IN RE: FOREMOST INDUSTRIES, INC.
GLD FOREMOST HOLDINGS, LLC AND DANIEL GORDON Appellants RALPH C. MICHAEL
from the Order Entered April 1, 2016 In the Court of Common
Pleas of Franklin County Civil Division at No(s): 2016-00109
BEFORE: LAZARUS, J., STABILE, J., RANSOM, J.
GLD Foremost Holdings, LLC and Daniel Gordon (collectively
"GLD"), appeal from the April 1, 2016 Order denying
GLD's Emergency Motion to Strike Lis Pendens on
real estate owned by Petitioner, Foremost Industries, Inc.
(hereinafter "Foremost Industries"). For the
following reasons, we reverse and remand with instructions.
Ralph C. Michael (hereinafter "Michael"), is a
former owner of Foremost Industries. In May 2015, GLD and
Michael entered into a Stock Purchase Agreement
("SPA") wherein GLD agreed to purchase Foremost
Industries from Michael. Trial Ct. 1925(a) Op., 6/13/2016, at
November 30, 2015, Michael filed a complaint in federal court
against GLD claiming breach of contract, fraud, and unjust
enrichment. See Michael v. GLD Foremost Holdings, LLC et
al., No. 15-2230, Pl. Compl., EDF No. 1, at 11-16 (M.D.
Pa. Nov. 20, 2015). In his complaint, he avers that GLD
failed to remit two million dollars of the purchase price
stated in the SPA. See id. at 9. Michael complains
that GLD received all of Michael's rights, titles, and
interests in the Company upon execution of the agreement
without delivering the full purchase price at closing.
Id. at 10. Thus, Michael asks for expectation
damages in the form of a monetary judgment.
same day, GLD filed its own complaint in federal court
against Michael, asserting multiple claims arising out of the
SPA. See GLD Foremost Holdings, LLC v. Ralph C. Michael,
Don E. Myers, and Laurie A. Myers, No. 15-2234, Pl.
Compl., EDF No. 1, at 12 (M.D. Pa. Nov. 20, 2015). Inter
alia, GLD claims a possessory interest in property
identified by Uniform Parcel Number 01-0A16.-126.-000000.
Id. at 25 ¶ 102. According to GLD, Michael
fraudulently transferred this property without consideration
to his daughter, Laurie Myers, in April 2015, contrary to an
SPA provision that expressly precluded Michael from selling
any of Foremost Industries' assets after January 1, 2015.
See id. at 25-26.
January 2016, Michael filed two praecipes for lis
pendens on three different tracts of land owned by
Foremost Industries, tax parcel nos. 01-0A16-027,
18-0K30-029, and 17-0J09-008 (collectively,
"Greencastle") in the Court of Common Pleas of
Franklin County, certifying that the federal actions
concerned real property located in Franklin
County. At that time, GLD was negotiating a sale
of Foremost Industries' Corporate Offices, specifically
tract no. 01-0A16-027, located at 2375 Buchanan Trail West,
to Greencastle-Antrim School District. Thus, GLD filed
an emergency petition to strike the lis pendens.
See Emergency Petition to Strike Lis
Pendens, 3/2/2016. Michael filed an Answer to GLD's
Petition to strike, arguing that title was involved in the
pending federal litigation and denying that GLD is the owner
of Foremost Industries. See Michael's Answer,
3/28/2016, at 2. Despite Michael's representations in his
Answer, his federal complaint does not seek a change in
title, but rather mere money damages. See Michael v. GLD
Foremost Holdings, LLC et al., No. 15-2230, Pl. Compl.,
EDF No. 1, at 12, 15, 16 (M.D. Pa. Nov. 20, 2015). Following
a hearing, the trial court denied GLD's emergency motion
to strike the lis pendens and issued an opinion.
See Trial Ct. Op., 4/1/2016. GLD timely filed a
court-ordered 1925(b) statement in May 2016. Thereafter, the
trial court issued an additional, responsive opinion.
See Trial Ct. 1925(a) Op., 6/13/2016.
initial review, this Court issued an order to show cause why
the appeal should not be quashed as taken from an
unappealable order. See Order to Show Cause,
5/18/2016. Upon receipt of GLD's reply, the show-cause
order was discharged, and the issue was referred to the
merits panel. See Order, 7/8/2016.
asserts that the order denying their petition is a final,
appealable order because it resolved the only claim at issue
in their petition. See Appellants' Response to
Rule to Show Cause Order, 5/26/2016, at 4. The order
effectively enables the lis pendens to exist as a
cloud on Foremost Industries' title to the Greencastle
property, which casts a shadow over any purchase and sale
negotiations for the Office Building property and calls into
doubt the ability of GLD to convey marketable title.
See GLD's Br. at 6. The order denying GLD's
emergency petition to strike effectively put GLD "out of
court" with respect to their ability to remove the cloud
on title to Greencastle. See McCahill v. Roberts,
219 A.2d 306, 308 (Pa. 1966) (overruling a motion to quash
where the lower court's lis pendens decision
effectively eliminated Appellant's claim of property
ownership); Pa.R.A.P. 341(b)(1). Accordingly, we have
jurisdiction to review the order denying their petition to
appeal, GLD raises the following issues:
1. Did the trial court err in concluding that 42 Pa.C.S.
§ 4302 permits a lis pendens to be filed in any
case where real estate is 'involved, ' even if the
title to the real estate is not at issue in the underlying
2. Did the trial court abuse its discretion when it
determined that it was irrelevant to the lis pendens
analysis whether a party is seeking title to the property as
a remedy in the underlying dispute, even though Pennsylvania
law indicates otherwise?
3. Did the trial court err when it ignored the harsh and
arbitrary effect of its decision on Appellants, which
significantly outweighed any negative impact on Appellee, who
is not now, ...