JAMES CARNEY, FERDINANDO DIMAIO, STEVE MACCOY, GERRY TENNITY, JEFFREY BARR, RONALD BONGI, JAMES CHI, AND UDO STUETZER
INTEGRATION ASSOCIATES, INC. AND FRIEDEMANN ARNOLD APPEAL OF: FRIEDEMANN ARNOLD INTEGRATION ASSOCIATES, INC. AND FRIEDEMANN ARNOLD
DIETER HOTZ AND DELTA CONSULTING, INC., JENNIFER COFFEY, JACK TOMB, RONALD BONGI, JAMES CHI AND JEFFREY BARR APPEAL OF: FRIEDEMANN ARNOLD DIETER HOTZ
INTEGRATION ASSOCIATES, INC. AND FRIEDEMANN ARNOLD APPEAL OF: FRIEDEMANN ARNOLD
Appeal from the Judgment Entered May 18, 2012 In the Court of Common Pleas of Delaware County Civil Division at No(s): 00-7131, 98-3557, 98-02316
BEFORE: GANTMAN, J., ALLEN, J., and OTT, J.
This consolidated appeal is taken by Friedemann Arnold from the trial court's orders that discharged Raymond J. Gutowski (the Receiver) as receiver of Integration Associates, Inc. (IA) and waived all liability of the Receiver, and discharged the Receiver's attorneys and waived all liability of the attorneys for the Receiver. Arnold contends the court erred in entering the orders (1) without the filing of an account; (2) without conducting a hearing or providing an opportunity for Arnold's objections to the Receiver's petition for discharge to be heard; (3) without appointing a replacement receiver or otherwise addressing the disposition of IA's presumptively valid claims; and (4) without permitting a deposition or other discovery requested by Arnold. See Arnold's Brief at 5. Based upon the following, we reverse.
IA was a corporation in the business of computer consulting and software integration, and was owned by Arnold and Deiter Hotz as 50% shareholders. Eventually, Arnold and Hotz parted ways. Thereafter, litigation ensued, Daniel Mingis was appointed as receiver of the property and assets of IA, and an appeal was filed with this Court. See Integration Associates v. Hotz, 830 A.2d 1057 (Pa. Super. 2003) (unpublished memorandum). By order entered March 16, 2004, the trial court appointed the Receiver as substitute receiver, following the death of Mingis.
On September 22, 2008, the Receiver filed a 3-page Report of Receiver that discussed the property of IA, the interest and claims against the property, the property's income producing capacity, and recommendations. See Report of Receiver, 9/22/2008. Thereafter, on March 22, 2012, the Receiver filed a Petition for Discharge and Waiver of Liability. The Receiver's petition asserted, "Neither Petitioner nor [the prior receiver] located any current assets belonging to [IA] and Petitioner concluded in his Report of Receiver [filed with the court on September 22, 2008], that he does not have the ability to produce a profit for the company or for the benefit of its creditors or two shareholders." Petition for Discharge and Waiver of Liability, 3/22/2012, at ¶4.
On April 30, 2012, Arnold, having been granted an extension of time, filed a Response to the Petition, requesting the court to (1) deny the Receiver's petition and order the Receiver to file a full accounting, (2) allow Arnold the opportunity to depose the Receiver regarding the matters referenced in the Receiver's petition, and (3) grant Arnold permission to sue the Receiver. On May 8, 2012, the Receiver filed a Reply to New Matter of Arnold Objecting to Release of Receiver. Thereafter, on May 15, 2012, the trial court discharged the Receiver and the Receiver's attorneys, and waived all liability of the Receiver and the Receiver's attorneys. This appeal followed., 
In reviewing the claims raised by Arnold, we are mindful that the Pennsylvania Supreme Court long ago stated: "We have no doubt whatever but that if a proper case for its exercise be made out, it is the right and duty of an appellate court to review the judgment of the court below, as to the removal or discharge of a receiver. But we are equally clear that this duty is one to be exercised only in cases showing a manifest abuse of discretion." Hilliard v. Sterlingworth Ry. Supply Co., 70 A. 819, 821 (Pa. 1908).
Arnold, in the first issue raised on appeal, contends the trial court erred in discharging the Receiver and the Receiver's attorneys, and waiving all liability of the Receiver and the Receiver's attorneys, without requiring the filing of an account by the Receiver subject to exceptions and confirmation. We agree.
The law holds a receiver "strictly responsible for property placed in his hands and imposes upon him the duty of fully accounting for it." Pangburn v. American Vault, Safe & Lock , 205 Pa. 93, 100 (1903). See Pa.R.C.P. 1534; Petition of Andrews, 25 F.2d 450, 452 (3d Cir. Pa. 1928) ("In the orderly administration and termination of a receivership, the law requires an accounting."). See also Gerber v. Weinstock, 453 A.2d 1043 (Pa. Super. 1982) (quashing appeal from court's order remanding matter to receiver; noting that receiver's report did not constitute an acceptable substitute for formal accounting).
Pursuant to Pennsylvania Rule of Civil Procedure 1534,  when the receiver files the account, the receiver is required to give notice of the intention to apply for confirmation on a date fixed by local rule or court order. Pa.R.C.P. 1534(a). Rule 1534(a) requires the notice to state that the court may confirm the account and order distribution, unless exceptions to the account are filed with the prothonotary before the scheduled date. Rule 1534(b) provides that notice may be given by personal service, mail, or publication, as directed by local rule or court order.
Here, the Receiver filed a "Report of Receiver" on September 22, 2008. The report did not purport to be an account under Pa.R.C.P. 1534, nor was it accompanied by notice of intent to apply for confirmation, subject to the filing of exceptions, as provided by Rule 1534. Moreover, the 2008 report was almost three and one-half years old at the time the Receiver filed his petition for discharge. As such, the Receiver's report did not relieve the Receiver from filing a formal account prior to his requested discharge. However, no account was filed.
Therefore, on this record, which reflects that there has been no account filed by the Receiver pursuant to Rule 1534, we are led to conclude the trial court erred in discharging the Receiver and waiving all liability of the Receiver, and discharging the Receiver's attorneys and waiving all liability of the ...