Wednesday, December 02, 2009

execution - entireties property

State Farm v. Lincow - ED Pa. - December 1, 2009 (decision of magistrate judge)

http://www.paed.uscourts.gov/documents/opinions/09D1420P.pdf

The property at issue -- season tickets to the Philadelphia Eagles -- is not the sort that our clients are likely to have, but the principles involved are very important and relevant.

The creditor got a judgment against husband and began execution on Eagles season tickets. The judgment debtor moved for a determination of ownership, claiming that the tickets were entireties property belong to both him and his wife.

Under Pennsylvania law, a judgment creditor may execute on property held by husband and wife as tenants by the entireties only if both spouses are judgment debtors. Klebach v. Mellon Bank, N.A., 565 A.2d 448, 450 (Pa. Super. Ct. 1989). If only one spouse is the judgment debtor, entireties property is immune from process, execution, or sale. The judgment in this case was just against the husband and not the wife.
The issue of ownership of is a matter of contract interpretation. Under Pennsylvania law, when the intention of the parties is clear in the written contract, there is no need to resort to extrinsic evidence. Instead, the meaning of a clear and unequivocal written contract “must be determined by its contents alone.” Bohler-Uddeholm America, Inc. v. Ellwood Group, Inc., 247 F.3d 79, 92 (3d Cir. 2001), cert. denied, 534 U.S. 1162 (2002).

However, where the contract terms are ambiguous and susceptible to more than one reasonable interpretation, the court may receive extrinsic parol evidence to resolve the ambiguity. See id at 93. A contract “will be found ambiguous if, and only if, it is reasonably or fairly susceptible of different constructions and is capable of being understood in more senses than one and is obscure in meaning through indefiniteness of expression or has a double meaning.” Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 614 (3d Cir. 1995).

In this case, only the husband signed the agreement. However, he testified that was because there was only one signature line. In addition, the tickets were paid for in the past from a joint account, and both husband and wife are listed as ticket owners on several documents. The court thus found that the agreements are ambiguous concerning ownership, and the court considered parol evidence to resolve the ambiguities. That evidence strongly favored a finding that the property was held by the entireties.

In the alternative, even if the court found that the terms of the agreements were not ambiguous, and that the husband/signatory of the contracts was the sole owner, "this is not dispositive because under Pennsylvania law the intent of the husband and wife to hold property by the entireties should be given effect if the evidence supports that fact. See Plastipak Packaging, Inc. v. DePasquale, 937 A.2d 1106, 1110 (Pa. Super. Ct. 2007) (“[I]ntention is the cardinal and controlling element, and if intention that the husband and wife shall take as such, i.e., by entireties, sufficiently appears, it will be given effect.”) (citation omitted), appeal denied, 956 A.2d 436 (Pa. 2008) (Table).

In the absence of a writing executed by both spouses, property titled in one spouse’s name alone, but treated by both spouses during the marriage as property owned by the entireties, constitutes jointly held property. See Hengst v. Hengst, 420 A.2d 370, 370 (Pa. 1980) (applying this principle to a savings plan titled in husband’s name alone; property owned by the entireties where both spouses treated it as jointly held property during the marriage). See also In re Estate of Holmes, 200 A.2d 745, 747-48 (Pa. 1964) (shares of stock purchased by the husband with his own funds, but the certificates for which were issued in the name of the husband and wife, created a gift and an estate by the entireties).

Here, despite only the signature of the husband on the agreements, it is clear that wife and husband treated the Eagles tickets throughout their marriage as entireties property, and intended them to be held as such. This intent is confirmed by the listing of both their names on two separate agreements. Thus, under Pennsylvania law, the property must be considered as being held as tenants by the entireties. As entireties property, the Eagles Tickets, and license associated therewith, are exempt from execution.

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