Court Opinion

ID: 4686628
Source: CourtListenerOpinion
Date Created: 2021-05-13 17:18:58.014492+00
Date Added: 2024-06-11T08:04:34.814643
License: Public Domain

J-A04008-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    KITE INVESTMENT GROUP, LLC                      IN THE SUPERIOR COURT
                                                       OF PENNSYLVANIA
                             Appellant

                        v.

    ELYSSE R. TEICHMAN

                             Appellee                  No. 1460 EDA 2020

                  Appeal from the Order Entered July 17, 2020
                 In the Court of Common Pleas of Lehigh County
                      Civil Division at No.: No. 2020-C-0942

BEFORE: STABILE, J., KING, J., and PELLEGRINI, J.*

MEMORANDUM BY STABILE, J.:                              Filed: May 13, 2021

        Appellant Kite Investment Group, LLC (“Kite”) appeals from the July 17,

2020 order entered in the Court of Common Pleas of Lehigh County (“trial

court”), which, following reconsideration, re-affirmed its June 2, 2020 order

sustaining Appellee Elysse R. Teichman’s (hereinafter “Wife”) preliminary

objections and dismissing Appellant’s complaint. Upon review, we affirm.

        The facts and procedural history of this case are undisputed. 1 Kite is a

Pennsylvania limited liability company that is owned jointly and solely by Wife

and Dr. Adam J. Teichman (“Husband”). Kite is engaged in the leasing of real

estate and owns the property located at 505 4th Avenue, Bethlehem, Lehigh

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
1Unless otherwise specified, these facts come from the trial court’s July 17,
2020 decision filed pursuant to Pa.R.A.P. 1925(a).
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County, Pennsylvania (the “Property”).2 Husband and Wife are in the midst

of a divorce, docketed at No. 2016-FC-1647 (the “Divorce Action”).

       At a January 10, 2020, hearing before the divorce master, the parties

agreed orally on the record to the terms of a property settlement agreement.

The divorce master stated:

       [C]ounsel have indicated that that the parties have reached a
       resolution as to all of the claims raised in the divorce action except
       for one discrete area which is going to be tax-related. So what
       we’re going to do now is I’m going to turn it over to counsel.
       Everybody’s in the courtroom right now. They’re going to recite
       the terms of what we think the agreement is between the parties
       regarding the divorce and the economic claims, everything but for
       the tax issue, and we’re going to also set forth the tax issue so we
       can lay out the parameters of what we are setting aside so we
       know what is resolved and what is not resolved. And then [Wife’s
       attorney] is going to follow this up, this recitation, with the
       drafting of a written property settlement agreement which he’s
       going to have reviewed by his client and then ostensibly sent to
       [H]usband’s counsel for him to review. And then the parties are
       going to try to get on the same page about that language and sign
       the agreement, which would then be filed of record and
       incorporated into a divorce decree.

        ....

       So my point is to the parties that what you are saying, you’re
       listening to today and agreeing to today on the record, is binding.
       If [Wife’s attorney] drafts something and there’s dispute, we will
       rely on what’s said today as the guidepost for that and you are
       bound by it. You cannot change your mind after today. So this is
       it.

____________________________________________

2 The Property is divided into two residential rental units, which are leased
separately.

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Hearing, 1/10/20, at 3-5. Immediately thereafter, with respect to Kite, Wife’s

attorney summarized the parties’ agreement.

     The next asset is Kite Investment Group LLC. That is also a
     partnership owned 50 percent by [H]usband and 50 percent by
     [W]ife. The parties have agreed as follows with regard to Kite
     properties: Wife will retain the [P]roperty[, located] at 505 Fourth
     Avenue, Bethlehem. I will prepare a deed transferring [the]
     [P]roperty. I’ll have to work with real estate counsel because
     going from a partnership to an individual there may be some tax
     issues and I don’t know how to handle that situation, but [Wife]
     will have 90 days from the execution of the property
     settlement agreement to refinance th[e] [P]roperty.

     It is my understanding from speaking to [Husband’s counsel] that
     [Husband] would like [Wife] to commence managing th[e]
     [P]roperty effective immediately, so any rents that have been
     received for January 2020 shall be immediately turned over to
     [Wife]. [Husband] will also provide any and all documents related
     to [the Property], including leases, insurance policies, keys, and
     any other documents that [W]ife may require in order to assume
     ownership and management of th[e] [P]roperty and for purposes
     of refinancing.

     Husband will retain the remaining Kite Investment Properties
     including the real estate as follows: 5934 Valley Forge Drive,
     Coopersburg; 5940 Valley Forge Drive, Coopersburg; 5942 Valley
     Forge Drive, Coopersburg; and 5956 Valley Forge Drive,
     Coopersburg. [Husband] and/or counsel will prepare deeds for
     those properties which [Wife] will sign. Those deeds will be held
     in my office pending [H]usband’s refinancing. That refinancing is
     to occur within 90 days of execution of a property
     settlement agreement.         To the extent [W]ife has any
     documents related to those properties, they will be turned over to
     [H]usband. It is my understanding that [H]usband has been
     managing those properties, so he has all the financial documents
     for those properties.

     Kite Investment Group also has two I believe Embassy Bank
     accounts[.] . . . [Husband] has agreed that he will turn over to
     [W]ife the security deposits for the two units located at 505 Fourth
     Avenue [(the Property)]. That will be done say within seven
     days of the execution of a property settlement agreement.

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      The remaining balance of those accounts are assigned to
      [H]usband and [W]ife waives any right to any claim or interest to
      those accounts.

Id. at 14-16 (emphasis added). Thereafter, Husband’s counsel remarked: “I

believe it’s the agreement of the parties that independent of the real estate,

even though the entity itself, [Husband] will retain ownership of, shall be

considered the sole owner of, and any document necessary to effectuate that

would be executed by the parties in a timely fashion.” Id. at 17 (emphasis

added). Wife’s counsel agreed, indicating that this applied to all “corporate

documents or partnership documents that need to be signed[.]” Id.

      Because of issues relating to other items of marital property, the parties

never executed the contemplated property settlement agreement.               On

March 26, 2020, Kite filed a civil complaint against Wife, raising causes of

action for breach of contract and conversion, and seeking declaratory relief.

Kite alleged, among other things, that “[Husband] and [Wife] attended a

[m]aster’s [h]earing where they entered into a settlement on January 10,

2020, addressing, inter alia, disposition of the Property.” Complaint, 3/26/20,

at ¶ 7. Kite further alleged that that “[p]ursuant to the settlement, [Husband]

and [Wife] agreed, individually and on behalf of [Kite], that [Wife] would

retain the Property and would obtain refinancing and acquire the deed (via

transfer from [Kite]) within ninety (90) days.” Id. at ¶ 8. Moreover, Kite

alleged that “pursuant to the settlement, [Wife] was to immediately

commence managing the Property, including but not limited to collecting

rents, paying the mortgage, and paying utilities and other expenses related”

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thereto. Id. at ¶ 9. Kite also alleged that “[d]espite the terms of [Husband]

and [Wife’s] settlement in the [Divorce Action], [Wife] has commenced

collecting rent from the tenants at the Property but has refused to pay

expenses associated with the Property included but not limited to the

mortgage and ongoing utility costs and expenses.” Id. at ¶ 10. According to

Kite’s allegation, Wife collected a total of $6,386.31 in rental income from

January 2020 to March 2020. Id. at ¶ 11. Finally, Kite alleged that Wife has

failed to pay the Property’s mortgage and utilities, exceeding $5000.00. Id.

at ¶ 12.

        In response, Wife filed preliminary objections asserting, inter alia,

pendency of a prior action under Pa.R.C.P. No. 1028(a)(6).3 She argued that

the instant action was related to the Divorce Action and thus it must be

resolved by the divorce court. Preliminary Objections, 4/6/20, at ¶¶ 15-17.

        On June 2, ,2020, the trial court sustained Wife’s preliminary objections

and dismissed the complaint. On June 11, 2020, Kite sought reconsideration.

On June 30, 2020, Kite appealed the June 2 order. During the pendency of

the appeal, but within 30 days of the June 2 order, the trial court granted

____________________________________________

3   Rule 1028 provides in pertinent part:
        (a) Preliminary objections may be filed by any party to any
        pleading and are limited to the following grounds:
               ....
              (6) pendency of a prior action or agreement for
              alternative dispute resolution[.]
Pa.R.C.P. No. 1028(a)(6).

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reconsideration on July 2, 2020. On July 17, 2020, the trial court re-affirmed

its June 2, 2020 order, sustaining Wife’s preliminary objections. 4 Kite filed

the instant appeal. Both Kite and the trial court complied with Pa.R.A.P. 1925.

        On appeal, Kite raises a single issue for our review:

        Did the lower court err in concluding that the pendency of the prior
        action doctrine was applicable to this case, therefore sustaining
        [Wife’s] preliminary objections and dismissing [Kite’s] complaint?

Appellant’s Brief at 5 (unnecessary capitalizations omitted).

        Our standard of review for an order sustaining preliminary objections is

well settled.

        In determining whether the trial court properly sustained
        preliminary objections, the appellate court must examine the
        averments in the complaint, together with the documents and
        exhibits attached thereto, in order to evaluate the sufficiency of
        the facts averred. The impetus of our inquiry is to determine the
        legal sufficiency of the complaint and whether the pleading would
        permit recovery if ultimately proven. This Court will reverse the
        trial court’s decision regarding preliminary objections only where
        there has been an error of law or abuse of discretion. When
        sustaining the trial court’s ruling will result in the denial of claim
        or a dismissal of suit, preliminary objections will be sustained only
        where the case is free and clear of doubt.

Brosovic v. Nationwide Mut. Ins., 841 A.2d 1071, 1073 (Pa. Super. 2004)

(quoting Clemleddy Const., Inc v. Yorston, 810 A.2d 693, 696 (Pa. Super.

2002)).

        To successfully assert lis pendens, i.e., the pendency of a prior action,

it must be shown that (1) the prior case is the same; (2) the parties are the

____________________________________________

4   We sua sponte quashed Kite’s appeal filed on June 30, 2020.

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same; and (3) the relief requested is the same. Richner v. McCance, 13

A.3d 950, 957-58 (Pa. Super. 2011). The purpose of the lis pendens defense

is to protect a defendant from harassment by having to defend several suits

on the same cause of action at the same time. Crutchfield v. Eaton Corp.,

806 A.2d 1259, 1262 (Pa. Super. 2002). Significantly, “[t]he doctrine of lis

pendens requires that the prior action be pending.” Id.

       Here, based upon our review of the record, we cannot conclude that the

trial court erred in sustaining Wife’s preliminary objections asserting the lis

pendens doctrine.5 As detailed above, on January 10, 2020, in the Divorce

Action, Husband and Wife stipulated before a divorce master that Wife would

have full ownership of the Property, refinance and assume the current

mortgage obligations on the Property within ninety days of the execution of a

property settlement agreement, and manage the Property, including paying

expenses and collecting monthly rental income beginning in January 2020.

Because of a dispute concerning other items of marital property, the parties

failed to execute a property settlement agreement. As a result, believing Wife

neglected to honor her obligations under the terms of the agreement reached

____________________________________________

5 We decline to entertain Kite’s argument that the divorce court refused to
address Wife’s failure to honor her obligations relating to Kite. Appellant’s
Brief at 15. As Wife correctly points out, and our review confirm, “the record
is devoid of any evidence that these claims were ever brought before the
Divorce Master in the context of the divorce action.” Wife’s Brief at 19.

                                           -7-
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before the divorce master in the Divorce Action, Kite brought the instant

action.6

       As the trial court accurately noted, under the lis pendens doctrine, it

was barred from considering the instant action.

       The parties’ agreement was entered within the context of their
       pending divorce case to partially distribute a marital asset. The
       asset, Kite, is owned by Husband or Husband and Wife; neither
       party claims any other person or entity has an equitable interest
       in it. Whether Kite is a marital asset and, if so, how it is to be
       managed pending equitable distribution is properly before the
       Master in Divorce.

Trial Court Opinion, 7/17/20, at 2. Tellingly, the remedies sought by Kite,7

through Husband, are available before the divorce court. Section 3502 of the

Divorce Code provides in relevant part:

       (e) Powers of the court.--If, at any time, a party has failed to
       comply with an order of equitable distribution, as provided for in
       this chapter or with the terms of an agreement as entered
       into between the parties, after hearing, the court may, in
       addition to any other remedy available under this part, in
       order to effect compliance with its order:

              (1) enter judgment;

              (2) authorize the taking and seizure of the
              goods and chattels and collection of the rents
              and profits of the real and personal, tangible and
              intangible property of the party;

____________________________________________

6 To the extent Kite claims that Husband is now the sole member of Kite, we
need not resolve the claim at this juncture, where we are asked only to rule
on a discrete procedural issue. Thus, the divorce court is in the best position
to resolve this ownership dispute.
7 It bears repeating that Kite is a marital asset that is subject to equitable
distribution.

                                           -8-
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            (3) award interest on unpaid installments;

            (4) order and direct the transfer or sale of any
            property required in order to comply with the
            court’s order;

            (5) require security to insure future payments in
            compliance with the court’s order;

            (6) issue attachment proceedings, directed to the
            sheriff or other proper officer of the county, directing
            that the person named as having failed to comply with
            the court order be brought before the court, at such
            time as the court may direct. If the court finds, after
            hearing, that the person willfully failed to comply with
            the court order, it may deem the person in civil
            contempt of court and, in its discretion, make an
            appropriate order, including, but not limited to,
            commitment of the person to the county jail for a
            period not to exceed six months;

            (7) award counsel fees and costs;

            (8) attach wages; or

            (9) find the party in contempt.

23 Pa.C.S.A. § 3502(e) (emphasis added). The issues raised in this action,

which arose as a result of Wife’s alleged failure to comply with the terms of

the property settlement agreement, are the same as the issues addressed in

the context of equitable distribution before the divorce court. The parties in

this action, Kite—a marital asset and acting in Husband’s interest—and Wife

are the same as the parties (Husband and Wife) in the Divorce Action. The

relief requested here is one that the divorce court has the power to grant

                                     -9-
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under Section 3502(e) in the pending Divorce Action.8 Accordingly, Kite does

not obtain relief.9

        Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/13/21

____________________________________________

8   We express no opinion on the merits of Kite’s claims against Wife.
9 We reject Wife’s request to (1) quash the instant appeal on account of Kite’s
failure to file timely a brief and reproduced record, and (2) award her
attorney’s fees under Pa.R.A.P. 2744. We excuse Kite’s untimely appellate
brief. We also cannot conclude, based on our review of this case, that this
appeal is “frivolous or taken solely for delay or that the conduct of the
participant against whom costs are to be imposed is dilatory, obdurate, or
vexatious.” Pa.R.A.P. 2744.

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