Court Opinion

ID: 4113245
Source: CourtListenerOpinion
Date Created: 2017-01-04 21:12:43.596957+00
Date Added: 2024-06-11T07:45:54.689306
License: Public Domain

J-A21002-16

                              2017 PA Super 3

EUGENE P. LEONI, JR.,                           IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                        Appellee

                  v.

GREGORY T. LEONI (AS THE EXECUTOR
OF THE ESTATE OF EUGENE LEONI, SR.)
AND MARIAN LEONI,

                        Appellant                  No. 3827 EDA 2015

            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

EUGENE P. LEONI, JR.,                           IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                        Appellee

                  v.

GREGORY T. LEONI (AS THE EXECUTOR
OF THE ESTATE OF EUGENE LEONI, SR.)
AND MARIAN LEONI,

                        Appellant                  No. 3828 EDA 2015

            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 BY BENDER, P.J.E.:                       FILED JANUARY 04, 2017
J-A21002-16

       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.
____________________________________________

1
 By per curiam order entered on February 4, 2016, this Court consolidated
sua sponte the appeals at Nos. 3827 EDA 2015 and 3828 EDA 2015.

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           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

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     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

                                    -4-
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     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
        Abstract be disbursed to [Appellee].

                                    -5-
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      2. Whether [the trial court] committed an abuse of discretion or
         error of law in directing that the funds in escrow at City Line
         Abstract be disbursed to [Appellee] when the liens of the
         judgments of Eugene P. Leoni, Jr. had been discharged
         pursuant to Pa.R.A.P. 1735.

      3. Whether [the trial court] committed an abuse of discretion or
         error of law in directing that the funds in escrow at City Line
         Abstract be disbursed to [Appellee] when the liens of the
         judgments in favor [of] Eugene P. Leoni, Jr. were subordinate
         to the liens of the judgments in favor of Gregory T. Leoni and
         Nanette Leoni.

      4. Whether [the trial court] committed an abuse of discretion or
         error of law in finding that the supersedeas had no effect on
         the priority or validity of the liens of [Appellee’s] judgments,
         citing Shearer v. Naftzinger, 747 A.2d 859 (Pa. 2000).

Appellants’ Brief at 4.

      It is well-settled that our review of the trial court’s decision after a

non-jury trial is “limited to a determination of whether the findings of the

trial court are supported by competent evidence and whether the trial court

committed error in the application of law.” Shaffer v. O’Toole, 964 A.2d

420, 422 (Pa. Super. 2009).

      Findings of the trial judge in a non-jury case must be given the
      same weight and effect on appeal as a verdict of a jury and will
      not be disturbed on appeal absent error of law or abuse of
      discretion. When this Court reviews the findings of the trial
      judge, the evidence is viewed in the light most favorable to the
      victorious party below and all evidence and proper inferences
      favorable to that party must be taken as true and all unfavorable
      inferences rejected.

      The trial court’s findings are especially binding on appeal, where
      they are based upon the credibility of the witnesses, unless it
      appears that the court abused its discretion or that the court’s
      findings lack evidentiary support or that the court capriciously
      disbelieved the evidence. Conclusions of law, however, are not
      binding on an appellate court, whose duty it is to determine
      whether there was a proper application of law to fact by the

                                     -6-
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        lower court. With regard to such matters, our scope of review is
        plenary as it is with any review of questions of law.

Id. at 422-423 (internal quotation marks and citations omitted).

        All of the issues raised by Appellants hinge on the resolution of their

final claim. Thus, we begin by addressing whether the supersedeas posted

by Appellants on November 17, 2010, had any effect on the priority or

validity of Appellee’s judgment liens.      As discussed supra, the trial court

entered orders on December 7, 2015, granting Appellee’s motions to compel

the distribution of escrow to satisfy, in part, the Eugene Judgments.      The

trial court’s order was based on its conclusion that the supersedeas did not

have any effect on the Eugene Judgment liens and that the liens maintained

their original priority.   Appellants argue, however, that the filing of the

supersedeas bond caused the Eugene Judgment liens to be discharged from

the real estate, which in turn elevated the priority of the revived judgment

liens of Gregory and Nanette.     Accordingly, Appellants argue that Gregory

and Nanette, rather than Appellee, are entitled to the escrow proceeds.

After careful consideration, we are in agreement with Appellants.

        Pennsylvania Rule of Appellate Procedure 1731 provides, in relevant

part:

        [A]n appeal from an order involving solely the payment of
        money shall, unless otherwise ordered pursuant to this chapter,
        operate as a supersedeas upon the filing with the clerk of the
        lower court of appropriate security in the amount of 120% of the
        amount found due by the lower court and remaining unpaid.

Pa.R.A.P. 1731(a) (emphasis added). In the instant case, Appellants posted

irrevocable standby letters of credit totaling $708,000 as security for the

                                      -7-
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amount owed to Appellee pending their appeal of the May 4, 2010 orders

reviving the Eugene Judgments.2 The total amount of the letters of credit

represented 120% of the Eugene Judgments’ total principal, in accordance

with Rule 1731. The trial court confirmed that the security posted “operated

as an automatic supersedeas and stay pending [Appellants’] appeal[s].”

Trial Court Order, 11/23/10, at 1.

       The effect of supersedeas is governed by Pennsylvania Rule of

Appellate Procedure 1735, which provides as follows:

       Rule 1735.        Effect    of    Supersedeas   on   Execution    or
       Distribution

       (a)    General rule. The filing of appropriate security in the
              amount required by or pursuant to this chapter within 30
              days from the entry of the order appealed from shall stay
              any execution theretofore entered. The filing of such
              appropriate security after the 30 day period shall stay only
              executions or distributions thereafter issued or ordered.

       (b)    Notation in judgment index.             Upon the filing of
              appropriate security in the amount required by or pursuant
              to this chapter the clerk of the lower court shall note in the
              docket and in any separate judgment index: “appeal
              perfected; lien discharged.” Upon return of the record by
              the appellate court to the lower court, in a matter where
              the order appealed from was affirmed in whole or in part,
              the clerk of the lower court shall thereupon enter an order,
____________________________________________

2
 In accordance with Pa.R.A.P. 1734, “irrevocable letters of credit issued by a
Federally-insured bank, bank and trust company, savings bank, savings
association, banking association or saving and loan association having an
office within this Commonwealth” constitute “appropriate security” for the
purposes of determining a supersedeas bond under Chapter 17 of the Rules
of Appellate Procedure. Pa.R.A.P. 1734(a)(2)(iii).

                                           -8-
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            as of the date of receipt of the remanded record, against
            the appellant for the amount due upon the order as
            affirmed, with interest and costs as provided by law.

Pa.R.A.P. 1735 (emphasis added).

      The trial court erroneously concluded that Rule 1735 does not apply to

this matter and, therefore, Appellee’s liens were not discharged upon the

filing of the supersedeas. TCO at 7. The court elaborated:

      Pa.R.A.P. 1735 applies only to execution liens and disbursement.
      This is evidenced by the title “Effect of Supersedeas on Execution
      or Distribution.” An execution lien is created by the sheriff’s levy
      and authorizes a sheriff or other officer to enforce a money
      judgment usually by means of seizing and selling the judgment
      debtor’s property. Shearer v. Naftzinger, 747 A.2d 859, 860
      (Pa. 2000). A writ of revival of a judgment lien preserves a
      judgment creditor’s existing rights and priorities. Id. at 861.

TCO at 7. These puzzling remarks by the trial court seem to imply that Rule

1735 only applies to execution liens and sheriff’s sales of personal property.

However, Chapter 17 of the Rules of Appellate Procedure governs the effect

of   appeals, in general – not only appeals from sheriff’s execution liens -

and the subchapter of Chapter 17 which consists of Rules 1731 to 1735

“prescribes the procedures to obtain specific forms of ancillary relief pending

appeal in civil matters on appeal….” 20A West’s Pa.Prac., Appellate Practice

§ 1701:1.    Moreover, the use of the word “or” in the title of Rule 1735

clearly reflects the applicability of this Rule to distributions, i.e., of escrow

funds, as well as executions.    We find no basis, whatsoever, for the trial

court’s conclusion that Rule 1735 applies only to execution liens created by a

                                      -9-
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sheriff’s levy.3 To the contrary, we conclude that Rule 1735 clearly applies

to the instant case and, thus, we must next examine the implications of this

Rule in the matter before us.          Specifically, it is the interpretation of Rule

1735(b) that is the crux of the dispute in this matter.

       The language in Rule 1735(b) plainly and unambiguously directs the

clerk of court to make the following notation in the docket and in any

separate judgment index, upon the filing of appropriate security in the

amount required under Chapter 17:              “Appeal perfected; lien discharged.”

Pa.R.A.P. 1735(b) (emphasis added).            The parties are at odds over whether

the notation of “appeal perfected; lien discharged” in the judgment index

results in a discharge of a judgment lien on real property.        Appellants argue

that under the plain language of Rule 1735, the judgment lien is discharged

upon receipt of appropriate security and the notation in the judgment index,

thus causing the lien to be lifted from the affected real property. However,

Appellee contends that Rule 1735 is only procedural in nature and that it

does not have any substantive effect on his judgment liens. Appellee’s Brief
____________________________________________

3
  The trial court’s citation to Shearer, 747 A.2d at 860, regarding the
creation of an execution lien by a sheriff’s levy and the enforcement of such
a lien by means of seizing and selling the judgment debtor’s property is
misplaced. The sole issue in Shearer was whether the statute of limitations
under 42 Pa.C.S. § 5529(a), which provides that an execution against
personal property must be issued within 20 years after the entry of the
judgment upon which the execution is to be issued, can be used as a
defense in a proceeding to revive a judgment lien. Id. Shearer does not
involve a supersedeas or the effect of supersedeas on liens against real
property and has no relevance to the present case.

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at 8. More specifically, Appellee argues that the body of Rule 1735 “does

not   state   that     judgment   liens    are     discharged   upon   the   entry   of

supersedeas.”        Id. at 9.    Rather, Appellee states, “[t]he reference to

notating ‘lien discharged’ in the judgment index only applies to ‘execution

liens’ created by the sheriff’s levy and attachment and there is no reference

to judgment liens.” Id.

      Again, we reject the contention that Rule 1735 only applies to

‘execution    liens’    and   deem   Appellee’s       argument    to   be    meritless.

Pennsylvania Rule of Civil Procedure 3023 provides, in relevant part: “[A]

judgment when entered in the judgment index shall create a lien on real

property located in the county, title to which at the time of entry is recorded

in the name of the person against whom the judgment is entered.”

Pa.R.C.P. 3023(a). We have previously explained:

      [T]he plain language of [Rule 3023] restricts the lien priority of
      all judgments, as well as verdicts and orders, such that they
      may not assume lien status until entered in the judgment index.
      Moreover, no lien is created unless the corresponding judgment
      is indexed while title to the property against which the lien would
      lie remains in the parties against whom the judgment is entered.
      Our Supreme Court’s suspension of statutory provisions that
      alter that scheme demonstrates conclusively the continuing
      mandate that all judgments, whatever the means of their
      creation, assume lien status and priority only from the date and
      time of their entry in the judgment index. Thus, as concerns
      title to real property, the time-honored rule in Pennsylvania
      remains: “It is undoubtedly a general rule that a purchaser is
      not bound to look for judgments beyond the judgment index,
      and if his search discloses the existence of no liens entered
      there, he may properly assume that no such lien exists.” First
      Nat. Bank of Spring Mills v. Walker, 296 Pa. 192, 145 A. 804,
      805 (1929).

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Shipley Fuels Marketing, LLC v. Medrow, 37 A.3d 1215, 1219 (Pa.

Super. 2012) (emphasis added in Shipley Fuels Marketing, LLC) (internal

citations omitted). Accordingly, the instruction to the clerk of court set forth

in Rule 1735(b), to make a notation in the judgment index, is of utmost

importance because the notation places the public on notice that the lien has

been discharged. If we were to affirm the trial court’s interpretation that the

notation in the judgment index has no legal effect on the status or priority of

Appellee’s liens, we would be contradicting the time-honored rule in

Pennsylvania that a purchaser is not bound to look for judgment beyond the

judgment index. Id. at 1219.

      Here, the record reveals that the clerk of the Montgomery County

Court properly noted “Appeal Perfected/Lien Discharged” in the judgment

index regarding Appellee’s judgments against Eugene P. Leoni, Sr., Gregory

Leoni, and Marian Leoni, in accordance with Rule 1735(b). Thus, it would

appear to any potential purchasers or lienholders that Appellants’ real

property was unencumbered by the Eugene Judgment liens. It is only fair to

conclude that Appellee’s judgment liens were, in fact, discharged upon the

filing of the supersedeas and subsequent notation in the Montgomery County

judgment index. Hence, when Gregory and Nanette’s liens were revived on

May 21, 2012, their judgment liens took priority over the Eugene

Judgments.    See PA Practice, Appellate Practice § 1725:2 (stating “[t]he

requirement that the clerk enter an order against the appellant for the

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amount due is critical because it, in effect, reinstates the lien of the original

judgment and, thus, could affect priority among lien holders”).

       Being that there is no Pennsylvania case law on point, we look to the

legislative history of Rule 1735(b) for further clarification of the legislature’s

intent.4 Prior to the enactment of Pa.R.A.P. 1735, the effect of supersedeas

was controlled by statute, 12 P.S. § 1139 (Public Law 103 of April 22, 1909;

Section 1). See TCO at 7. The original Act (“Act 61”), which was codified

by 12 P.S. § 1139, provides in its entirety, as follows:

                                         No. 61.

                                         AN ACT

          Relating to the entry of bail upon an appeal to the supreme
          or superior court, from an order, judgment, or decree
          directing the payment of money, and the release of the
          appellant’s real estate from the lien of said
          judgment, order, or decree pending the appeal and
          re-entry of judgment, if judgement be affirmed.

       Section 1. Be it enacted, … That hereafter it shall be lawful for
       any one against whom an order, judgment, or decree directing
       the payment of money shall have been made by any court of
       record of this Commonwealth, upon taking or entering an appeal
       to the superior court or the supreme court of this
____________________________________________

4
  We also find persuasive case law of other states with similar rules of
appellate procedure regarding the effect of supersedeas on judgment liens.
See Diversified Holdings, L.C. v. Turner, 63 P.3d 686, 705, 2002 UT 129
(2002) (holding that “a supersedeas bond determined to be sufficient in
form and amount by the trial judge may serve as [security] sufficient to
release a judgment lien” on real estate); See also Davis v. Perry, 120 Cal.
App. 670, 673 (1932) (stating “[t]he lien of the judgment and the lien of the
attachment on real property are both terminated by the filing of a
supersedeas bond”).

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     Commonwealth, to enter bail in the court below in double the
     amount of such order, judgment, or decree, with security to be
     approved by the said court, conditioned for the payment of the
     amount finally adjudged to be due upon such order, judgment,
     or decree, including interest and costs; or that the appellant in
     such cases may, in lieu of entering such bail, deposit with the
     prothonotary of the said court below, in cash, such amount as
     the said court shall, upon petition, deem to be sufficient to
     insure the payment of the amount finally adjudged to be due and
     owing upon said order, judgment, or decree; and, in either case,
     upon the entry of said bail or the deposit of money, as
     aforesaid, and upon the said appeal being perfected, the
     said judgment and the verdict, when such judgment has
     been entered on a verdict, order, or decree, shall cease to
     be a lien against the real estate of the appellant; and the
     prothonotary or clerk of the said court shall thereupon
     mark upon the docket and upon the margin of the
     judgment index, “appeal perfected; lien discharged:”
     Provided, however, That upon the return of the record of
     such judgment, order, or decree to the said court below, with a
     remittitur certifying the said judgment, order, or decree to have
     been affirmed in whole or in part, the prothonotary shall
     thereupon enter judgment, as of that date, against the
     appellant for the amount due upon the said judgment, order, or
     decree as affirmed, with interest and costs as provided by law.

P.L. 103, No. 61 (12 P.S. § 1139) (emphasis added).

     The plain language of Act 61 clearly indicates that the Act applied to

appeals from judgments or orders directing the payment of money, as in the

present case. We note that the preface to Act 61 expressly states the Act

related to the release of appellant’s real estate from the lien of said

judgment or order, pending the appeal and re-entry of the judgment if the

judgment was affirmed.    Id.   Moreover, the body of Act 61 clearly and

unambiguously dictates that upon receipt of appropriate security, the

judgment “shall cease to be a lien against the real estate of the appellant;

and the prothonotary or clerk of the said court shall thereupon mark upon

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the docket and upon the margin of the judgment index, “appeal perfected;

lien discharged.”        Id. (emphasis added). As further evidence of the

legislature’s intent for the judgment lien to cease to exist against the

appellant’s real estate upon the entry of the notation in the judgment index,

the Act further directs the prothonotary to re-enter judgment, as of the date

the record is returned to the lower court, against the appellant for the

amount due upon said judgment if affirmed on appeal. Id.

       Pa.R.A.P. 1735 was adopted on November 5, 1975, and made effective

on July 1, 1976. It was accompanied at the time with an Official Note that

read, in its entirety, as follows:

       Note: Subdivision (a) of this rule changes former practice under
       the Act of May 19, 1897 (P.L. 67, No. 53), § 4 which provided a
       three week period for superseding execution. Subdivision (b)
       of this rule is based on the Act of April 22, 1909 (P.L. 103,
       No. 61) (12 P.S. § 1139), which is suspended absolutely
       by these rules, and makes no change in substance.

Pa.R.A.P. 1735, Official Note (emphasis added).5

       The trial court opined that the omission of the language “shall cease to

be a lien against the real estate of the appellant” from Act 61 with the

adoption of Rule 1735, in conjunction with the deletion of the Official Note in

1978, indicates that the effect of supersedeas no longer applies to liens on

real property.     Based on our foregoing analysis, we deem the trial court’s

____________________________________________

5
 The Appellate Rules Committee deleted the Official Note by amendment to
Pa.R.A.P. 1735 on December 11, 1978.

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interpretation to be an error of law. Moreover, the trial court’s citation to

Deremer v. Workmen’s Comp. Appeal Bd., 433 A.2d 926 (Pa. Cmwlth.

1981), in support of its conclusion is misapplied.       See TCO at 8.           The

Deremer Court held that “[t]he deletion of statutory language by the

legislature   renders   the   language   inoperative   and   indicates    that   the

legislature has admitted a different intent.”     Demerer, 433 A.2d at 928.

Here, the language of Rule 1735 was never changed or deleted. Only the

Official Note accompanying the Rule was omitted.

      While the language of Rule 1735 differs slightly from the language of

Act 61, the Appellate Rules Committee expressly stated in its Official Note

that the Rule “makes no change in substance” to the Act.                 Thus, it is

abundantly clear that Rule 1735 was intended to maintain the same effect.

The mere deletion of the Note after several years had no effect on the

substance of the Rule.        We agree with Appellants that the Note was

eventually dropped because it had merely become superfluous to the Rule,

which, to date, has never been amended.

      Based on our foregoing analysis, we must reject the trial court’s

assertion that it would be “illogical and inequitable if [Appellee] lost priority

in [his] judgment lien due to [Appellants’] appeal of the writ of revival to the

Superior Court, particularly when the bond posted is not sufficient to cover

the total amount of the judgment including interest.”        TCO at 8.       To the

contrary, we find the only logical and equitable conclusion to be that

Appellee’s judgment liens were, in fact, discharged by the filing of the

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supersedeas, which resulted here in the loss of priority in Appellee’s

judgment liens.   The supersedeas was deemed by the trial court to be

“appropriate security,” and the purpose of requiring 120% bond is to

account for interest and costs incurred during the appeal to protect the

appellee’s interests. Moreover, “a court may enter judgment in the amount

of an appeal bond if appellant is not successful on appeal.” Burrell Const.

& Supply v. Straub, 656 A.2d 529, 533 (Pa. Super. 1995).

      Significantly, the Pennsylvania Rules of Appellate Procedure provide

the following means to object, in the event that a party disagrees with the

amount of the supersedeas posted:

      Rule 1737. Objections to Security

      (a)   The lower court or the appellate court, may at any time
            upon application of any party and after notice and
            opportunity for hearing:

                                      …

            (4)   increase, decrease, eliminate, or otherwise alter the
                  amount or type of any security that has been or is to
                  be filed by a party, upon cause shown for
                  modification.

Pa.R.A.P. 1737(a)(4) (emphasis added).       Accordingly, if Appellee believed

the standard 120% supersedeas amount required under Rule 1731 was

insufficient to protect his interests, then he could have petitioned the court

for an increase in the amount of security. However, Appellee failed to do so.

He should not now be permitted to benefit from his failure to implement the

appropriate means provided him under the Pennsylvania Rules of Appellate

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Procedure to seek additional security at the time the supersedeas was

posted.

       It was not until August of 2013, almost three years after the initial

appeals were filed, that Appellee petitioned the court to assess interest on

his judgments from January 25, 1989.               The trial court issued an order on

September 10, 2013, assessing interest owed on the Eugene Judgments in

the amount of $849,000.           Although this amount was not included in the

calculation of the supersedeas, Appellee remains adequately protected by

the judgment obtained for the additional interest owed to him.6

       Finally, we are unconvinced by the trial court’s proclamation that “[i]f

this court found the supersedeas discharged [Appellee’s] liens[,] thereby

eliminating [Appellee’s] priority, it would encourage other litigants to

strategically appeal revival of judgments for the purpose of changing lien

proprieties [sic].”     TCO at 8-9.       The requirement of appropriate security

protects against this very scenario, as appellants run the risk of losing the

supersedeas bond in the event they are unsuccessful on appeal.

       As the trial court stated, “[t]he purpose of a supersedeas bond is to

maintain the status quo and protect the winning party from injury during the

appeal period.     Such a bond protects an appellee because it guarantee[s]

____________________________________________

6
  The Montgomery County judgment index reflects judgments in favor of
Appellee and against Appellants in the amount of $849,000, as of September
19, 2013.

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that his judgment, if it is affirmed, will be paid in full, with interest and court

costs.”   TCO at 9 (quoting Parkinson v. Lowe, 760 A.2d 65, 67-68 (Pa.

Super. 2000) (internal citations omitted)). Here, the supersedeas acted as

security for the amount of Appellee’s judgments, plus appropriate costs and

interest. It would be illogical to conclude that Appellee maintained his liens

against Appellants’ real property during the pending appeal, as this would

unnecessarily further encumber Appellants’ assets and would result in

Appellee’s being doubly protected. In sum, we conclude that the trial court

erred in directing the escrow funds to be disbursed to Appellee.

      Orders reversed. Case remanded for entry of orders consistent with

this opinion. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/4/2017

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