DeCoatsworth v. Jones

• Decision Date: 01 May 1992
• Parties: Charles DeCOATSWORTH, Appellant, v. Louis E. JONES.
• Court: Pennsylvania Superior Court

Page 1094

607 A.2d 1094

414 Pa.Super. 589

Charles DeCOATSWORTH, Appellant, v. Louis E. JONES.

Superior Court of Pennsylvania.

Argued Jan. 9, 1992.

Filed May 1, 1992.

Charles DeCoatsworth, pro se, appellant.

Allan K. Marshall, Philadelphia, for appellee.

Before CIRILLO, TAMILIA and FORD ELLIOTT, JJ.

CIRILLO, Judge:

This is an appeal from an order entered in the Court of Common Pleas of Philadelphia County denying Charles DeCoatsworth's petition to strike judgment for the trial court's lack of jurisdiction. We reverse.

In December of 1983 a dwelling owned by Odessa and Louis Jones, as tenants by the entireties, was listed to be sold at a sheriff's sale due to the owners' failure to pay a lien of $1,700.00. Alan Alper, who arranges financing for owners in jeopardy of losing their properties, sent a notice to the Joneses' dwelling suggesting that he could help. Louis Jones ("Louis") arranged to have Alper meet him at his house on December 3, 1983, two days before the scheduled sheriff's sale. Alper took appellant Charles DeCoatsworth, a real estate investor, with him to the meeting with Louis Jones. Louis's estranged wife and co-owner of the dwelling, Odessa Jones ("Odessa"), was not at the meeting. DeCoatsworth looked over the property and left within a half hour; Alper remained for more than eight hours. At the end of their lengthy negotiations, Louis and Alper ostensibly had an agreement of sale. The agreement provided that Alper, through one of his real estate investors (here, DeCoatsworth) would pay Louis's outstanding debts on the property, refinance the property, and pay one dollar in consideration. In exchange, Louis signed a blank deed to the property with the understanding that he could continue to live in the dwelling and either pay rent (not to exceed $300.00 per month), enter into a lease-purchase agreement in which the full rental payment would be applied to the purchase price, or buy the property outright.

Alper contacted Odessa, and on December 4, 1983 she signed the blank deed in return for one thousand dollars. The next day Alper paid the judgment lien and stayed the sheriff's sale. In seeking title insurance for the property, DeCoatsworth learned of two additional mortgages on the property which, under the terms of the agreement of sale, he was obligated, but failed, to pay. On January 5, 1984, at settlement, ¹ Alper completed the deed by inserting $10,000.00 (and not one dollar as agreed) for the amount of consideration. ² Alper had the deed notarized, ³ and simultaneously assigned and delivered the deed to appellant DeCoatsworth as security for the $1,700.00 DeCoatsworth had already expended.

Later that same month Louis received a statement from DeCoatsworth outlining the three options for remaining in the house. The statement listed the total cost of repurchasing the house from DeCoatsworth as $15,000.00, which was to be repaid over twenty years at fourteen percent interest, the prevailing rate at that time. ⁴ The $15,000.00 purchase price covered, among other expenses, a $5,000.00 profit for DeCoatsworth, $3,175.00 for Alper's services in arranging the deal, and the $1,000.00 Odessa received for her signature on the deed. However, none of these charges had been agreed to in the agreement of sale.

Louis refused to pay any of DeCoatsworth's charges and remained in the house, rent free, until September of 1984 when DeCoatsworth filed a complaint to evict him. ⁵ Louis counterclaimed against DeCoatsworth, alleging fraud in the transaction that deprived him of his property, and seeking $20,000.00 in damages, plus attorney's fees. Neither Louis nor DeCoatsworth added Odessa as an indispensable party to the counterclaim, despite the fact that she was co-owner of the entireties property and therefore equally a victim of the alleged fraud. The case was tried in December of 1987 and the jury found in favor of Louis. The jury rejected DeCoatsworth's eviction claim, permitting Louis to remain in the house rent free, and awarded him $35,000.00 in damages as well. Title to the property, however, remained in DeCoatsworth's name. The post-trial motions of Louis, to have title transferred to him, and DeCoatsworth, for a new trial or judgment notwithstanding the verdict, were denied. On appeal to this court the panel affirmed the jury's verdict. ⁶ DeCoatsworth then appealed to the supreme court, but his petition for allocatur was denied in August of 1990.

Shortly thereafter, DeCoatsworth petitioned motions court, pro se, to strike the trial court judgment for that court's lack of subject matter jurisdiction over Louis's counterclaim. DeCoatsworth argued that since Louis's counterclaim alleged fraud in the transaction that deprived him of title to his property, only the legal entity that was deprived of that title could sue. The property in question was owned by both Louis and his wife, Odessa. ⁷ In Pennsylvania, a conveyance to a husband and wife, without more, creates an estate by the entireties. Brenner v. Sukenik, 410 Pa. 324, 330, 189 A.2d. 246, 249 (1963). "It is their actual marital status and not necessarily the words stated or omitted in the instrument that determines their right to take as tenants by the entireties." In Re Holmes' Estate, 414 Pa. 403, 406, 200 A.2d 745, 747 (1964), citing Ladner on Conveyancing in Pennsylvania, § 1.16 (3rd ed. 1961). Similarly, "the presumption remains that where property is held in the names of husband and wife they hold it by entireties and not as ordinary joint tenants or as tenants in common." Madden et al. v. Gosztonyi Savings and Trust Co., 331 Pa. 476, 484, 200 A. 624, 628 (1938). An entireties estate may only be severed under limited circumstances. During the lifetime of both spouses the tenancy may be severed only by a joint conveyance of the estate, by express or implied mutual agreement, or by divorce. Clingerman v. Sadowski, 513 Pa. 179, 183, 519 A.2d 378, 381 (1986). Neither party may unilaterally sever or destroy the entireties estate. Shapiro v. Shapiro, 424 Pa. 120, 136, 224 A.2d 164, 173 (1966).

Although Louis and Odessa had been estranged for decades, they had never divorced; title to the house was still in both of their names. Therefore, according to DeCoatsworth, since Louis's counterclaim addressed the circumstances which also deprived Odessa of her undivided one-half interest in the entireties property, Odessa was a necessary and indispensable party whose joinder was compulsory to establish subject matter jurisdiction. DeCoatsworth's motion to strike judgment, heard by the original trial judge, was denied. DeCoatsworth was also "ordered to pay the sum of $2,500.00 in attorney's fees for filing a petition [the] court finds blatantly frivolous." DeCoatsworth filed this timely appeal.

DeCoatsworth presents four issues for our review:

1. Did both the Trial Court and the Motions Court Err in not recognizing that Odessa Jones was an indispensable party to Louis Jones' counter-claim since the property in question was owned and sold by the entireties of Louis and Odessa Jones, husband and wife?

2. Did the trial Court lack jurisdiction to hear and decide the issues presented in Jones' counterclaim because of the absence of an indispensable party and, therefore, err in allowing the jury to reach a verdict and in entering judgment?

3. Did the Motions Court err in denying DeCoatsworth's Petition to Strike Judgment since, because of the absence of an indispensable party, the Trial Court lacked jurisdiction to render that same judgment?

4. Did the Motions Court err in finding DeCoatsworth's Petition to Strike Judgment to be "blatantly frivolous" and in taxing him $2,500.00 based on that finding?

Louis filed a motion with this court to quash DeCoatsworth's appeal, characterizing it as "a second appeal." Louis also requested $2,000.00 in attorney's fees, pursuant to 42 Pa.C.S. § 2503 and Pa.R.A.P. 2744. The motion to dismiss the appeal was denied. The request for attorney's fees was referred to this panel to be determined in conjunction with the merits of the case.

A petition to strike judgment may only be granted when a fatal defect appears on the face of the record. Nobel Well Service, Inc. v. Penn Energy, Inc., 348 Pa.Super. 267, 270, 502 A.2d 200, 202 (1985) (citations omitted). In reviewing a denial of a petition to strike judgment, we may only reverse the trial court if it committed an abuse of discretion. "The trial court abuses its discretion when it misapplies the law or when a manifestly unreasonable, biased, or prejudiced result is reached." Id., 348 Pa. Superior Ct. at 271, 502 A.2d at 202.

In his first issue DeCoatsworth contends that Odessa was an indispensable party to her husband's suit because their house was owned as a tenancy by the entireties. We agree. An indispensable party is one whose " 'rights are so connected with the claims of the litigants that no decree can be made between them without impairing such rights.' " ⁸ Patwardhan v. Brabant, 294 Pa.Super. 129, 131-132, 439 A.2d 784, 785 (1982) (citations omitted). Here, Odessa's rights were impaired. Louis, in his name alone, was awarded the $35,000.00 on the counterclaim; Odessa was awarded nothing. As one-half owner of the property, Odessa is entitled to one-half of the value of it. Furthermore, as our supreme court stated, "[o]ne must be joined who otherwise, not being bound by the decree, might assert a demand against the principal defendant which would be inequitable after the latter's performance of a decree in favor of the plaintiff." Hartley v. Langkamp & Elder, 243 Pa. 550, 555, 90 A. 402, 403 (1914). The court continued:

A party is indispensable when he has such an interest that a final decree cannot be made without affecting it, or leaving the controversy in such a condition that the final determination may be wholly inconsistent with equity and good conscience ... The rule as to indispensable parties is neither technical nor one of convenience; it...