Court Opinion

ID: 4098583
Source: CourtListenerOpinion
Date Created: 2016-11-16 04:23:52.600545+00
Date Added: 2024-06-11T14:47:41.359070
License: Public Domain

J-A16022-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DANA LEE CARMEN                                IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                         Appellee

                    v.

GARY JOHN CARMEN

                         Appellant                  No. 1236 WDA 2015

                      Appeal from the Order July 21, 2015
              In the Court of Common Pleas of Allegheny County
                    Family Court at No(s): FD 08-7066-004

BEFORE: SHOGAN, OLSON and STRASSBURGER,* JJ.

MEMORANDUM BY OLSON, J.:                       FILED NOVEMBER 15, 2016

      Appellant, Gary John Carmen (“Gary”), appeals from the order entered

on July 21, 2015.    After careful consideration, we conclude that the trial

court lacked subject matter jurisdiction over this dispute because an

indispensable party was not joined in the action.       Accordingly, we are

constrained to vacate the order and dismiss the petition.

      The relevant factual background and procedural history of this case is

as follows.   In 1979, Gary’s parents, Fred Carmen (“Fred”) and Ida Rose

Carmen (“Ida”), along with several other individuals, formed VECA Land

Development Corporation (“the Corporation”). In June 1985, Gary married

Dana Lee Carmen (“Dana”). At the time of Gary and Dana’s marriage, Gary

did not have an ownership interest in the Corporation.        In 1994, the

Corporation merged into VECA Land Development, A Pennsylvania Business

* Retired Senior Judge assigned to the Superior Court
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Trust (“VECA”).1    According to the parties, VECA issued 4,000 shares of

stock,2 of which Fred and Ida owned 2,100 shares.

      In 2003, Fred died and his interest in VECA passed to Ida.              In

November 2006, Janet and David Wingrove (“the Wingroves”) acquired all

VECA shares not owned by Ida. According to Dana, in December 2006, Ida

1
  Neither party, nor amici, cite to VECA’s trust instrument (as it existed in
2006 and/or 2014) or the merger documents relating to the Corporation’s
merger with VECA. These documents are critical to determining exactly
what must occur for the interest of a trust beneficiary to be transferred to
another individual. The parties left this issue largely unaddressed before the
trial court, making only very brief references to the trust instrument during
trial and in Gary’s post-trial brief. See Gary’s Post-Trial Brief (Doc. No.
124), 1/2/15, at 3-4; N.T., 5/6/15, at 77.

The absence of these documents in the certified record prevents us from
addressing certain jurisdictional arguments and from providing more
direction to the trial court. Specifically, it is impossible to determine if VECA
is an indispensable party, as it argues in its amicus curiae brief, without a
copy of the above referenced documents. Cf. In re Saint Catherine Hosp.
of Pennsylvania, LLC, 2012 WL 5177751, *1 (Bankr. M.D. Pa. Oct. 18,
2012) (holding that a Pennsylvania business trust can be a party to an
action even though the more prudent course may be to join the trustees of
the trust); Marin v. Leslie, 2008 WL 4238961, *4–5 (W.D. Pa. Sept. 10,
2008), aff’d as modified, 337 F. App’x. 217 (3d Cir. 2009) (holding that a
Pennsylvania business trust can be a party to an action).

Moreover, it is difficult for us to understand how or why VECA adopted the
Corporation’s bylaws without amendment thereto. Those bylaws, which all
parties and the trial court rely upon, are clearly meant for a corporation, not
a business trust formed pursuant to 15 Pa.C.S.A. § 9501 et seq. If the trial
court is called upon to address these same issues again, we recommend that
the trust instrument and merger documents be admitted into evidence in
order to determine if VECA is an indispensable party as well as ruling on the
merits of the parties’ dispute.
2
 We note that it is more likely that VECA issued shares of beneficial interest
and not shares of stock.

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transferred her 2,100 VECA shares to Gary and Dana. The trial court found

that in January 2007, Gary and Dana then purported to transfer ten shares

of VECA stock to the Wingroves.3 The trial court also found that, over the

ensuing seven years, Gary and Dana acted as though they owned at least

2,000 VECA shares.4

      On January 10, 2008, Dana filed a complaint in divorce.      On July 6,

2011, the parties entered into a marital settlement agreement (“MSA”)

which resolved the outstanding equitable distribution issues. Included within

that MSA was the statement that:

      It is believed [Dana and Gary] currently own 2,100 shares of
      stock in VECA and the parties shall take all steps necessary
      pursuant to the [bylaws] of VECA to divide equally the shares of
      stock between them, such that each party receives a
      [c]ertificate[] for 1,050 shares and said action shall be ratified
      by VECA.

MSA (Doc. No. 46),5 7/6/11,6 at 2.     On August 19, 2011, the trial court

entered a decree of divorce dissolving the matrimonial bond between Gary

3
  Gary and Dana intended to transfer 100 shares; however, due to a clerical
error, they only purported to transfer ten shares.
4
 Specifically, Gary assumed responsibility for paying VECA’s taxes and both
Gary and Dana served as VECA officers.
5
  For the convenience of this Court, the trial court, and the parties, when
possible we parallel cite to the document number assigned by the Allegheny
County Department of Court Records.
6
 Although the MSA was signed on July 1, 2011, it was not filed of record
until July 6, 2011. Throughout this memorandum, we cite to the date a
(Footnote Continued Next Page)

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and Dana.      The trial court incorporated the MSA into the divorce decree.

See Divorce Decree (Doc. No. 52), 8/19/11, at 1.

      On September 10, 2014, there was a special meeting of VECA’s

shareholders. The individuals present at the meeting were Gary, Ida, Gary’s

new wife, Joan Carmen (“Joan”), and the Wingroves.                        Dana was not

informed of the meeting and thus did not attend. During the meeting, Ida

purported to transfer 2,000 VECA shares to Gary and 100 VECA shares to

the Wingroves. She asserted that, in December 2006, she did not transfer

her 2,100 VECA shares to Gary and Dana. That same day, Gary purported

to transfer his 2,000 VECA shares to himself and Joan as tenants in the

entireties.

      On      October    10,    2014,    Dana     filed   a   petition   seeking   specific

performance of the portion of the MSA relating to division of the VECA

shares. After a six-day hearing, over the course of six months, on July 22,

2015, the trial court found in favor of Dana and ordered Gary to surrender

one-half of his interest in VECA to Dana. The trial court also awarded Dana

attorney fees in accordance with the MSA. This timely appeal followed.7

                       _______________________
(Footnote Continued)
document was entered on the docket and not the date it was signed or
issued.
7
  On August 26, 2015, the trial court ordered Gary to file a concise
statement of errors complained of on appeal (“concise statement”). See
Pa.R.A.P. 1925(b).    On September 16, 2015, Gary filed his concise
statement. On October 27, 2015, the trial court issued its Rule 1925(a)
opinion.
(Footnote Continued Next Page)

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      After Gary filed his notice of appeal, Joan filed a declaratory judgment

action against VECA, the Wingroves, Gary, and Dana (“the civil action”). In

the civil action, Joan seeks a declaration that she, along with Gary, as

tenants in the entireties, own 2,000 VECA shares. That case was transferred

to the trial judge who presided over Dana’s petition seeking specific

performance of the MSA. On April 25, 2016, the parties to the civil action

entered into a consent order pending disposition of the instant appeal.

      Gary presents three issues for our review:

      1. Whether the [t]rial [c]ourt lacked subject matter jurisdiction
         . . . due to [Dana’s] failure to join [] indispensable part[ies]
         ...?

      2. Whether the [t]rial [c]ourt erred and/or abused its discretion
         in finding that the shares at issue were gifted to [Gary and
         Dana] during th[eir] marriage . . . ?

      3. Whether the [t]rial [c]ourt erred and/or abused its discretion
         [] in finding that [Gary] defaulted under the [MSA] . . . ?

Gary’s Brief at 3-4.

                       _______________________
(Footnote Continued)

Gary’s concise statement fails to comply with Rule 1925(b). A seven-page
document of alleged errors is not “concise” and fails to comply with Rule
1925(b). See Jones v. Jones, 878 A.2d 86, 89 (Pa. Super. 2005) (finding
all issues waived when the appellant filed a seven-page concise statement);
see also Tucker v. R.M. Tours, 939 A.2d 343, 346–347 (Pa. Super. 2007),
aff'd, 977 A.2d 1170 (Pa. 2009). Nonetheless, issues of subject matter
jurisdiction are non-waivable. N. Forests II, Inc. v. Keta Realty Co., 130
A.3d 19, 28–29 (Pa. Super. 2015) (citation omitted). As we conclude that
the trial court lacked subject matter jurisdiction over Dana’s petition because
of her failure to join Joan as an additional defendant, we decline to address
whether waiver is appropriate with respect to Gary’s remaining issues.

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      In his first issue, Gary argues that the trial court lacked subject matter

jurisdiction in this matter because of Dana’s failure to join Ida and Joan.

“The failure to join an indispensable party is a non-waivable defect that

implicates the trial court’s subject matter jurisdiction.” N. Forests II, Inc.

v. Keta Realty Co., 130 A.3d 19, 28–29 (Pa. Super. 2015) (citation

omitted).   As such, our standard of review is de novo and our scope of

review is plenary. See S.K.C. v. J.L.C., 94 A.3d 402, 406 (Pa. Super. 2014)

(citation omitted).

      As this Court explained:

      A party is indispensable when [its] rights are so connected with
      the claims of the litigants that no decree can be made without
      impairing those rights. If no redress is sought against a party,
      and its rights would not be prejudiced by any decision in the
      case, it is not indispensable with respect to the litigation.

Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015) (internal

alteration, quotation marks, and citations omitted).

      When determining if a party is indispensable, this Court proceeds

through a four step process.     First, we consider if “absent parties have a

right or an interest related to the claim[.]”          Martin v. Rite Aid of

Pennsylvania, Inc., 80 A.3d 813, 814 (Pa. Super. 2013) (citation omitted).

If we answer that question in the affirmative, we then examine “what is the

nature of that right or interest” and if “that right or interest [is] essential to

the merits of the issue” raised in the suit. Id. Based upon our answers to

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those questions, the ultimate inquiry is whether “justice be afforded without

violating the due process rights of absent parties[.]” Id.

      We agree with the trial court that Ida is not an indispensable party in

this case.   Although we are unaware of any appellate case in Pennsylvania

addressing whether a transferor of property is an indispensable party, we

find persuasive decisions of appellate courts in other jurisdictions. 8   These

courts have held that a transferor is not an indispensable party when he or

she has parted with all of his or her interest in the property. See Estate of

Faisao v. Tenorio, 4 N.M.I. 260, ¶5 n.11 (1995) (citations omitted);

Emarine v. Haley, 892 P.2d 343, 348 (Colo. App. 1994) (citation omitted);

M.R. Bldg. Corp. v. Bayou Utilities, Inc., 637 So.2d 614, 618 (La. Ct.

App. 1994).

      Gary argues that Ida is indispensable because it was not clear

throughout the litigation that Ida relinquished all of her VECA shares. This

uncertainty during the litigation, however, is irrelevant to our disposition of

the jurisdictional question. Our task is to determine whether the trial court

possessed subject matter jurisdiction at the time it issued its order granting

Dana’s petition. As noted above, our scope of review when determining if a

party is indispensable is plenary. In other words, we may review the entire

record, including the testimony at trial. That record reflects that there is no

8
 Cf. Bensinger v. Univ. of Pittsburgh Med. Ctr., 98 A.3d 672, 682 (Pa.
Super. 2014) (decisions from other jurisdictions are persuasive).

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dispute regarding the current status of Ida’s ownership interest in VECA

stock: she no longer owns any VECA stock.           If there were a dispute

regarding whether Ida currently owned the VECA stock, the trial court could

have required Dana to join Ida as an additional defendant.           This was

unnecessary, however, as the trial court learned that Ida no longer retained

any ownership interest in VECA.

      Because there is no dispute that Ida relinquished her VECA shares, the

only “interest” she has in this litigation is seeing that Dana does not acquire

any VECA shares.        Such an “interest” is insufficient to make Ida

indispensable.   The interest required to be an indispensable party is an

interest recognized by the Fourteenth Amendment’s Due Process Clause.

See Martin, 80 A.3d at 814. An interest in seeing that a specific individual

not own property, after relinquishing one’s interest in the property, is not an

interest recognized by the Due Process Clause.

      Next, we address whether Joan is an indispensable party.         As this

Court has stated, “in actions intended to affect the title to property which is

either held or claimed by tenants by the entireties, both spouses are

indispensable parties and must be joined.” Miller v. Benjamin Coal Co.,

625 A.2d 66, 68 (Pa. Super. 1993), appeal denied, 641 A.2d 311 (Pa. 1994)

(emphasis added).    The trial court, however, found that Joan was not an

indispensable party because the question raised by Dana’s petition was who

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possessed valid title to the 2,100 VECA shares in 2011, not who possessed

valid title to the 2,100 VECA shares at the time the petition was filed.

      We reject the trial court’s rationale because the claim affected Joan’s

claim to title to property, i.e., the VECA shares, that Joan and Gary claimed

in the entireties.    The issue before the trial court asked whether Ida

perfected a transfer to Gary and Dana in 2006 or whether Ida retained her

interest in the VECA shares such that she could later transfer them to Gary.

These issues heavily implicated the validity of Joan’s claim of title to the

VECA shares.

      The trial court’s rationale, which focused exclusively on the sufficiency

of Ida’s transfer in 2006 and who possessed valid title to the 2,100 VECA

shares in 2011, is flawed. Although the question before the court may not

involve the current purported owner, the question before the court definitely

impacts the current purported owner’s, i.e., Joan’s, title or claim of title. As

the Commonwealth Court recently explained, the purported owner (and his

or her spouse if the purported ownership is in the entireties) is an

indispensable party to such litigation. See In re Balaji Investments, LLC,

2016 WL 5833330, *5 n.4 (Pa. Cmwlth. Oct. 6, 2016), citing Fulton v.

Bedford Cnty. Tax Claim Bureau, 942 A.2d 240, 243 (Pa. Cmwlth. 2008)

(“[A] successful purchaser at a judicial sale . . . is an indispensable party in

an action to set aside a sale.”).

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      Under the trial court’s rationale, the purported current owner of a

parcel of land is not an indispensable party to an action seeking to set aside

a sheriff’s sale from 1940. Under the trial court’s rationale, the question in

such a case would be whether the sheriff’s sale was valid in 1940, and that

question does not involve the current purported owner of the land.       This

rationale ignores a current property owner’s obvious interest in the chain of

ownership.    Clearly, as noted above, the current purported owner has an

interest in whether the sheriff’s sale was valid and is an indispensable party

to the litigation.    See Balaji Investments, 2016 WL 5833330 at *5

(citation omitted).

      The trial court states that the order appealed from does not require

Gary to give Dana one-half of the shares gifted to him by Ida in September

2014. This is a correct reading of the order, and the trial court’s rationale

for this reading is also correct.     The trial court determined that the

September 2014 gift never occurred because Ida had no VECA shares to gift

to Gary after she gifted the shares to Gary and Dana in 2006. We believe

that this reasoning puts the proverbial cart before the horse and is

inapposite for purposes of determining if Joan is an indispensable party.

Indeed, the trial court’s invalidation of the September 2014 transfer

demonstrates that Joan is an indispensable party. Joan has an interest in

whether she owns, as a tenant in the entireties, 2,000 shares of VECA stock

or whether she owns no VECA shares. By conducting a trial in which Joan

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was unable to call witnesses, cross-examine witnesses, and otherwise

present evidence, the trial court’s ruling on the merits of Dana’s petition

denied Joan due process of law as to her property interest in those 2,000

VECA shares.

      Dana notes that Joan was keenly aware of the petition to enforce the

MSA as her counsel was served with a copy of the petition. Whether Joan

was aware of the litigation is of no moment to our jurisdictional analysis. As

a non-party to the litigation, Joan had no obligation to intervene in the

dispute between Gary and Dana. Furthermore, Gary could not join Joan to

the litigation because Gary has no claims against Joan.       Instead, it was

Dana’s obligation, as the individual seeking relief, to ensure that Joan was

joined as an additional defendant, either voluntarily or involuntarily. 9   See

Pa.R.C.P. 2227(b).

      We find instructive our Supreme Court’s decision in Van Buskirk v.

Van Buskirk, 590 A.2d 4 (Pa. 1991). In that case, the husband’s parents

testified at the equitable distribution hearing.   See id. at 5.   The parents

testified regarding the status of property which they equitably gifted to the

husband and wife but failed to legally gift. Nonetheless, our Supreme Court

held that the trial court lacked subject matter jurisdiction over the equitable

distribution because the parents were not joined as indispensable parties.

9
 Because Dana filed the petition in the original divorce action, Joan could
not be an original defendant.

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See id. at 7-8. The same rationale applies in this case. Although Joan was

fully aware of the litigation, she was not joined as an indispensable party.

Thus, although Joan’s inaction may have frustrated efficient resolution of this

dispute, that does not mean we can overlook her absence when determining

if the trial court possessed subject matter jurisdiction over Dana’s petition

for enforcement.

      Dana argues that Joan is not an indispensable party because the trial

court lacked the authority to modify the MSA. Specifically, Dana argues that

section 3105(c) of the Divorce Code prohibits a trial court from modifying a

marital settlement agreement.      Section 3105(c) provides that, “In the

absence of a specific provision to the contrary appearing in the agreement, a

provision regarding the disposition of existing property rights and interests

between the parties, alimony, alimony pendente lite, counsel fees or

expenses shall not be subject to modification by the court.”      23 Pa.C.S.A.

§ 3105(c).

      Dana’s argument fails because section 3105(c) only bars a trial court

from modifying an MSA provision “regarding the disposition of existing

property rights and interests between the parties[.]”     Id.   In this case, if

Gary did not own VECA stock when the parties executed the MSA, then the

trial court would not be modifying a provision regarding existing property

rights and interests because Gary lacked ownership at that time. In other

words, if the trial court determines that no transfer occurred in 2006, the

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trial court would not be modifying any interest or right conferred by the MSA

because the MSA only conferred rights and interests related to the property

actually owned by Gary and Dana. Thus, section 3105(c) does not bar the

joinder of Joan in this action.

      Dana also argues that section 3331 of the Divorce Code bars Gary’s

collateral attack on the MSA. Section 3331 provides that:

      The validity of a decree of divorce or annulment issued by a
      court shall not be questioned, except by appeal, in any court or
      place in this Commonwealth after the death of either party to the
      proceeding. If it is shown that a party who subsequently
      attempts to question the validity of the decree had full
      knowledge of the facts and circumstances later complained of at
      the time of issuance of the decree or failed to take any action
      despite this knowledge within two years after the date of the
      decree, the party shall be barred from questioning the decree,
      and it shall be valid in all courts and places within this
      Commonwealth.

23 Pa.C.S.A. § 3331.

      Dana’s argument fails for two reasons. First, Gary is not attacking the

validity of the divorce decree. To the contrary, he agrees that the divorce

decree, and thus the MSA, is enforceable. Instead, he argues that the plain

terms of the MSA provide that he would only split the VECA stock with Dana

if he owned any such stock.       Moreover, he argues that even if the trial

court’s interpretation of the phrase “it is believed” is correct, he cannot turn

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over stock he did not own at the time.10       These claims are distinct from

collateral attacks on the MSA.

      Second, Dana’s argument is evidence of the indispensable nature of

Joan’s interest in this action. If Dana’s argument were correct, and Gary’s

failure to attack the MSA within two years of the divorce decree foreclosed

judicial review of the MSA, then Joan could lose her interest in VECA stock

without any opportunity to assert her interest. Instead, Joan would have no

process whatsoever, much less due process, to contest whether Ida

transferred the VECA stock to Gary and Dana in December 2006.           Such a

result violates Joan’s right to due process. Therefore, section 3331 does not

relieve Dana of the obligation to join Joan as an indispensable party.

Accordingly, we conclude that in this case Joan is an indispensable party.

      In sum, we conclude that Ida does not have an interest in the claim

brought by Dana. As such, she is not an indispensable party. We conclude,

however, that Joan does have an interest in Dana’s claim and she is an

indispensable party to this litigation. The trial court therefore lacked subject

matter jurisdiction over Dana’s petition.     As we conclude the trial court

lacked jurisdiction over Dana’s petition, we decline to address Gary’s

10
  There was a dispute at trial regarding the construction of the phrase “it is
believed” in the MSA. Dana argued that the phrase modified the number of
shares. In other words, Dana asserted that the MSA recognizes that she and
Gary owned VECA shares but uncertainty existed regarding the number of
shares owned. Gary, on the other hand, argued that the phrase modified
the phrase “currently own.” In other words, Gary asserted that there was
uncertainty as to whether he and Dana owned any VECA shares.

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remaining appellate issues.   We vacate the trial court’s order granting the

petition and, pursuant to Pennsylvania Rule of Civil Procedure 2227(a), we

dismiss Dana’s petition.   See Altoona Reg’l Health Sys. v. Schutt, 100

A.3d 260, 268 (Pa. Super. 2014) (citation omitted).

     Order vacated. Petition dismissed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 11/15/2016

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