Artillio v. Artillio

• Decision Date: 16 December 2020
• Docket Number: No. 158 EDA 2020,158 EDA 2020
• Citation: 245 A.3d 1078 (Table)
• Parties: Charles ARTILLIO Jr., Appellant v. Teresa ARTILLIO
• Court: Pennsylvania Superior Court

245 A.3d 1078 (Table)

Charles ARTILLIO Jr., Appellant v. Teresa ARTILLIO

No. 158 EDA 2020

Superior Court of Pennsylvania.

Filed December 16, 2020

MEMORANDUM BY NICHOLS, J.:

Appellant Charles Artillio, Jr., appeals from the order creating a constructive trust for undisclosed marital assets in favor of Appellee Teresa Artillio. On appeal, Appellant contends the trial court lacked authority to create a constructive trust and erred by finding that the record supported the creation of a constructive trust. We affirm.

We adopt the facts set forth in the trial court's opinion. See Trial Ct. Op., 3/4/20, at 1-6, 13-26. We add that the parties' divorce complaint requested incorporation of the parties’ property settlement agreement (PSA) into the divorce decree. See Compl. in Divorce, 2/25/15; see also Trial Ct. Op. at 1-2. The certified record also reflects the filing of an inventory of marital property. ¹ See Compl. in Divorce; see also R.R. at 91a.

Subsequently, Appellee filed a petition for special relief, which essentially asserted that Appellant intentionally concealed marital assets. Appellee's Pet. for Special Relief for Constructive Tr. & Accounting, 2/25/19, at 10-11. Appellee asserted that as a result of Appellant's material misrepresentations, Appellant induced her to sign the PSA. Id. at 7. Appellee alleged that the trial court has "full equity power and jurisdiction and may issue injunctions or other orders which are necessary to protect the interests of the parties or to effectuate the purposes of this part and may grant such other relief or remedy as equity and justice require ...." Id. at 11 (unpaginated) (quoting 23 Pa.C.S. § 3323 (f) ).

On that basis, Appellee's petition requested the following relief:

a. [Appellant] shall, within ten (10) days of the date of the court's order, file with the court a verified inventory and appraisement of all financial accounts held by [Appellant] or any financial account that [Appellant] has any interest for the past five years to present, substantially in the form provided by [Pa.R.Civ.P.] 1920.75.

b. All of the entities which [Appellant] failed to disclose to [Appellee] shall be placed in a constructive trust and discovery shall be ordered to be completed within ninety days to determine the true value of the marital estate and to compel [Appellant] to tender to [Appellee] her equitable marital share of the full marital estate and to award all reasonable counsel fees and other costs in connection with the petition; and granting [Appellee] such other further relief as the court deems equitable and just[,] including interim counsel fees.

Id. at 12 (unpaginated).

On December 12, 2019, the trial court granted relief, and we quote the order in relevant part as follows:

Pursuant to Section 3505(d)^[2] of the Pennsylvania Divorce Code, 23 Purdon's Consolidated Statutes Annotated, a constructive trust is established for all undisclosed assets/businesses including, but not limited to the following: ...

* * *

[The trial court designated an attorney as trustee of the constructive trust and stated the trustee would be paid].

[Appellant] shall provide to Trustee and opposing counsel within thirty (30) days of the date of this Order, an accounting of the above businesses which shall include, at minimum the following: date established; names and addresses of all partners/shareholders; percentage of [Appellant's] interest in said property; if no longer in existence, then date it was dissolved; copies of all tax returns for all businesses from 2012 until the present; name of [all of the] officers; and any other information requested by the Trustee.

None of the above assets/businesses shall be disposed of, alienated or further encumbered without written notice given to the Trustee and all parties at least ten (10) days in advance of any action involving the assets/businesses.

This matter is referred to the Master's Office for further oversight in accordance with state and local procedure. There is an outstanding request by [Appellee] for attorney's fees. [Appellee] is required to file any pleadings necessary, under state or local rule, to have the matter handled by the Master's Office. The Master's Office shall deal with the division of assets and attorney's fees.

Order, 12/12/19, at 1-2 (emphasis added). Appellant timely appealed on January 6, 2020, and timely filed a court-ordered Pa.R.A.P. 1925(b) statement.

On January 28, 2020, this Court issued a rule to show cause why Appellant's appeal should not be quashed because the trial court's December 12, 2019 order, which referred "the matter to the Master's Office for division of the listed assets and for disposition of [A]ppellee's petition for attorney's fees," was not a final order. Order, 1/28/20. On February 6, 2020, Appellant filed an answer asserting that because the trial court ordered the creation of a constructive trust under 23 Pa.C.S. § 3505(d), the order was appealable as of right under Pa.R.A.P. 311(a)(4). ³ Appellant's Answer to Rule to Show Cause, 2/6/20, at 2-3. On February 7, 2020, the Court discharged its rule and referred the issue to this panel. ⁴ Order, 2/7/20.

Whether Appellant Could Properly Take an Interlocutory Appeal

Before quoting Appellant's issues, we address our appellate jurisdiction, which we may raise sua sponte. See Grun v. Grun , 496 A.2d 1183, 1185 (Pa. Super. 1985).

Pennsylvania Rule of Appellate Procedure 311(a)(4) states:

(a) General rule. —An appeal may be taken as of right and without reference to Pa.R.A.P. 341(c) from:

(4) Injunctions.— An order that grants or denies, modifies or refuses to modify, continues or refuses to continue, or dissolves or refuses to dissolve an injunction unless the order was entered:

(i) Pursuant to 23 Pa.C.S. §§ 3323(f), 3505(a) ; or

(ii) After a trial but before entry of the final order. Such order is immediately appealable, however, if the order enjoins conduct previously permitted or mandated or permits or mandates conduct not previously mandated or permitted, and is effective before entry of the final order.

Pa.R.A.P. 341(a)(4).

As quoted above, Rule 311(a)(4) lists two statutory exceptions: § 3323(f) and § 3505(a). Section 3323(f) of the Domestic Relations Code states:

(f) Equity power and jurisdiction of the court. —In all matrimonial causes, the court shall have full equity power and jurisdiction and may issue injunctions or other orders which are necessary to protect the interests of the parties or to effectuate the purposes of this part and may grant such other relief or remedy as equity and justice require against either party or against any third person over whom the court has jurisdiction and who is involved in or concerned with the disposition of the cause.

23 Pa.C.S. § 3323(f).

We quote Section 3505(a) and 3505(d), of which the instant trial court cited the latter:

(a) Preliminary relief.— Where it appears to the court that a party is about to leave the jurisdiction of the court or is about to remove property of that party from the jurisdiction of the court or is about to dispose of, alienate or encumber property in order to defeat equitable distribution, alimony pendente lite, alimony, child and spousal support or a similar award, an injunction may issue to prevent the removal or disposition and the property may be attached as prescribed by general rules. The court may also issue a writ of ne exeat to preclude the removal.

* * *

(d) Constructive trust for undisclosed assets. —If a party fails to disclose information required by general rule of the Supreme Court and in consequence thereof an asset or assets with a fair market value of $1,000 or more is omitted from the final distribution of property, the party aggrieved by the nondisclosure may at any time petition the court granting the award to declare the creation of a constructive trust as to all undisclosed assets for the benefit of the parties and their minor or dependent children, if any. The party in whose name the assets are held shall be declared the constructive trustee unless the court designates a different trustee, and the trust may include any terms and conditions the court may determine. The court shall grant the petition upon a finding of a failure to disclose the assets as required by general rule of the Supreme Court.

23 Pa.C.S. § 3505(a), (d).

Instantly, the trial court's order created a constructive trust and enjoined Appellant from alienating any assets that were to be transferred into the trust, which is a form of injunctive relief. See Order, 12/12/19; see generally Santoro v. Morse, 781 A.2d 1220, 1223 n.1 (Pa. Super. 2001) (noting interlocutory appeal as of right may be taken from order granting preliminary injunction and creating constructive trust). Rule 311(a)(4) permits an interlocutory appeal as of right from an order granting an injunction unless the injunction was created under either Sections 3323(f) or 3505(a). See Pa.R.A.P. 311(a)(4). Here, the trial court's order explicitly created a constructive trust, which is relief within the scope of Section 3505(d). Order, 12/12/19. We therefore do not need to examine whether the trial court could also have created a constructive trust under Section 3323(f) or 3505(a) for the purpose of determining our appellate jurisdiction. See Pa.R.A.P. 311(a)(4) ; 23 Pa.C.S. §§ 3323(f), 3505(a). Accordingly, Appellant could properly take an interlocutory appeal as of right from the order at issue. See Pa.R.A.P. 311(a)(4).

We therefore address the merits, and Appellant raises the following issues on appeal:

1. Was it an error of law and an abuse of discretion for the trial court to deny Appellant's "motion for demurrer" requesting the dismissal of the petition for special relief ("PFSR") filed by [Appellee], as Appellee was not legally entitled to the relief sought via the PFSR, that being the creation of a constructive trust pursuant to 23 Pa.C.S. [§] 3505(d) ?

2. Was it an error of law and abuse of

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