Court Opinion

ID: 4257314
Source: CourtListenerOpinion
Date Created: 2018-03-22 18:27:45.088086+00
Date Added: 2024-06-11T13:28:14.418882
License: Public Domain

J-A01024-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    LOUISE M. DUELFER,                            IN THE SUPERIOR COURT
                                                            OF
                                                       PENNSYLVANIA
                             Appellee

                        v.

    STEVEN JAMES DUELFER,

                             Appellant               No. 1322 EDA 2017

                      Appeal from the Decree April 11, 2017
                 in the Court of Common Pleas of Lehigh County
                       Civil Division at No.: 2008-FC-0617

    LOUISE M. DUELFER,                            IN THE SUPERIOR COURT
                                                            OF
                                                       PENNSYLVANIA
                             Appellant

                        v.

    STEVEN JAMES DUELFER,

                             Appellee                No. 1419 EDA 2017

                      Appeal from the Decree April 11, 2017
                 in the Court of Common Pleas of Lehigh County
                       Civil Division at No.: 2008-FC-0617

BEFORE: LAZARUS, J., OTT, J., and PLATT, J.*

MEMORANDUM BY PLATT, J.:                             FILED MARCH 22, 2018

        In these consolidated cross appeals, Steven James Duelfer (Husband),

and Louise M. Duelfer (Wife), appeal from the trial court’s orders interpreting
____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
J-A01024-18

certain provisions of their antenuptial agreement (Agreement), and overruling

their exceptions to the report filed by the Divorce Master, as made final by the

court’s entry of a divorce decree.1 We reverse the trial court’s order overruling

the exceptions in part, and affirm in all other respects.

       We take the following relevant facts and procedural history of this case

from our independent review of the record.           The parties executed the

Agreement on November 5, 1997, and they married a few days later. Wife

filed a complaint in divorce on May 15, 2008, raising claims for equitable

distribution and alimony. On June 9, 2008, Husband filed a petition for special

relief, seeking an interpretation of certain provisions of the Agreement. The

Agreement provides, in pertinent part:

       2. FULL DISCLOSURE OF ASSETS. [Husband] and [Wife] agree
       that they have made a full and complete disclosure of their assets,
       income, and debts to the other. A complete inventory of the
       assets and liabilities of [Husband] is attached hereto as Exhibit
       “A”.[2] A complete inventory of the assets and liabilities of [Wife]
       is attached hereto as Exhibit “B”. . . .

____________________________________________

1A pre-divorce order is interlocutory and unappealable before the court enters
a divorce decree. See Campbell v. Campbell, 516 A.2d 363, 365–66 (Pa.
Super. 1986), appeal denied, 528 A.2d 955 (Pa. 1987).
2 Husband is the owner, sole shareholder, and president of an S Corporation
called Equus Systems, Inc. Exhibit A to the Agreement lists his assets as
follows:

       Bank account                                     $3,000.00
       Equus Systems Capital Stock                      $1,000.00
       Personal Loan invested in Equus                  $128,000.00
       Equus Computer Equipment                         $7,500.00

                                           -2-
J-A01024-18

       3. RETENTION OF SEPARATE PROPERTY.

             A. Each party shall, except as otherwise provided, during his
       or her remaining lifetime, retain sole ownership of all of his or her
       respective Separate Property, and shall have the exclusive right
       to dispose of any and all such Separate Property during his or her
       remaining lifetime by inter vivos, or by any and all other
       dispositions, and/or to encumber, pledge, or sell, transfer or
       hypothecate the same, without any interference by or the
       necessity of the joinder of the other, in such manner as shall be
       determined in the sole discretion of such owner thereof, as if the
       aforesaid marriage had not taken place.

              B. For all purposes of this Agreement as used herein
       the term “Separate Property” shall mean, with respect to a
       party hererto, all of such party’s right, title and interest, legal or
       beneficial, in and to any and all property and interests in property,
       real, personal or mixed, whatever situated and regardless of how
       titled, which each of the parties owned or had a beneficial
       interest in at the time of marriage as set forth and
       delineated on Schedules A and B attached hereto.

             C. “Separate Property” shall also mean: (a) any
       increase or appreciation in value of such property, whether the
       increase, appreciation or enhancement is due to market conditions
       or to the services, skills or efforts of either of the parties; (b) all
       property acquired hereafter by either party out of the proceeds
       from the sale, transfer, mortgaging or use of any such separate
       property.
                                    *     *    *

       7. POSSIBLE TERMINATION OF MARRIAGE. . . .

                                       *       *   *

____________________________________________

       Brokerage Account (July, 1997 statement)           $51,800.00
       IRA (Sept., 1997 statement)                        $25,700.00
       SEP IRA (Sept., 1997 statement)                    $6,600.00
       Car                                                $1,000.00

(Agreement, at 14, Exhibit “A”).

                                           -3-
J-A01024-18

             B. EQUITABLE DISTRIBUTION. In the event that the
       marriage of the parties is terminated by a divorce, dissolution or
       annulment, the parties specifically agree as follow[s]:

             (1) [Husband and Wife] shall not be entitled to receive from
       the other any share of his/her Separate Property, as defined
       herein, and do hereby waive any right that he/she may have to
       claim equitable distribution of such Separate Property, whether or
       not such Separate Property shall be construed to be marital
       property.

              (2) Except as may be otherwise herein provided, any
       property acquired by the parties, either individually or jointly,
       after their marriage and through the date of final separation,
       except that property which was previously excluded as
       separate property, shall be divided equally between the
       parties. Each of the parties specifically waives all other claims
       for division or distribution of marital property.

(Agreement, 11/05/97, at 3-4, 6-8) (emphases added).

       The trial court held a hearing on the matter on June 23, 2008. “Counsel

for the parties stipulated that the assets at issue were not [those] generated

by the investment or growth of the funds listed as individual property, but

were    contributions   made   to   the   separate   property   from   Husband’s

employment earnings during the marriage.” (Trial Court Opinion, 7/24/17, at

2; see also N.T. Hearing, 6/23/08, at 5, 8-10). On November 21, 2008, the

court entered an order stating:

               . . . [U]pon consideration of the Petition for Special Relief
       filed June 9, 2008,

             IT IS ORDERED that income earned during the marriage,
       but added to accounts which existed prior to the marriage, is not
       “separate property” as governed by 3 (b & c) of the [Agreement];
       the income is governed by the “Equitable Distribution” provisions
       of 7 (b).

(Order, 11/21/08).

                                       -4-
J-A01024-18

       Following extensive proceedings before a Divorce Master, the Master

issued a report on February 19, 2016. The trial court overruled the parties’

exceptions thereto on July 21, 2016. It entered a final divorce decree on April

11, 2017. These timely appeals followed.3

       Husband raises the following issues for our review:

       [1]. Was the conclusion that [Husband’s] “income” received from
       such sources as interest and dividend income from the brokerage
       account, commissions from the account, “SPIFF” payments, a
       portion of interest paid on the loan account, and other
       miscellaneous commissions an abuse of discretion and error of law
       when it constitutes income earned by [Husband] from his
       employment during the marriage, and should be excluded as
       separate property under the parties’ Antenuptial Agreement?

       [2]. Was the inclusion of income which was deposited to
       [Husband’s] brokerage account and his SEP/IRA an abuse of
       discretion and an error of law when that income was earned by
       [Husband] through his services, skills, and efforts as president,
       sole shareholder, and sole employee of the corporation known as
       Equus Systems, which entity was listed as [Husband’s] separate
       property in the parties’ Antenuptial Agreement dated November
       5, 1997?

       [3]. Was the inclusion of increases and appreciation in value which
       were due to interest, dividends, enhancements and market
       conditions that accrued in [Husband’s] brokerage account and
       SEP/IRA an abuse of discretion and an error of law when those
       accounts were listed as separate property in the parties’
       Antenuptial Agreement dated November 5, 1997?

(Husband’s Brief, at 7).

       Wife presents the following claims:

       1. Whether the [c]ourt, by upholding the Master, committed an
       abuse of discretion or error of law by improperly calculating the
____________________________________________

3 Husband and Wife filed timely, court-ordered concise statements of errors
complained of on appeal on May 10, 2017 and June 6, 2017, respectively. The
trial court issued an opinion on July 24, 2017. See Pa.R.A.P. 1925.

                                           -5-
J-A01024-18

       portion of Husband’s brokerage account which was subject to
       Wife’s fifty percent (50%) share?

       2. Whether it was an error of law or abuse of discretion to use
       values only as of date of separation for distribution purposes
       rather than also considering values proximate to the hearing date,
       where there was a delay between the date of separation and the
       hearing and assets appreciated significantly during interim
       period[?]

       3. Whether the [c]ourt, by upholding the Master, committed an
       abuse of discretion or error of law to the extent that transfers of
       property to Husband from his parents were not subject to
       distribution contrary to the plain language of the prenuptial
       agreement?

(Wife’s Brief, at 6).4

       The parties’ claims center on the trial court’s interpretation of the

Agreement. Therefore, our review is guided by the following principles:

             The determination of marital property rights through
       prenuptial, post-nuptial and settlement agreements has long been
       permitted, and even encouraged. Where a prenuptial agreement
       between the parties purports to settle, fully discharge, and satisfy
       any and all interests, rights, or claims each party might have to
       the property or estate of the other, a court’s order upholding the
       agreement in divorce proceedings is subject to an abuse of
       discretion or error of law standard of review. An abuse of
       discretion is not lightly found, as it requires clear and convincing
       evidence that the trial court misapplied the law or failed to follow
       proper legal procedures. We will not usurp the trial court’s fact-
       finding function.

                                         *     *   *

            As to interpretation, enforcement, and remedies,             in
       Pennsylvania, antenuptial agreements are interpreted              in
____________________________________________

4 The parties preserved their issues by including them in their exceptions to
the Master’s Report. (See Husband’s Exceptions, 3/09/16, at 1-2, ¶¶ 1-3;
Wife’s Exceptions, 3/28/16, at unnumbered page 1, ¶¶ 1-3).

                                             -6-
J-A01024-18

       accordance with traditional principles of contract law. Generally,
       the parties are bound by their agreements, absent fraud,
       misrepresentation or duress. They are bound without regard to
       whether the terms were read and fully understood and
       irrespective of whether the agreements embodied reasonable or
       good bargains.

             When interpreting an antenuptial agreement, the court
       must determine the intention of the parties. When the words of a
       contract are clear and unambiguous, the intent of the parties is to
       be discovered from the express language of the agreement.
       Where ambiguity exists, however, the courts are free to construe
       the terms against the drafter and to consider extrinsic evidence in
       so doing.

Harvey v. Harvey, 167 A.3d 6, 11-12 (Pa. Super. 2017) (citation omitted);

see also Habjan v. Habjan, 73 A.3d 630, 640 (Pa. Super. 2013) (“When

construing agreements involving clear and unambiguous terms, this Court

need only examine the writing itself to give effect to the parties

understanding.”) (citation omitted).

       On appeal, Husband argues5 that the trial court erred by including his

employment earnings in the property to be distributed between the parties.

(See Husband’s Brief, at 22-33). Husband contends that the court improperly

applied the definition of separate property set forth in the Agreement by failing

to classify as separate property the income he earned through his position at

Equus, that he then deposited into his brokerage and SEP/IRA accounts listed

____________________________________________

5  Although Husband frames his claims as three separate issues in the
statement of the questions involved, he combines them in the argument
section of his brief by incorporating each preceding argument by reference.
(See Husband’s Brief, at 7, 26, 31). The trial court treated Husband’s claims
as a single issue. (See Trial Ct. Op., at 4-5). We will therefore address his
interrelated claims together for ease of disposition.

                                           -7-
J-A01024-18

on his separate property list. (See id. at 23-24, 26-27, 30; see also *2 n.2,

supra). He further maintains that because he earned the funds from Equus,

and not from outside sources, any increase or appreciation in value of the

brokerage and SEP/IRA accounts are also his separate property.                 (See

Husband’s Brief, at 31-33). These claims do not merit relief.

     We reiterate, the Agreement defines separate property as:

     3. RETENTION OF SEPARATE PROPERTY.

                                 *    *     *

         B.   For all purposes of this Agreement as used herein
     the term “Separate Property” shall mean, with respect to a
     party hererto, all of such party’s right, title and interest, legal or
     beneficial, in and to any and all property and interests in property,
     real, personal or mixed, whatever situated and regardless of how
     titled, which each of the parties owned or had a beneficial
     interest in at the time of marriage as set forth and
     delineated on Schedules A and B attached hereto.

        C.    “Separate Property” shall also mean: (a) any
     increase or appreciation in value of such property, whether the
     increase, appreciation or enhancement is due to market conditions
     or to the services, skills or efforts of either of the parties; (b) all
     property acquired hereafter by either party out of the proceeds
     from the sale, transfer, mortgaging or use of any such separate
     property.

(Agreement, at 3-4, ¶¶ 3B, C) (emphases added).

     Pursuant to paragraph 7B(2) of the Agreement, all other property

acquired during the marriage through the date of separation is to be divided

equally between the parties. (See id. at 7-8, ¶ 7B(2)).

     As previously outlined, Husband maintains that his income earned

through Equus is his separate property under the definitions set forth above.

                                      -8-
J-A01024-18

However, Schedule A to the Agreement, referenced in paragraph 3B, supra,

delineated only three items related to Equus—capital stock ($1,000.00), a

personal loan invested in the company, and computer equipment. (See *2

n.2, supra).      Thus, Schedule A, on its face, does not purport to cover

Husband’s future income earned at Equus.         Therefore, the income is not

property “which [Husband] owned or had a beneficial interest in at the time

of marriage as set forth and delineated on Schedule[] A[,]” and does not fit

within the definition of “Separate Property” set forth at paragraph 3B of the

Agreement. (Agreement, at 4 ¶ 3B). Furthermore, at the hearing on this

matter, counsel for Husband stipulated that the income at issue was “earned

from other sources than the separate property list.” (N.T. Hearing, 6/23/08,

at 9).

         Husband’s attempt to fit his income within the definition of paragraph

3C likewise fails. (See Husband’s Brief, at 31-33). That provision, through

the repeated use of the word “such,” directly refers back to the property

expressly set forth by the parties on their respective schedules. (Agreement,

at 4 ¶ 3C). As discussed, Schedule A lists only three very specific items related

to Equus, and does not cover Husband’s income. (See *2 n.2, supra).

         Accordingly, we conclude, based on the clear and unambiguous terms

of the Agreement, that the trial court did not err or abuse its discretion in

determining that Husband’s earnings were not separate property, and that his

placement of those joint funds into his brokerage and SEP/IRA accounts did

not convert them into separate property.       See Harvey, supra at 11–12;

                                      -9-
J-A01024-18

Habjan, supra at 640; (see also Trial Ct. Op., at 5). Therefore, Husband’s

claims do not merit relief.

       We now turn to the questions raised by Wife on cross appeal. Wife first

challenges the trial court’s calculation of the marital portion of Husband’s

brokerage account. (See Wife’s Brief, at 12-13). She argues that the court

improperly deferred to the Master’s valuation, when both of the parties’

experts set the value at a higher amount.          (See id. at 13).   This issue is

waived.

       “The Rules of Appellate Procedure state unequivocally that each

question an appellant raises is to be supported by discussion and analysis of

pertinent authority. Pa.R.A.P. 2119(b). Failure to do so constitutes waiver of

the claim.” Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959
A.2d 438, 444 (Pa. Super. 2008), appeal denied, 972 A.2d 522 (Pa. 2009)

(case citations and internal quotation marks omitted).

       Here, in her underdeveloped argument spanning one and one-half

pages, Wife has failed to include any citation to legal authority in support of

her assertion that the trial court should have accepted the consensus valuation

of the experts, instead of the calculation of the Master. (See Wife’s Brief, at

12-13).    Therefore, Wife’s first issue is waived.     See Giant Food Stores,

supra at 444.6

____________________________________________

6Moreover, it would not merit relief. In valuing marital assets, the trial court
must exercise discretion and rely on the information submitted by the parties.

                                          - 10 -
J-A01024-18

       Wife next challenges the trial court’s determination that she is not

entitled to any amount for the post-separation appreciation of the brokerage

account. (See Wife’s Brief, at 13-19). She argues that this finding is contrary

to the general rule that assets should be valued as close to distribution as

possible, and not at the date of separation. (See id. at 14). This claim does

not merit relief.

       Although Wife is correct that, generally, the preferred date of valuation

of an asset is the date of distribution and not the date of separation, 7 the

rights of the parties in the instant case are governed by the Agreement. As

noted, the term pertaining to equitable distribution provides:

       B. EQUITABLE DISTRIBUTION.

                                        *      *     *
____________________________________________

See Carney v. Carney, 167 A.3d 127, 131 (Pa. Super. 2017). “However,
this Court has consistently held that, [i]n determining the value of marital
property, the court is free to accept all, part or none of the evidence as to the
true and correct value of the property.” Id. at 132 (citations and internal
quotation mark omitted). It is also well-settled that a master’s report and
recommendation, although only advisory, is to be given the utmost
consideration. See id. at 131.

      Here, the Master determined that the conclusions reached by the
parties’ experts regarding the marital portion of the brokerage account were
not accurate, nor were they consistent with the trial court’s order interpreting
the Agreement, and he set forth his own detailed calculation. (See Master’s
Report, 2/19/16, at 26, 31-32). The trial court declined to disturb the Master’s
findings in this regard. (See Trial Ct. Op., at 6). Upon review, we discern no
abuse of discretion. Wife’s first issue would not merit relief, even if it were
not waived.

7 See Nagle v. Nagle, 799 A.2d 812, 820-21 (Pa. Super. 2002), appeal
denied, 820 A.2d 162 (Pa. 2003).

                                            - 11 -
J-A01024-18

             (2) Except as may be otherwise herein provided, any
      property acquired by the parties, either individually or jointly,
      after their marriage and through the date of final separation,
      except that property which was previously excluded as separate
      property, shall be divided equally between the parties. Each of
      the parties specifically waives all other claims for division
      or distribution of marital property.

(Agreement, at 7-8, ¶ 7B(2)) (emphases added).

      In light of the foregoing provision, we agree with the trial court that the

date of accounting for the marital portion of the brokerage account is the date

of separation. (See Trial Ct. Op., at 5). Wife is bound by the Agreement’s

clear terms.   See Harvey, supra at 11-12.          Therefore, her second issue

merits no relief.

      In her final issue, Wife argues that the Master erroneously found that

gifts from Husband’s parents deposited into his brokerage account (totaling

$40,800.00) were his separate property. (See Wife’s Brief, at 19-21; see

also Master’s Report, at 24 ¶ 126, 25 ¶ 129, 26 ¶ 135; Master’s Hearing,

4/17/14, at 100). Upon review, we agree.

      We again set forth the relevant language of the Agreement:

      B. EQUITABLE DISTRIBUTION.

                                   *     *      *

            (2) Except as may be otherwise herein provided, any
      property acquired by the parties, either individually or
      jointly, after their marriage and through the date of final
      separation, except that property which was previously
      excluded as separate property, shall be divided equally
      between the parties. Each of the parties specifically waives all
      other claims for division or distribution of marital property.

                                       - 12 -
J-A01024-18

(Agreement, at 7-8, ¶ 7B(2)) (emphases added).

      Applying the plain language of this provision, the gifts from Husband’s

parents qualify as “any property acquired by the parties” while they were

married, and the gifts were not “previously excluded as [Husband’s] separate

property” on Schedule A to the Agreement. (Id. (emphasis added); see also

*2 n.2, supra). Therefore, we are constrained to conclude that the Master

and the trial court erred in classifying the gifts as Husband’s separate

property. Accordingly, we remand to the trial court for the limited purpose of

awarding Wife fifty percent of the date of separation value of the gifts.

      Divorce decree and November 21, 2008 order affirmed.                  Order

overruling exceptions reversed in part.       Case remanded with instructions.

Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/22/18

                                     - 13 -