In Re: REM, LLC, Appeal of: Day, E.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: REM, LLC LEWIS R. : IN THE SUPERIOR COURT OF
GAINFORT : PENNSYLVANIA
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APPEAL OF: EDWARD E. DAY :
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: No. 626 WDA 2022
Appeal from the Order Entered April 25, 2022
In the Court of Common Pleas of Westmoreland County Civil Division at
No(s): 3050 of 2021
BEFORE: BENDER, P.J.E., LAZARUS, J., and McLAUGHLIN, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED: MAY 4, 2023
Edward Day appeals pro se from the order appointing a receiver for REM,
LLC (“REM”). Day argues that the court abused its discretion and deprived him
of due process in denying his request for a continuance to obtain counsel and
that, had he been represented by counsel, he would have been able to refute
the evidence supporting the appointment of a receiver. We affirm.
REM is a limited liability company that owns and operates an electronic
billboard in New Stanton. The billboard is on land owned by Edward and Agnita
Day, and REM leases the land from them. REM also owns an adjoining parcel
of property. Day owns a 75% share of REM. Lewis R. Gainfort owns the
remaining 25%.
In August 2021, Gainfort filed a Verified Consent Petition for the
Expedited Appointment of a Receiver. He alleged REM was insolvent due to
Day’s mismanagement. Gainfort also alleged that REM was delinquent in
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making payments under the terms of a promissory note, and owed Gainfort
$395,691.47, plus accruing interest. Gainfort requested the court appoint a
receiver to preserve REM’s estate.
The court held a status conference in November 2021, after which it
ordered Gainfort to file a petition for a rule to show cause and ordered Day to
file a responsive pleading. The court also scheduled a hearing in January 2022.
Gainfort accordingly filed the petition for a rule to show cause, as well as a
brief in support. Day did not file a responsive pleading. The court continued
the hearing on the petition to March 28, 2022, at Day’s request.
At the hearing, Day appeared without counsel. Day stated his attorney
was unable to attend the hearing due to an emergency, and the following
exchange occurred:
Mr. Day: I would like to let the Court know at this time my
attorney is unavailable to come this morning. He had an
emergency situation.
The Court: Who is your attorney?
Mr. Day: Attorney Brian Aston from Aston Law Group.
The Court: I just saw Brian Aston walking down Main Street right
here.
Mr. Day: He had an emergency in Latrobe.
...
The Court: Go back and see, [court staff], if he entered his
appearance.
Mr. Day: He was tied up.
The Court: We are going to see if he entered his appearance
because if he didn’t enter his appearance, we are proceeding
today.
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Mr. Day: He was tied up with a homicide trial last week.
The Court: I understand that.
Mr. Day: And a felony the week before.
The Court: But if he didn’t enter his appearance, we are
proceeding today.
Mr. Day: Then, I would ask for a recess to go to his office because
I can’t do it. I am not allowed to represent the company –
The Court: Your motion is denied.
...
The Court: I am not delaying this. I am not waylaying it. I am not
putting it off any further. This case is from 2021 and it should
have been in the court already. . . . You knew this hearing was
coming for months.
...
Mr. Day: Well, I am not prepared to proceed without my attorney.
The Court: That’s fine. You can leave and we can do it in absentia
then, sir, because I’m ordering you to proceed in this case if he
failed to enter his appearance.
...
The Court: . . . [T]he Court has confirmed that Mr. Aston has not
entered his appearance in regard to this case nor has he notified
the Prothonotary’s Office nor is he scanned in . . . to be established
as your attorney. Mr. Aston was further contacted by myself by
telephone and he indicated although he has represented your
interest in the past, he does not usually represent any civil
litigation or receivership-type cases; therefore, he had no
knowledge of this. Mr. Day, he said you never talked to him ever
about this particular case, so, therefore, we are going to proceed.
N.T., 3/28/22, at 4-8.
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The court proceeded to hear evidence. Gainfort and Day both testified,
as did Jeffrey Anzovino, REM’s accountant. Following the hearing, the court
appointed George Butler, Esquire, to serve as receiver.
Day appealed. He raises the following questions:
1. Whether the Court abused [its] discretion by denying [Day]’s
request for a continuance?
2. Whether the court abused its discretion in granting the
Appellee’s Petition for Appointment of a Receivership?
3. The remainder of the issues are all interlocked: the court
forcing [Day] to represent the corporate interests; the court
needing to recuse because of his conflict of interest; and the
court permitting the petitioner to commit perjury[.]
Day’s Br. at 3 (reordered).
Day’s overarching issue is that the court abused its discretion and
deprived him of due process in denying his request for a continuance to obtain
counsel. He argues that before the hearing, he contacted numerous lawyers,
but was unable to find representation. He claims he informed the court of this
at the hearing and informed the court that he had an appointment scheduled
with an attorney who had promised to help him find representation for this
case. Day argues that without counsel, he was unable to successfully oppose
the petition, due to his ignorance of the rules related to court procedure and
the introduction of evidence. He asserts that a continuance would not have
caused Gainfort any prejudice.
“Appellate review of a trial court’s continuance decision is deferential.”
Commonwealth v. Brooks, 104 A.3d 466, 469 (Pa. 2014). We will only
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reverse the denial of a continuance upon a showing that the trial court abused
its discretion. The abuse-of-discretion standard requires a showing that the
court exercised manifestly unreasonable judgment, overrode or misapplied
the law, or acted out of partiality, prejudice, bias, or ill-will. Id.A reviewing court should consider the following factors to determine
whether a court abused its discretion in denying a continuance request: (1)
“whether there was prejudice to the opposing party by a delay,” (2) “whether
opposing counsel was willing to continue the case,” and (3) “the length of the
delay requested and the complexities involved in presenting the case.”
Papalia v. Montour Auto Serv. Co., 682 A.2d 343, 345 (Pa.Super. 1996).
A trial court may also “demand a showing of diligence” before granting a
request for a continuance. Baysmore v. Brownstein, 771 A.2d 54, 57
(Pa.Super. 2001). Parties “should not be permitted to unreasonably clog the
machinery of justice or hamper and delay the effort to administer justice
effectively,” even when a continuance request is purportedly to clarify the
status of counsel. Brooks, 104 A.3d at 475 (internal quotation marks and
citation omitted).
In its Rule 1925(a) opinion, the court explained that it denied Day’s
continuance request because it had already granted Day’s previous request,
seven months had elapsed since the filing of the petition, and Gainfort
opposed the continuance. The court additionally observed that the attorney
Day had claimed was his counsel had told the court that he would not be
entering his appearance in this case. The court concluded, “Because this is a
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very straightforward matter, and because Mr. Day did not provide a timeline
for obtaining an attorney despite more than adequate notice of the hearing,
the court in its discretion did not find that an additional continuance would be
appropriate.” Trial Court Opinion, 7/15/22, at 4.
The court did not abuse its discretion. The transcript of the hearing
belies Day’s assertions that he acknowledged to the court that he was
unrepresented, he had vigorously attempted to obtain counsel, and he had an
upcoming meeting with an attorney who had promised to help him find
representation. Rather, Day misinformed the court regarding the status of his
representation, despite having had seven months to secure counsel.
Furthermore, this was Day’s second continuance request. On this record, the
court’s decision to move forward with the hearing was not manifestly
unreasonable.
Nor did the court’s decision to proceed without counsel deny Day due
process. Procedural due process rights include “adequate notice, the
opportunity to be heard, and the chance to defend oneself before a fair and
impartial tribunal having jurisdiction over the case.” Commonwealth v.
Turner, 80 A.3d 754, 764 (Pa. 2013). Day had adequate notice of the
allegations and the date of the hearing, testified at the hearing, cross-
examined the opposing witnesses, and made argument. Day has not alleged
that he had a right to counsel in this case. His due process rights were not
offended.
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In his second issue, Day asserts that because he was not represented
by counsel, he was unable to present evidence to resolve the “significant
confusion” the court found related to REM’s recordkeeping and financial
accounting. Day’s Br. at 8 (quoting Trial Ct. Op. at 2). He claims the court
therefore did not have enough information to support the appointment of a
receiver, and its doing so was an abuse of discretion.
The decision to appoint a receiver is within the sound discretion of the
trial court. Abrams v. Uchitel, 806 A.2d 1, 8 (Pa.Super. 2002). A court must
exercise this equitable power reluctantly and sparingly. Hankin v. Hankin,
493 A.2d 675, 677 (Pa. 1985). It may appoint a receiver to prevent waste,
dissipation of assets, fraud, or mismanagement. Id. “Where substantial
evidence supports findings that indicate that a receiver is necessary to
preserve the property and the rights of all the parties concerned . . . the
[court’s] exercise of discretion must be affirmed.” Id. at 678.
In its Rule 1925(a) opinion, the court explained its findings as follows.
Mr. Gainfort has clearly met his burden of showing waste and
mismanagement of REM’s assets by Mr. Day. Mr. Gainfort himself
as a creditor is owed approximately $398,000, and he has only
recouped $50,000 of his initial investment. The company’s former
accounting firm and the electric supplier are also owed money.
There appears to be significant confusion regarding the current
financial situation of REM, LLC. The company bank account at First
Commonwealth Bank is presently frozen owing to an alleged
altercation between bank personnel and Mr. Day. No additional
ad[vertising] business has been acquired by Mr. Day in the last
five years. Mr. Gainfort and Mr. Day have attempted to reach an
amical resolution for sale of the billboard and dissolution of the
business, but they have not been successful.
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Looking to the business of REM, LLC overall, it has clearly been
grossly mismanaged. In the ten years of its existence, neither
party presented any evidence that the business has produced
enough net income to avoid persistent insolvency. There is
significant confusion and disruption regarding recordkeeping and
financial accounting. This court has determined that the only way
to equitably resolve the matter of REM, LLC between Mr. Gainfort
and Mr. Day is through the appointment of a neutral third-party
perceiver to resolve the financial situation and dissolve the
business in a manner fair to both parties.
Trial Ct. Op. at 2-3 (citations to hearing transcript omitted).
Day has not given a specific explanation of the evidence or argument
that he believes a lawyer could have presented for him at the hearing. Nor
has he shown that the evidence presented at the hearing was improper,
incompetent, or insufficient. As the court’s factual findings are supported by
the record, and those findings support the grant of a receiver, we reject Day’s
claim that the court lacked sufficient information to render its decision.
In his final argument, Day contradicts his foregoing allegations
regarding his attempts to find counsel, and asserts that he believed REM’s
corporate attorney, “a friend of the Court,” would be representing him at the
hearing, and did not realize “until everyone appeared at the evidentiary
hearing” that “everyone was against him.” Day’s Br. at 11. He contends that
the hearing was “orchestrated” to prevent him from presenting his case. Id.
We find these arguments undeveloped and moreover, the allegations are
unsubstantiated by the record. We therefore reject them.
Although Day mentions recusal, perjury, and his representation of
corporate interests in his statement of questions presented, he does not make
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any argument regarding those issues. To the extent Day intended to raise
them, we find them waived.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/4/2023
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