Court Opinion

ID: 9747154
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:59:04.957496+00
Date Added: 2024-06-11T07:25:20.543289
License: Public Domain

DISSENTING STATEMENT BY
McEWEN, P.J.E.:
¶ 1 Since the opinion of the trial judge reflects a keen judicial insight and provides a persuasive expression of rationale for his decision, and since my astute colleagues of the majority would affirm that decision, I am hesitant to differ, but dissent I must. Essentially, my study of the record compels me to disagree with certain of the conclusions reached by my colleagues, including
(1) the ruling that a default judgment entered by the prothonotary based on the failure to timely file an answer admits not only the factual allegations but also the legal conclusions contained in the complaint;
*300(2) the finding that appellants’ concession that trial was to be conducted solely for the purpose of assessing damages relieved the trial court of the need to determine the nature and type of damages to which the plaintiff and the 243 class members were entitled based on the facts admitted by the default;
(3) the ruling that the failure to appeal from the class certification order filed on June 19, 2002, rendered that decision of the trial court “conclusive”; and
(4) the ruling that the computation of the award of counsel fees was permissible under the law of Pennsylvania.
Thus, I would vacate the judgment and remand.
1. EFFECT OF DEFAULT JUDGMENT
¶ 2 The proposition that by virtue of the default judgment entered by the prothono-tary due to the failure of appellants to file an answer,23 the legal conclusions contained in the complaint were finally established has been rejected by quite a number of courts, including this one.24
¶ 3 This Court, in Ehrenzeller v. Chubb, 171 Pa.Super. 460, 90 A.2d 286 (1952), cogently summarized the relevant law when it wrote:
A rule to strike off a judgment for irregularity on the face of the proceedings is in the nature of a demurrer to the rec*301ord. The proceeding is not equitable and a defendant is not required to answer on the merits if the complaint is not self-sustaining in setting up a good cause of action. A plaintiff’s complaint is alwags open to attack on the ground that it is not self-sustaining, as a demurrer, when he asks for judgment for want of an answer.
Id. at 286-287 (emphasis supplied; citations omitted).
¶ 4 Subsequently, this Court, in Calesnick v. Redevelopment Authority of the City of Philadelphia, 365 Pa.Super. 320, 529 A.2d 528 (1987), appeal denied, 517 Pa. 629, 539 A.2d 810 (1988), citing prior Supreme Court, Superior Court, and Commonwealth Court cases, held that a default judgment based on a failure to timely file an answer to a complaint admits only the factual allegations of the complaint:
The [appellant] contends that the lower court erred in denying its petition to strike the default judgment because the complaint failed to set forth a cause of action. We agree. A petition to strike a judgment may be granted only if defects appear on the face of the record. Franklin Interiors v. Wall of Fame Management, 510 Pa. 597, 599, 511 A.2d 761, 762 (1986); Malakoff v. Zambar, Inc., 446 Pa. 503, 506, 288 A.2d 819, 821 (1972).
In Frankel v. Donehoo, 306 Pa. 52, 158 A. 570 (1931), our Supreme Court stated that A DEFAULT JUDGMENT DOES NOT ADMIT THE SUFFICIENCY OF THE PLEADING TO SUSTAIN A JUDGMENT, NOR DOES IT ADMIT THAT THE FACTS AS STATED CONSTITUTE A CAUSE OF ACTION. Id., 306 Pa. at 57, 158 A. at 572, Our Courts have held that if the complaint fails to state a cause of action, the default judgment entered thereon should be stricken. See Rosser v. Cusani, 97 Pa.Superior Ct. 255 (1929). In Commonwealth, Dept. of Environmental Resources v. Allias, 20 Pa.Commonwealth Ct. 222, 341 A.2d 226 (1975), the Court stated that “[e]ven though a judgment is entered, as here, if the face of the record shows the same to be baseless, the court should strike it off.” Id. at 226, 341 A.2d at 228 (citing Constable v. Andrews, 297 Pa. 285, 146 A. 899 (1929)). See also Wilkinsburg Borough v. School District, 298 Pa. 193, 202, 148 A. 77, 81 (1929); Alderfer v. Pendergraft, 302 Pa.Superior Ct. 210, 215, 448 A.2d 601, 604 (1982); Roberts v. Gibson, 214 Pa.Superior Ct. 220, 225, 251 A.2d 799, 802 (1969).
Calesnick v. Redevelopment Authority of the City of Philadelphia, supra, 529 A.2d at 529-530 (emphasis supplied). Accord: Miernicki v. Seltzer, 312 Pa.Super. 166, 458 A.2d 566, 568 (1983), affirmed, 505 Pa. 323, 479 A.2d 483 (1984).
¶ 5 “The rules permitting the entry of default judgments were designed to prevent a dilatory defendant from unreasonably thwarting plaintiffs efforts to establish a claim. They were not intended to provide the plaintiff with a means of gaining a judgment without the difficulties which arise from litigation.” Miller Block Co. v. U.S. Nat’l Bank, 389 Pa.Super. 461, 567 A.2d 695, 701 (1989), appeal denied, 525 Pa. 658, 582 A.2d 324 (1990). Accord: ABG Promotions v. Parkway Publishing, Inc., 834 A.2d 613, 618 (Pa.Super.2003).
¶ 6 Some of the other jurisdictions which have considered this issue have likewise concluded that a default judgment entered as a result of a failure to timely plead to a complaint does not concede the existence of a viable cause of action. See, e.g.: Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1267 (9th Cir.1992); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.1978); Nishimatsu Construction Co. v. *302Houston National Bank, 515 F.2d 1200, 1206 (5th Cir.1975); Moore’s Federal Practice, § 55.12[1] (3d ed.1997); Skanchy v. Calcados Ortope SA, 952 P.2d 1071, 1076 (Utah 1998); American Towers Owners Assoc. v. CCI Mechanical, Inc., 930 P.2d 1182, 1194 (Utah 1996); Wiseman v. Stocks, 527 So.2d 904, 906 (Florida 1st DCA 1988).
¶ 7 The Oregon Supreme Court, in so ruling, cited a 1975 opinion written by our Pennsylvania Commonwealth Court in support of its ruling that a default judgment does not admit the legal conclusions contained in the complaint:
Defendant argues that the effect of the default order was to admit not only the truth of the facts alleged in the counterclaims, but also that the alleged actions were illegal and caused injury. She argues that the only issue properly before the trial court judge was the measure of damages, and that the trial court erred in considering plaintiffs’ motion to dismiss after the order of default had been entered.
We disagree. According to the great weight of authority, a default establishes only the truth of the factual allegations contained in the complaint and does not admit that the facts alleged constitute a valid claim for relief. Under this view, the trial court has no authority to award damages against a defaulting defendant if the complaint fails to state a cause of action. See ... Pennsylvania Dep’t of Environmental Resources v. Allias, 20 Pa.Cmwlth.222, 341 A.2d 226 (1975) (default judgment does not admit the sufficiency of "the pleading to sustain the judgment, nor does it admit that the facts alleged constitute a cause of action).
Hi Hi % * * Hi
The rule suggested by defendant would allow her to recover damages even if it is apparent on the face of her pleading that she has suffered no legally cognizable injury. A default judgment, no less than any other judgment, must have a basis in the pleadings. The trial court acted within its authority in considering the legal sufficiency of defendant’s counterclaims.
Rajneesh Foundation International v. McGreer, 303 Or. 139, 142-144 734 P.2d 871, 873-874 (1987) (most citations omitted).
¶ 8 The Utah Court of Appeals, in applying the majority rule on the effect of such a default judgment amusingly, but astutely, observed:
Were the rule otherwise, a court asked to enter judgment by default would be obligated to do so in a case where a complaint sought damages for defendant’s “refusal to share her recipes with her neighbors, including plaintiff.” But such is not the case. Defendant’s failure to answer and ensuing default would require the court to accept the factual allegations as true, but the court would enter judgment as requested only if it determined those facts established an actionable claim.
Stevens v. Collard, 837 P.2d 593, 596 n. 5 (Utah Ct.App.1992), modified on other grounds, 863 P.2d 534 (Utah Ct.App.1993).
¶ 9 Similarly, the United States Court of Appeals for the Fourth Circuit explained the effect, under the Federal Rules of Civil Procedure,25 of a default entered for failure to timely plead to a complaint:
*303The defendant, by his default, admits the plaintiffs well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established. ... As the Supreme Court stated in the “venerable but still definitive case” of Thomson v. Wooster: a default judgment may be lawfully entered only “according to what is proper to be decreed upon the statements of the bill, assumed to be true,” and not “as of course according to the prayer of the bill.” The defendant is not held ... to admit conclusions of law. In short, despite occasional statements to the contrary, a default is not treated as an absolute confession by the defendant of his liability and of the plaintiffs right to recover.
Nishimatsu Constr. Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir.1975) (quoting Thomson v. Wooster, 114 U.S. 104, 113, 5 S.Ct. 788, 29 L.Ed. 105 (1885)) (internal quotations and other citations omitted). The court must, therefore, determine whether the well-pleaded allegations in Appellants’ complaint support the relief sought in this action. Weft, Inc. v. G.C. Inv. Assocs., 630 F.Supp. 1138, 1141 (E.D.N.C.1986), aff'd, 822 F.2d 56 (table), 1987 WL 36124 (4th Cir.1987). For the purpose of this decision, the complaint alleges, the default establishes, and the parties agree that the fair market value of the property is $179,000, that the amount owed to the holder of the first deed of trust is $181,876, and that the amount owed to the holder of the second deed of trust is $47,305.46. The district court correctly concluded that acceptance of these undisputed facts does not necessarily entitle the Appellants to the relief sought; in this case, stripping off the second deed of trust. Nishimatsu, 515 F.2d at 1206.
Ryan v. Homecomings Financial Network, 253 F.3d 778, 780-781 (4th Cir.2001) (emphasis supplied).
¶ 10 Thus it is that I am obliged to opine that while the default judgment precluded Liberty from contesting the facts of the complaint, including the allegations that the claimants were not fully paid overtime when they worked in excess of forty hours per week, the default
• Does not admit that the facts of the complaint constitute a cause of action,
• Should not be treated as a confession of liability, and
• Does not establish the claimant’s right to recover.
2. LEGAL ENTITLEMENT TO DAMAGES
¶ 11 Accepting, as we must, the fact that the default judgment was, on its face, validly entered upon defendants’ failure to timely respond to the plaintiffs complaint, which thereby conclusively established the facts pleaded therein, the legal issue still to be resolved by the trial court was whether the use of the fluctuating work week method of payment by the Liberty violated the Pennsylvania Minimum Wage Act, 43 P.S. §§ 333.101-333.115, or, by extension, the Pennsylvania Wage Payment and Collection Law, 43 P.S. §§ 260.1 et seq.
¶ 12 Both the federal Fair Labor Standards Act and the Pennsylvania Minimum Wage Act use the term “regular rate” without defining the term,26 and both statutes require that overtime (hours worked in excess of 40 hours in a week) be paid at one and one-half times the regular hourly rate. The United States Supreme Court *304has determined that use of the fluctuating work week meets the requirements of the Federal Fair Labor Standards Act. See: Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942). While a number of appellate' courts have also approved the use of the fluctuating work week concept under their respective state laws,27 Pennsylvania has not yet addressed the issue. This issue is, of course, one of substantial importance to the laboring citizens of this Commonwealth, as well as to its employers. However, I am, most respectfully, of the view that in order to award damages to Ms. Signora and to the members of the class, where the complaint averred that overtime wages had not been fully paid by Liberty to the members of the class, the trial court was obliged to first determine if the facts averred in the complaint set forth a violation of Pennsylvania law requiring an award of overtime pay or, more specifically, whether implementation of the fluctuating work week concept was in satisfactory compliance with the Pennsylvania statute, for, only after such a determination, could damages be awarded to Ms. Signora and the class. In the absence of any such determination by the esteemed trial judge, I am of the mind that damages for overtime wages could not be lawfully awarded to the class.
3. APPEALABILITY OF CLASS CERTIFICATION
¶ 13 In the instant case, the default judgment was entered due to the failure of Liberty to timely answer the Ms. Signora’s complaint. While Signora in the complaint sought relief on her own behalf and that of the putative class, that default judgment was enforceable solely as to the individual plaintiff, Signora, for two reasons: (1) because no class had yet been certified, and (2) because Pa.R.C.P. 1715 prohibits the entry of a default judgment in a class action except by special order of the court. As a consequence, Signora and the other putative plaintiffs' subsequently moved, on August 19, 1998, pursuant to the special order provisions of Pa.R.C.P. 1715, for the entry of the default judgment in favor of the class. That motion was granted by order dated January 22, 1999, and appellants filed a petition to open or strike the order entering the default judgment in favor of the class. That petition was denied by the trial court by order dated December 30, 1999. When Liberty then filed an appeal to the Superior Court, Signora filed a motion to quash the appeal on the basis that the order was interlocutory, not appealable as of right. This Court agreed, holding that “as this is not an appeal from a final appealable order, we are constrained to quash this appeal.” Signora v. Liberty Travel, 769 A.2d 1218 (Pa.Super.2000) (unpublished memorandum, filed December 4, 2000).
¶ 14 The majority here adopts the view of the eminent trial judge that this prior review and quashal by this Court determined “conclusively ... that Cross Appellants [i.e., Liberty] were not entitled to relief from the class-wide default judgment entered against them by special order.” Signora v. Liberty Travel, Inc., 886 A.2d 284, 290 (Pa.Super.2005). As I, most respectfully, see it, however, the prior decision of this Court was founded upon the *305well established rule that an order approving certification of an action as a class action is not a final and appealable order. See: Pincus v. Mutual Assurance Co., 457 Pa. 94, 96-97, 321 A.2d 906, 908 (1974); Piltzer v. Independence Federal Savings and Loan Association, 456 Pa. 402, 319 A.2d 677 (1974); Foust v. SEPTA 756 A.2d 112, 116 n. 3 (Pa.Cmwlth.2000), appeal denied, 565 Pa. 652, 771 A.2d 1289 (2001); 3 Standard Pennsylvania Practice 2d § 14:104. See also: Debbs v. Chrysler Corp., 810 A.2d 137 (Pa.Super.2002), appeal denied, 574 Pa. 744, 829 A.2d 311 (2003). Thus, Liberty’s present challenge to that certification order, filed as it is after judgment has been entered against it, is timely. However, since Liberty has focused its challenge on the propriety of the underlying default judgment and whether it should have been entered against the class, rather than whether the class itself should have been certified, it has not offered any persuasive arguments that the trial court erred in certifying the class.
¶ 15 Nonetheless, I am of the mind that the order of January 22, 1999, which purported to apply the default judgment to the class, was null and void since no class had been certified at that point — indeed, the order certifying the class was not entered until more than three years later on June 19, 2002. As I see it then, since the default judgment of January 22, 1999, in favor the class was null and void, and since no judgment was entered in favor of the class after it was certified on June 19, 2002, there was no properly entered'judgment in favor of the class, and, therefore, it was error to conduct a trial upon the damages claims of the class.
4. AWARD OF COUNSEL FEES
¶ 16 Finally, I am compelled to the view that there is no provision in Pennsylvania law for the application of a multiplier to an award of statutory attorney fees. This Court made clear in an insightful opinion of my esteemed colleague, Judge Justin M. Johnson in Logan v. Marks, 704 A.2d 671, 675 (Pa.Super.1997), that interest on attorney fees is not permitted unless specifically authorized by statute. Legal scholars might counsel that it is unbecoming to apply simple logic in so complex an appeal, but it strikes me that if the lesser and rather routine sanction of interest upon a statutory attorney fee is not permitted, surely it follows that the greater sanction of a multiplier is not allowed unless the General Assembly so declares.
¶ 17 Thus set forth are the bases of this dissent.

. The circumstances surrounding the entry of the default judgment were described in the September 30, 1997, opinion of another trial court judge, the late Judge Joseph Battle, as follows:
On July 17, 1995 the plaintiff’s attorney mailed to the defendants’ [attorney] a ten (10) day notice of an intention to take a default judgment. On July 18, 1995 the defendants’ attorney orally requested an extension of time until August 4, 1995, because of a scheduled vacation. The plaintiff’s attorney orally agreed to an extension and, on the same day, sent a letter to the defendants’ attorney confirming that an extension had been granted until August 4, 1995. The letter further indicated that the extension was for the filing of an answer, only. The letter further demanded that the defendants’ law firm enter its appearance by July 27, 1995.
Apparently, the plaintiff’s attorney’s letter of July 18, 1995 granting the extension of time for the filing of an answer arrived in the offices of the defendants' attorneys on July 24, 1995. Because the attorney handling the case on behalf of the defendants was on vacation, another attorney in the same office faxed a responsive letter to the plaintiff’s attorney indicating that the agreement to extend time would not be signed until the attorney returned from vacation. The plaintiff's attorney faxed a letter back agreeing that the agreement to extend could be signed and the entry of appearance filed on August 4, 1995.
However, in addition to the written communications, the partner of the attorney on vacation spoke to a paralegal in the office of the plaintiff’s attorney. He stated to the paralegal that his firm would not be bound by the terms of the extension agreement limiting the filing of the responsive pleading to that of an answer. The partner admitted making such a statement and said he did so because he did not know what the terms of the oral agreement were between the plaintiff's attorney and the attorney who was on vacation.
In light of the disagreement between counsel for the parties as to the terms of the extension, plaintiff's counsel filed a praecipe for the entry of a default judgment, which was entered on July 28, 1995.
On appeal to this Court a panel consisting of Judges Sydney Hoffman, Corréale Stevens and Michael Eakin affirmed, on the basis of the trial court opinion, the order which had refused to open the default judgment entered in favor of the plaintiff, Ms. Signora. Signora v. Liberty Travel, Inc., 718 A.2d 355 (Pa.Super.1998) (unpublished memorandum). No petition for allowance of appeal was filed.

. The 1993 opinion of Justice Papadakos in Fox v. Gabler, 534 Pa. 185, 626 A.2d 1141 (1993) is not here relevant as it was a default judgment entered by the court as a sanction for discovery abuses.

. The federal courts rely on notice pleading, as distinguished from Pennsylvania's fact pleading. See: Fed.R.Civ.P. 8(a). That distinction permits of no variation of view in the consequences of a default judgment.

. See: 43 P.S. § 333.104(c).

. States deciding this issue in favor of adopting the fluctuating work week concept include: Samson v. Apollo Resources, Inc., 242 F.3d 629 (5th Cir.2001), cert. denied, 534 U.S. 825, 122 S.Ct. 63, 151 L.Ed.2d 31 (2001) (La.law); Goodrow v. Lane Bryant, Inc., 432 Mass. 165, 732 N.E.2d 289 (2000); Young v. State, 195 Or.App. 31, 96 P.3d 1239 (2004), review granted, 338 Or. 57, 107 P.3d 626 (2005); Inniss v. Tandy Corp., 141 Wash.2d 517, 7 P.3d 807 (2000).