Barak v. Karolizki

• Decision Date: 18 September 2018
• Docket Number: No. 1672 WDA 2017,1672 WDA 2017
• Citation: 196 A.3d 208
• Parties: Golan BARAK, Appellant v. Eyal KAROLIZKI and Gal Zeev Schwartz
• Court: Pennsylvania Superior Court

196 A.3d 208

Golan BARAK, Appellant

v.Eyal KAROLIZKI and Gal Zeev Schwartz

No. 1672 WDA 2017

Superior Court of Pennsylvania.

Argued July 17, 2018

Filed September 18, 2018

Charles C. Hasson, Bridgeville, for appellant.

Wayne B. Cobb, II, Monaca, for appellees.

BEFORE: OTT, J., KUNSELMAN, J. AND MUSMANNO, J.

OPINION BY KUNSELMAN, J.:

I. Introduction

Golan Barak filed a lis pendens¹ in the Allegheny County Department of Court Records' judgment index against a certain piece of real estate.² In reviewing the lis pendens , the trial court applied the wrong legal test – namely, the standard for a preliminary injunction – and ordered the court clerks to remove the lis pendens from their judgment index. In that same order, the trial court also erroneously directed that the proceeds from a sale of the real estate be placed into escrow pending this litigation's outcome. Mr. Barak appeals that order, and we vacate it in both respects. However, jurisdictional concerns and judicial restraint require us to remand, so a trial judge can apply the second part of Pennsylvania's lis pendens law in the first instance.

II. Factual Background

In January of 2016, Mr. Barak filed a "Praecipe for Writ of Summons in Equity – Index as Lis Pendens " against Eyal Karolizki and Gal Zeev Schwartz to litigate ownership of a piece of real estate in Wilkinsburg. Mr. Barak's complaint contains one count of quiet title. Through it, he prays for (1) the voiding of Mr. Karolizki and Mr. Schwartz's deed and (2) restoration of his title. See Barak's Second Amended Complaint at 5.

After filing an answer and new matter, Mr. Karolizki and Mr. Schwartz moved the trial court to strike Mr. Barak's lis pendens , because they had found a potential buyer for the property. However, the buyer would not consummate the sale subject to the lis pendens .

The trial judge conducted a hearing on their motion to strike. Instead of presenting any competent testimony or evidence of record to prove that the equities required removal of the lis pendens , counsel for Mr. Karolizki and Mr. Schwartz offered the court his version of the facts and the law. The attorney even brought someone out of the gallery, who, without taking an oath or affirmation, identified herself as "Hope Feldman ... a real estate broker" to give her opinions on the property. N.T., 10/26/17, at 34. Thus, the defendants' attorney called no actual witnesses, moved the admission of no exhibits, and produced no record in support of the motion to strike the lis pendens .

In Mr. Barak's complaint, which we will accept as true due to the lack of any contradictory evidence from the defendants, he claims to be the rightful owner of the Wilkinsburg property. He further alleges that he attempted to sell it to Alon Rimoni in 2015,³ and they entered into a sales agreement to do so. At the closing, after executing a deed of transfer to Mr. Rimoni, Mr. Barak learned that Mr. Rimoni did not bring any money to pay for the land. However, Mr. Barak did not tear up or void the signature page of the executed deed.

Instead, Maximillian F. Beier, Esq., the attorney facilitating the closing, agreed, in writing, to hold Mr. Barak's executed deed in escrow until Mr. Rimoni produced the funds. See Exhibit D of Second Amended Complaint. A few days later, at the direction of Mr. Rimoni, Attorney Beier used Mr. Barak's signature page as grantor from the deed in escrow and attached it to a new deed. This new deed purported to transfer title from Mr. Barak directly to Mr. Karolizki and Mr. Schwartz. Attorney Beier recorded this fraudulent deed in the Allegheny County Department of Real Estate.⁴

Mr. Barak says he received no compensation from that transfer. He wants to regain legal title to the land, so he sued Mr. Karolizki and Mr. Schwartz in this action.

At the hearing on the lis pendens , counsel for Mr. Karolizki and Mr. Schwartz argued that, to maintain a lis pendens in the court's records, "plaintiffs have to show six things under the case law ... because the courts have said already ... that a lis pendens acts as an injunction." N.T., 10/26/17, at 12-13.

After the defendants' attorney explained in detail why Mr. Barak did not deserve a preliminary injunction, he offered a convenient solution:

Now, what I have proposed ... is that we allow the lis pendens to be removed and ... the money from the sale be placed into the Department of Court Records, and it cannot be touched by any party during this litigation. In fact, what I am proposing ... [is] that we would need a court order ... [to] release the funds at the conclusion of the litigation, not before. And whoever wins takes the money.

Id. at 19. Without even hearing Mr. Barak's side of the case, the trial judge decided that the "escrow sounds like a good idea to me." Id. at 20.

But Mr. Barak's attorney, skeptical of defense counsel's proposal, still wished to be heard. "Your Honor, if I may," he interrupted, "Your Honor, Chris Hasson for Golan Barak who's the plaintiff in this matter." Id.

Attorney Hasson then attempted to draw the judge's attention to a chart and several documents he had passed to the bench. But he managed two sentences before the judge, fixated on defense counsel's proposal, asked:

THE COURT: Well, what's wrong with the escrow?

HASSON: My client doesn't want to sell the property. He wants to keep the property.

THE COURT: Well, he sold it already.

HASSON: He did not sell it already.

THE COURT: What was he doing in Beier's office?

HASSON: He was attempting to sell the property, but the proceeds for the sale were never produced.

THE COURT: Well –

HASSON: If Your Honor will give me a moment to explain what happened ...

THE COURT: You're going into the whole program. I want to know why escrow isn't a good thing.

Id. at 20-21.

After discussing purchase prices, various offers, and where the parties live, the judge allowed Attorney Hasson to present his argument. See id. at 22-26. He explained that his client filed suit to undo the allegedly fraudulent deed that Attorney Beier had created and recorded. He also said that Mr. Barak has a separate case pending against Attorney Beier for malpractice, in which Attorney Beier filed an answer admitting "that he took the deed that was signed" by Mr. Barak, "pulled the coversheet off of that deed, and he prepared a new coversheet that showed the deed going from Golan Barak to the defendants in this case, and then he recorded that deed." Id. at 26.

After this exchange, the hearing went far afield. The judge referenced the unrelated case of DiSalle v. P.G. Publishing Company , 375 Pa.Super. 510, 544 A.2d 1345 (1988). Opposing counsel argued with one another. Then, Ms. Feldman came forward with her unsworn statements. She said that the property had fallen into disrepair and "[t]axes have not been paid since Mr. Barak took over the property." Id. at 34.

Attorney Hasson responded by saying that Mr. Barak had:

paid the taxes when he owned it. [Ms. Feldman's] clients have been on the deed for two years and have never paid the taxes – her clients have not paid the taxes since they've been on the deed. Of course my client hasn't paid the taxes. He doesn't have his name on the deed. They don't even allow him in the property. They won't even allow him to have an opinion about the sales value here. If the property is under disrepair, that's their fault. The taxes have not been paid, that's their fault.

Id.

THE COURT: The disrepair is hardly their fault.

HASSON: How is it not their fault? They've had title to the property –

THE COURT: Disrepair in two years?

HASSON: First of all, the house is worth $300,000.

THE COURT: No. no. This case does not pass the smell test. I'll sign [the defendants'] order.

* * *

HASSON: A query, Your Honor. Under your order, you're removing the lis pendens . They're clearly going to sell the property. They have an agreement to sell the property. My client has a pending lawsuit to quiet title. That's the only claim, one count to quiet title. He proves his case and comes back –

THE COURT: He gets the money.

HASSON: Comes back in six months and proves that he doesn't want the money, he wants the title –

THE COURT: Well, too bad.

HASSON: Is that the Court's position?

THE COURT: Too bad.

Id. at 35-36.

The trial judge signed the order removing Mr. Barak's lis pendens from the judgment index and simultaneously ordered the court clerks to hold any proceeds from a sale in escrow until the end of the quiet title action.

On November 3, 2017, Mr. Barak filed this appeal. Two weeks later, this Court issued a per curium rule to show cause why it should not quash his appeal as interlocutory, pursuant to Levitt v. Patrick , 976 A.2d 581 (Pa. Super 2009) (holding that, if any claim remains outstanding, then the order is generally not appealable).

Counsel for Mr. Barak filed an answer to the rule to show cause. Mr. Karolizki and Mr. Schwartz did not respond. This Court then discharged its rule and deferred the question of whether a party may immediately appeal an order striking lis pendens to this panel.

III. Analysis

Mr. Barak's appellate brief contains two issues. The first challenges the striking of his lis pendens as an abuse of discretion and legal error. See Barak's Brief at 4. Among other things, Mr. Barak argues that the trial judge erred as a matter of law when he applied the preliminary-injunction test to the lis pendens . Mr. Barak's second issue claims that the order removing his lis pendens "ignored the admitted fraud of Attorney Beier." Id.

A. Whether an order striking a lis pendens is immediately appealable.

Preliminarily, however, we must resolve the jurisdictional question that this Court raised in November of 2017 – i.e. , whether an order striking lis pendens is interlocutory.

Although no party has challenged our jurisdiction on such grounds, we may always review our jurisdiction sua sponte . See, e.g., M. London, Inc. v. Fedders Corp. , 306 Pa.Super. 103, 452 A.2d 236, 237 (1982). "Jurisdiction is purely a question of law; the appellate standard of review...