.

            However, on August 8, 2013, this Court reversed the prior
      order and found that [Appellee] had in fact been providing the
      money for [Appellant’s] premiums, but Appellant had failed to
      apply these funds to maintain coverage. This order credited
      [Appellee] with the money that Appellant had failed to apply
      toward health insurance.

Trial Court Opinion, 6/27/14, at 4. The trial court construed its order as a

credit for misapplied funds rather than a modification of the APL order.

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      To summarize the foregoing, the record contains no direct evidence

that the parties agreed to the May 1, 2008 order.        The order does not

expressly state that it was entered by consent.        The order makes the

success of Appellee’s petition to bifurcate conditional on his compliance with

paragraphs 2 (provide health insurance) and 3 (obtain life insurance). The

court did not condition the grant of Appellee’s bifurcation motion on his

compliance with Paragraph 1, which includes the “without reduction”

language. Ultimately, we are left to speculate whether the terms of the May

1, 2008 order was the subject of a negotiated agreement or whether it was

of the trial court’s design.   Under these circumstances, we do not believe

§ 3105(c), governing APL by agreement, is dispositive.

      We further conclude the trial court did not violate the express terms of

its own order.   The court did not devise a reduction to Appellant’s APL.

Rather, the trial court explained that the effect of its order “was to credit

[Appellee] for the payments he made to Appellant for health insurance while

she did not have premiums to pay.” Trial Court Opinion, 6/27/14, at 15 n.3.

In other words, the order required Appellee to provide health insurance in

addition to the $2,400.00 per month APL payment.           To discharge that

obligation, Appellee provided money to Appellant to cover her insurance

premiums. Appellee failed to apply the money to the premiums and allowed

her coverage to lapse.         The trial court therefore devised a way to

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compensate Appellee for misapplied funds.            We discern no abuse of

discretion or error of law. Appellant’s third assertion of error fails.

      In her fourth argument, Appellant argues the trial court erred in

awarding attorney’s fees to compensate Appellee for the discovery Appellant

conducted in her unsuccessful attempt to establish that Reliance was a

continuation of PRN under a new name.

      Section 2503 of the Judiciary Code governs awards of counsel fees.

42 Pa.C.S.A. § 2503.       A trial court may award fees to a party for an

opposing party’s “dilatory, obdurate or vexatious conduct during the

pendency of any matter.”       42 Pa.C.S.A. § 2503(7).    Counsel fees are also

appropriate where “the conduct of another party in commencing the matter

or otherwise was arbitrary, vexatious or in bad faith.”             42 Pa.C.S.A.

§ 2503(9).    The trial court also relied on Rule 4019 of the Rules of Civil

Procedure.    Rule 4019 governs the imposition of sanctions for a party’s

failure to comply with discovery. Pa.R.C.P. 4019.

      Matters of discovery rest within the trial court’s discretion. Octave v.

Walker, 103 A.3d 1255, 1266 (Pa. 2014).               Trial courts have broad

discretion to craft sanctions for discovery violations.     Id.   The trial court

justified its ruling as follows:

            Over the several years of the litigation of this case, this
      [c]ourt found that Appellant was fishing for facts that were not
      supported by the evidence. Accordingly, Appellant was ordered
      to compensate [Appellant and Reliance] for their time spent in
      discovery.

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Trial Court Opinion, 6/27/14, at 13.

      We conclude the trial court lacked statutory authority to impose

attorney’s fees in this case. The trial court did not make any finding that

Appellant’s conduct was dilatory, obdurate or vexatious, pursuant to

§ 2503(7). Likewise, the trial court did not note any violation, on Appellant’s

part, of Rule 4019.     Rule 4019 applies principally where the subject of

discovery fails to comply with a request from the party seeking discovery.

Rather than crafting sanctions to punish abusive behavior, the trial court in

this case punished Appellant because her discovery was unsuccessful. As we

explained above in connection with Appellant’s first argument, we believe

Appellant had good reason to examine closely the relationship between PRN

and Reliance.    Her failure to establish a relationship sufficient to bring

Reliance within the marital estate is not, by itself, a sufficient basis for

imposing sanctions.   Extensive but unsuccessful discovery is by no means

synonymous with dilatory, obdurate or vexatious behavior. The trial court

abused its discretion in concluding otherwise. We will therefore vacate the

April 7, 2014 order directing Appellant to pay counsel fees.

      Appellant’s fifth argument is that the trial court erred in failing to find

husband responsible for spoliation of evidence and violation of various court

orders and discovery rules.      Appellant cites no law in support of this

argument and therefore has waived it.           Pa.R.A.P. 2119(b); Dalrymple v.

Kilishek, 902 A.2d 1275, 1281 (Pa. Super. 2007).

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         Appellant’s sixth assertion of error is that the trial court erred in

limiting the depositions of Appellee and Hutt to three hours and two hours,

respectively.1    As we noted above, trial courts enjoy broad discretion in

managing discovery.         Octave, 103 A.3d at 1266.       In support of this

argument, Appellant reprises the facts set forth in her first argument,

whereby she attempted to establish that Reliance is simply the same

company as PRN. She argues that the total of five hours of deposition time

was woefully inadequate to examine the witnesses on a very complicated

issue.

         Our review of the record convinces us that the trial court permitted

Appellant to conduct extensive discovery on this issue, in the form of

depositions and voluminous requests for document production. We believe

the trial court afforded Appellant more than sufficient opportunity to prove

her claims.     We therefore discern no abuse of discretion in the deposition

time limitations.

         In her penultimate argument, Appellant asserts the trial court erred in

awarding insufficient alimony of $367.00 per month for five years.          The

Divorce Code provides:         “Where a divorce decree has been entered, the

____________________________________________

1
   This section of Appellant’s brief also includes no citation to authority,
though in an earlier portion of her brief she cited the abuse of discretion
standard applicable to discovery matters. We conclude Appellant did not
waive this argument, as the standard of review is dispositive of this
argument.

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court may allow alimony, as it deems reasonable, to either party only if it

finds that alimony is necessary.” 23 Pa.C.S.A. § 3701(a). Section 3701(b)

provides seventeen factors for trial courts to consider in fashioning an

alimony award. 23 Pa.C.S.A. § 3701(b). We will not reverse an award of

alimony absent an abuse of discretion. Middleton v. Middleton, 812 A.2d

1241, 1248 (Pa. Super. 2002).

        Instantly, the    trial court acknowledges an error      in calculating

Appellee’s income.       The trial court reduced Appellee’s income based on a

garnishment for a defaulted SBA loan.          Garnishment is not among the

exclusive list of approved income reductions set forth in Pa.R.C.P. 1910.16-

2(c).    In pertinent part, that Rule reads:    “Unless otherwise provided in

these rules, the court shall deduct only the following items from monthly

gross income to arrive at net income.” Garnishment is not among the items

listed. Appellee disputes this point, but fails to provide any legal authority to

support his argument.        In accord with the trial court’s request, we will

vacate the alimony award and remand for calculation of a new award.

        Appellant’s eighth and final argument is that the trial court erred in

refusing to award her attorney’s fees for Appellee’s multiple alleged

violations of discovery rules, including delays, spoliation of evidence and

incomplete responses. Once again, we note that management of discovery

and imposition of sanctions, if necessary, rests within the discretion of the

trial court.   Octave, 103 A.3d at 1266.       The trial court found Appellee’s

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discovery responses adequate, and therefore declined to award counsel fees

to Appellant. Appellant, on the other hand, believes Appellee’s insufficient

responses prevented her from examining thoroughly the circumstances of

the closing of PRN and the subsequent opening of Reliance. Our review of

the record reveals no abuse of discretion on the part of the trial court. At

the December 10, 2013 hearing, Appellant examined Appellee and Hutt

extensively based on part on materials obtained from Appellee and Hutt

through discovery. The record does not support a conclusion that delayed

and incomplete discovery responses hindered Appellant’s ability to present

her case. Once again, we note our belief that expert review of voluminous

and intricate financial information would have been of great assistance to

Appellant in preparing her case and to this Court in conducting review.

     In summary, we vacate the April 7, 2014 order directing Appellant to

pay counsel fees. We also vacate the alimony award set forth in the March

26, 2014 divorce decree and remand for entry of a new alimony award. We

affirm the remainder of the March 26, 2014 decree. We affirm the orders of

May 15 and August 8, 2013.

     Decree affirmed in part and vacated in part.     Order of April 7, 2014

vacated. Orders of May 15 and August 8, 2013 affirmed. Case remanded

for entry of a new alimony award. Jurisdiction relinquished.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/14/2015

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