BARBARA LINDE, IN HER OWN RIGHT AND BARBARA LINDE ON BEHALF OF LINDE CORPORATION v. SCOTT LINDE, ROBERT L. HESSLING, ROBERT M. MCGRAW, PAUL FEDOR, CHRISTOPHER LANGEL, ALFRED OSTROSKI, MICHAEL BOCHNOVICH, LINDE CORPORATION AND SCOTT LINDE FAMILY‘S CORPORATION TRUST
No. 1392 MDA 2018
IN THE SUPERIOR COURT OF PENNSYLVANIA
NOVEMBER 01, 2019
2019 PA Super 331
BEFORE: BOWES, J., OLSON, J., and STABILE, J.
J-A11019-19. Aрpeal from the Order Entered July 20, 2018. In the Court of Common Pleas of Luzerne County Civil Division at No(s): 2013 CV 11028.
Appellants, Scott Linde, Robert L. Hessling, Robert M. McGraw, Paul Fedor, Christopher Langel, Alfred Ostroski, Michael Bochnovich, Linde Corporation, and Scott Linde Family‘s Corporation Trust, appeal from the trial court‘s order entered on July 20, 2018.1 We vacate and remand.
On September 18, 2013, Barbara Linde (hereinafter “Barbara“), individually and on behalf of Linde Corporation (hereinafter “LindeCo“), filed a complaint against Appellants. The case proceeded to a bench trial, aftеr which the trial court found in Barbara‘s favor on many of her claims and ruled that Barbara was entitled to an equitable remedy in which Appellants were to purchase her minority interest in LindeCo at fair value. Trial Court Order, 11/13/15, at 1-2. The trial court then convened a second proceeding aimed at determining the fair value of Barbara‘s shares. On December 28, 2017, the trial court entered its decision in the matter, ruling that Barbara‘s shares had a fair value of $4,433,000.00 and that Barbara was entitled to $959,000.00 in interest, for a total award of $5,392,000.00. Trial Court Order, 12/28/17, at 1.
On January 8, 2018, Appellants filed a timely post-trial motion. See Appellants’ Motion for Post Trial Relief, 1/8/18, at 1-11. Eleven days later, and while Appellants’ post-trial motion remained pending before the trial court, Barbara prematurely filed a praecipe to enter judgment with the Luzerne County clerk of courts. Barbara‘s Praecipe to Enter Judgment, 1/19/18, at 1; see also
The January 19, 2018 entry of judgment was beyond the clerk of court‘s authority and, thus, void. In relevant part,
. . . the prothonotary shall, upon praecipe of a party:
(1) enter judgment upon . . . the decision of a judge following a trial without jury, if
(a) no timely post-trial motion is filed; or
(b) one or more timely post-trial motions are filed and the court does not enter an order disposing of all motions within one hundred twenty days after the filing of the first motion. . . .
Here, Appellants’ timely post-trial motion was still outstanding and the 120-day time-period specified in
Notwithstanding the void judgment, Barbara immediately began to engage in discovery in aid of execution. But see
On May 18, 2018, the trial court entered an order granting in part and denying in part Barbara‘s Motion to Compel. The order declares:
1. [Appellants] shall provide [Barbara‘s] counsel with full and complete responses to [Barbara‘s] Interrogatories and Requests for Production of [D]ocuments within [30] days of the date of this order.
2. All other requests for relief are denied.
Trial Court Order, 5/18/18, at 1 (some capitalization omitted).
On April 3, 2018, the trial court denied Appellants’ post-trial motion. Trial Court Order, 4/3/18, at 1. Appellants filed a notice of appeal on April 30, 2018 and a valid judgment was subsequently entered on May 21, 2018.
Second, Appellants requested clarification because, on May 29, 2018, the trial court approved a supersedeas bоnd in the maximum amount of $6,470,400.00 (or, 120% of the monetary judgment against Appellants), “conditioned for the satisfaction of the judgment in full with interest and costs for the delay, if [the judgment] is affirmed or if for any reason the appeal is dismissed, or for the satisfaction of any modification of the order.” Id. at 4-5 (some capitalization omitted), quoting, Supersedeas Bond, 5/29/18, at 2. Under the terms of the supersedeas bond, the trial court “order[ed] a stay of execution of, or any proceedings to enforce, the judgment” rendered against Appellants. Supersedeas Bond, 5/29/18, at 2. Given these circumstances, Apрellants requested clarification as to “whether it was the intent of the [trial] court [to state in the May 18, 2018 order] . . . that [Appellants] must produce the answers to the discovery in aid of execution.” Appellants’ Motion for Clarification, 6/8/18, at 5 (some capitalization omitted).
Barbara filed an “Emergency Motion for Sanctions” against Appellants on June 19, 2018. See Barbara‘s Emergency Motion for Sanctions, 6/19/18, at 1-3. Within this motion, Barbara claimed that Appellants “intentionally failed to comply with” the trial court‘s May 18, 2018 order, which directed that Appellаnts “provide [Barbara‘s] counsel with full and complete responses to [Barbara‘s] Interrogatories and Requests for Production of [D]ocuments within [30] days.” Id. at 2. Barbara requested that the trial court sanction Appellants $1,000.00 per day “for each day any [Appellant] fails to produce responses to [her] discovery requests” and grant her “such other relief as the [trial] court deems just and appropriate.” Id. at 3 (some capitalization omitted).
On July 20, 2018, the trial court entered an order declaring, in relevant part:
1. [Appellants‘] Motion for Clarification is hereby denied.
2. [Appellants] shall provide [Barbara‘s] counsel with full and complete responses to [Barbara‘s] Interrogatories and Requests for Production of [D]ocuments within [30] days of the date of this order.
3. Failure to comply with [the trial court‘s] order will result in the imposition of sanctions upon [Appellants].
Trial Court Order, 7/20/18, at 1 (emphasis and some capitalization omitted).
On Monday, August 20, 2018, Appellants filed a notice of appeal from the trial court‘s July 20, 2018 order. Appellants raise one issue to this Court:
Did the [trial] court commit an error of law in its July 20, 2018 order, . . . denying the Motion for Clarification and granting the Emergency Motion and оrdering [Appellants] to provide Barbara‘s counsel with full and complete responses to the Interrogatories and Requests for Production of Documents (hereinafter the[] “Execution Discovery“) within [30] days because the pursuit of the Execution Discovery prior to the time the supersedeas bond was filed of record was void and [had] no effect as established by Pa.R.C.P. 227.4(1)(b) because [] Barbara was effectively secured or bonded in an amount well in excess of the judgment and as such, no practical or legal reason exists to require [Aрpellants] to respond to the Execution Discovery and the Execution Discovery served absolutely no legitimate purpose, and was sought strictly to annoy, or to harass [Appellants] and was undertaken in bad faith, creating unreasonable annoyance, embarrassment, oppression, burden or expense?
Appellants’ Brief at 15 (some capitalization omitted).
Prior to reaching the merits of this appeal, this Court must “first ascertain whether the [order appealed from] is properly appealable.” Commonwealth v. Borrero, 692 A.2d 158, 159 (Pa. Super. 1997). Indeed, since “the question of appealability implicates the jurisdiction of this Court[, the issue] may be raised by [this] Court sua sponte.” Commonwealth v. Baio, 898 A.2d 1095, 1098 (Pa. Super. 2006).
Generally, this Court‘s jurisdiction “extends only to review of final orders.” Rae v. Pa. Funeral Dir‘s Ass‘n, 977 A.2d 1121, 1124-1125 (Pa. 2009);
Our Supreme Court has held that “a determinative order relating to execution is in character a judgment, which, when of final nature, is appealable.” Cherry v. Empire Mut. Ins. Co., 208 A.2d 470, 471 (Pa. 1965) (quotations and citations omitted). The trial court‘s July 20, 2018 order directs thаt Appellants comply with Barbara‘s discovery requests in aid of execution. This order, directing compliance with discovery requests, is not of a “final nature” and, thus, does not constitute a final order. Kine v. Forman, 194 A.2d 175, 176-177 (Pa. 1963) (holding: an order directing the judgment debtor to answer certain questions, posed during discovery in aid of execution on a judgment, was interlocutory and unappealable);3 see also Jones v. Faust, 852 A.2d 1201, 1203 (Pa. Super. 2004) (“in general, discovery orders are not final, and are therefore unappealable“). The order is, therefore, not appealable under
Therefore, since the trial court‘s July 20, 2018 order does not fall under any of the three definitions of a “final order,” the order is not appealable under
Interlocutory orders are appealable in certain circumstances. As our Supreme Court explained:
in addition to an appeal from final orders of the Court[s] of Common Pleas, our rules provide the Superior Court with jurisdiction in the following situations: interlocutory appeаls that may be taken as of right,
Pa.R.A.P. 311 ; interlocutory appeals that may be taken by permission,Pa.R.A.P. [312] ; appeals that may be taken from a collateral order,Pa.R.A.P.
313 ; and appeals that may be taken from certain distribution orders by the Orphans’ Court Division,Pa.R.A.P. 342 .
Commonwealth v. Garcia, 43 A.3d 470, 478 n.7 (Pa. 2012) (internal quotations omitted), quoting McCutcheon v. Phila. Elec. Co., 788 A.2d 345, 349 n.6 (Pa. 2002).
Here, the trial court‘s July 20, 2018 order is not an orphans’ court distribution order (under
the collateral order doctrine is a specialized, practical [exception to] the general rule that only final orders are appealable as of right. Thus, Rule 313 must be interpreted narrowly, and the requirements for an appealable collateral order remain stringent in order to prevent undue corrosion of the final order rule. To that end, each prong of thе collateral order doctrine must be clearly present before an order may be considered collateral.
Melvin v. Doe, 836 A.2d 42, 46-47 (Pa. 2003) (internal citations omitted).
Moreover, and in keeping with the narrow interpretation of the collateral order doctrine, our Supreme Court has held that “the collateral order rule‘s three-pronged test must be applied independently to each distinct legal issue over which an appellate court is asked to assert jurisdiction pursuant to Rule 313.” Rae, 977 A.2d at 1130. Therefore, even if the collateral order test “is satisfied with respect tо one [appellate] issue,” the assertion of jurisdiction does not necessarily mean that we have “jurisdiction to consider every issue within the ambit of the appealed order.” Id. at 1123.
As our Supreme Court has held, an order is “separable from and collateral to the main cause of action” if it is capable of review without considering the merits of the underlying cause of action. Ben v. Schwartz, 729 A.2d 547, 551-552 (Pa. 1999); Melvin, 836 A.2d at 45-46. In the case at bar, Appellants claim that the trial court erred when it directed that they comply with Barbara‘s discovery requests in aid of exeсution, even though Appellants appealed the underlying judgment and Appellants obtained (and the trial court approved) an appropriate supersedeas bond. This issue is “separable from and collateral to the main cause of action,” as it is solely concerned with a discovery request regarding
Next, we must determine whether the directive that Appellants comply with Barbara‘s discovery requests, notwithstanding their appeal and acquisition of a supersedeas bond, “involves a right too important to be denied review.” In re Bridgeport Fire Litigation, 51 A.3d at 230 n.8. Our Supreme Court has explained:
In analyzing the importance prong, we weigh the interests implicated in the case against the costs of piecemeal litigation.
For purposes of defining an order as a collateral order under Rule 313, it is not sufficient that the issue be important to the particular parties. Rather it must involve rights deeply rooted in public policy going beyond the particular litigation at hand.
The overarching principle governing “importance” is that . . . an issue is important if the interests that would potentially go unprotected without immediate appellate review of that issue are significant relative to the efficiency interests sought to be advanced by adherence to the final judgment rule.
Ben, 729 A.2d at 552 (citations, corrections, and some quotations omitted).
Post-judgment discovery in aid of execution demands the disclosure of the defendant‘s personal assets - information in which the defendant possesses a right of privacy. See
Our Supreme Court has held that the mere “assertion of an attendant privacy concern [does not] transform a discovery order that otherwise is not appealable by right into a collateral order subject to as-of-right interlocutory appellate review.” Dougherty v. Heller, 138 A.3d 611, 628 (Pa. 2016). Instead, the Supreme Court held:
the specific privacy concern in issue must be evaluated and adjudged to satisfy the importance requirement. In this regard, we make the distinction among different orders of privacy interests, such as those of a constitutional magnitude or recognized as such by statute, as compared with lesser interests.
Id. at 628-629 (footnote omitted).
The Dougherty Court highlighted the statutorily-recognized рrivacy interest of “information contained in federal tax returns,” which is “made confidential per federal statute.” Id. at 629 n.10, citing
Barbara seeks discovery of Appellants’ personal financial information in aid of execution, notwithstanding the fact that Appellants filed a timely notice of appeal, the trial court approved Appellants’ supersedeas bond, and execution in this case has been stayed. The information Barbara seeks is “contained in [Appellants‘] fеderal tax returns;” as such, the information is “made confidential per federal statute” and
Appellants’ heightened privacy interest, when combined with the fact that Appellants filed a timely notice of appeal and the trial court approved Appellants’ supersedeas bond (thus staying execution), leads us to conclude that the trial court‘s July 20, 2018 order involves a right too important to be denied review. We arrive at this conclusion because the right to privacy is “deeply rooted in public policy going beyond the particular litigation at hand” and the privacy interests that “would potentially go unprotected without immediate appellate review . . . are significant relative to the efficiency interests sought to be advanced by adherence to the final judgment rule.” Ben, 729 A.2d at 552 (quotations, citations, and corrections omitted); J.S. v. Whetzel, 860 A.2d 1112, 1117 (Pa. Super. 2004) (holding: trial court‘s discovery order, which directed that the appellant produce certain income tax returns, satisfied the second prong of the collateral order doctrine because the appellant‘s “privacy interest in his income information raises a sufficiently important public policy concern“); see also Feldman v. Ide, 915 A.2d 1208, 1211 (Pa. Super. 2007) (holding that a discovery order, which directed defendant to disclose his medical expert‘s income tax returns, satisfied the second prong of the collateral order doctrine because: “the underlying privacy rights implicate matters of public policy that extend beyond the current controversy. In that [the defendant], and not [the expert witness], was the party served with the request, not only are [the expert witness‘] privacy rights implicated by the trial court‘s order, [the defendant‘s] right to choose the means by which to defend himself is also implicated. These rights have obvious implications extending beyond the confines of this case“) (citations and some capitalization omitted); Merithew v. Valentukonis, 869 A.2d 1040, 1043 (Pa. Super. 2005) (holding: “[r]egarding the second prong [of the collateral order doctrine], the [trial court‘s] order compels [the appellant] to answer interrogatories that would permit the [plaintiffs] to determine [the appellant‘s] complete financial worth. We agree with [the appellant] that her privacy interest in her financial information raises a sufficiently important public policy concern, and the second prong is established“).4 Further, as will be explained below, because of the stay, Barbara does not yet have any right to intrude upon Appellants’ privacy interests in their personal financial information. Therefore, we conclude that this portion of the trial court‘s order satisfies the second prong of the collateral order doctrine.
Finally, we must determine whether the order “presents a question that, if review is postponed until final judgment in the case, the claim will be irreparably lost.” In re Bridgeport Fire Litigation, 51 A.3d at 230 n.8. We conclude that
On appeal, Appellants claim that the trial court erred in ordering that they respond to Barbara‘s discovery in aid of execution requests because Appellants are in the process of appealing the underlying judgment against them and Appellants obtained, and the trial court approved, a supersedeas bond for 120% of the monetary judgment. Appellants’ Brief at 25. According to Appellants, since the bond fully secures Barbara and since the execution proceedings are stayed during the pendency of the appeal, Barbara “may not pursue discovery in aid of execution.” Id. at 31. We agree.
“Generally, on review of an order concerning discovery, an appellate court applies an abuse of discretion standard.” McNeil v. Jordan, 894 A.2d 1260, 1268 (Pa. 2006). However, where an issue presents a pure question of law, our standard of review is de novo and our scope of review is plenary. Shinal v. Toms, 162 A.3d 429, 441 (Pa. 2017).
The parties and the trial court all agree that the trial court‘s approval of Appellants’ supersedeas bond (in the amount of 120% of the monetary judgment against them) triggered a stay of execution on the judgment, pending resolution of Appellants’ aрpeal from that judgment. See Barbara‘s Brief at 18; Appellants’ Brief at 24; Trial Court Opinion, 11/1/18, at 12-13; see also
The dispute on appeal concerns the effect of the stay of execution upon Barbara‘s ability to conduct discovery in aid of execution. According to Appellants, the stay of execution on the judgment also stays any discovery in aid of execution. On the other hand, Barbara and the trial court contend that the stay of execution has no effect upon discovery in aid of execution. We agree with Appellants.
Pennsylvania Rule of Civil Procedure 3117 provides:
Rule 3117. Discovery in Aid of Execution
(a) Plaintiff at any time after judgment, before or after the issuance of a writ of execution, may, for the purpose of discovery of assets of the defendant, take the testimony of any person, including a defendant or a garnishee, upon oral examination or written interrogatories as provided by the rules relating to Depositions and Discovery. The prothonotary of the county in which judgment has been entered or of the county within this Commonwealth where the deposition is to be taken, shall issue a subpoena to testify.
(b) All reasonable expenses in connection with the discovery may be taxed against the defendant as costs if it is ascertained by the discovery proceedings that the defendant has property liable to execution.
As we explained:
Discovery under Rule 3117 . . . is “pure discovery,” intended as an ancillary aid in the discovery of assets.
The language of Rule 3117 makes its broad application clear. Discovery under the rule may be pursued “at any time after judgment, before or after the issuance of a writ of execution.” Discovery in aid of execution thus is not linked to a pending execution or attachment, but rather may be pursued even before issuance of a writ in order to locate assets subject to execution and obtain the information necessary to begin the process of execution or attachment. Moreover, Rule 3117 permits discovery requests to be directed to “any person, including a defendant or garnishee.” Thus, in keeping with the “pure discovery” purposes of thе rule, plaintiffs are not restricted to obtaining discovery from defendants or garnishees, but may seek discovery from any person who may have information regarding the location of assets of the judgment debtor.
PaineWebber, Inc. v. Devin, 658 A.2d 409, 412-413 (Pa. Super. 1995) (citations omitted).
The body of
The title of
Therefore, we conclude that the trial court erred when it ordered Appellants to respond to Barbara‘s discovery in aid of execution requests during the pendency of the stay of execution.
Order vacated. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/1/2019