Court Opinion

ID: 2781582
Source: CourtListenerOpinion
Date Created: 2015-02-24 19:06:25.189065+00
Date Added: 2024-06-11T11:52:16.263803
License: Public Domain

J-S76031-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

GARY SCALZITTI, ATTORNEY IN FACT                IN THE SUPERIOR COURT OF
FOR DONNA STRONG,                                     PENNSYLVANIA

                            Appellant

                       v.

NORTHWEST SAVINGS BANK,

                            Appellee                No. 1061 WDA 2014

                  Appeal from the Order Entered June 26, 2014
                  In the Court of Common Pleas of Erie County
                       Civil Division at No(s): 13571-2013

BEFORE: FORD ELLIOTT, P.J.E., PANELLA AND OLSON, JJ.

MEMORANDUM BY OLSON, J.:                        FILED FEBRUARY 24, 2015

       Appellant, Gary Scalzitti in his capacity as attorney-in-fact for Donna

Strong,1 appeals from the order entered on June 26, 2014 in the Civil

Division of the Court of Common Pleas of Erie County that sustained the

preliminary objections filed by Northwest Savings Bank (“Northwest”). We

affirm.

       On or around October 17, 2007, Daniel D. Strong, David J. Strong, and

Donna L. Strong entered into a promissory note with Northwest under which

the Strongs obtained a loan in the principal amount of $150,000.00 (the

“October 2007 loan”). Thereafter, on or about June 12, 2008, the Strongs

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1
  Appellant became the attorney-in-fact for Donna Strong under a power of
attorney executed on September 13, 2013.
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executed a second promissory note with Northwest whereby they obtained a

loan in the principal amount of $35,000.00 (the “June 2008 loan”).     The

Strongs failed to make payments when due under the October 2007 and

June 2008 loans and, on September 14, 2012, Northwest confessed

judgment against the Strongs pursuant to the terms of both loan

agreements. As a result, Northwest obtained judgments against the Strongs

for $162,012.20 on the October 2007 loan and $35,541.14 on the June 2008

loan.    None of the Strongs petitioned to open or strike these adverse

judgments and, to date, Northwest has not executed on its judgments.

        Notwithstanding the entry of the confessed judgments in favor of

Northwest, the Strongs continued to make payments to the bank.      Donna

Strong, through counsel for Appellant, requested that Northwest provide her

with copies of the operative loan documents and an accounting of payments

received on each of the obligations. Under cover of a letter dated December

17, 2013, counsel for Northwest forwarded copies of the account histories

for the October 2007 loan and the June 2008 loan. These account histories

showed remittances for each loan, including payments made after Northwest

confessed judgment against the Strongs. In particular, the account history

for the October 2007 loan showed that Northwest received five payments

totaling $18,396.74 after judgment had been entered.      Additionally, the

account summary for the June 2008 loan reflected that Northwest received

six payments totaling $2,110.78 after the bank confessed judgment against

the Strongs.

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       On December 16, 2013, Appellant, on behalf of Ms. Strong, filed a civil

complaint against Northwest seeking a declaration of rights and requesting

an accounting.2        The complaint alleged that Ms. Strong, through her

representatives, asked Northwest for “copies of the operative [loan]

documents and an accounting of payments it has received on each of the

obligations.”     Appellant’s Complaint (reissued), 2/14/14, at ¶ 5.       The

complaint also alleged that Northwest “refused to give an accounting of the

date and amounts of payments made and the application of payments to

[the October 2007 and June 2008 loans].” Id. at ¶ 7. Ms. Strong requested

this information because she “believe[d] … that [her] money [had been]

applied to obligations of her son and her husband for which she [was] not

liable.”   Id. at ¶ 6. Appellant’s complaint also alleged that Northwest had

“improperly appl[ied] Donna Strong’s money, received as the result of rents

from property jointly owned with her husband and son, to obligations for

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2
  Despite Appellant’s prayers for relief, he did not attach copies of the loan
agreements to the complaint, allegedly because he could not determine
“which [n]otes are operative, which [a]greements are operative and that is
the reason for filing this suit.” Appellant’s Complaint (reissued), 2/14/14, at
¶ 4. Notwithstanding Appellant’s contention, neither the complaint, nor our
review of the certified record, reveals the existence of any loan agreements
between Ms. Strong and Northwest apart from the October 2007 and June
2008 loan obligations.

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which she [was] not liable, in violation of the various agreements between

Donna Strong and [Northwest].” Id. at ¶ 8.3

       Northwest filed preliminary objections to Appellant’s complaint on

March 11, 2014, raising two challenges to Appellant’s complaint.       First,

Northwest argued that Appellant failed to state a cognizable claim upon

which relief could be granted. Northwest also alleged that Appellant had a

full, complete, and adequate non-statutory remedy at law within the context

of a separate litigation against Ms. Strong’s son that sought an accounting

and appointment of a receiver for certain jointly held property. Northwest

argued that Appellant could issue a subpoena to Northwest for the requested

documents and sworn testimony in that litigation.

       The trial court sustained Northwest’s preliminary objections on June

26, 2014, concluding that Appellant’s complaint failed to assert a cognizable

claim for relief and that the information it sought was available through

other means. Trial Court Order, 6/26/14. In a subsequent memorandum,

the court explained that Appellant failed to assert a cognizable claim since

Northwest had reduced the October 2007 and June 2008 loans to judgment

and since the bank had disclosed the requested information by producing

loan histories for both obligations. This appeal followed.

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3
   Appellant’s complaint does not identify which agreement Northwest is
alleged to have violated, nor does the complaint set forth breach of contract
as a theory of relief.

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      Appellant’s brief raises five issues for our review:

      Whether the [trial] court should have held oral argument on
      [Northwest’s] [p]reliminary [o]bjections [in so far as] Pa.R.C.P.
      211, [] provides, in pertinent part[,] “Any party, or the party’s
      attorney, shall have the right to argue any [m]otion and the
      [c]ourt shall have the right to require oral argument[?]”

      Whether [Appellant’s c]omplaint should have been dismissed
      with prejudice without leave to amend without any explanation
      of how the cause of action is deficient[?]

      Whether [Appellant] is entitled to an explanation of the manner
      in which [Northwest] calculates balances on obligations due it[?]

      Whether [Appellant] may maintain an independent action
      against [Northwest] to determine the balance remaining on the
      judgments in favor of [Northwest] where payments on the
      judgments have been made since their entry[?]

      Whether [Appellant] should have been allowed to take the
      deposition of a representative of [Northwest] in order to gain an
      explanation of the interpretation of the proprietary documents
      attached by [Northwest] to its [p]reliminary [o]bjections[?]

Appellant’s Brief at 4.

      We begin our discussion of the contentions raised in this appeal by

first reviewing Appellant’s procedural claim that the trial court erred in

sustaining   Northwest’s   preliminary   objections   without   permitting   oral

argument by the parties.       We next address Appellant’s four remaining

claims, which we confront collectively given their interrelated nature.

      Appellant asserts that the trial court erred in sustaining Northwest’s

preliminary objections without oral argument in violation of Pa.R.C.P. 211.

Specifically, Appellant argues that Rule 211 required the trial court to hear

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oral argument upon request. Appellant further claims that the court’s failure

to convene oral argument on Northwest’s preliminary objections led it to

misapprehend the facts of this case. We disagree.

        In relevant part, Rule 211 provides:

        Rule 211. Oral Arguments

        Any party or the party's attorney shall have the right to argue
        any motion and the court shall have the right to require oral
        argument. With the approval of the court oral argument may be
        dispensed with by agreement of the attorneys and the matter
        submitted to the court either on the papers filed of record, or on
        such briefs as may be filed by the parties.

Pa.R.C.P. 211.

        This Court has previously held that Rule 211 confers only a qualified

right to oral argument.      In Gerace v. Holmes Protection of Phila., 516
A.2d 354 (Pa. Super. 1986), appeal denied, 527 A.2d 541 (Pa. 1987), we

said:

        Rule 211 gives every party or his attorney a qualified right to
        make an oral argument on any motion. The court by local rule
        may regulate the length of time of such arguments. In a given
        case the local court may also dispense with oral argument
        if it so desires and dispose of the case on the record or
        upon briefs. The parties may also waive oral argument unless
        it is required by the court.

Gerace, 516 A.2d at 359 (emphasis in original).

        In this case, we discern no abuse of discretion in the trial court’s

decision    not   to   entertain   oral   argument   on   Northwest’s   preliminary

objections.    The claims alleged in Appellant’s complaint were simple and

straightforward. The two-page, eight-paragraph complaint requested copies

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of Ms. Strong’s “operative” loan documents and an accounting of payments

received by Northwest.    Appellant requested this information on behalf of

Ms. Strong because she believed that Northwest improperly applied her

money to obligations of her husband and her son for which she was not

liable.   Northwest’s preliminary objections alleged that Appellant was not

entitled to a declaration of rights since the bank had previously reduced the

October 2007 and June 2008 loans to judgment and because Ms. Strong had

never sought to open or strike those judgments. Northwest further alleged

that the documents and information Appellant sought in the complaint were

available through discovery requests that Ms. Strong could pursue in

separate litigation against Daniel Strong.        Based upon the parties’

submissions, it is abundantly clear that the sole question that confronted the

trial court was whether Appellant’s complaint stated a cognizable claim for

the requested relief, given Northwest’s prior judgments and the availability

of the discovery process in separate pending litigation between Ms. Strong

and Daniel Strong.    Thus, we fail to see in this case how oral argument

would have enhanced the presentation of claims before the trial court and,

therefore, find no prejudice to Appellant.

      We turn now to Appellant’s substantive challenges to the order

sustaining Northwest’s preliminary objections.      Given the substantially

similar nature of these claims, we address them in a single discussion.

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       Our standard of review in considering a challenge to an order

sustaining preliminary objections is well-settled.

       [O]ur standard of review of an order of the trial court overruling
       or [sustaining] preliminary objections is to determine whether
       the trial court committed an error of law. When considering the
       appropriateness of a ruling on preliminary objections, the
       appellate court must apply the same standard as the trial court.

       Preliminary objections in the nature of a demurrer test the legal
       sufficiency of the complaint.       When considering preliminary
       objections, all material facts set forth in the challenged pleadings
       are admitted as true, as well as all inferences reasonably
       deducible therefrom.      Preliminary objections which seek the
       dismissal of a cause of action should be sustained only in cases
       in which it is clear and free from doubt that the pleader will be
       unable to prove facts legally sufficient to establish the right to
       relief. If any doubt exists as to whether a demurrer should be
       sustained, it should be resolved in favor of overruling the
       preliminary objections.

Richmond v. McHale, 35 A.3d 779, 783 (Pa. Super. 2012) (citations

omitted).

       Issues two through five in Appellant’s brief allege that the complaint

filed in this matter set forth viable claims seeking an accounting and a

declaration of Ms. Strong’s rights vis-à-vis Northwest. In support of these

contentions, Appellant points out that Northwest accepted payments on the

October 2007 and June 2008 loans after judgment was entered. Appellant

also   claims   that   the   loan   histories   produced   by   the   bank    were

incomprehensible and required explanation.         At the very least, Appellant

maintains, the trial court should have permitted amendment of the

complaint to allow Appellant to clarify the issues.

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       An equitable accounting is improper where no fiduciary
       relationship exists between the parties, no fraud or
       misrepresentation is alleged, the accounts are not mutual or
       complicated, or the plaintiff possesses an adequate remedy at
       law. Equitable jurisdiction does not exist simply because the
       petitioner desires information.

Rock v. Pyle, 720 A.2d 137, 142 (Pa. Super. 1998) (citations omitted).

       Appellant has not alleged sufficient facts to establish entitlement to an

accounting.       There are no allegations that demonstrate a fiduciary

relationship between Appellant and Northwest since Appellant represents Ms.

Strong, a borrower pursuant to an arms-length transaction with a lender.

Further, Appellant has not alleged fraud or misrepresentation by Northwest.

Moreover, in the present case, the loan transactions appear relatively

straightforward and were never administered by Northwest mutually with, or

for the benefit of, Ms. Strong.             Lastly, Ms. Strong possessed an adequate

remedy at law in the form of discovery requests that she could pursue within

the   context    of    the     litigation    against    Daniel   Strong.    Given    these

circumstances,        equity    cannot      burden     Northwest   to   supply   a   formal

accounting simply because Appellant desires information.4                    Accordingly,

Appellant's demand for an equitable accounting in this case is improper.

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4
  Any right of Appellant to an accounting based upon alleged payments to
Northwest after entry of the confessed judgments would not arise until after
a sheriff’s sale of the encumbered properties. See Pa.R.C.P. 3136 (setting
forth scheme for distribution by sheriff of proceeds from sale of real
property, including procedures for filing and litigation of exceptions to
distribution of proceeds); see also Landau v. Western Pennsylvania Nat.
(Footnote Continued Next Page)

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      Appellant’s final claim is that Ms. Strong was entitled to a declaration

of her rights under the October 2007 and June 2008 loan agreements

notwithstanding the fact that Northwest had previously confessed judgment

as to those loan transactions. Neither party has cited, and our own efforts

have failed to uncover, any Pennsylvania authority for such a novel cause of

action. We note, however, that “[a] judgment rendered by a court having

jurisdiction of parties and subject matter, unless reversed or annulled in

some proper proceeding, is not open to contradiction or impeachment, in

respect of its validity, verity, or binding effect, by parties or privies, in any

collateral action or proceeding.”         Mangold v. Neuman, 91 A.2d 904, 906

(Pa. 1952) (noting that “[i]t is a rule of law of general application that a

judgment properly entered is not subject to collateral attack[]”). Appellant

summarizes the thrust of the claims alleged in the complaint as follows:

“[Appellant] was within [his] rights to file a declaratory judgment action

seeking   a   determination        of   all    amounts   owed   by   [Ms.   Strong]   to

[Northwest]. The entry of the judgment is not conclusive since payments

have been made subsequent to the entry of judgment.” Appellant’s Brief at

14 (emphasis added).          This contention confirms that the complaint in this

                       _______________________
(Footnote Continued)

Bank, 282 A.2d 335 (Pa. 1971) (where mortgagee had taken possession of
subject property and was collecting rent and paying expenses in that
capacity, mortgagors were entitled to an accounting but such accounting
was not due until the property had been sold at sheriff's sale and distribution
of proceeds had been made).

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case was a direct challenge to the unreversed, unmodified, and unannulled

judgments     obtained   by   Northwest   that   were   never   subjected   to   a

conventional method of attack, including a petition to open or strike the

judgments. Since those judgments cannot be collaterally challenged in this

fashion, the trial court did not err in sustaining Northwest’s preliminary

objections.

      Moreover, under the doctrine of merger of judgments, we further

conclude that Northwest’s confessed judgments on the October 2007 and

June 2008 loan agreements extinguished any rights Appellant or Ms. Strong

may have possessed pursuant to those instruments. The Court of Appeals

for the Third Circuit aptly summarized relevant Pennsylvania law under the

present circumstances:

      Under controlling Pennsylvania law, “[i]t is elementary that
      judgment settles everything involved in the right to recover, not
      only all matters that were raised, but those which might have
      been raised. The cause of action is merged in the judgment
      which then evidences a new obligation.” Lance v. Mann, 60
A.2d 35, 36 (Pa. 1948) (citations omitted). The doctrine of
      merger of judgments thus provides that the terms of a mortgage
      are merged into a foreclosure judgment and thereafter no longer
      provide the basis for determining the obligations of the parties.
      In re Presque Isle Apartments, 112 B.R. 744, 747
      (Bankr.W.D.Pa. 1990); see In re Herbert, 86 B.R. 433, 436
      (Bankr.E.D.Pa. 1988) (“The Debtor is, in our view, correct in her
      assertion that ‘[t]he mortgage is merged in a judgment entered
      in a mortgage foreclosure action’ in Pennsylvania.”) (quoting 25
      P.L.E. 85 (1960); citing Murray v. Weigle, 11 A. 781, 782 (Pa.
      1888); Hartman v. Ogborn, 54 Pa. 120, 122-23 (1867)); see
      also In re Roach, 824 F.2d 1370, 1377 (3d Cir. 1987) (“In New
      Jersey, as in many states, the mortgage is merged into the final
      judgment of foreclosure and the mortgage contract is

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       extinguished. As a result of this merger, there is no longer a
       mortgage....”) (citations omitted).

In re Stendardo, 991 F.2d 1089 (3d Cir. 1993).5 Once Northwest entered

confessed judgments against Ms. Strong, her rights vis-a-vis Northwest were

governed by those judgments, not the October 2007 and June 2008 loan

agreements.      Hence, the only available avenue for obtaining credit for, or

information about, payments forwarded to Northwest after the entry of the

judgments is within the context of execution proceedings as discussed

supra at footnote four.

       Order affirmed.

       President Judge Emeritus Ford Elliott and Judge Panella concur in the

result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/24/2015

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5
  We are not bound by decisions of the federal courts, but we may rely on
them for persuasive authority. McEwing v. Lititz Mut. Ins. Co., 77 A.3d
639, 648 n.7 (Pa. Super. 2013).

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