Snyder, K. v. Snyder, R., Jr. ( 2022 )

J-A05033-22
2022 PA Super 72KIMBERLY A. SNYDER : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
ROBERT A. SNYDER, JR. :
:
Appellant : No. 326 MDA 2021
Appeal from the Decree Entered March 3, 2021
In the Court of Common Pleas of Northumberland County Civil Division at
No(s): CV-2015-00290
BEFORE: OLSON, J., KUNSELMAN, J., and STEVENS, P.J.E.*
OPINION BY STEVENS, P.J.E.: FILED APRIL 20, 2022
Robert A. Snyder, Jr. (“Husband”) appeals from the March 3, 2021,
divorce decree entered in the Court of Common Pleas of Northumberland
County, which, inter alia, provided for the equitable distribution of the marital
assets of Husband and Kimberly A. Snyder (“Wife”). After a careful review,
we affirm, in part, and vacate and remand, in part. Specifically, we affirm the
decree in all respects, except we vacate the portion of the equitable
distribution order which double counted certain assets associated with RAS
BAR, Inc., and remand for further proceedings consistent with this decision.
The relevant facts and procedural history are as follows: The parties
were married on May 13, 1995, and they have one daughter, who is no longer
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* Former Justice specially assigned to the Superior Court.
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a minor.1 On February 13, 2015, Wife filed a complaint in divorce seeking
equitable distribution of the marital property, and she filed a praecipe for lis
pendens concerning various real estate properties. On August 25, 2015,
Husband filed an answer with a counterclaim seeking, inter alia, alimony and
alimony pendente lite (“APL”), and Wife filed an answer on September 4,
2015.
On March 16, 2017, Wife filed a motion for discovery, and on June 1,
2017, the trial court directed Husband to sign an authorization to release M&T
Bank records to Wife. The master was appointed on May 14, 2018, for
purposes of the divorce and economic claims. Regarding the divorce, the
parties executed affidavits of consent and waivers of notice on October 25,
2019.
Regarding the economic claims, on January 5, 2018, Wife filed an
inventory, income, and expense statement, which she amended on October
1, 2019. On June 18, 2018, she filed a pretrial statement, which she amended
on October 15, 2019. Husband filed a pretrial statement on June 25, 2018.
However, despite being ordered to do so, he failed to file an inventory, income,
and expense statement.2 He also failed to submit the information pertaining
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1 Husband has an adult son, Christopher Allen Snyder, from a separate
relationship.
2The Rules of our Supreme Court require a party to list his or her marital and
nonmarital assets on the inventory, marital asset summary, and pretrial
(Footnote Continued Next Page)
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thereto as an exhibit to or as a chart within his pretrial statement in
accordance with Pa.R.C.P. 1920.33(b).
The matter proceeded to a hearing before the master. At the hearing,
the parties stipulated that, from February 11, 2015, to March 24, 2017, Wife
had exclusive possession of the property where the parties resided during their
marriage (“marital residence”), and Husband gained possession thereafter.
They further stipulated that Husband’s savings account balance at the date of
separation was $7,355.44; the marital property was to be distributed fifty-
fifty to each party; and the date of separation was February 5, 2015.
At the conclusion of the hearing, the master made extensive factual
findings, which the trial court subsequently adopted and incorporated into its
decision. Specifically, the master found:
In May of 1993, [Husband] created a corporation, RAS BAR,
Inc. [(“RAS BAR” or “RAS BAR, Inc.”)], wherein he was the sole
shareholder and sole officer with the stock valued at one cent per
share. Husband owned 100% of the stock to RAS BAR prior to the
date of marriage….[B]ased upon the lack of information provided
by Husband, the value of this stock was a mere $0.01 per share
as no proof was presented that the stock had increased from the
date of creation until the date of marriage.
In July of 1994, [Husband], a single man, purchased the
soon to be “marital residence” involving two tracts on East Drive
[in] Sunbury for $89,900.00, and [he] took out a mortgage in the
amount of $71,820.00 on both tracts 328-330 East Drive,
hereinafter referred to as First Mortgage.
On May 13, 1995, the parties were married. The parties did
substantial work on the “marital residence.” Six months after
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statement. Pa.R.C.P. 1920.33. See Kozel v. Kozel, 97 A.3d 767 (Pa.Super.
2014).
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marriage, in November [of] 1995, Husband took out a Second
Mortgage through First National Trust Bank for $35,064.50 on the
[marital residence]. Husband testified [he took out the Second
Mortgage] to open Perk A Deli at 328 Market Street [in]
Lewisburg.
In March of 1998, the parties refinanced with First National
Trust Bank, paying off the Second Mortgage balance of
$21,458.67, and a payment to ENTB-Rest [in the] amount of
$18,602.87, as well as 1997 delinquent taxes. Husband testified
that this was the restaurant loan for Perk A Deli. Prior to
refinancing, a deed of correction was filed identifying the precise
[marital] residence as 330 East Drive. Both Husband and Wife
signed the Note for $111,361.00.
***
On September 27, 2004, a deed was transferred during the
marriage for the real estate at 700-706 Market Street [in]
Sunbury, known as “the Peppermint Lounge” property, to
[Husband, as] a married person. Husband testified he paid
$310,000.00 for the real estate and liquor license pursuant to an
Installment Sales agreement. No evidence of the sale of the liquor
license was ever produced by Husband, and his testimony does
not even state whether the license was in his name or RAS BAR,
but [his testimony indicates] that the financing started in July of
1992, at an interest rate of six to eight percent over a ten-year
agreement[.] RAS BAR was not incorporated until May of 1993.
On February 20, 2009, the Peppermint Lounge…burnt down.
The insurance proceeds totaled $790,000.00 according to
Husband’s testimony; however, the insurance checks total
$809,720.00, which [was used to pay] off the mortgage on the
marital residence, satisfaction filed [on] April 28, 2009.
Neither party was able to state with certainty where the
insurance proceeds went; however, Husband had complete
control over the money and claimed most of it went to remodeling
the marital residence. In fact, Husband’s Answer to
Interrogatories claims $491,000.00 was spent on the new
addition. Wife repeatedly asked for proof of where the money
went and, even at the hearing, Husband presented not one single
check or invoice for the renovations.5
5 The parties agree that these renovations occurred and were extensive;
however, Wife has never known or seen how much the renovations
actually cost.
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On March 26, 2010, the real estate known as the
Peppermint Lounge was sold to James and Debra Eister for one
dollar ($1.00) but assigned a 1% transfer tax of $706.14, which
translates to a value of [just over $70,600.00]. Husband testified
he sold the property for $1.00 because of the clean-up and
demolition involved and the deal was done by handshake. Both
Husband and Wife signed the deed, which lists the sale value for
each tract at one dollar. Mr. James R. Eister testified that he
purchased the real estate, formerly known as the Peppermint
Lounge, for one dollar for each parcel after discussion with
Husband about three or four days after the fire in the bar area,
[the] part that didn’t burn down. The east side was totally
destroyed[,] and the bar area was semi-destroyed. Mr. Eister
testified he did not give $70,000.00 for the building[,] but he did
have to use the county tax assessor valuation for taxes….[H]e paid
between $50,000.00 and $60,000.00 for demolition….For some
reason, Husband was writing checks to several individuals…from
his RAS BAR account for “clean-up” or “repair” [or] “rental”
beginning [on] April 23, 2009, through August 14, 2009.
***
On July 26, 2010, a deed was transferred from the IRS to
Husband for the property at 448½ Market Street [in] Sunbury,
known as the “Squeeze-In”, for a purchase price of $69,000.00.
Husband’s Answer to Interrogatories valued the real estate at
$75,000.00. Neither party obtained a real estate appraisal, as
such, the value provided by Husband of the real estate shall be
used by the master.
***
Husband and Wife kept separate bank accounts throughout
the marriage. The parties separated on February 5, 2015.
Husband resided at Northumberland County Jail for a lengthy
period of time since date of separation. The parties agreed to the
entry of a Protection from Abuse Order (“PFA”) and providing Wife
and their daughter exclusive possession of the [marital
residence]. After Husband’s release, he resided at the apartment
located at 448½-450 Market Street [in] Sunbury, a/k/a Squeeze-
In. Husband sought to modify the PFA and the court granted him
the ability to resume possession of the [marital residence] but
required him to post a bond in the amount of $100,000.00.
In March of 2016, Husband executed several transactions to
move the liquor license, which was held in safekeeping and about
to be lost if not transferred to an existing operating premise.9
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9 Husband’s son used the parties’ American Express account card to
begin the process with the Pennsylvania Liquor Control Board (“PALCB”).
The licensee was RAS BAR, Inc., DBA Peppermint Lounge at 700 Market
Street [in] Sunbury and requested to be transferred to Christopher Allen
Snyder, t/a Squeeze-In at 448½ Market Street [in] Sunbury. Husband
and son submitted a retail space lease contract to lease the “Squeeze-
In” real estate for $1.00 per year on March 1, 2016. The documents
also include stock transfers [of] 100% stock ownership of RAS BAR, Inc.
from Husband to son, and a check for the license transfer by RAS BAR,
Inc. to PALCB on March 23, 2016. A stock purchase agreement [was]
also created and signed on the same date, March 1, 2016, for sale of
one thousand shares of common stock for a total price of $10.00. The
license was approved by the PALCB in April of 2018 and listed as active
with a licensee of RAS BAR, Inc. at 448½ Market Street [in] Sunbury.
The Corporate Record Book for RAS BAR, Inc., now lists a principal place
of business as 448½-450 Market Street [in] Sunbury[.]
Husband finally re-created the corporate records, which he
claims were lost in the Peppermint Lounge fire, which if the
business was operating correctly, should have been done over the
past five years while operating RAS BAR, Inc., t/a Pop Snyder’s.
Husband, or his agent, also withdrew the remaining equity on [a
home equity line of credit],[3] despite an order for non-dissipation
of marital assets and freezing of the line of credit.
Master’s Report and Recommendation, filed 5/4/20, at 4-9 (footnotes omitted)
(citations to record omitted) (footnote added).
After consideration of the evidence, the master concluded the real estate
located at 330 East Drive in Sunbury, which later became the marital
residence, was purchased by Husband prior to the marriage and the deed
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3 Husband testified that, on February 20, 2013, which was prior to the parties’
separation, he obtained a home equity line of credit on the marital residence
with a maximum amount of $150,000.00. Husband testified this was his
alone, as Wife did not participate. Husband did not testify as to what purpose
he used the money. When the parties separated, the balance on the home
equity line of credit was $86,000.00, and at the end of 2017, the outstanding
principal balance was $149,873.04.
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remained in his individual name throughout the marriage. Id. at 4. Thus, the
master concluded the home was premarital property, but Wife was entitled to
a share of the increase in value of the real estate during the parties’ marriage.
Id. The master further concluded Wife was not entitled to the fair rental value
of non-marital property. Id.
Regarding RAS BAR, Inc., the master concluded Husband created the
corporation prior to the parties’ marriage. Accordingly, the master found the
business was premarital, but that Wife was entitled to a share of the increase
in value of the corporation during the parties’ marriage. Id.
Based on the evidence presented at the hearing, and the parties’
stipulation to a fifty-fifty split of marital property, the master set forth a
detailed proposed plan of distribution, which took into account the marital
assets and the increase/decrease in value of non-marital assets.
Thus, the master found the following to be assets: (1) real estate at 330
East Drive in Sunbury (non-marital, only increase in value is marital)-value of
$233,690.66-Husband; (2) real estate at 448½-450 Market Street in
Sunbury-(marital)-value of $75,000.00-Husband; (3) 2008 Lincoln Mark LT-
value of $20,050.00-Husband; (4) 1995 Mercedes SL 500-value of $7,975.00-
Husband; (5) 2013 Nissan Altima-trade-in value of $2,000.00-Wife; (6) 1989
28-Foot Rinker Festavee 250 boat-value of $9,250.00-Husband; (7) Jet ski
and trailer-value of $2,000.00-Husband; (8) Swineford RAS BAR small
business checking account-value of $7,355.44-Husband; (9) M&T direct
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checking account-value of $549.13-Wife; (10) M&T Advanced Business
checking account-value of $3,102.61-Husband; (11) M&T bank checking
account-value of $356.60-Husband; (12) M&T Rel. Savings account-value of
$341.24-Husband; (13) M&T Com. Savings account-value of $0.00-Husband;
(14) Northumberland National Savings account-value of $0.00-Wife; (15)
contents of safe deposit boxes-value of $0.00-Wife; (16) Prudential Whole Life
Insurance policy-value of $0.00-Husband; (17) Wife’s clothing and personal
items-value of $2,000.00-Wife; (18) furniture and furnishings for Husband’s
New York apartment-value of $3,257.84-Husband; (19) household furnishings
and property-value of $22,776.00-Husband; (20) RAS BAR, Inc.—Squeeze-
In/Dip In/Duck In-value of $449,012.87-Husband; (21) RAS BAR, Inc. liquor
license-value of $25,000.000-Husband. See Master’s Report and
Recommendation, filed 5/4/20, at 36-37.
Accordingly, the master concluded the marital estate had assets of
$863,727.39 with $4,549.13 representing the value of Wife’s assets and
$859,178.26 representing the value of Husband’s assets. Id. at 37.
The master found the following sole debt of the marital estate: (1) M&T
Bank Line of Credit-debt of $86,000.00-Husband. Id.
In performing the relevant calculations, the master concluded the total
assets, minus debts, of the marital estate equaled the following: $777,727.39
with Wife having $4,549.13 in total assets and Husband having $773,178.26
in total assets. Id. at 38. At an equitable distribution rate of fifty percent for
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each party, the master concluded each party was entitled to a distribution
equaling $388,863.69. Id. Further, the master concluded Wife was entitled
to her fair rental share of RAS BAR property at 448½ Market Street, which
totaled $36,416.67.
The master directed the following:
Husband shall retain all debts and assets with a value listed
[with his name], and Wife shall retain all debts and assets with a
value listed [with her name]. Husband shall make a lump sum
payment to Wife for her fifty percent share of the marital estate
in the amount of $420,731.23, which represents Wife’s share of
the marital portion, $384,314.56, plus Wife’s share of the fair
rental value for the joint real estate, post separation, after
Husband no longer resided there, $36,416.67.
The master notes that there remains equity in 330 East
Drive, which Husband would be able to refinance or seek a second
mortgage, as well as Husband owns two other pieces of real
estate, which are non-marital property, free and clear, as well as
the 448½-450 Market Street property that could be mortgaged.
In addition, the business itself could obtain a loan; however, a
business appraisal would be required.
Id.
Husband filed a timely exception to the master’s report and
recommendation, and Wife filed a response. By decree filed on March 3, 2021,
the trial court declared Wife and Husband were divorced, and Husband’s
exceptions to the master’s report and recommendation were denied.
Regarding the equitable distribution issues, the trial court specifically
adopted and relied upon the master’s factual findings and reasoning.
Specifically, the trial court indicated “[t]he master’s valuations, legal
reasoning, determinations of credibility, and conclusions are sound. The
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master’s report shall become the Order of Distribution.” Trial Court Opinion,
filed 3/3/21, at 1.
Husband filed a timely notice of appeal, and the trial court directed
Husband to file a Pa.R.A.P. 1925(b) statement. Husband timely complied, and
on April 12, 2021, the trial court filed a brief Rule 1925(a) opinion indicating
it was relying on the master’s report, as well as the trial court’s previous
opinion.
On appeal, Husband sets forth the following issues in his “Statement of
Questions Presented” (verbatim):
I. Whether the trial court erred in finding Wife competent to
testify as to the value of the RAS BAR assets.
II. Whether the trial court erred in finding the testimony of Wife
as to the value of the RAS BAR assets credible and in
adopting Wife’s proposed method of valuation.
III. Whether the trial court erred in double-valuing the RAS BAR
assets by assigning them values under both the gross
income and a market value approach.
IV. Whether the trial court erred in assigning values to certain
personal property including an American Express Account, a
2008 Lincoln Mark LT, a 1995 Mercedes-Benz SL 500, a
Rinker boat, and various apartment furnishings.
V. Whether the trial court erred in determining the net value
of the marital estate and ordering a cash distribution to Wife
rather than distribution in kind.
Husband’s Brief at 4 (unnecessary capitalization omitted).
Preliminarily, we note that, “[a]lthough the master’s report is entitled to
great weight, the final responsibility of making the distribution rests with the
[trial] court.” Trembach v. Trembach, 615 A.2d 33, 36 (Pa.Super. 1992).
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A trial court has broad discretion when fashioning an award of
equitable distribution. Dalrymple v. Kilishek, 920 A.2d 1275,
1280 (Pa.Super. 2007). Our standard of review when assessing
the propriety of an order effectuating the equitable distribution of
marital property is “whether the trial court abused its discretion
by a misapplication of the law or failure to follow proper legal
procedure.” Smith v. Smith, 904 A.2d 15, 19 (Pa.Super. 2006)
(citation omitted). We do not lightly find an abuse of discretion,
which requires a showing of clear and convincing evidence. Id.This Court 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.”
Wang v. Feng, 888 A.2d 882, 887 (Pa.Super. 2005). In
determining the propriety of an equitable distribution award,
courts must consider the distribution scheme as a whole. Id.“[W]e 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.” Schenk
v. Schenk, 880 A.2d 633, 639 (Pa.Super. 2005) (citation
omitted).
Biese v. Biese, 979 A.2d 892, 895 (Pa.Super. 2009).4
____________________________________________
4Factors relevant to the equitable division of marital property are set forth in
23 Pa.C.S.A. § 3502(a) and include the following:
[T]he trial court must consider the length of the marriage; any
prior marriages; age, health, skills, and employability of the
parties; sources of income and needs of the parties; contributions
of one party to the increased earning power of the other party;
opportunity of each party for future acquisitions of assets or
income; contribution or dissipation of each party to the
acquisition, depreciation, or appreciation of marital property;
value of each party’s separate property; standard of living
established during the marriage; economic circumstances of each
party; and, whether the party will be serving as custodian of any
dependent children.
Mercatell v. Mercatell, 854 A.2d 609, 611 (Pa.Super. 2004).
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Husband’s first, second, and third issues are intertwined and relate to
the trial court’s valuation of RAS BAR and the assets associated therewith. In
this regard, Husband contends he is specifically challenging the trial court’s
valuation of the following:
1. Squeeze-In Property-$75,000.00
2. RAS BAR checking-$7,335.44[5]
3. RAS BAR business-$449,012.87
4. RAS BAR Liquor License-$25,000
5. RAS BAR Rental Value-$36,416.67
Husband’s Brief at 10 (citations to master’s report and recommendation
omitted) (footnote added).
Husband specifically contends that, in establishing a value for these
assets, the trial court erred by:
1. Finding Wife competent to testify as to the value of the assets.
2. Assuming, arguendo, that Wife was competent to testify,
finding Wife’s testimony to be credible and adopting Wife’s
proposed method of valuation.
3. Double-valuing the RAS BAR assets by assigning value under
both gross income and market-value approaches.
Husband’s Brief at 10.
Husband first argues the trial court erred in accepting Wife’s testimony
as to the value of RAS BAR and its assets. Specifically, he initially contends
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5 Husband’s stated value of $7,335.44 appears to be a typographical error.
The master indicated the RAS BAR Swineford Business Checking account had
a value of $7,355.44.
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that Wife was “incompetent” to testify regarding the valuation of RAS BAR and
its assets since she was not an owner or involved in the business. He next
suggests that, assuming, arguendo, she was competent to testify on this
issue, her testimony was incredible such that the trial court erred in adopting
her proposed valuations.
Husband further challenges the method used by the trial court in
evaluating the RAS BAR business and its assets. He specifically contends:
[T]he trial court was obliged to disregard as inadmissible Wife’s
testimony as to the value of RAS BAR, Inc., the liquor license held
by it, the Squeeze-In property, and the enterprises conducted
therein. Accordingly, the only evidence of value is that submitted
by Husband and the trial court should have adopted his valuations.
Husband’s Brief at 13-14.
In reviewing Husband’s issues, we note the following well-established
legal principles:
“The Divorce Code[6] does not specify a particular method of
valuing assets.” Smith, 904 A.2d at 21. Thus, “[t]he trial court
must exercise discretion and rely on the estimates, inventories,
records of purchase prices, and appraisals submitted by both
parties.” Id. at 21-22. When “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.”
Schenk, 880 A.2d at 642 (citation omitted). “Where the evidence
offered by one party is uncontradicted, the court may adopt this
value even [though] the resulting valuation would have been
different if more accurate and complete evidence had been
presented.” Id. “A trial court does not abuse its discretion in
adopting the only valuation submitted by the parties.” Id.____________________________________________
6 See 23 Pa.C.S.A. §§ 3101-3333.
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Childress v. Bogosian, 12 A.3d 448, 456 (Pa.Super. 2011) (quoting Biese,
979 A.2d at 897) (footnoted added).
As it relates to RAS BAR, Inc. as a business entity, the master indicated
the following:
Husband [was] less than credible in many aspects
concerning property ownership, title, and value and simply self-
serving. The master has used Wife’s inventory and appraisal,
records of receipts and purchases, bank records, and business
financial tax returns in determining the value of the marital
property.
In addition, Wife’s testimony concerning the value of the
business based upon the gross income-based approach is an
acceptable method of valuing businesses, [See Gaydos v.
Gaydos, 693 A.2d 1368 (Pa.Super. 1997) (en banc)], [which the
master] found to be credible. [Husband] objects to her testimony
concerning the values of the RAS BAR, Inc. businesses and liquor
license[, however, the court finds no merit to his objection].
***
The accepted rule in Pennsylvania is that a corporation shall
be regarded as an independent entity even if its stock is owned
entirely by one person. College Watercolor Group, Inc. v.
William H. Newbauer, Inc., 468 Pa. 103, 360 A.2d 200 (1976).
Under Pennsylvania law, ownership of corporate stock and
ownership of corporate assets are separate areas of inquiry.
The master finds the valuation of this corporation extremely
difficult. The re-created documents of stock indicate in May [of]
1993 (prior to the marriage) Husband created the corporation and
issued all the stock to himself and also named himself to be all the
officers. The stock was valued by himself at one cent per share.
Husband testified to a business in Lewisburg known as Perk A Deli,
which failed. He did not indicate when the business began
precisely or ended; however, the corporation was actually in the
red in March [of] 1998 to the tune of $18,602.87.
Husband and Wife both signed a mortgage and paid off the
entire debt for the Perk A Deli on March 20, 1998. The mortgage
paid during the marriage was satisfied on April 15, 2009.
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Wife was never made a corporate officer[, and she] did [not]
ever receive any shares of stock at any time. Therefore, the
master finds the [RAS BAR, Inc.] business is non-marital property
that has increased in value and Wife’s marital share is fifty percent
of the increase in value. The starting value for determining the
increased value is -$18,602.87.
The corporation did not have any debts at [the] date of
separation, the stock was held entirely in Husband’s name, and
there were no other corporate officers other than Husband.
Husband did not provide a value at all for the corporation, other
than his pretrial statement where counsel claims RAS BAR, Inc.
and all assets, including the liquor license, are worth a total of
$5,000.00, and his post-trial brief seeking a finding that the liquor
license…is worth $10,000.00.
Neither party provided a value for the stock. The master
specifically rejects the price listed by Husband for the stock
transfer to his son, which he later contradicted by stating that his
son would eventually inherit the business, and counsel for
Husband’s own post-trial brief, which argues “Husband owns, in
his name alone, a corporation named RAS BAR, Inc. (whose sole
asset is a liquor license).” This statement alone is clearly not true,
as the corporate tax returns list depreciation of property that was
purchased during the marriage and includes rental income to real
estate Husband inherited from his mother. In fact, the stock
transfer certificates provided are not consistent with Husband’s
tax returns, which show Husband as owning .274% stock
ownership and [his son] as owning 99.726% stock ownership. In
addition, the real estate that the business operates on, which is
marital property purchased during the marriage, is allegedly
leased to [Husband’s] son for a mere one dollar a year for the next
ten years.
The master finds the value of the stock is directly tied to the
corporation. As no value of the stock was alleged by either party,
the master only proceeds to attempt to value the corporation.
This non-marital asset should have been appraised with a
business appraisal; however, neither party did so. Wife testified
to her value of the asset based upon the gross sales approach and
the tax returns and gross sales testified to by Husband. Wife used
the gross sales, excluding 2009 because that was the year of the
fire, and omitting 2011 because Husband never produced that
year, and arrived at a value of $475,000.00. Wife testified the
gross sales approach is a method of valuing a business using gross
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sales per year and multiplying by three times and up to five times
the sales.
The master finds the case of Smith v. Smith to be helpful
in determining how to value the RAS BAR business. Smith v.
Smith, 653 A.2d 1259 (Pa.Super. 1995).
In [Smith], [the] wife had the burden of producing evidence
of the increased value of the gifts and inheritance she received
during the parties’ marriage since she had exclusive control over
the relevant records. In the case [sub judice], Husband did not
file an Inventory and Appraisal valuing any marital property or
interest in marital property, including the business. His pretrial
statement values RAS BAR and all assets, including the liquor
license, at $5,000.00, but his testimony indicated the liquor
license alone cost $25,000.00 over twenty years ago and the cost
basis is $25,000.00. Husband’s post-trial proposed schedule of
distribution does not even list the corporation, but only lists the
liquor license. Clearly, the corporation is more than just the liquor
license as the business tax returns reveal gross sales during the
years the license was in safe keeping, i.e., not in use.
Husband claims Wife is not permitted to testify to the value
of the business or the liquor license….
Concerning Wife’s testimony on the value of RAS BAR, Inc.,
her opinion was based upon stipulated facts, financial tax returns
of the business, and Husband’s testimony that the Squeeze-In
gross sales over the years is between $140,000 to $170,000 per
year. Wife testified that she has a degree in business
administration with a focus on accounting and worked as an
auditor and then at a certified public accounting firm in Sunbury
when the parties married, the same firm that the business used
for its tax returns. The master notes that prior experts have
testified concerning the gross sales approach to value a business
and the restaurant business. Husband did not list any specific
reasons why his opinion on value should be used. Moreover, using
Husband’s logic, he is also not competent to testify to the value of
the corporation or the value of the liquor license [since] he
transferred ownership to his son and is no longer an officer of any
kind. Such a result is absurd.
***
Wife testified to the gross sales approach and arrived at a
value of $475,000.00. The…master will use [this testimony] in
part, but not entirely. As stated earlier, RAS BAR, Inc. is a
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premarital asset and shall be valued at the date of separation.
The testimony of Wife included gross sales for post-separation
years. The master finds a multiplier of four, higher than three,
but not five, shall be used given the increase in sales over the
years to assign a fair and equitable value but the average shall
only include gross profits from 2010, 2012, 2013, and 2014. The
master finds the value of RAS BAR, Inc. at date of separation to
be $430,410.00. Using this value and the date of marriage value,
negative $18,602.87, the master finds the increased value of the
business equals $449,012.87.
Master’s Report and Recommendation, filed 5/4/20, at 10, 24-28.
We find no abuse of discretion in this regard. Childress, supra.
Specifically, the master did not err in permitting Wife to testify about the value
of RAS BAR, Inc., and its assets, and the master was free to accept Wife’s
testimony as credible. See id.
Moreover, we find no merit to Husband’s contention the trial court was
required to utilize the market-value approach, as opposed to Wife’s gross-
income based approach, in valuing the business. In determining the valuation
of a business for purposes of equitable distribution, “[o]ur precedent requires
that the trial court be given great discretion to evaluate the parties’ valuation
methods and determine which is most reliable.” Carney v. Carney, 167 A.3d
127, 132 (Pa.Super. 2017).
In criticizing Wife’s testimony and valuation methods, Husband is asking
this Court to substitute his viewpoint for the credibility findings of the master
and the trial court. “We reiterate that we defer to the factfinder’s discretion
in weighing the evidence and assessing the credibility of the witness.” Id.- 17 -
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Simply put, the master concluded Wife’s testimony was credible, and
her valuation method accurately valued the business. “Consistent with our
precedent…, the trial court was free to give weight to the master’s report,
particularly with respect to witness credibility, as the master had the
opportunity to observe and assess the behavior and demeanor of the parties.”
Carney, 167 A.3d at 132 (citation omitted). As the findings are supported by
the evidence, we cannot find the trial court abused its discretion in adopting
Wife’s valuation method for the RAS BAR business.7 See id.
In his third issue, Husband contends the trial court erred by double
counting certain business assets associated with RAS BAR. Specifically, he
claims the trial court erred in double counting (1) the Swineford checking
account, (2) the liquor license, (3) the property at 448½-450 Market Street in
Sunbury (a/k/a Squeeze-In), and (4) the fair rental value of the RAS BAR
apartment at 448½ Market Street. See Husband’s Brief at 10. In this vein,
he contends the trial court erroneously assigned these assets values under
the gross income approach and the asset approach. We agree.
As indicated supra, the trial court was permitted to exercise its
discretion in accepting Wife’s gross-income based approach, and thus, the
____________________________________________
7 We note Husband challenges the master’s valuation of particular RAS BAR
assets, including the Swineford checking account, the liquor license, the
property at 448½-450 Market Street (a/k/a Squeeze-In), and the fair rental
value of the RAS BAR apartment at 448½ Market Street. However, given our
discussion and resolution of Husband’s third issue infra, we need not address
his challenges to the valuation of these particular assets further.
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court was permitted to find RAS BAR has a value of $449,012.87. See
Carney, supra. However, after choosing this method of valuing the business
and its assets, the trial court then separately valued and assigned to Husband
as marital property the four assets set forth above. Since these four assets
were already included in the value of RAS BAR under the gross-income based
approach, the trial court erred in considering the four assets to be separate
marital property. See Carney, supra. As Husband contends, the trial court
was required to choose one method of valuing the business and its assets.
See generally Gaydos, supra. Thus, while the trial court did not err in
accepting Wife’s valuation method of the business, the court erred in including
the business assets as separate marital property when they were already
evaluated as part of the business.
Because we agree with Husband’s contention that the four assets listed
supra were double counted by the trial court, we vacate and remand to the
trial court to remove these four assets from the master’s distribution plan and
recalculate the amount due to Wife.
In his fourth issue, Husband contends the trial court erred in failing to
include the American Express credit card debt as marital debt and in requiring
him to pay any outstanding balances.
In determining Husband was responsible for any remaining balance on
the American Express credit card, the master noted:
Husband submitted credit card statements from American
Express initially as Husband’s Exhibit 16, Trial p. 264-277, and
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supplemented as Husband’s Exhibit 32, Snyder 252-552.26 Exhibit
16 shows some purchases made in 2009 at Lowes, hotels,
shopping for clothing and liquor. Exhibit 32 includes statements
from closing date September 3, 2009, through January 7, 2015.
The statement closing February 4, 2015, was not provided.
26 The master notes the exhibit shows clearly Wife’s frustration with not
receiving discovery. The Snyder pages were pages provided in discovery
and the Trial pages were part of the pretrial exhibits. A review of Snyder
252-552 shows many pages of documents missing. The September
2009 statement shows pages 1, 3, and 4 of 5. Then pages 1 and 3 of 3
are provided for August 2009, following by June page 1 and 3. Very
quickly it became easy to assume the statements were double-sided and
only one side copied; however, if that were the case page 3/8, 4/8, and
5/8 would not all be copied as shown in Snyder 270-272.
There is a summary of new charges, Snyder 548, which
shows four cards, Robert A. Snyder, Jr. x 1-02009, C A Snyder x
1-04013,[8] Kimberly Snyder x 1-01027, and Shelby Snyder x 1-
01514.[9] There are pay in full amounts and pay over time
amounts listed for each month and the pay over time charges have
a diamond by each charge. There are 90,349 points available
under account x 6096 as of November 30, 2014. These points
have some value, although neither party testified to what value,
although the points may be transferred into the SkyMiles Program
and there is no longer a limit on the amount which may be
transferred.
The master finds all debt associated with use of the America
Express is not marital. The pay over time portion was almost
entirely paid off when a payment of $17,903.36 was made on
March 3, 2014, from Husband’s Money Market Account, which was
funded from a $20,000.00 check to Robert Snyder #3394 from
the [home equity line of credit] on February 26, 2014. The new
balance due as of April 1, 2014, was a mere $644.70.
Husband again paid almost the entire balance in September
[of] 2014 with a $5,000.00 payment on a balance of $5,829.52.
This payment was made from Husband’s M&T Classic Checking x
1344 electronically on September 2, 2014. The funds for that
payment were from a deposit on August 11, 2014, a check written
____________________________________________
8 “C A Snyder” refers to Husband’s son.
9 Shelby A. Snyder is the parties’ daughter.
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from the [home equity line of credit] in the amount of $15,000.00
to Bob Snyder.
In September [of] 2014, beginning with a balance of
$829.52, there were new charges…totaling $6,637.58, of which,
$6,118.72 was charged on the parties’ daughter’s card[,] which
appears to have included flights and travel in Philadelphia,
California, Florida, and State College. Husband paid $2,000.00
from his M&T power checking x 1344 toward that month’s
payment, which he had transferred $5,000.00 from the [home
equity line of credit] into his M&T classic checking, check # 109.
In fact, since September [of] 2014, when the balance was
just over $800.00, the only purchases made on Wife’s card include
$88.85 for fuel and parking fees in July [of] 2014; $0 in August
and September; $0.99 in October; and $3.93 in November for i-
tunes; and $102.00 at Susquehanna Ale House in December [of]
2014. Yet, the card issued to C A Snyder used $727.77 in
December [of] 2014 alone. On December 2, 2014, RAS BAR, Inc.
made an American Express Card payment in the amount of
$1,200.00.
Bank statements of Husband’s M&T checking account at the
date of separation were not provided. The last monthly bill for the
American Express card was also not provided. The most recent
statement has a balance owed of $9,660.60. There is writing on
the last statement; however, [there is] no testimony concerning
what that means, therefore all handwriting on the exhibits not
identified or testified to is omitted by the master as hearsay.
After reviewing the entire exhibit and the payments, as it
seems the marital portion of any expenses, as well as many
business purchases, were largely paid off by use of Husband’s
power/classic checking account x 1344, after drawing down on the
[home equity line of credit] account, in his name alone, and
considering these draw downs taken before date of separation are
already considered, the master finds any amounts due and owing
at date of separation on the American Express, if any, are
Husband’s sole responsibility. However, Husband shall also be
awarded sole use of the points associated with the account.
Master’s Report and Recommendation, filed 5/4/20, at 31-33 (footnote
omitted) (footnotes added).
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On appeal, in arguing the Master erred, Husband’s entire argument is
as follows:
The Pennsylvania Supreme Court has held that “[b]etween
divorcing parties, debts which accrue to them jointly prior to
separation are marital debts.” Litmans v. Litmans,…673 A.2d
382, 391 (Pa.Super. 1996) (citing Duff v. Duff, 510 Pa. 251, 507
A.2d 371 (1986)).
The special master found the date of separation balance on
the American Express card to be non-marital. It is not questioned
that the debt was incurred prior to the separation of the parties.
The debt is presumed to be marital. There is neither testimony
nor evidence of record which overcomes this presumption.
Accordingly, Husband should be credited with the debt in the
amount of $9,660.69.
Husband’s Brief at 28.
We find no abuse of discretion. See Childress, supra. Initially, we
note the master indicated Husband failed to provide his last monthly M&T
checking account statement. The evidence revealed that Husband often
transferred money into his personal M&T checking account from the home
equity line of credit, which was solely in his name, to pay the American Express
credit card bill. Also, Husband failed to provide the last monthly American
Express bill so that the master could determine what, if any, amount remained
unpaid.
Moreover, the master noted the American Express credit card was used
by the parties for personal expenses, as well as RAS BAR business expenses;
however, since the final monthly bill had not been provided, the master was
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unable to determine what portion of any outstanding balance was for personal,
as opposed to business, expenses.
Given this lack of clarity, the master ordered that Husband was
responsible for the remaining balance on the American Express credit card, if
any. The master recognized that Husband should be responsible, rather than
splitting the debt, after consideration of the parties’ economic circumstances.
The master also noted Wife’s personal charges on the credit card were
relatively minimal, and the master gave Husband sole use of the accrued
points associated with the account.
The trial court has discretion to deal with each asset or debt discretely
rather than applying a single percentage split to every part of the marital
estate. See Winters v. Winters, 512 A.2d 1211, 1216 (Pa.Super. 1986) (“It
is within the discretion of the court to credit an amount to one of the parties
and take such credit into consideration when dividing the marital property.”).
Based upon the record, the trial court did not abuse its discretion. See id.Husband next contends the master erred in its valuation of two
automobiles, a boat, and the apartment furnishings in Husband’s New York
apartment. Specifically, Husband argues (1) the 2008 Lincoln Mark LT should
have been valued at $10,000.00 instead of $20,050.00; (2) the 1995
Mercedes Benz SL 500 should have been valued at $0.00 instead of
$7,975.00; (3) the 1989 28-Foot Rinker Festavee 250 boat should have been
valued at $0.00 instead of $9,250.00; and (4) the apartment furnishings
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should have been valued at $500.00 instead of $3,257.84. See Husband’s
Brief at 28-31. For each of these items, Husband suggests the trial court erred
in finding Wife’s testimony credible as to the value of the items. He specifically
suggests that he “has offered more reliable testimony” as to the value of the
items. Id. at 30.
Here, in valuing the items, the master indicated the following:
Husband testified that [the 2008 Lincoln Mark LT], although
titled in his Mother, Anna Snyder’s name, belonged to him and
was only purchased in her name due to better credit. The title to
the vehicle issued on August 22, 2018[,] remains in his Mother’s
name. The truck is listed on Schedule E of Anna Snyder’s
decedent tax return with a value of $23,950.00 at date of death,
March 10, 2010. The NADA[10] value of the truck as of December
21, 2017[,] is between $16,550.00 for a rough trade-in up to
$23,450.00 for clean retail. Husband testified that he paid for the
truck and admits it is marital property. While he testified it needs
transmission work, he also stated it looks brand new and is
beautiful. In addition, he stated he doesn’t put more than 2,000
to 5,000 miles per year on it, using it in parades. It is noted
Husband has not filed an Inventory and Appraisal indicating the
value or condition of this vehicle[,] and while he testified it needs
transmission work, he did not provide any testimony or exhibits
to a different value. As such, the master finds this vehicle was
purchased during the marriage[,]…is marital property[,] and [is]
assign[ed] the NADA clean trade-in value of $20,050.00.
***
Husband testified that [the 1995 Mercedes SL 500] was
purchased for seven or eight thousand dollars, but [it] could have
been ten or twelve thousand. The NADA value average retail price
is $7,975.00, and he hopes to sell it and get that price. He claims
that [the] vehicle needs a new transmission, but [it] starts. He
____________________________________________
10National Automobile Dealers Association. An entity called National Appraisal
Guides, Inc., licensing the name “NADA,” publishes vehicle pricing information
and tools for new, used, and classic cars, for use by consumers, dealers, and
other entities.
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said there is no dipstick on the transmission[,] so he has to take
it to a dealer. As such, based upon the undisputed value, the
master finds this vehicle [is] a marital asset worth $7,795.00.[11]
***
Wife’s Inventory and Appraisal filed [on] January 5, 2018[,]
clearly lists the [1989 28-Foot Rinker Festavee 250 boat] as a
marital asset with an approximate value of $13,250.00. Husband
never filed an Inventory and Appraisal, but [he] [summarily] lists
the boat as non-marital property on his pretrial statement filed
[on] June 25, 2018, with an estimated value…of $8,400.00.
Husband testified he purchased this boat in early 1993 by
obtaining a bank loan in the amount of $16,000.00 from Ben
Cerven after he wanted $25,000.00 and Husband wrote out a
check for four thousand dollars. The boat was paid off during the
marriage.
After the separation[,] Husband claims he owes about six to
eight thousand dollars because of the engine transmission and
three years of storage; however, no evidence of any debt was
provided to substantiate this alleged debt incurred post
separation. The NADA value produced by Wife as of December
[of] 2017 indicates [an] average retail value of $13,250.00.
The increase in value of any non-marital asset shall be
deemed marital. The court shall use whichever value, date of
separation or date of distribution, results in a lesser increase. In
this case[,] there is no value to compare because the master finds
Husband failed to meet his burden of proof that there is any debt
or lesser value than that of the NADA value. His testimony
throughout the hearing was self-serving and without any
documentation to support his statements, such that both his
vehicles and boat all allegedly have transmission problems without
ever producing a mechanic statement or testimony.
As such, the master finds the equity in the boat at date of
marriage is approximately $4,000.00 and the value produced by
Wife (which is between date of separation and date of distribution)
____________________________________________
11 It appears the master made a typographical error in the report and
recommendation, thus inverting the numbers in the valuation of the 1995
Mercedes Benz. However, there is no dispute the master utilized the value of
“$7,975.00” in the proposed distribution of assets.
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is $13,250.00, the marital increase in value is the difference, or
$9,250.00
***
Husband’s receipts for items purchased to furnish the New
York apartment less than a year before date of separation is
$3,254.84. The master finds the amount[] used to be fair and
reasonable.
Master’s Report and Recommendation, filed 5/4/20, at 17-19, 23 (footnote
omitted) (footnotes added).
Initially, we note that, as it pertains to the Lincoln Mark LT, our review
of the record indicates that Husband described the condition of the vehicle as
“beautiful” and that he drives the vehicle “every day[.]” N.T., 10/24/19, at
132. As to the value, he testified “I would think I would get what any 2008 is
worth, I don’t think it’s any different than that, and I have no idea what the
NADA value is.” Id. at 133. However, when shown the NADA exhibits, he
agreed the clean trade-in value for such a vehicle in 2017 was $20,050.00,
which is the value the master assigned to the vehicle. Id. at 133-34.
As to the 1995 Mercedes Benz 500 SL, Husband testified the value of
the vehicle was “$8,000, 79, 75, I’m not arguing with that.” Id. at 136. The
master assigned a value of $7,975.00.
Regarding the boat, Husband testified he purchased the boat in 1993
for $16,000.00. Id. at 138. He agreed that he paid off the loan on the boat,
but he owes $6,000.00 or $8,000.00 to a mechanic, who repaired the
transmission the year prior to the master’s hearing. Id. at 139. However,
Husband did not provide documentation in support of his claim.
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Regarding the apartment furnishings, Husband agreed the receipts from
the purchase of furnishings totaled “[g]ive or take 3200 bucks[.]” Id. at 159.
The master valued the furnishings at $3,254.84.
In any event, to the extent the master found Wife’s testimony to be
more credible than Husband’s testimony as to the value of these items, we
will not disturb the credibility determinations or reweigh the evidence. See
Childress, supra. Further, we note that, to the extent the master used the
NADA in establishing the value for the vehicles, this Court has concluded such
a valuation method is acceptable in equitable distribution cases. See Carney,
supra. Thus, we find no abuse of discretion or error of law.
In his final issue, Husband contends the trial court erred in ordering
Husband to pay Wife a lump sum of $420,731.23 instead of ordering a
distribution of assets in kind.
We emphasize the flexible approach provided under the Divorce Code
for the equitable distribution of property. Specifically, the relevant statutory
language provides “[u]pon the request of either party in an action for
divorce…, the court shall equitably divide, distribute or assign, in kind or
otherwise, the marital property between the parties…in such manner as the
court deems just after considering all relevant factors.” 23 Pa.C.S.A. §
3502(a).
According to the Divorce Code, the legislative intent and policy of this
Commonwealth is to: “Effectuate economic justice between parties who are
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divorced or separated.” 23 Pa.C.S.A. § 3102(a)(6). The specific language of
this policy under the statute is to “insure a fair and just determination and
settlement of their property rights.” Id.
In the case sub judice, Husband has cited no authority in support of his
argument that the trial court erred in ordering him to pay Wife her share of
the marital assets in a lump sum of cash as opposed to assets in kind.12 “The
trial court had the discretion to decide that [Husband] pay [Wife] via any
method it saw fit, so long as the result was a ‘fair and just’ determination of
the parties' rights.” Wayda v. Wayda, 576 A.2d 1060, 1064 (Pa.Super.
1990).
We have reviewed the record, and we find no evidence that the trial
court misapplied the law or failed to follow proper procedure in deciding that
Husband should make a lump sum cash payment to Wife. Therefore, we
cannot conclude that the trial court’s decision in this regard constituted an
abuse of discretion. See id.For all of the foregoing reasons, we affirm the trial court’s decree in all
respects, except to the extent it double counted four of RAS BAR’s assets: (1)
the Swineford checking account, (2) the liquor license, (3) the property at
448½-450 Market Street in Sunbury (a/k/a Squeeze-In), and (4) the fair
____________________________________________
12 We note Husband’s sole cited authority, Gaydos, supra, stands for the
general principle that the trial court has broad equitable power to effectuate
economic justice in determining a distribution scheme. See Husband’s Brief
at 31.
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rental value of the RAS BAR apartment at 448½ Market Street. Upon remand,
we direct the trial court to remove these four assets from the master’s
distribution plan and recalculate the amount due to Wife.
Decree affirmed, in part, and vacated, in part. Case remanded for
proceedings consistent with this decision. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/20/2022
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