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filed: July 20, 1984.




Clayton T. Hyman, Allentown, for appellant.

Anthony J. Urban, Assistant Public Defender, Mahanoy City, for appellee.

Spaeth, President Judge, and Cavanaugh and Cirillo, JJ. Spaeth, President Judge, filed a dissenting opinion.

Author: Cirillo

[ 331 Pa. Super. Page 5]

This is an appeal from an order of the Court of Common Pleas of Schuylkill County, entered June 7, 1982, awarding rehabilitative alimony and the partial payment of counsel fees to appellant and granting the equitable distribution of all marital property between the parties. The court dismissed the appellant's application for alimony pendente lite. The appellant Theresa A. Semasek requests either modification or remanding of the order, claiming that the hearing court abused its discretion in its findings. We disagree with the appellant's position and affirm the order of the hearing court.

[ 331 Pa. Super. Page 6]

On August 5, 1980, the appellee Joseph P. Semasek instituted an action under the New Divorce Code,*fn1 alleging that his marriage was irretrievably broken and that he and his wife had lived separate and apart for a period exceeding three years. The appellant filed an answer and a counterclaim seeking child support, custody,*fn2 counsel fees, alimony, alimony pendente lite and equitable distribution of marital property.

The matter was assigned to a master, who, after having conducted extensive hearings, recommended that a divorce be granted. The master filed a supplemental report addressing the economic issues.

On May 5, 1981, the divorce decree was entered, to which there was no appeal. Both parties, however, filed exceptions to the additional report of the master. The court subsequently reviewed the record, and on June 7, 1982, the Honorable James E. Lavelle issued an order, equitably distributing marital property and awarding alimony. Marital property was distributed by allocating 56 percent to the appellee and 44 percent to the appellant. The court awarded alimony to the appellant in an amount equal to any money expended by her for education, not to exceed $2,750 annually for three years. Additionally, the appellee was directed to pay one half of the appellant's counsel and expert witness fees. The court dismissed the appellant's application for alimony pendente lite. This appeal followed.

In determining the propriety of property distribution and of alimony, we use the abuse of discretion standard of review. Ruth v. Ruth, 316 Pa. Super. 282, 462 A.2d 1351 (1983); Remick v. Remick, 310 Pa. Super. 23, 456 A.2d 163 (1983). Under this standard, we do not usurp the hearing court's duty as fact finder. Rather we apply the legislative guidelines of the Divorce Code to the record to determine whether or not the hearing court has abused its discretion.

[ 331 Pa. Super. Page 7]

The appellant's first contention on appeal is that the court erred in classifying three diamond rings given to her by her husband during the marriage as marital property to be equitably distributed. The appellant asserts that such property falls within the "gift" exception of the Divorce Code. We disagree.

Section 401(e) defines marital property as "all property acquired by either party during the marriage". The "gift" exception excludes:

Property acquired by gift, bequest, devise or descent except for the increase in value during the marriage.

The hearing court, in the instant matter, determined that the jewelry was not a "gift" within the meaning of the statute as intended by the legislature.

In reviewing these provisions, we note that the hearing court should evaluate the facts of the case, giving consideration to the source of funds with which the gift was purchased, the intent of the donor as to the use of the property, the status of the marriage at the time of the transfer, and any agreements regarding the exclusion of the item from marital property. See O'Neill v. O'Neill, 600 S.W.2d 493 (Ky.App. 1980). In this case, the hearing court found that the jewelry had been purchased by the appellee with money from his salary, which is certainly a marital asset. When the money was exchanged for the purchased items, the marital property assumed a different form, but remained marital property to be included in equitable distribution. This reasoning in classifying the jewelry as marital property does not constitute an abuse of discretion, and will not be disturbed on appeal.

The appellant next contends that several factual findings, specifically the valuation of the appellant's diamond rings and of two parcels of realty, were arbitrary and unsupported by the record. The appellant additionally asserts that the court made conflicting findings as to her banking transactions and an erroneous finding that the appellant still holds assets in excess of $75,000 which she appropriated in 1979.

[ 331 Pa. Super. Page 8]

Section 401(d)(8) of the Divorce Code requires that the court consider the value of property set apart to each party in making a determination as to equitable distribution. Since there is no specific method of valuing assets, the court must exercise its discretion, relying upon the estimates and inventories submitted by both parties, records of purchase prices, and appraisals. From evaluating this evidence, the court makes its findings of fact. Gee v. Gee, 314 Pa. Super. 31, 460 A.2d 358 (1983). See Jost v. Jost, 89 Wis.2d 533, 279 N.W.2d 202 (1979).

The appellant submitted her diamond rings to the master, indicating that she would accept $35,000 credit in exchange for returning the rings to the appellee. The appellee testified that the purchase price of the rings was $35,000. Both parties agreed to an appraisal to be arranged by the master, who discovered that the rings were costume jewelry. Upon close examination of the jewelry, the appellee asserted that the rings held by the master were not the ones he had purchased. In resolving this issue that had become one of credibility, the master made a specific finding that this jewelry had a value of $15,000 based upon an estimate of carat worth. Thereafter, this finding was accepted by the hearing court.

Similarly, the court placed values upon real property of the parties by considering testimony, records of purchase prices and, in some instances, expert appraisal reports. These valuations amply supported by the record will not be disturbed on appeal.

As to appellant's banking transactions, we find that the hearing court scrutinized the numerous bank statements to ascertain as accurately as possible the funds remaining in the accounts. Since the appellant herself conducted these transactions, any conflicts in the court's findings spring from her failure to fully disclose all necessary information. Further, the appellant's allegation that the court should not have considered the funds appropriated by her from joint accounts is without merit. The intentional

[ 331 Pa. Super. Page 9]

    dissipation of marital assets by one party does not preclude its status as marital property in equitable distribution. It is the duty of the court to "issue other orders which are necessary to protect the interest of the parties and may grant such other relief or remedy as equity and justice require . . ." 23 P.S. ยง 401(c). It is undisputed that the appellant appropriated funds of over $75,000 from the joint banks accounts. Since these funds are marital property to be equitably distributed, the court is warranted in having included them as such in its calculations.

The appellant additionally contends that the division of marital property is inequitable. Guidelines for the equitable distribution of marital property are set forth in Section 401(d) of the New Divorce Code which provides:

In a proceeding for divorce or annulment, the court shall, upon request of either party, equitably divide, distribute or assign the marital property between the parties without regard to marital misconduct in such proportions as the court deems just after considering all relevant factors including:

(1) The length of the marriage.

(2) Any prior marriage of either party.

(3) The age, health, station, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties.

(4) The contribution by one party to the education, training, or increased earning power of the other party.

(5) The opportunity of each party for future acquisitions of capital assets and income.

(6) The sources of income of both parties, including but not limited to medical, retirement, insurance or other benefits.

(7) The contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the marital property, including the contribution of a party as homemaker.

(8) The value of the property set apart to each party.

[ 331 Pa. Super. Page 10]

(9) The standard of living of the parties established during the marriage.

(10) The economic circumstances of each party at the time the division of property is to become effective.

As the record indicates, the hearing court found that the parties were married for eighteen years and that neither had been previously married. Two boys born of the marriage are each over eighteen years and are not pursuing higher education.

At the time of the hearing, the appellant was 44 years of age and in good health. The appellant, a high school graduate, had been employed as a bookkeeper and clerk until 1960, at which time she forfeited her employment to become a housewife, mother, and homemaker. In doing so, the appellant made substantial non-monetary contributions to the marriage and to the purchase and accumulation of jointly held assets. She also assisted in a secretarial and clerical capacity in her husband's law practice, which attests to her employability and future earning potential.

The appellee, 45 years of age, is a self-employed attorney in private practice, a part-time member of the Schuylkill County Public Defender's Office and the operator of a private detective agency. His gross earnings from his practice ...

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