G.S. Lepre, Jr. v. US Bancorp v. PA Dept. of Treasury Bureau of Unclaimed Funds ~ Appeal of: G.S. Lepre, Jr. ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Gerald S. Lepre, Jr. :
:
v. :
:
US Bancorp d/b/a US Bank :
and Corporate Trust Services; :
Gerald S. Lepre, Sr.; and Christine :
Lepre-Lukus :
:
v. :
:
Pennsylvania Department of Treasury :
Bureau of Unclaimed Funds :
: No. 903 C.D. 2018
Appeal of: Gerald S. Lepre, Jr. : Submitted: October 19, 2018
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: February 8, 2019
Gerald S. Lepre, Jr. (Lepre), pro se, appeals from the Dauphin County
Common Pleas Court’s (trial court) March 14, 2018 order sustaining the
Pennsylvania Department of Treasury (Treasury) Bureau of Unclaimed Fund’s
(Bureau) Preliminary Objections and dismissing Lepre’s action with prejudice. The
issue before this Court is whether the trial court erred by sustaining Treasury’s
Preliminary Objections.1 After review, we affirm.
1
In Lepre’s “Statement of the Questions Involved,” he lists the following issues for this
Court’s review: (1) whether sovereign immunity and/or the doctrine of custodia legis would be
frustrated by permitting a judgment creditor to attach or garnish unclaimed funds held by Treasury;
and (2) whether the facts of this case represent an exception to sovereign immunity and the doctrine
of custodia legis. Lepre Br. at 5. Treasury’s “Counterstatement of the Questions Involved,”
specifies the following issues: (1) whether Lepre’s action is barred by collateral estoppel; (2)
Background
This case has a prolonged history, but the facts related to this appeal are
undisputed. In 2010, US Bancorp d/b/a US Bank and Corporate Trust Services (US
Bancorp) delivered to Treasury $10,500.00 in uncashed checks (Property) in the
names of Lepre’s parents, Gerald S. Lepre, Sr. and Christine Lepre-Lukus (Parents),
as the primary owners for the benefit of Lepre’s deceased brother Matthew A. Lepre
(M. Lepre).2
On September 28, 2011, Lepre filed a claim with the Bureau for the
Property’s proceeds. On October 24, 2011, the Bureau denied Lepre’s claim because
Lepre failed to establish that he was the Property’s trustee or beneficiary. Lepre
appealed from the Bureau’s determination to Treasury, which held a hearing on May
9, 2012. Lepre asserted that, due to M. Lepre’s death, Lepre was entitled to the
Property.3 On June 21, 2012, Treasury denied and dismissed Lepre’s claim. On June
whether the trial court properly held that Lepre failed to establish an exception to sovereign
immunity; and (3) whether the doctrine of custodia legis bars Lepre from enforcing his judgment.
Because these issues are subsumed in determining whether the trial court erred by sustaining the
Preliminary Objections, we have restated the issues accordingly.
Treasury also listed as an issue: whether the trial court properly determined that this Court
has jurisdiction. See Treasury Br. at 2, 9-10; see also Concise Statement of Errors Complained of
on Appeal, Original Record Item 36. However, since Lepre concedes this Court’s jurisdiction, see
Lepre Br. at 3, that issue will not be addressed herein.
2
Under Section 1301.2(a) of the portion of The Fiscal Code commonly referred to as the
Disposition of Abandoned and Unclaimed Property Act (DAUPA), “[a]ll abandoned . . . property . .
. is subject to the custody and control of the Commonwealth[.]” Act of April 9, 1929, P.L. 343, as
amended, added by Section 5 of the Act of December 9, 1982, P.L. 1057, 72 P.S. § 1301.2(a).
Section 1301.14 of DAUPA, also added by Section 5 of the Act of December 9, 1982, P.L. 1057,
states: “Upon the payment or delivery of the property to the [] Treasurer, the Commonwealth shall
assume custody and shall be responsible for the safekeeping thereof.” 72 P.S. § 1301.14. The
purpose is to allow the Commonwealth to attempt to reunite the abandoned property with its lawful
owner. See Am. Express Travel Related Servs., Inc. v. Sidamon-Eristoff, 669 F.3d 359 (3d Cir.
2012). Section 1301.1 of DAUPA, added by Section 5 of the Act of December 9, 1982, P.L. 1057,
defines “owner,” in relevant part, as “a person that has a legal or equitable interest in property . . . .”
72 P.S. § 1301.1.
3
At the hearing, Lepre introduced M. Lepre’s death certificate, but did not offer the trust
documents into the record.
2
25, 2012, Lepre appealed from Treasury’s decision to this Court. On March 4, 2013,
this Court affirmed Treasury’s order because Lepre failed to prove that he was
entitled to the Property’s proceeds. See Treasury Br. Attachment 1, Lepre v. Dep’t of
Treasury, Bureau of Unclaimed Prop. (Pa. Cmwlth. No. 1186 C.D. 2012, filed March
4, 2013).
In July 2013, Lepre sued his parents and US Bancorp in the Allegheny
County Common Pleas Court (Allegheny County trial court) which, on January 28,
2015, rendered a non-jury verdict in Lepre’s favor and against Parents in the amount
of $9,000.00 plus interest from June 4, 2003. Lepre reduced the verdict to a
judgment on February 18, 2015. Original Record (O.R.) Item 3 (Judgment/Non-Jury
Verdict). Thereafter, Lepre filed a post-trial relief motion with the Allegheny County
trial court seeking equitable relief in the nature of an order directing Treasury to
release the Property. By April 21, 2015 order, the Allegheny County trial court
denied Lepre’s post-trial motion because Lepre failed to request/waived any right to
equitable relief, and because Treasury was not a party to the action. See Treasury Br.
Attachment 2. Lepre appealed to the Superior Court, which dismissed his appeal on
July 6, 2015 due to Lepre’s failure to file a brief. See Treasury Br. Attachment 3.
Facts
In June 2017, Lepre filed a praecipe for writ of execution in the trial
court naming Treasury as garnishee, therein requesting the Property’s attachment
pursuant to the Allegheny County trial court’s judgment. See O.R. Items 6 (Praecipe
for Writ of Execution), 21 (Sheriff’s Return). On July 25, 2017, Treasury filed the
Preliminary Objections, therein contending: the action is barred because of collateral
estoppel, sovereign immunity4 and the doctrine of custodia legis;5 the trial court lacks
4
[U]nder the Pennsylvania Rules of Civil Procedure, immunity from
suit is an affirmative defense that must be pled in a responsive
3
jurisdiction; and Treasury is not a proper garnishee. See O.R. Items 8 (Treasury’s
Preliminary Objections), 18 (Treasury’s Brief in Support of Preliminary Objections).
On August 1, 2017, Lepre opposed the Preliminary Objections. See O.R. Items 11
(Lepre’s Answer to Preliminary Objections), 20 (Lepre’s Br. in Opposition to
Preliminary Objections). On March 14, 2018, after a hearing, the trial court sustained
Treasury’s Preliminary Objections and dismissed Lepre’s action with prejudice
because Lepre failed to identify a waiver of sovereign immunity which entitled him
to relief, and because the trial court lacked subject matter jurisdiction over an action
against a Commonwealth agency. See O.R. Items 2 (Trial Ct. Op.), 25 (February 6,
2018 Order), 34 (Notes of Testimony, March 8, 2018). On March 20, 2018, Lepre
appealed to the Superior Court, which transferred the matter to this Court.6
pleading under the heading new matter, not as a preliminary
objection. We recognize that courts have permitted limited exception
to this rule and have allowed parties to raise the affirmative defense of
immunity as a preliminary objection. The affirmative defense,
however, must be clearly applicable on the face of the complaint.
Where the plaintiff does not object to the improper procedure, courts
have ruled on the affirmative defense of immunity raised by
preliminary objections.
Smolsky v. Pa. Gen. Assembly, 34 A.3d 316, 321 n.7 (Pa. Cmwlth. 2011) (citations omitted), aff’d,
50 A.3d 1255 (Pa. 2012). Here, Lepre did not object to Treasury’s procedure.
5
The doctrine of custodia legis
provides generally that property in the possession of the state . . . that
is owing to individuals may not be subject to attachment, under the
policy that the government should be free from the annoyance and
uncertainty of disputes between those to whom the state owes the
property and others who claim a right by garnishment.
Pa. Higher Educ. Assistance Agency v. Lal, 714 A.2d 1116, 1119 (Pa. Cmwlth. 1998).
6
“When reviewing a trial court’s order sustaining preliminary objections in the nature of a
demurrer, our standard of review is de novo and our scope of review is plenary.” Young v. Estate of
Young, 138 A.3d 78, 84 (Pa. Cmwlth. 2016).
On May 18, 2018, Treasury filed a motion to quash Lepre’s Superior Court appeal. On May
29, 2018, Lepre filed an application to dismiss, which this Court treated as an answer to Treasury’s
motion to quash. On July 16, 2018, this Court denied Treasury’s motion to quash.
4
Lepre argues that the trial court erred by sustaining Treasury’s
Preliminary Objections. Specifically, Lepre contends that sovereign immunity and
the doctrine of custodia legis would not be frustrated by permitting a judgment
creditor to attach or garnish unclaimed funds held by Treasury. Lepre further asserts
that the facts of this case represent an exception to sovereign immunity and the
doctrine of custodia legis.
Initially,
‘[w]here a [trial court] dismisses a complaint based on
preliminary objections, this Court’s review is limited to
determining whether the trial court committed an error of
law or an abuse of discretion.’ Kittrell v. Watson, 88 A.3d
1091, 1095 (Pa. Cmwlth. 2014). When considering
preliminary objections, we must accept as true all well-
pleaded material facts alleged in the complaint and all
reasonable inferences deducible therefrom. A preliminary
objection should be sustained only in cases when, based on
the facts pleaded, it is clear and free from doubt that the
facts pleaded are legally insufficient to establish a right to
relief.
Minor v. Kraynak, 155 A.3d 114, 121 (Pa. Cmwlth. 2017) (citation omitted).
Here, Treasury objected to Lepre’s writ of execution and the trial court
sustained the objection because the action is barred by sovereign immunity.7 See
O.R. Items 8, 18. Lepre did not specifically challenge Treasury’s sovereign
immunity defense before the trial court.8 See O.R. Items 11, 20. However, Lepre
On September 6, 2018, because US Bancorp and Parents failed to file their briefs by August
27, 2018, they were ordered to do so by September 20, 2018. As a result of their failure to timely
file briefs as ordered, on October 12, 2018, this Court precluded US Bancorp and Parents from
filing briefs in this matter.
7
Treasury also objected to Lepre’s writ of execution on the basis that the action was barred
by collateral estoppel. See O.R. Items 8, 18. The trial court did not specifically address that
objection, and Lepre did not raise that issue in this appeal. Accordingly, that issue is not before us.
8
In his Brief in Opposition to the Preliminary Objections, Lepre stated: “Since the doctrine
of custodia[] legis does not apply and the facts . . . clearly carve out an exception . . . [Lepre] need
not argue against the [P]reliminary [O]bjections to . . . immunity[.]” O.R. Item 20 at 5.
5
argues to this Court on appeal that the facts of this case carve out an exception to the
general rule of sovereign immunity. Lepre clearly raised the issue of sovereign
immunity in his “Statement of the Questions Involved” in his brief and referred to it
in his argument; therefore, this Court shall consider it. See Ramins v. Chem.
Decontamination Corp., 560 A.2d 836 (Pa. Cmwlth. 1989).
“Pursuant to Article I, Section 11 of the Pennsylvania Constitution, the
General Assembly declared that ‘the Commonwealth . . . shall continue to enjoy
sovereign immunity and official immunity and remain immune from suit except as
the General Assembly shall specifically waive the immunity.’ 1 Pa.C.S. § 2310.”
Minor, 155 A.3d at 121 (footnote omitted). Section 8522(a) of the portion of the
Judicial Code commonly referred to as the Sovereign Immunity Act (Act),9 provides:
The General Assembly, pursuant to [S]ection 11 of Article I
of the Constitution of Pennsylvania, does hereby waive, in
the instances set forth in subsection (b) . . . , sovereign
immunity as a bar to an action against Commonwealth
parties, for damages arising out of a negligent act where the
damages would be recoverable under the common law or a
statute creating a cause of action if the injury were caused
by a person not having available the defense of sovereign
immunity.
42 Pa.C.S. § 8522(a). In Section 8522(b) of the Act, the General Assembly waived
sovereign immunity for Commonwealth agencies relative to: (1) vehicle liability; (2)
medical-professional liability; (3) care, custody or control of personal property; (4)
Commonwealth real estate, highways and sidewalks; (5) potholes and other
dangerous conditions; (6) care, custody or control of animals; (7) liquor store sales;
(8) National Guard activities; and (9) toxoids and vaccines. See 42 Pa.C.S. §
8522(b).
In essence, sovereign immunity may be overcome where
the party can establish: (1) a common law or statutory
9
42 Pa.C.S. §§ 8521-8528.
6
cause of action under which damages could be
recoverable if not for the immunity defense, and (2) the
alleged negligent act falls within one of the nine specific
exceptions provided in [Section 8522(b) of the Act].
Kull v. Guisse, 81 A.3d 148, 157 (Pa. Cmwlth. 2013) (emphasis added).
Lepre cites Buchholz v. Cam, 430 A.2d 1199 (Pa. Super. 1981), in
support of his position that the facts before the Court carve out an exception to the
general immunity rule. However, Buchholz is a custodia legis case that did not
reference sovereign immunity. In addition, Lepre’s litigation is not grounded in
negligence or other common law or a statutory cause of action,10 and he does not
contend that any of the immunity exceptions apply to this case.
Collecting a debtor’s property in Treasury’s custody is not expressly
listed among the sovereign immunity exceptions, nor is it fairly encompassed therein.
The care, custody and control of personal property exception relates to “[t]he care,
custody or control of personal property in the possession or control of
Commonwealth parties, including . . . property of persons held by a Commonwealth
agency[.]” 42 Pa.C.S. § 8522(b)(3). However, the Pennsylvania Supreme Court has
ruled: “An attempt to garnish personal property of a debtor in the possession of a
third party, here the state, is not an action for damages arising out of alleged
negligence by the garnishee” that implicates the care, custody and control of personal
10
Initially, [Lepre] must meet the threshold requirement that the alleged
damages would be recoverable under the common law or a statute
against a party not protected by sovereign immunity by proving the
following elements of negligence: (1) [Treasury’s] duty or obligation
recognized by law; (2) a breach of that duty; (3) a causal connection
between [Treasury’s] conduct and the resulting injury; and (4) actual
damages.
Page v. City of Phila., 25 A.3d 471, 475 (Pa. Cmwlth. 2011). Lepre made no such claims against
Treasury in his underlying case.
7
property exception to sovereign immunity.11 Ramins, 560 A.2d at 840. This Court
has concluded that “[i]n the absence of any claim by a judgment creditor that his
effort to garnish funds in the possession of the state is authorized by some express
statutory provision, the language of the [Act] as well as the language of the Rules of
Civil Procedure relating to such garnishment compel the conclusion that the state is
immune from the judgment creditor’s action.”12 Ramins, 560 A.2d at 842.
Because Lepre has not brought a negligence action, none of the specified
immunity exceptions apply, and Lepre has not cited to any other express statutory
provision that authorizes his requested relief, it is clear and free from doubt that
“[Treasury] . . . shall continue to enjoy sovereign immunity[.]”13 1 Pa.C.S. § 2310.
Accordingly, the trial court properly sustained Treasury’s Preliminary Objection that
sovereign immunity barred Lepre’s claim against Treasury and dismissed Lepre’s
action on that basis.
Based on the foregoing, the trial court’s order is affirmed.
___________________________
ANNE E. COVEY, Judge
11
Moreover, Treasury is not a proper garnishee. See Ramins. Pennsylvania Rule of Civil
Procedure No. (Rule) 3101(a) relating to judgments for the payment of money defines judgment as
“a judgment or order requiring the payment of money entered in any court . . . except a judgment
against the Commonwealth or a political subdivision[.]” Pa.R.C.P. No. 3101(a). Rule 3101(b)
provides that “[a]ny person may be a garnishee . . . .” Pa.R.C.P. No. 3101(b). Rule 76 defines
“person” as “a corporation, partnership and association, as well as a natural person[,]” Pa.R.C.P.
No. 76, “but that definition does not encompass the Commonwealth . . . . See 9 Goodrich-Amram
2d § 310 1(b): 1 and 1.1.” Ramins, 560 A.2d at 842.
12
Immunity remains the rule; thus, the Court must narrowly construe the exceptions
applicable under the Act. See Gale v. City of Phila., 86 A.3d 318 (Pa. Cmwlth. 2014); see also
Quinones v. Dep’t of Transp., 45 A.3d 467 (Pa. Cmwlth. 2012).
13
In light of this Court’s holding, we need not address the applicability of the custodia legis
doctrine.
8
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Gerald S. Lepre, Jr. :
:
v. :
:
US Bancorp d/b/a US Bank :
and Corporate Trust Services; :
Gerald S. Lepre, Sr.; and Christine :
Lepre-Lukus :
:
v. :
:
Pennsylvania Department of Treasury :
Bureau of Unclaimed Funds :
: No. 903 C.D. 2018
Appeal of: Gerald S. Lepre, Jr. :
ORDER
AND NOW, this 8th day of February, 2019, the Dauphin County
Common Pleas Court’s March 14, 2018 order is affirmed.
___________________________
ANNE E. COVEY, Judge