Court Opinion

ID: 4407421
Source: CourtListenerOpinion
Date Created: 2019-06-17 17:48:18.798412+00
Date Added: 2024-06-11T09:37:07.183949
License: Public Domain

J-E03003-18

                             2019 Pa. Super. 190

ROBERT W. DRISCOLL, JR.                          IN THE SUPERIOR COURT
                                                    OF PENNSYLVANIA
                         Appellant

                    v.

JOHN A. ARENA

                         Appellee                  No. 226 EDA 2017

           Appeal from the Order Entered December 19, 2016
          In the Court of Common Pleas of Philadelphia County
               Civil Division at No: 03288, May Term, 2016

ROBERT W. DRISCOLL, JR.                          IN THE SUPERIOR COURT
                                                    OF PENNSYLVANIA
                         Appellant

                    v.

JOHN A. ARENA

                         Appellee                  No. 228 EDA 2017

           Appeal from the Order Entered December 30, 2016
          In the Court of Common Pleas of Philadelphia County
               Civil Division at No: 03293, May Term, 2016

ROBERT W. DRISCOLL, JR.                          IN THE SUPERIOR COURT
                                                    OF PENNSYLVANIA
                         Appellant

                    v.

THOMAS ARENA

                         Appellee                  No. 286 EDA 2017

              Appeal from the Order Entered December 14, 2016
J-E03003-18

               In the Court of Common Pleas of Philadelphia County
                    Civil Division at No: 03286, May Term, 2016

BEFORE: GANTMAN, P.J., BENDER, P.J.E., BOWES, PANELLA, LAZARUS,
        OTT, STABILE, DUBOW, and MURRAY, JJ.

OPINION BY STABILE, J.:                                         FILED JUNE 17, 2019

       Appellant, Robert W. Driscoll, Jr., appeals from the orders entered

December 14, 19, and 20, 2016, granting the petitions of Appellees, Thomas

Arena and John A. Arena, to strike confessed judgments.                    We vacate and

remand.

       Appellant filed confessed judgments in these three consolidated matters

on May 25, 2016 and served Appellees, who are located in Massachusetts, on

June 1, 2016.      The confessed judgments arose from Appellees’ default on

three promissory notes—two executed (one by each Appellee) on March 24,

2005 and one executed (by Appellee John A. Arena) on October 27, 2009. On

June 22, 2016, Appellees retained local counsel in Philadelphia. On June 28,

2016, Appellees, through Massachusetts counsel, filed a notice of removal in

the   United    States    District   Court     for   the   District   of   Massachusetts.

Massachusetts counsel attempted to send notice of the removal to the

Philadelphia County Court of Common Pleas but inexplicably sent the notice

to the wrong address.1 The certified dockets do not reflect receipt by the trial

____________________________________________

1 Appellees’ Massachusetts counsel addressed the notice of removal to “Court
of Common Pleas, Philadelphia City Hall, Chestnut Street, Philadelphia, PA,

                                           -2-
J-E03003-18

court of any notice of removal.          There is no indication in the record that

Appellees’ Massachusetts counsel was admitted to practice in Pennsylvania,

or admitted pro hac vice for these cases.

       Appellees’ removal petition was improper for at least two reasons.

Pursuant to the federal removal statute, Appellees should have filed the

removal petition in the Eastern District of Pennsylvania, where the underlying

state action was pending: “A defendant or defendants desiring to remove any

civil action from a State court shall file in the district court of the United States

for the district and division within which such action is pending a notice of

removal[.]” 28 U.S.C. § 1446(a).

       Further, Appellees’ failure to serve the state court was improper:

             Promptly after the filing of such notice of removal of a civil
       action the defendant or defendants shall give written notice
       thereof to all adverse parties and shall file a copy of the notice
       with the clerk of such State court, which shall effect the removal
       and the State court shall proceed no further unless and until the
       case is remanded.

28 U.S.C. § 1446(d).        There is no indication in the record that Appellees

attempted to confirm whether the Philadelphia County Court of Common Pleas

received the removal notices.          There is no indication that the record was

____________________________________________

19107.” Appellant’s Response to Thomas Arena’s Motion to Strike, 11/18/16,
at Exhibit F. Appellant’s responses to Appellees’ motions to strike are
substantially similar. Throughout this Opinion, we will cite Appellant’s
response to Thomas Arena’s motion to strike.

                                           -3-
J-E03003-18

forwarded to the federal court, and the common pleas court continued to

accept Appellant’s filings.

       Appellant served notice of writs of execution on June 29, 2016 and filed

praecepies for writs of execution on August 18, 2016. On September 1, 2016,

the Massachusetts federal court issued a remand order. Appellees, by and

through Philadelphia counsel, filed petitions to strike the confessed judgments

on September 23, 2016.          In the orders on appeal, the trial court granted

Appellees’ petitions reasoning that Appellant’s confessed judgments failed to

comply with the applicable four-year statute of limitations set forth at 42

Pa.C.S.A. § 5525(a)(8).2 On appeal, Appellant claims Appellees’ petitions to

strike were untimely, given their ineffective effort to remove this matter to

federal court in Massachusetts. He also claims that a statute of limitations

defense, if one exists, renders the confessed judgments voidable, but not void,

and therefore is grounds for opening the judgments, but not striking them off.

Finally, Appellant argues that the confessed judgments were sealed

instruments subject to the twenty-year limitations period set forth at 42

Pa.C.S.A. § 5529(b)(1).3

____________________________________________

2  Section 5525(a)(8) provides a four-year limitations period for: “An action
upon a contract, obligation or liability founded upon a writing not specified in
paragraph (7), under seal or otherwise, except an action subject to another
limitation specified in this subchapter.” 42 Pa.C.S.A. § 5525(a)(8).
3  Section 5529(b)(1) provides: “Notwithstanding section 5525(7) (relating
to four year limitation), an action upon an instrument in writing under seal
must be commenced within 20 years.” 42 Pa.C.S.A. § 5529(b)(1).

                                           -4-
J-E03003-18

      We conclude that Appellees’ petitions were untimely, and therefore we

vacate the orders striking the confessed judgments.         Rule 2959 of the

Pennsylvania Rules of Civil Procedure provides that “[i]f written notice [of the

writ of execution] is served upon the petitioner pursuant to Rule 2956.1(c)(2)

or Rule 2973.1(c), the petition to strike the judgment 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).    Appellant filed writs of execution and

served written notice in accord with Rule 2959(a)(3) on June 29, 2016.

Appellees filed their petitions to strike on September 13, 2016, well beyond

the thirty-day deadline. Appellees’ petitions were therefore untimely unless

they can establish “compelling reasons” for the delay.      The reason for the

delay in this case is Appellees’ disregard for the federal removal statute.

      At a status conference on July 19, 2016, the Federal District Court for

the District of Massachusetts sua sponte raised the issue of Appellees’ removal

to that district rather than the Eastern District of Pennsylvania. Appellant’s

Response to Thomas Arena’s Motion to Strike, 11/18/16, at Exhibit N, p. 2.

“The appropriate district court for removal is the Eastern District of

Pennsylvania. The parties have not made any persuasive showing that this

Court qualifies under the statute.      Thus, removal to this Court is not

permitted.” Id.

                                      -5-
J-E03003-18

      In support of their arguments that they had compelling reasons for their

delay, Appellees assert they “had every reason to believe that the Court of

Common Pleas had lost jurisdiction over the cases unless and until the matters

were remanded.” Appellees’ Brief at 32. They claim the failure to notify the

Philadelphia County Court of Common Pleas of the removal petition was a

mere “clerical error involving Massachusetts counsel.”     Id.   Massachusetts

counsel apparently obtained the wrong address by running a Google search

for “Philadelphia court of common pleas.” Id. at 33. We find these excuses

unavailing. Appellees obtained local counsel in Philadelphia before they filed

their removal petition. We can conceive of no reason, let alone a compelling

one, why Appellees’ Massachusetts counsel would fail to coordinate with

Philadelphia counsel regarding a notice of removal of an action pending in

Philadelphia. Likewise, we can conceive of no reason, let alone a compelling

one, why any lawyer with access to the Internet could not find the appropriate

filing address, nor do we understand Appellees’ failure to follow up and ensure

the court received the removal notice. Furthermore, even if Massachusetts

counsel was unaware of the error regarding the notice of removal, removal to

the District of Massachusetts, rather than the Eastern District of Pennsylvania,

was facially improper under the plain text of the federal removal statute, as

the District Court explained. Appellees’ failed removal attempt was the result

of several errors or counsel, and we cannot conclude that those mistakes

                                     -6-
J-E03003-18

provided a compelling reason for noncompliance with Rule 2959(a)(3).4 We

observe that the trial court did not make any detailed findings on this issue,

noting only that Appellees’ “error” could not defeat their petitions because the

underlying judgments were void. Trial Court Opinion, 12/13/16, at 12 n.37.

Regardless, the facts pertaining to Appellees’ failed removal attempt are not

in dispute. We have concluded, as a matter of law, that the undisputed facts

do not constitute compelling reasons for untimeliness under Pa.R.C.P.

2959(a)(3).

       We now turn to whether the judgments were void or merely voidable.

In M & P Mgmt., L.P. v. Williams, 937 A.2d 398, 401 (Pa. 2007), our

Supreme Court held that a void judgment, such as a judgment entered where

the court lacks subject matter jurisdiction, cannot be made valid by the

passage of time.      This case is inapposite, because the trial court’s subject

matter jurisdiction is not at issue. Rather, Appellees assert that Appellant filed

the confessed judgments after the applicable statute of limitations expired.

The statute of limitations is an affirmative defense, and it is waivable.

Pa.R.C.P. 1030(a); Griffin v. Central Sprinkler Corp., 823 A.2d 191, 195

(Pa. Super. 2003). Assuming without deciding that Appellant failed to file the

____________________________________________

4   While our courts have not had occasion to consider the meaning of
compelling reasons for delay under Rule 2959(a)(3), our Supreme Court has,
in other contexts, applied a general rule that attorney error does not, in and
of itself, constitute a compelling reason for delay in prosecuting a case.
Marino v. Hackman, 710 A.2d 1108, 1111 n.6 (Pa. 1998).

                                           -7-
J-E03003-18

confessed judgments within the applicable limitations period, that failure did

not excuse Appellees’ noncompliance with Rule 2959(a)(3).

       On the question of void versus voidable judgments, this Court has

written that “[b]y labelling a judgment ‘defective’ or ‘irregular’ or ‘invalid’ one

does not dispose of the ultimate issue of whether the defect, irregularity or

invalidity renders the judgment void or voidable, but rather merely begs the

question.” Keiper v. Keiper, 494 A.2d 454, 456 (Pa. Super. 1985). A void

judgment is one that is “of no effect, potency or value, [and] irretrievably and

incurably lost.” Id. Where the judgment is voidable, the defendant must act,

or the judgment will stand on the record as valid. Id. at 456-57. Instantly,

Appellees’ statute of limitations defense, even if apparent from the face of the

record,5 does not render the judgments void. Appellees cite no law holding

the applicable limitations period in this case was nonwaivable, or that

____________________________________________

5  A petition to strike a confessed judgment is a demurrer to the record, such
that the defect in the judgment is apparent from the face of the record.
Midwest Fin. Acceptance Corp v. Lopez, 78 A.3d 614, 623 (Pa. Super.
2013). Ordinarily, an affirmative defense such as the statute of limitations
should not be raised as a preliminary objection, such as a demurrer. Pa.R.C.P.
1030; Devine v. Hutt, 863 A.2d 1160, 1167 (Pa. Super. 2004). The parties
dispute whether these principles hold in the context of a motion to strike a
confessed judgment. Appellees argue that the presence or absence of a
sealed contract is apparent from the face of the record, and therefore their
petitions to strike were procedurally appropriate, even though the petitions
raise an affirmative defense. This contention, even if accurate, does not save
Appellees’ untimely petitions because their statute of limitations defense, even
if valid, does not render the judgments void. We need not decide whether
Appellees’ should have filed a petition to open instead of a petition to strike.

                                           -8-
J-E03003-18

Appellant’s alleged failure to timely file the confessed judgments deprived the

trial court of subject matter jurisdiction. The thirty-day deadline in Pa.R.C.P.

2959(a)(3) applies whether the petition seeks to strike or open a confessed

judgment. Pa.R.C.P. 2959(a)(3). The Rule is explicitly mandatory, stating

that a petition “shall be filed within thirty days” and that, absent compelling

reasons, an untimely petition “shall be denied.”6 Appellees did not file their

petitions on time, and did not offer compelling reasons for their untimeliness.

Rule 2959 mandates denial under these circumstances. The trial court erred

in not doing so.

       In addition, we conclude that it was error for the trial court to grant

Appellees’ petitions to strike the judgments based upon the applicable statute

of limitations. The trial court found that the underlying promissory notes (the

“Notes”) were not filed under seal and are therefore subject to the four-year

statute of limitations of 42 Pa.C.S.A. § 5525(a)(8). The Notes each contain

an identical statement regarding seal: “Borrower intends this to be a sealed

instrument and to be legally bound hereby.” See Complaint in Confession of

Judgment, 5/25/16, at Exhibit A.7 We conclude this statement is sufficient to

____________________________________________

6 “[T]he term ‘shall’ is mandatory for purposes of statutory construction when
a statute is unambiguous.”        Chanceford Aviation Props., L.L.P. v.
Chanceford Twp. Bd. of Supervisors, 923 A.2d 1099, 1104 (Pa. 2007).
7  The note is a two-page document. The quoted portion appears on the
second page in a paragraph titled “Waiver.” The note attached to the March
25 complaint erroneously omitted the first page of the note, but Appellant
subsequently filed a praecipe to substitute the complete note.

                                           -9-
J-E03003-18

create a sealed document and that the confessions of judgment were subject

to the twenty-year statute of limitations of 42 Pa.C.S.A. § 5529(b)(1).

      “The application of the statute of limitations to an alleged cause of action

is a matter of law to be determined by the court.” Packer Soc’y Hill Travel

Agency, Inc. v. Presbyterian Univ. of Pennsylvania Med. Ctr., 635 A.2d
649, 651 (Pa. Super. 1993). In Beneficial Consumer Discount v. Dailey,

644 A.2d 789, 789 (Pa. Super. 1994), the borrowers signed a document on

which the word “seal” was pre-printed next to their names. When the lender

sued for default, the borrowers claimed they did not understand that they

were signing a document under seal, and that the four-year statute of

limitations should apply. Id. This Court disagreed, holding that “when a party

signs a contract which contains the pre-printed word “SEAL,” that party has

presumptively signed a contract under seal.” Id. at 790 (citing Klein v. Reid,

422 A.2d 1143 (Pa. Super. 1980), superseded by statute on other

grounds as stated in Packer, 635 A.2d at 649)). The borrowers failed to

rebut the presumption and thus the 20-year statute of limitations applied. Id.

at 790-91. This Court concluded as follows:

            Unless one distances himself from the pre-printed seal, the
      other party to a contract should be entitled to rely on the objective
      manifestations of the maker’s actions. There can be no question
      that the pre-printed “SEAL” is an actual seal and that the
      [borrowers] signed next to it. The [borrowers] were under no
      duty to accept the seal, and had every opportunity to inquire
      about its significance, and signed the agreement freely. We must
      therefore agree with the trial court that the obligation should be
      enforced.

                                     - 10 -
J-E03003-18

Id. at 791. Thus, Beneficial Consumer holds that a presumption of a sealed

document arises where the pre-printed word “seal” appears by the signatures.

More significant for present purposes, however, is what            Beneficial

Consumer does not hold.      It does not hold that the word “seal” by the

signature line is required. Moreover, Beneficial Consumer is silent on the

circumstances before us—an explicit statement of the parties’ intent within

the contract unaccompanied by any mark at the signature line. There appears

to be no Pennsylvania authority directly controlling the question before us,

though a 19th century opinion from our Supreme Court provides some

guidance:

           The days of actual sealing of legal documents, in its original
     sense of the impression of an individual mark or device upon wax
     or wafer, or even on the parchment or paper itself, have long gone
     by. It is immaterial what device the impression bears, and the
     same stamp may serve for several parties in the same deed. Not
     only so, but the use of wax has almost entirely—and, even of
     wafers, very largely—ceased. In short, sealing has become
     constructive, rather than actual, and is in a great degree a
     matter of intention.

Loraw v. Nissley, 27 A. 242 (Pa. 1893) (emphasis added).

     Given the lack of binding authority governing the precise circumstances

before us, we turn to general principles of contract interpretation. “When a

contract is clear and unequivocal, its meaning must be determined by its

contents alone.” N.E.A. Cross, Inc. Nat’l Fuel Gas Supply Corp., 600 A.2d
228, 229 (Pa. Super. 1991), appeal denied, 608 A.2d 31 (Pa. 1992).

           The paramount goal of contractual interpretation is to
     ascertain and give effect to the intent of the parties. In

                                    - 11 -
J-E03003-18

       determining the intent of parties to a written agreement, the court
       looks to what they have clearly expressed, for the law does not
       assume that the language of the contract was chosen carelessly.

Id. (quoting PBS Coals, Inc. v. Burnham Coal Co., 558 A.2d 562 (Pa.

Super. 1989), appeal denied, 568 A.2d 1248 (Pa. 1989))(emphasis added).

Further, “a contract must be interpreted to give effect to all of its provisions.”

Commonwealth ex rel. Kane v. UPMC, 129 A.3d 441, 464 (Pa. 2015).

“Thus, our Court ‘will not interpret one provision of a contract in a manner

which results in another portion being annulled.’” Id. (quoting LJL Transp.

v. Pilot Air Freight, 962 A.2d 639, 648 (Pa. 2009)).

       Appellees argue, in essence, that a contract is not under seal unless an

appropriate mark appears at the signature line, even in the face of a clear

statement to the contrary elsewhere in the contract.         Nothing in the law

governing sealed instruments supports such a holding, and, in our view, the

principles of contract interpretation require a different result.8 Specifically we

must give effect to all the provisions in the Notes.     Under the trial court’s

analysis, the parties’ clear statement of intent—“Borrower intends this to be

____________________________________________

8  Appellees and the trial court rely on In re Polkowski, 303 B.R. 585 (Bankr.
M.D. Pa. 2003), wherein the Bankruptcy Court wrote that “a written or printed
seal, word, scrawl or other sign appears to be absolutely essential
notwithstanding a finding of a party’s intention to execute a sealed
instrument.” Id. at 587. In the next sentence, the Bankruptcy Court cites
the presumption created by the presence of the word seal at the signature
line. Id. The holding of a federal bankruptcy court on a matter of state law
is, at most, persuasive authority. For the reasons explained in the main text,
we do not find Polkowski persuasive on this point.

                                          - 12 -
J-E03003-18

a sealed   instrument and    to   be   legally   bound   hereby”—is rendered

meaningless. Furthermore, the trial court effectively interprets one part of

the Notes to annul another—relying upon on the absence of any mark at the

signature line to annul a clear, positive statement of the parties’ intent—in

clear violation of our rules of contract interpretation. Cf. See Radio Craft

Co. v. Westinghouse Elec. & Mfg. Co., 7 F.2d 432, 434 (3d Cir. 1925)

(reasoning that “unnecessary presumptions, based upon silence, […] cannot

destroy plain, positive provisions of an agreement.”). Finally, the contract

clearly states that the borrower intends “this to be a sealed instrument….”

We do not believe it is possible to read the disputed sentence as a mere

statement of intent to file a sealed document in the future. To do so would

be to ignore unambiguous contractual language.

     In light of Loraw and the principles of contract interpretation referenced

above, we conclude that the Notes are instruments under seal in accord with

§ 5529(b)(1).

     Further, we reject Appellees’ argument that § 5529 does not apply

because the Notes are governed by the Uniform Commercial Code (“UCC”),

and because § 5529’s twenty-year limit conflicts with the UCC’s six-year

statute of limitations, which would otherwise apply in this case.      See 13

                                   - 13 -
J-E03003-18

Pa.C.S.A. § 3118(a).9       Section 5501(b) of the Judicial Code provides that

“[t]he provisions of Title 13 (relating to commercial code), to the extent that

they are inconsistent with this chapter, shall control over the provisions of this

chapter.”    42 Pa.C.S.A. § 5501(b).           Put simply, there is no direct conflict

between § 3118(a) of the UCC and § 5529 of the Judicial Code because

§ 3118(a) does not expressly apply to instruments under seal. Cf. Osprey

Portfolio, LLC v. Izett, 32 A.3d 793, 798 (Pa. Super. 2011) (finding no

conflict on the meaning of the word “instrument” as used in §§ 5525 and 5529

of the Judicial Code and as defined in § 3104 of the UCC), affirmed, 67 A.3d
749 (Pa. 2013). Appellees’ position would forbid the parties to any instrument

governed by § 3118(a) to avail themselves of § 5529(b)(1)’s twenty-year

statute of limitations, despite the absence in § 3118 of any reference to sealed

instruments. We would not infer any such limitation on contractual freedom

absent an express pronouncement to that effect from the General Assembly

or from our Supreme Court.

____________________________________________

9 Section 3118(a) provides: “Except as provided in subsection (e), an action
to enforce the obligation of a party to pay a note payable at a definite time
must be commenced within six years after the due date or dates stated in the
note or, if a due date is accelerated, within six years after the accelerated due
date. 13 Pa.C.S.A. § 3118(a).

The trial court judge who presided over one of these three consolidated
matters found § 3118(a) applicable. The trial judge presiding over the other
two matters did not address the issue because Appellant filed these actions
more than six years after Appellees’ default. Thus, it did not matter whether
the court applied a four- or six-year statute.

                                          - 14 -
J-E03003-18

      For all of the foregoing reasons, we vacate the orders striking off the

confessed judgments and remand for further proceedings consistent with this

opinion.

      Orders vacated. Case remanded. Jurisdiction relinquished.

      President Judge Gantman, President Judge Emeritus Bender, Judge

Bowes, Judge Panella, Judge Dubow, and Judge Murray join the opinion.

      Judge Ott files a concurring and dissenting opinion in which Judge

Lazarus joins.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/17/19

                                   - 15 -