Ford, D. v. Ford, V., 1548 EDA 2015

Background

David (Husband) and Virginia Ford (Wife) separated in 2003; multiple orders and agreements addressed tax liabilities arising from joint and individual returns for years through 2010.
Husband and Wife executed tax indemnification agreements for 2004 and 2007 (and earlier years), under which Husband agreed to hold Wife harmless for taxes, penalties, interest, and related costs for those years.
In 2010 the court entered an equitable distribution order; in 2011 the parties filed a stipulation/order (the 2011 order) that replaced a prior paragraph and expressly retained court jurisdiction to allocate responsibility for taxes, penalties, interest, and legal/accounting fees for tax years through 2010.
New York assessed Husband as a resident for 2004–2007, issuing a large deficiency that the parties settled for $6,000,000 in 2013; Husband paid the settlement by borrowing on a home equity line.
Husband petitioned (2013) for special relief seeking reimbursement from Wife for 45% of the settlement and 45% of related fees/expenses; trial court awarded Husband 45% of settlement and 45% of defense fees plus statutory interest through the court’s decision date, but denied fees for litigation of the special-relief petition.
On appeal, the Superior Court affirmed that the 2011 order was integrated and superseded the 2004/2007 indemnities, affirmed the reimbursement award, vacated the interest award, and denied both parties’ requests for counsel-fee sanctions.

Issues

Issue	Husband's Argument	Wife's Argument	Held
Whether the 2011 stipulation/order was an integrated agreement that superseded 2004/2007 indemnification agreements	2011 order displaced prior indemnities and authorized court allocation of tax liabilities	2011 order was not integrated, lacked integration clause/consideration, so prior indemnities remained enforceable	Court: 2011 order was an integrated, complete agreement that superseded inconsistent indemnities; affirmed
Whether Wife must reimburse Husband 45% of NY settlement and defense fees	Husband sought 45% reimbursement under court’s allocation authority in 2011 order	Wife argued indemnities (limiting reimbursement to certain years and terms) controlled and challenged evidence of fees	Court: Award of 45% of settlement and 45% of legal/accounting defense fees to Husband affirmed
Whether Wife must pay statutory interest on amounts owed before payment deadline	Husband sought 6% interest on Wife’s share from time of settlement/borrowing until payment	Wife argued statute inapplicable; Husband didn’t prove actual borrowing interest; she had offered to pay portions earlier	Court: Interest award vacated—§3502(e)(3) inapplicable because there was no earlier fixed sum owed under an order/contract prior to court’s allocation
Whether either party is entitled to counsel fees for litigating the special-relief petition	Husband sought fees for litigating petition; Wife sought fees as sanction	Both argued the other acted dilatory/ vexatiously	Court: Denied both requests; no statutory basis shown for fee awards

Key Cases Cited

Ragnar Benson, Inc. v. Hempfield Township Municipal Authority, 916 A.2d 1183 (Pa. Super. 2007) (contract interpretation reviewed de novo)
Stamerro v. Stamerro, 889 A.2d 1251 (Pa. Super. 2005) (parol evidence and contract interpretation principles)
McGuire v. Schneider, Inc., 534 A.2d 115 (Pa. Super. 1987) (integrated writing bars parol evidence)
Gemini Equipment v. Pennsy Supply, 595 A.2d 1211 (Pa. Super. 1991) (written contract, if unambiguous, embodies prior negotiations)
Lenzi v. Hahnemann University, 664 A.2d 1375 (Pa. Super. 1995) (integration and final expression rules)
Murray v. University of Pennsylvania Hospital, 490 A.2d 839 (Pa. Super. 1985) (whether a writing is integrated is a question of law)
Kehr Packages, Inc. v. Fidelity Bank, Nat. Ass'n, 710 A.2d 1169 (Pa. Super. 1998) (absence of integration clause not dispositive)
Peugeot Motors of Am., Inc. v. Stout, 456 A.2d 1002 (Pa. Super. 1983) (complete legal obligation presumed to reflect whole agreement)
Penneys v. Pennsylvania R. Co., 183 A.2d 544 (Pa. 1962) (interest on a contractually fixed sum is allowable from time performance was due)