Court Opinion

ID: 2766078
Source: CourtListenerOpinion
Date Created: 2014-12-31 23:06:21.014561+00
Date Added: 2024-06-11T10:45:27.774805
License: Public Domain

J-A35002-14

                             2014 PA Super 290

THE HUNTINGTON NATIONAL BANK,                  IN THE SUPERIOR COURT OF
SUCCESSOR IN INTEREST TO SKY BANK,                   PENNSYLVANIA

                        Appellee

                   v.

K-COR, INC.,

                        Appellant                  No. 1265 WDA 2013

                Appeal from the Order Entered July 12, 2013
             In the Court of Common Pleas of Allegheny County
                    Civil Division at No(s): GD13-009199

BEFORE: BENDER, P.J.E., BOWES, J., and ALLEN, J.

OPINION BY BENDER, P.J.E.:                     FILED DECEMBER 31, 2014

     K-Cor, Inc. (Appellant) appeals from the order entered on July 12,

2013, denying its petition to strike or open judgment entered by confession.

We affirm.

     The following facts are not in dispute. This case involves guarantees

on two commercial loans. In November 2000, Huntingdon National Bank’s

predecessor, Sky Bank, entered into a loan agreement with Rock Airport of

Pittsburgh, LLC (Airport LLC), pursuant to which the bank loaned $3,000,000

to Airport LLC. Appellant guaranteed the loan. The guaranty provides for

judgment by confession in the event of a default on the loan.
J-A35002-14

      In June 2002, the bank and Airport LLC entered into a second loan

agreement, pursuant to which the bank loaned an additional $370,000 to

Airport LLC.    Appellant guaranteed the loan.     The guaranty provides for

judgment by confession in the event of a default on the loan.

      Following default and notice, Huntingdon National Bank (hereinafter,

the Bank) initiated this action in May 2013, filing a complaint in confession of

judgment.      Thereafter, judgment was entered in the total amount of

$3,282,049.77. See Notice of Judgment, 05/22/2013.

      In June 2013, Appellant filed a petition to strike or open the judgment,

comprised of a single paragraph averring that it had not voluntarily,

intelligently, and knowingly given up its right to notice and a hearing prior to

the entry of judgment.     In July 2013, following argument, the trial court

denied Appellant’s petition, concluding that Appellant had failed to raise a

meritorious defense to the confessed judgment.         The trial court further

denied Appellant’s oral motion to amend its petition, concluding that the

general rule permitting liberal amendment of pleadings does not apply to a

petition to strike or open.    Appellant filed a motion for reconsideration,

attaching proposed amendments to its petition, which was denied thereafter

by the trial court.   Appellant timely appealed and filed a court-ordered

Pa.R.A.P. 1925(b) statement.       The trial court submitted a responsive

opinion, addressing both the defect in Appellant’s initial petition as well as

the substantive merit of Appellant’s proposed amendments.

                                     -2-
J-A35002-14

       Appellant raises the following issues on appeal:

       [1.] Whether or not the [trial] [c]ourt abused its discretion in
       failing to grant the motion for amendment of a petition, when
       good and cognizable defenses are presented at the time of the
       presentment of the petition and request for amendment and
       incorporation of allegations at related cases?

       [2.] Whether or not the [trial] [c]ourt abused its discretion in
       failing to grant reconsideration of the denial of the motion for
       amendment of a petition?

Appellant’s Brief at “vi.”

       In its first issue, Appellant contends that the trial court should have

permitted Appellant to amend its original petition and that its proposed

amendments support opening the confessed judgment.1 We review a court’s

order denying a petition to open a confessed judgment for an abuse of

discretion.   PNC Bank, Nat’l Ass’n v. Bluestream Tech., Inc., 14 A.3d

831, 835 (Pa. Super. 2010).              However, to the extent that Appellant

challenges the lower court’s interpretation of the Pennsylvania Rules of Civil

Procedure, our standard of review is de novo, and our scope of review is

plenary. See Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 624

(Pa. Super. 2013) (citing Boatin v. Miller, 955 A.2d 424, 427 (Pa. Super.

2008)); see also Pa.R.C.P. 127 (describing the manner in which we

interpret rules of court); Pa.R.C.P. 129 (same).

____________________________________________

1
   Appellant does not challenge the trial court’s decision to deny its petition to
strike. In addition, Appellant concedes that its petition to open, as originally
filed, is deficient. See Appellant’s Brief, at 2.

                                           -3-
J-A35002-14

      Petitions to strike or open judgment by confession are governed by

Pennsylvania Rules of Civil Procedure 2959 and 2960.

      Relief from a judgment by confession shall be sought by petition.
      Except as provided in subparagraph (2), all grounds for relief
      whether to strike off the judgment or to open it must be
      asserted in a single petition.

Pa.R.C.P. 2959(a)(1) (emphasis added); see also Pa.R.C.P. 2959(a)(2)

(permitting a further, limited request for a stay of execution on due process

grounds); Pa.R.C.P. 2959(c) (“A party waives all defenses and objections

which are not included in the petition or answer.”); Pa.R.C.P. 2960 (limiting

the scope of proceedings upon opening of judgment).

      Appellant does not dispute the plain language of Rule 2959. Rather,

Appellant maintains that there are meritorious defenses to the Bank’s

complaint and that the absence of either factual allegations or defenses in its

petition was merely an “administrative oversight,” easily cured through

amendment.     Appellant’s Brief, at 9.   Appellant suggests its error became

apparent at the outset of the hearing, prior to any determination by the trial

court, notes the liberal policy of amendment that prevails in Pennsylvania,

and argues that the Bank would have suffered no prejudice if Appellant had

been permitted to amend. Id. at 11-12 (citing, inter alia, Pa.R.C.P. 126).

Thus, Appellant concludes, the trial court erred.

      In contrast, the Bank contends that no amendment is permitted under

the rules. The Bank notes that a party waives all defenses and objections

that are not included in the petition, citing in support Pa.R.C.P. 2959(c), and

                                     -4-
J-A35002-14

asserts that Pennsylvania courts have consistently applied our procedural

rules to prohibit defendants from amending petitions to strike or open.

      For its part, the trial court concluded that Appellant’s petition could not

be amended. In its opinion, the court stated it could not “ignor[e] the clear

and unambiguous language of the [r]ules of [c]ourt.”        Trial Court Opinion

(TCO), May 14, 2014, at 5. The court offered no precedent in support of its

decision, rejected Appellant’s plea to the equitable powers of the court, and

found irrelevant the question whether amendment would prejudice the Bank.

Id. at 6.

      To the extent the trial court determined it was powerless to permit

amendment, we disagree.        The language employed in Rule 2959 is not

unlike that found in Rule 1028 governing preliminary objections. That Rule

states, in relevant part:

      All preliminary objections shall be raised at one time. They shall
      state specifically the grounds relied upon and may be
      inconsistent. Two or more preliminary objections may be raised
      in one pleading.

Pa.R.C.P. 1028(b) (emphasis added); see also Pa.R.C.P. 1032(a) (providing

that objections not properly raised by preliminary objection are waived).

      The purpose of the requirement that a party raise all objections at one

time is “to reduce the number of dilatory steps [available to a party] … and

thus expedite the reasonable disposition of the litigation.”        Yentzer v.

Taylor Wine Co., 186 A.2d 396, 398 (Pa. 1962); see also Wagner v.

Wagner, 768 A.2d 1112, 1120 n.3 (Pa. 2001); Bowman v. Meadow

                                      -5-
J-A35002-14

Ridge, Inc., 615 A.2d 755, 757 (Pa. Super. 1992).            The single-petition

requirement in Rule 2959 fulfills the same purpose.              See generally

Pa.R.C.P. 206.1 (Explanatory Comment – 2013).

      However,     this   Court   has   previously   permitted   amendment    of

preliminary objections.    See Bowman, 615 A.2d at 757 (declining to find

the trial court erred in ruling on amended preliminary objections, despite

failure to secure the consent of the adverse party or leave court, where no

action had been taken on the original preliminary objections and the

amended motion did not delay the proceedings); see also Dep’t of Transp.

v. Schodde, 433 A.2d 143, 145 (Pa. Cmwlth. 1981) (“[A] court has the

discretion to allow an amendment of preliminary objections in the absence of

an error of law or prejudice to the adverse party.”).

      More generally, the purpose of our procedural rules is to facilitate the

administration of justice, and our courts should apply them with that

purpose in mind.

      The rules shall be liberally construed to secure the just, speedy
      and inexpensive determination of every action or proceeding to
      which they are applicable. The court at every stage of any such
      action or proceeding may disregard any error or defect of
      procedure which does not affect the substantial rights of the
      parties.

Pa.R.C.P. 126; see also In re Larsen, 812 A.2d 640, 650 (Pa. 2002)

(“Pennsylvania law is well-settled that procedural rules are not ends in

themselves, and are not to be exalted to the status of substantive

                                        -6-
J-A35002-14

objectives.”) (citing McKay v. Beatty, 35 A.2d 264, 275 (Pa. 1944));

Yentzer v. Taylor Wine Co., 186 A.2d 396, 398 (Pa. 1962).

      Finally, we conclude that the appellate decisions cited by the Bank are

distinguishable from the matter currently before this Court.      See, e.g.,

Davis v. Woxall Hotel, Inc., 577 A.2d 636, 638-39 (Pa. Super. 1990)

(declining to address a defense raised on appeal, but not pleaded in

appellant’s petition to open or strike); C-Rich Co. v. Davis, 556 A.2d 413,

417-18 (Pa. 1989) (quashing as interlocutory an appeal from an order

denying Appellant’s motion to amend its petition to open or strike); Mellon

Bank v. Rafsky, 535 A.2d 1090, 1091-94 (Pa. Super. 1987) (affirming the

trial court’s finding of waiver where petitioner in a related matter raised

additional grounds to open a confessed judgment “during the course of the

hearing,” testimony was adduced over several days, and no motion to

amend was considered); J. M. Korn & Son, Inc. v. Fleet-Air Corp, 446

A.2d 945, 947 (Pa. Super. 1982) (reversing the trial court’s decision

granting leave to amend “after judgment had been opened”) (emphasis

added).   None of these cases addresses precisely a petitioner’s motion to

amend prior to the adjudication of the original petition, and we are aware of

no appellate decision that does so.

      Accordingly, we hold that no strict prohibition of amendments is

warranted.    In our view, the decision whether to permit a petitioner to

amend a petition to open or strike a confessed judgment, presented prior to

                                      -7-
J-A35002-14

adjudication of the merits of the original petition, is best left to the discretion

of the trial court. In exercising this discretion, a trial court should examine

the proposed amendments and consider whether amendment will unduly

prejudice    the     opposing     party.       See, e.g., Horowitz    v. Universal

Underwriters Ins., 580 A.2d 395, 398-400 (Pa. Super. 1990) (discussing

undue prejudice).

       That does not end our analysis, however, for we may affirm the trial

court on any ground. See, e.g., Commonwealth v. Price, 876 A.2d 988,

994 (Pa. Super. 2005). It is not clear from the record when the trial court

considered the substance of Appellant’s proposed amendments. There is no

transcript of the argument, and Appellant did not submit written, proposed

amendments until July 18, 2013, nearly a week after the court denied its

initial petition.2    Nevertheless, it is clear that the court considered and

rejected them. See TCO, at 7-9 (concluding that Appellant’s allegations of

conspiracy and fraud were of questionable relevance, devoid of merit, and,

at least in part, previously rejected by the court in a different case).           We

have reviewed the content of Appellant’s allegations and agree with the trial

court. Accordingly, we discern no abuse of the court’s discretion in denying

Appellant’s motion to amend its petition.

____________________________________________

2
   Appellant attached           its   proposed    amendments   to   its   motion   for
reconsideration.

                                           -8-
J-A35002-14

      Appellant also contends that the Court should have granted its motion

for reconsideration.    “Pennsylvania case law is absolutely clear that the

refusal of a trial court to reconsider, rehear, or permit reargument of a final

decree is not reviewable on appeal.”     Provident Nat’l Bank v. Rooklin,

378 A.2d 893, 897 (Pa. Super. 1977) (citing McCready v. Gans, 89 A. 459

(Pa. 1913)). Accordingly, the issue is not properly before this Court.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/31/2014

                                     -9-