Court Opinion

ID: 2691498
Source: CourtListenerOpinion
Date Created: 2014-08-01 21:05:21.029398+00
Date Added: 2024-06-11T12:57:28.655790
License: Public Domain

J-A01019-14

                               2014 Pa. Super. 161

DEBORAH L. KOZEL                               IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                          Appellee

                    v.

DAVID F. KOZEL

                          Appellant                 No. 461 WDA 2013

             Appeal from the Order Entered February 12, 2013
            In the Court of Common Pleas of Allegheny County
                 Family Court at No(s): FD 98-00761-004

BEFORE: BENDER, P.J.E., LAZARUS, J., and MUNDY, J.

OPINION BY LAZARUS, J.                                FILED JULY 29, 2014

      David F. Kozel (Husband) appeals from the order of the Court of

Common Pleas of Allegheny County denying his motion for summary

judgment, which permitted Deborah L. Kozel (Wife) to go forward with her

petition for special relief seeking imposition of a constructive trust.   After

careful review, we affirm.

      The trial court summarized the underlying facts and procedural history

of the case as follows:

      The parties were married on July 30, 1994, separated on
      September 9, 1998 and were divorced by final decree on April 4,
      2002. Master Gary Gilman held a nine-day hearing on the issues
      of equitable distribution, alimony, counsel fees and contempt in
      late 2004 and early 2005. Master Gilman issued Findings of Fact
      Regarding Equitable Distribution, Alimony, Counsel Fees and
      Conte
                        -
      exceptions were granted in part.       Wife then appealed and
      Husband cross-appealed to the Pennsylvania Superior Court.
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       The Superior Court affirmed
       2007.

       On November 16, 2012, Wife presented a Petition asserting
       section 3505(d) of the Divorce Code, 23 Pa.C.S. § 3505(d),

       required by general rule of the Supreme Court and in
       consequence thereof an asset or assets with a fair market value
       of $1,000 or more is omitted from the final distribution of
       property . . . [t]he Court shall grant the petition [for imposition
       of a constructive trust] upon a finding of a failure to disclose the

       Petition claims that Husband failed to disclose his legal or

       non-disclosures necessitate the imposition of a constructive trust
       as to the following assets:

          a. Falcon Partners;

          b. Gulf Keystone Petroleum Ltd.,          GPK,    LLC,   Gulf
             Keystone, and related entities;

          c. Other gas interests/wells and partnerships; and

          d. Other assets of which Wife has at this time no
             knowledge, but as to which she will conduct discovery
             in this matter. See

       Husband filed a Motion for Summary Judgment, dated December

       limitations of Section 3332 of the Divorce Code, 23 Pa.C.S. §
       3332, Opening or Vacating Decrees, which requires that any
       action claiming intrinsic fraud be filed within 30 days of the
       divorce decree and any action claiming extrinsic fraud be filed
       within 5 years of the final decree.

Trial Court Opinion, 5/13/13, at 1-2. 1

____________________________________________

1

petition for special relief raising substantially the same issues that he raised
in his motion for summary judgment.

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order dated February 12, 2013. Shortly thereafter, Husband filed a motion

to amend the order to state that it involves a controlling question of law as

to which there is a substantial ground for difference of opinion and that an

immediate appeal may materially advance the ultimate termination of the

matter.      See 42 Pa.C.S. § 702(b)(1).         The court issued an order to this

effect on March 13, 2013. Husband filed a timely notice of appeal on March

petition for permission to appeal.2

        Husband raises the following issues for our review:

        1. Whether an action brought under the constructive trust
           provision of the Divorce Code, 23 Pa.C.S. § 3505(d), seven
           years after the final equitable distribution order, based solely
           on allegations of fraud, is barred by the statute of limitations
           provision of the Divorce Code, 23 Pa.C.S. § 3332, related to
           fraud claims.

        2.
             motion for summary judgment where there was no genuine

             Partners was fully disclosed in discovery and included in the
             order of equitable distribution.

        3.
             motion for summary judgment where there was no genuine
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2
    The order, docketed at 28 WDM 2013, provided:

        Upon consideration of the Petition for Permission to Appeal, the
        petition is hereby GRANTED. The matter shall proceed before
        this Court at docket number 461 WDA 2013 as an appeal from
        the order dated February 12, 2013.

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           issue of material fact that Gulf Keystone Petroleum, Ltd., or
           GPK, LLC, did not exist at the time of the marriage.

      4.
           motion for summary judgment where there was no genuine

           well interests and partnerships was fully disclosed in
           discovery and included in the order of equitable distribution.

      5.
           motion for summary judgment where Wife failed to state a

           as

Brief of Appellant, at 6-7.

      Wife filed her petition for special relief based on section 3505 of the

Divorce Code, which provides in relevant part:

      § 3505.      Disposition of property to defeat obligations

      (d) Constructive trusts for undisclosed assets. If a party fails
      to disclose information required by general rule of the Supreme
      Court and in consequence thereof an asset or assets with a fair
      market value of $1,000 or more is omitted from the final
      distribution of property, the party aggrieved by the
      nondisclosure may at any time petition the court granting the
      award to declare the creation of a constructive trust as to all
      undisclosed assets for the benefit of the parties and their minor
      or dependent children, if any. The party in whose name the
      assets are held shall be declared the constructive trustee unless
      the court designates a different trustee, and the trust may
      include any terms and conditions the court may determine. The
      court shall grant the petition upon a finding of a failure to
      disclose the assets as required by general rule of the Supreme
      Court.

23 Pa.C.S. § 3505(d).

ownership of certain property brings her petition for constructive trust within

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Husband disagrees, and argues that the relief Wife seeks is controlled by

section 3322 of the Divorce Code, which provides:

        § 3322.      Opening or vacating decrees

        A motion to open a decree of divorce or annulment may be made
        only within the period limited by 42 Pa.C.S. § 5502 (relating to
        modification of orders) and not thereafter. The motion may lie
        where it is alleged that the decree was procured by intrinsic
        fraud or that there is new evidence relating to the cause of
        action which will sustain the attack upon its validity. A motion to
        vacate a decree or strike a judgment alleged to be void because
        of extrinsic fraud, lack of jurisdiction over the subject matter or
        a fatal defect apparent upon the face of the record must be
        made within five years after the entry of the final decree.
        Intrinsic fraud relates to a matter adjudicated by the judgment,
        including perjury and false testimony, whereas extrinsic fraud
        relates to matters collateral to the judgment which have the
        consequence of precluding a fair hearing or presentation of one
        side of the case.

23 Pa.C.S. § 3322.

        Initially, we note that Wife does not seek to vacate the divorce decree,

which is the relief provided under section 3322.            Rather, she seeks a

constructive trust, which is the relief provided under section 3505. Major v.

Major, 518 A.2d 1267 (Pa. Super. 1986), supports the proposition that

section 3505 is an alternative and distinct cause of action to section 3332.

In Major, wife sought relief under the predecessor to section 3322,3 seeking

to reopen equitable distribution because husband had failed to mention his

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3
    1980, April 2, P.L. 63, No. 26 § 602 (23 P.S. § 602).

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                                                 4
                                                     Id. at 1269. This Court held

that wife was not entitled to relief under the predecessor to section 3332

not argued that fraud was perpetrated; [and] 3) she presents no new

evidence relating to the cause of act            Id. at 1272. Nevertheless, this

Court held that the appropriate remedy was a constructive trust under the

predecessor to section 3505.5

court of competent jurisdiction is presented with facts warranting its

               Id. at 1274.

       Importantly, the facts warranting impo

not include a requirement that the failure to disclose an asset be a deliberate

or intentional effort to avoid subjecting funds to the equitable distribution

             Creeks v. Creeks, 619 A.2d 754, 757 (Pa. Super. 1993). The

intent of the party who fails to disclose the assets is of no moment. Id.

       Husband relies on Hassick v. Hassick, 695 A.2d 851 (Pa. Super.

is not entitled to relief.     We disagree because significant distinctions exist

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4
  Major involved a      bifurcated divorce. The divorce decree was entered on
December 2, 1982.        The equitable distribution order was entered on March
29, 1983, and wife      sought to reopen equitable distribution on October 17,
1983.
5
  1980, April 2, P.L.   63, No. 26 § 403 (23 P.S. § 403).

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between the instant matter and Hassick, where, fourteen years after the

parties executed a property settlement agreement, wife filed a petition for

special relief alleging that her husband fraudulently concealed a pension.

                                                                           id.

at 853, but relied on Major, Creeks, and section 3505 to grant wife a fifty

percent interest in the pension, and imposed a constructive trust until the

pension reached pay status. On appeal, this Court reversed, in part because

Majors and Creeks did not involve allegations of fraud, and in part because

an excessive period of time had passed between the final decree and the

petition for relief.    The Court further noted that relief was only available

under section 3505(d) if a party had failed to disclose information regarding

as was then required by section 3505(b). Because neither party in Hassick

of a constructive trust.6       In summary, Hassick is not a section 3505(d)

case, and accordingly, it cannot serve as a basis for denying Wife the

opportunity to seek relief under section 3505(d).

       Husband further argues that sections 3505 and 3323 should be read in

pari materia, pursuant to section 1932 of the Statutory Construction Act, 1
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6
  The inventory and appraisment formerly required under 23 Pa.C.S. §
3505(b) has been suspended and is now governed by Pa.R.C.P. 1920.33,
which provides for filing of an inventory of all assets and a pre-trial
statement containing a valuation of those assets.

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rules of statutory construction, the necessity of applying the rule as to the

construction of statutes in pari materia exists only where the terms of the

                                             Oliver v. City of Pittsburgh, 11
A.3d 960, 965 (Pa. 2010) (citing AM.JUR.2D Statutes

words of a statute are clear and free from all ambiguity, the letter of it is not

1921(c). Here, the language of section 3505 is unambiguous. When a party

fails to disclose information required by a general rule of the Supreme Court,

such as the Rules of Civil Procedure governing identification and valuation of

assets, and as a result of the nondisclosure an asset with a fair market value

of $1000 or more is omitted from the final distribution, the aggrieved party

       at any time petition the court granting the award to declare the

3505(d) (emphasis added).        Accordingly, the plain language of section

                                                                          in pari

materia with section 3332. Oliver, supra.

      Having concluded that Wife properly sought relief under section

                                             t the trial court erred in denying

his motion for summary judgment.

      Our standard of review of an order granting or denying a motion for

summary judgment is well-settled:

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     We view the record in the light most favorable to the nonmoving
     party, and all doubts as to the existence of a genuine issue of
     material fact must be resolved against the moving party. Only
     where there is no genuine issue as to any material fact and it is
     clear that the moving party is entitled to a judgment as a matter
     of law will summary judgment be entered. Our scope of review

     order will be reversed only where it is established that the court
     committed an error of law or abused its discretion.

Daley v. A.W. Chesterton, Inc., 37 A.3d 1175, 1179 (Pa. 2012) (citation

omitted).

     Pa.R.C.P. 1035.2 governing motions for summary judgment provides:

     After the relevant pleadings are closed, but within such time as
     not to unreasonably delay trial, any party may move for
     summary judgment in whole or in part as a matter of law

        (1)   whenever there is no genuine issue of any material
              fact as to a necessary element of the cause of action
              or defense which could be established by additional
              discovery or expert report; or

        (2)   if after the completion of discovery relevant to the
              motion, including the production of expert reports,
              an adverse party who will bear the burden of proof
              at trial has failed to produce evidence of facts
              essential to the cause of action or defense which in a
              jury trial would require the issues to be submitted to
              a jury.

Pa.R.C.P. 1035.2.

     Here, the trial court determined there are genuine issues of material

fact that require discovery, and therefore it denied Husba

summary judgment.

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      With respect to the existence of disputed material facts regarding

court, which noted:

     The Master found that Husband transferred his interest in 1998
     to his brothers for no consideration. See
     Recommendations, p. 10, footnote 3. The Master found that

                                                -Six Thousand Eight
     Hundred Eight Dollars ($46,808) based on the assertion by
     Husband that he did not have current or ongoing interest in the
     asset. See [Id.], paragraphs 79-85, pp. 23-24. Wife claims
     that shortly after the entry of the final Trial Court order of
     September 27, 2005 disposing of the Exceptions and Cross-

     in Falcon to an entity called Pioneer I Associates Trust, a trust of
     which Husband is the beneficiary.           See
     paragraph 17. Wife asse

     would provide Husband all of the rights and benefits of actual
     ownership in the interim, and Todd would then convey Falcon to
     Husband as soon as his divorce was concluded. See
     Petition. This Court acted within its discretion in determining
     that an issue of genuine material fact exists with regard to both
                                        ivorce planning. These are
     issues for discovery in accordance with the standard for
     summary judgment set forth in Pa.R.C.P. 1032.2.

Trial Court Opinion, 5/13/13, at 9-10.

      In her petition, Wife avers that prior to separation on September 9,

1998, and afterward, Husband had a legal and/or equitable ownership

interest in Gulf Keystone and related entities that he failed to disclose. See

                                             Robert Kozel, in which he states

that Gulf Keystone was established in approximately 1997.            However,

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Husband asserts that he could not have had such an interest because Gulf

Keystone did not exist until January 2000.        See Motion for Summary

Judgment, at paragraph 44.         Even assuming this to be true, Husband

trial, and therefore had an affirmative duty to disclose this interest.   See

Pa.R.C.P. 1920.33.     Accordingly, the trial court did not err or abuse its

discretion in finding there were genuine issues of material fact that need to

be determined through additional discovery.

      Wife also sought relief on the basis that Husband may have owned

more gas wells and related interests than he disclosed in his inventory,

marital asset summary and pretrial statement. See                            -

40. She based her claim on averments in a lawsuit for specific performance

unrelated plaintiffs aver that on April 1, 2004, Husband and his brothers

agreed to sell approximately 592 natural gas wells.      Id.   Based on this

information, Wife has established a genuine issue of material fact as to when

Husband acquired his interest in these assets. Furthermore, even if the sale

of these assets was completed on April 1, 2004, it occurred before the

equitable distribution hearing and thus should have been disclosed pursuant

                                                                      Section

3505(d).   Accordingly, the trial court did not err or abuse its discretion in

all his interests in natural gas wells.

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                                                             discretion by not

granting his motion for summary judgment where Wife failed to state a

cause of action for a constructive trust on assets not otherwise specified. If

Wife had simply sought a constructive trust on unspecified assets, we might

have been p

finding that Husband engaged in divorce planning, the trial court did not err

as a matter of law or abuse its discretion in denying summary judgment,

thus allowing the parties to engage in discovery.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/29/2014

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