IN RE ESTATE OF BULLOTTA

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Docket Number

[J-9-2003].

Attorney(S)

James C. Kuhn, Pittsburgh, for Carolyn Bulotta. Roberta Altavilla, Richard F. Rinaldo, Pittsburgh, for Estate of James A. Bullotta Jr.

Judges

Chief Justice CAPPY, Concurring.

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Smart Summary

Factual and Procedural Background

James Bullotta filed for divorce from Carolyn Bullotta. The parties reached a marital settlement and the trial court entered a consent order on October 19, 1999, providing that the divorce would be finalized when the settlement's terms were completed. James died before completion of those terms and no final divorce decree was entered. A petition for probate was filed and letters testamentary issued. The executor obtained a citation directing Carolyn to show cause why assets allocated to James under the settlement should not be turned over to the estate. The trial court granted the executor's motion, ordering turnover based on Reese v. Reese. Carolyn's exceptions were denied; the Superior Court affirmed relying on Reese. The Supreme Court of Pennsylvania (Eakin, J.) affirmed the Superior Court's decision.

Legal Issues Presented

Whether a marital settlement agreement that has not been reduced to a final divorce decree is enforceable after the death of one spouse.
Whether a court-ordered equitable distribution or enforcement of a marital settlement may be sustained in the absence of a final divorce decree.
Whether Reese v. Reese (and the doctrine of judicial estoppel as applied there) controls the outcome of this case.

Arguments of the Parties

Wife's Arguments

The absence of a final divorce decree renders the settlement agreement void and unenforceable after the death of one party.
The court cannot order enforcement of the agreement after a party's death; Reese is distinguishable because that case involved bifurcation and court-ordered equitable distribution treated as final, whereas here the proceedings were not bifurcated and the trial court entered a consent order adopting the parties' agreement.
The agreement is an executory contract that cannot be completed because husband died before performance.

Executor/Estate (as reflected in trial court and Superior Court actions)

The executor sought turnover of assets allocated to husband under the settlement and relied on Reese to support enforcement against the surviving spouse and estate turnover.
The trial court and Superior Court treated the consent order/settlement as enforceable and ordered the assets turned over to the estate.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Reese v. Reese, 506 A.2d 471 (Pa.Super. 1986)	Used to support that a final distribution order, acted upon by parties, remains binding and is not destroyed by death of a party (estoppel).	Trial court and Superior relied on Reese to order turnover; Supreme Court held Reese not dispositive here because judicial estoppel did not apply under the facts of this case.
Trowbridge v. Scranton Artificial Limb Co., 747 A.2d 862, 864 (Pa. 2000)	Statement of the general rule of judicial estoppel: a party is estopped from assuming a position inconsistent with a previously successful assertion.	Quoted by the Court to explain the doctrine of estoppel and to conclude judicial estoppel did not apply in this case.
Philadelphia Suburban Water Co. v. Pa. P.U.C., 808 A.2d 1044 (Pa. Cmnwlth. 2002)	Another authority cited for the general rule of estoppel.	Used to support the Court's description of the estoppel doctrine.
Sunbeam Corporation v. Liberty Mutual Insurance Company, 781 A.2d 1189, 1192 (Pa. 2001)	Explains the purpose of judicial estoppel (protecting court integrity and preventing litigants from "playing fast and loose").	Quoted to describe the purpose and scope of judicial estoppel and to explain why it was not applicable here.
Bacchetta v. Bacchetta, 445 A.2d 1194, 1198 (Pa. 1982)	Establishes that equitable distribution occurs only after a divorce decree is issued (statutory/precedential support).	Cited to state the rule that equitable distribution requires a divorce decree and thus ordinarily cannot proceed without one.
Savage v. Savage, 736 A.2d 633, 644 (Pa. Super. 1999)	Supports that economic issues may not be fully resolved before entry of a divorce decree.	Used to reinforce the statutory principle limiting equitable distribution absent a divorce decree.
Drumheller v. Marcello, 532 A.2d 807, 808 (Pa. 1987)	General rule that a divorce action abates upon the death of one spouse; equitable distribution ordinarily cannot proceed after death (with narrow murder-related exception).	Cited for the abatement rule and to note the Court's limited prior exception (murder) does not apply here.
Vaccarello v. Vaccarello, 757 A.2d 909, 913 (Pa. 2000)	Holds marital settlement agreements are governed by contract law.	Basis for treating the parties' settlement as a contract enforceable despite absence of a final divorce decree.
In re Allam's Estate, 49 A. 252 (Pa. 1901)	Authority for the proposition that executory contracts not personal to decedent do not dissolve upon death.	Applied to support that the settlement may be completed by the decedent's estate and thus remains enforceable.
Stumpf's Appeal, 8 A. 866 (Pa. 1887)	Similar authority concerning executory contracts surviving death when not personal.	Cited to support the proposition that the contract did not dissolve upon husband's death.
Huffman v. Huffman, 166 A. 570 (Pa. 1933)	Example that an estate can complete a contract that is not strictly personal to the decedent.	Used to demonstrate that the estate is capable of completing the settlement terms, preserving enforceability.

Court's Reasoning and Analysis

The Court examined competing principles: (1) equitable distribution by statute occurs only after a divorce decree and divorce actions generally abate on a spouse's death; (2) Reese applied judicial estoppel to sustain a final distribution order after a party's death where parties had acted in reliance on the order. The majority found Reese not dispositive because judicial estoppel requires an adjudication or factual inconsistency not present here. The Court then treated the marital settlement as a contract governed by contract law (citing Vaccarello). It rejected the wife's assertion that the agreement was void as an executory contract incapable of completion upon death, noting precedent that executory contracts not personal to the decedent may be completed by the decedent's estate (In re Allam's Estate; Stumpf's Appeal; Huffman). Because the husband's estate was capable of performing the agreement's terms, the settlement did not dissolve upon his death. The Court thus affirmed the Superior Court's enforcement of the settlement and turnover to the estate. The concurrence (Chief Justice Cappy, joined by Justices Castille and Nigro) would have resolved the case on judicial estoppel grounds, emphasizing that the wife previously sought enforcement and obtained the consent order and cannot now repudiate that position.

Holding and Implications

Order affirmed.

Direct effect: The trial court and Superior Court orders directing turnover of the marital assets to the decedent's estate were affirmed; the settlement agreement remained enforceable and could be completed by the estate. The opinion affirms existing principles rather than announcing a broad new rule; no novel precedent beyond application of existing contract and estoppel principles is stated.

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IN RE: ESTATE OF JAMES A. BULLOTTA, JR. APPEAL OF: CAROLYN BULLOTTA.

OPINION

MR. JUSTICE EAKIN

James Bullotta sought to divorce Carolyn Bullotta. During the course of proceedings, the parties reached a settlement agreement, dividing their marital assets. On October 19, 1999, the trial court entered a consent order setting forth the terms of their agreement, which provided the divorce could be finalized when the terms of the settlement were completed. Unfortunately, husband died before all those terms were carried out, and no final divorce decree was entered.

A petition for probate of his estate was filed with the register of wills, and letters testamentary were granted. The executor of the estate obtained a citation directing wife to show cause why the marital assets allocated to husband by the settlement agreement should not be turned over to the estate. The trial court granted the executor's motion, and ordered the assets turned over to the estate. The trial court based its decision on Reese v. Reese, 506 A.2d 471 (Pa.Super. 1986). Wife filed exceptions, which were denied, and on appeal, the Superior Court, relying on Reese, affirmed.

In Reese, after an equitable distribution hearing, the trial court entered a decree of distribution, and the parties took sole possession of the property awarded to them. The husband petitioned to vacate the equitable distribution order after the wife died (before a divorce decree was entered, but after the action was bifurcated). The Superior Court acknowledged the divorce action abated upon the death of the wife, but concluded the existence of a final distribution order, and the fact the parties acted in reliance upon the order, made it binding upon them. Although the Superior Court suggested that entering an equitable distribution decree prior to a divorce decree was improper, the court determined that since the husband invoked the jurisdiction of the court, received the relief he requested, and acted upon the court's order, he would not be permitted to "blow hot and cold." The Court concluded the husband was estopped from challenging the trial court's jurisdiction to enter the order; hence, the equitable distribution order was not destroyed by the death of one of the parties.

The underlying doctrine in Reese was estoppel. As a general rule, a party is estopped from "assuming a position inconsistent with his or her assertion in a previous action," if the party is successful in maintaining that action. Trowbridge v. Scranton Artificial Limb Co., 747 A.2d 862, 864 (Pa. 2000); Philadelphia Suburban Water Co. v. Pa. P.U.C., 808 A.2d 1044 (Pa. Cmnwlth. 2002). The purpose of the doctrine is to "protect the integrity of the courts by preventing litigants from `playing fast and loose' with the judicial system" by switching positions as required by the moment. Sunbeam Corporation v. Liberty Mutual Insurance Company, 781 A.2d 1189, 1192 (Pa. 2001), reargument denied, 2001 Pa. Lexis 2597 (Pa. Dec. 5, 2001). Judicial estoppel depends on the "relationship of one party to one or more tribunals." Id., at 1192. As there was no adjudication or inconsistency in the case at hand, judicial estoppel does not apply, and Reese is not dispositive.

Wife argues the absence of a divorce decree renders the settlement agreement void, and contends a court cannot order enforcement of the agreement after the death of one of the parties. Further, she maintains Reese is distinguishable since it involved a bifurcated proceeding and court-ordered equitable distribution, which the parties treated as final; here, the proceedings were not bifurcated, and the trial court entered a consent order adopting the parties' agreement.

Statutorily, equitable distribution occurs only after a divorce decree is issued. 23 Pa.C.S.A. § 3323(b); Bacchetta v. Bacchetta, 445 A.2d 1194, 1198 (Pa. 1982); see also Savage v. Savage, 736 A.2d 633, 644 ( Pa. Super. 1999) (economic issues may not be fully resolved before entry of divorce decree). Generally, a divorce action abates with the death of one of the spouses. Drumheller v. Marcello, 532 A.2d 807, 808 (Pa. 1987). Therefore, if there is no final divorce decree, there can be no court-ordered equitable distribution. Id., at 808-09.

The only circumstances in which this Court has allowed equitable distribution to proceed after the death of the other spouse, prior to the issuance of a divorce decree, is when one spouse has murdered the other. See, e.g., Drumheller (permitting equitable distribution to proceed because court with Divorce Code expertise could complete already developing record and determine appropriate division of marital property). There was no murder here.

However, marital settlement agreements are governed by the law of contracts. Vaccarello v. Vaccarello, 757 A.2d 909, 913 (Pa. 2000). The pending divorce may be the impetus for the contract, but it is an agreement nevertheless, made in lieu of having the court divide the property. Once such a contract is made, though fulfillment may be delayed until entry of the final divorce decree, the contract is still enforceable.

Wife argues this is an executory contract, and since husband died before its execution, the contract is not capable of completion. This is not the law of this Commonwealth, and wife's failure to support her position is indicative of this. The agreement is still enforceable though the parties may no longer divorce. A marital settlement agreement, while requiring performance from each party, is not necessarily unique to the respective parties. Thus, an executory contract that is not personal to a decedent does not dissolve upon death. See In re Allam's Estate, 49 A. 252 (Pa. 1901); see also Stumpf's Appeal, 8 A. 866 (Pa. 1887). In other words, if the contract can be completed by the estate of a party, it is not void due to the death of a party. See, e.g., Huffman v. Huffman, 166 A. 570 (Pa. 1933) (estate can complete contract that is not strictly personal to decedent). Since husband's estate is capable of completing the terms of the settlement agreement, the agreement did not dissolve upon husband's death. Accordingly, the Superior Court's decision is affirmed.

An executory contract is a contract that remains wholly unperformed or for which there remains something still to be done on both sides, often as a component of a larger transaction, and sometimes memorialized by an informal letter agreement, by a memorandum, or by oral agreement. Black's Law Dictionary, 321 (7th ed. 1999).

Order affirmed.

Chief Justic CAPPY files a concurring opinion in which Justices CASTILLE and NIGRO join.

Chief Justice CAPPY, Concurring.

Respectfully, I concur in the majority's result. I write separately because I would find that the doctrine of judicial estoppel applies in this instance.

The majority correctly sets forth the standard regarding the doctrine: Generally, a party is estopped from assuming a position inconsistent with her assertion in a previous action if her contention was successfully maintained. Trowbridge v. Scranton Artificial Limb Co., 747 A.2d 862, 864 (Pa. 2000). The purpose of judicial estoppel is to "protect the integrity of the courts by preventing litigants from `playing fast and loose' with the judicial system" by switching positions as the moment requires. Sunbeam Corp. v. Liberty Mutual Ins. Co., 781 A.2d 1189, 1192 (Pa. 2001) (citation omitted).

Yet the majority opinion omits relevant factual history. On September 25, 1998, at Wife's request, the trial court issued an order prohibiting bifurcation of the economic issues from the divorce action. Wife subsequently filed a "Petition to Enforce Settlement Agreement" in which she asserted that the parties had reached an agreement on the distribution of their property. As a result, on October 19, 1999, the trial court entered a consent order distributing the marital assets based on the parties' agreement that Wife filed to enforce. Wife now argues that the October 19, 1999 order is a nullity and that she is entitled to the property.

Wife is estopped from challenging the October 19, 1999 consent order. Wife has taken inconsistent positions: she initially asserted that there was a valid settlement agreement, but now contends that the agreement is void. Wife also successfully maintained her prior position in that she sought enforcement of the settlement agreement and obtained a consent order from the trial court distributing the marital property on that basis.

Wife argues that in a non-bifurcated divorce proceeding, a marital settlement agreement is a form of executory contract, and when the non-performing spouse dies before performance of its terms and before the issuance of a divorce decree, the divorce action abates, the court loses subject matter jurisdiction, the agreement is a nullity and the survivor accedes to the property. But this matter was bifurcated — at Wife's request. Wife does not suggest that when the trial court entered the consent order, it lacked subject matter jurisdiction, only that jurisdiction in that forum is now lost. Even assuming arguendo that the family court division loses jurisdiction, the matter is now in Orphans' Court. Wife cannot now "play fast and loose" with the courts and change her position to suit her own ends. Accordingly, I would affirm the Superior Court on this basis.

Justice CASTILLE and NIGRO join this concurring opinion.