Court Opinion

ID: 9766950
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:04:20.421727+00
Date Added: 2024-06-11T07:30:26.462075
License: Public Domain

SPAETH, President Judge,
dissenting:
I am unable to agree with the majority’s decision affirming the orders of the trial court. I am of the view that several of appellant’s arguments have merit and that the orders of the trial court should be reversed and the case remanded for further proceedings. Specifically, I agree with appellant that interspousal gifts are within the exclusion from marital property for "[pjroperty acquired by gift, bequest, devise or descent except for the increase in value during the marriage,” 23 P.S. § 401(e)(3); that with respect to the valuation of several items of marital property, the trial court abused its discretion; and that the trial court erred in purportedly distributing to her marital assets that no longer existed, and further erred in then relying on this purported distribution in determining her entitlement to alimony, counsel fees and costs, and alimony pendente lite.
-1-
The issue regarding interspousal gifts concerns three rings that appellee gave appellant. The majority holds that *16whether an interspousal gift comes within the gift exclusion is to be determined by the particular facts of the case, with consideration given to the source of the funds, the intent of the donor, the status of the marriage, and any agreement to exclude the item from marital property. The majority then goes on to hold that the trial court did not abuse its discretion in reasoning that the money used to purchase the three rings came from appellee’s salary, which was marital property, and merely changed form when it was used to purchase the rings, which remained marital property. This reasoning does not persuade me.
The statute provides that “[property acquired by gift” is to be excluded from marital property. 23 P.S. § 401(e)(3). What could be clearer? “When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S. § 1921(b).1 See Sorbello v. Sorbello, 21 D. & C.3d 187 (Cumberland Co.1981). Nor is this clarity obscured by any other provision in the statute. To the contrary, it is sharpened. For excluding interspousal gifts from marital property is consistent with the purposes of the statute. Consider in particular Section 401(e)(2), which excludes from marital property “[pjroperty excluded by valid agreement of the parties entered into before, during or after the marriage.” A gift from one spouse to another is analogous to an agreement between the parties that the property be excluded from marital property. Under the reasoning of the trial court, which is approved by the majority, inter-spousal gifts will virtually never come within the gift exclusion because interspousal gifts are virtually always purchased with funds that are marital property. This result is contrary to both the language and the intent of the statute. See In re Marriage of Severns, 93 Ill.App.3d 122, 48 Ill.Dec. *17713, 416 N.E.2d 1235 (1981) (statutory exclusion for gifts includes interspousal gifts; donee did not meet burden of proving gift by clear and convincing evidence). Cf. Burgess v. Burgess, 277 S.C. 283, 286 S.E.2d 142 (1982) (interspousal gift is subject to equitable division where statute provides for settlement of all equitable rights of parties as to all “real and personal property of the marriage”).
I should hold that in determining whether an interspousal transfer is a gift, the only relevant issue is the intent of the transferor, which must be determined by consideration of the transferor’s expressed intent as well as the circumstances surrounding the transfer. Under Section 401(f) the presumption is that property acquired during the marriage is marital property, with the spouse claiming that the property is excluded able to overcome the presumption by showing that the property was acquired by gift. Cf. Chambers v. Chambers, 406 Pa. 50, 176 A.2d 673 (1962) (common law presumption that gift is intended may be overcome by evidence that conveyance was not intended as gift). In this case, there is no dispute that appellee’s transfer to appellant of the three rings at issue was intended to be a gift.2 The rings were personal in nature; they were not designed for use by both spouses, as for example a household appliance might be; and there was no testimony that they were purchased as an investment. Cf. O’Neill v. O’Neill, 600 S.W.2d 493 (Ky.App.1980) (husband testified that jewelry was purchased as an investment). Rather, appellee testified that he bought the rings for appellant because “she never got an engagement ring.” N.T. February 5, 1981, at 41. Given the undisputed evidence that appellee intended the transfer of the rings to be a gift to appellant, I should hold that appellant has established that the rings are not marital property, except for the increase in value, if any, during the marriage.3 Cf. Chambers v. Chambers, supra (common law presumption that gift is intended when hus*18band purchases or transfers property in name of wife did not arise where undisputed facts regarding the purpose of the transfer negated any presumption of gift).
-2-
Appellant argues that the trial court abused its discretion in valuing three assets that it held were marital property: the three rings just discussed; the Kline Township property; and the Pottsville office.4 I agree with appellant.
(a)
As I have explained, I believe the trial court erred in holding that the rings were marital property. However, even though the rings should have been excluded from marital property as a gift (except for the increase in value, if any, during the marriage), the issue of their valuation must still be considered. This is so because appellant’s possession of the rings is relevant to the issue of what division of the marital property would be equitable, since in equitably distributing the marital property, the court must consider, inter alia, the “estate ... of each of the parties,” 23 P.S. § 401(d)(3), and “[t]he economic circumstances of each party at the time the division of the property is to become effective,” id. at § 401(d)(10).
The trial court accepted the master’s valuation of $15,000 for the three rings, and awarded the rings to appellant. Appellant argues that the trial court abused its discretion in accepting the master’s valuation because there is no support for it in the record.
Appellee testified that over the course of the marriage he purchased three diamond rings for appellant, and that he *19estimated the value of the three rings to be $35,000. N.T. February 5, 1981, at 12, 41. Appellant brought three rings to the March 18, 1981, hearing and testified that they were the ones appellee had bought her. N.T. March 18, 1981, at 23. Appellant and appellee then agreed that the master should have the rings appraised. Id. at 23-24. During the lunch break, the master received a cursory appraisal from a jeweler, who stated that the rings were costume jewelry. Id. at 50. The record does not indicate any agreement by the parties to accept this appraisal in place of a formal appraisal. Later in the day, appellee testified that the rings that appellant had given to the master were not the ones he had given appellant during the marriage. Id. at 94, 98. In his report at page 14 the master found that appellant had received from appellee three diamond rings that resembled the rings appellant had submitted, and that the value of the three rings was $15,000 ($8,000 for the multi-carat solitaire ring at $4,000 per carat, $3,000 for the wedding band with diamonds, and $4,000 for another solitaire ring). The master did not explain how he arrived at this valuation. The trial court in its opinion at page 22 states: “We accept the valuation of $15,000 placed upon [the rings] by the Master, since the Court has not had an opportunity to view them.”
I agree with appellant that there is no support in the record for this valuation. Apparently, the master determined that the rings that appellee gave to appellant resembled the rings that appellant had brought to the hearing and that the rings actually given did contain diamonds. The master was entitled to make this determination on the basis of an assessment of the parties’ credibility. However, nothing in the record supports the valuation placed on the rings by the master. While apparently the master did not find credible appellee’s testimony that the rings were worth $35,000, there is no indication of why or how the master arrived at the $15,000 valuation. I should therefore hold that the trial court abused its discretion in accepting the master’s valuation. Cf. F.W. Woolworth Co. Tax Assessment Case, 426 Pa. 583, 235 A.2d 793 (1967) (court is not an expert appraiser and can act only upon credible and compe*20tent evidence presented to it); Avins v. Commonwealth, 379 Pa. 202, 108 A.2d 788 (1954) (court may not disregard evidence as to property values and substitute its own ideas; court’s view of property does not qualify it to make its own independent appraisal; purpose of view is to enable trier of fact to comprehend and weigh the testimony).
(b)
The trial court awarded two parcels of land in Kline Township, totalling 8.8 acres, to appellee. The court valued the property at $10,000, stating in Finding of Fact 56 that the property is subject to sewage and drainage limitations that seriously affect its market value. Appellant argues that the $10,000 valuation is without support in the record.
Appellant introduced into evidence an expert appraisal of the Kline Township property, which valued the property at $29,880 for parcel 1 and $22,920 for parcel 2. Defendant’s Exhibit 4. In arriving at this valuation, the appraiser noted in the report that there was currently a ban on new sewer hook-ups and that because of this ban the property could not be subdivided, but the two existing lots would be allowed to hook-up to existing sewer lines. The appraiser concluded that therefore the best use for the property would be two residential building lots. This is the only evidence in the record regarding the valuation of the Kline Township property. Nevertheless, the court rejected this evidence and valued the property at $10,000, without giving any reason why it did not accept the expert appraisal. I should hold that the court abused its discretion. See F.W. Woolworth Co. Tax Assessment Case, supra (court cannot refuse to accept expert’s estimate of fair market value, when court finds expert to be competent and credible and there was no countervailing testimony); Avins v. Commonwealth, supra (court may not disregard evidence as to value and substitute its own idea). Cf. Gee v. Gee, 314 Pa.Super. 31, 460 A.2d 358 (1983) (record adequately supports master’s estimate of fair market rental value of $300 per month where appraisal report estimate of $200 did not include 132 acres that appellant farmed or $15,000 barn located on farm land).
*21The trial court awarded the Pottsville office to appellee and valued it at $35,000, Finding of Fact 47. Appellant again argues that this valuation is without support in the record.
Appellant testified that she thought the Pottsville property was worth about $45,000. N.T. March 18, 1981, at 15. Appellee testified as follows:
A. I think it’s worth more than $45,000. They say $35,000.
Q. This is your $35,000 for the Pottsville property.
A. I say it’s worth more than $45,000.
Id. at 96.
The court did not explain how it arrived at the $35,000 valuation. The only reference to $35,000 in the record is the above-quoted reference to some unknown “they.” Again, I should hold that the trial court abused its discretion in arriving at a valuation not supported by any competent evidence of record.
I recognize that the master, in the first instance, and the trial court thereafter, may sometimes be put in a difficult position. Under Section 401 the court has the obligation, upon request of either party, to determine what is marital property and to distribute it equitably. Under Section 401(d)(8) the court must consider the value of the property set aside to each party. The court can only do this if there is competent and credible evidence before it upon which to base a valuation. The parties have the primary obligation to present evidence that will enable the court to make a reasonable valuation, including expert appraisals where necessary. See Lavene v. Lavene, 148 N.J.Super. 267, 372 A.2d 629 (1977). Nevertheless, when the parties do not meet this obligation, the trial court still has the responsibility to distribute the property equitably. Cf. Lewis v. Lewis, 267 Pa.Super. 235, 406 A.2d 781 (1979) (in child custody proceeding each party bears burden of proving that an award of custody to that party would be in the child’s best interests; it is the responsibility of the trial court, if necessary, to develop the record itself). In order to fulfill this *22responsibility the master or the court should not hesitate to require the parties to present expert appraisals, or, if the parties’ proofs are inadequate, to appoint its own expert at the parties’ expense. See Lavene v. Lavene, supra. So long as the court has fulfilled its responsibility and based its valuation on competent and credible evidence of record, a party who has failed to produce countervailing evidence will not be heard to complain on appeal. Cf. Dean v. Dean, 87 Wis.2d 854, 275 N.W.2d 902 (1979) (court did not abuse its discretion in relying on allegedly out of date real estate valuation based on purchase price where appellant failed to produce countervailing expert testimony). But if, as here, the court’s valuation is not supported by competent and credible evidence of record, then the order of distribution must be reversed and the case remanded for further proceedings. Cf. Avins v. Commonwealth, supra (if after trying to determine the value of property in a condemnation action, the court is unable to come to a conclusion, the proper resolution is to order a new trial).
-3-
Appellant’s final argument is that the trial court erred in purportedly distributing to her marital assets that no longer existed; in relying on this purported distribution in determining appellant’s entitlement to alimony, counsel fees and costs; and in holding that appellant was not entitled to alimony pendente lite because, inter alia, during the pend-ency of the divorce proceedings she had the use of and income from the assets purportedly distributed to her by the order of equitable distribution.
The trial court made extensive findings of fact regarding appellant’s withdrawal of funds from the parties’ joint savings accounts from October of 1975 through June of 1977. The court traced the funds through various accounts and found that the total withdrawals amounted to $79,-403.96. Finding of Fact 86. The court also found that when the parties separated in October 1976, appellant withdrew $7,900 in cash and bonds with a face value of $8,000 from the parties’ safe deposit box. Finding of Fact 87. The court found that the value of the bonds as of the *23beginning of 1981 was approximately $9,600. The court further found that all of the funds withdrawn had remained in appellant’s possession “to the present time.” Finding of Fact 92; Trial Court Opinion at 26. In its order of equitable distribution, the court purported to distribute to appellant $96,903.96 ($79,403.96 + $7,900 + $9,600). Appellant argues that the court erred in basing its order of equitable distribution on assets that did not exist when the divorce complaint was filed or when the order of distribution was made. I agree.
“Property which a party has sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the time proceedings for the divorce are commenced” is excluded by Section 401(e)(5) from the definition of marital property subject to equitable distribution. Appellee filed the complaint in divorce on August 5, 1980. Nevertheless, the trial court included as marital property subject to equitable distribution the full amount of funds that appellant had withdrawn in 1977. Despite its careful tracing of the funds through June 1977, the court made no attempt to determine, either how the funds were used thereafter, or what amount of the funds remained in appellant’s possession. Appellant testified that she had used the funds to live on following the parties’ separation. See N.T. February 5, 1981, at 72; N.T. March 18, 1981, at 18, 21, 59; Defendant’s Exhibit 2. The court’s Finding of Fact 88 that appellee had paid $100 per week to appellant from the time of separation until May 4, 1981, as well as paying the heating bills, electric bills, telephone bills, and taxes on the marital premises, is not disputed. Nevertheless, the record does not support the court’s finding that the full amount of the funds withdrawn remained in appellant’s possession. Appellant submitted a detailed list of expenses that she had incurred in excess of the amounts paid to her by appellant, and the court made no finding that these expenses were unreasonable or that they were not actually incurred. Appellee presented evidence to establish only that some of the funds withdrawn remained in appellant’s possession as of August 5, 1980. See Plaintiff’s Exhibits 6-9, 15.
*24Since under Section 401(e)(5) only property disposed of for value and in good faith is excluded from the definition of marital property, to the extent that the funds were not disposed of by the time the complaint was filed, or to the extent that they were not disposed of for value and in good faith, the funds were marital property. Cf. Barriger v. Barriger, 514 S.W.2d 114 (Ky.1974) (trial court did not err in including $10,500 previously spent in parties’ net worth where husband dissipated funds by taking Caribbean cruise and losing over $8,000 gambling). I agree with the majority that the intentional dissipation of marital assets would not preclude the property from remaining marital property. See Majority Opinion at 1051. However, the trial court made no finding as to how the funds were used, but instead treated the full amount as marital property subject to equitable distribution. To the extent that appellant used the funds to provide for her own and her sons’ living expenses following the parties’ separation, the funds were not marital property subject to equitable distribution. Cf. In re Marriage of Sevon, 117 Ill.App.3d 313, 73 Ill.Dec. 41, 453 N.E.2d 866 (1983) (court rejects husband’s argument that wife dissipated marital assets; wife spent $24,000 for personal and household expenses after husband left home; wife earned $348 biweekly; wife listed expenses and court found them to be appropriate); Hellwig v. Hellwig, 100 Ill.App.3d 452, 55 Ill.Dec. 762, 426 N.E.2d 1087 (1981) (court reverses finding of dissipation where husband’s testimony that he used funds for family expenses and to support parties’ lifestyle was uncontradicted); Dean v. Dean, supra (no abuse of discretion in not including in marital estate amounts spent by husband on vacations during pendency of divorce so long as amounts were reasonable). I should hold that on remand the trial court must determine, through application of Section 401(e)(5) and further development of the record, the extent to which the funds withdrawn by appellant are marital property. See In re Marriage of Block, 110 Ill.App.3d 864, 65 Ill.Dec. 769, 441 N.E.2d 1283 (1982) (given meager evidence regarding use of funds and purposes of mortgage, court cannot agree that funds were *25dissipated and issue should be decided on remand on basis of more particular evidence).
This would not, however, complete the court’s inquiry. For in determining what distribution of marital property is equitable, a court must consider the parties’ dissipation of marital property, 23 P.S. § 401(d)(7), the value of the property set aside to each party, id. at § 401(d)(8), and the economic circumstances of each party at the time the division of property is to become effective, id. at § 401(d)(10). I should therefore further hold that on remand the court must consider appellant’s use of the funds after the complaint was filed. If after the complaint was filed, appellant used the funds to provide for her own and her sons’ living expenses, then the court should consider that fact in equitably distributing the marital property. Cf. Scherzer v. Scherzer, 136 N.J.Super. 397, 346 A.2d 434 (1975) (wife was not entitled to equitable distribution with respect to items that had become worthless since date of filing complaint where nothing in record suggests depletion was result of husband’s deliberate action). If, on the other hand, appellant dissipated some of the funds, then the court should consider that fact in equitably distributing the marital property.
In determining appellant’s entitlement to alimony, counsel fees and costs, the trial court relied, inter alia, on the fact that it had purportedly distributed “substantial marital property” to appellant. Conclusions of Law 10, 11. Since, as discussed above, the court’s order of equitable distribution was in error, I should also reverse its orders regarding alimony, counsel fees and costs, with instructions that on remand it should reconsider appellant’s entitlement to alimony, counsel fees and costs after it has properly distributed the marital property.
In determining appellant’s entitlement to alimony pendente lite, the trial court relied, inter alia, on the fact that since October 1976 appellant had had the use of and income from liquid marital assets in excess of $94,000. Since, as discussed above, the court erred in treating the full amount of the funds withdrawn as marital property still in appel*26lant’s possession, I should reverse the order denying alimony pendente lite. Alimony pendente lite is awarded ancillary to the principal action in divorce and is intended to enable the dependent spouse to maintain or defend the principal action in divorce. Remick v. Remick, 310 Pa.Super. 23, 456 A.2d 163 (1983). The trial court could not properly determine appellant’s entitlement to alimony pendente lite on the basis of funds that she had in 1977, without determining the extent of the funds remaining in her possession in 1980, when the divorce complaint was filed. If on remand the court were to deny alimony pendente lite because appellant had sufficient funds remaining in 1980 to support herself and to pursue the divorce action, then it could not properly purport to distribute the funds so spent in its order of equitable distribution. To do so would be to distribute less property to appellant than the court apparently thought equitable considerations warranted merely because she had properly and reasonably used funds for her own support.
The orders of the trial court should be reversed and the case remanded for further proceedings in which, consistent with this opinion, the trial court would properly value the property at issue and properly determine an equitable distribution of the marital property and appellant’s entitlement to alimony, counsel fees and costs, and alimony pendente lite.

. The principle of ejusdem generis, codified at 1 Pa.C.S. § 1903(b), is not applicable to the construction of the term "gift” in Section 401(e)(3) because "gift” is not a general word preceded by more particular words. Moreover, the common element of the terms "gift, bequest, devise or descent" is not the source but the donative nature of the transfer.

. There is also no allegation that the transfer was procured by fraud or undue influence.

. I recognize that there is some uncertainty regarding the cut-off date for determining the increase in value "during the marriage.” In *18Sorbello v. Sorbello, supra, the court relied on Section 401(e)(4) in holding that the date of final separation controls. Since neither party has offered any argument on this issue and the trial court did not address it, I should leave it for the trial court to resolve, if necessary, on remánd.

. The trial court accepted the master’s valuation of the rings but made its own valuation of the Kline Township property and the Pottsville office. The master did not attempt to value the real property because the parties had agreed, and the master recommended, that it be sold and the proceeds divided. N.T. August 20, 1981, at 60; Master’s Report at 16-24.