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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SAMUEL A. MORGANTE : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
KELLY S. MORGANTE : No. 597 MDA 2017
Appeal from the Order Entered March 7, 2017
In the Court of Common Pleas of Lycoming County
Civil Division at No(s): 11-20,065
BEFORE: GANTMAN, P.J., SHOGAN, J., and OTT, J.
MEMORANDUM BY OTT, J.: FILED MAY 22, 2018
Samuel A. Morgante (Husband) appeals from the order entered March
7, 2017, in the Court of Common Pleas of Lycoming County, finding him in
contempt and ordering him to pay Kelly S. Morgante (Wife) a lump sum
payment of $31,888.85 on or before May 31, 2017, to make monthly
payments to Wife, commencing April, 2017, in the amount of $911.11 either
directly from the Navy retirement pay and/or through direct payments from
Husband, and to pay Wife’s counsel fees in the amount of $750.00. The trial
court’s order provides Husband’s obligation to pay counsel fees to Wife’s
counsel would be suspended upon the condition that Husband make the lump
sum payment to Wife of $31,888.85 on or before May 31, 2017. See Order,
June 9, 2014, at ¶4.
Husband contends the trial court erred in (1) finding him in contempt
and awarding Wife counsel fees, (2) ordering him to pay Wife an equitable
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distribution sum from monies Wife elected to include in his income to calculate
child support, (3) ordering him to make direct payments to Wife, (4) failing to
consider the tax consequences of the lump sum and monthly payments, (5)
failing to require Wife’s payment from his retirement to be distributed by a
Qualified Domestic Relations Order (QDRO), (6) failing to give him credit
toward the lump sum because he had paid child support, alimony pendente
lite, and mortgage contributions based on his retirement income, and (7)
utilizing June 9, 2014, as the retroactive date under the order. Based upon
the following, we affirm.
By way of background, the parties were married on May 16, 1987, and
separated on February 14, 2010. Husband’s Navy pension is in pay status. A
final decree in divorce was entered on January 14, 2014.
The facts and procedural history relevant to this appeal have been
summarized by the trial court in its opinions filed March 7, 2017, and May 31,
2017. For purposes of our discussion, we reiterate the court’s summaries, as
abbreviated, below:
By way of background, a Master’s Hearing in regard to Equitable
Distribution was held on August 31, 2012; October 12, 2012;
December 9, 2012; supplemented by an Order of Court dated
March 5, 2013. A Master’s Report and Recommendation in regard
to Equitable Distribution was filed on June 25, 2013. …
Subsequently, Husband filed Exceptions on July 10, 2013, and
Amended Exceptions on July 15, 2013. …
An Amended Master’s Report on Equitable Distribution was issued
on November 19, 2013. …
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On November 20, 2013, Husband filed Exceptions to the Amended
Master’s Report. On December 30, 2013, the [trial court] heard
argument by the parties on the outstanding Exceptions. On June
9, 2014 th[e trial c]ourt issued an Opinion and Order ruling on
Husband’s Exceptions. … Husband filed a Notice of Appeal on June
30, 2014, and Amended Notice of Appeal on July 9, 2014. On
June 26, 2015, the Superior Court issued an Opinion affirming the
Trial Court’s O[rder] of June 9, 2014. [Morgante v. Morgante,
119 A.3d 382 (Pa. Super. 2015).]
… Pursuant to the Master’s Report dated June 25, 2013, and this
Court’s Order dated June 9, 2014, which was affirmed by the
Superior Court Order dated June 26, 2015, Wife shall receive the
sum of $567,201.26 as her equitable distribution portion of the
marital estate. It was further ordered that this payment would be
made by Wife receiving a monthly payment from Husband’s
disposable retirement income. To protect Wife’s interest in the
equitable distribution portion of the marital estate, the Court
Order further indicates that if Husband’s Navy Pension (retirement
income) is reduced in any way which reduces the amount or share
of retired pay to which Wife is entitled, such as receipt of disability
pay, then Husband will make direct payments to Wife to indemnify
and hold her harmless from any reduction, costs or damages
which she may incur. The minimum payment which Wife is to
receive either directly from the Navy Pension and/or through
direct payments from Husband is $911.11 per month, plus
consideration of the associated COLAs [Cost of Living
adjustments]. The Court’s Order further directed that a qualified
domestic relations order [QDRO] would be prepared directing
payments to Wife of 47.652%[1] of Husband’s monthly Navy
Pension to be prepared and submitted by Husband’s attorney
within thirty days of the date of the Court's Order of June 9, 2014.
Trial Court Opinion, 3/9/2017, at 1-4.
Wife filed her Petition for Contempt on September 23, 2016,
alleging that Husband and his attorney have been uncooperative
since September 2015 in providing additional information
requested by Wife’s actuarial consultant, and therefore the QDRO
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1 “The Master … found that the $567,201.26 payment owed to Wife in
equitable distribution is 47.652% of the present value of Husband’s disposable
retired pay.” Morgante v. Morgante, 119 A.3d 382, 392 (Pa. Super. 2015).
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had not been prepared. Wife further alleges that Husband had not
made any payments of the $911.11 minimum to which she was
entitled under the Order of June 9, 2014. A hearing was held on
January 9, 2017. At that time, Husband argued that the $911.11
minimum monthly payment obligation did not commence until the
QDRO was in place and distributed directly to Wife from his Navy
Retirement pay. He further argued that the full amount of his Navy
Retirement pay is included in his income for child support and
spousal support calculation purposes and, therefore, it would be
considered impermissible “double-dipping” for Wife if she were to
receive her payments directly from Husband prior to the QDRO
being implemented. …
Trial Court Opinion, May 31, 2017, at 3-4.
By Order entered March 7, 2017, the trial court found Husband in
contempt for his failure to comply with the court’s order of June 9, 2014. The
trial court ordered him to pay Wife a lump sum of $31,888.85 (representing
monthly payments of $911.11 from June 2014 through March 2017) by May
31, 2017, to pay Wife $911.11 monthly, commencing April, 2017, either
through his Navy Retirement pay or directly from Husband, and to pay Wife
$750.00 in counsel fees. However, the obligation to pay attorney fees was to
be suspended upon Husband making the required lump sum payment to Wife
by May 31, 2017. This appeal followed.2 Subsequently, Husband filed a
request for a stay, pursuant to Pennsylvania Rule of Appellate Procedure 1731,
and the trial court denied the request in part, and granted the request in part.3
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2Husband timely complied with the order of the trial court to file a Pa.R.A.P.
1925(b) statement of errors complained of on appeal.
3 The trial court explained:
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In his first issue, Husband contends the trial court erred in finding him
in contempt and awarding attorney fees because the order was not clear,
definite and specific and he did not act with wrongful intent. Husband argues
there is no language in the order that specifies immediate, direct payment to
Wife. He asserts the only explicit language is to prepare a QRDO within 30
days and submit it to Wife, and to pay $911.11 directly to Wife when the
amount received by Wife is reduced below that amount. Husband maintains
he complied with the order by submitting a QDRO within the timeframe
directed by the trial court. Husband further contends that even if the order is
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Husband filed a Motion for Stay of the Order on April 5, 2017, and
an Amended Motion for Stay of the Order on April 19, 2017. A
hearing was held on May 5, 2017, regarding the Motions. By Order
dated May 8, 2017, Husband’s request for a stay of the monthly
payment to Wife in the amount of $911.11 commencing in April
2017, was denied. Husband’s request for a stay with regard to the
lump sum payment in the amount of $31,888.85 on or before May
31, 2017, was granted. The Court found that there were
reasonable grounds for a difference of opinion as to whether or
not the lump sum payment ordered by the Court in its March 7,
2017, Order was appropriate. Pursuant to Pa.R.A.P. 1731(b),
Husband was directed to pay a bond in the amount of $31,888.85
in cash or property with the Prothonotary of Lycoming County on
or before May 31, 2017. Husband's request for a stay of the
required payment of $750.00 in counsel fees, which would have
been suspended upon payment of the lump sum amount on or
before May 31, 2017, was granted, and the payment was stayed
pending a decision from the Superior Court on the lump sum
payment.
Trial Court Opinion, 5/31/2017, at 4-5.
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found to confer a duty on him to make direct payments to Wife regardless of
whether a QDRO is in place, the order is ambiguous and there is a reasonable
interpretation to the contrary. In this regard, Husband points to the trial
court’s order granting, in part, his request for a stay, finding that “there are
reasonable grounds for a difference of opinion as to whether or not the lump
sum payment in the amount ordered by the Court is appropriate.” Stay Order,
5/8/2017 at 2.
Our standard of review is well settled:
"When considering an appeal from an [o]rder holding a party in
contempt for failure to comply with a court [o]rder, our scope of
review is narrow: we will reverse only upon a showing the court
abused its discretion." Harcar v. Harcar, 2009 PA Super 203,
982 A.2d 1230, 1234 (Pa. Super. 2009) (quoting Hopkins v.
Byes, 2008 PA Super 172, 954 A.2d 654, 655 (Pa. Super. 2008)).
We also must consider that:
Each court is the exclusive judge of contempts against its process.
The contempt power is essential to the preservation of the court's
authority and prevents the administration of justice from falling
into disrepute. When reviewing an appeal from a contempt order,
the appellate court must place great reliance upon the discretion
of the trial judge.
Langendorfer v. Spearman, 2002 PA Super 93, 797 A.2d 303,
307 (Pa. Super. 2002) (quoting Garr v. Peters, 2001 PA Super
110, 773 A.2d 183, 189 (Pa. Super. 2001)). "The court abuses its
discretion if it misapplies the law or exercises its discretion in a
manner lacking reason." Godfrey v. Godfrey, 2006 PA Super 39,
894 A.2d 776, 780 (Pa. Super. 2006). Additionally, "[i]n
proceedings for civil contempt of court, the general rule is that the
burden of proof rests with the complaining party to demonstrate,
by [a] preponderance of the evidence that the defendant is in
noncompliance with a court order." Lachat v. Hinchliffe, 2001
PA Super 50, 769 A.2d 481, 488 (Pa. Super. 2001).
Habjan v. Habjan, 73 A.3d 630, 637 (Pa. Super. 2013).
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The June 9, 2014 order for equitable distribution underlying the present
contempt order under appeal provided, in relevant part:
It is therefore ORDERED and DIRECTED as follows:
A QDRO directing payments to Wife of 47.652% of Husband’s
monthly Navy pension shall be prepared and submitted by
Husband’s attorney within 30 days of the date of this Order.
If [Husband’s] Navy Pension is reduced in any way which reduces
the amount or share of retried [sic] pay to which [Wife] is entitled,
such as the receipt of disability pay, then he will promptly make
direct payments to [Wife] to indemnify her and hold her harmless
from any reduction, costs or damages which she may occur [sic].
The minimum payment which Wife shall receive either
directly from the Navy Pension and/or through direct
payment from Husband’s $911.11 per month plus
applicable COLAs.
Order, 6/9/2014 (emphasis added).
The trial court rejected Husband’s argument that the $911.11 payment
per month to Wife only commenced once the QDRO was in place, and found
him in contempt, reasoning:
… Husband, in violation of the Court's Order which was affirmed
by the Superior Court, made zero minimum monthly payments of
$911.11 from June 9, 2014, through March of 2017. Husband’s
justification for doing so is twofold. First, he argues that the
language of the June 9, 2014, Order specifically required direct
payments to Wife only if his disposable retirement pay was
reduced in any way, and that his payment was not reduced at all
and therefore fully available to Wife via QDRO, and in fact was not
distributed solely due to Wife’s recalcitrance. Second, he argues
that this Court erred in not requiring Wife’s payment to be
distributed by QDRO as was the agreement of the parties and the
Court Order.
Husband is of the opinion that the monthly minimum payments
were not to begin until the QDRO was in place. He further argues
that this Court erred in utilizing June 9, 2014, as the retroactive
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date under the contempt Order, presumably because there was
no QDRO in effect on that date. This Court’s Order of June 9, 2014,
although it states that a QDRO shall be prepared and submitted
by Husband’s attorney within 30 days of the date of the Order,
does not state that Wife’s minimum monthly payments were
contingent on the QDRO being in place. The Order stated that “the
minimum payment which Wife shall receive either directly from
the Navy Pension and/or through direct payment from Husband is
$911.11 per month plus applicable COLAs.” As stated in this
Court’s Order of March 7, 2017, Husband’s retirement payments
were intended to be used for the monthly payment to Wife, but
not mandated. The Order indicated that a minimum monthly
payment of $911.11 was to be made to Wife. The Court’s June 9,
2014, Order permitted Husband to satisfy his equitable
distribution obligation over time rather than in a lump sum, which
was a benefit to Husband. The amount and the frequency of the
payment was Ordered by the Court. The source of the payment or
the method by which it was received was not. An Order [QDRO]
requiring direct payment to Wife would certainly promote
efficiency, but was not required prior to the payment obligation
commencing.
****
Additionally, this Court did not err in awarding counsel fees to
Wife. The Divorce Code grants trial courts broad power to enforce
equitable distribution orders and to provide remedies in the event
of failure to comply with orders of equitable distribution. Prol v.
Prol, 935 A.2d 547, 553 (Pa. Super. 2007). This Court found
Husband in contempt for his failure to pay to Wife, for 35
consecutive months, the monthly minimum amount required of
him under the June 9, 2014, Order. Attorneys’ fees and other
disbursements necessitated by the contemnor’s noncompliance
may be recovered by the aggrieved party in a civil contempt case.
Rhoads v. Pryce, 874 A.2d 148, 152 (Pa. Super. 2005). Because
an award of counsel fees is “intended to reimburse an innocent
litigant for expenses made necessary by the conduct of an
opponent, it is coercive and compensatory, and not punitive. . .”
Id. Counsel fees are a proper element of a civil contempt order.
Id. In reviewing an award of counsel fees, an appellate court will
not disturb the decision below absent a clear abuse of discretion.
Id. This Court’s award of $750.00 to Wife in counsel fees to [sic]
is reasonable considering she had to expend time and money to
enforce an Order on which she received no payments for more
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than two years at the time of the filing of the petition.
Furthermore, this Court initially permitted Husband to avoid the
payment of counsel fees if he paid the entire lump sum owed to
Wife by May 31, 2017, and subsequently, by Order dated May 8,
2017, stayed the requirement that Husband pay counsel fees until
a decision is rendered by the Superior Court regarding the lump
sum payment. Husband’s argument regarding the award of
counsel fees is without merit.
Trial Court Opinion, May 31, 2017, at 7-8.
Based on our review, we likewise find that pursuant to the trial court’s
June 9, 2014, order, Wife was entitled to $911.11 per month from Husband’s
Navy pension regardless of the existence of a QDRO. The language of the
order did not condition Wife’s monthly payment on a QDRO. In addition, the
order specifically provided that “The minimum payment which Wife shall
receive either directly from the Navy Pension and/or through direct payment
from Husband’s $911.11 per month plus applicable COLAs.” Order, 6/9/2014.
Moreover, as this Court pointed out in Husband’s appeal of the June 9, 2014,
order, the trial court “afforded Husband the opportunity to pay his equitable
distribution obligation to Wife over time through monthly payments, rather
than in a lump sum,” which inured to his benefit. Morgante v. Morgante,
119 A.3d 382, 394 (Pa. Super. 2015). Finally, while Husband states the order
is ambiguous, we find no basis upon which to accept Husband’s argument that
essentially posits the provision for the QDRO could suspend the order
indefinitely. Therefore, as we find the June 9, 2014 order is clear and
unambiguous, we conclude the trial court did not abuse its discretion in finding
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Husband in contempt for failure to make monthly payments to Wife,
commencing on June 9, 2014.
In his second issue, Husband argues the trial court erred in ordering him
to pay Wife an equitable distribution sum from monies Wife elected to include
in Husband’s income to calculate support constituting a double dip of an asset.
It is well-settled that “money included in an individual’s income for the
purpose of calculating support payments may not also be labeled as a marital
asset subject to equitable distribution.” Miller v. Miller, 783 A.2d 832, 835
(Pa. Super. 2001) (quoting Rohrer v. Rohrer, 715 A.2d 463, 465 (Pa. Super.
1998)).
In the trial court, Husband filed a motion to reopen/clarify record, raising
the issue of the inclusion of his Navy retirement and disability payment in his
income. This issue was similar to the issue raised in Husband’s exceptions.
Thereafter, Husband filed an exception to the Amended Master’s Report,
contending that the Master erred in her finding of incomes/income capacity
for both parties. However, after the trial court denied the exception, Husband
did not appeal the issue of inclusion of his retirement pay as both income and
an asset to be distributed in equitable distribution. Under the doctrine of res
judicata, Husband may not now raise this issue when it was litigated prior to
the trial court’s June 9, 2014, order, and not included in Husband’s prior
appeal.
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“Res judicata, or claim preclusion, is a doctrine by which a former
adjudication bars a later action on all or part of the claim which was the subject
of the first action.” Balent v. City of Wilkes-Barre, 669 A.2d 309, 313 (Pa.
1995). “Any final, valid judgment on the merits by a court of competent
jurisdiction precludes any future suit between the parties or their privies on
the same cause of action.” Id. “Res judicata applies not only to claims
actually litigated, but also to claims which could have been litigated during the
first proceeding if they were part of the same cause of action.” Id.
As explained by the trial court in its March 7, 2017 opinion:
Initially, we note that the second issue raised in Husband's
Concise Statement alleges that this Court erred in ordering
Husband to pay Wife an equitable distribution sum that was
derived directly from monies Wife elected to include in Husband's
income to calculate child support, APL and a mortgage
contribution. Husband appears to be attempting to re-litigate an
issue that has already been decided. The Court’s award of
equitable distribution was issued on June 9, 2014, affirmed by the
Superior Court on June 26, 2015, and made final 30 days later
after the time for filing a petition for allowance of appeal to the
Pennsylvania Supreme Court was exhausted. When this Court’s
Order was entered, Husband’s military retirement pay became an
asset.
Trial Court Opinion, 5/30/2017, at 6.
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We agree that Husband cannot relitigate this issue that was litigated in
the trial court, and not raised in the prior appeal to this Court. Accordingly,
we conclude Husband’s claim is unavailing.4
In his third issue, Husband claims the trial court erred in ordering him
to make direct payments to Wife because the concise language of the June 9,
2014, order specifically required direct payments to Wife only if the pension
income was reduced in any way. As our discussion relating to Husband’s first
issue concerning contempt encompasses this argument, no further discussion
is warranted here.
The fourth claim presented by Husband is that the trial court erred in
not considering the tax consequences of the lump sum and monthly payments
because the parties agreed and the court ordered that a QDRO be completed
but deemed the payments in equitable distribution. Husband’s complete
argument consists of two sentences:
Because the QDRO was not entered, [Husband] was taxed on the
retirement but [Wife] received her payment of the pension without
tax. Had the QDRO been entered and the pension distributed to
[Wife], she would have paid the taxes on her portion as well.
Husband’s Brief, at 24.
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4 Nonetheless, as the trial court points out, and Wife also recognizes, Husband
has a remedy by seeking modification of the support order based upon
changed circumstances, specifically, the characterization of Husband’s
disposable retirement pay as an asset subject to equitable distribution, which
is handled in the Court of Common Pleas of Centre County. See Trial Court
Opinion, 5/31/2015, at 5-6; Wife’s Brief at 16.
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While Husband argues that if payment is not by QDRO, then the trial
court should have considered the tax consequences of direct payment by
Husband, we have found the trial court’s June 9, 2014 order is clear that a
QDRO was not a prerequisite for Wife’s entitlement to payments. As such,
the issue of tax consequences to Husband for direct payments should have
been raised in Husband’s direct appeal from the June 9, 2014 order.
Accordingly, at this juncture, Husband’s claim is unavailing. See Balent,
supra.
In the fifth issue, Husband contends the trial court erred in not requiring
Wife’s payment from Husband’s retirement to be distributed by a QDRO
because the parties agreed and the court suggested a QDRO be completed.
This issue has already been rejected in connection with our discussion of
Husband’s first issue, regarding contempt. Therefore, no further discussion is
warranted.
In his sixth issue, Husband contends the trial court erred in not giving
Husband credit toward the lump sum payment because Husband had paid
child support, alimony pendente lite and mortgage contributions based on his
retirement income. This issue is the same as Husband’s second issue, which
we have discussed above. Therefore, we need not address it.
The final issue presented by Husband is his contention the trial court
erred in using June 9, 2014, as the retroactive date under the order because
the date should have been when the retirement pay was withdrawn from the
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calculation of income for support purposes. Again, this issue is intricately
entwined with the second issue that has already been addressed and,
therefore, no further discussion is warranted.
In sum, having carefully reviewed the contentions of Husband, and
finding that these issues present no basis upon which to disturb the decision
of the trial court, we affirm.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/22/2018
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Morgante, S. v. Morgante, K.
Combined Opinion