Court Opinion

ID: 4643165
Source: CourtListenerOpinion
Date Created: 2020-12-15 19:12:26.403279+00
Date Added: 2024-06-11T08:00:38.160255
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    RUKHSANA HASIB, A/K/A                      :   IN THE SUPERIOR COURT OF
    RUKHSANA CHOUDHURY                         :        PENNSYLVANIA
                                               :
                                               :
                v.                             :
                                               :
                                               :
    MAHMOOD CHOUDHURY                          :
                                               :   No. 2623 EDA 2019
                       Appellant               :

                Appeal from the Order Entered August 9, 2019
     In the Court of Common Pleas of Bucks County Civil Division at No(s):
                           2010-60229-D-E-Q-R-Y

BEFORE:      LAZARUS, J., KING, J., and STRASSBURGER, J.*

MEMORANDUM BY LAZARUS, J.:                           FILED DECEMBER 15, 2020

        Mahmood Choudhury (Husband) appeals from the order, entered in the

Court of Common Pleas of Bucks County, following this Court’s June 10, 2019

decision reversing, in part, the trial court’s order distributing the marital

property between Husband and Appellee Rukhsana Hasib (Wife), and

remanding with instructions. After careful review, we affirm.

        This case has a protracted procedural history and is before this Court

for the second time in two years. On January 26, 2010, Wife filed a complaint

in divorce. Following seven years of litigation, the parties appeared before a

master on July 12, 2017. The master issued a report and recommendation,

and Husband filed exceptions. The trial court scheduled an equitable

distribution hearing for January 9, 2018. The day before the hearing, Husband
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*   Retired Senior Judge assigned to the Superior Court.
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sought a continuance, which the court denied. The hearing, presided over by

the Honorable James M. McMaster, proceeded as scheduled. Husband did not

appear.

       On January 17, 2018, Judge McMaster entered a final decree in divorce

and an order distributing the parties’ marital property. On February 14, 2018,

Husband appealed to this Court, challenging various aspects of the equitable

distribution order, in particular the trial court’s redistribution of interests in

the parties’ family owned limited partnerships. These partnerships, created

for purposes of estate and tax planning, were set up with Husband as general

partner and Wife and adult children as limited partners. Husband challenged

the following language in Judge McMaster’s order:

       [Wife] is awarded 50% of [Husband’s] 1% interest as General
       Partner of Sovereign Realty Investments, LP, and the parties are
       hereafter Co-General Partners, with equal rights, responsibilities,
       duties and obligations.

       [Wife] is awarded 50% of [Husband’s] 1% interest as General
       Partner of Cabochon Properties, LP, and the parties are hereafter
       Co-General Partners, with equal rights, responsibilities, duties and
       obligations.

       [Wife] is awarded [Husband’s] 1% interest as General Partner of
       Orchards Industrial Land, LP, and shall be the sole General
       Partner.

Order and Decree, 1/17/18, at ¶¶ 12, 13, 15 (emphasis added).1          Husband

argued the trial court erred or abused its discretion in removing him as General
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1 In addition, the trial court ordered the parties to complete the pending sale
of the property owned by Orchards Industrial Land, LP. The proceeds of the

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Partner and naming Wife as sole General Partner of Orchards Industrial Land,

LP, or in naming Wife co-General Partner of the other entities. This Court

agreed, concluding that the trial court overreached its authority in altering the

corporate structure.2        On June 10, 2019, we remanded the case with

instructions.   See Hasib v. Choudhury, 2623 EDA 2020 (Pa. Super. filed

June 10, 2019) (unpublished memorandum) (citing 15 Pa.C.S.A. §§

6883(7)(i)-(iii), 8641(b)(1)-(4)).3 The Court stated:

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sale were to be distributed among the partners, with the partnership dissolved
after the sale. Hasib v. Choudhury, supra at 3-4. In May of 2018, Wife
filed a petition for contempt. The trial court found Husband in contempt for
the following: (1) misappropriating funds from the business accounts for
personal use; (2) delaying sale of the Orchards Industrial Land, LP property;
(3) testifying that he intended to reinvest the funds from the sale of the
property instead of redistributing the funds per the court’s equitable
distribution order; (4) failing to pay Wife for her buy-out of assets and interest
in marital home; (5) refusing to allow Wife to remove her personal property;
and (6) failing to pay attorney’s fees. Order, 7/19/18. The court’s remedy
was to give Wife sole control over the business accounts and the sale of the
property and distribution of proceeds. Id. at 3. The court also ordered
Husband to allow Wife to collect her property and to pay her the money owed.
Id. at 5-6.

2We have uncovered no case law or statute that allows a court to dissolve a
partnership or alter corporate structure to effectuate an equitable distribution
order.

3There are three statutory circumstances whereby an individual can properly
be dissociated from being a general partner:

       (i) the individual dies;

       (ii) a guardian for the individual is appointed, or

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       None of the events or conditions described in this section are
       instantly applicable. Accordingly, we find no statutory authority
       for the trial court, in determining equitable distribution, to fashion
       its own rules for the appointment of a co-general partner. While
       we understand the trial court’s motives in attempting to
       restructure the limited partnership agreements to ostensibly
       provide a more secure and stable base for the ongoing business
       activities of the partnership, ultimately, the trial court lacks the
       authority to act in this manner. Therefore, we must reverse those
       portions of the order that (1) appoints Hasib as co-general partner
       in Sovereign Realty Investments, L.P. and Cabochon
       Investments Florida, L.P., and which (2) dissociates Choudhury
       as general partner of Orchards Industrial Land, L.P. and
       replaces him with Hasib. Further, regarding paragraph 15 and
       Orchards Industrial Land, L.P., we also reverse that portion of
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       (iii) a court orders that the individual has otherwise become
       incapable of performing the individual’s duties as a general
       partner under this title or the partnership agreement.

15 Pa.C.S.A. § 8663(7)(i)-(iii).      Section 8641(b)(1)-(4) describes the
statutory method of becoming a general partner, and admission as a general
partner after formation of a limited partnership:

      (b) Admission after formation.—After formation of a limited
partnership, a person becomes a general partner:

          (1) as provided in the partnership agreement;

          (2) as the result of a transaction effective under Chapter 3
          (relating to entity transactions);

          (3) with the affirmative vote or consent of all the partners;
          or

          (4) under section 8681(a)(3)(ii) or (5) (relating to events
          causing dissolution) following the dissociation of a limited
          partnership’s last general partner.

15 Pa.C.S.A. § 8641(b)(1)-(4). See also supra, n.2.

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       the order that directs Hasib, as the newly appointed
       General Partner, to sell the 16-acre parcel of land held by
       Orchards Industrial Land, L.P., and then to dissolve that
       partnership. Because we have determined the trial court abused
       its discretion in appointing Hasib as the sole General Partner of
       Orchards Industrial Land, L.P., she cannot now legally fulfill those
       duties. The effect of our decision on this issue is to return
       the corporate structure of the three limited partnerships
       involved in this matter to the status quo ante. . . .
       Essentially, we have determined that the trial court
       possessed the authority to reallocate the finances of the
       parties to achieve a financial balance. However, the trial
       court did not possess the authority to reallocate the
       corporate power within the three Limited Partnerships.

Id. at *3-4 (emphasis added).4

       Following this Court’s decision, the trial court held a conference on July

2, 2019, and directed the parties to file memoranda of law to address this

Court’s remand order. The parties filed their respective memoranda, and on

August 9, 2019, the trial court entered an amendment to the January 17, 2018

equitable distribution order. The court adopted Wife’s proposed order, which

reads:

       AND NOW, this 9th day of August, 2019, upon consideration of the
       parties[’] respective submissions of Memorand[a] to the [c]ourt
       with respect to their respective interpretations of the effect of the
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4 We note that this Court referred to three partnerships. Husband states in
his appellate brief that the trial court’s orders correctly refer to four
partnerships: Sovereign Realty Investments, L.P., Cabochon Properties, L.P.,
Cabochon Investments Florida, L.P., and Orchards Industrial Land, L.P. It
appears this Court erroneously combined the two Cabochon entities. In the
August 9, 2019 Amendment to the January 17, 2018 Decree and Order, the
trial court refers to the four entities. See Order, 8/9/19. However, in its
November 6, 2019 opinion following remand, the trial court references three
entities: Sovereign Realty Investments, L.P., Cabochon Properties, L.P., and
Orchards Industrial Land, L.P. See Trial Court Opinion, 11/6/19, at 1.

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     Superior Court of Pennsylvania’s June 10, 2019 [d]ecision entered
     in the matter of Hasib v. Choudhury at docket 514 EDA 2018, it is
     ORDERED and DECREED that:

        1. Husband is reinstated as General Partner of Sovereign
           Realty Investments, LP, Cabochon Properties, LP, Cabochon
           Investments Florida, LP, and Orchards Industrial Land, LP.

        2. The 16-acre parcel of land owned by Orchards
           Industrial Land, LP shall continue to be sold with the
           proceeds distributed as previously ordered.

        3. All other terms and conditions of the January 17, 2018
           Decree and Order shall remain in full force and effect,
           unaltered in any way.

        4. This Order does not supersede any Order entered by this
           [c]ourt after the January 17, 2018 Decree and Order.

Amendment to January 17, 2018 Decree and Order, 8/9/19 (emphasis added).

     On September 7, 2019, Husband filed this appeal followed by a court-

ordered Pa.R.A.P. 1925(b) concise statement of errors complained of on

appeal. He raises the following issues for our review:

        1. Did the trial court err and abuse its discretion when it failed
           to return the corporate structure of the partnerships owned
           in part by the parties[] to the [s]tatus [q]uo [a]nte, and
           specifically with regard to Husband’s responsibilities and
           duties as the General Partner in violation of the Partnership
           Agreements, applicable Pennsylvania law, and the Superior
           Court’s June 10, 2019 [d]ecision?

        2. Did the trial court err and abuse its discretion by ordering
           the continued sale of a partnership asset by the parties as
           minority partners and directing how the partnership should
           distribute the proceeds of said sale in violation of the
           Partnership Agreements, applicable Pennsylvania law, and
           the Superior Court’s June 10, 2019 [d]ecision?

        3. Did the trial court err and abuse its discretion by ordering
           that no part of its Order was to supersede any order entered
           by the trial court after the original January 17, 2018 Decree
           and Order, although its subsequent order provided Wife

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              continuing powers as general partner, sole control of the
              sale of partnership assets owned in part by the parties[,]
              and the business bank accounts of the other partnerships,
              in violation of the Partnership Agreements, applicable
              Pennsylvania law, and the Superior Court’s June 10, 2019
              [d]ecision?

Appellant’s Brief, at 5-6. We address these claims as one. Our standard of

review is well settled:

       We review a challenge to the trial court’s equitable distribution
       scheme for an abuse of discretion. We do not lightly find an abuse
       of discretion, which requires a showing of clear and convincing
       evidence. We will not find an abuse of discretion unless the law
       has been overridden or misapplied or the judgment exercised was
       manifestly unreasonable, or the result of partiality, prejudice,
       bias, or ill will, as shown by the evidence in the certified record.
       When reviewing an award of equitable distribution, we measure
       the circumstances of the case against the objective of effectuating
       economic justice between the parties and achieving a just
       determination of their property rights.

Hess v. Hess, 212 A.3d 520, 523 (Pa. Super. 2019) (citations and quotations

omitted).

       Husband argues the trial court erred in failing to return the corporate

structure of the partnerships to the status quo ante,5 “specifically with regard

to Husband’s responsibilities as the General Partner in violation of the

Partnership Agreements, Pennsylvania [l]aw, and [this] Court’s June 10, 2019

[d]ecision.” Appellant’s Brief, at 19.         Husband also claims the trial court’s

order did not specifically reinstate Wife as a limited partner and, therefore,
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5 The status quo ante is that “last actual, peaceable and lawful uncontested
status which preceded the pending controversy.” Commonwealth v.
Coward, 414 A.2d 91, 99 (Pa. 1980).

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Wife “continues to hold rights granted only to the General Partner pursuant to

the existing Partnership Agreements,” and is contrary to this Court’s remand

order. Id. at 24. Further, Husband argues that the court’s order directing

him to continue with the sale of the 16-acre parcel of land held by Orchards

was error. Finally, Husband claims the trial court’s order, directing that “all

other terms and conditions of the [e]quitable [d]istribution order shall remain

in full force and effect[,]” violated this Court’s remand order and was contrary

to the partnership agreements.      Id. at 25.    Each of these arguments is

meritless.

      First, the trial court’s August 9, 2019 amended order clearly reinstated

Husband as General Partner of the partnerships—returning the partnerships

to the status quo ante, the original corporate structure.       The trial court

complied with this Court’s remand order. At the November 19, 2019 hearing

on Husband’s application for stay pending appeal, the trial court made it clear

that Husband is “the sole general partner[.]” N.T. Stay Hearing, 11/19/19, at

50. Despite Husband’s insistence that Wife retains General Partner powers,

she does not.

      This Court’s remand order also reversed that portion of the trial court’s

order directing Wife to sell the 16-acre parcel of land held by Orchards, as

Wife was not the General Partner. Our order, however, did not preclude the

trial court from directing Husband, as the General Partner, to “continue the

sale” of the property in order to effectuate the equitable distribution of the

parties’ marital property. Notably, prior to entry of the divorce decree,

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Husband had signed the agreement of sale with respect to that property. As

Wife points out, Husband does not actually object to the sale, and Husband

acknowledged this at the stay hearing.6          Rather, Husband objects to the

direction that the proceeds of the sale be used to effectuate the equitable

distribution order. Husband, as General Partner, believes it should be in his

discretion to reinvest 100% of the proceeds (the sale price is $7.2 million) as

he deems fit. However, allowing Husband to solely control marital property

would defeat the purpose and spirit of equitable distribution law—to effectuate

economic justice between the parties and insure a fair and just determination

of their property rights. See 23 Pa.C.S.A. § 3502; Isralsky v. Isralsky, 824

A.2d 1178 (Pa. Super. 2003); see also 23 Pa.C.S.A. § 3502(e)(4) (“If, at any

time, a party has failed to comply with an order of equitable distribution, as

provided for in this chapter or with the terms of an agreement as entered into

between the parties, after hearing, the court may, in addition to any other

remedy available under this part, in order to effect compliance with its order:

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6   At the hearing, Husband testified as follows:

        Q:    And so would it be fair to say that your issue is not with the
        sale of the property? Would it be fair to say that your concern is
        not with the sale of the property?

        A: No, not at all, because we have been trying to sell it for [a]
        long time.

N.T. Stay Hearing, 11/19/19, at 20.

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order and direct the transfer or sale of any property required in order

to comply with the court's order[.]”) (emphasis added).

      Husband claims that his duties and responsibilities as General Partner

take precedence over his responsibilities as Husband and limit the way the

proceeds can be distributed. Id. at 24. Husband’s position is that this Court

“ordered it is [his] right and [his] decision to do what happens [sic] with the

proceeds[.]”    N.T. Stay Hearing, supra at 22. That was not what our remand

order stated.

      The trial court understood this Court’s order, and amended its order to

comply. The court made clear:

      The Superior Court held that we abused our discretion by
      restructuring the Partnership regarding the position of General
      Partner and remanded the case. The Superior Court reversed
      provisions that (1) appointed Wife as Co-General Partner in two
      of the partnerships, (2) dissociated Husband as General Partner
      of Orchards Industrial Lands, L.P., and appointed Wife as General
      Partner, and (3) [] directed Wife to use her newly granted General
      Partnership position to sell the 16[-] acre parcel of land owned by
      Orchards Industrial Land, L.P., and then to dissolve that
      partnership.

Trial Court Opinion, 11/6/19, at 1-2. At the stay hearing, the court again

clarified:

      So the way the Order is right now, sir, when and if this settlement
      takes place, and you’re obligated to do everything you can to
      make it take place, whether that means granting an extension or
      not granting [an] extension, you have the power to make that
      decision, but when and if the settlement takes place, after the
      time of settlement that money will come into the . . . limited
      partnership account and then my [o]rder, unless it’s changed, will
      require you to then distribute that in the fashion that I’ve told you.
      [W]hen it comes to Orchards, which is an issue of sale, somebody

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      has to make the business decision as to whether or not to grant
      an extension of time [for settlement]. Prior to the Superior Court’s
      decision, that had to be done jointly. Now [Husband] has the sole
      ability to do that. That’s a business decision. As far as the
      distribution is concerned, that’s not something he can individually
      make.

Id. at 41-42, 51-52.      Husband’s argument that the trial court’s order

contravenes our remand order is meritless.

      Moreover, Husband cannot hide behind a partnership agreement,

particularly here, where the notes of testimony indicate the limited partnership

agreement for Orchards Industrial Land Associates was admitted into evidence

as H-1, see id., at 23, but was not included in the certified record on appeal.

This Court may review and consider only items that have been duly certified

in the record on appeal. Pa.R.A.P.1921.       “For purposes of appellate review,

what is not of record does not exist.” Frank v. Frank, 587 A.2d 340, 343

(Pa. Super. 1991). See also Rosselli v. Rosselli, 750 A.3d 355 (Pa. Super.

2000) (same). The responsibility of ensuring that the transmitted record is

complete rests squarely upon the appellant, not the appellate courts.

Pa.R.A.P. 1931. Husband is entitled to no relief.

      It is quite clear to this Court that Judge McMaster understood our

remand order. Judge McMaster’s order requires the net sale proceeds to be

distributed to the partners in proportion to their ownership interests as set

forth in the January 17, 2018 decree and order. That provision “does not

affect the structure or power of the Partnership[;] it merely is subjecting this

asset to equitable distribution.” Trial Court Opinion, supra at 4.   See Buckl

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v. Buckl, 542 A.2d 65 (Pa. Super. 1988) (partnership interest is marital

property and is subject to equitable distribution).   We find no error or abuse

of discretion. Hess, supra.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/15/2020

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