Walker, D. v. Maffeo, M. ( 2020 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DONALD JAMES WALKER AND : IN THE SUPERIOR COURT OF
ROSEANN WALKER, HIS WIFE : PENNSYLVANIA
:
:
v. :
:
:
MICHAEL J. MAFFEO, JR., KARA :
WALKER AND DONALD JOSEPH : No. 1478 WDA 2019
WALKER :
:
:
APPEAL OF: MICHAEL J. MAFFEO, :
JR. :
Appeal from the Order Entered September 12, 2019
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD14-002883
BEFORE: BENDER, P.J.E., DUBOW, J., and NICHOLS, J.
MEMORANDUM BY BENDER, P.J.E.: FILED AUGUST 27, 2020
Michael J. Maffeo, Jr. (“Maffeo”) appeals from the order dated
September 11, 2019 and entered September 12, 2019, granting Donald James
Walker and Roseann Walker’s (“the Walkers”) motion for sanctions, declaring
the transfer of real property from Maffeo to Maffeo and his wife, Karen L.
Maffeo (“Wife”), as tenants in the entireties null and void, and prohibiting any
further transfer of said property to avoid collection of a judgment entered in
the Court of Common Pleas of Allegheny County. The order further awarded
attorneys’ fees in the amount of $1,000.00 in favor of the Walkers. After
careful review, we vacate the order and remand with instructions.
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We previously summarized the facts of this matter during a prior appeal
to this Court:
Maffeo and his sister, Clara Urbanek (“Clara”), each
inherited a one-half interest in their family home in Pittsburgh,
Pennsylvania (“the Property”). The Property had an appraised
value of $110,000. When Maffeo’s daughter, Kara, became
engaged to Donald Joseph Walker (“DJ”), he wanted to help them
own a home. To that end, in April of 2008, Maffeo orchestrated
an agreement of sale (“AOS”) signed by Clara as the Seller, and
himself, Kara, and DJ as the Buyers, whereby Kara and DJ would
acquire title to the Property. The undated AOS—prepared by
Maffeo’s attorney—provided that DJ and Kara would obtain a
mortgage, and if they defaulted, divorced, or did not marry, they
would convey their joint one-half interest in the Property to
Maffeo.
DJ and Kara tried to secure a mortgage for the purchase of
Clara’s one-half interest in the Property for $55,000. When they
could not obtain a mortgage, DJ and Kara approached DJ’s
parents, the Walkers, for the money. The Walkers agreed to pay
the $55,000 for Clara’s interest in the Property. In doing so, the
Walkers were unaware of the AOS. They believed that DJ and
Kara would obtain Clara’s one-half interest in the Property and
that Maffeo would give his one-half interest to Kara and DJ.
Additionally, the Walkers expected that DJ and Kara would repay
the $55,000 by obtaining a home equity loan during their first year
of marriage.
The Walkers obtained a home equity loan on April 22, 2008,
and wrote a check to Clara for $55,000 on April 29, 2008. Maffeo
took the check from the Walkers and gave it to Clara, who cashed
the check on May 5, 2008. By deed dated September 9, 2008,
Clara transferred her one-half interest in the Property to Maffeo,
who then held full title. By deed dated March 3, 2009, Maffeo
transferred title in the Property to himself (one-half interest) and
DJ and Kara (one-half interest) as joint tenants. During their
marriage, DJ and Kara lived in the Property and made four
payments of $385 each to the Walkers; however, they did not
obtain a home equity loan to repay the $55,000.
DJ and Kara separated in August of 2010, with DJ leaving
the Property. A divorce decree was entered on September 17,
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2013. By deed dated February 28, 2014, DJ and Kara transferred
their one-half interest in the Property to Maffeo, at which point
Maffeo again held full title to the Property. Maffeo allowed Kara
and her daughter to live in the Property rent-free.
Approximately one week before DJ and Kara conveyed their
one-half interest in the Property to Maffeo in February of 2014,
the Walkers filed a complaint in equity against Maffeo, Kara, and
DJ, seeking an interest in the Property based on their payment of
the purchase price for Clara’s one-half interest. Additionally, the
Walkers sought an injunction and consequential damages. The
trial court appointed a special master who unsuccessfully
mediated the case and prepared a report.
By stipulation of the parties, the trial court ordered the
taking of depositions, which, along with the documents of record
and the Walkers’ proposed findings of facts and conclusions of law,
it used to decide the case. Based on its independent review, the
trial court agreed with the special master that the Walkers were
entitled to a purchase money resulting trust, and it awarded them
a one-half interest in the Property as joint tenants with Maffeo.
The trial court directed Maffeo and the Walkers to:
[E]xecute and file with the Allegheny County Department of
Real Estate, a deed in a legally sufficient form to transfer
fee simple title in the Property from [Maffeo to Maffeo and
the Walkers], so that the Property is held as tenants in
common with a one-half ownership interest in the Property
to be held by [Maffeo] and … the other one-half ownership
interest in the Property to be held by [the Walkers].
Maffeo filed a motion for post-trial relief, which the trial court
denied. The trial court’s [a]mended [o]rder was reduced to
judgment on August 9, 2017. Maffeo appealed.
Walker v. Maffeo, 2018 WL 1835375 at *1-2 (Pa. Super. April 18, 2018)
(footnote and citations to record omitted).
On appeal, this Court determined that the trial court erred in finding
that the Walkers were entitled to a resulting trust. See id. at *5.
Nevertheless, we affirmed the trial court based on our conclusion that Maffeo
was unjustly enriched by obtaining full ownership of the Property without any
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consideration paid in the original transaction with his sister, Clara. Id. at *5-
6 (citing Lynn v. Nationwide Ins. Co., 70 A.3d 814, 823 (Pa. Super. 2013)
(stating that this Court may affirm the trial court on any basis supported by
the record)).1 “[A]llowing Maffeo to accept the $55,000 and retain Clara’s
one-half interest in the Property without payment of that value to the Walkers
would be unjust and unconscionable.” Id. at *6 (citing Gutteridge v. J3
Energy Group, Inc., 165 A.3d 908, 917 (Pa. Super. 2017) (en banc) (“To
sustain a claim of unjust enrichment, a claimant must show that the party
against whom recovery is sought either wrongfully secured or passively
received a benefit that it would be unconscionable for her to retain.”)). Thus,
we concluded that Maffeo is liable to the Walkers for $55,000. Id.Accordingly, we vacated the judgment and remanded for the trial court to
enter judgment in favor of the Walkers for $55,000, plus interest. Id.____________________________________________
1 Our determination of unjust enrichment was based on our reasonable
inference from the record,
that the Walkers expected their $55,00 payment would buy
Clara’s one-half interest in the Property for DJ and Kara. However,
Maffeo unilaterally used the $55,000 from the Walkers to obtain
Clara’s one-half interest in the Property for himself. Maffeo then
conveyed Clara’s one-half interest to himself, DJ and Kara, as joint
tenants, citing $55,000 as consideration. Upon DJ and Kara’s
divorce, Maffeo obtained full title to the Property. To the extent
Maffeo argues that the Walkers must seek repayment from DJ and
Kara, his position ignores a critical fact: Maffeo—not DJ and
Kara—used the Walkers’ $55,000 to obtain full title in his name.
Id. at *6 (citations to record omitted).
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Maffeo filed a petition for allowance of appeal with the Pennsylvania
Supreme Court, which was denied on January 3, 2019. The Walkers
subsequently praeciped the Common Pleas Court of Allegheny County to enter
judgment in accordance with this Court’s April 18, 2018 decision. On March
29, 2019, a judgment was entered in favor of the Walkers and against Maffeo
in the amount of $71,798.35, plus recording costs. Maffeo did not file an
appeal from the judgment.
During their attempt to collect on the judgment, the Walkers discovered
that Maffeo transferred his ownership of the Property, by deed dated March 4,
2015, to himself and Wife, as tenants in the entirety. The deed was not
recorded until May 14, 2018, shortly after the entry of this Court’s prior
decision. On July 25, 2019, the Walkers filed a motion for sanctions with the
trial court, alleging that the transfer of the Property constituted a fraudulent
conveyance in violation of the Pennsylvania Uniform Fraudulent Transfer Act
(“PUFTA”), 12 Pa.C.S. §§ 5101-5114,2 and seeking to void the transfer.
Maffeo filed a response to the Walkers’ motion, and the trial court scheduled
an argument for September 11, 2019.
The trial court opined:
During the pendency of the litigation and appeals, and knowing
that he was likely obligated to pay [the Walkers] at least the
$55,000[,] Maffeo transferred his title to the property, the very
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2 See 12 Pa.C.S. § 5101 (Feb. 20, 2018) (“This chapter, that was formerly
cited as the [PUFTA], shall be known and may be cited as the Pennsylvania
Uniform Voidable Transactions Act.”). For the purpose of consistency, we will
continue to refer to the Act as the PUFTA herein.
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subject of the litigation, to himself and … [W]ife, by deed dated
May 4, 2015, and recorded it on May 14, 2018. This lawsuit was
filed three (3) months prior to Maffeo’s fraudulent transfer, and
the recorded deed was less than a month after the Superior Court
decision. Thus, Maffeo’s transfer to … [W]ife was concealed from
the [Walkers] and from this [c]ourt and [the] Appellate Courts
throughout the litigation, with Maffeo’s intent to make himself
judgment proof against any collection taken by the Walkers.
Trial Court Opinion (“TCO”), 11/20/19, at 3.
Following the September 11, 2019 argument on the Walkers’ motion,
the trial court entered an order, which declared “the fraudulent transfer of the
[P]roperty” from Maffeo to himself and Wife “null and void[,]” prohibited
Maffeo “from further transfer of the … [P]roperty to avoid collection of the
judgment[,]” and awarded the Walkers attorneys’ fees in the amount of
$1,000.00. See Trial Court Order, 9/11/19.
Maffeo filed a timely appeal on September 26, 2019, followed by a
timely, court-ordered Pa.R.A.P. 1925(b) statement. Herein, Maffeo presents
the following issues for our review:
[I.] Did the lower court err in granting the [Walkers’] motion for
sanctions[,] because after the lower court entered the judgment
on March 29, 2019[,] as directed by the Superior Court of
Pennsylvania, the lower court no longer had jurisdiction of this
matter?
[II.] Did the lower court err in granting the [Walkers’] motion for
sanctions[,] because the matters complained of in the motion for
sanctions raised allegations of an alleged fraudulent transfer
under the [PUFTA,] which should have been raised in a separate
civil action complaint alleging a violation of the [PUFTA]?
[III.] Did the lower court err in awarding attorney[s’] fees in any
amount and in an amount in excess of the fees requested by the
[Walkers]?
Maffeo’s Brief at 4 (unnecessary capitalization omitted).
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Preliminarily, we address sua sponte the issue of whether the trial court
lacked subject matter jurisdiction for failure to join Wife as an indispensable
party. It is well-settled that:
Under Pennsylvania law, the failure to join an indispensable party
implicates the trial court’s subject matter jurisdiction. Sabella v.
Appalachian Dev. Corp., 103 A.3d 83, 90 (Pa. Super. 2014).
“Failure to join an indispensable party goes absolutely to the
court’s jurisdiction and the issue should be raised sua sponte.”
Barren v. Dubas, … 441 A.2d 1315, 1316 ([Pa. Super.] 1982)
(internal quotation marks and citations omitted).
Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015).
“A party is indispensable ‘when his or her rights are so
connected with the claims of the litigants that no decree can be
made without impairing those rights.’” City of Phila. v.
Commonwealth, … 838 A.2d 566, 581 ([Pa.] 2003), quoting
Sprague v. Casey, … 550 A.2d 184, 189 ([Pa.] 1988). “If 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.” Grimme Combustion, Inc. v.
Mergentime Corp., … 595 A.2d 77, 81 ([Pa. Super.] 1991), citing
Sprague, supra. We have consistently held that a trial court
must weigh the following considerations in determining if a party
is indispensable to a particular litigation.
1. Do absent parties have a right or an interest related to
the claim?
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?
Martin v. Rite Aid of Pa., Inc., 80 A.3d 813, 814 (Pa. Super.
2013); accord Mechanicsburg Area Sch. Dist. v. Kline, … 431
A.2d 953, 956 ([Pa.] 1981). “In determining whether a party is
indispensable, the basic inquiry remains ‘whether justice can be
done in the absence of a third party.’” Pa. State Educ. Ass’n v.
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Commonwealth, … 50 A.3d 1263, 1277 ([Pa.] 2012), quoting
CRY, Inc. v. Mill Serv., Inc., … 640 A.2d 372, 375 ([Pa.] 1994).
Id. at 406-07. We have previously held that “in actions intended to affect the
title to property which is either held or claimed by tenants by the entireties,
both spouses are indispensable parties and must be joined.” Id. at 407.
Applying these principles to the case sub judice, it is undisputed that
the deed, dated May 4, 2015 and recorded on May 14, 2018, was executed
by Maffeo and Wife, as tenants by the entireties. As Wife’s name is listed on
the deed and the September 11, 2019 order declaring the deed null and void
clearly affects her interest in the Property, we conclude that Wife is an
indispensable party and should have been joined in the underlying matter.
Accordingly, we discern that the trial court lacked subject matter jurisdiction
over this matter.
Moreover, we note that the Walkers should have commenced a separate
equitable action under the PUFTA to request that the alleged fraudulent
conveyance be set aside.3 See Garden State Standardbred Sales Co., Inc.
v. Seese, 611 A.2d 1239, 1242 (Pa. Super. 1992) (citing Greater Valley
Terminal Corporation v. Goodman, 202 A.2d 89, 93 (Pa. 1964) (holding
that “supplementary proceedings may not be used to adjudicate conflicting
rights or claims made in good faith to property in the possession of third
persons, because it deprives defendants in such actions of the protection
afforded by the safeguards of a full hearing”)).
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3 The PUFTA outlines remedies available to creditors. See 12 Pa.C.S. § 5107.
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Based on the foregoing, we conclude the trial court lacked subject
matter jurisdiction to enter an order declaring the transfer of the Property to
Maffeo and Wife null and void. Accordingly, the trial court’s September 11,
2019 order is vacated, and the case is remanded with instructions for the trial
court to enter an order dismissing the Walkers’ motion for sanctions without
prejudice, consistent with this memorandum.
Order vacated. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/27/2020
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