Alimony & Spousal Support

Equitable Distribution; Business Opened Post Separation; Marital Debt; Valuation Method

In the case of Kimmel vs. Kimmel, PICS Case No. 13-3096, (C.P. Lawrence County), the Honorable John Hodge ruled that the exceptions to a master’s distribution of a couple’s property were largely denied where the master correctly distinguished pre-marital and marital assets by identifying equitable advances of funds and post-separation withdrawal of funds used to pay down marital debt.

The husband filed an exception to the master’s award of a portion of husband’s business account that was opened after the parties separated.

Plaintiff wife and defendant husband filed competing exceptions to the report and recommendations of the equitable distribution master.

Wife and husband separated after 24 years of marriage. The division of assets included the marital home, IRA accounts, savings, husband’s business assets, other investment accounts and motor vehicles. Marital debt consisted of a mortgage and a home equity loan.

The master awarded wife the marital home, with a buyout of husband’s half-share. The money accounts were subject to liquidation and distribution to both parties. Wife was granted attorney fees and alimony.

First, the court found that the master erred by allowing husband to testify about his monthly expenses after he failed to include an expense report with his pretrial statement as required by the Rules of Civil Procedure. Strict adherence to the rule was required.

The court denied both parties’ exceptions to the masters’ valuation of some investment accounts and husband’s former business assets. Neither wife nor husband presented evidence of the assets’ pre-marital value. In the absence of such information, the master was correct to apply present-day values and multiply that number by the number of years in the marriage, divided by the length of each account’s existence.

The court granted wife’s exception to the master’s determination that husband’s withdrawal from the home equity line of credit to pay for their children’s college tuition was marital debt because the debt was incurred after separation.

The master correctly calculated the current mortgage balance on the marital home, rather than at the date of separation, to value the property because wife remained in the home and paid the mortgage. Those costs were offset by husband not receiving a fair rental value award.

The master’s calculation of husband’s earning capacity was also upheld because it was properly based on husband’s current salary in a new position as a store manager, along with his skills and experience in the wholesale furniture business.

Both parties argued that the master erred in calculating alimony. However, the master established the award amount based on applying the factors set forth in the Divorce Code, and due deference was appropriate.

The master properly awarded to wife an IRA account that she established with inherited funds and funds withdrawn from a separate marital account, which the master identified as an equitable advance. The evidence established that wife did not intend to make the IRA a marital asset.

Husband was not entitled to an offset for other post-separation withdrawals by wife that were used to make payment on a home equity line of credit.

Husband’s exception to the master’s award of a portion of husband’s business account opened after the parties separated was granted. The assignment of marital value to the account was unsupported by the master’s factual findings and was therefore reversible error that required a redistribution of the funds allotted to wife.

The master’s assignment of marital value to a motor vehicle purchase during the marriage was upheld because husband sold the vehicle after separating from wife.

Wife’s testimony about the condition of the marital home form appraisal value was properly admitted. The master’s valuation and wife’s valuation were consistent with husband’s appraised value.

The court found no error in the master’s order for husband to obtain a life insurance policy and name wife as beneficiary to secure the alimony award. Wife’s attorney fees were adjusted to reflect the changes the court made in the master’s distribution payments.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly (November 26, 2013)

Filed Under: Family Law

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