Appeals from Order of the Court of Common Pleas, Civil Division, of Lycoming County, No. 81-20,272.
Lester L. Greevy, Jr., Williamsport, for appellant in No. 325 and for appellee in No. 186.
Elliott B. Weiss, Williamsport, for appellant in No. 186 and for appellee in No. 325.
Cirillo, President Judge, and Brosky, Rowley, Wieand, Montemuro, Beck, Tamilia, Popovich and Johnson, JJ. Beck, J., files a concurring opinion. Tamilia, J., concurs in the result.
[ 357 Pa. Super. Page 486]
Presently before this Court are cross-appeals from an order directing equitable distribution of marital property. Because of a unique procedural posture, however, we must first determine whether the decree of equitable distribution is properly before us for review.
Charles J. Campbell and Judith I. Campbell were married on November 28, 1963. In June, 1980, they separated; and on February 25, 1981, Judith commenced an action for divorce under the Divorce Code of 1980.*fn1 She requested a
[ 357 Pa. Super. Page 487]
section 201(c)*fn2 divorce and advanced various economic claims. On May 19, 1983, Charles filed a counterclaim in which he alleged a cause of action for a fault divorce on grounds that Judith had been guilty of a course of conduct constituting indignities to his person. At a hearing before a master on July 18, 1983, the parties, by their respective counsel, stipulated that if Charles were to file a section 201(d)*fn3 affidavit, Judith would not contest the affidavit, and a section 201(d) divorce could be entered. Charles filed a section 201(d) affidavit on July 19, 1983, and no challenge was thereafter made by Judith.
In the master's report, filed December 2, 1983, the master recited that the parties had stipulated to an uncontested section 201(d) divorce. The master's recommended order, however, did not contain a decree in divorce. Instead, the recommended order was limited to a proposed scheme for distributing marital property. Both Judith and Charles filed exceptions to the master's report. On June 1, 1984, the trial court, after considering the exceptions of the parties, entered an order distributing the marital property. The trial court's order, however, did not include a decree of divorce. Charles filed an appeal in this Court from the order of equitable distribution; Judith filed a cross-appeal.
When the parties discovered that no divorce decree had been entered, they appeared before the trial court; and, on September 18, 1984, the trial court entered a divorce decree which incorporated the prior order of equitable distribution. In an accompanying opinion, the trial court observed that it had entered the order of equitable distribution on June 1, 1984 in the mistaken belief that a decree in divorce had previously been entered. The court suggested that the
[ 357 Pa. Super. Page 488]
parties had suffered from the same misconception. Relying on Pa.R.A.P. 1701(b)(6) and believing that the order of equitable distribution was a non-appealable, interlocutory order, the court concluded that the entry of a decree in divorce was not precluded by the pending appeals from the decree of distribution. See: Pa.R.A.P. 1701(b)(6).*fn4
We are thus faced with an appeal and a cross-appeal which were taken from a pre-divorce order of equitable distribution entered in a case in which the trial court and the parties erroneously believed that a decree of divorce had already been entered. In fact, a final decree in divorce had not been entered at the time of the appeal. Unless otherwise permitted by statute or rule, an appeal will lie only from a final order. Adoption of G.M., 484 Pa. 24, 27, 398 A.2d 642, 644 (1979); Beasley v. Beasley, 348 Pa. Super. 124, 126, 501 A.2d 679 (1985). A final order has been defined as one which ends the litigation or disposes of the entire case. Fried v. Fried, 509 Pa. 89, 94, 501 A.2d 211, 213 (1985). "[A]n order is interlocutory and not final unless it effectively puts the litigant 'out of court.'" T.C.R. Realty, Inc. v. Cox, 472 Pa. 331, 337, 372 A.2d 721, 724 (1977).
A pre-divorce order of equitable distribution, even one entered upon the mistaken assumption that a divorce decree has already been entered, is not a final order. A premature distribution of marital property does not terminate the divorce action. While "[t]he courts of common pleas have been given [subject matter] jurisdiction to hear and decide divorce actions and related economic claims[,] . . . [t]o enter a decree of equitable distribution prior to a divorce decree . . . is improper." Reese v. Reese, 351 Pa. Super. 521, 526, 506 A.2d 471, 474 (1986). The courts of common pleas are only empowered to make equitable distribution
[ 357 Pa. Super. Page 489]
contemporaneously with or subsequent to a decree in divorce. Bacchetta v. Bacchetta, 498 Pa. 227, 235, 445 A.2d 1194, 1198 (1982); Reese v. Reese, supra, 351 Pa. Super at 521, 506 A.2d at 473-474; Drumheller v. Marcello, 351 Pa. Super. 139, 140, 505 A.2d 305, 306 (1986); Pastuszek v. Pastuszek, 346 Pa. Super. 416, 424, 499 A.2d 1069, 1073 (1985); Laxton v. Laxton, 345 Pa. Super. 450, 455, 498 A.2d 909, 912 (1985); Dech v. Dech, 342 Pa. Super. 17, 22, 492 A.2d 41, 43 (1985). This is because the settlement of economic and property claims is merely a part of the trial court's broader power to terminate the marriage. Equitable distribution is an incident of divorce, not marriage.
It seems clear, therefore, that a pre-divorce decree distributing marital property is interlocutory. It cannot be reviewed until it has been rendered final by the entry of a decree in divorce.*fn5 Nevertheless, a final decree in divorce has now been entered in this action, and the decree of equitable distribution appears ripe for appellate review. Therefore, as in Mandia v. Mandia, 341 Pa. Super. 116, 491 A.2d 177 (1985), we disregard the inadvertent, procedural misstep taken by both counsel and enter upon a review of the trial court's order of distribution.
Our standard of review is clear. An order determining equitable distribution will be reversed only for an abuse of discretion. Sergi v. Sergi, 351 Pa. Super. 588, 591, 506 A.2d 928, 930 (1986); LaBuda v. LaBuda, 349 Pa. Super. 524, 528, 503 A.2d 971, 974 (1986). An abuse of discretion occurs if the trial court fails to follow correct legal procedure or misapplies the law. Braderman v. Braderman, 339 Pa. Super. 185, 190, 488 A.2d 613, 615 (1985). In determining whether a court has abused its discretion, we do not
[ 357 Pa. Super. Page 490]
usurp the trial court's duty as fact finder. Barnhart v. Barnhart, 343 Pa. Super. 234, 237, 494 A.2d 443, 444 (1985); Ruth v. Ruth, 316 Pa. Super. 282, 287, 462 A.2d 1351, 1353 (1983). The trial court's findings of fact, if supported by credible evidence, are binding upon a reviewing court and will be followed.
The parties' principal dissatisfaction with the trial court's order centers upon Husband's interest in Williamsport Candy Company, a partnership owned and operated by the Campbell family. Husband was not always a partner. The original firm was owned by Husband's uncle, Harold (65%), Husband's father, Richard (30%), and Husband's cousin, H.T. Collins (5%). Harold, however, was semi-retired and living in Florida. Therefore, by agreement, profits were distributed in a ratio different than the ownership interests. Thus, Harold and Richard each received forty percent of the profits, while H.T. Collins received twenty percent of the profits. In 1978, Richard Campbell gave to his son, Charles, one-half of his interest in the firm. This interest was valued by the parties at $26,000.00. Six Thousand ($6,000.00) Dollars was in the form of an outright gift. Charles borrowed the remaining Twenty Thousand ($20,000.00) Dollars from the bank and paid it to his father in consideration for the balance of his father's interest in the firm. The loan, however, was repaid to the bank by Charles' father.
The trial court found that Husband's interest in the family business had been received as a gift and placed a value on it of $26,000.00. This interest, therefore, was held not to be marital property. See Divorce Code of April 2, 1980, P.L. 63, § 401(e)(3), 23 P.S. § 401(e)(3). A gift to a spouse remains the property of that spouse unless he or she manifests an intention to donate it to the entireties entity. Coyle v. Coyle, 282 Pa. Super. 221, 226, 422 A.2d 1085, 1088 (1980). See also: DiFlorido v. DiFlorido, 459 Pa. 641, 331 A.2d 174 (1975); Uccellini v. Uccellini, 423 Pa. 273, 223 A.2d 694 (1966). In the instant case, Husband did not manifest an intent to donate his interest in the family
[ 357 Pa. Super. Page 491]
business to the entireties, and the trial court so found. A gift to the entireties was not created merely because the proceeds of Husband's bank loan ($20,000.00) passed through a joint account on its way to Husband's father in payment for a portion of his interest in the business. The gift of this portion of the business was made by the father to the son, and that interest never vested in both husband and wife as tenants by the ...