Kurtas, M., Jr. v. Kurtas, R.

• Court: Superior Court of Pennsylvania
• Decided: March 11, 2022
• Docket: 1569 MDA 2020
• Status: Unpublished

Opinion

J-A22011-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

MICHAEL T. KURTAS, JR. : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : RANDI E. KURTAS : No. 1569 MDA 2020

Appeal from the Order Entered December 3, 2020 In the Court of Common Pleas of Lancaster County Civil Division at No(s): CI-10-07648

BEFORE: BOWES, J., OLSON, J., and KING, J.

MEMORANDUM BY BOWES, J.: FILED: MARCH 11, 2022

Michael T. Kurtas, Jr. (“Husband”) appeals from the December 3, 2020

order directing him to continue to pay Randi E. Kurtas (“Wife”) alimony in the

amount of $2,026.40 per month. We affirm.

Husband and Wife married on August 22, 1982, separated on July 1,

2010, and divorced on January 3, 2014. In anticipation of the dissolution of

the marriage, on October 11, 2013, the parties entered a comprehensive

postnuptial agreement that, inter alia, established Husband’s obligation to pay

monthly alimony until December 31, 2023. Regarding alimony, the

agreement provided, in pertinent part, as follows:

[Beginning December 31, 2013,] Husband shall pay Wife a sum of $3,400 per month for a period of eight years (96 consecutive months) and thereafter pay Wife a sum of $1,000 per month for an additional two years (24 consecutive months).

Postnuptial Agreement, 11/10/13, at 5, ¶8. J-A22011-21

As it related to the modification of this obligation, the agreement

continued:

Husband’s support obligation is non-modifiable in amount as well as duration unless Husband experiences an involuntary reduction in his income through no fault of his own, Wife’s death, remarriage, or cohabitation with an unrelated male individual. In the event Husband experiences an involuntary reduction in his income through no fault of his own, the amount of any reduction in Wife’s support/alimony shall be in the same percentage as the reduction in Husband’s income when taking into consideration his salary, cost of employer provided health insurance, bonuses, commissions, car allowance, clothing allowance, any other employer paid benefits, as well as any other sources of income for Husband. For example, if Husband’s income is involuntarily reduced by 10% then Wife’s support/alimony shall be reduced by 10%. In the event Husband does not attempt to minimize any involuntary reduction in his income and/or secure alternative employment to maintain an income stream sufficient to satisfy his support/alimony obligation to Wife, he shall not be entitled to a reduction in his support/alimony obligation to Wife.

Id. at 6-7, ¶8 (emphases added). The parties agreed to use Husband’s base

gross salary of $263,588.00, or $5,069.00 per week, to calculate any

modifications to the alimony obligation.

On April 3, 2020, Husband was terminated from his position as the

general manager of Rumson Country Club, a position that he had held for the

prior eleven years. Husband received a $70,000 severance and was eligible

for unemployment. Following Husband’s termination, he filed a petition to

modify alimony, but the parties reached a temporary agreement to permit

Husband to pay reduced alimony in the amount of $2,026.40 per month for

the remainder of 2020. The amount was based on the income drawn from

Husband’s $70,000.00 severance and his unemployment benefits. The

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interim order that memorialized the parties’ agreement continued the alimony

hearing until December 1, 2020.

At the ensuing hearing, Husband sought a further, permanent reduction

in the alimony support based on his continued unemployment. Wife contested

any further reduction, arguing that Husband neglected his contractual duty to

mitigate his loss of income. Rather than deny any deduction, as would be

warranted under the agreement, she proposed that the court assess an

earning capacity to calculate Husbands’ obligation. Both Husband and Wife

testified, and Husband introduced six exhibits to document his employment

search and unemployment status, respectfully.

On December 3, 2020, the trial court entered the above-referenced

order finding that Husband failed to adequately mitigate the reduction of

income, assessing an earning capacity to Husband of $157,100 per year, and

ordered that Husband’s monthly alimony obligation remain $2,026.40. This

timely appeal followed. Both Husband and the trial court complied with

Pa.R.A.P. 1925.

Husband presents four issues for our review:

1. Whether the trial court erred and/or abused its discretion in finding that Husband had not adequately mitigated his reduction in income consistent with the parties’ Postnuptial Agreement.

2. Whether the trial court erred as a matter of law in considering Husband’s earning capacity when interpreting the parties' Postnuptial Agreement and further erred in concluding that Husband had an earning capacity of $157,100.00.

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3. Whether the trial court erred in permitting Wife to testify as to the circumstances that existed prior to the execution of the Postnuptial Agreement as well as her current financial circumstances.

4. Whether the trial court erred in failing to address a method for the application of credit for Husband’s overpayment as stipulated to by counsel on the record.

Husband’s brief at 5.

We start by noting the relevant legal principles. “A settlement

agreement between spouses is governed by the law of contracts unless the

agreement provides otherwise.” Stamerro v. Stamerro, 889 A.2d 1251,

1258 (Pa.Super. 2005). Such an agreement “imposes a duty of good faith

and fair dealing to perform contractual obligations diligently and honestly.”

Id. at 1261. Furthermore, “When interpreting a marital settlement

agreement, the trial court is the sole determiner of facts and absent an abuse

of discretion, we will not usurp the trial court’s fact-finding function.” Id. at

1257. “In determining whether the trial court properly applied contract

principles, the reviewing court must decide, based on all the evidence,

whether the trial court committed an error of law or abuse of discretion.”

Lewis v. Lewis, 234 A.3d 706, 711 (Pa. Super. 2020) (citation omitted).

In denying Husband’s petition to reduce his alimony obligation, the trial

court reasoned that Husband’s mitigation evidence was insufficient under the

circumstances of this case. The trial court made explicit credibility

determinations against Husband’s assertion that his skills do not translate to

opportunities beyond the management of country clubs or community

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associations. Thus, while acknowledging that Husband applied for thirty-two

jobs within those industries, the court rejected Husband’s contention that his

probability of finding employment that fulfilled his earning potential was best

served by a utilizing a narrow focus. The court determined, “Appellant’s job

search was insufficiently broad so as to be reasonably calculated to return

employment offers, given the effect of the ongoing pandemic on the

hospitality industry.” Trial Court Opinion, 2/19/21, at 3. It reasoned that

Husband’s failure to look for meaningful employment outside of county club

management did not satisfy his contractual obligation to mitigate the loss of

income. It explained its rationale as follows:

Despite having been out of work for eight months prior to the hearing in December 2020, [Husband] testified that he had only applied for thirty-two jobs. This translates to a rate of less than one job application being submitted, on average, per week. A postnuptial agreement “imposes a duty of good faith and fair dealing to perform contractual obligations diligently and honestly,” including the payment of the bargained-for amount of alimony. Stamerro[, supra at 1261]. The parties’ agreement here clearly imposes on [Husband] the duty, in the event of an involuntary reduction in his income, to make every reasonable effort to minimize the reduction in income and to maintain a sufficient income stream to continue paying the alimony obligation. As in Stamerro, the Court here found that [Husband]’s testimony not credible regarding the efforts taken to prevent or minimize a reduction in income. While it might not be ideal for [Husband] to take a position in another industry, [Husband]’s unwillingness to broaden his job search to positions in other industries does not meet his duty to maintain an income stream. [Husband]’s testimony that none of his job skills would translate to another industry simply was not credible.

Id. at 3-4 (cleaned up).

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Husband’s first argument is that the trial court abused its discretion in

finding that he failed to adequately mitigate the loss of income as required by

the alimony provision in the postnuptial agreement. Essentially, he challenges

the trial court’s factual findings and credibility determinations that led to the

conclusion that he did not explore all available avenues to obtain employment

following his termination from the Rumson Country Club. Noting his age, the

fact that his separation from employment coincided with the economic

shutdown that stemmed from the COVID-19 pandemic, and the uniqueness of

his skill set as a manager of a country club, Husband asserts, “[F]or the court

to conclude that a sixty-six year old individual should look for employment

outside of a field that he has worked in for the last twenty-five years and

during a national pandemic when unemployment is at an all-time high, is

patently unreasonable.” Husband’s brief at 13 (cleaned up). Thus, he

contends that the trial court erred in failing to give adequate weight to the

evidence that he presented concerning his effort to find suitable employment.

In opposition to Husband, Wife contends that the certified record

illustrates that Husband did not act in good faith in attempting to mitigate his

loss of income. Building upon the trial court’s adverse credibility

determination, she argues that Husband’s considerable management

experience and certification within the hospitality industry were sufficiently

marketable and transferrable to other businesses that he could have obtained

“gainful employment” in another industry if he had proceeded in good faith.

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Wife’s brief at 13. She asserts that Husband’s testimony that he submitted

what amounts to one application per week within his narrow trade is

insufficient to established good-faith efforts to mitigate. She further observes

that, although Husband is eligible for retirement, he elected to subsist on

unemployment benefits rather than mitigate the diminished revenue by

accessing his retirement income or social security benefits. Husband’s

amortized severance was exhausted in January 2021, and unemployment

compensation is his sole source of income.

For the following reasons, we conclude that the trial court did not abuse

its discretion in rejecting Husband’s request to reduce his alimony payments

commensurate to his actual income. Husband testified that he does not have

any health conditions that limited his employment opportunities. N.T.,

Hearing, 12/1/20, at 20. As to his attempt to secure a position within his field

of expertise, Husband stated that his search included contacting professional

organizations with extensive career resources, executive search firms that

cater to the “club industry” and employment websites such as Indeed® and

LinkedIn®. Id. at 16. In addition, he worked with several headhunters in

New Jersey, who informed neighboring country clubs of his availability. Id.

at 19-20.

Husband testified that he commits approximately twenty-five hours per

week to the employment search, and, as noted supra, submitted thirty-two

applications in response to various postings garnered from the above-noted

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resources, mostly search firms and professional contacts. Id. at 16-17, 21.

Those opportunities ranged in salary from $100,000 to $300,000. Id. at 19.

Husband also conceded that his professional certification made him

more marketable but stated that his qualifications are industry-specific and

would not translate to other fields. Id. at 17-18 (“One of my focuses is to try

to maintain the same earning potential and the club field is where my

maximum earning potential would lie”). The search focused on the northeast

region but included positions in Georgia and “the Carolinas.” Id. at 18. In

this vein, Husband highlights that he branched out his job search to include

managerial positions in private clubs and community associations. Id. at 12.

As to his unsuccessful efforts, Husband observed, “In some cases it was

simply a contact to let people know that I’m open for work. So[,] it just says

contact and some cases the job has been filled and it says closed. And in

some cases[,] I’m still waiting to hear back from the prospective employer.”

Id. at 13. As to whether he considered retirement, which would have provided

a stable source of income, Husband explained that it was his intention to find

employment because he was not ready to retire. Id. at 14.

Thus, by Husband’s own testimony, Husband averaged less than one

application per week over the eight-month period and refused to look for

employment beyond opportunities in club and facility management. Indeed,

the record is utterly bereft of any inquiries into other aspects of the hospitality

industry beyond managing clubs and community facilities. As the foregoing

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evidence in the certified record supports the trial court’s finding of facts and

credibility determinations, we do not disturb the court’s conclusion that

Husband failed to properly mitigate the loss of income as required by the

express terms of the postnuptial agreement. See Stamerro, supra at 1257

(“When interpreting a marital settlement agreement, the trial court is the sole

determiner of facts and absent an abuse of discretion, we will not usurp the

trial court's fact-finding function.”). Accordingly, this aspect of Husband’s

challenge the December 3, 2020 order fails.

Next, we address Husband’s contention that the trial court erred in

imputing an earning capacity of $157,100.00. The crux of this argument is

that the postnuptial agreement does not mandate the use of an earning

capacity and the trial court lacked the authority to modify the accord to impose

it.

Husband is correct insofar as, “Absent fraud, misrepresentation, or

duress, spouses should be bound by the terms of their agreements.”

Stackhouse v. Zaretsky, 900 A.2d 383, 386 (Pa.Super. 2006). However,

the parties modified the contract in 2020 when they elected to temporarily

reduce Husband’s monthly alimony obligation to $2,026.40. This appeal

stems from Husband’s subsequent request for further modification based on

his anticipated reduction of income when he exhausts his severance pay. The

trial court denied that request due to Husband’s failure to satisfy the

contractual duty to minimize the income loss by securing employment to

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maintain a sufficient income stream. As the trial court found that Husband

failed to mitigate the loss of income or secure alternative employment, the

postnuptial agreement provided that Wife was entitled to the full amount of

monthly alimony, $3,400, that was calculated by using the Husband’s base

gross salary of $263,588.00. See Postnuptial Agreement, 11/10/13, at 5, ¶8

(“In the event Husband does not attempt to minimize any involuntary

reduction in his income and/or secure alternative employment to maintain an

income stream sufficient to satisfy his support/alimony obligation to Wife, he

shall not be entitled to a reduction in his support/alimony obligation to Wife.”).

However, rather than impose such a severe obligation upon Husband during

the pandemic, and with no objection from Wife, the trial court elected to

maintain the status quo that the parties previously negotiated.

Thus, although the trial court styled its calculation as using Husband’s

earing capacity, it merely denied Husband’s request for an additional reduction

and held Husband to the obligation that he agreed upon following his

termination from employment. As the court explained, “The amount of

$157,000 leads to the monthly alimony obligation remaining at $2[,]026.40

per month, which was the reduced amount the parties agreed to on an interim

basis following the loss of Appellant's employment.” Trial Court Opinion,

2/19/21, at 5. Considering the foregoing, we reject Husband’s assertion that

the trial court erred in failing to impose the exact terms of the postnuptial

agreement.

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Husband’s next contention is that the trial court erred in permitting Wife

to testify as to the circumstances that existed prior to the execution of the

postnuptial agreement and her current financial circumstances. He argues

that Wife’s testimony concerning the marriage or her post-separation

employment efforts were irrelevant to Husband’s contractual obligation to pay

alimony. He argues that the trial court necessarily relied upon some portion

of the testimony because, in rejecting Husband’s assertion, the trial court

stated that it “afforded little weight to evidence regarding the circumstances

prior to the execution of the Postnuptial Agreement” and that it was “helpful

merely for the purpose of setting the contextual background for the petition.”

Husband’s brief at 21-22 citing Trial Court Opinion, 2/19/21, at 7. Relying

upon the foregoing statements, Husband argues that the trial court erred

insofar as “the court is acknowledging that this evidence did provide some

weight in its decision[.]” Id. at 21. For the reasons that follow, no relief is

due.

In Grove v. Port Auth. of Allegheny Cty., 218 A.3d 877, 888 (Pa.

2019), our High Court reiterated,

The harmless error doctrine underlies every decision to grant or deny a new trial. A new trial is not warranted merely because some irregularity occurred during the trial or another trial judge would have ruled differently; the moving party must demonstrate to the trial court that he or she has suffered prejudice from the mistake.

Id. (quoting Harman ex rel. Harman v. Borah 756 A.2d 1116, 1122 (Pa.

2000)).

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As is evident from the trial court’s statement of rationale, the trial court

denied Husband’s entreaty because Husband failed to mitigate the loss of

income as required by the postnuptial agreement. See Trial Court Opinion,

2/19/21, at 3-4. Notwithstanding Husband’s protestations that the

information contributed to the court’s decision to deny his request to reduce

his monthly alimony obligation, we see no reason to ignore the trial court’s

proffered rationale. Stated plainly, absent an indication of prejudice in the

certified record, we will not suppose that the trial court’s determination

concerning Husband’s failure to comply with his contractual obligation was

tainted by Wife’s testimony regarding background information, which was

helpful merely for the purpose of setting the contextual background for

Husband’s petition. Thus, this argument also fails.

Finally, we address Husband’s argument that “The trial court erred in

failing to address a method for the application of credit for Husband’s

overpayment as stipulated to by counsel on the record.” Husband’s brief at

23. This issue concerns a $2,270.72 credit that the parties stipulated was

owed to Husband for overpayments made to Wife over the course of the

alimony obligation. The parties disagreed, however, as to how the

overpayments would be proportionally divided to reduce Husband’s monthly

obligation. Husband argues that the trial court confirmed the stipulated credit

on the record during the hearing and acknowledged the need for an order

explaining how the credit would be assessed but nevertheless neglected to

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address that issue prior to the close of the hearing. Husband’s brief at 23.

Again, no relief is due.

Husband misstates the relevant exchange concerning the credit.

Contrary to Husband’s characterization, the trial did not indicate that it would

address the overpayment immediately. Indeed, during the hearing, the

parties stated that they would determine a method to apply the credits after

the court addressed Husband’s pending request to reduce the alimony

obligation based upon his reduction of income. Wife’s counsel explained,

“once we know th[e] amount [of the reduction], then we can do a final tally

for the last two and a half years of alimony. We were intending to address

it that way.” N.T. Hearing, 12/1/20, at 6 (emphasis added). Thus, as the

trial court accurately observed, “[T]here was no request made for a method

for addressing the over payments, and in fact the discussion with counsel on

the record indicated that the parties intended to come to an agreement to

address the amount of overpayment after a determination was made on

Appellant's Petition to Modify Alimony[.]” Trial Court Opinion, 2/19/21 at 7.

As neither party proposed a method to prorate the credit, the trial court did

not err or abuse its discretion in failing to revisit the issue sua sponte in the

December 3, 2020 order.1

____________________________________________

1 Husband did not request specific relief in relation to this issue. To the extent that he desires to have the credit applied to proportionally reduce his monthly alimony obligation, he need only submit a proposal to the trial court as the parties envisioned during the December 2020 hearing.

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Therefore, since none of Husband’s issues merits relief, we affirm the

trial court’s order directing him to continue to pay Wife $2,026.40 per month

in alimony.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 3/11/2022

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