Rosario, A. v. Northwood Manor, LLC. ( 2016 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ABIGAIL ROSARIO IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
NORTHWOOD MANOR, LLC., PHILLY
MANAGEMENT GROUP, LLC.
AND CHUCK W. CHIU
APPEAL OF: CHUCK W. CHIU
No. 2888 EDA 2015
Appeal from the Order Dated August 14, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): July Term 2007, No. 00032
BEFORE: FORD ELLIOTT, P.J.E., OTT, J., and FITZGERALD, J.*
MEMORANDUM BY OTT, J.: FILED NOVEMBER 17, 2016
Chuck W. Chiu appeals from the order entered August 14, 2015, in the
Philadelphia County Court of Common Pleas, denying his petition to strike or
open a $9,000,000.00 default judgment entered against him, and in favor of
Abigail Rosario. On appeal, Chiu argues the trial court erred or abused its
discretion in refusing to open or strike the judgment. For the reasons below,
we affirm.
The facts and procedural history underlying this appeal are as follows.
On July 2, 2007, Rosario initiated this negligence action by writ of summons
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*
Former Justice specially assigned to the Superior Court.
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naming Chiu, Northwood Manor, LLC (“Northwood Manor”), and Philly
Management Group, LLC (“PMG”), as defendants (collectively, “the
defendants”). She served Chiu both at his home address on Brighton Street
in Philadelphia, and at 7628 Castor Avenue in Philadelphia, a property that
he owned and leased, in part, to PMG. Thereafter, on July 18, 2007, Rosario
filed a complaint, in which she alleged the “defendants owned, operated,
leased, managed, controlled and/or had dominion over the premises known
as Northwood Manor and Northwood Manor Apartment ‘1 F’ both located at
1320 Foulkrod Street, Philadelphia, Pennsylvania 19124.”1 Complaint,
7/18/2007, at ¶ 5. She further averred that on March 11, 2007, while living
in Apartment 1F, she fell due to an “unreasonably dangerous condition” in
the flooring and carpeting, and suffered serious and permanent injuries to
her face, head and spinal cord. See id. at ¶ 6. The record reveals Rosario
mailed the initial complaint to Chiu’s Brighton Street home address.
However, when she reissued the complaint on January 17, 2008, she sent
Chiu’s copy by certified mail to the Castor Avenue address. From that date
forward, Rosario served Chiu with all relevant documents at the Castor
Avenue address.
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1
This is the only averment in Rosario’s complaint that links Chiu to the
Foulkrod Street apartment.
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When none of the defendants responded to the complaint, on February
21, 2008, Rosario sent all three defendants notice of her intent to enter a
default judgment. See Pa.R.C.P. 237.1. Again, Rosario sent Chiu’s notice to
the Castor Avenue address. On March 24, 2008, the trial court entered
default judgment against all three defendants. Thereafter, Roasario filed a
motion to assess damages, and, following a hearing, the court entered an
order in December of 2008 assessing damages against all three defendants,
jointly and severally, in the amount of $9,000,000.00.2
Unbeknowst to the trial court, a bankruptcy stay had been entered
against Northwood Manor. After that stay was lifted, the trial court
conducted a second assessment hearing, and, on December 16, 2009,
entered an order, once again, assessing damages against the defendants in
the amount of $9,000,000.00.3
On October 14, 2012, Rosario filed a praecipe for a writ of revival of
the judgment. Thereafter, on October 21, 2014, she served Chiu with the
writ of revival only at his home address on Brighton Street on October 21,
2014. See Affidavit of Service, filed 11/3/2014. More than five months
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2
Rosario was rendered a paraplegic as a result of the injuries she sustained
in the fall. See Rosario’s Motion to Assess Damages in Accord with Request
for Admissions, 4/1/2008, at ¶ 13.
3
Although there is no transcript of either assessment hearing in the certified
record, from what we can gather, none of the defendants participated in
either hearing.
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later, on March 31, 2015, Chiu filed a petition to strike or open the default
judgment. Following a hearing on August 14, 2015, the trial court denied
Chiu’s petition. On September 11, 2015, Chiu filed, simultaneously, both a
motion for reconsideration and a notice of appeal.4 The trial court denied
the motion for reconsideration on September 15, 2015.5
On appeal, Chiu first argues the trial court erred in denying his motion
to strike the nine million dollar default judgment. Specifically, he contends
the record “reflects a fatal error” because he was not properly served with
the ten-day default notice as required by Pennsylvania Rule of Civil
Procedure 237.1(a)(2)(ii). Chiu’s Brief at 12. Chiu asserts that because
Rosario mailed the default notice to the Castor Avenue address, which was
neither his residence nor place of business, her service of the notice was
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4
The record reflects that the order denying Chiu’s petition was mailed to the
parties on August 18, 2015. See Order, 8/14/2015. Therefore, Chiu had
until September 17, 2015, to file a timely notice of appeal. See Pa.R.A.P.
903(a).
5
When the court failed to expressly grant Chiu’s motion for reconsideration
within the relevant 30-day period, Chiu’s previously filed notice of appeal
took effect. Pa.R.A.P. 1701(b)(3). See also Valley Forge Ctr. Associates
v. Rib-It/K.P., Inc., 693 A.2d 242 (Pa. Super. 1997).
On September 16, 2015, the trial court ordered Chiu to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
Chiu complied with the court’s directive, and filed a concise statement on
October 6, 2015.
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ineffective pursuant to Pennsylvania Rule of Civil Procedure 440(a)(2)(i).
Id.Chiu’s appeal implicates the Pennsylvania Rules of Civil Procedure. As
such, we are presented with a question of law so that “our standard of
review is de novo and our scope of review is plenary.” Osward v. WB
Public Square Associates, LLC, 80 A.3d 790, 793 (Pa. Super. 2013). See
also Green Acres Rehab. & Nursing Ctr. v. Sullivan, 113 A.3d 1261,
1267 (Pa. Super. 2015).
Preliminarily, “[a] petition to strike a default judgment and a petition
to open a default judgment request distinct remedies and generally are not
interchangeable.” Erie Ins. Co. v. Bullard, 839 A.2d 383, 386 (Pa. Super.
2003). In considering the denial of a request to strike a judgment, we are
guided by the following:
“A petition to strike a judgment operates as a demurrer to
the record, and must be granted whenever some fatal defect
appears on the face of the record.” First Union Nat. Bank v.
Portside Refrigerated Servs., Inc., 827 A.2d 1224, 1227 (Pa.
Super. 2003) (quoting PNC Bank v. Bolus, 440 Pa. Super. 372,
655 A.2d 997, 999 (1995)). “When deciding if there are fatal
defects on the face of the record for the purposes of a petition to
strike a judgment, a court may only look at what was in the
record when the judgment was entered.” Cintas Corp. v. Lee's
Cleaning Servs., Inc., 549 Pa. 84, 700 A.2d 915, 917 (1997)
(citing Linett v. Linett, 434 Pa. 441, 254 A.2d 7, 10 (1969)).
“Importantly, a petition to strike is not a chance to review the
merits of the allegations of a complaint. Rather, a petition to
strike is aimed at defects that affect the validity of the judgment
and that entitle the petitioner, as a matter of law, to relief.”
City of Philadelphia v. David J. Lane Advertising, 33 A.3d
674, 677 (Pa. Cmwlth. 2011) (citing First Union Nat'l Bank,
827 A.2d at 1227). Importantly, “[a] petition to strike does not
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involve the discretion of the [trial] court.” Cintas Corp., 700
A.2d at 919 (citing Dubrey v. Izaguirre, 454 Pa. Super. 504,
685 A.2d 1391, 1393 (1996)).
Oswald, supra, 80 A.3d at 793–794. Moreover, we emphasize: “Matters
outside of the record will not be considered, and if the record is self-
sustaining, the judgment will not be stricken.” Aquilino v. Philadelphia
Catholic Archdiocese, 884 A.2d 1269, 1280 (Pa. Super. 2005) (citation
omitted).
Chiu’s argument focuses on the interplay between Pennsylvania Rules
of Civil Procedure 237.1 and 440. Rule 237.1 requires a plaintiff to provide a
defendant with at least 10 days prior notice of her intent to enter a default
judgment. The Rule states:
(2) No judgment … by default for failure to plead shall be
entered by the prothonotary unless the praecipe for entry
includes a certification that a written notice of intention to file
the praecipe was mailed or delivered
****
(ii) in the case of a judgment by default, after the failure
to plead to a complaint and at least ten days prior to the
date of the filing of the praecipe to the party against whom
judgment is to be entered and to the party's attorney of
record, if any.
Pa.R.C.P. No. 237.1(a)(2)(ii) (emphasis supplied). The notice requirement
may not be waived,6 and “[a] record that reflects a failure to comply with
Rule 237.1 is facially defective and cannot support a default judgment.”
Erie Ins. Co., supra, 839 A.2d at 387.
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6
Pa.R.C.P. 237.1(a)(4).
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Rule 440 sets forth the requirements for the service of legal papers
other than original process. Where, as here, there was no attorney of
record, the Rule provides:
[S]ervice shall be made by handing a copy to the party or by
mailing a copy to or leaving a copy for the party at the address
endorsed on an appearance or prior pleading or the residence
or place of business of the party, or by transmitting a copy
by facsimile as provided by subdivision (d).
Pa.R.C.P. 440(a)(2)(i) (emphasis supplied).7
As noted above, Chiu maintains that “the Default Notice was not sent
to [his] residence or place of business but rather allegedly to his tenants at
his Castor Avenue Property where he had no agents, employees or
managers under his control.” Chiu’s Brief at 11. Therefore, he argues the
record “reflects a fatal error” and the trial court erred in failing to strike the
default judgment. Id. at 12.
The trial court, however, concluded Chiu “failed to demonstrate that a
fatal defect existed at the time the judgment was entered.” Trial Court
Opinion, 1/5/2016, at 3. Rather, the court found Rosario “substantially
complied” with the requirements of Rule 237.1, by mailing the 10-day notice
to “an address of record” for Chiu.8 Id. Upon our review of the record, we
agree.
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7
See also Pa.R.C.P. 440 (a)(2)(ii) (explaining that “[i]f such service cannot
be made [under subsection (i),] service shall be made by leaving a copy at
or mailing a copy to the last known address of the party to be served.”).
8
We note the trial court did not specifically address Rule 440 in its opinion.
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When Rosario filed the praecipe to enter a default judgment against
Chiu, her attorney properly attached to the document a copy of the 10-day
notice required by Rule 237.1, and certified that the notice was “mailed to
[Chiu] at his last known address.” Praecipe for Entry of Judgment of
Default, 3/24/2008. The attached 10-day notice is addressed to Chiu at the
Castor Avenue property. See id. Further, Rosario’s counsel also attached
an Affidavit of Non-Military Service to the praecipe, in which counsel’s
averred the following:
Defendant, Chuck Chiu, is an adult, that his place of residence,
upon reasonable investigation, is [] Brighton Street …, and that
he is in the business of real estate, with his place of business
located at 7628 Castor Avenue, Philadelphia, PA 19152,
and that he not in the military service of the Unites States or its
allies …
Affidavit of Non-Military Service, 3/24/2008 (emphasis supplied). Moreover,
the record also contains two affidavits of service for the writ of summons,
which establish Chiu was served with a copy of the writ both at his residence
on Brighton Street, and at the Castor Avenue property. See Affidavits of
Service, filed 7/18/2007. There was no indication in the certified record
that service to Chiu at the Castor Avenue property was improper. See
Pa.R.A.P. 440(a)(2)(i) (service may be mailed to “the residence or place of
business of the party”). Accordingly, considering only the facts of record, we
agree with the trial court’s determination that no fatal defect or irregularity
was apparent on the face of the record at the time the default judgment was
entered. See Trial Court Opinion, 1/5/2016, at 3.
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In his second issue, Chiu argues the court abused its discretion in
denying his petition to open the default judgment. Chiu contends the trial
court erred in considering his delay in filing the petition to open after the
judgment had been revived, rather than focusing on the fact that Rosario
“did not provide one shred of evidence that [Chiu] had actually received the
Default Notice.” Chiu’s Brief at 13. Moreover, he emphasizes “the equities
of [the] circumstances demanded that the [c]ourt examine the fact that
[Chiu] had no nexus or connection with the party defendants, [Rosario] and
the underlying case and controversy.”9 Id. at 14.
Our review of a trial court’s ruling concerning a petition to open a
default judgment is well-settled: “The decision to grant or deny a petition to
open a default judgment is within the sound discretion of the trial court, and
we will not overturn that decision absent a manifest abuse of discretion or
error of law.” Green Acres Rehab., supra, 113 A.3d at 1270 (quotation
omitted).
Unlike a petition to strike a judgment, “a petition to open a judgment
is an appeal to the equitable powers of the court.” Mother's Rest. Inc. v.
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9
During the hearing on Chiu’s petition, Chiu’s counsel explained PMG was
the property manager, and Northwood was the owner, of the building at
which Rosario was injured. N.T., 8/14/2015, at 6. However, counsel stated
Chiu “doesn’t have any ownership interest, management interest or control
of Northwood [or] Philly Management Group.” Id. In fact, he claimed Chiu’s
only connection to the parties is as the owner of the Castor Avenue property,
where PMG is a tenant. Id. at 5.
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Krystkiewicz, 861 A.2d 327, 336 (Pa. Super. 2004) (en banc) (quotation
omitted). Accordingly, if, as here, a party’s right to relief is based upon a
challenge to the factual averments contained in the record at the time the
default judgment was entered, he should seek to open the judgment, not
strike it. Id.Ordinarily, if a petition to open a judgment is to be successful, it
must meet the following test: (1) the petition to open must be
promptly filed; (2) the failure to appear or file a timely answer
must be excused; and (3) the party seeking to open the
judgment must show a meritorious defense.... In making this
determination, a court can consider facts not before it at the
time the judgment was entered.
Id. (quotation omitted). “Moreover, we note the trial court cannot open a
default judgment based on the ‘equities’ of the case when the defendant has
failed to establish all three of the required criteria.” US Bank N.A. v.
Mallory, 982 A.2d 986, 995 (Pa. Super. 2009).
In denying Chiu’s petition to open, the trial court emphasized Chiu
waited “more than seven years after the entry of default judgment” to file
his petition to open. Trial Court Opinion, 1/5/2016, at 4 (emphasis in
original). Furthermore, the court explained that even if it determined Chiu
did not discover the default judgment until he was served with the writ of
revival on October 21, 2014, he still “waited approximately 168 days from
this notice to file his petition to open” on March 31, 2015, and offered no
explanation for the five-month delay. Id. at 4-5. Accordingly, the court
found Chiu failed to act promptly in filing his petition to open the default
judgment.
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We find no abuse of discretion on the part of the trial court. Contrary
to Chiu’s argument, the trial court properly focused on the delay between
the date Chiu actually learned of the default judgment (i.e., service of the
writ of revival in October of 2014), and the filing of the petition to open (i.e.,
March 31, 2015). Indeed, the record includes an affidavit of service averring
that the writ of revival was personally served on an adult male at Chiu’s
Brighton Street residence on October 21, 2014. See Affidavit of Process
Server, filed 11/3/2014. Assuming arguendo, the service of the writ of
revival was the first time Chiu learned the default judgment had been
entered against him, he still waited more than five months to file a
petition to open the judgment. The trial court acted well within its discretion
in concluding the petition was not “promptly filed.” Mother’s Rest., supra,861 A.2d at 366. See US Bank, supra, 982 A.2d at 995 (delay of 82 days
between notice of entry of default judgment and filing of petition to open
was not prompt).
The trial court also found Chiu failed to satisfy the second prong of the
test in that he neglected to provide a “justifiable explanation for his failure to
file an Answer to the Complaint.” Trial Court Opinion, 1/5/2016, at 5. We
agree. “The appellate courts have usually addressed the question of
legitimate excuse in the context of an excuse for failure to respond to the
original complaint in a timely fashion.” US Bank, supra, 982 A.2d at 995(emphasis supplied).
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In his petition to open the judgment, Chiu averred he is a “Chinese
immigrant who does not speak English” and “had no legal representation
when [j]udgment was entered against him.” Chiu’s Petition to Strike or
Open the Default Judgment Entered in Favor of Plaintiff Abigail Rosario,
3/31/2015, at ¶¶ 2, 4. Furthermore, he asserted he “immediately filed this
petition after he retained counsel” once the judgment was revived. Id. at ¶
21. He did not explain either in his petition or in his brief before this Court
why he failed to file an answer to the original complaint. Indeed, Chiu
admitted in his petition that “the original complaint had been served to [him]
at his home at … Brighton Street” in July of 2007. Id. at ¶ 7. See also
Complaint, 7/18/2007, Certificate of Service.
Although Chiu emphatically argues he has no connection to the
underlying controversy, and equitable considerations require this Court to
open the underlying judgment,10 we remind him that neither this Court nor
the trial court may “open a default judgment based on the ‘equities’ of the
case when the defendant has failed to establish all three of the required
criteria.” US Bank, supra, 982 A.2d at 995. Here, Chiu failed to
demonstrate two of those prongs: (1) his petition to open was promptly
filed and (2) that he had a reasonable excuse for failing to answer the
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10
See Chiu’s Brief at 14.
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complaint. Consequently, we are compelled to conclude the trial court did
not abuse its discretion in denying his petition to open the default judgment.
Because Chiu has failed to establish that the trial court erred or
abused its discretion in denying his petition to strike or open the default
judgment, we affirm the order on appeal.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/17/2016
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