ITOCHU INTERNATIONAL INC. v. DEVON ROBOTICS, LLC et al

Filing 256

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE J. CURTIS JOYNER ON 5/22/2014. 5/28/2014 ENTERED AND COPIES MAILED, E-MAILED, USM.(kp, ) Modified on 5/28/2014 (afm, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ITOCHU INTERNATIONAL,

INC.,
Plaintiff,

CIVIL ACTION
NO. 09-cv-1819

v.

-----

CONSOLIDATED WITH

DEVON ROBOTICS, LLC, ET. AL.,
Defendants.

NO. 09-cv-4123

MEMORANDUM

Before the Court are ITOCHU INTERNATIONAL INC. and Medsurg
Specialty Devices, Inc.'s Motion for Order Determining Ownership
of Dr. John A. Bennett's Eight Vehicles (Case No. 9-4123, Doc.
No. 251), Dr. John Bennett's Response in Opposition Thereto (Doc.
No. 254)

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and ITOCHU INTERNATIONAL INC. and Medsurg Specialty

Devices, Inc.'s Reply in Further Support Thereof

(Doc. No. 255).

For the following reasons, it is hereby ORDERED that the Motion
is GRANTED in part.
I .

BACKGROUND
The facts of this case are known to the Court and the

parties, and the Court will recount only those facts pertinent to
this motion. The Court entered final judgment in favor of ITOCHU
INTERNATIONAL INC.

("Itochu") and Medsurg Specialty Devices, Inc.

("Medsurg") on October 4, 2013, in the total amount of
$14,357,631.04.

(Case No. 9-4123, Doc. No. 104). Since that time,
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judgment debtors Dr. John Bennett and his two companies, Devon
Robotics and Devon Health Services ("judgment debtors"), have not
paid any amount of the judgment. The present motion, then,
represents a part of ITOCHU's continued efforts to enforce its
judgment.
In October 2013, ITOCHU filed praecipes for writs of
execution against, in relevant part, Dr. Bennett's estate in
Villanova, Pennsylvania, and writs of garnishment against 37
companies ITOCHU bel.ieved to be owned by Dr. Bennett.

(Doc. Nos.

107, 108). The Court issued the writs. The Court later ordered
judgment debtors to provide an inventory of their assets to aid
ITOCHU in executing its judgment (Doc. No. 193, modified by Doc.
No. 198) and required Dr. Bennett to arrange for ITOCHU's counsel
and representatives to inspect his home at 1835 County Line Road
in Villanova to identify personal property subject to levy.

(Doc.

No. 198).
The inventory was conducted on January 16, 2014. ITOCHU
submitted the inventory to the marshal, who levied on all the
personal property listed. ITOCHU's counsel then informed Dr.
Bennett's counsel that ITOCHU intended to direct the marshal to
take possession of seven vehicles listed on the inventory. In
response, Dr. Bennett filed an emergency motion to stay
execution, asserting that the seven vehicles were owned jointly
by him and his wife as tenants by the entirety, and thus not

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subject to execution.

(Doc. No. 227). After a telephone

conference with counsel for the parties, the parties agreed that
Dr. Bennett would execute a bond for the vehicles. Subsequently,
Dr. Bennett executed a bond for six of the seven vehicles.
(ITOCHU's Motion, Ex. H). ITOCHU accepted this bond.
ITOCHU now seeks a ruling determining the ownership of eight
vehicles owned by Dr. Bennett. The eight vehicles include the six
for which Dr. Bennett has posted a bond, an eighth car in the
possession of a Mr. Alphonso ("Al") Perna in Florida, 1 and a 2012
Audi A8. The makes and models of these cars, as well as their
status in relation to this litigation, are as follows:

•

2005 Jeep Grand Cherokee - bond posted

•
•

2005 Ford F150 - bond posted
2007 Ford F150

-

bond posted

•
•

2007 Mercedes Benz SL 550 - bond posted

•
•
•

2007 Cadillac Escalade - bond posted

2007 BMW 750Li - bond posted

2012 Audi A8 - no bond posted
2006 Cadillac Escalade - in possession of Al Perna in
Florida

II.

ENTIRETIES PROPERTY UNDER PENNSYLVANIA LAW

ITOCHU argues that the titles to the vehicles at issue

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Al Perna is employed by Devon Office Furniture.
Response, Ex. B at 20).

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(Dr. Bennett's

certify that they are owned exclusively by Dr. Bennett. Because
the titles to the cars name only Dr. Bennett, ITOCHU asserts,
they are his sole property and are subject to execution. Dr.
Bennett counters that other factors, not the title of the
vehicles, should guide the Court's analysis. Dr. Bennett points
to the fact that the vehicles were acquired during the marriage
of Nance DiRocco and Dr. Bennett, were purchased with funds from
two joint bank accounts owned by the couple, and are insured
jointly. Moreover, the vehicles were intended to be and are used
jointly by Ms. DiRocco, Dr. Bennett, and their children. Dr.
Bennett asserts that the vehicles are not subject to execution
because they are owned by Ms. DiRocco and Dr. Bennett as tenants
by the entirety.
Under Pennsylvania law, marital property that is held by
spouses as tenants by the entirety is not subject to the debtorspouse' s creditors. Livingston v. Unis, 659 A.2d 606, 611 (Pa.
Cornrow. Ct. 1995); see also In re Brannon, 476 F.3d 170, 173 (3d
Cir. 2007). A well-noted exception to this rule, however, is if
there is evidence establishing fraud in the conveyance of
individual property of a spouse to both spouses as tenants by the
entirety. Garden City Shopping Center, Inc. v. Super General
Stores, 29 Pa. D. & C.3d 319, 332-34 (Ct. Comm. Pl. 1982). If
fraud is proven, the entireties property is subject to execution.
Id.

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Tenancy by the entirety is a form of ownership under
Pennsylvania law in which each spouse has an undivided interest
in the possession and enjoyment of the whole property and all of
the rights arising from the possession. Clingerman v. Sadowski,
519 A.2d 378, 380-81 (Pa. 1986). This type of ownership is
applicable to personal as well as real property. Pichler v.
Unite, 457 F.Supp.2d 524, 528 n.3

(E.D. Pa. 2006), rev'd in part

on other grounds, 541 F.3d 380 (3d Cir. 2008); In re Denillo, 309
B.R. 866, 871 (Bankr. W.D. Pa. 2004) . 2 In order for a tenancy by
the entirety to arise, husband and wife must take identical
interests in a property. In re Brannon, 476 F.3d at 173. The
"four unities" of time, title, interest, and possession, as well
as marriage, must exist simultaneously for the tenancy to be
created. U.S. v. Strube, 58 F.Supp.2d 576, 584 (M.D. Pa.
1999) (citing U.S. v. Klimek, 952 F.Supp. 1100, 1115 (E.D. Pa.
1997)); see also In re Cosper, 106 B.R. 377, 380 (Bankr. M. D.
Pa. 1989); Hill v. Department of Corrections, 64 A.3d 1159, 1165
(Cornrow. Ct. 2013) (holding that entireties estate was not created
in inmate bank account because petitioners did not obtain title
by the same instrument) . Property conveyed to a husband and wife

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Dr. Bennett contends that Bankruptcy Court cases are inapplicable to
the issues to be considered in the present matter. However, bankruptcy courts
often consider Pennsylvania property law issues that are directly on point
here. See, ~' In re Brannon, 476 F.3d at 173 ("[b]efore addressing the
bankruptcy issues presented in this case, it will be helpful to have a brief
sketch of relevant tenancy by the entireties principles.")

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is presumed to be held as tenants by the entirety. Shapiro v.
Shapiro, 224 A.2d 164, 173 (Pa. 1966); In re Holmes' Estate, 200
A.2d 745, 747 (Pa. 1964).
"[U]nity of title exists when the married couple obtain
title by and through the same instrument." In re DelCorso, 382
B.R. 240, 252 (Bankr. E.D. Pa. 2007). In order to create unity of
title,

"[t]he instrument by which the [property] was originally

acquired must have been in the names of both husband and wife."
Id. at 254; Hill, 64 A.3d at 1165. In contrast,

"[w]hen property

such property cannot be

is titled in only one spouse

presumed to be held by a married couple as tenants by the
entirety." Id. at 253; see also In re Roberts, 81 B.R. 354, 364
(Bankr. E.D. Pa. 1987) (finding that any property titled
individually to one spouse "is not entireties property.")
III. OWNERSHIP OF THE EIGHT VEHICLES

In the case at hand, ITOCHU has provided the Court with the
title instruments to seven of the eight vehicles at issue. See
(ITOCHU's Motion, Exs. A-F, J). Each of these Certificates of
Title, issued by the Commonwealth of Pennsylvania, lists the
registered owner as either "John Bennett" or "John A. Bennett".
See id. Dr. Bennett does not contest that these vehicles are
titled in his name only. Though he argues that the vehicles are
insured and used jointly, this "unity of possession" alone is
insufficient for a determination that the vehicles constitute

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entireties property. In Re DelCorso, 382 B.R. at 252-53.
Because Dr. Bennett took sole title of the vehicles when
acquiring them, he and Ms. DiRocco did not have unity of title.
Without unity of title at the time of acquisition, the vehicles
were not acquired and are not held by Ms. DiRocco and Dr. Bennett
as tenants by the entirety. The Court finds that ITOCHU has
sustained its burden of rebutting the presumption that the
vehicles at issue are entireties property. The vehicles are
subject to execution by ITOCHU and Medsurg in satisfaction of
their judgment against Dr. Bennett.
Dr. Bennett has posted a bond for six of the vehicles at
issue. ITOCHU may now collect on the bond posted for them.
Dr. Bennett did not post a bond for the 2012 Audi AS. ITOCHU
explains that Dr. Bennett relayed to ITOCHU that the Audi is
subject to a financing lien that may take precedence over
ITOCHU's judgment lien.

(ITOCHU's Motion at 8); see also (Doc.

No. 227 at 4). However, the Court agrees with ITOCHU that
possession by a U.S. marshal would not preclude the financing
company from asserting its claim. While the Court does not have
before it the title instrument to the vehicle,

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Dr. Bennett has

asserted in previous filings that the vehicle is titled solely in
his name. See (Doc. No. 227 at 4). Moreover, ITOCHU has submitted

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ITOCHU notes that Dr. Bennett did not produce the title to this
vehicle, despite his production of other titles. (ITOCHU's Motion at 3 n.2).

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the Pennsylvania Financial Responsibility Identification Card for
the Audi, which names only John A. Bennett.

(ITOCHU's Motion, Ex.

G). The Court finds this evidence, especially Dr. Bennett's
previous filing, to be sufficient to conclude that the 2012 Audi
is his sole property and is subject to execution.
As to the 2006 Cadillac Escalade currently in the possession
of Alphonso Perna in Florida, Dr. Bennett maintains that it was
purchased by Mr. Perna in 2012 and has been in his control since
that time.

(Dr. Bennett's Response at 4). Dr. Bennett has

submitted emails and an Accounts Payable Invoice History Report
from Devon Office Furniture detailing the structure of the
payments made regarding the vehicle. Id. Ex. B. One email from
Francis Lutz, the CFO of Devon International Group, instructs
Peggy Higgins, a Devon Office Furniture employee, to create a
loan from Devon Office Furniture to Al Perna for $15,000, and
another loan from Dr. Bennett to Devon Office Furniture for the
same amount. Id. at 25. 4 Mr. Lutz indicates that Mr. Perna will
have the payments for the Escalade deducted from his salary from
Devon Offices Furniture, in bi-monthly deductions of $1,500 each.
Id. In another email, Al Perna agrees to this arrangement. Id. at
26.
Mr. Lutz explains that, after receiving the second $1,500
deduction from Mr. Perna's paycheck each month, Devon Office

4 The page numbers for Exhibit B refer to the ECF page numbering.

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Furniture will make a loan payment of $3,000 to Dr. John A.
Bennett. Id. at 25. In this way, Mr. Perna will pay the $15,000
to Dr. Bennett in five monthly installments of $3,000 (comprised
of 10 bi-monthly salary deductions of $1,500), with the money
passing through and documented on the invoices of Devon Offices
Furniture.
Dr. Bennett and Mr. Perna agreed that title to the vehicle
would be transferred after all payments had been made. Id. at 13.
As of September 4, 2012, two payments were still outstanding those for September and October 2012. Id. at 10. In the most
recent email provided to the Court, which was written in
September 2012, Mr. Perna writes to Kimberly Ni Bradaigh, the
Devon International Group Vice President of Operations, that he
is "within a few months of ownership

I need to allow my

daughters use of the car and haven't cause its in Johns name.
what do you think?" Id. at 8.
ITOCHU points out that Dr. Bennett has not provided
documentation of transfer of title from himself to Mr. Perna.
Indeed, although it appears to the Court that by September 2012
Dr. Bennett had received five $3,000 monthly checks for a total
of $15,000 from Devon Offices Furniture, see id. at 5, and it
appears that Devon Offices Furniture may have made the ten salary
deductions necessary to complete payment, see id. at 3-4, 6, the
emails between Ms. Bradaigh and Mr. Perna assert that title had

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not yet passed to Mr. Perna, and would not do so until October
2012 at the earliest. Id. at 8. Additionally, in his November 22,
2012 inventory submitted to ITOCHU, Dr. Bennett listed the
Escalade as "purchased by Al Perna in Spring 2012 but title not
yet transferred."

(ITOCHU's Motion, Ex. I at 3).

The Court declines to determine the ownership of the 2006
Cadillac Escalade at the present time. Because the parties
focused only a minority of their briefing of this Motion on the
ownership of the Escalade, the Court will give the parties time
to supplement their arguments and evidence as to this vehicle.

CONCLUSION

For the foregoing reasons, ITOCHU and Medsurg's Motion to
Determine Ownership of Dr. John A. Bennett's Eight Vehicles is
GRANTED in part. An Order follows.

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