Court Opinion

ID: 4106070
Source: CourtListenerOpinion
Date Created: 2016-12-09 19:10:10.362656+00
Date Added: 2024-06-11T14:36:33.550432
License: Public Domain

J-A20024-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

PITTSBURGH PROPERTIES, LTC                     IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                            Appellee

                       v.

CYNTHIA A. CASTEEL, ANTHONY J.
PARAVATI AND CMG, LLC D/B/A
CASTEEL MANAGEMENT GROUP

                            Appellant             No. 1597 WDA 2015

              Appeal from the Order Entered September 18, 2015
              In the Court of Common Pleas of Allegheny County
                      Civil Division at No: GD-14-012850

BEFORE: BOWES, STABILE, and MUSMANNO, JJ.

MEMORANDUM BY STABILE, J.:                      FILED DECEMBER 9, 2016

       Appellants, Anthony J. Paravati, Cynthia Casteel, and CMG, LLC D/B/A

Casteel Management Group, appeal from the September 18, 2015 order

denying his petition to open a confessed judgment against him. We affirm.

       Appellant CMG and Appellee, Pittsburgh Properties, LTC, entered a

commercial lease agreement on December 19, 2011 (the “Lease”) and a

lease amendment and renewal agreement dated March 28, 2012 (the “Lease

Amendment and Renewal”)1 whereby Appellants leased office space from

Appellee. Appellant Casteel was the owner and operator of Appellant CMG, a

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1
   The Lease Amendment and Renewal provided that Appellant CMG would
lease an expanded space to be renovated by Appellee.
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creative talent management company. N.T. Casteel Deposition, 3/27/15, at

8.   On December 19, 2011, Appellants Casteel and Paravati, Casteel’s

boyfriend, executed unconditional personal guarantees (the “Guarantees”) of

CMG’s obligations under the lease. The Lease, the Lease Amendment and

Renewal, and the Guarantees contain warrants of attorney authorizing entry

of judgment against Appellants in the event a default.

     Unable to generate sufficient revenue, CMG ceased operations and

vacated the leased premises in October or November of 2013. N.T. Casteel

Deposition, 3/27/15, at 15. On July 11, 2014, Appellee filed a complaint in

confession of judgment for $53,894.50 against Appellants. Appellee served

notice of judgment and execution, per Pa.R.C.P. No. 2958.1, on Appellants

Casteel and CMG, LLC on August 4, 2014. Appellee served a Rule 2958.1

notice on Appellant Paravati on November 19, 2014.        Appellants filed a

petition to open or strike the judgment, pursuant to Pa.R.C.P. No. 2959 on

December 15, 2014. On January 2, 2015, the trial court denied the petition

to strike the judgment but issued a rule to show cause why the judgment

should not be opened. Appellee answered the petition to open on January

22, 2015.   Appellants Paravati and Casteel gave deposition testimony and

both parties filed briefs. On September 18, 2015, the trial court entered the

order on appeal. This timely appeal followed.

     Appellants raise five assertions of error:

           I.    Whether the court erred in determining that
     Appellants did not raise a meritorious defense to the amount of

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       finance fees included as part of the confessed judgment when
       unauthorized finance fees were charges imposed upon CMG and
       such finance fees were assessed at higher [sic] rate than what
       was authorized under the [Lease and Lease Amendment and
       Renewal].

             II.  Whether the court erred in determining that
       Appellants did not raise a meritorious defense to the amount
       included as part of the confessed judgment for ‘tenant
       improvements’ when such improvements were the responsibility
       of Appellee under the [Lease and Lease Amendment and
       Renewal] and were assessed after CMG had vacated the leased
       premises.

             III. Whether the court erred in determining that the
       confession of judgment clause contained in the Unconditional
       and Continuing Guarantee (hereinafter “the Guarantee”) was
       valid when it is not conspicuous, is buried within the body of the
       document, and not clearly labeled or identified as authorizing
       judgment by confession.

              IV.  Whether the court erred in determining that the
       individual Appellant, Paravati, did not raise a meritorious defense
       to the confession of judgment when the Warrant of Attorney set
       forth in the [Lease and Lease Amendment and Renewal] only
       authorized the entry of a confessed judgment against the
       Lessee, CMG, LLC, and not the individual Appellants.

             V.    Whether the court erred in determining that
       Appellants did not raise a meritorious defense to the amount of
       unpaid rent included as a part of the confessed judgment when
       the Appellee committed multiple breaches of the Lease?

Appellant’s Brief at 4-5.2

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2
   We have reordered the third and fourth arguments to correspond to the
order in which Appellants present them in the argument section of their
brief.

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      We review the trial court’s order for abuse of discretion. Neducsin v.

Caplan, 121 A.3d 498, 506 (Pa. Super. 2015), appeal denied, 1131 A.3d
492 (Pa. 2016).

             Judicial discretion requires action in conformity with law on
      facts and circumstances before the trial court after hearing and
      consideration. Consequently, the court abuses its discretion if, in
      resolving the issue for decision, it misapplies the law or exercises
      its discretion in a manner lacking reason.

Id.   A petition to open a confessed judgment will succeed where the

petitioner (1) acts promptly; (2) alleges a meritorious defense; and (3)

produces sufficient evidence to require submission of the matter to a jury.

Id. “A petition to open a confessed judgment is an appeal to the equitable

powers of the court.” Id. at 504.

             A meritorious defense is one upon which relief could be
      afforded if proven at trial. Pa.R.Civ.P. 2959(e) sets forth the
      standard by which a court determines whether a moving party
      has properly averred a meritorious defense. If evidence is
      produced which in a jury trial would require the issues to be
      submitted to the jury the court shall open the judgment.
      Furthermore, the court must view the evidence presented in the
      light most favorable to the moving party, while rejecting
      contrary evidence of the non-moving party. The petitioner need
      not produce evidence proving that if the judgment is opened, the
      petitioner will prevail. Moreover, we must accept as true the
      petitioner’s evidence and all reasonable and proper inferences
      flowing therefrom.

            In other words, a judgment of confession will be opened if
      a petitioner seeking relief therefrom produces evidence which in
      a jury trial would require issues to be submitted to a jury. The
      standard of sufficiency here is similar to the standard for a
      directed verdict, in that we must view the facts most favorably
      to the moving party, we must accept as true all the evidence and
      proper inferences in support of the defense raised, and we must
      reject all adverse allegations.

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Id. at 506-07 (internal citations and quotation marks omitted).

      As noted above, Appellants Casteel and CMG filed their petitions to

open more than four months after Appellee served them with notice of

execution under rule 2958.1., and five months after Appellee filed and

served the complaint. The trial court found that Appellants Casteel and CMG

failed to act promptly, and Appellants have not challenged that finding. In

addition, the procedural rules required Appellants to file any petition to open

or strike within 30 days of the Rule 2958.1 notice of execution. Pa.R.C.P.

Nos. 2956.1(c)(2) and 2959(a)(3).      Appellants Casteel and CMG failed to

meet that deadline.     We therefore affirm the trial court’s order as to

Appellants Casteel and CMG and confine our analysis to Appellant Paravati’s

petition to open.

      Appellant Paravati’s first substantive argument is that Appellee

confessed judgment for greater finance charges than are authorized in the

Lease. General principles of contract construction govern our analysis of the

Lease:

            Whether a judge has correctly interpreted a writing and
      properly determined the legal duties which arise therefrom is a
      question of law for the appellate court. The legal effect or
      enforceability of a contract provision presents a question of law
      accorded full appellate review and is not limited to an abuse of
      discretion standard.      A cornerstone principle of contract
      interpretation provides that where the words of the document
      are clear and unambiguous, we must ‘give effect’ to the
      language.

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Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 624 (Pa. Super.

2013) (internal citations and quotation marks omitted).

      The Lease authorized 1.5% finance charges on “all unpaid non-rent

invoices.”    Lease, at ¶ 5.    The Lease also authorizes Appellee to charge

Appellant $25.00 per day for late payment of rent and $25.00 per day in the

event of insufficient funds to cover the automatically billed amount of rent.

Lease, at ¶ 4.      Paravati asserts that Appellee’s confession of judgment

included finance charges of more than 8% on various outstanding balances.

Paravati references Exhibit E to Appellee’s complaint in confession of

judgment, which is a chart containing five columns: “Date,” “Charge Code,”

“Charge      Description,”   “Amount,”   and   “Balance   Due.”   Complaint   in

Confession of Judgment, at Exhibit E. An item dated December 10, 2012,

with the charge code “LAT”, a charge description of “finance fee,” an amount

of $184.05, and a balance of $2,229.05.            Complaint in Confession of

Judgment, Exhibit E.         Appellant asserts, without citation to any other

evidence, that the $2,229.05 balance includes past due rent.           Paravati

asserts that a finance charge of $184.05 against a balance of $2,229.05

represents a finance charge of 8.2569%—significantly more than the amount

provided for in the Lease. Other items in Exhibit E follow a similar pattern.

Appellant produced no evidence about whether balances due in Exhibit E are

comprised of rent invoices or non-rent invoices. Appellant also produced no

evidence to establish whether the finance fees are comprised of finance

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charges on non-rent invoices, as per paragraph five of the Lease, or late

charges, as per paragraph four of the Lease.

       Appellee responds that the Lease, in paragraphs four and five, clearly

allows finance fees, and that Appellants never objected to the finance fees at

the time they were charged. Appellee also asserts that Paravati’s argument

on appeal is different from the argument he offered to the trial court. In the

petition to open and in the briefs to the trial court, Appellants argued that

Appellee was not entitled to assess finance charges. The trial court, citing

paragraphs four and five of the lease, rejected that argument:

             With respect to finance charges, [Appellants] allege there
       is no provision in the Lease requiring CMG to pay finance
       fees and, thus, the finance fees included in the Confessed
       Judgment are unauthorized. However, sections 4 and 5 of
       the Lease clearly authorize [Appellee] to charge late fees and
       monthly finance charges for unpaid non-rent invoices.         By
       executing and guaranteeing the Lease, [Appellants] agreed to
       these charges. Based on the clear, unambiguous language of
       the Lease, there is no question of fact as to whether CMG was
       required to pay finance fees under the Lease and [Appellants]
       have failed to raise a meritorious defense in this regard.

Trial Court Opinion, 1/6/16, at 5-6 (emphasis added). On Appeal, Paravati

now challenges the amount of finance fees, an argument Appellants never

raised in the trial court. 3 Paravati’s argument fails for this reason alone, as

he cannot raise an issue for the first time on appeal. Pa.R.A.P. 302(a).

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3
   We are cognizant that courts can modify a confessed judgment where the
plaintiff confesses judgment for an allowable item, but an excessive amount.
Housing Mortg. Corp. v. Tower Dev. and Inv. Corp., 167 A.2d 146, 147
(Footnote Continued Next Page)

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      Were we to address the merits, Paravati still would not obtain relief.

As explained above, Paravati must produce evidence sufficient to create a

jury question. Given the record before us, proper interpretation of Exhibit E

is a matter of mere speculation rather than reasonable inference. Paravati

has produced no evidence to establish that some or all of the balances due

in Exhibit E arose from non-rent invoices. If portions of the balances due

pertain to rent invoices, it is possible that portions of the finance charges

include the $25 per day late fees authorized by paragraph four of the Lease.

Even if Paravati had preserved this issue for appeal, we could not conclude

that he has produced sufficient evidence to require submission of this issue

to a jury.

      Next, Paravati argues that Appellee was not authorized to confess

judgment for tenant improvements because Appellee was responsible for the

cost of improvements under the Lease Amendment and Renewal and

because Appellant CMG vacated the premises before Appellee incurred the

costs. This argument suffers from the same fatal flaw as the previous one:

Appellants produced no evidence to support it. The trial court observed:

            [Appellants] challenge the confessed judgment because it
      includes charges for certain […] alterations to the leased
      premises. [Appellants] alleged the Lease requires [Appellee]
      (and not [Appellants]) to make these improvements and
      alterations to the leased premises. While [Appellee] did agree to
                       _______________________
(Footnote Continued)

(Pa. 1961). As Paravati has failed to carry his burden of production, we
need not decide whether modification is appropriate in this case.

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      perform certain work when the Lease [Amendment and Renewal]
      was executed, [Appellants] have failed to show that the charges
      in the confessed judgment relate to the work [Appellee] agreed
      to perform in the Lease. Once again, [Appellants] had sufficient
      time to depose representatives of [Appellee] on this issue, but
      failed to do so. As such, [Appellants] have failed to present
      evidence or support for their claim that the charges for
      alterations are unauthorized.

Trial Court Opinion, 1/6/16, at 5.

      In addition to Appellants’ failure to produce evidence that Appellee

assessed unauthorized charges for alterations to the leased premises,

Appellants’ brief fails to explain which charge or charges in the confession of

judgment were unauthorized. Appellants’ argument on this point spans just

over one page and fails to provide any supporting citations to the record.

Appellants’ Brief at 17-18. This failure results in waiver. Pa.R.A.P. 2119(c);

J.J. DeLuca Co., Inc. v. Toll Naval Assoc., 56 A.3d 402, 411 (Pa. Super.

2012).

      Next, Paravati argues that the        confession of judgment clause

contained in the Guarantee was not sufficiently conspicuous. He argues that

the lack of conspicuity creates a meritorious defense. This argument fails for

at least two reasons. First, it asserts a defect apparent from the face of the

record. If correct, this argument would be a basis for striking, rather than

opening, the confessed judgment.      “A petition to strike a judgment is a

common law proceeding which operates as a demurrer to the record.            A

petition to strike a judgment may be granted only for a fatal defect or

irregularity appearing on the face of the record.”    Naducsin, 121 A.3d at

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504.   “In contrast, if the truth of the factual averments contained in [the

complaint in confession of judgment and attached exhibits] are disputed,

then the remedy is by proceeding to open the judgment, not to strike it.”

Id. (quotation marks and citations omitted; brackets in original).

       The conspicuity, or lack thereof, of the confession of judgment clause

does not depend upon the truth of the factual averments in the complaint.

Rather, it is apparent from the complaint and attached exhibits.       Paravati

cannot obtain relief on this issue because Appellants failed to challenge the

trial court’s order denying their petition to strike.

       Second, the argument lacks merit. We have held that “[a] warrant of

attorney to confess judgment must be self-sustaining and to be self-

sustaining the warrant must be in writing and signed by the person to be

bound by it.”      Naducsin, 121 A.3d at 505 (quoting Midwest Fin.

Acceptance Corp. v. Lopez, 78 A.3d 614, 622-23 (Pa. Super. 2013)).

“The requisite signature must bear a direct relation to the warrant of

attorney and may not be implied.” Id. “There should be no doubt that the

lessee signed the warrant and that he was conscious of the fact that he was

conferring a warrant upon the lessor to confess judgment in the event of

breach.” Ferrick v. Bianchini, 69 A.3d 642, 651 (Pa. Super. 2013).

             A general reference in the body of an executed lease to
       terms and conditions to be found is insufficient to bind the lessee
       to a warrant of attorney not contained in the body of the
       lease unless the lessee signs the warrant where it does appear.
       In short, a warrant of attorney to confess judgment is not to be

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     foisted upon anyone by implication or by general and nonspecific
     reference.

Graystone Bank v. Grove Estates, LP., 58 A.3d 1277, 1282–83 (Pa.

Super. 2012) (quoting Frantz Tractor Co. v. Wyoming Valley Nursery,

120 A.3d 303, 305 (Pa. 1956) (emphasis added in Graystone)), aff'd sub

nom., 81 A.3d 880 (Pa. 2013). The Graystone Court found the warrant of

attorney valid because it appeared “conspicuously in all caps” at the bottom

of a page and the signature line appeared at the top of the next page. Id.

The Graystone Court therefore distinguished the facts before it from cases

in which the warrant of attorney was “located either altogether outside the

body of the agreement, too remote from the signature, or on pages

subsequent to the signature.” Id.

     In other cases, we have denied relief to the defendant where the

confession of judgment clause was printed in the same font size as the

remainder of the document. Germantown Sav. Bank v. Talacki, 657 A.2d
1285, 1289 (Pa. Super. 1995).

           The warrant of attorney in this case appeared as a
     separately numbered paragraph within the body of the
     Guaranty; it was paragraph six out of 18, on page three of nine
     pages. It was printed in the same size type as the rest of the
     text. It was not a finely printed clause on the unsigned reverse
     side of the document. It is clear that a party’s signature to a
     contract is designed to evidence his or her intention to be bound
     thereby. Where, as here, the debtor has not alleged fraud, and
     has produced no evidence to show a lack of capacity to
     understand the document signed, or that he or she had asked
     for an explanation of the contract language, the debtor must be
     held to the contract’s terms.

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Id. at 1289-90 (citations omitted).             “It is well established that, in the

absence of fraud, the failure to read a contract before signing it is an

unavailing excuse or defense and cannot justify an avoidance, modification

or nullification of the contract; it is considered ‘supine negligence.’” Id. at

1289 (quotation marks omitted).

       Instantly, we observe that Paravati’s initials appear on the page of the

Guarantee containing the confession of judgment clause.                Complaint in

Confession of Judgment, at Exhibit C.              At the very top of the next page,

Paravati signed his name under a paragraph that is printed in larger font

than the rest of the document, bolded, and italicized. Id. That paragraph

provides: “WARNING – BY SIGNING THIS PAPER YOU GIVE UP YOUR

RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME

A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR

PRIOR KNOWLEDGE [….].”                 Id.     We conclude that the confession of

judgment clause in the Paravati Guarantee clearly complies with the

requirements set forth in the foregoing case law.4 Paravati’s argument lacks

merit.

       Next, Appellants’ brief asserts that the trial court should have opened

the judgment because the Lease and Lease Amendment and Renewal

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4
  We believe Appellants’ reliance on the definition of conspicuity set forth in
the Uniform Commercial Code at 13 Pa.C.S.A. § 1201(b)(10) is misplaced,
as the UCC governs contracts for the sale of goods.

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authorize entry of judgment against CMG but not Casteel or Paravati. As we

have just explained, Paravati signed a Guarantee with a valid confession of

judgment clause.       Appellee was entitled to confess judgment against

Paravati based on the Guarantee.

      Finally, Appellants’ brief argues that the trial court should have opened

the judgment because Appellee’s alleged breaches of the Lease excused

Appellants’ default.   Appellants argue that Appellee failed to make needed

repairs to the ceiling, and of the heating and electrical systems of the leased

premises. Paragraph 18 of the Lease provides that CMG was not “entitled to

any reduction of rent or to damages by reason of Lessor’s failure to furnish

[electricity and heat] when such failure is caused by […] repairs […] or by

any other cause beyond the reasonable control of Lessor.” Lease, at ¶ 18

(emphasis added).       Likewise, Appellee was obligated to provide heat,

electricity, and other utilities only so long as Appellants were not in default

under the Lease.

      The trial court found as follows:

           In her deposition, Casteel testified that issues related to
      heat and electric were the result of renovations and repairs to
      expand the leased premises at the request of CMG. Under the
      terms of the Lease, CMG is not entitled to an abatement of rent
      because the heat and electric issues were the result of such
      renovations and repairs. Moreover, Casteel has not explained
      how the heat and/or electrical failures were the Landlord’s fault
      or responsibility so as to justify an abatement of rent.
      [Appellants] had sufficient time to depose representatives of
      [Appellee] on this issue, but failed to do so.

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Trial Court Opinion, 1/6/16, at 4-5.        The record supports the trial court’s

findings. N.T. Casteel Deposition, 3/27/15, at 11-14. Thus, we agree with

the trial court’s conclusion that Appellants failed to produce sufficient

evidence to create a jury question on this issue.

      In summary, we have reviewed all of Appellants’ assertions of error

and found them lacking in merit or not preserved for appellate review. We

therefore affirm the trial court’s order.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/9/2016

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