Court Opinion

ID: 4026139
Source: CourtListenerOpinion
Date Created: 2016-08-17 23:28:19.427068+00
Date Added: 2024-06-11T13:25:39.907490
License: Public Domain

J. A15013/16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

BERNIE ENTERPRISES, INC.,               :     IN THE SUPERIOR COURT OF
DONALD METZGER AND BAILEY &             :           PENNSYLVANIA
BILLERA ENTERPRISES, INC.               :
                                        :
                  v.                    :
                                        :
MICHEAL FOSTER, INDIVIDUALLY,           :
MICHEAL FOSTER, TRUSTEE, AND            :
HEYWOOD E. BECKER                       :           No. 55 EDA 2012
                                        :
APPEAL OF: MICHEAL FOSTER               :

                 Appeal from the Order, November 23, 2011,
               in the Court of Common Pleas of Lehigh County
                      Civil Division at No. 2006-C-0035

BEFORE: FORD ELLIOTT, P.J.E., DUBOW AND JENKINS, JJ.

MEMORANDUM BY FORD ELLIOTT, P.J.E.:                FILED AUGUST 17, 2016

     Micheal Foster appeals from the order of November 23, 2011, granting

plaintiffs/appellees’ motion to declare the November 1, 2010 settlement

agreement complete and directing the clerk of courts to mark the matter

settled, discontinued, and ended with prejudice. We affirm.

     The trial court has described the history of this matter as follows:

                  These attenuated matters proceeding under
           the above-captioned consolidated cases stem from
           disputes arising out of the disposition of proceeds
           and properties relating to real-estate purchase and
           investment schemes involving the parties. In the
           most general sense, the controversy concerns
           whether properties were purchased by Defendants
           individually on behalf of themselves or, conversely,
J. A15013/16

          on behalf of their employers or beneficiaries and held
          in trust therefor.

                After    protracted   proceedings,     including
          arguments over disqualification of counsel and
          various and sundry ancillary procedural wranglings
          and recriminations, the parties entered into a
          one-hundred-and-seventy-page               settlement
          agreement, which was adopted as an order of court
          entered on November 1, 2010. A dispute thereafter
          arose concerning compliance with the settlement
          terms, whereupon Plaintiffs, on March 17, 2011, filed
          a motion to enforce the settlement agreement,
          contending in pertinent part that Defendant Heywood
          Becker was obliged to convey his interests in a
          subject Delaware corporation, Hanoverian, Inc., as
          well as a Pennsylvania entity under a similar name.
          Defendants countered with a motion for sanctions,
          filed on April 15, 2011, arguing that Plaintiffs had
          failed to discharge their responsibilities under the
          settlement agreement in respect to, among other
          things, proper recordation of the deeds to the
          subject properties. Argument on both issues was
          scheduled on June 15, 2011, and, thereafter, on
          October 5, 2011, a rule setting a hearing date for
          October 25, 2011, was issued on the parties to show
          cause why a special master, identified by the Court,
          should not be appointed to implement the settlement
          agreement, with the parties to incur the expenses of
          the master’s services.

                At [the] hearing convened on October 25,
          2011, Plaintiffs indicated they were now satisfied
          that the settlement agreement had been fully
          implemented and their motion was thus rendered
          moot.       Defendants     were    represented    by
          Ronald Clever, Esq., who was also proceeding
          pro se. Mr. Clever did not offer any legal authority
          or substantive evidence at the hearing to
          demonstrate why a master should not be appointed
          nor did he offer any evidence in support of the
          motion for sanctions. Instead, in an attempt to exalt
          form over substance, he contended, incorrectly, that
          the sole matter before the Court consisted of

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            Plaintiffs’ March 17, 2011, motion.          (See N.T.,
            10/25/2011, at 5-6, 9-10.)          Counsel refused to
            accede to the appointment of a master to address
            the convoluted morass presented by his motion for
            sanctions for alleged non-compliance with the
            170-page settlement agreement. Accordingly, on
            the basis of the evidence presented at [the] hearing,
            the Court invited Plaintiffs to file a motion to declare
            the settlement agreement resolved. (See id. at 11.)
            On October 28, 2011, Plaintiffs filed such a motion.
            After receiving Defendants’ response thereto on
            November 17, 2011, the Court on November 23,
            2011, entered an order declaring the settlement
            agreement resolved and directing the clerk of judicial
            records to mark the matter settled, discontinued,
            and ended with prejudice.

Trial court opinion, 2/17/12 at 2-3. This timely appeal followed. Appellant

complied with Pa.R.A.P. 1925(b), and the trial court has filed an opinion.

      Appellant has raised the following issues for this court’s review:

            A.    When the court (sua sponte) has summoned
                  the lawyers into court, to “show cause” why a
                  “special master” should not be appointed to
                  “implemen[t] the settlement agreement,” is it
                  error for the court – instead – to expect a
                  party to be prepared (then and there) to
                  litigate his motion (and it is [sic] error to
                  deem the motion “waived”)?

            B.    When     the   “settlement    agreement”    has
                  obligations that continue into the future, and
                  when there is a pending motion pointing out
                  fraud by one of the parties and breach of those
                  obligations, is it error to close the case
                  (especially “with prejudice”) (and especially
                  when the order to close the case arises
                  out of the kind of “waiver” addressed in
                  Argument Section “A” above)?

            C.    When deeds have already           been    signed,
                  notarized, and delivered,

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                          . . . and when this was done, pursuant to
                          a consent order,

                          . . . and when this was done, pursuant to
                          a stipulation (in which each and every
                          page of the deeds-to-be-signed had
                          been initialed in advance by counsel
                          for both parties),

                       . . . is it proper for the grantee/plaintiff to add
                       extra pages – (pages designed to show the
                       grantor      making     representations)     (pages
                       designed to fraudulently avoid real estate
                       transfer taxes)?

Appellant’s    brief     at   4   (brackets   in   original;   emphasis    in    original;

capitalization deleted).

      At a hearing on April 15, 2011, appellant voiced his concerns that

appellees were making changes to the deeds before filing.                       (Notes of

testimony, 4/15/11 at 2-3, 17.)           Counsel for appellee Bernie Enterprises,

Inc., Craig T. Edwards, Esq., explained that some of the deeds were not

accepted because appellant was not listed as the trustee.                 (Id. at 4-5.)

Therefore, Attorney Edwards inserted the word “trustee” in some of the

deeds. (Id. at 7.) Attorney Edwards also had to correct a deed that listed

the wrong parcel number.            (Id. at 10.)      According to Attorney Clever,

however, Attorney Edwards had made material and substantial changes to

the deeds before filing, including inserting trust agreements into them. (Id.

at 17.)       The trial court expressed its impatience with the delay in

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implementing the settlement agreement, and set a new hearing date of

June 15, 2011:

             THE COURT: You guys come back on June 15th, and
             you bring all the corrected deeds that you need to
             have signed in recordable form. And you bring your
             clients, and you guys are going to sit in this
             courtroom, and you are going to execute all of those
             documents, whatever it takes to get them done
             properly.   I am not interested in anymore [sic]
             motions.    I’m really not.    I am interested in
             implementing an agreement that all of the parties
             agreed to in open Court under oath.

Id. at 14-15.

             I have got the date of June 15th on my calendar. We
             are going to keep the date. You guys get this thing
             resolved between now and then. To the extent that
             you don’t, you come on back on June the 15th, and I
             will decide whatever I have to decide, but I am
             telling you right up front, I have no patience for this,
             I really don’t. And I am going to start imposing
             sanctions, including attorney’s fees, if there are
             attorneys,     and/or    other     kinds    of   fines;
             reimbursements, to implement what you all agreed
             to. Now go back and read the agreement, figure out
             what you have got to do under the agreement, and
             go ahead and do it.

Id. at 18.

      On June 15, 2011, appellant again claimed that appellees had altered

the deeds and inserted pages prior to recording them. (Notes of testimony,

6/15/11 at 23-27.) Attorney Edwards explained that he was required to file

a trust agreement with the deeds and that appellees will pay any real estate

transfer taxes due on the properties.      (Id. at 39-41.)   He noted that the

settlement agreement contained an indemnification clause.           (Id. at 39.)

                                      -5-
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Attorney Edwards denied that there were any substantive changes made to

the deeds, except one in Bucks County which had the wrong parcel number.

(Id. at 42-43.)

     The trial court proposed appointing a special master, knowledgeable in

real estate matters, to examine the deeds and recommend to the court

whether any other filings needed to be made in order to comply with the

parties’ settlement agreement. (Id. at 48.) The trial court observed that

the case had settled 1½ years prior and expressed its frustration with the

parties’ inability to execute the terms of the settlement agreement:

           If you think that I am going to sit here -- that I have
           the time to sit here, and to go through every one of
           those deeds, and to see whether they are in
           “substantial compliance” with what was part of the
           settlement agreement, I am not going to do that. I
           don’t have that kind of time.

Id. at 47. “And it astounds me how this case hasn’t been settled. And here

we are almost what, a year-and-a-half, two years, past the settlement date,

and we are still arguing about things -- about whether there was compliance

with the terms of the settlement agreement.” (Id.)

           Frankly, I have no confidence in the litigants doing
           any of this themselves, because you don’t have any
           confidence in the other party doing it. We will be
           right back here again. I am astounded as to -- I will
           put it as charitably as possible -- the ineptitude that
           has really marked this case, and almost everything
           that has been done here, astounded by it. How
           difficult should this have been?

Id. at 48-49.

                                    -6-
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      The trial court proposed that each side come up with an advance

deposit of $10,000 to pay for a special master:

              So I have a pot of $20,000 to pay for the Master’s
              time, to go over all of these things, to have the
              master re-draw the documents if anything has to be
              re-drawn, to have the master go ahead and file it, to
              have the master get a certified copy of it, and to get
              the master to get the receipt, and to provide it to
              everybody. Anything short of that, I don’t think is
              going to work.

Id. at 48.    Counsel for both sides agreed to the appointment of a special

master.      (Id. at 53-55.)    Although co-counsel for appellant, Kevin T.

Fogerty, Esq., balked at the $10,000 deposit, he agreed to appointment of a

special master:

              MR. FOGERTY: Judge, I am fine -- I don’t know
              about the $10,000. That’s a little bit steep.

              THE COURT: Someone is going to have to pay.

              MR. FOGERTY: And I agree, and the only request I
              would make, is that the master should have the
              power to determine who was at fault for what
              happened --

              THE COURT: I have no problem with that.

              MR. FOGERTY: -- and there should be a shifting of
              that fee responsibility.

              THE COURT: That may be, but someone is going to
              advance the money.

Id. at 53.

      Similarly, although he disputed that there were any material changes

made to the deeds, Attorney Edwards agreed to appointment of a special

                                      -7-
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master:   “They are not substantive changes.       But if the master needs to

decide that, I am okay with that.” (Id. at 55.) On October 5, 2011, the trial

court issued a rule to show cause why Edward P. Sheetz, Esq., should not be

appointed special master for purposes of implementing the settlement

agreement reached between the parties, returnable October 25, 2011.

      The parties appeared before the court on October 25, 2011. The trial

court expressed confidence that Attorney Sheetz, an experienced real estate

lawyer and counsel to a title company, would be able to “tie it up and get it

resolved.” (Notes of testimony, 10/25/11 at 3-4.) The trial court remarked,

“And as I indicated back in June, I thought given the complexity of the

issues that have to be addressed, and the numbers of deeds, and the history

between the litigants and/or the attorneys, that you needed some outside

help in order to consummate your settlement.” (Id. at 3.) “I don’t know

what else to do. I am open to suggestions, but this case can’t linger on like

this. And so it’s got to be dealt with.” (Id. at 4.)

      At that time, Attorney Clever suggested that the plaintiffs’ motion to

enforce the settlement was moot, as Mr. Becker had assigned his interest in

Hanoverian, Inc., a Delaware Corporation. (Notes of testimony, 10/25/11 at

5.)   Although Attorney Clever continued to insist that the recorded deeds

were not acceptable, he stated that appellant’s motion for sanctions, filed

April 15, 2011, was not before the court.        (Id. at 6, 9.)   According to

                                      -8-
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Attorney Clever, the rule returnable only related to plaintiffs’ motion to

enforce the settlement. (Id. at 9.)

     Patrick J. Reilly, Esq., counsel for appellee Donald Metzger, stated, “I

thought we were here because the Plaintiffs [sic] weren’t satisfied with

deeds that were filed.   I agree that the Hanoverian, Inc., issue is not an

issue.” (Id. at 6.) Attorney Edwards indicated his continuing willingness to

put the issue before a special master:      “That’s why we were going to the

Master, as I understood.      And I am here today, to say we are perfectly

happy to go to a Master; show every deed that we filed, that we did them

appropriately and properly.    And we are prepared to do so, Your Honor.”

(Id. at 7-8.) Attorney Clever, however, argued that sanctions are squarely

a matter for the court, not a special master. (Id. at 10.) Attorney Clever

objected to appointment of a special master. (Id.) At that point, the trial

court indicated that it would entertain a written motion to declare the matter

resolved and discontinue the case with prejudice. (Id. at 11.)

     Appellant cites no authority for the proposition that a special master

could not be appointed to help decide the issue; and, in fact, at the hearing

of June 15, 2011, appellant agreed to appointment of a special master. See

In re Thirty-Fifth Statewide Investigating Grand Jury, 112 A.3d 624,

633-634 (Pa. 2015) (Baer, J., concurring) (“When a court seeks to engage in

fact-finding, it employs a special master. . . .    The function of a special

master is to gather necessary factual information, consider pertinent legal

                                      -9-
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questions, and provide the court with recommendations.         Special masters

operate as an arm of the court, investigating facts on behalf of the court and

communicating with it to keep it apprised of its findings. . . .”) (footnote

omitted); In re City of Pittsburgh, 600 A.2d 630, 632 (Pa.Cmwlth. 1991)

(holding that “[c]ourts historically possess the inherent authority to appoint

masters to assist them in performing their various functions”). It was made

abundantly clear at the hearing of June 15, 2011, that the trial court

intended to address the allegations regarding appellees’ alteration of the

deeds by appointing a special master. Despite agreeing on the record to this

course of action, counsel for appellant appeared at the October 25, 2011

hearing and objected to appointment of a special master. Nor was appellant

prepared to move forward on his motion for sanctions, filed April 15, 2011.

As the trial court states,

            As a review of the transcript of the October 25, 2011
            hearing suggests, the Court and Plaintiffs were well
            aware that the purpose of the hearing was to
            address the need for, and the issues giving rise to,
            an appointment of a master to address any
            remaining dispute over compliance with the
            settlement agreement. Counsel’s unwillingness to
            address those matters on the merits and failure to
            present any evidence in support of claims of
            non-compliance was thus deemed a waiver and the
            issues related to non-compliance with the settlement
            agreement by either Plaintiffs or Defendants were
            thus held to be resolved on the strength of the
            superior credibility of Plaintiffs as represented at the
            hearing on October 25, 2011.                (See N.T.,
            10/25/2011, at 6-7 (representations as to steps
            Plaintiffs undertook in compliance with settlement
            agreement).)

                                     - 10 -
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Trial court opinion, 2/17/12 at 4.           It is axiomatic that credibility

determinations cannot be disturbed on appeal. Furthermore, as the above

quotations from the hearings in this matter illustrate, the trial court was

justifiably losing its patience with the parties’ inability to comply with the

terms of the settlement agreement.      The trial court eventually proposed

appointment of a special master to examine the deeds to determine whether

they complied with the settlement agreement, to which both sides agreed.

Then, inexplicably, Attorney Clever objected to appointment of a special

master at the October 25, 2011 hearing and insisted that his motion for

sanctions was not properly before the court. Under these circumstances, we

cannot find the trial court erred in declaring the settlement agreement

resolved and ordering the matter settled, discontinued, and ended with

prejudice.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/17/2016

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