Court Opinion

ID: 3181752
Source: CourtListenerOpinion
Date Created: 2016-03-02 02:23:51.027909+00
Date Added: 2024-06-11T12:57:41.240860
License: Public Domain

J-S04027-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

MARY ANN FERRIS, NOW MARY ANN                  IN THE SUPERIOR COURT OF
PETRI,                                               PENNSYLVANIA

                        Appellant

                   v.

RALPH A. FERRIS,

                        Appellee                    No. 514 WDA 2015

               Appeal from the Order Entered March 2, 2015
               In the Court of Common Pleas of Erie County
                    Civil Division at No(s): 12741-2004

BEFORE: BOWES, OLSON AND STRASSBURGER,* JJ.

MEMORANDUM BY OLSON, J.:                            FILED MARCH 1, 2016

     Appellant, Mary Ann Ferris (now Mary Ann Petri), appeals from an

order entered on March 2, 2015 that denied her motion to declare and

impose a constructive trust on undisclosed assets of Ralph A. Ferris

(Husband). We vacate and remand.

     The trial court summarized the facts of this case as follows:

     The parties were married on June 18, 1994 and divorced on
     December 30, 2004. The [d]ivorce [d]ecree incorporated a
     [m]arriage [s]ettlement [a]greement dated December 17, 2004
     which provided for, among other things, distribution of marital
     property in the form of retirement accounts.          Marriage
     Settlement Agreement, Article VII, paragraph D, Retirement
     Funds.

     Before the parties married, and for a period of time during the
     marriage, Husband worked at Van Air Systems, Inc. Motion
     Hearing Transcript, 3/2/15, at 15. He was eligible for a pension
     by virtue of that employment. Sometime in 2012, well after the
     [parties’] divorce was final, Husband collected a lump sum

*Retired Senior Judge assigned to the Superior Court.
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     distribution of the pension in the amount of $16,000.00. Motion
     Hearing Transcript, 3/2/15, at 12.

     It is undisputed the existence of the pension was not listed in the
     [m]arital [p]roperty [s]ettlement [a]greement, nor did Husband
     file an inventory or any other document with the [Erie C]ounty
     [p]rothonotary listing the pension as an asset subject to
     equitable distribution.

     There was also evidence [Appellant] had a pension or a 401k
     retirement plan while she worked during the marriage as a nurse
     at St. Vincent’s Hospital. Motion Hearing Transcript, 3/2/15, at
     9. This asset was not specifically identified in the [m]arital
     [s]ettlement [a]greement.     It is therefore unclear whether
     references made to [Appellant’s] brokerage or mutual fund
     accounts in the agreement refer in fact to the 401k plan from
     the hospital.

     In support of her request for imposition of a constructive trust,
     [Appellant] testified at the motion hearing she was not aware of
     Husband’s Van Air Systems pension until she learned of it from
     her sister-in-law, Darlene Nelson, in a [telephone] conversation
     sometime in November, 2012. Nelson did not testify at the
     hearing so there is nothing in the record to show how she knew
     [of Husband’s pension], what motivated Nelson to do so, or if
     the conversation even took place.

     [Appellant] further testified she hired an attorney once she []
     learned of the existence of the asset. Her attorney filed a
     motion on January 30, 2013 requesting relief similar to the relief
     requested in the motion at issue in this case. Husband filed a
     response to the 2013 motion.

     Shortly after receiving the response, the attorney for
     [Appellant], with [Appellant’s] consent, withdrew her motion
     before a hearing could be could be held on the merits. Of note is
     that around the same time, the parties were engaged in a
     custody dispute over their three minor children. See [Trial
     Court] Docket Entries dated 11/21/12 [through] 8/27/13.

     Husband’s testimony contradicted [Appellant’s] position. He said
     the parties’ finances were not kept separate and apart during the
     marriage. He also said during the marriage he received yearly
     statements concerning the pension.        He did not hide the

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      existence of the pension or hide the statements from
      [Appellant]. He recalled the statements, when received in the
      mail, were available to [Appellant] and he had no reason to hide
      their existence “from her during the marriage.” Motion Hearing
      Transcript, 3/2/15, at [15-16 and 18].

      In response to the court’s inquiries concerning his knowledge of
      [Appellant’s] pension or 401k[, Husband] did not know the
      specifics of it and did not pay attention to the type of investment
      it was. He did know, however, there were several times during
      the marriage she cashed in part of it to buy “a piano and things
      like that.” Motion Hearing Transcript, 3/2/15, at 18-19.

      Finally, Husband testified about the existence of an oral
      agreement made between he and [Appellant] that was not
      included in the [m]arital [s]ettlement [a]greement:

        [Husband]: She had something from one of her employers,
        I had the Van Air, neither one did we have a specific value
        on, so we just agreed we’d each keep our own and then
        move on.

                                   *    *    *

        [Counsel]:   And it’s your testimony that there was an
        agreement reached. … That she would walk with whatever
        retirement funds she had and you would walk with yours?

        [Husband]: Right. That’s correct.

      Motion Hearing Transcript, 3/2/15, at 14, 16.

Trial Court Opinion, 5/19/15, at 2-4.

      At the conclusion of the hearing, the trial court entered an order

denying Appellant’s request for imposition of a constructive trust over

Husband’s pension assets. Appellant filed a timely notice of appeal on March

25, 2015 and, pursuant to court order, a concise statement of errors

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complained of on appeal followed on April 16, 2015. See Pa.R.A.P. 1925(b).

The trial court issued its Rule 1925(a) opinion on May 19, 2015.

        Appellant raises two questions for our review:

        Whether the trial court erred in failing to follow the mandates of
        23 Pa.C.S.A. § 3505(d) when [Husband] admitted he failed to
        disclose information required by general rule of the Supreme
        Court, resulting in an asset with a fair market [value] of more
        than $1,000.00 being omitted from the final distribution of
        property[?]

        Whether the trial court erred in failing to follow the mandatory
        language of 23 Pa.C.S.A. § 3505(d) which directs a trial court to
        “grant the petition [to impose a constructive trust] upon finding
        a failure to disclose the assets as required by general rule of the
        Supreme Court[?]” [Husband] admitted he did not list the
        pension in pleadings, contrary to the Pennsylvania Rules of Civil
        Procedure.

Appellant’s Brief at 4.

        Appellant’s issues are closely related; hence, we shall address them in

a single discussion.      Appellant’s position is that the trial court erred or

abused its discretion in denying Appellant’s request to impose a constructive

trust on Husband’s pension assets that he omitted from the parties’ marital

settlement agreement.        She argues that the provisions of 23 Pa.C.S.A.

§ 3505(d) are mandatory and that Husband’s failure to disclose the

existence of his pension met all of the statutory criteria for the imposition of

a constructive trust. She also argues that the trial court erred in denying

her motion to the extent it weighed certain factors against the imposition of

a constructive trust. Those factors include the passage of time between the

entry    of the   parties’ divorce   decree   and Appellant’s request for a

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constructive    trust,   the   trustworthiness    of   the   source   of   Appellant’s

information concerning Husband’s pension, and the alleged existence of

pension assets owned by Appellant.

        Appellant’s claims rest on her contention that Husband failed to

disclose his pension in the marital settlement agreement executed by the

parties on December 17, 2004, which the court incorporated into the parties’

divorce decree issued on December 30, 2004.                   See Divorce Decree,

12/30/04. The recital provision of the marital settlement agreement states,

among other things, that “the parties acknowledge that they have reached a

satisfactory agreement between themselves and have entered into this

Agreement freely, with full disclosure of their respective assets[.]” Marital

Settlement Agreement, 12/30/04, at 2.            Article V of the agreement, titled

“Full Disclosure,” reads as follows:

        Each party represents and warrants that he or she has made
        full and complete disclosure in the text of this Agreement
        of all the real and personal property of whatsoever kind and
        nature and wheresoever situate belonging in any way to each of
        them, of all debts and encumbrances incurred in any manner
        whatsoever by each of them, of all sources and amounts of
        income received or receivable by each of them, including pension
        benefits, and of such other facts relating to the subject matter of
        this Agreement.

Marital Settlement Agreement, 12/30/04, at 5 (emphasis in original).

        The trial court specifically found that Husband failed to disclose his

pension in the marital settlement agreement. Trial Court Opinion, 5/19/15,

at 3.    The trial court, however, concluded that that it was not required to

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impose a constructive trust because Appellant knew of Husband’s pension

when the parties entered into their agreement and because the parties

agreed to retain their respective retirement assets upon dissolution of their

marriage.   Trial Court Opinion, 5/19/15, at 1.       As additional support for

declining to impose a constructive trust, the trial court also referred to the

passage of time between the entry of the parties’ divorce decree and

Appellant’s request for a constructive trust, the unreliability of the source of

Appellant’s information concerning Husband’s pension, and the alleged

existence of undisclosed pension assets owned by Appellant.

      In a prior case in which we considered both the duty of a party to

make disclosure under an equitable distribution agreement, as well as the

consequences of nondisclosure, we stated as follows:

      When construing agreements involving clear and unambiguous
      terms, this Court need only examine the writing itself to give
      effect to the parties understanding. McMahon v. McMahon,
      612 A.2d 1360 (1992) (en banc). The court must construe the
      contract only as written and may not modify the plain meaning
      of the words under the guise of interpretation. Trumpp v.
      Trumpp, 505 A.2d 601 (Pa. Super. 1985). When the terms of a
      written contract are clear, this Court will not re-write it or give it
      a construction in conflict with the accepted and plain meaning of
      the language used. Litwack v. Litwack, 433 A.2d 514 (Pa.
      Super. 1981). Conversely, when the language is ambiguous and
      the intention of the parties cannot be reasonably ascertained
      from the language of the writing alone, the parol evidence rule
      does not apply to the admission of oral testimony to show both
      the intent of the parties and the circumstances attending the
      execution of the contract. DeWitt v. Kaiser, 484 A.2d 121 (Pa.
      Super. 1984).

Creeks v. Creeks, 619 A.2d 754, 756 (Pa. Super. 1993).

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      The language of the marital settlement agreement, which the court

incorporated into the parties’ divorce decree, required each party to make

complete and accurate disclosure of all assets, including retirement benefits.

The trial court found that Husband breached the clear terms of this duty.

Because Husband’s disclosure duties are expressly established by the

parties’ marital settlement agreement, the trial court’s decision to resort to

parol agreements and circumstances was improper. Husband’s obligation to

disclose his assets was not conditioned upon Appellant’s knowledge of those

assets or the parties’ intended distribution scheme.     In addition, the court

should not have looked to the passage of time between entry of the parties’

divorce decree and Appellant’s request for a constructive trust, the reliability

of the source of Appellant’s information concerning Husband’s pension, and

the alleged existence of undisclosed pension assets owned by Appellant. We

therefore conclude that Husband's failure to disclose his pension assets

violated the plain language of the parties’ marital settlement agreement.

      Since Husband failed to disclose all of his financial assets, we turn now

to determine whether Appellant is entitled to raise a constructive trust over

Husband’s pension account. Appellant sought a constructive trust 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[.00] or more is omitted from the final

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      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).

      “This section mandates the imposition of a constructive trust when a

party fails to disclose financial assets, and that failure results in the omission

of an asset with a fair market value of [$1,000.00] or more from the

equitable distribution scheme.” Creeks, 619 A.2d at 757. We also held, in

construing this provision, that the circumstances that support imposition of a

constructive trust “do 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 process.” Id. In fact, “[t]he intent of the party who

fails to disclose the assets is of no moment.” Id.

      It is undisputed that Husband failed to disclose his pension account in

the parties’ marital settlement agreement. He argues, however, that there

are three reasons we should affirm the trial court’s refusal to impose a

constructive trust. First, Husband asserts that the trial court did not abuse

its discretion in finding that Appellant lacked credibility in denying her

awareness of Husband’s pension assets and in denying an agreement

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between the parties to retain their respective retirement assets following

dissolution of the marriage.      Second, Husband asserts that section 3505

does not apply since neither party filed an inventory or appraisement under

Pa.R.C.P. 1920.33. Lastly, Husband claims that while there is proof of the

value of his pension at the time of distribution in 2012, there is no proof of

its value at the time it was omitted from the parties’ marital settlement

agreement.

      As we stated above, Husband’s duty to disclose his pension was clear

and was not conditioned upon Appellant’s lack of knowledge of his property

or the parties’ intended distribution scheme. These parol circumstances are

irrelevant to the issues at hand.      Hence, this factor is not grounds for

affirming the trial court’s ruling.

      We also conclude that the lack of an inventory and appraisement

under Pa.R.C.P. 1920.33 does not preclude application of section 3505 in

this case.    Here, the parties’ divorce decree incorporated their marital

settlement agreement, which made no mention of Husband’s pension

account despite a clear disclosure requirement. In a prior case, we said that

“the parties’ failure to submit an [i]nventory and [a]ppraisement or include

a disclosure clause in the [marital settlement a]greement undermines the

appellee’s reliance upon 23 Pa.C.S.A. § 3505.”     Hassick v. Hassick, 695
A.2d 851 (Pa. Super. 1997) (emphasis added).        Hassick suggests that a

financial omission in either an inventory and appraisement or a marital

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settlement agreement triggers the remedy found in 23 Pa.C.S.A. § 3505.

Hence, Husband’s second argument in support of the trial court’s order fails.

       Finally, Husband argues that Appellant failed to establish the value of

his pension at the time the parties executed their marital settlement

agreement to confirm that it met the $1,000.00 threshold required under

section 3505(d).      We agree that the record does not clearly establish the

value of Husband’s pension at the time it was omitted from the parties’

marital settlement agreement. Accordingly, we vacate the trial court’s order

and remand for further proceedings to ascertain the value of Husband’s Van

Air Systems pension as of the date it was excluded from the parties’ marital

settlement agreement.1

       Order vacated. Case remanded for further proceedings.      Jurisdiction

relinquished.

       Judge Bowes joins this Memorandum.

       Judge Strassburger files a Concurring Statement.

____________________________________________

1
  We allow Appellant this opportunity to develop the record as it pertains to
the value of Husband’s pension in December 2004 since section 3505 affords
a remedy for the omission of assets “at any time.”

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/1/2016

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