Duelfer, L. v. Duelfer, S. ( 2018 )

J-A01024-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LOUISE M. DUELFER, IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellee
v.
STEVEN JAMES DUELFER,
Appellant No. 1322 EDA 2017
Appeal from the Decree April 11, 2017
in the Court of Common Pleas of Lehigh County
Civil Division at No.: 2008-FC-0617
LOUISE M. DUELFER, IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellant
v.
STEVEN JAMES DUELFER,
Appellee No. 1419 EDA 2017
Appeal from the Decree April 11, 2017
in the Court of Common Pleas of Lehigh County
Civil Division at No.: 2008-FC-0617
BEFORE: LAZARUS, J., OTT, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED MARCH 22, 2018
In these consolidated cross appeals, Steven James Duelfer (Husband),
and Louise M. Duelfer (Wife), appeal from the trial court’s orders interpreting
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A01024-18
certain provisions of their antenuptial agreement (Agreement), and overruling
their exceptions to the report filed by the Divorce Master, as made final by the
court’s entry of a divorce decree.1 We reverse the trial court’s order overruling
the exceptions in part, and affirm in all other respects.
We take the following relevant facts and procedural history of this case
from our independent review of the record. The parties executed the
Agreement on November 5, 1997, and they married a few days later. Wife
filed a complaint in divorce on May 15, 2008, raising claims for equitable
distribution and alimony. On June 9, 2008, Husband filed a petition for special
relief, seeking an interpretation of certain provisions of the Agreement. The
Agreement provides, in pertinent part:
2. FULL DISCLOSURE OF ASSETS. [Husband] and [Wife] agree
that they have made a full and complete disclosure of their assets,
income, and debts to the other. A complete inventory of the
assets and liabilities of [Husband] is attached hereto as Exhibit
“A”.[2] A complete inventory of the assets and liabilities of [Wife]
is attached hereto as Exhibit “B”. . . .
____________________________________________
1A pre-divorce order is interlocutory and unappealable before the court enters
a divorce decree. See Campbell v. Campbell, 516 A.2d 363, 365–66 (Pa.
Super. 1986), appeal denied, 528 A.2d 955 (Pa. 1987).
2 Husband is the owner, sole shareholder, and president of an S Corporation
called Equus Systems, Inc. Exhibit A to the Agreement lists his assets as
follows:
Bank account $3,000.00
Equus Systems Capital Stock $1,000.00
Personal Loan invested in Equus $128,000.00
Equus Computer Equipment $7,500.00
-2-
J-A01024-18
3. RETENTION OF SEPARATE PROPERTY.
A. Each party shall, except as otherwise provided, during his
or her remaining lifetime, retain sole ownership of all of his or her
respective Separate Property, and shall have the exclusive right
to dispose of any and all such Separate Property during his or her
remaining lifetime by inter vivos, or by any and all other
dispositions, and/or to encumber, pledge, or sell, transfer or
hypothecate the same, without any interference by or the
necessity of the joinder of the other, in such manner as shall be
determined in the sole discretion of such owner thereof, as if the
aforesaid marriage had not taken place.
B. For all purposes of this Agreement as used herein
the term “Separate Property” shall mean, with respect to a
party hererto, all of such party’s right, title and interest, legal or
beneficial, in and to any and all property and interests in property,
real, personal or mixed, whatever situated and regardless of how
titled, which each of the parties owned or had a beneficial
interest in at the time of marriage as set forth and
delineated on Schedules A and B attached hereto.
C. “Separate Property” shall also mean: (a) any
increase or appreciation in value of such property, whether the
increase, appreciation or enhancement is due to market conditions
or to the services, skills or efforts of either of the parties; (b) all
property acquired hereafter by either party out of the proceeds
from the sale, transfer, mortgaging or use of any such separate
property.
* * *
7. POSSIBLE TERMINATION OF MARRIAGE. . . .
* * *
____________________________________________
Brokerage Account (July, 1997 statement) $51,800.00
IRA (Sept., 1997 statement) $25,700.00
SEP IRA (Sept., 1997 statement) $6,600.00
Car $1,000.00
(Agreement, at 14, Exhibit “A”).
-3-
J-A01024-18
B. EQUITABLE DISTRIBUTION. In the event that the
marriage of the parties is terminated by a divorce, dissolution or
annulment, the parties specifically agree as follow[s]:
(1) [Husband and Wife] shall not be entitled to receive from
the other any share of his/her Separate Property, as defined
herein, and do hereby waive any right that he/she may have to
claim equitable distribution of such Separate Property, whether or
not such Separate Property shall be construed to be marital
property.
(2) Except as may be otherwise herein provided, any
property acquired by the parties, either individually or jointly,
after their marriage and through the date of final separation,
except that property which was previously excluded as
separate property, shall be divided equally between the
parties. Each of the parties specifically waives all other claims
for division or distribution of marital property.
(Agreement, 11/05/97, at 3-4, 6-8) (emphases added).
The trial court held a hearing on the matter on June 23, 2008. “Counsel
for the parties stipulated that the assets at issue were not [those] generated
by the investment or growth of the funds listed as individual property, but
were contributions made to the separate property from Husband’s
employment earnings during the marriage.” (Trial Court Opinion, 7/24/17, at
2; see also N.T. Hearing, 6/23/08, at 5, 8-10). On November 21, 2008, the
court entered an order stating:
. . . [U]pon consideration of the Petition for Special Relief
filed June 9, 2008,
IT IS ORDERED that income earned during the marriage,
but added to accounts which existed prior to the marriage, is not
“separate property” as governed by 3 (b & c) of the [Agreement];
the income is governed by the “Equitable Distribution” provisions
of 7 (b).
(Order, 11/21/08).
-4-
J-A01024-18
Following extensive proceedings before a Divorce Master, the Master
issued a report on February 19, 2016. The trial court overruled the parties’
exceptions thereto on July 21, 2016. It entered a final divorce decree on April
11, 2017. These timely appeals followed.3
Husband raises the following issues for our review:
[1]. Was the conclusion that [Husband’s] “income” received from
such sources as interest and dividend income from the brokerage
account, commissions from the account, “SPIFF” payments, a
portion of interest paid on the loan account, and other
miscellaneous commissions an abuse of discretion and error of law
when it constitutes income earned by [Husband] from his
employment during the marriage, and should be excluded as
separate property under the parties’ Antenuptial Agreement?
[2]. Was the inclusion of income which was deposited to
[Husband’s] brokerage account and his SEP/IRA an abuse of
discretion and an error of law when that income was earned by
[Husband] through his services, skills, and efforts as president,
sole shareholder, and sole employee of the corporation known as
Equus Systems, which entity was listed as [Husband’s] separate
property in the parties’ Antenuptial Agreement dated November
5, 1997?
[3]. Was the inclusion of increases and appreciation in value which
were due to interest, dividends, enhancements and market
conditions that accrued in [Husband’s] brokerage account and
SEP/IRA an abuse of discretion and an error of law when those
accounts were listed as separate property in the parties’
Antenuptial Agreement dated November 5, 1997?
(Husband’s Brief, at 7).
Wife presents the following claims:
1. Whether the [c]ourt, by upholding the Master, committed an
abuse of discretion or error of law by improperly calculating the
____________________________________________
3 Husband and Wife filed timely, court-ordered concise statements of errors
complained of on appeal on May 10, 2017 and June 6, 2017, respectively. The
trial court issued an opinion on July 24, 2017. See Pa.R.A.P. 1925.
-5-
J-A01024-18
portion of Husband’s brokerage account which was subject to
Wife’s fifty percent (50%) share?
2. Whether it was an error of law or abuse of discretion to use
values only as of date of separation for distribution purposes
rather than also considering values proximate to the hearing date,
where there was a delay between the date of separation and the
hearing and assets appreciated significantly during interim
period[?]
3. Whether the [c]ourt, by upholding the Master, committed an
abuse of discretion or error of law to the extent that transfers of
property to Husband from his parents were not subject to
distribution contrary to the plain language of the prenuptial
agreement?
(Wife’s Brief, at 6).4
The parties’ claims center on the trial court’s interpretation of the
Agreement. Therefore, our review is guided by the following principles:
The determination of marital property rights through
prenuptial, post-nuptial and settlement agreements has long been
permitted, and even encouraged. Where a prenuptial agreement
between the parties purports to settle, fully discharge, and satisfy
any and all interests, rights, or claims each party might have to
the property or estate of the other, a court’s order upholding the
agreement in divorce proceedings is subject to an abuse of
discretion or error of law standard of review. An abuse of
discretion is not lightly found, as it requires clear and convincing
evidence that the trial court misapplied the law or failed to follow
proper legal procedures. We will not usurp the trial court’s fact-
finding function.
* * *
As to interpretation, enforcement, and remedies, in
Pennsylvania, antenuptial agreements are interpreted in
____________________________________________
4 The parties preserved their issues by including them in their exceptions to
the Master’s Report. (See Husband’s Exceptions, 3/09/16, at 1-2, ¶¶ 1-3;
Wife’s Exceptions, 3/28/16, at unnumbered page 1, ¶¶ 1-3).
-6-
J-A01024-18
accordance with traditional principles of contract law. Generally,
the parties are bound by their agreements, absent fraud,
misrepresentation or duress. They are bound without regard to
whether the terms were read and fully understood and
irrespective of whether the agreements embodied reasonable or
good bargains.
When interpreting an antenuptial agreement, the court
must determine the intention of the parties. When the words of a
contract are clear and unambiguous, the intent of the parties is to
be discovered from the express language of the agreement.
Where ambiguity exists, however, the courts are free to construe
the terms against the drafter and to consider extrinsic evidence in
so doing.
Harvey v. Harvey, 167 A.3d 6, 11-12 (Pa. Super. 2017) (citation omitted);
see also Habjan v. Habjan, 73 A.3d 630, 640 (Pa. Super. 2013) (“When
construing agreements involving clear and unambiguous terms, this Court
need only examine the writing itself to give effect to the parties
understanding.”) (citation omitted).
On appeal, Husband argues5 that the trial court erred by including his
employment earnings in the property to be distributed between the parties.
(See Husband’s Brief, at 22-33). Husband contends that the court improperly
applied the definition of separate property set forth in the Agreement by failing
to classify as separate property the income he earned through his position at
Equus, that he then deposited into his brokerage and SEP/IRA accounts listed
____________________________________________
5 Although Husband frames his claims as three separate issues in the
statement of the questions involved, he combines them in the argument
section of his brief by incorporating each preceding argument by reference.
(See Husband’s Brief, at 7, 26, 31). The trial court treated Husband’s claims
as a single issue. (See Trial Ct. Op., at 4-5). We will therefore address his
interrelated claims together for ease of disposition.
-7-
J-A01024-18
on his separate property list. (See id. at 23-24, 26-27, 30; see also *2 n.2,
supra). He further maintains that because he earned the funds from Equus,
and not from outside sources, any increase or appreciation in value of the
brokerage and SEP/IRA accounts are also his separate property. (See
Husband’s Brief, at 31-33). These claims do not merit relief.
We reiterate, the Agreement defines separate property as:
3. RETENTION OF SEPARATE PROPERTY.
* * *
B. For all purposes of this Agreement as used herein
the term “Separate Property” shall mean, with respect to a
party hererto, all of such party’s right, title and interest, legal or
beneficial, in and to any and all property and interests in property,
real, personal or mixed, whatever situated and regardless of how
titled, which each of the parties owned or had a beneficial
interest in at the time of marriage as set forth and
delineated on Schedules A and B attached hereto.
C. “Separate Property” shall also mean: (a) any
increase or appreciation in value of such property, whether the
increase, appreciation or enhancement is due to market conditions
or to the services, skills or efforts of either of the parties; (b) all
property acquired hereafter by either party out of the proceeds
from the sale, transfer, mortgaging or use of any such separate
property.
(Agreement, at 3-4, ¶¶ 3B, C) (emphases added).
Pursuant to paragraph 7B(2) of the Agreement, all other property
acquired during the marriage through the date of separation is to be divided
equally between the parties. (See id. at 7-8, ¶ 7B(2)).
As previously outlined, Husband maintains that his income earned
through Equus is his separate property under the definitions set forth above.
-8-
J-A01024-18
However, Schedule A to the Agreement, referenced in paragraph 3B, supra,
delineated only three items related to Equus—capital stock ($1,000.00), a
personal loan invested in the company, and computer equipment. (See *2
n.2, supra). Thus, Schedule A, on its face, does not purport to cover
Husband’s future income earned at Equus. Therefore, the income is not
property “which [Husband] owned or had a beneficial interest in at the time
of marriage as set forth and delineated on Schedule[] A[,]” and does not fit
within the definition of “Separate Property” set forth at paragraph 3B of the
Agreement. (Agreement, at 4 ¶ 3B). Furthermore, at the hearing on this
matter, counsel for Husband stipulated that the income at issue was “earned
from other sources than the separate property list.” (N.T. Hearing, 6/23/08,
at 9).
Husband’s attempt to fit his income within the definition of paragraph
3C likewise fails. (See Husband’s Brief, at 31-33). That provision, through
the repeated use of the word “such,” directly refers back to the property
expressly set forth by the parties on their respective schedules. (Agreement,
at 4 ¶ 3C). As discussed, Schedule A lists only three very specific items related
to Equus, and does not cover Husband’s income. (See *2 n.2, supra).
Accordingly, we conclude, based on the clear and unambiguous terms
of the Agreement, that the trial court did not err or abuse its discretion in
determining that Husband’s earnings were not separate property, and that his
placement of those joint funds into his brokerage and SEP/IRA accounts did
not convert them into separate property. See Harvey, supra at 11–12;
-9-
J-A01024-18
Habjan, supra at 640; (see also Trial Ct. Op., at 5). Therefore, Husband’s
claims do not merit relief.
We now turn to the questions raised by Wife on cross appeal. Wife first
challenges the trial court’s calculation of the marital portion of Husband’s
brokerage account. (See Wife’s Brief, at 12-13). She argues that the court
improperly deferred to the Master’s valuation, when both of the parties’
experts set the value at a higher amount. (See id. at 13). This issue is
waived.
“The Rules of Appellate Procedure state unequivocally that each
question an appellant raises is to be supported by discussion and analysis of
pertinent authority. Pa.R.A.P. 2119(b). Failure to do so constitutes waiver of
the claim.” Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959
A.2d 438, 444 (Pa. Super. 2008), appeal denied, 972 A.2d 522 (Pa. 2009)
(case citations and internal quotation marks omitted).
Here, in her underdeveloped argument spanning one and one-half
pages, Wife has failed to include any citation to legal authority in support of
her assertion that the trial court should have accepted the consensus valuation
of the experts, instead of the calculation of the Master. (See Wife’s Brief, at
12-13). Therefore, Wife’s first issue is waived. See Giant Food Stores,
supra at 444.6
____________________________________________
6Moreover, it would not merit relief. In valuing marital assets, the trial court
must exercise discretion and rely on the information submitted by the parties.
- 10 -
J-A01024-18
Wife next challenges the trial court’s determination that she is not
entitled to any amount for the post-separation appreciation of the brokerage
account. (See Wife’s Brief, at 13-19). She argues that this finding is contrary
to the general rule that assets should be valued as close to distribution as
possible, and not at the date of separation. (See id. at 14). This claim does
not merit relief.
Although Wife is correct that, generally, the preferred date of valuation
of an asset is the date of distribution and not the date of separation, 7 the
rights of the parties in the instant case are governed by the Agreement. As
noted, the term pertaining to equitable distribution provides:
B. EQUITABLE DISTRIBUTION.
* * *
____________________________________________
See Carney v. Carney, 167 A.3d 127, 131 (Pa. Super. 2017). “However,
this Court has consistently held that, [i]n determining the value of marital
property, the court is free to accept all, part or none of the evidence as to the
true and correct value of the property.” Id. at 132 (citations and internal
quotation mark omitted). It is also well-settled that a master’s report and
recommendation, although only advisory, is to be given the utmost
consideration. See id. at 131.
Here, the Master determined that the conclusions reached by the
parties’ experts regarding the marital portion of the brokerage account were
not accurate, nor were they consistent with the trial court’s order interpreting
the Agreement, and he set forth his own detailed calculation. (See Master’s
Report, 2/19/16, at 26, 31-32). The trial court declined to disturb the Master’s
findings in this regard. (See Trial Ct. Op., at 6). Upon review, we discern no
abuse of discretion. Wife’s first issue would not merit relief, even if it were
not waived.
7 See Nagle v. Nagle, 799 A.2d 812, 820-21 (Pa. Super. 2002), appeal
denied, 820 A.2d 162 (Pa. 2003).
- 11 -
J-A01024-18
(2) Except as may be otherwise herein provided, any
property acquired by the parties, either individually or jointly,
after their marriage and through the date of final separation,
except that property which was previously excluded as separate
property, shall be divided equally between the parties. Each of
the parties specifically waives all other claims for division
or distribution of marital property.
(Agreement, at 7-8, ¶ 7B(2)) (emphases added).
In light of the foregoing provision, we agree with the trial court that the
date of accounting for the marital portion of the brokerage account is the date
of separation. (See Trial Ct. Op., at 5). Wife is bound by the Agreement’s
clear terms. See Harvey, supra at 11-12. Therefore, her second issue
merits no relief.
In her final issue, Wife argues that the Master erroneously found that
gifts from Husband’s parents deposited into his brokerage account (totaling
$40,800.00) were his separate property. (See Wife’s Brief, at 19-21; see
also Master’s Report, at 24 ¶ 126, 25 ¶ 129, 26 ¶ 135; Master’s Hearing,
4/17/14, at 100). Upon review, we agree.
We again set forth the relevant language of the Agreement:
B. EQUITABLE DISTRIBUTION.
* * *
(2) Except as may be otherwise herein provided, any
property acquired by the parties, either individually or
jointly, after their marriage and through the date of final
separation, except that property which was previously
excluded as separate property, shall be divided equally
between the parties. Each of the parties specifically waives all
other claims for division or distribution of marital property.
- 12 -
J-A01024-18
(Agreement, at 7-8, ¶ 7B(2)) (emphases added).
Applying the plain language of this provision, the gifts from Husband’s
parents qualify as “any property acquired by the parties” while they were
married, and the gifts were not “previously excluded as [Husband’s] separate
property” on Schedule A to the Agreement. (Id. (emphasis added); see also
*2 n.2, supra). Therefore, we are constrained to conclude that the Master
and the trial court erred in classifying the gifts as Husband’s separate
property. Accordingly, we remand to the trial court for the limited purpose of
awarding Wife fifty percent of the date of separation value of the gifts.
Divorce decree and November 21, 2008 order affirmed. Order
overruling exceptions reversed in part. Case remanded with instructions.
Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/22/18
- 13 -