Court Opinion

ID: 4092672
Source: CourtListenerOpinion
Date Created: 2016-10-25 21:55:46.381356+00
Date Added: 2024-06-11T08:44:59.647227
License: Public Domain

J-A20023-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

STANISLAV OCHAKOVSKIY                           IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                         Appellant

                    v.

IRINA KHALMATOVA

                         Appellee                   No. 1522 WDA 2015

             Appeal from the Order Entered September 2, 2015
             In the Court of Common Pleas of Allegheny County
                  Civil Division at No: FD-08-008120-017

STANISLAV OCHAKOVSKIY                           IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                         Appellee

                    v.

IRINA KHALMATOVA

                         Appellant                  No. 1636 WDA 2015

            Appeal from the Order Entered September 28, 2015
            In the Court of Common Pleas of Allegheny County
                    Civil Division at No: FD-08-008120

BEFORE: BOWES, STABILE, and MUSMANNO, JJ.

MEMORANDUM BY STABILE, J.:                        FILED OCTOBER 25, 2016

      Stanislav Ochakovskiy (“Husband”) and Irina Khalmatova (“Wife”)

have filed appeals from the trial court’s equitable distribution orders entered

September 2 and 28, 2015. We affirm in part, vacate in part, and remand.
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      The parties were married on November 5, 2003. They separated on

May 20, 2012. Husband originally filed a complaint in divorce on June 12,

2008, but neither party took any action in the case until 2012 when Husband

filed for alimony pendente lite.     The parties appeared before a master on

August 14, 2014, and November 18 and 19, 2014 for hearings on equitable

distribution of the marital estate.         The trial court issued orders on

September 8 and 28, 2015 and the court entered a decree in divorce on

December 1, 2015.         The parties’ timely cross appeals are now ripe for

disposition.

      Husband raises four issues:

      I.       Did the court err and abuse its discretion in overruling the
               Master’s determination regarding discovery and the award
               of attorneys’ fees in the amount of $12,000 to [Husband].

      II.      With respect to the sale of the marital business (Siberian
               Enterprises), (1) [d]id the court err and abuse its
               discretion in deducting cash proceeds in the amount of
               $25,000.00 from the sale of a marital business; and (2) in
               determining that [Wife] realized a loss from said
               transaction and that only $1,438 should have been
               included in the marital estate, when the evidence did not
               support such determinations. Finally, with respect to the
               sale of the marital business (Siberian Enterprises), and
               [Wife’s] motion for reconsideration, did the court err and
               abuse its discretion in determining that [Wife] realized a
               loss from said transaction, and that only $1,438 should
               have been included in the marital estate, when the
               evidence clearly did not support such determinations; and
               which was contrary to the master’s findings?

      III.     Did the court err and abuse its discretion by giving [Wife]
               rental value for the Ellsworth Avenue home when [Wife]
               presented NO evidence of what that rental value was, and

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            which was contrary to the evidence presented at the time
            of trial before the master.

      IV.   Did the court err and abuse its discretion by giving [Wife]
            credit and attorneys’ fees for costs incurred in obtaining
            discovery documents, which was contrary to the evidence
            presented in this case to the master.

Appellant’s Brief at 2.

      Our standard of review is well settled:

             A trial court has broad discretion when fashioning an
      award of equitable distribution. Our standard of review when
      assessing the propriety of an order effectuating the equitable
      distribution of marital property is whether the trial court abused
      its discretion by a misapplication of the law or failure to follow
      proper legal procedure. We do not lightly find an abuse of
      discretion, which requires a showing of clear and convincing
      evidence. 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. In determining the propriety of an equitable
      distribution award, courts must consider the distribution scheme
      as a whole. We 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.

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

quotation marks omitted).

      We have reviewed the trial court opinion, the applicable law, the

parties’ briefs, and the record.   We conclude that the trial court properly

applied the law and did not abuse its broad discretion. We therefore reject

Husband’s assertions of error for the reasons stated in the trial court’s

November 23, 2015 opinion.

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      Wife raises the following assertions of error on cross appeal:

            I.       Did the trial court commit an error of law and abuse
                     its discretion when it included Wife’s nonmarital
                     assets in the marital estate?

                     A. Did the trial court commit an error of law and
                        abuse its discretion when it included in the marital
                        estate Wife’s individual investment and bank
                        accounts that held funds gifted to her from her
                        father?

                     B. Did the trial court commit an error of law and
                        abuse its discretion when it included Wife’s
                        nonmarital business, Siberian Enterprises, in the
                        marital estate?

            II.      Did the trial court commit an error of law and abuse
                     its discretion when it failed to comply with and
                     enforce the June 17, 2013 order of court awarding
                     Wife a credit for rental income?

            III.     Did the trial court commit an error of law and abuse
                     its discretion when it failed to retroactively terminate
                     Wife’s alimony pendente lite obligation, where
                     Husband’s earning capacity was greater than that of
                     Wife?

            IV.      Did the trial court commit an error of law and abuse
                     its discretion in failing to include the increase in
                     value of Husband’s nonmarital property in the
                     marital estate?

Wife’s Brief at 1.

      In support of issue I.A., Wife argues that the trial court erred in

including accounts in Wife’s name—an investment account with Smith

Barney and money market and checking accounts with PNC (collectively the

“Accounts”)—in the marital estate. The relevant facts are as follows. The

funds in the Accounts came from gifts to Wife from her father in Russia.

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During the marriage, Wife used some money from the Accounts to pay

marital expenses and to fund the purchase of a Fox’s Pizza Den franchise,

for which Husband handled the day-to-day operations.

      Section 3501(a)(3) of the domestic relations code exempts gifts from

marital property:

      (a) General rule.--As used in this chapter, ‘marital property’
         means all property acquired by either party during the
         marriage and the increase in value of any nonmarital property
         acquired pursuant to paragraphs (1) and (3) as measured and
         determined under subsection (a.1). However, marital
         property does not include:

                                        [***]

            (3) Property acquired by gift, except between spouses,
                 bequest, devise or descent or property acquired in
                 exchange for such property.

23 Pa.C.S.A. § 3501(a)(3).    The trial court found that the Accounts were

funded with gifts to the wife from her father and thus did not begin as

marital property under § 3501(a)(3).          The trial court found that these

Accounts became marital property because Wife donated them to the marital

estate.

      “Whether an asset is marital property or separate property for

purposes of distribution of the marital estate[ ] is a matter reserved to the

sound discretion of the trial court.”    Goodemote v. Goodemote, 44 A.3d
74, 77 (Pa. Super. 2012), appeal denied, 57 A.3d 71 (Pa. 2012). “An abuse

of such discretion will be found to exist, however, if the trial court fails to

follow proper legal procedures or misapplies the law.”            Id.   Where

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nonmarital funds are commingled with marital funds and therefore cannot be

traced to a nonmarital asset, those funds cease to be nonmarital. Busse v.

Busse, 921 A.2d 1248, 1257 (Pa. Super. 2007), appeal denied, 934 A.2d
1275 (Pa. 2007). Likewise, a gift to a spouse can become marital property if

“he or she manifests an intent to donate it to the entireties entity.”

Campbell v. Campbell, 516 A.2d 363, (Pa. Super. 1986) (en banc), appeal

denied, 528 A.2d 955 (Pa. 1987).

         In Verholek v. Verholek, 741 A.2d 792, 797 (Pa. Super. 1999), for

example, the husband deposited a $54,000 inheritance into a personal

account that bore his name but also contained money that was a marital

asset.     He used money from that account to buy the marital home.      Id.

Finally, he put money from the personal account into a brokerage account

that contained marital assets. Id. The $54,000 inheritance became marital

property because it was commingled with marital funds. Id. In Campbell,

the husband received an interest in a family business as a gift from his

father.    The gifted interest was not marital property (but the increase in

value of that interest during the marriage was marital property). Campbell,
516 A.2d at 367.

         Wife concedes that the money she removed from the Accounts and

spent on living expenses and the restaurant became marital property. She

contends the trial court erred in holding that the money remaining in the

accounts is marital property.    We agree.   Wife’s use of a portion of the

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Accounts does not necessarily manifest her intent to donate all funds in the

Accounts to the marital estate. Wife did not commingle the remaining funds

by transferring them to a joint account.            Nor does anything in the record

evidence her intent as to the intended use for the remaining funds. Neither

Husband nor the trial court has cited any authority to support a conclusion

that a spouse donates an entire gift to the marital estate by using a portion

of that gift for marital expenses.             The trial court misapplied the law in

concluding that any money remaining in the Accounts was subject to

equitable distribution.

       We reject the remainder of Wife’s assertions of error based on the trial

court’s November 23, 2015 opinion, and remand for further proceedings in

accordance with this memorandum.1                We direct that a copy of the trial

court’s November 23, 2015 opinion be filed along with this memorandum.

       Orders affirmed in part and vacated in part.             Application for relief

denied. Case remanded. Jurisdiction relinquished.

____________________________________________

1
    We are also in receipt of Wife’s application for relief requesting
reimbursement of costs and fees incurred in preparation of his supplemental
reproduced record. The application is denied.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/25/2016

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