In the Pennsylvania Superior Court case Kozel v. Kozel, a trial court's decision to re-open a divorce matter that originally concluded in 2005 was upheld. The trial court opened the divorce matter based on the theory of "constructive trust." Under this theory, a court may impose a "constructive trust" on certain assets that were not disclosed in the original divorce proceedings. The undisclosed assets are then once again subject to divorce proceedings.

In Kozel, the parties' divorce litigation started in 1998. As the case proceeded through the courts, each party was required to file an "inventory" listing any and all assets and debts. After each party filed their "inventory," the parties participated in a nine day divorce master's hearing, and the court distributed the parties' assets and entered a divorce decree on May 2, 2005.

Seven years after the divorce, Wife filed a petition under the Pennsylvania Divorce Code that stated if a

…party fails to disclose information required by general rule of the Supreme Court and in consequence thereof an asset or assets with a fair market value of $1,000 or       more, is omitted from the final distribution of property…. the court shall grant the petition [for imposition of a constructive trust] upon a finding of a failure to disclose the assets as required by general rule of the Supreme Court.

23 Pa. C.S.A. §3505(d)

Wife's petition alleged that Husband failed to disclose the nature and extent of several assets, including several gas wells and gas related partnerships. Wife also alleged in her petition that Husband, and Husband's brother, participated in "divorce planning" whereby Husband transferred assets from his name to his brother's name and to trusts, in an attempt to avoid Wife obtaining such assets in the divorce.

In response to Wife's petition, Husband argued that Wife was too late and that section 3322 of the Divorce Code imposed a five year statute of limitations for vacating a divorce decree.

The Superior Court disagreed with Husband and stated that Wife was not trying to vacate the divorce decree; rather, she was proceeding under section 3505(d) of the Divorce Code, which permits a court to impose a constructive trust over assets that were not disclosed in divorce action.

This case demonstrates at least two important points. First, for divorce cases that are litigated before a Divorce Master, it shows the importance of fully disclosing the nature and extent or assets and debts to avoid re-litigating aspects of the divorce several years later. Second, many divorce cases are resolved not through the courts, but by agreement. In many cases resolved by agreement, the parties have not filed "inventories." Thus, a spouse who is prejudiced by the failure to disclose is likely not protected by Section 3505(d) of the Divorce Code. In that case, it is important to include such language in any agreement that if an asset is later discovered, a court of competent jurisdiction will have authority to impose a constructive trust over any and all assets that are not disclosed.