J-S21045-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
RICHARD HABERERN, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
TERRY SCHAFFER,
Appellant No. 3134 EDA 2014
Appeal from the Judgment Entered December 30, 2014
in the Court of Common Pleas of Lehigh County
Civil Division at No.: 2012-C-4340
BEFORE: BOWES, J., JENKINS, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED APRIL 21, 2015
Appellant, Terry Schaffer, appeals from the judgment entered
pursuant to the trial court’s decision declaring Appellee, Richard Haberern, to
be the legal and equitable owner of real estate held in constructive trust by
Appellant. We affirm.
In its May 15, 2014 opinion, the trial court aptly sets forth the relevant
facts and procedural history of this case, as follows.
This dispute concerns a contested title to realty located in
Schnecksville, Pennsylvania. . . .
While still married to his former wife, [Appellee] became
romantically involved with [Appellant]. After the two had
become acquainted through a men’s “chat room” on the internet,
they arranged to meet in person for the first time at a shopping
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*
Retired Senior Judge assigned to the Superior Court.
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outing at Dick’s Sporting Goods in the early morning hours on
the Friday following Thanksgiving Day in 2007. They shopped
for [k]ayaks, and thereafter began seeing each other more
frequently. Their relationship progressed to include intimate
physical relations.
In November of the following year, [Appellee] became
involved in an automobile accident, which he understood to be
his fault. Meanwhile, [his] relationship with [Appellant]
continued, and after [Appellee] was hospitalized for what he
described as a nervous breakdown in February 2009, [his] then-
wife commenced divorce proceedings. [Appellant] had an extra
bedroom in a house he was renting in Bethlehem, and he invited
[Appellee] to stay there. [Appellee] moved in with [Appellant]
and their intimate relationship continued. [Appellant] also
assisted [Appellee] with expenses, including attorney’s fees he
incurred in the course of the divorce.
As part of the disposition of marital assets pursuant to his
divorce, [Appellee], through a deed dated August 28, 2009,
acquired sole title to the couple’s former marital home situated
on Route 309 in Schnecksville. Meanwhile, after consulting with
his insurance agent in connection with the 2008 motor-vehicle
accident, [Appellee] had concluded it would be advisable to
transfer assets out of his name in the event a lawsuit were to
follow the accident. [Appellee] and [Appellant] discussed
transferring the title into [Appellant’s] name, and it was agreed
that the property would temporarily be titled in the latter’s name
until any claim arising out of the November 2008 motor vehicle
accident was resolved, at which point the property would be
conveyed back to [Appellee]. Accordingly, shortly after
[Appellee] acquired title to the property in August 2009, [he], on
September 11, 2009, executed a deed transferring the property
to [Appellant] for one dollar.
[Appellant] paid for the attorneys fees and transfer taxes
and both men moved into the property, which the couple shared
with another man. [Appellee], in August 2009, changed his will
to name [Appellant] as executor and sole beneficiary, believing
him to be “the best friend in the whole world.” . . . The couple
also shared expenses and exchanged gifts. . . .
Relations for the couple, however, eventually became
strained, culminating in a falling out in October 2011. . . . Hard
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feelings ensued, resulting in, among other things, [Appellee]
moving out of the Schnecksville home and [Appellant] filing a
lawsuit demanding repayment of [a] $2,000 . . . automobile
[loan]. [Appellee], in this action, [sought] relief in the form of
an equitable decree declaring that the Schnecksville property be
deemed to have been held in trust by [Appellant] pursuant to
the circumstances and understanding of the parties at the time
the deed was executed in September 2009.
Opposing that demand, [Appellant] claim[ed] he paid
$100,000 as full and fair consideration for the property. . . .
(Trial Court Opinion, 5/15/14, at 1-3).
The court held a non-jury trial on October 3, 2013, and filed a decision
on May 5, 2014, declaring that Appellant held the subject real estate for
Appellee in a constructive trust. Appellant filed post-sentence motions,
which the trial court denied on October 13, 2014. Appellant timely
appealed.1
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1
Appellant filed a timely statement of errors on December 3, 2014 pursuant
to the trial court’s order, and, on December 8, 2014, the court filed a
statement in which it relied on its May 15, 2014 memorandum opinion. See
Pa.R.A.P. 1925.
Appellant purported to appeal from the trial court’s order denying his
post-trial motions. However, “an appeal properly lies from the entry of
judgment, not from the denial of post-trial motions.” Commonwealth Fin.
Systems, Inc. v. Smith, 15 A.3d 492, 493 n.1 (Pa. Super. 2011) (citation
omitted). We have amended the caption accordingly.
We also note that, on December 22, 2014, this Court issued a Rule to
Show Cause because our review of the docket revealed that judgment had
not been entered on the verdict. On December 30, 2014, Appellant filed a
praecipe for judgment. Therefore, because judgment has now been entered
in this matter, we consider his appeal timely. See Harvey v. Rouse
Chamberlin, Ltd., 901 A.2d 523, 525 n.1 (Pa. Super. 2006).
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Appellant raises five questions for our review:
1. Did the [t]rial [c]ourt err or abuse its discretion when it
concluded that [Appellee] met the heavy burden of proof
necessary to establish a constructive trust?
2. Did the [t]rial [c]ourt err or abuse its discretion when it
entered a decision that was unsupported by the evidence
presented and was against the weight of the evidence?
3. Did the [t]rial [c]ourt’s credibility determinations lack
evidentiary support or amount to an abuse of the [t]rial [c]ourt’s
discretion?
4. Did the [t]rial [c]ourt err or abuse its discretion by finding
that the property was held in trust rather than finding [Appellee]
was merely attempting to advance an alleged verbal agreement
that would otherwise be precluded by the Statute of Frauds?
5. Did the [t]rial [c]ourt err or abuse its discretion by
granting equitable relief to [Appellee] when he had unclean
hands?
(Appellant’s Brief, at 4).
Appellant’s first three issues challenge the sufficiency and weight of
the evidence in support of the trial court’s credibility finding, and imposition
of a constructive trust. (See id. at 4, 13-19). These claims lack merit.
Our standard of review of a matter involving a court sitting in equity 2
is well-settled:
Our review of this case is guided by the principles that the
scope of appellate review of a decree in equity is particularly
limited, and that the findings of the [trial court] will not be
reversed unless it appears that the [court] clearly committed an
abuse of discretion or an error of law. Where credibility of
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2
A constructive trust is an equitable remedy. See Stauffer, infra at 241.
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witnesses is important to a determination, the findings of the
[trial court] are entitled to particular weight because the [court]
has the opportunity to observe their demeanor. . . .
DiMaio v. Musso, 762 A.2d 363, 365 (Pa. Super. 2000), appeal denied, 785
A.2d 89 (Pa. 2001) (citation omitted). In fact, “our standard of review
makes clear that with regard to issues of credibility and weight of the
evidence, we must defer to the presiding trial judge who viewed and
assessed the witnesses first-hand.” D.K. v. S.P.K., 102 A.3d 467, 479 (Pa.
Super. 2014) (citation and internal quotation marks omitted).
The imposition of a constructive trust, unlike the finding of an
express or a resulting trust, does not require that the parties
specifically intended to create a trust; it is an equitable remedy
designed to prevent unjust enrichment. There is thus no rigid
standard for determining whether the facts of a particular case
require a court of equity to impose a constructive trust; the test
is whether or not unjust enrichment can thereby be avoided. . . .
A constructive trust is the formula through
which the conscience of equity finds expression.
When property has been acquired in such
circumstances that the holder of the legal title may
not in good conscience retain the beneficial interest
equity converts him into a trustee . . . . A court . . .
in decreeing a constructive trust is bound by no
unyielding formula. The equity of the transaction
must shape the measure of relief.
Stauffer v. Stauffer, 351 A.2d 236, 241 (Pa. 1976) (citations and
quotation marks omitted); see also Nagle v. Nagle, 799 A.2d 812, 819
(Pa. Super. 2002), appeal denied, 820 A.2d 162 (Pa. 2003).
Further,
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[i]t is necessary that both a confidential relationship and reliance
upon a promise to reconvey induced by that relationship be
shown. . . .
Although no precise formula has been devised to ascertain
the existence of a confidential relationship, it has been said that
such a relationship is not confined to a particular association of
parties but exists whenever one occupies toward another such a
position of advisor or counselor as reasonably . . . to inspire
confidence that he will act in good faith for the other’s interest.
Silver v. Silver, 219 A.2d 659, 661-62 (Pa. 1966) (footnote and citations
omitted).
Here, the trial court found that Appellee’s version of events was more
credible than that of Appellant, and that it supported the grant of a
constructive trust. Specifically, the court stated, in pertinent part, that:
In view of the totality of the evidence and the demeanors of the
witnesses on the stand, [Appellant’s] attempt to deny the extent
of his romantic relationship with [Appellee], and thereby
characterize the September 2009 transfer as part of an arm’s
length purchase for $100,000, is simply not plausible.
Particularly specious is [Appellant’s] effort to deny a history of
romantic involvement that began in the form of an online
relationship. . . . By contrast, [Appellee’s] explanation as to the
history and development of the pair’s relationship, which
proceeded from an internet chat to a first meeting and
subsequent romantic and physical intimacy, jibes with the
overall evidence and is, therefore, decidedly more convincing.
* * *
. . . All things considered, therefore, including [Appellee’s] fuller
and more logical explanation of events and his more convincing
and forthright demeanor on the stand, establishes by a clear and
convincing demonstration that [Appellee] conveyed the property
to [Appellant] with the mutual understanding that it would be
returned to [him] upon resolution of any potential outstanding
claim arising from his November 2008 automobile accident.
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(Trial Ct. Op., at 3-4, 6).
We are bound by the court’s finding that Appellee’s version of events
was credible, and decline Appellant’s request that we re-weigh the evidence
in this regard. (See Appellant’s Brief, at 18-19); DiMaio, supra at 365;
see also D.K., supra at 479. Further, we agree with the court that the
credible evidence of record sufficiently established Appellant was under an
equitable duty to convey the subject residence to Appellee in order to
prevent unjust enrichment, thereby supporting the court’s imposition of a
constructive trust. See Stauffer, supra at 241; Nagle, supra at 819.
Specifically, Appellee testified that he first met Appellant online in
2007 in a “men for men chat room” while Appellee still was married to his
then-wife, and living in the marital home they shared in Schnecksville,
Pennsylvania. (N.T. Trial, 10/03/13, at 8). He and Appellant arranged to
meet face-to-face for the first time at a Dick’s Sporting Goods on the Friday
after Thanksgiving in 2007. (See id.). They began dating shortly
thereafter, and their relationship became intimate in 2008. (See id. at 9-
10). After Appellee was in a 2008 motor vehicle accident, Appellant drove
him to and from work. (See id. at 11). In February of 2009, after Appellee
was hospitalized for two weeks because of a nervous breakdown, Appellant
picked Appellee up from the hospital and drove him home to his
Schnecksville residence. (See id. at 12-13). Upon arriving at the home,
Appellee’s then-wife, with whom he still lived, served him with divorce
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papers, and Appellant offered to let him stay with him in a property he was
renting in Bethlehem. (See id. at 13). On August 18, 2009, Appellee
drafted a last will and testament, and “because of all the help that
[Appellant] gave [him], and help [with] getting through [the] divorce,
[Appellee] decided to will everything [he] had to [Appellant].” (Id. at 20;
see id. at 21). Appellee also named Appellant executor of the will because
he “thought [Appellant] was the best friend in the whole world.” (Id. at 26;
see id. at 20).
On August 28, 2009, as part of the divorce settlement, Appellee
received the deed to the marital home he had shared with his ex-wife in
Schnecksville. (See id. at 15). Appellant lived in the Schnecksville property
with Appellee. (See id. at 36, 38). Shortly thereafter, Appellee’s insurance
company advised him that “if [he] ha[d] any assets of value, it would be
very advised (sic) for [him] to put it in someone else’s name,” because he
could potentially be the subject of a lawsuit arising from the 2008 motor
vehicle accident. (Id. at 18). Hence, on September 11, 2009, Appellee
executed a deed for the Schnecksville home to Appellant, for one dollar in
consideration. (See id.; see also Deed, 9/11/09, at unnumbered page 1).
He stated that Appellant agreed to accept the home with the understanding
that after the “possible [c]ourt case . . . was settled, then the house would
then be deeded back to [him].” (N.T. Trial, 10/03/13, at 19; see also id. at
36). However, after an October 2011 falling out, “[Appellant] [changed the
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locks, and] locked [Appellee] out of [the Schnecksville] property . . . .” (Id.
at 24; see id. at 25).
Based on the foregoing testimony, and in light of the record as a
whole, we conclude that the competent evidence supported the court’s
findings that the parties shared an intimate romantic relationship, and that
they agreed that the Schnecksville property would be held by Appellant and
then deeded back to Appellee. See DiMaio, supra at 365. Therefore, the
court did not err when it imposed a constructive trust in order to prevent
Appellant’s unjust enrichment. See Stauffer, supra at 241; see also
Nagle, supra at 819. Appellant’s first three claims do not merit relief.
In Appellant’s fourth issue, he argues that the court’s imposition of a
constructive trust was precluded by the statute of frauds3 because Appellee
“failed to present sufficient evidence to establish a confidential relationship .
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3
The statute of frauds provides:
All declarations or creations of trusts or confidences of any
lands, tenements or hereditaments, and all grants and
assignments thereof, shall be manifested by writing, signed by
the party holding the title thereof, or by his last will in writing, or
else to be void: Provided, That where any conveyance shall
be made of any lands or tenements by which a trust or
confidence shall or may arise or result by implication or
construction of law, or be transferred or extinguished by act
or operation of law, then and in every such case such trust
or confidence shall be of the like force and effect as if this
act had not been passed.
33 P.S. § 2 (emphases added).
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. . [that] was abused by [Appellant].” (Appellant’s Brief, at 20). This issue
lacks merit.
It is well-settled that “a constructive trust for realty can be based upon
oral evidence because statutory law specifically exempts trusts arising by
implication or construction of law from the Statute of Frauds.” Friday v.
Friday, 457 A.2d 91, 93 (Pa. Super. 1983) (citations omitted).
In fact, Appellant admits this long-standing principle of law. (See
Appellant’s Brief, at 20). He argues, however, that this rule does not apply
because the court erred in imposing a constructive trust where a confidential
relationship was not established. (See id. at 19-20). We disagree.
As stated more fully above, we conclude that the trial court properly
imposed a constructive trust where the parties, who stood in a confidential
relationship, agreed to the terms of the property’s conveyance. Therefore,
because the statute of frauds specifically “exempts trusts arising by
implication or construction of law,” Friday, supra at 93, Appellant’s fourth
issue lacks merit.
In Appellant’s fifth claim, he maintains that “[t]he [t]rial [c]ourt erred
or abused its discretion by granting equitable relief to [Appellee] when he
had unclean hands.” (Appellant’s Brief, at 20). Specifically, he argues that
“the basis for [Appellee’s] claim [that the parties had a verbal agreement]
was false” and “providing equitable relief to [him] . . . resulted in a
windfall[.]” (Id. at 21-22). This issue does not merit relief.
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It is well-settled that:
The bar of unclean hands is applicable in Pennsylvania only
where the wrongdoing of the plaintiff directly affects the
equitable relationship subsisting between the parties and is
directly connected with the matter in controversy. Furthermore,
the application of the doctrine to deny relief is within the
discretion of the [trial court], and in exercising [its] discretion
the [trial court] is free not to apply the doctrine if a
consideration of the entire record convinces him that an
inequitable result will be reached by applying it.
Stauffer, supra at 244-45 (declining to impose doctrine to upset
constructive trust) (citations omitted).
Here, as previously detailed above, we conclude that the court
properly found that credible evidence established that the parties agreed to
reconvey the Schnecksville property from Appellant to Appellee. Therefore,
Appellee did not receive a windfall, and Appellant’s argument in this regard
must fail. Stauffer, supra at 244.4
Judgment affirmed.
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4
We observe that the trial court declined to impose the doctrine of unclean
hands for different reasons than those stated above. (See Trial Ct. Op., at
7). However, it is well-settled that “[t]his Court may affirm the trial court’s
decision on any basis supported by the record.” Barren v.
Commonwealth, 74 A.3d 250, 254 (Pa. Super. 2013) (citation omitted).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/21/2015
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