Jones, B. v. McGreevy, D. ( 2022 )

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2022 PA Super 8BRIAN W. JONES, ASSIGNEE OF : IN THE SUPERIOR COURT OF
WILSON C. FOX : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 269 WDA 2021
JANICE MCGREEVY, :
ADMINISTRATRIX OF THE ESTATE OF :
DANIEL MCGREEVY, JANICE :
MCGREEVY, SNOWDEN CAPITAL :
ADVISORS LLC, ALSO KNOWN AS :
SNOWDEN LANE PARTNERS, :
PERSHING LLC, BANK OF NEW YORK :
MELLON NA, ALSO KNOWN AS BNY :
MELLON :
Appeal from the Judgment Entered February 4, 2021
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD-09-016053
BRIAN W. JONES : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
JANICE MCGREEVY, : No. 286 WDA 2021
ADMINISTRATRIX OF THE ESTATE :
OF DANIEL M. MCGREEVY, JANICE :
MCGREEVY, LAUREN ROSE :
MCGREEVY-GRUSZKA, BRENT :
GRUSZKA, BRENDAN MCGREEVY, :
JANICE MCGREEVY, :
ADMINISTRATRIX OF THE ESTATE :
OF DANIEL M. MCGREEVY, AS :
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TRUSTEE FOR THE DANIEL M. :
MCGREEVY SEPARATE SHARE :
TRUST, AND ALL OTHER :
IMMEDIATE AND MEDIATE
TRANSFEREES
Appeal from the Order Entered February 18, 2021
In the Court of Common Pleas of Warren County Civil Division at
No(s): A.D. 454 of 2020
BEFORE: PANELLA, P.J., BENDER, P.J.E., and McCAFFERY, J.
OPINION BY BENDER, P.J.E.: FILED: January 11, 2022
Brian W. Jones (“Appellant”), assignee of Wilson C. Fox (“Fox”), appeals
from the February 4, 2021 judgment entered at docket no. 269 WDA 2021
after a non-jury verdict in favor of the debtor, Daniel M. McGreevy
(“McGreevy”), and the garnishees, Snowden Capital Advisors LLC, a/k/a
Snowden Lane Partners (“Snowden”), Pershing LLC (“Pershing”), and Bank of
New York Mellon NA, a/k/a BNY Mellon (“BNY Mellon”) (collectively
“Garnishees”). In addition, Appellant appeals from the February 18, 2021
order entered at docket no. 286 WDA 2021, which sustained the preliminary
objections filed by the defendant, McGreevy, and the transferees, Janice
McGreevy, Lauren Rose McGreevy-Gruszka, Brent Gruszka, Brendan
McGreevy, the Daniel McGreevy Separate Share Trust, and all other
immediate and mediate transferees (collectively “Transferees”), and
dismissed Appellant’s complaint.1 After careful review, we vacate the
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1As the appeals at nos. 269 WDA 2021 and 286 WDA 2021 involve the same
parties and the issues raised therein are closely related, we consolidate the
appeals sua sponte for ease of disposition.
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judgment entered at docket no. 269 WDA 2021, vacate the February 18, 2021
order entered at docket no. 286 WDA 2021, and remand these cases for
further proceedings consistent with this opinion.
We glean the following relevant facts and procedural background of
these matters from the record. On December 16, 2008, Fox commenced a
civil action against McGreevy in the Westmoreland County Court of Common
Pleas at docket no. 14497 of 2008, after McGreevy defaulted on an agreement
to purchase two collectible shotguns from him for $40,000.00. On July 10,
2009, Fox obtained a default judgment against McGreevy in the amount of
$50,800.00. On September 17, 2009, the judgment was transferred to the
Allegheny County Court of Common Pleas at docket no. GD-09-016053
(“Garnishment Action”). Fox subsequently sold and assigned the judgment to
Appellant.
On August 2, 2018, Appellant began post-judgment enforcement
proceedings via the Garnishment Action, by requesting the issuance of a writ
of execution and naming PNC Bank as the garnishee.2 That action resulted in
the garnishing of funds from McGreevy’s individual checking and savings
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2 “Garnishment is a proceeding through which a creditor collects his debt out
of property of the debtor in the hands of a third party….” Garden State
Standardbred Sales Co., Inc. v. Seese, 611 A.2d 1239, 1241 (Pa. Super.
1992) (internal quotation marks and citation omitted). Service of a writ of
execution on a garnishee “attaches all property of the defendant in the
possession of the garnishee, including property that comes into the
garnishee’s possession after service.” Korman Commercial Properties,
Inc. v. Furniture.com, LLC, 81 A.3d 97, 100 (Pa. Super. 2013) (citing
Pa.R.C.P. 3111(b)).
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accounts with PNC Bank in the amount of $4,945.17, which was paid towards
the balance owed to Appellant on the judgment.
On January 23, 2019, Appellant requested a writ of execution be
reissued and served on BNY Mellon, as garnishee.3 The sheriff personally
served BNY Mellon with the writ of execution, along with interrogatories in
attachment on January 24, 2019. BNY Mellon never filed an answer to the
interrogatories. On February 27, 2019, Appellant filed a praecipe to reissue a
writ of execution, naming Snowden and Pershing as garnishees.4 Appellant
subsequently served Pershing with the writ of execution, along with
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3 BNY Mellon is a wholly owned subsidiary of Bank of New York Mellon
Corporation, which provides check services for customers such as McGreevy
who maintain BNY Pershing Corestone accounts. See Appellant’s Brief
(“Appellant’s Brief I”), 5/19/21, at 7.
4 Snowden and Pershing, also subsidiaries of Bank of New York Mellon
Corporation, maintained control of the following accounts owned by McGreevy
at the time the writ was reissued: (1) individual brokerage/checking account;
(2) separate share trust; (3) individual retirement account (“IRA”); (4)
inherited/decedent IRA; and (5) joint brokerage/checking account. N.T.
Deposition of Robert Feldman, 6/11/19, at 8-11. Snowden is an independent
brokerage dealer and registered investment advisory firm which managed
McGreevy’s investments, while Pershing was the custodian of the assets in
McGreevy’s accounts. Id.; N.T. Trial, 3/2/20, at 18-19. Robert Feldman is
the Senior Partner and Managing Director of the Feldman Group at Snowden’s
Pittsburgh office. As an employee and agent of Snowden, Mr. Feldman
provided investment advice and brokerage services for McGreevy for more
than ten years prior to McGreevy’s death. See id. at 9-10; Affidavit of Robert
Feldman, 3/5/19, at 1-2 (unnumbered).
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interrogatories in aid of execution,5 on March 1, 2019, via certified mail at its
corporate office located in New Jersey, as agreed upon by Pershing.6 On April
1, 2019, Pershing filed its answers to the interrogatories, in which it indicated
that it had frozen the funds in McGreevy’s individual brokerage/checking
account, totaling $102,549.08, and that it elected not to freeze the assets in
McGreevy’s other accounts, because there were enough funds in his individual
checking account to pay the balance owed on the judgment.
In February and March of 2019, McGreevy filed claims for exemption
and immunity of his assets in Garnishees’ custody from levy or attachment,
pursuant to Pa.R.C.P. 3123.1(a).7 Additionally, in April of 2019, McGreevy
filed preliminary objections to the writ of execution served on Pershing, in
which he asserted that his property held in Pershing’s custody was exempt or
immune from execution.8 On September 25, 2019, McGreevy’s wife, Janice
McGreevy (“Wife”), joined the Garnishment Action as an interested party and
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5 In the context of an attachment proceeding, interrogatories are analogous
to a complaint and are designed to ascertain the property in the possession of
a garnishee. See Painwebber, Inc. v. Devin, 658 A.2d 409, 412 (Pa. Super.
1995) (citing Pa.R.C.P. 3144, 3145).
6 Service of the writ was never obtained on Snowden.
7 Rule 3123.1(a) provides, in relevant part: “A defendant may claim
exemption or immunity of property from levy or attachment by filing with the
sheriff a claim substantially in the form provided by Rule 3252(a).” Pa.R.C.P.
3123.1(a).
8Rule 3142 allows a defendant or garnishee to raise the defenses of immunity
or exemption of property from attachment in the form of preliminary
objections. See Pa.R.C.P. 3142(a).
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adopted McGreevy’s preliminary objections. On September 29, 2019, the trial
court stayed the preliminary objections and declared that the issue of whether
McGreevy’s assets in Pershing’s custody are exempt or immune from
execution would be decided at a non-jury trial.
Senior Judge Paul F. Lutty, Jr., presided over the non-jury trial held on
March 3, 2020. At the close of trial, Judge Lutty directed McGreevy and
Appellant to submit proposed findings of fact and conclusions of law. Both
parties complied. On June 23, 2020, Judge Lutty entered the following order:
AND NOW, this 23rd day of June 2020, it is hereby ORDERED,
ADJUDGED AND DECREED that verdict is entered in favor of …
McGreevy and against … Appellant…. The writs of execution
issued against … Garnishees on January 23, 2019 and February
27, 2019 are dismissed and dissolved, and all property owned and
held by [McGreevy], or established for the benefit of [McGreevy]
or otherwise associated with [McGreevy], including all accounts in
the custody of Pershing … is hereby ordered, adjudged and
decreed to be immune and exempt from attachment, levy and
execution. Pershing … is hereby ordered and directed to release
any and all holds and/or freezes on the accounts of … McGreevy
on deposit and within the custody of Pershing….
Trial Court Order (“Order”), 6/23/20, at 1-2 (unnumbered; some capitalization
omitted).9 See Pa.R.C.P. 3121(a)(4) (requiring the court to set aside a writ
of execution upon the showing of exemption or immunity of property from
execution). No findings of fact were issued by the trial court, nor was the
Non-Jury Verdict accompanied by a memorandum explaining Judge Lutty’s
decision.
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9 On the same date, Judge Lutty amended the Order solely for the purpose of
renaming it “Non-Jury and Amended Verdict,” which we refer to herein as
Non-Jury Verdict. See Non-Jury Verdict, 6/23/20, at 1-2 (unnumbered).
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On June 29, 2020, Appellant filed a motion for post-trial relief. Oral
argument was held on the post-trial motion on September 24, 2020, and
continued on October 15, 2020. Both parties subsequently submitted briefs
at the trial court’s request. On February 4, 2021, Appellant filed a praecipe
for entry of judgment on the Non-Jury Verdict pursuant to Pa.R.C.P.
227.4(1)(b), as more than 120 days had passed since the filing of his request
for post-trial relief and the trial court had not yet disposed of the motion.
Judgment was entered on the same date. On February 8, 2021, Appellant
filed a timely notice of appeal at docket no. 269 WDA 2021, followed by the
filing of a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors
complained of on appeal.
McGreevy died on January 17, 2021, just prior to the filing of the appeal
in the Garnishment Action. Wife was appointed as administratrix of his estate
(“Administratrix”) in February of 2021 and, on March 23, 2021, McGreevy’s
counsel filed a notice of McGreevy’s death, along with a request to substitute
Administratrix for the deceased as the defendant in the Garnishment Action,
in compliance with Rules 2355 and 2352. See Pa.R.C.P. 2355(a) (“If a named
party dies after the commencement of an action, the attorney of record for
the deceased party shall file a notice of death with the prothonotary. The
procedure to substitute the personal representative of the deceased party
shall be in accordance with Rule 2352.”); Pa.R.C.P. 2352 (directing the filing
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of a statement of material facts on which the right to substitution of a party
is based). The prothonotary adjusted the caption accordingly.10
While the Garnishment Action was still pending, Appellant instituted a
separate action on October 9, 2020, in the Warren County Court of Common
Pleas at docket no. A.D. 454 of 2020, with the filing of a complaint against
McGreevy, in which he alleged that McGreevy attempted to harbor transferred
and subsequently acquired assets and/or funds from the reach of creditors, in
violation of the Pennsylvania Uniform Voidable Transactions Act (“PUVTA”), 12
Pa.C.S. §§ 5101-5114.11 On November 9, 2020, PUVTA Appellees filed
preliminary objections to the complaint, asserting, inter alia, that the trial
court lacked subject matter jurisdiction as a result of the Non-Jury Verdict
entered in the Garnishment Action, in which Judge Lutty declared all of
McGreevy’s assets exempt and immune from attachment, levy, and execution.
In response, Appellant filed preliminary objections to PUVTA Appellees’
preliminary objections. On February 17, 2021, following argument on the
preliminary objections, the trial court entered an order sustaining PUVTA
Appellees’ first objection regarding the court’s lack of subject matter
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10Administratrix and Garnishees, the appellees in this matter, are referred to
collectively herein as “Garnishment Appellees.”
11We refer to this action herein as the “PUVTA Action.” With regard to the
PUVTA Action, McGreevy and Transferees are referred to collectively herein as
“PUVTA Appellees.”
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jurisdiction, which rendered their remaining objections moot, and dismissing
the complaint without prejudice.
On February 23, 2021, Appellant filed a timely, pro se notice of appeal
at docket no. 286 WDA 2021. The trial court directed Appellant to file a Rule
1925(b) concise statement of errors complained of on appeal. Appellant
timely complied.12
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12 On April 29, 2021, this Court issued an order directing Appellant to show
cause why this appeal should not be dismissed, as an appeal filed from an
order sustaining a preliminary objection and dismissing the appellant’s
complaint without prejudice is generally interlocutory and unappealable. Per
Curiam Order, 4/29/21 (single page) (citing Mier v. Stewart, 683 A.2d 930,
930 (Pa. Super. 1996) (stating that an order dismissing a complaint without
prejudice for the plaintiff to file an amended complaint is not a final order);
Levitt v. Patrick, 976 A.2d 581, 588 (Pa. Super. 2009) (noting the key
inquiry in determination of finality of a judgment is whether there is any
outstanding claim; if any claim remains outstanding then the order is generally
not appealable subject to exceptions); Pa.R.A.P. 341(b)(1) (providing that a
final order is any order that disposes of all claims and of all parties)).
Appellant filed a timely response, in which he explained that the trial judge
predicated Appellant’s ability to refile his PUVTA complaint on the reversal of
the Non-Jury Verdict pending appeal in the Garnishment Action. Appellant’s
Response to Rule to Show Cause, 4/30/21, at 1. Moreover, Appellant argues
that the PUVTA contains a four-year “look back” period which was not tolled
by the dismissal of his complaint and that the trial judge did not grant him
leave to refile or amend the complaint within a time certain. Id. at 1-2.
Appellant concludes that he was effectively placed out of court and that there
are no outstanding claims before the trial court in the PUVTA Action. Id. at
2-3. See also id. at 2 (citing Fastuca v. L.W. Molnar & Associates, 950
A.2d 980, 986 (Pa. Super. 2008) (“[T]o determine whether finality is achieved,
we must consider whether the practical ramification of the order will be to
dispose of the case, making review appropriate.”) (citation omitted); West v.
West, 446 A.2d 1342, 1342 (Pa. Super. 1982) (“The finality of an order is a
judicial conclusion which can be reached only after an examination of its
ramifications. If the practical effect of an order is to put an appellant out of
court by precluding him from presenting the merits of his claim, the order is
(Footnote Continued Next Page)
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On July 2, 2021, Garnishment Appellees filed an application to dismiss
the appeal at docket no. 269 WDA 2021 as moot. We denied their application.
Per Curiam Order, 8/27/21 (single page).13
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appealable.”) (internal quotation marks and citations omitted)). Accordingly,
we discharged the rule to show cause and allowed the appeal to proceed. See
Per Curiam Order, 5/7/21 (single page).
13 Garnishment Appellees requested dismissal of this appeal pursuant to the
mootness doctrine, as they argued that the issues raised by Appellant became
moot during the pendency of the appeal. Application to Dismiss, 7/2/21, at
5-9 (unnumbered) (citing Deutsche Bank Nat’l Co. v. Butler, 868 A.2d 574,
577 (Pa. Super. 2005) (“[A]n actual claim or controversy must be present at
all stages of the judicial process for the case to be actionable or
reviewable[.]”); In re Duran, 769 A.2d 497, 502 (Pa. Super. 2001) (“If
events occur to eliminate the claim or controversy at any stage in the process,
the case becomes moot.”)). Instantly, Appellant seeks a reversal of the Non-
Jury Verdict declaring McGreevy’s assets exempt and immune from execution
by a judgment creditor and a remand with instructions to reinstate his writs
of execution. Garnishment Appellees argued that such an order by this Court
would have no legal force or effect, as the subject accounts in Pershing’s
custody are now closed and no longer exist. Id. at 9. They explained that,
on July 15, 2020, subsequent to the entry of the Non-Jury Verdict dissolving
the writs of execution and releasing the hold on the funds in McGreevy’s
checking account, McGreevy transferred the balance of his individual checking
account to the joint checking account he held with Wife. McGreevy and Wife
then transferred the funds from their joint account to their son, Brendan
McGreevy, as a gift. Id. at 6-7. Additionally, after McGreevy’s death, Wife
exercised her option as the beneficiary of the inherited/decedent IRA to roll
over the funds into a new IRA created for her benefit. Id. at 7. Finally, upon
McGreevy’s death, McGreevy’s brother, Shawn McGreevy, became the
successor trustee of the separate share trust. On February 16, 2021, the
assets of the separate share trust were divided and distributed to the late
McGreevy’s three adult children, pursuant to the trust agreement. Id. at 8.
Thus, Garnishment Appellees asserted that any opinion and order issued by
this Court as to the immunity and/or exemption of McGreevy’s former assets
would be purely advisory in nature. Id. at 9 (citing Erie Ins. Exchange v.
(Footnote Continued Next Page)
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Appeal from Garnishment Action
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Claypoole, 673 A.2d 348, 352 (Pa. Super. 1996) (“It is impermissible for
courts to render purely advisory opinions.”)).
In response, Appellant argued that the issues it raised on appeal are certainly
not moot, as a reversal of the Non-Jury Verdict would allow Appellant to
pursue his fraudulent claim action in Warren County. Answer to Application
to Dismiss, 7/9/21, at 4-5 (unnumbered) (noting that, “according to the trial
court in Warren County, because of Judge Lutty’s order, Appellant could never
sufficiently plead the existence of any assets that could be fraudulently
transferred[,]” rendering his PUVTA claim null and void absent a reversal).
Moreover, Appellant filed a claim against McGreevy’s estate on February 17,
2021. Id. at 5. Administratrix filed an objection to his claim, stating “all
property of the decedent … was property by the entireties … and was judicially
determined during his lifetime to be immune and exempt from attachment
and execution by creditors…. [T]he judgment upon which the alleged claim is
based is void under Pennsylvania law.” Id. Thus, Appellant explained that
without a reversal of the Non-Jury Verdict, he may be prevented from pursuing
his claim against the estate. Id. at 6. Finally, Appellant asserted that Judge
Lutty’s ruling could also be used by unscrupulous married debtors in the future
to avoid paying valid debts, thus causing public harm. Id. at 7.
We agree with Appellant that, even though some or all of the funds which
were previously in Pershing’s possession may have changed hands, an actual
claim or controversy continues to be present in this matter, see id. at 4;
Deutsche Bank Nat’l Co., supra, and that a reversal of the Non-Jury Verdict
“would have significant legal force and effect.” Id. at 6. We discern no
intervening change in the facts of this case that would render this appeal
moot. See In re Gross, 382 A.2d 116, 119 (Pa. 1978) (“[A] legal question
can become moot on appeal as a result of an intervening change in the facts
of the case.”). We do not believe that the transfer of funds and depletion of
assets of the estate by the appellees in this matter are the type of intervening
changes in the facts that would render this appeal moot. “[O]ur courts have
never held that an adverse party may create mootness through deliberate
factual manipulation.” Jefferson Bank v. Newton Assocs., 686 A.2d 834,
838 (Pa. Super. 1996) (noting that the appellant had “taken no action which
would divest it of a real interest in the outcome of [the] proceedings, and [the]
appellees’ unilateral actions to that effect will not result in a finding of
mootness”).
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We first address the issues raised on appeal in the Garnishment Action.
Herein, Appellant presents the following questions for our review:
1. Whether [A]ppellant properly exercised his right under
Pa.R.C.P. [] 227.4(1)(b) to move the case along instead of
waiting for the trial court to dispose of his post-trial motion[?]
2. Whether the trial court committed reversible error when it
sustained [McGreevy’s] preliminary objections, dissolved the
writs of execution directed to Pershing … and BNY Mellon, and
declared the entirety of … McGreevy’s assets to be “immune
and exempt from attachment, levy, and execution[,”] even
though the evidence clearly demonstrated that [] McGreevy’s
single party brokerage/checking account, his
decedent/inherited IRA, and his trust account were not exempt
or immune from execution[?]
Appellant’s Brief I at 4.
We begin by addressing Appellant’s first issue, which concerns the
timeliness of this appeal. Instantly, Judge Lutty issued a memorandum in lieu
of a Rule 1925(a) opinion, in which he asserts that this appeal is untimely, as
Appellant had not yet received a decision from the trial court on his post-trial
motion. Trial Court Memorandum (“TCM”), 4/9/21, at 2 (unnumbered).
Accordingly, he suggests that the appeal be quashed. To the contrary,
Appellant argues that he merely exercised his right to move the case along
with the filing of a praecipe to enter judgment on the Non-Jury Verdict,
pursuant to Rule 227.4(1)(b), and that the appeal is timely. Appellant’s Brief
I at 17.
We agree with Appellant. Rule 227.4 provides, in pertinent part:
[T]he prothonotary shall, upon praecipe of a party:
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(1) enter judgment upon a nonsuit by the court, the
verdict of a jury or the decision of a judge following a trial
without jury, if
…
(b) one or more timely post-trial motions are filed and
the court does not enter an order disposing of all motions
within one hundred twenty days after the filing of the first
motion. A judgment entered pursuant to this
subparagraph shall be final as to all parties and all issues
and shall not be subject to reconsideration…[.]
Pa.R.C.P. 227.4(1)(b).
This Court previously established:
The Rules of Civil Procedure governing post-trial practice were
amended to allow the parties to minimize post-trial delay.
Pa.R.C.P. 227.1 (Explanatory Comment—1995). Rule 227.4(1)(b)
is optional with the parties; they may await the decision of the
trial court or move the case along. Id. The judgment entered
pursuant to Rule 227.4(1)(b), is effective as to all parties and all
issues. Id. Reconsideration is strictly prohibited and the case is
ready in its entirety for the appellate process. Id.In view of the language of Rule 227.4(1)(b) and the explanatory
comment, it is clear that once the requisite 120[-]day period runs
and a party opts to praecipe for the entry of judgment, the
judgment becomes final[] and immediately appealable[] when it
is entered on the docket. See Pa.R.A.P. 108(b) (date of entry of
order in matter subject to Pennsylvania Rules of Civil Procedure is
the day clerk makes notation in docket that notice of entry of order
has been given pursuant to Pa.R.C.P. 236(b)).
Conte v. Hahnemann University Hospital, 707 A.2d 230, 231 (Pa. Super.
1998). Hence, “all that [Rule] 227.4(1)(b) does is to provide an opportunity
for a party to the litigation to move the case forward, so that the judgment
entered on the verdict is a final, immediately appealable order.” Gibbs v.
Herman, 714 A.2d 432, 434 (Pa. Super. 1998).
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Here, Appellant filed his post-trial motion on June 29, 2020. Oral
argument was held on October 15, 2020, and briefs were submitted by both
parties. As 221 days had elapsed since the filing of his post-trial motion and
no decision had been entered by the trial court, we conclude that Appellant
properly exercised his right under Rule 227.4(1)(b) to praecipe the court for
the entry of a final judgment on the Non-Jury Verdict.14 Based on the
foregoing, we deem the judgment entered on February 4, 2021 to be final and
appealable. Thus, we will proceed to review the merits of Appellant’s
remaining claim.
In his second claim, Appellant asserts that the trial court erred in
declaring the entirety of McGreevy’s assets to be “immune and exempt from
attachment, levy, and execution[,]” and in dissolving the writs of execution
directed to Pershing and BNY Mellon. Appellant’s Brief I at 23.15 Appellant
claims that the trial court’s findings regarding the exemption status of
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14 While we acknowledge that, to some extent, delays in this matter were
caused due to court closures related to the COVID-19 pandemic, under the
circumstances of this case, such closures did not have any effect on
Appellant’s exercising his right to move the case along under Rule
227.4(1)(b).
15 We note that Appellant also avers the trial court erred in sustaining
McGreevy’s preliminary objections; however, Judge Lutty’s Non-Jury Verdict
does not expressly sustain McGreevy’s preliminary objections. Appellant
merely postulates that the trial court accepted McGreevy’s arguments and
granted his objections, as the order signed by Judge Lutty is identical to the
proposed order submitted by McGreevy, along with his proposed findings of
fact. Id. at 24-25.
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McGreevy’s assets are contrary to the law and against the weight of the
evidence. Id. at 17. Additionally, he argues that the Non-Jury Verdict
declaring the entirety of McGreevy’s assets immune and exempt from
execution extends “way beyond the scope of the trial[,]” as the court’s findings
were supposed to be limited to the status of McGreevy’s assets in Pershing’s
custody at the time Pershing was served with the writ of execution. Id. at 16.
Preliminarily, we note:
Our appellate role in cases arising from non-jury trial verdicts is
to determine whether the findings of the trial court are supported
by competent evidence and whether the trial court committed
error in any application of the law. The findings of fact of the trial
judge must be given the same weight and effect on appeal as the
verdict of a jury. We consider the evidence in a light most
favorable to the verdict winner. We will reverse the trial court
only if its findings of fact are not supported by competent evidence
in the record or if its findings are premised on an error of law.
However, where the issue concerns a question of law, our scope
of review is plenary. The trial court’s conclusions of law on appeal
originating from a non-jury trial are not binding on an appellate
court because it is the appellate court’s duty to determine if the
trial court correctly applied the law to the facts of the case.
Wyatt Inc. v. Citizens Bank of Pennsylvania, 975 A.2d 557, 564 (Pa.
Super. 2009) (citation, brackets, quotation marks, ellipsis, and paragraph
break omitted).
Based on our extensive review of the instant matter, we deduce that
Judge Lutty agreed with McGreevy’s position that all of his assets in Pershing’s
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possession constituted entireties property.16 Moreover, while we do not have
the benefit of a Rule 1925(a) opinion, we deem the record to be sufficient as
to not impede our appellate review, as the parties have thoroughly briefed the
legal issues upon which this matter must be resolved. See Hess v. Fox
Rothschild, LLP, 925 A.2d 798, 805 (Pa. Super. 2007) (declining to remand
to the trial court for preparation of an opinion that describes its rationale for
the order under appeal for reasons of judicial economy, where the parties
have thoroughly argued the legal issues upon which the case must be
resolved). Thus, we delve into the legal arguments presented by the parties.
Instantly, there is no dispute that McGreevy had a legal interest in the
following accounts held in Pershing’s custody at the time the writ of execution
was issued: (1) individual brokerage/checking account; (2) separate share
trust; (3) individual IRA; (4) inherited/decedent IRA; and (5) joint
brokerage/checking account. Appellant concedes that the individual IRA and
the joint checking account were not subject to execution in a garnishment
action; however, he argues that McGreevy’s individual checking account, the
separate share trust, and the inherited/decedent IRA were subject to
attachment. Appellant’s Brief I at 26. Garnishment Appellees, on the other
____________________________________________
16 See McGreevy’s Proposed Findings of Fact and Conclusions of Law, 3/23/20,
at 3 ¶ 24 (“All assets and property owned by … McGreevy and in the custody
of … Pershing … constitute marital property, i.e.[,] tenancies by the entireties,
and is therefore exempt and immune from execution, attachment and levy by
any judgment creditors of … McGreevy.”). See also Non-Jury Verdict at 1-2
(unnumbered) (appearing identical to the proposed order attached to
McGreevy’s Proposed Findings of Fact and Conclusions of Law).
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hand, essentially argue that all the foregoing assets were immune and exempt
from the reach of McGreevy’s creditors because the funds constituted property
held as tenants by the entireties. Garnishment Appellees’ Brief at 8. For the
reasons set forth infra, we deem Garnishment Appellees’ argument to be
wholly without merit.
Preliminarily, we recognize that the accounts at issue have been closed
and that the funds are no longer in Pershing’s possession. See n.14, supra.
Nevertheless, we deem it necessary to address whether each of these
accounts should have been found subject to attachment, because these three
accounts were the subject of the non-jury trial which led to Judge Lutty’s
incredibly broad Order and Non-Jury Verdict declaring all of McGreevy’s assets
exempt and immune from execution by his creditors and dismissing
Appellant’s writs of execution. Without reversal of the Non-Jury Verdict,
Appellant would be prevented from pursuing collection on his judgment
against any assets owned by McGreevy and/or his estate.
It is well-established:
A tenancy by the entireties is a form of co-ownership of real or
personal property by husband and wife, with its essential
characteristic being that “each spouse is seised per tout et non
per my, i.e., of the whole or the entirety and not of a share, moiety
or divisible part.” In re Gallagher’s Estate, … 43 A.2d 132 ([Pa.]
1945). When one spouse dies, the surviving spouse takes no new
estate; rather, the only change is in the properties of the legal
entity holding the estate. Beihl v. Martin, … 84 A. 953 ([Pa.]
1912). For the duration of the entireties estate, either spouse has
the presumptive power to act for both, so long as both spouses
share the proceeds, and neither spouse may appropriate property
for his or her own use, to the exclusion of the other spouse,
without the consent of the other spouse. Fazekas v. Fazekas,
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737 A.2d 1262, 1264 (Pa. Super. 1999). Entireties property is
unavailable to satisfy the claims of the creditor of one of the
tenants. Patwardhan v. Brabant, … 439 A.2d 784[, 785] ([Pa.
Super.] 1982). However, a conveyance in fraud of creditors may
be appropriately attacked, but the proceedings must conform to
proper procedures. Id.Johnson v. Johnson, 908 A.2d 290, 295 (Pa. Super. 2006). Further, we
recognize that, “in this Commonwealth, a presumption exists that property
held by a husband and wife is held by the entireties and that said presumption
can be overcome only when the opposing party demonstrates, through clear
and convincing evidence, that the property was not intended to be held by the
husband and wife as entireties property.” Id. at 296. We remain mindful of
these principles while examining the trial court’s determinations regarding the
exempt status of each of the three contested accounts.
1. Individual Brokerage/Checking Account
Appellant claims the trial court erred in finding McGreevy’s individual
brokerage/checking account (“checking account”) exempt and immune from
attachment, levy, and execution, as the account was titled only in McGreevy’s
name, and McGreevy was the only person who made contributions to and/or
used the account. Appellant’s Brief I at 28. Contrarily, Garnishment Appellees
maintain that the funds in McGreevy’s individual checking account constituted
tenancy by the entireties property and, thus, were exempt from attachment
by McGreevy’s creditors. Garnishment Appellees’ Brief at 9-10 (citing In re
Holmes’ Estate, 200 A.2d 745, 747 (Pa. 1964) (presuming husbands and
wives take property as tenants by the entireties unless there is clear and
convincing evidence to the contrary)). Additionally, they baldly assert that
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Appellant failed to produce any evidence to support his contention that only
McGreevy made contributions to and/or used his individual checking account.
Id. at 12. Garnishment Appellees’ claims are belied by the record and are
wholly without merit.
First, Garnishment Appellees correctly note that the judgment assigned
to Appellant was “strictly and exclusively a judgment entered against …
McGreevy alone[,]” id. at 10, and that despite claims McGreevy and Wife had
separated in 2007, see Appellant’s Brief I at 33, the two remained legally
married until McGreevy’s death in January of 2021.17 See Seese, 611 A.2d
at 1243 (“It is well settled that Pennsylvania subscribes to the majority view
which holds that entireties property is unavailable to satisfy the claims of the
creditor of only one of the tenants.”). However, their argument fails to
recognize that the checking account was opened in McGreevy’s name only and
that Wife had no authority to use the account. See N.T. Trial, 3/2/20, at 24
(Robert Feldman’s testifying that Wife was not a signatory on the account and
that she had no authority to write checks on the account or to transfer money
from the account). In fact, all the cases cited by Garnishment Appellees in
____________________________________________
17Our review of the record reveals that no divorce action was ever instituted
by either party, nor did McGreevy and Wife ever enter into a formal separation
agreement. Id. at 10-11. Yet, Wife did acknowledge that she and McGreevy
separated in 2007. N.T. Deposition of Wife, 2/5/19, at 7. See also N.T.
Deposition of McGreevy, 2/5/19, at 5 (McGreevy’s explaining that he and Wife
are “still married” but separated “[a]pproximately 10, 11 years ago[,]” and
that he still communicates with her on a regular basis and relies on her to help
keep him organized with day-to-day business).
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support of their argument that McGreevy’s individual checking account
constituted entireties property are distinguishable from the instant matter, as
those cases involve property titled to both a husband and wife. See
Garnishment Appellees’ Brief at 9-10 (citing In re Holmes Estate, 200 A.2d
at 747 (“Where property or an account is placed in the names of a husband
and wife, a gift and the creation of an estate by the entireties is presumed
even though the funds used to acquire the property or to establish the account
were exclusively those of the husband. The placing of the property in both
names, without more, creates an estate by the entireties.”) (internal citations
omitted; emphasis added); In re Barsotti, 7 B.R. 205, 207 (Bankr. W.D. Pa.
1980) (describing the creation and nature of tenancy by the entireties
property where a conveyance is made to husband and wife)).
After careful review, we detect no competent evidence in the record to
support the trial court’s conclusion that this account constituted entireties
property. Rather, the record establishes that McGreevy opened the checking
account in his name only, utilizing his individual funds, and that only McGreevy
contributed to and withdrew from the account. Appellant produced a copy of
McGreevy’s Corestone Account Application (“Application”), which designated
the account title as “Daniel M. McGreevy” and contained only McGreevy’s
signature as account owner, along with a copy of the Account Transfer Form
(“Transfer Form”), which directed Merrill Lynch to transfer all of McGreevy’s
assets in his individual account with Merrill Lynch to his checking account at
Pershing. See Appellant’s Evidence, 9/6/19, at Exhibit 7 (Application); id. at
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Exhibit 7 (Transfer Form). Step 7 of the Application required the signature of
“all account owner(s), authorized persons and additional signatorie(s)[,]” and
contained only McGreevy’s signature. Application at 3 (emphasis added).
Wife did not sign the Application as a joint owner or additional signatory. Id.Moreover, the Transfer Form specified the receiving account as a single party
account and was signed only by McGreevy as the “primary account holder.”
Transfer Form at 1, 3. The space for the signature of a secondary account
holder remained blank. Id. at 3.
Given the documentation in the record establishing that the checking
account was an individual account titled in McGreevy’s name only, and
Garnishment Appellees’ failure to produce any evidence to the contrary, we
determine there is no presumption that McGreevy’s opening of the account
created an estate by the entireties. See Fratangelo v. Fratangelo, 520 A.2d
1195, 1201 (Pa. Super. 1987) (noting the creation of entireties property
requires that the property be acquired in joint names of husband and wife).
See also Constitution Bank v. Olson, 620 A.2d 1146, 1149 (Pa. Super.
1993) (“[T]he legal unity of time, title, interest, possession and marriage
create a tenancy by the entireties[.]”).18 It is clear that Wife was not a
____________________________________________
18 As we explained in In re Estate of Rivera, 194 A.3d 579 (Pa. Super. 2018),
[a] tenancy by the entireties requires a legally binding marriage
plus the satisfaction of all four unities, which are further defined
below:
(Footnote Continued Next Page)
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signatory on the account and had no authority to withdraw funds from the
account; thus, we determine that none of the four unities have been satisfied
with respect to McGreevy’s individual checking account.19
Finally, we acknowledge that where a spouse’s individual funds are
commingled in a joint checking account held by both husband and wife or used
to purchase property in the name of husband and wife, the presumption of a
____________________________________________
Unity of time requires that the interests of the tenants vest
at the same time. Unity of title requires the tenants to have
obtained their title by the same instrument. … Unity of
possession requires the tenants to have an undivided
interest in the whole estate. … Unity of interest requires the
tenants to have estates in the property of the same type,
duration and amount.
Id. at 586 (quoting Fenderson v. Fenderson, 685 A.2d 600, 607 (Pa. Super.
1996) (internal citations and quotations omitted)). “If one of the unities is
lacking, then, by common law, there can be no joint tenancy or entirety.”
Madden v. Gosztonyi Savings & Trust Co., 200 A. 624, 631 (Pa. 1938).
19 Even if there was a presumption of entireties, the record contains evidence
of McGreevy’s intention to create ownership other than as tenants by the
entireties, which would be sufficient to rebut the presumption. See
Constitution Bank, 620 A.2d at 1152 n.3 (“Intention is the cardinal and
controlling element in determining if a husband and wife shall take ownership
of property by the entireties, and if such … sufficiently appears, it will be given
effect.”). Here, in addition to the overwhelming evidence contained within the
account documents reflecting McGreevy’s intention to open an individual
checking account solely for his use, the fact that McGreevy and Wife opened
a joint checking account with Pershing around the same time as McGreevy’s
individual checking account further supports Appellant’s argument that
McGreevy clearly did not intend for his individual checking account to be
entireties property. See Appellant’s Brief I at 38-39.
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gift and creation of an estate by the entireties arises.20 Such a presumption
does not arise here, however, as Garnishment Appellees have failed to
produce any evidence whatsoever of commingling of the funds. We emphasize
that the mere existence of a marriage does not render all property owned by
either spouse tenancy by the entireties property. See In re Estate of
Rivera, 194 A.3d at 586 (indicating Pennsylvania jurisprudence has not
adopted a de facto tenancy by entireties).
2. Separate Share Trust
Next, we consider Appellant’s claim that the trial court erred in finding
McGreevy’s separate share trust exempt and immune from attachment by his
creditors. See Appellant’s Brief I at 42-43. It is undisputed that the trust,
formally titled as the “Daniel M. McGreevy Generation Skipping Tax Exempt
Trust,” was an irrevocable trust that was established by McGreevy’s deceased
father’s will and trust agreement, dated July 9, 2008. See Appellant’s
Evidence at Exhibit 8 (Trust Account Documents); McGreevy’s Evidence,
7/16/19, at Exhibit B (Affidavit of Robert E. Feldman, 3/28/19, at 1-2)
(unnumbered). McGreevy was the sole beneficiary and the sole trustee of the
trust. See Trust Account Documents; N.T. Deposition of Robert Feldman at
29.
____________________________________________
20See Constitution Bank, 620 A.2d at 1150 (quoting In re Holmes’ Estate,
200 A.2d at 747 ) (“Where property or an account is placed in the names of a
husband and wife, a gift and the creation of an estate by the entireties is
presumed even though the funds used to acquire the property or to establish
the account were exclusively those of the husband. The placing of the
property in both names, without more, creates an estate by the entireties.”).
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Garnishment Appellees claim that the separate share trust was
entireties property and was therefore exempt from attachment by Appellant.
See Garnishment Appellees’ Brief at 8 (asserting generally that “all property
of … McGreevy constituted entireties property”). This claim is meritless, as
the record clearly establishes that McGreevy was the sole beneficiary and sole
trustee of the separate share trust created by his deceased father. See Trust
Account Documents (containing only McGreevy’s signature). Wife has failed
to provide any evidence that she was vested an interest in the trust at the
same time and by the same document as McGreevy. See Madden, 200 A. at
631 (declaring that if even one of the unities is lacking, there can be no
entirety); Constitution Bank, 620 A.2d at 1149 (recognizing that the legal
unity of time, title, interest, and possession are required to create a tenancy
by the entireties).
Alternatively, Garnishment Appellees claim the trust funds could not
be reached by McGreevy’s creditors pursuant to 20 Pa.C.S. § 7745, which
provides that “[a] judgment creditor or assignee of the settlor of an
irrevocable trust may reach the maximum amount that can be distributed to
or for the settlor’s benefit.” Garnishment Appellees’ Brief at 19 (quoting 20
Pa.C.S. § 7745(2) (emphasis added)). Garnishment Appellees’ argument that
the trust funds were exempt from execution by McGreevy’s creditors because
McGreevy was the beneficiary, not the settlor, of the trust is seemingly based
on their interpretation of section 7745(2) to mean that creditors can only
reach the assets of an irrevocable trust if the claims are against the settlor.
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We deem this argument to be faulty and their reliance on section 7745 to be
misplaced, as section 7745 only governs creditor’s claims against settlors.
See 20 Pa.C.S. § 7745.
As Appellant notes, Pennsylvania’s Uniform Trust Act, 20 Pa.C.S. §§
7701-7799.3 (“PUTA”), provides numerous situations where a judgment
creditor of a trust beneficiary can reach the assets of the trust. For instance,
section 7741, which pertains to the rights of a beneficiary’s creditor, provides:
“A judgment creditor or assignee of the beneficiary may reach the
beneficiary’s interest by attachment of present or future distributions to or for
the benefit of the beneficiary or other means to the extent the beneficiary’s
interest is not subject to a spendthrift provision.” 20 Pa.C.S. § 7741.21
____________________________________________
21 The legislature explained:
This section applies only if the trust does not contain a spendthrift
provision…. Absent a valid spendthrift provision, a creditor may
ordinarily reach the interest of a beneficiary the same as any other
of the beneficiary’s assets. This does not necessarily mean that
the creditor can collect all distributions made to the beneficiary.
The interest may be too indefinite or contingent for the creditor to
reach or the interest may qualify for an exemption under the
state’s general creditor exemption statutes. See [Restatement]
(Third) of Trusts § 56 (2003); Restatement (Second) of Trusts §§
147-149, 162 (1959). Other creditor law of the State may limit
the creditor to a specified percentage of a distribution. This
section does not prescribe the procedures (“other means”) for
reaching a beneficiary’s interest or of priority among claimants,
leaving those issues to the enacting State’s laws on creditor rights.
This section does clarify, however, that an order obtained against
the trustee, whatever state procedure may have been used, may
(Footnote Continued Next Page)
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Additionally, section 7748 states: “Trust property that is subject to a power of
withdrawal, during the period the power may be exercised and after its lapse,
release or waiver, may be reached by a creditor or an assignee of the holder
of the power whether or not the interest of the holder in the trust is subject
to a spendthrift provision.” 20 Pa.C.S. § 7748.
Accordingly, we conclude the trial court’s determination regarding the
exemption status of the separate share trust is not supported by competent
evidence in the record and that the trial court erred in its application of the
law. See Wyatt Inc., supra.
3. Inherited/Decedent IRA
Finally, we address the trial court’s finding regarding McGreevy’s
inherited/decedent IRA (“inherited IRA”). The inherited IRA was funded by
proceeds of an IRA owned by McGreevy’s late father. McGreevy was the
named beneficiary on his father’s IRA. McGreevy’s financial advisor, Robert
Feldman, established the inherited IRA account for the purpose of enabling
McGreevy to receive minimum annual distributions over the expectancy of his
life, thereby minimizing his tax liability. See N.T. Deposition of Robert
Feldman at 13-14. Garnishee Appellees claim that the inherited IRA was a
retirement account, which was immune and exempt from execution, pursuant
____________________________________________
extend to future distributions whether made directly to the
beneficiary or to others for the beneficiary’s benefit….
20 Pa.C.S. § 7748, Uniform Law Comment (some citations omitted).
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to 42 Pa.C.S. § 8124(b)(1)(ix). Garnishees’ Appellees’ Brief at 14, 16.
Contrarily, Appellant contends that such an IRA does not constitute retirement
funds and, therefore, he concludes that the trial court erred in finding the
funds exempt or immune from attachment by a judgment creditor.
Appellant’s Brief I at 42.
Pennsylvania law protects retirement funds and accounts from
attachment or execution by judgment creditors. See 42 Pa.C.S. § 8124(b)
(enumerating the types of retirement funds and accounts that shall be exempt
from attachment or execution on a judgment). However, no courts in this
Commonwealth have discussed whether the statute covers inherited IRAs.
Thus, whether an inherited IRA is considered a retirement account for the
purpose of attachment involves a question of statutory interpretation. When
considering issues of statutory interpretation, the applicable standard of
review is de novo and our scope of review is plenary. Trout v. Strube, 97
A.3d 387, 389 (Pa. Super. 2014) (citation omitted). As we have explained:
When we undertake statutory interpretation, our object is to
ascertain and then effectuate the intention of the Legislature. 1
Pa.C.S.[] § 1921(a). When possible, this Court construes every
statute so as to give effect to all of its provisions. If the terms of
a statute are clear and free of all ambiguity, we will not disregard
the letter of the law in favor of pursuing its apparent spirit.
However, when the words of a statute are not explicit, this Court
must determine what it was that the General Assembly intended.
We then apply the legislators’ intent when interpreting the law in
question.
Id. at 389-90 (citation omitted).
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The statutory provision in question here is subsection 8124(b)(1)(ix),
which exempts the following from attachment or execution on a judgment:
Any retirement or annuity fund provided for under section 401(a),
403(a) and (b), 408, 408A, 409[,] or 530 of the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a), 403(a) and
(b), 408, 408A, 409[,] or 530), the appreciation thereon, the
income therefrom, the benefits or annuity payable thereunder and
transfers and rollovers between such funds.
42 Pa.C.S. § 8124(b)(1)(ix).22 Although “[t]he statute’s plain language
generally provides the best indication of legislative intent[,] where … the
statutory language at issue is determined to be ambiguous[,] we may go
beyond the text and look to other considerations to discern legislative intent.”
Harmon v. Unemployment Compensation Board of Review, 207 A.3d
292, 304 (Pa. 2019) (internal quotation marks and citations omitted). “Such
considerations include, inter alia, the occasion and necessity for the statute,
____________________________________________
22 Subsection 8124(b)(1)(ix) shall not apply to:
(A) Amounts contributed by the debtor to the retirement or
annuity fund within one year before the debtor filed for
bankruptcy. This shall not include amounts directly rolled
over from other funds which are exempt from attachment
under this subparagraph.
(B) Amounts contributed by the debtor to the retirement or
annuity fund in excess of $15,000 within a one-year period.
This shall not include amounts directly rolled over from
other funds which are exempt from attachment under this
subparagraph.
(C) Amounts deemed to be fraudulent conveyances.
42 Pa.C.S. § 8124(b)(1)(ix)(A)-(C).
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the mischief to be remedied, the consequences of a particular interpretation,
and the contemporaneous legislative history.” Id. (citation omitted).
Instantly, section 8124(b)(1)(ix) is ambiguous as to whether the term
“retirement fund” includes an inherited IRA. See Burke ex rel. Burke v.
Independence Blue Cross, 103 A.3d 1267, 1273 (Pa. 2014) (“An ambiguity
exists when there are at least two reasonable interpretations of the specific
text under review.”). Thus, we look first to the relevant section of the Internal
Revenue Code, section 408, which is referenced in the foregoing statutory
provision and governs the taxability of distributions from an IRA. See 26
U.S.C. § 408. Section 408(a) defines an IRA as “a trust created or organized
in the United States for the exclusive benefit of an individual or his
beneficiaries,” subject to certain requirements enumerated in the statute. 26
U.S.C. § 408(a). An inherited IRA is defined under the Internal Revenue Code
as “an individual retirement account or individual retirement annuity” that a
beneficiary acquired “by reason of the death of another individual, and such
[beneficiary] was not the surviving spouse of such other individual.” 26 U.S.C.
§ 408(d)(3)(C)(ii).
Additionally, we observe that similar to the Pennsylvania Consolidated
Statutes which exempt certain property from attachment or execution on a
judgment, see 42 Pa.C.S. § 8124, the Bankruptcy Code allows a debtor to
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exempt certain property from the bankruptcy estate.23 Specifically, section
522(b) provides that, unless a state has statutorily “opted out” and thereby
foreclosed the use of federal exemptions, a debtor may choose between the
federal exemptions listed in section 522(d) and state law exemptions to
exempt property from the bankruptcy estate. See 11 U.S.C. § 522(b). See
also Ambrosia, 572 A.2d at 779 (“Under the federal construct, a debtor must
choose between these two alternatives; he or she is not permitted to take
certain exemptions which are allowed by the state and other exemptions which
are prescribed by § 522(d).”). Pennsylvania has not enacted “opt out”
legislation. Id.
Under section 522 of the Bankruptcy Code, an individual debtor is
authorized to exempt from his bankruptcy estate “retirement funds to the
extent that those funds are in a fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal
Revenue Code of 1986.” 11 U.S.C. §§ 522(b)(3)(C), 522(d)(12). The term
“retirement funds” is not defined by the Bankruptcy Code, and a split
developed in the federal appellate courts as to whether funds in an inherited
IRA qualify for the section 522 exemption. See In re Clark, 714 F.3d 559,
562 (7th Cir. 2013) (determining “inherited IRAs represent an opportunity for
current consumption, not a fund of retirement savings” and, therefore, do not
____________________________________________
23 Under the Bankruptcy Code, when a debtor files for bankruptcy, “all legal
and equitable property interests of the debtor at that time are included as part
of the debtor’s bankruptcy estate.” Ambrosia v. Yerage, 572 A.2d 777, 779
(Pa. Super. 1990) (citing 11 U.S.C. § 541).
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qualify for the exemption under section 522); In re Chilton, 674 F.3d 486,
489 (5th Cir. 2012) (deciding inherited IRAs are exempt from the bankruptcy
estate under section 522(d)(12), as they constitute funds that others had
originally set aside for their retirement and that the transfer of these
retirement funds to the debtor does not alter their status as retirement funds).
Upon a grant of certiorari, the Supreme Court of the United States heard
the In re Clark debtor-beneficiary’s appeal and affirmed the Seventh Circuit’s
decision, ruling that inherited IRAs are not included in the definition of
“retirement funds” under section 522(b)(3)(C) of the Bankruptcy Code. Clark
v. Rameker, 573 U.S. 122 (2014). To begin its analysis, the Clark Court
defined “retirement funds” as “sums of money set aside for the day an
individual stops working[,]” since the term is not defined by the Bankruptcy
Code. Id. at 127 (citing American Heritage Dictionary 712, 1489 (4 th ed.
2000) (stating the ordinary meaning of “funds” and “retirement”)). To
determine whether funds in an account qualify as “retirement funds,” the
Clark Court dictated that “courts should not engage in a case-by-case, fact-
intensive examination into whether the debtor actually planned to use the
funds for retirement purposes as opposed to current consumption. Instead,
we look to the legal characteristics of the account in which the funds are held,
asking whether, as an objective matter, the account is one set aside for the
day when an individual stops working.” Id.- 31 -
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The Clark Court concluded that funds held in inherited IRAs are not
objectively set aside for the purpose of retirement, based on the following
three legal characteristics of such accounts.
First, the holder of an inherited IRA may never invest additional
money in the account. 26 U.S.C. § 219(d)(4). Inherited IRAs are
thus unlike traditional and Roth IRAs, both of which are
quintessential “retirement funds.” For where inherited IRAs
categorically prohibit contributions, the entire purpose of
traditional and Roth IRAs is to provide tax incentives for
accountholders to contribute regularly and over time to their
retirement savings.
Second, holders of inherited IRAs are required to withdraw money
from such accounts, no matter how many years they may be from
retirement. Under the [Internal Revenue] Code, the beneficiary
of an inherited IRA must either withdraw all of the funds in the
IRA within five years after the year of the owner’s death or take
minimum annual distributions every year. See § 408(a)(6); §
401(a)(9)(B); 26 CFR § 1.408-8 (Q-1 and A-1(a) incorporating §
1.401(a)(9)-3 (Q-1 and A-1(a)))….
Finally, the holder of an inherited IRA may withdraw the entire
balance of the account at any time—and for any purpose—without
penalty. Whereas a withdrawal from a traditional or Roth IRA prior
to the age of 59½ triggers a 10 percent tax penalty subject to
narrow exceptions, … a rule that encourages individuals to leave
such funds untouched until retirement age[,] there is no similar
limit on the holder of an inherited IRA. Funds held in inherited
IRAs accordingly constitute “a pot of money that can be freely
used for current consumption,” [In re Clark,] 714 F.3d at 561,
not funds objectively set aside for one’s retirement.
Id. at 128.
Moreover, the Clark Court opined:
Our reading of the text is consistent with the purpose of the
Bankruptcy Code’s exemption provisions. As a general matter,
those provisions effectuate a careful balance between the
interests of creditors and debtors. On the one hand, we have
noted that “every asset the Code permits a debtor to withdraw
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from the estate is an asset that is not available to … creditors.”
Schwab v. Reilly, 560 U.S. 770, 791 … (2010). On the other
hand, exemptions serve the important purpose of “protect[ing]
the debtor’s essential needs.” United States v. Security
Industrial Bank, 459 U.S. 70, 83 … (1982) (Blackmun, J.,
concurring in judgment).3
3As the House Judiciary Committee explained in the process
of enacting § 522, “[t]he historical purpose” of bankruptcy
exemptions has been to provide a debtor “with the basic
necessities of life” so that she “will not be left destitute and
a public charge.” H.R.Rep.No. 95-595, p. 126 (1977).
Allowing debtors to protect funds held in traditional and Roth IRAs
comports with this purpose by helping to ensure that debtors will
be able to meet their basic needs during their retirement years.
At the same time, the legal limitations on traditional and Roth IRAs
ensure that debtors who hold such accounts (but who have not
yet reached retirement age) do not enjoy a cash windfall by virtue
of the exemption—such debtors are instead required to wait until
age 59½ before they may withdraw the funds penalty-free.
The same cannot be said of an inherited IRA. For if an individual
is allowed to exempt an inherited IRA from her bankruptcy estate,
nothing about the inherited IRA’s legal characteristics would
prevent (or even discourage) the individual from using the entire
balance of the account on a vacation home or sports car
immediately after her bankruptcy proceedings are complete.
Allowing that kind of exemption would convert the Bankruptcy
Code’s purposes of preserving debtors’ ability to meet their basic
needs and ensuring that they have a “fresh start” into a “free
pass[.”] We decline to read the retirement funds provision in that
manner.
Id. at 129-30 (some internal citations omitted). Based on its foregoing
analysis, the Court determined “[t]he text and purpose of the Bankruptcy
Code make clear that funds held in inherited IRAs are not ‘retirement funds’
within the meaning of § 522(b)(3)(C)’s bankruptcy exemption.” Id. at 127.
Instantly, Appellant relies on the holding in Clark in support of his
argument that McGreevy’s inherited IRA did not constitute retirement funds
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and, thus, it was not exempt or immune from attachment by a judgment
creditor. Appellant’s Brief I at 41-42. Garnishment Appellees simply aver that
Clark does not apply here, because this matter does not involve a debtor in
a bankruptcy proceeding. Garnishment Appellees’ Brief at 16.
While Garnishment Appellees are correct in stating the underlying
matter here is not a bankruptcy proceeding, we agree with Appellant that
Clark is controlling. The very purpose of the exemptions under the federal
Bankruptcy Code, which is “to provide a debtor with the basic necessities of
life so that she will not be left destitute and a public charge[,]” Clark at 129
n.3 (internal quotation marks and citation omitted), is also served by this
Commonwealth’s analogous exemptions under section 8124, which are
likewise intended to protect an individual’s retirement income from execution
by creditors. See In re Barshak, 106 F.3d 501, 504 (3d. Cir. 1997) (citing
In re Houck, 181 B.R. 187, 193 (Bankr. E.D.Pa. 1995) (“The Pennsylvania
legislature has made a policy decision that, for purposes of state law, IRAs
should be insulated from involuntary alienation via a creditor’s execution.”)).
Moreover, subsection 8124(b)(1)(ix) contains substantially similar language
to the statutory bankruptcy exemption under section 522(b). Hence, we apply
the Clark Court’s logic to the instant matter and conclude that McGreevy’s
inherited IRA did not qualify for an exemption under section 8124.
Finally, we address Appellant’s claim that the Non-Jury Verdict extends
beyond the scope of the Garnishment Action. Appellant is correct in stating
that the issue presented at trial was limited to whether certain assets owned
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by McGreevy and in the possession of Pershing—namely, McGreevy’s
individual checking account, the separate share trust, and the inherited IRA—
were subject to execution. See Appellant’s Brief I at 25 (citing TCM at 1
(acknowledging the issue before the court “is whether certain property owned
by [McGreevy] was subject to execution in order to pay a judgment held by
[Appellant]”) (unnumbered; emphasis added)). See also Trial Court Order,
9/26/19 (single page) (“The issue of whether the assets in the custody of
Pershing … are subject to execution or conversely, immune and exempt from
execution shall be determined after a non-jury trial scheduled for January 15,
2020….”) (emphasis added). Nonetheless, the Non-Jury Verdict declared “all
property held by [McGreevy], or established for the benefit of [McGreevy] or
otherwise associated with [McGreevy], including all accounts in the custody of
Pershing” to be immune and exempt from attachment, levy and execution.
Non-Jury Verdict at 1-2 (unnumbered; emphasis added). We deem the trial
court’s declaration of all property being immune from attachment to be in
error, as the order goes well beyond the scope of the relief sought by Appellant
and the procedural posture of this case.
In sum, we do not discern any competent evidence in the record to
support Judge Lutty’s conclusion that McGreevy’s individual checking account,
separate share trust, and inherited IRA, let alone all of his assets, are immune
and exempt from attachment, levy, and execution by creditors. We deem
such findings to be based on a misapplication of the law. The Non-Jury Verdict
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must be reversed, so as not to impede Appellant’s pursuit of his PUVTA claim,
as well as his pending judgment claim against McGreevy’s estate.
Accordingly, we vacate the judgment entered on February 4, 2021, at
docket no. 269 WDA 2021, and remand this matter with instructions for the
trial court to enter a verdict consistent with this opinion and to reinstate the
January 23 and February 27, 2019 writs of execution to the extent that
Garnishees may still have any assets of McGreevy and/or his estate in their
possession.
Appeal from PUVTA Action
Next, we address the issues raised on appeal in Appellant’s PUVTA
Action. Appellant presents the following questions for our review:
A. Whether the trial court committed reversible error when it
sustained PUVTA Appellees’ preliminary objection no. 1 and
dismissed the entire complaint as to … McGreevy, individually,
and … McGreevy, as trustee for the Daniel M. McGreevy
Separate Share Trust, even though the death of … McGreevy
deprived the trial court of subject matter jurisdiction over
litigation by or against the deceased because the proper parties
were never substituted?
B. Whether the trial court committed reversible error when it
sustained PUVTA Appellees’ preliminary objection[] no. 1,
dismissed the entire complaint, and held that Allegheny County
Court of Common Pleas Judge Paul F. Lutty[,] Jr.’s June 23,
2020 [N]on-[J]ury [V]erdict was issue preclusive and
collaterally estopped Appellant from litigating his civil
complaint, even though the judgment on the [N]on[-J]ury
[V]erdict was not final for purposes of collateral estoppel, the
issues and/or claims involved in the prior action were not
identical, Appellant did not have full and fair opportunity to
litigate the exempt status of assets not within the scope of the
prior action, and/or finding in the [N]on[-J]ury [V]erdict fell
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within one or more of the exceptions to collateral estoppel, law
of the case, lis pendens, or the coordinate jurisdiction rule[?]
C. Whether the trial court erred as a matter of law in sustaining
PUVTA Appellees’ preliminary objection [no.] 1 and dismissing
the entire complaint, because even if the issue regarding the
exempt status of some or all of … McGreevy’s assets was
collaterally estopped, the complaint in civil action should more
properly have been either stayed altogether pending the
outcome of the appeal in the prior litigation, [or] stayed as to
assets within the scope of the previous action pending the
outcome of the appeal in the prior litigation and allowed to
proceed as to the transfer of … McGreevy’s assets that were
not within the scope of the trial[?]
Appellant’s Brief (“Appellant’s Brief II”), 5/10/21, at 3-5.
To reiterate, PUVTA Appellees filed preliminary objections to Appellant’s
complaint, alleging, inter alia, that the trial court lacked subject matter
jurisdiction because the entirety of McGreevy’s assets were found to be
exempt from attachment. Appellant filed preliminary objections to PUVTA
Appellees’ preliminary objections on December 15, 2020. On January 17,
2021, McGreevy died. A notice of death was filed in the Warren County Court
of Common Pleas on February 17, 2021, pursuant to Pa.R.C.P. 2355; however,
no substitution of party was filed on behalf of McGreevy in his individual
capacity or as trustee for the separate share trust. Regardless, after hearing
argument on the parties’ preliminary objections on February 17, 2021, the
trial court issued an order that same day sustaining PUVTA Appellees’
preliminary objection regarding lack of subject matter jurisdiction and
dismissing Appellant’s complaint without prejudice.
Appellant argues that the trial court did not have authority to rule on
PUVTA Appellees’ preliminary objections to the complaint, because
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McGreevy’s death deprived the trial court of subject matter jurisdiction over
claims brought by or against him. Appellant’s Brief II at 11. He avers that
“[u]ntil a proper party is substituted for [] McGreevy individually, and a
successor trustee is substituted for … McGreevy, as trustee for the Daniel M.
McGreevy Separate Share Trust, any rulings in favor of or against those
parties are null and void.” Id.24 We agree.
It is clear that “the death of a party deprives the trial court of subject
matter jurisdiction over litigation by or against the deceased until such time
as the deceased’s personal representative is substituted in his or her place.”
Grimm v. Grimm, 149 A.3d 77, 84 (Pa. Super. 2016). As we explained in
Grimm, “Pennsylvania Rule of Civil Procedure 2355 provides that, ‘if a named
party dies after the commencement of an action, the attorney of record for
the deceased party shall file a notice of death with the prothonotary. The
procedure to substitute the personal representative of the deceased party
shall be in accordance with Rule 2352.’” Id. (quoting Pa.R.C.P. 2355(a)
(emphasis added)).25 Thus, “under Rules 2352 and 2355, the filing of a notice
____________________________________________
24 We acknowledge that Appellant failed to include this issue in his Rule
1925(b) concise statement; however, a challenge to subject matter
jurisdiction cannot be waived. Commonwealth v. Jones, 929 A.2d 205, 210
(Pa. 2007). Moreover, it is well-settled that this Court may raise the question
of subject matter jurisdiction sua sponte. Barndt v. Barndt, 580 A.2d 320(Pa. Super. 1990).
25 Rule 2352 provides:
(Footnote Continued Next Page)
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of death and the substitution of a personal representative is mandatory.” Id.(emphasis added).
Moreover, this Commonwealth “has long recognized that a trial court
lacks subject matter jurisdiction over a claim filed against a deceased party.”
Id. (citing Thompson v. Peck, 181 A. 597, 598 (Pa. 1935) (declaring a suit
filed against a deceased individual “void”); Valentin v. Cartegena, 544 A.2d
1028, 1029 (Pa. Super. 1988) (deeming a suit filed against a deceased
individual a “nullity”)). “A dead man cannot be a party to an action, and any
such attempted proceeding is completely void and of no effect.” Id. at 84-85
(quoting Lange v. Burd, 800 A.2d 336, 341 (Pa. Super. 2002) (citation
omitted)). Based on the foregoing, we conclude that the trial court did not
have the authority to enter the order sustaining PUVTA Appellees’ preliminary
objection and dismissing Appellant’s complaint.26
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(a) The successor may become a party to a pending action by
filing of record a statement of the material facts on which
the right to substitution is based.
(b) If the successor does not voluntarily become a party, the
prothonotary, upon praecipe of an adverse party setting
forth the material facts shall enter a rule upon the successor
to show cause why the successor should not be substituted
as a party.
Pa.R.C.P. 2352.
26 It is well-established:
Before a court may issue an order, it must have authority to act.
Mintz v. Mintz, [1924 WL 3939, at *1 (Pa. Super. January 1,
1924)]. Jurisdiction over the subject matter is fundamental to a
(Footnote Continued Next Page)
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Accordingly, we vacate the February 18, 2021 order entered at docket
no. 286 WDA 2021 and remand this matter to the trial court to permit
substitution of a personal representative for McGreevy, in accordance with the
Pennsylvania Rules of Civil Procedure.
Based on our disposition of Appellant’s first issue, we need not address
the remainder of Appellant’s claims raised on appeal regarding the PUVTA
Action.
Judgment vacated at docket no. 269 WDA 2021. Order vacated at
docket no. 286 WDA 2021. Cases remanded. Jurisdiction relinquished.
____________________________________________
court’s authority to act. Leveto v. Nat’l Fuel Gas Dist. Corp.,
… 366 A.2d 270 ([Pa. Super.] 1976).
Jurisdiction is the capacity to pronounce a judgment of the
law on an issue brought before the court through due
process of law. It is the right to adjudicate concerning the
subject matter in a given case…. Without such jurisdiction,
there is no authority to give judgment and one so entered
is without force or effect.
Mintz …, supra [at *1].
Rieser v. Glukowsky, 646 A.2d 1221, 1223 (Pa. Super. 1994).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/11/2022
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