Huntington National Bank v. K-Cor, Inc.

J-A35002-14
2014 PA Super 290THE HUNTINGTON NATIONAL BANK, IN THE SUPERIOR COURT OF
SUCCESSOR IN INTEREST TO SKY BANK, PENNSYLVANIA
Appellee
v.
K-COR, INC.,
Appellant No. 1265 WDA 2013
Appeal from the Order Entered July 12, 2013
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD13-009199
BEFORE: BENDER, P.J.E., BOWES, J., and ALLEN, J.
OPINION BY BENDER, P.J.E.: FILED DECEMBER 31, 2014
K-Cor, Inc. (Appellant) appeals from the order entered on July 12,
2013, denying its petition to strike or open judgment entered by confession.
We affirm.
The following facts are not in dispute. This case involves guarantees
on two commercial loans. In November 2000, Huntingdon National Bank’s
predecessor, Sky Bank, entered into a loan agreement with Rock Airport of
Pittsburgh, LLC (Airport LLC), pursuant to which the bank loaned $3,000,000
to Airport LLC. Appellant guaranteed the loan. The guaranty provides for
judgment by confession in the event of a default on the loan.
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In June 2002, the bank and Airport LLC entered into a second loan
agreement, pursuant to which the bank loaned an additional $370,000 to
Airport LLC. Appellant guaranteed the loan. The guaranty provides for
judgment by confession in the event of a default on the loan.
Following default and notice, Huntingdon National Bank (hereinafter,
the Bank) initiated this action in May 2013, filing a complaint in confession of
judgment. Thereafter, judgment was entered in the total amount of
$3,282,049.77. See Notice of Judgment, 05/22/2013.
In June 2013, Appellant filed a petition to strike or open the judgment,
comprised of a single paragraph averring that it had not voluntarily,
intelligently, and knowingly given up its right to notice and a hearing prior to
the entry of judgment. In July 2013, following argument, the trial court
denied Appellant’s petition, concluding that Appellant had failed to raise a
meritorious defense to the confessed judgment. The trial court further
denied Appellant’s oral motion to amend its petition, concluding that the
general rule permitting liberal amendment of pleadings does not apply to a
petition to strike or open. Appellant filed a motion for reconsideration,
attaching proposed amendments to its petition, which was denied thereafter
by the trial court. Appellant timely appealed and filed a court-ordered
Pa.R.A.P. 1925(b) statement. The trial court submitted a responsive
opinion, addressing both the defect in Appellant’s initial petition as well as
the substantive merit of Appellant’s proposed amendments.
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Appellant raises the following issues on appeal:
[1.] Whether or not the [trial] [c]ourt abused its discretion in
failing to grant the motion for amendment of a petition, when
good and cognizable defenses are presented at the time of the
presentment of the petition and request for amendment and
incorporation of allegations at related cases?
[2.] Whether or not the [trial] [c]ourt abused its discretion in
failing to grant reconsideration of the denial of the motion for
amendment of a petition?
Appellant’s Brief at “vi.”
In its first issue, Appellant contends that the trial court should have
permitted Appellant to amend its original petition and that its proposed
amendments support opening the confessed judgment.1 We review a court’s
order denying a petition to open a confessed judgment for an abuse of
discretion. PNC Bank, Nat’l Ass’n v. Bluestream Tech., Inc., 14 A.3d
831, 835 (Pa. Super. 2010). However, to the extent that Appellant
challenges the lower court’s interpretation of the Pennsylvania Rules of Civil
Procedure, our standard of review is de novo, and our scope of review is
plenary. See Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 624
(Pa. Super. 2013) (citing Boatin v. Miller, 955 A.2d 424, 427 (Pa. Super.
2008)); see also Pa.R.C.P. 127 (describing the manner in which we
interpret rules of court); Pa.R.C.P. 129 (same).
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1
Appellant does not challenge the trial court’s decision to deny its petition to
strike. In addition, Appellant concedes that its petition to open, as originally
filed, is deficient. See Appellant’s Brief, at 2.
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Petitions to strike or open judgment by confession are governed by
Pennsylvania Rules of Civil Procedure 2959 and 2960.
Relief from a judgment by confession shall be sought by petition.
Except as provided in subparagraph (2), all grounds for relief
whether to strike off the judgment or to open it must be
asserted in a single petition.
Pa.R.C.P. 2959(a)(1) (emphasis added); see also Pa.R.C.P. 2959(a)(2)
(permitting a further, limited request for a stay of execution on due process
grounds); Pa.R.C.P. 2959(c) (“A party waives all defenses and objections
which are not included in the petition or answer.”); Pa.R.C.P. 2960 (limiting
the scope of proceedings upon opening of judgment).
Appellant does not dispute the plain language of Rule 2959. Rather,
Appellant maintains that there are meritorious defenses to the Bank’s
complaint and that the absence of either factual allegations or defenses in its
petition was merely an “administrative oversight,” easily cured through
amendment. Appellant’s Brief, at 9. Appellant suggests its error became
apparent at the outset of the hearing, prior to any determination by the trial
court, notes the liberal policy of amendment that prevails in Pennsylvania,
and argues that the Bank would have suffered no prejudice if Appellant had
been permitted to amend. Id. at 11-12 (citing, inter alia, Pa.R.C.P. 126).
Thus, Appellant concludes, the trial court erred.
In contrast, the Bank contends that no amendment is permitted under
the rules. The Bank notes that a party waives all defenses and objections
that are not included in the petition, citing in support Pa.R.C.P. 2959(c), and
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asserts that Pennsylvania courts have consistently applied our procedural
rules to prohibit defendants from amending petitions to strike or open.
For its part, the trial court concluded that Appellant’s petition could not
be amended. In its opinion, the court stated it could not “ignor[e] the clear
and unambiguous language of the [r]ules of [c]ourt.” Trial Court Opinion
(TCO), May 14, 2014, at 5. The court offered no precedent in support of its
decision, rejected Appellant’s plea to the equitable powers of the court, and
found irrelevant the question whether amendment would prejudice the Bank.
Id. at 6.
To the extent the trial court determined it was powerless to permit
amendment, we disagree. The language employed in Rule 2959 is not
unlike that found in Rule 1028 governing preliminary objections. That Rule
states, in relevant part:
All preliminary objections shall be raised at one time. They shall
state specifically the grounds relied upon and may be
inconsistent. Two or more preliminary objections may be raised
in one pleading.
Pa.R.C.P. 1028(b) (emphasis added); see also Pa.R.C.P. 1032(a) (providing
that objections not properly raised by preliminary objection are waived).
The purpose of the requirement that a party raise all objections at one
time is “to reduce the number of dilatory steps [available to a party] … and
thus expedite the reasonable disposition of the litigation.” Yentzer v.
Taylor Wine Co., 186 A.2d 396, 398 (Pa. 1962); see also Wagner v.
Wagner, 768 A.2d 1112, 1120 n.3 (Pa. 2001); Bowman v. Meadow
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Ridge, Inc., 615 A.2d 755, 757 (Pa. Super. 1992). The single-petition
requirement in Rule 2959 fulfills the same purpose. See generally
Pa.R.C.P. 206.1 (Explanatory Comment – 2013).
However, this Court has previously permitted amendment of
preliminary objections. See Bowman, 615 A.2d at 757 (declining to find
the trial court erred in ruling on amended preliminary objections, despite
failure to secure the consent of the adverse party or leave court, where no
action had been taken on the original preliminary objections and the
amended motion did not delay the proceedings); see also Dep’t of Transp.
v. Schodde, 433 A.2d 143, 145 (Pa. Cmwlth. 1981) (“[A] court has the
discretion to allow an amendment of preliminary objections in the absence of
an error of law or prejudice to the adverse party.”).
More generally, the purpose of our procedural rules is to facilitate the
administration of justice, and our courts should apply them with that
purpose in mind.
The rules shall be liberally construed to secure the just, speedy
and inexpensive determination of every action or proceeding to
which they are applicable. The court at every stage of any such
action or proceeding may disregard any error or defect of
procedure which does not affect the substantial rights of the
parties.
Pa.R.C.P. 126; see also In re Larsen, 812 A.2d 640, 650 (Pa. 2002)
(“Pennsylvania law is well-settled that procedural rules are not ends in
themselves, and are not to be exalted to the status of substantive
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objectives.”) (citing McKay v. Beatty, 35 A.2d 264, 275 (Pa. 1944));
Yentzer v. Taylor Wine Co., 186 A.2d 396, 398 (Pa. 1962).
Finally, we conclude that the appellate decisions cited by the Bank are
distinguishable from the matter currently before this Court. See, e.g.,
Davis v. Woxall Hotel, Inc., 577 A.2d 636, 638-39 (Pa. Super. 1990)
(declining to address a defense raised on appeal, but not pleaded in
appellant’s petition to open or strike); C-Rich Co. v. Davis, 556 A.2d 413,
417-18 (Pa. 1989) (quashing as interlocutory an appeal from an order
denying Appellant’s motion to amend its petition to open or strike); Mellon
Bank v. Rafsky, 535 A.2d 1090, 1091-94 (Pa. Super. 1987) (affirming the
trial court’s finding of waiver where petitioner in a related matter raised
additional grounds to open a confessed judgment “during the course of the
hearing,” testimony was adduced over several days, and no motion to
amend was considered); J. M. Korn & Son, Inc. v. Fleet-Air Corp, 446
A.2d 945, 947 (Pa. Super. 1982) (reversing the trial court’s decision
granting leave to amend “after judgment had been opened”) (emphasis
added). None of these cases addresses precisely a petitioner’s motion to
amend prior to the adjudication of the original petition, and we are aware of
no appellate decision that does so.
Accordingly, we hold that no strict prohibition of amendments is
warranted. In our view, the decision whether to permit a petitioner to
amend a petition to open or strike a confessed judgment, presented prior to
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adjudication of the merits of the original petition, is best left to the discretion
of the trial court. In exercising this discretion, a trial court should examine
the proposed amendments and consider whether amendment will unduly
prejudice the opposing party. See, e.g., Horowitz v. Universal
Underwriters Ins., 580 A.2d 395, 398-400 (Pa. Super. 1990) (discussing
undue prejudice).
That does not end our analysis, however, for we may affirm the trial
court on any ground. See, e.g., Commonwealth v. Price, 876 A.2d 988,
994 (Pa. Super. 2005). It is not clear from the record when the trial court
considered the substance of Appellant’s proposed amendments. There is no
transcript of the argument, and Appellant did not submit written, proposed
amendments until July 18, 2013, nearly a week after the court denied its
initial petition.2 Nevertheless, it is clear that the court considered and
rejected them. See TCO, at 7-9 (concluding that Appellant’s allegations of
conspiracy and fraud were of questionable relevance, devoid of merit, and,
at least in part, previously rejected by the court in a different case). We
have reviewed the content of Appellant’s allegations and agree with the trial
court. Accordingly, we discern no abuse of the court’s discretion in denying
Appellant’s motion to amend its petition.
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2
Appellant attached its proposed amendments to its motion for
reconsideration.
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Appellant also contends that the Court should have granted its motion
for reconsideration. “Pennsylvania case law is absolutely clear that the
refusal of a trial court to reconsider, rehear, or permit reargument of a final
decree is not reviewable on appeal.” Provident Nat’l Bank v. Rooklin,
378 A.2d 893, 897 (Pa. Super. 1977) (citing McCready v. Gans, 89 A. 459(Pa. 1913)). Accordingly, the issue is not properly before this Court.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/31/2014
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