Roberts, E. v. Lily Development, L.P. ( 2022 )

J-A11033-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ELISABETTA ROBERTS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
LILY DEVELOPMENT, L.P. & LILY :
CONSTRUCTION, LLC AND LILY :
DEVELOPMENT BAINBRIDGE SOUTH : No. 1494 EDA 2021
COMPANY :
:
:
APPEAL OF: LILY DEVELOPMENT :
BAINBRIDGE SOUTH COMPANY :
Appeal from the Order Entered June 21, 2021
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 160300651
BEFORE: BOWES, J., STABILE, J., and McLAUGHLIN, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED AUGUST 3, 2022
Lily Development Bainbridge South Company (“Lily Development”)
appeals from the order granting a motion to compel post-judgment discovery
and ordering sanctions on Lily Development and its founder and member
Robert Volpe. Lily Development argues the court abused its discretion by
imposing sanctions without holding an evidentiary hearing or oral argument
and by imposing sanctions against Volpe in his individual capacity. We affirm
the order compelling discovery and imposing sanctions on Lily Development
and reverse the order to the extent it imposes sanctions on Volpe.
In March 2016, Elisabetta Roberts filed a Complaint against Lily
Development, L.P. In May 2018, the parties entered a stipulation dismissing
J-A11033-22
Lily Development, L.P. as a party and substituting Lily Development and Lilly
Construction, LLC as parties to the action. Volpe is the founder and a member
of Lily Development. N.T., Aug. 15, 2018, at 83. In August 2018, a jury
returned a verdict in Roberts’ favor on her negligence and nuisance claims.
After post-trial motions, the court entered a judgment notwithstanding the
verdict (“JNOV”) as to the negligence claim.1
In January 2019, Roberts filed a praecipe to enter judgment pursuant
to Pennsylvania Rule of Civil Procedure 227.4 and judgment was entered
against Lily Development and Lily Construction, LLC in the amount of
$16,062.63 each.
Roberts appealed the trial court’s order granting JNOV as to the
negligence claim, and in March 2021, this Court reversed and remanded for
the reinstatement of the verdict on the negligence claim in favor of Roberts.2
The trial court entered judgment in favor of Roberts and against Lily
____________________________________________
1 They jury also awarded $175,000 in punitive damages. In ruling on the post-
trial motion, the court concluded that, unless Roberts consented to a reduction
in the punitive damages award to $15,000 per defendant, the court would
grant a new trial limited to punitive damages on the nuisance claim. Roberts
filed a notice of election to accept punitive damage remittitur, reducing the
punitive damages to $15,000 against each defendant.
2 The Pennsylvania Supreme Court denied Lily Construction, LLC’s petition for
allowance of appeal in December 2021.
-2-
J-A11033-22
Development in the amount of $291,062.62.3 Lily Development has not paid
the judgment.
In April 2019, Roberts sent Lily Development post-judgment
interrogatories in aid of execution and post-judgment requests for production
of documents. Lily Development did not respond. Roberts filed a motion to
compel in June 2019. In August, the trial court issued an order granting
Roberts’ motion to compel discovery responses and requiring Lily
Development to file an answer to the post-trial interrogatories within 20 days.
That same month, Lily Development sent Roberts incomplete responses to the
interrogatories, which excluded relevant information. Roberts’ Second Motion
to Compel, filed Sept. 16, 2019, at Exh. D. It provided no information prior to
May 8, 2018, which is when Lily Development became a party to the litigation.
Id.
In August 2019, Roberts sent a notice of asset deposition to Lily
Development, scheduling the deposition for September 17, 2019, and stating
Roberts would take the deposition of Volpe or “an alternative representative,
in his/her capacity as an authorized member of [Lily Development].” Roberts’
Second Motion to Compel, filed Sept. 16, 2019, at Ex. G. Notice of Asset
Deposition. Lily Development failed to fully respond to the discovery requests
or produce Volpe or an alternative representative for deposition. In September
____________________________________________
3 The court also entered judgment against Lily Construction, LLC, which
satisfied its portion of the judgment. See Praecipe to Satisfy the Judgment,
filed Mar. 29, 2019.
-3-
J-A11033-22
2019, Roberts filed a second motion to compel discovery responses and a
motion for sanctions. In October, the trial court granted the motion and
ordered Lily Development to provide full and complete responses, without
objections, to the discovery requests within 15 days, to produce Volpe or an
alternative representative for an asset deposition within 15 days, and to pay
sanctions in the amount of $250.00. Lily Development did not complete
discovery, produce Volpe or an alternative representative for the deposition,
or pay the sanction.
Roberts filed a third motion to compel and motion for sanctions in March
2021. In June 2021, the trial court entered an order granting the motion and
requiring Lily Development to produce an authorized representative for the
purposes of discovery of assets within five days. It also imposed sanctions on
Lily Development and Volpe in the amount of $1,000.00 for failing to comply
with the court’s prior orders and $250.00 for every day after the five days
where “they failed to produce an authorized representative for deposition.”
Order, filed June 21, 2021. Lily Development filed this appeal.
Lily Development raises the following issues:
1. Did the trial court abuse its discretion by imposing
sanctions against Robert Volpe in his individual capacity
where he was not a party in the case and no previous court
order was directed at him?
2. Did the trial court abuse its discretion by imposing
sanctions against [Lily Development] and Robert Volpe
without holding an evidentiary hearing and/or oral
argument on [Roberts’] Motion for Sanctions?
-4-
J-A11033-22
3. Does the Court have jurisdiction to hear this appeal where
the trial court’s Sanctions Order is related to [Roberts’]
discovery in aid of execution and the trial court has entered
final judgment in the case?
Lily Development’s Br. at 3.
We will first address Lily Development’s third claim, as it impacts our
jurisdiction to hear this appeal. In November 2021, this Court issued a rule to
show cause “as to the finality or appealability of the order.” Order, filed Nov.
4, 2021. We noted generally an order granting or denying discovery sanctions
is an interlocutory order, not subject to an appeal. Id. Lily Development filed
a response, arguing the order was appealable as a final order or, in the
alternative, as a collateral order. We discharged the rule to show cause but
advised the parties the Court may revisit the issue.
Lily Development claims this court has jurisdiction to hear this appeal
because the order deals with post-judgment discovery and judgment in the
case already had been entered. Lily Development argues that although
discovery orders are usually interlocutory and not appealable, this general rule
should not apply here. It points out that the final order in this case had already
been entered and the case arose from post-judgment discovery, where
sanctions were imposed. Because it is post-judgment, there will be no final
judgment from which to appeal. It further claims that if the order is not
appealable as a final order, it is appealable as a collateral order, as it is
separable from and collateral to the main cause of action, the right involved
is the imposition of sanctions on a non-party, and there is no other opportunity
for this Court to address the order.
-5-
J-A11033-22
Roberts argues this Court lacks jurisdiction to determine this matter
because it is not an appeal from a final order, it is not an interlocutory order
as of right, and not a collateral order.
In Kine v. Forman, the Pennsylvania Supreme Court quashed the
appeal from an order requiring a party to answer post-judgment discovery.
194 A.2d 175, 176-77 (Pa. 1963). There, the discovery request came after
judgment on a note had been entered. In a footnote, the Court stated that
“[h]ad the court, upon refusal of the party to answer the questions, imposed
sanction, the order would have been final and appealable.” Id. at 177 n.2.
After remand, the case returned to this Court after the trial court had imposed
sanctions for the defendant’s failure to comply with post-judgment discovery.
Kine v. Forman, 209 A.2d 1, 2 (Pa.Super. 1965). We affirmed the order,
without discussing whether this Court had jurisdiction. Id. at 2-4.
In Christian v. Pennsylvania Financial Responsibility Assigned
Claims Plan, 686 A.2d 1 (Pa.Super. 1996), this Court addressed whether an
order imposing sanctions under Pennsylvania Rule of Civil Procedure 4019(d)4
____________________________________________
4 Rule 4019(d) provides:
If at the trial or hearing, a party who has requested
admissions as authorized by Rule 4014 proves the matter
which the other party has failed to admit as requested, the
court on motion may enter an order taxing as costs against
the other party the reasonable expenses incurred in making
such proof, including attorney’s fees, unless the court finds
that
(Footnote Continued Next Page)
-6-
J-A11033-22
was appealable. Rule 4019(d) “allows the court to enter an order imposing
sanctions where a party fails to make a requested admission under [Rule]
4014.” Id. at 4. We noted that “[i]mplicit in subdivision (d) is the requirement
that a party file a motion for sanctions only after a trial and entry of a verdict
or decree,” as a party requesting admissions must prove the matters at trial.
Id. We concluded the order denying sanctions was final and appealable. We
reasoned that “[b]ecause a motion pursuant to Rule 4019(d) occurs after the
completion of the underlying action, by its very nature, it is essentially a
discrete proceeding which ends upon the issuance of an Order granting or
denying sanctions[.]” Id. We noted that at that time “litigation is . . .
concluded and the litigant is out-of-court” and “[t]herefore, the finality of the
Order denying sanctions is determined not by the entry of judgment, but by
the language and requirements of Pa.R.C.P. 4019(d).” Id.Here, Roberts sought discovery under Rule 3117, which provides:
(a) Plaintiff at any time after judgment, before or after the
issuance of a writ of execution, may, for the purpose of
discovery of assets of the defendant, take the testimony of
any person, including a defendant or a garnishee, upon oral
____________________________________________
(1) the request was or could have been held objectionable
pursuant to Rule 4014, or
(2) the admission sought was of no substantial importance,
or
(3) the party failing to admit had reasonable ground to
believe that he or she might prevail on the matter, or
(4) there was other good reason for the failure to admit.
Pa.R.Civ.P. 4019(d).
-7-
J-A11033-22
examination or written interrogatories as provided by the
rules relating to Depositions and Discovery. The
prothonotary of the county in which judgment has been
entered or of the county within this Commonwealth where
the deposition is to be taken, shall issue a subpoena to
testify.
(b) All reasonable expenses in connection with the discovery
may be taxed against the defendant as costs if it is
ascertained by the discovery proceedings that the defendant
has property liable to execution.
Pa.R.C.P. 3117.
Here, as in Christian, under the applicable Rule, the discovery would
necessarily take place after judgment has been entered and the discrete
proceeding ended with the issuance of the order imposing sanctions. Further,
here, the trial court imposed sanctions for failure to comply with post-
judgment discovery. The Supreme Court stated in Kine that where, as here,
the court imposed sanctions for failure to comply with post-judgment
discovery, it would result in an appealable order. We therefore conclude we
have jurisdiction over this appeal and turn to the merits of the appeal.
In its first claim, Lily Development argues that this Court should reverse
and vacate the trial court’s sanction order as to Volpe because the court
abused its discretion by imposing sanctions against Volpe where he was not a
party to the action and where the discovery and prior orders were not directed
to Volpe. Lily Development claims the court references rules and cases that
give it discretion to regulate the parties’ conduct during discovery but points
out that Volpe is not a party. It argues Volpe was the principal of Lily
Development before its dissolution, but a corporate entity is separate from
-8-
J-A11033-22
individuals who have ownership in the entity. Lily Development argues that
Volpe was not a party and was not served with a subpoena in his individual
capacity and therefore the court abused its discretion in sanctioning him.
Further, Lily Development notes that Roberts directed the discovery to Lily
Development, not Volpe, and the orders directed Lily Development, not Volpe,
to produce Volpe or an alternative for deposition. It reasons the trial court
could not sanction Volpe where it had never directed him to take action.
Roberts claims the court did not abuse its discretion in imposing
sanctions against Volpe, who is a principal, member, and corporate officer of
Lily Development, claiming Volpe used his ownership in shell entities as a
method to limit his liability. Roberts notes the asset discovery sought is the
deposition of Volpe or an alternate representative and, as principal of Lily
Development, Volpe failed to produce himself or an alternative representative.
She argues that Volpe is a member, founder, corporate officer, and designated
principal of Lily Development and he and Lily Development continually failed
to comply with the orders directing compliance with discovery requests.
Roberts points out that Volpe signed the verifications for pleadings and
submissions. She argues that, because Lily Development seeks to protect and
shield Volpe from individual liability, the only effective way to get compliance
was to sanction both Lily Development and Volpe. She also claims Volpe
committed fraud by requesting that Lily Development be substituted as a
-9-
J-A11033-22
party, even though it had been dissolved. She claims that, based on the facts
of the case, it was proper to pierce the corporate veil.5
The trial court found it properly sanctioned both Lily Development and
Volpe as its principal for failing to comply with the orders. The court noted it
was undisputed that Volpe was a corporate officer and the designated principal
of Lily Development and that Lily Development is a proper party in the action.
It further found that Volpe and Lily Development willingly failed to comply with
the prior orders mandating discovery, including the orders to produce Volpe
or an alternate representative for a deposition. It found that Lily Development
and Volpe did not show any discernible efforts to comply with the discovery
mandates. It therefore concluded that sanctions against both Lily
Development and Volpe were appropriate and necessary to ensure
compliance. The court further stated that sanctions upon both Volpe and Lily
Development were necessary due to the severity of the discovery violations,
reasoning the court faced extreme circumstances, as Lily Development
continued to disregard its orders and it was left with no option but to sanction
appropriate individuals.
____________________________________________
5 Roberts further claims, in a single paragraph in the brief, that Lily
Development does not have standing to appeal the order on Volpe’s behalf.
Roberts’ Br. at 21. However, Roberts did not cite to any authority for the
contention and did not develop this argument in the brief, and we will not do
so for her. See Commonwealth v. B.D.G., 959 A.2d 362, 371 (Pa.Super.
2008) (en banc) (finding claim waived where appellant did not develop
argument and noting this Court “is neither obliged, nor even particularly
equipped, to develop an argument for a party”).
- 10 -
J-A11033-22
“Generally, imposition of sanctions for a party’s failure to comply with
discovery is subject to the discretion of the trial court, as is the severity of the
sanctions imposed.” Rohm and Haas Co. v. Lin, 992 A.2d 132, 142
(Pa.Super. 2010).
Pennsylvania Rule of Civil Procedure 4019(a) governs the imposition of
sanctions for discovery violations and provides:
(a)(1) The court may, on motion, make an appropriate order
if
(i) a party fails to serve answers, sufficient answers
or objections to written interrogatories under Rule
4005;
(ii) a corporation or other entity fails to make a
designation under Rule 4004(a)(2) or 4007.1(e);
(iii) a person, including a person designated under
Rule 4004(a)(2) to be examined, fails to answer,
answer sufficiently or object to written interrogatories
under Rule 4004;
(iv) a party or an officer, or managing agent of a party
or a person designated under Rule 4007.1(e) to be
examined, after notice under Rule 4007.1, fails to
appear before the person who is to take the
deposition;
(v) a party or deponent, or an officer or managing
agent of a party or deponent, induces a witness not to
appear;
(vi) a party or an officer, or managing agent of a party
refuses or induces a person to refuse to obey an order
of court made under subdivision (b) of this rule
requiring such party or person to be sworn or to
answer designated questions or an order of court
made under Rule 4010;
(vii) a party, in response to a request for production
or inspection made under Rule 4009, fails to respond
- 11 -
J-A11033-22
that inspection will be permitted as requested or fails
to permit inspection as requested;
(viii) a party or person otherwise fails to make
discovery or to obey an order of court respecting
discovery.
Pa.R.C.P. 4019(a).
Rule 4019 provides for the imposition of sanctions where a party fails to
comply with discovery requests. Volpe was not a party to the action. Further,
although Rule 4019(a)(iii) mentions a “person,” that reference is to a person
served with discovery requests. See Pa.R.C.P. 4004(a)(2) (“interrogatories
shall contain a notice stating . . . the name and address of each person to be
examined if known, and, if the name is not known, a general description
sufficient to identify each person to be examined or the particular class or
group to which each person belongs . . . .”). Roberts directed the discovery
requests and subpoena to Lily Development, not Volpe, and the requested
deposition was to be of Volpe or an alternate representative.
The court provided justification for the imposition of sanctions, but it
failed to justify the imposition of sanctions on Volpe where the court had not
ordered that he, in his individual capacity, complete any task. See Order, Oct.
21, 2019 (ordering Lily Development to “provide full and complete responses”
to discovery and to “produce Mr. Robert Volpe, or an alternate representative,
in his/her capacity as authorized member of” Lily Development); Order, Aug.
1, 2019 (ordering Lily Development to answer the discovery). Although
Roberts argues that the court could properly sanction Volpe by piercing the
corporate veil, the trial court did not find that the veil could be pierced prior
- 12 -
J-A11033-22
to imposing sanctions. We conclude that, because Volpe was not a party to
the case and no court order directed his individual compliance prior to the
order imposing sanctions, the court erred. Jones v. Faust, 852 A.2d 1201,
1204 (Pa.Super. 2004) (finding sanctions not proper where imposed on doctor
for violating order that did not mention him).
In its second issue, Lily Development argues the trial court abused its
discretion by granting the motion and imposing sanctions without holding oral
argument or an evidentiary hearing. Lily Development cites Rule 208.3 and
local Rule 208.2, which, it claims, require a court to have argument or to
develop the record on contested discovery motions. It argues its response
raised issues of fact. It further claims that court-ordered Covid protocols
required the trial court to set a hearing date. It argues the court abused its
discretion by granting the motion and imposing sanctions without a hearing.
A party waives any issue not included in its concise statement of errors
complained of on appeal. See Pa.R.A.P. 1925(b)(4)(vii).
Lily Development raised the following issues in its concise statement:
1. There is no basis to impose sanctions against Robert
Volpe individually, as [Roberts’] March 18, 2021 motion to
compel does not request sanctions against Mr. Volpe in his
individual capacity, nor provide any authority in support of
such sanctions.
2. The Court[] erred in imposing sanctions against Robert
Volpe in his individual capacity, as Mr. Volpe is not a party
to this case.
3. The Court erred in granting [Roberts’] motion to compel
and for sanctions where [Lily Development] provided full
- 13 -
J-A11033-22
and complete responses to [Roberts’] discovery in aid of
execution.
4. The Court erred in granting [Roberts’] motion to compel
and for sanctions where [Lily Development] provided
[Roberts] with documentation demonstrating that [Lily
Development] was a single-purpose entity that developed
an[d] sold its single asset—the real property located at 734-
38 Bainbridge Street, Philadelphia, PA—in November 2017,
before [Lily Development] was made a party to this case.
5. The Court erred in compelling post-judgment discovery
from [Lily Development], an entity that has wound down its
affairs and formally dissolved.
6. The Court erred in imposing sanctions on [Lily
Development], an entity that has wound down its affairs and
formally dissolved.
7. The Court erred in compelling post-judgment discovery
from [Lily Development] concerning [Lily Development’s]
affairs before being a party to this action.
Statement of Matters Complained of on Appeal, filed Aug. 12, 2021.
Lily Development did not include in this statement a challenge to the
court’s failure to hold a hearing. It therefore waived the claim. See Pa.R.A.P.
1925(b)(4)(vii). Accordingly, we affirm the ordering directing Lily
Development to respond to the discovery requests and produce a
representative for an asset deposition and imposing sanctions on Lily
Development. However, we reverse the order to the extent it imposes
sanctions on Volpe in his individual capacity.
Order affirmed in part and reversed in part. Case remanded. Jurisdiction
relinquished.
- 14 -
J-A11033-22
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/03/2022
- 15 -