Fidelity Bank v. Duden

• Decision Date: 06 March 1987
• Citation: 361 Pa.Super. 124,521 A.2d 958
• Parties: The FIDELITY BANK, Appellee, v. Mary G. DUDEN, Appellant.
• Court: Pennsylvania Superior Court

Page 958

521 A.2d 958

361 Pa.Super. 124

The FIDELITY BANK, Appellee, v. Mary G. DUDEN, Appellant.

Superior Court of Pennsylvania.

Argued Oct. 1, 1986.

Filed March 6, 1987.

Alison M. Benders, Philadelphia, for appellant (at 2878) and appellee (at 3321).

Paul Logan, Norristown, for appellant (at 3321) and appellee (at 2878).

Before CIRILLO, President Judge, and CAVANAUGH, WICKERSHAM, WIEAND, McEWEN, DEL SOLE, TAMILIA, KELLY and JOHNSON, JJ.

PER CURIAM:

This appeal is from an order summarily dismissing a counterclaim which had been filed without leave of court more than ten months after the pleadings had been closed. A panel of this Court assigned to hear argument certified the appeal to a court en banc so that further consideration might be given to the appealability of an order summarily dismissing a counterclaim. After careful consideration, we have determined that an order summarily dismissing a counterclaim is final and immediately appealable. Having made an independent review of the order appealed from, however, we find no abuse of discretion and affirm the order of the trial court.

The Supreme Court of Pennsylvania has repeatedly and consistently held that an order summarily dismissing a counterclaim is an appealable order. See: Commonwealth v. Orsatti, Inc., 448 Pa. 72, 75-76, 292 A.2d 313, 315 (1972); Broido v. Kinneman, 375 Pa. 568, 569-570, 101 A.2d 647, 648 (1954). This Court has followed the precedent established by the Supreme Court and has also held such orders appealable. See: Duquesne Light Co. v. United States Industrial Fabricators, Inc., 334 Pa.Super. 444, 446 n. 1, 483 A.2d 534, 535 n. 1 (1984); Zivitz v. Centennial Road Properties, Inc., 328 Pa.Super. 79, 81 n. 1, 476 A.2d 462, 463 n. 1 (1984). Nevertheless, it has been suggested that an appeal from an order summarily dismissing a counterclaim should be quashed on the basis of the "collateral order" test for appealability which was announced by the Supreme Court of the United States in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed.2d 1528 (1949) and later adopted by the Supreme Court of Pennsylvania in Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978). See also: Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975). This argument, we conclude, misapprehends the Cohen "collateral order" test of appealability.

An order summarily dismissing a counterclaim puts a party out of court on his or her counterclaim. Such an order, the Supreme Court has held, is final and appealable. The Cohen test has nothing to do with determining "finality." If an order adjudicates an action finally, it is appealable. Conversely, if the order does not determine the action finally, it is interlocutory and generally nonappealable. See: Rossi v. Pennsylvania State University, 340 Pa.Super. 39, 43-44, 489 A.2d 828, 830 (1985); Sanderbeck v. Sanderbeck, 327 Pa.Super. 461, 463-464, 476 A.2d 44, 45 (1984).

Cohen created an exception to the rule allowing appeals solely from final orders. See: Pugar v. Greco, supra 483 Pa. at 73, 394 A.2d at 545. It has application only to orders which are interlocutory. Cohen holds that an interlocutory order is appealable "if (1) it is separable from and collateral to the main cause of action; (2) the right involved is too important to be denied review; and (3) the question presented is such that if review is postponed until final judgment in the case, the claimed right will be irreparably lost." Cohen v. Beneficial Consumer Discount Co., supra 337 U.S. at 546, 69 S.Ct. at 1226, 93 L.Ed.2d at 1536 (emphasis added).

The Cohen rule, by its express terms, can have application solely to orders which are interlocutory. Interlocutory orders are appealable where they are "separable from and collateral to the main cause of action" and where an important right will be lost if an immediate appeal is not allowed. See: Praisner v. Stocker, 313 Pa.Super. 332, 342, 459 A.2d 1255, 1260-1261 (1983). Thus, in the Cohen case, the Supreme Court of the United States applied the test to an order denying a request that security be posted for an opponent's counsel fees and expenses before the case proceeded. And in Katz v. Katz, 356 Pa.Super. 461, 514 A.2d 1374 (1986), this Court applied the "collateral order" test to an order requiring that divorce proceedings before a master be open to the public. And finally, in Fried v. Fried, 509 Pa. 89, 501 A.2d 211 (1985), the Pennsylvania Supreme Court applied the "collateral order" test to determine the appealability of an order awarding interim counsel fees and expenses in a divorce action. In all of these cases the orders from which appeals had been taken were interlocutory "collateral orders" which were separable from the main cause of action. To such orders the Cohen test properly had application.

The suggestion made in Elderkin, Martin, Kelly, Massina & Zamboldi v. Sedney, 354 Pa.Super. 253, 256, 511 A.2d 858, 859 (1986) that because of Fried, "the appropriate test to be applied in determining finality is the three prong Cohen test," is disapproved. According to longstanding precedent, an order is final where it puts a litigant out of court or otherwise terminates the litigation by precluding a party from presenting the merits of a claim or defense to the trial court. Temtex Products, Inc. v. Kramer, 330 Pa.Super. 183, 189, 479 A.2d 500, 503 (1984). See: Pugar v. Greco, supra; Feingold v. Bell of Pennsylvania, 477 Pa. 1, 383 A.2d 791 (1977); T.C.R. Realty, Inc. v. Cox, 472 Pa. 331, 372 A.2d 721 (1977); Safety Tire Corp. v. Hoffman Tire Co., 458 Pa. 102, 329 A.2d 834 (1974); Myers v. Travelers Insurance Co., 353 Pa. 523, 46 A.2d 224 (1946); Appeal of Washington Union Trust Co., 350 Pa. 363, 39 A.2d 137 (1944); In re Keasbey's Trust, 342 Pa. 439, 20 A.2d 281 (1941). Cohen, to repeat, has nothing to do with determining finality; it has application only to orders which admittedly are interlocutory but which are collateral to and separable from the main action.

The Fried holding that the Cohen test was applicable to determine the appealability of interim orders pertaining to the payment of counsel fees and expenses did not overrule expressly or by necessary implication those prior decisions of the Supreme Court which had permitted appeals from orders summarily dismissing counterclaims. An order dismissing a counterclaim is not only final, but by its very nature has application to the main action in a way that is direct and not collateral. A counterclaim is a part of the main action and an order dismissing a counterclaim is sufficiently final to permit an immediate appeal. See: Commonwealth v. Orsatti, Inc., supra; Broido v. Kinneman, supra. The appeal by Duden from the order summarily dismissing her counterclaim, therefore, is properly before this Court for review.

The facts of the case are relatively uncomplicated. On July 5, 1977, a judgment in the amount of $59,780 was confessed against Mary and Frederick Duden pursuant to a guaranty note held by Fidelity Bank. In April, 1979, Mary Duden entered into a contract with the bank whereby Duden agreed to make periodic payments to the bank on account of the judgment which had been confessed against her and her husband if the bank would refrain from executing upon the judgment. Payments allegedly totalling $8,000 were made by Duden in accordance with that agreement. In May, 1980, however, Duden refused to make further payments.

On March 26, 1982, the bank commenced a civil action against Duden by filing a complaint in which it alleged a breach of the agreement entered in April, 1979. Duden filed preliminary objections to the complaint, which were dismissed on December 29, 1982. She was given by the court a period of twenty days within which to file an answer. An answer containing new matter was filed on January 13, 1983; and a reply to new matter was filed by the bank on January 25, 1983. More than ten months later, on December 8, 1983, Duden filed a separate pleading entitled "Counterclaim" in which she sought to recover the eight thousand ($8,000) dollars which she had previously paid to the bank. On September 17, 1984, the trial court sustained preliminary objections filed by the bank and ordered that Duden's counterclaim be stricken. ¹ In doing so, the trial court reasoned that the counterclaim was procedurally improper. Not only had it been filed untimely, but it constituted an amendment to the answer and had been filed without "the consent of the adverse party or by leave of court" as required by Pa.R.C.P. 1033.

Duden argues on appeal that the trial court abused its discretion by sustaining the bank's preliminary objections and striking her counterclaim. She asserts that the procedural deficiencies which prompted the dismissal of her counterclaim should have been excused by the trial court pursuant to Pa.R.C.P. 126. This rule suggests a liberal construction of the Rules of Civil Procedure and permits a court to overlook errors or defects in procedure which do not affect the substantive rights of the parties. Appellant's argument was properly and cogently rejected by the trial court in its opinion of December 27, 1984, and we perceive no need for further comment. For the reasons stated by the trial court, the order granting the bank's preliminary objections and striking Duden's counterclaim was proper. It did not constitute an abuse of discretion. Therefore, we affirm.

Affirmed.

DEL SOLE, J., files a dissenting opinion.

DEL SOLE, Judge, dissenting.

I respectfully dissent because I believe this Court is without jurisdiction to address the merits of the appeals presently before us, and accordingly, the appeals should be quashed.

Presented before this Court are consolidated appeals from two Orders entered by the trial court. The appeal at No. 2878 is from an order entered September 19, 1984, which struck Appellant's "counterclaim". The appeal at No. 3321 is from an order entered ...