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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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.
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           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



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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.



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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

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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.



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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

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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

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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




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