Lamm, D. v. Brook Lenfest (memorandum)
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J-A19022-13 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 DAVIN S. LAMM AND MARC WISER IN THE SUPERIOR COURT OF PENNSYLVANIA Appellees v. BROOK LENFEST, MARINER CHESTNUT HOLDINGS, LLC, MARINER CHESTNUT PARTNERS, LP AND CHESTNUT PROPERTY GP, LLC Appellants No. 2955 EDA 2012 Appeal from the Order September 20, 2012 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 002232 May Term 2009 BEFORE: BENDER, PANELLA, and FITZGERALD,* JJ. MEMORANDUM BY PANELLA, J. FILED JULY 02, 2014 Appellants, Brook Lenfest, Mariner Chestnut Holdings, LLC, Mariner Chestnut Partners, LP, and Chestnut Property GP, LLC (collectively, Honorable Mark I. Bernstein, Court of Common Pleas of Philadelphia County, which accepted the Final Report of Findings with Regard to General Partner Activities and Auction Sale of Assets and appointed Davin S. Lamm as appeal. A detailed recitation of the extensive facts and procedural history of this case is not essential to our disposition of the instant appeal. * Former Justice specially assigned to the Superior Court. Briefly, J-A19022-13 Appellees initiated this action for breach of contract and breach of fiduciary duty. Appellees also requested an accounting and a court-supervised dissolution of the Partnership. Following discovery, all parties filed cross- motions for summary judgment. The trial court disposed of the motions for summary judgment by orders dated February 11, 2011 and April 5, 2011. The trial court also issued an order appointing Eric Freed, Esquire, as a Liquidating Trustee to evaluate all assets of the partnership, accumulating all assets and dissolving the partnership. Order, 4/5/11. On appeal, a panel of appointing the Liquidating Trustee. [Subsequent thereto, t]he Liquidating Trustee faithfully and diligently performed his duties, conducted a fair and thorough review of partnership activities and issued a final Trustee determined that significant partnership assets may exist in the form of a claim against the former general partner, Brook Lenfest. However, because a third party refused to voluntarily provide documentation and the Liquidating Trustee was not permitted to subpoena third party records, the Liquidating part of [the former general partner], but [it] is uncertain The Liquidating Trustee determined that at the same time the general partner represented to the limited partners and the public that the property located at 1441 Chestnut Street, the only partnership asset, was to be auctioned for use as a parking lot, the general partner had in fact secured an agreement or -2- J-A19022-13 agreement in principle to develop that property as a luxury Starwood Hotel. Accordingly, the partnership has the potential claim that the general partner in breach of his duties arranged to transfer the only partnership asset in adequate consideration to a different entity he controlled, for the exact purposes for which Mariner Chestnut Partners, L.P., had been created. Accordingly, by Order dated March 20, 2012, the [trial court] directed that a meeting of all partners be convened and the Liquidating Trustee determine whether any individual partner, at his own personal expense, was prepared to pursue this litigation on behalf of the partnership. The Liquidating Trustee reported that limited partners Davin S. Lamm and Marc Wise were prepared to pursue that litigation on behalf of the partnership at their own personal expense. The [c]ourt entered an Order adopting the final report7 and replacing the liquidating trustee with limited partner Davin S. Lamm as Receiver for limited purposes. So that this matter, which has already been in litigation for three and one half years, not remain interminably dormant, the [trial court] ordered that litigation based on the potential claims s final report must be filed within 90 days or the partnership shall be immediately dissolved and all remaining assets distributed in accord with the partnership agreement. The [c]ourt further ordered that in the event the Receiver timely file[s] such litigation, upon termination shall be paid and the remainder of any recovered assets shall be distributed to the partners in accord with the partnership agreement or as ordered by a court and the partnership thereafter dissolved. It is from this Order of September 20, 2012, that [Appellants] appeal. 7 The adoption Order specifically referenced that no factual findings were being made because the purpose of appointing the Liquidating Trustee was not to pursue potential claims but merely to identify (and if possible accumulate) potential assets prior to liquidating. This task was faithfully, diligently and admirably pursued by the Liquidating Trustee even though no definitive conclusion could be reached. Trial Court Revised Opinion, 5/11/12 at 1-3 (some footnotes omitted). -3- J-A19022-13 On appeal, Appellants seek to raise the following issues for our review: 1. motion and adopting and accepting its findings and conclusions when the decision was not based on adversary proceedings the [c]ourt made no findings of fact and the conclusions with record evidence? 2. Did the [c]ourt err in allowing a derivative action to proceed where the Liquidating Trustee was unable to identify any damages suffered by the limited partnership, but was empowered to seek information regarding potential damages, including by the issuance of a third party subpoena? 3. Did the [c]ourt err in appointing a self-interested receiver that was adverse to the limited partnership in litigation and filed a meritless appeal against the limited partnership? 4. Did the [c]ourt err in prospectively granting attorney fees for actions not yet initiated that will be heard by other judges? 5. Did the [c]ourt err by engaging in ex parte communications with the Liquidating Trustee, declaring the Liquidating Trustee in its favor while making no factual findings and approving the fees and costs of the Liquidating Trustee and its counsel in an amount in excess of $500,000 without conducting a hearing or considering any evidence regarding the propriety of the fees and costs? Ap of September 20, 2012, from which Appellants take their appeal, is not a final order. The Pennsylvania Supreme Court has discussed the finality of orders as follows: It is, of course, well settled that an appeal will lie only from a final order unless otherwise permitted by statute. A final order is one which usually ends the litigation, or alternatively, disposes of the entire case. In determining what constitutes a final order -4- J-A19022-13 necessarily be ascertained from the face of a decree alone, nor simply from the technical effect of the adjudication. The finality of an order is a judicial conclusion which can be reached only if the practical consequence of the order by the trial court is party from presenting the merits of his claim to the lower court. Grant v. Blaine, 582 Pa. 1, 3, 868 A.2d 400, 402 (2005) (citing Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978)). Appellants do not argue that the instant appeal is authorized by appointing replacing the Liquidating Trustee with David S. Lamm as Receiver to pursue any potential litigation based upon the claims made in the Lamm as the receiver and directing him to file a new lawsuit or dissolve the Appellees counter that litigation on behalf of the partnership based on the claims identified in the order or prosecute or to institute in the name of Mariner Chestnut Partners, L.P. any and all suits or other legal proceedings, in this Commonwealth or elsewhere, and to abandon the prosecution of claims -5- J-A19022-13 -18 (citing Orders dated September 20, 2012 and April 5, 2011). order appointing Davin S. Lamm as receiver is not a final and appealable order was entered. Rather, we are persuaded by the argument advanced by Appellees that the September 20, 2012 order was merely a continuation of merits of any claim in the court below. Moreover, we find that while the September order appointing the receiver surely authorizes the pursuit of any potential litigation, there is no guarantee that any litigation will result.1 Accordingly, as we find that the September 20, 2012 order does not constitute a final and appealable order, we are constrained to quash ____________________________________________ 1 To the extent that the court adopted the final report of the Liquidating Trustee, we note that it appears to have done so solely in order to advance the proceedings in the case, and specifically did not make any factual findings with regards to the averments made therein. Order, 9/20/12 n.7. -6- J-A19022-13 remaining claims at this time.2 Appeal quashed. Jurisdiction relinquished. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 7/2/2014 ____________________________________________ 2 ability to raise any remaining claims when the matter is ripe for adjudication. -7-
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