Schall v. Joyce
| Citation | 885 F.2d 101 |
| Decision Date | 06 December 1988 |
| Docket Number | No. 88-3512,88-3512 |
| Parties | Theresa SCHALL, on behalf of herself and all others similarly situated, Appellant, v. John P. JOYCE, Prothonotary of Allegheny County, Pennsylvania, in his Official Capacity, Eugene Coon, Sheriff of Allegheny County, Pennsylvania, in his Official Capacity, and National Builders and Acceptance Corporation v. Chief Justice Robert N.C. NIX, and Justices of the Supreme Court of Pennsylvania, Rolf Larsen, John P. Flaherty, James T. McDermott, Stephen A. Zappala, Nicholas P. Papadakos, Juanita Kidd Stout, and Nancy Sobolevitch, Administrator of the Supreme Court of Pennsylvania, and Charles Starrett, Administrator of the Common Pleas Court of Allegheny Co., Pa., Third Party Defendants. . Submitted Pursuant to Rule 12(6) |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Catherine T. Martin, M. Thomas Murray, Neighborhood Legal Services Ass'n, Pittsburgh, Pa., for appellant.
Martin M. Scoratow, Scoratow & Dudik, Pittsburgh, Pa., for Nat. Builders & Acceptance Corp.
James R. Fitzgerald, Pittsburgh, Pa., for John P. Joyce Prothonotary of Allegheny County, Pa.
Norman Paul Wolken, Pittsburgh, Pa., for Eugene L. Coon.
Howard M. Holmes, Charles W. Johns, Administrative Office of Pennsylvania Courts, Philadelphia, Pa., for Nix, Larsen, Flaherty, McDermott, Zappala, Papadakos, Stout Sobolevitch and Starrett.
Before SLOVITER, BECKER, Circuit Judges, and BARRY, * District Judge.
The plaintiff in this case, Theresa Schall, brought suit in federal district court to challenge the constitutionality of Pennsylvania's confession of judgment procedures and to have a judgment entered against her in state court by confession marked satisfied. The district court stayed consideration of the suit pending resolution of proceedings instituted by Schall in state court to set aside the judgment. The district court's terse opinion did not explain which of the several federal abstention doctrines justified a stay. This appeal presents two principal questions. First, is the district court's stay order appealable under 28 U.S.C. Sec. 1291 (1982)? Under the authority of Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), we hold that it is. Second, should the district court's order be affirmed under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and its progeny? Under the authority of Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987), we hold that it should.
On February 25, 1988, Schall filed a complaint in the district court for the Western District of Pennsylvania. Named as defendants were John P. Joyce, the Prothonotary of Allegheny County; Eugene L. Coon, the Sheriff of Allegheny County; and National Builders and Acceptance Corporation [hereinafter "NBAC"], a mortgage company. The complaint alleges that Schall purchased a home in 1968, that it was titled solely in her name, and that she first learned that NBAC had a mortgage against her home in 1981 from a lawyer preparing her will. The complaint further alleges that Schall called NBAC to learn about the details of this mortgage and was told that the mortgage had been taken in 1980 to secure a business loan given to her husband, from whom she has been separated since January 1, 1979. Additionally, the complaint alleges that Schall has never had any connection with her husband's business, that she never received any of the loan proceeds, never made any loan payments and repeatedly told NBAC that she never signed the mortgage, and that what purports to be her signature on the mortgage is a forgery.
The complaint also alleges that on February 6, 1984, NBAC entered a $21,699.12 judgment by confession against Schall in the Allegheny County Court of Common Pleas on a $100,000 note executed simultaneously with the mortgage, and that on December 3, 1987, NBAC filed with the Allegheny County Prothonotary's office a praecipe for writ of execution on the confessed judgment. The complaint goes on to aver that Schall never signed the note, although, as with the mortgage, a signature purporting to be hers appears on it, witnessed by her husband. According to the complaint, the Prothonotary's office issued the writ, and the Allegheny County Sheriff's office, pursuant to the writ, listed her house for Sheriff's sale on March 7, 1988 to permit NBAC to collect on the confessed judgment. Finally, the complaint alleges that, having never received notice of the entry of the confession of judgment, Schall first learned of its existence when the Sheriff served her notice that her house was listed for sale in execution of the judgment.
Against all defendants, the complaint asserts a claim under 42 U.S.C. Sec. 1983 (1982) for violation of the fourteenth amendment of the United States Constitution. Against NBAC only, the complaint asserts claims under the Truth in Lending Act, Pub.L. No. 90-321, 82 Stat. 146 (1968) (); under Pa.Stat.Ann. tit. 41, Sec. 407 (Purdon Supp.1989); and under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, Pa.Stat.Ann. tit. 73, Secs. 201-1 to 201-9.2 (Purdon Supp.1989). The requested relief includes a declaratory judgment that the defendants had violated the laws under which Schall asserted claims; rescission of the alleged transactions between Schall and NBAC; an order that the NBAC mortgage recorded against Schall's property and the confessed judgment against her be marked satisfied; monetary relief; costs and attorneys' fees; and an injunction enjoining defendants from entering confessed judgments in violation of due process. In addition, Schall requested that the district court certify her challenge to the statutory confession of judgment procedure as a class action brought on behalf of herself and all Pennsylvania residents who have had or may have judgments by confession entered against them.
Schall requested a temporary restraining order to prevent the Sheriff's sale of her home. On February 26, 1988, the district court held a hearing on the TRO request and directed Schall to go to state court to seek a stay of the Sheriff's sale and to try to open or strike the confessed judgment entered against her by NBAC in that forum. Schall thereupon filed a petition in the Allegheny County Court of Common Pleas to open or strike the confessed judgment; on March 1, 1988, the state court stayed the execution of the judgment. Schall's petition purported to limit the scope of the state court suit to eliminating the judgment against her so as to allow her to proceed with her federal claims in federal court; only Schall and NBAC were parties in the state court action. On March 3, 1988, the district court denied Schall's TRO motion in light of the state court stay.
Defendant Joyce then filed a third-party complaint against each Justice of the Pennsylvania Supreme Court, on the theory that they had promulgated the procedural rules challenged by Schall, and against Nancy M. Sobolevitch, the Administrator of the Pennsylvania Supreme Court, and Charles Starrett, the Administrator of the Common Pleas Court of Allegheny County, on the theory that they are the designated parties under the law to be notified of the unconstitutionality of those rules. The third party defendants, Joyce, and NBAC each filed a motion to dismiss. On May 13, 1988, Schall formally moved for class certification.
On June 28, 1988, the district court issued the stay order which Schall has appealed. The order recited the brief procedural history of the litigation and noted that the rule to show cause why the confessed judgment should not be opened or stricken before the Court of Common Pleas was still pending. After its recitation of procedural history, the district court stated the following:
After consideration of the motion for class certification, and the briefs of defendants filed in opposition thereto, the court concludes that all proceedings in the federal court action should be stayed pending resolution of the state court action.
It is, accordingly, ORDERED that all proceedings in the above-captioned action be, and hereby are, stayed pending the resolution of the state court action at docket number GD 84-2077 [] in the Court of Common Pleas of Allegheny County, Pennsylvania.
Dist. Ct. Order at 2-3 (June 28, 1988). The district court did not explain why its stay pending resolution of the state court action was appropriate. While this appeal was pending, on June 8, 1989, the Court of Common Pleas opened the judgment that had been entered against Schall. We consider the consequences of this action in Part III infra.
Title 28 U.S.C. Sec. 1291 (1982) provides that courts of appeals may review only "final" decisions of the district courts. A party generally may not take an appeal under section 1291 until there has been a decision by the district court that " 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' " Van Cauwenberghe v. Biard, 486 U.S. 517, 108 S.Ct. 1945, 1949, 100 L.Ed.2d 517 (1988) (citation omitted). This general rule would suggest that the district court's stay order is not an appealable final order because it stays rather than terminates the suit.
In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), however, the Supreme Court held that, notwithstanding this general rule, a district court stay order grounded on the pendency of similar litigation in state court may be appealable under section...
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Chief Judge Edward R. Becker: a truly remarkable judge.
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