Equitable Distribution


In the family law, equitable distribution case of Carney v. Carney, PICS No. 17-0944 (Pa. Super. May 31, 2017), the Pennsylvania Superior Court ruled that the trial court erred in failing to consider evidence related to the potential sale of the parties’ successful trucking business before assigning the entire asset to husband as part of the equitable distribution of the parties’ marital estate.


Read More…


The appellate court affirmed in part, reversed in part and remanded for further proceedings.

The parties were married in 1986 and separated in 2010. During the marriage husband founded Brothers Auto Transport, a company that picks up new and used vehicles and transports them through the country. As of the date of separation, Brothers was a thriving business with average gross sales of about $9 million each year and a fleet of over 40 trucks. Wife worked for Brothers at one point but stopped working due to health problems, including rheumatoid arthritis, lupus and Raynaud’s Syndrome. In July 2016, the trial court entered an order setting forth its equitable distribution that divided the parties’ marital estate 50/50. The court valued Brothers at just under $2 million. To avoid liquidation of the business, the court awarded Brothers solely to husband. To equalize this distribution, the court then awarded wife the marital residence and a marital 401(k) account. The court also directed husband to pay wife $6,762 each month for 10 years. Additionally the court granted wife’s petition to modify alimony pendente lite and increased her award to $12,000 each month. In this second appeal to the Superior Court, husband argued that the trial court erred in refusing to consider the tax effects of awarding the parties’ business solely to him. The trial court had dismissed this argument, explaining that it was not required to apply a tax effect value to any of the marital assets as there was no evidence the parties intended to sell any of the assets. The Superior Court noted that at 23 Pa.C.S. § 3502(a), the Divorce Court lists 11 relevant factors in an equitable distribution analysis, including expenses associated with the sale of each marital asset. In Balicki v. Balacki, 4 A.3d 654 (Pa. Super. 2010), the appellate court upheld an equitable distribution order that deducted sale expenses and tax ramifications from the valuation of husband’s insurance agency business before assigning the asset solely to husband. In that case, the Superior Court rejected the notion that the sale expenses and tax ramifications associated with the sale, transfer or liquidation of a marital asset are only relevant in an equitable distribution determination if a sale of the asset is likely. In this matter, the trial court assigned the entire Brothers business to husband, but the business could not be converted into cash without significant expense, the court observed. By comparison, wife was to receive monthly payments of cash without equivalent expenses. In light of its holding in Balicki, the Superior Court concluded that the trial court erred in failing to consider evidence related to the potential sale of Brothers before assigning the entire asset to husband. As such, the court reversed in part, affirmed in part and remanded for further proceedings.


Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 40 PLW 590 (June 27, 2017)


Kindly visit our Family Law and Equitable Distribution websites and call our Philadelphia Divorce Attorneys at 215-977-8200 for more information on this topic.