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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 09-1683

 

PLASTIPAK PACKAGING, INC.,

 Appellant

v.

FREDERICK PETER DEPASQUALE; MARK J. DEPASQUALE; 

CARL B. DEPASQUALE; MARIO C. DEPASQUALE,

 

 

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

(D.C. Civil No. 99-cv-00245)

District Judge: Honorable Terrence F. McVerry

 

Submitted Under Third Circuit LAR 34.1(a)

January 12, 2010

 

Before: SCIRICA, Chief Judge, BARRY and SMITH, Circuit Judges

(Opinion Filed: January 27, 2010)

 

OPINION

 

BARRY, Circuit Judge

Plastipak Packaging, Inc. (“Plastipak”), a manufacturer of plastic containers, has

Case: 09-1683 Document: 00319998611 Page: 1 Date Filed: 01/27/2010
 From the early 1980s until sometime in 1995, Mac-Jam and Plastipak had an

1

ongoing business relationship in which Plastipak supplied Mac-Jam with plastic bottles. 

In December of 1995, Plastipak filed a lawsuit against Mac-Jam alleging breach of

contract.

 The merits of the action before us, which were decided by a jury eight years ago, 2

revolved around whether Mac-Jam was Mr. DePasquale’s alter ego, and whether he had

engaged in the fraudulent transfer of property under the Pennsylvania Uniform Fraudulent

Transfer Act (“PUFTA”), 12 Pa. Cons. Stat. §§ 5105-5110. On December 7, 2001, a jury

found that Mac-Jam was his alter-ego, and judgment was entered against him in the

amount of $767,393.62. The jury found in his favor on the fraudulent transfer count. 

 42 Pa. Cons. Stat. § 8124(c) provides that: 3

Insurance proceeds.-The following property or other rights of the judgment

debtor shall be exempt from attachment or execution on a judgment: 

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been seeking payment since 1995 for plastic bottles it manufactured for Mac-Jam, Inc.

d/b/a Regent Bottling Co. (“Mac-Jam”), a soft drink bottler. In February of 1999, 1

Plastipak obtained a judgment against Mac-Jam. In an effort to collect on that judgment,

Plastipak filed an action against Mac-Jam's sole shareholder, Frederick P. DePasquale

(“Mr. DePasquale,” together with his non-party wife, the “DePasquales”), and won a

$767,393.62 judgment against Mr. DePasquale in 2001. Plastipak now seeks to satisfy 2

the judgment by executing on certain moneys (the “Moneys”) which the DePasquales

recently transferred from their joint bank account (the “Bank Account”) to a life

insurance policy (the “Policy”) owned by Mr. DePasquale for the benefit of his wife. 

The first issue on appeal is whether the District Court erred in refusing to permit

Plastipak to execute on the Policy, which is protected from Mr. DePasquale’s creditors by

Pennsylvania’s exemption statute, 42 Pa. Cons. Stat. § 8124. The second issue is 3

Case: 09-1683 Document: 00319998611 Page: 2 Date Filed: 01/27/2010
. . . .

(6) The net amount payable under any annuity contract or policy of life

insurance made for the benefit of or assigned to the spouse, children or

dependent relative of the insured, whether or not the right to change the

named beneficiary is reserved by or permitted to the insured. The preceding

sentence shall not be applicable to the extent the judgment debtor is such

spouse, child or other relative. 

 The most important of several flaws in Plastipak’s theory (which it wishes to explore 4

with further discovery) is that even if Mr. DePasquale fraudulently transferred the

Moneys to the Policy, the Moneys are now safe and unreachable, and Plastipak seems to

have no basis to recover them either in law or in equity.

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whether the Court abused its discretion in refusing to allow additional discovery, i.e.,

refusing to allow Plastipak to depose the DePasquales in hopes of finding evidence that

the DePasquales, albeit inexplicably, intended to terminate their tenancy by the entireties

in the Moneys in the Bank Account prior to transferring the Moneys to the Policy (and

thereby exposing Mr. DePasquale to liability for fraudulent transfer).4

I. Jurisdiction & Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have

jurisdiction under 28 U.S.C. § 1291. We review the factual findings of the District Court

for clear error; the legal conclusions are subject to plenary review. Del. River & Bay

Auth. v. Kopacz, 584 F.3d 622, 626 n.5 (3d Cir. 2009). “A district court’s denial of

discovery is reviewed for abuse of discretion.” LeBoon v. Lancaster Jewish Cmty. Ctr.

Ass’n, 503 F.3d 217, 235 (3d Cir. 2007). 

II. Discussion

Plastipak is asking for essentially the same equitable relief which we already

Case: 09-1683 Document: 00319998611 Page: 3 Date Filed: 01/27/2010
 In that appeal, Mr. DePasquale appealed certain evidentiary and other rulings, and 5

Plastipak cross-appealed the District Court’s decision protecting certain funds held in the

same Policy now at issue before us. 

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considered and denied in Plastipak’s first appeal before us, in this very same action, in

2003. See Plastipak Packaging, Inc. v. DePasquale, 75 Fed. Appx. 86 (3d Cir. 2003). 

5

In its first appeal before us, Plastipak argued for access to certain funds in the same

Policy on equitable grounds, in the form of the “judicial estoppel” remedy. We rejected

Plastipak’s arguments because, despite the allegations of fraudulent transfer, judicial

estoppel “would punish the interests of an innocent third party, DePasquale’s wife,” who

was the Policy’s beneficiary. Id. at 94 n.9 (citing Montrose Med. Group Participating

Savs. Plan v. Bulger, 243 F.3d 773, 778 (3d Cir.2001) (we incorrectly cited to page 777)). 

A. Execution on the Policy

Plastipak now argues that the Moneys in the Policy can be reached via another

equitable remedy: a constructive trust. However, our consideration of whether to impose

a constructive trust requires that we balance the same equities that we considered in

Plastipak’s earlier request for judicial estoppel. See Janus Mgmt. Servs., Inc. v.

Schlessinger, 810 A.2d 637, 642 (Pa. Super. 2002). It is, to say the least, disturbing that

the parties have not even mentioned this in their briefs. 

The equitable factors weighing against allowing Plastipak to reach the funds in the

Policy have not changed. Mrs. DePasquale remains the beneficiary of the Policy. Mr.

DePasquale is accused now, as before, of misusing the Policy to hide assets. Regardless

Case: 09-1683 Document: 00319998611 Page: 4 Date Filed: 01/27/2010
 Plastipak cites two factually dissimilar cases for the proposition that a constructive 6

trust is appropriate here: Fidelity Trust Co. v. Union National Bank of Pittsburgh, 169 A.

209 (Pa. 1933) and Nagle v. Nagle, 799 A.2d 812 (Pa. Super. 2002). Those cases are

simply inapplicable under the circumstances here, and we reject them without further

discussion. 

 Section 8124 specifically provides exceptions to other exemptions. 42 Pa.C.S. § 7

8124. For example, the exemption for certain retirement funds, under § 8124(b)(1)(ix),

includes an exception for “[a]mounts deemed to be fraudulent conveyances.” 42 Pa.C.S.

§ 8124(b)(1)(ix). The insurance exemption applicable in the case before us, at § 8124(c),

contains no such exception. 42 Pa.C.S. § 8124.

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of whether our earlier ruling is relevant under equitable or judicial estoppel or as the law

of the case, it is appropriate to affirm. The DePasquales’ intentions, vis-à-vis whether 6

the Moneys in the Bank Account were held in a tenancy by the entireties, are irrelevant

because the Moneys are now safely in the Policy. 

Moreover, as we explained in the prior appeal, the Policy is also protected by law. 

The plain language of the Pennsylvania exemption statute, 42 Pa.C.S. § 8124, makes clear

that, regardless of the subjective intent of Mr. DePasquale when he took out the Policy,

the funds are safe from his creditors. Plastipak has offered neither arguments nor any 7

case that even suggests that Pennsylvania law allows creditors to access otherwiseprotected assets on proof of the debtor’s subjective intent. 

In any event, the factual findings of the District Court are not clearly erroneous. 

The record supports the Court’s finding that there is not clear and convincing evidence

that the DePasquales intended to sever the tenancy by the entireties with respect to the

Moneys. See Johnson v. Johnson, 908 A.2d 290, 296 (Pa. Super. 2006) (noting that

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 The issue is rarely discussed (the leading case was decided in 1939). See C.I.T. 8

Corp. v. Flint, 5 A.2d 126, 129 (Pa. 1939) (creditors could not challenge a transaction

which spouses engaged in for the admitted purpose of preventing husband from becoming

the owner by survivorship). In any event, as a matter of logic, it is unlikely that the

DePasquales could reasonably be accused of trying to hinder creditors by transferring the

Moneys from one protected asset (the Bank Account, held in a tenancy by the entireties)

to another (the Policy). Addressing this issue, Plastipak offers only the conclusory

statement that, even if the Moneys were held in a tenancy by the entireties prior to being

transferred to the Policy, there was still a fraudulent transfer because the Bank Account

“had been deemed to be subject to execution.” (Plastipak Br. at 29.) Plastipak cites no

cases in support of this proposition, and, regardless, to say that the Bank Account had

been “deemed to be subject to execution” is misleading. (Id.) In 2004, a Pennsylvania

trial court refused to sustain objections to a writ of execution on certain funds held in the

Bank Account which the court found were not held in a tenancy by the entireties. See

Plastipak Packaging, Inc. v. DePasquale, GD No. 03-19032 (Ct. Com. Pl., Allegheny

County, Civ. Div. August 3, 2004). However, another Pennsylvania trial court later held

that the Bank Account was not subject to execution vis-à-vis certain funds awarded to the

DePasquales in a separate lawsuit because those funds were awarded to the DePasquales

jointly. See Plastipak Packaging, Inc. v. DePasquale, GD No. 03-19032 (Ct. Com. Pl.,

Allegheny County, Civ. Div. Nov. 30, 2006). Similarly, the Moneys at issue here, which

were awarded to the DePasquales jointly after an arbitration proceeding, were never

subject to execution when they were on deposit in the Bank Account. 

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Pennsylvania law creates a rebuttable presumption that property is held in tenancy by the

entireties, which may be overcome by clear and convincing evidence). The Court found

that the Moneys were so-held until the moment they were transferred to the Policy. The

Moneys were never accessible to Plastipak and were never in Mr. DePasquale’s

individual control, and so could not have been fraudulently transferred. 

8

B. The Discovery Issue

The District Court did not abuse its discretion in refusing to allow additional

discovery, and, in particular, the depositions of the DePasquales. Plastipak argues that it

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 Plastipak argues that “the [D]istrict [C]ourt denied Plastipak’s discovery requests 9

only because they were supposedly untimely.” (Plastipak Br. at 23). We disagree.

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is entitled to an opportunity to depose the DePasquales in order to confirm its theory that,

at some point, the DePasquales decided to sever their tenancy by the entireties of certain

funds in the Bank Account, thereby rendering those funds vulnerable to attachment. If

the DePasquales transferred the Moneys while the Moneys were held in tenancy by the

entireties, the DePasquales are not subject to liability for fraudulent transfer. See C.I.T.

Corp., 5 A.2d at 129. On the other hand, if the tenancy by the entireties was severed

before the Moneys were transferred to the Policy, then Mr. DePasquale alone transferred

the Moneys to the Policy and Mr. DePasquale could be liable for fraudulent transfer. 

The District Court denied the discovery request as untimely and because, “given

the litigious history of these parties, it is unlikely that further discovery, briefing and an

evidentiary hearing would be consistent with the just, speedy, and inexpensive

determination of this action.” Plastipak Packaging, Inc. v. DePasquale, No. 99-cv-245,

2009 WL 186139, at *2 (W.D.Pa. Jan. 27, 2009). It appears that the Court may have 9

been incorrect in concluding that Plastipak’s requests were untimely, but the Court surely

did not err, much less abuse its discretion, in refusing to allow additional discovery. 

First, we discourage “fishing expeditions.” See Ranke v. Sanofi-Synthelabo Inc.,

436 F.3d 197, 204 (3d Cir. 2006). Plastipak’s proposal to depose the DePasquales in

hopes that it will find a legal theory by which it could attach Mr. Pasquale’s assets bears

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 As the District Court explained, in its opinion denying Plastipak’s motion for 10

reconsideration: 

[T]here was no basis to conclude that Mrs. DePasquale ever acted to sever

the entireties ownership. The proceeds at issue were: (1) in the form of a

check made out to Mrs. DePasquale; (2) deposited into a joint checking

account; and (3) sent to Penn Mutual to restore the value of Mrs.

DePasquale's interest as a death beneficiary. Plastipak’s argument that these

proceeds somehow became the sole property of Mr. DePasquale borders on

the frivolous. The Court adheres to the analysis in the January 29 Order.

Plastipak Packaging, Inc. v. DePasquale, No. 99-cv–245, 2009 WL 501888, at *2

(W.D.Pa. February 27, 2009).

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all the hallmarks of a fishing expedition, particularly given that there is no evidence that

the DePasquales intended to sever their tenancy by the entireties. Indeed, we have no

more reason than did the District Court to believe that the DePasquales intended to do

so. Plastipak's argument that Mr. DePasquale evinced his intent to sever by writing a 10

check to the Policy is unavailing. Plastipak offers no support for the proposition that an

intention to separate property in the future severs the tenancy in the present. Moreover,

Pennsylvania law is clear that both parties—not just one—must intend to sever a tenancy

by the entireties. Clingerman v. Sadowski, 519 A.2d 378 (Pa. 1986).

Finally, Plastipak argues that if the DePasquales severed their tenancy by the

entireties, then Mr. DePasquale could be liable for fraudulent transfer under

Pennsylvania’s fraudulent conveyances statute, 12 Pa. Cons. Stat. § 5104. However,

Plastipak has failed to show how Mr. DePasquale’s alleged fraudulent transfer would

change the fact that the Moneys are now safely out of reach, and that Plastipak has no

remedy at law or, under the circumstances, in equity, by which it can reach the Moneys in

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the Policy. Plastipak’s repeated conclusory statements about how the case turns on the

intent of the DePasquales are not persuasive. 

IV. Conclusion

We will affirm the order of the District Court. 

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