Court Opinion

ID: 4019064
Source: CourtListenerOpinion
Date Created: 2016-07-26 22:10:42.703176+00
Date Added: 2024-06-11T14:44:49.701396
License: Public Domain

J-S39032-16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37

JEWEL L. WOODS,                          :    IN THE SUPERIOR COURT OF
                                         :          PENNSYLVANIA
                 Appellee                :
                                         :
                    v.                   :
                                         :
JAMES A. WOODS,                          :
                                         :
                 Appellant               :    No. 2098 MDA 2015

              Appeal from the Order Entered November 5, 2015
                in the Court of Common Pleas of York County
                   Civil Division at No(s): 2011-FC-640-15

BEFORE:      STABILE, PLATT,* and STRASSBURGER,* JJ.

MEMORANDUM BY STRASSBURGER, J.:                     FILED JULY 26, 2016

      James A. Woods (Husband) appeals from the order entered November

5, 2015 denying his petition for enforcement of the parties’ marital

settlement agreement.        Specifically, Husband seeks enforcement of a

provision regarding the marital residence. We vacate the trial court’s order

and remand for proceedings consistent with this memorandum.

      Husband and Appellee Jewel Woods (Wife) were married on January

16, 1993, and separated in October 2010. On April 13, 2011, Wife filed a

complaint for divorce and a petition for special relief, requesting that

Husband transfer all of his interest in the marital residence to Wife. Soon

thereafter, the parties entered into a partial marital settlement agreement

(partial settlement agreement) which provided, in relevant part, the

following:

*Retired Senior Judge assigned to the Superior Court.
J-S39032-16

           The parties acknowledge that at the time of separation
     they were the owners of real property located at 1265 Cranberry
     Lane West, York, Windsor Township, York County, Pennsylvania
     which served as the marital residence. The parties further
     acknowledge that Wife has been residing in the marital residence
     since separation.

            The parties hereby agree that the marital residence is
     subject to a first mortgage with Chase Home Mortgage, having
     an approximate balance of $304,000.00 and a second mortgage
     with Chase Home Mortgage having an approximate balance of
     $75,000.00. The parties agree that the fair market value of the
     property is less than the amount owed to Chase Home Mortgage
     on the first and second mortgages and that there is no equity for
     distribution between them. The parties further acknowledge that
     Husband was primarily responsible for making the mortgage
     payments while the parties were together and that both
     mortgages were delinquent at the time of separation with the
     last payment having been made on March 10, 2010.

           The parties acknowledge that Wife would like to retain the
     marital residence and is seeking a mortgage modification
     through Chase Home Mortgage.

            Husband hereby agrees to transfer to Wife all of his right,
     title and interest in and to the marital residence. In furtherance
     of this covenant, Husband shall, contemporaneously with the
     execution of this agreement, duly execute and acknowledge a
     Deed transferring all his right, title and interest in and to the
     said property to Wife, with the understanding that the Deed shall
     be held in escrow by Wife’s attorney until Wife’s mortgage
     modification has been approved. Wife shall assume full
     responsibility for the costs associated with the preparation and
     recording of the Deed for the transfer of the marital residence by
     Husband to Wife.

           The parties acknowledge that Wife shall assume sole
     responsibility for payment of the first and second mortgages,
     real estate taxes, premiums for liability and fire insurance
     coverage, sewer, water, utilities, refuse collection, maintenance,
     repairs and assessments at the residence.

                                   -2-
J-S39032-16

           Wife agrees to indemnify and hold Husband harmless of
     and from any such liabilities, obligations, claims or demands as a
     result thereof since the date of execution of this Agreement.
     Wife agrees that she will attempt to either refinance the existing
     mortgages with Chase Home Mortgage so as to remove
     Husband’s name from liability and/or gain approval for a
     mortgage modification on said property within ninety (90) days
     of the execution of this Agreement.

           In the event that Wife is unable to refinance and/or
     assume the first and second mortgages to remove Husband’s
     name from the same within ninety (90) days, then in such
     event, the parties agree, that at Husband’s request, the property
     shall be placed for sale with a responsible Real Estate Agent,
     chosen by the parties. The parties will cooperate with the Real
     Estate Agent’s suggestions with regard to the listing price,
     reduction of price and acceptance of offers, as well as the
     appearance of the home. Further, both parties will cooperate
     with the Short Sale[1] process and will provide any and all
     documentation requested by the first and second mortgage
     companies so that the property may be approved as a Short
     Sale.

Partial Settlement Agreement, 4/25/2011, at 3-4.

     At the November 4, 2015 special relief hearing which preceded this

appeal, Wife testified that following the parties’ 2011 partial settlement

agreement she sought, but was unable to secure refinancing from the bank.

Wife contends the bank was unwilling to refinance the mortgage because

Husband failed to pay the mortgage for ten months, which she claims she

was unaware of when she entered into the partial settlement agreement.

1
 A short sale is “the sale of a real property for less than the mortgage loan
balance.” Ronald D. Jung, Short Sale Assistance in Colorado and Under
Mars, Colo. Law., January 2012, at 69.

                                    -3-
J-S39032-16

N.T., 11/4/2015, at 5. She was, however, approved for a loan modification

lowering her monthly obligation, and she began paying the mortgage. Id. at

15.

      Husband testified at the hearing that in April 2013 he sent Wife a

letter, through counsel, electing to enforce the provision within the partial

settlement agreement which allowed him to request the property be sold.

Id. at 34-35. The issue was eventually referred to a Divorce Master and the

parties reached an agreement on May 21, 2015 (second settlement

agreement).     The second settlement agreement, as detailed by their

respective attorneys on the record specified, in part, the following:

      [Husband’s Attorney]: At this point the agreement -- we are
      going to dictate an agreement on the record.         It will be
      incorporated, but not merged into the decree. Both parties --
      the standard provisions with regard to both parties have the
      right to live separate and apart would be contained in the
      agreement and the actual property [sic]. The parties together
      own a home located at 1265 Cranberry Lane West, York, in York
      County, Pennsylvania 17402. There is currently a mortgage on
      the property with a principle [sic] balance of approximately
      $375,000.00 through Chase Bank. There is a possibility that
      Chase Bank may have acted inappropriately in regard to the first
      and second mortgages. In that the second mortgage should
      ha[ve] been forgiven rather than added to the first loan. This
      would reduce the total loan amount. Nonetheless, neither party
      would make [any more] payments toward this debt from this
      day forward. There is an interim property settlement agreement
      in which wife indicated she would hold husband harmless with
      regard to the payments on this property. That agreement would
      remain in effect. If [W]ife chooses to bring any action against
      Chase Bank, she would be entitled to any proceeds from that
      action.

                                     -4-
J-S39032-16

     [Wife’s Attorney]: And [H]usband waives any claim to those
     proceeds.

     [Husband’s Attorney]: Husband would waive any claim.
     However, such an action would not slow down the short sale or
     other provisions related to getting rid of this property.
     Specifically, the parties will use Wade Elfner to start the process
     for a short sale of the properties. Wade indicates that he uses a
     professional company in Harrisburg that specializes in short
     sales. Both parties will cooperate in providing any documents
     requested by the short sale company or the real estate agent
     within ten days of such a request. If at any point Mr. Elfner does
     not want to proceed or feels it is not going to be fruitful to
     proceed with the short sale, then the parties will attempt a deed
     in lieu of foreclosure. If the bank does not want to cooperate
     with regard to a deed in lieu of foreclosure, then the parties will
     proceed to a foreclosure. Wife may remain in the property
     during the time that the property is listed for short sale and/or
     any foreclosure proceedings are occurring.

N.T., 5/21/2015, at 3-5.

     Wife   initially    complied   with   the   second   settlement     agreement,

foregoing payment of the mortgage for one month. However, she testified

that after her credit score “plummeted seventy points in one month” she

began making payments again, contrary to the terms of the second

settlement agreement. N.T., 11/4/2015, at 9-10. Wife cites her mistaken

belief that a short sale would not hurt her credit “because the judge told

[her] to do it.” Id. at 16-17. Wife contends that she would not have been

able to find a place to rent or get another loan if she continued to miss

mortgage payments. Id. at 9-10.

     Husband     filed    a   petition   for   enforcement   of   both   settlement

agreements on August 20, 2015.           Specifically, Husband sought to enforce

                                         -5-
J-S39032-16

the provision within the second settlement agreement that Wife cease

paying the mortgage on the marital property.2 Following the conclusion of

testimony at the special relief hearing, the trial court denied Husband’s

petition on the record. This timely filed appeal followed.3

        Husband sets forth a number of issues on appeal.         However, as an

initial matter we consider his contention that the trial court erred by not

enforcing the marital settlement agreement. See Appellant’s Brief at 4.4

        In considering this issue, we bear in mind that marital settlement

agreements are governed by the law of contracts. Stamerro v. Stamerro,

889 A.2d 1251, 1258 (Pa. Super. 2005).

              Because contract interpretation is a question of law,
              this Court is not bound by the trial court’s
              interpretation.   Our standard of review over

2
  At the April 2015 special relief hearing, Wade Elfner, a real estate broker,
explained why Wife must cease paying the mortgage in order to attempt to
enter into a short sale. See N.T., 11/4/2015, at 27 (“[T]he mortgage
company will give no credence if a loan is current. They’re not [going to]
voluntarily forgive money to a seller just because they don’t want to pay
anymore. … If they’re [going to] take a short sale on price, they want the
homeowner to have consequences and that would be credit
[consequences].”)

3
    On July 23, 2015 the trial court entered a divorce decree.

4
  Husband complied with the trial court’s directive to file a concise statement
of errors complained of on appeal pursuant to Pa.R.A.P. 1925. The trial
judge, however, did not file an opinion and instead submitted a notice to this
Court stating that due to his “pending retirement and attendant time
constraints as well as a lack of transcript presently, a formal 1925 opinion
will not be filed in this appeal.” See Notice to the Superior Court Re: 1925
Opinion, 12/30/2015. The transcript in this case was filed on December 16,
2015.

                                       -6-
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           questions of law is de novo and to the extent
           necessary, the scope of our review is plenary as the
           appellate court may review the entire record in
           making its decision. However, we are bound by the
           trial court’s credibility determinations.

Kraisinger v. Kraisinger, 928 A.2d 333, 339 (Pa. Super. 2007) (quoting

Stamerro, 889 A.2d at 1257-58).

     The standard of enforceability of a marital settlement agreement is

well settled: “[a]bsent fraud, misrepresentation, or duress, spouses should

be bound by the terms of their agreements.” Crispo v. Crispo, 909 A.2d
308, 313 (Pa. Super. 2006) (quoting McMahon v. McMahon, 612 A.2d
1360, 1363 (Pa. Super. 1992)) (citations omitted). “We are not permitted

to review the reasonableness of a marital settlement agreement to

determine its validity.” Paroly v. Paroly, 876 A.2d 1061, 1065 (Pa. Super.

2005) (citing Simeone v. Simeone, 581 A.2d 162 (Pa. 1990)). A trial court

has “neither the power nor the authority to modify or vary the decree unless

there is conclusive proof of fraud or mistake.” Bianchi v. Bianchi, 859 A.2d
511, 515 (Pa. Super. 2004).

     Following testimony by the parties and real estate broker, Wade

Elfner, the trial court denied Husband’s request to enforce the settlement

agreement. In doing so the trial court stated:

           So, here’s my dilemma. [Husband’s] premise is faulty on
     saving [his] credit, but nevertheless the agreement itself
     provides for certain things. [W]ife now argues, as we hear from

                                    -7-
J-S39032-16

     [Wife’s Attorney], it’s impossible[5] to do what the agreement
     says. Well, not really. [Wife] can stop making the payments,
     wait the default period, attempt to do a short sale, which is what
     the import of the agreement is, and then whatever happens
     happens.

           Well, here’s my take on that. That’s a circumstance that I
     view as an unnecessary problem for both parties because now
     you end up with a foreclosure on your credit as well as the
     default in payments. Is this the case where I am called upon to
     save both parties from themselves?        I get it.   You want
     something done. You want action. Wife wants an opportunity to
     straighten this out.

           What is the import of enforcing the agreement?       My
                                                  [6]
     conclusion is there’s no benefit to [H]usband , so why would I
     do that simply to penalize [W]ife, who has been making
     payments? And there also is the troubling issue of [Husband]
     waiting for two years to come forward.

5
  At the special relief hearing, Wife testified that she did not adhere to the
settlement agreement, in particular, the part in which she agreed not to
make any future payments on the mortgage because her credit score
plummeted, which she was unaware would occur if she stopped paying the
mortgage. Wife stated she feared having bad credit because she was caring
for children and testified that when she went to look for other financing or a
place to rent “people laughed at [her].” N.T., 11/4/2015, at 10-11. Wife’s
attorney summarized Wife’s position by stating: “your honor, this isn’t a
case where my client doesn’t want to not [sic] be agreeable or not comply.
It’s a case where she’s not able to comply. She lives in a house with a
number of children that she’s obligated for. She does not want herself and
the children to be homeless. She’s not able to obtain another place for her
to live.” Id. at 51. In her brief to this Court, Wife argues that her mistaken
understanding as to the effect not paying her mortgage would have on her
credit was material, and enough to warrant the trial court not to enforce the
contract. Wife’s Brief at 7-8.
6
  Husband disagrees with the trial court’s finding that the agreement would
not benefit him. To the contrary, Husband contends that “he cannot buy a
house and has trouble even buying a car because he is still listed as the
primary borrower on the mortgages for the marital residence. [Husband]
testified that, aside from bad credit, the amount of debt is creating a debt-
to-income ratio that requires him to pay a higher interest rate.” Husband’s
Brief at 11 (citations to the record removed).

                                    -8-
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N.T., 11/4/2015, at 51-56.

      Based on the foregoing, it is evident the trial court did not apply the

applicable standard a court must use when deciding whether a contract is

enforceable. The trial court’s reasoning was based neither on a finding of

ambiguity   within     the   agreement     nor   on   any   purported   fraud,

misrepresentation or duress. In deciding not to enforce the agreement, the

trial court essentially substituted its personal opinion that the agreement did

not benefit the parties, in lieu of determining whether the agreement was

valid under the law, and therefore the provision mandating Wife to cease

payment of the mortgage was enforceable.

      Because we find the trial court abused its discretion, we vacate the

court’s order and remand for a new hearing to determine whether the

parties’ May 21, 2015 settlement agreement, which incorporated the partial

settlement agreement,7 should be enforced in accordance with the above-

stated case law.     At that time, the trial court is also directed to address

Husband’s request for relief and issues regarding attorney’s fees and Wife’s

contempt.

      Order vacated. Case remanded for proceedings consistent with this

memorandum. Jurisdiction relinquished.

7
  The second settlement agreement stated that the partial settlement
agreement “should remain in full force and effect and be incorporated into
this agreement to the extent it is not inconsistent with it.” N.T., 5/21/2015,
at 11.

                                     -9-
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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/26/2016

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