PNC Bank v. Willis, D. and P. ( 2014 )

J.S45043/14 & J.S45044/14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PNC BANK, NATIONAL ASSOCIATION, : IN THE SUPERIOR COURT OF
SUCCESSOR IN INTEREST TO NATIONAL : PENNSYLVANIA
CITY BANK, :
:
v. :
:
DONALD J. WILLIS AND :
PATRICIA A. WILLIS, :
:
Appellants : No. 235 EDA 2014
Appeal from the Order Entered November 19, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division No(s).: 3251 June Term, 2013
PNC BANK, NATIONAL ASSOCIATION, : IN THE SUPERIOR COURT OF
SUCCESSOR IN INTEREST TO NATIONAL : PENNSYLVANIA
CITY BANK, :
:
v. :
:
WHISPERING MEADOWS, LLC, :
:
Appellant : No. 282 EDA 2014
Appeal from the Order Entered November 19, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division No(s).: 3250 June Term, 2013
BEFORE: BOWES, WECHT, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED DECEMBER 30, 2014
We dispose of these two appeals together, as they lie from identical
orders issued in the Philadelphia County Court of Common Pleas denying
*
Former Justice specially assigned to the Superior Court.
J.S45043/14 & J.S45044/14
petitions to strike or open confessed judgments obtained by the same
Appellee, PNC Bank, National Association, Successor in Interest to National
City Bank. The appellants at No. 235 EDA 2014 are Donald J. and Patricia A.
Willis. The appellant at No. 282 EDA 2014 is Whispering Meadows, LLC, a
limited liability company of which the Willises are members. We will use the
appellation “Appellants” to refer to all three appellants. 1 Appellants have
filed identical briefs and argue the trial court erred in: (1) holding they did
not raise meritorious defenses to the confessed judgment; and (2) awarding
the attorneys’ fees to Appellee. We deny relief on the first issue but grant
relief on the second. Accordingly, we vacate and remand for the calculation
of attorneys’ fees.
“On April 30, 2007, Donald and Patricia Willis, as the borrowers,
executed a promissory note with National City Bank, as the lender, in the
principal amount of $1,280,000[.]” Trial Ct. Op., 2/26/14, at 2. The Willises
defaulted on the note. Am. & Restated Forbearance Agreement, 7/1/12, at
1, Ex. C to Appellee’s Compl. in Confession of Judgment, 6/25/13.
On July 1, 2012, [the Willises and Appellee] executed an
“Amended and Restated Forbearance Agreement” that
amended the payment terms of the promissory note and
caused Whispering Meadows, LLC . . . to execute a
1
Appellants were represented in the trial court proceedings and in the
instant appeal by the same law office. Furthermore, the appellate briefs,
trial court opinions, and filings in both cases are identical, and for ease of
disposition we refer to them in the singular.
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J.S45043/14 & J.S45044/14
guaranty and suretyship agreement whereby it became a
guarantor and surety for the Willis[es’] obligations.
Trial Ct. Op. at 2 (citations to record omitted). The documents attached to
the forbearance agreement set forth the outstanding balance as
$613,233.23.2 The new maturity date for the loan was one year later, June
30, 2013. Am. & Restated Forbearance Agreement, Exh. A at 1.
Appellants did not make any payments under the new agreement. On
June 25, 2013, Appellee, as a successor in interest to National City Bank
filed complaints in confession of judgment against both the Willises and
Whispering Meadows, LLC for the alleged failure to make payments Appellee
asserted it was owed $710,411.96, which included $63,715.94 in “attorneys’
fees of 10%.”3
[The parties] agreed to extend the time to file petitions
to strike off or open the judgment so that the parties could
attempt to negotiate a settlement of their issues. Those
discussions were unsuccessful, and [on September 26,
2013, Appellants] separately filed nearly identical motions
to “Open and Strike Confessed Judgment.”[4]
2
This figure included: (1) a principal balance of $546,012.57; (2) interest
due of $61,950.33; and (3) a late fee of $5,270.33. The interest rate was
5%.
3
The total damages of $710,411.96 also included: (1) $546,012.57 of
principal balance; (2) $91,146.89 of interest through the date of the filing of
the complaint; (3) $9,536.56 late charges. Appellee’s Compl. in Confession
of Judgment, 6/25/13, at ¶ 7.
4
Pennsylvania Rule of Civil Procedure 2959 governs petitions strike or open
confessed judgment. Pa.R.C.P. 2959. “Pursuant to Pa.R.C.P. 2959(a)(3), a
petition to strike or open a confessed judgment must be filed within thirty
days of the date the judgment creditor filed written notice of its
-3-
J.S45043/14 & J.S45044/14
Trial Ct. Op. at 2 (citations to record omitted).
Appellants’ motions raised three defenses. First, they argued:
[Appellee] has failed to properly calculate the amount
outstanding on the Promissory Note and has failed to
give [Appellants] proper credit for payments[.]
Specifically, [Appellants] made two payments of $2,500 on
March 30, 2011 and April 12, 2011.[5 Appellee’s] failure to
credit these payments affects the principal balance,
interest, and late charges in an amount that cannot be
determined at this time because [Appellee] has thus far
been unwilling to provide an accounting on how those
amounts were calculated. Thus, it is indisputable that the
confessed judgment is in an amount in excess to which
[Appellee] could be entitled as a matter of law.
Appellants’ Mot. to Open & Strike Confessed Judgment, 9/26/13, at ¶ 3
(emphasis added). Appellants’ second defense was that Appellee
acted in bad faith with the intent and effect of frustrating
[Appellee’s] ability to make payments on the Promissory
Note. Specifically, [Appellee] lost two executed copies of
the Forbearance Agreement; (2) . . . never provided
[them] with a countersigned copy of the Forbearance
Agreement; (3) . . . never provided [them] with a
payment schedule; (4) . . . never provided [them] with a
monthly payment amount; and (5) . . . never provided
[them] with a location or address to which payments could
be directed. [Appellants] requested the foregoing items on
numerous occasions, but [Appellee] failed to address these
requests. . . . As a result of [Appellee’s] failure to provide
the foregoing items, [Appellants] were effectively unable
to make regular payments on the Promissory Note. The
two payments [above] were made by [Appellant] Donald J.
execution.” ESB Bank v. McDade, 2 A.3d 1236, 1240 (Pa. Super. 2010)
(emphasis added). Here, Appellee did not seek to execute the confessed
judgments, and thus Rule 2959(a)(3) is not triggered. See id.5
As we discuss infra, the March and April 2011 payments predated the July
2012 execution of the amended forbearance agreement.
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J.S45043/14 & J.S45044/14
Willis literally appearing at a local [branch of Appellee
bank] and giving the checks to a local teller. It was clear
to [Appellants] from these circumstances that their
payments were not being properly credited, and the
Complaint in Confession of Judgment . . . has confirmed
that belief. Thus, as a result of [Appellee’s] bad faith, it
was objectively unreasonable for [Appellants] to
continue to make payments that they knew would
not be properly credited to the Promissory Note.
Id. at ¶ 2 (emphases added). Appellants’ final defense was that the
attorneys’ fees of $63,715.96 “act[ed] as an unlawful penalty rather than a
lawful liquidated damages provisions [sic]” and was “clearly unrelated to and
disproportionate to the work actually performed,” that of “filing . . . a three
page Complaint in Confession of Judgment.” Id. at ¶ 3.
On October 2, 2013, Appellee filed answers, asserting Appellants
“failed to present the requisite evidence of a meritorious defense necessary
to open a confessed judgment.” See Trial Ct. Op. at 4. Appellee attached a
transaction history for the account, which showed the March and April, 2011
payments were credited. Appellee further argued that Appellants offered no
factual support for their allegation that it “frustrated [their] ability to make
payments on the promissory note.” Id.
[Appellee] further argued “the other allegations
asserted by [Appellants] are immaterial, as none of them
[affected Appellants’] ability to make payments to
[Appellee] when due.” Finally, regarding the requested
attorney’s fees of 10%, [Appellee] asserted that they are
consistent with Pennsylvania law, and this court did not
need to specifically access their reasonableness as they
were specifically authorized by the warrant of attorney [in
the parties’ forbearance agreement].
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J.S45043/14 & J.S45044/14
Id. at 4-5 (citations to record omitted).
On November 14, 2013, the trial court held oral argument. Appellee
produced a transaction history of Appellants’ account. Appellants conceded
the two $2,500 payments were credited to their account. Appellee further
argued that “throughout 2011, the Willis[es] continued to make payments
on a monthly basis” and on December 13, 2011, “made a principal reduction
payment of $732,625.23.” Id. at 5 (quoting N.T., 11/14/13, at 7).
On November 18, 2013, the trial court entered two orders, denying
each of Appellants’ motions to strike or open the confessed judgments. This
timely appeal followed.6
In their first issue, Appellants argue the trial court abused its
discretion by failing to recognize their meritorious defense that Appellee
acted in bad faith. Their sole argument is:
The trial court was presented with uncontested evidence
that [Appellee]: (1) two executed copies of the
Forbearance Agreement [sic]; (2) provided [Appellants]
with a countersigned copy of the Forbearance Agreement
[sic]; (3) provided [Appellants] with a payment schedule
[sic]; (4) never provided [Appellants] with a monthly
payment amount; and, (5) provided [Appellants] with a
location or address to which payments could be directed.
6
Although the text of the orders state the date is November 18, 2013, the
orders bear “filed” time-stamps of November 19th. The trial docket also
indicated that notice of the orders was given on November 19th.
Accordingly, Appellants’ notices of appeal filed on December 19, 2013, were
timely. See Pa.R.A.P. 302(a); Pa.R.C.P. 236(a)(2). The trial court did not
order Appellants to file a Pa.R.A.P. 1925(b) statement; however the court
issued an opinion.
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J.S45043/14 & J.S45044/14
[Appellants’ Reproduced Record at] 47a-48a and 140a-
141a. Appellants] requested the foregoing items on
numerous occasions, but [Appellee] failed to address these
requests. Id. Specifically, [Appellant] Donald J. Willis
made numerous phone calls to Ms. Jean Mascia,
[Appellee’s] agent who negotiated the transaction, to have
these issues addressed, but none of his calls were
returned. Id.
The court below reasoned that [Appellants] should have
continued to make payments—of an indeterminate amount
and at an indeterminate location—on the blind faith that
their payments were being properly credited. This
effectively alleviates [Appellee] of its duty of good faith
and fair dealing by allowing [Appellee] to interfere with
and fail to cooperate with [Appellants’] attempts to
perform under the contract by making payments.
Appellants’ Brief at 8-9. We hold no relief is due.
This Court has stated:
“A petition to strike a judgment is a common law
proceeding which operates as a demurrer to the record.[“]
* * *
[T]he petition to strike a confessed judgment must focus
on any defects or irregularities appearing on the face of
the record, as filed by the party in whose favor the warrant
was given, which affect the validity of the judgment and
entitle the petitioner to relief as a matter of law. . . .
In contrast, “if the truth of the factual averments
contained in [the complaint in confession of judgment and
attached exhibits] are disputed, then the remedy is by
proceeding to open the judgment,” not to strike it. A
petition to strike a confessed judgment and a petition to
open a confessed judgment are distinct remedies; they are
not interchangeable. A petition to open a confessed
judgment is an appeal to the equitable powers of the
court. Factual disputes by definition cannot be raised
or addressed in a petition to strike off a confession
of judgment, because factual disputes force the court to
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J.S45043/14 & J.S45044/14
rely on matters outside the relevant record to decide the
merits of the petition.
Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 622-23 (Pa.
Super. 2013) (citations omitted) (emphases added).
In the instant matter, Appellants’ motion to strike the confessed
judgment did not aver any defects or irregularities appearing on the record.
Accordingly, we agree with the trial court that Appellants’ motions “were
only petitioning to open the confessed judgments.” See Trial Ct. Op. at 6.
Thus, we affirm the denial of the requests to strike the confessed judgment.
See id. We thus consider whether the trial court erred in denying the
motion to open the confessed judgment.
We note the relevant standard for a ruling on a petition to open a
confessed judgment: “A petition to open judgment is an appeal to the
equitable powers of the court. As such it is committed to the sound
discretion of the hearing court and will not be disturbed absent a manifest
abuse of discretion.” PNC Bank v. Kerr, 802 A.2d 634, 638 (Pa. Super.
2002) (citation omitted).
“[A] court acting in equity should open a confessed judgment only
when the petitioner ‘acts promptly, alleges a meritorious defense and
presents sufficient evidence of that defense to require submission of the
issues to the jury.’” Id. (citation omitted).
Pa.R.Civ.P. 2959(e) sets forth the standard by which a
court determines whether a moving party has properly
averred a meritorious defense. “If evidence is produced
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J.S45043/14 & J.S45044/14
which in a jury trial would require the issues to be
submitted to the jury the court shall open the judgment.”
Furthermore, the court must view the evidence presented
in the light most favorable to the moving party, while
rejecting contrary evidence of the nonmoving party. The
petitioner need not produce evidence proving that if the
judgment is opened, the petitioner will prevail. Moreover,
we must accept as true the petitioner’s evidence and all
reasonable and proper inferences flowing therefrom.
Liazis v. Kosta, Inc., 618 A.2d 450, 453 (Pa. Super. 1992) (citations
omitted and emphasis added). “Fundamentally, every contract imposes
upon the parties a duty of good faith and fair dealing in the performance and
enforcement of the contract.” Id. at 454.
In the case sub judice, the trial court opined that Appellants failed to
present sufficient evidence of a meritorious defense. We agree, and note
Appellants did not produce any evidence, either by attachment to their
motion7 to open confessed judgment or by presentation at oral argument
before the trial court.
With respect to Appellants’ claim that Appellee lost and failed to
provide executed copies of the forbearance agreement, we agree with the
trial court that these two facts, even if true, “had nothing to do with
[Appellants’] ability to make payments.” See Trial Ct. Op. at 7.
With respect to Appellants’ defense that Appellee failed to provide a
7
The only exhibits attached to Appellants’ motions to open confessed
judgment were: (1) emails between the parties concerning their agreement
to extend the time for Appellants to petition to open the judgment; (2)
copies of two checks payable to Appellee, of $2,500 each, and bearing
“deposited” stamps.
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J.S45043/14 & J.S45044/14
payment schedule, monthly payment amount, and payment address, we
note the following. Appellants’ motion to open confessed judgment averred
that Donald Willis called Ms. Mascia, Appellee’s representative, for the
payment schedule, monthly amount, and payment address, “none of his
calls were returned,” and consequently, [the Willises] “were effectively
unable to make regular payments on the Promissory Note.” Appellants’
Mot. to Open & Strike Confessed Judgment at ¶ 4 (emphasis added).
Appellants concluded, “Thus, as a result of [Appellee’s] bad faith, [including
its alleged failure to credit the March and April 2011 payments,] it was
objectively unreasonable . . . to continue to make payments that they knew
would not be properly credited to the Promissory Note.” Id. (emphasis
added).
A careful review of this argument reveals Appellants’ argument was
that because two payments were not properly credited under the
promissory note and Appellants were unable to obtain payment
information, it was unreasonable for them make payments under the
subsequently executed forbearance agreement. Appellants provided no
evidence, nor even an assertion, that despite the lack of a payment
schedule, monthly payment amount, and payment address for the
promissory note, and the fact that they ultimately defaulted under the
promissory note, they subsequently attempted to obtain the above
information after they executed the forbearance agreement. The trial
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J.S45043/14 & J.S45044/14
court noted:
Given the undisputed fact that [Appellants] successfully
made payments to [Appellee] on the account in the past
(and even when they asserted the payments were not
being credited), we agreed it was absurd for [Appellants]
to now claim [Appellee’s] conduct somehow prevented
them from doing so after the forbearance agreement was
executed . . . . No doubt that is why [Appellants] carefully
alleged only the hollow accusation that they were
“effectively” unable to make regular payments on the
promissory note, not that they were actually precluded
from doing so.[ ]
Trial Ct. Op. at 7 (emphasis added).
Furthermore, the trial court reasoned:
[T]here is a level of disingenuousness in [Appellants’]
claiming bad faith on [Appellee’s] part for allegedly not
providing . . . a monthly payment amount after they
entered into the forbearance agreement when thereafter
[Appellants] had an equal obligation [sic] to make
payment, but failed to make any payment on the account.
In addition to explicitly stating payments were due “on the
last day of each consecutive calendar month” until the
June 30, 2013 maturity date (which is essentially a
payment schedule, something [Appellants] also averred
they were never provided with in bad faith), Exhibit A to
the forbearance agreement includes the interest rate and
payment terms for the loan going forward. This court is
hard pressed to believe that if [Appellants] really were not
being told [the monthly payment amount], they could not
have attempted to calculate the expected payment (that
appears to be approximately $6,900 a month) or at least
make some kind of payment on the account, which in all
certainty would have been properly credited to the account
like all the other payments they made. Of course, there
is no evidence [Appellants] attempted to make a
payment of any kind after the forbearance
agreement was entered into, but were refused. . . .
Id. at 7-8 n.1 (emphases added).
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J.S45043/14 & J.S45044/14
On appeal, Appellants ignore the above analyses. They likewise ignore
the trial court’s observation that at oral argument: (1) they conceded that
the March and April 2011 payments were credited to their account; and (2)
Appellee averred the Willises continued to make monthly payments
“throughout 2011” and “made a principal reduction payment of
$732,625.23” on December 13, 2011. See Trial Ct. Op. at 5; N.T. at 4, 6-7.
At oral argument, Appellee contended such payments indicated Appellants’
knowledge of where to make payments, as well as the fact that they had,
prior to executing the forbearance agreement, previously made payments.
N.T. at 7. In response, Appellants: (1) reiterated the five instances of
alleged bad faith on the part of Appellee; and (2) then reasoned that the
transaction history corroborated their claims: the lack of “a concession of
monthly payment[s]” and the different amounts paid “tend to show
[Appellants] didn’t even know what [they were] supposed to be paying
because of the bank’s actions.” Id. at 9-10.
In light of all the foregoing, including their argument before the trial
court, Appellants have not persuaded this Court that the trial court abused
its discretion in finding they did not allege meritorious defenses. See PNC
Bank, 802 A.2d at 638. Accordingly, we deny relief on their first issue.
Appellants’ second claim on appeal is that the court abused its
discretion in rejecting their defense as to the attorneys’ fees. As stated
above, Appellee’s complaint in confessed judgment demanded 10%
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attorneys’ fees in the amount of $63,715.94. Appellants present two
arguments, which we address seriatim. First, they assert that the
“attorneys’ fee awards . . . had no relationship to the work actually
performed by [Appellee’s] attorney, and therefore, violated the express
terms of the Forbearance Agreement, which specifically provides that ‘the
amount of attorneys’ fees that [Appellee] may recover . . . shall not exceed
the actual attorneys’ fees incurred.’” Appellants’ Brief at 9-10. They assert
that the trial court improperly overlooked this provision of the forbearance
agreement. Appellants further aver, without any citation to the record, that
Appellee “admitted that those fees bore no relationship whatsoever to the
work actually performed by [its] counsel.” See id. at 10. They reason that
the attorneys’ fees thus “acted as an unlawful penalty rather than a lawful
liquidated damages provision.” Id. We find no relief is due.
In Dollar Bank v. Northwood Cheese Co., 637 A.2d 309 (Pa. Super.
1994), the trial court refused to open a confessed judgment to determine
the reasonableness of counsel fees. Id. at 314. On appeal, the borrower
“assert[ed] that counsel fees awarded in accordance with the fifteen percent
attorney’s commission specified in the warrant of attorney [were]
excessive.” Id. This Court set forth relevant Pennsylvania authority:
If a confessed judgment includes an item not authorized
by the warrant, the judgment is void in its entirety and
must be stricken. However, if the judgment as entered is
for items clearly within the judgment note, but excessive
in amount, the court will modify the judgment and cause a
proper judgment to be entered. If the judgment was
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entered for an amount which was grossly excessive, the
judgment must be stricken in its entirety.
Id. (citations omitted). We then reasoned:
Here, it is clear that attorney’s fees in the amount of
fifteen percent were specifically authorized by the warrant
of attorney. [The borrowers] claim that the amount of
attorneys’ fees is excessive, but they provide no citation to
any evidence of record to this effect, and similarly do not
make any argument as to why the fees are claimed to be
excessive. We note that a voluminous record accompanies
the instant case. In light of the fact that the warrant of
attorney permits the fee to which [the borrowers] object,
and in the absence of any specific argument concerning
the alleged excessiveness of the fee, we find this argument
meritless.
Id.Rait P’ship, L.P. v. E Pointe Props. I, 957 A.2d 1275 (Pa. Super.
2008), relied on Dollar Bank. Id. at 1279. In that case, the borrowers
argued “that the trial court erred in refusing to strike off or open that part of
the judgment that included ‘an attorney’s collection commission’ of
$450,000.” Id. This Court disagreed:
[T]his Court has previously approved the inclusion of
similar collection commission provisions in contracts. See:
Dollar Bank[,637 A.2d at 314] (attorney’s fee provision of
fifteen percent enforceable where it was “specifically
authorized by the warrant of attorney”). Here, there is no
dispute that the Forbearance Agreement specifically
provided for [the lender] to include as part of the
confessed judgment “an attorney’s collection commission
of fifteen percent (15%) of the aggregate amount of the
foregoing sums.” . . .
Id. Furthermore, in a footnote, this Court stated:
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We are not persuaded by [the borrower’s] argument that
the decision of this Court in PNC Bank v. Bolus, [655
A.2d 997 (Pa.Super. 1995)], compels a different result. In
that case, this Court approved a trial court's finding that
the inclusion of an attorney's commission of $70,647.77 on
a confessed judgment was "unreasonable." However, the
provision at issue in that case specifically called for the
imposition of a "reasonable" fee, thus justifying the trial
court's inquiry into the reasonableness of the fee. Here,
however, there is no similar provision, merely the
automatic imposition of a "commission" of fifteen percent
taxable as a cost attributable to [the borrower’s] default.
...
Id. at 1279 n.3.
In the instant case, the forbearance agreement included the following
clause pertaining to attorneys’ fees:
The Borrower hereby reaffirms and empowers any
attorney of any court of record, after he occurrence of any
Event of Default hereunder, to appear for the Borrower
and, without complaint filed, confess judgment . . . against
the Borrower in favor of the Bank . . . for the entire
principal balance of the Note, all accrued interest and all
other amounts due hereunder, together with costs of suit
and an attorney’s commission of the greater of 10%
of such principal and interest or $1,000 added as
reasonable attorneys’ fee, and for doing so, the Note or
a copy verified by affidavit shall be a sufficient
warrant. . . . Notwithstanding the attorney’s commission
provided for in this paragraph (which is included in the
warrant for purposes of establishing a sum certain), the
amount of attorneys’ fees that the Bank may recover
from the Borrower shall not exceed the actual
attorneys’ fees incurred by the Bank.
Am. & Restated Forbearance Agreement at ¶ 10 (emphases added).
The trial court found Appellants’ claim failed as a matter of law. Citing
Rait P’ship, L.P., the trial court noted the Superior Court “has previously
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approved of the inclusion of similar collection commission provisions in
contracts.” Trial Ct. Op. at 8. The trial court also held that it “need not
assess the reasonableness of such a commission where the” contract
explicitly provides for the commission and does not specifically call for a
“reasonable’ fee.” Id. The court reasoned: “Here, the requested attorney’s
commission of 10% appeared in four separate places in the contracts
between the parties and did not call on the court to inquire into the
reasonableness of the commission.” Id.We agree with the court’s reasoning. The forbearance agreement
provided for “an attorney’s commission of the greater of 10% of such
principal and interest or $1,000 added as a reasonable attorney’s fee.” Am.
& Restated Forbearance Agreement at ¶ 10 (emphasis added). Although the
term “reasonable” appears, it modifies the $1,000 alternative. However, the
agreement provided for either 10% of principal and interest or $1,000,
whichever was greater. In this case, the 10% figure was greater and thus
controlled. That clause did not invoke a court inquiry into the
reasonableness of attorney’s fees.
Appellants’ second argument is that that the forbearance agreement
limited an award of attorney’s fees to “actual attorneys’ fees” incurred by
Appellee. We agree with this interpretation of the contract. See Am. &
Restated Forbearance Agreement at ¶ 10. The trial court included the
following footnote in its opinion:
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While the [forbearance agreement] provisions . . . allowed
[Appellee] to establish a sum certain and confess
judgment in the amount of $63,715.94 for attorney’s fees,
the court would note the guarantee and forbearance
agreements will only allow [Appellee] to . . . recover . . .
the actual attorney’s fees it incurs, which may end up
being less than $63,000 in the absence of further
litigation.
Trial Ct. Op. at 8 n.2 (citing Am. & Restated Forbearance Agreement at ¶
10) (emphasis added).
On appeal, Appellants respond:
The problem with [the trial court’s] analysis is that the
confessed judgments act as final [judgments. Appellee]
can collect $63,715.94 in attorney’s fees with impunity
[sic], and if [Appellants] attempt to argue [Appellee]
actually expended less, then surely [Appellee] will fall back
on the doctrine of res judicata. In other words, the only
way for the trial court have given [sic] “actual attorney’s
fees” provision any hope of being enforced was to open the
confessed judgment and require [Appellee] to establish its
actual attorney’s fees. Having failed to do so was an
abuse of discretion which should be overturned.
Appellants’ Brief at 11-12. We determine this argument has merit.
The trial court’s footnote indicates that the final sum of Appellee’s
attorney’s fees was not yet calculated or determined, and could be less than
the amount demanded in its complaint. Trial Ct. Op. at 8 n.2. None of
Appellee’s filings, including its complaint, includes documentation showing
incurrence of $63,715.94 of attorneys’ fees. Our review of the record
likewise reveals no explanation for the court’s reference to a $63,000 figure.
As Appellants point out, the confessed judgments will act as final judgments
against them. Because the trial court has indicated the final sum of
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attorney’s fees requested may not be calculated, and may be less than what
was demanded, we agree with Appellants that the confessed judgments
should be opened to determine this discrete issue. Accordingly, we vacate
the court’s orders denying Appellants’ motions to open the confessed
judgments and remand for the court to determine only the appropriate
award of attorneys’ fees.
Orders vacated. Case remanded for proceedings consistent with this
memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/30/2014
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