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Leoni v. Leoni

Superior Court of Pennsylvania

January 4, 2017

EUGENE P. LEONI, JR., Appellee
v.
GREGORY T. LEONI (AS THE EXECUTOR OF THE ESTATE OF EUGENE LEONI, SR.) AND MARIAN LEONI, Appellant EUGENE P. LEONI, JR., Appellee
v.
GREGORY T. LEONI (AS THE EXECUTOR OF THE ESTATE OF EUGENE LEONI, SR.) AND MARIAN LEONI, Appellant

         Appeal from the Order Entered December 7, 2015 In the Court of Common Pleas of Montgomery County Civil Division at No(s): No. 1989-01293 No. 1989-01294

          BEFORE: BENDER, P.J.E., DUBOW, J., and MUSMANNO, J.

          OPINION

          BENDER, P.J.E.

         Appellants, Gregory T. Leoni (as the executor of the estate of Eugene Leoni, Sr.) and Marian Leoni, appeal from orders entered in two separate cases on December 7, 2015, granting Appellee's, Eugene P. Leoni, Jr., motions to compel the distribution of escrow funds in his favor.[1] After careful review, we reverse.

         The trial court provided the following detailed account of the relevant facts and lengthy procedural history of this case in its Pa.R.A.P. 1925(a) opinion:

In 1989, Dr. Eugene Leoni, Sr. and his wife, Marian Leoni, issued five confessed judgments in favor of three of their four children [-] Nanette, Eugene, Jr.[, ] and Gregory[, ] and against themselves as a plan to protect their assets from creditors. On January 25, 1989, these judgments were entered in Montgomery County. These judgments included: two in favor of Eugene P. Leoni, Jr. ("[Appellee]") in the amounts of $375, 000 and $215, 000, docketed as 1989-01293 and 1989-01294, respectively ("the Eugene Judgments"); two in favor of Nanette Leoni in the amounts of $175, 000 and $225, 000, docketed as 1989-01297 and 1989-01298, respectively; and one in favor of Gregory Leoni in the amount of $165, 000[, ] docketed at 1989-01296. The Eugene Judgments were revived once on September 18, 1992. Dr. Leoni died on August 18, 2006[, ] and Gregory Leoni was named executor of his estate.
On November 1, 2006, [Appellee] filed praecipes for writs of revival of the judgments. These writs included a request to record the Eugene Judgments in the judgment index, which created liens against [Appellants'] real property located in Montgomery County. Gregory Leoni, in his capacity of executor of the estate of Eugene Leoni, Sr., opposed the revival of the Eugene Judgments.
A bench trial was held before the Honorable Gary S. Silow on April 27, 2010[, ] regarding the revival of the Eugene Judgments. On May 4, 2010, Judge Silow entered a decision that revived the Eugene Judgments in favor of [Appellee] and against [Appellants] in the amounts of $375, 000 and $215, 000. [Appellants] appealed that decision to the Superior Court on September 30, 2010. [Appellants] posted two irrevocable standby letters of credit on November 17, 2010[, ] as security in the amounts of $450, 000 in the case under docket number 1989-01293[, ] and $258, 000 in the case under docket number 1989-01294[, ] during the pendency of the appeal pursuant to Pa.R.A.P. 1731 and 1734.
On November 23, 2010[, ] Judge Silow entered the following order:
AND NOW, this 23 day of November 2010, by agreements of counsel for the parties, since the [Appellants] have filed with the Prothonotary security in the form of irrevocable letters of credit in the aggregate amount of $708, 000, representing 120% of the judgments at issue, pursuant to Pa.R.A.P. 1731 and 1734(a)(ii)(iii), and which shall remain in full force and effect pending [Appellants'] appeal, the filing of security by [Appellants] operated as an automatic supersedeas and stay pending [Appellants'] appeal.
On January 18, 2012, the Superior Court of Pennsylvania affirmed Judge Silow's decision under docket numbers 2807 EDA 2010 and 2808 EDA 2010. The Superior Court denied [Appellants'] request for reargument. [Appellants'] petitions for allowance of appeal from the order of the Superior Court were denied under docket numbers 327 MAL 2012 and 328 MAL 2012. The case was remanded by the Superior Court back to this court on December 4, 2012.
Prior to the case being remanded, Gregory and Nanette Leoni revived their judgments on May 21, 2012, creating liens in their favor on all real property owned by the Estate of Eugene Leoni Sr. and Marian Leoni.
On January 3, 2013, [Appellee] filed a motion to have [the] prothonotary direct [the] bank to draw down irrevocable standby letters of credit in favor of [Appellee] pursuant to Pa.R.A.P. 1734. On March 20, 2013, this court granted [Appellee's] motion and directed the prothonotary to collect the irrevocable standby letters of credit in the aggregate amount of $708, 000 and distribute same to [Appellee]. On May 20, 2013,
[Appellants] filed an emergency motion to stay draw down on irrevocable standby letters of credit, claiming [Appellee] [was] not entitled to the entire amount of the standby letters of credit, but solely the principal aggregate amount of the Eugene Judgments equaling $590, 000, without interest. On May 23, 2013, the undersigned ordered the parties to file legal memoranda on the issue of whether [Appellee] was entitled to interest on the Eugene Judgments. On May 30, 2013, this court ordered the immediate disbursement of $590, 000, said sum representing the undisputed principal of the two Eugene Judgments. The principal of the Eugene Judgments was paid to [Appellee] on June 18, 2013.
On August 5, 2013, [Appellee] filed a petition to assess interest from January 25, 1989[, ] on the two Eugene Judgments totaling $849, 600. On September 10, 2013, after [receiving] no response to [Appellee's] petition to assess interest, this court granted said petition and assessed interest on the Eugene Judgments in the amount of $849, 600.
On September 16, 2013, [Appellants] filed a motion to vacate order of September 10, 2013 (hereinafter "Motion to Vacate"). On September 18, 2013, the court stayed its order of September 10, 2013[, ] and scheduled argument on the Motion to Vacate.
On September 27, 2013, in order to effectuate the sale of a property owned by [Appellants] on which [Appellee] claimed a judgment lien, [Appellee] and [Appellants] entered into an agreement ("Escrow Agreement") to place the proceeds from the sale in escrow at City Line Abstract ("Escrow Funds"). The parties further "agreed to cause the liens, if any, of the Eugene Judgments and the September 10, 2013 order to be released from the property and any such liens shall attached [sic] to the Escrow Fund … in the same order of priority as they existed prior to the execution of this Escrow Agreement."
On October 15, 2013[, ] [Appellants] filed a motion to compel the distribution of escrow and termination of letters of credit ("Motion to Compel") seeking the court to order: (1) [Appellee] and his assignee to enter satisfactions of the judgments; (2) [Appellee] and his assignee to pay the Estate of Marian E. Leoni the sum of $5, 900 (1% of $590, 000) for each day that the satisfactions have not been entered since July 18, 2013; (3) the proceeds held in escrow by City Line Abstract Company be distributed immediately to Gregory T. Leoni and Nanette G. Leoni; and (4) the letters of credit issued by Ambler Savings Bank immediately be terminated and cancelled.
On December 12, 2013, the court entered orders which denied [Appellants'] Motion to Vacate and [Appellants'] Motion to Compel. [Appellants] appealed these order[s] to the Pennsylvania Superior Court on January 9, 2014. The Pennsylvania Superior Court affirmed the court's orders denying [Appellants'] Motion to Compel and separate Motion to Vacate. In addition, the Court quashed the portion of the appeal as it related to the priorities of liens on the Escrow Funds in an opinion dated February 19, 2015. [Appellants'] petitions for allowance of appeal from the order of the Superior Court were denied under docket numbers 397-400 MAL 2015. The case was remanded by the Superior Court to the trial court on November 19, 2015.
On February 26, 2014, while the prior appeal was pending in the appellate courts, [Appellee] filed a motion to authorize the distribution of an escrow fund. [Appellee] requested the court to order the Escrow Funds be distributed to satisfy, in part, the interest on the Eugene Judgments since the amount of the irrevocable letters of credit did not satisfy the principal and interest of the Eugene Judgments. [Appellants] replied on March 11, 2015. Following oral argument held on May 13, 2015 and November 13, 2015, the court entered an order on December 7, 2015[, ] which granted [Appellee's] Motion to Compel the Distribution of an Escrow.

         Trial Court Opinion (TCO), 2/12/16, at 1-5.

         On December 16, 2015, Appellants filed a timely notice of appeal, followed by a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal. Appellants now present the following issues for our review:

1. Whether [the trial court] committed an abuse of discretion or error of law in directing that the funds in escrow at City Line ...

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