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Conner v. Conner

Superior Court of Pennsylvania

August 20, 2019

CHRISTOPHER CONNER Appellant
v.
KATHERENE E. HOLTZINGER CONNER CHRISTOPHER CONNER
v.
KATHERENE E. HOLTZINGER CONNER Appellant

          Appeal from the Order Entered April 24, 2018 In the Court of Common Pleas of Cumberland County Civil Division at No(s): 15-01899

          BEFORE: LAZARUS, J., MURRAY, J., and STEVENS [*] , P.J.E.

          OPINION

          MURRAY, J.

         Christopher Conner (Husband) appeals, and Katherene E. Holtzinger Conner (Wife) cross-appeals, from the order purporting to resolve the economic claims attendant to the parties' divorce action. Upon review, we reverse in part, affirm in part, and remand for further proceedings.

         Factual and Procedural Background

         Husband and Wife were married on July 29, 1984, and have four adult children. They were married for more than 30 years before separating in 2014. They are currently in their early 60s. Both parties have law degrees, although their careers and earnings have diverged.

         Husband worked as an attorney in private practice for the first 20 years of his career. The retirement funds from Husband's time in private practice, plus $5, 909 in premarital retirement funds, are reflected in Husband's Schwab IRA account.

         On July 26, 2002, Husband was appointed United States District Judge for the Middle District of Pennsylvania. On September 1, 2013, Husband was appointed, and currently serves as, Chief Judge of the Middle District of Pennsylvania. In his capacity as a federal judge, Husband, upon satisfying the Rule of 80, [1] is entitled to receive "an annuity equal to the salary he was receiving at the time he retired." 28 U.S.C.A. § 371 (Judicial Income). Moreover, Husband can elect to participate in a judicial survivors' annuity system (JSAS), "a voluntary survivor benefit plan that provides annuities to the survivors of certain Article III judges." Trial Court Opinion, 4/24/18, at 2; see also 28 U.S.C.A. § 376. Husband contributes 2.2% of his gross income to the JSAS.

         Wife began her career working at the Dauphin County District Attorney's Office. Following the birth of the parties' first child, Wife began working part-time in a private law practice. Eventually, Wife transitioned to a faculty position at Penn State Dickinson Law School, where she remained a part of the faculty until her contract expired in 2017. While at Dickinson Law School, Wife held various positions, including Director of Public Interest Programs and Faculty Supervisor for Externship Placement. At the time of the equitable distribution hearing, Wife was unemployed but receiving a pension through her Pennsylvania State Employee Retirement System (SERS).

         On April 2, 2015, Husband filed a complaint in divorce. On November 10, 2016, Husband filed a petition for bifurcation, seeking to separate the divorce action from ancillary economic claims. Wife filed an answer to Husband's petition and a separate petition raising economic claims on November 23, 2016. On January 4, 2017, Wife filed a petition for alimony pendente lite (APL). On February 1, 2017, the trial court entered an order granting Husband's petition for bifurcation and issuing a divorce decree, and awarding Wife $3, 900 per month in APL.

         The record reveals that on September 25, 2017, after reviewing the parties' briefs - but without conducting an evidentiary hearing - the trial court entered an order finding Husband's Judicial Income and JSAS to be marital property subject to equitable distribution. See Order, 9/25/17. Husband filed a motion for reconsideration, which the trial court denied on November 16, 2017.

         On November 28, 2017, the trial court convened a hearing to address equitable distribution and alimony. On December 22, 2017, the trial court entered an order and opinion, dividing the parties' assets, and awarding Wife $2, 500 per month in alimony until Husband "reaches pay status for his Judicial [Income]," at which time "Wife shall immediately begin receiving her share of Husband's retirement. . ." Trial Court Opinion, 12/22/17, at ¶ 3-4. Husband and Wife both filed for reconsideration of the trial court's equitable distribution and alimony order. The trial court granted reconsideration on January 17, 2018. On March 9, 2018, the parties consented to post-trial stipulations, in which they addressed Husband's Schwab IRA, Judicial Income, JSAS, and alimony. On April 24, 2018, the trial court issued a final order and opinion disposing of the parties' equitable distribution and alimony claims.

         Husband filed a timely appeal, challenging: (1) the September 25, 2017 order finding Husband's Judicial Income and JSAS to be marital property subject to equitable distribution; (2) the November 16, 2017 order denying reconsideration of the September 25, 2017 order; (3) the December 22, 2017 equitable distribution order; and (4) the April 24, 2018 final equitable distribution order.[2] Husband's Brief at 11.

          Wife cross-appealed, challenging the trial court's April 24, 2018 final order of equitable distribution. The trial court, Husband and Wife have all complied with Pennsylvania Rule of Appellate Procedure 1925.

         Issues

         On appeal, Husband raises five issues:

1. Did the trial court abuse its discretion and commit reversible error when it found that marital property included the salary guarantee afforded to [Husband], a United States Federal Judge, pursuant to 28 U.S.C.A. § 371 et seq., upon a transition to senior status or to full retirement?
2. Did the trial court abuse its discretion and commit reversible error when, after having determined that Former Husband's [Judicial Income] benefits should be subject to deferred distribution, abruptly reversed course on reconsideration (without notice to the parties) and engaged in an independent actuarial calculation to determine a present value of said [Judicial Income] in the amount of $3, 536, 000?
3. Did the trial court abuse its discretion and commit reversible error by attributing an earning capacity to Former Wife far below the uncontested expert response [sic] submitted into evidence?
4. Did the trial court abuse its discretion and commit reversible error when, on reconsideration, it doubled the award of alimony to Former Wife from $2500 per month to $5000 per month after merely listing the relevant factors but not considering all relevant factors as required under 23 Pa.C.S.A. § 3701(b) and applying a reasonable needs analysis?
5. Did the trial court abuse its discretion and commit reversible error in assessing the value of the marital estate and applying the equitable distribution scheme?

         Husband's Brief at 4-5 (suggested answers omitted).

         In her cross-appeal, Wife raises three issues:

1. Although properly determining that Husband's [Judicial Income] constituted a marital asset, did the Trial Court abuse its discretion in its equitable distribution of Husband's Judicial [Income] by failing to provide for a deferred distribution of Wife's marital share?
2. Whether the Trial Court abused its discretion in adopting Husband's valuation of Wife's SERS pension as Husband's valuation included post-separation contributions, which are unequivocally precluded from inclusion in the valuation of the asset in equitable distribution, and by attributing to Wife a purported withdrawal from her SERS pension?
3. Whether the Trial Court committed an abuse of discretion in valuing Husband's Schwab IRA as of the date of separation, rather the [sic] date distribution, despite Husband's Schwab IRA growing dramatically in value post separation due to market increases on the marital portion of the asset?

Wife's Brief at 7-8 (suggested answers omitted).

         Wife's Cross-Appeal

         As a preliminary matter, we address our jurisdiction over Wife's cross-appeal. Pennsylvania Rule of Appellate Procedure 903 governs the filing of cross-appeals, and states in pertinent part:

. . . [I]f a timely notice of appeal is filed by a party, any other party may file a notice of appeal within 14 days of the date on which the first notice of appeal was served, or within the time otherwise prescribed by this rule, whichever period last expires.

         Pa.R.A.P. 903(b) (emphasis added). The appeal period is strictly construed, and we have no jurisdiction to expand the period or excuse the failure to file a timely notice of appeal. Instantly, Husband filed his timely notice of appeal on May 21, 2018. Wife filed a notice of cross-appeal, which was docketed on June 5, 2018, 15 days after Husband filed his notice of appeal. Thus, ostensibly, Wife's cross-appeal is untimely as it was filed beyond the 14 days prescribed in Pa.R.A.P. 903(b).

         However, Husband did not serve Wife with his notice of appeal until May 23, 2018. Accordingly, Wife had 14 days from the date she was served with the notice of appeal to file a cross-appeal. See Pa.R.A.P. 903(b). As Wife filed her cross-appeal on June 5, 2018, 13 days from the date she was served with Husband's notice of appeal, it is timely. See id.

         The Parties' Economic Claims

         Turning to the issues before us, both Husband and Wife assert that the trial court erred in formulating its equitable distribution award. At the outset, we underscore the economic complexity of the parties' issues. We further observe:

We review a challenge to the trial court's equitable distribution scheme for an abuse of discretion. Brubaker v. Brubaker, 201 A.3d 180, 184 (Pa. Super. 2018) (citation omitted). "We do not lightly find an abuse of discretion, which requires a showing of clear and convincing evidence." Id. We will not find an abuse of discretion "unless the law has been overridden or misapplied or the judgment exercised was manifestly unreasonable, or the result of partiality, prejudice, bias, or ill will, as shown by the evidence in the certified record." Carney v. Carney, 167 A.3d 127, 131 (Pa. Super 2017). When reviewing an award of equitable distribution, "we measure the circumstances of the case against the objective of effectuating economic justice between the parties and achieving a just determination of their property rights." Hayward v. Hayward, 868 A.2d 554, 558 (Pa. Super. 2005). When determining the propriety of an equitable distribution award, this Court must consider the distribution scheme as a whole. Mundy v. Mundy, 151 A.3d 230, 236 (Pa. Super. 2016). "We do not evaluate the propriety of the distribution order upon our agreement with the court's actions nor do we find a basis for reversal in the court's application of a single factor. Rather, we look at the distribution as a whole in light of the court's overall application of the 23 Pa.C.S.A. § 3502(a) factors for consideration in awarding equitable distribution. If we fail to find an abuse of discretion, the order must stand." Harvey v. Harvey, 167 A.3d 6, 17 (Pa. Super. 2017) (citation and internal brackets omitted). Finally, "it is within the province of the trial court to weigh the evidence and decide credibility and this Court will not reverse those determinations so long as they are supported by the evidence." Brubaker, 201 A.3d at 184 (citation omitted).

Hess v. Hess, ___A.3d ___, 2019 WL 2334113, at *2 (Pa. Super. 2019).

         Husband's Claims

         Husband's first and second issues concern his Judicial Income, which implicate the interplay of federal and state law. In his first issue, Husband asserts that the trial court erred in concluding that the annuity he receives upon satisfying the Rule of 80 is a retirement benefit subject to equitable distribution.

         Section 371 of the United States Code reads, in relevant part:

§ 371. Retirement on salary; retirement in senior status
(a) Any justice or judge of the United States appointed to hold office during good behavior may retire from the office after attaining the age and meeting the service requirements, whether continuous or otherwise, of subsection (c) and shall, during the remainder of his lifetime, receive an annuity equal to the salary he was receiving at the time he retired.
(b) (1) Any justice or judge of the United States appointed to hold office during good behavior may retain the office but retire from regular active service after attaining the age and meeting the service requirements, whether continuous or otherwise, of subsection (c) of this section and shall, during the remainder of his or her lifetime, continue to receive the salary of the office if he or she meets the requirements of subsection (e)
(2) In a case in which a justice or judge who retires under paragraph (1) does not meet the requirements of subsection (e), the justice or judge shall continue to receive the salary that he or she was receiving when he or she was last in active service or, if a certification under subsection (e) was made for such justice or judge, when such a certification was last in effect. The salary of such justice or judge shall be adjusted under section 461 of this title.

28 U.S.C.A. § 371. Husband urges this Court to characterize his Judicial Income as a "salary guarantee," rather than a retirement benefit subject to equitable distribution, based on Adams v. Comm'r of Internal Revenue, 841 F.2d 62 (3d Cir. 1988). Husband's Brief at 24-26; see also U.S. v. Hatter, 532 U.S. 557 (2001).

         The Adams decision is "an appeal by the Commissioner of Internal Revenue from a decision of the Tax Court allowing certain deductions for contributions to individual retirement accounts (IRA)," pursuant to Section 219 of the United States Code. Adams, 841 F.2d at 63; see also 26 U.S.C.A. § 219 (effective to Dec. 31, 1996) (current version at 26 U.S.C. § 219 (effective March 23, 2018)). Although Adams is not on point, Husband cites its discussion of Section 371 as authority for finding that Husband's Judicial Income is not a retirement plan. The Adams court stated: "Thus, we cannot regard 28 U.S.C. §§ 371(a), 371(b) and 372(a) as establishing a retirement plan for judges. Further, we cannot possibly regard the provisions of the Constitution itself providing for lifetime appointments to be a retirement plan." Id. ...


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