Appeal from the Order entered in the Court of common Pleas of Allegheny County, Family Division, No. FD81-09801
John M. Kish, Pittsburgh, for appellant.
James Beck, Pittsburgh, for appellee.
Cirillo, President Judge, and Tamilia and Popovich, JJ.
[ 360 Pa. Super. Page 489]
This appeal is taken from a decree of equitable distribution of marital property, alimony and counsel fees. The action was commenced in 1981 by the wife, Josephine Fratangelo, against the husband, Anthony Fratangelo; a decree in divorce between the parties was entered by the court July 1, 1983. Subsequent thereto, after trial on claims for equitable distribution, alimony and counsel fees, a decree nisi was entered ordering equitable distribution and denying wife's claim for alimony and counsel fees. Thereafter, following post-trial motions, the wife filed this appeal to the Order dated September 27, 1985, which made the decree nisi, dated June 25, 1985, a final Order.
The husband and wife were married on May 2, 1964, this being the second marriage of the wife and the first marriage of the husband. At the time of trial, the wife was fifty-three (53) and the husband, fifty (50); no children were born of their marriage. After four and one-half years of living together, the parties separated, the husband leaving the marital residence in December, 1968. Prior to the marriage, the husband lived with his mother and was employed by JAF, Inc., a family business, of which he and his brother were the sole shareholders. At the time of incorporation, in January 1964, JAF, Inc. was thinly capitalized and had little or no assets. Prior to the marriage, the wife lived
[ 360 Pa. Super. Page 490]
in her deceased mother's residence with her daughter from a previous marriage, and she had accumulated savings totaling approximately $13,000, most of which was advanced to the husband for his business, JAF, Inc., for liquidating certain outstanding debts of the husband and to establish joint accounts for the husband and wife. Prior to marriage, the husband had virtually no assets other than his interest in JAF, Inc. and two undeveloped building lots in Port Charlotte, Florida, for which he was paying on an installment basis the sum of $20 per month. In 1965, the husband transferred two shares of his stock in JAF, Inc. to his sister, Nina Noonan. Those two shares, at the time of trial, represented all of the issued and outstanding shares in the corporation.
During the marriage and prior to separation, the parties purchased a residential building lot in Bethel Park, Pennsylvania from the wife's sister for the sum of $4,000. Two thousand-five hundred dollars of the purchase price came from the wife's inheritance from her mother's estate and the balance was provided from a loan against the wife's passbook savings. A construction loan in the amount of $22,500 was obtained from Mt. Washington German Savings and Loan Association and a dwelling was built on the lot. An additional $3,700 was expended from the wife's savings for construction to pay for block, the plumbing and heating system and carpeting. The parties took up residence in the dwelling when it was completed in October, 1967.
The parties separated in 1968 and shortly after separation, in January, 1969, the husband filed a complaint in divorce to which the wife filed an answer and counterclaim, claiming alimony pendente lite from the husband. In 1970, the wife obtained employment as a teller at First Federal Savings and Loan Association. From the inception of the marriage until 1970, the wife remained in the home as a homemaker and housewife. From 1969, when the divorce action was commenced by the husband, the parties went through numerous hearings on enforcement and contempt,
[ 360 Pa. Super. Page 491]
including two separate appeals by the husband to this Court as a result of husband's failure to pay alimony pendente lite. During this time, the husband resigned from his position of President of JAF, Inc. and transferred the remainder of his stock to the corporation for the sum of $1,400. While the husband was before the court for contempt for failure to pay sums to the wife as ordered, his accountant testified as to how poorly JAF, Inc. was doing, that it lost in excess of $15,000 for the first three quarters of the year and that its outlook for survival was dim. However, the corporate income tax returns for the same year reflect a profit of $2,372.04, representing at least a $17,372.04 profit swing. The corporation acquired new business quarters in November, 1971, which also became the rentfree residence of the husband, who was, after his resignation as President, employed by the firm as an "outside salesman".
In 1972, Mt. Washington German Savings and Loan Association, the mortgage holder on the Bethel Park residence, commenced foreclosure proceedings. Even though the husband was aware of these proceedings, which resulted in part from the husband's failure to comply with Orders requiring monthly payments to the wife, he refused to take any action to stop the foreclosure. The wife, therefore, was forced to borrow $2,000 from her brother, the funds being used to cure the delinquency on the mortgage and stop the foreclosure. The divorce action was discontinued in 1974 by agreement and the husband was ordered to pay all past due real estate taxes and future real estate taxes on the Bethel Park residence in lieu of alimony pendente lite. Since that time, the wife has continued to make all of the mortgage payments, has paid all utility bills, maintains insurance on the dwelling and has paid for all repairs and maintenance. In addition to normal maintenance and upkeep, the wife replaced the roof for $6,000, with money partially borrowed from a sister and partially in the form of a Home Improvement Loan. She also expended at least $1,200 for landscaping the lot. The husband has made no contribution to the
[ 360 Pa. Super. Page 492]
upkeep and maintenance of the dwelling despite requests for his assistance on several occasions.
The wife's gross income for 1982 from her employment as a head teller, which she held for three years prior to the trial date, was $12,843.88.
The husband resides rent-free in the premises owned by JAF, Inc. He continues to hold the position of "outside salesman". During 1979 he earned wages and bonuses of $25,000, in 1980, $33,333, and in 1981 his wages and bonuses were $21,500, all from his position of "outside salesman". During 1980, JAF, Inc. loaned the husband sums in excess of $100,000, interest free, from which he earned interest of $18,855 in 1980 and $11,535 in 1981. JAF, Inc. also loaned the husband $25,000 to buy a computer which he leases to JAF, Inc. Additionally, the husband receives the benefit of the unrestricted use of two of the four company cars, available to the husband and his sister, as they are the only employees of JAF, Inc. The husband testified he has paid back the interest-free loans and that he now receives a salary from JAF, Inc. of $1,500 per month.
The husband, his sister and the accountant for JAF, Inc. testified that JAF, Inc. had lost its only product line and that the company was on the verge of being dissolved due to a lack of sales. The husband testified he continues to draw his $1,500 per month salary, but the prospects look dim for the entity, JAF, Inc. He also testified that irrespective of the loss of its only product line and no sales and its dim prospect for survival, he had not contemplated or sought other employment.
At the time of trial, the husband had certificates of deposit valued at approximately $25,000 and an Individual Retirement Account of approximately $11,000.
On June 25, 1985, Judge Lawrence Kaplan of the Court of Common Pleas of Allegheny County filed an Opinion and Decree Nisi, wherein he placed a value of approximately $111,000 on the Bethel Park residence. The residence was awarded to the wife provided she pay $40,000 to the husband within sixty (60) days, $100,000 being the equity after
[ 360 Pa. Super. Page 493]
considering the first mortgage of $11,000. The Order further provided that upon the failure of the wife to pay $40,000 to the husband within sixty (60) days, the house should be sold and the net proceeds divided sixty percent to the wife and forty percent to the husband. Further, pending sale, the wife was to pay husband $333.33 per month representing ten percent interest on his $40,000. The Order further provided that all other claims would be dismissed.
The wife filed post-trial motions and raised therein the issues raised here on appeal. Those exceptions, as well as exceptions filed by the husband, were dismissed by the lower court, following which this appeal was filed by the wife.
The issues presented to this Court on appeal are as follows:
1) The trial court erred by establishing a fifty-fifty starting point for making an award of equitable distribution of marital property;
2) The trial court erred in concluding that the only marital asset to be dealt with was the residence at 987 Clifton Road;
3) The trial court erred in requiring payment of the husband's distributive share, by the wife, within sixty (60) days and imposing interest payments of $333.33 per month thereafter for failure to make the payment;
4) The trial court erred in failing to award alimony and counsel fees summarily, without setting forth reasons as mandated by 23 P.S. 501(d).
We will deal with each of the issues seriatim, the most involved being the first.
The opinion and reasoning of the trial court in this case illustrates the fallacy of using as a starting point a fifty-fifty division of the marital property, which in this case is the marital residence. In a rather summary fashion, the trial court disregarded, as irrelevant and ...