9795 Perry Highway Mgmt., LLC v. Bernard

273 A.3d 1098

9795 PERRY HIGHWAY MANAGEMENT, LLC

v.Walter BERNARD and Wynton Bernard, Appellants

No. 926 WDA 2021

Superior Court of Pennsylvania.

Argued March 1, 2022

Filed March 29, 2022

Reargument Denied June 1, 2022

Robert L. Downey Jr., Oakmont, for appellants.

James A. Salemme, Pittsburgh, for appellee.

BEFORE: MURRAY, J., SULLIVAN, J., and COLINS, J.^*

OPINION BY MURRAY, J.:

Walter Bernard and Wynton Bernard (Appellants) appeal from the order denying their petition to strike or open the confessed judgment for $100,882.37 entered against them and in favor of 9795 Perry Highway Management, LLC (Perry Highway). After careful review, we affirm.

The trial court summarized the case history as follows:

[Appellants] entered into a commercial lease [(lease)] on July 7, 2017, with [Perry Highway] for space to operate an escape room. The six-year lease commenced on November 1, 2018. [Appellants] fell behind on the rent by making only a half-payment in April, 2020, and thereafter did not make further payments. On June 5, 2020, [Appellants] sent a letter terminating the lease. [Perry Highway] responded that the lease was in default and demanded all sums due. [Perry Highway] filed a Complaint in Confession of Judgment on July 22, 2020. On August 4, 2020, [Appellants] filed a Petition to Open/Strike that is the subject of this appeal. [Appellants] argued that they should be excused from paying rent based on the Commonwealth's COVID-19 closure order of March 2020.

Trial Court Opinion, 9/14/21, at 1-2.

Following the filing of an answer and new matter by Perry Highway, on November 6, 2020, the trial court issued a rule to show cause setting a schedule for discovery and briefing. While Perry Highway served discovery requests and took depositions from Appellants, Appellants did not seek discovery from Perry Highway. On July 7, 2021, the trial court issued an order denying Appellants’ petition to open/strike.¹ This appeal followed.²

Appellants raise four issues for review:

I. Did the Trial Court err in failing to strike the confessed judgment for errors apparent on the face of the record, including but not limited to, defects on the face of the record, and a failure to comply with the advance notice provisions of Act 6 of 1974?

II. Did the Trial Court err by failing to find that the total prohibition of the use of real estate for the only purpose permitted by the lease was a frustration of the purpose of the lease, canceling the parties’ obligations under the lease?

III. Did the Trial Court err by failing to recognize that a claim was raised for a total temporary taking of the Lease by the government (the classic definition of the exercise of eminent domain) which, at the very least, raised a jury question, requiring the opening of the confessed judgment?

IV. Did the Trial Court err by failing to open the judgment when the amount was obviously, and admittedly excessive, relegating the defense to the inefficient and uncertain process of execution, thus depriving [Appellants] of an opportunity to have the matter determined at a meaningful time and in a meaningful manner?

Appellants’ Brief at 7 (reordered for disposition).

It is well-settled that a petition to strike off or open a confessed judgment "appeals to the equitable and discretionary powers of the trial court, and absent an abuse of discretion or manifest error, we will not disturb its decision." Courtney v. Ryan Homes, Inc. , 345 Pa.Super. 109, 497 A.2d 938, 941 (1985) (citations omitted). We have explained:

A confessed judgment will be stricken "only if a fatal defect or irregularity appears on the face of the record." A judgment by confession will be opened if the petitioner acts promptly, alleges a meritorious defense, and presents sufficient evidence in support of the defense to require the submission of the issues to a jury. In adjudicating the petition to strike and/or open the confessed judgment, the trial court is charged with determining whether the petitioner presented sufficient evidence of a meritorious defense to require submission of that issue to a jury. A meritorious defense is one upon which relief could be afforded if proven at trial.

Ferrick v. Bianchini , 69 A.3d 642, 647 (Pa. Super. 2013) (citations omitted).

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. "[T]he record must be sufficient to sustain the judgment." 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.

In contrast, "if the truth of the factual averments contained in [the complaint in confession of judgment and attached exhibits] is disputed, then the remedy is by proceeding to open the judgment," not to strike it. A petition to strike a confessed judgment and a petition to open a confessed judgment are distinct remedies; they are not interchangeable.

Midwest Fin. Acceptance Corp. v. Lopez , 78 A.3d 614, 623 (Pa. Super. 2013) (citations omitted).

In their first issue, Appellants contend Perry Highway "fail[ed] to strictly comply with the law and rules governing judgments by confession," and there "are defects on the face of the record which require the confessed judgment to be stricken." Appellants’ Brief at 28. However, rather than explain the defects, Appellants state: "The allegations of the Petition to Open or Strike are incorporated herein by reference. The defects apparent on the face of the record, such as a failure to ever file a Return of Service, as required by the rules, have gone uncorrected, even though admitted to by [Perry Highway]." Id. In their short discussion of this issue, Appellants reiterate, "The defects on the record have been extensively set forth in the Petition to Strike." Id. at 29.

The incorporation of pleadings by reference, as a substitute for argument, is unacceptable. See Franciscus v. Sevdik , 135 A.3d 1092, 1096 n.6 (Pa. Super. 2016) (citation omitted); see also Deal v. Children's Hosp. of Phila. , 223 A.3d 705, 714-15 (Pa. Super. 2019) (issue waived where appellant "merely refers to or incorporates by reference prior legal filings.").

Moreover, while Appellants assert Perry Highway's failure to file a return of service constitutes a fatal defect on the face of the pleadings,³ they fail to cite legal authority to support their claim. As we stated in Deal , " Rule of Appellate Procedure 2119(a) requires that each distinct issue in the argument section of a brief contain such discussion and citation of authorities as are deemed pertinent." Id. (citations omitted). This Court will not act as counsel and will not develop arguments on behalf of an appellant. Commonwealth v. Hardy , 918 A.2d 766, 771 (Pa. Super. 2007) ; Bombar v. West Amer. Ins. Co. , 932 A.2d 78, 94 (Pa. Super. 2007). When deficiencies in a brief hinder our ability to conduct meaningful appellate review, we can dismiss the appeal entirely or find certain issues to be waived. Pa.R.A.P. 2101 ; Hardy , supra . As Appellants have failed to develop their argument, this first issue is waived.

In their second issue, Appellants maintain they were entitled to discharge of their lease under the doctrines of frustration of purpose and/or impracticability/impossibility of purpose. Appellants’ Brief at 13-20. Appellants argue:

The purpose of the Lease is clear. Tenants are to operate an escape room. The premises are not to be used for any other purpose. It is also clear from the unrebutted testimony of each of the Appellants that the premises cannot be used for this purpose by reason of the pandemic and the Orders of the Governor. The purpose from [Appellants’] perspective is to have a space amenable to an escape room which they could (and did) adapt to such purpose. From [Perry Highway's] perspective, the obligation is to deliver a space suitable for that purpose. Otherwise, of course, there would be no Lease.

That purpose was met and was being fulfilled from January 2018 into March of 2020. Circumstances, completely beyond the control or vision of either party, changed. Covid-19 was released into the world. As a result, "social distancing" orders were issued which shut down much of society, and the escape room in particular. The business could not be run at all. There was absolutely no portion of the escape room which could be operated safely, or without risking a violation of the Lease by operating in direct violation of the shut-down orders.

This is the classic definition of "Frustration of Purpose."

Appellants’ Brief at 13-14. Appellants also contend the events fell under the doctrine of impracticability/impossibility of performance. Id. at 14-20.

Perry Highway counters that the lease does not contain a force majeure clause⁴ which would have allocated the risk of loss, and that nothing prevented Appellants from negotiating one. Perry Highway's Brief at 11-12. Perry Highway maintains the doctrines of frustration of purpose and impracticability/impossibility of purpose do not apply. Id. at 12-16.

Under the doctrine of frustration of purpose,

"[w]hen people enter into a contract which is dependent for the possibility of its performance on the continual availability of a specific thing, and that availability comes to an end by reason of circumstances beyond the control of the parties, the contract is prima facie regarded as dissolved." Hart v. Arnold , 884 A.2d 316, 335 (Pa. Super. 2005) (citation omitted). The Restatement (Second) of Contracts section 261 provides:

Discharge By Supervening Impracticability

Where, after a contract is made, a party's performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged,

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