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K.A.R. v. T.G.L.

Superior Court of Pennsylvania

December 23, 2014

K.A.R. FORMERLY K.A.L., Appellant
v.
T.G.L., Appellee

Argued May 21, 2014

Page 771

[Copyrighted Material Omitted]

Page 772

Appeal from the Order of the Court of Common Pleas, Allegheny County, Family Court Division, No(s): FD 00-7928-016. Before WALKO, J.

Brian E. McKinley, Pittsburgh, for appellant.

Daniel H. Glasser, Pittsburgh, for appellee.

BEFORE: DONOHUE, J., OTT, J., and MUSMANNO, J.

OPINION

Page 773

OTT, J.

K.A.R., formerly K.A.L. (hereinafter " Wife" ), brings this appeal[1] from the order entered September 6, 2013, in the Court of Common Pleas of Allegheny County, dismissing in part her Exceptions to the Report and Recommendation of the Master, and granting the Exceptions filed bye T.G.L. (hereinafter " Husband" ), in this action brought by Wife to enforce the parties' equitable distribution agreement. Wife claims the trial court erred in ruling (1) that Husband's statute of limitations defense barred Wife's action to enforce the parties' equitable distribution agreement, and (2) that Husband's laches defense barred Wife's action to enforce the parties' equitable distribution agreement. Based upon the following, we affirm.

The trial court has aptly stated the factual and procedural history, which we restate, in part:

Husband and Wife married on June 17, 1988. Two children were born of the marriage [who] are both emancipated. Wife filed a Complaint in Divorce on January 29, 2000, and a decree in divorce was entered August 5, 2003. The parties participated in an Equitable Distribution hearing before Master Gary Gilman on August 21 and August 22, 2003. On the second day of the hearing counsel for the parties read an Equitable Distribution Agreement into the record. One marital asset the parties discussed in the Agreement was Husband's interest in his startup venture, [Business-1] (hereinafter referred to as " [Business-1]" ). Counsel for Husband stated,
With regard to [Business-1] stock, Husband would agree -- or the parties I believe agree that in this contemplated agreement that of the first net after taxes of a million dollars [H]usband received from the sale of [Business-1] stock, if and when it would be sold, and/or of the sale of any warrants which Husband has in [Business-1] stock or any other benefits he derives from the disposition of his interest in [Business-1] as it stands right now, as to the first million dollars of that net, after taxes, Wife would receive 50 percent -- I'm sorry -- Wife would receive 45 percent, Husband would receive 45 percent and 10 percent would be invested in a vehicle for the Children ... And with regard to any amount over that first million net, again, defining the proceeds broadly to include remuneration of any kind other than his salary or wages which he would receive from the disposition of what currently exists as of today, it would be split 75 percent to Husband, 15 percent to Wife, 10 percent to the Children. (8/22/2003 H.T., at 72-3).
Wife served Husband a Petition to Enforce the Equitable Distribution Agreement and for Sanctions on March 21, 2011 (hereinafter referred to as the " Petition to Enforce" ). The Petition to Enforce asserted, inter alia, that Husband

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sold a portion of his [Business-1] stock in January 2004[, that the total sale was completed] for approximately $22 million[, and that Wife believes Husband received initial proceeds in excess of $2.5 million.] Wife also stated that Husband retained the advertising component of [Business-1] as part of the initial transaction, which was renamed [Business-2]. She claimed that [Business 2] subsequently became [Business-2A], and Husband then sold his interest in [Business-2A]. Wife alleged that Husband retained all the funds from the transaction. Wife averred that Husband made a payment to her of $300,000 on April 9, 2004 and a second payment of $150,000 to her on September 15, 2005. Wife further alleged that Husband failed to include any interest component for the delayed payments. [Wife averred that based upon the limited information provided by Husband, she believed she was owed over $300,000 for her share of the sale proceeds from Business-1 and Business-2/Business-2A.] Wife asked the Court, inter alia, to schedule a hearing to address Wife's claim for enforcement of the Equitable Distribution Agreement.
On March 30, 2011 Husband served Wife an Answer to the Petition to Enforce, New Matter and Counter Petition. Husband stated that Wife's interests in [Business-1] were limited to Husband's ownership rights as they existed on August 22, 2003,[1] and Wife was not entitled to any future consideration given to Husband for the future commitments he made as part of the [Business-1] transaction. Husband stated that Wife's interests were limited to the after-tax proceeds that he would have received if his stock were treated the same as all common shares because he only held common stock in [Business-1] on August 22, 2003. Husband further stated that he retained no ownership interest in [Business-1] after the January 2004 sale and that [Business-2A] was completely distinct from [Business-1]. Husband averred that he overpaid Wife $152,887.28 for her share of what he received for the [Business-1] stock and asked that Wife repay this amount to him along with interest.[2]

[1] This is the date that the Equitable Distribution Agreement was read into the record.
[2] Husband stated that he would have received a pre-tax payment of $846,475 as a result of the [Business-1] transaction if his shares were treated as common shares. Under Husband's calculations this would have yielded after-tax proceeds of $660,000, which would entitle Wife to $297,112.73. Husband stated that he had paid Wife $450,000 with respect to [Business-1], which is an overpayment in the amount of $152,887.28
****
The four (4) day hearing to address Wife's Petition to Enforce took place before Master [Patricia] Miller [on March 20, 2012, May 29, 2012, May 31, 2012, and August 30, 2012]. Master Miller entered her Report and Recommendation on September 28, 2012. In this Report the Master determined that no agreement was formed between the parties on August 22, 2003. The Master found that Wife's decision to discharge her attorney after the parties' counsel discussed the disposition of the [Business-1] stock on the record, to sue him for malpractice, and to state in verified pleadings that there was no valid agreement was sufficient evidence that an agreement never existed. The Master also concluded that it was not clear if even Husband believed there was an agreement that he was to pay Wife 45% of the first $1,000,000 he received for the sale of his [Business-1] stock. The Master stated that either party could praecipe for an equitable distribution

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hearing to determine the marital property component of the [Business-1] stock and the percentage distribution to each party.
Husband and Wife filed Exceptions to the Report and Recommendation of Master Miller on October 18, 2012....
****
After the parties argued Exceptions on August 29, 2013, the Court entered its September 6, 2013 Order that granted in part Wife's Exceptions to the Report and Recommendation of Master Miller. The Court found that the Master ruled on an issue that was not before her [namely, the validity of the agreement], that the Master failed to rule on the issues referred to her by the August 19, 2011 Order of Court [namely, Husband's affirmative defenses of statute of limitations and/or laches], that a valid equitable distribution agreement exists between Husband and Wife, and that an equitable distribution hearing was not to be scheduled. The Order dismissed Wife's remaining Exceptions. The Order also granted Husband's Exceptions to the Report and Recommendation of Master Miller [that asserted Wife's claims were time barred by the statute of limitations and the doctrine of laches]. The Court found that Husband's defenses of statute of limitations and laches bar enforcement of the Equitable Distribution Agreement. The Order also resolved all remaining economic issues between Husband and Wife.
Wife filed her Notice of Appeal to the September 6, 2013 Order of Court on September 30, 2013, and she thereafter filed her Concise Statement of Matters ...

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