J-A25021-17

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* Former Justice specially assigned to the Superior Court.

2018 PA Super 10

VICTOR GUR

v.

JONATHAN NADAV 

Appellant

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 917 EDA 2017

Appeal from the Order February 15, 2017

In the Court of Common Pleas of Philadelphia County Civil Division at 

No(s): November Term, 2016 No. 02384

BEFORE: OTT, STABILE, JJ., and STEVENS, P.J.E.*

OPINION BY STEVENS, P.J.E.: FILED JANUARY 22, 2018

Jonathan Nadav, Appellant/Borrower, appeals from the order entered in 

the Court of Common Pleas denying his petition to strike and/or open the 

confessed judgment entered against him by Victor Gur, Appellee/Lender. 

After careful review, we affirm the trial court’s order in all respects except on 

Appellant’s claim for offset, which we remand to the trial court for appropriate 

resolution.

The trial court aptly sets forth the case history as follows:

On March 18, 2016, defendant Jonathan Nadav (hereinafter 

“Borrower”), executed a Commercial Judgment Promissory Note 

(the “Note”), containing his promise to repay certain loaned funds 

to plaintiff Victor Gur (hereinafter “Lender”), in a principal amount 

not to exceed $200,000.00. Under the Note, Borrower agreed to 

pay a simple rate of interest of fifty (50%) per year, payable on a 

monthly basis. Borrower also agreed to pay a default interest of 

two percent (2%). In addition, the Note contained a warrant-ofattorney clause which, upon default, authorized the entry of a 

confessed judgment against Borrower for the full amount owing 
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to Lender. Specifically, the Note stated as follows in pertinent 

part:

UPON THE OCCURRENCE OF AN EVENT OF 

DEFAULT ... [BORROWER] AUTHORIZES ... ANY 

ATTORNEY ... TO ENTER JUDGMENT AGAINST ... 

[BORROWER] FOR THE FULL AMOUNT DUE 

HEREUNDER ... AND ... THE AMOUNT DUE 

HEREUNDER SHALL INCLUDE THE UNPAID 

PRINCIPAL SUM, INTEREST AND ALL SUMS 

OWED BY ... [BORROWER] PURSUANT TO THIS 

NOTE, INCLUDING COSTS AND ATORNEY’S FEES 

IN THE AMOUNT OF TEN (10% PERCENT OF THE 

FULL AMOUNT DUE....

On November 25, 2016, Lender confessed judgment against 

Borrower in the amount of $146,721.71. This amount includes 

the full, unpaid principal of $100,000.00, interests of $31,249.95, 

default interest of $2,000.00, attorney’s fees of $13,325.00, and 

court costs of $146.76. 

On December 22, 2016, Borrower filed a petition to strike or open 

the confession of judgment. On January 20, 2017, the Court 

issued an Order staying execution proceedings and directing 

Lender to file a response in opposition and memorandum to 

Borrower’s petition to strike or open the confession of judgment. 

The response in opposition was timely filed, and the [trial court 

determined the] petition to strike or open the confessed judgment 

[was] ripe for a decision.

***

On February 15, 2017, [the trial court] denied [Borrower’s] 

petition to strike or open the confession of judgment [and lifted 

the stay of execution]. In the Order-and-Memorandum-Opinion 

denying the petition, [the court] rejected Borrower’s argument 

that the inordinate amount of interest charged by Lender 

constituted a “Racketeering Activity” in violation of 18 Pa.C.S.§ 

911(b) of the Crime-and-Offenses Code [the “RICO Statute”].

In the Memorandum Opinion, [the court] noted that “the express 

intent of the corrupt organization statute [is] to prevent infiltration 

of legitimate businesses by organized crime.” Based on the 

foregoing, [the court] rejected Borrower’s argument because “the 

petition to strike or open ... [failed to even] remotely aver that the 
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inordinate interest charged by Lender [was] connected with an 

attempt by organized crime to infiltrate Lender’s legitimate 

business.

On the same day, but nearly two hours after [the court] issued its 

Order-and-Memorandum Opinion, a supplemental brief appeared 

on its docket. The supplemental brief, filed by Borrower, 

reasserted the same argument contained in the petition to strike 

or open—namely, that the judgment should be stricken because 

the rate of interest contemplated under the Note was usurious and 

in violation of the RICO Statute. In that supplemental brief, 

Borrower relied upon an unpublished Opinion issued by the 

Pennsylvania Superior Court to support his conclusion that “[t]he 

purpose of the RICO Statute’s interest rate limit is to prohibit 

loaning money to individuals at excessive interest rates.” [(citing 

First Surety Financial, LLC v. Taylor Associates, LP 134 A.3d 

91 (Pa.Super. 2015))]. 

On the following day, February 16, 2017, Borrower filed a motion 

for reconsideration. In that motion, Borrower asked the Court to 

reconsider its decision and to rule in his favor on the strength of 

the same argument stated the previous day in the supplemental 

brief. On February 22, 2017, this Court issued an Order denying 

the motion for reconsideration and Borrower filed an appeal. 

Trial Court Order and Opinion, dated 2/15/2017, at 1-2; Trial Court Pa.R.A.P. 

1925(a) Opinion, dated 3/22/2017, at 2-3.

Appellant presents the following questions for our review:

1. WHETHER THE TRIAL COURT ERRED IN DENYING 

APPELLANT’S MOTION TO STRIKE THE CONFESSED 

JUDGMENT WHERE THE INTEREST RATE CHARGED ON 

THE LOAN, EFFECTIVELY 74% PER ANNUM, PLUS 

ATTORNEY’S FEES, WAS USURIOUS IN VIOLATION OF 

THE PENNSYLVANIA “CIVIL RICO” STATUTE, 18 

PA.C.S.A. § 911(H)(1)(IV), WHICH DEFINES 

“RACKETEERING ACTIVITY,” AS CHARGING INTEREST 

AT A RATE IN EXCESS OF 25%, AND WHERE THE 

INTEREST AND ATTORNEY’S FEES CHARGED WERE 

OTHERWISE GROSSLY EXCESSIVE AND WHERE THE 

COMPLAINT FAILED TO CONTAIN AN ITEMIZED 
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COMPUTATION OF THE AMOUNT ALLEGED DUE, IN 

VIOLATION OF PA.R.C.P. 2952(7)?

2. WHETHER THE TRIAL COURT ERRED AND ABUSED ITS 

DISCRETION IN DENYING THE PETITION TO OPEN THE 

CONFESSED JUDGMENT WHERE THE INTEREST RATE 

CHARGED WAS USURIOUS, THE INTEREST AND 

ATTORNEY’S FEES GROSSLY EXCESSIVE, THE 

COMPLAINT DID NOT CONTAIN AN ITEMIZED 

COMPUTATION OF THE AMOUNT ALLEGED DUE, AS 

REQUIRED BY PA.R.C.P. 2952(7), AND THE APPELLANT 

ALLEGED FACTS SUFFICIENT TO SET FORTH A CLAIM 

FOR OFFSET OF AMOUNTS ALLEGED DUE?

Appellant’s brief at 4.

We review the trial court's order denying Appellant/Borrower’s petition 

to strike or open for an abuse of discretion. Neducsin v. Caplan, 121 A.3d 

498, 506 (Pa. Super. 2015). “[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.” Id.

“A petition to strike a judgment is a common law proceeding which 

operates as a demurrer to the record. [It] may be granted only for a fatal 

defect or irregularity appearing on the face of the record.” Knickerbocker 

Russell Co., Inc. v. Crawford, 936 A.2d 1145, 1146–1147 (Pa. Super. 2007) 

(citations omitted). In assessing whether “there are fatal defects on the face 

of the record ..., a court may only look at what was in the record when the 

judgment was entered.” Cintas Corp. v. Lee's Cleaning Servs., Inc., 700 

A.2d 915, 917 (Pa. 1997) (quoting Resolution Trust, Corp., v. Copley Qu–

Wayne Assocs., 683 A.2d 269, 273 (Pa. 1996)). Therefore, the original 

record that is subject to review in a petition to strike a confessed judgment 
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consists only of the complaint in confession of judgment and the attached 

exhibits. See id.

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. A petition to open a 

confessed judgment is an appeal to the equitable powers of the 

court. Factual disputes by definition cannot be raised or 

addressed in a petition to strike off a confession of judgment, 

because factual disputes force the court to rely on matters outside 

the relevant record to decide the merits of the petition. 

Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 622–23 (Pa.Super. 

2013) (internal citations omitted).

In his first issue, Appellant/Borrower argues that the trial court erred 

and/or abused its discretion by failing to grant his petition to strike the 

confessed judgment, as the annual interest rate of 50% set forth in the Note 

was manifestly usurious under Pennsylvania’s “Civil RICO” statute, 18 Pa.C.S. 

§ 911. Section 911(b) prohibits “Racketeering Activity,” Appellant argues, 

and Section 911(h)(1)(iv) defines “Racketeering Activity” to include:

(iv) The collection of money or other property in full or partial 

satisfaction of a debt which arose as the result of the lending or 

other property at a rate of interest exceeding 25% per annum or 

the equivalent rate for a longer or shorter period, where not 

otherwise authorized by law.
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18 Pa.C.S. § 911(h)(1)(iv). By lending money at an interest rate double the 

statutory limit,

1 Appellant argues, Lender engaged in racketeering activity 

proscribed under the RICO statute, rendering the promissory note he signed 

patently unlawful and unenforceable, and necessitating the striking of the 

confessed judgment.

The trial court, however, denied that the RICO statute applied to the 

present loan, which was, because of its undisputed categorization as a 

business loan entered into by presumptively sophisticated parties of their own 

free accord, otherwise exempt from this Commonwealth’s statutory scheme 

dedicated to the task of policing lending abuse, i.e., the Loan Interest and 

Protection Law (“LIPL”), 41 P.S. §§ 101-605.2 Specifically in this regard, 

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1 Appellant contends that effective interest rate applicable under the note was 

actually 74% per annum, when one factors the default interest of 2% per 

month. Further indicative of a racketeering activity in this regard was the 

imposition of attorney’s fees equal to 10% of the combined balance of the 

confessed judgment.

2 As noted above, the lower court found instructive the non-precedential 

memorandum decision of a Superior Court panel in First Surety Financial, 

LLC v. Taylor Associates LP, No. 3233 EDA 2014, unpublished 

memorandum (Pa.Super. filed Oct. 5, 2015). In First Surety, the 

plaintiff/commercial lender had prevailed at bench trial on its breach of loan 

agreement claim against multiple defendants, including an incorporated 

construction company, for failure to pay the loan in full. 

The defendant/borrower construction company had raised a defense that the 

loan agreement violated RICO’s criminal usury provision at Section 

911(h)(1)(iv) because it charged an interest rate of 72% per annum. The 

lower court rejected this RICO claim, opining that the PIPL’s exemption of 

business loans from an interest rate limit also brought such loans within 
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Section 201 sets the lawful maximum rate of interest at 6%, but it specifically 

exempts business loans from its ambit. See 41 P.S. § 201.3 No other 

provision in the LIPL limits interest rates attendant to business loans.

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section 911(h)(1)(iv)’s exception conferred upon loans otherwise authorized 

for higher rates. 

Our panel affirmed, “conclud[ing] that the claims raised in [the appellant’s] 

brief are meritless and that [the trial court’s] opinions ... meticulously and 

accurately explain why Appellant’s claims fail.[] Therefore, we adopt the trial 

court’s opinions as our own.” Id, at *4.

The panel did, however, assume, arguendo, that “even if section 911(h)(1)(iv) 

were applicable to business loans, [the appellant’s] claim would fail because 

[defendant/borrower construction company] is a Pennsylvania corporation 

and, under 15 Pa.C.S.A. § 1510(a), [] cannot use ‘the taking of more than the 

lawful rate of interest ... as a defense to any action or proceeding brought 

against it to ... enforce payment of any obligation executed or effected by’ it.” 

Id, at *4 n. 2. Notably, the panel also held that another named defendant, 

sued in his individual capacity as an accommodation party to the construction 

company for purposes of obtaining the construction loan, likewise could not 

assert the defense of usury, as an accommodation party, though an individual, 

is entitled to only those protections available to the corporate borrower.

3 Section 201, Maximum lawful interest rate, provides:

(a) Except as provided in Article III of this act, the maximum lawful rate of 

interest for the loan or use of money in an amount of fifty thousand dollars 

($50,000) or less in all cases where no express contract shall have been made 

for a less rate shall be six per cent per annum.

(b) The maximum lawful rate of interest set forth in this section shall not apply 

to:

(1) an obligation to pay a sum of money in an original bona fide principal 

amount of more than fifty thousand dollars ($50,000);

(2) an unsecured, noncollateralized loan in excess of thirty-five thousand 

dollars ($35,000); or
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After careful review of the complaint in confession of judgment, 

accompanying exhibits, and relevant law bearing on the matter, we discern 

no merit to the Appellant/Borrower’s claim challenging the trial court’s order 

denying the motion to strike. As noted, supra, the RICO act sets a maximum 

interest rate of 25% per annum, but, significantly, it waives this proscription 

in the event another statute authorizes rates exceeding 25%. 41 P.S. § 201, 

which establishes a 6% per annum maximum lawful rate to stem the 

imposition of usurious rates, specifically exempts business loans of any 

principal amount from this statutory limitation, effectively authorizing higher, 

albeit unspecified, rates in the business setting.

Given the RICO Act’s self-limiting scope where higher interest rates are 

otherwise authorized by law, we decline to hold, as a matter of law, that the 

agreement between the business entities here to a 50% interest rate 

represented a per se RICO violation where the PIPL, with its focus on curbing 

usurious lending in this Commonwealth, expressly provides that business 

loans are exempt from the maximum lawful interest rate set therein.4 Thus 

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(3) business loans of any principal amount

41 P.S. § 201

4

In this respect, we believe this decision, relying as it does on Appellant’s 

status as a bona fide sophisticated business owner, harmonizes with principles 

informing both the PIPL, whose thrust is to protect “unsuspecting borrowers” 

from being exploited, see Smith v. Mitchell, 616 A.2d 17 (Pa.Super. 1992) 

(discussing why business loans are exempt from protections of “Usury Law” 

at 41 P.S. § 101 et seq.), and the Business Corporation Law, 15 Pa.C.S.A. § 
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discerning no fatal defect or irregularity on the face of the complaint or 

accompanying attachments, we find no error with the trial court’s denial of 

Appellant/Borrower’s petition to strike.

Instead, we consider the question of whether the interest rate charged 

ran afoul of Pennsylvania’s RICO statute to be better presented within a 

petition to open confessed judgment, as that vehicle provides an opportunity 

for a defendant/borrower to present evidence supporting the allegation of a 

corrupt organization infiltrating a legitimate business by means of a usurious 

interest rate. Turning, then, to the propriety of the court’s denial of 

Appellant’s petition to open, we observe the following standard of review:

Historically, Pennsylvania law has recognized and permitted entry of 

confessed judgments pursuant to the authority of a warrant of attorney 

contained in a written agreement.” Neducsin, 121 A.3d at 505. In 

adjudicating a petition to open a 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.” Ferrick v. 

Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013) (citing Homart 

Development Co. v. Sgrenci, 662 A.2d 1092 (1995)). “When determining 

a petition to open a judgment, matters dehors the record filed by the party in 

whose favor the warrant is given, i.e., testimony, depositions, admissions, and 

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1510(a), which goes so far as to deny altogether a corporate defendant of the 

“use of usury as a defense.” 
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other evidence, may be considered by the court.” Graystone Bank v. Grove 

Estates, LP, 58 A.3d 1277, 1282 (Pa. Super. 2012). 

A meritorious defense is one upon which relief could be afforded if 

proven at trial. Ferrick, 69 A.3d at 647. Moreover:

Pa.R.[C.]P. 2959(e) sets forth the standard by which a court 

determines whether a moving party has properly averred a 

meritorious defense. If evidence is produced which in a jury 

trial would require the issues to be submitted to the jury the court 

shall open the judgment. Furthermore, the court must view the 

evidence presented in the light most favorable to the moving 

party, while rejecting contrary evidence of the non-moving party. 

The petitioner need not produce evidence proving that if the 

judgment is opened, the petitioner will prevail. Moreover, we 

must accept as true the petitioner's evidence and all reasonable 

and proper inferences flowing therefrom.

In other words, a judgment of confession will be opened if a 

petitioner seeking relief therefrom produces evidence which in 

a jury trial would require issues to be submitted to a jury. The 

standard of sufficiency here is similar to the standard for a 

directed verdict, in that we must view the facts most favorably to 

the moving party, we must accept as true all the evidence and 

proper inferences in support of the defense raised, and we must 

reject all adverse allegations.

Neducsin, 121 A.3d at 506–507 (internal citations and quotation marks 

omitted) (emphasis added). 

In charging error with the court’s denial of his alternate motion to open 

judgment, Appellant assails the trial court’s determination that it was his 

burden to present evidence that Lender charged the interest rate in question 

as part of a broader enterprise in organized crime. Specifically, the court 

referenced “the express intent of the corrupt organization statute to prevent 
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infiltration of legitimate businesses by organized crime[,]” and it denied that 

Appellant presented any evidence raising a jury question as to whether 

Lender’s conduct fit this description. Order and Memorandum-Opinion, dated 

2/15/17, at 3-4 (citing Commonwealth v. Bobitski, 632 A.2d 1294, 1296 

(Pa. 1993). 

According to the court, Appellant failed to so much as allege, let alone 

offer details of how, Lender was involved “in the acquisition of any interest in, 

or the establishment or operation of, any enterprise” through organized crime 

or racketeering activity.” Trial Court Opinion, dated 3/22/17, at 3-5 (citing 

Pa.C.S.A. § 911(a) and (b)). Appellant responds that such evidence was not 

necessary to open the judgment where the RICO statute defines the collection 

on a debt charging more than 25% interest as a proscribed “racketeering 

activity” in and of itself.5

Our review of the record supports the trial court’s conclusion that 

Appellant failed to present sufficient evidence raising a jury question as to 

whether Lender attempted to leverage Appellant’s legitimate business in 

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5

Initially, we note that Appellant offers this argument exclusively within his 

first issue challenging the court’s denial of his petition to strike. He does not 

offer a RICO-based challenge in his second briefed issue challenging the 

court’s denial of his petition to open confessed judgment. We may, thus, find 

he has waived this challenge. See Moses Taylor Hosp. v. White, 799 A.2d 

802, 804 (Pa. Super. 2002) (observing it is well-settled that “[w]hen an 

appellant attempts to incorporate by reference issues addressed elsewhere 

and fails to argue them in his brief, the issues are waived.”); see also

Pa.R.A.P. 2119(a). Nevertheless, we decline to find waiver in this regard and 

elect, instead, to read his second issue in conjunction with the first, stating an 

integrated challenge to the court’s denial of his petitions to strike and open. 
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violation of the RICO law. Again, other than referencing the interest rate 

charged, Appellant failed to offer evidence of any kind to support the allegation 

that Lender was acting corruptly in the making of the business loan at issue. 

Instead, the only evidence bearing on the relationship of the parties and the 

nature of the loan was that Appellant, the owner of an established business,

sought a business loan from Lender, Lender provided the loan at terms agreed 

upon knowingly and intelligently by Appellant, Appellant failed to make a 

single payment of principal or interest on the loan, and Lender initiated this 

legal action after several months of unsuccessful attempts to collect 

installment payments on the loan. Even when read most favorably to 

Appellant as the moving party, such facts did not compel the court to open 

the confession of judgment. 

Next, Appellant posits that the court erred in failing to open judgment 

where the Lender’s complaint lacked sufficient information allowing one to 

determine how much interest was due and whether such interest conformed 

to the rate specified on the promissory note. This is so, Appellant argues, 

because the complaint neither included an itemized calculation of the amount 

due as required by Pa.R.C.P. 2952(7)

6 nor indicated when the disbursements 

of loan principal occurred. He, therefore, asks that the confession of judgment

be opened to allow Lender to prove the amounts claimed as due.

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6 Pa.R.C.P. 2952(7) requires that a complaint in confession of judgment 

contain “an itemized computation of the amount then due, based on matters 

outside the instrument if necessary, which may include interest and attorneys’ 

fees authorized by the instrument.” 
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Reviewing the pertinent record in a light most favorable to Appellant as 

the moving party, we conclude, nevertheless, that the record confirms Lender 

provided the court with copies of bank records indicating the dates on which 

Appellant posted loan checks for payment in the aggregate amount of 

$100,000.00. See “Plaintiff’s Supplemental Memorandum of Law in 

Opposition to Defendant’s Petition to Strike and/or Open Confessed 

Judgment,” Exhibit I, filed 1/27/17. Accordingly, we reject Appellant’s appeal 

to the equitable powers of the court in this regard, as an adequate basis for 

Lender’s calculations of interest due existed at the time the court denied 

Appellant’s petition to open confessed judgment. 

Appellant’s petition to open also averred that Lender came to Appellant’s 

place of business following the alleged default and took merchandise having a 

value in excess of $7,000.00 without Appellant’s consent. In Lender’s 

responsive Memorandum of Law in opposition to Appellant’s petition to open, 

Lender argued that the issue of offset was “impertinent and irrelevant to the 

judgment at issue[,]” and he emphasized that Appellant provided no evidence 

to support the contention that any such merchandise was offered or accepted 

as a payment towards the Note. See Lender’s “Memorandum of Law in 

Opposition to Defendant’s Petition to Strike And/Or Open Confessed 

Judgment,” filed 1/27/17, at 8. 

Appellant, therefore, submits it was error for the court to deny his 

petition without a hearing, where he had raised a legitimate factual dispute 

and requested a hearing to address the as to whether the amount of the loan 
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due should have been offset by the value of the merchandise taken. On this 

point, we find the equities to weigh in favor of Appellant’s position that his 

request for a hearing should have been granted, particularly since Lender’s 

response hardly denied acquisition of merchandise in question but, instead, 

asserted only that Appellant offered insufficient evidence establishing the 

acquisition of any such merchandise was related to the loan. Finding a factual 

dispute bearing upon the actual amount due on the loan, we conclude that 

remand is appropriate to resolve this issue.

Accordingly, we grant Appellant’s petition to open confessed judgment 

and remand this matter for resolution of the limited question of whether 

Appellant’s claim of offset is meritorious. In all other respects, we affirm the 

order of the trial court. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 1/22/18