Opinion
J-S38006-18 No. 282 WDA 2017
10-10-2018
DEMOCRATIC PARTY OF WASHINGTON COUNTY v. MILAN MARINKOVICH Appellant
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Judgment Entered February 13, 2017
In the Court of Common Pleas of Washington County Civil Division at No(s): 2008-1227 BEFORE: BOWES, J., NICHOLS, J., and STRASSBURGER, J. MEMORANDUM BY BOWES, J.:
Retired Senior Judge assigned to the Superior Court.
Milan Marinkovich appeals from the judgment entered against him and in favor of the Democratic Party of Washington County ("Committee") in this replevin action. Specifically, Marinkovich claims that the trial court, in orders dated April 25, 2011, and January 30, 2017, decided matters not before it and improperly awarded attorney fees to the Committee. For the reasons detailed below, we vacate the judgment and the orders and remand with instructions.
The Committee instituted the instant action in 2008 by filing a complaint in replevin. Therein, it alleged that Marinkovich had in his possession the following property that belonged to the Committee:
books of accounts, all financial records, checkbooks, cancelled checks, bank statements, and any and all other documentation regarding any voluntary contributions that were received or collected on behalf of the [Committee,] and any monies paid out for any election or operating expenses incurred by the
organization and two (2) computers donated by Congressman Murtha.Complaint in Replevin, 2/21/08, at ¶ 1. Accordingly, the Committee sought the following relief from the trial court:
a. That [Marinkovich] be ordered to deliver to the [Committee] possession of the property above described, or the sum of $15,000[,] the value thereof in case delivery cannot be had, with the exact sum to be determined[;]Id. at unnumbered 2-3.
b. That [Marinkovich] be forever barred and enjoined from making or ascertaining any claim to the said property above described;
c. That the [Committee] recovers his or her attorney's fees and costs[; and]
d. That the [Committee] be granted such other and further relief as the [c]ourt may deem just and proper.
At the initial hearing on the Committee's complaint, the Committee acknowledged that Marinkovich had returned the computers, the checkbook, deposit tickets, a stamp to endorse checks, and the most recent PNC bank statement. N.T., 4/23/08, at 2. The only requested property not obtained by the Committee was older bank statements and contribution records, which Marinkovich did not keep after he filed reports with the county and state election boards. Id. at 3, 5. Marinkovich indicated his willingness to execute authorizations to allow the Committee to obtain the unavailable documents from entities which had access to the information, namely the bank and the Elections Office. Id. at 2-3. At the conclusion of the hearing, the court indicated that the Committee was to attempt to reconstruct the records through the authorizations, and then either inform the court that the matter was resolved or "come back to the [c]ourt and request further replevin." Id. at 17.
The next docket entry, made two years later, was an April 30, 2010 order scheduling a status conference. As a result, the court entered an order on September 20, 2010, directing the parties to file praecipes outlining the posture of the case. In its praecipe, the Committee conceded that Marinkovich had fulfilled his obligations in the replevin action "in the most technical sense" but contended that, given the absence of the destroyed records, Marinkovich "provided the equivalent of an automobile without an engine." Praecipe, 9/30/10, at unnumbered 3. The Committee indicated that it hired the firm of Cypher & Cypher to conduct an audit to determine the value of the property that should have been returned, and requested that the trial court consider that report and award the Committee money damages to compensate it for the property Marinkovich did not return. Id. at unnumbered 4-5. That report did not detail the cost of recreating the records, but did opine from a review of them that Marinkovich "broke campaign finance laws, improperly destroyed the records of the Committee, and paid personal expenses with Committee [f]unds." Cypher Report, 11/15/09, at 3.
It does not appear that the conference was conducted on the record.
In his response, Marinkovich took the position that the Committee received everything in his possession, that the missing records were obtained through the use of the authorizations, and that the unsigned Cypher report improperly opined that Marinkovich violated campaign finance laws and paid $5,194.79 of personal expenses with Committee funds. Memorandum of Law, 10/18/10, at 3-4.
Upon consideration of the above filings, the trial court found that Marinkovich violated the Election Code by failing to properly maintain records, and that it was thus unacceptable for Marinkovich "to respond to the Committee's replevin action by simply stating that he destroyed all of the records requested." Opinion and Order, 4/28/11, at 4. Accordingly, it ordered Marinkovich to reproduce, at his own expense, "all bank statements, cancelled checks, deposit and withdrawal information, and related documentation" from the time period of January 1, 2002 through January 31, 2008. Id. at 4. The order also scheduled a hearing for July 21, 2011, to review Marinkovich's compliance with the order, examine the audit, and "assess any special damages claimed on behalf of" the Committee. Id. at 5.
Marinkovich, through new counsel, filed a notice of appeal to the Commonwealth Court on May 6, 2011. While the appeal was pending, the trial court proceeded with the July 21, 2011 hearing, at which the Committee appeared but Marinkovich did not. The Committee offered the Cypher report into evidence, and elicited testimony from its current chairman to establish that Marinkovich had not complied with the April 28, 2011 order. N.T., 7/21/11, at 6. At the trial court's suggestion and direction, the chairman further testified that, as reflected in the Cypher report, $5,194.79 of Committee funds were used improperly by Marinkovich to pay for defense of a lawsuit that should have been Marinkovich's personal expense. Id. at 9-12.
The appeal was ultimately transferred to, and quashed as interlocutory by, this Court, as the order was neither a final order that resolved all issues nor was immediately appealable as of right. Democratic Party v. Marinkovich , 116 A.3d 684 (Pa.Super. 2014) (unpublished memorandum).
At the conclusion of the hearing, the trial court ordered Marinkovich in absentia to comply with the April 28, 2011 order within twenty days and to reimburse the Committee the $5,194.79 discussed in the Cypher report. The court also found Marinkovich and his counsel in contempt for failure to appear at the hearing. Id. at 14-15.
Subsequent motions for reconsideration and stay pending appeal were denied, but no further action upon the order requiring compliance with twenty days was taken. This Court quashed the appeal on December 10, 2014. The trial court subsequently scheduled a hearing at which it would again review Marinkovich's compliance with the April 28, 2011 order, review the audit, and "assess any special damages claimed on behalf of" the Committee. Order, 2/5/15.
The hearing was conducted on May 22, 2015, after both parties requested continuances, at which time it was established that Marinkovich had complied in full with the April 28, 2011 order, and the Committee presented evidence of its attorney fees. By order and opinion of January 30, 2017, the trial court, after entertaining memoranda from the parties, again ordered Marinkovich to pay the Committee the $5,194.79, and also awarded the Committee $3,075 in attorney fees upon the finding that Marinkovich's "conduct during the course of the litigation, from April 25, 2011, through May 22, 2015, was consistently dilatory, obdurate[,] and vexatious." Opinion and Order, 1/30/17, at 14. Marinkovich entered judgment on the order and filed a timely notice of appeal. Both Marinkovich and the trial court complied with Pa.R.A.P. 1925.
Marinkovich presents the following issues for this Court's consideration.
I. Did the lower court err in going beyond matters properly before the court and inequitably ordering [Marinkovich] to produce documents or funds of which he had no control?Marinkovich's brief at 4.
II. Did the lower court err by finding [Marinkovich] had violated the Election Code without any request for such a finding or any evidence that there was any, theft, fraud, or impropriety?
III. Did the lower court err by finding [Marinkovich] was responsible for attorney fees in a replevin action by paying the Party solicitor's attorney fees ?
[I]V. Did the lower court err by finding [Marinkovich] was personally responsible for attorney fees in contempt or in a replevin action ?
We begin with a recitation of the applicable law. Our sister court offered the following succinct summary of the nature of replevin.
The action of replevin is founded upon the wrongful taking and detention of property and seeks to recover property in the possession of another. The value is recovered in lieu of the property only in case a delivery of the specific property cannot be obtained. Replevin is a possessory action in which the issues are plaintiff's title and right of possession. The primary relief sought is the return of the property itself, the damages being merely incidental.Valley Gypsum Co. v. Pennsylvania State Police , 581 A.2d 707, 710 (Pa.Cmwlth. 1990) (citing 17 STANDARD PA. PRACTICE 2d §§ 96:1-3). "[A] plaintiff in a replevin action may recover money damages only as a secondary remedy." Com. ex rel. Anderson v. Fid. & Deposit Co. of Maryland , 811 A.2d 1040, 1042 (Pa.Super. 2002).
"The focus in a replevin action is strictly limited to title and right of possession; all matters foreign to those limited issues are expressly excluded from consideration and are not available as defenses or counterclaims." Ford Motor Credit Co. v. Caiazzo , 564 A.2d 931, 933 (Pa.Super. 1989). However, "the Rules governing replevin do not bar a separate action in equity where equitable relief, such as injunctive relief, is available." Barren v. Commonwealth , 74 A.3d 250, 255 (Pa.Super. 2013); see also Pa.R.C.P. 1079.1.
In his first three issues, Marinkovich argues that the trial court exceeded its authority by deciding matters outside the scope of the replevin action brought by the Committee. He contends that the trial court abused its discretion in "ordering the return of property not held by [Marinkovich], not based on any evidence of record after sitting idle for three (3) [y]ears." Marinkovich's brief at 15. He also asserts that the trial court erred in ordering in this replevin action the repayment of $5,194.79 that the trial court determined was paid from Committee funds for Marinkovich's personal defense in a prior action. Id. at 16, 19-20. Marinkovich further maintains that Election Code violations cannot be determined by a replevin action, and, in any event, issues concerning the Election Code, and his compliance with it, were "never alleged, addressed[,] or requested" by the Committee. Id. at 14. We agree on all three counts.
The Committee conceded, no later than in September of 2010, that Marinkovich provided all of the requested property that was in his possession. The Committee's lingering complaint was that the financial documents returned included "no balances and no listing of checks paid out, checks paid out to whom, where, how, and in what amounts." Praecipe, 9/30/10, at 3. However, it is undisputed that Marinkovich did not have documents reflecting the desired information in his possession, but supplied authorizations to enable the Committee to obtain them.
Under the case law discussed above, the trial court's duty then was to rule that Marinkovich was responsible to compensate the Committee for the value of the destroyed documents, which was the remedy requested by the Committee. See , e.g., Com. ex rel. Anderson , supra at 1043 ("[I]n a replevin action a non-possessor may recover money damages only if it cannot practicably recover the property as an adequate remedy."). Instead, the trial court took it upon itself to grant injunctive relief, neither available in a replevin action nor requested by the Committee in this one, in the form of commanding Marinkovich to reconstruct the records from the very same statements obtained from the bank and government bodies that Cypher & Cypher had already utilized to perform an accounting. The trial court's order in this respect was improper.
See Barren , supra at 255 (noting that injunctive relief may be sought in addition to replevin if pursued in a separate action).
Similarly, the trial court exceeded its authority in ordering Marinkovich to repay the Committee $5,194.79 that Cypher & Cypher identified as having been paid from Committee funds for Marinkovich's personal benefit. First, the Committee's complaint in replevin made no reference to such funds, and did not request their return. Second, even if it had, money cannot be the property sought to be recovered in a replevin action unless "it is easily susceptible to ready and positive identification," such as a bundle of $2 bills. Commonwealth v. Dean , 369 A.2d 423, 425 (Pa.Super. 1976) (en banc) (holding replevin was not the proper vehicle for the appellant, who had ultimately been acquitted of passing bad checks, to recover from the Commonwealth fungible funds it had taken from the appellant and given to the victim). Therefore, the trial court erred in ordering Marinkovich to reimburse the Committee for the $5,194.79 as a remedy in this replevin action.
Likewise, whether Marinkovich did or did not violate the Election Code is irrelevant to this action. As discussed above, replevin actions are "strictly limited to title and right of possession; all matters foreign to those limited issues are expressly excluded from consideration[.]" Ford Motor Credit Co., supra at 933. Whether the Election Code required Marinkovich, in his prior position with the Committee, to keep copies of the now-missing documents has no bearing on the relevant determinations.
The trial court justified its foray into this area by noting that our Supreme Court "has held that since the Legislature, [through] the Election Code, has seen fit to impose upon political party organizations certain duties which bear a direct and substantial relationship to the selection of public officials, the activities of the organization are public, subject to judicial supervision." Trial Court Opinion, 1/11/18, at 10 (citing Bentman v. Seventh Ward Democratic Exec. Comm., 218 A.2d 261, 263 (Pa. 1966)). As Marinkovich was the chairman and treasurer of the Committee, the trial court concluded that he "is a public official, subject to judicial supervision[.]" Id.
In Bentman , two people elected as Democratic committeemen were removed from their positions by the ward's executive committee and filed a mandamus action seeking their reinstatement. The Court, examining the 1947 adoption of the Election Code, concluded that it changed prior law under which the courts would not interfere in the internal organization of a political party. With the 1947 Election Code,
the legislature has seen fit to impose upon political party organizations the performance of certain public functions which directly affect the public and our government. Such fact, considered in connection with the extension in recent years of the concept of "state action" under the 14th Amendment, has brought about a change of judicial thinking in this area of the law. Judicial interference, even with the internal organization of a political party, is justifiable if such internal organization may directly affect the performance of a public function and the public interest. The invocation of judicial interference in this area must be restricted or circumscribed; judicial intervention must be limited to controversies where the issue raised bears a direct and substantial relationship to the performance of public functions by the political party.Bentman , supra at 266 (emphasis in original). Accordingly, the trial court erred in dismissing the complaint for lack of jurisdiction, because the issue of whether the executive committee violated due process by denying membership to the ousted committeemen who had been duly elected bore a direct and substantial relationship to the party's public functions. Id. at 269.
Bentman in no way suggests that a trial court's examination of compliance with the Election Code is proper any time an office-holder in a political party is a litigant in a case before it. If the Committee or any of its members wished to obtain judicial oversight of Marinkovich's compliance with his statutory duties, it could have filed a separate action to litigate that issue. Bentman offers no support for a trial court's sua sponte adjudication in a replevin action of Election Code violations by a former party chairman. Any discussion of Election Code violations in this replevin action was irrelevant and unnecessary to the resolution of the claim. Indeed, that is the reason the Commonwealth Court transferred Marinkovich's prior interlocutory appeal to this Court: because "this is a replevin action between private parties and not an Election Code matter[.]" Order, 6/14/12. Accordingly, the trial court's decision to inject the Election Code into this matter was error.
With his remaining issue, Marinkovich challenges the trial court's award of attorney fees to the Committee. Marinkovich's brief at 21-25. We begin our review by noting that it has long been the law of Pennsylvania that "there can be no recovery of attorney fees from an adverse party, absent an express statutory authorization, a clear agreement by the parties or some other established exception." Merlino v. Delaware Cty., 728 A.2d 949, 951 (Pa. 1999).
The first instance of the trial court's awarding the Committee attorney fees related to the instant action was at the conclusion of the July 21, 2011 hearing at which Marinkovich and his counsel failed to appear. The court stated as follows in relevant part,
The [c]ourt finds [Marinkovich] and his attorney in contempt for failure to appear today and failing to give any notice. For the record, my office received no notice or calls or anything that they were not attending, or could not attend or were stuck in traffic or anything of that nature. The [c]ourt finds [Marinkovich] and his counsel in contempt for defying my [o]rder to be here and the court will assess further sanctions in that regard.N.T., 7/21/11, at 14-15. The trial court subsequently entered an order providing the same. Order, 7/25/11. Shortly after the entry of the written order, Marinkovich filed a petition for reconsideration, indicating therein that all counsel involved believed that the filing of the appeal acted to stay further proceedings, given that the appealed-from order was the one that scheduled the hearing in question. Petition for Reconsideration, 7/27/11, at ¶¶ 3-8. Marinkovich thus asked the trial court to reconsider its contempt order or to schedule the matter for a hearing to allow Marinkovich to be heard. Id. at ¶ 12. The trial court denied the petition. No further action on the July 2011 order was taken until after the appeal was quashed in December 2012.
At the next hearing, the Committee contended that it was entitled to fees based upon the trial court's July 2011 contempt finding. N.T., 5/22/15, at 8, 12, 13, 15. The Committee disavowed any attempt to obtain fees in connection with the underlying replevin claim, stating as follows: "The replevin is over. We have the property. That's why I told this honorable [c]ourt in July that everything is fine. We have the property; that's over. We are now talking about the expenses that the party had to incur to make themselves whole, pursuant to a contempt." Id. at 13.
Marinkovich responded that if fees were to be awarded upon a contempt finding, the court first had to determine why the defense did not appear at the hearing, conclude that "the contempt [was] volitional and was made in defiance of the [c]ourt," and to establish the fees the Committee incurred as a result of the failure of Marinkovich to appear that day. Id.
The trial court scheduled another hearing, and directed the Committee to provide authority for the court to order the legal fees. Id. at 65. In that filing, the Committee cited no authority, but reiterated that the award of fees and costs was "clearly not pursuant to a [r]eplevin action but for [Marinkovich's] contempt of [the trial court's] clear [o]rder of April 25, 2011[,] further ordering [Marinkovich] to appear and show he complied with the same." Memorandum of Law, 1/19/16, at unnumbered 3.
When asked at the subsequent hearing what authority supported the award of attorney fees in this action, counsel for the Committee responded "You're looking at him right there in the black robe." N.T., 3/18/16, at 11. At that hearing, Marinkovich produced uncontested evidence that the failure to appear at the July 2011 hearing was based upon the advice of counsel, who mistakenly believed that the hearing would not take place as scheduled because the appeal was pending. Id. at 20, 23, 36.
By order of March 30, 2016, the trial court indicated that it would review the various transcripts and then render a decision. It did so by order and opinion of January 30, 2017. Therein it absolved Marinkovich and his counsel of contempt for their failure to appear at the July 2011 hearing. The court expressly determined that it was "hard-pressed to find [Marinkovich's] failure to appear at the July 21, 2011 hearing to be an act of bad faith, since he was relying on the advice of counsel who was under the mistaken impression that an interlocutory appeal, filed without leave of court, stayed all further proceedings." Opinion and Order, 1/30/17, at 12 n.18.
Instead, the trial court framed the issue as involving "[t]he amount of attorneys' fees, if any, which may be awarded to the Committee as a result of [Marinkovich's] conduct during the pendency of this action." Id. at 7. For the first time, the trial court referenced the statutory provision authorizing fees to litigants "awarded counsel fees as a sanction against another participant for dilatory, obdurate or vexatious conduct during the pendency of a matter." Id. at 11 (quoting 42 Pa.C.S. § 2503(7)). It then reviewed Marinkovich's conduct throughout the entire course of the litigation, detailing that Marinkovich should have known that the Election Code required him to keep the records for three years, that he appealed the order requiring him to reconstruct the records rather than acknowledging his mistake in doing so, and that he "continued to do nothing but demonstrate dilatory, obdurate and vexatious behavior" during the pendency of the appeal. Id. at 11-12. Recognizing that it was not permitted to award fees based upon conduct prior to the filing of the action, the court limited its award to the $3,075 incurred by the Committee between the entry of the order requiring Marinkovich to reconstruct the records in April 2011 and the post-quashal hearing on May 22, 2015, at which time the Committee indicated that the "replevin is over" and sought fees only based upon contempt. Id. at 11, 13.
From our review of the record, we conclude that the award of attorney fees was in error. First, the Committee, in seeking fees, repeatedly emphasized that the basis was the contempt order. N.T., 5/22/15, at 8, 12, 13, 15. However, the record does not support a finding of contempt because the trial court expressly found, once it gave the defense an opportunity to be heard, that the failure to appear at the July 2011 hearing was not in bad faith. Opinion and Order, 1/30/17, at 12 n.18. Moreover, even if contempt-based fees were appropriate, they would be limited to the amount necessary to reimburse "an innocent litigant for expenses made necessary by the conduct of an opponent." Mrozek v. James , 780 A.2d 670, 674 (Pa.Super. 2001). The entirety of the Committee's fees between April 2011 and May 2015 cannot be attributed to Marinkovich's failure to appear at the July 2011 hearing.
Second, the record does not support the trial court's finding that Marinkovich "continued to do nothing but demonstrate dilatory, obdurate and vexatious behavior" from 2011 to 2015. "Generally speaking, obdurate conduct may be defined in this context as stubbornly persistent in wrongdoing. Conduct is dilatory where the record demonstrates that counsel displayed a lack of diligence that delayed proceedings unnecessarily and caused additional legal work." In re Estate of Burger , 852 A.2d 385, 391 (Pa.Super. 2004), aff'd, 898 A.2d 547 (Pa. 2006) (citations and internal quotation marks omitted). Vexatious litigation is that which is "without sufficient grounds in either law or in fact," conducted for "the sole purpose of causing annoyance." Id. (internal quotation marks omitted). For example, this Court found conduct qualified as "dilatory, obdurate[,] or vexatious" when a plaintiff demonstrated "repeated abuse of the court system to harass defendants and opposing counsel with lawsuits that contain nothing more than unfounded allegations." Feingold v. Hendrzak , 15 A.3d 937, 943 (Pa.Super. 2011).
In the instant case, the trial court itself, in its Rule 1925(a) opinion prepared for the appeal to the Commonwealth Court, indicated that Marinkovich had fully complied with the trial court's April 25, 2011 order by January 2012. Opinion, 1/10/12, at 9. His subsequent actions were taken to seek review of the trial court's orders, not to persist in wrongdoing or cause unnecessary delay. Cf. Feingold , supra at 943 ("[I]t is blatantly clear that Appellant filed this frivolous lawsuit and subsequent appeal to vex Appellees with complete disregard for our court system, our rules of civil procedure, and the legal profession.").
Further, the same reasons underpinning our holdings that the trial court lacked the authority to enter injunctive relief or order repayment of money in a replevin action, serve as evidence that Marinkovich had a reasonable basis to seek review of the trial court's April 2011 order mandating such actions before he complied with them. In other words, there was merit to Marinkovich's claims of error, and his conduct was thus not vexatious.
With the record supporting neither the basis for the award of fees alleged by the Committee nor the basis offered by the trial court, we conclude that the award of the $3,075 in counsel fees incurred by the Committee between April 25, 2011, and May 22, 2015, was erroneous. See , e.g., Oliver v. Irvello , 165 A.3d 981, 987 (Pa.Super. 2017) (reversing award of attorney fees where party's conduct, while not supported by the law, was not "brought purely for the purpose of annoyance, nor was it so plainly obdurate or vexatious as to warrant the award of counsel fees"); Commonwealth v. Douris , 766 A.2d 1276, 1280 (Pa.Super. 2001) (reversing award of attorney fees to witness who hired counsel to quash subpoena because counsel had a reasonable explanation for the subpoena and thus did not engage in vexatious conduct).
In sum, we hold that the trial court lacked the authority in this replevin action to adjudicate Election Code violations, require Marinkovich to re-create property he did not possess, or return money paid by the Committee for the defense of the prior action. Additionally, we find that the record does not support the award of $3,075 in attorney fees to the Committee. Accordingly, we vacate (1) the February 13, 2017 judgment, (2) the January 30, 2017 order upon which the judgment was entered, and (3) the April 25, 2011 order, and remand for the entry of a judgment reflecting that the replevin action is concluded.
Judgment vacated. Orders vacated. Case remanded with instructions. Jurisdiction relinquished. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 10/10/2018