National Asset Loan v. McCann, J. ( 2015 )

J. S54035/15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
NATIONAL ASSET LOAN : IN THE SUPERIOR COURT OF
MANAGEMENT LIMITED : PENNSYLVANIA
:
v. :
:
JOHN MCCANN, :
:
Appellant : No. 641 EDA 2015
Appeal from the Orders Entered February 9, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division No(s).: 003130 January Term, 2014
BEFORE: BOWES, PANELLA, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED NOVEMBER 24, 2015
Defendant/Appellant, John McCann, appeals from the February 9, 2015
order entered in the Philadelphia County Court of Common Pleas, staying
distribution of sales proceeds and authorizing the financial monitor to review
sale proceeds. Appellant also challenges the court’s February 12, 2015
order enforcing a prior order appointing a financial monitor.1 We note this
appeal was filed while Appellant’s first appeal before this Court, docketed at
3309 EDA 2014, was pending.2 Consistent with this Court’s holding at 3309
*
Former Justice specially assigned to the Superior Court.
1
As we discuss infra, Appellant does not challenge the portion of the
February 9th order staying the distribution of proceeds of any sale of
property. See Appellant’s Brief at 6 (statement of questions involved).
2
See Nat’l Asset Loan Mgmt Ltd. v. McCann, 3309 EDA 2014
(unpublished mem.) (Pa. Super. Sept. 3, 2015) (“NALM”).
J.S54035/15
EDA 2014, we hold the February 12th order, and the portion of the February
9th order directing Appellant, Walnut Rittenhouse GP, LLC, and Walnut
Rittenhouse Associates, L.P., to provide certain documents to the financial
monitor are not appealable and thus quash.
Plaintiff/Appellee, National Asset Loan Management Limited, is a
corporation in the Republic of Ireland.3 Appellant is a citizen of Northern
Ireland, United Kingdom.4 On November 15, 2013, in the Irish courts
Appellee obtained a default judgment against Appellant, which was based on
Appellant’s “failure to make payments as guarantor of certain defaulted
loans that had been extended to companies in which [Appellant] has
ownership interests.”5 NALM, 3309 EDA 2014 at 2 n.3.
On January 28, 2014, Appellee commenced the instant matter in the
Philadelphia Court of Common Pleas by filing a praecipe to enter foreign
money judgment against Appellant in the amount of $159,235,126.36.
Appellant has membership interests in the following Pennsylvania entities:6
Castleway Properties, LLC, Castleway Management Services LLC, and Walnut
3
Appellee’s Mot. for Imposition of Charging Order, 9/5/14, at ¶ 1.
4
Appellant’s Brief at 9.
5
On February 12, 2014, Appellant took an appeal in the Irish courts from
the default judgment entered there. As of September 3, 2015, “[t]hat
appeal is currently pending.” NALM, 3309 EDA 2014 at 3.
6
Appellee’s Mot. for Imposition of Charging Order at ¶¶ 4-6, 8.
-2-
J.S54035/15
Rittenhouse GP, LLC, as well as a partnership interest in Walnut Rittenhouse
Associates, L.P. (collectively, “the McCann Entities”). We review the ensuing
procedural history in detail.
The next filing on the docket is Appellee’s September 5, 2014 motion
for a charging order against Appellant’s interests in the McCann Entities. 7
Appellee then also filed a petition for the appointment of a financial
monitor,8 which averred Walnut Rittenhouse Associates, L.P., owns “real
property located at 1904-1920 Sansom Street, 1907-1915 Walnut Street
and 125 South 20th Street in Philadelphia, Pennsylvania.” 9 Over Appellant’s
objections, the court granted both motions. The first order, dated October
1, 2014, directed: “Distributions or other amounts owed or payable to
[Appellant] by [the McCann Entities] shall be paid directly to [Appellee] until
the amount of the judgment with interest is satisfied.” Order, 10/21/14, at 1
n.1. The second order, dated October 30, 2014, appointed a “financial
monitor with respect to the membership and partnership interests of”
Appellant in the McCann Entities and directed the financial monitor to
7
A “charging order” “is the remedy for a judgment creditor against a
member’s interest in a limited liability company.” Zokaites v. Pittsburgh
Ir. Pubs, LLC, 962 A.2d 1220, 1225-26 (Pa. Super. 2008).
8
Appellee sought this relief under Pa.R.C.P. 3118(a)(6), which allows the
court to “grant[ ] such other relief as may be deemed necessary and
appropriate” following the entry of judgment. See Pa.R.C.P. 3118(a)(6).
9
Appellee’s Pet. Pursuant to Pa.R.C.P. 3118 for Appointment of Fin. Monitor,
9/12/14, at ¶ 11.
-3-
J.S54035/15
“perform a monthly review of the McCann Entities, their current finances and
operations . . . and file with the court monthly reports of his findings.”
Order, 10/30/14, at ¶¶ 1, 3. Appellant appealed from both orders at
Superior Court docket 3309 EDA 2014. He did not, however, seek a stay or
supersedeas of the orders pending the appeal.
On December 12, 2014, while the appeal was pending before this
Court, Appellee filed a motion to enforce the order appointing a financial
monitor. It alleged Appellant “and his counsel have not complied with the
Financial Monitor’s repeated requests for documents, information and access
to the personnel and facilities of the McCann Entities.” Appellee’s Mot. to
Enforce Order Appointing Fin. Monitor, 12/12/14, at ¶ 7. On February 5,
2015, Appellee then filed an emergency motion averring, “[M]edia reports
announced that Castleway Properties . . . has entered into a deal to sell a
vacant lot on the 1900 block of Walnut Street” and “that [a buyer] has
agreed to purchase” Walnut Rittenhouse Associates, L.P.’s properties “for
$30 million if the current zoning . . . remains unchanged or $40 million if the
property is rezoned . . . for denser development.” Appellee’s Emergency
Pet., 2/5/15, at ¶¶ 13, 16. The emergency petition requested the
prohibition of distributions or payments from Walnut Rittenhouse Associates,
L.P., or Walnut Rittenhouse GP, LLC, to Appellant, arising from any sale of
property.
On February 9, 2015, the court held a hearing and granted Appellee’s
-4-
J.S54035/15
emergency motion to stay distribution of sale proceeds and directing
Appellant, Walnut Rittenhouse GP, LLC, and Walnut Rittenhouse Associates,
L.P., to provide sale-related documents to the financial monitor for review.
On February 12th, the court granted Appellee’s motion to enforce the
charging order. On February 24th, Appellant filed the instant appeal from
both court actions.
Appellant’s first appeal, meanwhile, was not resolved until six months
later, on September 3, 2015. In that appeal, a different panel of this Court
affirmed the charging order.10 Furthermore, the panel quashed Appellant’s
appeal from the order appointing a financial monitor, finding the order was
not final or appealable. The panel rejected Appellant’s argument that the
order provided for injunctive relief under Pa.R.A.P. 311(a)(4), and found
waived his claims that the order affected the possession or control of
property under Pa.R.A.P. 311(a)(2) and that the order finally and incurably
disposed of valuable property rights pursuant to Pa.R.A.P. 341. NALM,
3309 EDA 2014 at 14-16.
Preliminarily, we consider whether the trial court had jurisdiction to
enter the two February 2015 orders from which the instant appeal is taken.
In litigating Appellee’s instant motions, the parties acknowledged the
10
In affirming, the panel rejected Appellant’s arguments that, inter alia, the
instant judgment is void because Appellee failed to file a complaint in the
trial court and “demonstrate that the Irish court that entered the default
judgment had personal jurisdiction over” him. NALM, 3309 EDA 2014 at 4-
8.
-5-
J.S54035/15
pending appeal,11 but neither the trial court nor the parties discussed
whether the court had jurisdiction to hear or act upon them.
Pennsylvania Rule of Appellate Procedure 1701(a) states the general
rule: “Except as otherwise prescribed by these rules, after an appeal is taken
or review of a quasijudicial order is sought, the trial court or other
government unit may no longer proceed further in the matter.” Pa.R.A.P.
1701(a). Subsection (b)(1), however, sets forth an exception for the trial
court to “[t]ake such action as may be necessary to preserve the status quo
. . . .” Pa.R.A.P. 1701(b)(1).
As stated above, Appellant’s first appeal was taken from orders that
appointed a financial monitor, directed the financial monitor to perform
monthly reviews of the McCann Entities’ finances and operations, and
charged the McCann Entities to pay Appellee any distributions owed to
Appellant. The instant order of February 9, 2015: (1) prohibited Walnut
Rittenhouse Associates, L.P. and Walnut Rittenhouse GP, LLC from
distributing, directly or indirectly, any proceeds from the sale of property to
Appellant; and (2) directed Appellant, Walnut Rittenhouse GP, LLC and
Walnut Rittenhouse Associates, L.P. to provide to the financial monitor
copies of the purchase agreement, settlement agreement, title commitment
and other requested documents. The February 12, 2015 order enforced the
11
N.T., 2/9/15, at 6-7; Appellee’s Emergency Pet. at ¶ 6; Appellant’s Resp.
to Emergency Pet., 2/6/15, at ¶ 6 (admitting Appellant’s first appeal was
pending before Superior Court).
-6-
J.S54035/15
October 30, 2014 order appointing a financial monitor; specifically, it
directed Appellant to “schedule one or more dates for the financial monitor
to have access to the personnel and facilities of the McCann Entities as
previously requested by the financial monitor.” Order, 2/12/15. We find the
instant actions by the court sought to enforce its previous orders and thus to
maintain the status quo. Accordingly, under Rule 1701(b)(1), we will not
vacate the instant orders for lack of the trial court’s jurisdiction. See
Pa.R.A.P. 1701(b)(1).
We now consider whether the instant orders are appealable. On May
1, 2015, this Court issued a rule to show cause why this appeal should not
be quashed.12 Appellant responded that both orders are appealable under
Pa.R.A.P. 311(a)(4) because they grant injunctive relief.
Appellant, however, did not acknowledge his pending appeal, at 3309
EDA 2014. That panel has since quashed the appeal from the initial financial
monitor order, rejecting Appellant’s argument that the order granted
injunctive relief. NALM, 3309 EDA 2014 at 14-15.
Consistent with the prior panel’s holding, we hold the February 12,
2015 order—which enforced the initial financial monitor order—is not
appealable. See Morgan v. Petroleum Prods. Equip. Co., 92 A.3d 823,
12
The rule to show cause stated: “Generally, taking one appeal from
separate judgments is not acceptable practice and is discouraged.
Additionally, neither order appears to be final and appealable pursuant to
Pa.R.A.P. 341(b)(1)[.]” Order, 5/1/15.
-7-
J.S54035/15
827 (Pa. Super. 2014) (“The law of the case doctrine [provides] that a court
involved in the later phases of a litigated matter should not reopen questions
decided by another judge of that same court or by a higher court in the
earlier phases of the matter.”). We thus quash the appeal from the
February 12, 2015 order.
We now consider whether the February 9, 2015 order is appealable.
As stated above, Appellant challenges only the portion of the order directing
him, Walnut Rittenhouse Associates, L.P., and Walnut Rittenhouse GP, LLC
“to provide to the Financial Monitor copies of” the purchase agreement,
settlement statement, title commitment, and other requested documents
relating to the sale of property.13 See Order, 2/9/15, at ¶ 3. We deem this
portion of the order merely duplicative of the court’s initial, October 30,
2014 financial monitor order directing the financial monitor to “perform a
monthly review of the McCann Entities, their current finances and
operations.” Order, 10/30/14, at ¶ 3; see also id. at ¶ 6 (“[Appellee] shall
cause the McCann Entities to provide to [the financial monitor] all the
information, documents, and access to persons, places and things [the
financial monitor] requests . . ..”). The instant order provides more specific
direction; it applies to Appellant and two of the McCann Entities only and
identifies the particular documents they are to provide to the financial
13
Appellant refers to the court’s February 5, 2015 order as the “Sales
Proceeds Injunction Order.” Appellant’s Brief at 2, 8, 13.
-8-
J.S54035/15
monitor for review. Thus, we again apply the holding of the prior panel of
Appellant’s first appeal and find this portion of the order is not appealable.
See Morgan, 92 A.3d at 827; Washington v. FedEx Ground Package
Sys., 995 A.2d 1271, 1275 n.3 (Pa. Super. 2010) (holding portion of order
regarding venue and coordination is appealable as of right); NALM, 3309
EDA at 14-16. We thus quash the appeal taken from the February 9, 2015
order.
Appeal quashed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/24/2015
-9-