Falcone, D. v. Falcone, D. ( 2019 )

J-A27017-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DOMENIC FALCONE, SR. IN THE SUPERIOR COURT
OF PENNSYLVANIA
Appellee
v.
DOMENIC FALCONE, JR.
Appellant No. 784 EDA 2018
Appeal from the Order Entered February 16, 2018
In the Court of Common Pleas of Delaware County
Civil Division at No.: 2016-003920
DOMENIC FALCONE, SR. IN THE SUPERIOR COURT
OF PENNSYLVANIA
Appellee
v.
DOMENIC FALCONE, JR.
Appellant No. 791 EDA 2018
Appeal from the Order Entered February 14, 2018
In the Court of Common Pleas of Delaware County
Civil Division at No.: 2016-003920
BEFORE: BOWES, STABILE, and McLAUGHLIN, JJ.
MEMORANDUM BY STABILE, J.: FILED FEBRUARY 21, 2019
Appellant/defendant Domenic Falcone, Jr. appeals from the February
14, 2018 and February 16, 2018 orders entered in the Court of Common Pleas
of Delaware County (“trial court”). The February 14, 2018 orders overruled
Appellant’s preliminary objections to Appellee/plaintiff Domenic Falcone, Sr.’s
J-A27017-18
petition for a charging order against Appellant’s business interests and granted
the charging order. The February 16, 2018 order denied Appellant’s petition
to open confessed judgment. Upon review, we affirm.
The facts and procedural history of this case are undisputed. Briefly, on
May 4, 2016, Appellee filed a complaint in confession of judgment for
monetary damages against Appellant, his son. In the complaint, Appellee
averred that Appellant had executed a promissory note in favor of Appellee
for $400,000.00 with an annual rate of three percent (3%) plus five percent
(5%) for attorney’s fees. The promissory note contained a confession of
judgment clause. Appellee alleged that despite demands for repayment,
Appellant failed to pay him a remaining balance of $100,000.00. As a result,
Appellee sought $155,011.96. On the same day as the filing of the complaint,
the Delaware County Prothonotary issued a notice that judgment in the matter
had been entered against Appellant.
On May 27, 2016, Appellant petitioned the trial court to open the
confessed judgment, raising several affirmative defenses. On June 16, 2016,
Appellee filed a response, opposing the petition to open the confessed
judgment. On November 3, 2017, in an effort to satisfy the confessed
judgment, Appellee filed a petition for a charging order against Appellant’s
interests in Narberth Investment Associates, LLC and Narberth Investment
Group, L.P. On November 21, 2017, Appellant filed preliminary objections to
Appellee’s petition for a charging order, asserting that Appellee had failed to
join an indispensable party in the underlying confession of judgment case. On
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J-A27017-18
February 14, 2018, the trial court overruled Appellant’s preliminary objections
and granted Appellee’s petition for a charging order. In granting the charging
order, the trial court ordered:
1. [Appellant’s] membership interest in Narberth Investment
Associates, LLC, is hereby charged with payment of the
unsatisfied amount of the judgment, interests, and costs until
satisfied in full;
2. [Appellant’s] interest in Narberth Investment Group, L.P., is
hereby charged with payment of the unsatisfied amount of the
judgment, interests, and costs until satisfied in full;
3. Any and all distributions, returns of contributions, and/or
outstanding valid obligations to which [Appellant] is entitled
shall be paid by Narberth Investment Associates, LLC and/or
Narberth Investment, L.P., directly to [Appellee].
4. [Appellant] shall provide [Appellee] with detailed information
concerning any and all corporations, partnerships, limited
liability companies, or other business entities in which he hold
an interest including Prescott Homes, Inc., within 30 days of
the date of this order.
5. Further, [Appellant] is hereby enjoined from transferring,
assigning, selling, gifting, or otherwise diluting his ownership,
stock, or membership interests in any corporation, partnership,
limited liability company, or other business entities, until
judgment has been satisfied, or upon further order of this
court.
Trial Court Order, 2/4/18. On February 16, 2018, the trial court denied
Appellant’s petition to open the confessed judgment. Appellant timely
appealed to this Court.1 Both Appellant and the trial court complied with
Pa.R.A.P. 1925.
____________________________________________
1Although Appellant appealed the February 14 and February 16, 2018 orders
separately, we have consolidated his appeals for ease of disposition.
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J-A27017-18
On appeal,2 Appellant raises four issues for our review:
[I.] Did the trial court abuse its discretion and/or commit errors
of law in denying the petition to open/strike the confessed
judgment without first proceeding with the scheduled hearing on
the six meritorious defenses raised in the petition after nearly one
year of discovery on these issues?
[II.] Did the trial court abuse its discretion and/or commit an error
of law in granting the petition for a charging order before Appellant
was given the opportunity to answer the petition and “state the
material facts which constitute the defense to the petition”
pursuant to Pennsylvania Rule of Civil Procedure 206.1 and 206.2?
[III.] Did the trial court abuse its discretion and/or commit an
error of law by overruling Appellant’s preliminary objections to the
petition for a charging order where Appellee’s petition failed to
include an indispensable party?
[IV.] Did the trial court abuse its discretion and/or commit an error
of law by granting the petition for a charging order where the
petition was never adjudicated on the merits to determine if
circumstances were present under which a charging order “may”
be issued pursuant to 15 Pa.C.S.A. §§ 8673 and 8853 to attach
the transferable interests of the judgment debtor?
Appellant’s Brief at 5 (unnecessary capitalization omitted).
After careful review of the record and relevant case law, we conclude
that the trial court accurately and thoroughly addressed the merits of
Appellant’s issues on appeal. See Trial Court Opinion, 5/16/18, at 9-29.
Accordingly, we affirm the trial court’s February 14, and 16 orders. We further
direct that a copy of the trial court’s May 16, 2018 opinion be attached to any
future filings in this case.
____________________________________________
2 We review a trial court’s order denying a petition to strike a confessed
judgment to determine whether the record is sufficient to sustain the
judgment. Lechowicz v. Moser, 164 A.3d 1271, 1273 (Pa. Super. 2017)
(citations omitted). A petition to strike a judgment may be granted only if a
fatal defect or irregularity appears on the face of the record. Id. Similarly,
we review an order denying a petition to open the confessed judgment for an
abuse of discretion. Id.
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J-A27017-18
Orders affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/21/19
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Circulated 01/31/2019 01:58 PM
IN THE COURT OF COMMON PLEAS OF DELA WARE COUNTY, PENNSYLVANIA
CIVIL ACTION-LAW
DOMENIC FALCONE, SR. No. 16-003920
PA Superior Court Docketing Numbers 784 EDA 2018
And 791 EDA 2018
v.
DOMENIC FALCONE, JR.
JEFFREY B. McCARRON, ESQUIRE, CANDIDUS K. DOUGHERTY, ESQUIRE, CARYN J.
STEIGER, ESQUIRE and JOSEPH P. O'BRIEN, ESQUIRE, Attorneys for the Plaintiff.
PAUL A. BUCCO, ESQUIRE and JOHN J. DORSEY, ESQUIRE, Attorneys for the Defendant.
OPINION
BURR, S.J. FILED: May 16, 2018
The Defendant, Domenic Falcone, Jr., has filed this dual appeal from the Orders of
this Court filed on February 14, 2018 and February 16, 2018, respectively overruling the
Defendant's Preliminary Objections to the Petition of the Plaintiff, Domenic Falcone, Sr., for
Charging Order, and denying the Defendant's Petition to Open Confessed Judgment.'
The Plaintiff filed his Complaint in Confession of Judgment for Money against his
son, the Defendant, on May 4, 2016, in order to recover the remaining balance of $100,000.00 on
a $400,000.00 Promissory Note executed by the Defendant nearly ten years ago on June 24,
2008, plus three percent interest and attorney's fees for a total judgment in the amount of
$155,011.66. The sworn and notarized Note, appended as Exhibit A to the Confession of
The Superior Court docketing statements for this action list both Orders as having been entered on February
16, 2018 and the filing date of the Notices of Appeal in this Court both on March 12, 2018. However, there are
consecutively issued PA Superior Court appeal docketing numbers at 784 EDA 2018 and 791 EDA 2018 for the
appealed from Orders. Therefore, since the Order overruling the Defendant's Preliminary Objections to Plaintiffs
Petition for a Charging Order was entered on February 14, 2018 sub Judice, discussion of the issues raised in the
appeal from that Order will appear under a heading bearing the first appeal docketing number of 784 EDA 2018.
Because the Order denyingthe Defendant's Petition to Open Confessed Judgment was entered on February 16,
2018, discussion of the issues raised in the appeal therefrom will appear under a heading bearing the second
docketing number of791 EDA 2018 below.
Judgment Complaint, includes, inter alia, an express allowance, "after one or more declarations
filed", for confession of judgment against the Defendant:
"ON DEMAND, after date [June 24, 2008] I, DOMENIC FALCONE, JR., do promise to
pay upon demand to the order of DOMENIC FALCONE, SR., the sum of Four Hundred
Thousand Dollars ($400,000.00), with interest at Three Percent (3%) per annum, payable
.at 54 West Eagle Road, Havertown, Pennsylvania 19083, with defalcation, value received
with interest and Further, to hereby empower any attorney of any Court of Record, and/or
Prothonotary of Montgomery County, within the United States or elsewhere to appear for
me and after one or more declarations filed, confess judgment against me as of any term
for the above sum with costs of suit and Attorney's commission of Five Percent (5%) and
for collection and release of all errors, and without stay of execution and inquisition and
extension upon any levy on real estate is hereby waived, and condemnation agreed to and
the exemption of personal property from levy and sale on any execution hereon, is hereby
expressly waived, and no benefit of exemption be claimed under and by virtue of any
exemption law nor in force which may be hereafter passed." (Confession of Judgment
Complaint-Exhibit A).
This document, bearing the signatures of a witness and the Defendant, is dated June
24, 2008. (Id.). Appended as Exhibit B to the Confession of Judgment Complaint is the
Defendant's signed and notarized Affidavit of Debtor's Waiver of Rights, also bearing the date
of June 24, 2008, in which the Defendant stated that he was:
" ... being duly sworn according to law, deposes and says that he ... , is the signer of the attached
note containing provision for the entry of judgment in court by confession and do/does hereby
intentionally, understandingly and voluntarily waive:
(a) the right to notice and hearing.
(b) the right to defalcation, i.e., the right to reduce or set off a claim by deducting a counterclaim.
(c) release of error.
(d) inquest (to ascertain whether rents and profits of defendant's real estate will be sufficient to
satisfy the judgment within seven years.
(e) stay of execution (if defendant owns real estate in fee simple within the county worth the
amount to which the plaintiff is entitled, clear of encumbrances ... )." (Id.).
The Plaintiff additionally contended in the Complaint in Confession of Judgment that:
2
• Under the terms of the Promissory Note, the Defendant was required to pay upon demand
any sums due and owing to the order of the Plaintiff. (Id., Paragraph 5).
• The Plaintiff sent a written demand to Defendant on April 7, 2016 via US Certified Mail
and with Return Receipt and US Regular Mail demanding payment of the balance owed
under the Note along with interest at 3% per annum in accordance with the terms of the
Note. (Id., Paragraph 6 and Exhibit C to Complaint - Plaintiffs written demand letter
with US mail certification).
• All conditions precedent to this Confession of Judgment both under the instrument and
the laws of the Commonwealth of Pennsylvania have been fulfilled. (Id., Paragraph 11).
• Defendant has made the following payments to Plaintiff under the Note:
$100,000.00 on 12/01/08
$ 50,000.00 on 12/12/08
$ 50,000.00 on 12/31/08
$100,000.00 on 4/25/14 (Id., Paragraph 14).
The Plaintiffs sworn and notarized averment of the Defendant's default upon this obligation
bearing. the date of May 3, 2016 was appended to the Confession of Judgment Complaint. The
Delaware County, Pennsylvania Office of Judicial Support then entered judgment against the
Defendant in the amount of $155,011.96 and sent the Defendant notice thereof on May 4, 2016,
or the same date upon which the Plaintiffs Complaint in Confession of Judgment for Money had
been filed.
The docket for this action reflects that the Defendant's Petition to Open Judgment
was filed on May 27, 2016, or some three weeks following the entry of the Judgment confessed
against him. It is here noted that, although the Defendant mentions the legal requirements of a
motion to strike a confessed judgment in his Petition and Memorandum of Law, the Defendant
does not seek a finding nor conclusion that this Judgment needs to be stricken. Therefore, any
such references of the Defendant therein may be disregarded.
In order to prevail on his Petition to Open Confessed Judgment, the Defendant was
required to respond promptly to the judgment confessed against him, to allege a meritorious
3
defense, and to present sufficient evidence that would allow submission of a defense to a jury.
Lambakis v . .Exar, 340 Pa. Super. 483, 490 A.2d 882 (1985). The evidence produced in support
thereof must be clear, direct, precise and credible. Germantown Savings .Bank v. Talacki, 441 Pa.
Super. 513, 657 A.2d 1285 (1995). The Defendant asserted the requisite timeliness in the filing
of the said Petition under Pennsylvania Rule of Civil Procedure 2959(a)(3)(i. e., thirty days from
the time of service of Notice to obtain relief from confessed judgment), and averred the
following defenses thereto:
• Affirmative Defense No. I - The Defendant disputes the amount of the Judgment claimed
in the Complaint. (Id., Paragraph I 0). Plaintiff calculated the interest allegedly due
incorrectly. (Id., Paragraph 11).
• Affirmative Defense No. 2 - The terms of the underlying note and confession of
judgment were ambiguous. (Id., Paragraph 12). Ambiguity in the terms of a note or the
confession of judgment clause can affect the validity of a confessed judgment and must
be construed against the holder of the note. Morrison v. Corr. Physician Servs., 2000
Phila. Ct. Com. Pl. LEXIS 80, *20-21 (Pa. C.P. 2000). (Id., Paragraph 13).
• Affirmative Defense No. 3 - The Judgment must be opened because obtaining a
Confession of Judgment is a draconian method frowned upon by Pennsylvania Courts.
(Id., Paragraph 14). The entry of Judgment by Confession thus violates the laws and
Constitution of the Commonwealth of Pennsylvania and the United States of America
because it deprives Defendant of a valuable interest in his property without due process
under the law. (Id., Paragraph 15).
• Affirmative Defense No. 4 - The Judgment must be opened because Defendant did not
voluntarily, intelligently, and knowingly waive the Defendant's right to have a trial. (Id.,
Paragraph 16).
• Affirmative Defense No. 5 -The Judgment must be opened because Plaintiff has not met
its [sicJ burden to establish that an "event of default'' has occurred. (Id., Paragraph 17).
• Affirmative Defense No. 6 -The Judgment must be opened because Defendant has made
demand upon Plaintiff in complete contradiction to the course of conduct established
between the parties for eight years regarding payment to Plaintiff. (Id., Paragraph 18).
• Affirmative Defense No. 7 - Defendant asserts a set-off in his proposed Answer to
Plaintiffs Complaint, attached hereto as Exhibit A, and raises specific claims that call
into question the total amount claimed as due and owing in the complaint. (Id.,
4
Paragraph 19). For all of these· reasons as well as general principles of due process, the
Judgment should be opened pursuant to Pa.R.Civ.P. et seq. [sic]. (Id., Paragraph 20).
The Defendant asserted in "legal argument" submitted in support of this Petition
that:
"Plaintiff avers that he was entitled to a confession of judgment because Defendant
failed to pay the balance of the Note upon demand by Plaintiff. However, this demand
was unreasonable as it was in direct contradiction of the established and customary
business practices between the parties. It was common practice between [Defendant] and
[Plaintiff], when purchasing properties, for [Plaintiff] to provide down payments for the
purchase of said properties. [The Defendant's] repayment of these 'loans' were [sic]
contingent upon profits and proceeds of the sale of other properties. This practice
between the parties is evidenced by the history of payments which are set forth in the
Complaint. For example, as referenced in Paragraph 14 of the Complaint, [Defendant]
made payments in December 2008 to [the Plaintiff] after receiving proceeds from the sale
of the property located at 1201 Edgewood Road, Havertown, PA 19083. The last
payment referenced in the complaint was made on April 25, 2014 after [Defendant] sold
property located at 348 N. Fairfield Road in Devon, PA 19333. Accordingly, when
[Plaintiff] made demand for a final payment, he did so, knowing that it was in complete
contradiction to the practices established between the parties.
Alternatively, even if [Plaintiff] avers that the parties did not have an
established customary practice among themselves, the terms on the face of the Note are
ambiguous as to Defendant's repayment obligations. It is well settled that 'ambiguity in
the terms of a note and/or the confession of judgment clause can affect the validity of a
confessed judgment and must be construed against the holder of the note.["] Morrison v.
Corr. Physician Servs., 2000 Phila. Ct. Com. Pl. LEXIS 80, *20-21 (Pa. C.P. 2000). The
terms of the note do not establish a payment schedule, terms of default, or date upon
which the note is due, essentially rendering the terms of the note ambiguous and
extremely vague. Therefore, it would be prejudicial if the judgment was not opened and
Defendant not provided an opportunity to set forth his defenses." (Memorandum in
Support of Defendant's Petition to Open Confessed Judgment, unnumbered pp. 6-7).
The Plaintiff responded to the foregoing allegations and argument of the Defendant
as follows:
'" [A] court should open a confessed judgment if the petitioner promptly presents
evidence on a petition to open which in a jury trial would require that the issues be
submitted to the jury.' Stahl Oil Co. v. Helsel, 860 A.2d 508, 512 (Pa. Super.·
2004)(citing Germantown Sav. Bank v. Talecki, 657 A.2d 1285, 1288-89 (Pa. Super.
5
1995)). To succeed on a petition to open, 'petitioner must offer clear, direct, precise and
believable evidence of a meritorious defense, sufficient to raise a jury question.' Id.
(citing Germantown, 657 A.2d at 1289). To determine if petitioner's evidence is
sufficient, courts utilize the same standard as on directed verdict and view evidence in
the light most favorable to petitioner. Id. (citing Crum v. F.L. Shaffer Co., 693 A.2d
984, 986 (Pa. Super. 1997). Merely stating a. meritorious defense is insufficient, and
petitioner must demonstrate the existence of a meritorious defense by directing the
court's attention to relevant facts which give rise to the defense.' Republic First Bank v.
Marke, 2013 WL 2993087, * 11 (C.C.P. Phila. Cnty, May 3, 2013)(citing West Che,ster
Plaza Assoc. v. Chester .Engineers, 465 A.2d 1297, 1299-1300 (Pa. Super. 1983)).
Defendant has provided no clear, direct, precise or believable evidence of a meritorious
defense, affirmative defenses, or discovery that require[s] opening the confessed
judgment.
Defendant alleged the judgment should be opened because he asserted separated
affirmative defenses and/or counterclaims that require discovery and may ultimately be
presented to a jury. Defendant attempted to assert affirmative defenses related to the
calculation of interest, an ambiguity in the terms of the underlying note and confession
of judgment, the draconian nature of confession of judgment, a failure to voluntarily,
intelligently and knowingly waive the right to have a trial, failure by [P]laintiff to
establish an event of default, behavior in contradiction of the course of conduct between
the parties, and a claimed set off. Defendant's asserted affirmative defenses are not
supported by the facts and do not rise to the level of meritorious defenses necessary to
open a judgment.
A. Interest Calculated Properly
The interest, as described in the [C]omplaint, was calculated at three percent as
specified in the [N]ote [attached as Exhibit A to the Complaint]. Defendant has provided
no clear, direct, precise, or believable evidence in support of his contention [that]
(P]laintiff calculated the interest due incorrectly. Defendant has not contended the
appropriate calculation of interest. Accordingly, [D]efendant has not sufficiently
demonstrated an error in calculating the interest due as a meritorious defense.
B. No Ambiguity in Note and Confession of Judgment
The underlying [NJote and confession of judgment were [not] ambiguous. The
[N]ote makes use of plain and clear English [and] provides:
ON DEMAND, after date [June 24, 2008] I, DOMENIC FALCONE, JR., do promise to
pay upon demand to the order of DOMENIC FALCONE, SR., the sum of Four Hundred
Thousand Dollars ($400,000.00), with interest at Three Percent (3%) per annum, payable
at 54 West Eagle Road, Havertown, Pennsylvania 19083, with defalcation, value received
with interest and Further, to hereby empower any attorney of any Court of Record, and/or
Prothonotary of Montgomery County, within the United States or elsewhere to appear for
6
me and after one or more declarations filed, confess judgment against me as of any term
for the above sum with costs of suit and Attorney's commission of Five Percent (5%) and
for collection and release of all errors, and without stay of execution and inquisition and
extension upon any levy on real estate is hereby waived, and condemnation agreed to and
the exemption of personal propertyfrom levy and sale on any execution hereon, is hereby
expressly waived, and no benefit of exemption be claimed under and by virtue of any
exemption law nor in force which may be hereafter passed.
Promissory [N]ote, attached to [C]omplaint in (C]onfession of [J]udgment for Money as
Exhibit 'A'. Moreover, [D]efendant's conclusory allegation without identification of the
alleged ambiguity or evidence to support the existence of an ambiguity fails to
demonstrate a meritorious defense. Defendant has provided no clear, direct, precise, or
believable evidence [showing that] the terms of the underlying [N]ote and [C]onfession
of [J]udgment were ambiguous.
C. Demand and Default Properly Supported
Plaintiff made a written demand for payment on the [N]ote on April 7, 2016 via
U.S. certified mail. Demand [letter,] dated ... April 7, 2016, attached to [C]omplaint in
[C]onfession for [M]oney as Exhibit 'C.' Plaintiff included an avennent of default with
the [C]omplaint in [C]onfession of [J]udgment for [M]oney, as required by Pennsylvania
Rule of Civil Procedure 2952(a)(6). See Pa.R.C.P. 2956(a)(6)('if the judgment may be
entered only after a default or the occurrence of a condition precedent, an avennent of the
default or of the occurrence of the condition precedent'). Plaintiff averred 'Defendant is
in violation and default of the said Promissory Note by failing to pay upon demand.'
Defendant has provided no clear, direct, precise or believable evidence [that] [P]laintiff
has not met his burden to establish an 'event of default' has occurred.
The [N]ote explicitly provides for payment upon demand and does not provide any
conditions related to a course of conduct. Defendant has made large payments on the
[N]ote in the past. Complaint in [C]onfession of [J]udgment for [M]oney at ,i 14.
Plaintiff has not acted contrary to a course of conduct between the parties. Defendant has
provided no clear, direct, precise, or believable evidence [showing that] [D]efendant has
made demand upon [P]laintiff in complete contradiction to the course of conduct
established between the parties for eight years. Defendant has provided no clear, direct,
precise, or believable evidence of a set off. A set off is not a meritorious defense to a
confession of judgment, and the [A]ffidavit of [D]ebtor's [W]aiver of [R]ights includes a
waiver of the right to reduce or set off a claim. Exhibit 'B' to [C]omplaint in
[C]onfession of [J]udgment for [M]oney.
D. Defendant Knowingly Waived Rights and Was Not Deprived of Due Process
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Defendant voluntarily, intelligently and knowingly waived his right to have a trial.
In the [AJffidavit of [DJebtor's [W]aiver of [R]ights, [D]efendant intentionally,
understandingly, and voluntarily waived:
(a) the right to notice and hearing.
(b) the right to defalcation, i.e., the right to reduce or set off a claim by deducting a
counterclaim.
(c) release of error.
(d) inquest (to ascertain whether rents and profits of defendant's real estate will be
sufficient to satisfy the judgment within seven years).
( e) stay of execution (if defendant owns real estate in fee simple within the county worth
the amount to which the plaintiff is entitled, clear of encumbrances ... )."
[A)ffidavit of [D]ebtor's [W]aiver of [RJights, attached to [C]omplaint in [C]onfession
of [JJudgment for [M]oney as Exhibit 'B;' see also Exhibit 'A' to [C]omplaint in
[C)onfession of [J]udgment [for [M]oneyJ. Defendant has provided no clear, direct,
precise, or believable evidence [showing that] he did not voluntarily, intelligently and
knowingly waive the right to have a trial.
Defendant has not been deprived of due process. The Pennsylvania Rules of Civil
Procedure provide for confession of judgment. Pa.R.C.P. 2950 et seq. Defendant has
provided no clear, direct, precise, or believable evidence [showing that] confessions of
judgment are draconian or frowned upon by Pennsylvania Courts. Defendant has
provided no authority supporting the contention [that] confessions are draconian or
frowned upon by Pennsylvania Courts. Defendant has provided no clear, direct, precise,
or believable evidence [that] entry of judgment by confession violates the laws and
constitution of the Commonwealth of Pennsylvania or the United States of America.
Defendant has provided no authority supporting the contention [that] entry of judgment
by confession violates the laws and constitution of the Commonwealth of Pennsylvania
or the United States of America. Defendant has provided no authority supporting the
contention [that] entry of judgment by confession deprives [D)efendant of a valuable
interest in property without due process under the law.
Defendant has provided no clear, direct, precise, or believable evidence in support
of any of his so called affirmative defense[s] or counterclaims. Defendant has not
alleged a meritorious defense requiring the opening of the confessed judgment.
Accordingly, [D]efendant's [P]etition to [O]pen [C]onfessed [J]udgment should be
denied. Defendant's [Petition] to [O]pen [C]onfessed [J]udgment appeared to request, in
the alternative, [that] the [C]ourt strike the confessed judgment. Defendant's [Petition]
does not address striking the confessed judgment. 'A petition to [s]trike a [confessed]
judgment operates as a demurrer to the record and may only be granted when an
apparent defect on the face of the record exists.' Republic [First Bank: v. Marke], 2013
8
WL 2993087 at *5. No defect on the face of the record exists. Accordingly, to the
extent [that] [D]efendant seeks to strike the confessed judgment, [D]efendant's [Petition]
should be denied." (Plaintiff's Memorandum of Law in Support of Response in
Opposition to [Defendant's] Petition to Open Confessed Judgment, pp. 3-9).
I. Appeal .from the Order Dated February 14, 2018 Overruling the Defendant's P'N!imimary
Objections to the Plaintiff's Petition for Charging Order
PA Superior Court Docketing Number 784 EDA 2018
On November 3, 2017, and after the denial of Defendant's Emergency Motion for
Stay of Execution by an Order issued on April 4, 2017 by the Honorable Spiros E. Angelos of
this court, the Plaintiff filed a Petition for Charging Order Against Defendant's interests in
Narberth Investment Associates, LLC and Narberth Investment Group, L.P. in accordance with
the provisions set forth in Sections 86732 and 88533, respectively, of Pennsylvania's newly
2
"15 Pa.C.S.A § 8673. Charging order under Pennsylvania's Uniform Partnership Act of 2016, 15 Pa.C.S.A § 8411, et seq.
(a) General rule.--On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable
interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable
interest and requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise
would be paid to the judgment debtor.
(b) Available relief.--To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection
(a), the court may:
(!) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have
made; and
(2) make all other orders necessary to give effect to the charging order.
(c) Foreclosure.--Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may
foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does
not thereby become a partner and is subject to section 8672 (relating to transfer of transferable interest).
(d) Satisfaction of judgment-At any time before foreclosure under subsection (c), the partner or transferee whose transferable interest is subject
to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the
satisfaction with the court that issued the charging order.
(e) Purchase of rights.--At any time before foreclosure under subsection (c), a limited partnership or one or more partners whose transferable
interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to
the rights of the judgment creditor, including the charging order.
(t) Exemption laws preserved.-This chapter shall not deprive any partner or transferee of the benefit of any exemption law applicable to the
transferable interest of the partner or transferee. Id.
(g) Exclusive remedy.-This section provides the exclusive remedy by which a person seeking, in the capacity of a judgment creditor, to enforce a
judgment against a partner or transferee may satisfy the judgment from the judgment debtor's transferable interest. Id.
15 Pa.C.S.A. § 8853. Charging order under Pennsylvania's Limited Liability Partnership Law, 15 PaC.S.A. § 820 I, et seq. [Noting here that
the Plaintiff mistakenly cites to this section as"§ 8854" that deals instead with "Power of personal representative of deceased member."]
(a) General rule.--On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable
interest of the judgment debtor for the unsatisfied amount of the judgment. Except as provided in subsection (t), a charging order constitutes a
lien on a judgment debtor's transferable interest and requires the limited liability company to pay over to the person to which the charging order
was issued any distribution that otherwise would be paid to the judgment debtor.
9
amended Uniform Partnership Act, 15 Pa.C.S.A. § 8411, et seq. and Limited Liability
Partnership Law, 15 Pa.C.S.A. § 8201, et seq., both of which became effective on February 21,
2017. The Plaintiff alleged that Narberth Investment Associates, LLC, hereinafter referred to as
"Narberth LLC," in which the Defendant is the sole member, is a business entity created on or
about May 16, 2008, and is the general partner of Narberth Investment Group, L.P., in which it
has a .5% ownership interest. (Id., Paragraphs 3-4). Plaintiff averred that Narberth Investment
Group, L.P., hereinafter referred to as "Narberth L.P.," was also created on or about May 16,
2008, that the Plaintiff is a limited partner in Narberth L.P. with a 50% ownership interest therein
and that Defendant is a limited partner in Narberth L.P. with a 49.5% ownership interest therein.
(Id., Paragraphs 4-8; Copies of the certificates for both organizations are appended to the
Charging Order Petition as Exhibits A and B, respectively).
(b) Available rclief.--To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection
(a), the court may:
(I) appoint a receiver of the distributions subject to the charging order, with the power to malce all inquiries the judgment debtor might have
made; and
(2) malce all other orders necessary to give effect to the charging order.
(c) Foreclosure.--Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may
foreclose the lien and order the sale of the transferable interest. Except as provided in subsection (t), the purchaser at the foreclosure sale only
obtains the transferable interest, does not thereby become a member, and is subject to section 8852 (relating to transfer of transferable interest).
(d) Satisfaction of judgment.--At any time before foreclosure under subsection (c), the member or transferee whose transferable interest is subject
to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing. a certified copy of the
satisfaction with the court that issued the charging order.
(e) Purchase of rights.-At any time before foreclosure under subsection (c), a limited liability company or one or more members whose
transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby
succeed to the rights of the judgment creditor, including the charging order.
(f) Foreclosure against sole member.-lf a court orders foreclosure of a charging order lien against the sole member of a limited liability
company:
(I) the court shall confirm the sale;
(2) the purchaser at the sale obtains the member's entire interest, not only the member's transferable interest;
(3) the purchaser thereby becomes a member; and
(4) the person whose interest was subject to the foreclosed charging order is dissociated as a member.
(g) Exemption laws preserved.-This chapter shall not deprive any member or transferee of tile benefit of any exemption laws applicable to the
transferable interest of the member or transferee.
(h) Exclusive remedy.-This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or
transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest." Id.
10
The Plaintiff contended that "Narberth L.P. is the legal owner of property located at
503, 505, 507, 509 Conway Avenue, Narberth, PA 19072" for which the Defendant alleges
certain "obligations owing to him as a result of work" for these properties. Plaintiffs Petition for
ChargingOrder, Paragraphs 13-14). The Plaintiff averred that, "under Pennsylvania's recently
amended Limited Liability Company Law effective February 21, 2017, a judgment creditor of a
member is entitled to a charging order against the relevant transferable interest which entitles the
judgment creditor to whatever distributions would otherwise be due to the member or transferee
whose interest is subject to the order. (15 Pa.C.S.A. § 88?3(a)]." (Id., Paragraph 15). The
Plaintiff contended that, "(a] charging order becomes a lien on a judgment debtor's transferable
interest and requires the Iimited liability company to pay over any distribution that otherwise
would be paid to the judgment debtor. See [§ 8853(a)]." (ld., Paragraph 16). The Plaintiff
further asserted that the Limited Liability Company Law provides the Court with the power to
appoint a receiver of the distributions subject to the charging order, "with the power to make all
inquiries the judgment debtor might have made; and to make all other orders necessary to give
effect to the charging order. See 15 Pa.C.S.A. § 8853(b)." (Id., Paragraph 17). According to the
Plaintiff: in accordance with 15 Pa.C.S.A. [§ 8853], and Z.okaites v. Pittsburgh Irish Pubs. LLC,
962 A.2d 1220 (Pa. Super. 2008)4, the Defendant's sole interest in Narberth Investment
Associates, LLC is subject to a charging order to satisfy this confessed judgment, and Plaintiff,
as judgment creditor, is entitled to a charging order directing this business entity to pay over to
Plaintiff any and all distributions or return of contributions that would otherwise be paid to
Defendant until the judgment is fully paid and satisfied. (Id., Paragraphs 18-19).
4But c.f., Macharg v. Macharg; ISi A3d 187, 191-195 (Pa. Super. 2016) that declined to accept Zokaites' holding that it was
impermissible to transfer a member's individual partnership interest pursuant to a charging order absent the permission of all of
the partners.
11
In like manner, the Plaintiff contended entitlement to a charging order allowing for
the Defendant's distributions or return of contributions from Narberth Investment Group, L.P., to
be transferred to him under the newly amended Pennsylvania Limited Partnership Law, 15
Pa.C.S.A. § 8673, in order to satisfy this confessed judgment. (Id., Paragraphs 20-23). Finally,
the Plaintiff averred that the Defendant is believed to be the sole shareholder of Prescott Homes,
Inc., and "[g]iven that Defendant's interests in [the] business entities as set forth herein are
subject to seizure, Defendant must be enjoined from transferring, assigning, selling, gifting or
otherwise diluting his ownership, stock or membership interest in those entities until the
Judgment has been satisfied, or upon further Order of this Court." (Id., Paragraphs 24-25).
The Defendant submitted, on November 21, 2017, or year and a half aft.er the within
confessed judgment was filed, a Preliminary Objection to Plaintiffs Petition for Charging Order
claiming that Narberth LLC was a necessary and indispensable party to this action and its
absence requires dismissal of this Petition, citing to Pennsylvania Rules of Civil Procedure
1028(a)(5)("nonjoinder of a necessary party is a ground upon which to file a preliminary
objection) and 2227(a), requiring that "the joinder of Narberth LLC in the Petition was
compulsory." (Id., Paragraphs 7-9). The Defendant cited to Mechanicsburg Area S.cho0l District
v. Kline, 494 Pa. 476, 431 A.2d 953 (1981) for the proposition that "the indispensable party rule
requires that a court should not adjudicate a case if an absentee was so closely related to the
matters in dispute that further litigation would probably be required to protect the defendant."
(Id., Paragraphs 10-12). The Defendant further grounded its claim for relief on an assertion that
requiring Narberth LLC to pay this judgment would be in violation of its right to due process.
(Id., Paragraph 13). Defendant additionally insisted that this Court lacks jurisdiction to hear the
charging order petition because an indispensable party had not been joined in this action. (Id.,
12
Paragraph 14). Further, the Defendant contended that Plaintiff omitted a reason for the omission
of Narberth LLC as a party to this action in the Petition, that Plaintiff took no steps to serve or
join Narberth LLC in this action, that Narberth LLC is a general partner of Narberth L.P. and as
such, makes decisions and should have been joined by the Plaintiff in order to protect its rights.
(Id.., Paragraphs 15-18).
The Plaintiff proffered the following legal argument in refutation of the contentions
submitted by the Defendant in his Preliminary Objection to the Petition for Charging Order:
"A charging order 'constitutes a lien on a judgment debtor's transferable interest'
and requires the limited liability company or limited partnership 'to pay over to the
person to which the charging order was issued any distribution that otherwise would be
paid to the judgment debtor.' 15 Pa.C.S.A. § 8853(a); 15 Pa.C.S.[A.] § 8673. A charging
order does not entitle a judgment creditor to any management or control of a limited
liability company or limited partnership, and does not permit the judgment creditor to
demand or alter a distribution scheduled. [Id.]. A charging order· attaches only to an
individual's economic and membership interests. Nat'l Asset Loan Mgmt. v. Mccann,
2014 Phila. Ct. Com. Pl., LEXIS 547, *2 n 1 (C.C.P. Phila. Oct. 21, 2014), ajf'd, 133
A.3d 63, (Pa. Super. Unpub. LEXIS 3200 (Pa. Super. Sept. 3, 2015)(citing 15 Pa. C.S.
§8563; 15 Pa.C.S.A. § 8924(a); Z0kaites v. Pittsburgh Irish P'ubs. LLC, 962 A.2d 1220,
1226 (Pa. Super. 2008)); [Nat'l Asset Loan Mgmt. v. McCann, 2015 WL 6666227, *6
(Pa. Super. 2015)(Non-precedential Memorandum Opinion filed September 3, 2015)
(Because the McCann entities "are not directly affected by this .order," they are not
"necessary and indispensable parties" to this order.)].
Defendant has not identified any basis for the Court to dismiss [P]laintiff's
[P]etition for [C]harging [O]rder. The request for a charging order does not render
Narberth LLC a necessary or indispensable party. Entry of a charging order would not
directly affect Narberth LLC. A charging order would require Narberth LLC to pay to
[P]laintiff any distribution that would otherwise be paid to [D]efendant. 15 Pa. C.S.A.
§8853(a); 15 Pa.C.S.A. § 8673. A charging order would not compel Narberth LLC to
make any payments that were not otherwise owed or affect the management of Narberth
LLC. Only [D]efendant's economic and membership interests would be impacted by a
charging order, and Narberth LLC would not be directly affected by a charging order.
Narberth LLC is not a necessary or indispensable party to this action.
Defendant has not identified a basis to dismiss [P]laintiff s [P]etition for
[C]harging [O]rder. Defendant can assert his contentions about the validity of 15 Pa.
C.S.[A.] § 8853 and 15 Pa.C.S.[A.] § 8673 in response to [P]laintiffs [P]etition for
(C]harging [O]rder. Accordingly, [D]efendant's preliminary objectionj] to [P]laintiff's
[P]etition for [C]harging [O]rder should be overruled." (Plaintiffs Response in
13
Opposition to the Defendant's Preliminary Objection to Petition for Charging Order, pp.
5-6)(Footnote omitted).
Clearly, the Defendant has sought to inflict procedural court rules governing the
pleading of a cause of action and a response thereto onto a statutory provision allowing for a
charging order to aid in the execution upon a confessed judgment. See: Pennsylvania Rules of
Civil Procedure 1028(a) and 3118; 15 Pa.C.S.A. § 8853(a); 15 Pa.C.S.A. § 8673(a), supra. There
is no such requirement in the applicable statutes for the presence of a necessary party to be
subject to execution by charging order, only that there be a judgment and that the Defendant be a
member of the organization against which a levy against his interest therein may be permitted by
the Court. 15 Pa.C.S.A. § 8853(a); 15 Pa.C.S.A. § 8673(a), supra.
Moreover, the Pennsylvania Superior Court in Maeharg v. Mach:arg, supra, 151
A.3d at 193-194, wrote, while noting that "[i]t is the public policy of Pennsylvania "that debtors
should pay their debts," under ,Gulf Mortg. & Realty Investments \l, Alte� 422 A.2d 1090. 1097
(Pa. Stipet. 1980), that "Pennsylvania case law makes it clear that "a charging order is
discretionary with the court [and the] ... exercise of this discretion has been said to be 'equitable'
after a full inquiry into the facts." Id. The Macharg court went on to state that: "[w]hile the court
recognizes the ultimate right of a creditor to recover the whole amount from any one joint
obliger, an appeal for an equitable procedure for recovery must produce equitable results," citing
to Shor v. Miller's Flower 'Sh0p? 84 Pa. D. & C. 164, 165 (Philadelphia County 1953)(citing to
Northampton Brewery Coi:p. v. Lande, 138 Pa. Super. 235, 10 A.2d 583 (1940)). Id. In short,
the Defendant has presented a position and legal argument totally alien from this context, and
thus has not met his burden of presenting an objection to the Plaintiffs Petition for Charging
Order that is cognizable under the law.
The following appealed from Order was subsequently entered by this Court:
14
"ORDER
AND NOW, this 14th day of February, 2018, upon consideration of Defendant's,
Domenic Falcone, Jr., Preliminary Objection to Plaintiffs Petition for Charging Order, and
Plaintiffs, Domenic Falcone, Sr., Response in Opposition thereto, it is hereby ORDERED and
DECREED that the said Preliminary Objections will be, and hereby are, OVERRULED.
BY THE COURT:
CHARLES B. BURR, II S.J.''
On the same date as the issuance of the foregoing appealed from Order that
overruled the Defendant's Preliminary Objection to the Plaintiffs Petition for Charging Order,
the Court issued additional Orders denying the Defendant's Emergency Motion for Stay of
Execution, as well as the following Charging Order:
"ORDER
AND NOW, this 14th day of February, 2018, upon consideration of
Plaintiffs Petition for Charging Order Against Defendant Domenic Falcone, Jr. 's
Interests in Narberth Investment Associates, LLC, And Narberth Investment Group, L.P.,
and any response filed by Defendant, it is hereby ORDERED that said Petition is
GRANTED.
IT IS FURTHER ORDERED as follows:
1. Defendant's membership interest in Narberth Investment Associates, LLC, is
hereby charged with payment of the unsatisfied amount of the Judgment,
interests, and costs until satisfied in full;
2. Defendant's interest in Narberth Investment Group, L.P., is hereby charged
with payment of the unsatisfied amount of the Judgment, interests, and costs until
satisfied in full;
3. Any and all distributions, returns of contributions, and/or outstanding valid
obligations to which Defendant is entitled shall be paid by Narberth Investment
Associates, LLC and/or Narberth Investment Group, L.P., directly to Plaintiff.
4. Defendant shall provide Plaintiff with detailed information concerning any and
all corporations, partnerships, limited liability companies, or other business
entities in which he holds an interest including Prescott Homes, Inc., within 30
days of the date of this Order.
15
5. Further, Defendant is hereby enjoined from transferring, assigning, selling,
gifting, or otherwise diluting his ownership, stock, or membership interests in any
corporation, partnership, limited liability company, or other business entities, until
Judgment has been satisfied, or upon further Order of this Court.
BY THE COURT:
ls/CHARLES B. BURR. II S.J."
The Defendant has submitted the following Concise Statement of Errors Complained
of on Appeal from the Order overruling his Preliminary Objection to Plaintiffs Petition for
Charging Order:
"1. The Court abused its discretion and committed errors of law in granting the Charging
Order Petition before the [Defendant] filed an answer to 'state the material facts which
constitute the defense of the petition as required under the Pennsylvania Rules of [Civil]
Procedure.
2. The Court abused its discretion and/or committed errors of law in granting the
Charging Order Petition without first providing an opportunity for the [Defendant] to
plead over and/or otherwise provide an answer to the Petition within 20 days of the
objections being overruled, as required under Pennsylvania Rules of [Civil] Procedure.
3. The Court abused its discretion and/or committed errors of law in issuing the Order
dated February 14, 2018 overruling the preliminary objections because the [Plaintiff]
failed to include the General Partners as an indispensable party.
4. The Court abused its discretion and/or committed errors of law in granting the
Charging Order Petition because the Petition was never adjudicated on the merits to
determine if circumstances were present under which a charging order 'may' be issued
pursuant to 15 Pa. Cons. Stat. Ann. §§ 8673 [and] 8853 to attach the transferable interests
of the judgment defense." (Id., pp. 1-2).
Waiver oflssues
The Defendant contends that: (a) the Court abused its discretion and committed
errors of law in granting the Charging Order Petition before the Defendant filed an answer to
'state the material facts which constitute the defense of the petition'; (b) the Court abused its
discretion and/or committed errors of law in granting the Charging Order Petition without first
16
providing an opportunity for the Defendant to plead over and/or otherwise provide an answer to
the Petition within 20 days of the objections being overruled; and (c) the Court abused its
discretion and/or committed errors of law in granting the Charging Order Petition because "the
Petition was never adjudicated on the merits to determine if circumstances were present under
which a charging order 'may' be issued pursuant to 15 Pa. Cons. Stat. Ann. §§ 8673 and 8853 to
attach the transferable interests of the judgment defense." (Concise Statement, Paragraphs 1, 2
and 4). However, while the instant appeal is from the Order overruling the Defendant's
Preliminary Objection to the Plaintiffs Petition for Charging Order and not from the granting of
the Charging Order itself, the Defendant is attempting to shoehorn issues emanating from the
latter into an appeal from the former. These issues must, perforce, be deemed waived.
Issues not raised in the lower court are waived and cannot be raised for the first
time on appeal. Pennsylvania Rule of Appellate Procedure 302(a); Schmidt v. Boardman Co.,
608 Pa. 327, 11 A.3d 924 (2011); Estate of Fr{denberg, 982 A.2d 68 (Pa. Super. 2009)(issues not
raised before the trial court, nor properly preserved for appeal are waived). Claims that were
never raised prior to the filing of a Concise Statement of Rulings and Errors Complained of on
Appeal pursuant to Pennsylvania Rule of Appellate Procedure 1925(b) are waived. Pennsylvania
Rule of Appellate Procedure 302 (a); Dilliplaine· v. Lehigh Valte� Trust Company, 457 Pa. 255,
322 A.2d 114 (1974); Irwin Union National Bank and Trust co: v. Famous, 4 A.3d 1099 (Pa.
Super. 2010), app. den., 20 A.3d 1212 (Pa. 2011); Moranko v. Downs Racing, LP, 118 A.3d
1111, 1115 (Pa. Super. 2015).
Hence, the issues raised by the Defendant in Paragraphs 1, 2 and 4 of the Concise
Statement require no further discussion in this Opinion.
17
Discussion
The Defendant's only viable claim that this Court "abused its discretion and/or
committed errors of law in issuing the Order dated February 14, 2018 overruling the preliminary
objections because the Plaintiff failed to include the so called 'General Partners' as an
indispensable party" fares no better. (Concise Statement, Paragraph 3). It is beyond obvious that
this action, filed over a year and a half ago, was brought by the Plaintiff for the purpose of
confessing judgment solely against the Defendant for the Defendant's sole breach of a promise to
repay a loan commitment to his father. The Plaintiff could not sue companies that could not
breach that obligation because they were not signatories or guarantors of this Promissory Note
obligation that executed a waiver of confession of judgment against them. The Defendant does,
however, possess an interest therein, the distributions from which could be tapped for repaying
that obligation under the "Charging Order" provisions of the Limited Liability Partnership and
Partnership Laws of this Commonwealth when circumstances, as here, allow for execution
thereupon. Therefore, because these entities are not directly affected by the requirements of the
Charging Order, they cannot be deemed "parties" to this law suit, whether indispensable or not.
Pennsylvania Rules of Civil Procedure 1028(a) and 3118; 15 Pa.C.S.A. § 8853(a); 15 Pa.C.S.A.
§ 8673(a), supra; Maeharg v. Macharg, supra; Zokaites v. Pittsburgh Irish Pubs. LLC, supra;
Nat'l Asset Loan Mgmt. v. Mccrum, supra. 5
s The Superior Court observed and noted in its� opinion filed on November 16, 2016 and holding that a charging order and judicial
sale of the plaintiff's former husband's interests in garnishee businesses was warranted, that "[t]here is a dearth of case law in Pennsylvania
concerning application of these statutes, and none of the decisions addresses the issue presented in the instant appeal [/&. whether the Plaintiff
could achieve a judicial sale of the defendant's interest in the companies]" and provided the following listing thereof in footnote 2:
"The published opinions addressing 15 Pa.C.S. § 8345 (general partnerships) are, in chronological order: Frankil v. Frankil, 15 Pa. D. & C. 103
(Philadelphia County 1931) (holding that the statute gives the court authority to order the sheriff to sell the charged interest of a partner);
Northhampton Brewery Corp. v, Lande, 138 Pa.Super. 235, 10 A2d 583 (1940) (affirming trial court order granting a request to charge the
interest of a partner upon determination that the debtor was in fact a partner); Shor v, Miller's Flower Shop, 84 Pa. D. & C. 164 (Philadelphia
County 1953) (declining to grant a charging order against the interest of one joint obligor's interest in a partnership where the creditor had not
shown inability to obtain satisfaction of the judgment by executing on assets owned by both joint debtors); Shirk v. Caterbone, 20 I PaSuper.
18
Finally, and although the Petition for Charging Order and the Defendant's
Preliminary Objection thereto are not pleadings as commonly understood under the law, the
Defendant set forth largely barebones, vague and boilerplate contentions that joinder of
"Narberth LLC" [sic] as an indispensable party was necessary in order to protect its due process
rights. In deciding preliminary objections, the standard remains as follows:
"Preliminary objections in the nature of a demurrer test the legal sufficiency of
the complaint. When considering preliminary objections, all material facts set forth in
the challenged pleadings are admitted as true, as well as all inferences reasonably
deducible therefrom. Preliminary objections which seek the dismissal of a cause of
action should be sustained only in cases in which it is clear and free from doubt that the
pleader will be unable to prove facts legally sufficient to establish the right to relief. If
any doubt exists as to whether a demurrer should be sustained, it should be resolved in
favor of overruling the preliminary objections."
Fe.inrgold v. Hendrzak, 15 A.3d 937, 941 (Pa. Super. 201 l)(quotations and citations omitted).
Further, in the context of a court's disposition of a Charging Order, Pennsylvania
case law deems the mechanism "discretionary with the court" with exercise thereof deemed to be
'"equitable' after a full inquiry into the facts." MAcharg v. Macharg, supra, 151 A.3d at 193-194.
A full inquiry into the facts of this case from its relatively voluminous record elicits that the
Defendant has fully admitted that he knowingly assumed the obligation of this Promissory Note
and signed the Affidavit waiving his rights to dispute confession of judgment in the event of
default. (See Plaintiff's Response in Opposition to Defendant's Motion for Recusal of J.
Angelos - Exhibit B - Sworn Deposition Transcript of the Defendant, Domenic Falcone, Jr.,
4/21/17 N.T. 5-132, passim). It is thus clear that the Plaintiff would be able to establish his
544, 193 A.2d 664 ( 1963) (holding that creditor of individual partner "can be paid only out of what remains to the individual partner as his share
of the profits after the partnership obligations, including those of any judgement creditor of the partnership have been satisfied"). The only
published opinion that discusses 15 Pa.C.S. § 8563 (limited partnerships) is Zokaites v, Pittsburgh Irish Pubs, LLC, 962 A.2d 1220 (Pa Super.
2008), which mentions both statutes in considering an appeal from the denial of a motion to compel sale of a debtor's interest in a limited liability
company governed by different statutes altogether."Macharg y, Macbarg, supra, 151 A.3d 187 at 191 and fn. 1.
19
rights to relief from the Defendant and that dismissal of the Plaintiffs Petition for Charging
Order would have been wholly unwarranted.
An appellant bears the burden of establishing entitlement to relief by showing
that a trial court's ruling is erroneous under the evidence and the law. Korn v. Epstein, 727 A.2d
1130, 1135 (Pa. Super. 1999). Barebones assertions and argument not appropriately developed
by citation to relevant and apposite authority are waived. Slappo v. J's Development Associates,
Inc., 791 A.2d 409 (Pa. Super. 2002). Here again, the Defendant's boilerplate contentions
expressed as a Preliminary Objection to the Plaintiff's Petition for Charging Order did not meet
the requisite burden of showing that the Charging Order should not issue.
Conclusion
For all of the foregoing reasons, there was no error nor discretionary abuse in this
Court's overruling of the Defendant's Preliminary Objection to the Plaintiffs Petition for
Charging Order and this Order must not be reversed on appeal.
II. Ap_peal from the Order Dated February 16, 2018 Denying the Defendant's Petition to Open
Judgment
PA Superior Court Dc,cketing Number 791 EDA 2018
The following Order of this Court denied the Defendant's Petition to Open
Confessed Judgment:
"ORDER
AND NOW, this 16th day of February, 2018, upon consideration of Defendant's,
Domenic Falcone, Jr., Petition to Open Confessed Judgment, and Plaintiffs, Domenic Falcone,
Sr., Response in Opposition thereto, as well as the Memoranda of Law submitted in support
thereof, it is hereby ORDERED and DECREED that the said Petition will be, and hereby is,
DENIED.
BY THE COURT:
.CHARLES B. BURR, II S.J."
20
The Defendant has submitted the following Concise Statement of Errors Complained
of on Appeal:
"l. The Court abused its discretion and/or committed errors of law in denying the
Petition to open the confessed judgment without first proceeding with the scheduled
hearing on whether the waivers for the confessed judgment were provided voluntarily,
knowingly and intelligently.
2. It was a violation of [Defendant's] due process rights to allow the confessed judgment
to enter when issues were raised as to whether [Defendant] voluntarily, knowingly and
intelligently provided the waivers required for a proper confessed judgment.
3. The Court abused its discretion and/or committed errors of law in denying the Petition
to open the confessed judgment without first proceeding with the scheduled hearing on
the six meritorious defenses raised in the Petition after nearly one year of discovery on
these issues.
4. The Court abused its discretion and/or committed errors of law in denying the Petition
[to Open Confessed Judgment] and allowing the confessed judgment to enter because
[the] balance owed to the Plaintiff was incorrect and disputed.
5. The Court abused its discretion and/or committed errors of law in denying the Petition
[to Open Confessed Judgment] and allowing the confessed judgment to enter because no
'Event of Default' occurred to trigger Plaintiff's right to file the confessed judgment.
6. The Court abused its discretion and/or committed errors of Jaw in denying the Petition
[to Open Confessed Judgment] and allowing the confessed judgment to enter because
Plaintiff failed to meet its burden of proving that the waivers from [Defendant] were
provided voluntarily, knowingly and intelligently, that the judgment balance owed was
the correct amount(], and that an 'Event of Default' occurred.
7. The Court abused its discretion and/or committed errors of law in allowing the
confessed judgment to enter because the underlying p�omissory note and confessed
judgment were ambiguous.
8. The Court abused its discretion and/or committed errors of law in denying the Petition
[to Open Confessed JudgmentJ and allowing the confessed judgment to enter [where] the
lender's attorney represent[ ed] both the lender, and also the [Defendant]-borrower[] for
this transaction without obtaining any informed consent and conflict waivers from
[Defendant]." (Jd.,pp.1-3).
21
Waiver oflssues
The Defendant's eighth issue listed above raises a contention that this Court abused
its discretion and/or committed errors of law in denying the Petition to Open Confessed
Judgment and allowing the confessed judgment to enter where the lender's attorney represented
both the lender, and also the Defendant-borrower for this transaction without obtaining any
informed consent and conflict waivers from Defendant. (Concise Statement, Paragraph 8).
However, this issue was not presented to this Court before the Order denying the Defendant's
Petition to Open Judgment was filed and is therefore deemed waived. Issues not raised in the
lower court are waived and cannot be raised for the first time on appeal, Pennsylvania Rule of
Appellate Procedure 302(a); Dilliplaine v. Lehigh Valley Trust Co., supra; Moranko·v. Downs
Racing, LP, supra.
Discussion
(1) Failure t0 Hold Hearing on Defendant's Petition to Open Judgment
In order to prevail on a Petition to Open Judgment, a petitioner is required to: (1)
respond promptly to the entry of judgment, (2) allege a meritorious defense, and (3) present
evidence sufficient to allow the submission of that defense to a jury. Lambakis v. Exar, 340 Pa.
Super. 483, 490 A.2d 882 (1985). The evidence produced must be clear, direct, precise,
believable and credible. Stahl ·Oil Company, Inc. v. Helsel, 860 A.2d 508, 512 (Pa. Super.
2004), app. den., 885 A.2d 43 (Pa. 2005). Germantown Savings Bank v. Talacki, 441 Pa. Super.
513, 657 A.2d 1285 (1995). To raise a meritorious defense, the pleading must aver clear,
specific and verified facts that would require submission of the matter to a judge or jury. Smith
v. Morrell Beer. Distributors, Inc., et al .• 29 A.3d 23 (Pa. Super. 2011 )(petitioner did not establish
a meritorious defense supported by verified clear, precise and specific allegations of fact, and
22
submitted only conclusions of law and challenges to plaintiffs proofs); Seeger v. First Union
National Bank, 836 A.2d 163 (Pa. Super. 2003); Penn-Delco S,chool Distdct v. Bell Atlantic-PA,
Inc.,745 A.2d 14 (Pa. Super. 1999).
Appellate review of an order denying a petition to open a confessed judgment
involves analysis as to whether or not the lower court has abused its discretion. PNC Bank v.
Kerr, 802 A.2d 634, 638 (Pa. Super. 2002)(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). There is no issue as to the
timeliness of this Petition that was filed only three weeks following the filing of the Plaintiffs
Complaint in Confession of Judgment for Money, and it has been shown that this is a prayer for
the opening of this Judgment and not that it be stricken. Pennsylvania Rule of Civil Procedure
2959(a)(3)(petition for relief from confessed judgment must be filed within 30 days of receipt of
notice thereof): Therefore, the Defendant was bound to de.monstrate a meritorious defense by
clear, direct, precise, believable and credible evidence of verified facts that would require
submission of the matter to a judge or jury. Stahl Oil Company, Inc. v. Helsel, supra;
Germantown Savings Bank v. Talacki, supra.
It is to be recalled that the affirmative defenses raised to this position were: (1) the
amount of the interest was calculated incorrectly; (2) the terms of the Note and Confession of
Judgment were ambiguous; (3) confession of judgment is a draconian method that violates the
laws and constitutions of the Commonwealth and United States for depriving the Defendant of a
valuable interest in his property without due process of law; (4) Defendant did not voluntarily,
intelligently and knowingly waive his right to a trial; (5) Plaintiff has not met his burden of
establishing that an "event of default" occurred; ( 6) Defendant has made demand upon Plaintiff
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in complete contradiction to the course of conduct established between the parties for eight years
regarding payment to Plaintiff; and (7) Defendant intends to assert a set-off in his proposed
Answer to Plaintiffs Complaint and raises specific claims that call into question the total amount
claimed as due and owing in the complaint. (Defendant's Petition to Open Judgment, Paragraphs
10 through 20).
The Defendant argued in support of this Petition that the Plaintiffs demand for
repayment of the Note was unreasonable and directly contradicted by the parties' usual practice
of the Plaintiff to provide down payments for the purchase of properties, and of the Defendant to
submit repayment thereof from profits and proceeds from their eventual sale. (Memorandum in
Support of Defendant's Petition to Open Confessed Judgment, unnumbered pp. 5-6). Defendant
insisted that the payment history of this Note set forth in the Complaint was evidence of this very
practice. (Id.). The Defendant contended, in the alternative, that if Plaintiff avers that the parties
did not have a customary practice among themselves for such repayment, the terms on the face
of the Note are ambiguous for not establishing a payment schedule, terms of default, or date
upon which the Note was due, essentially rendering the terms of the note ambiguous and
extremely vague. (Id.). Therefore, according to the Defendant, "it would be prejudicial if the
judgment was not opened and Defendant not provided an opportunity to set forth his defenses" to
the confessed judgment. (Id., p. 6).
The first three grounds raised in the Defendant's Concise Statement are that (a) the
Court abused its discretion and/or committed errors of law {a) in denying the Petition to open the
confessed judgment without first proceeding with the scheduled hearing on whether the waivers
for the confessed judgment were provided voluntarily, knowingly and intelligently; (b) because
it was a violation of Defendant's due process rights to allow the confessed judgment to enter
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when issues were raised as to whether Defendant voluntarily, knowingly and intelligently·
provided the waivers required for a proper confessed judgment; and (c) without first proceeding
with the scheduled hearing on the six meritorious defenses raised in the Petition after nearly one
year of discovery on these issues. (Concise Statement, Paragraphs 1-3).
However, no hearing was required on the Defendant's Petition because it was filed
under Pennsylvania Rule of Civil Procedure 2959. North Penn Consumer Discount Company v.
Shultz, 378 A.2d 1275, 1277-1278 (Pa. Super. 1977). (See: Defendant's Petition to Open
Confessed Judgment, Paragraph 4). Although due process rights provide an opportunity to be
heard prior to an intrusion upon one's property by public or private actors with the assistance of
the goverrunent, the courts of this Commonwealth have long since determined that such does not
require a hearing or a trial on the merits. North Penn Consumer Discount Company v. Shultz,
supra, 378 A.2d at 1277-1278. Moreover, the ad damnum statement of the Defendant's Petition
sought only an Order granting the requested relief and not a hearing before the Court. (Id.,
unnumbered p. 4; Memorandum of Law in support thereof, unnumbered p. 7).
All in all, however, it is impossible to take seriously the Defendant's insistence upon
a due process deprivation of rights, inasmuch as his business involvement and sophisticated
dealings in numerous real estate holdings arising from a 24 years' long business relationship with
his father do not place him in a category of individuals who would be deemed incapable of
understanding the wording of the instruments they were signing, including an Affidavit attesting
to an intentional and voluntary waiver of due process rights. North Penn Consumer Disc.o:unt
Company v. Shultz, supra. Further, the Defendant's contentions in this regard were presented in
a barebones fashion and not supported by discussion of relevant and appropriate legal authorities,
nor indeed by the quantum and quality of credible evidence required. Most crucially of all, the
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Defendant has given sworn deposition testimony that, indeed, he owes the money sought by this
confessed judgment and was aware of the rights he was waiving (except for "defalcation") when
executing the Note and Waiver of Rights in question ten years ago. (Plaintiffs Response in
Opposition to Defendant's Motion for Recusal of J. Angelos - Exhibit B - Sworn Deposition
Transcript of the Defendant, Domenic Falcone, Jr., 4/21/17 N.T. 16-17). Hence, and for both of
the foregoing reasons, the Defendant's claims of discretionary abuse and error in not holding a
hearing before denying the Defendant's Petition to Open Confessed Judgment are of no moment
whatsoever. Meritless also is the Defendant's contention in Paragraph 6 of the Concise Statement
that this Court wrongfuJJy denied the Defendant's Petition to Open Confessed Judgment because
Plaintiff failed to meet its burden of proving that the waivers from Defendant were provided
voluntarily, knowingly and inteJJigently, averrnents that the Defendant has fallen woefully short
at disproving as well.
(2). Claims· of Inconect and Ambiguous Terms of the Promissory Notes Reflected in tM
Qomplaint .in Confession of Judgment for M0ne;y
The Defendant also asserted in largely boilerplate language unsupported by the
requisite quantum and quality of credible evidence that the Court abused its discretion and/or
committed errors of law in denying the Petition to Open Confessed Judgment because: (a) the
balance owed to the Plaintiff was incorrect and disputed; (b) no "Event of Default" occurred to
trigger Plaintiffs right to file the confessed judgment; and (c) the underlying promissory note
and confessed judgment were ambiguous. (Concise Statement, Paragraphs 4-7). Here again, the
Defendant's asserted affirmative defenses are largely boilerplate and not sufficiently supported
in the evidence so as to rise to the level of meritorious defenses necessary to open this judgment.
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There is no credible demonstration from the Defendant that the three percent
interest contended in the Complaint in Confession of Judgment for Money was incorrect nor that
the terms of the underlying Note and the warrant of attorney to confess judgment were
ambiguous. Indeed, the Defendant's sworn deposition testimony indicated that the only word he
did not understand when reading the Note and Affidavit of Waiver of Rights was "defalcation", a
synonym for a set-off of this obligation by another. (Plaintiffs Response in Opposition to
Defendant's Motion for Recusal of J. Angelos -·Exhibit B - Sworn Deposition Transcript of the
Defendant, Domenic Falcone, Jr., 4/21/17 N.T. 16-17). The Defendant additionally opined
therein that he considers this entire process to be a "total vendetta", but did not dispute that he
understood when signing the Note on June 24, 2008, that he was paid $400,000 and was
ultimately obligated to repay that amount plus three percent interest to the extent that it was not
paid back to his father. (Id., 14-15, 17). The Defendant acknowledged that he owes $100,000
plus interest on the Note, but does not know how the interest claimed in the Complaint was
computed. (Id., 41-42, 44).
The Defendant bitterly complained in his deposition that never before, in their 24
years' long business relationship, had the Plaintiff demanded that he repay money that Defendant
owed to him. (Id., 122). The Defendant testified that, although the Plaintiff had previously
sought repayment of the within loan obligation on which the Defendant had tendered $300,000
by June of 2014, it wasn't in "the revengeful, spiteful way he's doing right now." (Id., 123-124).
The Defendant also admitted that there were anger issues between himself and his father that
resulted in the Plaintiff ejecting him from an office that he had used rent free for two decades.
(Id., 124-125). When asked whether he could not make the payment sought via the Plaintiffs
demand letter of April 7, 2016, the Defendant evasively replied: "Perhaps. The funds may or
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may not be there. I'm not denying that I owe him money plus interest. He owes me money too."
(Id., 130). In light of his own admissions, the Defendant's current conclusory contention of
ambiguities in the Note and supporting documents sans any identification of such specific
defects throughout this litigation fails to raise a scintilla of a meritorious defense to the judgment
confessed against him. Further, given his sworn deposition testimony acknowledging receipt of
the demand letter two years ago and its representation of the sum that remains due and owing on
this obligation plus three percent interest belies any contention by the Defendant that no "Event
of Default" occurred to trigger Plaintiff's right to file the confessed judgment and that the
underlying promissory note and confessed judgment were ambiguous. The Defendant repaid
$300,000.00 of this loan made in 2008 by 2014, and has remitted not an additional cent during
the ensuing four years with no excuse other than that the Defendant has become angered by his
father's conduct in pursuing repayment of this loan obligation through the courts and is refusing
to resolve this matter solely from a fit of pique.
Conclusion
An appellant bears the burden of establishing entitlement to relief by showing that a
trial court's ruling is erroneous under the evidence and the law. Korn V. Epstein, supra.
Barebones assertions and argument not appropriately developed by citation to authority are
waived. Slappos v. Jfs: Development Associates. Inc., supra. Following careful review of the
record and the parties' legal arguments appertaining thereto, this Court concludes that the
Defendant has failed to assert any meritorious defense to the Plaintiff's Complaint in Confession
of Judgment for Money. _Lambakis v. Exar supra; Stahl Oil Company, Inc.. v. Helsel, supra;
3
Germantown Savings Bank v. Talacki, supra. To raise a meritorious defense, the pleading must
aver clear, specific and verified facts that would require submission of the matter to a judge or
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jury. Smith v. Morrell Beer Distributors, Inc., et al., supra. The evidence of record adduces that
the Defendant executed the Note and its supporting documents, including a warrant of attorney
and waiver of rights, without expressing a scintilla of the instant objections thereto until being
finally called to account for his ongoing dereliction in retiring a loan made ten years previously.
Besides being unsubstantiated in the evidence, the Defendant's contentions on appeal cannot
establish proof of a meritorious defense to a judgment that was confessed against him on grounds
of his own admitted default in repayment of its balance. The doctrine of unclean hands requires
that one seeking equity must act fairly and without fraud or deceit as to the controversy in issue,
and a court may deprive relief to a party who is guilty of such conduct. Terraciano v. Dept. of
Trans_p., Bureau of Driver Licensing, 562 Pa. 60, 753 A.2d 233, 237-238 (2000).
For all of the foregoing reasons, the Defendant has failed to meet his burden of
proving a valid and meritorious defense to the judgment confessed against him by means of
clear, direct, precise and credible evidence that could be presentable to a jury, and the ruling
denying his Petition to Open Confessed Judgment must not be disturbed on appeal.
BY THE COURT:
�-,/�
CHARLES B. BURR, II SJ.
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