Campbell, K. v. Campbell, A. ( 2020 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KEITH CAMPBELL : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
ALICE CAMPBELL : No. 1925 EDA 2019
Appeal from the Order Entered June 4, 2019
In the Court of Common Pleas of Chester County Civil Division at No(s):
2010-08326-DI
BEFORE: BOWES, J., MURRAY, J., and McLAUGHLIN, J.
MEMORANDUM BY BOWES, J.: Filed: May 7, 2020
Keith Campbell (“Husband”) appeals pro se from the June 4, 2019 order
directing him to pay $25,000 to Alice Campbell (“Wife”) under the terms of a
property agreement that was incorporated into the parties’ divorce decree (the
“Settlement Agreement”). We quash this appeal as interlocutory, and remand
for further proceedings consistent with this memorandum.
The parties were married in March 1999. Ultimately, a divorce decree
was issued in September 2012. The Settlement Agreement was incorporated
in the decree and provided, inter alia, as follows:
The marital residence located at 165 Mountain View Drive, West
Chester, Pennsylvania shall become the sole and separate
property of Wife with Husband waiving all right, title and interest
therein. There are currently three liens against the property. The
first mortgage is in Wife’s name alone. The second mortgage is
in Husband’s name alone. The third mortgage is in joint names.
Wife agrees she will pay the first and second mortgages on a
timely basis and will indemnify and hold Husband harmless with
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respect to the first and second mortgages. Neither party has
made payments on the third mortgage[,] which is held by Cross
& Simon. The parties agree that Wife will be responsible for
37.5% and Husband 62.5% of the third mortgage liability if, as
and when repayment is sought. . . . Wife will attempt to refinance
the first and second mortgages by December 31, 2014 so as to
remove Husband’s name from the second mortgage. In the event
she is unsuccessful, Wife will make a good faith effort to refinance
the first and second mortgages at two[-]year intervals. Husband
shall cooperate in the refinancing process.
Master’s Recommendation, 10/2/12, at § 2 ¶ 2.
At the time that the Settlement Agreement was incorporated, the parties
were operating under the belief that these three liens were, in order of
priority: (1) a mortgage from Aurora Loan Services in Wife’s name for
$199,524.66; (2) a home equity line of credit from First Tennessee Bank in
Husband’s name for $115,385.13; and (3) a lien from Cross & Simon, LLC for
legal services rendered to Husband for a lawsuit that related to his business
for $184,629.04. See Trial Court Opinion, 8/22/19, at 3-6. However, Cross
& Simon’s lien was actually second-in-priority, while First Tennessee’s lien was
third-in-priority. Id. at 3. As a result of this “mutual mistake” by the parties,
Wife alleged that she was “unable to refinance the mortgages as the loans
were greater than the value of the property.” Id.
In February 2016, Husband filed a petition for special relief asking the
trial court to order that the marital residence, in which Wife and the parties’
three minor children were residing, be sold. See Opinion, 3/26/18, at 2.
Specifically, Husband argued Wife would be unable to continue paying the
installments on the First Tennessee lien, which were set to more than triple
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when the loan “reset” in March 2017 from $400 to $1,300 per month. Id. at
3. Wife argued that the Settlement Agreement had been premised upon a
mutual mistake by the parties regarding the priority of the liens. See Trial
Court Opinion, 8/22/19, at 4. She filed a petition for special relief pursuant
to 23 Pa.C.S. § 3323(f), requesting the equitable reformation of the
Settlement Agreement based upon the mutual mistake of the parties. Id.
Ultimately, the trial court granted Wife’s petition and reformed the
Settlement Agreement to include the following provision:
The marital residence located at 165 Mountain View Drive, West
Chester, Pennsylvania shall be listed for sale within thirty (30)
days and sold with the parties accepting the offer recommended
by their realtor. Proceeds from the sale shall be allocated first to
the outstanding mortgage, second to the principal of the second
lienholder Cross & Simon, third to the lien holder [First] Tennessee
and finally to [Wife].
In the event of any deficiency it shall be apportioned as follows:
Cross & Simon 62.5% to [Husband], 37.5% to [Wife], and [First]
Tennessee 100% to [Wife].
If the liens are charged off by the lien holder then any resulting
1099 income shall be apportioned as follows: Cross & Simon
62.5% to [Husband], 37.5% to [Wife], and [First] Tennessee
100% to [Wife].
Order, 6/6/18, at 1-2.
On January 25, 2019, the martial residence was sold for $340,000.
Under the terms of the reformed agreement, Wife paid off the first mortgage
from Aurora Loan Services in its entirety. Wife negotiated a settlement of the
lien held by Cross & Simon whereby the firm accepted $100,000 as a full
satisfaction of the parties’ joint obligation, and forgave the remainder of the
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debt. Only $60,000 of the parties’ joint debt to Cross & Simon represented
principal. However, Wife repaid the entire $100,000 from the proceeds of the
marital residence. Id. at 5-6. Finally, Wife paid First Tennessee $20,770.80,
which issued a 1099-C in the amount of $94,614.33 for the unpaid portion of
the lien. Id. at 6. Husband signed a letter indicating his approval of the sale
under these terms. See N.T. Hearing, 3/25/19, at 22.
Several weeks after the sale, Wife filed a petition for special relief
seeking reimbursement from Husband for part of the $40,000 in interest that
was paid to Cross & Simon from the proceeds of the marital residence. Id.
Specifically, Wife requested that Husband be ordered to pay her $25,000, or
62.5 percent of $40,000. See Petition for Special Relief, 2/19/19, at ¶¶ 1-9.
Overall, Wife argued that she was required to pay the full amount of the Cross
& Simon debt out of the proceeds of the marital residence. Id. Husband
responded that he was not obligated to reimburse Wife under the terms of the
reformed agreement, arguing that there was no “deficiency” to apportion.
On March 25, 2019, a hearing on Wife’s petition was held at which both
parties testified and presented arguments pro se. Husband raised concerns
that Wife would not be able to honor her obligation to pay for the tax
consequences associated with the “charge-off” from First Tennessee. See
N.T. Hearing, 3/25/19, at 16 (“[When Wife] does not actually pay the taxes
that she has testified that she will pay, I will unfortunately have to file another
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action to come back to get those funds but the first payment is due April –
next month.”).1
On April 23, 2019, Husband filed a new petition for special relief, seeking
to enforce the terms of the reformed agreement requiring Wife to pay for the
tax consequences related to First Tennessee’s substantial loan forgiveness.
See Petition to Hold Alice Campbell in Contempt, 4/23/19, at ¶¶ 1-10. In that
filing, Husband averred that Wife had defaulted by refusing to pay the tax
assessment on the First Tennessee charge-off by April 15, 2019, or the
deadline first-quarter taxes set by the Internal Revenue Service. Id. at ¶ 6.
That same day, the trial court issued a rule to show cause upon Wife as to
why Husband’s petition should not be granted and scheduled a hearing for
June 24, 2019.
Wife filed a timely answer arguing that Husband was mistaken regarding
when the First Tennessee debt forgiveness would trigger tax consequences.
See Wife’s Answer, 5/6/19, at ¶ 4 (“[Wife] believes and therefore avers that
any resulting taxes due from the sale of the house are not due until the 1099-
C is issued in January 2020 and 2019 taxes are filed in April 2020.”).
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1 The trial court explained this issue of timing in its Rule 1925(a) opinion:
“According to [Husband], his first quarterly tax obligation on the [First
Tennessee] charge-off was not due until April 15, 2019, so at the time of the
hearing on March 25, 2019 there was no default to address.” Trial Court
Opinion, 8/22/19, at 11. The trial court was mistaken, however, in asserting
that Husband did not file a separate petition seeking relief related to the First
Tennessee charge-off. Cf. id. at 10-11 (“Plaintiff did not file a separate
petition . . . seeking such relief.”). Husband did, in fact, file such a petition.
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On June 4, 2019, the trial court granted Wife’s petition under the
equitable doctrine of unjust enrichment. See Order, 6/4/19, at 2 n.1 (“Had
Wife not paid this $40,000 shortfall to Cross & Simon, LLC, the law firm would
have had recourse to both Wife and Husband for the [total] amount of the
debt due . . . .”). On July 3, 2019, Husband filed an appeal from the trial
court’s June 4, 2019 order. Thereafter, both Husband and the trial court
timely complied with Pa.R.A.P. 1925.
On August 23, 2019, the trial court issued an order staying all
proceedings in the above-captioned matter pursuant to Pa.R.A.P. 1701,
including the evidentiary hearing on Husband’s still-pending petition.
Husband has listed four issues for our disposition:
(1) Did the lower court err and abuse its discretion by allowing
[Wife’s] petition to be heard when [Wife] came before the court
with unclean hands?
(2) Did the lower court err and abuse its discretion by granting
[Wife’s] petition for special relief when [Wife] came before the
court with unclean hands?
(3) Did the lower court err and abuse its discretion by applying
the doctrine of unjust enrichment?
(4) Did the lower court err and abuse its discretion regarding its
interpretation of loan deficiency?
Husband’s brief at 3-4 (issues numbered for clarity).
Before assessing the merits of Husband’s claims, we must first ascertain
whether this appeal properly lies from an appealable order. See Terpin v.
Terpin, 460 A.2d 1188, 1189 (Pa.Super. 1983) (“Although neither party
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raises the question of the appealability of the order in question, we not only
may but must raise the question of jurisdiction sua sponte.”). This approach
is taken in order to promote efficiency and finality:
Stated generally, the policy underlying the principle than an order
is not appealable unless it puts the appellant “out of court” is that
piecemeal litigation should be avoided; the appellate courts will
use their resources more economically if they review a case only
once, rather than deciding one issue on one appeal, and another
issue on a later appeal.
Id.Specifically, we must determine whether the June 4, 2019 order
granting Wife’s petition for special relief is a “final” order, and therefore
appealable as of right. Husband has identified his appeal as lying from a “final”
order pursuant to Pa.R.A.P. 341(a). See Husband’s brief at § I. In this
context, “[a] final order is one which ends the litigation, or disposes of the
case. . . . An order is interlocutory and not final unless it puts the litigant out
of court.” Noto v. Noto, 437 A.2d 1255, 1257(Pa.Super. 1981).
Furthermore, it has consistently been held that where “ancillary claims remain
unresolved, issues such as those seeking special relief, are interlocutory and
unappealable.” Mensch v. Mensch, 713 A.2d 690, 691 (Pa.Super. 1998).
To make this determination, we must “examine the ramifications of the order.”
Curran v. Curran, 667 A.2d 1155, 1156 (Pa.Super. 1995).
Simply stated, this appeal is premature and interlocutory. At the time
that the trial court issued its June 4, 2019 order, Husband’s economic claims
against Wife regarding the tax consequences of First Tennessee’s debt
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forgiveness were (and are) still pending before it. Critically, the bulk of
Husband’s arguments in this appeal depend upon the resolution of that
unresolved claim. Specifically, Husband’s first two issues assert that Wife
should not have access to the equitable relief granted by the trial court
because she has allegedly defaulted upon her aforementioned obligations.2
See Husband’s brief at 10-11 (“The doctrine of unclean hands [o]n which this
[o]rder is based is without merit as [Wife] is [c]ourt-ordered to pay the taxes
and has failed to do so.”). However, the trial court never had the opportunity
to render a decision regarding that claim.
Although the June 4, 2019 order granted Wife relief, it did not dispose
of all the claims of the parties related to the sale of the marital residence. 3
Therefore, it was not “final” under Rule 341, and thus not appealable as of
right under Pennsylvania law.4 See Puricelli v. Puricelli, 667 A.2d 410, 412
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2 Husband’s first two issues relate to the legal doctrine of “unclean hands.”
See Morgan v. Morgan, 193 A.3d 999, 1005 (Pa.Super. 2018) (“The doctrine
of unclean hands requires that one seeking equity act fairly and without fraud
or deceit as to the controversy at issue.”) (internal emphasis omitted).
3 There is no indication that the June 4, 2019 order is interlocutory but
appealable as of right. Compare with Pa.R.A.P. 311(a)(1)-(8). Furthermore,
the trial court never issued a finality determination under Pa.R.A.P. 341(c).
4 We make no comment on the relative merits or probity of Husband’s
arguments. Assuming that no other petitions are filed by the parties, these
claims will be ripe for review once the court addresses Husband’s outstanding
petition and issues a final order disposing of all claims and all parties. See
Bird Hill Farms, Inc. v. U.S. Cargo & Courier Service, Inc., 845 A.2d 900,
903 (Pa.Super. 2004) (“Once an appeal is filed from a final order, all prior
interlocutory orders are subject to review.” (emphasis added)).
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(Pa.Super. 1995) (“The order in the instant case did not dispose of all claims
or parties nor did it otherwise put the litigants out of court.”). Accordingly,
we lack jurisdiction and are compelled to quash this appeal as interlocutory.
Id. at 414 (quashing an appeal from an interlocutory and unappealable order).
Appeal quashed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/7/20
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