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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HOWARD MCELNEA AND IN THE SUPERIOR COURT
CAROLE MCELNEA, H/W AND OF PENNSYLVANIA
REGINALD WORTHINGTON AND
JULIE WORTHINGTON, H/W
v.
ESTATE OF JEFFREY VAN SLYKE,
INDRA VAN SLYKE, ADRIAN
KHILLAWAN,
INDRA VAN SLYKE, TRUSTESS OF
THE INDRA C. VAN SLYKE
IRREVOCABLE
TRUST DATED FEBRUARY 2, 2017
APPEAL OF: INDRA C. VAN SLYKE AND
THE INDRA C. VAN SLYKE
IRREVOCABLE TRUST DATED FEBRUARY
2, 2017
No. 1808 EDA 2018
Appeal from the Order Entered June 11, 2018
In the Court of Common Pleas of Pike County
Civil Division at No: 125-2018 CIVIL
BEFORE: OTT, STABILE, AND MCLAUGHLIN, JJ.
CONCURRING STATEMENT BY STABILE, J.: FILED SEPTEMBER 05, 2019
I concur fully with the learned Majority’s conclusion that the trial court’s
finding—that the defendant trust was created to operate as a shield to protect
the real estate parcels from potential liability as a result of the civil action filed
by Appellees—is not supported by the record. As such, this finding cannot
support relief under the Pennsylvania Uniform Fraudulent Transfer Act
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(“Act”).1 I write separately, however, to express my view that other findings
by the trial court may support relief. Specifically, I believe that “actual intent”
to hinder, delay or defraud Appellees may be found based upon the fact the
real estate was placed under an agreement of sale shortly after Appellees filed
their civil suit for damages against Appellants.
Section 5104(a) of the Act provides that a transfer made or obligation
incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim
arose before or after the transfer was made or obligation incurred, if the
debtor made the transfer or incurred the obligation, inter alia, with actual
intent to hinder, delay or defraud any creditor of the debtor. 12 Pa.C.S.A.
§ 5104(a). Section 5104(b)(4) provides that in determining actual intent,
consideration may be given to whether “before the transfer was made or
obligation was incurred, the debtor had been sued or threatened with suit.”
12 Pa.C.S.A. § 5104(b)(4). Here, the trial court found that the real estate at
issue, the Glen Combe Condominiums, was under an agreement of sale and
that Appellants did not dispute the property was listed contemporaneously
with the filing of Appellees’ civil lawsuit.2 Trial Court Opinion, 08/14/18, at 7.
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112 Pa.C.S.A. § 5101, et. seq., and as the Majority notes, as of February 20,
2018, now known as the Pennsylvania Uniform Voidable Transactions Act.
12 Pa.C.S.A. § 5101(a).
2 The trial court docket reflects Appellants’ civil action was commenced on
January 19, 2018 with the filing of a praecipe for a writ of summons. A
complaint was filed on March 6, 2018. The agreement of sale for the real
estate is dated March 20, 2018.
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In addition, the trial court made findings that the defendant Khillawan3 was
facing criminal charges for two separate incidents involving Appellants arising
out of the very events that form the basis of Appellants’ civil action; that there
was dubious insurance coverage for the suit; and that pending criminal
charges against Khillawan served as motivation to shield certain assets from
Appellants’ reach. Id. at 5, 7. In my opinion, these findings may be sufficient
to infer a fraudulent intent on the part of Appellants to warrant the relief
ordered by the trial court.
Accordingly, while I agree that the Majority is correct to conclude the
trial court was wrong in finding the trust was created to shield the real estate,
because the property was transferred into the trust long before Appellants’
civil action was commenced or threatened, I do not believe this disposes
entirely of whether a fraudulent transfer may have occurred. Under Section
5104, a fraudulent transfer may have occurred when the real estate contained
in the trust became subject to a sales agreement,4 as that occurred when a
suit was threatened or pending. The Majority considers only a possible
transfer as of the time the real estate was placed in trust. Relevantly, I think
the more focused inquiry is whether Appellants were attempting to transfer
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3Appellees have sued Appellants, in part, for their alleged acquiescence in the
actions of Adrian Killawan for repeatedly harassing Appellees and for harm
arising out of an incident that led to the shooting of Appellee Howard McElnea
by the deceased Jeffrey Van Slyke and then by Adrian Killawan attempting to
shoot and kill the Appellee Howard McElnea.
4Section 5106 of the Act, 12 Pa.C.S. § 5106, defines when a transfer is made
or obligation incurred.
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the real estate out of the trust because they were sued or threatened with
suit. Therefore, while I agree it was temporally impossible for the trust to
have been created to shield the real estate against Appellants’ civil suit, I
believe this does not answer the question fully as to whether the trial court
could find that a fraudulent transfer occurred. Because I would find that relief
may have been proper under the Act, see infra, I proceed to address the
procedural issue raised by Appellants.
In their brief, Appellants contend that no evidence was presented at the
hearing held on Appellees’ motion and, therefore, Appellants did not offer
evidence to rebut or refute the position of Appellees. Appellants’ Brief at 6.
Appellants further contend that at the time of hearing, the pleadings had not
been closed and the complaint was subject to pending preliminary objections.5
It is their position the trial court therefore made numerous findings not
supported by any evidence. Id.
Appellees proceeded by way of filing a motion for relief under the Act.
Pennsylvania Rules of Civil Procedure 208.1 through 211 comprehensively
address motion practice. Pa.R.C.P. No. 208.3(a) provides that a court shall
initially consider a motion without written responses or briefs. However, a
court may not enter an order granting relief to a moving party unless the
motion is uncontested or the other parties are given an opportunity for
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5 This is contradicted by Appellants’ motion for expedited hearing, discussed
infra, which represents a hearing on preliminary objections was not necessary
because an amended complaint was filed.
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argument. Id. Pa.R.C.P. No. 208.3(b) provides that a court, by local rule,
may impose requirements with respect to motions regarding the filing of a
response, a brief, or both. The published rules for the trial court here, the
Pike County Court of Common Pleas, do not provide for the filing of a response
or brief, but merely provide, in relevant part, that all motions shall state
whether a hearing or argument is requested, and the estimated length of time
for the hearing or argument. Pike County Local Rule 208.3(a),(b). Pa.R.C.P.
208.4 further addresses initial consideration of a motion. Pa.R.C.P. 208.4(a)
provides the court a number of options to dispose of a motion, including
authority to dispose of a motion when presented, or to set forth procedures
the court will use to decide the matter, including procedures for developing a
record. Pa.R.C.P. 208.4(a)(2)(vi). If a moving party seeks relief based upon
disputed facts for which a record must be developed, the court on its own
motion, or at the request of a party, may proceed with the issuance of a rule
to show cause. Pa.R.C.P. 208.4(b)(1). A court, however, is not limited to the
issuance of a show cause order, but also has the discretion to employ other
more efficient methods for developing a record, i.e., affidavits. See Note to
Pa.R.C.P. No. 208.4.
Instantly, the trial court docket reflects that after Appellees filed their
April 5, 2018 motion for relief under the Act, the trial court entered an April
13, 2018 order scheduling a hearing for May 23, 2018. An order then was
entered April 19, 2018, continuing the matter until further order of court. On
April 27, 2018, Appellants filed a motion for expedited hearing. The motion
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represented that argument on preliminary objections was scheduled for May
23, 2018, but was no longer necessary due to the filing of an amended
complaint. The motion further represented that a sale was scheduled to close
on April 30, 2018 on property owned by them, but that the pendency of
Appellees’ motion created a cloud on title rendering the title uninsurable.
Appellants further asserted that any allegation the sale of the property was
fraudulent was baseless.6 Significantly, the Appellants’ prayer for relief
requested only that a hearing on Appellees’ motion be expedited and that the
motion be dismissed. Appellants did not file a separate answer or response
to Appellees’ motion, or request that a rule to show cause issue to consider
disputed facts. By order dated May 18, 2018, the trial court granted the
motion for expedited hearing and scheduled a hearing for May 23, 2018. The
trial court held the hearing as scheduled at which time it appears only
argument was heard. By order dated June 11, 2018, the trial court granted
Appellees’ motion for relief under the Act.
The question thus presented is whether the trial court was within its
discretion to decide Appellees’ motion for relief under the Act upon the motion
and hearing, or whether Appellants were entitled to further process. At the
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6 Appellants contended in their motion for expedited hearing that the
allegation the sale was fraudulent was baseless. Motion for Expedited
Hearing, 4/27/18, at ¶ 9. They averred the sale was made in the open market,
for a fair price in an arms-length transaction, that the assets were not being
dissipated improperly, that they were retaining the cash from the sale with
the intention to invest the proceeds to provide income, and that the sale was
based upon the impracticality of the trust to hold real estate as a rental
property managed by Jeffrey Van Slyke, now deceased. Id.
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outset, I note that no party requested anything other than argument on
Appellees’ motion. Argument was entertained by the trial court. Thus,
Appellants cannot be heard to complain that they were denied any process
requested by them as required under the rules. Focus, therefore, must be
upon the trial court’s obligation to dispose of the motion properly. Initially,
there was nothing improper about the trial court considering the motion
without written responses or briefs as permitted under Rule 208.3. However,
it was incumbent upon the trial court at initial consideration to determine
whether it could properly decide the motion upon the papers and argument
before it, or whether it had to order additional procedures to develop a proper
record to resolve disputed issues of fact. Pa.R.C.P. No. 408.4. In support of
its factual findings, the trial court indicated that the facts relied upon were not
placed on the official record at hearing, but were ones which the court was
entitled to consider because they were of public record and/or were never
disputed by Appellants. The trial court, however, does not identify the
documents or matters of public record that support its findings. It further is
unclear as to how the trial court gained insight into Appellants’ Trust when
that document was not before the court.
Since Appellants offered no evidence at the hearing on Appellees’
motion, it is unclear whether facts found by the trial court were in dispute. I
recognize that Appellants in their motion for an expedited hearing averred that
any allegation the sale of the real estate was fraudulent was baseless. Even
if this could be considered a response to the motion, those facts do not appear
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to contradict largely the facts averred by Appellees in their motion in support
of relief under the Act. The facts averred by Appellants in their motion for
expedited hearing principally address whether the transfer of the real estate
was for fair value in an arms-length transaction. The facts averred by
Appellants in support of their motion address not whether the transaction was
for fair value in an arms-length transaction, but rather, whether the
transaction was being conducted to liquidate the real estate so that the
proceeds could be dissipated or transferred to avoid collection by execution
upon a judgment in their civil action. Granted, Appellants dispute that any
proceeds would be dissipated and contend instead that the proceeds were to
be invested to provide income. While it would seem that the trial court
dismissed Appellants’ averments for the reasons above stated, it cannot be
ignored that a significant factor affecting the trial court’s grant of relief was
its unsupported finding that the trust was created to shield the real estate
from potential liability as a result of Appellants’ civil lawsuit. Accordingly, I
would remand this matter to the trial court to conduct a new hearing and/or
direct that additional proceedings be undertaken to resolve disputed issues of
fact to reconsider and determine if relief under the Act is still warranted in
favor of Appellees. A remand further will provide the trial court an opportunity
to cite sources in support of uncontested facts and give the parties an
opportunity to argue and/or present evidence on what they believe may be
the material facts in dispute. See Auman v. Juchniewitz, 458 A.2d 254
(Pa. Super. 1983) (where it appears appellant did not have an opportunity to
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place evidence on record, a remand was ordered for that opportunity to
develop a record); White v. Alston, 331 A.2d 765 (Pa. Super. 1974) (where
it was not possible to tell where trial court got information to make its decision,
a remand was ordered so depositions could be taken).
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