Katz, S. v. Katz, J.
1653 WDA 2015
| Pa. Super. Ct. | Nov 3, 2016Background
- James and Susan Katz, wealthy spouses with a long, acrimonious divorce and extensive real-estate/marital-business interests (Pittsburgh Land Company and Coventry Estates). Divorce decree entered December 17, 2014 after multi-year Master hearings and exceptions.
- Major assets: the Enclave real-estate development (lots, roads), rental properties, and disputed jewelry (appraised jewelry and $74,367 in “missing” jewelry recovered from a safe-deposit box).
- Master recommended 50/50 equitable distribution, allocated lots, addressed jewelry, found Husband less credible, and recommended Husband bear 100% of litigation costs in a separate homeowners’ suit (the Enclave Lawsuit) and Wife pay 25% of any damages.
- Trial court adopted most recommendations but made adjustments, denied many fee claims, and later reduced an award of Wife’s Enclave-related attorney fees by $35,857; the court also found certain record discrepancies (a purported $330,734 Coventry shareholder loan and an unexplained $48,500 attributed to Husband).
- Superior Court affirmed the decree in large part but remanded limited discrete issues: (1) the Coventry Estates shareholder-loan accounting, (2) the unexplained $48,500 attributed to Husband, and (3) clarification of the $35,857 reduction of Wife’s attorney’s fees tied to the Enclave litigation.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Credit for returned "missing" jewelry (treatment of non‑marital items) | Master’s credit to Husband (50% of returned jewelry) improperly converts Wife’s non‑marital property into marital credit | Husband defends credit as sanction for Wife’s concealment and equitable adjustment | Court upheld Master/trial-court credibility findings and denied relief to Wife (no abuse of discretion) |
| Coventry Estates "shareholder loan" (post‑separation $330,734) | Wife: loan was marital and Master correctly charged Husband half | Husband: entry was a paper tax/accounting recap, not cash distribution; court previously sustained his cross-exception | Record inconsistent; Superior Court remanded for clarification of whether the loan existed and how it was allocated |
| Unexplained $48,500 charged to Husband | Wife ties it to personal expenses taken from Coventry; Master attributed it to Husband | Husband: amount unsupported by evidence and neither counsel could identify source | Trial court could not trace the sum; Superior Court remanded for clarification by the Master/trial court |
| Enforcement / scope of attorneys’ fees for Enclave Lawsuit ($159,960 claim; $35,857 reduction) | Wife: all fees were incurred because Husband’s conduct and joinder created the litigation; reduction improperly reverses Master credibility findings | Husband: many billed entries unrelated to Enclave matter; reduction appropriate; some fees tied to non‑covered tasks; also argued Wife should bear share of damages | Court found Husband liable in principle for Enclave-related fees but could not identify which billed items were disallowed; Superior Court remanded to specify and justify the $35,857 reduction |
Key Cases Cited
- Biese v. Biese, 979 A.2d 892 (Pa. Super. 2009) (standards for reviewing equitable distribution decisions)
- Childress v. Bogosian, 12 A.3d 448 (Pa. Super. 2011) (deference to master on credibility and factual findings)
- Dalrymple v. Kilishek, 920 A.2d 1275 (Pa. Super. 2007) (trial court’s broad discretion in equitable distribution)
- Smith v. Smith, 904 A.2d 15 (Pa. Super. 2006) (abuse of discretion standard for distribution awards)
- Wang v. Feng, 888 A.2d 882 (Pa. Super. 2005) (consider distribution as whole; reversal only for clear abuse)
- Schenk v. Schenk, 880 A.2d 633 (Pa. Super. 2005) (objective of economic justice in equitable distribution)
- Yuhas v. Yuhas, 79 A.3d 700 (Pa. Super. 2013) (abuse of discretion standard reiterated)
- Busse v. Busse, 921 A.2d 1248 (Pa. Super. 2007) (credibility determinations are for the trial court)
- Marra v. Marra, 831 A.2d 1183 (Pa. Super. 2003) (appellate review of attorney‑fee awards for abuse of discretion)
- Hutnik v. Hutnik, 535 A.2d 151 (Pa. Super. 1987) (treatment of expectancies/inheritances in equitable-distribution analysis)
- Solomon v. Solomon, 611 A.2d 686 (Pa. 1992) (distinguishing vested vs. contingent interests for consideration in equitable distribution)