Appeal from the Orders entered in the Court of Common Pleas of Montgomery County, Civil Division, Nos. 84-15710, 84-10958
Catherine Miraglia-Lecky, King of Prussia, for appellant.
Howard J. Casper, Philadelphia, for appellee.
Cirillo, President Judge, and Cavanaugh, Rowley, Wieand, McEwen, Olszewski, Beck, Tamilia and Popovich, JJ. Concurring and dissenting opinion by Cavanaugh, J. Concurring and dissenting opinion by Wieand, J., joined by Rowley, J. Concurring and dissenting opinion by Beck, J.
[ 378 Pa. Super. Page 480]
These cases were consolidated for appeal and certified to the Court en banc for review of a single issue, that being whether a property settlement agreement providing for the payment of support and incorporated into a divorce decree merged with the decree thereby becoming modifiable by the courts upon a showing of a material change in circumstances.
Suzanne Sonder and Carl Sonder were married on November 8, 1968, separated in 1982 and divorced on December 13, 1985. Two children were born of the marriage, a son M., born on May 25, 1970, and A., a daughter, born on November 28, 1973. The parties entered into a property settlement agreement (P.S.A.) on November 29, 1983, which included provisions for spousal and child support payments at the rate of $800 per week. Prior to entry of the divorce decree, the agreement was litigated and determined to be an enforceable contract (Order of March 27, 1985). Upon the issuing of the divorce decree, the agreement by its terms was to be incorporated into the decree without merging into it (Divorce Decree, December 13, 1985). The purpose for this is contested as the parties disagree as to whether it was to insure the survival of the agreement as an enforceable contract not subject to later modification by the court, or intended to become an Order of court subject to the control by the court over future payments, modified terms and enforcement. For purposes of clarity, we will consider each appeal in a separate section according to the issue presented.
A. VALIDITY OF PROPERTY SETTLEMENT AGREEMENT
The first appeal, at No. 02259 Philadelphia, 1985, is from an Order denying exceptions to the Order of March 27, which affirmed the property settlement agreement entered into by the parties dated November 29, 1983. At the time of this action in equity for specific performance of the P.S.A., it had not been merged or incorporated into the
[ 378 Pa. Super. Page 481]
divorce decree, although a complaint in divorce had been filed by the plaintiff, Mrs. Sonder, on July 17, 1984, in Montgomery County, after which the defendant, Dr. Carl Sonder, filed a complaint in divorce in Chester County.
The complaint in equity was filed on October 16, 1984 and a hearing was set for January 28, 1985 on the equity complaint. The defendant, on Friday, January 25, 1985, filed a petition for preliminary objections nunc pro tunc and an answer to complaint in equity and new matter. On Monday, January 28, 1985, a hearing was held and, on March 27, 1985, the Honorable Albert Subers entered an Order denying appellant's petition to file preliminary objections nunc pro tunc and granted Mrs. Sonder's motion to enforce the property settlement agreement and directing appellant to comply with the terms of the P.S.A. in total. Exceptions were filed to this Order on April 8, 1985, with a petition for hearing en banc on the exceptions to the Order and a petition for leave to file additional exceptions. On June 20, 1985, argument on these exceptions was held before the en banc Court below at which time appellant moved to quash the proceedings and strike or rescind the Order of March 27, 1985. On June 20, 1985, appellant filed additional exceptions to the Order of March 27, 1985. On August 2, 1985, the trial Court en banc issued an Order denying appellant's exceptions to the Order of March 27, 1985. On August 28, 1985, appellant, Dr. Sonder, entered a praecipe for judgment and notice of appeal to perfect the instant appeal. Upon reviewing this record, we see nothing to disturb the decision by the trial court. See Litwack v. Litwack, 289 Pa. Super. 405, 433 A.2d 514 (1981) (court may not alter contract absent mistake or fraud without consent of both parties).
[ 378 Pa. Super. Page 482]
However, as to that appeal, the issue as to the validity of the agreement was rendered moot when appellant insisted the agreement be incorporated in the divorce decree, which was then accomplished by the decree dated December 13, 1985. See K.L.H. v. G.D.H., 318 Pa. Super. 330, 464 A.2d 1368 (1983); Commonwealth ex rel. Watson Page 482} v. Montone, 227 Pa. Super. 541, 323 A.2d 763 (1974) (existence of actual controversy is essential to appellate jurisdiction and if event occurs rendering it impossible for appellate court to grant any relief, issue is moot). No appeal having been taken from the decree, the agreement is rendered valid and incorporation renders the issue res judicata as will be explained below.
B. CONTEMPT ACTION ON UNINCORPORATED P.S.A.
The second appeal, No. 03025 Philadelphia, 1985, flows from appellee/wife's attempt to enforce the Order of March 27, 1985 (appeal at No. 02259 Philadelphia, 1985) directing appellant to comply with the terms of the P.S.A. Appellee, Suzanne Sonder, filed a petition for contempt of the March 27th Order and, following hearing before Judge Louis Stefan, on October 22, 1985, an Order was entered on October 24, 1985 adjudicating appellant in contempt and ordering him to pay the total sum of $29,800 "forthwith" and $1,000 counsel fees and expenses of enforcing the terms of the agreement. On November 22, 1985, appellant filed a Notice of Appeal to this Court from the Order of October 24, 1985 which is the instant appeal.*fn1
[ 378 Pa. Super. Page 483]
The substance of Dr. Sonder's argument is that the trial court, in the contempt proceeding at No. 03025 Philadelphia, 1985, did not give appellant an adequate or ample opportunity to develop his defense to the contempt proceeding because appellant's counsel was in the midst of another trial; exhibits necessary for his defense, corroborating his financial situation, could not be copied for submission to the trial court and the trial court issued its contempt Order before receiving these exhibits, although he represented to counsel he would take those matters under advisement. Further, appellant alleges the court failed to follow the procedure required in adjudicating him to be in contempt. While appellant refers to case law governing contempt, contempt for support matters generally follows the procedures under Rule 1910.21 of Pa.R.C.P., Actions for Support. That is so even when the matter is ancillary to a divorce proceeding. See Pennsylvania Divorce Code, 23 P.S. §§ 401(b), 403(a), 503 and Pa.R.C.P. 1920.31(b)(1). The effect of Rule 1910.21, Civil Contempt, streamlined the five elements required by Crislip v. Harshman, 243 Pa. Super. 349, 365 A.2d 1260 (1976). See Explanatory Note-1981 to Rule 1910.21. It requires notice by petition alleging failure to comply with extended notice to defend, which will include time and place of the hearing and consequence of failure to appear. The petition must also contain facts showing a willful failure to obey the support Order (here, contempt Order). This is followed by a hearing and appropriate Order. An Order imposing sanctions shall specify the condition of which fulfillment will result in release of the defendant. Rule 1910.21(c), (d). The proceeding employed was substantially as above except the appellant alleges he did not have a full hearing, as required, to present his defense, if any.
[ 378 Pa. Super. Page 484]
As indicated above at footnote 1, in the Order of October 24, 1985, while a finding of contempt was entered and an Order of specific performance imposed, no sanctions were imposed, therefore, this Court is powerless to grant appellant relief on that Order since he has yet to suffer harm or penalty. We, therefore, are unable to review his allegations of failure to consider his defenses, if any, and the trial court's procedural errors in conducting the hearing. Thus our only course is to quash the appeal at No. 03025 Philadelphia, 1985 as being interlocutory.
C. INCORPORATION OF AGREEMENT INTO DIVORCE DECREE
These proceedings were moving forward on two fronts and at the point of the entrance of the divorce decree on December 13th, they converged. As stated earlier, a divorce complaint was filed by Mrs. Sonder on July 17, 1984 (reinstated September, 1984) in Montgomery County, while Dr. Sonder filed for divorce in Chester County. Appellant, in answer and counterclaim to Mrs. Sonder's divorce complaint, denied allegations of indignities and requested equitable distribution. On June 4, 1985, appellant filed an affidavit of consent under 23 P.S. § 201(c), and on June 5, 1985, appellee filed her affidavit of consent. On July 1, appellee filed a motion to transmit records under Montgomery County Local Civil Rules 1920.42(c) (conforming to Pa.R.C.P. 1920.42 and 1920.73 Praecipe to Transmit Record). This was countered by appellant's objections to the praecipe to transmit record because the praecipe contained a statement that the agreement was not to be incorporated into the divorce decree, whereas, in fact, the agreement itself contained an incorporation clause (Agreement, para. 17, p. 27). Following a hearing on the objection, an Order was entered finding moot Dr. Sonder's counterclaims to the complaint filed by Mrs. Sonder and directing plaintiff to file an amended praecipe to transmit record requesting a Form 2 Divorce Decree which included an Order incorporating the P.S.A. but not merging it with the decree.
[ 378 Pa. Super. Page 485]
Following this Order, a decree of divorce, using Montgomery County Form 2, was entered on December 13, 1985 and signed by Judge Joseph C. Smyth. This decree was never appealed and is valid and subsisting for purposes of any further proceeding on this case.
The entry of the decree of divorce incorporating the P.S.A., unappealed from, confirms the validity of the P.S.A. and the appeal at No. 02259 Philadelphia, 1985 contesting its validity is, as stated above, therefore, moot. This is so as by his action in insisting on incorporation of the P.S.A. into the decree, Dr. Sonder acknowledged its existence and validity. Since no appeal was taken from the divorce decree which incorporated the agreement, no issue remains as to the agreement's validity. The appeal at No. 02259 Philadelphia, 1985 is, therefore, dismissed.*fn2
D. MODIFIABILITY OF INCORPORATED AGREEMENT
The apparent strategy of Dr. Sonder was to have the P.S.A. become part of the decree, be merged with the decree and, thereafter, as an Order of court, be subject to review, modification and remission of arrears, pursuant to the alimony and support laws. In furtherance of that goal, when a third action for enforcement of the agreement was presented by Mrs. Sonder in a Petition for Contempt, filed January 3, 1986, to enforce the Order of October 24, 1985 (No. 01343 Philadelphia, 1986), it was countered by a petition to reduce and remit (No. 01423 Philadelphia, 1986). The Order in question on that appeal (No. 01423) is dated May 13, 1986, and dismisses the petition to reduce and remit "for at least two reasons." We undertake to review this appeal prior to considering the companion appeal at No.
[ 378 Pa. Super. Page 48601343]
Philadelphia, 1986,*fn3 as it will be dispositive as to both appeals.
Judge Salus heard preliminary argument from counsel regarding the appellant's petition and, after a lunch recess, dismissed the petition for lack of jurisdiction. On May 13, 1986, Judge Salus signed a written Order dismissing the petition for reduction and to remit arrears. It is from this Order the appeal at No. 01423 Philadelphia, 1986 was taken.
At the outset, it is clear that proceedings on the P.S.A. prior to the time of the divorce are governed by the law of contract and, if the agreement is valid, it is not subject to the remission of arrears and reduction of amount of payment as would be a support Order. As of December 13, 1985, the time the divorce decree was entered and the agreement was incorporated into it, any review must consider whether it is to be construed as a court Order and not an agreement.
The agreement, which is contained in the "Divorce Decree Form 2", a Montgomery County Court form, reads in the essential part:
[A]nd it is further ordered and adjudged and decreed pursuant to Pa.R.C.P. 1920.1 et seq. and Act 26-1980, 23 P.S. § 1, et seq., the Divorce Code that the terms, provisions, and conditions of certain property settlement agreement between the parties dated November 29, 1983, and attached to this decree and Order as exhibit A is hereby incorporated into this decree and Order by reference as fully as though the same were set forth at length. Said agreement shall not merge but shall survive this decree and Order.
This Decree was signed by Honorable Joseph A. Smyth.
The issue presented is whether the agreement, having been incorporated, is now subject to modification by the court as an alimony or support Order entered through the
[ 378 Pa. Super. Page 487]
court and not as an agreement. Upon his review of the agreement, and after hearing argument from counsel, Judge Salus declined to hear the petition for arrears and reduction and dismissed them, alleging a lack of jurisdiction. A review of the argument and discussion of the parties with the court on the record, which is the only information available to us, does not divulge the reason for the trial court making that decision.
For the reasons stated below, we believe the trial court was correct in dismissing the petition as it did not have jurisdiction to hear that petition.
Since the Divorce Code of 1980, confusion has been engendered by the attempt to equate support agreements which are contracts with support Orders which are creatures of statute. Since the two are enforceable in distinct fashions and are governed by clearly distinguishable principles of law, the attempt to homogenize these principles into a unitary concept, which creates a third entity not envisioned by the law, must fail. In that entity, the elements of contract apply to the binding and non-modifiable aspect of the agreement and serve to create a debt, whereas the elements of a support Order apply to means of enforcing the agreement. The agreement sub judice, if so interpreted, creates an instrument which is unenforceable. Accordingly, we must look to the intent of the parties as manifested by the language of the contracts to give it legal effect.
The distinction between contract and statutory concepts was detailed in Hollman v. Hollman, 347 Pa. Super. 289, 500 A.2d 837 (1985) (rev'd and remanded on other issues) 515 Pa. 288, 528 A.2d 146 (1987), which we quote as follows:
A support or alimony order is a creation of statute and an incident of the marriage which is enforceable by operation of law. Commonwealth ex rel. Smith v. Smith, 260 Pa. Super. 203, 393 A.2d 1224 (1978). Proceedings relative to such orders contain due process requirements, evidentiary findings and involve scrutiny by the court as to their validity, subject to appellate review. In
[ 378 Pa. Super. Page 488]
return for this closely proscribed legal proceeding with its attendant safeguards and judicial findings, the legislature has extended the powers to bring about compliance by granting courts the right to attach property and wages and to incarcerate willfully delinquent obligors. A further extension of this power is the right to modify the order or vacate the arrears upon a showing of changed circumstances, 23 P.S. § 501(e), and in furtherance of the process, provides that the court will have domestic relations sections and personnel to receive, disburse and monitor payments. 23 P.S. § 504. See Support Proceedings, 42 Pa.C.S.A. § 6701 et seq., as superseded by Pa.R.C.P. 1910, Actions for Support; Revised Uniform Reciprocal Enforcement of Support Act (1968), 42 Pa.C.S.A. § 6741 et seq. Thus, upon analysis, it is apparent that extraordinary attributes and conditions are attached to support and alimony orders, which become instruments of the court, and not subject to the control of the parties. Were we to make the enforcement of support agreements equivalent to the enforcement of support or alimony orders, then the full panoply of enforcement means would become available, including jailing for contempt. Thus, a person could be jailed on an obligation which never passed the due process accorded to court orders and is not subject to constant review for modification for change of circumstance or ability to pay.
By comparison, agreements, whether they be separation, antenuptial, postnuptial or support, are instruments of contract in which the court has no involvement. None of the elements of due process, court review and appealability are involved in agreements such as these, which are private undertakings between two parties, each having responded to the 'give and take' of negotiations and bargained consideration. As such, they are governed by the law of contracts. Steuart v. McChesney, [498 Pa. Super. 45, 444 A.2d 659 (1982)], Brown v. Hall, [495 Pa. 635, 435 A.2d 859 (1981)], Litwack v. Litwack, [289 Pa. Super. 405,
[ 378 Pa. Super. Page 489433]
A.2d 514 (1981)], VanKirk v. VanKirk, 336 Pa. Super. 502, 485 A.2d 1194 (1984). This means, of course, they are not modifiable unilaterally; a court cannot remake or modify such an agreement as it would be the taking of property without due process of law. Also, such an agreement is solely enforceable by an action in assumpsit [or equity-specific performance]. Brown, [supra], Commonwealth ex. rel. Jones v. Jones [216 Pa. Super. 1, 260 A.2d 809 (1969)], Cavazza's Estate [169 Pa. Super. 246, 82 A.2d 331 (1951)], Exner v. Exner [268 Pa. Super. 253, 407 A.2d 1342 (1979)]. Since they are not court orders, the extraordinary powers flowing from a court order are not available. To jail a person for failing to pay on his agreement (which created a debt) is prohibited by our constitutions, state and federal, as imprisonment for debt. Clark, Law of Domestic Relations, Ch. 16.12, p. 554 (1968).
A careful reading of all the cases clearly indicates there has never been any intent to foster an interpretation of the law whereby contracts and statutory provisions may be applied interchangeably or the non-modifiability of contract be engrafted on a support Order; rather, the contrary is quite evident. Brown v. Hall, 495 Pa. Super. 635, 435 A.2d 859 (1981) clearly provided that support agreements which were intended to survive a decree of divorce were enforceable in equity both as to past and future payments of support under the agreement. It was therein also provided that a subsequent reduction in support, through the imposition of a court-imposed support Order, did not abrogate the contract. Subsequently, in Millstein v. Millstein, 311 Pa. Super. 495, 457 A.2d 1291 (1983), this Court held that while a support agreement could not be reduced by a subsequent support Order, a subsequent support Order could be used to increase payment for support of a child as the parties could not, by agreement, deny the child reasonable support. The court, however, should consider a separation agreement in setting spousal support and child support if the agreement is voluntary and both parties had counsel. Borrell v. Borrell, 346 Pa. Super. 1, 498 A.2d 1339 (1985). There
[ 378 Pa. Super. Page 490]
appears to have been no change in the law as has been pronounced by Silvestri v. Slatowski, 423 Pa. 498, 224 A.2d 212 (1966), that where an agreement did not merge into the court Order, although ratified by the divorce decree, the amount of support agreed upon can be enforced in equity by specific performance according to the terms of the contract. It pointed out that in Colburn v. Colburn, 279 Pa. 249, 123 A. 775 (1924), attachment of the person could not issue in this type of case. Subsequently, in Tokach v. Tokach, 326 Pa. Super. 359, 474 A.2d 41 (1984), this Court held there is no statutory basis upon which incorporation could be distinguished from merger. Tokach held the incorporated agreement merged with the divorce decree and, therefore, became enforceable as an Order of court and was modifiable. Also see Lee v. Lee, 352 Pa. Super. 241, 507 A.2d 862 (1986). McGough v. McGough, 361 Pa. Super. 391, 522 A.2d 638 (1987) was distinguished from Tokach in that it held specific language in McGough provided for incorporation but not merger. This meant the contact would be enforced according to its terms and was not modifiable since it was not superseded by merger into an Order of court.
To bring about the clarification of this issue, we return to the statute which permits merger of agreements into divorce decrees to be entered as court Orders. The basis upon which the court has the capacity for enforcement of support Orders relating to children, incorporated into a divorce decree, is found in 23 P.S. § 401 Decree of Court. Therein, section (b) in pertinent part states:
(b) Any decree granting a divorce or an annulment, shall include . . . an order or orders determining and disposing of existing property rights and interests between the parties, custody and visitation rights, child support, alimony and any other related matters including the enforcement of separation agreements voluntarily entered into between the parties.
A reading of this section makes no distinction between incorporation and merger and simply provides for "an order
[ 378 Pa. Super. Page 491]
or orders . . . including enforcement of separation agreements voluntarily entered into between the parties." By this language, it was not intended the court be placed in a position where it would enforce agreements in any fashion other than provided by contemporary law, relying on the law as it had developed until the time of the Divorce Code. In reality, this agreement combines a property settlement agreement and a separation agreement.*fn4 It is clear contractual obligations are enforced according to the assumpsit and equity principles of law and support Orders are enforced in accordance with statutory provisions of law. The Divorce Code goes one step further in providing for merger of alimony agreements. In section 501(f) Alimony, it states:
(f) Whenever the court shall approve an agreement for payment of alimony voluntarily entered into between the parties, such agreement shall be deemed the order of the court and may be enforced as provided in section 503.
In 23 P.S. § 501(e), the Code provides:
(e) Any order entered pursuant to this section is subject to further order of the court upon changed circumstances of either party of a substantial and continuing nature whereupon such order may be modified, suspended, terminated, reinstituted or a new order made.
It is incontrovertible that an agreement subject to a section 501(f) Order, is an "order entered pursuant to this section." Such an agreement is no longer enforceable as a contract but is subject to the full range of modification and change permitted to court Orders under section 501(e). It is also subject to enforcement provisions provided by section 503,
[ 378 Pa. Super. Page 492]
Enforcement of arrearages.*fn5 For an Order voluntarily entered into to be enforced as a court Order, the language of the decree must clearly state the agreement is merged with the decree. Otherwise, it remains a contract which is enforced as is any other contract in law or equity.*fn6
Since a property settlement/separation agreement can encompass any of the varied and multiplicity of marital disputes, enforcement is in accordance with the law as it developed in each category of marital proceedings. The agreement could well contain conditions relating to equitable distribution, marital property, terms concerning visitation and custody matters, as well as alimony and support. In construing these matters, the court is given full equity powers to bring about a proper resolution of any disputes which may arise under the agreements. While the agreements
[ 378 Pa. Super. Page 493]
relating to property matters might be strictly enforced according to their terms and be non-modifiable, it is inconceivable that agreements relating to visitation, custody and support should be so binding as to be irreversible when the interest of justice and the best interests of the child require otherwise. The court cannot be bound to enforcement of agreements which produce inequitable results when conditions change and as the status of the parties is altered in relation to each other over the passage of time. This, however, is subject to the proviso that property rights and support rights may be so intertwined as not to permit modification as to either. By drawing an agreement so it purports incorporation without merger, the parties may not carve the agreement in stone so that it is unalterable while imposing an obligation on the court to enforce Orders which may not be enforceable through contempt and attachment powers.
We, therefore, hold that any agreement which speaks of incorporation but rejects merger was intended by the parties not to be brought under the provisions of sections 401, 501(e) and (f) and 503 for the enforcement of separation agreements. Only by an Order which does not reject merger, or requires court enforcement of the agreement, does it become part of the decree and have the effect of an Order. By renouncing merger and failing to have language in the decree requiring enforcement as a court Order, the contract survives. In doing so, the parties reject the benefit of the provisions developed under the Divorce Code and the divorce procedures enunciated in the Civil Procedural Rules for contempt, attachment and payment of alimony on divorce. They do, however, avoid the law relating to recision of arrears or modification based on need, whether there be a need for an increase in the support Order or a modification downward as the circumstances would require. Notwithstanding, visitation and custody matters will be enforced according to the best interests of the child and as with support Orders, advisory effect will be given to the agreement but without binding effect on the
[ 378 Pa. Super. Page 494]
court when it is not in the best interest of the child. As to equitable distribution, the agreements will be enforced according to their terms so long as law and equity permit. See footnote 3, supra.
Therefore, should the parties desire to have the agreement inflexible and binding only as a contract, merger is not the proper procedure. However, such contracts and agreements, in addition to actions in assumpsit, are still enforceable in equity by specific performance although they do not have the remedies available for enforcement of support Orders. The advantage of incorporation (without merger) is to give the agreement the finality of res judicata.
For us to hold that the fiction of incorporation without merger provides statutory enforcement of the contract would be to impose on the courts a burden which they cannot sustain. A decree of court, like any other Order, is subject to statutory rules which may be totally inconsistent with the intent of the parties in a contractual undertaking. By having an Order of court, which is, in effect, dictated by the agreement between the parties, they abrogate the statutory rules governing such decrees. A full analysis of this matter is stated in Johnston v. Johnston, 297 Md. 48, 465 A.2d 436 (1983). There, quoting the Supreme Court of Arizona in McNelis v. Bruce, 90 Ariz. 261, 367 P.2d 625, 631 (1961) (en banc), the Johnston court said:
It is the rule that mere approval of a property settlement in the divorce decree does not operate to make it a part of and enforceable as a decree. If the language of the agreement shows an intent to make it part of the divorce decree and the agreement is actually incorporated in the decree, the provisions of the agreement may be enforced as an order of the court. As soon as a property settlement agreement is incorporated into the decree, the agreement is superseded by the decree and obligations imposed are not those imposed by contract but are those imposed by the decree since the contract is merged in the decree. (Citations omitted.)
[ 378 Pa. Super. Page 495]
E. CONTEMPT PARAMETERS ON AGREEMENTS
This leaves us to the resolution of the appeal at No. 01343 Philadelphia, 1986, in which the trial court, under Order dated May 13, 1986, found defendant in contempt and ordered payment of $10,000 forthwith or commitment to jail for 90 days.
There is no question this is an appealable Order as a final contempt Order was entered after hearing in compliance with Crislip, supra. The appellant contends the court below erred in holding him in contempt because it ignored a valid defense of inability to pay and that incarceration is not an appropriate sanction for failure to comply with a support agreement.
As to the first issue, a thorough review of the record and testimony of the parties leads us to conclude the evidence, presented by appellee as to appellant's ability to pay and that of the appellant in his defense, will not support the contempt finding. There is no contempt in refusing to obey an Order when the alleged contemnor, without fault, is unable to comply with it. Grubb v. Grubb, 326 Pa. Super. 218, 473 A.2d 1060 (1984). To enforce a support agreement through an equity action and decree of specific performance by a finding of contempt and imposition of sanctions which include incarceration, the evidence presented must establish beyond a reasonable doubt the willful non-compliance with the decree of specific performance, despite the ability to do so. The general rule in civil contempt cases is that the complaining party "has the burden of proving non-compliance with the court Order (for specific performance) by a preponderance of the evidence, and that present inability to comply is an affirmative defense to be proved by the contemnor." Barrett v. Barrett, 470 Pa. 253, 263, 368 A.2d 616, 621 (1977); In Re Grand Jury, 251 Pa. Super. 43, 53, 379 A.2d 323, 327 (1977).*fn7 The trial court, in imposing the
[ 378 Pa. Super. Page 498]
sanction of immediate payment of $10,000 or commitment for 90 days, heard the evidence concerning appellant's financial circumstances, including changes in those circumstances which would effect his present ability to pay, without giving that evidence any weight. It appears that because appellant voluntarily entered into the agreement and the agreement is valid, as indicated above, the trial court took the position there was little or no change in income from the time of the agreement to the time of the contempt hearing and, therefore, appellant had the ability to pay and would be in willful contempt of the Order if payment was not immediately made.
[ 378 Pa. Super. Page 499]
From the trial court Opinion, it is evident the court gave no credence to appellant's testimony. At the outset of the hearing, after finding appellant in contempt, the trial court appeared predisposed to impose sanctions based on a previous finding of Judge Stefan. He properly agreed to go forward with testimony to permit appellant to interpose a defense of inability to pay. It appears the trial court assumed that if income had not substantially changed from the time of the agreement to the time of the contempt hearing, there could be no defense. Appellant maintains there was never adequate income to perform the agreement which was the reason he unilaterally reduced payment, in May 1984, from $800 to $400 per month after approximately six months payment at the $800 level. Thus the fact his income level had not substantially changed, and to some extent appeared to be improving at the beginning of 1986 at a moderate rate due to liquidation of a family-medicine practice and greater concentration on a psychiatric practice, according to the court, the inability to pay an Order of $800 per week was not established. From the evidence presented in this case, even allowing for puffing of business expenses and the possibility (not proven) of unreported fees, the record fails to establish beyond a reasonable doubt that the appellant can pay the Order in full and is in willful non-compliance with the contempt Order. See Barrett, Page 499} supra;*fn8 Durant v. Durant, 339 Pa. Super. 488, 489 A.2d 266 (1985); Commonwealth ex rel. Heimbrook v. Heimbrook, 295 Pa. Super. 300, 441 A.2d 1242 (1982) (in imposing a coercive sentence upon a finding of civil contempt, the court must be convinced beyond a reasonable doubt that the contemnor has the ability to purge himself).
The procedural posture of these cases tended to force the conclusion the appellant was in willful non-compliance. At the outset, as indicated above, the first proceeding tested the validity of the agreement (No. 02259 Philadelphia, 1985), when in fact appellant wished to contest his ability to pay. Once the agreement was held to be valid, with no change in circumstances, the subsequent hearing focused on the lack of change to support the finding of contempt for non-payment, and on limited evidence, held there was ability to pay (No. 03025 Philadelphia, 1985). The present proceeding (No. 01343 Philadelphia, 1986), buttressed by the two earlier hearings, resulted in a determination the evidence as to inability, though substantial, was not credible and resulted in a finding of willful non-compliance with the earlier contempt Order. Throughout, the appellant has maintained, and established with some conviction, his inability to pay the amount to which he agreed. While a party may agree to conditions in a contract, which in actuality he is unable to perform, this does not invalidate the contract. He may, however, have a valid defense to a contempt action for non-payment. This appears to be the case here. This agreement, as to the husband, was uncounselled, which is possibly the root of the problem, although binding because he had the opportunity to obtain counsel.
The agreement entered into requires the appellant to:
[ 378 Pa. Super. Page 5001]
. pay all bills incurred prior to the separation agreement;
2. pay $800 per week for support of the two children until oldest child's graduation from high school; reduces to $400;
3. payment to wife shall terminate when the youngest child begins a course of post-high school education or graduation from high school;
4. wife's employment or earnings shall not be a basis for modification and/or reduction in payment under the agreement;
5. he can claim children as dependents if no defaults;
6. appellant is responsible for payment of tuition and college expenses;
7. appellant is responsible for yearly campership for each child at cost of approximately $3,000 each;
8. wife to receive net proceeds from sale of residence.
The evidence presented by appellant to establish his defense as to inability to comply with the agreement may be summarized as follows. In November 1983 through December 1985, appellant had a family practice which, according to his patient visit books, serviced a high of 269 patients per month to a low of 110 per month when it was terminated as a failing business. His private psychiatric practice averaged 17 patients per month between November 1983 and February 1986. Only in the two months prior to the hearing was there a substantial increase; in March 1986, it was 32, and in April, it was 44. Dr. Sonder testified time would never permit more than 44 patients per month. His business deductions included standard expenses such as employee salaries, rent, utilities, insurance, parking, automobile rental, drug and lab expenses. Allowing these expenses against gross income for the first year of the agreement (11/83-11/84) and including the salary received from Bryn Mawr Hospital ($2,166 per month), the total gross income for that period was $112,262 (this figure is different than testified by appellant as different months were used; the
[ 378 Pa. Super. Page 501]
figures are drawn from appellant's recapitulation submitted on the record). The business expenses during that period totaled $65,570. Other business related expenses totaled $6,086 for a combined total of $71,656. Taking appellant's figures at face value, the gross income, without considering taxes and living expenses, available to pay support was $40,606 during the year following the agreement. During that period (11/83-11/84), he paid $32,400 toward support and $4,000 toward the camperships, or $36,600. The agreement called for payment of $41,600 and $6,000 in campership expenses, or $47,600.
Taking the evidence presented by the appellant for the period when he gave up the family practice and focused on the psychiatric practice, while the data is limited, by projecting those figures for the coming year, the anticipated income would be: contract with Northeastern Hospital, $2,640/month; Bryn Mawr, $2,166/month; psychiatric practice (average 30 patients per month at $75 per visit equals $2,250/month, totals $7,056/month or $84,672/year. Appellant's own projection given in testimony was $72,150 per year. Business expenses were considerably less as he had no employees and reduced rent and, according to appellant, projected for the following year to approximately $22,604. His gross income before taxes and without consideration of living expenses would be $49,556. Taxes would further reduce this amount by $17,567 to $32,000, according to appellant's figures. With our higher estimate of income, the net, after taxes, would still not exceed $44,000. Thus, despite reducing his business expense by giving up the family practice while obtaining a second contractual position with Northeastern Hospital and focusing on increasing the psychiatric practice, appellant still will produce substantially less income than needed to fulfill his obligation of $47,600 under the agreement.
Appellee hints or alleges that while living together and while she handled the books, there was an unspecified amount paid in cash through the family practice that did not appear on the books. Appellant did acknowledge he retained
[ 378 Pa. Super. Page 502]
amounts of $100 to $250 per week that did not get deposited, but which were reported for income tax purposes and which are accounted for in his patient visit books. To account for maintaining the standard of living which the agreement sought to replicate, appellant alleges he received frequent gifts ($1,500 per month), including one of $10,000, from appellee's father, as well as a loan of $51,000 to establish the family practice. According to him, the family was constantly on the verge of default. After the separation, appellant testified he was able to sustain himself and the amount paid in support by loans from friends ($7,000 from Dr. Zois; $8,000 from Janet Azar), liquidation of the family practice and sale of its equipment and furnishings and going into debt. In further support of this position, he presented testimony and evidence that he filed for bankruptcy in December 1985, claiming $112,000 in debts for business and personal expenses.
Unquestionably, various items of expenses and income may be disputed but it appears from a close examination of the record that whether from appellant's figures or an independent calculation of the income and expenses from undisputed evidence presented on the record, appellant was and is incapable of paying $47,600 yearly and is presently incapable of paying $10,000 toward the arrears on the agreement.
The trial court relied on Hopkinson v. Hopkinson, 323 Pa. Super. 404, 470 A.2d 981 (1984) as authority to impose a jail sentence for contempt for non-payment under the agreement. We hold Hopkinson not to be applicable. There, it was determined the appellant had the ability to pay at least some part of the agreement but failed to pay anything. Here, appellant paid according to his ability. We also have serious doubts that Hopkinson is a correct statement of the law. There, the trial court imposed a sentence of weekend incarceration, pursuant to the Divorce Code, in what appeared to be a merged agreement. This Court held the merger concept was not applicable as the agreement had been entered in February, 1978, prior to the
[ 378 Pa. Super. Page 503]
effective date of the Divorce Code. The court then affirmed the trial court on other grounds, holding it was a proper exercise of judicial power to enforce compliance with its Orders if its purpose is to compel performance and not to inflict punishment. In support of this proposition, the Hopkinson Court cites numerous cases, none of which has to do with imposition of incarceration for failure to pay on a support agreement after a contempt finding. Our exhaustive research discloses no Pennsylvania case, aside from Hopkinson, which permits incarceration for non-payment of support pursuant to an agreement. (It is treated as an agreement although a consent decree; see infra p. 506.) The last definitive pronouncement in that regard was Colburn v. Colburn, 279 Pa. 249, 123 A. 775 (1924). There, the Supreme Court, in a Per Curiam Opinion, stated:
The question before us is the power of a court of equity to enforce its decree for the payment of money due under a separation agreement by attachment of the person of the defaulting husband. Section 1 of the Act of July 12, 1842, P.L. 339, provides: 'No person shall be arrested, or imprisoned on any civil process issuing out of any court of this Commonwealth, in any suit or proceeding instituted for the recovery of any money due upon an judgment or decree founded upon contract, or due upon any contract, express or implied, or for the recovery of any damages for the nonperformance of any contract, etc.' Here plaintiff's bill is founded upon a contract and the decree is for the payment of money. While it is admitted equity has jurisdiction in separation agreements, it is denied that decrees for payment of money in such proceedings are enforceable by attachment of the person. This court has held that attachment in such cases does not lie. In Pierce's Appeal, 103 Pa. 27, 29, it is said: 'The statute applies alike to all judgments at law and to decrees in equity, and prohibits arrest in every case upon contract which is not included in the exceptions. Where it applies, an attachment cannot be lawfully issued, for the party shall not be arrested and put to his answer to the satisfaction of the judge or chancellor, that he is unable
[ 378 Pa. Super. Page 504]
to pay the judgment or decree, under pain of imprisonment. The object being to prevent oppression of debtors in furtherance of that end, it should be liberally construed.'
Id., 279 Pa. at 250-251, 123 A. at 775-76. Pierce's Appeal, 103 Pa. 27 (1883) and Colburn rely on the Act of July 12, 1842, P.L. 339, which prevents imprisonment for debt. While repealed by the Judiciary Act Repealer Act (J.A.R.A.), it was reenacted in 1978 as part of the Judicial Code, by Act of 1978, April 28, P.L. 202, No. 53 § 10(59). As reenacted, 42 Pa.C.S.A. § 5108 provides:
§ 5108. Imprisonment for debt
(a) Constitutional restriction. -- The person of a debtor, where there is not strong presumption of fraud, shall not be continued in prison after delivering up his estate for the benefit of his creditors in such ...