Opinion
J. A32009/16 No. 1226 EDA 2015
04-03-2017
BLUE HAVEN POOLS, Appellant v. SKIPPACK BUILDING CORPORATION, AND BS TRUST, EB TRUST, JE TRUST AND SJ TRUST, GARNISHEES
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Entered March 23, 2015
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 05-26165 BEFORE: DUBOW, RANSOM, AND PLATT, JJ. MEMORANDUM BY DUBOW, J.:
Retired Senior Judge Assigned to the Superior Court.
Appellant, Blue Haven Pools, appeals from the March 23, 2015 Order denying its Post-Trial Motion. After careful review, we affirm on the basis of the trial court's well-reasoned Opinion.
The trial court's docket reflects that on January 23, 2017, Judgment was entered against Appellant and in favor of Appellees. Because the trial court's March 23, 2015 Order denying Appellant's Post-trial Motion was later reduced to Judgment, and was the court's final pronouncement on the matter, it is properly appealable. See Johnston the Florist , Inc. v. TEDCO Constr. Corp., 657 A.2d 511, 513 (Pa. Super. 1995) (en banc) (holding that, although the appeal was taken from an order denying post-trial relief, "jurisdiction in appellate courts may be perfected after an appeal notice has been filed upon the docketing of a final judgment.").
The trial court's Pa.R.A.P. 1925(a) Opinion includes a thorough and complete narrative of the lengthy factual and procedural history of this case, which we adopt for purposes of this appeal. See Trial Court Opinion, dated 7/15/16, at 2-11. While we will not go into exhaustive detail here, some of the relevant facts are as follows.
On November 1, 2005, Appellant filed a civil action for breach of contract against Appellee Skippack Building Corporation ("Skippack"), citing Skippack's failure to make payments due on a construction contract. During the pendency of the civil action, Skippack distributed nearly half a million dollars in funds to its shareholders (BS Trust, EB Trust, JE Trust, and SJ Trust, or "Garnishees"), leaving Skippack with only $375 in assets. A portion of the funds transferred were initially classified as "loans to shareholders" in Skippack's 2008 and 2009 tax returns, but by 2010, Skippack had reclassified the loans as distributions in tax filings.
On November 1, 2010, Appellant received a Judgment in its favor against Appellee Skippack in the amount of $74,131.73, which was later reassessed at $94,754.10. Since that date, Appellant has been involved in extensive litigation trying to enforce the Judgment through garnishment proceedings and, eventually, an attempt to void the transfer to Garnishees as fraudulent. At issue in the instant appeal is the procedural posture by which Appellant attempted to void the fraudulent transfer, as well as the characterization of the transfers as a distribution rather than a loan.
Specifically, Appellant raises five issues on appeal:
1. Whether the trial [c]ourt committed an abuse of discretion or error of law in failing to enter judgment against Garnishees, BS Trust, EB Trust, JE Trust[,] and SJ Trust (the Trusts), jointly and severally, in the amount of $94,754.10.Appellant's Brief at 4 (reordered for ease of disposition).
[2.] Whether the trial [c]ourt committed an abuse of discretion or error of law in failing to find that Skippack Building Corporation's "Loans to shareholders" (that is, loans to each of the Trusts) in the amount of $231,573.00 were subject to execution, when [Skippack] and the Trusts admitted, and when the unrefuted and uncontradicted [sic] evidence was, that they were "assets" and "receivables" of the corporation, and were never repaid.
[3.] Whether the trial [c]ourt committed an abuse of discretion or error of law in finding that it was without the authority to determine or adjudicate conflicting rights to property in the possession of third parties, including alleged fraudulent transfers, when the [c]ourt was duly authorized, and subsequently conducted, "an independent full dress," "plenary" trial on the merits.
[4.] Whether the trial [c]ourt committed an abuse of discretion or error of law in finding that the distributions of cash made by Skippack Building Corporation to shareholders (that is, distributions to each of the Trusts), in the aggregate amount of $464,568.00, were fraudulent conveyances, when the unrefuted and uncontradicted [sic] evidence was that they effectively stripped the corporation of any assets.
5. Whether the trial [c]ourt committed an abuse of discretion or error of law in failing to find that the elimination or writing off of "Loans to shareholders" (that is, loans to each of the Trusts), by "distributing" them to shareholders, as if no money were owed, were fraudulent conveyances.
This Court's scope and standard of review on appeal following a bench trial is well-settled:
Our appellate role in cases arising from non-jury trial verdicts is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findings of fact of the trial judge must be given the same weight and effect on appeal as the verdict of a jury. We consider the evidence in a light most favorable to the verdict winner. We will reverse the trial court only if its findings of fact are not supported by competent evidence in the record or if its findings are premised on an error of law. However, where the issue . . . concerns a question of law, our scope of review is plenary.Stephan v. Waldron Elec. Heating and Cooling LLC , 100 A.3d 660, 664-65 (Pa. Super. 2014) (citation and quotation omitted). The trial court, as the finder of fact, is free to believe "all, part[,] or none of the evidence presented." Ruthrauff , Inc. v. Ravin , Inc., 914 A.2d 880, 888 (Pa. Super. 2006). "Issues of credibility and conflicts in evidence are for the trial court to resolve; this Court is not permitted to reexamine the weight and credibility determinations or substitute our judgment for that of the factfinder." Id. (citation and internal quotation marks omitted).
The trial court's conclusions of law on appeal originating from a non-jury trial are not binding on an appellate court because it is the appellate court's duty to determine if the trial court correctly applied the law to the facts of the case.
As a preliminary matter, although Appellant lists five issues in his Statement of Questions Involved, they are better understood as two issues. In fact, the argument portion of Appellant's Brief is broken into only two sections, and the trial court addressed Appellant's five issues as only two distinct arguments. Similarly, we will combine Appellant's issues into the two underlying arguments.
First, Appellant argues that the trial court erred in finding that the Trusts lacked any assets of Skippack subject to execution, averring that at least a portion of the distributions made to Garnishees was in fact a loan. Appellant's Brief at 26-36. The Honorable Thomas P. Rogers has authored a comprehensive, thorough, and well-reasoned Opinion, citing to the record and relevant case law in addressing Appellant's claim. After a careful review of the parties' arguments and the record, we affirm on the basis of that Opinion, which found that "Garnishees owed no money to and possessed no property of [Appellee] Skippack subject to execution when the Montgomery County Sheriff's Department served the writs of execution on August 19, 2011, or thereafter." Trial Court Opinion at 13-17.
Second, Appellant avers that Appellee Skippack's distributions to Garnishees were fraudulent transfers, and that the trial court erred in concluding that it was precluded from adjudicating the merits of a fraudulent transfer claim in a garnishment proceeding brought pursuant to Pa.R.C.P. No. 3118. Appellant's Brief at 36-47. Judge Rogers' Opinion includes a comprehensive, thorough, and well-reasoned discussion of this claim, with citations to the record and relevant case law. After a careful review of the parties' arguments, and the record, we affirm on the basis of that Opinion, which recognized binding precedent from our Supreme Court holding that, absent a waiver by the parties, a trial court may not properly adjudicate a fraudulent transfer claim in a garnishment proceeding, and a plaintiff must instead bring a separate action in equity. Trial Court Opinion at 17-25 (citing, inter alia, Greater Val . Terminal Corp. v. Goodman , 202 A.2d 89 (1964)). In the instant case, Appellee Skippack and Garnishees did not waive their objection to the trial court adjudicating the fraudulent transfer claim; accordingly, the trial court properly concluded that it was without authority to hear the matter.
Our analysis, and that of the trial court's well-written Opinion, is unaffected by this Court's recent holding in Knoll v. Uku , ___ A.3d ___, 2017 PA Super 6 (filed January 12, 2017). In Knoll , this Court reviewed the merits of a fraudulent transfer claim that was brought pursuant to Pa.R.C.P. No. 3118. There, the parties did not object to the trial court hearing the fraudulent transfer claim within a Rule 3118 proceeding, and on appeal, neither party asked this Court to consider whether a fraudulent transfer claim may properly be brought in a Rule 3118 proceeding over the objections of the garnishees.
The instant case, however, is distinguishable from Knoll. Appellee Skippack and Garnishees did, in fact, object to the trial court adjudicating the fraudulent transfer claim in a Rule 3118 proceeding. As discussed supra , our review confirms that the trial court properly concluded that it was without authority to hear the matter.
At oral argument, Appellant raised a third theory of relief, arguing that the fraudulent transfer claim was raised under Pa.R.C.P. No. 3147, and not pursuant to Pa.R.C.P. No. 3118. Appellant has waived this argument by failing to develop it in its Brief to this Court. See Commonwealth v. Hardy , 918 A.2d 766, 771 (Pa. Super. 2007). Moreover, Rule 3147 applies after a court has entered judgment for a plaintiff against a garnishee upon pleadings or after trial; nothing in Rule 3147 authorizes a plaintiff to file pleadings or request a trial. See Pa.R.C.P. No. 3147 ("If the court enters judgment for the plaintiff and against the garnishee upon pleadings or after trial, the judgment shall be for the property of the defendant found to be in the garnishee's possession, but no money judgment entered against the garnishee shall exceed the amount of the judgment of the plaintiff against the defendant together with interest and costs.") --------
The parties are directed to attach a copy of the trial court's July 15, 2016 Opinion to all future filings.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 4/3/2017
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