J. A15044/15

 2015 PA Super 212

 

RYAN FELL, : IN THE SUPERIOR COURT OF

: PENNSYLVANIA

Appellant :

:

v. :

:

340 ASSOCIATES, LLC AND :

334 KAYLA, INC. :

:

Appellees : No. 3009 EDA 2014

Appeal from the Judgment Entered December 17, 2014

In the Court of Common Pleas of Chester County 

Civil Division No(s).: 11-10055

BEFORE: BOWES, MUNDY, and FITZGERALD,*JJ.

OPINION BY FITZGERALD, J.: FILED OCTOBER 05, 2015

Appellant, Ryan Fell, appeals from the judgment entered in the 

Chester County Court of Common Pleas following a two-day bench trial and 

the denial of her motion for post-trial relief. Appellant challenges the trial 

court’s determination that Appellees, 340 Associates, LLC, and 334 Kayla, 

Inc., did not fraudulently transfer 340 Associates’ sole asset—a liquor 

license—to avoid collection on a verdict entered in Appellant’s favor in a 

separate Dram Shop Act1action. We hold the trial court erred by holding 

334 Kayla appropriately compensated 340 Associates for the liquor license 

under Section 5104(b)(8) of the Pennsylvania Uniform Fraudulent Transfer 

 

*

Former Justice specially assigned to the Superior Court.

1 47 P.S. § 4-493.
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Act2(“PUFTA”). We vacate the judgment in favor of Appellees, reverse the 

order denying Appellant’s post-trial motion, and remand with instructions to 

enter judgment in favor of Appellant and for further proceedings as set forth 

below.

We adopt the trial court’s findings of fact set forth at paragraphs one 

through twenty-four, twenty-seven, twenty-eight, thirty-one, and thirty-two, 

as set forth below:

1. Defendant 340 Associates LLC is a limited liability 

company formed on June 8, 2001 (“340 Associates”).

2. 340 Associates is a single purpose entity formed to 

purchase and hold a liquor license.

3. On March 25, 2002, 340 Associates purchased Liquor 

License R11807 (“the License”). The purchase was 

approved by the Pennsylvania Liquor Control Board 

(“PLCB”) for the purpose of operating a bar and 

restaurant.

4. Since 2003[,] the sole members of 340 Associates 

have been Michael Andrew McCool and Raymond Christian 

McCool, who manage 340 Associates’ operations.

5. In December 2004, 340 Associates entered into a 

management agreement with Nazario and Rosa Tapia to 

manage a bar/restaurant known as The Famous Mexican 

Restaurant, located at 334-340 East Lincoln Highway, 

Coatesville (“the Property"). Mr. Tapia was approved by 

the PLCB to manage the License.

6. As a result of problems at The Famous Mexican 

Restaurant, the property was placed in the Nuisance Bar 

Program by the PLCB and the License[e] was required to 

 

2 12 Pa.C.S. §§ 5101-5110.
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enter into a Conditional Licensing Agreement, which 

required, inter alia, alcohol management training, 

cooperation with police, a prohibition on weapons, and 

monitoring outside of the bar.

7. At the end of 2005, McCool Properties, LLC (“McCool 

Properties”) purchased the Property. Thereafter, the 

Tapias paid rent to McCool Properties.

8. McCool Properties is a separate entity from 340 

Associates. The members of McCool Properties are Michael 

Andrew McCool, Raymond Christian McCool and Raymond 

R. McCool, now deceased.

9. On January 4, 2006, 340 Associates began to market 

the License for sale, using a multiple listings service and a 

sign posted at The Famous Mexican Restaurant.

10. On March 15, 2007, [Appellant] was injured by a 

car driven by Omar Villaiva-Martinez.

11. In the fall of 2007, The Famous Mexican Restaurant 

ceased operations and closed, whereupon the License was 

put into safe-keeping with the PLCB.

12. On November 8, 2007, [Appellant] filed suit against 

Villaiva-Martinez and others, including 340 Associates. 

[Appellant] alleged that Villaiva-Martinez had been served 

alcoholic beverages while visibly intoxicated prior to 

causing the car accident in which she was injured. No 

liquor liability insurance was in place at the time 

[Appellant] was injured.

13. Through May, 2009, 340 Associates did not 

receive[ ] any offers for the License.

14. In June, 2009, Jose Diaz saw the For Sale sign at 

the property where The Famous Mexican Restaurant had 

been located and subsequently offered to purchase the 

License for $75,000.

15. In June, 2009[,] 334 Kayla, Inc., a corporation 

formed by Diaz (“Kayla”), and 340 Associates entered into 
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an Agreement of Sale for the License at the agreed upon 

price of $75,000.

16. In June, 2009[,] [334] Kayla entered into a lease 

with McCool Properties for the property formerly occupied 

by The Famous Mexican Restaurant (“the Lease”).

17. The Lease is for an initial five-year term with an 

option to extend for two additional five-year terms. At the 

Lease’s expiration, [334] Kayla is required to sell the 

License to McCool Properties or its assignee for market 

value. In addition, the License is security for the Lease. 

Therefore, [334] Kayla is restricted and may not sell, 

transfer, pledge or assign the License during the term of 

the Lease.

18. On December 21, 2009[,] the PLCB approved the 

transfer of the License to [334] Kayla.

19. In February, 2010, [334] Kayla and 340 Associates 

closed on the sale of the License with 340 Associates 

taking back a note for the full purchase price (“the Note”).

20. On August 18, 2010[,] a jury rendered a verdict in 

favor of [Appellant] in the amount of Six Million Eight 

Hundred Thousand Dollars ($6,800,000) and against ten 

defendants, including 340 Associates.

21. [Appellant] commenced this action on September 

14, 2011 under the Pennsylvania Uniform Fraudulent 

Transfer Act, 12 Pa.C.S.A. §§5101-5110.

22. On July 3, 2012[, 334] Kayla began to make 

payments to 340 Associates under the Note for the 

purchase of the License. At the time of hearing, [334] 

Kayla’s payments totaled $13,342.72.

23. Under the terms of the Note, payments for the 

purchase of the License were to have 1.) started one 

month following closing, 2.) continued for 60 consecutive 

months and 3.) been made in the amount of $1,415.35 per 

month.
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24. 340 Associates deferred payment on the Note until 

[334] Kayla had got the restaurant/bar open and on its 

feet.

* * *

27. At all times [334] Kayla has been controlled by Diaz 

and Nereida Jaquez, neither of whom have any interest in 

340 Associates or McCool Properties.

28. Kayla and its shareholders are not insiders or 

parties related to 340 Associates or McCool Properties.

* * *

31. The transfer of the License from 340 Associates to 

Kayla is a matter of public record.

32. A bench trial was held on May 21-22, 2014.

Trial Ct. Op., 5/28/14, at 1-3. 

340 Associates’ only asset was the liquor license, which was offered for 

sale at $375,000. Appellant’s Trial Ex. 6. (N.T. Dep. of Raymond C. McCool, 

8/8/11, at 6); Appellant’s Trial Ex. 14. 340 Associates sold the license to 

334 Kayla pursuant to the below terms:

2. Consideration. [340 Associates] agrees to accept 

and [334 Kayla] agrees to pay for the License the total 

sum of SEVENTY-FIVE THOUSAND ($75,000.00) DOLLARS.

3. Terms. The aforesaid consideration of $75,000.00 

shall be in the form of a loan from [340 Associates] to 

[334 Kayla], which loan shall be repaid within 5 years, 

together with interest at the rate of five percent (5%) 

simple per annum based on a 5 year pay-out, in 60 

successive, equal monthly installments of $1,415.35 each. 

The first monthly payment shall be due and payable one 

(1) month subsequent to the date of closing and the 

remaining payments shall be due on the same day of each 

successive month thereafter until fully paid. [334 Kayla] 
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shall have the right to prepay the loan in whole or in part 

at any time without penalty.

(a) The loan shall be evidenced and secured by a 

judgment note executed by [334 Kayla], which note 

may be recorded only in the event of a default. The 

loan shall further be secured by a security agreement 

together with UCC-1 financing statements granting unto 

[340 Associates] a first lien position security interest in 

the License and the corporate stock of [334 Kayla]. A 

pledge of all of the capital stock of [334 Kayla], 

together with the resignations of all the officers and 

directors of said corporation shall also be provided to 

[340 Associates]. The loan documents shall provide 

that no default may be declared by [340 Associates] 

unless [340 Associates] shall first have sent written 

notice specifying the nature of the default and providing 

[334 Kayla] with thirty (30) days thereafter within 

which to cure the default. [340 Associates] may assign 

its interests in the loan to its nominee.

(b) [Pennsylvania Liquor Control Board] Note. 

As required by the PLCB, [334 Kayla] shall execute a 

judgment note in the amount of $75,000.00, 

representing the purchase price, payable to [340 

Associates] on demand, which note shall be held in 

escrow by counsel for [334 Kayla], but subject always 

to the terms and conditions as contained herein.

Appellant’s Trial Ex. 1, Agreement of Sale of Liquor License, 6/16/09, at 2-3.

Appellant filed an amended complaint in equity requesting a 

mandatory injunction compelling 334 Kayla to return the license at issue to 

340 Associates or the court to order the public sale of the license, with 

proceeds paid to Appellant. Appellant’s Amended Compl., 11/17/12, at 3 

(unpaginated). After a bench trial, the trial court held that Appellant 

established the existence of the elements of fraud at 12 Pa.C.S. § 
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5104(b)(4), (5), (9), and (10).3 The trial court, however, identified two 

mitigating factors as follows:

1.) 340 Associates first marketed the License for sale in 

January, 2006, fifteen months before Fell was injured, and 

continually marketed the License for sale thereafter, and

2.) 340 Associates took back the Note, on which payments 

are being made, in exchange for the License.

Trial Ct. Op. at 5. The trial court ultimately entered judgment in favor of 

Appellees. 

Appellant filed a timely post-trial motion requesting judgment 

notwithstanding the verdict or a new trial, which the court denied on October 

1, 2014. Appellant timely appealed and timely filed a court-ordered 

Pa.R.A.P. 1925(b) statement raising seventeen issues.

Appellant raises the following three issues in her brief:

Whether the trial court’s findings of facts are unsupported 

by substantial, competent evidence and whether it erred 

as a matter of law when it found that 340 Associates’ 

conveyance was not fraudulent under Section 5104 of 

[PUFTA] because 340 Associates, or its operating 

members[,] the McCool Brothers, did not possess actual 

intent to hinder, delay or defraud a creditor when it 

conveyed the subject liquor license to Kayla?

Whether the trial court abused its discretion and erred as a 

matter of law when it found that 340 Associates’ 

conveyance of the subject license did not violate Section 

5104(a)(2) and Section 5105 of the [PUFTA]?

 

3 The statute is reproduced, infra.
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Whether the trial court’s findings of fact are unsupported 

by substantial, competent evidence and whether it erred 

as a matter of law when it found that Diaz and/or Kayla 

was an innocent and good faith purchaser of the liquor 

license?

Appellant’s Brief at 6.

We summarize Appellant’s arguments in support of all of her issues, as 

they are interrelated.4 She contends that because Appellees “retained 

possession or control” of the license under 12 Pa.C.S. § 5104(b)(2), she 

presented an additional element of actual fraud. Similarly, Appellant 

maintains that she established a badge of fraud per Section 5104(b)(8), 

because the judgment note received by 340 Associates does not constitute 

“value” under PUFTA. Assuming, however, the judgment note constituted 

“value” under PUFTA, Appellant insists the trial court erred by valuing the 

note at $75,000. As a corollary, Appellant questions the trial court’s 

valuation of the license at $75,000. Appellant asserts that 340 Associates 

 

4 Appellant, although raising three issues, presents four arguments, thus 

violating Pa.R.A.P. 2119(a), which mandates that “argument shall be divided 

into as many parts as there are questions to be argued.” See Pa.R.A.P. 

2119(a). We decline to quash. See PHH Mortg. Corp. v. Powell, 100 

A.3d 611, 615 (Pa. Super. 2014) (refusing to quash appeal despite 

numerous violations of appellate briefing rules); see also Commonwealth 

v. Briggs, 608 Pa. 430, 516, 12 A.3d 291, 343 (2011) (“The briefing 

requirements scrupulously delineated in our appellate rules are not mere 

trifling matters of stylistic preference; rather, they represent a studied 

determination by our Court and its rules committee of the most efficacious 

manner by which appellate review may be conducted so that a litigant’s right 

to judicial review as guaranteed by Article V, Section 9 of our 

Commonwealth’s Constitution may be properly exercised.”).
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knew it would incur debts beyond its ability to pay and thus she 

demonstrated a fraudulent transfer under Section 5104(a)(2)(ii). Lastly, 

Appellant summarily opines that 334 Kayla is not an innocent and good faith 

purchaser for value.5

340 Associates counters that Appellant improperly equates 340 

Associates with non-party McCool Properties and there is no action to pierce 

the corporate veil. 340 Associates insists that McCool Properties’ right to 

purchase the license does not mean McCool Properties retained possession 

or control over the license. 340 Associates note that Appellees were the 

only parties to introduce evidence of the liquor license’s value and, 

therefore, the trial court correctly held the license was sold, exchanged, or 

transferred for a judgment note of reasonably equivalent value. 340 

Associates also contends that 334 Kayla is an innocent good faith purchaser 

for value.

334 Kayla disputes that it engaged in fraud. It points out that 

Appellant abandoned on appeal any argument that it was an “insider.”6 334 

Kayla maintains that a requirement that it sell the license to McCool 

Properties at the end of the lease does not establish fraud. It contends 

 

5 Appellant concedes 334 Kayla is not an “insider” as defined by PUFTA. See

Appellant’s Brief at 18 n.6 (“[Appellant] no longer asserts the argument that 

the transfer was to an insider”).

6 See Appellant’s Brief at 18 n.6.
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there is “no legal support for the proposition that the value of a note is 

based on the ability of a purchaser to pay the note,” as value can also 

include a “mere ‘opportunity’ to receive an economic benefit in the future.” 

334 Kayla’s Brief at 9 (quoting In re Fruehauf Trailer Corp., 444 F.3d 

203, 212 (3d Cir. 2006)).7 334 Kayla also counters that the trial court found 

credible testimony that it did not have to make immediate payments on the 

note and that it began repaying the note when it was feasible. After careful 

review, we hold Appellant is entitled to relief.

The standard of review is deferential:

In prior matters involving review of alleged fraudulent 

conveyances, we have stated that our standard of review 

 

7 We acknowledge the following:

[F]ederal court decisions do not control the determinations 

of the Superior Court. Our law clearly states that, absent 

a United States Supreme Court pronouncement, the 

decisions of federal courts are not binding on Pennsylvania 

state courts, even when a federal question is involved. 

When the Third Circuit has spoken on a federal issue, the 

ultimate answer to which has not yet been provided by the 

United States Supreme Court, it is appropriate for this 

Court to follow Third Circuit precedent in preference to that 

of other jurisdictions. Whenever possible, Pennsylvania 

state courts follow the Third Circuit so that litigants do not 

improperly “walk across the street” to achieve a different 

result in federal court than would be obtained in state 

court.

NASDAQ OMX PHLX, Inc. v. PennMont Secs., 52 A.3d 296, 303 (Pa. 

Super. 2012) (citation omitted); accord Parr v. Ford Motor Co., 109 A.3d 

682, 693 n.8 (Pa. Super. 2014) (en banc), appeal denied, 46 EAL 2015 (Pa. 

May 27, 2015). 
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of a decree in equity is particularly limited and that such a 

decree will not be disturbed unless it is unsupported by the 

evidence or demonstrably capricious. The findings of the 

chancellor will not be reversed unless it appears the 

chancellor clearly abused the court’s discretion or 

committed an error of law. The test is not whether we 

would have reached the same result on the evidence 

presented, but whether the chancellor’s conclusion can 

reasonably be drawn from the evidence.

Mid Penn Bank v. Farhat, 74 A.3d 149, 153 (Pa. Super. 2013) (citation 

omitted).

Generally, PUFTA permits a creditor to void a transfer or obligation 

upon direct or indirect proof of fraud. See 12 Pa.C.S. §§ 5101-5110. 

Because direct proof of fraud is rarely available, Section 5104 identifies 

factors—“badges of fraud”—that a court may consider in ascertaining 

whether the debtor executed a voidable transfer:

§ 5104. Transfers fraudulent as to present and 

future creditors

(a) General rule.—A transfer made or obligation incurred 

by a debtor is fraudulent as to a creditor, whether the 

creditor’s claim arose before or after the transfer was 

made or the obligation was incurred, if the debtor made 

the transfer or incurred the obligation:

(1) with actual intent to hinder, delay or defraud any 

creditor of the debtor; or

(2) without receiving a reasonably equivalent value in 

exchange for the transfer or obligation, and the debtor:

(i) was engaged or was about to engage in a business 

or a transaction for which the remaining assets of the 

debtor were unreasonably small in relation to the 

business or transaction; or
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(ii) intended to incur, or believed or reasonably should 

have believed that the debtor would incur, debts 

beyond the debtor’s ability to pay as they became due.

(b) Certain factors.—In determining actual intent under 

subsection (a)(1), consideration may be given, among 

other factors, to whether:

(1) the transfer or obligation was to an insider;[8]

(2) the debtor retained possession or control of the 

property transferred after the transfer;

(3) the transfer or obligation was disclosed or 

concealed;

(4) before the transfer was made or obligation was 

incurred, the debtor had been sued or threatened with 

suit;

(5) the transfer was of substantially all the debtor’s 

assets;[9]

(6) the debtor absconded;

(7) the debtor removed or concealed assets;

(8) the value of the consideration received by the 

debtor was reasonably equivalent to the value of the 

asset transferred or the amount of the obligation 

incurred;

 

8

PUFTA did not define “insider” but asserted “‘insider’ should be interpreted 

in a common-sense way, consistent with Comments (5) and (6) to 12 

Pa.C.S. § 5104.” 12 Pa.C.S. § 5101 cmt. (12).

9

For example, “the distribution of a corporation’s assets, leaving it incapable 

of discharging its debts, is fraudulent in the eyes of the law.” Heaney v. 

Riddle, 343 Pa. 453, 458, 23 A.2d 456, 458 (1942).
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(9) the debtor was insolvent or became insolvent 

shortly after the transfer was made or the obligation 

was incurred;

(10) the transfer occurred shortly before or shortly after 

a substantial debt was incurred; and

(11) the debtor transferred the essential assets of the 

business to a lienor who transferred the assets to an 

insider of the debtor.

12 Pa.C.S. § 5104 (emphasis added). Courts review the factors 

qualitatively, and not quantitatively. See 12 Pa.C.S. § 5104 cmt. (5).10 The 

plain language of the statute also permits a court to find actual fraud even in 

the absence of any of the enumerated factors. In re C.F. Foods, L.P., 280 

B.R. 103, 109 (Bankr. E.D. Pa. 2002). 

As noted above, in ascertaining whether a transfer is voidable as to 

present and future creditors under Section 5104(a)(1), a court may consider 

whether “the value of the consideration received by the debtor was 

reasonably equivalent to the value of the asset transferred.” 12 Pa.C.S. § 

5104(b)(8). “Value” is defined at 12 Pa.C.S. § 5103 as follows:

§ 5103. Value

 

10 “Proof of the existence of any one or more of the factors enumerated in 

subsection (b) may be relevant evidence as to the debtor’s actual intent but 

does not create a presumption that the debtor has made a fraudulent 

transfer or incurred a fraudulent obligation.” 12 Pa.C.S. § 5104 cmt. (5); 

see also In re Arbogast., 466 B.R. 287, 313 (Bankr. W.D. Pa. 2012) 

(holding absence of fraudulent transfer despite satisfying six of eleven 

Section 5104 factors).
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(a) General rule.—Value is given for a transfer or an 

obligation if, in exchange for the transfer or obligation, 

property is transferred or an antecedent debt is secured or 

satisfied, but value does not include an unperformed 

promise made otherwise than in the ordinary course of the 

promisor’s business to furnish support to the debtor or 

another person.

12 Pa.C.S. § 5103(a).11 

The definition in subsection (a) is not exclusive. “Value” is 

to be determined in light of the purpose of this chapter to 

protect a debtor’s estate from being depleted to the 

prejudice of the debtor’s unsecured creditors. 

Consideration having no utility from a creditor's viewpoint 

does not satisfy the statutory definition.

12 Pa.C.S. § 5103 cmt. (2).

In Farhat, this Court examined whether the creditor established a 

fraudulent transfer based on the following facts:

Zene is the son of Saheira and Ismail Farhat. Zene is a 

sole proprietor of a business that builds houses . . . .

On June 15, 2007, Zene met with [Mid Penn Bank’s] 

loan officer . . . who advanced a $165,000.00 unsecured 

line of credit to Zene (hereinafter “loan”).

On August 3, 2007, Saheira transferred Lot 19 of the 

Preliminary/Final Subdivision Plan of Pheasant Hill Phase I, 

Wayne Township, Dauphin County, Pennsylvania 

(hereinafter “the property”) to Zene for $1.00. As a result, 

Zene became the record owner of the property from 

August 2007 through January 15, 2010. Construction of a 

house on the property started in December of 2007 and 

was completed in June of 2008.

 

11 The definition of “value” set forth at 12 Pa.C.S. § 5103(b) “does not apply 

to an action under 12 Pa.C.S. § 5104(a)(1) . . . .” 12 Pa.C.S. § 5103 cmt. 

(5).
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Meanwhile, Zene was paying timely interest payments 

on the loan he received in June of 2007. Near the end of 

2009, Dennis Sweigart (hereinafter “Mr. Sweigart”), a 

commercial loan officer for [Mid Penn Bank], contacted 

Zene. . . . Zene and Mr. Sweigart met on December 23, 

2009. Mr. Sweigart informed Zene that he needed to 

begin paying on the [principal] and suggested Zene use 

the property to secure the loan. Zene refused to provide 

security and stated he would continue to pay interest. 

Additionally, Zene testified he informed Mr. Sweigart the 

property belonged to his father. Mr. Sweigart informed 

Zene that if he did not provide collateral [Mid Penn Bank] 

would file judgment against him.

Thereafter, Terrence Michael Monteverde (hereinafter 

“Mr. Monteverde”), senior vice president and chief credit 

officer, contacted Zene to instruct that he either provide 

security for the loan or pay the loan in full, pursuant to the 

loan documents. Again, Zene refused to provide security 

for the loan. Zene ceased making payments on the loan 

after December 30, 2009.

By deed dated January 15, 2010, the property was 

transferred back to Saheira for $1.00. In May of 2010, 

Saheira sold the property for $275,000.00.

. . . Moreover, on January 29, 2010, Zene obtained a 

home equity loan in the amount of $50,000.00 secured by 

a mortgage on his personal residence.

Farhat, 74 A.3d at 151 (brackets and footnotes omitted).

Mid Penn Bank sued Zene and Saheira under PUFTA; the trial court 

entered judgment adverse to Mid Penn Bank. Id. at 152. The trial court 

identified the following facts establishing actual intent to defraud: Zene 

transferred the deed to his mother, an insider, see 12 Pa.C.S. § 5104(b)(1), 

the transfer occurred after a threatened lawsuit, see 12 Pa.C.S. § 

5104(b)(4), and the transfer occurred two weeks before Zene incurred a 
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substantial debt. See 12 Pa.C.S. § 5104(b)(10); Farhat, 74 A.3d at 154. 

The trial court, however, held that Mid Penn Bank failed to establish the 

factors set forth at Subsections (2), (5), (7), (8), and (9), reasoning that (i) 

Zene’s transfer of the deed was not intended to “to hinder, delay, or 

defraud” Mid Penn Bank, (ii) Zene “never controlled or had any financial 

stake in the property even during the period when he was the record owner 

of the land,” (iii) Zene, although buying the property for one dollar, Saheira 

financed the development and Zene did not profit from the later sale, and 

(iv) the sale did not make Zene insolvent as he was timely paying his bills 

and “had no effect on [his] financial position.” Farhat, 74 A.3d at 154-56.

The Superior Court disagreed with the trial court’s reasoning. Id. at 

154. The Farhat Court initially noted that the deed granted Zene “every 

legal and equitable interest that Saheira held” between August 3, 2007 

through January 15, 2010. Id. at 155. Moreover, the record established 

that during that timeframe, Zene identified the property as his asset. Id. 

Finally, the record established Zene’s debt to Mid Penn Bank greatly 

exceeded the equity interest he had in the property and, two weeks after 

transferring the deed, he borrowed $50,000 secured by a second mortgage 

on his home. Id. at 156. In sum, the Farhat Court held the record also 

established the badges of fraud set forth at Subsections (2), (5), (7), (8), 

and (9). The Superior Court thus held that the trial court erred as Zene, by 
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transferring the property, “intended to hinder, delay, or defraud [the 

a]ppellant’s efforts to collect a debt within the meaning of § 5104.” Id. 

Instantly, similar to the trial court in Farhat, the trial court also held 

Appellant established the elements of fraud at 12 Pa.C.S. § 5104(b)(4) and 

(10), which, respectively, are that the transfer was made after 340 

Associates was sued and the transfer occurred “shortly”12 before it incurred 

a substantial debt. The instant trial court also held Appellant demonstrated 

the indicia of fraud set forth at Subsection (5), “the transfer was of 

substantially all the debtor’s assets,” and Subsection (9), “the debtor was 

insolvent or became insolvent shortly after the transfer was made or the 

obligation was incurred.” See 12 Pa.C.S. § 5104(b)(5), (9).

We reject, however, the trial court’s determination that the value of 

the consideration received by 340 Associates was reasonably equivalent to 

the value of the liquor license transferred to 334 Kayla. See 12 Pa.C.S. § 

5104(b)(8). 334 Kayla, in fact, borrowed $75,000 from 340 Associates in 

order to buy the license and did not start repaying the loan until July 3, 

2012. See Trial Ct. Op., 5/28/14, at 3; Appellant’s Trial Ex. 1. Thus, 334 

Kayla did not transfer any property to 340 Associates in exchange for the 

license. See 12 Pa.C.S. § 5103(a). 334 Kayla did not secure or otherwise 

satisfy a preexisting debt in exchange for the license. See id. Because the 

 

12 The license was transferred eight months before the verdict was rendered.
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purpose of PUFTA is to protect 340 Associates’ estate from being depleted to 

the prejudice of its unsecured creditors, see 12 Pa.C.S. § 5103 cmt. (2), 

340 Associates’ only asset was the liquor license, and 340 Associates lent 

the purchase price of the license to 334 Kayla, we disagree with the trial 

court that the record established 334 Kayla transferred property or 

otherwise satisfied an antecedent debt. See 12 Pa.C.S. §§ 5103(a), 

5104(b)(8); Farhat, 74 A.3d at 154. To paraphrase our Supreme Court, the 

distribution of 340 Associates’ only asset—leaving it incapable of discharging 

its debts—in conjunction with the other badges of fraud found by the trial 

court, establishes fraud as a matter of law. See Heaney, 343 Pa. at 458, 

23 A.2d at 458; Farhat, 74 A.3d at 154-56. Having discerned an error of 

law, we vacate the judgment in favor of Appellees, reverse the order 

denying Appellant’s post-trial motion, remand with instructions to enter 

judgment in favor of Appellant, and remand for further proceedings to 

resolve which relief Appellant receives.13

Judgment vacated. Order denying post-trial motion reversed. Case 

remanded with instructions. Jurisdiction relinquished.

 

13 Because we have granted relief on Appellant’s first issue, we need not 

address her remaining issues. See Siegal v. Stefanyszyn, 718 A.2d 1274, 

1277 n.6 (Pa. Super. 1998). We note Appellant, in her complaint, requested 

alternative forms of relief: (1) a mandatory injunction compelling 334 Kayla 

to return the license to 340 Associates or (2) the court to order the public 

sale of the license, with proceeds paid to Appellant. See Appellant’s 

Amended Compl., 11/17/12, at 3 (unpaginated).
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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 10/5/2015