ISN Bank v. Rajaratnam
83 A.3d 170
| Pa. Super. Ct. | 2013Background
- ISN Bank (now Customers Bank) extended a construction loan to Tower Apartment Partnership; Arasu Rajaratnam signed the 2005 guaranty.
- Emma Rajaratnam signed the 2007 guaranty as to alleged modification/extension of the Tower loan.
- Tower defaulted; confession judgment against Arasu in 2009 for $4,988,321.05, plus interest and fees.
- Customers Bank obtained a deficiency judgment against Emma in 2012 for $3,300,764.53 plus post-judgment interest.
- In 2012-2013, Customers Bank moved to consolidate the two judgments; trial court denied consolidation.
- Pennsylvania law requires joint action to encumber tenancy by the entireties; separate judgments against spouses generally cannot be consolidated to reach entireties property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May separate judgments against spouses be consolidated? | Bank contends the two judgments create a joint indebtedness. | Rajaratnams contend separate acts cannot create a joint debt encumbering entireties. | Consolidation not permitted; separate judgments cannot be merged to reach entireties. |
Key Cases Cited
- Beihl v. Martin, 236 Pa. 519 (1912) (tenancy by the entireties requires joint action to encumber)
- Klebach v. Mellon Bank, N.A., 388 Pa. Super. 203 (1989) (execution on entireties requires both spouses as debtors)
- Arch Street Bldg. & Loan Assn. v. Sook, 104 Pa. Super. 269 (1932) (to bind entireties, judgment must include both spouses)
- Napotnik v. Equibank and Parkvale Sav. Ass'n, 679 F.2d 316 (1982) ([A] joint judgment on a joint debt may levy upon property held by both spouses)
- A. Hupfel’s Sons v. Getty, 299 F.2d 939 (1924) (separate transactions by spouses for indebtedness do not create a joint action)