Lechowicz v. Moser

164 A.3d 1271

Robert LECHOWICZ

v.Edward MOSER, Appellant

No. 1889 EDA 2016

Superior Court of Pennsylvania.

Submitted January 17, 2017

Filed May 31, 2017

Joseph A. Diorio, Willow Grove, for appellant.

Ronald R. Bolig, Telford, for appellee.

BEFORE: MOULTON, J., RANSOM, J., and FITZGERALD, J.^*

OPINION BY RANSOM, J.:

Appellant, Edward Moser, appeals from the order entered May 24, 2016, denying his petition to open and/or strike a confession of judgment entered against Appellant in favor of Appellee, Robert Lechowicz, pursuant to a judgment note arising out of legal services rendered to Appellant. We affirm.

The relevant facts and procedural history are as follows. Moser retained Lechowicz to represent him in a variety of business litigation matters, including: Knox v. Moser, Mont. Cty. CCP No. 1998–01833; The Moser Group v. Staufer; Bucks Cty. CCP No. 1997–08307; The Moser Group v. David Cavalier; Mont. Cty. CCP No. 1997–21186; Moser Construction Company v. OCAL, Mont. Cty. CCP No. 1997–21179; and the "Lynn Rose Plaza Matter." See Petition to Open and/or Strike Judgment, 9/12/2014, at ¶ 12 (hereinafter "Petition"). In addition, Moser engaged Lechowicz as defense counsel against allegations brought by Timoney Knox LLP to collect legal fees for services rendered by Attorney John Knox during Moser's divorce (hereinafter "the Knox litigation"). See id. at ¶¶ 13–15. In February 2004, Moser executed a judgment note confessing $55,000.00 in favor of Lechowicz and an affidavit waiving any rights or defenses.

See Affidavit Accompanying Judgment Note, 2/9/2004.

In February 2007, Lechowicz filed a complaint for confession of judgment in the Bucks County Court of Common Pleas. The court promptly entered judgment for $55,000.00 against Moser. In November 2013, Lechowicz filed a writ to revive the judgment. The court entered a judgment on the docket in the revived amount of $89,257.16. Thereafter, in September 2014, Moser filed a petition to open and/or strike the judgment that was accompanied by a memorandum of law. Following additional briefing and oral argument, the court denied and dismissed Moser's petition to open and/or strike. See Order, 5/24/2016. Moser timely filed a notice of appeal and court-ordered 1925(b) statement. The court issued a responsive opinion.

On appeal, Moser raises the following issues:

1. Did the [court] err when it held that the issue of time was dispositive regarding the [p]etition to [o]pen/[s]trike [j]udgment?

2. Did the [court] err when considering the consumer nature of the transaction when it held that [Appellant] failed to [show a defect on the face of the record or] a bona fide defense on the merits, namely that the use of judgment by confession was per se illegal?

3. Did the [court] err when it failed to open judgment to allow [Appellant] to contest the reasonableness and amount of claimed legal fees as it is a matter of law that the issues of reasonableness and amount of legal fees is always open to review[?]

Appellant's Br. at 7–8 (reordered for ease of analysis).¹

Moser appeals from the order denying his petition to open and/or strike a confession of judgment. Our standard of review is as follows.

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. First Union National Bank v. Portside Refrigerated Services, 827 A.2d 1224, 1227 (Pa. Super. 2003). A petition to strike a judgment may be granted only if a fatal defect or irregularity appears on the face of the record. [ First Union Nat'l Bank, 827 A.2d at 1227 ]. Similarly, we review the order denying Appellant's petition to open the confessed judgment for an abuse of discretion. Id. ; 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.").

ESB Bank v. McDade, 2 A.3d 1236, 1239 (Pa. Super. 2010).

A confession of judgment action is a proceeding to enter a judgment by confession of money in which "[t]he rules requiring and establishing the form of notices to defend and to plead in ordinary civil complaints do not apply." Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 625–26 (Pa. Super. 2013) (quoting Pa.R.C.P. 2952(b) cmt.); see also Pa.R.C.P. 1003 ("Rules relating to the manner of commencing an action or the time for serving process or for filing or serving pleadings may be waived by agreement of the parties."). To enter a judgment of confession, the creditor files a complaint for confession of judgment along with the judgment note signed by the party to be bound pursuant to Pa.R.C.P. 2950 through 2967. Midwest, 78 A.3d at 626. According to Rule 2956, the prothonotary shall enter judgment in conformity with the confession and provide Rule 236 notice to the debtor. Pa.R.C.P. 2956 ; Pa.R.C.P. 236. Though the entry of a confessed judgment lacks the hallmarks of an adversarial proceeding, "it has all the qualities of a judgment on a verdict." Midwest, 78 A.3d at 626 (quoting O'Hara v. Manley, 140 Pa.Super. 39, 12 A.2d 820, 822 (1940) ).

A petition to strike operates as a demurrer to the record only if the petitioner can show a fatal defect or irregularity on the face of the record. Ferrick v. Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013) (citing Graystone Bank v. Grove Estates, 58 A.3d 1277 (Pa. Super. 2012) ; see also Resolution Trust Corp. v. Copley Qu–Wayne Assoc., 546 Pa. 98, 683 A.2d 269, 273 (1996). "If the record is self-sustaining, the judgment will not be stricken. However, if 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." Resolution Trust Corp., 683 A.2d at 273 (internal citations omitted).

First, Moser contends the court erred in finding the untimeliness of his petition dispositive to any arguments raised in his petition. See Appellant's Br. at 21. The court found Moser failed to act promptly to open the judgment and failed to provide any explanation to excuse the delay, rendering any defenses asserted in his petition untimely and subject to waiver. See Trial Ct. Op. (TCO), 8/17/2016, at 10–12 (citing in support cases relevant to default judgment).

Prior to amendments to the rule governing confession of judgments, a petition to open and/or strike a judgment by confession had to be filed promptly or within a reasonable time from the entry of judgment. See, e.g. , King Athletic Sporting Goods v. Redevelopment Auth. , 481 Pa. 504, 393 A.2d 18, 20 (1978) ; B. Lipsitz Co. v. Walker, 361 Pa.Super. 238, 522 A.2d 562, 564 (1987) ; Bethlehem Steel Corp. v. Tri State Industries, Inc., 290 Pa.Super. 461, 434 A.2d 1236, 1239 (1981) (superseded by legislation). However, in 1996, the rules relating to confession of judgment were substantially revised and now require the creditor to provide notice to the debtor prior to or contemporaneous with the execution on a confessed judgment. Pa.R.C.P. 2950, cmt. (1996).² As amended, the rule ties the common law requirement of promptness to notice of execution; a defendant must promptly file their petition to open and/or strike within thirty days from such notice.

Thomas Assocs. Investigative & Consulting Services, Inc. v. GPI Ltd., Inc., 711 A.2d 506, 508 (Pa. Super. 1998) ; see Pa.R.C.P. 2959(a)(3).

The rule, as amended, states:

If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1(c), the petition shall be filed within thirty days after such service. Unless the defendant can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall be denied.

Pa.R.C.P. 2959(a)(3) (emphasis added). As this Court explained,

The execution notice, however, has no timeliness requirement; the judgment creditor may delay execution until the judgment debtor acquires sufficient assets to satisfy the judgment. Therefore, under the revised rules, timely filing of the petition to strike and/or open means within thirty days from a notice of execution which need not be timely at all.

Thomas Assocs., 711 A.2d at 508 ; see also Pa.R.C.P. 2959.1(c)(2) (conditioning timeliness requirement of a petition to open and/or strike on service of notice of execution).

Here, the prothonotary issued Rule 236 notice of judgment entered to Moser in February 2007. Lechowicz filed a praecipe to revive the judgment in November 2013 to account for interest on the unpaid balance. However, Lechowicz never served Moser with notice of execution. Pa.R.C.P. 236 notice is insufficient to invoke the thirty-day requirement of Rule 2959.1, as this Court explained:

Rule 236 requires that the prothonotary give written notice to the defendant that a judgment has been confessed against him or her. To the contrary, Rule 2956.1(c)(2) requires the plaintiff to serve notice on the defendant that he or she intends to execute on the defendant's property. The latter situation employs the sheriff, a state actor, to take the defendant's property and thereby raises substantial due process concerns not implicated by the entry of judgment.

Thomas Assocs., 711 A.2d at 508 (citing Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1272 (3rd Cir. 1994) ).

Without notice of execution in either instance, the promptness requirement of Rule 2959 did not attach, and the clock did not begin to run. Thomas Assocs., 711 A.2d at 508. Thus, contrary to the trial court's ruling, the former, common law timeliness requirement did not render any arguments made in Moser's petition waived. Id. Accordingly, we find Moser's petition timely.

Although we conclude the trial court denied Moser's petition for an incorrect reason, this Court may affirm a decision on any proper legal ground. Williams v. Wade, 704 A.2d 132, 135 (Pa. Super. 1997) (citing Schimp v. Allaman, 442 Pa.Super. 365, 659 A.2d 1032 (1995) ). Thus, ...