J-A08027-15


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DANIELA BURGUI                                 IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                            Appellee

                       v.

ALBERT S. BURGUI

                            Appellant               No. 1390 MDA 2014


                     Appeal from the Decree of July 16, 2014
                 In the Court of Common Pleas of Berks County
                         Civil Division at No.: 09-16199


BEFORE: SHOGAN, J., WECHT, J., and STRASSBURGER, J.*

MEMORANDUM BY WECHT, J.:                             FILED APRIL 10, 2015

       Albert S. Burgui (“Husband”) appeals the July 16, 2014 divorce decree

that made final the June 26, 2014 order that denied Husband’s exceptions to

the Master’s recommended equitable distribution of the marital property

between Husband and Daniela Burgui (“Wife”). After review, we affirm.

       The trial court provided the following factual and procedural summary:

       [Husband] and [Wife] were married on August 20, 1994, in
       Constanta, Romania. The [p]arties have one child, [I.B., born in
       August 2000]. Wife filed a Complaint in Divorce [in Berks
       County] on December 8, 2009, requesting primary custody of
       the minor child, equitable distribution of all marital property,
       alimony and counsel fees/ costs/expenses. The instant appeal
       concerns the equitable distribution of the parties’ marital
       property and alimony and counsel fees.


____________________________________________


*
       Retired Senior Judge assigned to the Superior Court.
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     After separation of the parties, Husband has remained the sole
     owner and operator of Beltrans, Ltd., a trucking business. Wife
     is a teacher with the Daniel Boone School District.        [After
     hearings on May 20, 2013 and July 19, 2013,] Divorce Master
     [Louis M.] Shucker provided a detailed report and
     recommendation based upon his extensive attempts to resolve
     all outstanding economic issues. [The Master made a
     determination of Husband’s income in which he rejected an
     approach that used depreciation of Beltrans’ assets and instead,
     included a portion of Beltrans’ retained income as part of
     Husband’s income. The Master also determined the value of
     Beltrans’ equipment in calculating the worth of the company.
     The Master recommended: an approximately equal division of
     the marital assets with Husband retaining the business and Wife
     retaining the marital residence, along with the associated
     mortgage and home equity loan; alimony to Wife in the amount
     of $500.00 per month for sixty months; and counsel fees to Wife
     in the amount of $7,500.00.] Husband filed exceptions to the
     Divorce Master’s Recommendation and upon agreement of
     counsel submitted the case to [the trial court] to be decided on
     briefs and the record produced by Master Shucker. [The trial
     court] reviewed the transcript and report of Master Shucker as
     well as the documents and evidence submitted and entered an
     Order on [June 26, 2014,] denying Husband’s Exceptions. . . .

Trial Court Opinion (“T.C.O.”), 10/14/2014, at 1.

     On July 16, 2014, the trial court entered the divorce decree, which

included equitable distribution as proposed by the Master. On July 23, 2014,

Husband filed a notice of appeal.    The trial court ordered, and Husband

timely filed, a concise statement of errors complained of on appeal pursuant

to Pa.R.A.P. 1925(b).

     Husband raises six issues for our review:

     I.    Whether the trial court erred as a matter of law and
           abused its discretion by denying [Husband’s] exceptions to
           the Divorce Master’s report and recommendation and
           granting [Wife] five (5) years of alimony and in its
           assessment of [Husband’s] income?

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     II.    Whether the trial court erred as a matter of law and
            abused its discretion by denying [Husband’s] exceptions to
            the Divorce Master’s report and recommendation and by
            awarding [Wife] seven thousand five hundred dollars
            ($7,500.00) in counsel fees?

     III.   Whether the trial court erred as a matter of law and
            abused its discretion by denying [Husband’s] exceptions to
            the Divorce Master’s report and recommendation and by
            affirming the Divorce Master’s conclusion that appraisals
            are inherently suspect inasmuch as they are often
            conducted by friends or family?

     IV.    Whether the trial court erred as a matter of law and
            abused its discretion by denying [Husband’s] exceptions to
            the Divorce Master’s report and recommendation and by
            affirming the Divorce Master’s computation of [Husband’s]
            income and subsequent conclusion thereon?

     V.     Whether the trial court erred as a matter of law and
            abused its discretion by denying [Husband’s] exceptions to
            the Divorce Master’s report and recommendation and in
            affirming the Divorce Master’s recommendation, which
            calculated, computed and considered that depreciation is a
            part of [Husband’s] income?

     VI.    Whether the trial court erred as a matter of law and
            abused its discretion by denying [Husband’s] exceptions to
            the Divorce Master’s report and recommendation and in
            affirming the Divorce Master’s recommendation, which
            considered [Husband’s] retained earnings of 2010 as a
            portion of assets for distribution?

Husband’s Brief at 2-3.

     We review an equitable distribution order as follows:

     A trial court has broad discretion when fashioning an award of
     equitable distribution. Our standard of review when assessing
     the propriety of an order effectuating the equitable distribution
     of marital property is whether the trial court abused its
     discretion by a misapplication of the law or failure to follow
     proper legal procedure. We do not lightly find an abuse of
     discretion, which requires a showing of clear and convincing
     evidence. This Court will not find an abuse of discretion unless

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     the law has been overridden or misapplied or the judgment
     exercised was manifestly unreasonable, or the result of
     partiality, prejudice, bias, or ill will, as shown by the evidence in
     the certified record.

Biese v. Biese, 979 A.2d 892, 895 (Pa. Super. 2009) (citations and

quotation marks omitted). Similarly, we review challenges to an award of

alimony and to an award of counsel fees for an abuse of discretion. Gates

v. Gates, 933 A.2d 102, 106, 109 (Pa. Super. 2007). We also note that “a

master’s report and recommendation, although only advisory, is to be given

the fullest consideration, particularly on the question of credibility of

witnesses, because the master has the opportunity to observe and assess

the behavior and demeanor of the parties.”       Childress v. Bogosian, 12

A.3d 448, 455-56 (Pa. Super. 2011).

     Because Husband challenges alimony and counsel fees and because

the award of those forms of economic relief rely, in part, upon his income,

we first address Husband’s fourth and fifth claims of error because, in those

claims, he challenges the determination of his income.

     Husband disagrees with the Master’s calculation of his income. First,

Husband contends that the court erred by including retained earnings in his

income determination.    Husband argues that his testimony demonstrated

that his company needed to retain those earnings to maintain his trucking

business.   Husband’s Brief at 19-20.    Husband contends that he provided

ample testimony relating to the increase in business expenses and the need

to purchase new equipment and hire additional employees. Husband asserts



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that this testimony demonstrated that he was required to retain earnings to

support the business. Id. at 13. Husband argues that the record does not

support the finding that some of those earnings actually were available to

Husband.

       Husband also asserts that the trial court erred in considering

depreciation as part of Husband’s income. Husband claims that the Master

erred in finding that the depreciation deduction on his corporate taxes was

not warranted. Husband’s Brief at 20. Husband also argues that there was

no proof that Husband took the deduction in an attempt to reduce income

for support or alimony. Id. at 21-22.

       The Master considered that Husband’s trucking company had retained

income, which was defined as “accumulated profits, i.e., the net sum of the

corporation’s     yearly     profits    and    losses.”   Master’s   Report   and

Recommendation (“Report”), 10/30/2013, at 18 (quoting Rohrer v. Rohrer,

715 A.2d 463 (Pa. Super. 1998)).1                Reviewing case law, the Master

determined that, because Husband had the ability to control the retention or

distribution of funds, he had the burden to prove that retention was required

to maintain the business. Id. at 19. The Master found that Husband failed

to provide any evidence that the retained income was necessary to maintain



____________________________________________


1
    The Report does not have numbered pages. We have supplied page
numbers for ease of reference.



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the trucking business. Therefore, the Master considered the retained income

after separation as part of Husband’s income. Id. at 20.

      To determine Husband’s income, the Master then considered that the

trucking business had increased its retained income each year, from

$29,161.00 in 2010 to $47,557.00 in 2012. Further, the entire amount of

retained income available to the business increased from $109,269.00 in

2010 to $225,861.00 in 2012. Id. at 32. During the same period of time,

sales increased from $250,000.00 to $873,000.00. Id. at 31. Based upon

these numbers and Husband’s failure to convince the Master that the entire

amount was necessary to maintain the business, the Master credited

$47,557.00 as income to Husband for 2012, increasing his income to a total

of $95,114.00.   In reaching this decision, the Master also considered that

Husband would receive a tax benefit from any awarded alimony, which

would reduce the actual effect on Husband’s income. Id. at 32.

      The trial court denied Husband’s exception, finding that Husband’s

testimony provided no support for the proposition that the retained income

was necessary to the survival of the business. Further, the trial court noted

that Husband testified that some of his expenses, such as cell phones and

meals, were paid directly from the business. Therefore, the trial court found

that the record supported the Master’s determinations of Husband’s income.

T.C.O. at 6.

      We agree with the trial court.      In Rohrer, this Court addressed

whether retained earnings should be considered as income for support or as

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an asset in equitable distribution. Rohrer, 715 A.2d at 465. There, the trial

court had ordered that the retained income should be used as income for the

purpose of child support. The master included the retained earnings from

the years prior to the support determination as an asset. Id. at 465. This

Court affirmed the arrangement, holding that it was not an impermissible

“double-dip,” or counting the same asset as both property for distribution

and income for support.    Id. at 466.    While not called to rule specifically

upon the issue, the Rohrer Court did not comment negatively upon the trial

court’s use of the retained income as part of income.

     We addressed the issue more directly in Fennell v. Fennell, 753 A.2d

866 (Pa. Super. 2000).     In that case, the trial court included retained

earnings as part of the father’s income for child support. Id. at 867. We

recognized that, in determining income for support, a trial court must

consider “all benefits flowing from corporate ownership” and “that the owner

of a closely-held corporation cannot avoid a support obligation by sheltering

income that should be available for support by manipulating . . . corporate

distribution amounts.” Id. at 868. However, in that case, the father was a

minority shareholder who could not control the distribution of profits.

Further, the retention of earnings was a long-standing practice in the

corporation and the trial court specifically found that the retention was a

business decision. Finding no evidence in the record of an intent to shield

income, we reversed the trial court. Id. at 869.




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      Here, the Master followed a similar path as outlined in Rohrer. The

Master considered retained earnings accumulated during the marriage as an

asset, namely, part of the valuation of Beltrans.     Report at 27-29.    The

Master considered the then-current retained earnings as part of Husband’s

income for alimony. Id. at 32. In following Fennell, the Master found the

retained income should be counted as income. Unlike in Fennel, Husband

had total control over distributions from the business, the business had

increased its retained income only recently, thus there was no long-standing

practice, and there was no evidence that the retained income was invested

for business purposes or necessary to maintain the business.

      The record supports the conclusions reached by the Master. Husband

testified regarding his business expenses and that he obtained more

equipment and hired employees in the year prior to the hearing. Notes of

Testimony (“N.T.”), 7/19/2013, at 82-84, 85-88. Husband also testified that

he pays himself a salary sufficient to meet his needs and puts the rest of the

profits back into the business. Id. at 98-100. Husband explained that he

retains profits to pay unexpected expenses, including the $1000.00-per-

incident deductible on his business insurance. Id. at 101-02. The Master, in

making his credibility determinations, found that the retained earnings were

not all necessary to maintain the business, despite Husband’s testimony.

Husband was unable to explain the need to retain twice as much income as

he retained prior to separation.      We defer to the Master’s credibility

determination and find no abuse of discretion.

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      As to the depreciation argument, the Master recognized that, at a

support conference, Husband’s income was determined by incorporating half

of the claimed depreciation into his income.    Report at 14.   However, the

Master rejected that method of calculation. Id. at 14-15. While the Master

found that it was “not clear that all of the depreciation deduction claimed by

Husband on his tax returns represent[s] the cost of acquiring new

equipment,” the Master decided to use retained income as an alternative

method of determining Husband’s income, as discussed above. Id. at 17.

Because the Master did not consider depreciation in his calculation,

Husband’s issue relating to depreciation is without merit.

      We turn next to Husband’s challenge to the court’s alimony award.

Husband asserts that, given the circumstances of the case, Wife should not

have been awarded alimony.       Husband contends that the factors did not

weigh in favor of alimony as Wife has a college degree, gainful employment,

employment benefits, and the opportunity for raises. Husband also argues

that, because Wife testified that her income is sufficient to meet her needs

and because alimony is only available to meet one’s reasonable needs, Wife

should not have been awarded alimony. Finally, Husband asserts that the

Master erred in concluding that Wife has understated her expenses and

reasonable needs.    Husband’s Brief at 7-11.

      [A]limony provides a secondary remedy and is available only
      where economic justice and the reasonable needs of the parties
      cannot be achieved by way of an equitable distribution. An
      award of alimony should be made to either party only if the trial
      court finds that it is necessary to provide the receiving spouse

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     with sufficient income to obtain the necessities of life. The
     purpose of alimony is not to reward one party and punish the
     other, but rather to ensure that the reasonable needs of the
     person who is unable to support herself through appropriate
     employment are met.

     Alimony is based upon reasonable needs in accordance with the
     lifestyle and standard of living established by the parties during
     the marriage, as well as the payor’s ability to pay.

Balicki v. Balicki, 4 A.3d 654, 659 (Pa. Super. 2010) (citations and

quotation marks omitted). In granting alimony, the trial court must consider

the seventeen factors set forth in 23 Pa.C.S.A. § 3701(b).

     The Master engaged in a detailed discussion of the seventeen factors.

Report at 30-38. The Master found that Wife, as a school teacher, was likely

to receive wage increases, but that there was no certainty about the amount

or timing of those raises. Id. at 31. The Master determined that Husband’s

company had more than doubled its sales since the parties’ separation, and

that Husband, as sole owner, had the ability to retain earnings or distribute

earnings to himself. Given the record, the Master concluded that Husband

was retaining more earnings in the company than necessary and included a

portion of those retained earnings as income for Husband.     Therefore, the

Master calculated Husband’s income as approximately twice that of Wife’s

income. Id. at 31-32.

     The Master credited Wife’s testimony that she had contributed to

Husband’s business by handling paperwork, dealing with customers, and

negotiating contracts and that Husband had not supported Wife’s efforts to

obtain her teaching certificate in the United States. Id. at 33. Also, Wife


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maintained the home and provided the majority of childcare, which allowed

Husband to be on the road to develop the trucking company. Id. at 34, 35-

36.

      The Master found that Wife had underestimated her expenses. Wife’s

expense statement indicated that Wife’s income was greater than her

expenses.    However, Wife neglected to include any expenses for food,

clothing, car repair, school lunches, child care, or legal fees.   The Master

found that, correcting for this oversight and the fact that Wife would no

longer be eligible for a mortgage deviation once the divorce became final,

Wife’s income would not meet her reasonable expenses.           Id. at 36-37.

Conversely, the Master found that Husband had overinflated his expenses

and that his income, especially with the inclusion of the retained earnings,

was more than adequate to provide for his reasonable needs. Id. at 36.

      The Master found that Wife had limited savings and would be receiving

the marital residence, which had an associated mortgage and home equity

loan. The Master determined that alimony would allow Wife to remain in the

marital residence and maintain the standard of living the parties had

attained during their marriage. Id. at 38. The Master concluded that Wife’s

income alone would not meet her monthly reasonable needs, especially once

Wife was responsible for the entire mortgage payment, and that the factors

weighed in favor of an award of alimony. The Master found it important for

Wife to maintain the marital residence to provide stability for I.B. Id. at 39.




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The trial court concurred, finding that that record supported the Master’s

findings and the award of alimony. T.C.O. at 4.

     We agree.      Wife testified that the line of credit on the marital

residence was started to allow Husband to purchase a truck for his business,

that he continued to take small amounts from the line after separation, and

that she would be responsible for that payment after the divorce became

final. N.T., 5/20/2013, at 38-39, 41. Wife also testified that alimony would

help her meet her monthly obligations. Id. at 64. On cross-examination,

Husband’s attorney questioned Wife about her failure to include food,

clothing, car insurance, and other personal expenses. N.T., 7/19/2013, at

19-21. While Wife testified that these expenses are small, there is no doubt

that her expense statement was incomplete. Further, Husband testified that

he was not sure if Wife would be able to maintain the marital residence on

her salary alone. Id. at 135-37. Given that Wife’s income does not cover

her reasonable needs and that Husband has a higher income, we find no

abuse of discretion in the Master’s award of alimony or the trial court’s

denial of Husband’s exception.

     Husband next contends that the Master erred in awarding counsel fees

to Wife. Husband argues that the Master misapplied the law and failed to

consider the property awarded to Wife or the value of the attorney’s services

rendered in determining whether attorney’s fees were warranted. Husband

also asserts that the evidence did not support the trial court’s conclusion

that Husband prolonged the litigation. Husband’s Brief at 14-17.

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      Counsel fees are awarded based on the facts of each case after a
      review of all the relevant factors. These factors include the
      payor’s ability to pay, the requesting party’s financial resources,
      the value of the services rendered, and the property received in
      equitable distribution.

      Counsel fees are awarded only upon a showing of need. In most
      cases, each party’s financial considerations will ultimately dictate
      whether an award of counsel fees is appropriate.

Busse v. Busse, 921 A.2d 1248, 1258 (Pa. Super. 2007) (citations and

quotations marks omitted).

      The Master found that Wife did not receive alimony pendente lite

(“APL”) during the course of litigation because the retained earnings were

not considered as part of Husband’s income at the time APL was decided.

The Master also concluded that the debt that Wife carried due to her counsel

fees would affect significantly her ability to meet her reasonable needs.

Report at 41. Wife incurred approximately $35,000.00 in total counsel fees

for the divorce and related litigation. The Master apportioned $15,000.00 of

that amount to the divorce litigation. Id. at 37.

      As noted above, Husband’s income is greater than Wife’s.        The vast

majority of what Wife received in equitable distribution is the marital

residence, which is not a liquid asset.       In contrast, Husband received his

business, which has a significant amount of retained earnings. The Master

noted that Wife included neither her legal expenses nor the credit cards she

used to finance her legal fees as part of the expenses statements that Wife

submitted for her alimony claim. Id. at 37.




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      The parties’ financial circumstances largely dictate the award of

counsel fees.   Busse, supra.    Even with alimony, Husband is in a better

financial position than Wife.   Given this record, there was no abuse of

discretion in the imposition of an award of $7,500.00 in counsel fees.

      Husband next contests the Master’s consideration of appraisals of

Beltran equipment.     Husband argues that the Master’s statement that

“appraisal are inherently suspect” was in error.      Husband’s Brief at 18.

Husband asserts that he obtained independent appraisals while Wife

researched the value of the vehicles. Husband argues that the Master erred

in not using his valuations of the vehicles. Husband’s Brief at 19-20.

      As part of his determination of the value of Beltrans, the Master

assigned a value to the business’ trucks and trailers. Wife provided values

based upon an internet search of similar vehicles and provided a total value

of $78,550.00.      Husband provided appraisals with a total value of

$44,300.00. As a compromise, the Master valued the vehicles at $50,000,

“electing to honor the appraisals done for Husband but taking into account a

possible ‘discount.’” Report at 10.

      A fact-finder need not accept even the uncontradicted opinion of
      a valuation expert, although the fact-finder should offer some
      explanation of the basis on which it sets value where that value
      varies from the only value given in evidence.

Gaydos v. Gaydos, 693 A.2d 1368, 1377 (Pa. Super. 1997).            Here, the

Master had two potential values. Neither party chose to have the business

as a whole valued by an expert.        Instead, they submitted values for the


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trucks and trailers owned by the business. The fact that the Master chose to

use neither Husband’s nor Wife’s submitted value, but to find a value

between the two, is within his purview as the fact-finder.       The Master

provided a rationale for his valuation, namely that he found that Husband’s

estimate undervalued the company’s vehicles. While we do not condone the

Master’s statement regarding the inherent unreliability of appraisals, and it

was unnecessary to the resolution of the issue, the Master’s determination of

the value of the equipment was reasonable and was based upon the

evidence presented. Therefore, we find no abuse of discretion.

      Finally, Husband argues that the Master erred by considering the

retained earnings of the business as both an asset to be divided in equitable

distribution and as income for the purposes of awarding alimony. Husband’s

Brief at 22-23.

      The Master included the retained earnings accumulated during the

marriage as part of the value of Beltrans for equitable distribution.    The

Master considered only at the retained earnings until December 2009, the

date of separation. The Master discounted the earnings for the part of the

year that the parties were separated and because, should the business be

sold, the retained earnings would be not received on a dollar-for-dollar

basis. Therefore, the Master concluded the business should be valued based

upon $50,000.00 worth of equipment and $66,727.00 in retained earnings.

Reports at 28-29.




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      For the purposes of alimony, as noted above, the Master found that

Husband could have distributed additional earnings to himself as income

without harming the business.     Therefore, for 2012, the Master found

Husband’s income to be higher than reported by Husband to reflect more

accurately the amount of income available to Husband.     While the Master

used retained earnings as both an asset and income, it was for different

periods of time and there was no impermissible double dipping.

      As noted above, this approach was similar to that used by the trial

court in Rohrer. There, the trial court ordered that the retained earnings

were to be used as income for support.      715 A.2d at 464.     However, the

master included the pre-date of separation retained income in the value of

the husband’s business.    Id. at 465.      While recognizing that “double-

dipping” was impermissible, we found this approach not to be a double-dip

because it involved two separate amounts of revenue.     We condoned this

practice because it permitted “monies accumulated during the marriage to

be equitably divided.” Id. at 466. The Master here used a similar rationale.

The retained earnings accumulated during the marriage were included in the

value of Husband’s business to be divided in equitable distribution.     The

retained earnings going forward were counted as income for the purpose of

determining whether alimony was warranted.          We find no abuse of

discretion.

      Decree affirmed.




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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/10/2015




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