Xtreme Caged Combat v. Zarro

In July 2012, Plaintiff filed a trademark infringement action against Steven Rosenblum (Debtor) and others in the U.S. District Court for the Eastern District of PA. In August 2014, a judgment was entered in his favor against Debtor and the other defendants in that action. On December 11, 2014, Debtor filed a voluntary bankruptcy petition under Chapter 13 of the Bankruptcy Code. In Xtreme Caged Combat v. Zarro, Plaintiff sought relief under the Pennsylvania Uniform Fraudulent Transfer Act (PUFTA), 12 Pa.C.S. §§ 5101–5110, which lapsed in 2018. At the jury trial, the court granted Defendants’ motion for a compulsory nonsuit because the court concluded that Plaintiff introduced no evidence sufficient to show that Debtor transferred property to either Defendant Rosenblum or Defendant Zarro. Plaintiff appealed, and the Pennsylvania Superior Court affirmed as to one defendant but reversed as to one defendant. Prior to addressing the merits of the appeal, the Court disposed of two of Plaintiff’s arguments. First, the law of the case doctrine did not apply. The Court explained that the rule applies only where a second judge rules on the same type of motion as the first judge. The rule did not bar the situation presented in this appeal: a judge at a later and different procedural stage of the case overruled another judge’s decision on preliminary objections even though the legal issue and record were unchanged. Second, the Court ruled that the doctrine of collateral estoppel did not apply. Because the ruling here was at trial, which was a different procedural posture from the ruling on preliminary objections, the coordinate jurisdiction rule–that a judge may generally not alter the resolution of a legal question previously decided by another judge of that court–could not limit, i.e., estop, the trial court’s authority to grant a nonsuit. As to the merits, because there was no evidence introduced at trial that Debtor transferred property to Defendant Rosenblum or that there was any fraudulent transfer, the trial court properly concluded that Plaintiff failed to prove a cause of action under 12 Pa.C.S. § 5108(b) for a money judgment against this defendant. However, the trial court erred in granting a nonsuit with respect to Defendant Zarro. The sole ground on which Defendant Zarro sought a nonsuit was that Plaintiff had failed to show that Debtor transferred property to her. Taking all reasonable inferences in Plaintiff’s favor, the evidence admitted at the trial was sufficient for a jury to find that Debtor gave property to Defendant Zarro for no consideration after Plaintiff had filed his 2012 trademark action when the debtor was no longer paying his debts as they came due.

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