Court Opinion

ID: 9940923
Source: CourtListenerOpinion
Date Created: 2024-02-15 17:14:11.557734+00
Date Added: 2024-06-11T13:46:03.801572
License: Public Domain

J-S02020-24

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

  WILMINGTON SAVINGS FUND                      :   IN THE SUPERIOR COURT OF
  SOCIETY, FSB                                 :        PENNSYLVANIA
                                               :
                                               :
                v.                             :
                                               :
                                               :
  WILLINGTON EQUITIES, LLC                     :
                                               :   No. 770 EDA 2023
                       Appellant               :

             Appeal from the Order Entered February 21, 2023
    In the Court of Common Pleas of Philadelphia County Civil Division at
                            No(s): 220803234

BEFORE:      LAZARUS, P.J., MURRAY, J., and STEVENS, P.J.E.*

MEMORANDUM BY MURRAY, J.:                            FILED FEBRUARY 15, 2024

       Willington Equities, LLC (Willington), appeals from the order denying its

petition to open or strike the confessed judgment entered against it and in

favor of Wilmington Savings Fund Society, FSB (WSFS). We affirm.

       On August 4, 2015, Willington entered into a Construction Loan

Agreement and a Promissory Note (the Note) with The Bryn Mawr Trust

Company (BMT), under which BMT extended to Willington a commercial

construction loan in the principal amount of $1,370,000.              Complaint in

Confession of Judgment, 8/30/22, ¶ 4. The Note set forth repayment terms

and contained, inter alia, the following confession of judgment provision:

       CONFESSION    OF JUDGMENT.       BORROWER    HEREBY
       IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR
____________________________________________

* Former Justice specially assigned to the Superior Court.
J-S02020-24

      THE PROTHONOTARY OR CLERK OF ANY COURT IN THE
      COMMONWEALTH OF 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 A REASONABLE ATTORNEY’S COMMISSION/FEE FOR
      COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE
      THOUSAND DOLLARS ($5,000.00) 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 THIS 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.

Id., Exhibit B (Note) at 3.

      On September 17, 2021, Willington and BMT executed a Note

Amendment extending the loan’s maturity date to June 30, 2022, and

modifying the payment and prepayment penalty terms. Id. ¶ 6, Exhibit C

(Note Amendment).      The Note Amendment referred to the original Note,

including its confession of judgment provision, in the following provisions:

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       3. Loan Documents. All Loan Documents[1] shall secure payment
       of all principal, interest, late charges and any other sums due
       under the Note as modified by this Amendment.           All Loan
       Documents referred herein and the entire content thereof are
       hereby fully incorporated herein by this reference.

                                           ***

       5. Ratification of Loan Documents. Except to the extent expressly
       modified or amended herein, all terms, conditions, covenants,
       representations, warranties and all other contents of the Note and
       all other Loan Documents (including, without limitation, the
       events of default and the remedies of the Lender contained
       therein) are hereby fully incorporated herein by this reference as
       though set forth herein at length and shall remain in full force and
       effect and shall continue to be fully enforceable as long as any
       sum due, or to become due, under the Loan and/or any of the
       Loan Documents remains outstanding.

                                           ***

       14.   Confession of Judgment.     Borrower specifically
       acknowledges, agrees to and does hereby reaffirm the
       warrant of attorney to confess judgment against the
       Borrower contained in the Loan Documents.

       THE BORROWER EXPRESSLY ACKNOWLEDGES THAT: (i)
       THE BORROWER HAS BEEN REPRESENTED BY LEGAL
       COUNSEL IN CONNECTION WITH THIS TRANSACTION; AND
       (ii) IN THE EVENT LENDER EXERCISES THE WARRANT OF
       ATTORNEY GRANTED HEREIN SUCH ACTION MAY BE
       ADVERSE TO BORROWER’S INTERESTS.        BORROWER
       HEREBY EXPRESSLY WAIVES THE DUTIES THAT MAY BE
       IMPOSED UPON LENDER PURSUANT TO 20 PA.C.S. §
       5601.3(b) IN EXERCISING ITS RIGHTS HEREUNDER.

       15. Acknowledgement of Waiver of Rights. The Borrower hereby
       acknowledges and agrees that by agreeing that the Lender may
       confess judgment hereunder, Borrower waives any rights
____________________________________________

1 The Note Amendment defined “Loan Documents” to include “[t]he Note and

any and all other documents executed from time to time in connection
therewith, as the same may be amended….”      Note Amendment at 1
(unpaginated).

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      Borrower may have, including without limitation, the right to
      notice of any constitutional or other right Borrower may have to a
      prior judicial proceeding to determine Borrower’s rights and
      liabilities hereunder, and the Borrower further acknowledges and
      agrees that the Lender, upon a default hereunder, may obtain a
      judgment against the Borrower without Borrower’s prior
      knowledge or consent and without the Borrower’s opportunity to
      raise any defense, setoff, counterclaim or other claim the
      Borrower may have, and the Borrower hereby expressly waives
      such rights as an explicit and material part of Borrower’s
      consideration for the Loan as amended by this Amendment. No
      single exercise of the foregoing warrant and power to confess
      judgment is deemed to exhaust the power, whether or not any
      such exercise is held by any court to be invalid, voidable or void,
      but the power shall continue undiminished and may be exercised
      from time to time as often as the Lender elects until all
      indebtedness has been paid in full. The Lender may, in its sole
      discretion, exercise the authority contained herein against the
      Borrower at any time or times or at different times.

Note Amendment ¶¶ 3, 5, 14, 15 (bold in original; footnote added).

      On January 1, 2022, WSFS became BMT’s successor-in-interest via

merger.   Id. ¶ 1.   According to WSFS, Willington failed to make the final

payment on the construction loan, which was due June 30, 2022. Id. ¶ 8. On

August 30, 2022, WSFS filed a complaint in confession of judgment, and

judgment by confession was entered against Willington in the amount of

$1,242,821.50.

      On September 29, 2022, Willington filed a petition to open or strike the

judgment and requested an emergency stay. The next day, the trial court

directed WSFS to answer the petition and stayed execution until further order

of court. WSFS thereafter filed an answer. On February 21, 2023, the trial

court entered an order denying the petition and lifting the stay.

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       Willington filed a timely appeal. Both Willington and the trial court have

complied with Pa.R.A.P. 1925.

       Willington presents two issues for our review:

              1.    Was it an abuse of discretion and error of law for the
       trial court to deny the Petition to Open the Confessed Judgment
       entered on August 30, 2022, because said judgment should have
       been opened because the underlying Note containing the original
       warrant of attorney to confess judgment was materially amended
       on September 17, 2021, per a contract styled as an “Amendment
       to the Note,[”] which did not expressly incorporate the warrant of
       attorney to confess judgment or contain its own warrant of
       attorney to confess judgment[?] …. Evidence outside the record
       showing the judgment must be opened [includes] the payment
       history of the Note, actions taken by the parties… after the Note
       was modified tending to show the Note was materially modified[,]
       and additional loan documents [that were] not attached to the
       Complaint but referenced in the Note and Amendment to the
       Note?

              2.    Was it an abuse of discretion and error of law for the
       trial court to deny the Petition to Strike the Confessed Judgment
       entered on August 30, 2022, because said judgment should have
       been stricken because the record demonstrated that the
       underlying Note containing the original warrant of attorney to
       confess judgment was materially amended on September 17,
       2021, per a contract styled as an “Amendment to the Note,[”]
       which did not expressly incorporate the warrant of attorney to
       confess judgment or contain its own warrant of attorney to
       confess judgment[?] ….

Willington’s Brief at 4 (citations omitted).

       As we determine Willington’s first issue is waived, we address only its

second issue.2 Willington argues the judgment should be stricken because the

____________________________________________

2 Though Willington’s statement of questions presented sets forth two issues,

its brief fails to make a separate argument concerning its petition to open.
(Footnote Continued Next Page)

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Note Amendment did not adequately incorporate the original Note’s confession

of judgment provision and, therefore, that provision did not survive the

amendment.       Willington’s Brief at 10-13.    WSFS counters that the Note

Amendment contains multiple provisions “explicitly stat[ing] the parties’ intent

to maintain the validity of the confession of judgment clause contained in the

original Note.” WSFS Brief at 8.

       We review a trial court’s ruling on a petition to strike or open a confessed

judgment for an abuse of discretion or error of law. Ferrick v. Bianchini, 69

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

       A petition to strike a judgment is a common-law proceeding that
       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. An order of the court striking
       a judgment annuls the original judgment and the parties are left

____________________________________________

See Willington’s Brief at 4, 10-13; see also Pa.R.A.P. 2119(a) (requiring
arguments to “be divided into as many parts as there are questions to be
argued”). Willington does assert in passing that the judgment should have
been opened because of “the payment history of the Note” and other evidence
not attached to WSFS’s complaint. Willington’s Brief at 4. However, that
assertion is contained only in Willington’s statement of questions presented
and is not developed elsewhere in its brief. Id. Willington fails to make any
argument regarding the defenses it asserted below, which might have
warranted opening the judgment. See Commonwealth v. Pi Delta Psi,
Inc., 211 A.3d 875, 884-85 (Pa. Super. 2019) (“When an appellant’s
argument is underdeveloped … we shall not … scour the record to find evidence
to support an argument; instead, we will deem the issue to be waived.”)
(citation, quotation, and brackets omitted); see also Commonwealth v.
Einhorn, 911 A.2d 960, 970 (Pa. Super. 2006) (“This Court will not become
the counsel for an appellant, and will not, therefore, consider issues which are
not fully developed in the brief.” (citation omitted)).     Accordingly, its first
issue is waived.

                                           -6-
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      as if no judgment had been entered. In assessing whether there
      are fatal defects on the face of the record, a court may only look
      at what was in the record when the judgment was entered.

Stoltzfus v. Green Line Labs, LLC, 303 A.3d 447, 452-53 (Pa. Super. 2023).

      A “petition to strike a confessed judgment must focus on any defects or

irregularities appearing on the face of the record, as filed by the party in whose

favor the warrant was given, which affect the validity of the judgment and

entitle the petitioner to relief as a matter of law.”    9795 Perry Highway

Mgmt., LLC v. Bernard, 273 A.3d 1098, 1102 (Pa. Super. 2022) (citation

omitted). “The record must be sufficient to sustain the judgment. The original

record that is subject to review in a motion to strike a confessed judgment

consists of the complaint in confession of judgment and the attached exhibits.”

Id. (citation, quotation, and brackets omitted).

      This Court has observed that confessions of judgment are accorded

“strict scrutiny” under Pennsylvania law:

      Entry of a valid judgment by confession must be made in rigid
      adherence to the provisions of the warrant of attorney; otherwise,
      such judgment will be stricken. A warrant to confess judgment
      must be explicit and will be strictly construed, with any
      ambiguities resolved against the party in whose favor the warrant
      is given. 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.

Chilutti v. Uber Tech., Inc., 300 A.3d 430, 442 (Pa. Super. 2023) (en banc)

(citation, brackets, and emphasis omitted).

                                      -7-
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      In Ferrick, we affirmed the denial of a petition to strike a confessed

judgment and held that a lease amendment properly incorporated the original

lease’s confession of judgment provision. 69 A.3d at 652. In determining

whether the provision remained in effect following the amendment, we

observed, “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….” Id. at 651. We further noted,

      A general reference in the body of an executed lease to terms and
      conditions to be found outside the agreement 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 foisted upon anyone by implication or by general and
      nonspecific reference.

Id. (quoting L.B. Foster Co. v. Tri-W Constr. Co., 186 A.2d 18, 19-20 (Pa.

1962)) (italics and brackets omitted).

      The lease amendment in Ferrick did not restate the confession of

judgment provision “in its entirety,” but it did “much more than generally

incorporate the terms of the original lease.” Id. at 652. The amendment

stated that “the confession of judgment provisions contained in [the original

lease documents] are hereby republished and both Tenant and Assignee agree

to be bound thereby in accordance with the terms thereof.” Id. The tenant

signed the amendment “immediately following the language confirming the

parties’ intention to be bound by the confession of judgment.” Id. These

circumstances, we determined, exhibited “the clear manifestation of consent

                                     -8-
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that is required to sustain the validity” of a confession of judgment provision.

Id. (quoting Egyptian Sands Real Est., Inc. v. Polony, 294 A.2d 799, 804

(Pa. Super. 1972)).

       Here, Willington argues that “a warrant of attorney must appear in the

body of a contract and cannot be incorporated by a casual reference with a

designation not its own.” Willington’s Brief at 12. Willington maintains “[t]he

Warrant of Attorney to Confess Judgment was not incorporated by reference

or reinstated verbatim within the 2021 Note Amendment but rather merely

‘acknowledged’ and ‘reaffirmed’            in reference to    … unspecified     ‘Loan

Documents’….”       Id. at 12 (citing Note Amendment ¶ 14).3              Willington’s

argument is inconsistent with Ferrick, which it does not distinguish.

       A confession of judgment provision need not be restated verbatim in an

amendment to remain enforceable.               Ferrick, 69 A.3d at 652.   Relying on

Ferrick, the trial court held that “Willington clearly agreed in the [Note

Amendment] to be bound by the Confession of Judgment provisions of… the

original Note.” Trial Court Opinion, 6/28/23, at 3. We agree.

       Our review discloses the Note Amendment generally incorporated all of

the original Note’s terms, see Note Amendment, ¶¶ 3, 5 (quoted supra), but

it did much more than that.            It specifically reaffirmed the confession of

judgment provision in a separate paragraph, stating: “Borrower specifically

____________________________________________

3 Contrary to Willington’s assertion, the Note Amendment specifically defined

“Loan Documents” to include the Note. See n.1 supra.

                                           -9-
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acknowledges, agrees to, and does hereby reaffirm the warrant of

attorney to confess judgment against the Borrower contained in the

Loan Documents.” Note Amendment, ¶ 14 (bold in original). The paragraph

reaffirming the confession of judgment provision appears conspicuously in

bold font and is the only emphasized language in the Note Amendment. Id.

The next paragraph again stressed the confession of judgment provision’s

continuing effect, stating:

      The Borrower hereby acknowledges and agrees that by agreeing
      that the Lender may confess judgment hereunder, Borrower
      waives any rights Borrower may have … and the Borrower further
      acknowledges and agrees that the Lender … may obtain a
      judgment against the Borrower without Borrower’s prior
      knowledge or consent and without the Borrower’s opportunity to
      raise any defense….

Id. ¶ 15. Paragraphs 14 and 15 appear on the fourth page of the five-page

Note Amendment. Willington’s signature appears on the fifth page.

      In light of the foregoing, we conclude the Note Amendment exhibited

“the clear manifestation of consent that is required to sustain the validity” of

the original Note’s confession of judgment provision. Ferrick, 69 A.3d at 652.

As in Ferrick, the amendment here “specifically republished the terms of the

confession of judgment and clearly stated the parties’ intent that it continue

in effect.” Id. We discern no abuse of discretion or error of law in the trial

court’s denial of Willington’s petition to strike the judgment.

      Order affirmed.

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Date: 2/15/2024

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