Opinion
J-A06022-17 No. 2138 EDA 2016
05-24-2017
WILLIAM AARON BROSKY, Appellee v. MJC INDUSTRIES, INC., Appellant
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order June 21, 2016
In the Court of Common Pleas of Bucks County
Civil Division at No(s): 2013-03355 BEFORE: PANELLA, SHOGAN, and RANSOM, JJ. MEMORANDUM BY SHOGAN, J.:
Appellant, MJC Industries, Inc., appeals from the order entered June 21, 2016, in the Court of Common Pleas of Bucks County, granting the praecipe of Appellee, William Aaron Brosky ("Brosky") to withdraw Counts I, IV, and V of his complaint, following the trial court's previous order granting Brosky's motion for partial summary judgment as to counts II and III. We affirm.
The trial court, partially quoting its prior opinion, summarized the factual and procedural history of this case as follows:
In 2001, [Brosky] was approximately twelve (12) years old when he met Michael Mesko [an adult]. Sometime thereafter, Mesko became sexually involved with [Brosky]. [Brosky] eventually reported these incidents leading to Mesko's arrest by the Allentown Police Department in February 2010. Mesko was charged with involuntary deviate sexual
intercourse pursuant to 18 Pa. C.S. § 3123. On October 13, 2010, Mesko pled guilty to this charge and was sentenced to 5-15 years of incarceration.
Prior to his incarceration, Mesko owned and operated a landscaping business, Mesko Landscaping, Inc., which used for its operations certain real estate owned by Mesko personally. On October 12, 2010, the day before Mesko's guilty plea, he signed a deed transferring his fee simple ownership of real property located at 3268 Route 212, Springtown, PA 18081 (hereinafter "the Route 212 property") to Appellant, MJC Industries, Inc., in exchange for $1.00. In addition, on the same date, Mesko signed a deed transferring his ownership of approximately 36 acres of real estate located at 1515 Woodcock Road, Kintnersville, PA 18930 (hereinafter "the Woodcock Road property") to Appellant in exchange for $1.00. Mesko also transferred stock in Mesko Landscaping, Inc. to Glenn Jackson, CEO of Appellant, MJC Industries, Inc. Other than the assets transferred, Mesko only retained a cabin in the Poconos, which he valued between $25,000 and $40,000. This cabin was subsequently sold at sheriff's sale because Mesko was unable to pay the real estate taxes thereon. Mesko admitted that he did not retain any other valuable assets. The 1515 Woodcock Road property was unencumbered by any mortgage, tax lien or other liability at the time of transfer. Both Mesko and Jackson admitted that they believed the value of this property was approximately $200,000. [Brosky's] appraiser valued the property to be $250,000 in October 2010. The 3268 Route 212 property was encumbered by a $200,000 line of credit. [Brosky's] appraiser valued this property to be $265,000 in October 2010.
On April 1, 2011, [Brosky] filed a civil suit against Mesko in the Lehigh County Court of Common Pleas, Docket No. 2011-C-1300, which resulted in a stipulated judgment against Mesko in the principal amount of $500,000.00. The judgment
was indexed in the Lehigh County Court of Common Pleas on December 14, 2012.
On May 13, 2013, [Brosky] filed the instant action in order to collect upon said judgment. At the time this suit was brought, [Brosky] had not collected any sum towards the $500,000 judgment. On June 26, 2013, Appellant filed an Answer to [Brosky's] Complaint. Thereafter, the parties engaged in discovery, and various motions and responses were filed by the parties. On December 26, 2013, [Brosky] filed a Motion for Summary Judgment claiming that the allegations of the Complaint were uncontroverted and therefore, no genuine issue of material fact existed. On January 28, 2013, Appellant filed his Response to [Brosky's] Motion for Summary Judgment as well as a "Motion to Dismiss Complaint with Prejudice for Failure to Join Indispensable Party and Lack of Jurisdiction." The parties filed additional supporting memoranda thereafter.
Trial Court Opinion, 06/30/14, pp. 1-3.
[The trial court] granted [Brosky's] Motion for Summary Judgment on February 20, 2014. Appellant filed an initial Notice of Appeal to Superior Court in response to [the] Order, and this Court's Opinion in support of our Order was docketed on July 2, 2014. On May 18, 2015, [the] Superior Court filed a Memorandum Opinion quashing Appellant's Appeal due to lack of jurisdiction, remanding the case for [the trial court] to make an express determination as to whether an indispensable party was absent from the litigation, as well as to resolve [Brosky's] remaining claims that [the] partial summary judgment Order did not specifically address.
On June 30, 2015, Appellant filed a "Motion to Vacate Order Granting Summary Judgment and Rule on Superior Court's Order of Remand and Instruction to Rule on Defendant MJC's Motion to Dismiss for Failure to Name Indispensable Parties." [The trial court] heard oral argument on said Motion on July 22, 2015, whereupon [it] ordered both parties to brief their arguments. Upon the arguments presented at oral argument and a review of the filings of record and the allegations therein,
[the trial court] determined that Appellant's Motion was without merit and issued an Order denying the Motion on September 14, 2015.Trial Court Opinion, 8/4/16, at 1-3 (internal citations omitted). The trial court and Appellant complied with Pa.R.A.P. 1925.
Appellant filed a Notice of Appeal of this Court's Order on October 8, 2015, however, [the] Superior Court Quashed the Appeal sua sponte as it was interlocutory in light of the fact that Counts I, IV, and V of [Brosky's] Complaint were still undecided. [Brosky] filed a Praecipe to Withdraw said Counts on June 9, 2016, which [the trial court] granted in a June 21, 2016 Order. Appellant filed a timely Notice of Appeal from that Order to the Superior Court on July 5, 2016.
Appellant presents the following issues for our review:
1. Did the trial court err as a matter of law in failing to Vacate its Order granting Summary Judgment after remand by the Superior Court when it:
a) failed to recognize the material issues of fact in dispute that should be presented to a jury concerning consideration for the transfer of real property as pointed out by the Superior Court;
b) violated the fundamental rule that "the Court is not to decide issues of fact when resolving a motion for summary judgment, but merely to determine whether any such issues exist";
c) failed to recognize that genuine issues of material facts in dispute can be and are established by depositions of the parties; the trial court, despite being presented with the actors testimony by deposition in which they clearly indicate their belief that the transaction was a legitimate and necessary complex transaction between them which included critical non-monetary consideration, the court ignored these factors when granting summary judgment[;]
d) In granting summary judgment based on the trial court's own determination of facts and law the trial court erred as a matter of law and fact by not allowing a jury to ascertain the credibility, demeanor and veracity of the witnesses and draw their own conclusions from testimony given and further the trial court violated the "Nanty-Glo Rule[.]"
2. Did the trial court err as a matter of law in failing to grant [Appellant's] Motion to Dismiss for failure to Name Indispensable Parties and then in proceeding with this case despite having no subject matter jurisdiction in this matter:
a) [A]ppellee failed to name as a party the debtor who sold the property in question and who would have to be proven to be in violation of the Uniform Fraudulent Transfer Act;
b) [A]ppellee failed to name as a party the individual who as sole shareholder, sole director, sole officer and sole negotiator for the shell corporation in whose name the real property was placed and who has right and interest related to the claim in the cause of action[;]
c) [A]ppellee failed to name as a party Mesko Landscaping, Inc., [a] jointly owned company of Jackson and Mesko that has over $400,000.00 worth of trees growing on the real property and [whose] assets were not allowed to be considered due to the trial judge granting summary judgment, is also an essential unnamed party as defined by Mechanicsburg Area School District.
Appellant's Brief at 3-4.
3. The trial court failed as a matter of law and fact in ignoring the clear defense of Latches [sic]. The issue of Latches [sic] constitutes a separate defense from the alleged failure of consideration and it constitutes a separate and viable genuine issue of material fact in dispute tha[t] would defeat the motion for summary judgment. Further, had the proper parties been named as defendants they would have joined said issue[.]
We must first address Appellant's second issue in which it asserts that the trial court erred in failing to grant the motion to dismiss the complaint due to Brosky's failure to join indispensable parties because such claim implicates our jurisdiction. "Under Pennsylvania law, the failure to join an indispensable party implicates the trial court's subject matter jurisdiction." Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015) (citation omitted). This issue may be raised sua sponte. Id .
Appellant argues that three indispensable parties were not named in the Complaint. Appellant's Brief at 21. First, Appellant posits that Michael Mesko, as the debtor who sold the property in question and "who would have to be proven to be in violation of the Uniform Fraudulent Transfer Act," was an indispensable party. Id. at 21. Second, Appellant identifies Glenn Jackson as an indispensable party and explains that Jackson is "the individual who as sole shareholder, sole director, sole officer and sole negotiator for the shell corporation in who's [sic] name the real property was placed and who has right and interest related to the claim in the cause of action." Id. at 21, 27-28. Third, Appellant asserts that Mesko Landscaping is an indispensable party, and in support of such claim maintains that "Mesko Landscaping, as a property of Mr. Mesko and Mr. Jackson and a[n] occupier of the real property in question also has a stake in this matter. It has a crop of trees growing on the property and meets the criteria [for an indispensable party]." Id. at 29.
Pennsylvania Rule of Civil Procedure 1032 provides as follows:
Rule 1032. Waiver of Defenses. Exceptions. Suggestion of Lack of Subject Matter Jurisdiction or Failure to Join Indispensable PartyPa.R.C.P. 1032.
(a) A party waives all defenses and objections which are not presented either by preliminary objection, answer or reply, except a defense which is not required to be pleaded under Rule 1030(b), the defense of failure to state a claim upon which relief can be granted, the defense of failure to join an indispensable party, the objection of failure to state a legal defense to a claim, the defenses of failure to exercise or exhaust a statutory remedy and an adequate remedy at law and any other nonwaivable defense or objection.
(b) Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter or that there has been a failure to join an indispensable party, the court shall order that the action be transferred to a court of the Commonwealth which has jurisdiction or that the indispensable party be joined, but if that is not possible, then it shall dismiss the action.
An indispensable party is one whose "rights are so connected with the claims of the litigants that no decree can be made without impairing or infringing upon those rights." Sprague v. Casey , 550 A.2d 184, 189 (Pa. 1988) (citations omitted). See also Commercial Banking Corp. v. Culp , 443 A.2d 1154 (Pa. Super. 1982) ("A person is a necessary and indispensable party only when his rights are so connected with the claims of the litigants that no decree can be made without impairing his rights."). As this Court has explained: "[i]f no redress is sought against a party, and its rights would not be prejudiced by any decision in the case, it is not indispensable with respect to the litigation." Orman , 118 A.3d at 406.
In evaluating this issue, the following factors must be considered:
1. Do absent parties have a right or an interest related to the claim?Martin v. Rite Aid of Pennsylvania , Inc., 80 A.3d 813, 814 (Pa. Super. 2013) (citation omitted) (quoting Mechanicsburg Area Sch. Dist. v. Kline , 431 A.2d 953 (Pa. 1981)).
2. If so, what is the nature of that right or interest?
3. Is that right or interest essential to the merits of the issue?
4. Can justice be afforded without violating the due process rights of absent parties?
A previous panel of this Court remanded this matter and in so doing specifically directed the trial court to address the issue of whether Mesko, Jackson, and Mesko Landscaping were indispensable parties to this action. Brodsky v. MJC Industries , Inc., 760 EDA 2014, 122 A.3d 451 (Pa. Super. filed May 18, 2015). Per this Court's directive, the trial court conducted a thorough analysis regarding each party. Following its cogent and detailed analysis, which spans seven pages, the trial court concluded that none of the three named parties constituted indispensable parties. Trial Court Opinion, 8/4/16, at 16-22. The trial court's determinations are supported by the evidence of record. We agree with the trial court's well-reasoned analysis and conclusions and adopt them as our own. Id. Thus, having determined that there were no indispensable parties not named, we conclude that we have jurisdiction over this matter and consider Appellant's remaining issues.
We note that in the appeal previously before this Court, Appellee's name was spelled "Brodsky".
Appellant next argues that the trial court erred as a matter of law in failing to vacate its order granting summary judgment after remand by a previous panel of this Court. Appellant's Brief at 12. As outlined previously in presenting Appellant's issues on appeal, Appellant presents four sub-issues in support of this claim. Id. at 3, 12. We repeat them here:
[The trial court:]
a) failed to recognize the material issues of fact in dispute that should be presented to a jury concerning consideration for the transfer of real property as pointed out by the Superior Court;
b) violated the fundamental rule that "the Court is not to decide issues of fact when resolving a motion for summary judgment, but merely to determine whether any such issues exist";
c) failed to recognize that genuine issues of material facts in dispute can be and are established by depositions of the parties; the trial court, despite being presented with the actors testimony by deposition in which they clearly indicate their belief that the transaction was a legitimate and necessary complex transaction between them which included critical non-monetary consideration, the court ignored these factors when granting summary judgment;
d) In granting summary judgment based on the trial court's own determination of facts and law the trial court erred as a matter of law and fact by not allowing a jury to ascertain the credibility, demeanor and veracity of the witnesses and draw their own conclusions from testimony given and further the trial court violated the "Nanty-Glo Rule."Appellant's Brief at 3, 12.
An order granting summary judgment is subject to the following scope and standard of appellate review:
Our standard of review on an appeal from the grant of a motion for summary judgment is well-settled. A reviewing court may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion. As with all questions of law, our review is plenary.Shepard v. Temple University , 948 A.2d 852, 856 (Pa. Super. 2008) (quoting Murphy v. Duquesne University , 777 A.2d 418, 429 (Pa. 2001)).
In evaluating the trial court's decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the nonmoving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. Lastly, we will review the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.
As explained previously, on February 20, 2014, the trial court granted Brosky's motion for summary judgment as to counts II and III of his complaint. Count II of the complaint alleged that the transfers of the Route 212 property and the Woodcock Road property to Appellant were fraudulent transfers pursuant to Pennsylvania's Uniform Fraudulent Transfer Act ("UFTA"), 12 Pa.C.S. § 5104. Specifically, Brosky raised his claim under 12 Pa.C.S. § 5104(a)(2)(ii) which states:
(a) General rule.--A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
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(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
12 Pa.C.S. § 5104(a)(2)(ii).
* * *
(ii) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.
Count III of the complaint alleged that the transfers were fraudulent pursuant to UFTA, 12 Pa.C.S. § 5105. Section 5105 provides that:
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.12 Pa.C.S. § 5105.
After conducting a thorough analysis based on the evidence presented as to the required elements of these two claims, the trial court concluded that there were no genuine issues of material fact as to any of the elements. Trial Court Opinion, 8/4/16, at 7-14. The trial court opined that: Brosky's claim arose before the transfers; Mesko did not receive reasonably equivalent value in exchange for the properties; Mesko reasonably should have believed he would incur debts beyond his ability to pay; and, Mesko became insolvent as a result of the transfers. Id. The certified record supports the determinations of the trial court. Accordingly, we adopt its well-reasoned analysis as our own. Id. Thus, we conclude that the trial court did not abuse its discretion in granting Brosky's motion for summary judgment as to Counts II and III of his complaint.
Furthermore, we conclude that Appellant's fourth sub-issue, wherein it asserts that the trial court violated the Nanty-Glo rule, lacks merit. Appellant's Brief at 13. Appellant contends that "[u]nder Nanty-Glo , the party moving for summary judgment may not rely solely upon its own testimonial affidavits or depositions, or those of its witnesses, to establish the non-existence of genuine issues of material fact." Appellant's Brief at 13. Appellant avers that the trial court violated this rule by relying on the testimony provided by Mesko and Jackson. Id. Appellant maintains that because Brosky called Mesko and Jackson as witnesses and failed to identify them as defendants in this matter, they were his witnesses, and under Nanty-Glo , Brosky could not succeed on his motion for summary judgment based upon their testimony. Id.
Borough of Nanty-Glo v. American Surety Co. of New York , 163 A. 523 (Pa. 1932). The Nanty-Glo rule prohibits summary judgment "where the moving party relies exclusively on oral testimony, either through testimonial affidavits or deposition testimony, to establish the absence of a genuine issue of material fact except where the moving party supports the motion by using admissions of the opposing party or the opposing party's own witness." Lineberger v. Wyeth , 894 A.2d 141, 149 (Pa. Super. 2006).
Our review of Appellant's answer to [Brosky's] motion for summary judgment reveals that Appellant failed to timely raise this issue. While Appellant argued that the trial court should not grant Brosky's motion for partial summary judgment, it failed to mention the Nanty-Glo rule in its response. [Appellant's] Answer to [Brosky's] Motion for Summary Judgment as to Counts II and III of [Brosky's] Complaint, 1/28/14. It appears that Appellant raised this issue for the first time in its February 24, 2014 motion for reconsideration. Motion for Reconsideration of Order Granting [Brosky's] Motion for Summary Judgment as to Counts II and III of [Brosky's] Complaint, 2/24/14, at ¶ 5. This Court has held that "a non-moving party's failure to raise grounds for relief in the trial court as a basis upon which to deny summary judgment waives those grounds on appeal." Devine v. Hutt , 863 A.2d 1160, 1169 (Pa. Super. 2004); see also Rabatin v. Allied Glove Corp., 24 A.3d 388, 391 (Pa. Super. 2011) (holding issues raised in a motion for reconsideration filed after entry of summary judgment are "beyond the jurisdiction of this Court and thus may not be considered by this Court on appeal"). This includes the failure to raise a Nanty-Glo issue. Lineberger , 894 A.2d at 149. Additionally, Appellant failed to raise this issue in its Pa.R.A.P. 1925(b) statement. "An appellant's failure to include an issue in his Rule 1925(b) statement waives that issue for purposes of appellate review." Id. Accordingly, Appellant is not entitled to relief on this claim.
Even if Appellant had not waived its Nanty-Glo argument, the claim still fails on the merits. The trial court did not rely solely on the testimony of Mesko and Jackson in granting partial summary judgment. Appellant's Motion for Summary Judgment, 12/26/13; Complaint, 5/13/13; Trial Court Opinion, 8/4/16, at 6-14; see also Rosenberry v. Evans , 48 A.3d 1255, 1262 (Pa. Super. 2012) (where the trial court did not rely solely upon oral testimony in support of summary judgment, Nanty-Glo was not triggered.). Additionally, as is clear from the facts in this case and the argument presented by Appellant, Mesko and Jackson were adverse parties to Brosky. See id. at 1261-1262 (where an individual's legal interests in a given context are adverse to a moving party, that individual is deemed an adverse party for purposes of the Nanty-Glo rule.). Thus, the trial court did not violate the Nanty-Glo rule in granting Brosky's partial motion for summary judgment.
Evidence relied upon in addition to testimony included, inter alia, the deeds transferring the properties, Complaint, 5/13/13, at Exhibits A and B; stock transfer of Mesko Landscaping to Jackson, Motion for Summary Judgment, 12/26/13, at Exhibit 3; and appraisal reports of the properties, id. at Exhibits 6 and 7.
Finally, Appellant argues that the trial court failed as a matter of law and fact in ignoring the defense of laches. Appellant's Brief at 29. Appellant argues that the "issue of latches [sic] constitutes a separate defense from the alleged failure of consideration and it constitutes a separate and viable genuine issue of material fact in dispute tha[t] would . . . defeat the motion for summary judgment." Id. Appellant also asserts that "had the proper parties been named as defendants they would have joined said issue." Id. Apart from setting forth legal tenets regarding the doctrine of laches, Appellant includes the following single statement in support of this argument: "Mr. Brosky in allowing the claim he had to lay fallow for such an extended period played a role in belief that they could safely go forward with this transaction." Id. at 30.
Although Appellant refers to this defense in its brief as "Latches," we presume from the context of the brief that it is referring to the defense of laches.
This Court has explained: "[t]he doctrine of laches is an equitable bar to the prosecution of stale claims and is the practical application of the maxim that those who sleep on their rights must awaken to the consequence that they have disappeared." Fulton v. Fulton , 106 A.3d 127, 131 (Pa. Super. 2014) (quoting Jackson v. Thomson , 53 A. 506, 506 (Pa. 1902)).
The doctrine of laches bears these requirements:
Laches bars relief when the complaining party is guilty of want of due diligence in failing to promptly institute the action to the prejudice of another. Thus, in order to prevail on an assertion of laches, respondents must establish: a) a delay arising from petitioner's failure to exercise due diligence; and, b) prejudice to the respondents resulting from the delay. Moreover, the question of laches is factual and is determined by examining the circumstances of each case.Fulton , 106 A.3d at 132 (quoting Estate of Scharlach , 809 A.2d 382, 383 (Pa. Super. 2002)). The doctrine of laches is not subject to a statute of limitations; indeed, laches may bar a suit in equity when a legal claim involving the same matter is still within a statute of limitations. Id.
Here, Appellant has failed to allege the requirements for application of the doctrine of laches. Moreover, Appellant has failed to establish a delay arising from Brosky's failure to exercise due diligence or prejudice resulting to Appellant from the delay. Fulton , 106 A.3d at 132. Thus, Appellant has failed to establish that the doctrine of laches is applicable in this case.
Additionally, we note that the $500,000 stipulated judgment obtained by Brosky in the underlying civil action was not indexed in the Lehigh County Court of Common Pleas until December 14, 2012. Trial Court Opinion, 8/4/16, at 14. Approximately five months later, Brosky initiated the instant action in order to collect upon said judgment. Thus, without further evidence to the contrary, it does not appear that a delay resulted from Brosky's failure to exercise due diligence. Accordingly, we cannot conclude that the trial court erred in failing to apply the doctrine of laches. Thus, Appellant is not entitled to relief on this claim.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 5/24/2017
The parties are directed to attach a copy of the August 4, 2016 trial court opinion in the event of further proceedings in this matter. --------
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