Court Opinion

ID: 7797479
Source: CourtListenerOpinion
Date Created: 2022-08-03 16:10:17.687171+00
Date Added: 2024-06-11T16:28:37.580943
License: Public Domain

J-A11033-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 ELISABETTA ROBERTS                      :   IN THE SUPERIOR COURT OF
                                         :        PENNSYLVANIA
                                         :
              v.                         :
                                         :
                                         :
 LILY DEVELOPMENT, L.P. & LILY           :
 CONSTRUCTION, LLC AND LILY              :
 DEVELOPMENT BAINBRIDGE SOUTH            :   No. 1494 EDA 2021
 COMPANY                                 :
                                         :
                                         :
 APPEAL OF: LILY DEVELOPMENT             :
 BAINBRIDGE SOUTH COMPANY                :

              Appeal from the Order Entered June 21, 2021
   In the Court of Common Pleas of Philadelphia County Civil Division at
                           No(s): 160300651

BEFORE: BOWES, J., STABILE, J., and McLAUGHLIN, J.

MEMORANDUM BY McLAUGHLIN, J.:                      FILED AUGUST 3, 2022

     Lily Development Bainbridge South Company (“Lily Development”)

appeals from the order granting a motion to compel post-judgment discovery

and ordering sanctions on Lily Development and its founder and member

Robert Volpe. Lily Development argues the court abused its discretion by

imposing sanctions without holding an evidentiary hearing or oral argument

and by imposing sanctions against Volpe in his individual capacity. We affirm

the order compelling discovery and imposing sanctions on Lily Development

and reverse the order to the extent it imposes sanctions on Volpe.

     In March 2016, Elisabetta Roberts filed a Complaint against Lily

Development, L.P. In May 2018, the parties entered a stipulation dismissing
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Lily Development, L.P. as a party and substituting Lily Development and Lilly

Construction, LLC as parties to the action. Volpe is the founder and a member

of Lily Development. N.T., Aug. 15, 2018, at 83. In August 2018, a jury

returned a verdict in Roberts’ favor on her negligence and nuisance claims.

After post-trial motions, the court entered a judgment notwithstanding the

verdict (“JNOV”) as to the negligence claim.1

       In January 2019, Roberts filed a praecipe to enter judgment pursuant

to Pennsylvania Rule of Civil Procedure 227.4 and judgment was entered

against Lily Development and Lily Construction, LLC in the amount of

$16,062.63 each.

       Roberts appealed the trial court’s order granting JNOV as to the

negligence claim, and in March 2021, this Court reversed and remanded for

the reinstatement of the verdict on the negligence claim in favor of Roberts.2

The trial court entered judgment in favor of Roberts and against Lily

____________________________________________

1 They jury also awarded $175,000 in punitive damages. In ruling on the post-
trial motion, the court concluded that, unless Roberts consented to a reduction
in the punitive damages award to $15,000 per defendant, the court would
grant a new trial limited to punitive damages on the nuisance claim. Roberts
filed a notice of election to accept punitive damage remittitur, reducing the
punitive damages to $15,000 against each defendant.

2 The Pennsylvania Supreme Court denied Lily Construction, LLC’s petition for
allowance of appeal in December 2021.

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Development in the amount of $291,062.62.3 Lily Development has not paid

the judgment.

       In   April   2019,    Roberts     sent    Lily   Development   post-judgment

interrogatories in aid of execution and post-judgment requests for production

of documents. Lily Development did not respond. Roberts filed a motion to

compel in June 2019. In August, the trial court issued an order granting

Roberts’    motion     to   compel     discovery    responses   and   requiring   Lily

Development to file an answer to the post-trial interrogatories within 20 days.

That same month, Lily Development sent Roberts incomplete responses to the

interrogatories, which excluded relevant information. Roberts’ Second Motion

to Compel, filed Sept. 16, 2019, at Exh. D. It provided no information prior to

May 8, 2018, which is when Lily Development became a party to the litigation.

Id.

       In August 2019, Roberts sent a notice of asset deposition to Lily

Development, scheduling the deposition for September 17, 2019, and stating

Roberts would take the deposition of Volpe or “an alternative representative,

in his/her capacity as an authorized member of [Lily Development].” Roberts’

Second Motion to Compel, filed Sept. 16, 2019, at Ex. G. Notice of Asset

Deposition. Lily Development failed to fully respond to the discovery requests

or produce Volpe or an alternative representative for deposition. In September

____________________________________________

3  The court also entered judgment against Lily Construction, LLC, which
satisfied its portion of the judgment. See Praecipe to Satisfy the Judgment,
filed Mar. 29, 2019.

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2019, Roberts filed a second motion to compel discovery responses and a

motion for sanctions. In October, the trial court granted the motion and

ordered Lily Development to provide full and complete responses, without

objections, to the discovery requests within 15 days, to produce Volpe or an

alternative representative for an asset deposition within 15 days, and to pay

sanctions in the amount of $250.00. Lily Development did not complete

discovery, produce Volpe or an alternative representative for the deposition,

or pay the sanction.

      Roberts filed a third motion to compel and motion for sanctions in March

2021. In June 2021, the trial court entered an order granting the motion and

requiring Lily Development to produce an authorized representative for the

purposes of discovery of assets within five days. It also imposed sanctions on

Lily Development and Volpe in the amount of $1,000.00 for failing to comply

with the court’s prior orders and $250.00 for every day after the five days

where “they failed to produce an authorized representative for deposition.”

Order, filed June 21, 2021. Lily Development filed this appeal.

      Lily Development raises the following issues:

         1. Did the trial court abuse its discretion by imposing
         sanctions against Robert Volpe in his individual capacity
         where he was not a party in the case and no previous court
         order was directed at him?

         2. Did the trial court abuse its discretion by imposing
         sanctions against [Lily Development] and Robert Volpe
         without holding an evidentiary hearing and/or oral
         argument on [Roberts’] Motion for Sanctions?

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         3. Does the Court have jurisdiction to hear this appeal where
         the trial court’s Sanctions Order is related to [Roberts’]
         discovery in aid of execution and the trial court has entered
         final judgment in the case?

Lily Development’s Br. at 3.

      We will first address Lily Development’s third claim, as it impacts our

jurisdiction to hear this appeal. In November 2021, this Court issued a rule to

show cause “as to the finality or appealability of the order.” Order, filed Nov.

4, 2021. We noted generally an order granting or denying discovery sanctions

is an interlocutory order, not subject to an appeal. Id. Lily Development filed

a response, arguing the order was appealable as a final order or, in the

alternative, as a collateral order. We discharged the rule to show cause but

advised the parties the Court may revisit the issue.

      Lily Development claims this court has jurisdiction to hear this appeal

because the order deals with post-judgment discovery and judgment in the

case already had been entered. Lily Development argues that although

discovery orders are usually interlocutory and not appealable, this general rule

should not apply here. It points out that the final order in this case had already

been entered and the case arose from post-judgment discovery, where

sanctions were imposed. Because it is post-judgment, there will be no final

judgment from which to appeal. It further claims that if the order is not

appealable as a final order, it is appealable as a collateral order, as it is

separable from and collateral to the main cause of action, the right involved

is the imposition of sanctions on a non-party, and there is no other opportunity

for this Court to address the order.

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        Roberts argues this Court lacks jurisdiction to determine this matter

because it is not an appeal from a final order, it is not an interlocutory order

as of right, and not a collateral order.

        In Kine v. Forman, the Pennsylvania Supreme Court quashed the

appeal from an order requiring a party to answer post-judgment discovery.

194 A.2d 175, 176-77 (Pa. 1963). There, the discovery request came after

judgment on a note had been entered. In a footnote, the Court stated that

“[h]ad the court, upon refusal of the party to answer the questions, imposed

sanction, the order would have been final and appealable.” Id. at 177 n.2.

After remand, the case returned to this Court after the trial court had imposed

sanctions for the defendant’s failure to comply with post-judgment discovery.

Kine v. Forman, 209 A.2d 1, 2 (Pa.Super. 1965). We affirmed the order,

without discussing whether this Court had jurisdiction. Id. at 2-4.

        In Christian v. Pennsylvania Financial Responsibility Assigned

Claims Plan, 686 A.2d 1 (Pa.Super. 1996), this Court addressed whether an

order imposing sanctions under Pennsylvania Rule of Civil Procedure 4019(d)4

____________________________________________

4   Rule 4019(d) provides:

          If at the trial or hearing, a party who has requested
          admissions as authorized by Rule 4014 proves the matter
          which the other party has failed to admit as requested, the
          court on motion may enter an order taxing as costs against
          the other party the reasonable expenses incurred in making
          such proof, including attorney’s fees, unless the court finds
          that
(Footnote Continued Next Page)

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was appealable. Rule 4019(d) “allows the court to enter an order imposing

sanctions where a party fails to make a requested admission under [Rule]

4014.” Id. at 4. We noted that “[i]mplicit in subdivision (d) is the requirement

that a party file a motion for sanctions only after a trial and entry of a verdict

or decree,” as a party requesting admissions must prove the matters at trial.

Id. We concluded the order denying sanctions was final and appealable. We

reasoned that “[b]ecause a motion pursuant to Rule 4019(d) occurs after the

completion of the underlying action, by its very nature, it is essentially a

discrete proceeding which ends upon the issuance of an Order granting or

denying sanctions[.]” Id. We noted that at that time “litigation is . . .

concluded and the litigant is out-of-court” and “[t]herefore, the finality of the

Order denying sanctions is determined not by the entry of judgment, but by

the language and requirements of Pa.R.C.P. 4019(d).” Id.

       Here, Roberts sought discovery under Rule 3117, which provides:

          (a) Plaintiff at any time after judgment, before or after the
          issuance of a writ of execution, may, for the purpose of
          discovery of assets of the defendant, take the testimony of
          any person, including a defendant or a garnishee, upon oral
____________________________________________

          (1) the request was or could have been held objectionable
          pursuant to Rule 4014, or

          (2) the admission sought was of no substantial importance,
          or

          (3) the party failing to admit had reasonable ground to
          believe that he or she might prevail on the matter, or

          (4) there was other good reason for the failure to admit.

Pa.R.Civ.P. 4019(d).

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         examination or written interrogatories as provided by the
         rules relating to Depositions and Discovery. The
         prothonotary of the county in which judgment has been
         entered or of the county within this Commonwealth where
         the deposition is to be taken, shall issue a subpoena to
         testify.

         (b) All reasonable expenses in connection with the discovery
         may be taxed against the defendant as costs if it is
         ascertained by the discovery proceedings that the defendant
         has property liable to execution.

Pa.R.C.P. 3117.

      Here, as in Christian, under the applicable Rule, the discovery would

necessarily take place after judgment has been entered and the discrete

proceeding ended with the issuance of the order imposing sanctions. Further,

here, the trial court imposed sanctions for failure to comply with post-

judgment discovery. The Supreme Court stated in Kine that where, as here,

the court imposed sanctions for failure to comply with post-judgment

discovery, it would result in an appealable order. We therefore conclude we

have jurisdiction over this appeal and turn to the merits of the appeal.

      In its first claim, Lily Development argues that this Court should reverse

and vacate the trial court’s sanction order as to Volpe because the court

abused its discretion by imposing sanctions against Volpe where he was not a

party to the action and where the discovery and prior orders were not directed

to Volpe. Lily Development claims the court references rules and cases that

give it discretion to regulate the parties’ conduct during discovery but points

out that Volpe is not a party. It argues Volpe was the principal of Lily

Development before its dissolution, but a corporate entity is separate from

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individuals who have ownership in the entity. Lily Development argues that

Volpe was not a party and was not served with a subpoena in his individual

capacity and therefore the court abused its discretion in sanctioning him.

Further, Lily Development notes that Roberts directed the discovery to Lily

Development, not Volpe, and the orders directed Lily Development, not Volpe,

to produce Volpe or an alternative for deposition. It reasons the trial court

could not sanction Volpe where it had never directed him to take action.

      Roberts claims the court did not abuse its discretion in imposing

sanctions against Volpe, who is a principal, member, and corporate officer of

Lily Development, claiming Volpe used his ownership in shell entities as a

method to limit his liability. Roberts notes the asset discovery sought is the

deposition of Volpe or an alternate representative and, as principal of Lily

Development, Volpe failed to produce himself or an alternative representative.

She argues that Volpe is a member, founder, corporate officer, and designated

principal of Lily Development and he and Lily Development continually failed

to comply with the orders directing compliance with discovery requests.

Roberts points out that Volpe signed the verifications for pleadings and

submissions. She argues that, because Lily Development seeks to protect and

shield Volpe from individual liability, the only effective way to get compliance

was to sanction both Lily Development and Volpe. She also claims Volpe

committed fraud by requesting that Lily Development be substituted as a

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party, even though it had been dissolved. She claims that, based on the facts

of the case, it was proper to pierce the corporate veil.5

       The trial court found it properly sanctioned both Lily Development and

Volpe as its principal for failing to comply with the orders. The court noted it

was undisputed that Volpe was a corporate officer and the designated principal

of Lily Development and that Lily Development is a proper party in the action.

It further found that Volpe and Lily Development willingly failed to comply with

the prior orders mandating discovery, including the orders to produce Volpe

or an alternate representative for a deposition. It found that Lily Development

and Volpe did not show any discernible efforts to comply with the discovery

mandates.      It    therefore    concluded    that   sanctions   against   both    Lily

Development         and   Volpe   were    appropriate   and   necessary     to   ensure

compliance. The court further stated that sanctions upon both Volpe and Lily

Development were necessary due to the severity of the discovery violations,

reasoning the court faced extreme circumstances, as Lily Development

continued to disregard its orders and it was left with no option but to sanction

appropriate individuals.

____________________________________________

5 Roberts further claims, in a single paragraph in the brief, that Lily
Development does not have standing to appeal the order on Volpe’s behalf.
Roberts’ Br. at 21. However, Roberts did not cite to any authority for the
contention and did not develop this argument in the brief, and we will not do
so for her. See Commonwealth v. B.D.G., 959 A.2d 362, 371 (Pa.Super.
2008) (en banc) (finding claim waived where appellant did not develop
argument and noting this Court “is neither obliged, nor even particularly
equipped, to develop an argument for a party”).

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      “Generally, imposition of sanctions for a party’s failure to comply with

discovery is subject to the discretion of the trial court, as is the severity of the

sanctions imposed.” Rohm and Haas Co. v. Lin, 992 A.2d 132, 142

(Pa.Super. 2010).

      Pennsylvania Rule of Civil Procedure 4019(a) governs the imposition of

sanctions for discovery violations and provides:

         (a)(1) The court may, on motion, make an appropriate order
         if

            (i) a party fails to serve answers, sufficient answers
            or objections to written interrogatories under Rule
            4005;

            (ii) a corporation or other entity fails to make a
            designation under Rule 4004(a)(2) or 4007.1(e);

            (iii) a person, including a person designated under
            Rule 4004(a)(2) to be examined, fails to answer,
            answer sufficiently or object to written interrogatories
            under Rule 4004;

            (iv) a party or an officer, or managing agent of a party
            or a person designated under Rule 4007.1(e) to be
            examined, after notice under Rule 4007.1, fails to
            appear before the person who is to take the
            deposition;

            (v) a party or deponent, or an officer or managing
            agent of a party or deponent, induces a witness not to
            appear;

            (vi) a party or an officer, or managing agent of a party
            refuses or induces a person to refuse to obey an order
            of court made under subdivision (b) of this rule
            requiring such party or person to be sworn or to
            answer designated questions or an order of court
            made under Rule 4010;

            (vii) a party, in response to a request for production
            or inspection made under Rule 4009, fails to respond

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            that inspection will be permitted as requested or fails
            to permit inspection as requested;

            (viii) a party or person otherwise fails to make
            discovery or to obey an order of court respecting
            discovery.

Pa.R.C.P. 4019(a).

      Rule 4019 provides for the imposition of sanctions where a party fails to

comply with discovery requests. Volpe was not a party to the action. Further,

although Rule 4019(a)(iii) mentions a “person,” that reference is to a person

served with discovery requests. See Pa.R.C.P. 4004(a)(2) (“interrogatories

shall contain a notice stating . . . the name and address of each person to be

examined if known, and, if the name is not known, a general description

sufficient to identify each person to be examined or the particular class or

group to which each person belongs . . . .”). Roberts directed the discovery

requests and subpoena to Lily Development, not Volpe, and the requested

deposition was to be of Volpe or an alternate representative.

      The court provided justification for the imposition of sanctions, but it

failed to justify the imposition of sanctions on Volpe where the court had not

ordered that he, in his individual capacity, complete any task. See Order, Oct.

21, 2019 (ordering Lily Development to “provide full and complete responses”

to discovery and to “produce Mr. Robert Volpe, or an alternate representative,

in his/her capacity as authorized member of” Lily Development); Order, Aug.

1, 2019 (ordering Lily Development to answer the discovery). Although

Roberts argues that the court could properly sanction Volpe by piercing the

corporate veil, the trial court did not find that the veil could be pierced prior

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to imposing sanctions. We conclude that, because Volpe was not a party to

the case and no court order directed his individual compliance prior to the

order imposing sanctions, the court erred. Jones v. Faust, 852 A.2d 1201,

1204 (Pa.Super. 2004) (finding sanctions not proper where imposed on doctor

for violating order that did not mention him).

      In its second issue, Lily Development argues the trial court abused its

discretion by granting the motion and imposing sanctions without holding oral

argument or an evidentiary hearing. Lily Development cites Rule 208.3 and

local Rule 208.2, which, it claims, require a court to have argument or to

develop the record on contested discovery motions. It argues its response

raised issues of fact. It further claims that court-ordered Covid protocols

required the trial court to set a hearing date. It argues the court abused its

discretion by granting the motion and imposing sanctions without a hearing.

      A party waives any issue not included in its concise statement of errors

complained of on appeal. See Pa.R.A.P. 1925(b)(4)(vii).

      Lily Development raised the following issues in its concise statement:

         1. There is no basis to impose sanctions against Robert
         Volpe individually, as [Roberts’] March 18, 2021 motion to
         compel does not request sanctions against Mr. Volpe in his
         individual capacity, nor provide any authority in support of
         such sanctions.

         2. The Court[] erred in imposing sanctions against Robert
         Volpe in his individual capacity, as Mr. Volpe is not a party
         to this case.

         3. The Court erred in granting [Roberts’] motion to compel
         and for sanctions where [Lily Development] provided full

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         and complete responses to [Roberts’] discovery in aid of
         execution.

         4. The Court erred in granting [Roberts’] motion to compel
         and for sanctions where [Lily Development] provided
         [Roberts] with documentation demonstrating that [Lily
         Development] was a single-purpose entity that developed
         an[d] sold its single asset—the real property located at 734-
         38 Bainbridge Street, Philadelphia, PA—in November 2017,
         before [Lily Development] was made a party to this case.

         5. The Court erred in compelling post-judgment discovery
         from [Lily Development], an entity that has wound down its
         affairs and formally dissolved.

         6. The Court erred in imposing sanctions on [Lily
         Development], an entity that has wound down its affairs and
         formally dissolved.

         7. The Court erred in compelling post-judgment discovery
         from [Lily Development] concerning [Lily Development’s]
         affairs before being a party to this action.

Statement of Matters Complained of on Appeal, filed Aug. 12, 2021.

      Lily Development did not include in this statement a challenge to the

court’s failure to hold a hearing. It therefore waived the claim. See Pa.R.A.P.

1925(b)(4)(vii).     Accordingly,   we     affirm   the     ordering   directing   Lily

Development     to   respond   to   the    discovery      requests   and   produce   a

representative for an asset deposition and imposing sanctions on Lily

Development. However, we reverse the order to the extent it imposes

sanctions on Volpe in his individual capacity.

      Order affirmed in part and reversed in part. Case remanded. Jurisdiction

relinquished.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/03/2022

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