J-A01025-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DARLENE M. CHIZMAR, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
RONALD L. CHIZMAR,
Appellee No. 1089 WDA 2016
Appeal from the Order Entered June 27, 2016
In the Court of Common Pleas of Crawford County
Civil Division at No(s): FD 2013-191S
BEFORE: BOWES, OLSON and STRASSBURGER,* JJ.
MEMORANDUM BY OLSON, J.: FILED FEBRUARY 22, 2017
Appellant, Darlene M. Chizmar, appeals from the order entered on
June 27, 2016, granting exceptions filed by Ronald L. Chizmar (Husband) to
a master’s recommendation regarding equitable distribution. We affirm.
We briefly summarize the facts and procedural history of this case as
follows. The parties married in July 1998, have no children, and separated
in April 2013. Appellant filed a complaint in divorce on May 15, 2015. The
trial court appointed a master, who held a two-day hearing commencing on
September 10, 2015 to determine, inter alia, equitable distribution, alimony,
and alimony pendente lite. Relative to this appeal, the parties provided
testimony that during the marriage Appellant inherited a one-sixth interest
in real property in Encinitas, California and a one-third interest in real
property in Cardiff, California. Appellant presented county assessments in
*Retired Senior Judge assigned to the Superior Court.
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support of her property estimations, showing the total value of the
properties was $131,480.00 and $59,054.00, respectively. Husband offered
residential housing listings, from the real estate website Zillow.com, showing
comparable properties in the area. He estimated Appellant’s properties were
worth $950,000.00 and $600,000.00, respectively. The master filed a
report and recommendation on February 4, 2016. On February 24, 2016,
Husband filed timely exceptions to the report, objecting to: (1) the amount
and duration of the alimony award, arguing that the master did not give
proper consideration to Appellant’s property ownership interests and
potential for rental income; and (2) a $500.00 monthly award of alimony to
be paid from his military retirement account without accounting for the tax
consequences to Husband. By order and opinion entered on June 27, 2016,1
the trial court granted Husband’s exceptions and entered a divorce decree.
This timely appeal resulted.2
On appeal, Appellant presents the following issues for our review:
I. Whether the trial court abused its discretion and/or
committed an error of law in drastically reducing the
term of [Appellant’s] award of alimony, where
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1
The trial court issued an amended decree on August 8, 2016.
2
Appellant filed a notice of appeal on July 25, 2016. On July 26, 2016, the
trial court issued an order pursuant to Pa.R.A.P. 1925(b), directing Appellant
to file a concise statement of errors complained of on appeal. Appellant
complied timely on August 1, 2016. The trial court issued an opinion
pursuant to Pa.R.A.P. 1925(a) on August 8, 2016. In that opinion, the trial
court relied on portions of its earlier opinion filed on June 27, 2016.
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[Appellant] is permanently disabled, Husband is
gainfully employed, there is a marked disparity in the
parties[’] income, the uncontroverted evidence is that
[Appellant’s] reasonable expenses exceed her monthly
income even with the award of alimony, and where
the court assumes values and disposition of
[Appellant’s] inherited property which require the
court to assert factual assumptions and legal
assumption[s] not of record and[,] in so doing, [to]
fashion an award which will ultimately fail to meet
[Appellant’s] basic needs?
II. Whether the trial court abused its discretion and/or
committed an error of law when refashioning and
reducing the master’s suggested award to [Appellant]
of Husband’s military retirement benefits based upon
the trial court’s errant belief that [Appellant] would
receive the reduced payment going forward as a tax
free gift, which is an impossibility under both the
Internal Revenue Code and the Treasury regulations
thereto, and/or was not appropriately set forth as any
other type of award which [Appellant] could receive
tax free?
Appellant’s Brief at 11 (complete capitalization and suggested answers
omitted).
In her first issue presented, Appellant argues, “the trial court abused
its discretion in changing [the master’s] award of alimony from indefinite, to
two years[.]” Id. at 18-27. Appellant asserts she is permanently disabled
and her expenses substantially outweigh her income. Id. at 23-24.
Regarding her interest in the California properties, Appellant argues that the
master properly determined “that an actual market value for the propert[ies]
[were] not ascertainable and even if market value[s] [were] ascertainable
that any future expectancy for [Appellant] was uncertain, given the joint
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land holdings” and because Appellant “has no ability to buyout her co-
tenants[.]” Id. at 15. In sum, Appellant argues:
Despite recognizing the disparity in income, the various
factors considered by the [m]aster, and the fact that the
[m]aster could not find that there was an actual fair market
value or any promise of realization relative to value of the
California properties, the trial court rejected the
recommended award of alimony. Instead, the court limited
the alimony award of $1,500.00 per month, to two (2)
years, despite [Appellant’s] total and ongoing disability
which arose during the marriage. While the trial court
recognized that the purpose of alimony is to provide a
receiving spouse with sufficient income to obtain the
necessities of life, it seems to completely ignore that even
with the award of alimony, [Appellant] does nothing more
than almost meet her basic monthly needs. Despite having
been disabled since three (3) years into the marriage, the
trial court has no explanation as to how [Appellant] will pay
for her reasonable needs after two (2) years and gives
[Appellant] no recourse to have the [o]rder reviewed or
modified. The trial court simply seems to proffer that
[Appellant] will magically realize some type of monetary
benefit from the properties in California, despite having no
competent evidence, besides [Appellant’s] testimony as to
what the value of the property in its entirety may be. The
trial court seems to ignore the fact that [Appellant] would
be in an utterly impossible situation were she to file a
partition action, in as much as one of the siblings and/or
their co-owners to the property may off the highest bid, a
relatively de minimus figure to buy [Appellant’s] share at a
judicial sale, with [Appellant] having the inability to outbid
the co-owners, in as much as she does not even have
enough income to meet her basic needs. The court also
leaves it to our imagination to suppose that [Appellant]
could possibly sell her one-sixth and/or one-third interest in
the real property to a bona fide purchaser of value, but
failed to take into account that residential property has little
value to a bona fide purchaser of value in an arm’s length
transaction where the property is owned by joint family
members who have no intent of allowing the property to be
further marketed or used for some type of rental value.
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[Appellant] received ownership in the real property during
the marriage and for the many years after she received the
property realized no value or profit from the same and it is
an abuse of discretion for the court to cut short
[Appellant’s] award on the basis of some imaginary scheme
where [Appellant] will profit from the aforesaid properties.
Relative to the California homes, it is acknowledged that
[Husband] has attempted to make a compelling argument
that the [] [m]aster should have found a different value or
outcome relative to [Appellant’s] one-third and one-sixth
interest in property situate in California. Unfortunately for
[H]usband, if [H]usband desired for the court to give those
properties consideration with a firm set value it was
imperative upon him to offer competent evidence
supporting the same. While it is true that [H]usband
attempted to proffer Exhibit B as some evidence to value,
upon inspection of that exhibit it is noted that the values of
the homes in the area as set forth by the online search
through Zillow are homes listed for sale and do not list
actual sale prices of those homes. Moreover, the Zillow
print offs in Exhibit B specifically refer the user to ‘get a
professional estimate’ through a ‘premier agent,’ thus
indicating that the estimates set at Zillow are not by a
professional and should not be relied upon. Moreover, there
is no actual estimate as to either property in question. To
the contrary, Exhibit B sets forth several actual estimated
values as to the properties that were previously on the
market, but are now noted as ‘off market.’ Husband’s
Exhibit B did not provide proof of sale of any home in the
area in California where [W]ife holds partial interest. It is
not a market analysis by a professional realtor, broker, or
appraisal by a certified and/or licensed appraiser. Without a
professional opinion of the value, [H]usband failed to
support his burden, which he has attempted to assert
thereafter. [The Superior Court] has made clear that any
party may give an opinion as to the value of assets in which
they as the party have ownership interest because of the
presumption of special knowledge derived from ownership.
[Appellant] is a title owner. [Appellant] gave an opinion of
value. Husband is not a title owner of either property and is
not deemed competent under the [relevant] law [] to
provide an opinion of value. Moreover, [H]usband admitted
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on cross-examination that he has no specialized experience
or credentials to provide a value of an opinion.
Id. at 25-26 (emphasis in original).
Our standard of review regarding questions pertaining to the award of
alimony is
whether the trial court abused its discretion. We previously
have explained that the purpose of alimony is not to reward
one party and to punish the other, but rather to ensure that
the reasonable needs of the person who is unable to
support himself or herself through appropriate employment,
are met. Alimony is based upon reasonable needs in
accordance with the lifestyle and standard of living
established by the parties during the marriage, as well as
the payor's ability to pay. Moreover, alimony following a
divorce is a secondary remedy and is available only where
economic justice and the reasonable needs of the parties
cannot be achieved by way of an equitable distribution
award and development of an appropriate employable skill.
In determining whether alimony is necessary, and in
determining the nature, amount, duration and manner of
payment of alimony, the court must consider numerous
factors including the parties' earnings and earning
capacities, income sources, mental and physical conditions,
contributions to the earning power of the other, educations,
standard of living during the marriage, the contribution of a
spouse as homemaker and the duration of the marriage.
Teodorski v. Teodorski, 857 A.2d 194, 200 (Pa. Super. 2004) (internal
citations, quotations, brackets, and original emphasis omitted); see also 23
Pa.C.S.A. § 3701. Pennsylvania law provides for indefinite, also referred to
as permanent, alimony where the marriage was lengthy and the statutory
factors warranting it have been met. See id. “The Divorce Code does not
specify a particular method of valuing assets. The trial court must exercise
discretion and rely on the estimates, inventories, records of purchase prices,
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and appraisals submitted by both parties.” Smith v. Smith, 904 A.2d 15,
21–22 (Pa. Super. 2006) (emphasis added). An alimony award “is subject
to further order of the court upon changed circumstances of either party of a
substantial and continuing nature whereupon the order may be modified,
suspended, terminated or reinstituted or a new order made.” 23 Pa.C.S.A.
§ 3701(e).
In this case, the trial court determined that Husband’s three years of
prior alimony payments enabled Appellant to maintain the status quo, but
the master’s recommendation of permanent alimony “would simply continue
the current arrangement indefinitely, without [Appellant] ever having to
draw upon such available resources as her ownership interest in the
California properties – one of which she even now apparently has the right
to occupy.” Trial Court Opinion, 6/27/2016, at 5. While the master found
that Appellant “need[ed] to put together a plan to address the assets in
California as well as to address her budget shortfall[,]” the trial court
determined that “by awarding alimony indefinitely, [the master] gave
[Appellant] no incentive to do so.” Id. at 4. The trial court further noted
that Appellant “as the party requesting alimony, would appear to have the
burden of proving its necessity by establishing that her resources – including
the California properties – were inadequate for her support.” Id. at 4 n.6.
Upon review, we discern no abuse of discretion or error of law. The
trial court carefully considered the numerous factors to determine alimony
and properly determined the master improperly gave little to no weight to
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the California properties in making his recommendation and report. In fact,
the master rejected both parties’ valuations of the properties. Thereafter,
the trial court did not adopt either party’s valuation of the properties. We
conclude, however, that the trial court was allowed to consider that the
California properties had some value. Furthermore, we reject Appellant’s
suggestion that only her evidence regarding the value of the properties
required the lower tribunals’ consideration. The trial court was permitted to
consider the evidence of the estimated value of the properties as presented
by both parties. While Appellant argues that her partial ownership interest
reduces her ability to control the sale of the property, or to rent the property
for income, as an owner those properties have value to her, which the
master did not properly consider. Finally, an alimony award is always
subject to modification upon changed circumstances under Section 3701(e).
Hence, we conclude that Appellant is not entitled to relief on her first claim.
Next, Appellant argues the trial court abused its discretion or
committed an error of law by reducing the master’s recommended award of
$500.00 per month from Husband’s military retirement account to $400.00
per month to account for tax consequences to the parties. Appellant’s Brief
at 27-29. Appellant admits “the [m]aster did not take into consideration
that in as much as the parties were married for less than ten (10) years of
[H]usband’s military service, that [H]usband would need to directly deduct
the $500.00 from his monthly pay, pay taxes on the same, and forward the
same to [Appellant], for which she would then need to pay taxes.” Id. at
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27. She argues that “[a]n award of non-modifiable alimony would have
appropriately addressed not only the payment of tax, but also [Appellant’s]
tax liability” but, “[i]nstead, the [trial] court arbitrarily reduced [Appellant’s]
award to $400.00 averring that the same is ‘a gift’ and thus ‘ tax-free’ to
[Appellant].” Id. at 28.
Here, there is no dispute that the master failed to consider the tax
consequences of Appellant’s receipt of a portion of Husband’s military
retirement benefits. Moreover, the trial court recognized that “no one []
anticipated at or prior to the hearing that payments could not be made
directly to [Appellant] from the Secretary of Defense.” Trial Court Opinion,
6/27/2016, at 7. This aspect of the claim is, likewise, not in dispute. The
trial court “rejected [Appellant’s] proposal that the suggested $500[.00]
(actually $467.41) be allocated as ‘non-modifiable alimony,’ because the
payments were in distribution of marital property and thus [does] not meet
the definition of alimony.” Trial Court Opinion, 8/8/2016, at 2, citing 26
U.S.C.A. §§ 71, 215(b), 23 Pa.C.S.A. § 3701. The trial court determined
that because payments out of Husband’s pension qualified as a distribution
of marital property subject to equitable distribution, as opposed to alimony,
“[t]he basic tax ramifications” were “fundamentally a matter of tax law and
mathematical calculation” which did not require additional testimony or
evidence. Trial Court Opinion, 6/27/2016, at 7. By reducing the master’s
award to Appellant to $400.00, the trial court accepted Husband’s proposal
that he “would pay all income taxes, without a corresponding tax deduction
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(to which he would be entitled if the payment were characterized as
alimony), and [Appellant will] receive, as a gift, the $400[.00] tax-free.” Id.
The trial court later clarified its decision in its Rule 1925(a) opinion.
Therein, it noted that payments from Husband’s military pension account
qualified as an interest in the marital estate, not alimony. Trial Court
Opinion, 8/8/2016, at 2. The trial court recognized, and there is no dispute,
that the master “neglected to adjust for [a] reduction in the pension amount
resulting from the ordered election [that Appellant retain] the survivor
benefit.” Id. When the trial court accounted for this error and recomputed
the amount due, it determined that Appellant was entitled to $467.41 per
month from Husband’s retirement account. Id. However, the trial court
also realized that “[h]ad the pension been subject to a qualified domestic
relations order” as part of equitable distribution, Appellant “would have paid
the tax on [her] portion of the pension distributed to her.” Id. Thus, in
reducing Appellant’s monthly award to $400.00, the trial court concluded
restructuring the payments was de minimus, resulting in a total monthly
reduction of $67.41. Id. at 4. The trial court further clarified, “Husband will
not incur gift tax liability of the $400[.00] transfers, nor will Wife incur an
income tax liability.” Id. at 3. In its amended decree, the trial court
specified that payments to Appellant from Husband’s retirement account did
not qualify Husband for a deduction from his gross income nor was the
amount to be included in Appellant’s gross income. Amended Decree,
8/8/2016, at n.1, ¶ 10.
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Upon review, we discern no abuse of discretion or error of law.
Appellant concedes that the master’s recommendation and report neglected
to consider the tax ramifications of Appellant’s receipt of a portion of
Husband’s monthly military pension. The trial court did not order the
$400.00 monthly payments as a gift as Appellant suggests. Instead, the
trial court reduced the amount to Appellant, to account for income tax to be
paid by Husband, noting that Appellant would then receive the benefit tax-
free. We agree. The trial court provided an equitable solution to the
master’s failure to account for taxes. Appellant does not challenge the
mathematical calculation of the award. For all of the foregoing reasons,
Appellant is not entitled to relief.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/22/2017
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