Goldstein v. Goldstein

512 A.2d 644, 354 Pa. Super. 490, 1986 Pa. Super. LEXIS 11067

Opinions

MONTEMURO, Judge:

The essential question presented in this appeal is whether a pending equity action seeking the partition of entireties property is pre-empted or superseded by a subsequently filed complaint in divorce which requests, inter alia, equitable distribution pursuant to the Divorce Code of 1980.¹

Appellant, Jerome Goldstein, and appellee, Helene Gold-stein, were married on August 27, 1972. On January 18, 1982, appellant filed an action in equity which alleged that appellee had misappropriated approximately $43,680 which had been held in the parties’ joint bank account. Appellant requested the partition of the joint account and all other property owned jointly by appellant and appellee. At the time of appellee’s misappropriation of the money, the parties were still residing together. Subsequent to the filing of appellant’s partition action, appellee, on January 27, 1982, filed² an action in divorce under the Divorce Code of 1980, in which she sought the equitable distribution of marital property. In response to her husband’s partition action, appellee filed preliminary objections claiming that partition actions were “superseded and preempted” by the Divorce Code.³ The trial court, in an order entered July 13, 1982, sustained appellee’s preliminary objections and dismissed appellant’s partition action without prejudice to the parties’ respective property rights as they may be determined in the divorce proceedings.⁴ This appeal followed.

It is a general principle of the law of this Commonwealth that neither spouse may partition entireties property prior to divorce. Shapiro v. Shapiro, 424 Pa. 120, 136, 224 A.2d 164, 173 (1966); Livingston v. Livingston, 288 Pa.Super. 22, 430 A.2d 1193 (1981). An exception exists where one spouse has wrongfully appropriated entireties property for his or her own use and to the exclusion and detriment of the other spouse. Shapiro, supra; Stemniski v. Stemniski, 403 Pa. 38, 169 A.2d 51 (1961); Berhalter v. Berhalter, 315 Pa. 225, 173 A. 172 (1934); Gray v. Gray, 275 Pa. Super. 131, 418 A.2d 646 (1980); Vento v. Vento, 256 Pa.Super. 91, 389 A.2d 615 (1978). Such an appropriation “works a revocation of the estate by the fiction of appropriation’s being an offer of an agreement to destroy the estate and an acceptance of that offer when the spouse starts suit; the property is then fit for accounting and division.” Stemniski, supra 403 Pa. at 42, 169 A.2d at 53. The entireties property subject to partition is then divided equally, Lindenfelser v. Lindenfelser, 396 Pa. 530, 534-35, 153 A.2d 901, 905 (1959), with each spouse becoming the sole owner of his or her partitioned share of the property. Stemniski, supra; Fitzpatrick v. Fitzpatrick, 181 Pa.Super. 581, 124 A.2d 709 (1956).

Thus, at least since the Pennsylvania Supreme Court fashioned this exception some fifty years ago in Berhalter, a remedy has existed, prior to and separate from the filing of an action in divorce, which allows a spouse who has been excluded from the use and control of entireties property to preserve his or her interest in the misappropriated property. However, the trial court found, and the appellee argues, that pre-divorce partition has been pre-empted or superseded by the broad sweep of the 1980 Divorce Code, as that legislation was enacted to “effectuate economic justice be tween parties who are divorced or separated,” 23 P.S. § 102(a)(6), through the means of equitable distribution of marital property, id § 401(d), and that the “Solomon-like approach” of partition is inconsistent with the clear legislative intendment behind the Code. While we certainly agree as to the legislature’s general intention when enacting the current divorce provisions,⁵ we do not agree with the conclusion⁶ drawn by the trial court that the General Assembly abrogated Berhalter partitions when it restructured the divorce law of this Commonwealth.

No provision of the Divorce Code expressly prohibits a Berhalter partition,⁷ and our review of the legislative history has failed to unearth any discussion in the General Assembly prior to the enactment of the Code regarding the effect of a partition action vis-a-vis a subsequent request for equitable distribution. See generally, J. Fishman, The Legislative History of the 1980 Pennsylvania Divorce Law (Pittsburgh, QSP, Inc., 1981).⁸ In addition, the Pennsylvania Supreme Court has not promulgated any rule which would require the pre-emption or supersession of a pre-ex-isting partition action once a request for equitable distribution has been made under 23 P.S. § 401. See Pa. R.C.P. 1920.1-.92. Thus, there is no explicit supersession under the Divorce Code of Berhalter partition actions whenever a subsequent divorce action with a request of equitable distribution is filed.

Lacking a clear directive, the trial court looked to the broadly-written prefatory section of the Code in which the General Assembly expressed its intention in enacting the Code. The trial court specifically cited section 102(a)(6), which provides:

The family is the basic unit in society and the protection and preservation of the family is of paramount public concern. Therefore, it is hereby declared to be the policy of the Commonwealth of Pennsylvania to:

Effectuate economic justice between parties who are divorced or separated and grant or withhold alimony according to the actual need and ability to pay of the parties and insure a fair and just determination and settlement of their property rights.

The courts are instructed to consider section 102(a)(6) when construing the Divorce Code. 23 P.S. § 102(b). As the trial court noted, “economic justice” is effectuated between parties seeking divorce by means of equitable distribution. Id. § 401(d).

The above-quoted legislative intention regarding “economic justice” between spouses is not necessarily inconsistent with the purpose behind the judicially-created Berhalter partition proceeding, i.e., enjoining the wrongful dissipation of entireties property. Indeed, an action in divorce requesting equitable distribution is one which contemplates the termination of the marital relationship and an equitable settling of the parties’ accounts. On the other hand, a Berhalter partition addresses not the marital relationship, but rather the right of one spouse to preserve his or her property rights, rights which have become vulnerable by the actions of the other spouse. As such, the court, acting in equity, addresses each spouse’s property rights within the continuing marital relationship, and not spousal proper ty rights after the termination of that relationship.⁹ Given the lack of an ineluctable conflict between the Code and a Berhalter partition, and in light of the absence of a specific statutory prohibition against the latter, we do not find that the legislature intended to pre-empt or supersede Berhalter partition when it drafted and enacted the current Divorce Code.

In her brief, appellee argues alternatively that whether or not the Divorce Code abrogated this Berhalter partition is “irrelevant” because of this court’s holding in Platek v. Platek, 309 Pa.Super. 16, 454 A.2d 1059 (1982). A proper reading of Platek does not support appellee’s position. In Platek, we held that the trial court erred when it directed partition of certain entireties property despite the fact that prior to the partition request, a complaint in divorce had been filed which requested equitable distribution pursuant to the Divorce Code.¹⁰ In Platek, the procedural chronology was the reverse of that found in the instant appeal. This difference is important. Despite an extant divorce complaint and a request for equitable distribution, the lower court, following Vento, supra, partitioned certain entireties property. This court held that the partition was error, stating:

It is apparent ... that the court’s power to direct a partition of property is qualified by its duty to divide marital property in an equitable way. If the property is not marital property, the court may direct its partition. But if it is marital property, the court must instead, upon request of either party, direct its equitable division.

Platek, supra, 309 Pa.Superior Ct. at 24, 454 A.2d at 1062-63 (emphasis in original). However, that “duty” does not arise until a party requests equitable distribution. See 23 P.S. § 401(d).

Thus, in Platek this court held that when a trial court is presented with a request for equitable distribution under the Divorce Code, the court must first determine what property is subject to equitable distribution, i.e., determine what is marital property. Because a Berhalter partition transforms entireties property into separate property,¹¹ the trial court in Platek was effectively removing certain en-tireties property from the area in which the Code’s writ may run. In other words, at the time the divorce action was filed, the entireties property which was eventually partitioned was marital property as that term is defined in the Code. See 23 P.S. §§ 401(e)-(f). Since a prior request had been made for the equitable distribution of all marital property, and because section 401(d) of the Code mandates equitable distribution of all extant marital property once such a request is made, “[i]t was ... the lower court’s responsibility to decide upon an equitable division.” Platek, supra, 309 Pa.Superior Ct. at 24, 454 A.2d at 1063.

In the instant case, there being no extant request for equitable distribution pursuant to section 401(d) at the time the partition action was filed, the trial court could have and should have proceeded with the partition action, applying the analysis as initially set forth by our supreme court in Berhalter and more recently explained by this court in Vento. If the court determines that partition is indeed appropriate and proper, the property is equally divided between the spouses, who then own their portion of the property separately. The property, having lost its designation as entireties property, is at that point not within the ambit of the marital property section of the Divorce Code. Thus, if the trial court is subsequently presented with a request for equitable distribution under section 401(d), the previously partitioned property does not become subject to equitable division. It is set aside, with all other separately held property, from the marital property to which the Code does apply.

In the instant case, because pre-divorce partition remains viable despite the passage of the Divorce Code, the trial court was capable of entertaining appellant’s partition action.¹² If partition is deemed proper, an order should be entered directing the equal distribution of the misappropriated property, here the $43,680. When the court then addresses the subsequent request for equitable distribution, the money is not marital property by virtue of section 401(e)(4), which excludes from the definition of marital property “[pjroperty acquired after separation until the date of the divorce.” Cf. Hurley v. Hurley, 342 Pa. Super. 156, 492 A.2d 439 (1985) (In which Judge Wieand noted that a spouse’s unliquidated claim for personal injury, which became liquidated after the parties’ separation, is not marital property under section 401(e)). Under the circumstances of the instant case, appellant “accepted” appellee’s “offer” to end their entireties when he filed the partition action on January 18, 1982. Although a precise date cannot be gleaned from the record, the parties apparently separated sometime in November of 1981. Thus, when entertaining appellee’s equitable distribution request, these monies will not be involved.¹³

As guidance to the trial courts, we conclude with the following. In situations such as the one found in this appeal where there has not yet been a partition at the time of the equitable distribution, it is clearly the better procedure to consolidate the consideration of both actions before the court presiding over the divorce action. We therefore instruct the courts to follow the consolidation procedure outlined in Marinello v. Marinello, 354 Pa.Super. 471, 512 A.2d 635 (E3005/85; filed June 9, 1986). Aside from conserving judicial resources, this approach enables one judge to handle all of the parties’ property disputes.

In addition, in holding today that pre-divorce, Berhalter partition is still viable, we are mindful of the language found in many partition cases to the effect that once partition is found applicable to one unit of entireties property, all entireties property is affected. See e.g. Shapiro, supra; Stemniski, supra; Watkins v. Watkins, 393 Pa. 284, 142 A.2d 6 (1958); Livingston, supra; Gray, supra; Damirgian v. Damirgian, 262 Pa.Super. 463, 396 A.2d 1263 (1978); Vento, supra. However, that language must be read in light of the purpose behind allowing pre-divorce partition. As our supreme court stated in Watkins, supra 393 Pa. at 287, 142 A.2d at 8:

[T]he Berhalter rule is not merely designed to afford the injured spouse a recovery of money actually taken. Implicit in the opinion is the conviction that the injured party should not be subjected to the risk of future misappropriation by a spouse who has disregarded the tenancy’s fundamental obligation.

In Watkins, the parties jointly owned four bank accounts, although only two of the accounts had been misappropriated. In light of the purpose behind the Berhalter decision, the court held that “it would be inconsistent with the policy of the Berhalter case to require plaintiff to wait until funds also are diverted from the two hitherto unwithdrawn accounts before suing to protect her interest in them.” Id., 393 Pa. at 287, 142 A.2d at 9.

In a situation such as the instant case in which a divorce action is filed after a separate partition action, the concern for future misappropriations does not exist. The injured spouse has a remedy in partition as to that property which has been misappropriated, while all other entireties property will be subject to the continuing supervision of the divorce court. As such, if future misappropriations do occur, the injured spouse can seek relief under sections 403(a)¹⁴ and 401(c)¹⁵ of the Divorce Code. See Lowenschuss v. Selnick, 324 Pa.Super. 193, 471 A.2d 529 (1984); Lazovitz v. Lazovitz, 307 Pa.Super. 341, 453 A.2d 615 (1982). Thus a court, sitting as it does in equity when it entertains a partition action, can fashion an equitable solution by limiting its order to those units of entireties property which have been misappropriated as described in Berhal-ter and its progeny. See Reifschneider v. Reifschneider, 413 Pa. 342, 196 A.2d 324 (1964). The court should therefore avoid the addressing other entireties property which has not been wrongfully appropriated.¹⁶

The order of the trial court is reversed and the case remanded for further proceedings consistent with this opinion.

WIEAND, J., filed a concurring and dissenting opinion, joined by McEWEN and ROWLEY, JJ. BROSKY, J., files a dissenting opinion. SPAETH, President Judge, did not participate in the consideration or decision of this case.

Footnotes

1

. Act of April 2, 1980, P.L. 63, No. 26, § 101, effective July 1, 1980, 23 P.S. § 101 et seq.

2

. Appellee's divorce action and appellant's partition action were both filed in the Court of Common Pleas of Montgomery County. In Marinello v. Marinello, 354 Pa.Super. 471, 512 A.2d 635 (1986), argued the same day as the instant case, we addressed the same issue presented herein as it arises when the partition and divorce actions are filed in different jurisdictions.

3

. Appellant filed preliminary objections to appellee’s preliminary objections wnich were also dismissed by the court below in its July 13, 1982 order.

4

. As the trial court noted in its opinion written pursuant to Pa. R.A.P. 1925, the Common Pleas Courts of Pennsylvania have been divided as to the issue now before us. Slip op. at 3. See also ROUNICK, PENNSYLVANIA MATRIMONIAL PRACTICE § 18:11.1 at 186-87.

5

. See generally, 23 P.S. § 102; see also Gold-Bickin and Rounick, The New Pennsylvania Divorce Code, 25 VILL. L.REV. 617 (1979-80).

6

. In its conclusion, the trial court stated: "In the interest of judicial economy ... and in order to effectuate the legislative purposes behind the Divorce Code, partition actions cannot lie once a claim for equitable distribution is raised in a divorce action.” Slip op. at 8.

7

. Indeed, the only mention of "partition” appears in section 301(a)(1) of the Code which gives the courts jurisdiction to determine and dispose "of property rights and interests between spouses ... including the partition of property held as tenants by the entireties or otherwise....” As such, if neither party requests equitable distribution under the Code, the court may partition property pursuant to 68 P.S. § 501. See Shoup v. Shoup, 469 Pa. 165, 364 A.2d 1319 (1976). The Divorce Code left 68 P.S. § 501 intact. 23 P.S. § 801; see generally Estep v. Estep, 326 Pa.Super. 404, 474 A.2d 302 (1984.)

8

. There was discussion as to how the courts of this Commonwealth should be directed to distribute marital property under the Code after a divorce decree has been entered, i.e., "equitable” rather than "equal" distribution. Hearings on H.B. 640 Before the Pennsylvania House of Representatives, 1979 Pa. Leg. J. 1958-60; see also Rounick, supra; § 18:11.1 at 190.

9

. One troubling consequence which could ensue if we adopt the trial court’s pre-emption theory relates to the spouse who seeks partition but not divorce. Such a spouse faces the dilemma of either filing a partition action under Berhalter v. Berhalter, 315 Pa. 225, 173 A. 172 (1934), knowing that the action will be dismissed whenever the other spouse files under the Divorce Code, or filing an action in divorce in order to take advantage of the injunctive relief pursuant to sections 401(c) or 403 of the Divorce Code. Thus, the spouse seeking only partition is forced into litigation over the vitality of his or her marriage in order to protect his or her property rights within the marriage.

10

. Unfortunately, the opinion in Platek v. Platek, 309 Pa.Super. 16, 454 A.2d 1059 (1982) does not specifically state that equitable distribution was requested in that case. However, the Platek court did quote the lower court, which stated: " ‘By her conduct in this case, the wife may have forfeited her right to equitable distribution....’ ” Id., 309 Pa.Superior Ct. at 21, 454 A.2d at 1061. The equitable distribution section of the Divorce Code operates at the election of either party. 23 P.S. § 401(d) (“... the court shall upon the request of either party, equitably divide, distribute, or assign the marital property...’’). Although the Platek court was not explicit, we assume that a request under section 401(d) was made in that case. See Platek, supra, 309 Pa.Superior Ct. at 24-25, 454 A.2d at 1062-63 (discussion of section 401(d)).

11

. See discussion infra and Stemniski v. Stemniski, 403 Pa. 38, 169 A.2d 51 (1961).

12

. In his dissent, Judge Brosky suggests that unless partition actions are abated when equitable distribution is sought, injustice in the form of waste or mismanagement of marital property will inevitably result. His proposed solution requires an injunction against such depredations followed by a "pre-distribution or pre-use of marital property until ... property rights are decided in the divorce proceeding.” However, the existence of an injunction obviates the necessity for "pre-distribution." Further, distribution cannot, under the Code, be made prior to the divorce, and no procedural or substantive law is cited as authority for the proposed division. Finally, assuming that the limits of equity could be expanded indefinitely, once divided, the property is no longer marital and is no longer subject to a second, "post”, distribution.

13

. Judge Wieand, in his concurring and dissenting opinion chides us for “misconceivi[ng] the nature of entireties property.” At 653. However, it appears that he is confusing the "nature" of entireties property with the determination of whether or not such property exists.

The decisions of our supreme court and of this court have been consistent in stating that a successful partition action works "to destroy the estate by entirety.” Berhalter v. Berhalter, 315 Pa. 225, 228, 173 A. 172, 173 (1934) (emphasis added); see also Stemniski v. Stemniski, 403 Pa. 38, 42, 169 A.2d 51, 53 (1961); Livingston v. Livingston, 288 Pa.Super. 22, 430 A.2d 1193 (1981); Gray v. Gray, 275 Pa.Super. 131, 418 A.2d 646 (1980). When the estate has been so destroyed, then the property is equally divided, Shapiro v. Shapiro, 424 Pa. 120, 224 A.2d 164 (1966), and the divided property becomes the separate property of each spouse. Stemniski, supra; Lindenfelser v. Lindenfelser, 383 Pa. 424, 119 A.2d 87 (1956).

Apparently, Judge Wieand would also find that the fictional offer and acceptance which is outlined in these partition cases acts "to destroy the entireties estate.” At 651. Oddly, he would also find that this "destruction” will not in any way alter the property’s “nature”. Our reading of Berhalter and its progeny leads us to conclude that once a partition has occurred, the property is no longer marital property but is instead the separate property of the parties who are now tenants in common.

14

. Section 403(a) provides:

Where it appears to the court that a party is about to remove himself or herself or his or her property from the jurisdiction of the court or is about to dispose of, alienate, or encumber property in order to defeat alimony pendente lite, alimony, child and spousal support, or similar award, an injunction may issue to prevent such removal or disposition and such property may be attached as provided by the Rules of Civil Procedure. The court may also issue a writ of ne exeat to preclude such removal.

23 P.S. § 403(a).

15

. See note 15 on page 500.

15. Section 401(c) provides:

In all matrimonial causes, the court shall have full equity power and jurisdiction and may issue injunctions or other orders which are necessary to protect the interests of the parties or to effectuate the purposes of this act, and may grant such other relief or remedy as equity and justice require against either party or against any third person over whom the court has jurisdiction and who is involved in or concerned with the disposition of the cause.

Id. § 401(c).

16

. As we noted above, under the particular circumstances of this case, the concern about possible future misappropriations of entireties property is greatly diminished. Thus the policy behind Berhalter as expressed by our supreme court in Watkins v. Watkins, 393 Pa. 284, 142 A.2d 6 (1958), does not require that "all” entireties property be partitioned.

Indeed, even if the instant circumstances differed and no divorce action had subsequently been filed, we do not believe that appellant would necessarily be entitled to the partition of all entireties property upon a finding of the misappropriation of one unit of that property. The language found in the decisions of our supreme court and this court would find all such property somehow affected by the misappropriation of one unit. See supra at 649; see also Fascione v. Fascione, 272 Pa.Super. 530, 416 A.2d 1023 (1979). However, this language notwithstanding, the supreme court, in Reifschneider v. Reifschneider, 413 Pa. 342, 196 A.2d 324 (1964), limited partition to that unit of entireties property which had been misappropriated, while affirming the lower court’s refusal to partition entireties property which had been properly used by one party. Our reading of Reifschneider in conjunction with these other opinions leads us to conclude that whenever a request is made under Berhalter for the partition of all entireties property, the court, upon finding misappropriation of some of the property, is still free to fashion a partition which reaches the most equitable result under the circumstances.