Dedicated Nursing Assoc. v. Midwest Geriatric

• Court: Superior Court of Pennsylvania
• Decided: February 28, 2025
• Docket: 372 WDA 2024
• Status: Unpublished

Opinion

J-A26006-24

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

DEDICATED NURSING ASSOCIATES, : IN THE SUPERIOR COURT OF INC. : PENNSYLVANIA : Appellant : : v. : : MIDWEST GERIATRIC MANAGEMENT, : LLC D/B/A MGM HEALTHCARE; : MIDWEST GERIATRIC MANAGEMENT, : LLC D/B/A FRANKLIN WOODS : HEALTH CARE, LLC; FRANKLIN : WOODS HEALTH CARE, LLC D/B/A : FRANKLIN WOODS NURSING AND : REHABILITATION CENTER; : FRANKLIN WOODS LEASING, LLC; : AND PROVIDENCE HEALTHCARE : MANAGEMENT, INC. D/B/A : WOODVIEW CARE AND : No. 372 WDA 2024 REHABILITATION :

Appeal from the Order Entered March 5, 2024 In the Court of Common Pleas of Westmoreland County Civil Division at No(s): Case No. 5630 of 2017

BEFORE: BOWES, J., BECK, J., and BENDER, P.J.E.

MEMORANDUM BY BOWES, J.: FILED: February 28, 2025

Dedicated Nursing Associates, Inc. (“DNA”) appeals from the order

granting its motion for determination of finality with respect to the trial court’s

grant of partial summary judgment in favor of Midwest Geriatric Management,

LLC d/b/a MGM Healthcare and d/b/a Franklin Woods Health Care, LLC

(“MGM”). We affirm.

We glean the following background from the certified record. On

November 22, 2016, DNA entered into an agreement with Franklin Woods J-A26006-24

Health Care, LLC (“FWHC”), d/b/a Franklin Woods Nursing and Rehabilitation

Center (“Franklin Woods”), to provide nursing staff and related services.

FWHC purportedly did not render full payment under the contract, and DNA

tried unsuccessfully for several months to collect on the amount owed, which

exceeded $75,000. During communications with counsel for FWHC, DNA was

informed that FWHC had transferred control of the nursing facility to several

other entities and had then gone out of business. The primary legal document

effectuating the transfer was an Operations Transfer Agreement (“OTA”),

which was executed by a Judah Bienstock on behalf of, among other

companies, FWHC. Critically, MGM, the appellee herein, was not listed on the

OTA anywhere. Additionally, Mr. Bienstock, although alleged to be affiliated

with MGM, did not conduct any action on behalf of MGM as part of the transfer

of Franklin Woods.

DNA subsequently filed a complaint against FWHC and MGM, asserting

one count of breach of contract against each entity. Therein, DNA stated its

belief that MGM “owned and operated” FWHC at the time of the breach. During

the pendency of the matter, DNA amended the complaint two additional times,

and the parties engaged in discovery.1 The third amended complaint stated

four counts against MGM: breach of contract as a third-party beneficiary,

breach of contract based on joint and several liability, unjust enrichment, and

actual fraud pursuant to 12 Pa.C.S. § 5104 of the Pennsylvania Uniform ____________________________________________

1 The third amended complaint named several other defendants; however, they are not implicated in this appeal.

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Voidable Transfer Act (“PUVTA”). By the actual fraud count, DNA sought to

set aside FWHC’s transfer of Franklin Woods. DNA more particularly

contended that Mr. Bienstock was both a managing member of FWHC and the

owner and registered agent of MGM, and that his actions relating to the

transaction were taken on behalf of both entities.

MGM filed a motion for summary judgment as to all counts. After

considering briefs and argument, the trial court granted the motion as to the

breach of contract claims but denied it as to unjust enrichment. After the

court was informed that it had not disposed of the claim for actual fraud, it

entered an amended order on January 8, 2023, granting summary judgment

as to that count. DNA subsequently filed a motion for determination of finality

pursuant to Pa.R.A.P. 341(c)(1), which the court granted.

This timely appeal followed. Both DNA and the trial court complied with

Pa.R.A.P. 1925. DNA presents two issues, which we have reordered for ease

of disposition:

1. Whether [MGM]’s motion for summary judgment should not have been granted as to actual fraud when a genuine issue of material facts exists as to whether [MGM] caused the transfer of the skilled nursing facility at issue in this matter.

2. Whether [MGM]’s motion for summary judgment should not have been granted as to actual fraud when a genuine issue of material fact exists as to whether [MGM] is a “debtor” as contemplated by the [PUVTA] pursuant to 12 Pa.C.S. § 5101(b).

DNA’s brief at 5-6.

We begin with the legal principles applicable to summary judgment:

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We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Only where there is no [genuine issue as to any] material fact and it is clear that the moving party is entitled to judgment as a matter of law will summary judgment be entered. Our scope of review of a trial court’s order granting or denying summary judgment is plenary, and our standard of review is clear: the trial court’s order will be reversed only where it is established that the court committed an error of law or abused its discretion.

Shellenberger v. Kreider Farms, 288 A.3d 898, 905 (Pa.Super. 2023)

(cleaned up).

The “failure of a nonmoving party to adduce sufficient evidence on an

issue essential to his case and on which he bears the burden of proof

establishes the entitlement of the moving party to judgment as a matter of

law.” Id. (cleaned up). However, “[i]f there is evidence that would allow a

fact-finder to render a verdict in favor of the non-moving party, then summary

judgment should be denied.” Id. at 905-06 (cleaned up). Accordingly, it is

this Court’s responsibility “to determine whether the record either establishes

that the material facts are undisputed or contains insufficient evidence of facts

to make out a prima facie cause of action, such that there is no issue to be

decided by the fact-finder.” Id. at 905.

Here, DNA asserted against MGM one count of actual fraud pursuant to

§ 5104(a)(1) of the PUVTA.2 This section is derived from the former Uniform

Fraudulent Conveyance Act, the primary purpose of which was “to protect

____________________________________________

2 Prior to an amendment, PUVTA was known as the Pennsylvania Uniform Fraudulent Transfer Act. See 12 Pa.C.S. § 5101(a) (in effect February 1, 1994 to February 19, 2018).

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unsecured creditors against transfers and obligations injurious to their

rights[.]” 12 Pa.C.S. § 5101, cmt. 3. Generally, under the PUVTA, “[i]f a

creditor proves that a transfer was fraudulent under [§] 5104 . . ., he may

have the transfer set aside to the extent necessary to satisfy his claim.”

Xtreme Caged Combat v. Zarro, 247 A.3d 42, 48 (Pa.Super. 2021) (citation

omitted).

The specific section relied upon by DNA provides as follows:

(a) General rule.--A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

(1) with actual intent to hinder, delay or defraud any creditor of the debtor[.]

12 Pa.C.S. § 5104 (emphasis added). Therefore, beyond showing an intent

to hinder, delay, or defraud, to succeed on its claim DNA was required to

establish both that MGM was a “debtor” and that it made the transfer of

Franklin Woods.

In its first issue, DNA argues that summary judgment was inappropriate

since there was a factual dispute as to whether MGM transferred the control

of Franklin Woods to another entity before FWHC shut down operations. See

DNA’s brief at 16. Next, and relatedly, it contends that the court incorrectly

determined that MGM did not satisfy the definition of being a “debtor” as

required by the PUVTA. Id. at 12-16. In support of its first claim, DNA notes

the following averments from its third amended complaint demonstrated a

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question as to whether there was a fraudulent transfer of Franklin Woods: (1)

MGM “owned and operated” the nursing facility in question; (2) MGM “caused

the transfer” of control of the facility from FWHC to other entities; (3) Mr.

Bienstock was both the owner of MGM and the signatory of the OTA and bill

of sale that shifted control of Franklin Woods; (4) and MGM delayed payments

due to DNA until FWHC went out of business immediately after the transfer.

Id. at 16-17.

Beyond these allegations, DNA also highlights evidence from discovery

purporting to buttress its claim that MGM caused the transfer of Franklin

Woods. It points to an MGM employee handbook which demonstrated that

MGM “owned, operated[,] and had the ability to effectuate a transfer, sale[,]

or conveyance” of the nursing facility. Id. at 17. DNA also proclaims in its

brief, without citation or discussion, that MGM’s written discovery responses

raise a dispute of fact. Id. It further argues that a factual dispute was

presented through the deposition testimony of Mr. Bienstock, as MGM’s

corporate designee, since he stated that he believed that “[FWHC] still exists”

despite it having “gone out of business.” Id. Finally, DNA asserts that a

judgment entered in an Ohio trial court against MGM “from an analogous fact

pattern to the instant matter” raises a genuine issue of material fact. Id. at

18; 9-10 (identifying without significant discussion a case involving Agera

Energy as the plaintiff against Christopher Coleman d/b/a MGM).

In its Rule 1925(a) opinion, the trial court indicated that DNA did not

set forth evidence relating to MGM having caused the transfer in question,

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regardless of any showing that MGM may have held some ownership interest

as to either FWHC or Franklin Woods itself. It examined the OTA and bill of

sale and noted that they were executed by Mr. Bienstock as part of the

transaction on behalf of several businesses, none of which was MGM. See

Trial Court Opinion, 5/22/24, at 5. The court stated that “[e]ven if Mr.

Bienstock also served in some capacity for MGM, the documentation does not

evidence any action taken by [him] on behalf of MGM.” Id. It also found that

the other proof cited by DNA, including discovery responses, the employee

handbook, and the like, “may establish an ownership interest between MGM

and Franklin Woods, but none of that . . . changes the fact that the transfer

at issue, which [DNA] seeks to have set aside as fraudulent, was done

completely by [FWHC] with no alleged or established involvement of MGM.”

Id. at 5-6. The court therefore concluded that without proof of this element,

DNA could not succeed on its actual fraud claim.3

For its part, MGM likewise contends that DNA’s own documentation

verifies that FWHC made the transaction in question, not MGM. See MGM’s

brief at 12. It accuses DNA of relying solely on its pleadings to survive

summary judgment, instead of adducing relevant evidence. Id. at 12-13.

MGM faults DNA for claiming that certain discovery responses support its claim

without specifying or discussing them. Id. at 15. It also maintains that

3 We note that within its third amended complaint, DNA did not seek to pierce

the corporate veil so as to tie Mr. Bienstock’s actions on behalf of FWHC to MGM.

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whether Mr. Bienstock believed that FWHC survived as an entity after the

transaction involving Franklin Woods has no bearing on whether MGM caused

the transfer. Id. at 16. MGM finally states that DNA took no steps to

adequately explain on appeal how an Ohio case involving Agera Energy and a

motion for summary judgment filed by it as a plaintiff was applicable to this

case. Id. at 16-17.

Upon review, we conclude that the trial court did not commit an error of

law or abuse its discretion in dismissing DNA’s actual fraud claim. Assuming

for the sake of argument that MGM satisfied the definition of a “debtor”

pursuant to the PUVTA, as DNA contends, we nevertheless agree with MGM

and the court that DNA has failed to prove MGM’s involvement in the

purportedly fraudulent transaction in dispute. At bottom, DNA argues that it

alleged sufficient facts demonstrating that: (1) MGM had control over Franklin

Woods and/or FWHC through Mr. Bienstock; and (2) evidence produced

throughout discovery showed that MGM had the power to effectuate the

transfer of Franklin Woods. However, even accepting that as true, that is not

enough to survive summary judgment.

A defending party is required to do more than rest upon the allegations

in the complaint. See, e.g., Finder v. Crawford, 167 A.3d 40, 44 (Pa.Super.

2017) (“Where the nonmoving party bears the burden of proof on an issue,

he may not merely rely on his pleadings or answers in order to survive

summary judgment.”). The burden was therefore on DNA to provide

evidence, beyond the averments in its complaint, that MGM caused the

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transfer of control of Franklin Woods. At best, DNA demonstrated that MGM

had some authority over Franklin Woods, either directly or through its

ownership interests in FWHC. The trial court correctly noted that proof of

MGM having the ability to sell or transition Franklin Woods was not evidence

that it, in fact, did so here.

Rather, the documents relied upon by DNA make it clear that MGM was

not involved in the deal in any capacity. The OTA was executed by six different

entities listed as the Current Operator of Franklin Woods and six other entities

as the New Operator to take over control. MGM was not identified in the

agreement. Further, Mr. Bienstock, who executed the OTA as a manager on

behalf of FWHC and the Current Operator companies, did not execute any

document on behalf of MGM. In short, while DNA may have adduced evidence

showing that MGM perhaps had the power to effectuate this transaction, there

is no evidence that it exercised that power and made the transfer. Without

this, DNA cannot succeed on its PUVTA actual fraud claim as a matter of law.

See 12 Pa.C.S. § 5104(a)(1) (permitting a court to set aside a transfer “if the

debtor made the transfer”).

Additionally, to the extent that DNA suggests in its brief that written

discovery responses provided material evidence to overcome summary

judgment, it failed to develop this position on appeal. It did not cite or analyze

any specific discovery responses, and we will not do so on DNA’s behalf. See

9795 Perry Highway Management, LLC v. Bernard, 273 A.3d 1098, 1103

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(Pa.Super. 2022) (“This Court will not act as counsel and will not develop

arguments on behalf of an appellant.” (citation omitted)).

Ultimately, we agree with the trial court that DNA did not establish a

prima facie case of actual fraud, and therefore there was “no issue to be

decided by the fact-finder.” Shellenberger, 288 A.3d 905. As a result,

summary judgment was properly entered in favor of MGM as to that count.

Order affirmed.

DATE: 02/28/2025

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