Haraszkiewicz, S. v. Barach, J. ( 2021 )

J-S13018-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
STEPHEN HARASZKIEWICZ AND : IN THE SUPERIOR COURT OF
OLIVIA VAKATOVA : PENNSYLVANIA
:
Appellees :
:
v. :
:
JONATHAN BARACH :
:
Appellant : No. 26 EDA 2021
Appeal from the Order Entered November 2, 2020
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): No. 200201039
BEFORE: OLSON, J., KING, J., and PELLEGRINI, J.*
MEMORANDUM BY KING, J.: FILED JUNE 21, 2021
Appellant, Jonathan Barach, appeals from the order entered in the
Philadelphia County Court of Common Pleas, denying his petition to strike
and/or open a confessed judgment in favor of Appellees, Stephen
Haraszkiewicz and Olivia Vakatova. We affirm.
The trial court set forth the relevant facts of this appeal as follows:
[Appellees] are two individuals, … husband and wife….
[Appellant] is an individual, … a licensed real estate agent.
[Appellant] is allegedly the sole owner of a limited liability
company trading as The Barach Group, LLC (the “Barach
Group”).
On September 20, 2018, [Appellees] wire-transferred
$150,000.00 to the Barach Group. On September 21, 2018,
[Appellant] executed a promissory note (the “Note”), in
favor of [Appellees]. The Note acknowledges the debt owed
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
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by [Appellant], in the amount of $165,000.00, representing
a principal amount of $150,000.00, and interest due at the
maturity of the Note of $15,000.00. The Note also contains
a warrant-of-attorney empowering [Appellees] to confess
judgment against [Appellant] upon a default committed by
the same, including a default for failure to pay principal and
interest, when due. Finally, the Note bears a maturity date
of March 21, 2019. [Appellees] confessed judgment against
[Appellant] on February 10, 2020.
The complaint-in-confession-of-judgment avers that
[Appellant] defaulted by failing to make any payments
under the Note. The complaint also avers that on October
7, 2019, after the maturity date on the Note had expired,
[Appellant] issued in the name of one of the two [Appellees]
a $175,000.00 check through an entity named TBG Real
Estate, LLC. However, this check was returned for lack of
sufficient funds. In the complaint-in-confession-of-
judgment, [Appellees] claim the full principal amount of
$150,000.00 and interest of $15,000.00, plus accruing
interest of $8,679.45, unspecified court costs, and accruing
attorney’s fees of $8,250.00, for a total of $181,929.45.
[Appellant] filed a petition to strike or open the judgment
and for a stay of execution.
(Trial Court Opinion, filed January 11, 2021, at 3-4) (internal footnotes
omitted).
On November 2, 2020, the trial court denied Appellant’s petition.
Appellant timely filed a notice of appeal on December 2, 2020. The court did
not order Appellant to file a Pa.R.A.P. 1925(b) concise statement of errors
complained of on appeal, and Appellant did not file one.
Appellant raises two issues for our review:
Did the trial court commit an error of law in refusing to strike
a confession of judgment where [Appellees] confessed
judgment and included items not authorized by the warrant
of attorney?
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Did the trial court commit an error of law or abuse of
discretion in permitting [Appellees] to include facts related
to criminal accusations and/or fraud in a confession of
judgment?
(Appellant’s Brief at 2).
In his two issues, Appellant asserts that the “warrant of attorney was
self-evidently limited,” and Appellees “could confess judgment for the amount
contractually owing…..” (Id. at 9). Appellant claims Appellees violated the
warrant of attorney by including additional language in the confession of
judgment. Specifically, Appellant contends the complaint in confession of
judgment “alleges a course of criminal conduct on Appellant’s part, namely
that [he] willfully, intentionally, materially and fraudulently misled [Appellees]
about various aspects of the loan … and his delays in repayment….” (Id.)
(internal citations to the record and quotation marks omitted). Appellant
argues that these accusations of criminal conduct were “(i) obviously not
authorized by the promissory note’s warrant of attorney; (ii) intended to
coerce [Appellant] to pay money; and, accordingly (iii) a gross abuse of the
process of” the trial court. (Id. at 10). Appellant concludes that this Court
must reverse the order denying the petition to strike and/or open the
judgment. We disagree.
“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 Associates, 546 Pa. 98, 106, 683 A.2d 269, 273 (1996)).
We review a trial court’s order denying a petition to strike a
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confessed judgment to determine whether the record is
sufficient to sustain the judgment. First Union National
Bank v. Portside Refrigerated Services, Inc., 827 A.2d
1224, 1227 (Pa.Super. 2003). A petition to strike a
judgment may be granted only if a fatal defect or irregularity
appears on the face of the record. Id. Similarly, we review
the order denying [a] petition to open the confessed
judgment for an abuse of discretion. Id.; PNC Bank v.
Kerr, 802 A.2d 634, 638 (Pa.Super. 2002) (“A petition to
open judgment is an appeal to the equitable powers of the
court. As such, it is committed to the sound discretion of
the hearing court and will not be disturbed absent a
manifest abuse of discretion.”).
Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa.Super. 2011) (quoting PNC Bank,
Nat. Ass’n v. Bluestream Technology, Inc., 14 A.3d 831, 835 (Pa.Super.
2010)).
“A judgment by confession will be opened if the petitioner acts promptly,
alleges a meritorious defense, and presents sufficient evidence in support of
the defense to require the submission of the issues to a jury.” Ferrick v.
Bianchini, 69 A.3d 642, 647 (Pa.Super. 2013). “A meritorious defense is one
upon which relief could be afforded if proven at trial.” Id.In considering the merits of a petition to strike, the court
will be limited to a review of only the record as filed by the
party in whose favor the warrant is given, i.e., the complaint
and the documents which contain confession of judgment
clauses. Matters dehors the record filed by the party in
whose favor the warrant is given will not be considered. If
the record is self-sustaining, the judgment will not be
stricken. However, if the truth of the factual averments
contained in such record are disputed, then the remedy is
by a proceeding to open the judgment and not to strike. An
order of the court striking a judgment annuls the original
judgment and the parties are left as if no judgment had been
entered.
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... When determining a petition to open a judgment, matters
dehors the record filed by the party in whose favor the
warrant is given, i.e., testimony, depositions, admissions,
and other evidence, may be considered by the court. An
order of the court opening a judgment does not impair the
lien of the judgment or any execution issued on it.
Id. (quoting Hazer, supra at 1169).
“Further, we require strict adherence to the rules governing the use of
confessed judgments.” Hazer, supra at 1169.
This is so because a warrant of attorney to confess judgment
confers such plenary power on the donee in respect of the
adjudication of his own claims that certain specific
formalities are to be observed in order to effectuate the
granting of such a power. Accordingly, [a] Pennsylvania
warrant of attorney must be signed. And it will be construed
strictly against the party to be benefited by it, rather than
against the party having drafted it. 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.
Ferrick, supra at 647-48 (internal citations and quotation marks omitted).
Instantly, the trial court evaluated Appellant’s argument about the
allegations of criminal conduct in the complaint in confession of judgment.
The court determined that any language referencing criminal conduct or
potential prosecution did not create a fatal flaw in the record, as matters
outside the record would not be considered. (See Trial Court Opinion at 4
n.10). Based upon our review of the record, we agree that the language at
issue did not create a fatal defect to justify the granting of Appellant’s petition.
See Hazer, supra. Further, Appellant signed the note, which included a
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warrant of attorney authorizing a confessed judgment for the full amount of
the note, plus interest, court costs, and counsel fees. (See Complaint in
Confession of Judgment, filed 2/10/20, at Exhibit 3). On this record, the court
did not abuse its discretion in refusing to strike the confessed judgment. See
Hazer, supra. Accordingly, we affirm.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/21/2021
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