Court Opinion

ID: 9365604
Source: CourtListenerOpinion
Date Created: 2023-01-24 17:07:47.952309+00
Date Added: 2024-06-11T17:15:46.373737
License: Public Domain

J-S35010-22; J-S35016-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    TRUIST BANK, FORMERLY KNOWN                :   IN THE SUPERIOR COURT OF
    AS BRANCH BANKING AND TRUST                :        PENNSYLVANIA
    COMPANY, SUCCESSOR-BY-MERGER               :
    TO SUSQUEHANNA BANK                        :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 565 MDA 2022
    PENNSYLVANIA MUSCLE BONE AND               :
    JOINT LLC                                  :
                                               :
                       Appellant               :

                 Appeal from the Order Entered March 2, 2022
       In the Court of Common Pleas of Schuylkill County Civil Division at
                             No(s): J-4065-2021

    TRUIST BANK, FORMERLY KNOWN                :   IN THE SUPERIOR COURT OF
    AS BRANCH BANKING AND TRUST                :        PENNSYLVANIA
    COMPANY, SUCCESSOR BY MERGER               :
    TO SUSQUEHANNA BANK                        :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 588 MDA 2022
    DANIEL J. D'ARCO                           :
                                               :
                       Appellant               :

                 Appeal from the Order Entered March 2, 2022
       In the Court of Common Pleas of Schuylkill County Civil Division at
                             No(s): J-4066-2021

BEFORE:      BENDER, P.J.E., McLAUGHLIN, J., and STEVENS, P.J.E.*

MEMORANDUM BY McLAUGHLIN, J.:                         FILED JANUARY 24, 2023

____________________________________________

*   Former Justice specially assigned to the Superior Court.
J-S35010-22; J-S35016-22

        Daniel J. D’Arco and the Pennsylvania Muscle Bone and Joint LLC (the

“Medical Practice”) appeal from the orders denying their petitions to strike

and/or open confessed judgments against them. The confessed judgments

were entered by Truist Bank, formerly known as Branch Banking and Trust

Company, Successor by Merger to Susquehanna Bank (“Truist”). D’Arco and

the Medical Practice argue Truist’s violation of the Equal Credit Opportunity

Act (“ECOA”)1 was a meritorious defense, the confession of judgment clauses

were not self-sustaining, and Truist failed to return Payment Protection

Program (“PPP”) money. We affirm.

        The trial court summarized the factual and procedural background as

follows:

           [D’Arco] operates, and is the sole member of, the Medical
           Practice. On January 7, 2009, the Medical Practice executed
           a Promissory Note in favor of Susquehanna Bank (the
           “Lender”) for the principal amount of $400,000.00 (the
           “Note”), along with a Commercial Security Agreement. The
           Note sets forth several provisions, including, that the loan is
           payable upon demand, and that the terms of the Note shall
           inure to the benefit of the Lender and its successors and
           assigns. Additionally, the Note contains a Confession of
           Judgment clause.1 On January 7, 2009, Dr. D'Arco executed
           a Commercial Guaranty2 in favor of the Lender, which also
           included a Confession of Judgment clause.
              1The Confession of Judgment clause contained in the
              Note, provides as follows.

              CONFESSION OF JUDGMENT. BORROWER HEREBY
              IRREVOCABLY AUTHORIZES AND EMPOWERS ANY
              ATTORNEY OR THE PROTHONOTARY OR CLERK OF
              ANY   COURT  IN  THE   COMMONWEALTH   OF
____________________________________________

1   15 U.S.C.A. §§ 1691-1691f.

                                           -2-
J-S35010-22; J-S35016-22

              PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY
              TIME FOR BORROWER AFTER A DEFAULT UNDER THIS
              NOTE AND WITH OR WITHOUT COMPLAINT FILED,
              CONFESS    OR    ENTER   JUDGMENT     AGAINST
              BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF
              THIS NOTE AND ALL ACCRUED INTEREST, LATE
              CHARGES AND ANY AND ALL AMOUNTS EXPENDED
              OR ADVANCED BY LENDER RELATING TO ANY
              COLLATERAL SECURING THIS NOTE, TOGETHER
              WITH COSTS OF SUIT, AND AN ATTORNEY'S
              COMMISSION OF TEN PERCENT (10%) OF THE
              UNPAID PRINCIPAL BALANCE AND ACCRUED
              INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT
              LESS THAN FIVE HUNDRED DOLLARS ($500) ON
              WHICH JUDGMENT OR JUDGMENTS ONE OR MORE
              EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO
              DOING, THIS NOTE OR A COPY OF THIS NOTE
              VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT
              WARRANT. THE AUTHORITY GRANTED IN THIS NOTE
              TO CONFESS JUDGMENT AGAINST BORROWER SHALL
              NOT BE EXHAUSTED BY ANY EXERCISE OF THAT
              AUTHORITY, BUT SHALL CONTINUE FROM TIME TO
              TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF
              ALL AMOUNTS DUE UNDER THE NOTE. BORROWER
              HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE
              TO NOTICE OR TO A HEARING IN CONNECTION WITH
              ANY SUCH CONFESSION OF JUDGMENT AND STATES
              THAT EITHER A REPRESENTATIVE OF LENDER
              SPECIFICALLY CALLED THIS CONFESSION OF
              JUDGMENT PROVISION TO BORROWER’S ATTENTION
              OR BORROWER HAS BEEN REPRESENTED BY
              INDEPENDENT LEGAL COUNSEL.[2]
              2 The Note, Commercial Security Agreement, and
              Guaranty are hereafter referred to collectively as the
              “Loan Documents”.

          By correspondence dated June 16, 2021, [Truist] informed
          [D’Arco and the Medical Practice] that it demanded the
____________________________________________

2 The confession of judgment clause contained in the Guaranty was
substantially similar, with minor changes, such as replacing “borrower” with
“guarantor” and “entire principal balance of this note” with “entire principal
balance of this guaranty.”

                                           -3-
J-S35010-22; J-S35016-22

         immediate payments of all amounts due and owing under
         the Loan Documents. Further, [Truist] notified [D’Arco and
         the Medical Practice] that failure to immediately pay the
         outstanding amount would result in the Bank filing for
         judgments under the Note and Guaranty, as well as, that
         [Truist] would proceed with foreclosure of the collateral
         secured by the Security Agreement. On August 18, 2021,
         [Truist] filed separate Complaints in Confession of Judgment
         against [the Medical Practice], at Docket J-4065-2021, and
         against [D’Arco], at Docket J-4066-2021. In these
         complaints, [Truist] alleges that [the Medical Practice]
         defaulted on the loan when it failed to make payment upon
         demand of the Note. Additionally, [Truist] alleges that the
         default remains uncured by the [Medical Practice] or
         [D’Arco]. [Truist] demands judgment in its favor, and
         against [the Medical Practice] or [D’Arco], in the total
         amount of $345,091.83. [Truist] asserts that this total
         includes $342,090.33 of principal, fees and interest through
         July 19, 2021; $2,990.00 in attorney’s fees and costs
         through July 19, 2021; and $11.50 in filing fees. [Truist]
         further requests continuing interest, including post
         judgment interest at the default rate, and continuing fees
         and costs. On August 18, 2021, the Prothonotary’s Office of
         Schuylkill County entered separate judgments against [the
         Medical Practice] and [D’Arco] in the amount of $
         345,091.83.

Trial Court Opinion, filed Mar. 2, 2022, at 1-3 (some footnotes omitted).

      The confession of judgment clause in the Note is on the same page as

D’Arco’s signature, who signed on behalf of the Medical Practice. Complaint in

Confession of Judgment, filed Aug. 18, 2021, at Exh. A. The Note further

provides that it “shall be binding upon [the Medical Practice], and upon [the

Medical Practice’s] heirs, personal representatives, successors and assigns,

and shall inure to the benefit of Lender and its successors and assigns.” Id.

Similarly, D’Arco’s signature appears on the same page of the Guaranty as the

                                    -4-
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confession of judgment clause and the Guaranty defines “Lender” as

“Susquehanna, its successors and assigns.” Id. at Exh. C.

      D’Arco and the Medical Practice filed petitions on October 13, 2021,

seeking to strike and/or open the judgments entered by confession, and

requesting stay of execution. They argued, among other things, the court

should strike the confessed judgment because the guaranty is not enforceable

by a successor and the warrant is unenforceable because it was in small print

on a pre-printed form. They contended that the court should open the

confessed judgment because the consent necessary to permit an alleged

successor to the Note to enforce it must be determined by a jury, Truist

required D’Arco’s spouse to pledge marital assets and otherwise guarantee

the loan to refinance the Note in violation of the ECOA and Regulation B, and

Truist knowingly and improperly froze, setoff, and attached wages.

      In a Declaration attached to a supplemental brief in support of the

petitions to strike and/or open, D’Arco stated that sometime in 2021, a

representative of Truist contacted him, stating that Truist had been assigned

the loan. The representative allegedly informed him that the “loan did not

meet Truist’s standard loan profile and that the Medical Practice, [D’Arco,] and

[his] wife . . . needed to pledge marital assets and [D’Arco’s] wife would need

to pledge her assets to guarantee the debt of the Medical Practice.”

Declaration of Daniel J. D’Arco, M.D., filed Jan.31, 2022, at ¶ 8. D’Arco stated

he was the sole owner of the Medical Practice, and his wife had no interest in

it. Id. at ¶ 9. He stated Truist insisted his wife pledge her assets and guarantee

                                      -5-
J-S35010-22; J-S35016-22

the debt even though the Medical Practice was not in default on the loan. Id.

at ¶ 10. He further claimed that because he and his wife “refused to pledge

[his] wife’s assets and she refused to guarantee the Medical Practice’s debt,

Truist took PPP monies loaned to pay . . . employees from the Medical

Practice’s bank account[,]” and Truist has not returned the money, “[e]ven

though [it] agreed” to do so. Id. at ¶ 12.

        The trial court issued rules to show cause why D’Arco and the Medical

Practice were not entitled to relief. Truist filed answers to the petitions to strike

and/or open. The court held oral argument and both parties filed supplemental

briefs. In March 2022, the trial court denied the petitions to strike and/or open

the confessed judgments. D’Arco and the Medical Practice filed timely notices

of appeal.3

        D’Arco and the Medical Practice raise the following issues:

           1. Did the trial court err in failing to hold that an Equal Credit
           Opportunity Act (15 U.S.C. § 1691 et seq.) claim was
           sufficiently alleged to constitute a meritorious defense to
           open the confessed judgment?

           2. Did the trial court err in holding that the Note and
           Guarantee are enforceable by an alleged successor bank
           when no evidence of such assignment to a successor bank
           was introduced?

           3. Did the trial court err in holding that the confession of
           judgment clause was enforceable notwithstanding its lack of
           descriptiveness, small print on a boiler plate form, failure to
           require the clause to be separately initialed, and no

____________________________________________

3   We consolidated the cases on appeal.

                                           -6-
J-S35010-22; J-S35016-22

         statement of waiver of rights was included within the
         clause?

         4. Did the trial court err in failing to hold that the Bank
         knowingly and improperly froze, setoff and attached wages
         and refused to release them?

Appellants’ Brs. at 2-3.

      Opening and striking a judgment are different remedies subject to

different standards. “A petition to strike a judgment is a common law

proceeding which operates as a demurrer to the record.” Resolution Trust

Corp. v. Copley Qu-Wayne Assoc., 683 A.2d 269, 273 (Pa. 1996). “A

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

irregularity appearing on the face of the record.” Id. The “record” for this

purpose is the court record behind the confessed judgment: the complaint in

confession of judgment and any exhibits the petitioner attached to it. Ferrick

v. Bianchini, 69 A.3d 642, 647 (Pa.Super. 2013).

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

powers of the court.” Neducsin v. Caplan, 121 A.3d 498, 504 (Pa.Super.

2015). The court may open a confessed judgment “if the petitioner (1) acts

promptly, (2) alleges a meritorious defense, and (3) can produce sufficient

evidence to require submission of the case to a jury.” Id. at 506 (citation and

emphasis omitted). “A meritorious defense is one upon which relief could be

afforded if proven at trial.” Id. (quoting Ferrick, 69 A.3d at 647). Rule

2959(e) provides that “[t]he court shall dispose of the rule on petition and

answer, and on any testimony, depositions, admissions and other evidence,”

and “[i]f evidence is produced which in a jury trial would require the issues to

                                     -7-
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be submitted to the jury the court shall open the judgment.” Pa.R.C.P.

2959(e). Therefore, “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.’” Neducsin, 121 A.3d at 507 (quoting Foerst

v. Rotkis, 368 A.2d 805, 807–08 (Pa.Super. 1976)).

      We review an order denying a petition to strike a confessed judgment

to determine whether the record in existence at the time of the entry of the

judgment is sufficient to sustain the judgment. First Union Nat’l Bank v.

Portside Refrigerated Servs., Inc., 827 A.2d 1224, 1227 (Pa.Super. 2003).

The denial of a petition to open a confessed judgment is subject to abuse of

discretion review. Neducsin, 121 A.3d at 506. Our scope of review is “very

narrow,” and we will overturn the trial court’s decision only if the trial court

abused its discretion or committed manifest error. Atl. Nat. Trust, LLC v.

Stivala Invs., Inc., 922 A.2d 919, 925 (Pa.Super. 2007).

      D’Arco and the Medical Practice first claim the court erred in failing to

hold that the ECOA claim constituted a meritorious defense. They claim the

ECOA and its implementing Regulation B prohibit creditors from discriminating

against credit applicants based on their marital status. They assert Truist

sought a spousal guarantee, and argue Truist treated D’Arco’s wife as a “joint

applicant” for refinancing even though she did not agree to take on that status.

Appellants’ Brs. at 7. D’Arco and the Medical Practice point out D’Arco’s wife

did not own an interest in the Medical Practice or receive any of the loan

proceeds. They claim that in D’Arco’s Declaration, he explained that during

                                     -8-
J-S35010-22; J-S35016-22

Truist’s credit review process, Truist “included a demand for the pledge of

marital assets and spousal guaranty without any analysis of their necessity.”

Id. at 9. They maintain a creditor cannot recover from parties who would not

have incurred liability for the debt without the ECOA violation and the creditor

is liable to the party whose rights were violated. They thus argue the

confessed judgment should be opened based on the ECOA violation.

      D’Arco and the Medical Practice liken this case to Silverman v. Eastich

Multiple Investor Fund, L.P., 51 F.3d 28, 33 (3d Cir. 1995). They maintain

that D’Arco has been harmed because “the Bank called a longstanding loan

that had not been in default simply out of spite because [his] wife would not

put her assets or marital assets at risk for the Medical Practice that she owned

no interest in.” Appellants’ Brs. at 11. They argue that courts should not limit

the claimants who can seek relief for an ECOA violation.

      The ECOA provides that it is unlawful “for any creditor to discriminate

against any [credit] applicant, with respect to any aspect of a credit

transaction . . . on the basis of . . . marital status.” 15 U.S.C.A. § 1691(a)(1).

Federal regulations implementing the ECOA provide that a creditor cannot

require the signature of an applicant’s spouse if the applicant qualifies under

the creditor’s standards of creditworthiness:

         Except as provided in this paragraph, a creditor shall not
         require the signature of an applicant’s spouse or other
         person, other than a joint applicant, on any credit
         instrument if the applicant qualifies under the creditor’s
         standards of creditworthiness for the amount and terms of
         the credit requested.

                                      -9-
J-S35010-22; J-S35016-22

12 C.F.R. § 202.7(d)(1).

      With the ECOA, “Congress chose to protect women from credit

discrimination by requiring that creditors treat all credit applicants—male and

female, married and unmarried—in an identical manner.” S.W. Pa. Reg’l

Council, Inc. v. Gentile, 776 A.2d 276, 281 (Pa.Super. 2001) (quoting

Integra Bank v. Freeman, 839 F.Supp. 326, 328 n.3 (E.D. Pa. 1993)).

However, “Congress did not enact the ECOA to permit permissibly bound

debtors to escape contractual liability when called upon to perform.” Id. at

282 (citation omitted). Where a spouse is required to sign as a guarantor, he

or she “may assert an ECOA violation as a defense to a state-court confession

of judgment.” Id. “If the defense is successful, the guarantor’s obligation is

voided, but the underlying debt and any other guarantees are not voided.” Id.

      In Silverman, which Appellants cite, the plaintiff was the wife of a

partner in a general partnership. 51 F.3d at 29-30. The partnership had

borrowed $10 million from a bank. The bank not only required the partners to

guaranty the loan, but also required the plaintiff to be a guarantor. The

partnership defaulted on the loan, and the bank confessed judgment in state

court against the guarantors, including the plaintiff. The plaintiff filed suit in

federal court alleging the Bank had violated her rights under the ECOA and

sought declaratory and injunctive relief barring execution on the confessed

judgment against her. Id. at 30. The Third Circuit concluded that although the

statute of limitations had expired on the plaintiff’s ability to sue under the

ECOA, nothing barred her from raising the ECOA defensively, which she had

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in effect done by seeking relief in federal court to stop the enforcement of the

confessed judgment. Id. at 32. The court pointed out that even if the plaintiff

obtained the relief she sought, “this would not void the underlying debt

obligation nor any other guaranties.” Id. at 33.

       Here, unlike in Silverman, it is the credit applicant D’Arco, not his

spouse, that attempts to raise an ECOA defense. Even if the credit applicant

may raise ECOA as a defense to a judgment of confession action, D’Arco has

not sufficiently alleged a ECOA violation to warrant the grant of a petition to

open. D’Arco maintains Truist required that his wife became a guarantor of

the loan. Such a requirement violates ECOA only where the credit applicant

“qualifies under the creditor’s standards of creditworthiness for the amount

and terms of the credit requested.” See 12 C.F.R. § 202.7(d)(1); Gentile,

776 A.2d at 282 (lender does not violate ECAO where spouses are joint

applicants or where credit applicant is not individually creditworthy without

spouse’s signature). D’Arco makes no claim in his pleadings or his declaration

that he qualified under Truist’s standards of creditworthiness for the credit

requested. Therefore, he failed to produce evidence which would require his

alleged ECOA defense to be submitted to a jury and the court did not err in

denying his petition to open.4 See Neducsin, 121 A.3d at 507.

____________________________________________

4 The trial court concluded D’Arco and the Medical Practice failed to allege
and/or produce sufficient evidence of a meritorious defense based on the
ECOA. Trial Ct. Op. at 13. It pointed out that D’Arco’s wife was not a signatory
to any of the Loan Documents and was not an applicant or guarantor of the
(Footnote Continued Next Page)

                                          - 11 -
J-S35010-22; J-S35016-22

       In his second claim, D’Arco and the Medical Practice argue the court

erred in holding the confession of judgment clauses in the Note and Guaranty

were enforceable by a successor bank. They argue rigid adherence to the

warrant of attorney provisions and other loan documents is required to enter

a valid confession of judgment. They point out that a confession of judgment

clause must be self-sustaining and argue that where clear consent to the

confession of judgment clause is absent, it is not self-sustaining. D’Arco and

the Medical Practice argue clear consent was not provided because the Note

did not show D’Arco authorized the Note’s enforcement by an assignee. They

claim the Note “is devoid of any evidence that Dr. D’Arco has had the required

clear consent to be liable to a successor or assignee of the original bank

necessary to sustain a confession of judgment.” Appellants’ Brs. at 14. D’Arco

and the Medical Practice therefore argue that, because the confession of

judgment     in   the   Note    was    not     self-sustaining,   it   was   invalid   and

unenforceable. Id. They contend the Note has a fatal defect on the face of the

record and the confession of judgment should be stricken and argue the

confession of judgment in the Guaranty is not self-sustaining because of the
____________________________________________

loan, and therefore had no obligations under the Loan Documents. The court
further noted that Truist had not sought judgment against D’Arco’s wife, and
therefore she could not raise ECOA as a defense and, even if she could raise
the defense, it would not void the underlying debt owed by D’Arco. The trial
court noted that “in general 15 U.S.C. § 1691e(a) provides for a separate
cause of action for violations of the ECOA.” Id. at 14 (footnote omitted).

Although our reasoning differs from the trial court, we can affirm the trial court
on any basis supported by the certified record. Commonwealth v. Williams,
125 A.3d 425, 433 n.8 (Pa.Super. 2015).

                                          - 12 -
J-S35010-22; J-S35016-22

defect in the Note. They further argue that, if it is not stricken due to the

defect, the court should open the confession of judgment and hold a hearing.5

       The trial court rejected this claim. It concluded the Note and Guaranty

expressly authorize the enforcement by a successor of the Lender, pointing

out that on page two of the Note, “in the provision entitled ‘SUCCESSOR

INTERESTS’ it specifically states that ‘[t]he terms of this Note shall be binding

upon Borrower, and upon Borrower’s heirs, personal representatives,

successors and assigns, and shall inure to the benefit of Lender and its

successors and assigns . . . .’” Trial Ct. Op. at 6 (alteration in original). The

court further noted that on page two of the Guaranty, “in a provision entitled

‘MISCELLANEOUS PROVISIONS’, it expressly states that ‘[t]he following

miscellaneous provisions are part of this Guaranty’ . . . Successors and

Assigns[--]The terms of this Guaranty shall be binding on Guarantor, and upon

Guarantor’s heirs, personal representatives, successors, and assigns, and

shall be enforceable by Lender and its successors and assigns.” Id.

(alterations in original). The court also pointed out that the Guaranty defines

the term “Lender” to include “Susquehanna Bank, its successors, and assigns.”

Id.

____________________________________________

5In the issue presented section in their briefs, D’Arco and the Medical Practice
argue the Note and Guaranty were unenforceable where no evidence of
assignment to the successor bank was introduced. However, they do not
present this argument in the argument section of the briefs and therefore
waived the claim. See Commonwealth v. Rolan, 964 A.2d 398, 411
(Pa.Super. 2008).

                                          - 13 -
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      The record supports the trial court’s conclusion, and it did not err in

denying the petition to strike. The Loan Documents made clear that they could

be enforced by the successor or assignee of the Lender, such as Truist.

      The trial court also denied the petition to open based on the claim that

there was not a clear manifestation of consent to allow a successor trustee to

enforce the confession of judgment clauses. Id. at 10. The court found D’Arco

and the Medical Practice failed to allege or produce evidence to support a

meritorious defense, reasoning that the Note and Guaranty expressly

authorize the enforcement by a successor. This was not an abuse of discretion.

      D’Arco and the Medical Practice next claim the confession of judgment

clauses were unenforceable because they lacked descriptiveness, were in

small printing on a boilerplate form, were not separately initialed, and had no

statement of waiver of rights within the clauses. They further argue the clause

was not “properly set apart or identifiable to constitute a valid waiver of due

process” and was “not separately and clearly signed or initialed so as to

acknowledge the warrant of attorney by the signor, who is the party allegedly

agreeing to allow confessing judgment.” Appellants’ Brs. at 17. Further, they

claim that the provision was “set in small hard-to-read font.” Id. D’Arco and

the Medical Practice argue that due to these alleged defects, they were denied

due process rights of notice and hearing, and D’Arco did not voluntarily,

intelligently, and knowingly waive his rights.

      Courts “have noted the need for strict adherence to rules governing

confessed judgments.” Graystone Bank v. Grove Estates, L.P., 58 A.3d

                                     - 14 -
J-S35010-22; J-S35016-22

1277, 1282 (Pa.Super. 2012) (quoting Hazer v. Zabala, 26 A.3d 1166, 1169

(Pa.Super. 2011)). “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. The requisite signature must bear a direct

relation to the warrant of attorney and may not be implied.” Id. (citation

omitted) (emphasis removed). In Graystone Bank, this Court found that a

warrant of attorney “directly related” to the signature where it “appeared

conspicuously in all caps on the very bottom of the penultimate page of the

agreement and immediately preceded where the executor . . . signed at the

top of the following, final page.” Id. at 1283 (emphasis removed). We

concluded that “[e]vidence of this location of a conspicuous cognovit contained

within the body of the agreement sufficed to establish that [the executor]

effectively signed his name to the warrant of attorney.” Id.

      The trial court found the confession of judgment clauses were valid and

self-sustaining because they appear in the Loan Documents in all caps, are at

the bottom of the last page of each agreement, and immediately precede the

Borrower’s and Guarantor’s signatures. It pointed out that in the clauses in

both Loan Documents, D’Arco waived his rights to notice and a hearing related

to a confessed judgment. Trial Ct. Op. at 9. The court found that he

nonetheless had opportunities to be heard, including the filing of the petition

to open or strike, the rule to show cause issued on Truist, and oral argument.

The court concluded there was no fatal defect on the face of the record and

D’Arco was not denied his due process rights.

                                    - 15 -
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       This was not error. The confession of judgment clauses were self-

sustaining, as they directly related to the signatures, which were on the same

page as, and close to, the confession of judgment clauses, which were in all

capital letters. See Graystone Bank, 58 A.3d at 1282-83.

       In their final issue, D’Arco and the Medical Practice claim the court erred

in failing to hold the Bank knowingly and improperly froze, set off and attached

wages and refused to release them. They assert that Truist attached $50,000

of PPP loan proceeds intended to be paid as wages to the Medical Practice

employees in violation of 42 Pa.C.S.A. § 8127(a).6 D’Arco claims he informed

Truist that the funds were PPP loan proceeds to be paid to employees and that

Truist agreed to restore the funds but did not. He therefore claims the

confessed judgments should have been opened because the money should be

released.

       The trial court concluded D’Arco and the Medical Practice failed to allege

and/or produce evidence of a meritorious defense. It reasoned that whether

Truist improperly froze, set off, and/or attached PPP loan proceeds and payroll

“is a separate and distinct issue from the issue at hand, which is whether the

confessed judgments should be opened.” Trial Ct. Op. at 15.

____________________________________________

6 42 Pa.C.S.A. § 8127(a) provides that, with certain exceptions, “[t]he wages,
salaries and commissions of individuals shall while in the hands of the
employer be exempt from any attachment, execution or other process.”

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     The court did not abuse its discretion. Whether certain funds should

have been preserved does not provide a defense to Truist’s ability to confess

judgment.

     Orders affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 01/24/2023

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