D. Sweigart v. London Towne Homeowners Assoc. & B. Carlise v. M. Serota ~ Appeal of: B. Carlise

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Dan Sweigart, Claudia Benack, :
Christine McNally, Patti Joseph, :
Margaret Alice Bothwell (Thomson), :
Beverly Romano, Georgene Siroky, :
Leslie Hyde, Lou Sanotra, Rose Lepri, :
Edward Szabo, Diane Szabo, Elizabeth :
Szabo, Nancy Kusko, Travis Boyle, :
Carrie Boyle, Judith Frazier, Betty :
Caricchio, Kirk Bruce, Donna Schaude, :
Janice Knapp, Jacqueline Carlucci, :
Eleanor Jane Check, Cathy Newell, :
Vicki Conti, Brian Jackson, Katherine :
Jackson, Lorren Pallone, Anne Pieto, :
Toni Weston, Keith Miller, Rose Mugo, :
Mike Janosik, Dawna Fisher, Matt :
Mager, Domenic Medina, Nina Carilli, :
Nancy Rogozinski, Albert Sanders and :
Justin Rees, a/k/a Concerned Owners of :
Homes in London Towne Homeowners :
Association :
:
v. :
:
London Towne Homeowners :
Association and Bennett Carlise :
:
v. :
:
Matthew Serota :
: No. 591 C.D. 2021
Appeal of: Bennett Carlise : Submitted: June 23, 2022
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE LORI A. DUMAS, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: August 9, 2022
Bennett Carlise (Carlise) appeals from the Allegheny County Common
Pleas Court’s (trial court) May 20, 2021 order denying his Motion to Vacate the
Temporary Receiver (Motion). Carlise presents five issues for this Court’s review:
(1) whether temporary receiver Robert G. Xides, Jr., Esquire (Receiver) was
appointed and/or permitted to continue to conduct London Towne Homeowners
Association (Association) business in violation of Pennsylvania Rule of Civil
Procedure (Rule) 1533 (relating to appointing receivers);1 (2) whether there was a
legal basis under Tate v. Philadelphia Transportation Co., 190 A.2d 316 (Pa. 1963),
and Bowman v. Gum Inc., 184 A. 258 (Pa. 1936), to appoint the Receiver or continue
the Receiver’s appointment; (3) whether the appointment and continuation of the
Receiver for the purpose of dissolving the Association violated the terms of
Paragraph 7 of a court-ordered Limited Settlement and Release Agreement
(Settlement Agreement); (4) whether Margaret Alice Bothwell (Thomson), Dawna
Fisher (Fisher), and Matt Mager (Mager), inter alia, a/k/a Concerned Owners of
Homes in London Towne Homeowners Association (Concerned Owners)2 lacked
standing to file the Petition to Appoint a Receiver (Receiver Petition) to dissolve the
Association or have the appointment continue because they failed to bring suit and
make a claim for relief by way of a shareholder derivative action in violation of the
1
Rule 1533 provides, in relevant part, that temporary receivers may be appointed without
notice if exigencies exist, the petitioners file a bond, and the receiver posts performance security;
a hearing to continue the appointment must be promptly held after notice is provided to all
interested parties; and the trial court’s order shall fix the time for a permanent receiver to file
his/her report. See Pa.R.Civ.P. 1533.
2
Concerned Owners also include Dan Sweigart, Claudia Benack, Christine McNally, Patti
Joseph, Beverly Romano, Georgene Siroky, Leslie Hyde, Lou Sanotra, Rose Lepri, Edward Szabo,
Diane Szabo, Elizabeth Szabo, Nancy Kusko, Travis Boyle, Carrie Boyle, Judith Frazier, Betty
Caricchio, Kirk Bruce, Donna Schaude, Janice Knapp, Jacqueline Carlucci, Eleanor Jane Check,
Cathy Newell, Vicki Conti, Brian Jackson, Katherine Jackson, Lorren Pallone, Anne Pieto, Toni
Weston, Keith Miller, Rose Mugo, Mike Janosik, Domenic Medina, Nina Carilli, Nancy
Rogozinski, Albert Sanders, and Justin Rees.
2
Nonprofit Corporation Law of 1988 (Law);3 and (5) whether Concerned Owners
lacked the legal capacity and/or standing to file the Receiver Petition or have the
Receiver’s appointment continue because (a) they were not a legally viable entity
when the Receiver Petition was filed; (b) they filed the Receiver Petition to
commence this action without first filing a praecipe or complaint in violation of Rule
1007 (relating to commencement of actions), Pa.R.Civ.P. 1007; and (c) there was no
record service of process of the Receiver Petition. After review, this Court affirms.
Background
The Association is a Pennsylvania non-profit corporation and planned
community consisting of 70 townhouses located in Pittsburgh, Pennsylvania,
governed by a Declaration of Covenants, Conditions, and Responsibilities
(Declaration) recorded in 1979, see Reproduced Record (R.R.) at 19a-36a, and the
London Towne Homeowners Association Bylaws (Bylaws). See R.R. at 45a-62a.
Carlise is the Association’s claimed president. On or about October 1, 2017, Carlise
was appointed to the Association’s Executive Board (Board). Thereafter, the
Association’s community unit home owners (community owners) became
concerned regarding Carlise’s handling of Association business and growingly
disquieted about Intervenor/community owner Matthew Serota’s (Serota)
involvement therewith.4
At a January 5, 2018 special meeting, the community owners voted 41
to 23 in favor of dissolving the Association. See Supplemental Reproduced Record
(S.R.R.) at 9b. At the September 5, 2018 annual Association meeting, a majority of
the community owners voted to remove Carlise and two other Board members that
Carlise unilaterally appointed (37 votes in favor, 25 in opposition). See R.R. at 69a-
3
15 Pa.C.S. §§ 5101-6146.
4
Serota owns 24 of the 70 units in the community. See R.R. at 115a, 132a.
3
72a. The Board members argued that their removal was invalid because the votes
fell short of the 66%, or two-thirds, vote necessary for their removal, pursuant to
Section 5303(f) of the Uniform Planned Community Act (UPCA).5 The community
owners argued that a simple majority was all that the Association’s Bylaws required
to remove the three Board members, and requested the Board members to step down.
Concerned Owners’ counsel notified the Board members by December 21, 2018
letter that if they did not step down, they would be in violation of the Association’s
Bylaws. See R.R. at 90a-92a. Thereafter, the two Carlise-appointed Board members
stepped down. See R.R. at 93a. Carlise did not step down but, rather, retained
counsel (purportedly on the Association’s behalf) to stop his removal.
On March 27, 2019, Concerned Owners filed the Receiver Petition in
the trial court. Therein, Concerned Owners pled that the Board’s failure to dissolve
the Association despite the community owners’ January 5, 2018 vote, continued
dissension between Carlise and the community owners, and ongoing disbursements
of Association funds required the immediate appointment of a receiver. See R.R. at
14a-15a. Concerned Owners also represented to the trial court that Carlise has been
the only Board member to sign Association checks (when multiple check signors are
required), see R.R. at 101a-102a, and he no longer lives in the community which,
according to the Bylaws, prohibits him from sitting on the Board. See R.R. at 102a.
5
Section 5303(f) of the UPCA provides:
Notwithstanding any provision of the declaration or bylaws to the
contrary, the unit owners, by a two-thirds vote of all persons present
and entitled to vote at any meeting of the unit owners at which a
quorum is present, may remove any member of the executive board
with or without cause, other than a member appointed by the
declarant.
68 Pa.C.S. § 5303(f). The UPCA went into effect on February 2, 1997.
4
On July 11, 2019, the trial court issued an order scheduling a hearing
on the Receiver Petition for July 18, 2019. See R.R. at 95a. On July 18, 2019, the
trial court permitted argument (without testimony) related to the Receiver Petition,
at which the trial court granted Serota’s petition to intervene in the action. See R.R.
at 100a. During argument, Carlise’s counsel acknowledged that the Association had
a history of dysfunction, see R.R. at 108a, claimed that it would not be beneficial to
dissolve the Association, see R.R. at 106a, and declared that “the appointment of a
receiver [wa]s an extreme remedy.” R.R. at 113a. Notwithstanding, the trial court
ruled from the bench: “I am going to put a neutral receiver in[,]” and afforded the
parties time at argument to agree upon a receiver. R.R. at 117a. Carlise did not
place any objection on the record at the hearing.
By order entered July 18, 2019, the trial court appointed the Receiver
as a temporary receiver and directed him to file a report and recommendation
(Report) within 45 days (Appointment Order). See R.R. at 120a-123a. The Receiver
accepted the appointment on July 24, 2019, and requested a retainer to be paid from
the Association’s funds. See R.R. at 124a-125a. No appeal was filed from the
Appointment Order.
On August 29, 2019, the Receiver met with Concerned Owners to
address their concerns. See R.R. at 132a. On September 3, 2019, the Receiver
conducted the Association’s annual meeting. See id. At the Association’s
September 3, 2019 annual meeting, three community owners were elected to the
Board; however, the complement remained below the Bylaws’ required five
members. See R.R. at 136a, 141a.
On September 13, 2019, the Receiver filed his Report, therein finding,
inter alia, that the community owners’ primary concerns are the Association’s lack
of transparency in its actions and the constant threat of being sued. See R.R. at 135a.
He opined that the Board’s expenditures during the previous three years,
5
“particularly for attorneys’ fees, liability insurance premiums[,] and assessment
credits,” were justified and benefited the Association. R.R. at 143a. The Receiver
determined that “although its governance is in constant dispute, the Association is
performing the services of lawn care, gutter cleaning[,] and pest control to
homeowners on a regular basis.” R.R. at 136a. The Receiver “found no evidence
of self-dealing, dishonesty[,] or corruption in the conduct of the Association.” Id.
The Receiver concluded that the community owners’ “[January 5, 2018] vote was
legal[ly] sufficient to dissolve the Association.” R.R. at 137a. He also declared that
the community owners’ September 5, 2018 vote to remove the Board members was
legal but, since there were no Board members until the September 3, 2019 annual
meeting, and there were only three thereafter, the legality of any actions taken during
that time was called into question. See R.R. at 138a, 140a, 142a-144a.
The Receiver stated that the Association had been in a state of turmoil
for five years, stemming from the mutual distrust between Serota and the community
owners. See Report at 6 (R.R. at 132a). The Receiver observed: “The Association
is now hopelessly divided into pro-Serota and anti-Serota camps. The two sides
disagree on virtually every aspect of governing the Association, including whether
the Association exists at all.” Report at 8 (R.R. at 134a).
The Receiver concluded:
After thorough investigation and attendance at two
meetings of the Association members, the Receiver finds
the Association to be partially paralyzed, without hope for
a quick cure. The division between the pro-Serota and
anti-Serota forces has caused such fear and anger that the
Association has been unable to elect the required five (5)
Board members for almost three (3) years. Three (3)
major lawsuits against the Association (two by Serota, one
by those opposing Serota) have left community residents
justifiably terrified of further litigation and reluctant to run
for Board seats. The Association is currently financially
6
stable, but that will quickly change if residents continue to
refuse payment of their assessments.
In this environment, the continuation of the Association is
a burden rather than a benefit to the community. The
benefits of having lawn care, gutter cleaning and pest
control provided by the Association seem miniscule
compared to the burden of bad feelings and constant
litigation caused by the Association.
If not for the clear requirement of the Declaration which
established the Association that its covenants and
restrictions must continue forever unless terminated
unanimously by all owners and mortgagees, the Receiver
would recommend dissolution of the Association. The
Receiver can and does recommend the suspension of all
regular Association activities. With no Board members
for almost a year, an illegal number of members for nearly
three years and a continuing boycott of assessments, the
Association has already begun to suspend itself.
The Receiver recommends that the Association
immediately cease all regular activities such as contracting
for lawn care and other services and issuing assessments.
The Receiver further recommends that the Association’s
activities be limited to payment of current debts and
otherwise winding down the Association’s affairs under
the supervision of the Receiver and the [trial c]ourt. It is
recommended that resale certificates and any other
documents necessary for transfer of units be issued until
the [trial c]ourt determines that they are no longer
necessary because the Association’s business is complete.
The Receiver will submit to the [trial c]ourt a list of debts
for payment.
The Receiver recommends that re-activation of the
Association be allowed by the [trial c]ourt upon petition
signed by at least seventy-five percent (75%) of unit
owners. This is the same percentage required for
amendment of the Declaration. Without such an
expression of cooperation, re-activation of the Association
would only trigger the same bad feelings that now exist.
The Receiver feels that the recommended suspension in
this case is well within the broad equity power of the [trial
c]ourt. Courts sitting in equity hold broad powers to grant
7
relief that will result in an equitable resolution of a dispute.
(See Williams T[wp.] B[d.] of Supervisors v. Williams
T[wp.] Emergency Co[.], 986 A.2d 914 (Pa. Cm[wlth.]
2009)).
Report at 18-20 (R.R. at 144a-146a) (italics and bold emphasis added).6
On September 3, 2019, Serota filed preliminary objections to the
Receiver Petition. On October 1, 2019, Serota filed amended preliminary objections
to the Receiver Petition. On December 10, 2019, the trial court conducted a status
conference. On December 12, 2019, the trial court entered an order authorizing the
Receiver to conduct the Association’s business pending further trial court order, and
prohibiting Serota and the purported Board members from exercising any of the
Association’s powers (Continuation Order).7 See R.R. at 178a-180a. By January 2,
2020 email to Serota, Mager, and Carlise’s counsel, the Receiver summarized his
payments of the Association’s outstanding invoices. See R.R. at 234a-235a, 255a-
256a.
On January 3, 2020, Concerned Owners filed a Complaint in Support
of Petition to Appoint Receiver and also Seeking Dissolution of Association and
Appointment of Permanent Receiver for Winding Up Association (Complaint).8 On
January 24, 2020, Serota filed preliminary objections to the Complaint. On January
25, 2020, Serota filed Second Amended Preliminary Objections to the Receiver
Petition. On January 27, 2020, Carlise filed preliminary objections to the Complaint
on the Association’s behalf. Concerned Owners filed a single response to all of the
preliminary objections.
6
Various exceptions and objections to the Report, and responses thereto, were filed
between September 25, 2019 and February 2020. See Original Record at Items 14, 20-21, 41, 43-
44.
7
By orders dated December 10, 2019, and January 23, 2020, the trial court directed the
Association to pay the Receiver’s law firm for his services. No appeals were filed from those
orders.
8
Allegheny Cnty. Docket No. GD-19-004563.
8
Also on January 27, 2020, Carlise filed the Motion, arguing that “[i]t is
clear that no permanent receiver is required, [] the duties requested of the
[t]emporary Receiver have been long completed and fulfilled,” R.R. at 185a, and the
trial court should vacate the Receiver’s appointment, reinstate the Board, and order
that all community owners pay his legal fees and expenses or, in the alternative,
Concerned Owners should pay his legal fees and expenses. See R.R. at 183a-195a.
That same day, Carlise also filed a Petition for Special Relief in response to the
Receiver Petition, asking the trial court to, inter alia, enforce Rule 1533’s mandatory
provisions. See R.R. at 196a-214a. On or about February 14, 2020, Concerned
Owners filed a reply to Carlise’s Motion, see R.R. at 215a-234a, and a response to
his Petition for Special Relief. See R.R. at 235a-259a.
On June 17, 2020, the trial court heard oral argument on Serota’s and
Carlise’s/the Association’s preliminary objections to the Receiver Petition and the
Complaint. On July 2, 2020, the trial court overruled all of the preliminary
objections. On July 27, 2020, Serota appealed to this Court. See Concerned Owners
of Homes in London Towne Homeowners Ass’n v. London Towne Homeowners
Ass’n (Pa. Cmwlth. No. 772 C.D. 2020, filed July 7, 2021) (Serota 2021). In Serota
2021, Concerned Owners filed a motion to quash the appeal because the trial court’s
July 2, 2020 order was interlocutory and not immediately appealable. This Court
heard oral argument on May 10, 2021. On July 7, 2021, this Court granted
Concerned Owners’ motion to quash Serota’s appeal. See id.The trial court conducted hearings on Carlise’s Motion and Petition for
Special Relief on July 22, August 5, and November 20, 2020, and March 23, 2021.9
9
On or about November 17, 2020, Carlise filed a praecipe to withdraw without prejudice
his request in the Motion that all of the community owners pay his legal fees and expenses. See
R.R. at 260a-263a.
In the interim, Serota and Kathleen Tomko (Tomko) filed the following lawsuits for
defamation, false light, tortious interference, declaratory judgment, and injunctive relief against
9
See R.R. at 264a-303a. On April 19, 2021, Carlise filed a Post-Hearing Brief in
Support of Motion (Post-Hearing Brief), and Concerned Owners filed their position
statement. See R.R. at 304a-362a. On May 20, 2021, the trial court denied the
Motion. See R.R. at 363a.
Carlise appealed to this Court.10 The trial court ordered Carlise to file
a Concise Statement of Errors Complained of on Appeal pursuant to Pennsylvania
four of the hearing witnesses: Serota v. Mager, Allegheny Cnty. Docket No. GD-20-008812;
Serota v. Fisher, Allegheny Cnty. Docket No. GD-20-009134; Serota v. Mager, Allegheny Cnty.
Docket No. GD-20-009548; and Tomko v. Mager, Allegheny Cnty. Docket No. GD-20-009891.
On November 6, 2020, the trial court granted Serota’s and Tomko’s motion to consolidate these
lawsuits and any future lawsuits filed among the parties, with Concerned Owners’ Complaint.
Carlise appealed from the trial court’s November 6, 2020 order to this Court (Pa. Cmwlth. No.
1254 C.D. 2020). By June 22, 2021 Order, this Court quashed that appeal on the basis that the
trial court’s November 6, 2020 order was not an immediately appealable collateral order.
10
“[T]he decision as to whether a receiver should be appointed is within the sound
discretion of the [trial] court[.]” Northampton Nat’l Bank of Easton v. Piscanio, 379 A.2d 870,
873 (Pa. 1977). Accordingly, this Court’s review of a trial court’s order appointing a receiver is
limited to determining whether the trial court abused its discretion. See id.“[A]n abuse of discretion exists if the trial court renders a judgment
that is [plainly] unreasonable, arbitrary or capricious, fails to apply
the law, or was motivated by partiality, prejudice, bias or ill will.”
[Ambrogi v. Reber, 932 A.2d 969, 974 (Pa. Super. 2007).] “If the
record supports the trial court’s reasons and factual basis, the court
did not abuse its discretion.” Id. In addition, the facts are to be
viewed in a light most favorable to the winner at the trial court level.
Commonwealth ex rel. Corbett v. Snyder, 977 A.2d 28, 41 (Pa. Cmwlth. 2009).
On October 20, 2021, this Court issued a Rule to Show Cause why the appeal should not
be quashed pursuant to Pennsylvania Rule of Appellate Procedure (Appellate Rule) 341(a) and the
Pennsylvania Supreme Court’s ruling in Commonwealth v. Walker, 185 A.3d 969 (Pa. 2018), for
filing a single appeal related to multiple trial court docket numbers. On November 8, 2021, Carlise
filed an answer to the Rule to Show Cause, arguing that his filing did not violate Walker because
the separately docketed matters had been consolidated and, thus, the trial court’s order did not
resolve issues arising under more than one trial court docket number. After determining that
Carlise’s appeal did not violate Appellate Rule 341(a), this Court discharged the Rule to Show
Cause by November 10, 2021 Order.
On January 5, 2022, Serota filed an Emergency Application to Stay and/or Supersede
Orders Directing Payment Pending Appeal, seeking to have this Court stay the trial court orders
directing payment to the Receiver. On January 6, 2022, Carlise filed an Emergency Application
to Stay Further Proceedings Pending Appeal, requesting that this Court order that the trial court
10
Rule of Appellate Procedure (Appellate Rule) 1925(b) (Appellate Rule 1925(b)
Statement), which he did. On August 20, 2021, the trial court issued its opinion
pursuant to Appellate Rule 1925(a) (Appellate Rule 1925(a) Opinion).11
Discussion
Appeal as of Right
Preliminarily, Concerned Owners argue that Carlise is not entitled to
relief because his appeal is an impermissible interlocutory appeal. Carlise responds
that the trial court’s May 20, 2021 order was appealable as of right. See Carlise
Reply Br. at 2-10.
The trial court’s May 20, 2021 order denied Carlise’s Motion to vacate
the Receiver’s appointment. As the Pennsylvania Superior Court has explained:
An appeal “may only be taken from: [(]1) a final order or
one certified by the trial court as final; [(]2) an
interlocutory order as of right [Appellate Rule 311]; [(]3)
an interlocutory order by permission; or [(]4) a collateral
order [Appellate Rule 313].” Est[.] of Considine v.
Wachovia Bank, 966 A.2d 1148, 1151 (Pa. Super. 2009);
[s]ee Pa.R.A.P. 341(a). Stated another way, “an appeal
properly lies only from a final order unless otherwise
permitted by rule or statute.” G.B. v. M.M.B., . . . 670 A.2d
714, 717 ([Pa. Super.] 1996) (citations omitted).
proceedings be stayed pending disposition of this appeal. On January 7, 2022, this Court ordered
that the trial court’s proceedings were stayed pending argument before this Court. On January 12,
2022, Concerned Owners filed an answer opposing Serota’s and Carlise’s Emergency
Applications. This Court conducted argument on the Emergency Applications on January 19,
2022. On January 27, 2022, this Court granted the Emergency Applications and ordered that the
trial court was prohibited from taking further action while the appeal is pending before this Court.
On February 19, 2022, Carlise filed an Application for Leave to File a Post-Brief
Submission to correct an erroneous citation in his brief, which this Court granted on February 28,
2022.
11
On January 23, 2022, the Receiver adopted the trial court’s Appellate Rule 1925(a)
Opinion. On February 1, 2022, Serota joined in Carlise’s brief. On June 9, 2022, Serota notified
this Court that he would join Carlise’s oral argument.
11
K.D. v. E.D., 267 A.3d 1215, 1222 (Pa. Super. 2021). Relevant here, Appellate Rule
311(a)(2) expressly declares that an appeal may be taken as of right from “[a]n order
confirming, modifying, dissolving, or refusing to confirm, modify or dissolve a[] . . .
receivership[.]” Pa.R.A.P. 311(a)(2). Accordingly, Carlise’s appeal is an appeal
permitted as of right, not an impermissible interlocutory appeal.12
Waiver
In addition, Concerned Owners argue that Carlise waived his claims
that the trial court erred by denying the Motion when the Receiver was appointed
and/or permitted to continue to conduct Association business in violation of Rule
1533, and waived his claims related to “the conditions justifying the appointment”
(i.e., failure to satisfy the legal standard to appoint a receiver), “the ongoing nature
of the appointment,” “the purported governance of the Association’s dissolution by
the Declaration, and the nature of [Concerned Owners’] initial pleading.”
Concerned Owners’ Br. at 9 n.2.
Carlise declares that, since the trial court only allowed argument and
did not conduct a full evidentiary hearing regarding the Receiver Petition, and the
trial court’s July 2019 Appointment Order and the Receiver’s acceptance thereof
were conditional, he did not waive those issues. See Carlise Reply Br. at 11-16.
Carlise asserts that the Receiver’s appointment violated Rule 1533
because: (1) no notice was given regarding the appointment of a temporary receiver;
(2) Concerned Owners failed to file a bond; (3) a hearing was not promptly held and
no notice was given relative to the continuation of the Receiver’s appointment; (4)
the Receiver failed to provide security; and (5) the Receiver’s term was not limited
12
In the January 27, 2022 Order granting the Emergency Applications, this Court observed
that this “appears to be an interlocutory order appealable as of right pursuant to [Appellate Rule]
311(a)(2),” but nevertheless allowed Concerned Owners to make appealability arguments in their
brief on the merits. Id.12
to a fixed period. Carlise further contends that Concerned Owners did not offer
proper legal support for the Receiver’s initial appointment and/or his continuation.
In addition, Carlise claims that the Receiver’s appointment and continuation violated
the terms of the Settlement Agreement, Concerned Owners lacked standing to pursue
the Receiver’s appointment and continuation because they failed to file a derivative
action, and Concerned Owners lacked the legal capacity and/or standing to pursue
the Receiver’s appointment and continuation when they are not a legal entity, they
failed to properly commence the action, and the Receiver Petition was not properly
served.
At the July 18, 2019 hearing on the Receiver Petition, Concerned
Owners requested the trial court to appoint a receiver to dissolve the Association.
The trial court took judicial notice that the parties disagreed on the issues, and
announced that a temporary receiver was necessary to act as an arm of the trial court
and to keep the Association functional. See R.R. at 105a-106a, 109a, 112a-113a.
The trial court reasoned:
I don’t want to be back here every five minutes to find out
whether [] Serota is running it appropriately and whether
folks have complaints. I don’t. I don’t. I want to put a
receiver in. Then I’m done. My receiver is going to tell
me what is going on.
R.R. at 115a. Therefore, without hearing evidence, the trial court appointed a
temporary receiver and concluded the proceeding, except to allow the parties to
agree on the temporary receiver. See R.R. at 117a-118a.
In the order entered July 18, 2019, the trial court declared: “[A]
temporary receiver shall be appointed. Robert [G.] Xides, [Jr.,] Esquire shall be
appointed this date to serve as temporary receiver, so long as he accepts the
appointment,” and the Receiver shall file a report and recommendations within 45
13
days. R.R. at 121a. By July 24, 2019 letter, the Receiver accepted his appointment
“as a temporary receiver . . . .” R.R. at 124a.
Despite that the trial court announced at the July 2019 hearing that the
trial court was appointing a receiver, Carlise did not object to or otherwise challenge
the trial court’s decision. When the trial court specifically requested Carlise’s
position on the appointment of “a neutral receiver [] as an arm of the [c]ourt [to] get
a [r]eport[,]” R.R. at 112a, Carlise’s counsel responded only that “the appointment
of a receiver is an extreme remedy.” R.R. at 113a. Carlise did not then raise any
objection to the Receiver Petition or Rule 1533’s requirements, nor did he object at
that time that Concerned Owners failed to offer proper legal support for the
Receiver’s initial appointment; the Receiver’s appointment violated the terms of the
Settlement Agreement; Concerned Owners lacked standing to pursue the Receiver’s
appointment because they failed to file a derivative action; Concerned Owners
lacked legal capacity and/or standing to pursue the Receiver’s appointment when
they are not a legal entity; Concerned Owners failed to properly commence the
action; or the Receiver Petition was not properly served (collectively, Objections).
Further, although the discussion at the trial court’s December 10, 2019
status conference is unclear, the resulting December 12, 2019 Continuation Order
reflected: “Temporary Receiver Robert G. Xides, Jr.[, Esquire] is empowered to
conduct the business of the [Association] on a continuing basis from July 18, 2019
(the date of the original [o]rder of this [trial c]ourt in this case)[,] forward until
issuance of a new [o]rder of the [trial c]ourt in this matter.” R.R. at 179a-180a.
There is no record evidence that Carlise raised the Objections.13
13
The Serota 2021 Court similarly observed:
[W]e note the complicated procedural background of this case, with
the near constant filing of pleadings, objections, exceptions, and
motions or applications for special relief, along with numerous
arguments and hearings. Notably, notwithstanding Serota’s and
14
The law is well[]established that
[w]hile a party has a duty to preserve an issue
at every stage of a proceeding, he or she also
must comply with the general rule to raise
an issue at the earliest opportunity. Renna
v. Dep’t of Transp., Bureau of Driver
Licensing, 762 A.2d 785, 788 (Pa. Cmwlth.
2000) (holding failure to raise issue during
trial court’s hearing constituted waiver).
Campbell v. Dep’t of Transp., Bureau of Driver
Licensing, 86 A.3d 344, 349 (Pa. Cmwlth.
2014) . . . [.]
City of Phila. v. Rivera, 171 A.3d 1, 6 (Pa. Cmwlth. 2017)
....
In Re Petition to Set Aside Upset Tax Sale, 218 A.3d 995, 998 (Pa. Cmwlth. 2019)
(emphasis added); see also Samuel-Bassett v. Kia Motors Am., Inc., 34 A.3d 1, 45
(Pa. 2011) (“Under prevailing Pennsylvania law, a timely objection is required to
preserve an issue for appeal.”).
The Pennsylvania Supreme Court has explained:
Requiring a litigant to make a timely, specific objection
during trial ensures that the trial court has a chance to
correct alleged trial errors. Dilliplaine v. Lehigh Valley
Tr[.] Co., . . . 322 A.2d 114, 116 ([Pa.] 1974). We have
stressed that “[w]aiver is indispensable to the orderly
functioning of our judicial process and developed out of a
sense of fairness to an opposing party and as a means of
promoting jurisprudential efficiency by avoiding appellate
court determinations of issues which the appealing party
Carlise’s [O]bjections to [the Receiver’s] appointment and actions,
neither directly challenged that appointment in July 2019 or in
December 2019, when the trial court clarified [the Receiver’s]
authority.
Id. at 18 n.18 (emphasis added).
15
has failed to preserve.” Reilly[ v. Se. Pa. Transp. Auth.],
489 A.2d [1291,] 1300 [(Pa. 1985)14].
Harman ex rel. Harman v. Borah, 756 A.2d 1116, 1124-25 (Pa. 2000). Accordingly,
“[o]n appeal[,] the [appellate c]ourt will not consider a claim that was not called to
the trial court’s attention at a time when any error committed could have been
corrected.” Campbell, 86 A.3d at 349 n.3 (quoting Thompson v. Thompson, 963
A.2d 474, 475-76 (Pa. Super. 2008)).
Here, based on the record before this Court, Carlise did not raise any
objections at the July 18, 2019 receivership hearing.15 In addition, Carlise failed to
raise the Objections in the six days after the trial court ordered the Receiver before
the Receiver accepted the position, nor did he appeal from the trial court’s
Appointment or Continuation Orders or otherwise object prior to filing the Motion,
the Petition for Special Relief, and the preliminary objections to Concerned Owners’
Complaint in January 2020. Because Carlise did not raise the Objections at the
earliest opportunity, which was to the trial court at the July 18, 2019 hearing, or at
any other reasonable point before January 2020, he waived them.16 See Samuel-
Bassett; In Re Petition to Set Aside Upset Tax Sale.
Substantive Issue
The only substantive issue remaining for this Court’s review is
Carlise’s claim that the trial court erred by denying the Motion when (a) Concerned
14
Reilly was overruled on other grounds, as recognized by In re: Estate of Shuman (Pa.
No. 1178 MDA 2020, filed Dec. 30, 2021).
15
The fact that the trial court deemed it unnecessary for the parties to present evidence at
the July 18, 2019 hearing did not preclude Carlise from then objecting to the trial court’s decision
on the bases he later raised.
16
Concerned Owners’ claim that Carlise waived these issues pursuant to Appellate Rule
302(a) (“Issues not raised in the trial court are waived and cannot be raised for the first time on
appeal.”), see Concerned Owners’ Br. at 8-9, lacks merit because it is clear in the record that
Carlise did, at some point, raise these issues before the trial court.
16
Owners failed to prove gross mismanagement, fraud, or similar circumstances in the
Association’s present or future operation; and (b) a five-member Board was ready,
willing and able to govern the Association.
The law is well settled that “the decision as to whether a receiver should
be appointed [or continued] is within the sound discretion of the [trial] court[.]”
Northampton Nat’l Bank of Easton v. Piscanio, 379 A.2d 870, 873 (Pa. 1977).
In determining in a specific case whether the [trial] court
has properly exercised its discretion in arriving at the
decision whether or not to appoint [and/or continue the
appointment of] a receiver, the appellate court will
consider all of the facts and circumstances. “In the
absence of a clear abuse of discretion, matters purely
within the discretion of a trial court are not reversible on
appeal . . . [and] [t]o justify a reversal, the abuse of
discretion must be clearly shown.” C. E. Williams Co. v.
H. B. Pancoast Co., . . . 194 A.2d 189, 191 ([Pa.] 1963)
(citations omitted).
Hankin v. Hankin, 420 A.2d 1090, 1103 (Pa. Super. 1980) (citations omitted)
(Hankin I).17 “Where substantial evidence supports findings . . . that a receiver is
necessary to preserve the property and the rights of all the parties concerned . . . , the
[trial court’s] exercise of discretion must be affirmed.” Hankin v. Hankin, 493 A.2d
675, 678 (Pa. 1985) (Hankin II).
[W]here the appointment [or continuation] will work an
irreparable injury to the rights and interests of others,
where greater injury will probably result from the
appointment [or continuation] or where the appointment
[or continuation] will do no good, a receiver should not be
appointed [or continued].
. . . [W]hat constitutes irreparable injury . . . for each case
must be evaluated in light of the facts established by the
17
Abrogation on other grounds recognized in Haymond v. Lundy, 177 F. Supp. 2d 371(E.D. Pa. 2001).
17
parties, their conduct and the relief necessary to do
substantial justice under the circumstances.
The existence of waste or dissipation of assets, or fraud or
mismanagement of [] assets, give cause for the
appointment of a receiver, but we have never indicated
that these are the only circumstances that would warrant
the appointment of a receiver[.]
Hankin II, 493 A.2d at 677. This Court recognizes that, although dissension among
the parties is alone insufficient to warrant appointing a receiver, it is a factor to be
considered when deciding to appoint and/or continue a receiver’s appointment. See
Hankin I; Bowman.
Here, at the July 22, 2020 hearing on the Motion and the Petition for
Special Relief, the trial court stated:
Let me just state for the record that in my understanding,
or since it was my appointment, it was not limited to being
a [Rule] 1533 receiver. This [R]eceiver was also an
equitable receiver, the purpose of which was to take
management of a property that was in dysfunction because
of failure to agree and, as we know, a receiver is an arm of
the [trial] court and the alternative to having a receiver
would be to have every dispute that came about end up in
court on my docket.
R.R. at 266a.
After four days of hearings on the Motion and the Petition for Special
Relief, the trial court denied the Motion as follows:
First, Pennsylvania law makes clear that the [trial c]ourt
may appoint a receiver where there has been gross
mismanagement or fraud or similar circumstances such
that a receiver is required. Tate . . . ([e]mphasis added);
[s]ee also Bowman . . . . The evidence demonstrates that
the Association[’s] [B]oard members lacked legitimacy,
were not transparent with the Association’s members
regarding the Association’s finances and utilized
Association funds to maintain control after they were
voted out, among other things.
18
Second, the [p]arties’ stipulations include that [] Carlise
was appointed to the [] Board, but not elected to it; that on
January 5, 2018, members of the Association voted [41] in
favor and [23] against the dissolution of the Association;
and that [] Carlise unilaterally appointed two individuals
to the [] Board. July 22, 2020 Transcript 35:7-19 [(S.R.R.
at 9b)]. This evidence illustrates a longstanding pattern of
ignoring the Bylaws’ strictures regarding elections and
appointments to the [] Board[,] as well as the democratic
will of the Association’s membership. Ex. GG, the
Bylaws, Article III [(R.R. at 49a-51a)]. Moreover, [the
Receiver’s Report] showed that the Association has been
in a state of turmoil and dysfunction for, at the minimum,
the first five years of its existence. [] Report, Pg. 6, Pgs.
9-10 [(R.R. at 132a, 135a-136a)].
In addition to the above, [the Receiver’s R]eport
concluded[:] (a) that the [] Board’s actions from October
19, 2017, through September 5, 2019, and from September
3, 2019[,] lack[ed] legitimacy because there were/are only
three [] Board members and the Bylaws require five; and
(b) in the current environment, the continuation of the
Association is a burden rather than a benefit to the
community. At a minimum, the Association ought to be
suspended, cease all regular activities[,] such as
contracting for services, its activities should be limited to
the payment of current debts, and wind down the
Association’s affairs under the supervision of the Receiver
and the [trial] court. [] Report, Pgs. 16, 18, and 19 [(R.R.
at 142a, 144a-145a)]. In sum, the evidence confirms that
the Association needs a receiver in order to protect the
interests of the [h]omeowners. No further evidence has
been provided that the conditions of the Association have
changed. Therefore, this [trial c]ourt . . . has committed
no abuse of discretion in so acting.
Trial Ct. Appellate Rule 1925(a) Op. at 15-16 (R.R. at 402a-403a). Clearly, “[i]t
was within the [trial court’s] discretion to appoint [the R]eceiver [and to continue
his appointment]. Our review of that decision, considering all of the facts and
circumstances, reveals no abuse of discretion.” Hankin II, 493 A.2d at 680.
Accordingly, the trial court properly denied the Motion.
19
Conclusion
Based on the foregoing, the trial court’s order is affirmed.
_________________________________
ANNE E. COVEY, Judge
20
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Dan Sweigart, Claudia Benack, :
Christine McNally, Patti Joseph, :
Margaret Alice Bothwell (Thomson), :
Beverly Romano, Georgene Siroky, :
Leslie Hyde, Lou Sanotra, Rose Lepri, :
Edward Szabo, Diane Szabo, Elizabeth :
Szabo, Nancy Kusko, Travis Boyle, :
Carrie Boyle, Judith Frazier, Betty :
Caricchio, Kirk Bruce, Donna Schaude, :
Janice Knapp, Jacqueline Carlucci, :
Eleanor Jane Check, Cathy Newell, :
Vicki Conti, Brian Jackson, Katherine :
Jackson, Lorren Pallone, Anne Pieto, :
Toni Weston, Keith Miller, Rose Mugo, :
Mike Janosik, Dawna Fisher, Matt :
Mager, Domenic Medina, Nina Carilli, :
Nancy Rogozinski, Albert Sanders and :
Justin Rees, a/k/a Concerned Owners of :
Homes in London Towne Homeowners :
Association :
:
v. :
:
London Towne Homeowners :
Association and Bennett Carlise :
:
v. :
:
Matthew Serota :
: No. 591 C.D. 2021
Appeal of: Bennett Carlise :
ORDER
AND NOW, this 9th day of August, 2022, the Allegheny County
Common Pleas Court’s May 20, 2021 order is affirmed.
_________________________________
ANNE E. COVEY, Judge