NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 AMOS FINANCIAL, LLC, IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant v. PAUL E. KIEBLER, IV, JOSEPH T. SVETE, KENNETH M. LAPINE, LAWRENCE J. DORSCH AND JOHN R. HESS, JR., Appellees No. 1277 WDA 2012 Appeal from the Order entered on July 20, 2012 in the Court of Common Pleas of Allegheny County, Civil Division, No. GD-11-26817 BEFORE SHOGAN, LAZARUS and MUSMANNO, JJ. MEMORANDUM BY MUSMANNO, J. FILED September 16, 2013 Amos Financial, LLC ( Amos ), appeals from the Order of the trial court striking a confessed judgment entered against Paul E. Kiebler, IV, Joseph T. Svete, Kenneth M. Lapine, Lawrence J. Dorsch and John R. Hess, Jr. (collectively, Guarantors ). We quash the appeal. The instant appeal appears to be the third attempt by Amos to collect on loans used for the construction of townhomes by the Village at Sewickley Hills, LLC ( the Village ), an Ohio limited liability company. In 2002, the Village obtained a construction/term loan from Sky Bank in the amount of $9,774,000.00, and a loan increase of $2,440,080.00. The loan proceeds were to be used by the Village for the development of a townhouse community in Sewickley Hills Borough in Allegheny County.
At issue in this case are Limited Guaranty and Suretyship Agreements (the Notes ) signed by each of the Guarantors. Each Note at issue provided, in relevant part, as follows WHEREAS, pursuant to that certain Construction Loan Agreement dated November 14, 2002, as amended by that certain First Amendment to Construction Loan Agreement and Other Loan Documents to be dated on or about January 12, 2004, by and between [the Village ( Borrower )] and the Bank, the Bank agreed to extend to the Borrower a TWO MILLION FOUR HUNDRED FORTY THOUSAND EIGHTY DOLLAR ($2,440,080.00) loan increase to the November 14, 2002 original construction/term loan in the principal amount of NINE MILLION SEVEN HUNDRED SEVENTY FOUR THOUSAND DOLLARS ($9,774,000.00) upon the terms and conditions set forth in the Agreement (the Loan ), which will be used by the Borrower to develop [] for sale [a] townshouse community (the Improvements, and together with the Land (as defined in the Agreement) collectively, the Property ) on certain real property situate in the Sewickley Hills Borough. WHEREAS the indebtedness of the Borrower to the Bank is evidenced by certain Notes to be dated on or about January 12, 2004, as such term is defined in the Agreement, with interest at rates provided in the Notes and to be repaid at the times and places and in the manner set forth in the Agreement and the Notes, and containing other terms and provisions; WHEREAS, as a condition precedent to the Bank making the Loan to the Borrower, the Bank has required that the Guarantor execute and deliver this Guaranty Agreement to the Bank. - 2 -
Notes, 1/12/04, at 1; Complaint at Exhibits A-E. 1 Upon the default of the Village, Amos filed a Complaint in mortgage foreclosure at No. 10-007671 in the Court of Common Pleas of Allegheny County. The trial court entered a default judgment against the Village, after which Amos purchased the property at a Sheriff s Sale. After recording the deed, Amos did not file a petition to set fair market value or file a deficiency judgment action. In March 2011, Amos filed a Complaint in confession of judgment at No. GD 11-04906 in the Court of Common Pleas of Allegheny County. Amos sought to confess judgment against the Guarantors on two Notes executed by each of the Guarantors. 2 Trial Court Opinion, 7/23/12, at 2. On December 16, 2011, the trial court granted the Guarantors Petition to strike the confessed judgment at GD 11-04906. On December 22, 2011, at No. GD 11-026817, Amos filed a second Complaint in confession of judgment against Guarantors in the amount of $2,440,080, the amount of the construction loan increase secured by the Note attached to the Complaint. Complaint at 7. Amos averred that the debt was in default; Guarantors had notice of the default; and that judgment 1 Each Guarantor previously had signed a Limited Guaranty and Suretyship Agreement to secure the $9,774,000.00 construction loan. The Guaranty at issue in this case secured the original construction loan, plus a $2,440,080.00 loan increase. 2 The record certified to this Court does not include the pleadings or exhibits filed at No. GD 11-04906. - 3 -
on the debt had not been entered in any other jurisdiction. Id. at 8, 9. Guarantors filed a Petition to strike the confessed judgment. In support, Guarantors alleged that (a) Amos s cause of action is barred by the Deficiency Judgment Act, as Amos had failed to file a petition to fix the fair market value of the Village s property sold at Sheriff s Sale, as required by 42 Pa.C.S.A. 8103; (b) Amos failed to attach necessary evidence of the underlying debts owed to it; (c) Amos failed to attach the Promissory Notes referred to in each Guaranty, which allegedly authorized Amos s claim for late fees and interest; (d) Amos s cause of action is barred by the doctrine of res judicata, as the $2,440,080.00 was included in Amos s Complaint in confession of judgment filed and stricken at GD 11-004906; and (e) Amos had exhausted its warrants of attorney in the case filed at GD 11-00496. On July 24, 2012, the trial court entered an Opinion and Order striking the judgment confessed by Amos. Trial Court Order, 7/24/12. In its Opinion, the trial court determined that in the prior action filed at No. GD 11-4906, Amos confessed judgment as to the same Note at issue in the instant case. Trial Court Opinion, 7/24/12, at 2. Additionally, the trial court stated, in relevant part, the following The judgment previously confessed at GD 11-4906 and based on the instant guaranties and the instant indebtedness was stricken, and no appeal was taken. That Order is the final word on the issue of confession. [Amos] had no right to file the instant Complaint in confession of judgment. [Amos s] recourse when the first judgment (GD 11-4906) was stricken was to appeal or try to get a judgment the old-fashioned way. This was not done. [Amos] may not re-open that prior case by simply - 4 -
filing a complaint in confession of judgment as to one of the two notes upon which the first confession was based. In addition, the failure to seek a deficiency judgment in the mortgage foreclosure action has, in all probability, resulted in the [Village s] underlying debt being satisfied and the instant guarantors free [sic] of any further liability. Requiring a Rule to issue, as [Amos] insists is the correct way to go, would be a fruitless act. Trial Court Opinion, 12/24/12, at 5-6 (emphasis in original). Upon the entry of the trial court s Order striking the confessed judgment, Amos filed the instant appeal. On appeal, Amos presents the following claims for our review 1. Is the instant case governed by a prior case in the Court of Common Pleas of Allegheny County at GD 11-4906? 2. Is a warrant of attorney exercised even though the Court struck the amended complaint that attempted to include the warrant? 3. Is a debt that was not the subject of a judgment in mortgage foreclosure subject to the deficiency judgment rules of 42 Pa.C.S.A. 8103? Appellant s Brief at 4. Before addressing the substantive merits of the appeal, we must first determine whether the Order from which Amos appeals is properly before this Court for appellate review. See UPS v. Hohider, 954 A.2d 13, 16 (Pa. Super. 2008) (recognizing that the appealability of an order is a question of jurisdiction and may be raised by the court sua sponte). [W]here an order is issued that grants a motion to strike a judgment, such an order is generally not appealable, i.e., it is not an interlocutory order from which an appeal as of right may lie. Such an order anticipates further litigation because the - 5 -
Id. parties are placed back in the position they were in prior to the entry of the judgment. Here, Amos appeals the Order striking a confessed judgment. Such an order is not final, and not appealable as of right. Accordingly, we quash the appeal as interlocutory. Even if this Court could exercise jurisdiction of Amos s appeal, we would affirm the trial court s Order, but for a reason other those discussed in the trial court s Opinions. 3 A petition to strike a judgment may be granted only if a fatal defect or irregularity appears on the face of the record. Graystone Bank v. Grove Estates, LP, 58 A.3d 1277, 1281-82 (Pa. Super. 2012). In considering the merits of a petition to strike, the court will be limited to a review of only the record as filed by the party in whose favor the warrant is given, i.e., the complaint and the documents which contain confession of judgment clauses. Matters dehors the record filed by the party in whose favor the warrant is given will not be considered. If the record is self-sustaining, the judgment will not be stricken. An order of the court striking a judgment annuls the original judgment and the parties are left as if no judgment had been entered. Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa. Super. 2011). 3 See Ira G. Steffy & Son, Inc. v. Citizens Bank of Pa., 7 A.3d 278, 285 (Pa. Super. 2010) (recognizing that the appellate court may uphold a decision of the trial court if there is any proper basis for result reached). We do not, however, express an opinion regarding the reasons set forth in the trial court s Opinion. - 6 -
The Notes forming the basis of Amos s Complaint in Confession of Judgment provided for their assignment by Sky Bank, the original holder of the Notes 20. Bank s Right to Assign. The Bank may sell, assign or transfer all of the Obligations and liabilities owed to the Bank or any part thereof to any Person, as permitted pursuant to the Agreement. In such event, each and every successive assignee, transferee or holder of all or any part of said Obligations and liabilities shall have the right to enforce this Guaranty Agreement by suit or otherwise for the benefit of such assignee, transferee or holder as fully as if such assignee, transferee or holder were herein by name specifically given such rights, powers and benefits; provided, however, that the Bank shall have an unimpaired right to enforce this Guaranty Agreement for its benefit as to so much of said Obligations and liabilities that it has not sold, assigned or transferred. Complaint, Exhibits A-E, at 20 (emphasis in original). Thus, under the terms of the Notes, Sky Bank could assign the Obligations described in the Notes and successive assignees could enforce the Note by suit or otherwise[.] Id. Notwithstanding, the Bank retained the unimpaired right to enforce the Notes for those Obligations and liabilities not assigned. Id. In its Complaint, Amos averred that [t]he underlying debt was assigned by Huntington National Bank, successor by merger to Sky Bank, to [Amos]. A copy of the Bill of Sale is attached as Exhibit G. Complaint in Confession of Judgment, 12. Exhibit G, the Bill of Sale from Huntington to Amos, provides as follows - 7 -
BILL OF SALE This bill of sale is executed without recourse and without representations or warranties of any kind or nature, expressed, implied or imposed by law, except as provided in the Asset Sale Agreement. Executed as of this 23 day of December 2009 SELLER The Huntington National Bank Complaint in Confession of Judgment, Exhibit G. The Bill of Sale does not identify the rights or assets sold to Amos, or whether the assets or rights were sold in whole or in part. The Bill of Sale s failure to identify the subject of the sale constitutes a defect fatal to Amos s Complaint in Confession of Judgment. Under these circumstances, we would affirm the trial court s Order striking Amos s confessed judgment against the Guarantors. Appeal quashed. Judgment Entered. Deputy Prothonotary Date 9/16/2013-8 -