Allied Building Prods. v. Delco Roofing Co.

• Decision Date: 17 July 1996
• Docket Number: Civil Action No. 96-1703.
• Parties: ALLIED BUILDING PRODUCTS CORPORATION v. DELCO ROOFING COMPANY, INC.
• Court: U.S. District Court — Eastern District of Pennsylvania

951 F.Supp. 1183

ALLIED BUILDING PRODUCTS CORPORATION v. DELCO ROOFING COMPANY, INC.

Civil Action No. 96-1703.

United States District Court, E.D. Pennsylvania.

July 17, 1996.

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Richard H. Lowe, Jacoby, Donner & Jacoby, P.C., Philadelphia, PA, for plaintiff Allied Building Products Corp.

Vincent P. Di Fabio, Paoli, PA, for defendant Delco Roofing Co., Inc.

MEMORANDUM

PADOVA, District Judge.

Plaintiff, Allied Building Products Corporation ("Allied"), filed a Complaint in Confession of Judgment for Money, and the Court entered judgment. The Court now considers the Motion of Defendant, Delco Roofing Company, Inc. ("Delco"), to Open And/Or Strike the Judgment Entered by Confession¹ and a Motion to Stay Proceedings to Enforce the Judgment. For the following reasons, the Court will deny the Petition to Strike the Judgment, defer ruling on Delco's Petition to Open the Judgment, and grant the Motion to Stay Proceedings to Enforce the Judgment.

I. FACTUAL ALLEGATIONS AND PROCEDURAL HISTORY

On March 5, 1996, Allied filed a Confession of Judgment for Money ("Complaint") in this Court. The Complaint alleges that on February 10, 1994, Delco sought credit from Allied. Delco, through Peter T. Finegan, the company president, signed a "CREDIT APPLICATION AND AGREEMENT" ("Credit Agreement") which contains a warrant of attorney provision stating:

WHENEVER MY/OUR FIRM FAILS TO MAKE PAYMENTS WHEN DUE, THE UNDERSIGNED HEREBY AUTHORIZE AND EMPOWER THE PROTHONOTARY, CLERK OF COURT OR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR AND CONFESS JUDGMENT AGAINST THE UNDERSIGNED INDIVIDUAL(S) ANY MY/OUR FIRM IN FAVOR OF ALLIED BUILDING PROD. CORP. ("ALLIED"), ITS SUCCESSORS OR ASSIGNS, FOR THE SUM OF MONEY WHICH MAY BE DUE TO ALLIED AS OF ANY TERM, WITH OR WITHOUT DEFALCATION FILED, WITH INTEREST AND COSTS, AND WITH COSTS ADDED FOR COLLECTION OF FEES, COURT COSTS, ATTORNEY FEES AND RELEASE OF ALL ERRORS; AND STAY OF EXECUTION UPON ANY LEVY ON REAL ESTATE IS HEREBY WAIVED AND CONDEMNATION AGREED TO.

Pl.'s Compl. Ex. A. According to Allied, Delco defaulted on the obligation outlined in the Credit Agreement by failing to make payment in the amount of $361,298.79.

By Order dated March 13, 1996, this Court entered Judgment in favor of Allied against Delco for $361,298.79 ("Judgment"). Entry of the Judgment prompted the filing of several motions. Specifically, Delco filed its Petition to Open, Petition to Strike, and Motion to Stay the Proceedings to Enforce the Judgment on March 14, 1996. On June 20, 1996, Delco also filed a Motion to Conduct Depositions and Other Discovery in Support of Defendant's Motion to Open And/Or Strike the Judgment, which the Court granted by Order dated June 21, 1996.

II. DISCUSSION

A. OPENING AND STRIKING GENERALLY

Pennsylvania Rule of Civil Procedure 2959 provides relief for a defendant against whom a judgment has been confessed:

Striking Off or Opening Judgment; Pleadings; Procedure (a) Relief from a judgment by confession shall be sought by petition. All grounds for relief, whether to strike off the judgment or to open it, must be asserted in a single petition. The petition may be filed in the county in which the judgment was originally entered, in any county to which the judgment has been transferred or in any other county in which the sheriff has received a writ of execution directed to him to enforce the judgment.

(b) If the petition states prima facie grounds for relief, the court shall issue a rule to show cause and may grant a stay of proceedings. After being served with a copy of the petition the plaintiff shall file an answer on or before the return day of the rule. The return day of the rule shall be fixed by the court by local rule or special order.

(c) A party waives all defenses and objections which he does not include in his petition or answer.

* * * * * *

(e) The court shall dispose of the rule on petition and answer and on any testimony, depositions, admissions and other evidence. The court for cause shown may stay proceedings on the petition insofar as it seeks to open the judgment pending disposition of the application to strike off the judgment. If evidence is produced which in a jury trial would require the issues to be submitted to the jury the court can open the judgment.

Pa.R.Civ.P. 2959.

"Matters raised by a petition to strike or open are limited to the validity and correctness of the judgment in issue." 7 Goodrich Amram 2d § 2959(a):1. "A petition to strike and a petition to open are two forms of relief with separate remedies; each is intended to relieve a different type of defect in the confession of judgment proceedings." Manor Bldg. Corp. v. Manor Complex Associates, 435 Pa.Super. 246, 645 A.2d 843, 845 n. 2 (1994). A petition to strike off the judgment "reaches defects apparent on the face of the record, while a petition to open the judgment offers to show that the defendant can prove a defense to all or part of the plaintiff's claim." 7 Goodrich Amram 2d § 2959(a):2.

B. PETITION TO STRIKE

A petition to strike "operates as a demurrer to the record and will only be granted if a fatal defect or irregularity appears on the face of the record or judgment. The defect ... must be alleged in the application." Manor Bldg. Corp., 645 A.2d at 846. Defects sufficient to justify striking a judgment occur when the judgment entered "is for a grossly excessive amount or includes recovery for items that were not permitted in the contract authorizing confession of judgment. In such cases, the defect in the judgment is easily ascertained on the face of the record by examining the confession of judgment clause in the contract." J.F. Realty Co. v. Yerkes, 263 Pa.Super. 436, 398 A.2d 215, 216 (1979). "When the petition is one to strike, the facts averred in the affidavit of default are to be taken as true and if the truth of the factual averments are disputed, the remedy is by a proceeding to open the judgment and not to strike." Id. 398 A.2d at 217.

Delco bases its Petition to Strike on two grounds. First, it argues that the Credit Agreement contained neither a specific term nor a condition articulating the proper time when Delco's payments were due and owing. Delco points to the Credit Agreement's language: "whenever my/our firm fails to make payments when due." Pl.'s Compl. Ex. A. Delco contends that the Court should strictly construe the warrant of attorney provision allowing confession of judgment and resolve any ambiguities against the party in whose favor the warrant is given.

1. The Complaint

Pennsylvania Rule of Civil Procedure 2952 delineates the applicable guidelines for filing a complaint in confession of judgment, all of which Allied has satisfied.² The Complaint includes a "Certification of Addresses," an "Affidavit of Addresses," and a photostatic copy of the Credit Agreement and accompanying credit application showing Peter Finegan's signature. See Pl.'s Compl. Exs. B, A (respectively). The Complaint contains no statement of any assignment and attests that judgment has not been entered on the Credit Agreement in any jurisdiction.

Allied also attached the "Averment of Default" by Jerry Manna, Allied's Assistant Corporate Credit Manager, averring that Delco defaulted on its obligations. The Complaint maintains that Allied is entitled to the entry of judgment "calculated in the principal amount of $361,298.79." Compl. at ¶ 10. While Allied did not itemize this amount, the Complaint demands neither attorneys' fees nor interest. Allied bases the demanded sum entirely on matters outside the Credit Agreement, specifically a computer printout of Delco's account affixed to the Complaint which shows an opening debit balance of $0.00 and a closing debit balance of $361,298.79.

With regard to signature and verification, Pa.R.Civ.P. 1024 requires that "[e]very pleading containing an averment of fact not appearing of record in the action ... shall state that the averment ... is true upon the signer's personal knowledge or information and belief shall be verified.... The verification shall be made by one or more of the parties filing the pleading." Pa.R.Civ.P. 1024(a), (c), 42 Pa.Cons.Stat.Ann. (West 1987).

While the Complaint does not per se contain a "Verification," Allied provided sufficient accompanying submissions with the Complaint to satisfy the relevant verification and signature requirements. The Complaint was signed by Allied's attorney. Allied attached Jerry Manna's (1) "Affidavit of Business Transaction," (2) "Affidavit of Addresses," (3) an affidavit that the Credit Agreement is not a retail sales agreement or contract, and (4) "Averment of Default." Pl.'s Compl. Ex. B.

Finally, Allied affixed an accompanying document signed by its attorney entitled "Confession of Judgment for Money" where the attorney states "[p]ursuant to the authority contained in the Warrant of Attorney ... I appear for defendant Delco Roofing Co., Inc., confess judgment and assess damages in favor of plaintiff against defendant ... in the principal amount of $361,298.79." Pl.'s Compl. Ex. A. See George H. Althof, Inc. v. Spartan Inns of America, Inc., 295 Pa.Super. 287, 441 A.2d 1236, 1238 (1982) (declining petition to strike and warning against the use of verification as "an offensive weapon designed to strike down an otherwise valid petition") (citation omitted). Moreover, Delco's Petition to Strike alleges neither inadequate compliance with signature and verification requirements nor any resulting prejudice from such, if any, noncompliance. See id. (noting "in the instant case there is no averment of prejudice to Appellees resulting from defective verification").

2. Warrant of Attorney Clause

Delco recites the appropriate standard with regard to warrant of attorney provisions. Courts must enter a judgment by confession "in rigid adherence to the provisions of the warrant of attorney; otherwise such judgment will be stricken. A...