Estate of Bradley v. A.B.E. Grp. A Pa. Gen. P'ship, 2461 EDA 2021

CourtSuperior Court of Pennsylvania
Writing for the CourtBENDER, P.J.E.
PartiesESTATE OF JOANNE M. BRADLEY v. A.B.E. GROUP A PENNSYLVANIA GENERAL PARTNERSHIP AND ASOK RAGHUNATHAN, INDIVIDUALLY AND IN HIS CAPACITY AS GENERAL PARTNER APPEAL OF: ASOK RAGHUNATHAN
Docket Number2461 EDA 2021,J-S12004-22
Decision Date16 September 2022

ESTATE OF JOANNE M. BRADLEY
v.

A.B.E. GROUP A PENNSYLVANIA GENERAL PARTNERSHIP AND ASOK RAGHUNATHAN, INDIVIDUALLY AND IN HIS CAPACITY AS GENERAL PARTNER

APPEAL OF: ASOK RAGHUNATHAN

No. 2461 EDA 2021

No. J-S12004-22

Superior Court of Pennsylvania

September 16, 2022


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

Appeal from the Order Entered November 9, 2021 In the Court of Common Pleas of Delaware County Civil Division at No(s): CV-2020-006823

BEFORE: BENDER, P.J.E., BOWES, J., and DUBOW, J.

MEMORANDUM

BENDER, P.J.E.

Asok Raghunathan ("Appellant") appeals from the order entered in the Court of Common Pleas of Delaware County on November 9, 2021, denying his petition to open a default judgment against him. After careful review, we reverse and remand for further proceedings consistent with this memorandum.

The Estate of Joanne Bradley ("Appellee") initiated this civil action on October 13, 2020, with the filing of a complaint against Appellant and A.B.E. Group, a Pennsylvania General Partnership ("the Partnership"), after disputes arose between Appellant and Appellee concerning the assets of the

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Partnership.[1] The complaint included causes of action for judicial dissolution, access to partnership documents, breach of contract, breach of fiduciary duty, and unjust enrichment. Complaint, 10/12/21, at ¶¶ 24-52. Notably, Appellee sought, inter alia, an order directing Appellant to pay "the counsel fees and costs of the instant litigation…." Id. at ¶¶ 29(d), 37(e), 40(f), 46(f), 52(g). A default judgment was entered in favor of Appellee on August 4, 2021. Trial Court Opinion ("TCO"), 12/13/21, at 1.[2]

On August 6, 2021, Appellant filed preliminary objections to Appellee's complaint seeking a demurrer as to the request for attorneys' fees only. See id.; Petition to Open Judgment, 8/10/21, at Exhibit D ("Preliminary Objections" at ¶ 11) ("There is no statute or contract which allows an award of counsel fees in the instant case."). Thereafter, on August 10, 2021, Appellant filed a petition to open the default judgment pursuant to Pa.R.Civ.P. 237.3(b)(2), and he attached to his petition a copy of the preliminary

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objections in compliance with Rule 237.3(b)(1).[3] Appellee filed a timely response to the petition, and a hearing was scheduled for November 9, 2021. Following the hearing on the petition, the trial court entered an order denying Appellant's petition to open the default judgment. Order, 11/9/21 (single page). On November 30, 2021, Appellant filed a timely appeal, followed by a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of matters complained of on appeal. The trial court issued its Rule 1925(a) opinion on December 13, 2021.

Herein, Appellant presents the following questions for our review:

1. Should [Appellant's] petition to open default judgment have been granted where the petition was filed within ten (10) [days] of the entry of the default judgment, and [Appellant] alleged a preliminary objection that stated a meritorious defense, pursuant to Pa.R.Civ.P. 237(b)(2)
2. Was a meritorious preliminary objection to the complaint proposed where the complaint sought attorneys' fees without citation to any contractual agreement or statute
3. Did the trial court err and abuse its discretion in requiring evidence relating to the reason for [Appellant's] lack of timely response to the complaint where a petition to open default judgment had been filed within ten (10) days of the entry of a default and a preliminary objection stating a meritorious defense had been attached to the petition?

Appellant's Brief at 4 (unnecessary capitalization omitted).

We review Appellant's claims mindful of the following well-settled principles:

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A petition to open a default judgment is an appeal to the equitable powers of the court. The decision to grant or deny a petition to open a default judgment is within the sound discretion of the trial court, and we will not overturn that decision absent a manifest abuse of discretion or error of law.

Smith v. Morrell Beer Distributors, Inc., 29 A.3d 23, 25 (Pa. Super. 2011).

Generally speaking, a default judgment may be opened if the moving party has (1) promptly filed a petition to open the default judgment, (2) provided a reasonable excuse or explanation for failing to file a responsive pleading, and (3) pleaded a meritorious defense to the allegations contained in the complaint.

Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 175-76 (Pa. Super. 2009) (citing McFarland v. Whitham, 544 A.2d 929 (Pa. 1988); Seeger v. First Union National Bank, 836 A.2d 163 (Pa. Super. 2003) (footnote omitted)). "If a petition to open a default judgment fails to fulfill any one prong of this test, then the petition must be denied." U.S. Bank Nat'l Ass'n for Pennsylvania Hous. Fin. Agency v. Watters, 163 A.3d 1019, 1028 (Pa. Super. 2017) (citations omitted).

Additionally, Pennsylvania Rule of Civil Procedure 237.3, which governs relief from the entry of a default judgment, provides:

(a) A petition for relief from a judgment of non pros or by default entered pursuant to Rule 237.1 shall have attached thereto a copy of the complaint, preliminary objections, and/or answer which the petitioner seeks leave to file. All grounds for relief shall be raised in a single petition.
(b)(1) If the petition is filed within ten days after the entry of a judgment of non pros on the docket, the court shall open the judgment if the proposed complaint states a meritorious cause of action.
(2) If the petition is filed within ten days after the entry of a default judgment on the docket, the court shall open the judgment
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if one or more of the proposed preliminary objections has merit or the proposed answer states a meritorious defense.

Pa.R.Civ.P. 237.3. The note to Rule 237.3 clarifies that these provisions do not supplant the traditional, three-part test for opening a default judgment, but merely ease the burden of a party against whom judgment has been entered and who moves promptly for relief from that judgment. See id. at Note ("Rule 237.3 does not change the law of opening judgments. Rather, the rule supplies two of the three requisites for opening such judgments by presupposing that a petition filed as provided by the rule is timely and with reasonable explanation or legitimate excuse for the inactivity or delay resulting in the entry of the judgment.").

In the instant matter, the trial court applied the three-prong test as outlined in Myers, supra, in its consideration of Appellant's petition to open. See TCO at 2-4. It determined that the first prong of the test was met, since Appellant's petition was filed within ten days of the entry of judgment. Id. at 3. Thus, the court proceeded to evaluate the second prong and determined that Appellant failed to provide "any excuse whatsoever … as to why he did not file an answer" to the complaint. Id. at 4. Based on its finding that Appellant failed to satisfy the second prong, the trial court concluded that there was "no reason to proceed to the third prong of the test," i.e., whether a meritorious defense was pleaded, and it denied Appellant's petition. Id. at 4-5.

Appellant claims that the trial court's denial of his...

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