Castings Condominium Ass'n, Inc. v. Klein

• Decision Date: 08 August 1995
• Citation: 444 Pa.Super. 68,663 A.2d 220
• Parties: CASTINGS CONDOMINIUM ASSOCIATION, INC., Appellee v. Florence R. KLEIN, Individually; Master Craftsman Associates (a Pennsylvania Limited Partnership); American Classic Development Company (a Pennsylvania Limited Partnership); American Classic Management Company; David Beck, d/b/a David Beck Architects; Meyer Kligerman Corporation; Mellon Bank; Meridian Bank; First Trust Savings Bank; Beneficial Savings Bank; Corestates Bank; PNC Bank; Fidelity Bank; Marian Bank; Jefferson Bank; Germantown Savings; United Bank. Appeal of Florence R. KLEIN.
• Court: Pennsylvania Superior Court

Page 220

663 A.2d 220

444 Pa.Super. 68

CASTINGS CONDOMINIUM ASSOCIATION, INC., Appellee v. Florence R. KLEIN, Individually; Master Craftsman Associates (a Pennsylvania Limited Partnership); American Classic Development Company (a Pennsylvania Limited Partnership); American Classic Management Company; David Beck, d/b/a David Beck Architects; Meyer Kligerman Corporation; Mellon Bank; Meridian Bank; First Trust Savings Bank; Beneficial Savings Bank; Corestates Bank PNC Bank; Fidelity Bank; Marian Bank; Jefferson Bank Germantown Savings; United Bank Appeal of Florence R. KLEIN.

Superior Court of Pennsylvania.

Submitted June 28, 1995.

Filed Aug. 8, 1995.

Andrew L. Miller, Philadelphia, for appellant.

Glenn M. Ross, Philadelphia, for appellee.

Before ROWLEY, President Judge, and HUDOCK and CERCONE, JJ.

HUDOCK, Judge:

Florence R. Klein appeals from the order which denied her petition to strike or open a default judgment. We affirm.

This case commenced on October 7, 1993 when Castings Condominium Association, Inc. (Castings) filed a complaint alleging that Florence Klein, Master Craftsman Associates, American Classic Development Company and American Classic Management Company were liable for inter alia, breach of contract, breach of fiduciary duty and fraud. Florence Klein, in her individual capacity and as general and limited partner of Master Craftsman Associates and American Classic Development Company and as chief executive officer of American Classic Management Company entered a contract with Castings for the construction and management of condominium properties in Philadelphia. Castings alleged that the named defendants breached the public offering statement made in connection with the sale of the condominiums by misrepresenting the condition of the property. Castings complained that the roof and windows of the condominiums were defective and in need of repair. Castings also alleged a breach of the management agreement, misrepresentation, misappropriation of funds, failure to perform fiduciary duties, and fraud.

On October 20, 1993, Klein was personally served with the complaint in her individual capacity and as general partner of Master Craftsman and American Classic Development Company. Klein forwarded a copy of the complaint to her attorney, E. Harris Baum. Baum, however, did not file an answer to Castings' complaint within the required twenty days. See Pa.R.C.P. 1026(a), 42 Pa.C.S.A. On November 12, 1993, Castings sent a notice of intent to enter a default judgment to Klein personally and to Klein's attorney, Baum. In response to this notice, Baum sent a letter to Castings' counsel, Glenn M. Ross, which stated:

I have received, on behalf of Florence Klein, a 10 day Notice of Judgment regarding the above-captioned matter. Master Craftsman is represented by Steven Angstreich, Esquire who has already been in touch with you and advised you that the claim is amply covered by insurance. I have advised Florence Klein to turn this over to her carriers and will assume that you will not file Judgment at this time. It will be a waste of everyone's money and time to litigate this issue when, in fact, it is covered by insurance.

If I do not hear from you, I will assume that you proceeded to discuss this matter with Zurick, CNA, U.S. Underwriters and National Union.

Letter dated 11/16/93.

On January 21, 1994, Baum entered his appearance for Klein and filed an answer to the cross-claim filed by Master Craftsman Associates. On August 5, 1994, Castings filed a praecipe for default judgment against Klein, American Classic Development Company and American Classic Management Company. The trial court granted Castings' petition and entered a default judgment. Klein subsequently obtained new counsel who filed a petition to open or strike the default judgment on November 2, 1994. On December 30, 1994, the trial court permitted Baum to withdraw as counsel of record for Klein since Klein had failed to pay Baum for his legal services. The trial court denied Klein's petition to open or strike the default judgment on January 3, 1995. Klein then perfected the instant appeal in which she argues that the trial court erred by denying her petition to open or strike the default judgment.

A petition to open a default judgment is addressed to the equitable powers of the court and the trial court has discretion to grant or deny such petition. Fink v. General Accident Insurance Company, 406 Pa.Super. 294, 296-98, 594 A.2d 345, 346 (1991). The party seeking to open the default judgment must establish three elements: (1) the petition to open or strike was promptly filed; (2) the default can be reasonably explained or excused; and (3) there is a meritorious defense to the underlying claim. Id. The court's refusal to open a default judgment will not be reversed on appeal unless the trial court abused its discretion or committed an error of law. Alba v. Urology Associates of Kingston, 409 Pa.Super. 406, 407-10, 598 A.2d 57, 58 (1991). "An abuse of discretion is not merely an error in judgment; rather it occurs when the law is overridden or misapplied, or when the judgment exercised is manifestly unreasonable or the result of partiality, prejudice, bias or ill-will." Pilon v. Bally Engineering Structures, 435 Pa.Super. 227, 233, 645 A.2d 282, 285 (1994), alloc. den.,539 Pa. 680, 652 A.2d 1325. Moreover, this Court must determine whether there are equitable considerations which weigh in favor of opening the default judgment and allowing the defendant to defend the case on the merits. Duckson v. Wee Wheelers, Inc., 423 Pa.Super. 251, 253-55, 620 A.2d 1206, 1208 (1993). "[W]here the equities warrant opening a default judgment, this Court will not hesitate to find an abuse of discretion." Id., 423 Pa.Super. 256, 620 A.2d at 1209.

The trial court found that Klein failed to establish all three criteria needed to open a default judgment. We will examine each factor independently.

The timeliness of a petition to open judgment is measured from the date that notice of the entry of the default judgment is received. Alba v. Urology Associates of Kingston, 409 Pa.Super. 409, 598 A.2d at 58. The law does not establish a specific time period within which a petition to open a judgment must be filed to qualify as timely. Instead, the court must consider the length of time between discovery of the entry of the default judgment and the reason for delay. Quatrochi v. Gaiters, 251 Pa.Super. 115, 120-22, 380 A.2d 404, 407 (1977).

In the present case the trial court entered the default judgment on August 5, 1994. The petition to open or strike the judgment was not filed until November 2, 1994. In previous decisions of this Court, we have held that periods of less than three months between notice of the entry of judgment and filing a petition to open were not prompt. See Pappas v. Stefan, 451 Pa. 354, 304 A.2d 143 (1973) (fifty-five days); Quatrochi v. Gaiters, supra (sixty-three days); Schutte v. Valley Bargain Center, Inc., 248 Pa.Super. 532, 375 A.2d 368 (1977) (forty-seven days). In McCoy v. Public Acceptance Corporation, 451 Pa. 495, 305 A.2d 698 (1973), our Supreme Court found that a period of two and one-half weeks was not prompt. Id., 305 A.2d at 700. In cases where we found a "prompt" and timely filing of the petition to open a default judgment, the period of delay was normally less than one month. See Fink v. General Accident Insurance Company, supra, at 406 Pa.Super. 294, 594 A.2d 345 (period of five days is timely); Duckson v. Wee Wheelers, Inc., supra, at 423 Pa.Super. 251, 620 A.2d 1206 (one day is timely); Alba v. Urology Associates of Kingston, supra, at 409 Pa.Super. 256, 620 A.2d 1209 (fourteen days is timely). Based on these previous opinions, we find support for the trial court's decision that a delay of three months does not constitute a prompt filing, therefore, we cannot conclude that the trial court abused its discretion.

Klein claims that she did not learn that Baum refused to file a petition to open the default judgment until October 13, 1994. Therefore, she claims that there was a delay of only two weeks until the petition to open judgment was filed by her new counsel.

We reject this argument since the record reveals that Baum notified Klein as early as August 30, 1994 that he would no longer represent her unless she paid his overdue legal fees. Baum repeatedly informed Klein that he would not continue to represent her until she paid the sizable outstanding balance owed to his law firm. Therefore, Klein cannot complain that she was unaware that Baum would not file a petition to open judgment until October 13, 1994.

The second requirement before opening a default judgment is that the default can be reasonably explained or excused. "Whether an excuse is legitimate is not easily answered and depends upon the specific circumstances of the case." Duckson, 258, 620 A.2d at 1210.

Klein contends that the failure to answer Castings' complaint was "totally excusable" because Castings' counsel agreed to notify Attorney Baum prior to filing a praecipe for entry of default judgment. Klein contends that Baum's letter dated November 16, 1993, see infra, in which he "assumed" that Castings' counsel would not seek a default judgment, established a common understanding between the parties that Castings would not seek the entry of a default judgment. This "assumption" by Attorney Baum, however, was unwarranted since Castings' counsel never affirmatively responded to Baum's letter. There was no enforceable agreement between the parties since counsel for Castings did not confirm, either orally or in writing, that he would not praecipe for a default judgment. Klein cannot rely on the November 16, 1993 letter as an enforceable contract between the parties since there was no "meeting of the...