Rockstone Capital v. IDR Enterprises ( 2017 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ROCKSTONE CAPITAL, LLC, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
I.D.R. ENTERPRISES, INC., AND IVAN :
HANTMAN AND ISDANER & COMPANY, :
L.L.C. : No. 1423 EDA 2016
Appeal from the Order April 26, 2016
in the Court of Common Pleas of Montgomery County,
Civil Division, No(s): 2007-14013
BEFORE: BENDER, P.J.E., SOLANO and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED SEPTEMBER 26, 2017
Rockstone Capital, LLC, (“Rockstone”) appeals from the Order granting
in part, and denying in part, its Motion to Enforce Writ of Execution against
I.D.R. Enterprises, Inc. (“IDR”), Ivan Hantman (“Hantman”), and Isdaner &
Company, LLC (“Isdaner”). We affirm.
Hantman is a certified public accountant, and has been a member of
Isdaner, a certified accounting firm, since 2005. In 2011, a Judgment was
entered in favor of Rockstone and against Hantman for $218,552.54.1 In
December 2011, Rockstone filed a Writ of Execution against Isdaner as a
garnishee, and enjoined Isdaner from delivering or disposing of any of
Hantman’s property. Between 2011 and 2012, Hantman incurred expenses
1
In March 2005, IDR borrowed $100,000 from Bank of America, N.A., and
Hantman personally guaranteed the loan. After Bank of America assigned
the loan to Rockstone, IDR defaulted.
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at Green Valley Country Club (“Green Valley”). In 2012, Isdaner paid
$21,032.69 to Green Valley, stating that these expenses were business
expenses incurred by Hantman for the benefit of Isdaner. Hantman paid his
personal expenses at Green Valley. On December 31, 2012, Hantman filed
for bankruptcy.
On July 27, 2015, Rockstone filed the Motion to Enforce Writ of
Execution, seeking, inter alia, a determination that Isdaner violated the Writ
of Execution by paying $21,032.69 to Green Valley on Hantman’s behalf.
The trial court denied this portion of Rockstone’s Motion.2 Rockstone filed a
timely Notice of Appeal and a court-ordered Pennsylvania Rule of Appellate
Procedure 1925(b) Concise Statement.
On appeal, Rockstone raises the following questions for our review:
1. Whether the trial court erred in denying [Rockstone’s] Motion
in part, and ordering that Rockstone’s [W]rit of [E]xecution[,]
served upon [Isdaner] as garnishee, did not attach as a lien
upon certain funds paid by Isdaner to [Green Valley], where,
under Pennsylvania law, the [W]rit attached the funds used
by Isdaner to pay the judgment debtor[] [Hantman’s] debts
to Green Valley[?]
2. Whether the trial court erred in denying Rockstone’s Motion in
part, and ordering that Rockstone’s [W]rit of [E]xecution[,]
served upon Isdaner[,] did not attach as a lien upon certain
funds paid by Isdaner to Green Valley where the public policy
of Pennsylvania prohibits a garnishee such as Isdaner from
2
The trial court granted Rockstone’s Motion with regard to its claim that
Isdaner violated the Writ of Execution by failing to release Hantman’s
$20,000 minimum capital balance held in Isdaner’s capital account. The trial
court found that Rockstone was entitled to the funds, but that it would have
to wait until the funds were distributed to Hantman. Rockstone did not
appeal this portion of the Order.
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engaging in conduct it knows or should know will facilitate the
judgment debtor in attempts to avoid the lawful garnishment
of its assets[?]
Brief for Appellant at 3.
It is well-settled that “ultimate control of the execution process rests
with the trial court.” Scampone v. Grane Healthcare Co., 2017 Pa. Super.
257, *23 (Pa. Super. 2017). “Since execution lies within the court’s
equitable powers, … the court’s decision to deny or grant an execution will
not be overruled absent an abuse of discretion.” Id. (citations omitted).
Further, while the trial court’s conclusions of law are subject to plenary
review, we are bound by the trial court’s findings of fact. Casey v. GAF
Corp., 828 A.2d 362, 367 (Pa. Super. 2003); see also id. (noting that a
motion to enforce is subject to plenary review).
We will address Rockstone’s claims together, as they are related.
Rockstone contends that the trial court erred in finding that the Writ did not
attach to the funds paid to Green Valley by Isdaner. Brief for Appellant at 8,
12. Rockstone argues that “upon service of the Writ on Isdaner, a judicial
lien arose in favor of Rockstone on all property of Hantman in the possession
of Isdaner[.]” Id. at 8. Rockstone asserts that under the operating
agreement between Isdaner and Hantman, Isdaner was obligated to
reimburse Hantman for any expenses related to Isdaner’s business, which
included the debts incurred at Green Valley. Id. at 9-10; see also id. at 10,
12 (claiming that Isdaner’s payments attached regardless of the fact that the
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payments were incurred as a business expense). Rockstone argues that the
debt in question was Hantman’s debt as the Green Valley invoices were
addressed to Hantman, a member of the club, and that Green Valley would
have no recourse against Isdaner for failure to pay the charges. Id. at 12.
Rockstone claims that Isdaner was prohibited from paying Hantman’s debts
to Green Valley prior to paying his debts to Rockstone. Id. at 10-11.
Rockstone contends that allowing Isdaner to facilitate Hantman’s attempts to
avoid garnishment of assets violates public policy. Id. at 13-14. To support
its arguments, Rockstone relies upon our Supreme Court’s decision in Witco
Corp. v. Herzog Brothers Trucking, Inc., 863 A.2d 443 (Pa. 2004). Brief
for Appellant at 10-11, 13-14.
Garnishment allows a judgment creditor to “collect[] his debt out of
property of the [judgment] debtor [which is] in the hands of a third party,
and may be used to determine whether the garnishee[3] owes a debt to the
judgment debtor, or has property of the judgment debtor.” Garden State
Standardbred Sales Co. v. Seese, 611 A.2d 1239, 1241 (Pa. Super. 1992)
(citations and quotation marks omitted, footnote added). A garnishee “is
required to exercise a high degree of care in protecting the rights of the
3
“Garnishee” is defined as “[a]ny person may be a garnishee and shall be
deemed to have possession of property of the defendant if the person . . .
has property of the defendant in his or her custody, possession or control.”
Pa.R.C.P. 3101(b)(2). Possession is defined as “[t]he fact of having or
holding property in one’s power; the exercise of dominion over property.”
Witco, 863 A.2d at 446 (citation omitted).
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other parties until a legal result has been regularly reached.” Korman
Commercial Prop.’s, Inc. v. Furniture.com, 81 A.3d 97, 102 (Pa. Super.
2013) (internal quotations and citations omitted).
Here, the trial court set forth the relevant rules and law, addressed
Rockstone’s claims, and determined that they are without merit. See Trial
Court Opinion, 3/31/17, at 4-8. The trial court found that Isdaner paid
Green Valley for business expenses incurred by Isdaner, not Hantman. See
id. at 4, 6, 7; see also id. at 4, 7 (noting that Rockstone did not refute
Isdaner’s classification of the expenses).4 The trial court specifically found
that Isdaner used its own funds to pay the debt owed to Green Valley, and
there is no evidence that these payments constituted any type of
compensation for Hantman, paid or payable. See id. at 6; see also id. at
5-6, 7 (wherein the trial court distinguished the holding in Witco based
upon the fact that Isdaner did not possess any of Hantman’s property or
money when paying the debt at issue in this case to Green Valley).
Analogously, the trial court noted that the operating agreement between
Isdaner and Hantman was inapplicable to the facts of this case because
Isdaner did not reimburse Hantman for business expenses or utilize any of
4
While Rockstone argues that Isdaner admitted to paying for expenses
incurred by Hantman, in its Answer and New Matter, Isdaner explicitly stated
that “[t]his was not a reimbursement to [] Hantman. It was a payment to
[Green Valley].” Answer and New Matter, 9/28/15, at 7. Further, as the
trial court noted, Rockstone did not present any evidence to support its
proposition that Isdaner possessed Hantman’s funds and paid his expenses
to Green Valley. See Trial Court Opinion, 3/31/17, at 6.
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Hantman’s funds in paying the fees owed to Green Valley. See id. at 6-7.
Thus, as the competent evidence supports the trial court’s findings of fact,
and its legal conclusions are sound, we adopt its thorough reasoning for the
purpose of this appeal. See id. at 4-8; see also Casey, 828 A.2d at 367.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/26/2017
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