Kakalelis, G. & A. v. H & N Zorbas Realty, LLC ( 2021 )

J-S30004-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GEORGE A. AND ANTEGONE : IN THE SUPERIOR COURT OF
KAKALELIS : PENNSYLVANIA
:
:
v. :
:
:
H & N ZORBAS REALTY, LLC :
: No. 593 MDA 2021
Appellant :
Appeal from the Order Entered April 8, 2021
In the Court of Common Pleas of Berks County Civil Division at No(s):
20-14796
BEFORE: BENDER, P.J.E., McCAFFERY, J., and COLINS, J.*
MEMORANDUM BY BENDER, P.J.E.: FILED OCTOBER 01, 2021
H & N Zorbas Realty, LLC (“Appellant”) appeals from the April 8, 2021
order, which denied its petition to open a confessed judgment in favor of
George A. Kakalelis and Antegone Kakalelis (“Appellees”). After careful
review, we affirm.
This case arises from an agreement of sale (“Agreement of Sale”)
entered into between the parties on June 28, 2017, for the purchase of a
commercial property located at 2840 Penn Avenue, West Lawn, Pennsylvania.
On November 3, 2017, Appellant executed a purchase money note (“Note”)
in favor of Appellees, in the principal amount of $130,000.00. On August 19,
2020, Appellees filed a complaint in confession of judgment against Appellant,
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* Retired Senior Judge assigned to the Superior Court.
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alleging that Appellant was in default under the Note and owed $25,672.24,
plus interest, late charges, and attorneys’ fees and costs.
On September 18, 2020, Appellant filed a petition to open the confessed
judgment, in which it alleged, in relevant part:
8. [Appellees] were aware at the time the Agreement [of Sale]
was negotiated and executed that [Appellant’s] intent was to erect
a commercial building on the property.
9. Unbeknownst to [Appellant], prior to the execution of the
Agreement [of Sale], [Appellees] granted an easement across the
property to PPL Electric Utilities [(“PPL”)] in exchange for an
undisclosed sum.
10. [Appellees] did not divulge to [Appellant] the existence of the
easement at the time the Agreement [of Sale] was executed.
11. [Appellant] only recently learned of the easement when
representatives of PPL … erected a pole on the property.
12. [Appellant] aver[s] that the existence of the easement
materially affects the value of the property.
13. [Appellant] avers that [Appellees] were aware that the
easement affected the value of the property and therefore did not
make [Appellant] aware of the same at the time the Agreement
[of Sale] was entered into.
14. [Appellant] avers that the pole erected by PPL … impacts its
ability to develop the property[,] and if [Appellees] had made
[Appellant] aware of the easement at the time the Agreement [of
Sale] was executed[,] it would have insisted upon a lower
purchase price.
15. [Appellant] notified [Appellees] of the issues set forth
hereinabove pertaining to the easement and [Appellees] then filed
the complaint in confession of judgment.
16. [Appellant] avers that the actions of [Appellees] as set forth
hereinabove constitute a breach of the Agreement.
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17. As set forth hereinabove, [Appellant] has a defense to the
complaint and therefore the judgment should be opened so that
[Appellant] can defend itself.
Petition to Open, 9/18/20, at 2-3 (unnecessary capitalization omitted).
On October 7, 2020, Appellees filed an answer and new matter. In their
answer, Appellees admitted that they granted an easement to PPL prior to
June 28, 2017. However, Appellees denied the allegation that they failed to
disclose the existence of the easement prior to entering the Agreement of
Sale. To the contrary, Appellees aver that not only did they inform Appellant
they had granted an easement on the property, they also provided Appellant
with documents reflecting the easement and its location, prior to execution of
the Agreement of Sale. Answer and New Matter, 10/7/20, at 2-3.
Additionally, Appellees aver that the easement was recorded in the Berks
County Recorder of Deeds office on October 27, 2017, five days prior to the
closing on the sale, which occurred on November 1, 2017. See id. at 4, 6-7.
The trial court held arguments on Appellant’s petition on November 17,
2020, March 16, 2021, and April 4, 2021. On April 5, 2021, the trial court
denied the petition, but incorrectly stated the year on the order. On April 8,
2021, the court vacated the incorrectly-dated order and entered an order
again denying the petition, reflecting the corrected date of April 8, 2021.
On May 5, 2021, Appellant filed a timely notice of appeal, followed by a
timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors
complained of on appeal. Appellant presents the following questions for our
review on appeal:
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1. Did the court err as a matter of law and fact in denying …
Appellant’s petition when … Appellant averred facts sufficient
to establish a meritorious defense to the complaint in
confession of judgment where … Appellant averred that …
Appellee[s] misrepresented to … Appellant the extent of a
utility easement on the property in order to induce … Appellant
to enter into the [A]greement of [S]ale for the property?
2. Did the court err as a matter of law and fact in denying …
Appellant’s petition when … Appellant averred facts sufficient
to establish a meritorious defense to the complaint in
confession of judgment where … Appellant averred that …
Appellee[s were] aware that … Appellant intended to erect a
commercial building on the property and disclosure of the
extent of the utility easement would materially affect the value
of the property and the price … Appellant would be willing to
pay for the same?
Appellant’s Brief at 4 (unnecessary capitalization omitted).
In addressing Appellant’s claims, we remain mindful of the following:
We review the order denying [an] [a]ppellant’s petition to open
the confessed judgment for an abuse of discretion.
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.
The trial 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.” Generally, the court will dispose of the rule on petition and
answer, along with other discovery and admissions.
…
A meritorious defense is one upon which relief could be afforded
if proven at trial.
Pa.R.[C].P. 2959(e) sets forth the standard by which a court
determines whether a moving party has properly averred a
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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. The trial court can make this
decision as a matter of law when the defense presented is without
adequate substance, because contract construction and
interpretation is generally a question of law for the court to decide.
…
In the context of a petition to open a confessed judgment, [t]he
function of our [C]ourt is not to [w]eigh the evidence in support
of the defense, but merely to determine whether there was
sufficient evidence to go to the jury.
Neducsin v. Caplan, 121 A.3d 498, 506-07 (Pa. Super. 2015) (internal
quotation marks, emphasis, and citations omitted).
In its first claim, Appellant asserts that it established a meritorious
defense to Appellees’ complaint in confession of judgment by averring that
Appellees misrepresented the scope of the easement they granted to PPL, in
order to induce Appellant into entering the Agreement of Sale. Appellant’s
Brief at 9-10. Moreover, Appellant concedes that it was aware of the existence
of the easement at the time it entered the Agreement of Sale. See id. at 11
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(“There is no issue that the easement granted by … Appellee[s] in favor of PPL
… relative to the property at 2840 West Penn Avenue, West Lawn, …
Pennsylvania, was discussed by the parties at the time they entered into the
Agreement of Sale for the property.”); id. at 12 (“Appellant was clearly aware
of the PPL easement….”).
By contrast, Appellant avers in its petition to open that it had no
knowledge of the easement and that Appellees had failed to disclose the
existence of the easement prior to the sale. See Petition to Open at 2 ¶ 9
(“Unbeknownst to [Appellant], prior to the execution of the Agreement,
[Appellees] granted an easement across the property to PPL….”); id. at 2 ¶
10 (“[Appellees] did not divulge to [Appellant] the existence of the easement
at the time the Agreement was executed.”). Appellant’s petition contains no
allegations regarding Appellees’ misrepresenting the scope of the easement,
nor does it allege that Appellees misled Appellant regarding the extent of the
easement in order to induce Appellant into entering the Agreement of Sale.
Hence, we deem Appellant’s first claim to be waived. See Pa.R.C.P. 2959(c)
(providing that a party waives all defenses and objections which are not
included in the petition to open the confessed judgment).
Additionally, to the extent that Appellant refers to “information provided
at oral argument” being sufficient to establish its meritorious defense, see
Appellant’s Brief at 11, we note that Appellant has failed to produce the
transcripts from the hearings on its petition. This Court has explained that,
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[w]ith regard to missing transcripts, the Rules of Appellate
Procedure require an appellant to order and pay for any transcript
necessary to permit resolution of the issues raised on appeal.
Pa.R.A.P. 1911(a)…. When the appellant ... fails to conform to the
requirements of Rule 1911, any claims that cannot be resolved in
the absence of the necessary transcript or transcripts must be
deemed waived for the purpose of appellate review.
Commonwealth v. Houck, 102 A.3d 443, 456 (Pa. Super. 2014) (citation
omitted). Thus, we would also consider Appellant’s claim waived on this basis.
In its second claim, Appellant asserts that it established a meritorious
defense to the complaint in confession of judgment by averring that Appellees
were aware Appellant intended to erect a commercial building on the property
and that disclosure of the extent of the easement would materially affect the
value of the property and the price Appellant would be willing to pay for the
purchase of said property. Appellant’s Brief at 13. We deem this issue waived,
as well, based on Appellant’s failure to develop its argument. See Pa.R.A.P.
2119(a). Appellant does not cite to any legal authority in support of its
argument, nor does it provide any legal analysis of its claim whatsoever. See
Appellant’s Brief at 13-14. In fact, its entire argument consists of two
sentences. The first sentence merely reiterates its claim that Appellees
advised Appellant of the existence of the easement granted to PPL, but that it
misrepresented the scope of said easement. Id. at 14. The second sentence
states: “The easement itself is not referenced in the Agreement of Sale[,]
however[,] insofar as it was clearly discussed, … Appellant contends that
evidence on that issue creates a meritorious defense[,] and it was error to
deny the [p]etition based simply on the language of the Agreement of Sale
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and related documentation.” Id. “The Rules of Appellate Procedure state
unequivocally that each question an appellant raises is to be supported by
discussion and analysis of pertinent authority.” Estate of Haiko v.
McGinely, 799 A.2d 155, 161 (Pa. Super. 2002) (citing, inter alia, Pa.R.A.P.
2119(b)). “Without a reasoned discussion of the law … our ability to provide
appellate review is hampered. It is not this Court’s function or duty to become
an advocate for [Appellant].” Id. (internal citations and quotation marks
omitted).
Nevertheless, even if Appellant had not waived its claims, we would
discern no abuse of discretion in the trial court’s conclusion that Appellant
failed to allege a meritorious defense. As the trial court opined:
Although there is a dispute as to whether the easement was
accurately disclosed to … Appellant[] prior to sale, it is not
disputed that the easement was recorded on October 27, 2017,
five days prior to the closing on the sale of the property[,] which
occurred on November 1, 2017. Additionally, the petition to open
the confessed judgment filed by Appellant had the Agreement of
Sale … appended to it as Exhibit “A[.”] Paragraph 4 of the
[Agreement of Sale] specifically sets forth, in pertinent part, that
“the title to the premises on the closing date shall be such as will
be insured by any reputable title insurance company as good,
complete and marketable title at regular rates free and clear of all
liens and encumbrances except as follows: (i) rights, if any, of any
gas, telephone, electric, oil or other public utility; (ii) provisions
of any local ordinances; (iii) easements not appearing of record
[emphasis added]…[.]” Not only did Appellant waive any claims
based upon utility rights and unrecorded easements, the very
easement Appellant asserts as a basis to open the judgment was
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actually recorded five days prior to settlement.[1] A bringdown
search prior to closing would have disclosed the easement.
Appellant[’s] failure to conduct such a search or to request, prior
to closing, full descriptions of all easements recorded or
unrecorded or to memorialize in writing any prohibitions against
unrecorded easements or those of record which might interfere
with their intended use of the property does not create a basis to
open and [sic] confessed judgment.
…
Appellant’s averment that [it] had made known [its] intended use
of the premises, and Appellee[s] knew or should have known that
the easement was inconsistent with that use is not supported by
any written evidence. There is nothing in the [Agreement of Sale]
nor any correspondence reflecting such discussions or agreements
restricting or limiting the scope of easements, or even mentioning
Appellant’s intended use for the property[.] Furthermore, the
suggestion that Appellees intentionally withheld disclosure of the
easement to avoid any reduction in the price is inconsistent with
the easement[’s] having been recorded five days prior to the
closing. Appellee[s] argue[], persuasively, that the doctrine of
merger operates to merge into the deed all binding terms and
conditions of the sale. It is a well-established presumption of law
that the acceptance of a deed constitutes satisfaction of all
previous covenants. Raab et us. v. Beatty, 96 Pa. Super. 574,
577 (1929). Generally, Pennsylvania courts hold that by
acceptance of a deed pursuant to an agreement of sale, the terms
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1 “All agreements in writing relating to real property situate in this
Commonwealth by the terms whereof the parties executing the same do grant,
bargain, sell, or convey any rights or privileges of a permanent nature
pertaining to such real property … shall be acknowledged according to law by
the parties thereto or proved in the manner provided by law, and shall be
recorded in the office for the recording of deeds in the county … wherein such
real property is situate.” 21 P.S. § 356. “The legal effect of the recording of
such agreements shall be to give constructive notice to subsequent
purchasers, mortgagees, and/or judgment creditors of the parties to said
agreements of the fact of the granting of such rights or privileges and/or of
the execution of said releases, and the rights of the subsequent purchasers,
mortgagees, and/or judgment creditors of the parties to said agreements shall
be limited thereby with the same force and effect as if said subsequent
purchasers, mortgagees, and/or judgment creditors had actually joined in the
execution of the agreement or agreements aforesaid.” 21 P.S. § 357.
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of the agreement merge into the deed. Id. Essentially, no
agreements or conditions not required in writing to be included in
the deed will survive settlement.
Trial Court Opinion, 6/11/21, at 3-4 (unnecessary capitalization omitted).
Accordingly, we affirm the April 8, 2021 order denying Appellant’s
petition to open the confessed judgment in favor of Appellees.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/01/2021
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