CHESTNUT STREET CONSOLIDATED, LLC v. DAWARA

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CHESTNUT STREET CONSOLIDATED, LLC, : CIVIL ACTION

: NO. 21-03046

Plaintiff, :

:

v. :

:

BAHAA DAWARA, et al., :

:

Defendants. :

M E M O R A N D U M

EDUARDO C. ROBRENO, J. August 3, 2022

I. INTRODUCTION

Plaintiff Chestnut Street Consolidated, LLC (“Plaintiff” or

“CSC”) brought this case under the Pennsylvania Uniform Voidable

Transactions Act (“PUVTA”) in an effort to thwart an alleged

fraudulent transfer of assets against Bahaa Dawara and Imad

Dawara (the “Incarcerated Defendants”), as well as their

relatives, Faten Dawara (a/k/a/ Fatan Dawara), Maisaa Dawara,

Mirvat Dawara, Abeer Naim, and Haitham Albarouki (a/k/a Hitham

Albarouki) (the “Non-incarcerated Defendants”) (collectively,

“Defendants”).1

1 Plaintiff brought this action on July 8, 2021. On September

8, 2021, Plaintiff requested an entry of default be filed

against the Non-Incarcerated Defendants. The Non-Incarcerated

Defendants did not retain counsel until October 7, 2021. On or

around September 7, 2021, the Clerk of Court entered a default

against the Non-Incarcerated Defendants. On October 7, 2021,

counsel for the Non-Incarcerated Defendants entered an

Faten Dawara, Maisaa Dawara, and Mirvat Dawara are the

sisters of the Incarcerated Defendants. Abeer Naim is the wife

of Imad Dawara. Haitham Albarouki is the husband of Faten Dawara

and the brother-in-law of the Incarcerated Defendants.2

Plaintiff brings two counts under the PUVTA, 12 Pa. Stat.

§§ 5101-5114, alleging that the Incarcerated Defendants

fraudulently transferred ten properties to the Non-Incarcerated

Defendants (Count I), and that the Incarcerated Defendants

fraudulently transferred other unidentified assets to the Non-

appearance, and on October 17, 2021, the Non-Incarcerated

Defendants filed a motion to set aside the entry of default. The

Court took the motion under advisement. See Ord., ECF No. 61.

Pursuant to Federal Rule of Civil Procedure 55(c), an entry

of default may be set aside for good cause. Fed. R. Civ. P.

55(c). There is generally “a distinction between a default

standing alone and a default judgment.” Feliciano v. Reliant

Tooling Co., Ltd., 691 F.2d 653, 656 (1982). “Less substantial

grounds may be adequate for setting aside a default than would

be required opening a judgment.” Id. “District courts have

discretion in evaluating whether good cause exists to set aside

an entry of default.” Handel v. Postmaster Gen., U.S. Postal

Serv., 806 F. App’x 95, 100 (3d Cir. 2020); see id. at 99-100

(explaining that “[a]n entry of default, however, is not

necessarily everlasting” because “[a]s an operation performed by

the Clerk of Courts, and not a judge, entry of default requires

only a showing of good cause to be set aside.”).

As the Non-Incarcerated Defendants have actively

participated in this litigation since their counsel entered an

appearance, there is good cause to set aside the entry of

default. The motion to set aside default will be granted, and

the Court will consider the Non-Incarcerated Defendants’

substantive arguments herein.

2 Plaintiff has also brought this suit against several John

Doe entities. These defendants were not pursued by Plaintiff in

this case.

Incarcerated Defendants (Count II). Plaintiff additionally

requests an imposition of an accounting against all Defendants

(Count III), an imposition of a constructive trust against all

Defendants (Count IV), and injunctive relief against all

Defendants (Count V).

Plaintiff requests that the Court find Defendants violated

the PUVTA with respect to ten properties that are identified

herein. Plaintiff also requests that the Court void transfers

with respect to three of the ten properties and that the Court

award a money judgment under the PUVTA with respect to the

remaining seven properties.

The Court held a bench trial at which all parties were

heard. This memorandum constitutes the Court’s findings of fact

and conclusions of law. For the following reasons, the Court

will enter judgment in favor of Plaintiff on Count I because the

Incarcerated Defendants fraudulently transferred certain

properties in violation of the PUVTA. The Court will enjoin the

Incarcerated Defendants from further transferring their

interests in certain properties. Because Plaintiff has provided

no arguments or evidence that would allow the Court to enter

judgment in favor of Plaintiff on Counts II, III, IV, and V,

these counts will be dismissed.3

3 Count V requests that the Court enter a permanent

injunction against Defendants. Because this is a request for

II. FINDINGS OF FACT

A. The Arson

The Incarcerated Defendants previously owned and operated a

business known as RCL Management. To operate the business, the

Incarcerated Defendants leased property located at 239 Chestnut

Street, Philadelphia, Pennsylvania 19106. See Imad Dawara Dep.

19:10-11, 23-24, ECF No. 136; Pl. Ex. 5B at ¶ 7, ECF No. 117 at

198. Several months prior to February 2018, the Incarcerated

Defendants stopped operating RCL Management. See Imad Dawara

Dep. 20:3-5. On February 18, 2018, in an effort to obtain

insurance proceeds, the Incarcerated Defendants intentionally

set fire to the buildings located at 239 Chestnut Street, where

they had operated the business, and the neighboring property at

241-43 Chestnut Street causing millions of dollars in property

damages.

Plaintiff is the owner of the claims against the

Incarcerated Defendants by purchase and assignment from the

individual owners of condominium units affected by the fire.

See, e.g., Trial Tr. 8:23-25; 9:1-14, ECF No. 94. Plaintiff’s

claims relate to all but one unit at 239 Chestnut Street and

relief rather than a claim, and because a permanent injunction

will be entered as part of the relief requested under Count I,

Count V will be dismissed.

three out of the eight units located at 241-43 Chestnut Street.

The units at issue are either uninsured or underinsured.

B. The Incarcerated Defendants’ Conviction and the

Restitution Agreement

On July 18, 2019, a grand jury returned an indictment

charging the Incarcerated Defendants with one count of

conspiracy to commit arson in violation of 18 U.S.C. § 844(n),

one count of conspiracy to use fire to commit a federal felony

in violation of 18 U.S.C. § 844(m), one count of malicious

damage by means of fire of a building used in interstate

commerce in violation of 18 U.S.C. 844(i), four counts of wire

fraud in violation of 18 U.S.C. § 1343, two counts of mail fraud

in violation of 18 U.S.C. § 1341, and one count of use of fire

to commit a federal felony in violation of 18 U.S.C. 844(h).

See Pl. Tr. Ex. 5B, ECF No. 117 at 197; United States v. Dawara,

No. 19-414 (E.D. Pa.).

On October 17, 2019, an arrest warrant was executed against

the Incarcerated Defendants. In October 2020, the Incarcerated

Defendants entered into a plea agreement with the United States

Attorneys’ office, and on February 25, 2021, the Incarcerated

Defendants pled guilty before the Honorable Juan R. Sánchez of

the Eastern District of Pennsylvania to the arson conspiracy as

well as the related crimes of fraud.

On October 27, 2020, the Incarcerated Defendants

memorialized a restitution agreement with the Government (the

“Restitution Agreement”). The Restitution Agreement provided

that the Incarcerated Defendants would pay restitution to the

victims of the arson in an amount not less than $22,000,00.00.4

In June 2022, the Incarcerated Defendants were each sentenced to

a term of 108 months’ imprisonment. On June 28, 2021, the

Incarcerated Defendants were ordered to pay restitution in the

amount of $22,000,000.00. See Pl. Ex. 5E2.

Pursuant to the Restitution Agreement, the Incarcerated

Defendants agreed to liquidate seven properties which they owned

and remit the proceeds from the sale of the properties to the

Government. See Pl. Ex. P5E1, ECF No. 117 at 250-254. The seven

properties are located at:

1. 134 Garfield Avenue, Woodlyn, Pennsylvania 19094;

2. 140-142 Garfield Avenue, Woodlyn, Pennsylvania 19094;

3. 312 Fern Street, Darby, Pennsylvania 19023;

4. 1524 McKean Street, Philadelphia, Pennsylvania 19145;

5. 321 Massasoit Street, Essington, Pennsylvania 19029;

4 Imad Dawara was also responsible for harm sustained in

another case in the amount of $199,808.00 and Bahaa Dawara was

responsible for restitution in the amount of $209,727.00 in

connection with a related case. United States v. Dawara, No. 20-

104 (E.D. Pa.). Imad Dawara also agreed to pay $15,137.52 based

on material misstatements he made in which he unlawfully

received Medicaid benefits.

6. 224 Erickson Avenue, Essington, Pennsylvania 19029; and

7. 1007 Milmont Avenue, Swarthmore, Pennsylvania 19081.

The Restitution Agreement provides that the Incarcerated

Defendants “shall sell these properties in a commercially

reasonable manner, to a disinterested buyer, and at fair market

value. The defendants also shall disclose to the government the

terms of the proposed sale and provide copies of all documents

relating to the sale.” See Pl. Ex. P5E1 at ¶ 9e, ECF No. 117 at

252. The Incarcerated Defendants are also required “to remit the

net proceeds of the sale, after payment of reasonable, ordinary

costs of sale and commission, as partial payment for the

restitution.” Id. at ¶ 9(f), ECF No. 117 at 252. Pursuant to

Restitution Agreement, the Incarcerated Defendants are required

to remit an initial payment of $1,000,000.00 to the Clerk of

Court. Id. at ¶ 9(a), (d) (f).

The Restitution Agreement provides that if the Incarcerated

Defendants “remit all payments due under [the restitution]

agreement within the time period prescribed [in the agreement],

the government’s right to collect restitution shall not extend

to the” three remaining properties located at:

1. 19 Ridgeway Avenue Norwood, Pennsylvania, 19074;

2. 305 Seminole Street Essington, Pennsylvania, 19029; and

3. 407 Seminole Street Essington, Pennsylvania, 19029.

Id at ¶ 9(g). The Restitution Agreement also provides that “[i]n

the event either defendant defaults with the payments set forth

above [pursuant to the Restitution Agreement], the defendants

understand and agree that the government reserves its right to

initiate an action against [the remaining three] properties to

collect restitution as provided under applicable federal and

state law.” See id. at ¶ 9(g).

The parties agree that five of the seven5 properties subject

to the Restitution Agreement have been sold, the proceeds of

which have been remitted to the Government, and the value of the

remaining unsold properties, when sold, will fulfill the

$1,000,000.00 obligation. The parties also agree that the

Incarcerated Defendants have thus far complied with the terms of

the Restitution Agreement and the Government has not sought to

collect from the remaining three properties. However, to the

best of the Court’s knowledge, because the initial

$1,000,0000.00 restitution threshold has not yet been satisfied,

the Government has not formally waived its rights with respect

to the remaining three properties.

5 At the time Plaintiff filed its Complaint, only three

properties had been sold. Public records reveal that two more

properties that are subject to the Restitution Agreement have

since been sold.

C. The Related State Court Case

On November 25, 2019, following the Incarcerated

Defendants’ arrest, Plaintiff’s predecessors in interest sued

the Incarcerated Defendants in the Philadelphia Court of Common

Pleas for trespass to chattels, alleging that the Incarcerated

Defendants intentionally destroyed Plaintiff’s property. See

Fresher Start Inc. v. Dawara, No. 3370 (Ct. Comm. Pl.); Pl. Ex.

1A, ECF No. 117 at 5-80.6 On July 9, 2021, after the Incarcerated

Defendants pled guilty in the federal criminal case, the

Honorable Nina W. Padilla of the Court of Common Pleas entered

judgment as to liability on Plaintiff’s trespass to chattels

claim. See Pl. Ex. 1C, ECF No. 117 at 81-82. Plaintiff’s

predecessors in interest have since assigned their rights to

Plaintiff in the state court action, such that CSC is now the

named plaintiff in state court.

On April 22, 2022, the Court of Common Pleas held a hearing

to determine the amount of damages Plaintiff is entitled to with

respect to the trespass to chattels claim. On July 1, 2022, the

Court of Common Pleas found that Plaintiff’s damages amount to

$9,044,255.00. See Pl. Exs. P13, P1C, ECF Nos. 129-1, 129-2. The

6 In the state court action, Plaintiff also brought claims

for breach of the lease agreement, negligent destruction of

property, strict liability for ultra-hazardous activity, and

liability for civil conspiracy. See Pl. Ex. 1A, ECF No. 117 at

5-80.

Court of Common Pleas found that Plaintiff is entitled to this

amount less $470,000.00, which Plaintiff expects to receive

under the Restitution Agreement.7 Id. Plaintiff’s damages award

will be offset by any additional restitution received as well.

Id. Accordingly, pursuant to the judgment entered in the Court

of Common Pleas, Plaintiff is entitled to compensatory damages

in the amount of $8,574,255.00 against the Incarcerated

Defendants, jointly and severally, plus post-judgment interest

that shall accrue. Id. The Court of Common Pleas also awarded

punitive damages in the amount of $1,000,000.00 jointly and

severally. See id.8

D. The Federal Court Case and the Temporary Restraining

Order

On July 8, 2021, Plaintiff filed the present action in this

Court. Plaintiff alleges that the Incarcerated Defendants

7 The Court of Common Pleas did not specify how it determined

that Plaintiff is expected to receive $470,000.00 in

restitution.

8 At the bench trial, for support of the amount of damages

Plaintiff suffered, Plaintiff submitted the sworn affidavits of

David Ciurlino and Steven Gelbert. The affidavits also included

declarations of other individuals, including Robert Gassel and

Craig Schmitt. The affidavits and declarations offer evidence of

the damages Plaintiff suffered. See Pl. Exs. 3-4. The Court

accepted these affidavits as exhibits at trial, subject to the

qualification that they should be given little weight because

these individuals did not testify at the bench trial. Trial Tr.

7:5-7, ECF No. 94. Because the Court of Common Pleas has already

made a determination regarding the amount of damages suffered,

the Court need not determine the amount of loss suffered here or

otherwise consider these affidavits.

violated the PUVTA by fraudulently transferring assets in their

names to their relatives, the Non-Incarcerated Defendants, to

thwart Plaintiff’s ability to recover the losses it sustained.

Plaintiff alleges that the Incarcerated Defendants fraudulently

transferred title to the seven properties that are subject to

the Restitution Agreement to the Non-Incarcerated Defendants as

well as the three properties that are not currently subject to

the Restitution Agreement. Plaintiff requests that the Court

void the transfers of the three properties not subject to the

Restitution Agreement and order the Non-Incarcerated Defendants

to return the titles to the three properties to the Incarcerated

Defendants so Plaintiff may execute on the properties to satisfy

the state court judgment. Because the remaining seven properties

are subject to the Government’s Restitution Agreement, and are

therefore exempt from execution, Plaintiff requests a money

judgment for the value of those seven properties as well as

punitive damages.

On July 16, 2021, Plaintiff filed a motion for preliminary

injunction in this Court to prevent Defendants from further

transferring their interests in the properties at issue. On July

19, 2021, the Court entered a temporary restraining order with

respect to the three properties not subject to the Restitution

Agreement. With the consent of the parties, the Court extended

the temporary restraining order during the pendency of this

litigation and it remains in effect. Pursuant to Federal Rule of

Civil Procedure 65(a)(2), and with the consent of the parties,

the Court advanced a bench trial on the merits of the case and

consolidated it with a final hearing on Plaintiff’s request for

relief. See Fed. R. Civ. P. 65(a)(2).

E. Incarcerated Defendants’ Interests in the Properties

On October 26, 2019, after his arrest, Imad Dawara granted

his brother-in-law, Haitham Albarouki, power of attorney. See

Def. Ex. D11, ECF No. 118 at 126-131. On October 30, 2019, Bahaa

Dawara, following his arrest, granted his sister, Faten Dawara,

power of attorney9 to “lease, demise, sell, assign, transfer, set

over and convey property.” See Def. Ex. D12, ECF No. 118 at 133-

139; see also Bahaa Dawara Dep. 39:7-13, ECF No. 134.10

Between November 11, 2019 and November 18, 2019, the

Incarcerated Defendants’ powers of attorney, with the assistance

of counsel, began preparing documents to transfer the

Incarcerated Defendants’ interests in the properties. Between

December 2019 and February 2020, the transfers were recorded,

and, as a result, the Incarcerated Defendants, through their

powers of attorney, each transferred half of their interests in

9 The individuals who were granted power of attorney are

hereinafter jointly referred to as “powers of attorney.”

10 Bahaa Dawara later executed a second power of attorney for

Faten Dawara on January 12, 2020 to correct a typographical

error. See Def. Ex. 13.

the ten properties to a Non-Incarcerated relative. The relevant

dates of transfer are the dates which the deeds were recorded

with the requisite counties. See, e.g., In re Cowden, 337 B.R.

512, 523-24 (W.D. Pa. 2006) (finding that the relevant date of

transfer under the PUVTA is the date when the deed at issue was

recorded). The circumstances of these transfers are described

herein.

1. Properties Subject to Restitution Agreement

As noted, seven properties are subject to the Government’s

Restitution Agreement. These properties were initially owned by

either Bahaa or Imad Dawara. See Trial Tr. 32:23-25; 33:1-3, ECF

No. 94. Though the Incarcerated Defendants transferred half of

their interests in the properties to their Non-Incarcerated

relatives, the Non-Incarcerated Defendants knew at the time of

transfer that these properties truly belonged to the

Incarcerated Defendants and not to them. See Trial Tr. 54:1-7,

ECF No. 96 (Haitham Albarouki testified that the properties

always belonged to the Incarcerated Defendants rather than other

members of the Dawara family).

a. 134 Garfield Avenue, Woodlyn, Pennsylvania 19094

Prior to December 2019, Bahaa Dawara held the title to the

property at 134 Garfield Avenue. On December 31, 2019,11 Bahaa

11 The deed was prepared on November 14, 2019 and recorded on

December 31, 2019.

Dawara’s power of attorney transferred 50% of Bahaa’s interest

in the property to Faten Dawara for $1.00. See Pl. Ex. 6K. ECF

No. 117 at 368-378. The property is valued at approximately

$324,900.00. See Pl. Prop. Findings of Facts ¶ 52.12 This

property has already been sold in accordance with the

Restitution Agreement.

b. 140-142 Garfield Avenue, Woodlyn, Pennsylvania

19094

Prior to December 2019, Bahaa Dawara held the title to the

property at 140-142 Garfield Avenue. On December 31, 2019,13

Bahaa Dawara’s power of attorney transferred 50% of Bahaa’s

interest in the property to Faten Dawara for $1.00. See Pl. Ex.

6L, ECF No. 117 at 380-390. This property is valued at

approximately $289,000.00. See Pl. Prop. Findings of Facts ¶ 52.

This property has already been sold in accordance with the

Restitution Agreement.

c. 312 Fern Street, Darby, Pennsylvania 19023

Prior to December 2019, Bahaa Dawara held the title to the

property at 312 Fern Street. On December 31, 2019,14 Bahaa

12 Plaintiff has provided a list of the estimated value of the

properties. These values are not contested so the Court has

relied on them here.

13 The deed was prepared on November 11, 2019 and recorded on

December 31, 2019.

14 The deed was prepared on November 11, 2019 and recorded on

December 31, 2019.

Dawara’s power of attorney transferred 50% of Bahaa’s interest

in the property to Faten Dawara for $1.00. See Pl. Ex. 6J, ECF

No. 117 at 356-366. This property is valued at approximately

$73,800.00. See Pl. Prop. Findings of Facts ¶ 52. This property

has already been sold in accordance with the Restitution

Agreement.

d. 1524 McKean Street, Philadelphia, Pennsylvania

19145

In 2004, Haitham Albaourki purchased the property at 1524

McKean Street with Imad Dawara. Trial Tr. 24:7-11, ECF No. 96.

Haitham Albarouki, transferred his interest in the property to

Imad Dawara for $1.00. in February 2014. Id. 25:4-15; Def. Ex.

D3, ECF No. 118 at 51-62. Imad Dawara then held the title to the

property at 1524 McKean Street. On February 4, 2020,15 Imad

Dawara’s power of attorney transferred 50% of Imad’s interest in

the property to Imad Dawara’s wife, Abeer Naim, for $1.00. See

Pl. Ex. 6G, ECF No. 117 at 341-344. This property is valued at

approximately $305,400.00. See Pl. Prop. Findings of Facts ¶ 52.

The property is listed for sale but has not yet been sold.

15 The deed was prepared on November 18, 2019 and recorded on

February 4, 2020.

e. 321 Massasoit Street, Essington, Pennsylvania

19029

Prior to December 2019, Imad Dawara held the title to the

property at 321 Massasoit Street. Imad Dawara rented the

property to unrelated tenants. Trial Tr. 27:10-18, ECF No. 95.16

On December 31, 2019,17 Imad Dawara’s power of attorney

transferred 50% of Imad’s interest in the property to Imad

Dawara’s wife, Abeer Naim, for $1.00. See Pl. Ex. 6H, ECF No.

117 at 345-349; see also Imad Dawara Dep. 53:17-20. See Trial

Tr. 28:17-20, ECF No. 95. This property is valued at

approximately $258,600.00. See Pl. Prop. Findings of Facts ¶ 52.

The property is listed for sale but has not yet been sold. There

is currently a mortgage on the property.

f. 224 Erickson Avenue, Essington, Pennsylvania

19029

Prior to December 2019, Imad Dawara held the title to the

property at 224 Erickson. On December 31, 2019,18 Imad Dawara’s

power of attorney transferred 50% of Imad’s interest in the

16 During the bench trial, Haitham Albarouki testified that

the current tenants have not paid rent in over a year and the

family is in the process of evicting the tenants. See Trial Tr.

28:16-1, ECF No. 95.

17 The deed was prepared on November 14, 2019 and recorded on

December 31, 2019.

18 The deed was prepared on November 11, 2019 and recorded on

December 31, 2019.

property to Imad Dawara’s wife, Abeer Naim, for $1.00. See Pl.

Ex. 6I, ECF No. 117 at 350-354. This property is valued at

approximately $203,000.00. See Pl. Prop. Findings of Facts ¶ 52.

This property has already been sold in accordance with the

Restitution Agreement.

g. 1007 Milmont Avenue, Swarthmore, Pennsylvania

19081

Prior to December 2019, Imad Dawara held the title to the

property at 1007 Milmont. Imad Dawara lived in that property

with his wife until he was arrested. Imad Dep. 58:16-24. On

December 31, 2019,19 Imad Dawara’s power of attorney transferred

50% of Imad’s interest in the property to Imad Dawara’s wife,

Abeer Naim, for $1.00. See Pl. Ex. 6M, ECF No. 117 at 392-395.

This property is valued at approximately $528,700.00. See Pl.

Prop. Findings of Facts ¶ 52. This property has already been

sold in accordance with the Restitution Agreement.

2. The Three Properties Not Subject to the Restitution

Agreement

As noted, three properties were not subject to the

Restitution Agreement. These properties were each owned by

either Bahaa or Imad Dawara. See Trial Tr. 32:23-25; 33:1-3, ECF

No. 94. In November 2019, the Incarcerated Defendants, through

their powers of attorney, each transferred at least half of

19 The deed was prepared on November 11, 2019 and recorded on

December 31, 2019.

their interests in the remaining three properties to a Non-

Incarcerated relative. As Haitham Albarouki testified, the

Incarcerated Defendants transferred their interests in these

properties because they had the potential to save the properties

“for the family,” Trial Tr. 55:4-7, ECF No. 96, because “the

family was afraid that these properties were going to be taken

away from the family.” Id. 52:22-24.

a. 19 Ridgewood Avenue, Norwood, Pennsylvania 19074

Prior to November 2019, Bahaa Dawara held the title to the

property at 19 Ridgewood Avenue. On December 31, 2019,20 Bahaa

Dawara’s power of attorney transferred 50% of Bahaa’s interest

in the property to Faten Dawara for $1.00. See Pl. Ex. 6A, ECF

No. 117 at 303-313. Bahaa Dawara still holds 50% of the interest

in the property. Faten Dawara, Abeer Naim, Imad Dawara’s

children, and the Incarcerated Defendants’ parents currently

reside at the property. See Imad Dawara Dep. 44:1-10.21 This

property is valued at approximately $350,600.00. See Pl. Prop.

20 The deed was prepared on November 14, 2019 and recorded on

December 31, 2019.

21 Since August 2017, the Incarcerated Defendants’ father,

Shaher Dawara, has resided at the property. On August 1, 2017,

Shaher Dawara entered a month-to-month lease agreement with

Bahaa Dawara which provided that Shaher Dawara would pay $850

per month to Bahaa Dawara. The agreement did not provide Shaher

Dawara would be entitled to an interest in the property. See

Def. Ex. D2(c), ECF No. 118 at 49.

Findings of Facts ¶ 52. There is currently a mortgage on the

property.22

b. 305 Seminole Street, Essington, Pennsylvania

19029

Prior to November 2019, Imad Dawara held the title to the

property at 305 Seminole Street. The Incarcerated Defendants’

sister, Maisaa Dawara, testified that she began living at the

property with her husband and their two children in 2015 shortly

after they immigrated from Syria. Trial Tr. 10:15-18; 11:9-11,

ECF No. 97. Though the home was in Imad Dawara’s name, Maisaa

Dawara entered into an agreement with Imad Dawara which she

believed provided that if she paid $1,100.00 every month to Imad

Dawara for five years (until 2020), she would own the home. Id.

at 15:19.

The record shows that on August 31, 2015, Maisaa Dawara and

her husband, as the tenants, signed a lease agreement with Imad

Dawara, as the landlord, which provided that Maisaa Dawara and

her husband would pay Imad Dawara $1,100.00 each month. See Def.

Ex. 2A, ECF No. 118 at 43-44. The terms of the lease agreement

commenced on September 1, 2015 and was set to expire in 2045.

See id. The parties do not contest that Maisaa Dawara and her

husband paid the requisite monthly amount under the lease

22 The parties have not specified the amount owed on the

mortgage. See Bahaa Dawara Dep. 29:3-6 (claiming he does not

remember the amount of money owed on the mortgage).

agreement. They continued to make payments to Imad Dawara’s

power of attorney after Imad Dawara was incarcerated. They

stopped making payments in 2020 because Masiaa Dawara believed

she owned the home. Trial Tr.45:17-25, ECF No. 95. However,

there is nothing in the lease agreement that provides that the

title to the property would be transferred to Maisaa Dawara and

her husband if they made monthly rental payments for five years.

The lease agreement did include an “option to purchase” by

which Maisaa Dawara and her husband were granted “the exclusive

right, option and privilege of purchasing [the] property . . .

during the term of the” lease agreement. See Def. Ex. 2A, ECF

No. 118 at 43-44. To exercise the option, Maisaa Dawara and her

husband were required to notify Imad Dawara “in writing of the

exercise of this option at least ten (10) days prior to the

expiration of the initial term” of the lease agreement. Id. The

document is silent as to the purchase price of the property.

There is no evidence in the record that Maisaa Dawara and/or her

husband provided written notice to exercise the option to

purchase the property. Again, the record shows that the only

payments Maisaa Dawara and her husband made to Imad Dawara were

the monthly rental payments provided for by the lease agreement.

Although Maisaa Dawara did not exercise her option to

purchase the property, on December 31, 2019,23 Imad Dawara’s

power of attorney transferred 50% of Imad’s interest in the

property to Maisaa Dawara for $1.00. See Pl. Ex. 6B, ECF No. 117

at 315-319. On April 13, 2021,24 over one month after the

Incarcerated Defendants pled guilty in the federal criminal

action, Imad Dawara’s remaining interest in the property was

transferred to Maisaa Dawara for $1.00. See Pl. Ex. 6C, ECF No.

117 at 320-323; see also Imad Dawara Dep. 37:36:21-24; 37:1-10

(noting that the property at 305 Seminole Street is currently in

Maisaa Dawara’s name).

Maisaa Dawara testified that she had an agreement with Imad

Dawara that provided that they would complete repairs on the

property and pay for all expenses and, after paying the lease

for five years, they would then own the property. Trial Tr.

19:5-13, 27:1-8, ECF No. 97. Haitham Albarouki testified that

this property belongs to Maisaa Dawara, Trial Tr. 55:17-18, ECF

No. 95, and Imad Dawara similarly testified that he transferred

the property to Maisaa Dawara because, pursuant to the lease

agreement, “she owns it.” Imad Dawara Dep. 37:22-24; 38:1-7.

23 The deed was prepared on November 11, 2019 and recorded on

December 31, 2019.

24 The transfer was notarized on March 25, 2021, but the deed

was recorded on April 13, 2021.

However, after considering the circumstances surrounding the

transfer, the Court does not find this testimony credible.

This property is valued at approximately $248,800.00. See

Pl. Prop. Findings of Facts ¶ 52.

c. 407 Seminole Street, Essington, Pennsylvania,

19029

Prior to November 2019, Imad Dawara held the title to the

property at 407 Seminole Street. Mirvat Dawara testified that

she began living at the property with her husband and their two

children in 2015. Trial Tr. 33:3-18, ECF No. 97. Mirvat Dawara

testified that Imad Dawara purchased the property for her, id.

at 34:1-77, and she believed that if she paid Imad Dawara

$1,200.00 per month for five years (until 2020), she would own

the home. Id. 36:9-13.

The record shows that on August 31, 2015, Mirvat Dawara and

her husband, as the tenants, entered into a lease agreement with

Imad Dawara, as the landlord, which provided that Mirvat Dawara

and her husband would pay Imad Dawara $1,200.00 each month. See

Def. Ex. 2B, ECF No. 118 at 46-47. The term of the lease

commenced on September 1, 2015 and was set to expire in 2045.

See id. The parties do not contest that Mirvat Dawara and her

husband paid the requisite monthly amount under the lease

agreement until 2020. They continued to make payments to Imad

Dawara’s power of attorney after Imad Dawara was incarcerated

and stopped making payments in 2020. Trial Tr. 45:17-25; 37:15-

20, ECF No. 95. However, there is nothing in the lease agreement

that provides that the title to the property would be

transferred to Mirvat Dawara and her husband if they made

monthly rental payments for five years.

The lease did include an “option to purchase” by which

Mirvat Dawara and her husband were granted “the exclusive right,

option and privilege of purchasing [the] property . . . during

the term of the” lease agreement. See Def. Ex. 2B, ECF No. 118

at 46-47. To exercise the option, Mirvat Dawara and her husband

were required to notify Imad Dawara “in writing of the exercise

of this option at least ten (10) days prior to the expiration of

the initial term” of the lease agreement. Id. The document is

silent as to the purchase price of the property. There is no

evidence in the record that shows that Mirvat Dawara and/or her

husband provided written notice to Imad Dawara to exercise the

option to purchase the property. Again, the record shows that

the only payments Mirvat Dawara and her husband made to Imad

Dawara were the rental installments provided for in the lease

agreement. Trial Tr. 51:3-11, ECF No. 96.

Although Mirvat Dawara did not exercise her option to

purchase the property, on December 31, 2019,25 Imad Dawara’s

25 The document was prepared on November 11, 2019, but was

recorded with Delaware County on December 31, 2019. A corrected

power of attorney transferred 50% of Imad’s interest in the

property to Mirvat Dawara for $1.00. See Pl. Ex. 6D, ECF No. 117

at 324-328. The only additional fees Mirvat Dawara paid to Imad

Dawara were the closing costs on the property. Trial Tr. 51:25;

52:1-8, ECF No. 96; see also Imad Dawara Dep. 38:15-24; 39-14

(noting that Imad Dawara’s interest in the property at 407

Seminole Street had been transferred to Mirvat Dawara). On April

13, 2021,26 over one month after the Incarcerated Defendants pled

guilty in the federal criminal action, Imad Dawara’s remaining

interest in the property was transferred to Mirvat Dawara for

$1.00. See Pl. Ex. 6F, ECF No. 117 at 335-340; see also Imad

Dawara Dep. 38:15-23 (Imad Dawara testified that his remaining

interest in the property was transferred to Mirvat Dawara).

Haitham Albarouki testified that this property truly

belongs to Mirvat Dawara, Trial Tr. 55:17-18, ECF No. 95, and

Imad Dawara similarly testified that he transferred the property

to Mirvat Dawara because, pursuant to the lease agreement, “she

was paying for the ownership,” Imad Dawara Dep. 39:13-18.

However, after considering the circumstances surrounding the

transfer, the Court does not find this testimony credible.

deed was later prepared but it was not recorded until September

1, 2020.

26 The deed was prepared on March 25, 2021, but was recorded

on April 13, 2021.

This property is valued at approximately $222,200.00. See

Pl. Prop. Findings of Facts ¶ 52.

3. Other Assets Owned by the Incarcerated Defendants

Imad Dawara and Bahaa Dawara both testified that the only

properties they had an interest in at the time of their arrest

were the ten properties at issue here. Imad Dawara Dep. 17:19-

24, 21:24; 22:1-9; Bahaa Dawara Dep. 12:3-13. Prior to their

arrest, the Incarcerated Defendants also operated a nightclub on

Delaware Avenue in Philadelphia known as “B Side.” However, at

the time of their arrest, the nightclub’s assets included only a

liquor license, some restaurant equipment, and some furniture.

Imad Dawara Dep. 14:11-15. The Incarcerated Defendants leased

the property, but the property was ultimately repossessed by the

landlord because the Incarcerated Defendants defaulted on their

rental agreement. Id. 14:22-23. Plaintiff has not provided

evidence of any other assets belonging to the Incarcerated

Defendants.

III. CONCLUSIONS OF LAW AND DISCUSSION

A. Liability Under the PUVTA

Plaintiff contends that the Incarcerated Defendants acted

with intent to defraud their creditors when they transferred the

ten properties into the names of their relatives or,

alternatively, that the Incarcerated Defendants constructively

defrauded their creditors in violation of the PUVTA. These

arguments will be addressed herein.

1. Actual Fraud

Under section 5401(a)(1) of the PUVTA, “[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” with “actual intent to

hinder, delay or defraud any creditor of the debtor.” 12 Pa.

C.S. § 5104(a)(1)); see also Klein v. Weidner, No. 08-3798, 2010

WL 27910, at *1 (E.D. Pa. Feb. 17, 2010) (quoting section

5104(a)(1) and noting the same). Section 5104(a)(1) considers

only “the debtor’s intent in making the transfer, not [the]

transferee’s intent, which is irrelevant.” Trizechahn Gateway

LLC, v. Schander Harrison Segal & Lewis LLP, No. 1472-WDA-2018,

2019 WL 5858227, at *5 (Super. Ct. Pa. Nov. 8, 2019) (citing 12

Pa. C.S. § 5104(a)(1)); see also In re Atomica Design Grp.,

Inc., 556 B.R. 125, 161 (E.D. Pa. 2016) (citing 12 Pa. C.S. §

5104(a)); In re Rite Way Electric, Inc., 510 B.R. 471, 480-81

(Bankr. E.D. Pa. 2014) (citing 12 Pa. C.S. § 5104(a)).

Because “individuals are rarely willing to admit intent,

actual fraud is rarely proven by direct evidence.” In re

Carbone, 615 B.R. 76, 80 (Bankr. E.D. Pa. 2020) (quoting In re

Pennsylvania Gear Corp., No. 02-36436, 2008 WL 2370169, at *9

(Bankr. E.D. Pa. April 22, 2008)). Instead, the PUVTA provides

that the Court may consider certain factors, frequently referred

to as the “badges of fraud,” to assist the Court in “determining

whether fraud has been proven by circumstantial evidence.” Id.

(internal quotation marks and citation omitted). The badges of

fraud include:

(1) the transfer or obligation was to an insider;

(2) the debtor retained possession or control of the

property transferred after the transfer;

(3) the transfer or obligation was disclosed or

concealed;

(4) before the transfer was made or obligation was

incurred, the debtor had been sued or threatened

with suit;

(5) the transfer was of substantially all the debtor's

assets;

(6) the debtor absconded;

(7) the debtor removed or concealed assets;

(8) the value of the consideration received by the

debtor was reasonably equivalent to the value of

the asset transferred or the amount of the

obligation incurred;

(9) the debtor was insolvent or became insolvent

shortly after the transfer was made or the

obligation was incurred;

(10) the transfer occurred shortly before or shortly

after a substantial debt was incurred; and

(11) the debtor transferred the essential assets of the

business to a lienor who transferred the assets

to an insider of the debtor.

12 Pa. C.S. § 5104(b).

The creditor27 has the burden of proving actual fraud by a

preponderance of the evidence. Id. at § 5104(c).28 “Although the

presence of a single . . . badge of fraud may cast suspicion on

a transferor’s intent, the confluence of several in one

transaction generally provides conclusive evidence of an actual

intent to defraud.” In re Roman Catholic Diocese of Harrisburg,

640 B.R. 59, 74 (M.D. Pa. 2022) (relying on the PUVTA and

quoting In re AgFeed USA, LLC, 546 B.R. 318, 337 (Bankr. D. Del.

2016)). “No particular badge is necessary, nor is any

combination sufficient; finding intent is always fact specific.”

Eddystone Rail Co., LLC v. Bridger Logistics, LLC, No. 17-495,

2022 WL 1768853, at *3 (E.D. Pa. Mar. 21, 2022) (citing 12 Pa.

C.S. § 5104(a)). Here, the evidence on the record allows the

Court to find that at least five badges of fraud are present and

that the Plaintiff has met its burden.

The evidence shows that the first badge of fraud, which

involves whether the transfer or obligation was made to an

27 Plaintiff here is a judgment creditor pursuant to a

judgment it received against the Incarcerated Defendants in the

Court of Common Pleas. See Pl. Exs. P13, P1C, ECF Nos. 129-1,

129-2.

28 Although fraud is generally required to be proven by clear

and convincing evidence, the PUVTA was amended to include that

“[a] creditor making a claim for relief under [section 5104(a)]

has the burden of proving the elements of the claim for relief

by the preponderance of the evidence.” 12 Pa. C.S. § 5104(c).

insider, is present here. Pa. C.S. § 5104(b)(1). The

Incarcerated Defendants were arrested on October 17, 2019.

Within two weeks of their arrest, the Incarcerated Defendants

appointed their relatives as their powers of attorney. Imad

Dawara appointed Haitham Albarouki on October 26, 2019, and

Bahaa Dawara appointed Faten Dawara on October 30, 2019. By

November 11, 2019, the Incarcerated Defendants’ powers of

attorney began preparing documents to transfer at least 50% of

the Incarcerated Defendants’ interests in the ten properties to

Faten Dawara, Abeer Naim, Maisaa Dawara, and Mirvat Dawara.

Specifically, on December 31, 2019, Bahaa Dawara

transferred 50% of his interests in 134 Garfield Avenue, 140-142

Garfield Avenue, 312 Fern Street, and 19 Ridgewood Avenue to his

sister, Faten Dawara. Imad Dawara transferred 50% of his

interests in 1524 McKean Street, 321 Massasoit Street, 224

Erickson Avenue, and 1007 Milmont Avenue to his wife, Abeer

Naim.29 Additionally, on December 31, 2019, Imad Dawara

29 It is of no moment that Imad Dawara transferred his

interests in these properties to his wife. Defendants do not

argue that Imad Dawara and Abeer Naim previously held the

properties as tenants by the entireties. Under the PUVTA, an

asset does not include “an interest in property held in tenancy

by the entireties to the extent it is not subject to process by

a creditor holding a claim against only one tenant.” 12 Pa. C.S.

§ 5101(b). Generally, “[e]ntireties properties cannot be used to

satisfy the claims of creditors of only one spouse.” Clinton

Plumbing and Heating of Trenton, Inc. v. Ciaccio, No. 09-2751,

2011 WL 6088611, at *6 (E.D. Pa. Dec. 7, 2011) (citing In re

Brannon, 476 F.3d 170, 173 (3d Cir. 2007)); United States v.

transferred 50% of his interest in 305 Seminole Street to Maisaa

Dawara and 50% of his interest in 407 Seminole Street to Mirvat

Dawara. On April 13, 2021, just over one month after the

Incarcerated Defendants pled guilty in the federal criminal

action, Imad Dawara transferred the remainder of his interests

in 305 Seminole Street and 407 Seminole Street to Maisaa Dawara

and Mirvat Dawara, respectively. Thus, the first badge of fraud

is present in this case.

The evidence shows that the fourth badge of fraud,

regarding whether the debtor had been sued or threatened with

suit, and the tenth badge of fraud, regarding whether the

transfer occurred shortly before or shortly after a substantial

debt occurred, are also present here. 12 Pa. C.S. § 5104(b)(4),

(10). By the time the transfers occurred, the Incarcerated

Defendants were aware that they had been sued and would be

Green, 201 F.3d 251, 253 (3d Cir. 2000)). However, the

conversion of property owned by one debtor-spouse to the other

spouse does not immunize the property from the PUVTA. Id.; see

Knoll v. Uku, 154 A.3d 329, 330, 333, 334, 336 (Pa. Super. Ct.

2017) (finding evidence of fraud existed under the PUVTA in a

circumstance where a debtor transferred property into his wife’s

name). Because the evidence shows that Imad Dawara and Abeer

Naim did not hold the properties as tenants by the entireties

before Imad Dawara transferred his interests in the properties

to himself and Abeer Naim, any argument that the assets are

excluded under section 5101(b) is without merit. See Clinton

Plumbing, 2011 WL 6088611, at *6 (finding that because a debtor

sought to insulate property by transferring it to himself and

his wife, the transfer was still subject to avoidance under the

PUVTA).

indebted to those with interests in the two buildings located at

239 Chestnut Street and 241-43 Chestnut Street. As noted, the

Incarcerated Defendants, through their powers of attorney and

counsel, began preparing documents to transfer the properties

within weeks of the Incarcerated Defendants’ arrest. Haitham

Albarouki even testified that, “the family was afraid that these

properties were going to be taken away from the family,” and

Trial Tr. 52:22-24, ECF No. 96. As it was feared, Plaintiff’s

predecessors in interest filed the related state court civil

suit on November 25, 2019. The initial transfers were finalized

between December 31, 2019 and February 4, 2020, after the

Incarcerated Defendants had been sued. Thus, the Incarcerated

Defendants were clearly aware that would face substantial

liability as a result of their actions. Accordingly, the fourth

and tenth badges of fraud are present here.

The fifth badge of fraud is present here as well. The fifth

badge of fraud involves whether the transfer was of

substantially all of the debtor’s assets. 12 Pa. C.S. §

5104(b)(5). Imad Dawara testified that his primary assets were

in real estate, and that the only real estate he had an interest

in were the properties at issue here. Imad Dawara Dep. 17:19-24,

21:24; 22:1-9. Bahaa Dawara similarly testified that the only

properties he owned at the time of his arrest are the properties

at issue here. Bahaa Dawara Dep. 12:3-13. Though the

Incarcerated Defendants operated a nightclub on Delaware Avenue

in Philadelphia known as “B Side,” at the time of their arrest,

the nightclub’s assets only included a liquor license, some

restaurant equipment, and some furniture. Imad Dawara Dep.

14:11-15. The Incarcerated Defendants leased the property, and

it was ultimately repossessed by the landlord due to their

failure to pay rent. Id. 14:22-23. Thus, the evidence shows that

the properties at issue here encompassed substantially all of

the Incarcerated Defendants’ assets, an assertion which the

Incarcerated Defendants have not disputed. Accordingly, the

Court finds that the fifth badge of fraud is present here.

The eighth badge of fraud requires the Court to consider

“the value of the consideration received by the debtor relative

to the value of the transferred asset.” Mid Penn Bank v. Farhat,

74 A.3d 149, 155 (Pa. Super. Ct. 2013). Courts generally find

that this badge of fraud is present if the debtor “did not

receive reasonably equivalent value for the property.” Id. Here,

the Incarcerated Defendants’ interests in the properties were

transferred to their relatives for $1.00. The market values of

the ten properties range from $73,800.00 to $528,700.00. See Pl.

Prop Findings of Fact ¶ 52, ECF No. 115. Defendants aver that it

is not uncommon for family members to transfer assets to each

other for a nominal amount. Under the circumstances of this

case, including the timing of the transfers, the Court finds

that regardless of whether the transfers were to family members,

the Incarcerated Defendants did not receive reasonably

equivalent value for the property. Thus, this badge of fraud is

present here. Overall, the Court finds that five badges of fraud

are present here.30

In response, Defendants fail to point to any evidence

disputing the existence of the badges of fraud with respect to

the seven properties subject to the Restitution Agreement or the

property at 19 Ridgeway Avenue. In fact, Haitham Albarouki even

testified that those properties truly belonged to the

Incarcerated Defendants. Trial Tr. 54:1-7, ECF No. 96. Instead,

Defendants focus on the properties at 305 Seminole Street and

407 Seminole Street. Defendants argue that the Incarcerated

Defendants’ sisters, Maisaa Dawara and Mirvat Dawara, were

contractually entitled to own the properties, so the

Incarcerated Defendants could not have fraudulently transferred

these properties. However, the Court finds no merit to this

argument.

30 The Court finds that there is insufficient evidence for the

Court to find that the second, third, seventh, and ninth badges

of fraud exist here. Additionally, the sixth and eleventh badges

of fraud are not relevant here. Regardless, for the reasons

stated herein, the Court has found that sufficient evidence

exists to find that the Incarcerated Defendants acted with

actual fraud in transferring their interests in the properties

at issue.

With respect to the property at 305 Seminole Street,

Defendants argue that Maisaa Dawara and her husband signed an

agreement with Imad Dawara that provided that if Maisaa Dawara

paid Imad Dawara $1,100.00 per month from 2015 until 2020,

Maisaa Dawara would own the property. Though it is uncontested

that Maisaa Dawara and her husband paid $1,100.00 to Imad Dawara

each month, the lease agreement between them did not provide

that Maisaa Dawara would automatically own the property after

five years. As noted, the lease agreement included an “option to

purchase” which required the tenants to provide written notice

of their option to purchase the property. However, there is no

evidence that Maisaa Dawara and/or her husband provided written

notice to Imad Dawara to exercise this option. The evidence

shows that Maisaa Dawara paid monthly installments to rent,

rather than own, the property. Because nothing on the record

would allow the Court to infer that this was anything but a

standard lease agreement, the Court cannot find that Maisaa

Dawara was the true owner of the property. Thus, the argument

that Imad Dawara transferred the property at 305 Seminole Street

to Maisaa Dawara for $1.00 in December 2019 because, pursuant to

the lease agreement, Maisaa Dawara owned the property, fails.

The same is true for the property at 407 Seminole Street.

Defendants similarly argue that Mirvat Dawara and her husband

signed an agreement with Imad Dawara that provided that if

Mirvat Dawara paid Imad Dawara $1,200.00 per month from 2015

until 2020, she would own the property. Again, nothing in the

record would allow the Court to find that Mirvat Dawara was the

true owner of this property. Thus, the argument that Imad Dawara

transferred the property at 407 Seminole Street to Mirvat Dawara

for $1.00 in December 2019 because, pursuant to the lease

agreement, Mirvat Dawara owned the property fails.

Additionally, Maisaa Dawara’s and Mirvat Dawara’s apparent

personal beliefs that they owned the properties do not shield

the Incarcerated Defendants from liability here. As noted, the

Court must only consider the intent of the transferor; the

intent of the transferee is irrelevant. Trizechahn Gateway LLC,

2019 WL 5858227, at *5 (citing 12 Pa. C.S. § 5104(a)(1)). Thus,

it is of no relevance that Maisaa Dawara and Mirvat Dawara may

truly believe that they are the rightful owners of these

properties.

In a final effort to contest liability, Defendants argue

that they should be immune from liability because the

Incarcerated Defendants were following the advice of counsel.

Defendants maintain that the Incarcerated Defendants sought

advice from Imad Dawara’s criminal defense attorney and were

informed by counsel that they should transfer the properties to

their Non-Incarcerated relatives. See Trial Tr. 12:13-14, ECF

No. 96 (Hitham Albarouki testified that the Incarcerated

Defendants were advised to change the deeds); Bahaa Dawara Dep.

17:13-14 (Bahaa Dawara testified he was advised to transfer

properties into his sister’s names). Some courts have found good

faith reliance on the advice of counsel can, under certain

circumstances, be a complete defense to claims that a debtor

violated the Bankruptcy Code’s fraudulent transfer provision, 11

U.S.C. § 548(A)(1). See, e.g., In re Global Outreach, S.A., No.

09-15985/09-1415, 2014 WL 4948184, at *4, *7 (D.N.J. Oct. 2,

2014); In re Colish, 289 B.R. 523, 541 (Bankr. E.D.N.Y. 2002);

Jones v. Gertz, 121 F.2d 782, 784 (10th Cir. 1941).31 This

defense is unavailable here.

Initially, Defendants fail to cite to any authority, and

the Court finds none, that advice of counsel is a recognized

defense under the PUVTA.32 Moreover, even if following the advice

of counsel were a viable defense under the PUVTA, the

Incarcerated Defendants have failed to point to any evidence

31 Even in the context of bankruptcy proceedings, “[r]eliance

on advice of counsel is not an impenetrable shield that will

preclude a finding that debtor acted with fraudulent intent . .

. .” 4 Bankr. Serv. L. Ed. § 39:126.

32 Section 5108 of the PUVTA provides that “[a] transfer or

obligation is not voidable under section 5104(a)(1) . . .

against a person that took in good faith and for a reasonably

equivalent value given the debtor or against any subsequent

transferee or oblige.” 12 Pa. C.S. § 5108(a). Section 5108 does

not provide that a transfer may be voided because the transferor

or transferee relied on the advice of counsel.

that would allow the Court to find that the defense is

applicable here.

An advice of counsel defense generally requires the

defendant-debtor to show that (1) counsel gave the advice, (2)

the advice was “legal” advice, (3) the debtor relied upon the

advice of counsel, and (4) the debtor acted in good faith when

relying on the advice. In re Gotwald, 488 B.R. 854, 873 (E.D.

Pa. 2013) (citing In re Adeeb,787 F.2d 1339, 1343 (9th Cir.

1986)); see also In re Colish, 289 B.R. at 652 (“reliance must

be in good faith and any protection based on reliance on

debtor’s counsel will only act as a protection to the extent the

reliance was reasonable.”).33

First, the Incarcerated Defendants have provided no

evidence, either by way of testimony by counsel or by written

documents, that shows advice was given. Second, even if some

general advice was given, the Incarcerated Defendants have

failed to point to evidence demonstrating that such advice was

“legal advice,” including whether counsel was provided with

accurate facts upon which to base his advice, that counsel

relied on applicable law, that counsel rendered an opinion which

proposed the course of action that the Incarcerated Defendants

33 This is consistent with the standard bankruptcy courts

apply when considering whether advice of counsel is a defense to

claims that a debtor violated the Bankruptcy Code’s fraudulent

transfer provision. See 4 Bankr. Service L. Ed. § 39:428.

followed, and that the proposed course of action was legally

permissible. And, in any event, the Incarcerated Defendants have

failed to show that they relied on such advice in good faith.

Thus, the Court is unable to conclude that the Incarcerated

Defendants are entitled to the advice of counsel defense here.

Overall, the Court finds that the existence of several

badges of fraud is sufficient to find that the Incarcerated

Defendants acted with intent in fraudulently transferring the

properties at 134 Garfield Avenue, 140-142 Garfield Avenue, 312

Fern Street, 1524 McKean Street, 321 Massasoit Street, 224

Erickson Avenue, 1007 Milmont Avenue, 19 Ridgeway Avenue, 305

Seminole Street, and 407 Seminole Street to the Non-Incarcerated

Defendants under 42 Pa. C.S. § 5104 (a)(1).34

2. Constructive Fraud

Plaintiff also brings, in the alternative, a claim for

constructive fraudulent transfer. “A transfer made or obligation

incurred by a debtor is [also] 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—”

34 As noted, the Plaintiff had the burden of proving its PUVTA

claim by a preponderance of the evidence. See supra note 28.

However, the Court finds that Plaintiff would have met its

burden even if the applicable standard were clear and convincing

evidence.

(2) without receiving a reasonably equivalent value in

exchange for the transfer or obligation, and the debtor:

(i) was engaged or about to engage in a business or

transaction for which the remaining assets of

the debtor were unreasonably small in relation

to the business or transaction; or

(ii) intended to incur, or believed or reasonably

should have believed that the debtor would incur,

debts beyond the debtor’s ability to pay as they

became due.

12 Pa. Con. Stat. § 5104(a)(2). Plaintiff avers that the

Incarcerated Defendants believed, or should have believed, that

they would incur debts following their arrest, so the

transactions are fraudulent under section 5104(a)(2)(ii).

Under the circumstances of this case and the facts as

stated, the Court finds that the transfers are fraudulent under

section 5104(a)(2)(ii) as well. Here, the Incarcerated

Defendants did not receive a reasonably equivalent value for the

properties at issue. Additionally, in light of the suspicious

timing of the transfers and the testimony that “the family was

afraid that these properties were going to be taken away from

the family,” Trial Tr. 52:22-24, ECF No. 96, the Court finds

that the Incarcerated Defendants believed, or reasonably should

have believed, that they would incur debts that would be beyond

their ability to pay.

B. Remedies Under the PUVTA

Plaintiff requests (1) that the transfers of the three

properties that are not subject to the Restitution Agreement be

voided and for the titles to these properties to be returned to

the Incarcerated Defendants, (2) a money judgment for the value

of the seven properties that are subject to the Restitution

Agreement, (3) punitive damages, (4) pre and post-judgment

interest, and (5) attorneys’ fees.

1. Transfers Voided

Plaintiff requests that the Court void the transfers with

respect to the three properties that are not subject to the

Restitution Agreement and order the title to these properties to

be transferred back to the Incarcerated Defendants. “Section

5104(a)(1) nullifies a transfer committed with actual fraud.”

Knoll v. Uku, 154 A.3d 329, 332 (Pa. Super. Ct. 2017). Section

5107 of the PUVTA provides a list of the following remedies:

(a)Available remedies.--In an action for relief against a

transfer or obligation under this chapter, a creditor,

subject to the limitations in sections 5108 (relating to

defenses, liability and protection of transferee or

obligee) and 5109 (relating to extinguishment of claim

for relief), may obtain:

(1) Avoidance of the transfer or obligation to the extent

necessary to satisfy the creditor's claim.

(2) An attachment or other provisional remedy against the

asset transferred or other property of the transferee

if available under applicable law.

(3) Subject to applicable principles of equity and in

accordance with applicable rules of civil procedure:

(i) an injunction against further disposition by the

debtor or a transferee, or both, of the asset

transferred or of other property;

(ii) appointment of a receiver to take charge of the

asset transferred or of other property of the

transferee; or

(iii) any other relief the circumstances may require.

(b) Execution.--If a creditor has obtained a judgment on a

claim against the debtor, the creditor, if the court so

orders, subject to the limitations of sections 5108 and

5109, may levy execution on the asset transferred or its

proceeds.

Pa. C.S. § 5107(a)-(b). Here, pursuant to section 5017(a)(1),

the transfers with respect to the three properties at 19

Ridgeway Avenue, 305 Seminole Street, and 405 Seminole Street

will be voided.

Title to these properties will be transferred back to the

Incarcerated Defendants and therefore will be available for

execution of the civil judgment Plaintiff obtained in the Court

of Common Pleas against the Incarcerated Defendants. However,

the Court recognizes that, pursuant to the Restitution

Agreement, in the event the Incarcerated Defendants default on

the payments set forth under the Restitution Agreement, the

Government has “reserve[d] its right to initiate an action

against [the remaining three] properties to collect restitution

as provided under applicable federal and state law.” See Pl. Ex.

P5E1 at ¶ 9(g), ECF No. 117. Because the Government has not yet

affirmatively waived its rights with respect to these three

properties, consistent with section 5107(a)(3)(i) of the PUVTA,

the Court will enjoin the Incarcerated Defendants from

transferring their title to these properties until further order

of the Court. See 12 Pa. 5107(a)(3)(i) (noting that “subject to

applicable principles of equity and in accordance with

applicable rules of civil procedure” the Court may issue “an

injunction against further disposition by the debtor . . . of

the asset transferred or of other property.”).

The Court notes that there is a mortgage on the property at

19 Ridgeway Avenue. Generally, an asset is not property of a

debtor if it is “encumbered by a valid lien.” 12 Pa. C.S. §

5101. If an asset is partially encumbered by a lien, only the

unencumbered portion will be considered an asset of the debtor.

See, e.g., In re Island View Crossing II, L.P., Nos. 17-14454,

1709292, 18-02800, 2021 WL 3745433, at *5 (E.D. Pa. Aug. 24,

2021) (noting that “if a debtor owns property that is completely

encumbered by liens, that property is not considered an asset of

the debtor under § 5101, or if that property is only partially

encumbered, then § 5101 dictates that only

the unencumbered portion of the property will be considered

an asset of the debtor”) (citing 12 Pa. C.S. § 5101 comm.

comment #2). Thus, if the Government ultimately waives its right

to this property, Plaintiff will be entitled to execute on its

state court judgment against this property, see 12 Pa. C.S. §

5107(c), but Plaintiff’s recovery will be limited to the value

of this property less the amount due on the outstanding mortgage

and any other valid liens.35

2. Judgment for the Value of the Remaining Seven

Properties

Plaintiff acknowledges that the seven properties subject to

the Restitution Agreement have already been sold, or will soon

be sold, and thus the transfers with respect to these properties

cannot be voided. Here, Plaintiff seeks a “money judgment” in an

amount equivalent to the value of the seven properties.

Pursuant to section 5108 of the PUVTA, a “creditor may

recover judgment for the value of the asset transferred . . . or

the amount necessary to satisfy the creditor’s claim” as long as

the judgment is “for an amount equal to the value of the asset

at the time of the transfer, subject to any adjustment as the

equities may require.” 12 Pa. C.S. § 5108(b)(1), (c). Because

the Court finds that the Incarcerated Defendants transferred

their interests in the seven properties that are subject to the

Restitution Agreement with fraudulent intent, Plaintiff will be

entitled to a judgment equivalent to the value of the seven

35 The parties have not specified the value of the outstanding

mortgage.

properties, as set forth later in this section, to be applied

towards the satisfaction of its civil judgment.36

Defendants argue that the Court should decline to find that

Plaintiff is entitled to this relief because the properties are

36 Though Plaintiff seeks a money judgment, Plaintiff’s

request misapprehends the purpose of the PUVTA. Only a

“creditor” may bring a claim under section 5014 of the PUVTA.

See 12 Pa. C.S. § 5104(a); id. at § 5107(a); id. at § 5108(b). A

creditor is defined as “[a] person that has a claim.” id. at §

5101(b) (Definitions). A “claim” includes a court judgment a

creditor may have against a defendant-debtor. 18A Summa. Pa.

Jur. 2d Comm. L. § 22:6 (2d Ed.). Here, Plaintiff is a creditor

because it has a judgment, arising from the related state court

proceeding, against the Incarcerated Defendants.

“[T]he purpose of the [PUVTA] is to protect creditors . . .

by preventing the debtor from placing assets otherwise available

to pay creditors out of the reach of those creditors.” Id. “At

its core, fraudulent transfer law,” including the PUVTA, “is a

debt-collection device” so that a creditor may recover on its

claim against the debtor. In re Lewis, 574 B.R. 536, 539 (Bankr.

E.D. Pa. 2017) (quoting Finkel v. Polichuk (In re Polichuk), 506

B.R. 405, 435 (Bankr. E.D. Pa. 2014)) (emphasis added). If a

debtor-defendant fraudulently transfers an asset, the creditor

may bring a claim under the PUVTA to void the transfer so the

creditor may execute on its judgment against the asset, as

Plaintiff has done here. 12 Pa. C.S. § 5108. If the assets are

no longer available, the creditor may also “recover judgment for

the value of the asset transferred” in order to satisfy its

underlying claim. 12 Pa. C.S. § 5108. This, however, does not

constitute a money judgment independent from the creditor’s

claim because the PUVTA is “not a revenue generating tool.” In

re Lewis, 574 B.R. at 539 (Bankr. E.D. Pa. 2017) (quoting In re

Polichuk, 506 B.R. at 435) (emphasis added).

Thus, as explained herein, as a means of collecting on its

state court judgment, Plaintiff will be entitled to a judgment

for the value of the seven properties, less the value of any

mortgages or other liens on the properties at the time they were

fraudulently transferred.

subject to the Government’s Restitution Agreement. Defendants

argue that Plaintiff would recover double damages if Plaintiff

receives restitution and is also able to execute on its state

court judgment against the value of these properties. The Court

finds that this argument is without merit.

Under federal law, restitution in the federal criminal

action was entered pursuant to the Mandatory Victims Restitution

Act of 1996 (the “MVRA”), Pub. L. No. 104-132, 110 Stat. 1227,

codified at 18 U.S.C. §§ 3613A, 3663A. However, the MVRA does

not prohibit victims from bringing a civil suit after they have

been awarded restitution. Doe v. Hesketh, 828 F.3d 159, 168 n.10

(3d Cir. 2016). As the Third Circuit has explained, “Congress

not only contemplated that a victim who had received restitution

could file a subsequent civil action, but also provided

procedures for that very situation.” Id. at 169. Federal law

provides that “[a]ny amount paid to a victim under an order of

restitution shall be reduced by any amount later recovered as

compensatory damages for the same loss by the victim in . . .

any Federal civil proceeding” and in “any State civil

proceeding, to the extent provided by the law of the state.” 18

U.S.C. § 3664(j)(2).

And, under Pennsylvania law, receipt of restitution does

not bar a party from recovering civil damages. Pennsylvania law

similarly provides that “[n]o judgment or order of restitution

shall debar the victim, by appropriate action, to recover from

the offender as otherwise provided by law, provided that any

civil award shall be reduced by the amount paid under the

criminal judgment.” 18 Pa. C.S. § 1106(g).

Under such circumstances, these “provisions ensure that a

victim will not have to re-litigate the conduct forming the

basis of a criminal conviction in a subsequent civil action and

a defendant will not be required to pay double damages for the

same loss if a subsequent civil action is successful.” Hesketh,

828 F.3d at 169. Though Plaintiff’s predecessors in interest had

the opportunity to submit relevant information to the Government

ahead of the Incarcerated Defendants’ sentencing in the criminal

action, “a victim’s participation in a sentencing court’s

determination of restitution is limited to conferring with the

government, submitting information to a probation officer, or

potentially providing testimony at the sentencing court’s

discretion.” Id. (internal citations omitted). As the Third

Circuit has explained “[a] subsequent civil action allows a

victim to fully litigate the question of her damages to achieve

compensation for the full amount of her damages,” id., as

victims are not “required to participate in any phase of a

restitution order.” 18 U.S.C. § 3664(g)(1). This is especially

true because “[n]otwithstanding the rights reflected in the

restitution statutes, crime victims are not parties to a

criminal sentencing proceeding.” United States v. Stoerr, 695

F.3d 271, 276 (3d Cir. 2012) (quoting United States v. Aguirre-

Gonzalez, 597 F.3d 46, 53 (3d Cir. 2012)).

Thus, as provided by both federal and state law, Plaintiff

is not precluded from separately recovering civil damages. And,

Defendants do not point to any authority that would preclude the

Court from entering a judgment for the value of the properties

transferred pursuant to 12 Pa. C.S. § 5108(b)(1), (c). Again,

Plaintiff will be able to collect on its state court judgment,

but will not be entitled to double damages because any damages

Plaintiff receives by executing on the state court judgment will

be offset by any restitution awarded. In fact, in entering

judgment, the Court of Common Pleas provided that compensatory

damages shall be offset by the restitution Plaintiff is expected

to receive. See Pl. Exs. P13, P1C, ECF Nos. 129-1, 129-2.

Finally, the Court must consider which defendants are

liable for the value of each asset transferred. The PUVTA allows

creditors to reach fraudulently transferred assets that are held

by transferees. Section 5108 of the PUVTA provides that

Plaintiff “may recover judgment for the value of the asset

transferred” and the “judgment may be entered against”

(i) the first transferee of the asset or the person for whose

benefit the transfer was made; or

(ii) an immediate or mediate transferee of the first

transferee, other than:

Pa. C.S. § 5108(b)(1)(i)-(ii). Thus, the Non-Incarcerated

transferees may be held liable for the value of the assets

transferred.

However, the Incarcerated Defendants did not transfer the

entirety of their interests in the seven properties to the Non-

Incarcerated Defendants. Instead, the Incarcerated Defendants

transferred only 50% of their interests in each of the seven

properties to one of their relatives. Thus, the Court will, in

its discretion, hold both the transferor and transferee jointly

and severally liable here. See In re Blastein, 260 B.R. 698,

720-21 (E.D. Pa. 2001) (finding that “joint and several

liability is an available remedy in fraudulent transfer cases”

and the decision to impose such liability is at the discretion

of the lower court). Here, the Court finds that Defendants are

jointly and severally liable37 for the value of the seven

properties as follows:

1. Bahaa Dawara and Faten Dawara are jointly and severally

liable for the value of the property at 134 Garfield

Avenue, Woodlyn, Pennsylvania 19094. It is uncontested that

the property is worth $324,900.00;38

37 Plaintiff argues that the Court should hold all Defendants

jointly and severally liable for the total value of these

properties. Plaintiff, however, fails to point to any authority

that would allow for this result.

38 Pursuant to PUVTA, Plaintiff is entitled to recover “an

amount equal to the value of the asset at the time of the

transfer, subject to any adjustment as the equities may

2. Bahaa Dawara and Faten Dawara are jointly and severally

liable for the value of the property at 140-142 Garfield

Avenue, Woodlyn, Pennsylvania 19094. It is uncontested that

the property is worth $289,000.00;

3. Bahaa Dawara and Faten Dawara are jointly and severally

liable for the value of the property at 312 Fern Street,

Darby, Pennsylvania 19023. It is uncontested that the

property is worth $73,800.00;

4. Imad Dawara and Abeer Naim are jointly and severally liable

for the value of the property at 1524 McKean Street,

Essington, Pennsylvania 19145. It is uncontested that the

property is worth $305,400.00;

5. Imad Dawara and Abeer Naim are jointly and severally liable

for the value of the property at 321 Massasoit Street,

Essington, Pennsylvania 19029. It is uncontested that the

property is worth $258,600.00;

6. Imad Dawara and Abeer Naim are jointly and severally liable

for the value of the property at 224 Erickson Avenue,

Essington, Pennsylvania 19029. It is uncontested that the

property is worth $203,000.00;

7. Imad Dawara and Abeer Naim are jointly and severally liable

for the value of the property at 1007 Milmont Avenue,

Swarthmore, Pennsylvania 19081. It is uncontested that the

property is worth $528,700.00;

The value of these properties will be diminished by any

valid mortgage or other lien owed on the properties at the time

of transfer. 12 Pa. C.S. § 5108(c). Accordingly, Plaintiff is

require.” Pa. C.S. § 5108(b)(1), (c). As noted, Plaintiff has

provided a list of the estimated value of the properties. These

values are not contested so the Court has relied on them here.

See Pl. Prop. Findings of Facts ¶ 52; supra note 12.

entitled to a judgment up to the value of these seven

properties.39

3. Punitive damages40

Plaintiff also seeks punitive damages. Though the PUVTA

does not expressly provide for punitive damages, Plaintiff

contends that that such relief is available because section 5107

of the PUVTA allows the Court to grant “any other relief

circumstances may require.” 12 Pa. C.S. § 5107(a)(3)(iii).

Pennsylvania appellate courts have not opined on whether

section 5107 authorizes courts to award punitive damages. In

Klein v. Weidner, the Third Circuit “predict[ed] that the

Pennsylvania Supreme Court would conclude that punitive damages

are available under the [PUVTA]” based on the language of the

“catch-all” damages provision under section 5107(a)(3)(iii). 729

F.3d 280, 288, 292 (3d Cir. 2013). Pennsylvania courts have yet

to determine whether Klein’s prediction is accurate. See, e.g.,

George M. Axilbund Trust v. Forman, No. 214-EDA-2021, 2021 WL

5370828, at *4-*5 (Super. Ct. Pa. Nov. 18, 2021) (noting Klein

39 Pursuant to section 5107 of the PUVTA, Plaintiff may

execute on its state court monetary judgment against the value

of these seven properties. See 12 Pa. C.S. 5107(b).

40 Consideration of punitive damages in this case is

restricted to the Court’s review of the Incarcerated Defendants’

conduct in the fraudulent transfers at issue. The Court will, of

course, not consider the conduct that the Incarcerated

Defendants pled guilty to in the federal criminal action.

predicted that punitive damages would be available under the

PUVTA, but upholding a district court award of punitive basis on

a different basis).

Even assuming the PUVTA allows courts to award punitive

damages, courts may award punitive damages only in cases where

the plaintiff can show that the defendant engaged in outrageous

conduct in connection with the fraudulent transfer.41 See Klein,

729 F.3d at 293. Generally, “[t]o justify the award of punitive

damages, there must be acts of malice, vindictiveness and a

wholly wanton disregard of the rights of others.” Pittsburgh

Live, Inc. v. Servov, 615 A.2d 438, 442 (Pa. Super. Ct. 1992);

see also George M. Axilbund Trust, 2021 WL 5370828, at *3-*4

(citing Pittsburgh Live, Inc. and noting the same). The Court

will consider whether Plaintiff has provided evidence showing

that Defendants acted with the requisite intent by clear and

convincing evidence.

41 Generally, fraud must be proven by clear and convincing

evidence. As explained, PUVTA differs in that the statute

provides that actual fraud can be shown by a preponderance of

the evidence. See supra note 28.

Pennsylvania courts have generally found that “[w]here the

plaintiff’s evidence establishes actual fraud, the decision of

whether to award punitive damages and the amount to be awarded

are within the discretion of the factfinder.” Noyes v. Cooper,

579 A.2d 407, 413 (Pa. Super. Ct. 1990). Because, under

Pennsylvania law, a plaintiff must typically establish fraud by

clear and convincing evidence, the Court will apply this

standard in considering punitive damages. The Court will do so

even though Plaintiff requests this relief in connection with

its PUVTA claim.

Plaintiff argues that Defendants fraudulently transferred

the ten properties as a means to defraud victims of the

Incarcerated Defendants’ arson, so the Court should find that

Defendants’ acts constitute outrageous and wanton conduct.

Here, the Court finds that Plaintiff has shown, by clear

and convincing evidence, that in orchestrating the scheme to

transfer all of their interests in the ten properties when the

Incarcerated Defendants were aware that they would be indebted

to the victims of the arson, and therefore would be depriving

the victims of their rights to recover, the Incarcerated

Defendants acted with “malice, vindictiveness and a wholly

wanton disregard of the rights of others.” Pittsburgh Live,

Inc., 615 A.2d at 442.

However, in determining whether the imposition of punitive

damages is justified, the Court must also consider evidence of

the Incarcerated Defendants’ ability to pay. See Berry v.

Anderson, 502 A.2d 717, 721 (Pa. Super. Ct. 1986) (noting that

“punitive damages, to effectively deter reprehensible conduct,

must be tailored to an individual’s ability to pay.”); Byrd v.

Sacco, 1 Pa. D.&C. 5th 319, 333 (Ct. Comm. Pl. June 30, 2006)

(noting it was relevant for the jury to consider evidence of the

defendant’s ability to pay punitive damages). Because the

Incarcerated Defendants already owe $22,000,000.00 under the

Restitution Agreement and $8,574,255.00 in compensatory damages

and $1,000,000.00 in punitive damages pursuant to the Court of

Common Pleas’ judgment, and because there is no evidence that

the Incarcerated Defendants have an interest in additional

assets recoverable by Plaintiff, the Court finds that the

Incarcerated Defendants have no ability to pay an award of

punitive damages. Accordingly, the Court will not award punitive

damages with respect to the Incarcerated Defendants.

Moreover, though the Non-Incarcerated Defendants were the

recipients of the Incarcerated Defendants’ interests in the

properties, the Court declines to find that Plaintiff has shown,

by clear and convincing evidence, that the individual Non-

Incarcerated Defendants acted with the requisite malice,

vindictiveness, and wanton disregard for the rights of Plaintiff

when agreeing to accept the transfer of the Incarcerated

Defendants’ interests in the properties, which would merit the

imposition of punitive damages.

4. Pre and post-judgment Interest

Plaintiff finally requests that the Court award pre and

post-judgment interest. In diversity cases, pre-judgment

interest is governed by state law. See Yohannon v. Keene Corp.,

924 F.2d 1255, 1265 (3d Cir. 1991); see also Talen Energy

Marketing, LLC v. Aluminum Shapes, LLC, 19-4303, 2021 WL 534467,

at *4 (E.D. Pa. Feb. 12, 2021). “[P]re-judgment interest may be

awarded ‘when a defendant holds money or property which belongs

in good conscience to the plaintiff, and the objective of the

court is to force disgorgement of his unjust enrichment.’”

Kaiser v. Old Repub. Ins. Co., 741 A.2d 748, 755 (Pa. Super. Ct.

1999) (quoting Dasher v. Dasher, 542 A.2d 164, 164-65 (Pa.

Super. Ct. 1988)). “Pennsylvania courts have awarded prejudgment

interest as of right in contract cases, ‘but also as an

equitable remedy awarded to an injured party at the discretion

of the trial court.’” George M. Axilbund Trust, 2021 WL 5370828,

at *6 (quoting Somerset Community Hosp. v. Allan B. Mitchell &

Associates, Inc., 685 A.2d 141, 201 (Pa. Super. Ct. 1996)). As

Plaintiff points out, courts in this circuit have authorized the

award of pre-judgment interest in cases arising under the PUVTA.

See In re Blatstein, 260 B.R. at 722-23; Sikirica v. Wettach,

511 B.R. 760, 772-73 (W.D. Pa. 2014); Tiab Comm. Corp. v.

Keymarket of Nepa, Inc., 263 F. Supp. 2d 925, 947 (M.D. Pa.

2003).

Generally, “[t]he fairest way for a court is to decide

questions pertaining to interest according to a plain and simple

consideration of justice and fair dealing.” George M. Axilbund

Trust, 2021 WL 5370828, at *6 (quoting Linde v. Linde, 220 A.3d

1119, 1150 (Pa. Super. Ct. 2019)). Courts in this circuit will

generally consider four factors in considering whether

prejudgment interest is warranted: (1) whether the claimant has

been less than diligent in prosecuting the action; (2) whether

the defendant has been unjustly enriched; (3) whether an award

would be compensatory; and (4) whether countervailing equitable

considerations militate against a surcharge. Feather v. United

Mine Workers, 711 F.2d 530, 540 (3d Cir. 1983); In re Blatstein,

260 B.R. 698, 721 (E.D. Pa. 2001); Tiab Comm. Corp., 263 F.

Supp. 2d at 947.

Here, Plaintiff contends it is entitled to pre-judgment

interest because Plaintiff has been diligent in prosecuting the

action, such interest would compensate Plaintiff for the

necessary time and expenses of litigating this matter, and

because no countervailing considerations militate against this

award. Defendants do not dispute this. The Court agrees that

Plaintiff is entitled to prejudgment interest here.

Under Pennsylvania law, unless otherwise specified by the

parties, the rate of prejudgment interest is calculated as

simple interest at a rate of six percent per year. 41 Pa. Stat.

Ann. § 202 (West 1999). Thus, pre-judgment interest will be

calculated based on the undisputed value of the seven properties

from the date by which they were fraudulently transferred, less

the value of any mortgage or other liens.42

Plaintiff is also entitled to post-judgment interest.

42 Because the Court will award only equitable relief with

respect to the three properties not subject to the Restitution

Agreement, the Court will award pre-judgment interest with

respect to the remaining seven properties only.

The award of post-judgment interest is governed by the federal

post-judgment interest statute, 28 U.S.C. § 1961. See Pierce

Assocs., Inc. v. Nemours Found., 865 F.2d 530, 548 (3d Cir.

1988) (noting that issues of post-judgment interest were

“governed by 28 U.S.C. § 1961 notwithstanding that this is a

diversity action”); see also Allstate Ins. Co. v. Clymer, No.

93-0348, 1994 WL 423875, at *2 (E.D. Pa. Aug. 11, 1994)

(collecting cases) (“As a general rule in federal cases where

jurisdiction is based on diversity of citizenship, federal

courts have held that post-judgment interest is governed by the

federal post-judgment interest statute rather than by state

law.”); Talen Energy Marketing, LLC, 2021 WL 534467, at *5

(same).

Section 1961(a) states that “[i]nterest shall be allowed on

any money judgment in a civil case recovered in a district

court.” 28 U.S.C. § 1961(a). The statute mandates that such

interest be “calculated from the date of the entry of the

judgment, at a rate equal to the weekly average 1-year constant

maturity Treasury yield, as published by the Board of Governors

of the Federal Reserve System, for the calendar week preceding.”

Id. Section 1961(b) requires that interest be computed “daily to

the date of payment” and “compounded annually.” Id. § 1961(b).43

43 The applicable post-judgment interest rate is 3.12%.

Defendants do not oppose the imposition of post-judgment

interest. Accordingly, Plaintiff is entitled to post-judgment

interest in accordance with 28 U.S.C. § 1961.

5. Attorneys’ Fees

Plaintiff contends that it is entitled to receive

attorneys’ fees here. Under Pennsylvania law, “a litigant cannot

recover counsel fees from an adverse party unless there is

express statutory authorization, a clear agreement of the

parties, or some other established exception.” Trizechahn

Gateway LLC v. Titus, 976 A.2d 474, 482-83 (Pa. 2009).

Plaintiff argues that because section 5107(a)(3)(ii) of the

PUVTA allows the Court to grant “any other relief circumstances

may require,” Pa. C.S. § 5107(a)(3)(iii), Plaintiff is entitled

to reasonable attorneys’ fees and legal costs. However, “there

is no express statutory authorization for an award of attorneys’

fees” under the PUVTA, or evidence of another established

exception here. Wells Fargo Bank, Nat’l Assoc. v. Akanan, ___ F.

Supp. 3d ___, 2021 WL 5910422, at *5 (W.D. Pa. 2021). Though

section 5107(a)(3)(ii) of the PUVTA provides for a “catch-all”

damages provision, because attorneys’ fees are not explicitly

authorized by the statute, the Court will decline to award

attorney’ fees here. See id. (holding that the plaintiff was not

entitled to attorneys’ fees with respect to its claim of

fraudulent transfer under the PUVTA).44

IV. CONCLUSION

For the foregoing reasons, judgment on Count I of the

Complaint will be entered in favor of Plaintiff and against

Defendants. The following three transfers will be voided: (1)

the transfer of Bahaa Dawara’s interest in 19 Ridgeway Avenue,

Norwood, PA 19074 to Faten Dawara (a/k/a Fatan Dawara); (2) the

transfer of Imad Dawara’s interest in 305 Seminole Street,

Essington, PA 19029 to Maisaa Dawara; and (3) the transfer of

Imad Dawara’s interest in 407 Seminole Street Essington, PA

19029 to Mirvat Dawara. Title to these properties will be

returned to the Incarcerated Defendants and, consistent with Pa.

C.S. § 5107(a)(3)(iii), the Incarcerated Defendants will be

permanently enjoined from further transferring their interests

in these properties until further order of the Court.

Plaintiff will be entitled to a judgment for the value of

the remaining seven properties. Defendants will be jointly and

severally liable for the value of the seven properties as

provided for in the accompanying Order and Judgment. Plaintiff

will be entitled to pre and post-judgment interest, which will

44 In any event, even if attorneys’ fees were available under

the PUVTA, the Court would exercise its discretion and, in

considering the extent of the financial award in this case,

decline to award attorneys’ fees here.

be calculated from the value of the seven properties subject to

the Restitution Agreement. Plaintiff’s request for punitive

damages and attorneys’ fees will be denied.

Because Plaintiff has failed to provide evidence supporting

its allegation that the Incarcerated Defendants fraudulently

transferred other unidentified assets to the Non-Incarcerated

Defendants, as pled in Count II of the Complaint, Count II of

the Complaint will be dismissed. Plaintiff also requests

additional relief under Counts III, IV, and V of the Complaint.

Because Plaintiff has not proven entitlement to additional

relief that would not be duplicative of the relief awarded under

Count I, Counts III, IV, and V will be dismissed as well.

An appropriate order follows.