J-A23015-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ANDREA FIORE : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : DANIEL FIORE : : Appellant : No. 20 WDA 2019
Appeal from the Order Entered, December 18, 2018, in the Court of Common Pleas of Erie County, Civil Division at No(s): No. 10559-2015.
BEFORE: BENDER, P.J.E., KUNSELMAN, J., and MUSMANNO, J.
MEMORANDUM BY KUNSELMAN, J.: FILED NOVEMBER 08, 2019
Appellant Daniel Fiore (Husband) appeals the trial court’s denial of his
petition to enforce the marriage settlement agreement (MSA) against Appellee
Andrea Fiore (Wife). We affirm.
The parties reached a comprehensive and final division of all assets and
debts related to their marriage when they entered into an MSA on February
5, 2018. Notably, the parties’ created their MSA by holding an on-the-record
dialogue with counsel, and then used the 19-page transcript as the final
memorialization of their agreement. The MSA was incorporated into, but it did
not merge with, the February 12, 2018 divorce decree.
The instant dispute involves the distribution of three assets: a real
estate property; a 2005 Formula 400 SS power boat; and a 2007 Nissan Titan
pickup truck. Specifically, the parties agreed that Wife would receive the real J-A23015-19
estate if she could refinance the note encumbering it. They further agreed
that they would equally divide the net proceeds from respective sales of the
boat and the truck.
On September 5, 2018, Husband filed a petition to enforce the parties’
MSA, claiming Wife failed to perform several of her obligations. He sought the
following relief: first, to compel the sale of the jointly-owned real estate;
second, to reallocate the proceeds from the sale of the parties' boat; and third,
to reallocate the proceeds from the sale of the parties' truck. Husband also
sought to recover the attorney fees that he expended seeking enforcement.
Following two days of testimony, the trial court denied the requested
relief by order dated December 18, 2018. Regarding Wife's failure to refinance
the mortgage by August 31, 2018 (and list it for sale thereafter), the court
found that the parties orally agreed to an extension of time while the bank
considered Wife’s loan application. The specific issues involving the boat and
the truck turned on whether the MSA authorized Wife to deduct from the net
proceeds the expenses that she incurred to prepare the properties for sale.
The court found that the costs were necessary and constituted “costs of sale”
per the terms of the MSA. In reaching its decisions, the court considered the
testimony of John Pursell, a mechanic who consulted with the parties
regarding both the boat and the truck. Because the court found Wife did not
breach the terms of the MSA, the court declined to award Husband attorney
fees. Husband filed this timely appeal.
Husband raises nine issues for our review:
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1. Whether the trial court committed an error of law and/or an abuse of discretion when it failed to enforce the marital settlement agreement as written in order to effectuate the parties' intent when they entered into it?
2. By giving wife credit for repairs whether the trial court reformed and modified the parties' agreement in her favor thereby committing an error of law and/or an abuse of discretion in contravention of 23 Pa.C.S.A. §3105?
3. Whether the trial court committed an error of law and/or an abuse of discretion when it found that the parties orally modified their marital settlement agreement when the evidence did not support such a finding?
4. Whether the trial court committed an error of law and/or an abuse of discretion when it reviewed wife's efforts to comply with the terms of the marital settlement agreement on a "good faith effort" basis when that term was not included in the parties' agreement?
5. Whether the trial court committed an error of law and/or an abuse of discretion when it allowed for the "cost of repairs" to be deducted from sales proceeds when that term was not included in the parties' agreement?
6. Whether the trial court committed an error of law and/or an abuse of discretion when it found that the truck repairs were necessary and the remaining proceeds from the sale of the pick- up truck were $2,374.73 when the evidence did not support such findings?
7. Whether the trial court committed an error of law and/or an abuse of discretion when it found that the boat repairs were necessary and totaled $11,236.26 when the evidence did not support such findings?
8. Whether the trial court committed an error of law and/or an abuse of discretion when it permitted John Pursell to testify as an expert witness in contravention of the Pennsylvania Rules of Evidence?
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9. By failing to enforce the parties' marital settlement agreement whether the trial court committed an error of law and/or an abuse of discretion when it failed to find that wife breached the agreement and correspondingly failed to award counsel fees?
Husband’s Brief at 6-7.
For ease of disposition, we address Father’s claims as they relate to each
property (the real estate, the boat, and the truck) before addressing his
ancillary issues.
It is well-established that the law of contracts governs a marital
settlement agreement if the agreement is not merged into a divorce decree.
Bennett v. Bennett, 168 A.3d 238, 245 (Pa. Super. 2017) (citation omitted).
The standard of enforceability of a contractual agreement is clear:
“absent fraud, misrepresentation, or duress, spouses should be bound by the
terms of their agreements.” See id. (citation omitted). An abuse of discretion
is not lightly found, as it requires clear and convincing evidence that the trial
court misapplied the law or failed to follow proper legal procedures. See Lugg
v. Lugg, 64 A.3d 1109, 1110 n.1 (Pa. Super. 2013). We will not usurp the
trial court’s fact-finding function. Id.
Husband claims that when Wife initially failed to secure refinancing on
a jointly owned real estate property, she had no choice but to list the property
for sale.
The MSA provided:
In the event Wife is unable or unwilling to refinance within 100 days, [sic] list the property for sale with a multi-list realtor. Wife will make application for refinance within 30 days of today’s date to remove husband’s name from the
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primary mortgage encumbering the property. Wife shall refinance the property by August 31, 2018.
MSA at 4.
Instantly, Wife applied for a loan to refinance within the designated
timeframe, but the application was still pending at the time of the August 31,
2018 deadline. At the hearing, Wife claimed that she and Husband orally
agreed that she would have more time to complete the refinancing process.
We note here that by the second day of testimony on November 14, 2018, a
bank granted her application and Wife successfully refinanced. Still, Husband
argued that Wife was in breach and sought an order forcing her to sell.
In the context of marriage settlement agreements, we have said that
even an agreement prohibiting non-written modification may be modified by
subsequent oral agreement if the parties’ conduct clearly shows the intent to
waive the requirement that the amendments be made in writing. See Fina v.
Fina, 737 A.2d 760, 764 (Pa. Super. 1999). To that end, an oral modification
of a written contract must be proved by clear, precise and convincing
evidence. Id. (citation omitted).
Instantly, the MSA anticipated that Wife’s refinance application could
take extra time. The MSA provided:
There is no default if [the parties] waive any part of the agreement. [I]f [Wife] does not refinance within the time period allowed…and [Husband] say[s] that’s ok, that doesn’t mean [Wife] doesn’t refinance totally, it just means [Husband is] okay allowing that to go a little longer.
MSA at 16.
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Per the MSA, the parties explicitly anticipated that Wife’s ability to
secure a loan may be subject to conditions beyond her control. Wife testified
that the parties entered into the very type of oral modification suggested by
the MSA; i.e., if Wife bore the expense of paying the current mortgage while
attempting to secure a new loan and if she was diligent in her endeavor, then
Husband would not proceed with enforcement while the bank considered
Wife’s application. Wife also provided evidence, in the form of a message to
Husband’s attorney, referencing such an oral agreement.
The court found Wife’s testimony to be credible. Husband argues that
the court’s reliance on Wife’s credibility constituted an abuse of discretion.
Contrary to Husband’s assertion, credibility is an important factor, because
testimony is evidence. And by the time the court heard the second day of
testimony, Wife had successfully refinanced the property. “Since matters of
credibility are for the trial court, we are bound by the court’s finding of fact[.]”
See Fina, 737 A.2d at 765 (citations omitted). The court concluded that such
evidence was clear, precise, and convincing. We discern no abuse of
discretion. Husband’s claims concerning the Wife’s refinancing are without
merit.
Next, we consider those appellate issues linked to the sale of the parties’
boat. Husband claims that Wife violated the MSA when she deducted from
the net proceeds those expenses she incurred preparing the boat for sale. The
MSA provided:
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In the event the boat is sold, the net proceeds shall be divided equally between the parties, that being sale prices less regular cost of sale, including commission and the outstanding debt, and the parties shall share the net proceeds equally.
MSA at 14.
The MSA referenced the outstanding debt as being “approximately
$95,000.” Id. at 13. The actual debt was $95,949.32. Although both parties
had an obligation to sell the boat, Husband left this onerous task to Wife when
Husband essentially abandoned the vessel in a parking lot after Wife was
unable to meet him with the keys. Wife prepared the boat for sale by having
it cleaned and detailed, services to which Husband consented. Wife found a
buyer who traveled from Michigan to retrieve the boat only to discover that
the boat would not start. She then incurred a bank fee when she was forced
to return the prospective buyer’s deposit. To determine why the boat would
not run, the parties hired their mechanic, John Pursell, who, after consulting
other mechanics, discovered that the boat’s motor and computer were in need
of repair. Mr. Pursell testified that Husband told him to repair the boat:
Q. Did you speak to [Husband] about the repairs that needed to be done on this boat?
A. Yes. When I spoke to him about [boat mechanic John] Montgomery he says, John, go ahead and do what you got to do, I respect your judgment, and that’s where we left it. That was the last time I spoke to him.
N.T., 10/9/18, at 66.
The total cost of repairs and expenses were $11,236.36. The boat sold
for $123,000. After deducting the outstanding debt, and the cost of repairs
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and expenses, the net proceeds were $15,814.32, which the parties divided
equally. The trial court determined that the term “cost of sale” encompassed
the costs Wife incurred to fix the boat’s motor and prepare it for sale.
In reviewing this decision, we are not without guiding precedence. In
Friia v. Friia, 780 A.2d 664 (Pa. Super. 2001), a parties’ settlement
agreement specified that the spouses would split the proceeds of a sale of
property “after payment of all liens, encumbrances, brokerage fees, taxes and
other costs of sale.” Friia, 780 A.2d at 668-669. There, we held:
The parties’ use of the phrase ‘cost of sale’ establishes their intent to limit items of expense deductible from the gross proceeds to those necessary to sell the property. Thus, the phrase ‘of sale’ operates as a broad limitation on the purpose for which deductible expenses might be incurred.
Id., at 669 (emphasis added).
Instantly, we similarly conclude the parties’ use of the term “cost of
sale” incorporates those expenses necessary to effectuate the sale of the boat.
Wife contends that the boat needed to be repaired if she was going to be able
to sell it while it was encumbered with debt. For support, she points to the
first buyer’s interest, who was set to purchase the boat until he discovered it
was not seaworthy. We note further that the second, eventual buyer naturally
required proof that the boat was free and clear of the bank lien. The only way
to discharge the lien was to sell the boat for more than the parties’ owed. To
do that, Wife had to repair it.
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Because Husband takes issue with the repair costs, we can assume it
was Husband’s view that Wife should have found a buyer who would purchase
a broken boat for at least $95,949.32, or the amount of outstanding debt. But
because Husband was dissatisfied with his ultimate payout (one half of
$15,814.32), we can assume further that Husband thought Wife should have
found a buyer who would purchase the broken boat for more than
$111,763.64 (a sum that would reflect his current net proceeds). Considering
that the refurbished boat sold for $123,000, we are tempted to speculate
that no such buyer exists. But we need not do so, because the court believed
Mr. Pursell’s testimony that Husband sanctioned the repair costs. Arguably,
Husband implicitly approved of Wife’s decision-making when he abandoned
the boat in a parking lot, leaving Wife to effectuate the sale as she saw fit.1
Ultimately, Husband’s argument fails because he explicitly agreed to the
repairs in order to secure a second buyer.
Husband also seems to make hay out of the fact that not all of the
expenses, totaling $11,236.36, were technical repairs relating to the motor
and computer. Some expenses related to preparing and effectuating the sale.
Regardless, the court determined that these expenses were costs “of sale” in
that they were necessary to the sale. See Friia, supra. This determination
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1 We note that Husband offered no appraisal of the boat in its unrepaired condition. Arguable, his net proceeds would have been less if Wife sold the boat in the condition he left it in the parking lot. Indeed, there may not have been any profit at all for such a sale.
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was not an abuse of discretion. Husband’s claims pertaining to the boat are
without merit.
We turn now to those issues involving the sale of the parties’ truck. Like
the boat, the pertinent issue here is whether the MSA authorized Wife to
deduct the costs of repair from the sale’s net proceeds.
The MSA provides:
During the marriage, the parties acquired a Nissan pickup truck, which is in joint name. The parties agree that [H]usband will deliver the pickup truck to [a designated car lot] within ten days of today’s date. It will be listed for sale by [W]ife’s family. They will handle the sale and title and transfer. Both parties will sign any titles necessary to effectuate the sale and transfer to a bona fide third party. Each party will receive 50 percent of the net proceeds. Net proceeds is defined as sale price less any normal and regular costs of sale. The balance is the proceeds.
MSA at 8.
Wife testified that neither party wanted the truck, which was titled in
Wife’s name but always driven by Husband. Wife testified she did not even
know where the truck was until Husband told her it was in storage. When
Wife retrieved the vehicle in order to sell it, she discovered that it was also in
poor condition. The seats were torn up, there was garbage and Husband’s
personal effects in the cab, the front headlight was broken and the front
bumper was dented from striking a deer. The rear bumper and tailgate were
also damaged. Wife was aware that Husband struck a deer, but she was
unaware that he never bothered to repair the truck.
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At the hearing, Husband admitted that he received a $3,000 insurance
check for the accident involving the deer, which he pocketed instead of
repairing the truck. Apart from the cosmetic state of the vehicle, Mr. Pursell
testified it was unsafe to drive or sell. The truck was no longer registered,
inspected, or insured. The brakes did not work. Mr. Pursell determined that
total cost of completely repairing the truck would be around $4,000, but such
a cost would prohibit any tentative return on the sale. Nevertheless, some
repairs were made; the truck was detailed to make it presentable so that it
could be sold at auction. Wife expended $2,500 on the body from the deer
accident and at least another $370 to detail the car. Initially, the truck
received no bids at auction. The truck was evidently placed in the “as is” lane,
and an eventual buyer came forward who needed the truck to tow a four-
wheeler he just purchased. Remarkably, the truck sold for $5,600. After
deducting the cost of repairs, there was a profit of $2,373.73.
Husband argument is twofold, which we discuss in turn. First, Husband
argues that because Wife seemingly forgot to seek admission of the repair bill,
the court could not consider the costs. Although Wife did not ask to admit the
repair bill (which had been marked as an exhibit), both Mr. Pursell and Wife
testified in detail about the expenses incurred to repair the truck. The court
was within its discretion to deny Husband’s petition based upon their
testimony alone.
In his second argument, like he claimed with the boat, Husband
maintains that the cost of repairs should not have been considered “costs of
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sale.” His argument fails here too. The court determined that the cost of
repairs were necessary to sell the truck. The record supports this conclusion.
The parties foresaw costs necessary to effectuate the sale of the truck.
Husband clearly possessed personal knowledge, which he evidently did not
reveal to Wife when they negotiated the MSA, that the truck was in need of
significant repair. Although Wife was aware he damaged the truck in 2015,
she was unaware that the truck remained damaged and certainly unaware
that Husband received $3,000 from the insurance company. While Husband
may have contemplated that truck would be sold “as is,” ample testimony
revealed that that was not an option. Even the repaired truck received no
bids at auction. The truck only sold because a buyer happened to need a truck
for one specific job. We conclude that Husband’s issues regarding the truck
are similarly meritless.
In addition to his primary contentions involving the house, the boat, and
the truck, Husband raises several ancillary issues that are readily disposable.
First, Husband argues that the trial court utilized the wrong legal standard in
reaching its decision. Specifically, Husband takes issue with the court’s finding
that Wife acted in good faith. The court cited Giant Food Stores, LLC v. THF
Silver Spring DEV., L.P., 959 A.2d 438, 447-448 (Pa. Super. 2008) for the
proposition that every contract imposes a duty of good faith and fair dealing
on the parties in the performance of the contract. We have also observed the
duty of each party to act in good faith in the context of marriage settlement
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agreements. See, e.g., Stamerro v. Stamerro, 889 A.2d 1251, 1259 (Pa.
Super. 2005).
Here, the trial court’s observation that Wife operated in good faith was
entirely appropriate to its decision. However, the case did not turn on this
finding. The trial court specifically found that the parties orally modified the
MSA to allow Wife an extension to secure refinancing; the court further
determined that the costs to prepare the boat and truck for sale were
necessary “costs of sale” per the language in the MSA. As we discussed above,
none of those determinations constituted abuses of discretion.
Next, Husband alleges the court improperly admitted expert testimony
from Mr. Pursell, who was not a qualified expert per Pa.R.E. 702. Although
the court referred to Mr. Pursell as an expert in passing when addressing the
order of the witnesses, it is clear that the court did not consider Pursell’s
testimony to be “expert” as contemplated by the Pennsylvania Rules of
Evidence. Moreover, Husband objects only to that part of Mr. Pursell’s
testimony regarding whether the truck sold for a reasonable price and whether
the boat could be sold before it was repaired. On these points, Mr. Pursell’s
opinion is irrelevant. The first sale of the boat fell through, because it needed
repairs. Similarly the truck, even after it was repaired, still failed to get a
single bid at auction; it only sold by happenstance. From these facts alone,
the court could properly infer that the repairs were necessary to effectuate
the sale of both items.
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In his a final issue, Husband seeks attorney fees. Because the court
determined that Wife did not breach the MSA, the court determined that no
fees were due. That logic stands.
Based on the forgoing reasons, we conclude that the trial court did not
abuse its discretion when it denied Husband’s petition to enforce the parties’
MSA.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 11/8/2019
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