Court Opinion

ID: 4265103
Source: CourtListenerOpinion
Date Created: 2018-04-18 17:45:04.482792+00
Date Added: 2024-06-11T14:30:45.567657
License: Public Domain

J-A06025-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 DONALD JAMES WALKER AND                :    IN THE SUPERIOR COURT OF
 ROSEANN WALKER, HIS WIFE               :         PENNSYLVANIA
                                        :
                                        :
              v.                        :
                                        :
                                        :
 MICHAEL J. MAFFEO, JR., KARA           :
 WALKER AND DONALD JOSEPH               :    No. 1185 WDA 2017
 WALKER                                 :
                                        :
                                        :
 APPEAL OF: MICHAEL J. MAFFEO,          :
 JR.

             Appeal from the Judgment Entered August 9, 2017
     In the Court of Common Pleas of Allegheny County Civil Division at
                           No(s): GD 14-002883

BEFORE:    BENDER, P.J.E., SHOGAN, J., and STRASSBURGER*, J.

MEMORANDUM BY SHOGAN, J.:                            FILED APRIL 18, 2018

      Michael J. Maffeo, Jr. (“Maffeo”) appeals from the judgment entered in

favor of Donald James Walker and Roseann Walker (collectively, “the

Walkers”). For the reasons that follow, we vacate the judgment and remand

for further proceedings.

      Maffeo and his sister, Clara Urbanek (“Clara”), each inherited a one-half

interest in their family home in Pittsburgh, Pennsylvania (“the Property”). The

Property had an appraised value of $110,000. When Maffeo’s daughter, Kara,

became engaged to Donald Joseph Walker (“DJ”), he wanted to help them

own a home. To that end, in April of 2008, Maffeo orchestrated an agreement

of sale (“AOS”) signed by Clara as the Seller, and himself, Kara, and DJ as the
____________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A06025-18

Buyers, whereby Kara and DJ would acquire title to the Property. The undated

AOS—prepared by Maffeo’s attorney—provided that DJ and Kara would obtain

a mortgage, and if they defaulted, divorced, or did not marry, they would

convey their joint one-half interest in the Property to Maffeo.

      DJ and Kara tried to secure a mortgage for the purchase of Clara’s one-

half interest in the Property for $55,000.     When they could not obtain a

mortgage, DJ and Kara approached DJ’s parents, the Walkers, for the money.

The Walkers agreed to pay the $55,000 for Clara’s interest in the Property.

In doing so, the Walkers were unaware of the AOS. They believed that DJ and

Kara would obtain Clara’s one-half interest in the Property and that Maffeo

would give his one-half interest to Kara and DJ.     Additionally, the Walkers

expected that DJ and Kara would repay the $55,000 by obtaining a home

equity loan during their first year of marriage.

      The Walkers obtained a home equity loan on April 22, 2008, and wrote

a check to Clara for $55,000 on April 29, 2008. Maffeo took the check from

the Walkers and gave it to Clara, who cashed the check on May 5, 2008. By

deed dated September 9, 2008, Clara transferred her one-half interest in the

Property to Maffeo, who then held full title. By deed dated March 3, 2009,

Maffeo transferred title in the Property to himself (one-half interest) and DJ

and Kara (one-half interest) as joint tenants. During their marriage, DJ and

Kara lived in the Property and made four payments of $385 each to the

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Walkers; however, they did not obtain a home equity loan to repay the

$55,000.

       DJ and Kara separated in August of 2010, with DJ leaving the Property.

A divorce decree was entered on September 17, 2013.             By deed dated

February 28, 2014, DJ and Kara transferred their one-half interest in the

Property to Maffeo,1 at which point Maffeo again held full title to the Property.

Maffeo allowed Kara and her daughter to live in the Property rent-free.

       Approximately one week before DJ and Kara conveyed their one-half

interest in the Property to Maffeo in February of 2014, the Walkers filed a

complaint in equity against Maffeo, Kara, and DJ, seeking an interest in the

Property based on their payment of the purchase price for Clara’s one-half

interest.   Additionally, the Walkers sought an injunction and consequential

damages. Complaint, 2/20/14, at Counts I–III. The trial court appointed a

special master who unsuccessfully mediated the case and prepared a report.

       By stipulation of the parties, the trial court ordered the taking of

depositions, which, along with the documents of record and the Walkers’

____________________________________________

1  Pursuant to its express terms, the AOS was contingent on DJ and Kara
obtaining a mortgage. AOS (undated) at ¶ 12. If they did not obtain a
mortgage, the AOS would be “of no further force and effect.” Id. Although
DJ and Kara did not obtain a mortgage, none of the parties challenges the
enforceability of the AOS. Arguably, without a written agreement of sale, all
agreements among Clara, Maffeo, DJ and Kara related to transferring any
interest in the Property were unenforceable under the Statute of Frauds.
Accord Meiksin v. Howard Hanna Co., Inc., 590 A.2d 1303 (Pa. Super.
1991) (explaining that Statute of Frauds affects only remedy and not validity
of contract).

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proposed findings of facts and conclusions of law, it used to decide the case.

Based on its independent review, the trial court agreed with the special master

that the Walkers were entitled to a purchase money resulting trust, and it

awarded them a one-half interest in the Property as joint tenants with Maffeo.

Amended Order, 6/30/17. The trial court directed Maffeo and the Walkers to:

      execute and file with the Allegheny County Department of Real
      Estate, a deed in a legally sufficient form to transfer fee simple
      title in the Property from [Maffeo to Maffeo and the Walkers], so
      that the Property is held as tenants in common with a one-half
      ownership interest in the Property to be held by [Maffeo] and a
      [sic] the other one-half ownership interest in the Property to be
      held by [the Walkers].

Amended Order, 6/30/17, at ¶ 3. Maffeo filed a motion for post-trial relief,

which the trial court denied. The trial court’s Amended Order was reduced to

judgment on August 9, 2017. Maffeo appealed. The trial court and Maffeo

complied with Pa.R.A.P. 1925.

      On   appeal,     Maffeo   presents   the   following   questions   for   our

consideration:

            Did the [Walkers] sustain their burden of proving the
      existence of a resulting trust by clear and convincing evidence?

            Was the Lower Court’s decision that the [Walkers]
      established the existence of a resulting trust supported by
      substantial, clear and convincing evidence?

             In its consideration of the evidence, did the Lower Court err
      in relying upon the report of the Special Master?

Maffeo’s Brief at 5.

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      As Maffeo’s issues involve a nonjury verdict, the following well-settled

standard guides our review:

      When reviewing the results of a non-jury trial, we give great
      deference to the factual findings of the trial court. We must
      determine whether the trial court’s verdict is supported by
      competent evidence in the record and is free from legal error. For
      discretionary questions, we review for an abuse of that discretion.
      For pure questions of law, our review is de novo.

Recreation Land Corp. v. Hartzfeld, 947 A.2d 771, 774 (Pa. Super. 2008)

(citations omitted).   Additionally, in an appeal from a trial court sitting in

equity, our standard of review is rigorous. “A chancellor’s findings of fact will

not be disturbed absent an abuse of discretion, a capricious disbelief of the

evidence, or a lack of evidentiary support on the record for the findings. A

chancellor’s conclusions of law are subject to stricter scrutiny.”      Lilly v.

Markvan, 763 A.2d 370, 372 (Pa. 2000) (citation omitted).          An abuse of

discretion occurs when a judgment is “manifestly unreasonable.” Id.

      We recognize that equity “does not act unless justice and good

conscience demand that relief should be granted and acts only in accordance

with conscience and good faith.” C.J.S. EQUITY § 97 (footnotes omitted); see

also Western Sav. Fund Soc. of Philadelphia v. SEPTA, 427 A.2d 175,

183 n. 4 (Pa. Super. 1981) (quoting Weissman v. Weissman, 121 A.2d 100,

102–103 (Pa. 1956) (“‘[E]quity surveys the whole situation and grants the

relief which justice and good conscience dictate.’”)).

      In his first two issues, Maffeo complains that the Walkers failed to

present clear and convincing evidence of a purchase money resulting trust.

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Maffeo’s Brief at 13, 18.      The Restatement (Second) of Trusts addresses

resulting trusts as follows:

      A resulting trust does not arise where a transfer of property is
      made to one person and the purchase price is paid by another, if
      the person by whom the purchase price is paid manifests an
      intention that no resulting trust should arise.

Restatement (Second) of Trusts § 441 (1959) (emphasis supplied).

      Where a transfer of property is made to one person and the
      purchase price is paid by another and the transferee is a wife,
      child or other natural object of bounty of the person by whom the
      purchase price is paid, a resulting trust does not arise unless the
      [payor] manifests an intention that the transferee should not have
      the beneficial interest in the property.

Id. at § 442 (emphasis supplied).

      Where a transfer of property is made to one person and the
      purchase price is advanced by another as a loan to the
      transferee, no resulting trust arises.

Id. at § 445 (emphasis supplied).

      If, therefore, the person who paid the purchase price manifested
      an intention that the transferee should hold the property
      beneficially and should be liable merely to repay the purchase
      price lent to him, no resulting trust arises.

Id. at Comment a.

      Where a transfer of property is made to one person and the
      purchase price is advanced by another as a loan to the transferee,
      the person making the advance is not entitled to an equitable lien
      upon the property in the absence of an agreement between him
      and the transferee that he is to have such a lien.

Id. at Comment b.

      The law requires clear, direct, precise, and convincing evidence of a

resulting trust before it will convert absolute ownership into an estate of lesser

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quality. Fenderson v. Fenderson, 685 A.2d 600, 605 (Pa. Super. 1996).

The person seeking imposition of a resulting trust has the burden of proof.

Id. Once the evidence establishes that a party has made a partial payment

towards the purchase price, the beneficiary has a prima facie case for a

purchase money resulting trust in his favor in the proportion that the amount

paid by him bears to the total purchase price. See Purman v. Johnston, 22

A.2d 722 (Pa. 1941) (mere payment of purchase price is sufficient to create a

resulting trust); Restatement (Second) of Trusts § 440. A prima facie case

established by the party seeking a resulting trust can be rebutted by evidence

showing that the payor did not intend to receive a resulting trust or any

beneficial interest in the land. Fenderson, 685 A.2d at 605; Restatement

(Second) of Trusts § 441.

      Here, the trial court based its determination that the Walkers were

entitled to a resulting trust on the Walkers’ version of the underlying

transactions. Trial Court Memorandum Order, 7/27/17, at 2 (adopting the

Walkers’ Proposed Findings of Fact and Conclusions of Law). In defense of its

ruling, the trial court opined that:

      despite the fact that some of the testimony and documentary
      evidence in the record refers to the purchase money advancement
      by [the Walkers] as a loan, the [c]ourt’s conclusion of law, based
      on the totality of the testimony and evidence, is that the payment
      was not a loan but was instead a purchase money payment
      qualifying under the law of Pennsylvania as the type of payment
      creating or resulting in a purchase money resulting trust.

Id. at 3.

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      Relying on the Restatement (Second) of Trusts, Maffeo asserts that no

resulting trust arose because “[t]he evidence produced by the Walkers shows

that the payment was a loan from them to their son and future daughter in

law and the Walkers intended that DJ and Kara would own a legal and

beneficial interest in the [Property].” Maffeo’s Brief at 14 (citing Restatement

(Second) of Trusts § 445). In support of his position, Maffeo contends that

the trial court erred by relying on Pa.R.E. 701 and Yeakel v. Driscoll, 467

A.2d 1342 (Pa. Super. 1983), and ignoring the testimony of Roseann Walker

and DJ that the $55,000 payment was a loan.

      The trial court cited Pa.R.E. 701 for the proposition that it was “in no

way bound by legal conclusions set forth in the testimony of lay witnesses.”

Trial Court Opinion, 7/27/17, at 4. However, Pa.R.E. 701 addresses opinion

testimony by lay witnesses that is “rationally based on the witness’s

perception, helpful to clearly understanding the witness’s testimony or to

determining a fact in issue; and not based on scientific, technical, or other

specialized knowledge . . . .” Pa.R.E. 701(a–c). Here, the parties testified to

the facts surrounding the Walkers’ $55,000 payment and the transfer of title

to Clara’s one-half interest in the Property; they did not offer opinions based

on their personal experience relative to agreements of sale, deed transfers,

or resulting trusts.   Additionally, as Maffeo explains, “the actual holding in

Yeakel v. Driscoll, supra, is quite different from the conclusion drawn from it

by the Lower Court.” Maffeo’s Brief at 19–20. The trial court relied on Yeakel

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for the proposition that it need not accept uncontradicted evidence as true.

Trial Court Opinion, 7/27/17, at 4. However, the Yeakel Court held that,

although the trial court accepted the plaintiff’s uncontradicted evidence that

she experienced water in her basement after the defendant completed work

on his own property, it did not have to accept her assertion that the defendant

caused the problem “in light of her failure at trial to demonstrate . . . what

the defendant did to cause such problems.” Yeakel, 467 A.2d at 1344. Thus,

we agree with Maffeo that Pa.R.E. 701 and Yeakel were inapposite to the

issues before the trial court.2

       Maffeo also asserts that the trial court erred in basing credibility

determinations solely on deposition testimony. As an initial matter, we remind

Maffeo that he stipulated to the taking of depositions and the trial court’s

reliance on them. Order, 1/13/17. Moreover, it is within the prerogative of

the trial court to make credibility determinations, even when based on

deposition testimony. American Express Co. v. Burgis, 476 A.2d 944, 947

(Pa. Super. 1984). Therefore, we cannot agree that the trial court abused its

discretion in this regard. However, an appellate court is not foreclosed “from

scrutinizing the identical evidence to determine if the ruling entered is

____________________________________________

2 We also agree with Maffeo that the appellate cases adopted by the trial
court are distinguishable for the reasons set forth in his appellate brief at
pages 21–22.

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supported by the record.” Id. Indeed, we have explained that, where the

trial court’s ruling is premised upon record deposition evidence:

      no credibility determinations or weight to be attached to a witness’
      testimony was required inasmuch as no witnesses testified before
      the trier of fact. Therefore, since the finding of fact . . . was simply
      a deduction from other facts and the ultimate fact in question is
      purely a result of reasoning, this Court may draw its own
      inferences and arrive at its own conclusions from the facts
      established.

Id. (emphasis in original); see also Romeo v. Looks, 535 A.2d 1101, 1114

(Pa. Super. 1987) (quoting American Express Co. on review of trial court’s

deposition-based finding that the appellant did not proffer a reasonable excuse

for failing to answer the complaint); Duckson v. Wee Wheelers, Inc., 620

A.2d 1206, 1209 (Pa. Super. 1993) (“Where the trial court’s analysis was

premised upon record evidence, where its findings of fact were deductions

from other facts, a pure result of reasoning, and where the trial court made

no credibility determinations, this Court may draw its own inferences and

arrive at its own conclusions.”).

      Thus, we utilize the American Express Co. approach to deposition-

based evidence and proceed to analyze the deposition testimony to consider

whether the trial court erred in finding that the Walkers’ $55,000 payment

created a resulting trust. Our assessment leads us to the conclusion that the

trial court erred.

      Neither the deposition testimony and exhibits nor the reasonable

inferences drawn therefrom establish by clear and convincing evidence that

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the Walkers created a resulting trust by paying the purchase price for Clara’s

one-half interest in the Property. Nothing in the record reveals an intention

by the Walkers or an agreement among the Walkers, Maffeo, and DJ and Kara

at the time of purchase that the Walkers would secure an interest in the

Property for themselves or would have a lien on the Property as security for

their payment of $55,000. Indeed, the Walkers failed to prove by clear, direct,

precise, and convincing evidence that they manifested an intent not to fund

the transfer of an undivided one-half interest in the Property to DJ and Kara.

Accord Mermon v. Mermon, 390 A.2d 796, 799 (Pa. Super. 1978) (holding

that parents failed to prove they had manifested an intent not to transfer to

their son and daughter-in-law a full, beneficial interest in the property).

      On the contrary, the Walkers and Maffeo expressed their intent and

understanding that DJ and Kara would acquire Clara’s one-half interest in the

Property with the $55,000. Roseann Walker Deposition, 2/8/17, at 8, 31–32;

Maffeo Deposition, 2/13/17, at 13.        Moreover, Roseann Walker and DJ

considered payment of the purchase price to be a loan to DJ and Kara, which

they started to repay and intended to repay by obtaining a home equity loan

during their first year of marriage. Roseann Walker Deposition, 2/8/17, at

17–18, 21, 28, 33, 35–36; DJ Walker Deposition, 2/8/17, at 14–15, 24–25;

Pretrial Statement, 8/14/13, at ¶ A, J. Thus, notwithstanding the trial court’s

seemingly well-intentioned motivation, the Restatement (Second) of Trusts

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§§ 441, 442, and 445 control to defeat the trial court’s imposition of a resulting

trust in favor of the Walkers.

      Based on the foregoing, we conclude that the record does not support

the trial court’s ruling.   Thus, the trial court erred in determining that the

Walkers were entitled to a resulting trust. Nevertheless, we may affirm the

trial court on any basis supported by the record. Lynn v. Nationwide Ins.

Co., 70 A.3d 814, 823 (Pa. Super. 2013).

      The Walkers submitted, the trial court adopted, and Maffeo does not

challenge the following proposed finding of fact: “22. It is also found as a

matter of fact that [Maffeo] has been unjustly enriched by obtaining full

ownership of the [P]roperty without any consideration paid in the original

transaction with his sister, Clara Urbanek.” Proposed Findings of Fact and

Conclusions of Law, 3/13/17, at ¶ 22. “Unjust enrichment is essentially an

equitable doctrine.” Assouline v. Reynolds, ___ A.3d ___, 2018 PA Super

53, *3 (Pa. Super. filed Mar. 9, 2018) (quoting Schenck v. K.E. David, Ltd.,

666 A.2d 327, 328 (Pa. Super. 1995)).

      We have described the elements of unjust enrichment as benefits
      conferred on defendant by plaintiff, appreciation of such benefits
      by defendant, and acceptance and retention of such benefits
      under such circumstances that it would be inequitable for
      defendant to retain the benefit without payment of value. The
      application of the doctrine depends on the particular factual
      circumstances of the case at issue. In determining if the doctrine
      applies, our focus is not on the intention of the parties, but rather
      on whether the defendant has been unjustly enriched.

            The most important factor to be considered in applying the
      doctrine is whether the enrichment of the defendant is unjust.

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      Where unjust enrichment is found, the law implies a contract,
      referred to as either a quasi contract or a contract implied in law,
      which requires that the defendant pay to plaintiff the value of the
      benefit conferred. In short, the defendant makes restitution to the
      plaintiff in quantum meruit.

Id. (quoting Schenck, 666 A.2d at 328–329 (internal quotation marks and

citations omitted; emphasis in original).

            “A quasi-contract imposes a duty, not as a result of any
      agreement, whether express or implied, but in spite of the
      absence of an agreement, when one party receives unjust
      enrichment at the expense of another.” [Discover Bank v.
      Stucka, 33 A.3d 82, 88 (Pa. Super. 2011)] (internal quotation
      marks omitted).

Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810, 817–818 (Pa.

Super. 2017). See also Gutteridge v. J3 Energy Group, Inc., 165 A.3d

908 (Pa. Super. 2017) (en banc) (“To sustain a claim of unjust enrichment, a

claimant must show that the party against whom recovery is sought either

wrongfully secured or passively received a benefit that it would be

unconscionable for her to retain.”).

      We draw a reasonable inference from the record that the Walkers

expected their $55,000 payment would buy Clara’s one-half interest in the

Property for DJ and Kara. However, Maffeo unilaterally used the $55,000 from

the Walkers to obtain Clara’s one-half interest in the Property for himself.

Clara Urbanek Deposition, 2/13/17, at 14–15, Exhibit 3 (Deed, 9/10/08);

Maffeo Deposition, 2/13/17, at 11. Maffeo then conveyed Clara’s one-half

interest to himself, DJ and Kara, as joint tenants, citing $55,000 as

consideration. Maffeo Deposition, 2/13/17, at 13, Exhibit 1 (Deed, 3/3/09).

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Upon DJ and Kara’s divorce, Maffeo obtained full title to the Property. Id. at

15–16, Exhibit 2. To the extent Maffeo argues that the Walkers’ must seek

repayment from DJ and Kara, his position ignores a critical fact: Maffeo—not

DJ and Kara—used the Walkers’ $55,000 to obtain full title in his name.

      Based on these facts of record, we conclude that unjust enrichment

serves as a basis for affirming the trial court’s equitable result of finding in

favor of the Walkers. Maffeo used the Walkers’ $55,000 to secure Clara’s one-

half interest in the Property for himself. That benefit appreciated by Maffeo

orchestrating a transfer from DJ and Kara whereby he would—and did—obtain

full title to the Property without paying any consideration for Clara’s one-half

interest.   Under the circumstances at hand, allowing Maffeo to accept the

$55,000 and retain Clara’s one-half interest in the Property without payment

of that value to the Walkers would be unjust and unconscionable.

Gutteridge, 165 A.3d 908. Thus, we conclude that Maffeo is liable to the

Walkers for $55,000. Accordingly, we vacate the judgment and remand for

the trial court to enter judgment in favor of the Walkers for $55,000 and any

applicable interest.

      In his final issue on appeal, Maffeo complains that the trial court

erroneously relied on the master’s report. Maffeo’s Brief at 22–24. Although

we agree with Maffeo that the record does not support the special master’s

resulting-trust conclusion, we disagree with his critique of the trial court’s

review. When the parties could not reach a settlement through mediation

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with the special master, the trial court held a status conference on January 11,

2017. At that conference, the parties “agreed to the taking of depositions and

the submitting of proposed findings of fact and conclusions of law so that the

[c]ourt could make its final determination in the matter.”          Trial Court

Memorandum Order, 7/27/17, at 2. As for the master’s report, the trial court

explained as follows:

      At that status conference, the [c]ourt and counsel for the parties
      discussed the Report of the Special Master, determined the facts
      and conclusions set forth therein that were stipulated to and those
      that were contested. . . .

            The [c]ourt, in its Amended Order, adopted [the Walkers’]
      Proposed Findings of Fact and Conclusions of Law as well as the
      Report of the Special Master because they each uniformly comport
      with the [c]ourt’s own, independent factual findings and legal
      conclusions reached after the [c]ourt’s independent review of the
      deposition testimony and evidence constituting the record in the
      case as well as the proposed findings of fact and conclusions of
      law submitted by counsel for the parties.

Trial Court Memorandum Order, 7/27/17, at 2–3. In light of the trial court’s

statements regarding its independent review of the entire record, we conclude

that Maffeo’s final issue lacks merit.

      Judgment vacated. Case remanded for proceedings consistent with this

Memorandum. Jurisdiction relinquished.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/18/2018

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