Court Opinion

ID: 3207572
Source: CourtListenerOpinion
Date Created: 2016-05-27 18:08:10.683634+00
Date Added: 2024-06-11T09:18:09.900651
License: Public Domain

J-A09027-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

PAUL S. GALANTI                                  IN THE SUPERIOR COURT OF
                                                       PENNSYLVANIA
                            Appellee

                       v.

GRACE P. GALANTI

                            Appellant                No. 1642 MDA 2015

                 Appeal from the Order Entered August 24, 2015
                 In the Court of Common Pleas of Berks County
                        Civil Division at No(s): 08-16756

BEFORE: FORD ELLIOTT, P.J.E., JENKINS, J., and PLATT, J.*

MEMORANDUM BY JENKINS, J.:                                 FILED MAY 27, 2016

        Grace P. Galanti (“Wife”) appeals from the order entered in the Berks

County Court of Common Pleas denying the exceptions she filed to the

Master’s Recommendation regarding the equitable distribution of marital

assets. We affirm.

        Husband and Wife married on August 31, 2003 and separated on

January 17, 2009. The parties have one child, born in August 2004.

        In December 2008, Husband filed a complaint in divorce. On July 10,

2014, Husband and Wife executed affidavits of consent under section

____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
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3301(c) of the Divorce Code and waivers of notice of intention to request

entry of a divorce decree under section 3301(c).1

       Wife is self-employed as a provider of skin care treatment. Master’s

Report and Recommendation Upon Equitable Distribution, Alimony, Counsel

Fees and Costs at 2, filed January 13, 2015 (“Master’s Report”).      A prior

support order found her net income was $1,163.63 per month. Id. Husband

is employed in a sales position by Peer Software and his net income was

found to be $6,200.00 per month. Master’s Report at 2-3.

       The Master made the following findings regarding the marital and non-

marital assets:

          In 2006, during the parties’ coverture, Husband and a
          business partner, David Christiansen, founded a business
          entity called Versimark. Versimark provided marketing
          software for businesses and 90% to 95% of its revenue
          was generated by one client, Farmers Insurance Group,
          which had a contract with Versimark. During the term of
          the contract, Versimark flourished. This was confirmed by
          the accountant who prepared Versimark’s income tax
          returns, who testified that the company’s gross revenues
          grew steadily from $743,672.00 in 2006 to $3,184,108.00
          in 2009 and then declined to $2,162,154.00 in 2010.
          However, subsequent to the parties’ separation, Farmers
          Insurance Group notified Versimark that the contract
          would not be renewed.         This left Versimark without
          sufficient revenue to remain in business. The assets of
          Versimark were purchased by Faulkner Media Group on
          January 31, 2011.          The consideration paid was
          $200,000.00 paid toward Versimark’s bank debt of
____________________________________________

1
  The Master found that grounds for divorce were established under 23
Pa.C.S. § 3301(c).

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       $500,000.00 and $20,000.00 toward operating expenses.
       Husband received a three month consulting contract for
       $1,000.00 per week and Husband and Mr. Christiansen
       received a royalty equal to 5% of sales generated by
       Husband, which they allocated 60% to Husband and 40%
       to Mr. Christiansen. The royalties received by Husband will
       be addressed separately herein.         Husband and Mr.
       Christiansen were able to persuade their creditor banks, to
       whom they had given personal guarantees, to accept the
       $200,000.00 payment from Faulkner Media Group in full
       satisfaction of the entire debt. The foregoing history was
       testified to by Husband and was confirmed, respectively,
       by the testimony of Mr. Christiansen and Mr. Faulkner of
       Faulkner Media Group. The Master specifically asked Mr.
       Faulkner whether Faulkner Media Group had purchased all
       assets of value from Versimark, other than very nominally
       valued assets, to which Mr. Faulkner responded that it
       had. Wife pointed out that under the Asset Purchase
       Agreement between Faulkner Media Group and Versimark,
       Versimark retained an asset described as a development
       server. This asset was subsequently transferred to Mr.
       Christiansen. No evidence of any consideration for the
       transfer or of any value in this asset was presented.
       Therefore, no marital value may be ascribed to this asset.
       The Master finds the testimony of Husband, Mr.
       Christiansen and Mr. Faulkner on the issues relating to
       Versimark to be credible and finds that Versimark has no
       marital value.

       Husband presented evidence in the form of a Metro Bank
       Account Statement comprised of his share of the post
       separation royalties from Faulkner Media Group as referred
       to above. Husband testified, without contradiction, that he
       has received all royalties due him by Faulkner Media Group
       and that no additional royalties will be due or payable.
       The Metro Bank account had a balance of $42,955.17 as of
       November 15, 2014.         It is not clear whether these
       payments were consolidated as income for child or spousal
       support purposes. There is also an Order entered
       September 17, 2012 by the Honorable Peter W. Schmehl
       of this [c]ourt which states that payments received by
       Husband from business loans constitute income for support
       purposes. The Master concludes that the royalties do not
       stem from Business loans and since it has not been

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       established that the royalties have been considered from
       support purposes, the royalties constitute marital property
       subject to equitable distribution. Income taxes on the
       royalties received in 2013 have been paid. The 2014
       income tax liability will be apportioned in equitable
       distribution.

       During the parties’ coverture, Husband lent money to a
       business entity called 50 Below and also, during coverture,
       Husband purchased the loan receivable of a Mr. William
       Rehder who also had lent money to 50 Below. Husband
       borrowed money from equity in marital real estate to
       accomplish these transactions. Subsequent to the parties’
       separation, Husband did receive payments on account of
       these loan receivables, however, 50 Below ultimately filed
       for bankruptcy protection. An Order dated September 17,
       2012 entered by the Honorable Peter W. Schmehl of this
       [c]ourt, previously referred to, determined that payments
       received by Husband from his business loans constituted
       income for support purposes. The payments received by
       Husband from 50 Below clearly emanate from business
       loans, as defined by Judge Schmehl’s Order, and, as such,
       may not be distributed again as marital property under the
       guise of equitable distribution. This would constitute a
       prohibited use of the funds as income for support and
       distribution as an asset. Rohrer vs. Rohrer, 715 A.2d
       463 (Pa.Super.[]1998), Cerny vs. Cerny, 656 A.2d 507
       (Pa.Super.[]1995). No evidence was presented addressing
       the likelihood of future loan repayments resulting from the
       bankruptcy, however, if any such payments are received,
       they must be classified as income for support purposes
       under Judge Schmehl’s Order.

                                  ...

       Husband also acquired real estate during coverture
       situated at 230 N. Fifth Street, Reading, Berks County,
       Pennsylvania. This real estate was acquired by Husband
       through a business entity entirely owned by him and
       contained the offices of Versimark. Husband testified that
       after Versimark was sold, there was insufficient cash flow
       to pay the mortgage on this property, therefore, the
       mortgage holder foreclosed and the property was sold at
       foreclosure sale.     Husband testified he received no
       proceeds from said foreclosure. Wife offered no evidence

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          to the contrary. Wife did offer her opinion that with minor
          renovations, this real estate could have been rented and
          generated sufficient revenue to service the mortgage
          payment, the implication being that Husband willfully
          dissipated this asset. No specific proof of this position was
          presented and the Master also notes that it would have
          been more appropriate to raise this issue through the
          [c]ourt at the time the mortgage began to become
          delinquent.     The Master declines to hold Husband
          responsible for any dissipation of this asset and finds that
          there is no marital equity in this asset.

                                          ...

          There was no evidence presented either of any additional
          marital property or marital debt or of any additional non-
          marital assets in possession of either party.

Master’s Report, at 3-9.

     Both     Husband       and   Wife     filed    exceptions   to     the   Master’s

recommendation. On August 4, 2015, the trial court conducted a hearing on

the exceptions.   In an order dated August 20, 2015, with notice sent to the

parties on August 24, 2015, the court denied Wife’s exceptions and granted

Husband’s exceptions in part and denied them in part. On September 21,

2015, Wife filed a timely notice of appeal. On October 19, 2015, Wife filed a

concise   statement    of    reasons     relied    upon   on   appeal    pursuant   to

Pennsylvania Rule of Appellate Procedure 1925(b). On November 17, 2015,

the trial court issued a Rule 1925(a) opinion adopting the Master’s

Recommendation and Report as the court’s reasoning for the August 20,

2015 decision and order.

     Wife raises the following claims on appeal:

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          A. Did the [trial] court err by failing to award Wife any
          percentage of the $1,229,314.00 in actual cash Husband
          took from the couple’s closely held corporation?

          B. Did the [trial] court err by failing to award Wife any
          percentage of a “loan” husband “purchased” that – after a
          few certain and distinct payments Husband actually
          received were declared income for support purposes,
          repaid all principal and interest due directly to Husband?

          C. Did the [trial] court err by failing to award Wife
          [alimony]2 pursuant to 23 Pa.C.S. § 3701(b)(1)-(17)?

          D. Did the [trial] court err by failing to award Wife
          attorney’s fees?

Appellant’s Brief at 2.

       This Court applies the following standard of review to orders regarding

equitable distribution of marital property:

          A trial court has broad discretion when fashioning an
          award of equitable distribution. Dalrymple v. Kilishek,
          920 A.2d 1275, 1280 (Pa.Super.2007). Our standard of
          review when assessing the propriety of an order
          effectuating the equitable distribution of marital property is
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2
  Wife’s appellate brief and 1925(b) statement argue that the trial court
erred in failing to award “support.” Prior to the entry of a divorce decree, a
party may be entitled to either spousal support or alimony pendente lite,
which are temporary orders.          Pa.R.Civ.P. 1910.16-1(c)(1) (“Orders for
spousal support and alimony pendente lite shall not be in effect
simultaneously.”); McKeown v. McKeown, 612 A.2d 1060, ___
(Pa.Super.1992), overruled by statute on other grounds as noted in
Jayne v. Jayne 663 A.2d 169, 176 n.4 (Pa.Super.1995) (“spousal support
provides living expenses for a dependent spouse prior to the resolution of
the divorce” ); Jayne, 663 A.2d at 176 (alimony pendente lite is “payable
during the pendency of a divorce proceeding”). Following the entry of a
divorce decree, however, a court may only enter an order for permanent
“alimony.” 23 Pa.C.S. § 3701(a) (“Where a divorce decree has been
entered, the court may allow alimony, as it deems reasonable, to either
party only if it finds that alimony is necessary.”)

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         “whether the trial court abused its discretion by a
         misapplication of the law or failure to follow proper legal
         procedure.”      Smith v. Smith, 904 A.2d 15, 19
         (Pa.Super.2006) (citation omitted). We do not lightly find
         an abuse of discretion, which requires a showing of clear
         and convincing evidence. Id. 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.”
         Wang v. Feng, 888 A.2d 882, 887 (Pa.Super.2005). In
         determining the propriety of an equitable distribution
         award, courts must consider the distribution scheme as a
         whole. Id. “[W]e 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.” Schenk v. Schenk, 880 A.2d 633,
         639 (Pa.Super.2005) (citation omitted).

Biese v. Biese, 979 A.2d 892, 895 (Pa.Super.2009).

      Wife first claims Husband took money from Versimark and Wife should

have been awarded a portion of this money. Appellant’s Brief at 10-11. She

claims Husband received $1,229,314.00 from Versimark in the form of

loans, distributions, rental income from the Medical Arts Building, and

deferred income.      Id.

      The trial court did not abuse its discretion or misapply the law when it

did not award Wife any percentage of the money she alleges Husband

received.       Wife relied on financial statements, without any testimony

interpreting the statements.          Further, Wife does not establish that, if

Husband did receive any distributions, they should be included as assets for

distribution,    particularly   as   Husband   testified   that   he   reported   any

distributions received as income for support purposes. N.T., 7/10/2014, at

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33; Roher v. Roher, 715 A.2d 463, 465 (Pa.Super.1998) (“money included

in an individual’s income for the purpose of calculating support payments

may not also      be   labelled as a marital asset subject to         equitable

distribution”). Also, the trial court made a credibility finding regarding the

financial decline of the company, finding Husband credible. See Busse v.

Busse, 921 A.2d 1248, 1255 (Pa.Super.2007) (“The fact-finder is in the

best position to assess credibility of witnesses and we do not disturb

credibility determinations on appeal.”). Accordingly, this issue lacks merit.

      Wife also claims Husband purchased loans from childhood friends,

which he claimed became non-performing post-separation. Appellant’s Brief

at 11-12.     Wife claims that Husband received all payments on the

outstanding principal against one of the loans, and that she should be

awarded 70% of this payment. Appellant’s Brief at 11-12.

      The trial court found that monthly payments Husband received were

income for support purposes.       Order, 9/17/2012.      Regarding the loan

payments, the Master found:      “No evidence was presented addressing the

likelihood of future loan repayments resulting from the bankruptcy, however,

if any such payments are received, they must be classified as income for

support purposes under Judge Schmehl’s Order.” Master Report, at 5.

      Because any payment received from the loan would constitute income

for support purposes, the trial court did not err in adopting the Master’s

finding that any payments received were not assets for distribution

purposes. See Roher, 715 A.2d at 465.

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      Wife next argues she should have been awarded alimony. Appellant’s

Brief at 12. She claims she sufficiently presented all that is necessary for an

award, but does not discuss the evidence in her brief, or provide any citation

to the record evidence. Id.

      The Pennsylvania Divorce Code provides the following regarding

alimony:

           (a) General rule.--Where a divorce decree has been
           entered, the court may allow alimony, as it deems
           reasonable, to either party only if it finds that alimony is
           necessary.

           (b) Factors relevant.--In determining whether alimony is
           necessary and in determining the nature, amount, duration
           and manner of payment of alimony, the court shall
           consider all relevant factors, including:

           (1) The relative earnings and earning capacities of the
           parties.

           (2) The ages and the physical, mental and emotional
           conditions of the parties.

           (3) The sources of income of both parties, including, but
           not limited to, medical, retirement, insurance or other
           benefits.

           (4) The expectancies and inheritances of the parties.

           (5) The duration of the marriage.

           (6) The contribution by one party to the education, training
           or increased earning power of the other party.

           (7) The extent to which the earning power, expenses or
           financial obligations of a party will be affected by reason of
           serving as the custodian of a minor child.

           (8) The standard of living of the parties established during
           the marriage.

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         (9) The relative education of the parties and the time
         necessary to acquire sufficient education or training to
         enable the party seeking alimony to find appropriate
         employment.

         (10) The relative assets and liabilities of the parties.

         (11) The property brought to the marriage by either party.

         (12) The contribution of a spouse as homemaker.

         (13) The relative needs of the parties.

         (14) The marital misconduct of either of the parties during
         the marriage. The marital misconduct of either of the
         parties from the date of final separation shall not be
         considered by the court in its determinations relative to
         alimony, except that the court shall consider the abuse of
         one party by the other party. As used in this paragraph,
         “abuse” shall have the meaning given to it under section
         6102 (relating to definitions).

         (15) The Federal, State and local tax ramifications of the
         alimony award.

         (16) Whether the party seeking alimony lacks sufficient
         property, including, but not limited to, property distributed
         under Chapter 35 (relating to property rights), to provide
         for the party’s reasonable needs.

         (17) Whether the party seeking alimony is incapable of
         self-support through appropriate employment.

23 Pa.C.S. § 3701.     Further, when filing a complaint for alimony, a party

should submit an expense statement.        Pa.R.Civ.P. 1910.27.     The expense

statement is required if a party is going to present testimony as to his or her

expenses. Pa.R.Civ.P. 1920.33(b)(6).

      The Master found the following:

         Wife has raised a claim for alimony. The Master carefully
         considered the evidence presented and the alimony factors
         set forth in Section 3701 of the Pennsylvania Divorce Code
         of 1980, as amended. Under Section 3710(a), alimony is

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          to [be] allowed only if it is necessary and under Section
          2701(b)(13) the relative needs of the parties are required
          to be considered. The Master notes that Wife did not
          testify as to her economic needs nor did she offer into
          evidence an Expense Statement in the form required by
          [Pa.R.Civ.P. 1910.27(c)(2)(B),] that form being required
          by [Pa.R.Civ.P. 1920.33(b)(6)], as a requisite to testimony
          on expenses. The Master also recognizes that Wife has
          been receiving spousal support either through benefit of
          payments on her behalf or through Court Order since the
          parties’ separation on January 17, 2009, a period of six
          years. The parties coverture was five years four and one-
          half months.      For these reasons, the Master must
          recommend that Wife’s claim for alimony be denied. As
          set forth previously in this Recommendation, the Master
          configured the equitable distribution award recognizing
          that Wife would not be receiving alimony.

Master’s Report at 12.

       This was not error and the trial court did not abuse its discretion in

adopting the Master’s recommendation to deny Wife’s request for alimomy.3
____________________________________________

3
  This Court’s standard of review for questions regarding alimony is abuse of
discretion. Isralsky v. Isralsky, 824 A.2d 1178, 1188 (Pa.Super.2003)
(citing Simmons v. Simmons, 723 A.2d 221 (Pa.Super.1998)). This Court
has stated:

          The purpose of alimony is not to reward one party and to
          punish the other, but rather to ensure that the reasonable
          needs of the person who is unable to support himself or
          herself through appropriate employment, are met.” In
          determining the nature, amount, duration and manner of
          payment of alimony, the court must consider all relevant
          factors, including those statutorily prescribed for at 23
          Pa.C.S.[] § 3701, Alimony, (b) Relevant Factors (1)-(17).
          Alimony is based upon reasonable needs in accordance
          with the lifestyle and standard of living established by the
          parties during the marriage, as well as the payor’s ability
          to pay.
(Footnote Continued Next Page)

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      In her next issue, Wife argues she should have been awarded

attorney’s fees because Husband “enjoyed representation from two (2) firms

through this matter and . . . engaged in every maneuver possible to

minimize anything Wife is entitled to receive.” Appellant’s Brief at 12. She

also argues that she should be awarded fees because of the disparity of

income. Id.

      Pursuant to Pennsylvania Rule of Civil Procedure 1920.33(b)(8),

          Within the time required by order of court or written
          directive of the master or, if none, at least sixty days
          before the scheduled hearing on the claim for the
          determination and distribution of property, each party shall
          file and serve upon the other party a pre-trial statement.
          The pre-trial statement shall include the following matters,
          together with any additional information required by
          special order of the court:

          (8) if there is a claim for counsel fees, the amount of fees
          to be charged, the basis for the charge, and a detailed
          itemization of the services rendered.

Pa.R.Civ.P.1920.33(b)(8).

      The Master found the following:

          Wife has raised a claim for attorney’s fees and costs. Wife
          presented no evidence in support of this claim.
          [Pa.R.Civ.P. 1920.33(b)(8)] requires that when a claim for
          counsel fees is raised, the party seeking the award must
          present evidence of the amount of fees to be charged, the
          basis for the charge, and a detailed itemization of the
          services rendered. Since no such evidence was presented,
                       _______________________
(Footnote Continued)

Id. (quoting Plitka v. Plitka, 714 A.2d 1067, 1069 (Pa.Super.1998))
(internal citations and quotation marks omitted).

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        the Master must recommend that          Wife’s   claim   for
        attorney’s fees and costs be denied.

Master’s Report at 12. The trial court did not err in adopting the Master’s

recommendation to deny the request for attorney fees.

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/27/2016

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