Korman Commercial Properties, Inc. v. Furniture.com, LLC
81 A.3d 97
| Pa. Super. Ct. | 2013Background
- Korman obtained judgment against TheFurniture.com and served a writ of execution on PayPal by certified mail on April 18, 2011; the account contained about $116,404.17 at that time.
- TheFurniture.com withdrew two sums (totaling about $116,404.17) on April 20, 2011, before PayPal placed any limitation on the account.
- PayPal routed the mailed writ internally, ultimately forwarding it to its Nebraska operations center, which placed a limitation on the account on or about April 26–27, 2011; PayPal answered interrogatories on April 27 and never filed preliminary objections to service.
- Korman moved for contempt (denied) and later for summary judgment; the trial court granted summary judgment for Korman, concluding the writ related back to the date PayPal received it and PayPal delayed unreasonably in acting.
- PayPal appealed, arguing (1) the lien attached only when PayPal waived service objections; (2) PayPal acted reasonably given improper service and internal routing; and (3) the trial court misapplied 13 Pa.C.S.A. § 4A502 (an issue the appellate court found waived).
Issues
| Issue | Plaintiff's Argument (Korman) | Defendant's Argument (PayPal) | Held |
|---|---|---|---|
| Did the garnishment lien attach as of the date PayPal received the writ despite improper service by mail? | Failure to object to improper service validated the service; lien attached on receipt per Pa.R.C.P. 3111(b). | Service was improper; lien only became effective when PayPal waived objections by answering interrogatories. | Court held validation of improper service relates back to date of receipt; lien attached on April 18, 2011. |
| Was PayPal’s delay in placing a hold reasonable given the allegedly improper service and internal routing? | PayPal had notice on receipt and had duty to protect the funds; its delay was unjustified. | The delay (about 8 days) was reasonable because the writ was sent to a non-agent address and required routing. | Court held PayPal was on notice upon receipt and unreasonably delayed; summary judgment for Korman affirmed. |
| Can PayPal claim lack of notice because the writ was not served by a sheriff? | Notice existed upon receipt and refusal to object waived service defect. | Lack of lawful service meant no effective injunction until waiver; thus no liability for withdrawals before perfection. | Court rejected PayPal’s notice argument, citing waiver and precedent; PayPal was deemed on notice at receipt. |
| Was the statutory argument under 13 Pa.C.S.A. § 4A502 preserved? | N/A | PayPal invoked the statute on appeal. | Issue was waived for failure to preserve below; not considered on appeal. |
Key Cases Cited
- Cox v. Hott, 371 A.2d 921 (Pa. Super. 1977) (failure to raise preliminary objections to defective process validates service and gives effect to earlier date)
- Witco Corp. v. Herzog Bros. Trucking, Inc., 863 A.2d 443 (Pa. 2004) (garnishee with notice must not facilitate debtor’s avoidance of garnishment)
- Sharp v. Valley Forge Med. Ctr. & Heart Hosp., Inc., 221 A.2d 185 (Pa. 1966) (service rules must be strictly followed)
- Royal Bank of Pa. v. Selig, 644 A.2d 741 (Pa. Super. 1994) (even when service is contested, garnishee should act in accordance with a writ)
- Adams v. Copper Beach Townhome Communities, L.P., 816 A.2d 301 (Pa. Super. 2003) (courts may look to factually analogous authority when confronting a question of first impression)