J-A05009-15

2015 PA Super 158

DANIEL R. NEDUCSIN IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellee

v.

SCOTT CAPLAN

Appellant No. 1116 EDA 2014

Appeal from the Order Entered February 25, 2014

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): September Term, 2012 No. 002706

BEFORE: GANTMAN, P.J., SHOGAN, J., and ALLEN, J.

OPINION BY GANTMAN, P.J.: FILED JULY 23, 2015

Appellant, Scott Caplan, appeals from the order entered in the 

Philadelphia County Court of Common Pleas, following denial of Appellant’s 

petition to strike and/or open a confessed judgment in favor of Appellee, 

Daniel R. Neducsin, in this breach of contract action. We affirm 

The relevant facts and procedural history of this case are as follows. 

In 1996, Appellant founded Sweat Gyms (“Sweat”), a chain of fitness 

centers. To expand the chain, on July 21, 2010, Appellant obtained a loan 

and a $250,000.00 line of credit from Wells Fargo, which Appellee 

guaranteed. On December 31, 2011, Appellant and Appellee executed a 

promissory note (“Bedrock Note”), which Appellant’s attorney had previously 

reviewed. 

By early 2012, Sweat was nearly bankrupt and needed debt 
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restructuring and a cash infusion to keep operating. Appellee worried he 

would be held responsible if Sweat defaulted on the Wells Fargo line of 

credit. Appellee blamed Sweat’s “business practices” for the company’s 

financial difficulties and offered to lend Appellant additional funds in 

exchange for Appellee’s greater oversight of the business and for changes in 

the corporate governance. 

On March 9, 2012, Appellant as “Maker” and other Sweat shareholders 

and entities entered into a new note with Appellee in exchange for 

$2,000,000.00 in additional funds. The relevant terms of the note were 

taken from the original Bedrock Note and gave Appellee the right to file a 

confessed judgment in the event of a default. The grounds for default 

included: (1) failure to make payment on the note when due; or (2) “If any 

certification, warranty, or representation made or hereafter made by Maker 

to [Appellee] should prove to be false, incorrect, incomplete or misleading in 

any material respect”; or (3) bankruptcy; insolvency proceedings against 

any party liable under the note; assignment for the benefit of creditors; 

appointment of a receiver, etc.; or (4) if Maker should obtain additional 

financing from another source, senior or junior, secured or unsecured. (See

Promissory Note, dated 3/9/12, at 2-3; R.R. at A.25─A.26.) Appellant 

expressly represented in the 3/9/12 note that he would use the proceeds of 

the note solely to pay the business’ outstanding debts, and the funds “shall 

not be used for personal, family, household, or other business uses.” (See
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id. at 5; R.R. at A.28.) As in the original Bedrock Note, the last paragraph 

of the 3/9/12 note also stated:

THIS NOTE CONTAINS A WARRANT OF ATTORNEY FOR 

CONFESSION OF JUDGMENT (SECTION 18) AND A WAIVER 

OF TRIAL BY JURY AND OF THE RIGHT TO INTERPOSE 

DEFENSES, COUNTERCLAIMS OR SETOFFS (SECTION 37). 

MAKER HEREBY KNOWINGLY, INTENTIONALLY, AND 

VOLUNTARILY AND (ON THE ADVICE OF THE SEPARATE 

COUNSEL OF MAKERS) UNCONDITIONALLY WAIVES ANY 

AND ALL RIGHTS MAKER HAS OR MAY HAVE TO TRIAL BY 

JURY AND THE RIGHT TO INTERPOSE ANY DEFENSE 

(EXCEPT THOSE BASED ON PAYMENT OR ERRORS IN 

COMPUTING THE BALANCE DUE), SET-OFF OR 

COUNTERCLAIM OF ANY NATURE OR DESCRIPTION UNDER 

THE CONSTITUTIONS AND LAWS OF THE UNITED STATES 

AND THE COMMONWEALTH OF PENNSYLVANIA AND 

EXPRESSLY AGREES AND CONSENTS TO PAYEE 

NEDUCSIN’S ENTERING JUDGMENT AGAINST ALL MAKERS 

HERETO PURSUANT TO THE TERMS HEREOF[.] 

(Id. at 8-9; R.R. at A.31−A.32). Appellant’s signature appears directly 

under this paragraph. 

On the same day, Appellant signed a revised shareholders’ agreement, 

which stated no shareholder, including Appellant, could take funds from the 

Corporation’s bank accounts for personal use without unanimous consent of 

all shareholders. Several months after executing the 3/9/12 note, Appellant 

unilaterally used the line of credit for certain undocumented transactions, 

including a deposit into his personal bank account. At two separate 

shareholder meetings on July 24, 2012, and on August 21, 2012, Appellee 

asked Appellant how much Appellant had drawn down on the line of credit, 

and Appellant twice replied with inaccurate information, stating he had 
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drawn down only $50,000.00, when in fact the amount was actually 

$170,000.00. 

On September 24, 2012, Appellee filed a confession of judgment 

against Appellant for $2,005,970.50, averring Appellant’s misrepresentation 

regarding the draw-down on the line of credit triggered a default under the 

3/9/12 note. After several agreed-upon extensions of time, on November 8, 

2012, Appellant filed a petition to strike and/or open the confessed 

judgment. On June 4, 2013, the court denied Appellant’s petition to strike 

but ordered discovery and briefs on Appellant’s petition to open. 

On January 29, 2014, the court initially granted the petition to open 

judgment, without conducting oral argument. Appellee asked the court to 

vacate its order and conduct oral argument. On January 31, 2014, the court 

vacated the January 29, 2014 order and conducted oral argument on 

February 6, 2014. The court denied Appellant’s petition to open the 

confessed judgment on February 25, 2014.1 Appellant timely filed a notice 

of appeal on March 26, 2014. The court did not order Appellant to file a 

concise statement per Pa.R.A.P. 1925(b), and Appellant filed none. 

____________________________________________

1 Appellant filed a second petition to strike on March 10, 2014. On March 

26, 2014, the court dismissed with prejudice Appellant’s March 10, 2014 

petition to strike, because the issue raised in the March 10, 2014 petition to

strike was the same as the issue raised in the original petition to strike, the 

new petition was untimely, it sought unavailable relief, and nothing in the 

record indicated that the decision to deny the prior petition to strike should 

be revisited. 
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Appellant raises the following issues on appeal:

WHETHER THE JUDGMENT ENTERED BY CONFESSION 

SHOULD HAVE BEEN STRICKEN WHERE THE PROMISSORY 

NOTE UPON WHICH JUDGMENT WAS BASED LACKS 

CLARITY AND PRECISION AND PRESENTS AMBIGUITIES 

WHICH SHOULD HAVE BEEN RESOLVED IN FAVOR OF 

[APPELLANT]. 

WHETHER [APPELLANT] WAS ENTITLED TO A FULL 

EVIDENTIARY HEARING TO DETERMINE IF THE JUDGMENT 

ENTERED BY CONFESSION SHOULD HAVE BEEN STRICKEN 

DUE TO THE INABILITY OF APPELLEE, AS CREDITOR, TO 

MEET HIS BURDEN THAT THERE WAS A KNOWING, 

VOLUNTARY AND INTELLIGENT WAIVER OF [APPELLANT’S] 

PROCEDURAL DUE PROCESS RIGHT TO A HEARING 

BEFORE THE ENTRY OF JUDGMENT. 

WHETHER [APPELLANT] PRESENTED SUFFICIENT 

EVIDENCE OF A MERITORIOUS DEFENSE TO THE CLAIM 

OF MISREPRESENTATION...AND, IF SO, WHETHER IT WAS 

MATERIAL, PLUS WHERE THERE WAS NO DETRIMENTAL 

RELIANCE UPON ANY STATEMENTS AND NO MONETARY 

LOSS TO WARRANT A $2 MILLION JUDGMENT UPON A 

FULLY PERFORMING LOAN. 

WHETHER, NOTWITHSTANDING THE LACK OF AN 

EVIDENTIARY HEARING, THE RECORD WAS SUFFICIENT 

TO OPEN THE JUDGMENT BASED UPON A LACK OF A 

KNOWING, VOLUNTARY AND INTELLIGENT WAIVER OF 

THE RIGHTS WHERE THE NOTE WAS CUT AND PASTED 

FROM ANOTHER TRANSACTION AND FALSELY STATED IT 

WAS EXTENSIVELY REVIEWED BY COUNSEL BUT WAS 

ONLY PRESENTED MOMENTS BEFORE SIGNATURE AND 

REFERENCED PARAGRAPHS THAT DID NOT EXIST, 

SECURITY AGREEMENTS WHICH DID NOT EXIST AND 

GUARANTIES THAT DID NOT EXIST. 

(Appellant’s Brief at 4). 

In his issues combined, Appellant initially argues the 3/9/12 note lacks 

the requisite precision to be enforceable and is internally inconsistent 
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because it is a “cut-and-paste job” from the Bedrock Note. Specifically, 

Appellant contends the default provisions of the 3/9/12 note are unclear and 

ambiguous, as strict construction of the terms suggests the default 

provisions only apply to Sweat, and not to Appellant; and the sections 

referred to in the last paragraph do not exist as numbered in the 3/9/12 

note. Additionally, Appellant asserts he did not knowingly, voluntarily, and 

intelligently waive his rights to notice and hearing regarding the confession 

of judgment, because Appellee presented the 3/9/12 note to Appellant 

moments before signing and without time for Appellant to obtain counsel’s 

review. Appellant insists he is entitled to an evidentiary hearing under the 

rules of court to determine if he knowingly, voluntarily, and intelligently 

waived his due process rights under the 3/9/12 note. Appellant submits the 

failure of the trial court to conduct an evidentiary hearing on Appellant’s due 

process challenge constitutes an abuse of discretion. 

Alternatively, Appellant wants to open the confessed judgment, 

claiming he has raised several meritorious defenses, including the 

“materiality” of the amount drawn down on the line of credit, Appellant’s 

attempt to cure the default, and Appellee’s decision not to confess judgment 

against the other shareholders. Appellant baldly states the record had a 

number of factual discrepancies, such as whether Appellee justifiably relied 

on Appellant’s misrepresentation and whether the damages are potentially a 

penalty. Appellant complains a jury should hear those issues. Appellant 
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submits the discrepancy between the actual draw-down and the amount 

Appellant disclosed was insignificant in light of the overall debt. Appellant 

repeats his contention that the trial court’s analysis does not reflect 

adequate consideration of whether Appellant properly waived his due 

process rights. 

Appellant concludes this Court should reverse the trial court’s decision 

and strike the judgment entered by confession; or remand the matter for a 

full evidentiary hearing to determine whether Appellant exercised a knowing, 

voluntary, and intelligent waiver of his procedural due process rights; or 

simply reverse the trial court’s decision and open the judgment, based on 

the meritorious defenses raised in Appellant’s petition to open the confessed 

judgment. We disagree. 

Initially, we observe:

“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, 546 Pa. 98, 106, 683 A.2d 269, 273 (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 of the court striking a judgment 

annuls the original judgment and the parties are left 

as if no judgment had been entered. 
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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 108, 683 A.2d 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 

106, 683 A.2d 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,

572 Pa. 735, 815 A.2d 634 (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 109, 683 A.2d at 275. 

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. See Scott Factors, Inc. v. Hartley, 425 Pa. 

290, 228 A.2d 887 (1967). “[A] warrant of attorney is a 

contractual agreement between the parties and the parties 

are free to determine the manner in which the warrant 

may be exercised.” Atlantic Nat. Trust, LLC v. Stivala 

Investments, Inc., 922 A.2d 919, 924 (Pa.Super. 2007), 

appeal denied, 594 Pa. 702, 936 A.2d 39 (2007). Entry of 

a valid judgment by confession must be “made in rigid 
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adherence to the provisions of the warrant of attorney; 

otherwise, such judgment will be stricken.” Dollar Bank, 

Federal Sav. Bank v. Northwood Cheese Co., Inc., 

637 A.2d 309, 311–12 ([Pa.Super.] 1994), appeal denied, 

539 Pa. 692, 653 A.2d 1231 (1994). “A warrant to confess 

judgment must be explicit and will be strictly construed, 

with any ambiguities resolved against the party in whose 

favor the warrant is given.” Id. “A warrant of attorney to 

confess judgment must be self-sustaining and to be selfsustaining the warrant must be in writing and signed by 

the person to be bound by it. The requisite signature must 

bear a direct relation to the warrant of attorney and may 

not be implied.” Hazer, supra at 1171; See also Ferrick 

v. Bianchini, 69 A.3d 642 [Pa.Super. 2013] (stating 

same).

Midwest Financial Acceptance Corp. v. Lopez, 78 A.3d 614, 622-23 

(Pa.Super. 2013). 

Rules 2950 to 2967 of the Pennsylvania Rules of Civil 

Procedure govern confessions of judgment for money. 

See generally Pa.R.C.P. 2950–2967. A confession of 

judgment “action” under these rules is distinctly defined as 

“a proceeding to enter a judgment by confession for 

money pursuant to an instrument...authorizing such 

confession.” Pa.R.C.P. 2950. Rule 2952 expressly 

authorizes the practice of allowing a party to file a 

complaint in confession of judgment without either a notice 

to defend or a notice to plead, and no responsive pleading 

is required (even if the complaint has a notice to defend or 

is endorsed with a notice to plead). Pa.R.C.P. 2952(b). 

The rules requiring and establishing the form of notices to 

defend and to plead in ordinary civil complaints do not 

apply to actions for confession of judgment. See id. Note 

(stating Rule 1018.1 and Rule 1361 do not apply to 

complaint in confession of judgment). Instead, “A 

confession of judgment clause ‘permits the creditor or its 

attorney simply to apply to the court for judgment against 

the debtor in default without requiring or permitting the 

debtor...’ to respond at that juncture.” Southwestern 

Pennsylvania Regional Council, Inc. v. Gentile, 776 

A.2d 276, 279 n. 3 (Pa.Super. 2001). Because the creditor 

is entitled to file the complaint and enter judgment against 
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the debtor without any appearance or response from the 

debtor, Pennsylvania’s initial procedure for confessing 

judgments lacks “the hallmarks of an adversary 

proceeding” until the debtor files a petition to strike off or 

open the judgment. See Newton v. First Union Nat. 

Bank, 316 F.Supp.2d 225, 233–34 (E.D.Pa. 2004). 

Nevertheless, “[t]he record of the entry of a judgment by 

the prothonotary under a power contained in the 

instrument is a record of the court, and it has all the 

qualities of a judgment on a verdict.” O’Hara v. Manley, 

12 A.2d 820, 822 ([Pa.Super.] 1940). 

Generally, notice and service of a confessed judgment to 

the debtor is contemporaneous with the entry of the 

judgment against the debtor. See Pa.R.C.P. 2956 Note 

(referring to Rule 236(a)(1)) requiring prothonotary to 

give written notice to defendants of entry of confessed 

judgment by ordinary mail together with all documents 

filed with prothonotary in support of confession of 

judgment. “The prothonotary shall note in the docket the 

giving of notice and, when a judgment by confession is 

entered, the mailing of the required notice and 

documents.” Pa.R.C.P. 236(b). 

Following a confession of judgment, the debtor can choose 

to litigate the judgment by filing a petition in compliance 

with Rule 2959. See Pa.R.C.P. 2959. The debtor must 

raise all grounds for relief (to strike off or open) in a single 

petition, which can be filed in the county where the 

judgment was originally entered or in any county where 

the judgment has been transferred. Id. A party waives all 

defenses and objections which are not included in the 

petition or answer. See Pa.R.C.P. 2959(c). 

Id. at 625-26 (footnote omitted). 

“[W]e review the order denying Appellant’s petition to open the 

confessed judgment for an abuse of discretion.” PNC Bank, Nat. Ass'n v. 

Bluestream Technology, Inc., 14 A.3d 831, 835 (Pa.Super. 2010) 

(quoting ESB Bank, supra).
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Judicial discretion requires action in conformity with law on 

facts and circumstances before the trial court after hearing 

and consideration. Consequently, the court abuses its 

discretion if, in resolving the issue for decision, it 

misapplies the law or exercises its discretion in a manner 

lacking reason. 

Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000) 

(internal citations omitted). The trial court may open a confessed judgment 

“if the petitioner (1) acts promptly, (2) alleges a meritorious defense, and

(3) can produce sufficient evidence to require submission of the case to a 

jury.” PNC Bank, Nat. Ass'n, supra at 836 (emphasis added). Generally, 

the court will dispose of the rule on petition and answer, along with other 

discovery and admissions. Pa.R.C.P. 2959(e). 

When determining if the petitioner acted promptly, “the courts are not 

bound by an inflexible time frame. The crucial factor in determining whether 

a petition is timely is not the specific time which has elapsed but rather the 

reasonableness of the explanation given for delay.” First Seneca Bank & 

Trust Co. v. Laurel Mountain Development Corp., 506 Pa. 439, 443, 485 

A.2d 1086, 1088 (1984). 

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

proven at trial.” Ferrick, supra, at 647. 

Pa.R.Civ.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 
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rejecting contrary evidence of the non-moving party. 

Continental Bank v. Axler, 510 A.2d 726, 728 

([Pa.Super.] 1986); Pawco v. Bergman Knitting Mills, 

Inc., 424 A.2d 891, 897 ([Pa.Super.] 1981). The 

petitioner need not produce evidence proving that if the 

judgment is opened, the petitioner will prevail. Id. 

Moreover, we must accept as true the petitioner’s evidence 

and all reasonable and proper inferences flowing 

therefrom. Federman v. Pozsonyi, 529 A.2d 530, 533 

([Pa.Super.] 1987) [(citing Hamilton Bank v. Rulnick,

475 A.2d 134, 137 ([Pa.Super.] 1984). 

Liazis v. Kosta, Inc., 618 A.2d 450, 453 (Pa.Super. 1992). 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.” Foerst v. Rotkis, 368 A.2d 805, 807-08 (Pa.Super. 

1976). 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. 

Greenwood v. Kadoich, 357 A.2d 604, 606 (Pa.Super. 1976). The trial 

court can make this decision as a matter of law when the defense presented 

is without adequate substance, because contract construction and 

interpretation is generally a question of law for the court to decide. Profit 

Wize Marketing v. Wiest, 812 A.2d 1270, 1274 (Pa.Super. 2002). 

A contract’s language is unambiguous if it can be determined without 

any other guide than knowledge of the simple facts on which its meaning 

depends. Id. When the contract is clear and unambiguous, the meaning of 
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the contract is ascertained from the writing alone. Kmart of 

Pennsylvania, L.P. v. MD Mall Associates, LLC, 959 A.2d 939, 944 

(Pa.Super. 2008), appeal denied, 602 Pa. 667, 980 A.2d 609 (2009). A 

court must not distort the meaning of the language or resort to a strained 

contrivance to find an ambiguity. Mitsock v. Erie Ins. Exchange, 909 

A.2d 828, 831 (Pa.Super. 2006). Additionally, a mere disagreement 

between the parties regarding the proper construction of the language does 

not render the contract ambiguous. Baney v. Eoute, 784 A.2d 132, 136 

(Pa.Super. 2001). In the context of a petition to open a confessed 

judgment, “[t]he function of our [C]ourt is not to [w]eigh the evidence in 

support of the defense, but merely to determine whether there was 

sufficient evidence to go to the jury.” Foerst, supra. 

“Whether a judge has correctly interpreted a writing and 

properly determined the legal duties which arise therefrom 

is a question of law for the appellate court.” Riccio v. 

American Republic Ins. Co., 550 Pa. 254, 263, 705 A.2d 

422, 426 (1997). The legal effect or enforceability of a 

contract provision presents a question of law accorded full 

appellate review and is not limited to an abuse of 

discretion standard. Id. See also Patriot Commercial 

Leasing Co., Inc. v. Kremer Restaurant, 915 A.2d 647 

(Pa.Super. 2006), appeal denied, 597 Pa. 720, 951 A.2d 

1166 (2008). ... Likewise, if the matter under review 

involves the interpretation of the Pennsylvania Rules of 

Civil Procedure, we have before us a question of law, 

where our standard of review is de novo and our scope of 

review is plenary. Boatin v. Miller, 955 A.2d 424, 427 

(Pa.Super. 2008). 

Midwest Financial Acceptance Corp., supra at 624. 

In the present case, Appellant founded Sweat Gyms in 1996, a chain 
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of fitness centers. To expand the chain, Appellant obtained a loan and a 

$250,000.00 line of credit from Wells Fargo on July 21, 2010, which Appellee 

guaranteed. On December 31, 2011, Appellant and Appellee executed the 

Bedrock Note, which Appellant’s attorney had reviewed. By early 2012, 

Sweat was almost bankrupt and needed debt restructuring and a cash 

infusion to continue operating. Appellee blamed the company’s “business 

practices” for its financial difficulties and offered to lend additional funds in 

exchange for Appellee’s greater oversight of the business and for changes in 

the corporate governance. 

On March 9, 2012, Appellant as “Maker” and other Sweat shareholders 

and entities entered into a new note with Appellee in exchange for 

$2,000,000.00 of additional funds. The relevant terms of the 3/9/12 note 

were taken from the original Bedrock Note, which gave Appellee a warrant to 

confess judgment in the event of a default. The express grounds for default 

included: (1) failure to make payment on the note when due; or (2) “If any 

certification, warranty, or representation made or hereafter made by Maker 

to [Appellee] should prove to be false, incorrect, incomplete or misleading in 

any material respect”; or (3) bankruptcy; insolvency proceedings against 

any party liable under the note; assignment for the benefit of creditors; 

appointment of a receiver, etc.; or (4) if Maker should obtain additional 

financing from another source, senior or junior, secured or unsecured. (See

Promissory Note, dated 3/9/12, at 2-3; R.R. at A.25─A.26). 
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On the same day, Appellant signed a revised shareholders’ agreement,

which stated no shareholder could take funds from the Corporation’s bank 

accounts for personal use without unanimous consent of all shareholders. 

Several months after executing the 3/9/12 note, Appellant unilaterally used 

the line of credit for certain undocumented transactions, including a deposit 

into his personal bank account. Appellee asked Appellant twice about the 

amount Appellant had drawn down on the line of credit. Appellant twice 

replied with inaccurate information that the draw-down was in the amount of 

$50,000.00. Based on the discovery that the draw-down was actually 

$170,000.00, Appellee asserted Appellant’s misstatements and this 

discrepancy constituted a default under the 3/9/12 note. 

Appellee filed a complaint in confession of judgment against Appellant 

for $2,005,970.50 on September 24, 2012.2 Appellant filed a petition to 

open or strike the confessed judgment on November 8, 2012, after several 

agreed-upon extensions of time. By order of June 4, 2013, the court denied 

Appellant’s petition to strike but ordered discovery and briefs on Appellant’s 

petition to open. The court conducted oral argument on February 6, 2014, 

and denied Appellant’s petition to open the confessed judgment on February 

____________________________________________

2 Appellant does not raise any issue in his appeal regarding compliance with 

the applicable rules for confessed judgments. Nonetheless we observe that 

Appellee’s complaint in confession of judgment fully complied with Pa.R.C.P. 

2952 by including the required averments, a demand for judgment, a 

signature and verification in accordance with the rules relating to civil 

actions; and no notice to plead or defend. See Pa.R.C.P. 2952. 
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25, 2014. 

We begin our analysis by recognizing that the claims Appellant raised 

in his petition to strike (relating to the ambiguity and precision of the 3/9/12 

note, or the absence of a knowing, voluntary, and intelligent waiver of his 

rights to notice and hearing regarding the confession of judgment) were 

inappropriate grounds to strike the confessed judgment. The confession of 

judgment provision at issue in the 3/9/12 note was in writing and placed 

within the note, prominently on its own page in all capital letters. (See

Promissory Note, dated 3/9/12, at 4; R.R. at A.27.) The last paragraph of 

the 3/9/12 note expressly states, in capital letters, that the note contains a 

warrant of attorney for confession of judgment as well as a waiver of a trial 

by jury and a waiver of the right to interpose defenses, counterclaims or 

setoffs; this paragraph also states that the “Maker” (Appellant) knowingly, 

intentionally, and voluntary waives these rights. Appellant’s signature 

appears directly below this paragraph. (See Promissory Note, dated 3/9/12,

at 8-9; R.R. at A.31─A.32.) 

By virtue of the confession of judgment/warrant of attorney provisions 

in the 3/9/12 note, Appellant irrevocably authorized and empowered any 

attorney or the prothonotary of any court in the United States, or elsewhere, 

to appear at any time for Appellant, pursuant to the terms of the note, and 

with or without complaint filed, as of any term, confess or enter judgment 

against Appellant. We conclude the confession of judgment and the warrant 
J-A05009-15

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of attorney provisions were valid, self-sustaining, explicit, and 

unambiguously without limit, except as required under the terms of the 

note. See Midwest Financial Acceptance Corp., supra. Therefore, the 

trial court had no reason to strike the confession of judgment or revisit the 

court’s June 4, 2013 order denying the petition to strike. (See Trial Court 

Opinion, filed February 25, 2014, at 2.) 

Appellant’s complaint, that he unknowingly, involuntarily, and 

unintelligently signed the waiver, is actually an argument for opening a 

confessed judgment. In response to Appellant’s petition to open the 

confessed judgment, the trial court reasoned as follows:

[Appellant] raises a number of unpersuasive grounds for 

opening the judgment. None of them rise to the level of a 

meritorious defense. The fact that [Appellee] chose to act 

only against [Appellant] and not the other shareholders is 

not significant in light of the facts. [Appellant’s] claim that 

he tried to cure the default does not negate the default. 

[Appellant’s] claim that he...had “always” taken these loans 

in the past is not significant. It is clear that [Appellee] 

tailored the default provisions in the [3/9/12 note] to 

prevent this practice. Claiming that [Appellee] had 

independent access to [Sweat’s] financial information does 

not negate the fact that [Appellant] misrepresented crucial 

facts on two occasions.

Similarly, [Appellant] argues that the misstatement was 

not material because the business owed approximately 

four and a half million in total. This is not a defense. The 

question was directed to the topic of the line of credit, the 

line of credit was vital to the continued operation of the 

business, and its reduction by more than two-thirds was 

alarming and material. 

[Appellant] also argues that he was denied due process 

because he was force[d] to sign the [3/9/12 note] and 
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revised Shareholders Agreement under threat of loss of the 

monetary infusion that [Appellee] was offering. This does 

not constitute a due process violation. In any case, the 

choice between securing financing under unpleasant terms 

and insolvency is a perennial dilemma for small businesses 

that need to borrow to stay open. [Appellant] does not 

claim that he asked for time to review the agreement with 

counsel and was denied permission to do so. Nor does he 

assert that he took the agreement subsequently to counsel 

to learn of his rights and obligations.

[Appellant’s] other position, an attempt to convert 

[Appellant] from a [M]aker (i.e. borrower) into a guarantor 

or accommodation party, is ludicrous. If [Appellant] were 

a guarantor, he would not have needed to borrow from 

[Appellee]. It was always [Appellee’s] funds which were at 

risk, and [Appellee] had to answer to Wells Fargo. 

[Appellant] either never read, or never took seriously, the 

instruments which worked a substantial limitation on his 

ability to treat the Sweat Funds as his own. While the 

[3/9/12 note] in question is not a masterpiece of clarity, 

the terms of default are clearly set out. [Appellant] is 

clearly described as a Maker, not a guarantor. The other 

documents make it crystal clear that shareholders were no 

longer allowed to take undocumented personal loans from 

the business. 

There having been no showing of a meritorious defense, 

the Petition to Open is denied, and the discovery motions 

are denied as Moot. 

(Trial Court Opinion at 3-4). We accept the court’s analysis. As further 

commentary, we recognize the relevant portions of the 3/9/12 note were 

taken directly from the Bedrock Note, which Appellant’s counsel had

reviewed and Appellant had signed. Additionally, Appellee (not Appellant) 

was the guarantor of the line of credit and could be held responsible for the 

money owed. The record makes clear Appellant gave Appellee the power to 
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confess judgment on specified grounds of default. Appellant twice defaulted 

by providing false information to Appellee about the amount of money 

Appellant drew down on the line of credit. At one if not both shareholder 

meetings, Appellant disclosed that he drew down only $50,000.00 on the 

line of credit, which he claimed he used for the business. In fact, Appellant 

had really drawn down $170,000.00 on the line of credit and utilized 

$85,000.00 of it for personal use. Appellant’s representation to Appellee 

regarding the total amount of money drawn down on the credit line was 

incorrect and misleading in a material respect because the $170,000.00 

draw-down was a substantial portion of the $250,000.00 line of credit. 

Further, the 3/9/12 note does not include any “cure” conditions. We

observe that Appellant’s belated and incomplete attempts to replenish the 

line of credit for his personal draw occurred after Appellee had declared 

default and confessed judgment. Appellant essentially admitted he took 

money from the corporate line of credit for personal use, without unanimous 

consent of the shareholders, and misrepresented the amount he took. In 

light of Appellant’s false statements and his admissions, Appellant was in 

default of the 3/9/12 note as a matter of law. Upon Appellant’s default, the 

3/9/12 note allowed Appellee to “declare the entire unpaid principal balance 

together with interest accrued thereon and all other sums due or owed by 

[Appellant] hereunder...to be due and payable immediately....” (Id. at 3; 

R.R. at A.26). Appellant failed to support any of the “meritorious” defenses 
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he alleged. See PNC Bank, Nat. Ass’n, supra. Therefore, the court had 

no need to conduct an evidentiary hearing on Appellant’s petition to open 

the confessed judgment. 

Based upon the foregoing, Appellant’s claims raised no defect on the 

face of the record to strike the confessed judgment. Given Appellant’s 

misstatements and admissions, he was in default of the parties’ agreements, 

and without adequate meritorious defenses. Accordingly we hold the trial 

court properly denied Appellant relief on the grounds asserted, and we 

affirm. 

Order affirmed. 

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 7/23/2015