Angel, C. v. Homestead Cabinet ( 2021 )

J-A28005-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CYNTHIA ANGEL : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
HOMESTEAD CABINET AND DISPLAY : No. 459 WDA 2020
CO., INC. :
Appeal from the Order Entered March 10, 2020
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD-16-010448
BEFORE: OLSON, J., MURRAY, J., and McCAFFERY, J.
MEMORANDUM BY OLSON, J.: FILED JANUARY 08, 2021
Appellant, Cynthia Angel, appeals from the March 10, 2020 order
striking a confessed judgment entered in favor of Homestead Cabinet and
Display Co., Inc. (hereinafter, “Homestead”). We reverse and remand for
further proceedings consistent with this memorandum.
The facts and procedural history of this case are as follows. On January
11, 2005, Homestead executed a promissory note (“Note”) in favor of
Appellant for the total of the sum of loans listed and outstanding on an
attached document, titled Schedule “A.” On its first page, Schedule “A” lists
the following outstanding loans as extended by Appellant to Homestead:
Dated Amount Description Interest Rate
9/11[/03] Mx. [$]500.00 Out of Pocket [0%] Applicable Rate
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9/11[/03] Variable Working Capital [0%] Applicable Rate
9/11[/03] Mx. [$] 1000.00 Credit Carts [*%] Applicable Rates Per Annum
9/11[/03] Variable Credit Lines [*%] Applicable Rates Per Annum
Appellant’s Complaint in Confession of Judgment, 6/10/16, at Exhibit A. On
its second page, Schedule “A” lists only the following loan extended by
Appellant.
Dated Amount Description Interest Rate
12/10[/04] $30,000.00 Loan Amount [0%] Applicable Rate
Id. The Note also contained a confession of judgment clause, which provided,
in pertinent part, as follows:
[Homestead] hereby authorizes and empowers any attorney of
any court of record within the United States of America to appear
for, and confess judgment against [Homestead,] at any time or
times and as of any term, with or without default, for principal
sum above mentioned or any less amount equaling the unpaid
balance of the principal debt; with or without declaration, with
costs of suit, without stay of execution, and with an attorney
commission of five percent [] of the principal indebtedness but in
no event less than the sum of [$150.00].
Id.
On June 10, 2016, Appellant filed a complaint in confession of judgment
in the Court of Common Pleas of Allegheny County. In her complaint,
Appellant alleged that, “as of May 4, 2016, the amount due from [Homestead]
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under the Note for which judgment is authorized in the [w]arrant of [a]ttorney
is $154,351.05[,]” plus costs of suit and accruing interest, computed as
follows:
Principal Indebtedness Under Note $147,001.01
Attorneys Commission[] $7,350.00
Total $154,351.05
Id. at 2. Thereafter, judgment was confessed against Homestead for the
aforementioned amount. Nearly three years later, on April 30, 2019,
Appellant filed a praecipe for writ of execution for payment in the amount of
$188,915.01.1 Homestead then filed separate petitions to open and strike the
judgment.
On March 10, 2020, the trial court convened a hearing on Homestead’s
petitions.2 During the hearing, Homestead’s counsel argued that Appellant’s
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1The praecipe for writ of execution also included $26,641.41 in interest and
$7,922.55 in attorney’s fees. See Appellant’s Praecipe for Writ of Execution,
4/30/19, at 1.
2 We note that, during the hearing, Appellant addressed the promptness of
Homestead’s petitions. See N.T. Hearing, 3/10/20, at 23-25. In so doing,
Appellant argued that Homestead’s petitions were not prompt because they
were filed nearly three years after Appellant filed the complaint in confession
of judgment. This period, however, is irrelevant. As we have stated, a petition
to open or strike judgment must be filed 30 days after a party is served with
a written notice of execution pursuant to Rule 2956.1(c)(2) or Rule
2973.1(c). See Pa.R.C.P. 2959(a)(3); see also Magee v. J.G. Wentworth
& Company, Inc., 761 A.2d 159, 161 (Pa. Super. 2000) (holding that the
trial court “erroneously tied the promptness requirement of Rule 2959 to the
judgment notice instead of to the execution notice”). Herein, Appellant filed
a praecipe for writ of execution on April 30, 2019. Homestead filed its
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complaint in confession of judgment failed to comply with Pa.R.C.P.
2952(a)(7) (explaining that a complaint in confession of judgment must
include an “itemized computation of the amount then due”) and, as such, the
complaint was defective on its face. Specifically, Homestead’s counsel stated:
[Homestead’s counsel]: As you will look at the [Note], you will
see that at the very top, there is no amount stated. There was
not a dollar amount [o]n the face of the [N]ote. There is language
that states a promise to pay the total of sums listed and
outstanding on Schedule A within 30 days of [a] demand.
So this [N]ote . . . does not make any reference to any specific
dollar amounts. It makes reference to schedules that are to be
attached to the [N]ote, as exhibits as part of the [N]ote, as loans
are made by [Appellant] to [Homestead].
***
So there [has] not been any dollar amounts stated on the face of
the [N]ote. I call your attention to Schedule A attached. The first
Schedule A also does not state any specific dollar amounts. It
states four categories of purposes for which loans may or may not
have been made, but there are no dollar amounts set forth in the
first Schedule A.
To the contrary, if you look at the second Schedule A, you will see
that it very specifically states a dollar amount, $30,000[.00].
So what you have before you, [j]udge, is a [N]ote . . . with two
exhibits attached. Only one of them defines with specificity a
dollar amount, and that is $30,000[.00].
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petitions to open and/or strike the judgment on June 4, 2019. Although
Homestead filed its petitions 35 days after Appellant filed her praecipe for
writ of execution, upon review of the certified record, there is no indication
that Appellant served Homestead with notice of execution in accordance with
Pa.R.C.P. 2956.1. As such, “the timeliness clock has not yet begun to run
against [Homestead,]” and we conclude that the petitions were timely filed.
Magee, 761 A.2d at 161.
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The complaint in confession of judgment asked for $147,001[.00],
as the principal amount that is claimed to be due and owing under
this [N]ote.
The Rules of Civil Procedure regarding filing complaints in
confession of judgment are very clear. The rule regarding the
contents of the complaint, which is Rule 2952, sets forth ten
criteria that must be included in the complaint to withstand a
challenge or to be stricken.
[Rule 2952](a)(7) provides that the complaint must contain an
itemized computation of the amount then due[,] based upon
matters outside the instrument, if necessary.
***
… . [I]n this case, there is absolutely no relationship. There is no
way that one looking at the [N]ote and [Schedule A] can come to
the conclusion that there was an amount of $147,000[.00] due
and owing as set forth in the complaint.
So based upon the lack of itemization and the fact that the [N]ote
itself is irregular, facially defective, irregular, because it only
references a $30,000[.00] loan with specificity, it is our contention
that the complaint [is] defective on its face and warrants being
stricken.
N.T. Hearing, 3/10/20, at 3-6.
Following argument, the trial court struck the judgment entered by
confession. The court stated:
I [am] prepared to rule. I [am] going to strike the judgment
based on the arguments here today, and to state the reason on
the record, that the pleadings, the [N]ote and the exhibits
attached thereto do not set forth a sum certain that can be
confessed; therefore, the motion to strike filed by [Homestead] is
appropriate, and I will enter such an [o]rder.
Id. at 35.
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Thereafter, Appellant filed a timely appeal to this Court.3 On April 30,
2020, this Court issued a rule to show cause why this appeal should not be
quashed because, pursuant to the Note accompanying Pa.R.A.P. 311(a)(1),
an order striking or opening a judgment is generally not immediately
appealable as of right. See Pa.R.A.P. 311(a)(1), Note. Appellant filed a timely
response and argued that, since the effect of the order striking judgment was
to end all litigation and remove the judgment lien of the confessed judgment,
this Court possessed jurisdiction over the instant appeal. Appellant’s
Response to Rule to Show Cause Order, 5/12/20, at *1-2 (un-paginated). On
May 20, 2020, this Court discharged the rule to show cause by per curiam
order and permitted the appeal to continue with the proviso that the ruling
was not a binding, final determination and that the panel assigned to address
the merits of the appeal could further address the issue.
Hence, before we consider the merits of Appellant's claims, we first
determine whether this appeal is properly before us. As this Court previously
explained:
[P]ursuant to Pa.R.A.P. 311(a)(1), an order refusing to strike a
judgment is an interlocutory order from which an appeal as of
right may be taken. Such an order anticipates no further litigation
in the lower court. However, where an order is issued that grants
a motion to strike a judgment, such an order is generally not
appealable, i.e., it is not an interlocutory order from which an
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3 Appellant filed her notice of appeal on April 3, 2020. On April 15, 2020, the
trial court entered an order directing Appellant to file a concise statement of
errors complained of on appeal pursuant to Pa.R.A.P. 1925(b)(1). Appellant
timely complied. The trial court issued an opinion pursuant to Pa.R.A.P.
1925(a) on June 26, 2020.
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appeal as of right may lie. Such an order anticipates further
litigation because the parties are placed back in the position they
were in prior to the entry of the judgment. … [However, when an]
order striking the judgment ends the litigation as to all parties and
all claims[,] such an order is a final order as defined in Pa.R.A.P.
341(b) and an appeal may be taken as of right. See Pa.R.A.P.
341(a). See also [Riley v. Farmers Fire Ins. Co., 735 A.2d
124, 127 n.3 (Pa. Super. 1999)] (concluding that appeal from
order striking judgment entered in an appraisal proceeding was
final and appealable otherwise right to appeal would have been
foreclosed and would have compelled the bringing of another
suit).
United Parcel Serv. v. Hohider, 954 A.2d 13, 16 (Pa. Super. 2008).
In this case, the trial court granted Homestead’s petition to strike the
judgment in its March 10, 2020 order. Notably the order did not contemplate
or direct any further proceedings. As such, the court’s order constituted a
final order and is appealable as of right. See id.; see also Wilson v.
Travelers Cas. and Sur. Co., 88 A.3d 237, 245 n. 10 (Pa. Commw. 2013)
(explaining that the trial court’s order striking judgment constituted a final,
appealable order, because the “[c]laimant had no recourse . . . other than to
appeal the legality of [the court’s] ruling”); compare PennEnergy
Resources, LLC v. Winfield Resources, LLC, 2020 WL 3485728, * 2 (Pa.
Super. June 26, 2020) (unpublished memorandum) (holding that, because the
trial court’s order striking PennEnergy’s petition to vacate the arbitration order
also directed PennEnergy to “file an amended petition to vacate [the]
arbitration award,” it was not a final order that “dispose[d] of all [the] claims
and of all parties”) (citation omitted). Having determined that this Court
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possesses appellate jurisdiction over the instant appeal, we now turn to the
merits of Appellant’s claims.
Appellant raises the following issue on appeal:4
[Whether the trial court abused its discretion by granting
Homestead’s petition to strike judgment?]
See generally Appellant’s Brief at 8.
We review a trial court’s ruling on a petition to strike or open a confessed
judgment for an abuse of discretion or error of law. See, e.g., Ferrick v.
Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013). “[T]he court abuses its
discretion if, in resolving the issue for decision, it misapplies the law or
exercises its discretion in a manner lacking reason.” Neducsin v. Caplan,
121 A.3d 498, 506 (Pa. Super. 2015).
As this Court previously explained,
“A petition to strike a judgment is a common law proceeding which
operates as a demurrer to the record. A petition to strike a
judgment may be granted only for a fatal defect or irregularity
appearing on the face of the record.” Resolution Trust Corp. v.
Copley Qu–Wayne Associates, 683 A.2d 269, 273 ([Pa.] 1996).
In considering the merits of a petition to strike, the court will
be limited to a review of only the record as filed by the party
in whose favor the warrant is given, i.e., the complaint and
the documents which contain confession of judgment clauses.
Matters dehors the record filed by the party in whose favor
the warrant is given will not be considered. If the record is
self-sustaining, the judgment will not be stricken. … An order
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4We have edited Appellant’s multiple issues for clarity and ease of discussion.
See Appellant’s Brief at 5.
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of the court striking a judgment annuls the original judgment
and the parties are left as if no judgment had been entered.
Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa. Super. 2011)[, quoting
Resolution Trust Corp., supra[.] In other words, the 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. ESB Bank v. McDade, 2 A.3d 1236, 1239 (Pa.
Super. 2010). “[T]he record must be sufficient to sustain the
judgment.” Id. The original record that is subject to review in a
motion to strike a confessed judgment consists of the complaint
in confession of judgment and the attached exhibits. Resolution
Trust Corp., supra [at 274].
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. Id. at [273]. A petition to strike a
confessed judgment and a petition to open a confessed judgment
are distinct remedies; they are not interchangeable. Hazer,
supra. A petition to open a confessed judgment is an appeal to
the equitable powers of the court. PNC Bank v. Kerr, 802 A.2d
634, 638 (Pa. Super. 2002), appeal denied, 815 A.2d 634 ([Pa.]
2002). 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 rely on matters outside
the relevant record to decide the merits of the petition.
Resolution Trust Corp., supra at [275].
Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 622–623 (Pa.
Super. 2013) (parallel citations omitted).
Herein, Appellant argues that the trial court abused its discretion in
striking off judgment because the complaint in confession of judgment was
not fatally defective. Specifically, Appellant claims that, by itemizing the
principal indebtedness, attorney’s fees, and the total, she complied with
Pa.R.C.P. 2952(a)(7)’s requirements. We agree.
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Rule 2952(a)(7) of the Pennsylvania Rules of Civil Procedure sets forth
the requirements for the itemization of the amounts due in a complaint to
confess judgment. It states that a complaint must contain
an itemized computation of the amount then due, based on the
matters outside the instrument if necessary, which may include
interest and attorneys’ fees authorized by the instrument.
Pa.R.C.P. 2952(a)(7). In Davis v. Woxall Hotel, Inc., 577 A.2d 636 (Pa.
Super. 1990), this Court held that “the itemization contemplated by Rule
[2952(a)(7)] permits the listing of the principle amount due . . . in one lump
sum.” Id. at 638. Thus, subsequent courts interpreting this rule permit a
confessing party to “put forth an ‘itemized computation’ only of the aggregate
amount owed, meaning the categories and subtotals that make up [the total]
amount.” Republic First Bank v. Jemal, 2011 WL 4087564, *6 (E.D. Pa.
Sept. 13, 2011); see also Live Oak Banking Company v. Applebrook,
LLC, 2019 WL 1596904, *7 (Pa. Super. 2019) (unpublished memorandum)
(holding that the itemization of the principal, interest, late fees, and attorney’s
fees complied with the requirements of Rule 2952(a)(7)); Ogontz Property
Holdings, LLC v. Landau, 2018 WL 2188947, *8 (Pa. Super. May 18, 2018)
(unpublished memorandum) (holding that Rule 2952(a)(7) “simply does not
direct that a plaintiff illustrate the underlying computation of the fees, i.e.,
show its work” and, as such, the confessing party’s itemization of the principal
amount, the late charge, and attorney’s fees, satisfied the requirements of
Rule 2952(a)(7)).
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Herein, the trial court held that the complaint in confession of judgment
was “defective on its face because the principal amount set forth in the
complaint [was] not adequately itemized.” Trial Court Opinion, 6/26/20, at 5.
By its terms, however, Davis, supra, held that a confessing party need not
itemize a principal indebtedness and, instead, need only aver default and
allege the amount due. Id. at 638. As indicated above, Appellant, in her
complaint confessing judgment, averred that Homestead defaulted and
itemized the amount to be confessed as follows:
Principal Indebtedness Under Note $147,001.01
Attorneys Commission[] $7,350.00
Total $154,351.05
Appellant’s Complaint in Confession of Judgment, 6/10/16, at 2. Accordingly,
Appellant complied with Pa.R.C.P. 2952(a)(7) and the trial court abused its
discretion in concluding otherwise.
Upon review of the transcripts from the hearing convened on March 10,
2020, however, it is apparent that, while the trial court stated in its Rule
1925(a) opinion that it struck judgment because Appellant’s complaint failed
to sufficiently itemize the principal amount, the trial court’s chief concern was
that “the pleadings, the [N]ote, and the exhibits attached thereto d[id] not
set forth a sum certain that [could] be confessed.” Trial Court Opinion,
6/26/20, at 5; see also N.T. Hearing, 3/10/20, at 35. In other words,
because the Note upon which judgment was confessed did not set forth a
specific loan amount and, instead, simply identified loan categories together
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with certain loan amounts, none of which totaled the principal indebtedness
reflected in Appellant’s complaint, the court simply did not know the basis and
could not derive the basis for the principal amount averred in the complaint.
As such, the court apparently granted Homestead’s petition to strike because
it concluded that the judgment entered “included recovery for items not
permitted in the [Note] authorizing confession of judgment.” J.F. Realty Co.
v. Yerkes, 398 A.2d 215, 217 (Pa. Super. 1979).
Notably, our Supreme Court, in Kros v. Bacall Textile Corp., 126 A.2d
421 (Pa. 1956) addressed a situation similar to the present case. In Kros,
the parties entered into a lease agreement for a lot and building in Hatfield
Township, Montgomery County, Pennsylvania. The Kros Court summarized
the relevant portions of the lease agreement as follows:
The lease provided that ‘Lessee agrees to pay as rent in addition
to the minimum rental herein reserved any and all sums which
may become due by reason of the failure of Lessee to comply with
all of the covenants of this lease and any and all damages, costs
and expenses which the Lessor may suffer or incur by reason of
any default of the Lessee or failure on his part to comply with the
covenants of this lease, and each of them, and also any and all
damages to the demised premises caused by any act or neglect of
the Lessee.’ Another provision was that ‘Lessee covenants and
agrees that he will without demand * * * [u]se every reasonable
precaution against fire.’ And still another provision that ‘In the
event that the demised premises is totally destroyed or so
damaged by fire or other casualty not occurring through fault or
negligence of the Lessee or those employed by or acting for him,
that the same cannot be repaired or restored within a reasonable
time, this lease shall absolutely cease and determine, and the rent
shall abate for the balance of the term.’ It was further provided
that ‘If rent and/or charges hereby reserved as rent shall remain
unpaid on any day when the same ought to be paid Lessee hereby
empowers any [p]rothonotary or attorney of any [c]ourt of
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[r]ecord to appear for Lessee in any and all actions which may be
brought for rent and/or the charges, payments, costs and
expenses reserved as rent or agreed to be paid by the Lessee,
and/or to sign for Lessee an agreement for entering in any
competent [c]ourt an amicable action or actions for the recovery
of rent or other charges or expenses, and in said suits or in said
amicable action or actions to confess judgment against Lessee for
all or any part of the rent specified in this lease and then unpaid
including, at Lessor's option, the rent for the entire unexpired
balance of the term of this lease, and/or other charges, payments,
costs and expenses reserved as rent or agreed to be paid by the
Lessee, and for interest and costs together with an attorney's
commission at 5%.'
Id. at 422–423. Subsequently, the premises was destroyed by a fire and Kros
caused judgment to be confessed against the Bacall Textile Corporation
(hereinafter, the “Corporation”). Importantly,
[t]he affidavit on which the judgment was based averred that the
fire was caused by the act, fault, or neglect of [the Corporation]
or those acting for it, and thereby [Kros] had suffered damages
and costs to the extent of $60,000[.00], and that[,] in further
violation of the terms of the lease[, the Corporation] had failed to
pay the rentals due from December 1, 1955, for the unexpired
balance of the term.
Id. at 423. Ultimately, judgment was entered for $60,000.00 in damages,
$3,240.00 in rent, $732.51 in interest, and $3,162.00 in attorney’s fees:
totaling $67,134.51. Id. Thereafter, the Corporation filed a petition to open
judgment, in which it denied causing the fire that destroyed the premises. Id.
The trial court, however, entered an order striking off the judgment, even
though the Corporation “had not requested such relief.” Id.
Kros appealed and our Supreme Court subsequently reversed the trial
court’s order. In so doing, the Court specifically explained that, the only
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“present question” it needed to answer in determining whether to strike off
judgment was “whether [Kros] had the right to enter the judgment by
confession under the warrant of attorney contained in the lease.” Id. at
423-424. The Court noted that
the lease provided that any and all sums which might become due
by reason of the failure of the lessee to comply with all of the
covenants of the lease and any and all damages, costs and
expenses which the lessor might suffer or incur by reason of any
default of the lessee or failure on its part to comply with the
covenants of the lease, and also any and all damages to the
demised premises caused by any act or neglect of the lessee, were
to be paid as additional rent.
Id. at 424 (emphasis omitted).
The Kros Court then concluded that the trial court erred in striking off
the judgment because Kros “averred that [the Corporation] caused the fire
which destroyed the premises” and because an “explicit provision in the lease
made the damages suffered by [Kros] payable as additional rent for the
premises.” Id. at 424-425. Per the Court, this “brought the confession of
judgment for such damages under the express terms of the warrant of
attorney.” Id. at 425. The mere fact that the amount of damages was not
specifically provided for in the lease or warrant of attorney was of no
consequence. Instead, the Court advised that, if the “damages were
overstated,” the proper remedy was to “open the judgment, not to strike it
off.” Id.
Herein, the Note authorized Appellant to confess judgment to recover
the total of the sum of the loans listed on Schedule “A.” As indicated above,
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Schedule “A” lists five different loans: three of the loans have maximum totals,
while two loans are listed as having “variable” amounts. Thus, the Note
authorized Appellant to confess judgment for $31,500.00 (the total of the
three loans that set forth maximum amounts) plus the total of the loans with
“variable” amounts. While Appellant alleged that the total amount for the
loans listed on Schedule “A” was $147,001.01, the trial court apparently
questioned the “truth of [this] factual averment.” Midwest Fin. Acceptance
Corp., 78 A.3d at 623. As such, the proper remedy was to “open the
judgment, not strike it off.” Kros, 126 A.2d at 425; see also Resolution Tr.
Corp., 683 A.2d at 273 (“[I]f the truth of the factual averments contained in
such record are disputed, then the remedy is by a proceeding to open the
judgment and not to strike”). Accordingly, we conclude that the trial court
abused its discretion in striking off the judgment. We therefore reverse the
trial court’s order and remand for proceedings consistent with this
memorandum.
Order reversed. Case remanded for proceedings consistent with this
memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/8/2021
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