Court Opinion

ID: 3206004
Source: CourtListenerOpinion
Date Created: 2016-05-23 22:07:43.891494+00
Date Added: 2024-06-11T12:48:31.424026
License: Public Domain

J-A09028-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ROBERT MOSNE AND JEAN MOSNE, HIS                 IN THE SUPERIOR COURT OF
WIFE                                                   PENNSYLVANIA

                            Appellees

                       v.

HERITAGE FOOD OF HAZLETON, LLC

                            Appellant                No. 1397 MDA 2015

                  Appeal from the Order Entered July 20, 2015
                in the Court of Common Pleas of Luzerne County
                       Civil Division at No(s): 2014-11116

BEFORE: FORD ELLIOTT, P.J.E., JENKINS, J., and PLATT, J.*

MEMORANDUM BY JENKINS, J.:                                 FILED MAY 23, 2016

        Heritage Food of Hazelton, LLC (“Appellant”) appeals the Luzerne

County Court of Common Pleas’ July 20, 2015 order denying Appellant’s

petition to open default judgment. After careful review, we affirm.

        On January 24, 2014, Robert Mosne sustained injuries when he slipped

on ice on an inclined surface at Appellant’s place of business, a grocery store

in Hazleton, Pennsylvania.1 On March 26, 2014, counsel for Appellees2 sent

____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
1
  The grocery store ceased operations during the pendency of this lawsuit,
although it was still in business as of June 19, 2015, when its general
manager was deposed in this matter.
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a letter informing Appellant that he had been retained to represent Appellees

in relation to the January 24, 2014 incident. On August 20, 2014, Appellees’

counsel sent a second letter3 advising that Appellees intended to file suit

within 30 days absent a response from Appellant’s insurance carrier.

Appellant acknowledges receipt of both letters, which Appellant claims its

general manager4 forwarded to its insurance broker.5

      On September 26, 2014, Appellees filed their Complaint, a copy of

which the Luzerne County Sheriff’s Department served at Appellant’s place

of business on October 1, 2014. Included with the Complaint was a Notice

                       _______________________
(Footnote Continued)
2
  Appellee’s wife, Jean Mosne, was also a plaintiff in the underlying matter
and is an Appellee in the instant appeal. Robert and Jean Mosne are
collectively referred to herein as “Appellees”.
3
  The second letter was sent to Hered, LLC, the company that owned the
property on which the Appellant’s grocery store was located. Both Appellant
and Hered, LLC were owned by the same individuals.
4
  Iftekhar Biplob had been Appellant’s general manager for five years. See
Deposition of Iftekhar Biplob, June 19, 2015, p. 6. Mr. Biplob has a
bachelor’s degree in management and had previously worked as an assistant
controller in a hotel in New York City. Mr. Biplob attended to all Appellant’s
insurance concerns.
5
   Appellant did not forward the claim to their insurer. Instead, Appellant
explained its “procedure was to forward every claim to Appellant’s insurance
broker, Gary Burdick of GDB & Associates, LLC, who would then handle the
claim on behalf of Appellant.” Appellant’s Brief, p. 6; see also Deposition of
Iftekhar Biplob, June 19, 2015, p. 7. Appellant further explained that its
general manager “always worked with and through the insurance broker
directly and did not work with the insurer.” Id. at 7; see also Deposition of
Iftekhar Biplob, June 19, 2015, pp. 7-8.

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to Defend.6       Appellant’s general manager forwarded the Complaint to

Appellant’s insurance broker.

        On January 3, 2015, Appellant was served with Appellees’ Notice of

Intent to Take Default Judgment pursuant to Pa.R.C.P. 237.1.7 Appellant’s
____________________________________________

6
 The Complaint included the following notice to defend text in both English
and Spanish:

                                        NOTICE

        YOU HAVE BEEN SUED IN COURT.

               If you wish to defend against the claim set forth in the
        following pages, you must take action within twenty (20) days
        after this complaint and notice are served, by entering a written
        appearance personally or by an attorney and filing in writing with
        the court your defenses or objections to the claims set forth
        against you. You are warned that if you fail to do so the case
        may proceed without you and a judgment may be entered
        against you by the court without further notice for any money
        claimed in the complaint or for any other claim or relief
        requested by the plaintiff. You may lose money or property or
        other rights important to you. YOU SHOULD TAKE THIS PAPER
        TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER,
        GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS
        OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING
        A LAWYER, IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS
        OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION
        ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO
        ELIGIBLE PERSONS AT A REDUCED RATE OR NO FEE.

See Notice to Defend, filed September 26, 2014 (legal services information
omitted).
7
    The notice Appellant received reads as follows:

                                 IMPORTANT NOTICE

        TO:          Heritage Food of Hazelton, LLC
(Footnote Continued Next Page)

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general manager promptly forwarded each pleading to Appellant’s insurance

broker via email.8

      On January 23, 2015, Appellees filed a praecipe for default judgment.

Also on January 23, 2015, the Luzerne County Court of Common Pleas

Prothonotary entered a default judgment and mailed Appellant a copy

                       _______________________
(Footnote Continued)

      DATE:                  January 2, 2015

             YOU   ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A
      WRITTEN APPEARANCE PERSONALLY OR BY AN ATTORNEY AND FILE IN
      WRITING WITH THE         COURT    YOUR DEFENSES OR OBJECTIONS TO THE
      CLAIMS SET FORTH AGAINST YOU.         UNLESS YOU ACT WITHIN TEN (10)
      DAYS FROM THE DATE OF THIS          NOTICE, A JUDGMENT MAY BE ENTERED
      AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE PROPERTY OR
      OTHER IMPORTANT RIGHTS.

             YOU   SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE.        IF
      YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET
      FORTH BELOW.        THIS   OFFICE CAN PROVIDE YOU WITH INFORMATION
      ABOUT HIRING A LAWYER.

             IF   YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY
      BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT
      MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE
      OR NO FEE.

Notice of Intent to Take Default Judgment, served on January 3, 2015 (legal
services information omitted).
8
  A dispute exists as to whether the general manager actually attached all
pleadings and notices to his emails to the broker. We need not address this
question, however, because even had he attached the notices, the result of
this case would not change for the reasons discussed infra.

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thereof.9 Appellant received notice of the entry of the default judgment on

January 29, 2015. Appellant’s general manager wrote another email to the

insurance broker explaining that Appellant had received another notice, but

did not forward the notice.

       Forty-six (46) days later, on March 16, 2015, Appellant improperly

electronically filed a petition to open default judgment. 10 Appellant properly

filed the petition to open judgment in person on April 9, 2015. Each petition

claimed Appellant operated a supermarket, was not litigation savvy, and did

not forward the default notice to its insurance broker because it did not

understand the importance of the default notice. On July 20, 2015, following

oral argument, the trial court denied Appellant’s petition to open the default

judgment.

       Appellant timely filed its notice of appeal on August 14, 2015.        The

trial court did not order, and Appellant did not file, a Pa.R.A.P. 1925(b)
____________________________________________

9
  The notice of entry of default judgment forwarded to Appellant by the
Prothonotary of the Luzerne County Court of Common Pleas reads as
follows:

           AS PRESCRIBED BY LAW, YOU ARE NOTIFIED THAT A
       JUDGMENT DEFAULT HAS BEEN FILED IN THIS OFFICE AGAINST
       YOU BY ROBERT MOSNE, PLAINTIFF, CREDITOR, ETC. IN THE
       AMOUNT OF TO BE ASSESSED ON January 23, 2015.

Notice of Entry of Default Judgment, mailed January 23, 2015.
10
  Appellant filed this petition electronically, in violation of the local rules of
Luzerne County Court of Common Pleas, which require petitions to open
default judgment to be filed by hand delivery.

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statement of matters complained of on appeal. The trial court entered its

Pa.R.A.P. 1925(a) opinion on November 18, 2015.

      Appellant raises the following five (5) claims for review:

      1. Whether the [t]rial [c]ourt erred and/or abused its discretion
      when it denied [Appellant’s] Petition to Open Default Judgment
      pursuant to Pa.R.Civ.P. 237.3 and established case law where
      the evidence established that [Appellant] met the following three
      requirements: (1) a prompt filing of a petition to open the
      default judgment; (2) a meritorious defense; and (3) a
      reasonable excuse or explanation for their failure to file a
      responsive pleading?

      2. Whether the [t]rial [c]ourt erred and/or abused its discretion
      when it denied [Appellant’s] Petition to Open Default Judgment
      because, in reaching its conclusion that [Appellant’s] reasons for
      delay did not excuse the delay and that the Petition was not filed
      promptly, the [c]ourt exercised judgment which is manifestly
      unreasonable under the circumstances?

      3. Whether the [t]rial [c]ourt erred and/or abused its discretion
      when it denied [Appellant’s] Petition to Open Default Judgment
      because the [c]ourt’s analysis regarding the promptness
      requirement is at odds with modern jurisprudence and the
      typical timeline associated with litigation of civil matters in the
      state court system from inception through trial?

      4. Whether the [t]rial [c]ourt erred and/or abused its discretion
      when it denied [Appellant’s] Petition to Open Default Judgment
      where equity clearly favored opening the judgment?

      5. Whether the [t]rial [c]ourt erred and/or abused its discretion
      when it denied [Appellant’s] Petition to Open Default Judgment
      where [Appellees] did not suffer any prejudice based on the
      delay between the entry of default judgment and the filing of the
      Petition to Open Default Judgment?

Appellant’s Brief, pp. 4-5.

      The decision to grant or deny a petition to open a default judgment is

a matter of judicial discretion. Schultz v. Erie Ins. Exchange, 477 A.2d

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471 (Pa.1984). “A petition to open a default judgment is an appeal to the

equitable powers of the court. The decision to grant or deny a petition to

open a default judgment is within the sound discretion of the trial court, and

we will not overturn that decision absent a manifest abuse of discretion or

error    of   law.”    Graziani   v.    Randolph,   856 A.2d 1212,   1223

(Pa.Super.2004).

        This Court’s standard of review regarding the denial of a petition to

open or strike a default judgment requires that the Court

        examine the entire record for any abuse of discretion, reversing
        only where the trial court’s findings are inconsistent with the
        clear equities of the case. Moreover, this Court must determine
        whether there are equitable considerations which require that a
        defendant, against whom a default judgment has been entered,
        receive an opportunity to have the case decided on the merits.
        Where the trial court’s analysis was premised upon record
        evidence, where its findings of fact were deductions from other
        facts, a pure result of reasoning, and where the trial court made
        no credibility determinations, this Court may draw its own
        inferences and arrive at its own conclusions. Finally, where the
        equities warrant opening a default judgment, this Court will not
        hesitate to find an abuse of discretion.

Reid v. Boohar, 856 A.2d 156, 159 (Pa.Super.2004).

        Pennsylvania’s Rules of Civil Procedure allow for the entry of default

judgments as follows:

        Rule 1037. Judgment            Upon   Default   or    Admission.
        Assessment of Damages

                                       ...

        (b) The prothonotary, on praecipe of the plaintiff, shall enter
        judgment against the defendant for failure to file within the
        required time a pleading to a complaint which contains a notice

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     to defend or, except as provided by subdivision (d), for any relief
     admitted to be due by the defendant’s pleadings.

        (1) The prothonotary shall assess damages for the amount
        to which the plaintiff is entitled if it is a sum certain or
        which can be made certain by computation, but if it is not,
        the damages shall be assessed at a trial at which the
        issues shall be limited to the amount of the damages.

                                    ...

     (c) In all cases, the court, on motion of a party, may enter an
     appropriate judgment against a party upon default or admission.

Pa.R.C.P. 1037. The Rules further provide:

     Rule 237.1 Notice of Praecipe for Entry of Judgment of
     Non Pros for Failure to File Complaint or by Default for
     Failure to Plead

                                    ...

     (2) No judgment of non pros for failure to file a complaint or by
     default for failure to plead shall be entered by the prothonotary
     unless the praecipe for entry includes a certification that a
     written notice of intention to file the praecipe was mailed or
     delivered

                                    ...

        (ii) in the case of a judgment by default, after the failure
        to plead to a complaint and at least ten days prior to the
        date of the filing of the praecipe to the party against whom
        judgment is to be entered and to the party’s attorney of
        record, if any.

Pa.R.C.P. 237.1.

     “Generally speaking, a default judgment may be opened if the moving

party has (1) promptly filed a petition to open the default judgment, (2)

provided a reasonable excuse or explanation for failing to file a responsive

                                    -8-
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pleading, and (3) pleaded a meritorious defense to the allegations contained

in the complaint.” Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 175-

76 (Pa.Super.2009); see also Reid, 856 A.2d at 160.11 “[A]ll three factors

must appear before a court is justified in opening a default judgment.”

McCoy v. Pub. Acceptance Corp., 305 A.2d 698, 700 (Pa.1973). Further,

a trial court cannot open a default judgment based on the “equities” of the

case where the defendant fails to establish all three of the required criteria.

Seeger v. First Union Nat. Bank, 836 A.2d 163, 167 (Pa.Super.2003).

       The third prong, a meritorious defense to the underlying matter, is not

at issue in this matter.         For purposes of a petition to open a default

judgment, “[t]he requirement of a meritorious defense is only that a defense

must be pleaded that if proved at trial would justify relief.”   Seeger, 836
A.2d at 166.      “The defense does not have to prove every element of its

defense[;] however, it must set forth the defense in precise, specific and

clear terms.” Id.

       Here, Appellant’s petition to open default judgment alleged various

defenses to the underlying action including comparative negligence, lack of

notice, assumption of the risk, open and obvious risk, choice of ways, and
____________________________________________

11
   Pennsylvania’s Rules of Civil Procedure provide that, where a party files a
petition for relief from a default judgment that attaches a proposed answer
that states a meritorious defense within 10 days of the entry of the default
judgment on the docket, the trial court must open the judgment. See
Pa.R.C.P. No. 237.3. In the case sub judice, however, Appellant concedes it
failed to file its petition to open default judgment within 10 days.

                                           -9-
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trivial defect.   Any of these pleaded defenses amount to a “meritorious”

defense to a slip and fall claim for the purpose of satisfying the third prong

required for a petition to open a default judgment.

      The instant matter instead hinges on the first prong, whether

Appellant promptly filed its petition to open default judgment, which

necessarily depends on the second prong, Appellant’s excuse for the delay.

      With regard to the first prong, whether the petition was timely filed,

this Court has noted the following:

      The timeliness of a petition to open judgment is measured from
      the date that notice of the entry of the default judgment is
      received.

US Bank N.A. v. Mallory, 982 A.2d 986, 995 (Pa.Super.2009) (some

internal quotations omitted).

      Pennsylvania law does not establish a specific period of time within

which a party may promptly file a petition to open or strike a default

judgment. US Bank, N.A., 982 A.2d at 995. This Court has suggested that

the Court should consider the length of time from the date that notice of the

entry of judgment was received and the reason for the delay in filing the

petition.   Flynn v. Casa Di Bertacchi Corp., 674 A.2d 1099, 1102

(Pa.Super.1996). Previous decisions have determined a fourteen-day delay

to be timely in one instance, Alba v. Urology Associates of Kingston, 598
A.2d 57 (Pa.Super.1991), but that a seventeen-day delay was untimely in

another. McCoy v. Public Acceptance Corp. et al., 305 A.2d 698

                                      - 10 -
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(Pa.1973) (“Although such a delay might not be considered excessive under

certain circumstances, filing the petition to open after two and one-half

weeks can hardly be considered prompt.”); see also Flynn v. Casa Di

Bertacchi Corp., 674 A.2d 1099, 1102 (Pa.Super.1996) (finding that, given

defendants’ previous inactivity, the trial court was generous in concluding

that a seventeen-day delay between notice of default judgment and the

filing of a petition to open judgment was prompt). Generally, the Court has

been willing to accept a delay of around one month or less. See Duckson

v. Wee Wheelers, Inc., 620 A.2d 1206 (Pa.Super.1993) (filing prompt only

one day after entry of default judgment); Reid, supra (filing of petition

prompt one month after entry of default judgment); Penneys v. Richard

Kastner Co., Inc., 443 A.2d 353 (Pa.Super.1982) (thirty-three day delay

considered prompt).    Beyond that, however, the Court has not been so

patient, especially in reference to sophisticated defendants.   See DiNardo

v. Central Penn Air Services, Inc., 516 A.2d 1187 (Pa.Super.1986)

(three-month delay not prompt for sophisticated entity).

     Here, Appellant acknowledges it received the notice of entry of default

judgment on January 29, 2015. Appellant’s general manager acknowledged

he understood the notice or at least understood that it was important. See

Deposition of Iftekhar Biplob, June 19, 2015, pp. 52-54. Despite knowledge

of the existing default judgment entered against it, Appellant did not

                                   - 11 -
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attempt to file its petition to open judgment until 46 days later, on March

16, 2015.12     Our case law indicates this period is too long for a corporate

defendant. See DiNardo, supra. Accordingly, Appellant fails to prove the

first prong – that it promptly filed its petition to open default judgment. This

failure is fatal to Appellant’s petition to open judgment.

       Even assuming, however, that it timely filed its petition to open the

default judgment, Appellant still failed to argue an adequate excuse for its

delay.

       “Whether an excuse [for delay in filing a petition to open a default

judgment] is legitimate is not easily answered and depends upon the specific

circumstances of the case.”            Seeger, 836 A.2d at 166.       “Excusable

negligence must establish an oversight rather than a deliberate decision not

to defend.”       Id. at 167.        “[U]nacceptable mistakes involve attorney

carelessness or dilatoriness, a failure to act by one who knows its

implications, or a deliberate decision not to defend.        Acceptable mistakes

involve the misplacement or handling of papers through no fault of the

appellant or its attorney, or a clerical oversight resulting in an attorney’s

being unaware of the suit from the outset.” Keystone Boiler Works, Inc.

v. Combustion & Energy Corp., 439 A.2d 792, 794 (Pa.Super.1982).
____________________________________________

12
    In the interest of fairness, we will not punish Appellant for counsel’s lack
of knowledge of Luzerne County Court of Common Please local rules and will
consider March 16, 2015 as the filing date for the purpose of the prompt
filing analysis.

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      Generally speaking, a default attributable to a defendant’s
      justifiable belief that his legal interests are being protected by
      his insurance company is excusable. However, if the insured
      fails to inquire of the insurer as to the status of the case after
      events have occurred which should have reasonably alerted the
      insured to a possible problem, the insured is precluded from
      asserting a justifiable belief that its interests were being
      protected.

Duckson, 620 A.2d at 1210 (internal citation omitted) (emphasis in

original).

      Furthermore, regarding the opening of default judgments, this Court

makes a distinction between laypersons and corporate defendants with the

means to monitor legal claims.   In DiNardo v. Central Penn Air Services,

Inc., supra, a corporate defendant averred its inaction (3-month delay)

resulted from relying on its insurer to represent its legal interests.     The

Court found “that appellee did not act in a manner which would enable it to

justifiably rely upon legal representation by its insurance company.”

DiNardo, 516 A.2d at 1191. As the Court explained:

      Appellee’s failure to answer the complaint was not due simply to
      the failure of its insurance company, but also to [Appellee’s]
      failure to seek reassurances that actions were being taken on its
      behalf after events had occurred which should have reasonably
      alerted it that a problem existed.

Id.

      In Flynn v. Casa Di Bertacchi Corp., supra, the appellant explained

its 17-day delay in filing a petition to open a default judgment by likening

itself to the appellant in Duckson, in which case this Court found reliance on

an insurer for representation an acceptable excuse for delay in filing a

                                    - 13 -
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petition to open a default judgment.               Initially, the Court distinguished

Duckson by noting that Duckson involved an unsophisticated layperson

defendant, not a corporation.13 Flynn, 674 A.2d at 1103. The Court further

stated that corporate entities should have in-house mechanisms for

monitoring legal complaints lodged against it, and further that corporate

entities are obliged to seek reassurances from their insurers that actions are

being taken on their behalf after receiving a notice of intent to seek default

judgment. Id.

        Here, Appellant is not an individual, but a corporate entity that has

previously been represented by counsel on various matters. See Deposition

of Iftekhar Biplob, June 19, 2015, pp. 28-29 (explaining Appellant has had

multiple attorneys represent it regarding ownership and taxation issues).

Appellant makes no claim that it lacked an in-house system for monitoring

claims against it. Instead, it explained its system for dealing with claims as

one whereby its general manager would forward the claims to its insurance

broker – not its insurance carrier – and let the broker handle the claims. As

a corporate entity, “[i]t was [] incumbent upon [Appellant] to seek

reassurance from its insurer when it received notification of [Appellees’]

intent to seek a default judgment.”            Flynn, 674 A.2d at 1103.        While

Appellant’s general manager did write an email to its insurance broker

____________________________________________

13
     We further note that Duckson involved a delay of only one day.

                                          - 14 -
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inquiring about the Mosne matter, Appellant did not forward the default

notice14 and, when it did not receive a response from the insurer, Appellant

did not inquire further.       Appellant’s manager also testified that he would

have spoken with Appellant’s insurance brokers about this case multiple

times on the telephone during the pendency of this matter. These actions

do not suffice to satisfy the obligation of a corporate defendant to establish

in-house mechanisms to monitor legal complaints lodged against it and then

utilize those mechanisms to seek reassurance from an insurer that actions

were being taken on its behalf to protect its interests.15

       Because the trial court properly determined Appellant did not establish

all three prongs required to successfully petition to open a default judgment,

the equitable concerns underlying this matter do not come into play.16
____________________________________________

14
  The petition to open default judgment claims Appellant did not understand
the significance of the default notice.
15
   To the extent Appellant likens itself to the unsophisticated layperson
defendant in Duckson because its general manager was not an attorney,
this argument is unpersuasive as a legitimate reason for the delay. See
Appellant’s Brief, p. 6. Corporations are often managed by non-attorneys.
As this Court has explained, corporations run by non-lawyer directors are
not excused from the corporate obligation to establish in-house mechanisms
to assure its legal interests are attended to by its legal representatives. See
Flynn, 674 A.2D at 1103.
16
    If they did, however, they would likely lean in Appellees’ favor.
Appellant’s grocery store closed during the pendency of this lawsuit and
appeal. As a result, the store employees and other required witnesses may
very well be unavailable or difficult to locate, possibly resulting in prejudice
to Appellees’ case. Appellant’s suggestion that the fact Appellees were able
to depose its general manager despite the closing of the store indicates the
(Footnote Continued Next Page)

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      The trial court’s denial of Appellant’s petition to open default judgment

does not represent either an abuse of discretion or an error of law.

Accordingly, we affirm the order of the trial court.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/23/2016

                       _______________________
(Footnote Continued)

store employee witnesses would still be available for a trial is unpersuasive.
At the time Appellees deposed Mr. Biplob, he testified he was still the
general manager of Heritage Food of Hazelton, and he described all duties of
the position in the present tense. See Deposition of Iftekhar Biplob, June
19, 2015, pp. 6-8. Appellees’ success in deposing then-employee Iftekhar
Biplob does not indicate any success in future attempts to locate employees
of a now-defunct grocery store.

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