Orris, K. v. Orris, P. ( 2015 )

J-S52040-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KATHLEEN K. ORRIS, NOW BUCKSBEE IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
PAUL E. ORRIS
Appellant No. 340 WDA 2015
Appeal from the Order of January 26, 2015
In the Court of Common Pleas of Erie County
Civil Division at No.: 14281-2009
BEFORE: SHOGAN, J., OLSON, J., and WECHT, J.
MEMORANDUM BY WECHT, J.: FILED SEPTEMBER 30, 2015
Paul E. Orris (“Husband”) appeals the January 26, 2015 order that
denied his motion for special relief and request for a preliminary injunction.
In that motion, Husband sought to revise the settlement agreement that he
entered into with Kathleen K. Orris n/k/a Bucksbee (“Wife”), which was
incorporated into their divorce decree. After review, we affirm.
The trial court has summarized the factual and procedural history of
this case as follows:
[The parties married on March 25, 1995, and separated on June
2, 2009. Wife] filed a Complaint for Divorce, which included one
count of divorce pursuant to [23 Pa.C.S.A.] § 3301(c) or (d) . . .
and one count of equitable distribution, by and through her
counsel, Joseph P. Conti, Esq., on September 22, 2009. A copy
of [Wife’s] Complaint for Divorce was personally served on
[Husband] via hand delivery on September 25, 2009, and an
Affidavit of Service was filed on September 29, 2009.
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[Wife] filed a Motion for Special Relief on October 14, 2009. By
Order of Court dated October 14, 2009, Judge William R.
Cunningham granted [Wife’s] Motion for Special Relief and
prohibited [Husband] from removing, transferring, selling,
pledging, encumbering, withdrawing, dissipating or otherwise
using assets, monies and benefits [Husband] may have.
[Wife] filed a Motion for Special Relief on May 26, 2011. By
Order of Court dated May 26, 2011, [the] trial court granted
[Wife’s] Motion for Special Relief and restrained [Husband] from
severing the timber from the land of the marital residence and
selling the timber on the open market and authorized Scott W.
Seibert, Certified Forester ACF, to enter upon the land of the
marital residence for the purpose of conducting a timber
appraisal on behalf of [Wife].
[Wife] filed a Motion for Appointment of a Master on May 22,
2014. By Order of Court dated May 23, 2014, Ralph R. Riehl III,
Esq., was appointed as Divorce Master. [Wife] filed her Income
and Expenses Statement and Inventory on June 20, 2014.
[Husband] filed his Income and Expense Statement and
Inventory and Appraisement on June 30, 2014. A settlement
conference took place on July 22, 2014, at which the parties
entered into a mutually agreed-upon Marital Settlement
Agreement. [Relevant to this appeal, pursuant to their
agreement, Wife was to receive the proceeds of the sale of the
timber on approximately 210 acres surrounding the marital
residence. Husband received the marital residence.] The Final
Divorce Decree, including the incorporated[, but not merged,]
Marital Settlement Agreement, was entered by Judge Elizabeth
K. Kelly on August 6, 2014.
On November 25, 2014, [Husband,] by and through his counsel,
Daniel P. Marnen, Esq., filed a Motion for Special Relief Pursuant
to [Pa.R.C.P.] 1920.43 and Request for Preliminary Injunction.
[Specifically, Husband complained that the 2011 appraisal for
the timber that was used for the Marital Settlement Agreement
significantly undervalued the timber. Wife] filed her
Answer/New Matter to [Husband’s motion] on December 1,
2014. [Husband] filed a Reply to [Wife’s] New Matter on
December 12, 2014. A hearing on [Husband’s motion] was held
on January 5, 2015, at which [Wife’s] counsel, Andrea G.L.
Amicangelo, Esq., raised the issue of whether [the] trial court
ha[d] jurisdiction to hear and exercise authority on [Husband’s
motion]. By Order of Court dated January 5, 2015, the parties’
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respective counsel filed Memoranda of Law regarding whether
[the] trial court ha[d] jurisdiction to hear and exercise authority
on [Husband’s motion]. After reviewing the parties’ Memoranda
of Law and relevant statutory and case law, [the] trial court
entered its Memorandum Opinion and Order dismissing
[Husband’s motion] as [the] trial court concluded it did not have
jurisdiction to open, modify, or vacate the parties’ Final Divorce
Decree and Marital Settlement Agreement.
[Husband] filed his Notice of Appeal to the Pennsylvania Superior
Court on February 25, 2015, appealing [the] trial court’s
Memorandum Opinion and Order dated January 26, 2015. [The]
trial court filed its [] Order [for a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b)] on
February 26, 2015. [Husband] filed his Statement of Matters
Complained of on Appeal on March 15, 2015.
Trial Court Opinion (“T.C.O.”), 4/27/2015, at 2-3 (minor modifications for
clarity). The trial court filed its opinion pursuant to Pa.R.A.P. 1925(a) on
April 27, 2015.1
Husband raises one issue for our review:
Whether the lower court erred as a matter of law in dismissing
[Husband’s] Motion [for] Special Relief and Request for
Preliminary Injunction for lack of jurisdiction pursuant to 42
Pa.C.S.A. § 5505 when the record as presented to the trial court
contained possible new evidence or proof of extraordinary
circumstances due to mistake of fact presented during the
divorce settlement negotiations?
Husband’s Brief at 2.
Before reaching the merits of Husband’s appeal, we must determine
whether the underlying agreement should be treated as a contract or a court
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1
Wife filed two motions to quash this appeal. Both were denied without
prejudice to raise the issue before this merits panel. Wife has not done so.
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order. The trial court analyzed this case as if the agreement merged with
the divorce decree and Husband sought to re-open the decree. However,
the decree states that, “[t]he provisions of the Marital Property Settlement
Agreement entered into between the parties on July 22, 2014 are
incorporated herein by reference for the purpose of enforcement, but not
merged into the decree. . . .” Decree of Divorce, 8/6/2014.
[I]n our law, marital settlement agreements that are merged
into a divorce decree are treated differently than agreements
that are incorporated into the divorce decree. See Jones v.
Jones, 651 A.2d 157, 158 (Pa. Super. 1994) (holding that an
agreement that merges into the divorce decree is enforceable as
a court order, but an agreement incorporated into the decree
“survives as an enforceable contract [and] is governed by the
law of contracts”).
Morgan v. Morgan, 99 A.3d 554, 557 (Pa. Super. 2014) (citation
modified).
[When a] property settlement agreement did not merge into the
divorce decree, it stands as a separate contract, is subject to the
law governing contracts and is to be reviewed as any other
contract. Simeone v. Simeone, 581 A.2d 162, 165-66 (Pa.
1990). It is well-established that the law of contracts governs
marital settlement agreements, and under the law of contracts,
the court must ascertain the intent of the parties when
interpreting a contractual agreement. Kripp v. Kripp, 849 A.2d
1159, 1163 (Pa. 2004) (citations omitted). The standard of
enforceability of a contractual agreement is also clear: “[a]bsent
fraud, misrepresentation, or duress, spouses should be bound by
the terms of their agreements.” McMahon v. McMahon, 612
A.2d 1360, 1363 (Pa. Super. 1992) (citations omitted). As such,
a trial court may interpret a property settlement agreement as it
would a contract, but it has neither the power nor the authority
to modify or vary the decree unless there is conclusive proof of
fraud or mistake. Bianchi v. Bianchi, 859 A.2d 511, 515 (Pa.
Super. 2004). Moreover, the long-standing law of this
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Commonwealth is that property settlement agreements are
presumed to be valid and binding upon the parties. McGannon
v. McGannon, 359 A.2d 431 (Pa. Super. 1976).
Crispo v. Crispo, 909 A.2d 308, 312-13 (Pa. Super. 2006) (citations
modified); see also Kraisinger v. Kraisinger, 928 A.2d 333, 339 (Pa.
Super. 2007); Stamerro v. Stamerro, 889 A.2d 1251, 1258 (Pa. Super.
2005). Here, the settlement agreement was not merged into the divorce
decree, but instead was incorporated. Therefore, we treat the agreement as
an enforceable contract.
In conducting our review of the court’s holding as to the
marriage settlement agreement, we remain cognizant of the
following:
Because contract interpretation is a question of law, this
Court is not bound by the trial court’s interpretation. Our
standard of review over questions of law is de novo and to
the extent necessary, the scope of our review is plenary as
the appellate court may review the entire record in making
its decision. However, we are bound by the trial court’s
credibility determinations.
Stamerro, 889 A.2d at 1257-1258 (citations and quotations
omitted).
When interpreting a marital settlement agreement, the
trial court is the sole determiner of facts and absent an
abuse of discretion, we will not usurp the trial court’s fact-
finding function. On appeal from an order interpreting a
marital settlement agreement, we must decide whether
the trial court committed an error of law or abused its
discretion.
Id. at 1257 (citations and quotations omitted).
Kraisinger, 928 A.2d at 339 (citation modified).
In the absence of a specific provision to the contrary appearing
in the agreement, a provision regarding the disposition of
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existing property rights and interests between the parties,
alimony, alimony pendente lite, counsel fees or expenses shall
not be subject to modification by the court.
23 Pa.C.S.A. § 3105(c). Instantly, the parties’ settlement agreement does
not contain a provision permitting modification of the terms by the court.
However, Husband argues that there was a mistake of fact, which
would permit revision, because he relied upon the timber appraisal in the
negotiations.2 Husband asserts that he believed the appraisal to be accurate
at the time that it was conducted. Husband now argues that Wife will
receive a windfall because the appraisal was undervalued.3 Husband’s Brief
at 8-9.
We have defined mistake of fact as follows:
The doctrine of mutual mistake of fact serves as a defense to the
formation of a contract and occurs when the parties to the
contract have an erroneous belief as to a basic assumption of
the contract at the time of formation which will have a material
effect on the agreed exchange as to either party. A mutual
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2
Husband also asserts that there was a unilateral mistake of fact.
Husband’s Brief at 8. However, “[i]f a mistake is not mutual but unilateral
and is not due to the fault of the party not mistaken, but to the negligence
of the one who acted under the mistake, it affords no basis for relief in
rescinding the contract[.]” Vonada v. Long, 852 A.2d 331, 338 (Pa. Super.
2004). Husband has not demonstrated that his reliance upon the appraisal
was “due to the fault of Wife” as he has not offered any argument that Wife
knew the appraisal was not accurate. Therefore, a claim of unilateral
mistake affords Husband no relief.
3
Although Husband also argued that the agreement was fraudulent at
the motion hearing, see Notes of Testimony, 1/5/2015, at 7, Husband has
abandoned any such argument before this Court.
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mistake occurs when the written instrument fails to . . . set forth
the “true” agreement of the parties. [T]he language of the
instrument should be interpreted in the light of the subject
matter, the apparent object or purpose of the parties and the
conditions existing when it was executed.
The Restatement (Second) of Contracts § 152 provides:
§ 152. When Mistake Of Both Parties Makes A Contract
Voidable
(1) Where a mistake of both parties at the time a
contract was made as to a basic assumption on
which the contract was made has a material effect
on the agreed exchange of performances, the
contract is voidable by the adversely affected party
unless he bears the risk of the mistake under the
rule stated in § 154.
(2) In determining whether the mistake has a
material effect on the agreed exchange of
performances, account is taken of any relief by way
of reformation, restitution, or otherwise.
Restatement (Second) of Contracts § 152 (1981). Under this
section,
[T]he contract is voidable by the adversely affected party if
three conditions are met. First, the mistake must relate to
a “basic assumption on which the contract was made.”
Second, the party seeking avoidance must show that the
mistake has a material effect on the agreed exchange of
performances. Third, the mistake must not be one as
to which the party seeking relief bears the risk. The
parol evidence rule does not preclude the use of prior or
contemporaneous agreements or negotiations to establish
that the parties were mistaken. However, since mistakes
are the exception rather than the rule, the trier of the facts
should examine the evidence with particular care when a
party attempts to avoid liability by proving mistake. The
rule stated in this Section is subject to that in § 157 on
fault of the party seeking relief. It is also subject to the
rules on exercise of the power of avoidance stated in
§§ 378–85.
Id. Comment: a. Rationale (emphasis added).
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A contract entered into under a mutual misconception as to an
essential element of fact may be rescinded or reformed upon the
discovery of the mistake if (1) the misconception entered into
the contemplation of both parties as a condition of assent, and
(2) the parties can be placed in their former position regarding
the subject matter of the contract. In other words, mutual
mistake occurs when a fact in existence at the time of the
formation of the contract, but unknown to both parties, will
materially affect the parties’ performance of the contract.
Section 154 of the Restatement (Second) of Contracts provides:
§ 154. When A Party Bears The Risk Of A Mistake
A party bears the risk of a mistake when
(a) the risk is allocated to him by agreement of the
parties, or
(b) he is aware, at the time the contract is made,
that he has only limited knowledge with respect to
the facts to which the mistake relates but treats his
limited knowledge as sufficient, or
(c) the risk is allocated to him by the court on the
ground that it is reasonable in the circumstances to
do so.
Restatement (Second) of Contracts § 154 (1981). “The rule
stated in this Section determines whether a party bears the risk
of a mistake for purposes of [Sections] 152 and 153.” Id.
Comment: a. Rationale. “Even though a mistaken party does
not bear the risk of a mistake, he may be barred from avoidance
if the mistake was the result of his failure to act in good faith
and in accordance with reasonable standards of fair dealing.”
Id.
Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 410-11 (Pa. Super. 2010)
(some citations omitted; emphasis in original).
Here, Husband’s argument fails because he bore the risk of a mistake.
Husband received a copy of the appraisal which noted that it was “a walk
through appraisal. No trees were measured.” Wife’s Answer and New
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Matter, 12/1/2014, at Exh. 1 (Appraisal, 6/20/2011). Husband was on
notice as of receipt of the appraisal that it was an estimate based upon a
walk-through of the property. Therefore, Husband knew that he and Wife
had only limited knowledge of the value of the timber based upon the
conditional appraisal.
Despite that limited knowledge, Husband did not seek to obtain a more
complete appraisal in the three years between the appraisal and the
settlement agreement. Husband resided upon the property during that
period of time and had complete control of the land. He could have sought a
new appraisal at any time. Further, Husband never questioned the appraiser
about the value or his methodology in reaching that value. Notes of
Testimony (“N.T.”), 1/5/2015, at 8, 12.4
When the settlement was entered into the record, the parties
acknowledged that the timber had been valued at $130,000, but the
agreement stated that Wife would receive the value of the timber when sold,
not that Wife would receive $130,000. N.T., 7/22/2014, 10-11. Husband
could have asked to limit Wife’s receipt to the appraised value or that Wife
could only sell $130,000 worth of timber. Husband chose not to limit his
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4
Interestingly, although Husband accepted the appraisal in 2014, at
argument, his attorney stated, “There was no need at the time to do a
counter appraisal. There was no dispute. In fact, [Husband] thought that
appraisal was higher than it should have been.” N.T., 1/5/2015, at 12. So
despite concerns that the appraisal might not be accurate in 2014, Husband
chose to do nothing and simply accepted the value.
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exposure to fluctuations in price and, instead, relied solely upon the
appraisal. Because he treated his limited knowledge as sufficient for the
settlement negotiations, Husband bore the risk of the mistake in value.
Even assuming that this issue was “a basic assumption upon which the
contract was made” and had “a material effect on the agreed exchange,”
see Step Plan Servs., Inc., supra, Husband bore the risk of mistake when
he accepted the appraisal value despite its caveats and failed to seek his
own appraisal or question the appraiser about the value. Therefore, no relief
is available.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/30/2015
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