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Habjan v. Habjan

Superior Court of Pennsylvania

July 25, 2013

DIANE S. HABJAN, NOW DIANE S. KNIGHT, Appellee
v.
JOHN HABJAN, Appellant

Appeal from the Order Entered November 8, 2011 In the Court of Common Pleas of Jefferson County Civil Division at No(s): 833-2007 C.D.

BEFORE: BENDER, J., LAZARUS, J., and STRASSBURGER, J. [*]

OPINION

BENDER, J.

John Habjan (Husband) appeals from the order entered November 8, 2011, that granted the petition for contempt/enforcement of a Marital Settlement Agreement (MSA or Agreement) filed by Diane S. Habjan, now Diane S. Knight (Wife), and granted in part and denied in part the petition for contempt/special relief filed by Husband. After review, we affirm.

Husband and Wife were married in August of 1988, and separated in August of 2007. Wife filed a complaint in divorce in September of 2007. Extensive negotiations ensued with both parties filing numerous petitions relating to the economics of the marital estate, the main asset of which was Monroe Heights Development Corporation, Inc. (the Corporation or MHD). On September 26, 2008, the parties entered into a MSA and the divorce decree was granted on October 7, 2008. Despite the finalization of the divorce, the parties continued to file petitions for contempt, special relief, and enforcement of the MSA, including the petitions that underlie the order presently on appeal.

We begin by quoting in its entirety the November 8, 2011 order issued by the trial court in response to the parties' petitions:

1. [Wife's] Petition for Contempt of a Court Order and Enforcement of Marital Settlement Agreement is GRANTED. Accordingly,
a. [Husband] is found to be in contempt of the Court's August 17, 2009, order for filing Monroe Heights Development Corporation, Inc. v. Diane S. Habjan in the Clarion County Court of Common Pleas.
b. If [Husband] does not discontinue that lawsuit with prejudice by December 31, 2011, with proof given to this Court, he shall report to the Jefferson County jail on January 1, 2012, at 7:00 p.m., and shall remain incarcerated until such time as the Court receives verification that the Clarion County lawsuit has been discontinued.
c. [Husband's] claims for past due interest on a public credit loan, unpaid payroll taxes, and unpaid workers' compensation taxes have expired.
d. [Husband] shall, within THIRTY (30) DAYS, issue a check or money order, payable to Heidi Ulrich Dennison, Esquire, [Wife's attorney] in the amount of $10, 690.62, to be appropriately distributed between her and [Wife's] Clarion County counsel.
2. [Husband's] Petition for Contempt and Petition for Special Relief is GRANTED in part and DENIED in part as more fully articulated in the accompanying opinion. Accordingly,
a. [Wife] is found to be in contempt of the Court's August 17, 2009, order for maligning [Husband] in e-mails to William Braatz and for harassing, disturbing, and interfering with [Husband] and Monroe Heights Development Corporation the weekend of October 9, 2009.
b. On account of said contempt, [Wife] shall pay to the Jefferson County General Fund within SIXTY (60) DAYS a fine in the amount of $10, 000.00, which fine shall be suspended on the condition that [Wife] does not enter any of the businesses she knows to be owned or operated by [Husband] or Monroe Heights Development Corporation.
c. [Wife] shall, within THIRTY (30) DAYS, issue a check or money order, payable to Cassandra M. Neely, Esquire, [Husband's attorney] in the amount of $4, 442.40.
d. In all other respects, [Husband's] petition is denied.

Trial Court Order, 11/8/11 (emphasis in original).

To understand the November 8th order, we provide a synopsis of the pertinent facts as found by the trial court that specifically relate to the Corporation, which was formed in 1991 by Husband and Wife to maintain a business for the ownership and operation of motels. Husband and Wife each owned 50% of the stock of the Corporation with Husband serving as president and vice-president, handling the building and maintenance of the properties and all future planning.[1] Wife served as secretary and treasurer, directing the management of the motels, overseeing the staff and dealing with all the necessary daily operations. The first motel was opened in 1995, and the parties resided there until five years later when they moved into the second motel owned by MHD. When necessary Husband provided additional funding from his gas and oil interests and Wife invested a $100, 000 inheritance she received from a relative.

With regard to what occurred shortly before and after the parties' separation, the trial court explained:

As the sole shareholders and officers of MHD, [Wife] and [Husband] mostly treated the corporation as an extension of themselves. Accordingly, they discussed most corporate issues around the dinner table and made decisions large and small in the comfort of their own home. They also observed basic corporate formalities, passed corporate resolutions when necessary and kept separate corporate bank accounts, however. Yet it was not until the parties' relationship soured that [Husband] began demanding formal, organized meetings and monthly accountings from [Wife].
Although [Wife's] official status in MHD had not changed by June 2007, [Husband], without providing notice to his wife, held a special meeting asking the Board of Directors to appoint a secretary and authorize [Husband] to act as the sole signatory on all MHD bank accounts. The Board ultimately granted [Husband] that authority and [he] appointed his daughter, Pauline Fleming, as MHD's secretary. [Wife] became aware of [Husband's] attempts to exclude her from MHD when he showed her a letter he had drafted advising her that her computer access was closed; that she could no longer sign checks and the bank would not honor any she had signed; that she could not enter onto MHD property; that she could not call any existing employees; and that the police and employees would be notified of her termination. He further demanded that she return any company property in her possession and notified her that his P.O. Box keys and the lock on her office door would be changed. [Wife] filed for divorce shortly thereafter.

Trial Court Opinion (T.C.O.), 11/8/11, at 3.

On September 26, 2008, the parties executed the MSA. In disposing of their marital estate, the parties "specifically agreed to indemnify one another and waive and relinquish any and all claims and interest relative to the identified assets." Id. at 4. The MSA provided that Husband retained ownership of multiple corporations and property and indemnified Wife as to those assets. As for the Corporation, which was addressed separately in the MSA, the trial court explained:

Addressing MHD specifically, the Agreement specified that [Husband] would assume sole and exclusive ownership of the corporation as of June 30, 2008, at 3:00 p.m., by which time [Wife] was to have turned over all corporate records, computer passwords, and other MHD items, documents, and information in her possession. Two paragraphs later, the parties referenced "Schedule A" and "Schedule B" as representing all of MHD's liabilities "to the best of their knowledge" and, paragraph I.T. notwithstanding, agreed that each would, on or before June 30, 2009, satisfy any later disclosed debts that he or she had personally incurred on behalf of MHD. [Agreement, ¶I.H.]. They further provided that the Court would resolve any issues upon which they could not agree relating to corporate debt and the payment thereof. Effecting their own statute of limitations, however, they concluded, "Effective June 30, 2009, all claims as to undisclosed corporate debt not yet discovered shall expire." [Agreement I.H.].
Recognizing that paragraph I.H. set an absolute deadline for raising any claims of [Wife's] undisclosed debt relative to MHD, [Husband] later identified four categories of liabilities for which he sought to hold [Wife] responsible. Those included 1.) past due interest on a public credit loan; 2.) unpaid payroll taxes; 3.) unpaid workers' compensation taxes; and 4.) undisclosed loans between MHD and other entities. This list was received at [Wife's] attorney's office via facsimile on June 30, 2009—the last possible date—at 4:34 p.m. No further details were provided, however, only defense counsel's statement that "Mr. Habjan is in the process of getting final figures and documentation concerning these liabilities." … "Once I receive them, " she noted, "I will provide them to you."

Id. at 4-5 (some citations to the MSA omitted). The court then noted in its opinion that no final figures and/or documentation were ever provided to [Wife], nor were they provided to the court at any point prior to or at the last hearing held in this matter. Also, one of the incidents discussed by the court involved Wife's staying at one of the motels with friends that the court concluded was a deliberate effort on Wife's part to annoy Husband. Additionally, the court referenced other occurrences and the orders it had issued to compel the parties to abide by the MSA. See Order, 8/17/09 (directing parties to abide by the terms of the MSA).

Then, on August 19, 2010, the Corporation filed suit in the Clarion County Court of Common Pleas against Wife. Husband, who at a minimum retained a majority interest in the Corporation, [2] verified the complaint as MHD's president. The trial court provided the following explanation as to the background of the Clarion County action:

In Clarion County, [the complaint] alleged that [Wife], while still an officer and executive director of MHD, and thus while standing in a fiduciary relationship with the corporation, had breached her fiduciary duty, as well as her duties of faithfulness, honesty, and loyalty, in eight different ways: 1.) by making personal use of cash paid by registered guests; 2.) by reimbursing herself with corporate funds for expenses not actually incurred on behalf of MHD; 3.) by using corporate credit cards for personal expenses and travel; 4.) by authorizing false reimbursements to employees, knowing that they were using the funds for personal expenses; 5.) by authorizing padded expense reports and retaining the amounts exceeding the employees' actual expenses; 6.) by retaining ...

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