Continental Bank v. Andrew Bldg. Co.

• Decision Date: 21 September 1994
• Citation: 436 Pa.Super. 559,648 A.2d 551
• Parties: CONTINENTAL BANK v. ANDREW BUILDING COMPANY, Chester County Industrial Development Authority Appeal of ANDREW BUILDING COMPANY.
• Court: Pennsylvania Superior Court

Page 551

648 A.2d 551

436 Pa.Super. 559

CONTINENTAL BANK v. ANDREW BUILDING COMPANY, Chester County Industrial

Development Authority

Appeal of ANDREW BUILDING COMPANY.

Superior Court of Pennsylvania.

Argued May 25, 1994.

Filed Sept. 21, 1994.

W. Mark Mullineaux, Wayne, for appellant.

Mark S. Kenney, Philadelphia, for Continental Bank, appellee.

Before CAVANAUGH, CIRILLO and BROSKY, JJ.

CIRILLO, Judge:

Appellant Andrew Building Company ("Andrew") appeals from an order of the Court of Common Pleas of Chester County granting Appellee Continental Bank's ("Continental") preliminary objections to Andrew's new matter and counterclaim to Continental's complaint in mortgage foreclosure. For the reasons stated below, we quash this appeal.

In 1979, Continental entered into a loan agreement (the "1979 loan") with the Chester County Industrial Development Authority ("CCIDA"), whereby Continental loaned CCIDA the sum of $8.4 million. This loan was secured by a note and a mortgage on approximately 123 acres of land (the "Premises") in Chester County. At the same time that this loan agreement was made, CCIDA entered into an Installment Sales Agreement with Andrew, in which CCIDA agreed to sell Andrew the Premises and Andrew promised to make monthly payments to CCIDA of an amount equal to the monthly mortgage payments owed by CCIDA to Continental. Andrew and CCIDA agreed that Andrew would pay the requisite amount to Continental directly. ¹

In addition, Unlimited Suretyship Agreements ("guaranties") were executed in conjunction with each loan, whereby Andrew became an absolute and unconditional surety. While CCIDA and Andrew are "real owners" of the Premises, CCIDA is the legal owner, and Andrew is the equitable owner and terre-tenant ² of the Premises. ³

In early 1991, Andrew allegedly requested that Continental approve a contract for the sale of a section of the undeveloped portion of the Premises to a developer for $4.8 million (the "Fanning Agreement"). However, Continental never replied. Later, when Andrew anticipated financial difficulty and further requested that Continental establish a "release price" for the commercial portion of the Premises, Continental advised Andrew that it would obtain two appraisals. However, these appraisals were not submitted in time for Andrew to hold its auction on October 15, 1991; Andrew alleges, therefore, that it was forced to cease payments under the Installment Sales Agreement.

As a result of Andrew's failure to make payments, CCIDA defaulted on the loans and the mortgages. Continental made a demand on CCIDA and Andrew for the full balance due under the loans but no payments were made. Thereafter, Continental instituted two confession of judgment actions in the Court of Common Pleas of Chester County; one against CCIDA on both of its promissory notes, and another against Andrew on both of its guaranties. Andrew petitioned to strike or open the judgments and obtained a stay thereon. Continental then initiated a separate mortgage foreclosure action which is the subject of this appeal.

In response to the complaint in mortgage foreclosure, Andrew filed preliminary objections in which it asserted that Continental was barred from bringing its mortgage foreclosure action because the mortgage, note, and guaranties were merged into the confessed judgments and, therefore, stayed. Judge Sugerman overruled Andrew's preliminary objections, finding that the mortgage foreclosure action was in rem, whereas the confessed judgments were in personam, and, thus, by law, they could not merge and the stay on the confessed judgments did not bar the mortgage foreclosure action.

Thereafter, in its answer to Continental's complaint, Andrew included new matter and a counterclaim. Andrew alleged therein that Continental's claim against Andrew should be eliminated by way of set-off and/or recoupment to reflect damages owed by Continental to Andrew for Continental's: 1) refusal to establish a release price for the commercial portion of the Premises; 2) failure to authorize a sale price for the undeveloped portion of the Premises; 3) use of confidential information regarding Andrew's financial situation for its own gain; and 4) negligent and fraudulent misrepresentation that it would provide a release price.

Continental filed preliminary objections to Andrew's new matter and counterclaim. An order was entered on April 15, 1993 by Judge Sugerman sustaining Continental's preliminary objections to Andrew's new matter and counterclaim and striking Andrew's new matter and counterclaim with prejudice. Andrew appealed to this court from that order. ⁴

As an appellate court, we may, sua sponte, determine whether an appeal is properly before this court. Edmonds v. Western Pa. Hosp. Radiology Assoc., 414 Pa.Super. 567, 571, 607 A.2d 1083, 1085 (1992) (citing Gatten v. Merzi, 397 Pa.Super. 148, 579 A.2d 974 (1990) (per curiam)). On May 6, 1992, the Pennsylvania Supreme Court amended Rules 311, 341, and 1311 and approved Rule 313 of the Pennsylvania Rules of Appellate Procedure. Although, initially, these amended and newly adopted rules were to govern all actions which commenced after July 6, 1992, on January 10, 1994, the Supreme Court of Pennsylvania entered another order establishing that the new and amended rules would also to apply to all orders entered on or after March 1, 1994, regardless of the underlying action's commencement date.

The commencement date of the instant action is July 15, 1992, the date on which Continental filed its complaint in mortgage foreclosure. Pa.R.C.P. 1007. The order from which Andrew is appealing was entered on April 15, 1993. Notwithstanding the entry date of the order, the July 15, 1992 commencement date clearly places this case within the purview of the new and amended rules of appellate procedure.

Under Pennsylvania law, an appeal may only be taken from an interlocutory order as of right (Pa.R.A.P. 311), from a final order (Pa.R.A.P. 341), from a collateral order (Pa.R.A.P. 313), or from an interlocutory order by permission (Pa.R.A.P. 313, 1311, 42 Pa.C.S.A. § 702(b)). The current case does not fall within the requirements of any of these categories and, therefore, this appeal must be quashed.

Rule 311 lists the following orders as interlocutory orders to which a right of appeal attaches: orders refusing to open, vacate or strike off a judgment; orders confirming or refusing to modify, confirm or dissolve an attachment, custodianship or receivership; orders changing venue or venire in a criminal proceeding; orders granting, continuing, modifying refusing or dissolving injunctions or orders refusing to dissolve or modify injunctions; orders awarding a new trial; orders directing partition; orders sustaining venue or personal or in rem jurisdiction; orders changing venue, transferring the case to another court, or declining to proceed on the basis of forum non conveniens; orders overruling preliminary objections in eminent domain cases; or orders of administrative remand. However, an order sustaining preliminary objections to new matter and counterclaim does not constitute a basis for an interlocutory appeal as of right within this rule.

We must next ascertain whether this order is appealable as a final order. As amended, Rule 341 provides in pertinent part:

(a) General Rule. Except as prescribed in subdivisions (d) and (e) of this rule, an appeal may be taken as of right from any final order of an administrative agency or lower court.

(b) Definition of Final Order. A final order is any order that:

(1) disposes of all claims or of all parties; or

(2) any order that is expressly defined as a final order by statute; or

(3) any order entered as a final order pursuant to subsection (c) of this rule.

(c) When more than one claim for relief is presented in an action, whether as a claim, counter-claim, cross-claim, or third-party claim or when multiple parties are involved, the trial court or other governmental unit may enter a final order as to one or more but fewer than all of the claims or parties only upon an express determination that an immediate appeal would facilitate resolution of the entire case. Such an order becomes appealable when entered. In the absence of such a determination and entry of a final order, any order or other form of decision that adjudicates fewer than all the claims or parties shall not constitute a final order.

Pa.R.A.P. 341 (emphasis added). Amended Rule 341 permits appeals only from orders which dismiss all claims or all parties. See Luiziaga v. Psolka, 432 Pa.Super. 26, 637 A.2d 645 (1994) (order denying intervention was not deemed appealable because action remained pending between initial parties); Robert H. McKinney, Jr., Assoc., Inc. v. Albright, 429 Pa.Super. 440, 632 A.2d 937 (1993) (order dismissing one of two defendants was not final and appealable because action remained pending against at least one defendant).

Barring some exception, an appeal as a final...