The opinion of the court was delivered by: Juan R. Sánchez, J.
Plaintiff Deborah Klein (Klein) is a creditor and the ex-wife of Defendant Douglas Weidner (Weidner). In Count One of her Amended Complaint, Klein asserts Weidner's transfer of a parcel of real estate, located at 1123 Saint Matthews Road, Chester Springs, Pennsylvania, 19425 (the Property), to himself and his current wife, Defendant Kathleen Weidner, as tenants by the entireties, was fraudulent under the Pennsylvania Uniform Fraudulent Transfer Act, 12 Pa. C.S. § 5101 et seq. (PUFTA). In Count Two, Klein asserts Weidner's transfer of an ownership interest in Defendant DMW Marine, LLC (DMW), to Kathleen Weidner and himself, as joint owners, was fraudulent under PUFTA.*fn1 In Count Three, Klein asks this Court to pierce DMW's corporate veil and treat DMW's assets as Weidner's so that Klein may look to DMW's assets for satisfaction of her judgment.
Weidner's mother, Jean Weidner, asserted a cross-claim against Weidner, alleging her sale of the Property to Weidner was procured by fraud, duress, and undue influence.*fn2 Jean Weidner seeks reformation of the contract price and compensatory damages for expenses occurred in defending against Klein's action.
By Memorandum and Order of January 6, 2010, this Court granted Klein's summary judgment motion as to Count One, concluding Weidner's transfer of the Property, to himself and his wife, as tenants by the entireties, was fraudulent under §§ 5104(a)(1), 5104(a)(2), and 5105 of PUFTA. The Court denied Klein's summary judgment motion as to the remaining counts.
A bench trial of Klein's remaining claims and Jean Weidner's claims was held on January 11-13, 2010.
1. Klein and Weidner divorced in California in 1999.
2. As part of the divorce decree, the Superior Court of Orange County, California (Superior Court), ordered Weidner to make spousal and child support payments to Klein. Weidner made some child support payments but has paid no spousal support to date.
3. On January 1, 2006, Weidner married Kathleen Weidner.
4. After litigation between Klein and Weidner with respect to how much Weidner owed, on June 2, 2008, the Superior Court determined Weidner owed Klein $548,797.07 for unpaid child and spousal support.
5. On August 25, 2008, the $548,797.07 judgment against Weidner, in favor of Klein, was entered in the Chester County Court of Common Pleas.
6. At all times relevant to the instant matter, Weidner and Kathleen Weidner were aware of Klein's claim Weidner owed her arrearages for spousal and child support.
7. On March 17, 2005, Weidner purchased a parcel of real estate, located at 1123 Saint Matthews Road, Chester Springs, Pennsylvania, 19425 (the Property), from his mother, Jean Weidner, for $300,000. The purchase price was paid in an advance on inheritance of $75,000 from Jean Weidner to Weidner, and a mortgage and note in which Weidner arranged to pay the remaining $225,000 to Jean Weidner.
8. On January 17, 2006, Weidner transferred the Property to himself and his wife, Kathleen Weidner, as tenants by the entireties.
9. The Transfer of Deed states Kathleen Weidner paid Weidner one dollar as consideration for her interest in the Property.
10. On March 31, 2006, the Property was appraised at approximately $750,000.
11. Kathleen Weidner paid over $300,000 to contractors for renovations to the Property. Such payments began approximately ten months after the Property's transfer, and they were made directly to contractors, not to Weidner.
12. On January 4, 2010, the Weidners granted a $200,000 mortgage against the Property to Robert Bendix. They filed this mortgage on January 12, 2010, the day the parties expected trial in this case to be completed.
13. The mortgage bears the signatures of both Weidner and Kathleen Weidner. Weidner asserted his Fifth Amendment privilege against self-incrimination at trial when asked about the preparation of the mortgage.
14. Kathleen Weidner testified she did not sign the January 4, 2010 mortgage.
15. The Court draws an adverse inference against Weidner based upon his assertion of his Fifth Amendment privilege and concludes Weidner participated in the forgery of his wife's signature on the January 4, 2010 mortgage.
16. DMW sells and leases marine cranes. DMW has continuously operated in Pennsylvania since 2003.
17. DMW produced no evidence, either through discovery or at trial, that corporate formalities are observed or that by-laws or other rules to govern its operation have been adopted.
18. At deposition, Weidner testified that, shortly after January 1, 2006, he transferred his ownership interest in DMW Marine, LLC, to himself and his wife, as joint owners.
19. A third party, Jake DuPont, subsequently purchased a 10% ownership interest in DMW for $250,000.
20. Kathleen Weidner testified at trial she owned either 85% or 90% of DMW jointly with Weidner.
21. When asked for her title with DMW, Kathleen Weidner replied she was the Vice President. When confronted with her deposition response that she was the CEO, she explained her job duties had not changed and, because DMW is small, her job title is irrelevant.
22. Schedule K-1 (K-1) forms are used to report income from certain business entities, including limited liability companies such ...