Pasceri, B. v. Karp, M. ( 2019 )

J-A22009-18
J-A22010-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BRUNO J. PASCERI : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
MICHAEL A. KARP :
:
Appellant : No. 68 EDA 2018
Appeal from the Order Entered November 28, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): July Term, 2015 No. 798
MICHAEL A. KARP, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
BRUNO J. PASCERI, :
:
Appellant : No. 288 EDA 2018
Appeal from the Order Entered November 28, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): July Term, 2015 No. 798
BRUNO J. PASCERI : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
MICHAEL A. KARP : No. 651 EDA 2018
Appeal from the Order Entered January 24, 2018
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): July Term, 2015, No. 0798
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BEFORE: BENDER, P.J.E., NICHOLS, J., and STEVENS*, P.J.E.
CONCURRING/DISSENTING STATEMENT BY NICHOLS, J.: FILED FEBRUARY
05, 2019
I respectfully concur in part and dissent in part. I concur in the result
reached by the majority for the accumulated profits of $15,370,488. As the
trial court correctly notes, Michael A. Karp owned all of the limited partnership
shares, comprising a 99% interest, in Gateway Funding Diversified Mortgage
Services, LP. The remaining 1% general partnership interest was owned by
Gateway Funding, Inc., which in turn was 100% owned by Karp. Karp
therefore had the discretion to, and did, decide that the accumulated profits
were to be retained by the partnership—presumably for use by the
partnership—instead of being distributed to himself. Whether categorized as
Karp’s investment into the partnership or as a partnership obligation to fulfill
covenant requirements, the retained earnings were unavailable for
disbursement under the employment agreement.
Although the majority correctly holds that it need not address the
remaining issues given its disposition, I note my disagreement with the trial
court’s rationale permitting Karp to deduct his personal losses on the non-
performing loans he purchased from Gateway. Simply, because Karp bought
non-performing loans from Gateway, the non-performing loans were no longer
* Former Justice specially assigned to the Superior Court.
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in Gateway’s “inventory” of assets. I suggest that any monetary gains or
losses attributable to and dating from Karp’s ownership of non-performing
loans belong to Karp alone. It follows that Karp cannot assign any monetary
losses (or gains) on assets he solely owns to Gateway. Although the money
used for Karp’s 2008 purchase of the non-performing loans may be construed
as an “investment” into Gateway, that does not mean Karp is entitled to assign
any post-2008 losses or gains from such loans to Gateway: any such monetary
gains or losses belong to Karp.1
I also disagree with the trial court’s rationale that the phrase “along with
interest thereon” is ambiguous. The parties agreed that Karp’s capital
contributions totaled $5,534,472, and the contract specifies that “interest
thereon” should have been awarded. Respectfully, I perceive no ambiguity in
that phrase. See generally Nicholas v. Hofmann, 158 A.3d 675, 693-94
(Pa. Super. 2017). I therefore decline to address whether it was common
business practice to award interest on capital contributions. Finally, I agree
with the trial court’s resolution of the Wage Payment and Collection Law issue.
For these reasons, I respectfully concur in part and dissent in part.
1 If an individual purchases real assets of a company, that individual usually
expects to realize any such gains or losses personally and not assign them to
the seller-company.
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