February 18, 2014
EDWARD J. MORRIS, ESQUIRE Appellant
DAVIS GIOVINAZZO CONSTRUCTION COMPANY, INC., AND SUSQUEHANNA BANK. Appellee
Appeal from the Order Dated March 6, 2012 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): June Term, 2008 No. 01321
BEFORE: LAZARUS, J., OTT, J., and STRASSBURGER, J. [*]
Edward J. Morris, Esquire, appeals from the order of the Court of Common Pleas of Philadelphia County that granted the petition to distribute funds filed by intervenor Susquehanna Bank (Susquehanna), and directed Morris to distribute to Susquehanna all available funds he received from Domus, Inc.
On April 4, 2013, this Court issued a memorandum and order directing the trial court to file a supplemental opinion. Upon receipt of the supplemental opinion and additional briefing by Morris, we affirm the order of the trial court.
We previously set forth the relevant facts as follows:
In 2006, Susquehanna made loans and agreed to extend a line of credit to Davis-Giovinazzo Construction Co. (DGC). The loan and line of credit agreements were secured by a security agreement and a UCC-1 financing statement covering, inter alia, all of DGC's receivables. DGC failed to repay the loans, and on June 16, 2008, Susquehanna confessed judgment against DGC in the amount of $17, 079, 732.52 plus interest .
DGC owed money to several parties including Morris, who obtained a judgment against DGC for unpaid legal services in Montgomery County on May 5, 2008. Morris transferred the judgment to Philadelphia on June 9, 2008.
Domus, a general contractor on several large projects, hired DGC as a masonry subcontractor. At the time that Morris transferred his judgment to Philadelphia, Domus owed DGC a significant amount of money. In an attempt to collect on the judgment, Morris garnished from Domus $41, 150, the amount of his judgment plus interest. Domus paid the funds to Morris, despite requests from Susquehanna that it not do so because Susquehanna had a first lien on the Domus account receivable.
On March 19, 2009, when Susquehanna learned that Domus had transferred the funds to Morris, it filed an emergency petition to intervene and to freeze the funds. In response, the court ordered that all funds paid to Morris by Domus be frozen pending further order.
Meanwhile, DGC wished to collect the money that Domus owed it, and in June 2008, it filed a demand for AAA arbitration. On April 5, 2010, a panel of arbitrators ordered Domus to pay DGC $757, 174.00 plus a portion of the arbitrators' administrative fees. Shortly thereafter, Domus filed an action in the United States District Court for the Eastern District of Pennsylvania alleging that multiple parties had claimed priority to the money it owed to DGC. Domus, Inc. v. Davis Giovinazzo Construction Co., Inc. et al., E.D.Pa. No. 10-1654. Susquehanna and Morris were among the several parties that participated in the federal court case. On August 22, 2011, the district court issued an order awarding the entire amount of the interplead funds to Susquehanna because it held a perfected security interest in all of DGC's accounts receivable.
In September 2011, Susquehanna notified the Philadelphia Court of Common Pleas of the district court's decision. In response, the court entered the following order:
AND NOW, this 10th day of November 2011, upon consideration of the Petition to Intervene filed by Susquehanna Bank, the response thereto, and after a hearing and review after a review of supplemental pleadings, it is hereby ORDERED and DECREED that the Petition is GRANTED and Susquehanna Bank is permitted to intervene in this matter.
It is further ORDERED that pending further Order of the Court, Edward J. Morris, P.C., shall retain possession and not disperse and/or transfer the $41, 500.00 in funds he received from Domas [sic], Inc., pursuant to a garnishment.
Intervenor, Susquehanna Bank is granted leave of thirty (30) days from the docketing of this Order to file an appropriate Motion to request distribution of the funds retained by Edward J. Morris, P.C., consistent with this Order. Failure to file such a petition within the thirty days designated shall result in dissolution of this Order.
Trial Court Order, 11/10/11 (emphasis added).
Eighty days later, on February 1, 2012, Susquehanna filed a petition to distribute the funds, which the court granted on March 6, 2012. On March 15, 2012, Morris filed a motion for reconsideration in which he avers:
7. [Morris], in reliance upon the Court's Order of November 10, 2011, which [Morris] believed was clear, specific and self-executing and the failure of Susquehanna Bank to file a timely Motion to Distribute within the thirty (30) days required by the Court's Order of November 11, 2001, . . . released the funds being held.
Motion for Reconsideration, 3/15/12, at 3.
Morris filed a timely notice of appeal on April 3, 2012, and the trial court subsequently denied the motion for reconsideration.
Morris v. Davis Giovinazzo Construction Co., Inc., No. 1089 EDA 2012, unpublished memorandum at 1-4 (Pa.Super. filed April 4, 2013).
Morris raises the following issues for our review:
1. Whether the trial court erred factually and legally in its order dated March 6, 2012 that upon consideration of intervenor Susquehanna's petition to distribute funds filed on February 1[, 2012] the petition of Susquehanna is granted and [Morris] is directed to disburse any and all available funds received from Domus to Susquehanna within fifteen (15) days of the docketing of this order.
2. Whether the trial court erred factually and legally in its order of March 6, 2012 in disregarding and [failing] to consider the court's order of November 10, 2011 that intervernor Susquehanna is granted leave of thirty (30) days from the docketing of this order to file an appropriate petition to request a distribution of funds retained by Morris consistent with this order and that the failure to file such a petition within the thirty (30) days designated shall result in dissolution of this order dated November 10, 2011.
3. Whether the trial court erred factually and legally in its order of March 6, 2012 by its failure to consider that Susquehanna filed its petition to request a distribution of funds on February 1, 2012 which was a period of eighty (80) days after the court's order of November 10, 2011.
4. Whether the trial court erred factually and legally in its order of March 6, 2012 by its failure to consider that the petition of Susquehanna to request a distribution of funds attached [sic] the trial court's order of November 10, 2011 and that Susquehanna failed to address or explain any reasons why its petition to request a distribution of funds was not filed within the thirty (30) days required by the court's order of November 10, 2011.
5. Whether the opinion of Judge Idee C. Fox dated June 14, 2012 confirmed that the court's order of November 10, 2011 did not operate to bar Susquehanna Bank from filing a petition to distribute funds; although the order granted "leave of thirty (30) days for the filing of a petition to distribute funds, " it also made clear the consequences for delay beyond the time limit. "Failure to file such petition within the thirty days shall result in the dissolution of this order." By the terms of the order, delay dissolved the order and therefore Morris was no longer bound to retain the funds at issue in the escrow account.
Brief of Appellant, at 5.
The five issues raised by Morris all focus on the trial court's order granting Susquehanna's petition to distribute funds despite the fact that it filed the petition fifty days beyond the time limit set forth in the court's order dated November 10, 2011. In its Rule 1925(a) opinion, the trial court addresses this issue as follows:
First, Morris incorrectly interprets this court's November 10, 2011 Order. The Order did not operate to bar the Bank from filing a Petition to Distribute Funds. Although the order granted "leave of thirty (30) days" for the filing of a Petition to Distribute Funds, it also made clear the consequences for delay beyond the time limit. "Failure to file such petition within the thirty days designated shall result in the dissolution of this Order." By terms of the Order, delay dissolved the Order and therefore Morris was no longer bound to retain the funds in the escrow account.
Further, [Susquehanna] did not waive its right to file a Petition to Distribute Funds. "[A] waiver will not be presumed or implied contrary to the intention of the party whose rights would be injuriously affected thereby, unless by his conduct the opposite party has been misled, to his prejudice, into the honest belief that such waiver was consented to." Brown v. Pittsburgh, 186 A.2d 399, 401 (Pa. 1962). Here, the Bank made no representation and performed no act from which Morris could have concluded that the Bank was waiving its right to file a Petition. Morris did not suffer any prejudice or detriment from reliance upon his apparent belief that the Bank had waived its right to file.
Trial Court Opinion, 6/14/12, at 4-5.
We remanded this matter to the trial court for a supplemental Rule 1925(a) opinion to address why Susquehanna's filing a petition to distribute funds fifty days beyond the limit set forth in the November 10, 2011 Order did not preclude the court from granting relief to Susquehanna on March 6, 2012.
This Court's November 10, 2011 order did not preclude the court from granting the relief requested by Susquehanna because there is no time limit on intervention other than it must be during the pendency of an action. Pennsylvania Rule of Civil Procedure 2327 provides that a person "shall be permitted to intervene" in an action where the action "may affect any legally enforceable interest of such person." Pa.R.Civ.P. 2347(4). There is no question that Susquehanna's lien is a "legally enforceable interest" that warranted its intervention. Courts regularly allow third parties to intervene in judgment execution proceedings to protect their interests. See e.g. Deutsch Larrimore and Famish, P.C. v. Johnson, 791 A.2d 350, 351 (Pa.Super. 2002). It is well established that a "question of intervention is a matter within the sound discretion of the court below and unless there is a manifest abuse of discretion, its exercise will not be interfered with on review." Darlington v. Reilly, 69 A.2d 84, 86 (Pa. 1949). Jackson v. Hendrick, 446 A.2d 226 (Pa. 1982); Templeton Appeal, 159 A.2d 725 (Pa. 1960).
Supplemental Trial Court Opinion, 7/2/13, at 3.
Morris raises five separate issues on appeal, all of which are based on his argument that the November 10, 2011 order requiring him to retain the funds he garnished from Domus, would dissolve if Susquehanna did not seek distribution of the retained funds within thirty days. It is clear that Susquehanna did not file a petition to distribute funds by December 10, 2011.
Morris appears to argue that once the thirty days passed, Susquehanna was precluded from ever collecting the garnished funds from him. We disagree. Rather, the only consequence of the dissolution of the November 10, 2011 order was that Morris was "no longer bound to retain the funds in the escrow account." Trial Court Opinion, 6/14/12, at 5.
Contrary to Morris's position, Susquehanna's failure to file a petition to distribute funds by December 10, 2011 did not conclude this matter. Because the case remained ongoing, Susquehanna maintained its right to file its petition to distribute funds in the ordinary course.