Court Opinion

ID: 9905962
Source: CourtListenerOpinion
Date Created: 2023-11-30 17:10:10.4456+00
Date Added: 2024-06-11T09:24:02.156800
License: Public Domain

J-A08006-23

                                   2023 PA Super 249

    TRIZECHAHN GATEWAY LLC, A                  :   IN THE SUPERIOR COURT OF
    DELAWARE LIMITED LIABILITY                 :        PENNSYLVANIA
    COMPANY                                    :
                                               :
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :   No. 1043 WDA 2022
                                               :
    SCHNADER HARRISON SEGAL &                  :
    LEWIS, LLP, PAUL H. TITUS, AND             :
    THOMAS D. ARBOGAST                         :

                        Appellees

            Appeal from the Judgment Entered September 12, 2022
              In the Court of Common Pleas of Allegheny County
                      Civil Division at No: GD-07-008527

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

OPINION BY STABILE, J.:                             FILED: NOVEMBER 30, 2023

       Appellant, TrizecHahn Gateway, appeals from the September 12, 2022

judgment entered in favor of Appellees, Schnader Harrison Segal & Lewis, LLP

(“Schnader”), Paul H. Titus (“Titus”), and Thomas D. Arbogast (“Arbogast”)

(together with Titus, the “Debtors”), under the Pennsylvania Uniform

Fraudulent Transfer Act (“PUFTA”), 12 Pa.C.S.A. § 5101, et. seq.1 We affirm.

____________________________________________

* Retired Senior Judge assigned to the Superior Court.

1 After the commencement of this litigation, the legislation was renamed the
Pennsylvania Uniform Voidable Transactions Act. 12 Pa.C.S.A. § 5101(a), as
amended. 2017 Pa. Laws 1249, No. 78, § 2. The parties agree that PUFTA
applies to this action. Throughout this opinion, we will cite to and quote PUFTA
rather than the present version of the statute.
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      The Debtors were partners of the Pittsburgh law firm Titus & McConomy

LLP when that firm entered a commercial lease agreement with Appellant. In

July of 2000, Appellant filed suit in Allegheny County (the “Underlying

Lawsuit”) against Titus & McConomy LLP and its partners, including the

Debtors, for breach of the lease agreement. On May 31, 2006, the trial court

entered a judgment (the “Judgment”) in the Underlying Lawsuit in favor of

Appellant and against the Debtors and other remaining defendants of more

than $3 million.

      By this time, Titus and McConomy LLP had dissolved and the Debtors

had become partners of Schnader. The complaint in the instant matter, filed

on April 24, 2007, alleged that the Debtors transferred their rights (the

“Transfers”) to the money in their Schnader capital accounts (the “Accounts”)

to Schnader in exchange for Schnader’s representation of them in the appeal

from the Judgment in the Underlying Litigation.       Schnader filed financing

statements referencing the Transfers on April 25, 2005, shortly after the trial

court entered its verdict in the Underlying Litigation. Schnader claims to be a

secured creditor with a priority interest in the Accounts, a claim that has

prevented Appellant from accessing those funds in execution of the Judgment.

For these reasons, Appellant argues the Transfers were actionable under

PUFTA.

      After a trial on May 2, 2018, the trial court found in favor of Appellees.

By memorandum of November 8, 2019, this Court vacated and remanded,

                                     -2-
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directing the trial court to provide a more thorough analysis of Appellant’s

claims. In response, the trial court filed an opinion dated October 5, 2020 and

a supplemental opinion dated December 16, 2020. On review, this Court once

again vacated and remanded, instructing the trial court to prepare an opinion

compliant with the previous remand order. On August 25, 2022, the trial court

issued an opinion in response to our second remand order authored by Judge

Michael A. Della Vecchia, as Judge Judith L. A. Friedman, the author of the

first two opinions, had retired from the bench. This matter is now ripe for our

review.

      Appellant argues that the Transfers were actionable under PUFTA, and

that the trial court erred in finding otherwise.      Appellant presents five

questions:

      1. Whether the trial court erred by making mistakes of law and
         fact when considering the factors set forth in 12 Pa.C.S.A.
         § 5104(b)(8) and (9) in determining that [Appellant] has failed
         to show that [the Debtors] provided reasonably equivalent
         value in exchange for the [T]ransfers and that they were
         insolvent shortly after the [T]ransfers were made.

      2. Whether the trial court erred by simply comparing the number
         of factors of 12 Pa.C.S.A. § 5104(b) present versus not present
         when determining that enough badges of fraud were not
         present for purposes of 12 Pa.C.S.A. § 5104(a)(1).

      3. Whether the trial court made mistakes of law and fact in
         determining that [the Debtors] did not make [the T]ransfers
         ‘with actual intent to hinder, delay or defraud any creditor of
         the debtor.’ See 12 Pa.C.S.A. § 5104(a)(1).

      4. Whether, contrary to the Superior Court’s instructions, the trial
         court failed to determine whether reasonably equivalent value

                                     -3-
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         was provided in exchange for the [T]ransfers from the point of
         view of [Appellant].

      5. Whether, contrary to the Superior Court’s instructions, the trial
         court erred by failing to address the claims set forth in
         [Appellant’s] complaint pursuant to § 5104(a)(2) and § 5105,
         including, but not limited to, whether reasonably equivalent
         value was received in exchange for the [T]ransfers based upon,
         among other things, the fact that the [T]ransfers were made in
         exchange for an unperformed promise that the trial court
         mistakenly stated were made in exchange for legal services
         already provided.

Appellant’s Brief, at 3-5 (underscoring in original).

      Avoidance of a transfer under PUFTA is an equitable remedy.            Our

standard of review is as follows:

            In prior matters involving review of alleged fraudulent
      conveyances, we have stated that our standard of review of a
      decree in equity is particularly limited and that such a decree will
      not be disturbed unless it is unsupported by the evidence or
      demonstrably capricious. The findings of the chancellor will not
      be reversed unless it appears the chancellor clearly abused the
      court's discretion or committed an error of law. The test is not
      whether we would have reached the same result on the evidence
      presented, but whether the chancellor's conclusion can reasonably
      be drawn from the evidence.

Mid Penn Bank v. Farhat, 74 A.3d 149, 153 (Pa. Super. 2013).

      PUFTA    permits    avoidance    of   transfers   under   the   following

circumstances:

      (a) General rule.--A transfer made or obligation incurred by a
      debtor is fraudulent as to a creditor, whether the creditor's claim
      arose before or after the transfer was made or the obligation was
      incurred, if the debtor made the transfer or incurred the
      obligation:

            (1) with actual intent to hinder, delay or defraud any
      creditor of the debtor; or

                                      -4-
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          (2) without receiving a reasonably equivalent value in
     exchange for the transfer or obligation, and the debtor:

                                     […]

            (ii) intended to incur, or believed or reasonably should have
     believed that the debtor would incur, debts beyond the debtor’s
     ability to pay as they became due.

12 Pa.C.S.A. § 5104(a). Appellant alleged causes of action against Appellees

under § 5104(a)(1) and (2)(ii), as well as under § 5105:

     A transfer made or obligation incurred by a debtor is fraudulent
     as to a creditor whose claim arose before the transfer was made
     or the obligation was incurred if the debtor made the transfer or
     incurred the obligation without receiving a reasonably equivalent
     value in exchange for the transfer or obligation and the debtor
     was insolvent at that time or the debtor became insolvent as a
     result of the transfer or obligation.

12 Pa.C.S.A. § 5105.

     In its first assertion of error, Appellant claims the trial court erred in

assessing whether the Debtors received reasonably equivalent value in

exchange for the transfers, and whether they became insolvent shortly

thereafter. Appellant references § 5104(b)(8) and (9), which are among the

factors relevant in determining the transferor’s intent for purposes of

§ 5104(a):

     (b) Certain factors.--In determining actual intent under
     subsection (a)(1), consideration may be given, among other
     factors, to whether:

                                     […]

           (8) the value of the consideration received by the debtor
     was reasonably equivalent to the value of the asset transferred or
     the amount of the obligation incurred;

                                    -5-
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              (9) the debtor was insolvent or became insolvent shortly
       after the transfer was made or the obligation was incurred[.]

12 Pa.C.S.A. § 5104(a)(8), (9).2

____________________________________________

2   For reference, § 5104(b) reads in its entirety as follows:

       b) Certain factors.--In determining actual intent under
       subsection (a)(1), consideration may be given, among other
       factors, to whether:

              (1) the transfer or obligation was to an insider;

             (2) the debtor retained possession or control of the property
       transferred after the transfer;

              (3) the transfer or obligation was disclosed or concealed;

             (4) before the transfer was made or obligation was incurred,
       the debtor had been sued or threatened with suit;

              (5) the transfer was of substantially all the debtor's assets;

              (6) the debtor absconded;

              (7) the debtor removed or concealed assets;

             (8) the value of the consideration received by the debtor
       was reasonably equivalent to the value of the asset transferred or
       the amount of the obligation incurred;

              (9) the debtor was insolvent or became insolvent shortly
       after the transfer was made or the obligation was incurred;

             (10) the transfer occurred shortly before or shortly after a
       substantial debt was incurred; and

             (11) the debtor transferred the essential assets of the
       business to a lienor who transferred the assets to an insider of the
       debtor.

12 Pa.C.S.A.§ 5104(b).

                                           -6-
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        Appellant cites Farhat, in which the appellee debtor transferred a real

estate parcel to his parents for one dollar (his parents had transferred the

property to him for one dollar several years earlier) after the appellant bank

threatened to execute judgment against him pursuant to a loan agreement.

Farhat, 74 A.3d at 151.       The parents subsequently sold the property for

$275,000.00. The trial court found in favor of the debtor and his parents,

reasoning that the conveyance was done without actual intent to defraud the

bank.    Id. at 154.   This Court reversed.     While accepting the trial court’s

findings that the conveyance took place between insiders (parents and son),

after a lawsuit was threatened, and shortly before the son incurred a

substantial debt (§ 5104(b)(1), (4), and (10), respectively), the Farhat court

found error in other respects. In particular, the Farhat Court concluded that

the trial court erred in finding that the debtor lacked a sufficient financial stake

in or control of the property. Id. at 155. Further, the transfer for one dollar

of a property that sold for $275,000.00 shortly thereafter clearly was not a

transfer for reasonably equivalent value under 5104(b)(8). Id. Finally, we

disagreed with the trial court’s finding that the debtor was solvent because he

was making timely payment of his bills. Id. at 156. The record reflected that

the debtor’s assets were worth less that the debt he owed to the bank. Id.

Therefore, the Farhat Court concluded that the debtor was insolvent under

§§ 5102(a) and 5104(b)(9). Id. at 156.

                                       -7-
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       Appellant also relies on Fell v. 340 Assocs., LLC, 125 A.3d 75 (Pa.

Super. 2015), appeal denied, 140 A.3d 13 (Pa. 2016), wherein the creditor,

winner of a $6.8 million judgment against the debtor and others in a dram

shop action, sought to set aside the debtor’s transfer of its liquor license. The

debtor offered the license for sale in January of 2006, the creditor was injured

in March of 2007 and filed suit against the debtor and others in November of

2007. In June of 2009, the debtor finally sold the license for $75,000.00, well

below the original $375,000.00 asking price. Id. at 77-80. The purchaser

was to make payments pursuant to a loan agreement and judgment note, and

the purchaser was required to sell the license to a company controlled by the

debtor at the expiration of the purchaser’s lease of the debtor’s restaurant

premises. Id.

       The trial court, reasoning that the license was for sale well before the

creditor’s injury and the ensuing dram shop litigation, declined to set the

transfer aside, despite the presence of several indicators of fraud under

§ 5104(b).3      This Court reversed because the debtor failed to procure

sufficient value for the license. In effect, the debtor loaned the purchaser the

money for the purchase price of the license. Id. at 84. The debtor therefore

____________________________________________

3  The trial court found that the transfer occurred after the debtor had been
sued, that it was substantially all of the debtor’s assets, that the debtor was
insolvent as of the time of transfer, and that the transfer occurred after the
debtor incurred a substantial debt. See, 12 Pa.C.S.A. § 5104(b)(4), (5), (9),
(10).

                                           -8-
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transferred its only asset in exchange for nothing of immediate value, thereby

leaving itself incapable of paying its outstanding debts. This, in addition to

the other § 5104(b) factors the trial court found present, led the Fell Court to

vacate and remand for entry of judgment in favor of the creditor. Id. at 84.

      In analyzing § 5104(b)(8) in the instant case, the trial court noted that

the amount of the Transfers (a combined total of roughly $118,000 in Titus’

and Arbogast’s capital accounts) was considerably lower than the value of the

services it ultimately received from Schnader ($400,000). Trial Court Opinion,

8/25/22, at 21. Based on those numbers, which Appellant does not dispute,

the trial court found that the Debtors received reasonably equivalent value in

exchange for the Transfers.      In this regard, the present case is easily

distinguishable from Farhat (where in a property worth $275,000 was

transferred for $1) or Fell (wherein the debtor lent the purchaser the money

to buy the asset at well below asking price).

      Appellant argues, however, that an unperformed promise does not

constitute value under § 5103:

             (a) General rule.--Value is given for a transfer or an
      obligation if, in exchange for the transfer or obligation, property
      is transferred or an antecedent debt is secured or satisfied, but
      value does not include an unperformed promise made
      otherwise than in the ordinary course of the promisor’s
      business to furnish support to the debtor or another
      person.

            (b) Reasonably equivalent value.--For the purposes of
      sections 5104(a)(2) (relating to transfers fraudulent as to present
      and future creditors) and 5105 (relating to transfers fraudulent as
      to present creditors), a person gives reasonably equivalent value

                                     -9-
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        if the person acquires an interest of the debtor in an asset
        pursuant to a regularly conducted, noncollusive foreclosure sale
        or the exercise of a power of sale for the acquisition or disposition
        of the interest of the debtor upon default under a mortgage, deed
        of trust or security agreement or pursuant to a regularly
        conducted, noncollusive execution sale.

12 Pa.C.S.A. § 5103 (emphasis added).

        The trial court rejected Appellant’s argument under § 5103, concluding

that “[Appellant’s]     assertion that    Schnader’s engagement to         provide

prospective legal services to the Debtors constitutes an ‘unperformed promise’

is of no moment because at the time, Schnader had already begun to perform

legal services for them.”      Trial Court Opinion, 8/5/22, at 20.       Appellant

disputes this, noting that the Transfers occurred on April 19, 2005, whereas

the Debtors did not receive their first invoices from Appellant until May of

2005.     Appellant is wrong about the facts, as the parties’ joint stipulation

states that Schnader commenced work on behalf of the Debtors on April 1,

2005, several weeks before the Transfers.         Joint Statement of Undisputed

Facts, 5/2/18, at ¶ 11. Given this stipulation, the record supports the trial

court's finding that the Debtors did not receive a mere unperformed promise

in exchange for the Transfers.

        We must also take account of the remainder of the portion of § 5103(a)

bolded above: “[…] an unperformed promise otherwise than in the ordinary

course of the promisor’s business to furnish support to the debtor or another

person.”     In other words, the text of § 5103(a) permits the debtor to give

consideration in exchange for a promise—made within the ordinary course of

                                       - 10 -
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the promisor’s business—to provide support to the debtor.4 Schnader, the

promisor, made a promise in the ordinary course of its business—the practice

of law—to represent the Debtors in their appeal from the Underlying

Judgment. The Transfers served as a retainer fee for Schnader’s services.5

       Our reading of the text of § 5103(a) is consistent with its attendant Bar

Association Comment.6         Of particular import is Comment (2), which states

that “Consideration having no utility from the creditor’s viewpoint does not

satisfy the statutory definition [of value].” 12 Pa.C.S.A. § 5103, cmt. 2. In

one of our prior remand memoranda we directed the trial court to analyze the

Transfers from the creditor’s point of view, as per Comment 2. TrizecHahn

v. Schnader Harrison Segal & Lewis, LLP, 2019 WL 5858227 at *7 (Pa.

Super. filed Feb. 8, 2019). Appellant argues Schnader’s representation of the

Debtors was hostile to Appellant and therefore had no utility from Appellant’s

standpoint.    This argument, based on Comment 2 considered in isolation,

would seem to provide Appellant a meritorious argument.            But to read

____________________________________________

4  We interpret § 5103(a) according to its plain meaning.          1 Pa.C.S.A.
§ 1921(b).

5  We note that Rule 1.16 of the Pennsylvania Rules of Professional Conduct
limits the circumstances under which Schnader could have withdrawn its
representation after the Debtors engaged it to represent them. Pa.R.P.C.
1.16.

6 Again, we note that we are citing to the version of PUFTA extant at the time
this lawsuit was filed. The comment to present version of § 5103 is titled
“Uniform Law Comment.”

                                          - 11 -
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Comment 2 in isolation would not comport with the language of § 5103(a),

nor would it comport with the remainder of the comments. As we explained

just above, § 5103(a) expressly permits the debtor to procure support

services from entities in the business of providing it.          The fourth Bar

Association Comment provides that such support includes “housing, feeding,

clothing, medical care, recreation, education, travel, burial and similar

services and expenses provided to an individual.” 12 Pa.C.S.A. § 5103, cmt.

4. In other words, § 5103(a) and Comment 4 indicate that a debtor may

spend money to procure necessary services.         Even though these services

come at the expense of the debtor, and are of no monetary value to the

creditor, the utility of these services, even from the standpoint of the creditor,

is obvious. Comment 2 directs an analysis of the utility of the consideration

from the standpoint of the creditor, not its monetary value to the creditor. We

believe that the procurement of legal representation in exchange for a retainer

is an example of a transaction that is of obvious utility but no monetary value

from the standpoint of the creditor.7 For the foregoing reasons, we reject

Appellant’s challenge to the trial court’s analysis under § 5104(b)(8).

       Regarding § 5104(b)(9), the court reasoned that the Debtors did not

become insolvent shortly after the Transfers, as they did not file for

____________________________________________

7 Appellant does not argue to this Court that the dollar amount of Transfers
was excessive for a retainer.

                                          - 12 -
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bankruptcy protection until several years later. Trial Court Opinion, 8/25/22,

at 22-23. Appellant counters that the filing of a bankruptcy petition is not

determinative under the statute, as a party may become insolvent well before

filing for bankruptcy. Appellant relies on Farhat, wherein this Court concluded

that the debtor was insolvent at the time of the disputed transfer, even though

he was still paying bills on time, because there was clear evidence that the

debtor’s assets were worth less than the outstanding debts. Appellant argues

the same is true in this case.

      Turning to the facts, Titus and Arbogast each stipulated that their assets

were worth less than the amount of the Judgment. But they note that the

amount of the non-jury verdict was $2.961 million, and that the $3.274 million

Judgment was entered after the Transfers (the Transfers occurred after the

verdict but before entry of the Judgment). Thus, according to the Debtors,

their stipulations that their assets were worth less than $3.274 million as of

the entry of Judgment is not sufficient evidence of their insolvency at the time

of or shortly after the Transfers. That is, each of the Debtors could have had

assets worth more than $2.961 million but less than $3.274 million at the time

of the Transfers.

      Given the analysis in Farhat, the trial court was incorrect in relying on

the timing of the Debtors’ bankruptcy petitions. Farhat establishes that a

finding of insolvency is appropriate if a debtor’s assets are less than its

liabilities, even if the debtor has yet to file for bankruptcy or otherwise

                                     - 13 -
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acknowledge its insolvency. To this extent, we agree with Appellant. On the

other hand, the Debtors’ argument—that the Debtors’ assets8 near the time

of the Transfers could have been more than the amount of the verdict but less

than the amount of the Judgment—strains credulity but is not foreclosed by

the record. We are not a factfinding court, and in any event, there appears

to be no precise evidence of the Debtors’ assets at or near the time of the

Transfers. Despite the trial court’s errant legal analysis, Appellant has not

established any basis upon which we can overturn the trial court’s conclusion

under § 5104(b)(9).9

       Appellant’s second argument is that the trial court erred in simply

counting the number of § 5104(b) factors present versus those not present:

“The undersigned concludes that because a majority of the eleven factors

under § 5104(b) weigh in favor of Schnader, [the Debtors] did not act with

actual intent to hinder, delay or defraud [Appellant] by allowing Schnader to

place a lien on the Accounts.” Trial Court Opinion, 8/25/22, at 24. Appellant

____________________________________________

8 The Debtors note that Titus and Arbogast were jointly liable with each other
as well as other former partners of Titus and McConomy, but they do not
address several liability.

9  As we explain below, the outcome of this case rested on a judgment call, in
light of the applicable law and the remand instructions from our prior panels,
as to whether the Debtors were shielding assets in a hopeless case or retaining
counsel to appeal from a judgment they believed to be entered in error. In
our view, the ultimate outcome is not dictated by any single subsection of
§ 5104(b). Even were we to conclude that the Debtors were insolvent at the
time of the Transfers, our disposition of this appeal would not change.

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argues that the foregoing sentence is legal error under Fell, wherein this Court

explained that the § 5104(b) factors are to be measured “qualitatively, and

not quantitatively.” Fell, 125 A.3d at 82. Appellant’s statement of the law is

correct. The sentence quoted above is in tension with Fell. Indeed, it may

be possible in some cases to find a transfer to be in violation of PUFTA even if

a majority of the § 5104(b) factors are not present. But it may be possible in

other cases for a quantitative and qualitative analysis of § 5104(b) to lead to

the same conclusion. Thus, the above-quoted sentence from the trial court’s

opinion does not, by itself, establish that the trial court reached the wrong

conclusion here. Likewise, Appellant’s second argument does not, by itself,

establish grounds for relief. For reasons we explain throughout this opinion,

we discern no reversible error in the trial court’s decision.

      Appellant next argues that the trial court made errors of law and fact in

deciding that the Debtors did not act with fraudulent intent. The trial court

found that their intent was to pay for legal representation in their appeal from

the Judgment. Trial Court Opinion, 8/25/22, at 25. Appellant criticizes the

trial court for demonstrating pity toward and bias in favor of the Debtors based

on their involvement in more than two decades of litigation in this matter and

the Underlying Lawsuit.    Appellant’s Brief at 30-31.     Appellant argues the

Transfers were “distinct attempts, and obviously so, by each of [the Debtors]

to place these assets outside of the reach of [Appellant] and its attempts to

enforce the [Judgment] it had obtained against each of them.” Appellant’s

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Brief at 33.     Appellant notes that Schnader’s witnesses and its counsel

acknowledged at trial that the reason for the Transfers was to ensure that

Schnader would receive compensation for its services:

            Q.    For clients that do face substantial judgments and
      seek legal advice, does Schnader typically require a retainer?

            A.     Yes.

            Q.     Why is that?

            A.    To secure payment for legal services that Schnader
      provides to the client.

N.T. Trial, 5/2/18, at 78. In this case, Schnader elected to demand a retainer

in the form of a security interest in the Accounts rather than cash. Id. at 80,

84, 94.

      The record reflects that an equity partner’s capital account, such as the

Accounts that were the subject of the Transfers, operate as follows:

            Q.     What is a capital account?

           A.     Capital accounts are individual contributions made by
      each of the equity partners in the firm that essentially forms the
      good will or capital underpinnings for the firm.

          Q.    Is there actually money sitting in an account
      somewhere for each equity partner?

            A.    No.     It’s really an accounting entry as much as
      anything else.

Id. at 76. The funds accountable to each partner are redistributed to that

partner beginning at retirement, resignation, or death, less any money the

partner owes to the firm in accordance with the partnership agreement. Id.

at 77, 85. The amount of money in the Debtor’s Accounts was frozen in 2006

                                    - 16 -
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when they resigned as equity partners of Schnader. Id. at 82. Schnader

never pursued the Debtors for any outstanding balance over the amount in

the Accounts because the Debtors filed for bankruptcy. Id. at 83. Appellant

argues, based on the foregoing, that the “facts of this case weigh heavily in

favor of a finding that [the Debtors] made [the Transfers] with the intent to

hinder, delay or defraud [Appellant] as the judgment creditor.” Appellant’s

Brief at 35.

      In its opinion, the trial court examined the foregoing facts considering

each subsection of §5104(b).     Trial Court Opinion, 8/25/22, at 10-24.    In

addition to its findings under subsections 5104(b)(8) and (9), discussed

above, the court found that the Transfers were to an insider, under

§ 5104(b)(1), because the Debtors were partners of Schnader at the time.

Id. at 10-11. Also, the Debtors knew they had been sued at the time of the

Transfers (§ 5104(b)(4)), and they released the funds to Schnader shortly

after a substantial verdict was entered against them (§ 5104(b)(10)).

      Weighing against a finding of fraud was that the Debtors did not retain

control over the funds after the Transfers (§ 5401(b)(2)), that the Debtors did

not conceal the Transfers (§ 5104(b)(3)), that there was no evidence that the

amount of the Transfers represented all or substantially all of the Debtors’

assets (§ 5104(b)(5)), that the Debtors did not abscond (§ 5104(b)(6)), that

they did not conceal any assets (§ 5104(b)(7)), and that Schnader did not

subsequently transfer the money to an insider of the Debtors (§ 5104(b)(11)).

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After conducting its § 5104(b) analysis, the trial court concluded that the

Debtors did not act with intent to hinder, delay, or defraud Appellant, but

rather to procure legal representation to appeal from the Underlying

Judgment. Trial Court Opinion, 8/25/22, at 25.

      The record supports the trial court’s findings. There is no dispute that

the Debtors retained Schnader to represent them in their appeal from the

Judgment, and that Schnader did so.             The Debtors’ appeal resulted in a

published opinion from this Court and another from the Pennsylvania Supreme

Court. TrizecHahn Gateway LLC v. Titus, 930 A.2d 524 (Pa. Super. 2007),

reversed in part, 976 A.2d 474 (Pa. 2009).            Given all the foregoing, we

conclude the record supports the trial courts’ findings as to the lack of intent

to delay, hinder, or defraud Appellant. Appellant’s third argument does not

merit relief.

      Appellant’s fourth argument is that the trial court erred in failing to

follow this Court’s previous instructions to analyze whether the Debtors

received reasonably equivalent value, from the standpoint of Appellant, in

exchange for the Transfers. We have already addressed the substance of this

argument above. Here we note only that the trial court’s opinion contained

sufficient findings of fact to facilitate appellate review of this issue. While our

analysis of the meaning of utility from the creditor’s point of view differs from

that of the trial court, we discern no reversible error in the trial court’s decision

and no need for further remand. It is well established that this Court may

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affirm the trial court on any valid basis. Dockery v. Thomas Jefferson Univ.

Hosps., Inc., 253 A.3d 716, 721 (Pa. Super. 2021).

      Appellant’s fifth and final argument is that the trial court erred in failing

to address its claims under §§ 5104(a)(2)(ii) and 5105. These subsections

are distinct from § 5104(a)(1) in that they do not require a finding of intent

to hinder, delay, or defraud a creditor as per § 5104(a)(1) and (b). Section

5104(a)(2)(ii) provides:

            (a) General rule.--A transfer made or obligation incurred
      by a debtor is fraudulent as to a creditor, whether the creditor’s
      claim arose before or after the transfer was made or the obligation
      was incurred, if the debtor made the transfer or incurred the
      obligation:

                                       […]

           (2) without receiving a reasonably equivalent value in
      exchange for the transfer or obligation, and the debtor:

                                       […]

             (ii) intended to incur, or believed or reasonably should have
      believed that the debtor would incur, debts beyond the debtor’s
      ability to pay as they became due.

12 Pa.C.S.A. § 5104(b)(2)(ii). And § 5105, titled “Transfers fraudulent as to

present creditors,” provides that,

            A transfer made or obligation incurred by a debtor is
      fraudulent as to a creditor whose claim arose before the transfer
      was made or the obligation was incurred if the debtor made the
      transfer or incurred the obligation without receiving a reasonably
      equivalent value in exchange for the transfer or obligation and the
      debtor was insolvent at that time or the debtor became insolvent
      as a result of the transfer or obligation.

12 Pa.C.S.A. § 5105.

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J-A08006-23

      Each of these sections requires, as a predicate, that the debtor made a

transfer without receiving reasonably equivalent value. The findings of fact in

the trial court’s August 25, 2022 opinion are sufficient to facilitate our review

of these issues. For the reasons we have explained above, we believe that a

judgment debtor’s payment of a retainer fee to appellate counsel to handle an

appeal from the judgment is permissible under PUFTA, and we believe the

judgment creditor can be expected to understand the utility of that

transaction. Because we affirm the trial court’s decision that Appellant has

failed to establish the lack of reasonable equivalent value, we have no basis

for overturning the trial court's decision as to these subsections.      Finally,

because we affirm the trial court’s decisions under §§ 5104 and 5105, we have

no occasion to analyze a defense under § 5108.

      Ultimately, we believe this matter required the finder of fact to make a

judgment call between one of two scenarios. The benign scenario is that the

Debtors used the Transfers to retain Schnader to represent them in an appeal

from a judgment they believed was entered against them in error. Appellees

posit that a ruling against them would preclude any judgment debtor from

ever appealing from a judgment large enough to render the debtor insolvent.

The malign scenario is that the Debtors intended to place an asset beyond

Appellant’s reach in anticipation of the Judgment the Debtors knew would be

entered against them. In the words of Judge Friedman, who presided over

the trial:

                                     - 20 -
J-A08006-23

             As we stated [prior to trial], the unavoidable suggestion
      prior to the instant trial testimony was that, at the time [of the
      Transfers], [the Debtors] had acted to defeat [Appellant’s] right
      to collect the [J]udgment that would surely be entered against the
      former Titus & McConomy partners. This would have been in
      keeping with Mr. Titus’s blithe handling of the winding up of that
      partnership’s rental obligations, and it is not surprising that
      [Appellant] was highly skeptical of the legitimacy of the
      [Transfers]. The subsequent discharges in bankruptcy of [the
      Debtors’] substantial obligations to Schnader would only have
      confirmed [Appellant’s] view of the [Transfers].

Trial Court Opinion, 5/24/18, at 3.

      We believe the record contains some evidence to support either

scenario. Our decision is guided by our limited standard of review, pursuant

to which we will not reverse a trial court’s decision unless it is “unsupported

by the evidence or demonstrably capricious.” Farhat, 74 A.3d at 153. The

question is not whether this Court would have reached the same result, but

whether the trial court’s conclusion “can reasonably be drawn from the

evidence.”   Id.   Based on all the foregoing, we conclude the trial court’s

conclusion can reasonably be drawn from the evidence, and that it was not

demonstrably motivated by capriciousness.         Understandably, Appellant

disagrees with much of the trial court’s analysis and argues that it reached

the wrong conclusion under the applicable law and our prior remand

instructions. But our prior remands directed the trial court to engage in a

more thorough analysis; they did not direct a result. Mindful of our applicable

standard of review, we discern no reversible error.

      Judgment affirmed.

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J-A08006-23

FILED: 11/30/2023

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