Court Opinion

ID: 9701232
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:11:29.801666+00
Date Added: 2024-06-11T18:21:21.095895
License: Public Domain

*259TAMILIA, Judge,
dissenting:
For the reasons set forth below, I respectfully dissent to the majority Opinion affirming the May 18, 1992 Order denying Manor Complex Associates, Ltd.’s motion to strike the $4,832,-572.82 confessed judgment entered against it on a second mortgage security agreement. A summary of all transactions and proceedings preceding this appeal follows.
On April 28, 1988, appellant executed a security agreement granting a second mortgage to ComFed Savings Bank1 as security for a $5,500,000 note. Manor also executed an assignment of rents and leases to ComFed in connection with the second mortgage. On April 20, 1989 ComFed assigned its interest in the mortgage to appellee Continental Realty Credit, Inc. (Continental) and, in turn, Continental assigned the mortgage and rents and leases to appellee Westinghouse Credit Corporation (Westinghouse). Continental avers, however, it retained an ownership interest in the mortgage. On December 27, 1990, Manor defaulted on the second mortgage and, pursuant to the terms of the mortgage which included a confession of judgment/warrant of attorney clause, Continental and Westinghouse filed a complaint in confession of judgment against Manor on April 8,1991 and judgment was entered that same day. On April 11, 1991, appellant filed for Chapter 11 bankruptcy, but by Order dated January 29, 1992, the case was dismissed effective March 16, 1992. On March 16, 1992, Continental and Westinghouse assigned the rents and leases as well as the April 8, 1991 judgment to appellee Manor Building Corporation. On April 20, 1992, appellant filed its petition to strike judgment,2 the denial of which is the subject of this appeal.
*260A motion to strike a judgment operates as a demurrer to the record and unless a fatal defect appears on the face of the record, the motion will not be granted. Commonwealth National Bank v. Boetzelen, 338 Pa.Super. 237, 487 A.2d 943 (1985). When a proceeding to confess judgment is instituted by complaint, the complaint and confession of judgment clause must be read together to determine whether there are defects on the face of the record. Parliament Industries, Inc. v. Wm. H. Vaughan & Co., 501 Pa. 1, 459 A.2d 720 (1983). Appellant argues judgment in favor of both Continental and Westinghouse was improper and contrary to Pa.R.C.P. 2954 as Continental did not retain an interest in the mortgage when it assigned the instrument to Westinghouse. For the reasons set forth below, I agree with the appellant’s argument and, therefore, would vacate that portion of the April 8, 1991 judgment entered in favor of appellee Continental.3
Although paragraph 5 of appellees’ complaint for confession of judgment avers Continental retained an interest when the mortgage was assigned to Westinghouse, the assignment executed by Continental to Westinghouse without recourse and attached to the complaint directly contradicts this averment. Granted, the appellees were not required to attach said assignment, as accurately stated by the majority and the trial court, but because they chose to attach a copy of the legally binding document to their complaint, the assignment thereby became part of the record and subject to the Court’s scrutiny. Because appellees have provided no evidence to contradict the assignment executed without recourse, other than their naked averment to the contrary, the issue of who has standing to confess judgment is clearly a matter of law within this Court’s scope of review.4 The record reveals Continental assigned and transferred “all of Continental’s right, title and interest in the Mortgage and Assignment [of rents and leases] to West*261inghouse Credit Corporation ... without recourse,” and, therefore, it is not a holder, assignee or transferee of the note and not entitled to judgment. However, for the aforementioned reasons and those which follow, I would find the record did establish appellee Westinghouse’s interest in the note which the mortgage security agreement secures.
The mortgage provided in the event of default the money owed on the note, mortgage or any other loan documents secured thereby (mortgage ¶ 29) would become, at the option of the mortgagee, immediately due and payable. The record established Westinghouse as holder of an interest in the mortgage by reason of the April 20, 1989 assignment from Continental. The complaint identified Westinghouse’s rights under the mortgage and the holder’s right to a confessed judgment upon default of the mortgagor, and averred appellant had defaulted. Westinghouse’s right to confess judgment under the mortgage is evident.
Last, appellant argues the judgment must be stricken as it was not confessed in conformity with the cognovit clause of the mortgage agreement. Appellant contends the affidavit evidencing the debt owed to the mortgagee and attached to plaintiffs’ complaint fatally failed to include the particulars of the alleged default as is required, appellant argues, by paragraph 29 of the mortgage agreement. My reading of the warrant of attorney paragraph indicates the affidavit must include “the amount of the indebtedness, inclusive of reasonable attorneys’ fees, with costs of suit and release of procedural errors,” with no mention of a requirement the terms or nature of the debt and/or default must be included. Accordingly, I would find this portion of appellant’s argument devoid of merit. However, also with regard to the affidavit necessary to enter judgment, appellant argues the document is legally deficient because Continental, as signator of the affidavit, was not a duly authorized designee of mortgagee as required by paragraph 29. Because I would find Continental does not have an interest in the mortgage upon which judgment has been confessed, I would likewise find the affidavit necessary to establish the mortgagee’s indebtedness to be legally deficient.
*262Regardless of the ultimate outcome of this case and irrespective of whether a motion to open would have been the better vehicle to determine the equitable result in this case, the irregularity on the face of the record is of sufficient legal import that as a matter of law the motion to strike should have been granted. Fountain Hill Millwork Bldg. v. Belzel, 402 Pa.Super. 553, 587 A.2d 757 (1991). Therefore, applying the standard of review set forth above, I would be compelled to vacate the April 8, 1991 judgment entered in Westinghouse’s favor. This holding would be made without prejudice to Westinghouse to refile the complaint in confession of judgment within the constraints of this dissent’s reasoning.

. ComFed is not a party to this appeal.

. The trial court stated that because of the imminence of the pending sheriff’s sale on the judgment and the time involved in pursing the process of Pa.R.C.P. 209, defendant/appellant agreed to abandon its petition to open and proceed solely on the petition to strike. (Slip Op., Strassberger, J., 7/21/92, p. 2.) This was unfortunate as the motion to open would have addressed the equitable issues, as indicated in the majority Opinion, and appellant would have been in a better position to argue the existence of factual issues at trial.

. I would also vacate judgment as to appellee Westinghouse but for different reasons to be discussed at a later point in this dissent.

. The situation before us is distinguishable from that in DeRose v. Lombardi, 413 Pa. 258, 196 A.2d 336 (1964), on which the appellees rely and which held questions of fact must be resolved by a petition to open.