J-A01020-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ISABELLE NATASHA WERNER, IN THE SUPERIOR COURT OF
AND SOPHIA KATERINA WERNER PENNSYLVANIA
v.
MELANIE R. WERNER
Appellant No. 646 WDA 2016
Appeal from the Order April 6, 2016
In the Court of Common Pleas of Allegheny County
Orphans' Court at No(s): 02-13-4697
BEFORE: BOWES, J., OLSON, J., AND STRASSBURGER,* J.
MEMORANDUM BY BOWES, J.: FILED: July 3, 2017
Melanie R. Werner appeals the April 6, 2016 order denying her petition
to open and strike the judgment entered in favor of her daughters, Isabelle
Natasha Werner and Sophia Katerina Werner (collectively “Appellees”) in the
amount of $507,000. We vacate the order and remand for further
proceedings.
This case concerns the interplay among seven orders entered by
different jurists presiding over matters in the Allegheny County Court of
Common Pleas Family and Orphans’ divisions, respectively. We previously
summarized the relevant procedural history of the orphans’ court case as
follows:
* Retired Senior Judge assigned to the Superior Court.
J-A01020-17
In the mid-1990's, [Appellant] and her former husband,
Eric Werner, . . . adopted [Appellees]. During [Appellant] and
[Mr. Werner’s] marriage, they created two separate custodial
investment accounts for the benefit of [Appellees] (collectively
referred to as “the UTMA accounts”), under [the Pennsylvania
Uniform Transfers to Minors Act (“PUTMA”)]. Both accounts
named [Appellant] as custodian. In August 2009, [Appellant]
and [Mr. Werner] separated. At that time, [Mr. Werner] moved
out of the marital residence, a very large home located at 44
Beaver Street, Sewickley, Pennsylvania (hereinafter “the marital
residence”).
In May 2010, [Appellant] withdrew the funds in the UTMA
accounts, which totaled $252,688.90 (hereinafter “the custodial
property”), and deposited the funds in her personal bank
account. In June 2010, [Appellant] used $235,000 of the
custodial property to purchase a residence located at 219
Centennial Avenue, Sewickley (hereinafter “the Centennial
House”). [Appellant] listed the title to the Centennial House in
her name alone. After purchasing the Centennial House,
[Appellant] used some of her personal funds to make
improvements to it.
[Appellant] filed a Complaint in divorce against [Mr.
Werner] in September 2010. In the divorce proceedings, the
trial court entered an Order in September 2010, freezing all
assets held for the benefit of the Children, absent prior written
consent of both [Mr. Werner] and [Appellant].
In August 2013, [Appellees] commenced the instant action
against [Appellant], seeking monetary damages and an
accounting, alleging that [Appellant] had violated her duties as
custodian by misappropriating the custodial property and
purchasing the Centennial House.
Werner v. Werner, 149 A.3d 338, 340 (Pa.Super. 2016) (footnotes
omitted).
Meanwhile, about the same time that Appellees commenced their
orphans’ court action, the family division judge that was presiding over
-2-
J-A01020-17
Appellant and Mr. Werner’s divorce proceedings entered two orders that: (1)
permitted Appellant to sell the Centennial Avenue property; (2) granted
Appellant $100,000 of the proceeds of that sale, and (3) created an interest
bearing escrow account for the balance of the proceeds and continued the
prohibition of withdrawals from the UTMA account absent court order or the
agreement of the parties.1 Family Court Order, 8/5/13, at 1; Family Court
Order, 8/19/13, at 1. The family court specifically directed that its August 5,
2013 order would be subject to the orphans’ court’s discretion once it was
determined that the money was taken from the UTMA accounts. On April 9,
2014, the orphans’ court entered an order in the underlying action that
effectively ratified the family court’s formation of the escrow account and
directed that $260,000 of the estimated $407,000 balance of the proceeds
be transferred to an investment account for Appellees’ exclusive benefit.
____________________________________________
1
In addition to permitting the sale of the Centennial Avenue property and
directing that the proceeds of the sale be placed in trust, the family court’s
August 5, 2013 order included two handwritten notations that read as
follows:
b.) This matter shall be dealt with before Master Miller at the
end of the ongoing trial (and/or if the accounts in question are
PUTMA accounts then J. Zottola [who presided over the orphans’
court proceedings])[;]
c.) [Appellant] may have $100,000 of the proceeds as long as
the proceeds exceed $250,000[.]
Family Court Order, 8/5/13, at 1.
-3-
J-A01020-17
See Orphans’ Court Order, 4/9/14, at 1-2. That money was deposited in
the IOLTA account assigned to Appellees’ counsel.
Thereafter,
[on] December 22, 2014, the Orphans' Court held a non-jury
trial, and later conducted supplemental hearings. Shortly prior to
trial, [Appellees] filed a Petition (hereinafter “Attorneys' Fees
Petition”) seeking an order requiring [Appellant] to pay their
attorneys' fees, due to her vexatious and bad faith conduct in
the litigation.
By an Order entered on September 29, 2015, the Orphans'
Court (1) ruled that [Appellant] had violated her duty as
custodian of the UTMA accounts under PUTMA, and, as damages,
the Children were entitled to the entire proceeds from the sale of
the Centennial House ($507,000); and (2) denied the Attorneys'
Fees Petition.
Werner supra, at 340-341 (footnotes omitted). We affirmed the orphans’
court order awarding Appellees the total net proceeds from the sale, i.e.,
$507,000, as damages for Appellant’s breach of her fiduciary duty pursuant
to PUTMA. Id.
On December 1, 2015, Appellees filed in the orphans’ court a motion
to release the balance of the escrow funds, which they conceded was
approximately $147,000 “after [Appellant’s] retention of $100,000, and [the
orphans’] [c]ourt’s original disbursement to [Appellees].” Motion For
Release of Funds From Escrow Account, 12/1/15, at 2. On the same date,
Appellees entered judgment in the orphans’ court in the amount of
$507,000, the entirety of the proceeds of the sale. Appellant filed a timely
petition to open and strike the judgment. She asserted that the judgment
-4-
J-A01020-17
was void on its face because: (1) the orphans’ court order did not expressly
subject her to personal liability or set forth a specific sum due to Appellees;
(2) the proceeds of the sale of the Centennial Avenue property were held in
an interest bearing escrow account; and (3) a portion of the account was
previously distributed by agreement. On April 6, 2016, the orphans’ court
denied Appellant’s motion on procedural grounds without reaching the merits
of her arguments.2 Essentially, the court reasoned that it lacked jurisdiction
to entertain the motion while the underlying award was before this Court.
This timely appeal followed.
Appellant presents four questions for our review:
[1.] May an order which awards recovery to parties from funds
held in custodia legis be used to enter judgment against a party
in her individual capacity?
[2.] May an order which awards recovery to a party from funds
held in custodia legis be used to enter judgment against an
individual for the full, original amount of the funds despite prior
court-approved, distributions for the fund?
[3.] May an order which does not indicate a personal obligation
to pay or identify a sum certain due be the basis for entry of
monetary judgment against an individual?
[4.] Does the pendency of the appeal of an order awarding an
in rem recovery against a fund in custodia legis deprive the
lower court of jurisdiction to strike an in personam judgment
entered pursuant to that order?
____________________________________________
2
The orphans’ court denied without explanation Appellees’ motion to release
the escrowed funds.
-5-
J-A01020-17
Appellant’s brief at 4.
Initially, we observe that “a petition to strike and a petition to open
are two distinct forms of relief, each with separate remedies.” Resolution
Trust Corp. v. Copley Qu–Wayne Associates, 683 A.2d 269, 273 (Pa.
1996). While Appellant styled the underlying entreaty as a petition to open
and strike the judgment, it is obvious from her arguments implicating an
alleged irregularity in the certified record that she seeks to strike the
judgment. As our High Court explained, “A petition to strike a judgment is a
common law proceeding which operates as a demurrer to the record. A
petition to strike a judgment may be granted only for a fatal defect or
irregularity appearing on the face of the record.” Id. (citations omitted).
Furthermore, “[a] petition to strike a judgment will not be granted unless a
fatal defect in the judgment appears on the face of the record[ and]
[m]atters outside of the record will not be considered, and if the record is
self-sustaining, the judgment will not be stricken.” Morgan v. Morgan, 117
A.3d 757, 761 (Pa.Super. 2015) (quoting Bell v. Kater, 943 A.2d 293, 295
(Pa.Super. 2008)). We review a trial court order denying a petition to strike
a judgment for an abuse of discretion or legal error. Id.
The crux of Appellant’s argument is that she is not personally liable to
her daughters and that their recovery in this proceeding is limited to the
existing balance of the escrowed funds. Thus, she asserts that the $507,000
judgment entered against her in this case is defective on its face. Appellees
-6-
J-A01020-17
counter that the orphans’ court order awarding Appellees the entirety of the
net proceeds, i.e., $507,000, from the sale of the Centennial Avenue
residence was, in fact, entered against Appellant personally and not merely
as the custodian of her daughters’ PUTMA accounts. They continue that, in
light of the fact that Appellant retained $100,000 of the initial proceeds for
her personal benefit and the orphans’ court determined that Appellees were
entitled to all of the net proceeds of the sale, including the $147,000 balance
of the escrow account, judgment was properly entered on the award as a
preliminary step toward reclaiming the $247,000 to which they are rightfully
owed.
Both parties level legitimate concerns regarding the interplay among
the various orders entered in the family and orphans’ divisions of the Court
of Common Pleas and the enduring effect of those orders upon their
respective rights. However, as noted supra, the trial court declined to
address the merits of Appellant’s petition to strike the judgment entered on
the $507,000 award because it believed that Appellant’s concomitant appeal
divested it of jurisdiction over the matter pursuant to Pa.R.A.P. 1701(a)
(“Except as otherwise prescribed by these rules, after an appeal is
taken . . ., the trial court . . . may no longer proceed further in the
matter.”). See Trial Court Opinion, 8/18/16, at 2-3.
As this Court subsequently affirmed the order awarding Appellees the
entirety of the proceeds from the sale of the Centennial Avenue home and
-7-
J-A01020-17
remanded the certified record to the orphans’ court, that tribunal is no
longer constrained by Rule 1701. See Werner, supra. Thus, we vacate
the order denying Appellant’s motion to open and strike the judgment and
remand the matter for the orphans’ court to address the merits of
Appellant’s petition and to determine whether Appellant is personally liable
to her daughters under the September 29, 2015 order and, if so, the extent
of that liability in light of the family court’s qualified grant of $100,000 to
Mother from the sale proceeds and the orphans’ court’s prior distribution to
Appellees totaling $260,000.
Order vacated. Matter remanded for further proceedings consistent
with this memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/3/2017
-8-