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ARLENE H. KLEBACH v. MELLON BANK (09/12/89)

filed: September 12, 1989.

ARLENE H. KLEBACH
v.
MELLON BANK, N.A., APPELLANT



Appeal from the Order dated July 14, 1988 in the Court of Common Pleas of Allegheny County Civil Division, No. GD 87-18316.

COUNSEL

Jesse L. Katz, Pittsburgh, for appellant.

William J. Helzlsouer, Dravosburg, for appellee.

Montemuro, Johnson and Cercone, JJ. Johnson, J., files a dissenting opinion.

Author: Cercone

[ 388 Pa. Super. Page 205]

This is an appeal from an order entered July 14, 1988 in the Court of Common Pleas of Allegheny County, Civil Division which removed a lien filed by Mellon Bank against real property owned by appellee. We affirm.

The record discloses that Mellon Bank, N.A. (hereinafter "Mellon"), filed a judgment by confession against Edward R. Klebach, the former husband of Arlene H. Klebach, in December of 1982. This judgment was entered on December 14, 1982 in Allegheny County and was indexed solely against Edward R. Klebach. On the date of entry, Edward and Arlene Klebach were husband and wife and held title by the entireties to the marital residence located at 633 Regency Drive in Plum Borough, Pennsylvania. The Klebachs were, however, in the midst of a divorce proceeding. Prior to the divorce decree, husband and wife, on December 28, 1982, entered into an agreement in which husband promised to convey his interest in the family residence to the wife, said conveyance to be made simultaneously with the signing of the agreement. On December 30, 1982, the divorce decree was entered in Allegheny County directing Mr. Klebach to convey all of his interest in the marital residence to Mrs. Klebach and incorporating the terms of the agreement. In accordance with the judicial decree, Edward and Arlene Klebach duly executed a deed on January 4, 1983 which was recorded on January 13, 1983.

[ 388 Pa. Super. Page 206]

The case sub judice arose in October of 1987, when appellee, Arlene Klebach, filed an action to quiet title on the Regency Drive property by removing the judgment lien filed by Mellon against her former husband. On December 4, 1987, Mellon revived the judgment against Edward R. Klebach and added Arlene H. Klebach as terre-tenant*fn1 of the Regency Drive property. After argument before the Honorable Eugene B. Strassburger III, judgment was granted on the pleadings. The lower court entered an order on July 14, 1988 which declared that Mellon had no lien on the property in question. The instant timely appeal followed.

Appellant Mellon raises three issues for our consideration: (1) whether the lower court erred in granting judgment on the pleadings when a factual issue remained undetermined, namely, whether appellee and her former husband transferred property pursuant to their divorce agreement thereby effectively rendering Edward Klebach insolvent; (2) whether the lower court erred in failing to consider that pursuant to statutory law, property held by a husband and wife as tenants by the entireties is immediately converted to ownership as tenants in common upon the entry of a divorce decree; and (3) whether the transfer of property from ownership by appellee and her former husband to ownership by appellee alone violated the constitutional rights of Edward Klebach's creditors. Thus, the gravamen of appellant's complaint is that the lower court permitted appellee and her former husband to perpetrate a fraud upon the creditors of Edward Klebach in derogation of the statutory law of this Commonwealth.

Our scope of review is plenary when reviewing a trial court's decision to grant judgment on the pleadings. Keystone Automated Equipment v. Reliance Insurance Co., 369 Pa. Super. 472, 475, 535 A.2d 648, 649 (1988),

[ 388 Pa. Super. Page 207]

    violation of the constitutional rights of the creditors. For the following reasons, we disagree with both contentions.

The law of Pennsylvania is quite clear that a judgment creditor may execute on entireties property to enforce his judgment if both spouses are joint debtors. Arch Street Bldg. & Loan Assn. v. Sook, 104 Pa. Super. 269, 158 A. 595 (1932); In re Riley, 48 B.R. 194 (Bankr.E.D.Pa.1985); Matter of Cipa, 11 B.R. 968 (Bankr.W.D.Pa.1981). However, if only one spouse is a debtor, entireties property is immune from process, petition, levy, execution or sale. Amadon v. Amadon, 359 Pa. 434, 59 A.2d 135 (1948); In re Williamson, 11 B.R. 791, 795 (Bankr.W.D.Pa.1981). See Sterrett v. Sterrett, 401 Pa. 583, 585, 166 A.2d 1, 2 (1960); McGary v. Lewis, 384 Pa. 173, 119 A.2d 497 (1956). In the latter situation, the judgment creditor has only a potential lien against property held by the entireties based on the debtor spouse's expectancy to become sole owner. Wylie v. Zimmer, 98 F.Supp. 298 (E.D.Pa.1951). See also Iscovitz v. Filderman, 334 Pa. 585, 6 A.2d 270 (1939) (property lawfully held by husband and wife as tenants by entireties cannot be reached by creditors of husband). Further, where a husband and wife own property as tenants by the ...


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