Wendy Rothstein is a litigation partner in our Blue Bell office and she writes for our Pennsylvania Trial Practice Blog. Recently, Wendy highlighted a case in which the Superior Court declined to consolidate two individual judgments against a husband and wife. The bank wanted to seek the attachment of their house which is titled as “tenants by the entirety” for two individual judgments the bank obtained against the parties.
As Wendy points out, the distinction lies in the legal designation of “tenants by the entirety” and how that asset can only be attached by obtaining a single judgment against the couple. The Superior Court basically declined to rectify the Bank’s mistake in not seeking a judgment against the parties as “husband and wife” or co-defendants. Wendy writes, “[the] Superior Court found that judgments were entered pursuant to separate documents and separate transactions and thus there was not joint liability. The Court affirmed the lower court decision denying the banks request to consolidate the judgments.”
This case can also serve as an important reminder that “tenants by the entirety” can be broken whenever the parties’ divorce. By operation of law, they are no longer “tenants by the entirety” but become “tenants in common” as soon as the Decree is issued. Unless appropriate language and precautions are put into a Marital Settlement Agreement, if parties divorce before a house is sold, it is entirely possible that one party could have a judgment entered against them and their portion of the asset attached. This would make any sale or refinance virtually impossible.