J-S03038-15


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

SILVERSWORD CAPITAL INVESTMENTS,                 IN THE SUPERIOR COURT OF
LLC                                                    PENNSYLVANIA

                         Appellee

                    v.

H. LARRY WILDE

                         Appellant                   No. 2054 EDA 2014


                    Appeal from the Order July 8, 2014
           In the Court of Common Pleas of Montgomery County
                  Civil Division at No(s): No. 2014-03720


BEFORE: FORD ELLIOTT, P.J.E., PANELLA, J., and OTT, J.

MEMORANDUM BY OTT, J.:                                FILED APRIL 22, 2015

      H. Larry Wilde appeals from the order entered July 8, 2014, in the

Montgomery County Court of Common Pleas, denying his petition to strike or

open the confessed judgment entered against him by Silversword Capital

Investments, LLC (“Silversword”).        The judgment, in the amount of

$865,996.06, was confessed against Wilde based on a commercial guaranty

he provided as collateral in satisfaction of his share of a $1.1 million loan

provided to Moorestown Daycare Associates, LLC (“MDA”). On appeal, Wilde

argues the trial court erred in refusing to grant his petition to strike or open

the default judgment. For the reasons set forth below, we affirm.

      The facts underlying this appeal are summarized by the trial court as

follows:
J-S03038-15


           On or about March 20, 2001, Harleysville National Bank
     and Trust Company, successor by merger to Millennium Bank
     (“Harleysville”), made a loan to MDA, where it advanced to MDA
     the principal amount of $1,100.00.00. On or about October 5,
     2007, Harleysville and MDA entered into a Note Modification
     Agreement, the purpose of which was, among other things, to
     re-advance the principal amount originally loaned, amend the
     interest rate, extend the maturity date and add certain financial
     covenants.

           In conjunction with the Note Modification Agreement, and
     as additional security for the amounts loaned, Wilde entered into
     the Guaranty, whereby he absolutely and unconditionally
     guaranteed full and punctual payment and satisfaction of his
     “Share of the Indebtedness” of MDA to Harleysville.          The
     Guaranty provides that Harleysville and its successors and
     assigns can enforce the Guaranty against Wilde, as guarantor,
     even when remedies against anyone else obligated to pay for the
     indebtedness     or   against    any  collateral   securing   the
     indebtedness, the guaranty or any other guaranty of
     indebtedness has not been exhausted. The Guaranty further
     defines the phrase “Guarantor’s Share of the Indebtedness” to
     mean:

        an amount not to exceed Five Hundred Fifty Thousand &
        00/100 Dollars ($550,000.00) of all the principal amount,
        interest thereon to the extent not prohibited by law, and
        all collection costs, expenses and attorneys’ fees whether
        or not there is a lawsuit, and if there is a lawsuit, any fees
        for costs for trial and appeals.

     In addition to guaranteeing the full and punctual payment and
     satisfaction of his share of the indebtedness to Harleysville, the
     Guaranty also contained a confession of judgment provision.

            On February 28, 2013, MDA and First Niagara Bank, N.A.
     (“First Niagara”), as successor to Harleysville, entered into
     another Note Modification Agreement, wherein it was agreed
     that, as of February 21, 2013, the outstanding principal balance
     of the Note was $970,641.49, plus accrued interest. As part of
     this latest modification, MDA agreed that the maturity date
     under the Note was extended to May 20, 2013 and further
     agreed that all collateral and guaranties securing or supporting
     the Note remained in full force and effect and as valid collateral
     and support for the Note. Within the February 28, 2013 Note


                                    -2-
J-S03038-15


     Modification Agreement, Wilde also executed a “Consent and
     Reaffirmation of Guaranty and Suretyship Agreement,” whereby
     he consented to the terms of the February 28, 2013 Note
     Modification Agreement, agreed that his Guaranty remained in
     full force and effect, and reaffirmed and restated his absolute
     and unconditional guaranty of his Share of the Indebtedness as
     contained in the October 1, 2007 Guaranty. Specifically, the
     Consent and Reaffirmation contained language reaffirming the
     confession of judgment clause in the Guaranty. The maturity
     date set forth in the February 28, 2013 Note Modification
     Agreement was thereafter extended to September 1, 2013.

           As of the September 1, 2013 maturity date, the principal
     balance of $955,830.30 along with accrued interest had not been
     paid to First Niagara by MDA. … [Furthermore, pursuant to the
     terms of the Note, as] of the date the Complaint was filed, First
     Niagara had incurred reasonable costs, expenses and counsel
     fees pertaining to the indebtedness in the amount of
     $20,335.77.

           MDA defaulted in its obligations under the Note by failing
     to pay the principal and accrued interest due thereunder by the
     September 1, 2013 maturity date. On December 20, 2013, First
     Niagara assigned all of its rights, title and interest in and to the
     loan and accompanying loan documents made to MDA, including
     the Note and Guaranty, to plaintiff, Silversword. Silversword
     proceeded to supply Wilde and MDA, respectively, with Notices
     of Default on January 20, 2014.

Trial Court Opinion, 7/29/2014, at 1-4.

     Thereafter, on February 19, 2014, Silversword filed a complaint in

confession of judgment in the amount of $865,996.06. On March 17, 2014,

Wilde filed a petition to strike or open the confessed judgment.            After

Silversword filed a response, the trial court conducted a hearing on July 3,




                                    -3-
J-S03038-15



2014. Subsequently, on July 8, 2014, the court denied Wilde’s petition, and

this timely appeal followed.1

       On appeal, Wilde contends the trial court erred in denying his petition

to strike or open the confessed judgment. Specifically, he argues the court

should have struck the judgment because (1) certain costs included in the

judgment were not expressly authorized by the warrant of attorney; (2) the

warrant of attorney was not restated in the modification agreement, but

rather, only incorporated by reference; and (3) the judgment included an

excessive amount for attorney’s fees. With regard to his request to open the

judgment, Wilde claims he filed the petition in a timely manner and asserted

several meritorious defenses.         In particular, he argues he has “defenses,

set-offs and counterclaims against Silversword, and cross-claims against [his

partner in MDA, David J. Lisa], due to breach of fiduciary duties, usurpation

of   business    opportunity      and    tortious   interference   with   prospective

contractual relations.” Wilde’s Brief at 24.        He also contends that the same

reasons he proffered to strike the judgment, justify opening the judgment.

       A petition to strike off or open a confessed judgment “appeals to the

equitable and discretionary powers of the trial court, and absent an abuse of

discretion or manifest error, we will not disturb its decision.” Courtney v.


____________________________________________


1
  The trial court did not direct Wilde to file a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b).




                                           -4-
J-S03038-15



Ryan Homes, Inc., 497 A.2d 938, 941 (Pa. Super. 1985) (citations

omitted).

     A confessed judgment will be stricken “only if a fatal defect or
     irregularity appears on the face of the record.” A judgment by
     confession will be opened if the petitioner acts promptly, alleges
     a meritorious defense, and presents sufficient evidence in
     support of the defense to require the submission of the issues to
     a jury. In adjudicating the petition to strike and/or open the
     confessed judgment, the trial court is charged with determining
     whether the petitioner presented sufficient evidence of a
     meritorious defense to require submission of that issue to a jury.
     A meritorious defense is one upon which relief could be afforded
     if proven at trial.

Ferrick v. Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013) (citations

omitted).

     In other words, the petition to strike a confessed judgment must
     focus on any defects or irregularities appearing on the face of
     the record, as filed by the party in whose favor the warrant was
     given, which affect the validity of the judgment and entitle the
     petitioner to relief as a matter of law. “[T]he record must be
     sufficient to sustain the judgment.” The original record that is
     subject to review in a motion to strike a confessed judgment
     consists of the complaint in confession of judgment and the
     attached exhibits.

           In contrast, “if the truth of the factual averments
     contained in [the complaint in confession of judgment and
     attached exhibits] are disputed, then the remedy is by
     proceeding to open the judgment,” not to strike it. A petition to
     strike a confessed judgment and a petition to open a confessed
     judgment are distinct remedies; they are not interchangeable.

Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 623 (Pa. Super.

2013) (citations omitted).

     After a thorough review of the record, the parties’ briefs, and the

relevant case law, we find the trial court’s July 29, 2014, opinion


                                   -5-
J-S03038-15



comprehensively discusses and properly disposes of the questions presented

in this appeal. See Trial Court’s Opinion, 7/29/2014, at 4-10 (concluding:

(1) the amount of the judgment confessed was authorized under the terms

of the Guaranty; (2) although the Guaranty limited Wilde’s share of the past

due principal to $550,000.00, that limit did not include Wilde’s share of the

interest, attorney’s fees, and other costs; (3) the “clear and conspicuous”

cognovit clause set forth in Guaranty and specifically referenced in the Note

Modification Agreement, although not “restated in its entirety,” was

sufficient to demonstrate “the parties’ intent that it continue in effect;2 (4)

the cognovit clause specifically provided for a 10% attorney’s commission,

which was not excessive, and has been “routinely upheld” in Pennsylvania

courts;3 (5) Wilde failed to demonstrate a meritorious defense, and “has

neither disputed the default nor alleged that he has cured the default[;]” 4

and (6) “Wilde’s defenses are all directed towards Lisa, acting in his capacity

as a member of MDA[,]”5 not against Silversword, the holder of the

Guaranty and Note). Accordingly, we affirm on the basis of the trial court’s

opinion, but add one additional comment.
____________________________________________


2
    Trial Court Opinion, 7/29/2014, at 7-8, citing Ferrick, supra.
3
    Id. at 8.
4
    Id. at 9.
5
    Id.




                                           -6-
J-S03038-15



     With respect to Wilde’s claim that the amount of the attorney’s

commission was excessive, we acknowledge Wilde refers to a recent decision

of this Court, Graystone Bank v. Grove Estates, L.P., 58 A.3d 1277 (Pa.

Super. 2012), aff’d, 81 A.3d 880 (Pa. 2013), which questioned the routine

imposition of a 10% attorney’s commission, even when commission is

provided for in the parties’ agreement.

     In Greystone Bank, the plaintiff confessed judgment against the

defendant in the amount of $10,650,027.74, which included a 10%

attorney’s fee surcharge of $966,361.11. On appeal, a panel of this Court

stated that any “fee-shifting provision” in a contract is subject to a

reasonableness standard. Id. at 1283. The panel also referred to the trial

court’s opinion, in which the court noted the contract included a provision

“elsewhere in the agreement requiring a reasonable attorney fee for

collecting on the loan[,]” although the trial court ultimately concluded the

provision was “distinct” from the one allowing for a 10% attorney’s fee. Id.

(emphasis supplied).     Because it was unclear whether the trial court

reviewed the fee award for reasonableness, the Graystone Bank Court

remanded the matter so that the trial court could determine “whether the

10% attorney’s fee provision worked a reasonable result under the

circumstances.” Id. at 1284.

     Here, however, Wilde does not argue that either the Guaranty or any

of the amendments include a provision requiring the attorney’s fee be a

“reasonable” amount.      Rather, he argues this Court should read a

                                    -7-
J-S03038-15



“reasonableness” clause into the agreement.      While Graystone provides

some authority for this argument, we find it distinguishable since, in that

case, the agreement did call for a “reasonable attorney fee for collecting on

the loan.” Id. at 1283. Accordingly, we rely, as did the trial court, on the

prior decisions of this Court authorizing an attorney’s commission, in a

warrant of attorney clause, based on a percentage of the balance due. See

RAIT Partnership, LP v. E Pointe Properties, I, Ltd., 957 A.2d 1275 (Pa.

Super. 2008) (upholding attorney collection commission of 15% of balance,

or $450,000.00); Dollar Bank, Federal Savings Bank v. Northwood

Cheese Co., Inc., 637 A.2d 309 (Pa. Super. 1994) (upholding attorney

collection fee of 15% of balance), appeal denied, 653 A.2d 1231 (Pa. 1994).

But see PNC Bank v. Bolus, 655 A.2d 997 (Pa. Super. 1995) (noting trial

court exercised its equitable power when it reduced 10% attorney fee of

$70,000 to $10,000, when the note authorized a “reasonable attorney’s

commission, not to exceed ten percent of the amount of the loan in

default.”).

      Therefore, because we find no abuse of discretion or error in the trial

court’s ruling denying Wilde’s petition to strike or open the confessed

judgment, we affirm the order on appeal.

      Order affirmed.




                                    -8-
J-S03038-15


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/22/2015




                          -9-
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                                                                                                 IN THE'COURTOF-COMMON:P°LEAS OF
                                                                                                MONTGOMERY COUNTY, PENNSYLVANIA
                                                                                                    .      CIVIL DIVISION .'


         ··~ ..                                        -SIL VERiSWORD CAP IT AL                                                                                                                    Superior Ct. No. 2054 EDA 2014
                 '··
                                                        INVESTMENTS, LLC
                                                                                                                                                                                                  Comm. Pl. Ct .. No. 2014-03720
                                                                                      v.
                 :   .~   .
                                                       H. LARRY WILDE

         ..                                                                                                                                                   OPINION
         .·      .

                                                      Moore, J.                                                                                                                                                                                                   July 29, 2014

                                                     I.               FACTS AND PROCEDURAL HISTORY

       (.                                                            This matter involves the appeal of Defendant, H. Larry Wilde, to this court's

                                                    denial of his petition to open/strike a confession of judgment against him filed by

                                                    Plaintiff;.Silversword Capital Investments, LLC.

                                                                    Silversword Capital Investments, LLC instituted the instant action against H.

                                                   Larry Wilde on February 19, 2014 by filing a Complaint in Confession of Judgment,
            ·:· ..
                                               confessingjudgment against Defendant in the amount of$865,996.06 pursuant to a

                                              · cognovit clause contained .in a Commercial Guaranty entered into by Wilde, dated

                                               October l ;2007. Plaintiff's confession ofjudgment is based upon Defendant's breach of

-.:
                                               his obligations due.under the· Guaranty, to fully and punctually pay and satisfy his "Share

                                               of.lndebte.dness"of a -certain Mortgage Note and related loan documents made to

                                               Moorestown Daycare Associates, LLC ("MDA'') by the maturity date thereunder of

                                               September l, 2013.

                                                               On or about March 20, 2001, Harleysville National Bank and Trust Company,

                                            · .successor by merger to Millennium Bank ("Harleysville"), made a loan to MDA, where it


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                                                                                                                                                                                                                             I I        Opinion
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                                       advanced to MDA the principal amount of$1,IOO,OOO.OO.         On or about October 5, 2007,

                   .· ..               Harleysville and MDA entered into a Note Modification Agreement, the purpose of

                                       which was, among other things, to re-advance the principal amount originally loaned,

                                      amend the interest rate, extend the maturity date and add certain financial covenants .
     . . . .....
                                              In conjunction with the Note Modification Agreement, and as additional security

                                      for the amounts loaned, Wilde entered into the Guaranty, whereby he absolutely and
             ..
          . ·.
                                      unconditionally guaranteed full and punctual payment and satisfaction of his "Share of

                                      the Indebtedness" of MDA to Harleysville. The Guaranty provides that Harleysville and

                                      its successors and assigns can enforce the Guaranty against Wilde, as guarantor, even

                                      when remedies against anyone else obligated to pay for the indebtedness or against any

                                     · collateral securing the indebtedness, the guaranty or any other guar~ty of indebtedness

                                     has not been exhausted. The Guaranty further defines the phrase "Guarantor's Share of

                                     the Indebtedness" to mean:

                                             an amount not to exceed Five Hundred Fifty Thousand & 00/100 Dollars
                                             ($550,000.00) of all the principal amount, interest thereon to the extent not
                                             prohibited by law, and all collection costs, expenses and attorneys' fees
                                             whether or not there is a lawsuit, and if there is a lawsuit, any fees for
                                             costs for trial and appeals.

                                     In addition to guaranteeing the full and punctual payment and satisfaction of his share of

                                     the indebtedness to Harleysville, the Guaranty also contained a confession of judgment

                                     provision.

                                             On February 28, 2013, MDA and First Niagara Bank, N.A. ("First Niagara"), as

                                     successor to Harleysville, entered into another Note Modification Agreement, wherein it

                                     ~as agreed that, as of February 21, 2013, the outstanding principal balance of the Note

,.                                   was $970,641.49, plus accrued interest. As part of this latest modification, MDA agreed

                                                                                                                                                  \
                                                                                                 2


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                  that the maturity date under the Note was extended to May 20, 2013 and further agreed

                  that all coJlateral and guaranties securing or supporting the Note remained in full force

                  and effect and as valid collateral and support for the Note. Within the February 28, 2013

                  Note Modification Agreement, Wilde also executed a "Consent and Reaffirmation of

                 Guaranty and Suretyship Agreement," whereby he consented to the terms of the February

                 28, 2013 Note Modification Agreement, agreed that his Guaranty remained in full force

                 and effect, and reaffirmed and restated his absolute and unconditional guaranty of his

                 Share of the Indebtedness as contained in the October 1, 2007 Guaranty. Specifically, the

                 Consent and Reaffirmation contained language reaffirming the conf~ssion of judgment

                 clause in the Guaranty. The maturity date set forth in the February 28, 2013 Note

                 Modification Agreement was thereafter extended to September I, 2013.

                        As of the September 1, 2013 maturity date, the principal balance of $955,830.30

                 along with accrued interest had not been paid to First Niagara by MDA. Pursuant to the

                terms of the Note, if the Note is not paid in full by the maturity date, the entire unpaid

                principal· balance together with accrued interest and all other sums due under the Note

                and other loan documents shall be immediately due and payable along with interest (after

                such default and acceleration and until the indebtedness is paid in full, including after

                entry of any judgment) at the default rate of two percent (2%) per month.             The Note

                further provides that the failure to make any payment of principal or interest, including

                the payment due at maturity, within ten (10) days after the same is due and payable will

                cause the lender to incur additional expense in servicing the indebtedness evidenced by

                the Note and would deprive the lender of the use of the monies due, the precise measure

                of which expenses and loss is not susceptible to exact determination . .As a result, the

-                                                                                      3


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                                Note provides for a late charge of seven cents ($.07) to be assessed for each dollar so

                                overdue in excess of ten (10) days. Moreover, pursuant to a March 20, 2001 Mortgage

                                and Security Agreement, if the mortgagee engages counsel for any purpose pertaining to

                                the indebtedness due thereunder, all of mortgagee's reasonable costs, expenses and

                                reasonable counsel fees are to be paid by the mortgagor on demand. As of the date the

                            Complaint was filed, First Niagara had incurred reasonable costs, expenses and counsel

                            foes pertaining to the indebtedness in the amount of$20,335.77.

                                              MDA defaulted in its obligations under the Note by failing to pay the principal

                            and accrued interest due thereunder by the September I, 2013 maturity date. On                                 ·

   :'·                      December 20, 2013, First Niagara assigned all of its rights, title and interest in and to the

                            loan and accompanying loan documents made to MDA, including the Note and Guaranty,

                           to plaintiff, Silversword. Silversword proceeded to supply Wilde and MDA,
. ·,
                           respectively, with Notices of Default on January 20, 2014.
                                                                                                            I

                                         Subsequently, pursuant to the terms of the Guaranty, Note and other loan

                           documents, and by reason of the default by Wilde thereunder, Plaintiff confessed

                          judgment against Wilde. Wilde thereafter filed a petition to open/strike the confessed

                          judgment, which this court later denied. Wilde now appeals from this court's

                          determination.

                          II.           DISCUSSION

                                        Jt is well-settled that a judgment by confession will be stricken "only if a fatal

                          defect or irregularity appears on the face of the record." See, e.g., Graystone Bank v.

                          Grove Estates, LP, 58 A.3d 1277, 1281-82 (Pa. Super. Ct. 2012). A petition to strike

                          does hot involve the discretion of the court and, thus, matters contained in the record filed


                                                                                                    4


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                                        by the party seeking to strike the judgment are not given any consideration by the court.

                                       See id at 1282; see also Resolution Trust Corp. v. Copley Qu-Wayne Assocs., 683 A.2d

                                       269, 273 (Pa. 1996). "If the truth of the factual avennents contained in such record are

                                       disputed, then the remedy is by proceeding to open the judgment and not to strike."

                  ;       .            Resolution Trust, 683 A.2d at 273. A judgment by confession will not be stricken if the

                ·.:'·                  record is "self-sustaining." Grays/one Bank, 58 A.3d at 1282; Resolution Trust, 683 A.2d

                                      at 273. A record is self-sustaining if the warrant of attorney is in writing, is signed by the

                                      person to be bound by the warrant of attorney, and the signature is in direct relation of the

                                      warrant of attorney. Frantz Tractor Co. v. Wyoming Valley Nursery, 120 A.2d 303, 306-

                                      07 (Pa. 1956).

                                                  Wilde contends that the confession of judgment should be stricken because the

                                     amounts confessed are not authorized. Specifically, Defendant argues that the Guaranty

                                     expressly limits the amount-of Wilde's.financial liability to a maximum dollar amount of

                                     $550,000.00, irrespective of accrued interest, collection costs and attorney's fees.

                                     Wilde's position is not supported by the clear language of the Guaranty, which shows
          :··
     ;.                              that each of the items included in the confessed judgment are authorized and permitted.

                                     Where a party has signed an agreement with clear and unambiguous language, the plain

                                    language of the agreement cannot be ignored. Herman v. Stern, 213 A.2d 594, 598 (Pa.

                                    1967).

                                             A suretyship agreement is created when a creditor refuses to extend credit to a

                                    debtor unless a third party agrees to provide additional security for the repayment of the

                                    underlying debt by personally undertaking the debtor's obligation to the creditor should
,;   '
                                    the debtor fail to perform. Rail P 'ship, l.P. v. Wilson, 2008 Phila. Ct. Com. Pl. LEXIS.


                                                                                     5
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       '.·
                          83, +9 (C.P. Phila. County Apr. 7, 2008). Within the Guaranty, Wilde absolutely and

                          unconditionally guaranteed full and punctual payment of his "Share of the Indebtedness"

                          ofMDA to Harleysville,         As noted in paragraph 9 of the complaint, the phrase

                          "Guarantor's Share of the Indebtedness" is defined in the Guaranty to mean the ·

                          following: (i) the amount not to exceed Five Hundred Fifty Thousand Dollars

                         ($550,000.00) of all the principal amount of the MDA Loan; (ii) interest thereon to the

                         extent not prohibited by Jaw; and (iii) all collection costs, expenses and attorneys' fees

                         whether or not there is a lawsuit; and (iv) if there is a lawsuit, any fees and costs for trial

                         and appeals. Based upon the unambiguous punctuation and intent of the Guaranty as a

                         whole, it is clear that the phrase "Guarantor's Share of the Indebtedness" means each of

                         the following items as separate and distinct: (i) principal in an amount not to exceed

                         $550,000;.(ii) interest accrued on the principal amount owed; (iii) all collection costs,
:·.
                        expenses and attorneys' fees, regardless of whether or not there is a lawsuit; and (iv) in

                        the event of a lawsuit, any fees and costs for trial and appeals incurred in connection

                        therewith.

                                As noted by Wilde, both he and David Lisa executed Commercial Guarantees in

                        connection with the $1,100,000 MDA loan. In light ofthe fact that Wilde owned fifty

                        percent (50%) of MDA, Wilde's Guaranty obligated him to repay a ~roportionate fifty

                        percent (50%) share of the principal amount owed, i.e., $550,000 and other charges such

                        as interest and expenses. Moreover, the use of the commas separating the maximum

                        principal in the amount of $550,000, the interest, the costs, expenses and attorneys' fees

                        incurred whether or not there is a lawsuit, and the costs for trial and appeals if there is a

                        lawsuit, together with the use of the word "and," establish that the $550,000 maximum

                                     /


                                                                                6
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                                            was intended to only apply to the principal owed in connection with 'the Note and Loan.

                                            If it were limited solely to the $550,000 suggested by Wilde, there would have been no
                         ···.
                                            need for the Guaranty to define "Share of the Indebtedness" to anything other than a limit

                                            of$550,000, and no more.

                                                   Wilde next argues that Silversword improperly confessed judgment based upon

                                            the Consent and Reaffirmation, and not based on the guaranty itself. In making his

                                           argument, Wilde ignores the fact that Silversword is confessing under the clear language

                                           under the Guaranty andnot the Consent and Reaffirmation. Notwithstanding this fact,

                                           Wilde further ignores recent Pennsylvania cases upholding confession of judgment
           -,   ;   ..
                                           clauses in circumstances similar to the instant case and, instead, misplaces his reliance on

                                          M & P Management, L.P. v. Williams, 937 A.2d 398 (Pa. 2007) and JBG!Rosenfe/d

                                          Retail Properties v. Anspach, 803 A.2d 783 (Pa. Super. Ct. 2002).
;    :
    .~ >

     -".
                                                  Recently, the Pennsylvania Superior Court expressly rejected the very argument

                                          advanced by both Wilde and the defendant in M & P Management. In Ferrick v.

                                          Bianchini, 69 A.3d 642, 650 n.7 (Pa. Super. Ct. 2013), the Superior Court initially noted

-:                                        that its prior decision in M & P Management did not address the merits of whether a

                                         cognovit clause had to be set forth in the body of an amendment, and not merely

                                         incorporated by general reference therein. Therefore, the M & P Management decision
                                                                                                                                                                        .;-
                                         was in no way dispositive of the issue. The court proceeded to note that the cognovit                                        ··.
                                         clause before it was "clear and conspicuous" in the underlying agreements containing the

                                         warrant of attorney in addition to being "mentioned specifically in the amendment." Id.

                                         at 651. Ultimately, the Superior Court denied the defendant's appeal, ruling that, even

                                         though the warrant of attorney was not restated in its entirety in the amendment, it                                         ·,
                                                                                                                                                               ...,



                                                                                      7
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                    ·,,,



                                                  specifically republished the terms of the confession of judgment and clearly stated the

                                                  parties' intent that it continue in effect. See id at 652.

                                                                Wilde's argument that a specifically authorized attorneys' commission in the
               ..
               ..
                                                  amount of ten percent (J 0%) of the principal and interest due is "grossly excessive,

                                                  punitive and/or unconscionable" ignores the clear precedent of Pennsylvania courts

                                              approving the inclusion of such amounts in confessed judgments.            Based upon

                                             Pennsylvania precedence, it is clear that the ten percent (10%) attorneys' commission is

                                             by no means excessive or unwarranted. Pennsylvania courts have routinely upheld

                                             similar provisions in confession of judgment clauses, and have upheld significantly

                                             higher percentages in cognovits clauses, so long as the amount set forth is specifically

                                            authorized by the warrant of attorney. See, e.g., Rail P 'ship, l. P. v. E Pointe Props. I,
                                                                                                                                 i

,.                                          Ltd, 957 A.2d 1275, 1279 (Pa. Super. Ct. 2008) {upholding )5% attorneys' collection
'
                                            commission as "specifically authorized by the warrant of attorne('); Dollar Bank v.

                                            Northwood Cheese Co., 63 7 A.2d 309, 314 (Pa. Super., Ct. 1994) (same); Wilson, 2008
     ..,. -.
                                            Phila Ct. Com. Pl. LEXIS 83, at • 13 (upholding 20% attorneys' collection commission in

                                            amount of $3,737,237.52 as "specifically authorized by the warrant of attorney"). The

                                           Guaranty here specifically authorizes "an attorney's commission of ten percent (10%) of

                                           the unpaid principal balance and accrued interest for collection."
                                                                                                                             '
                                                         A petition to open a confessed judgment is an appeal to the equitable powers of
                                                                                                                                                                                                    :·:

                                           the court. As such, "[a] judgment taken by confession will be opened in only a limited

                                           number of circumstances, and only when the person seeking to have it opened acts

                                           promptly, alleges a meritorious defense and presents sufficient evidence of that defense

                                           to require submission of the issues to the jury." First Seneca Bank & Trust Co. v. laurel


                                                                                                              8          .   I
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               Mountain Dev. Corp., 485 A.2d 1086, 1088 (Pa. 1984). A meritorious defense is one

               upon which relief could be afforded if proven at trial. Ferrick, 69 A3d at 647. Wilde

               has failed to present sufficient evidence of a meritorious defense that would warrant

              opening the confessed judgment.

                         Wilde has neither demonstrated the existence of a meritorious defense, nor

              produced clear, direct, precise or believable evidence sufficient to warrant the opening of

              the confessedjudgment. Instead, Wilde's Petition asserts that the confessed judgment

              must be opened because a member of MDA, David Lisa, was allegedly in exclusive

             control ofMDA, and that Lisa caused MDA to default on, or to refrain from renewing or

             refinancing, the MDA Loan.

                        Wilde defaulted under the Guaranty by failing to make payments when due,
                                                                                                                           . i
             including payment of the principal balance of $955,830.30 by maturity date under the

             Loan Documents of September l, 2013. Wilde has neither disputed the default nor

             alleged that he has cured the default. See Manor Bldg Corp. v. Manor Complex Assocs.,

             ltd, 645 A.2d 843, 848 (Pa. 1994).

                        Judgment was confessed against Wilde pursuant to his obligations under his

            individual Guaranty of the Note and related loan documents in connection with a loan
. ; .
·..
            from Harleysville to MDA. These obligations did not disappear simply because the Note,

            Guaranty and loan documents were assigned from First Niagara, as successor to

            Harleysville, to Silversword. Silversword is the plaintiff and the holder of the Guaranty,

            Note and related loan documents. Wilde fails to allege the existence of a single

            meritorious defense against Silversword. Instead, Wilde's defenses are all directed

            towards Lisa, acting in his capacity as a member of MDA. Any purported claims Wilde

 ·t...
                                                                     9
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                          ·~·.
                                   may have against a member of MDA are not relevant and have nothing to do with the

                                   obligations under the Guaranty, Note and related loan documents, and Silversword's right

              ..
                  .   .            to exercise its rights under the confession of judgment clause .

                                                 The documents are clear on their face that default would occur if the principal
              <.

                                  balance was not paid off in its entirety by the September I, 2013 maturity date. Wilde

                                  therefore lacks a meritorious defense as "it is readily apparent that [~ilde] did not

                                  comply with the terms" of the Guaranty. Beneficial Mut. Sav. Bank v. Gell Fin. Corp.,
                                                                                                                                          I

                                  2011 Phila. Ct. Com. Pl. LEXIS 260, **8-9 (C.P. Phila. County Sep. :12, 2011); see also

                                  Indus. Valley Bank & Trust Co. v. Lawrence Voluck Assocs., Inc., 42$ A.2d 156 (Pa.
                                                                                                                                     '!

                                  Super. Ct. 1981).         Accordingly, this court properly denied Defendant',s petition to

                                  open/strike the confessed judgment.
        ,.'
        I

    (                             III.         CONCLUSION

                                               Based upon the foregoing analysis, this Court's determination :was proper and

                                 should 'be AFFIRMED.


                                                                                                BY THE COURT:


    .·.
                                                                                                ·~~

                                                                                                BERNARD A MOORE, J.                                                  .




    I
        '     .                  Date:       July 29, 2014
                                 Cc:         Nicholas Poduslenko, Esq.
                                             Michael V. Phillips, Esq.
                                             Marc A. Zaid, Esq.
,·
I




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