J-A15027-19

                                 2019 PA Super 206

 DOMINIC'S INC.                            :   IN THE SUPERIOR COURT OF
                                           :        PENNSYLVANIA
                     Appellee              :
                                           :
              v.                           :
                                           :
 TONY'S FAMOUS TOMATO PIE BAR &            :
 RESTAURANT, INC.                          :
                                           :
                     Appellant             :         No. 50 EDA 2019

              Appeal from the Order Entered November 30, 2018
             In the Court of Common Pleas of Philadelphia County
               Civil Division at No(s): 1546 October Term 2018


BEFORE:     BENDER, P.J.E., GANTMAN, P.J.E., and COLINS*, J.

OPINION BY GANTMAN, P.J.E.:                              FILED JULY 02, 2019

      Appellant, Tony’s Famous Tomato Pie Bar & Restaurant, Inc., appeals

from the order entered in the Philadelphia County Court of Common Pleas,

which denied Appellant’s petition to strike and/or open the confessed

judgment entered in favor of Appellee, Dominic’s Inc. We affirm in part and

reverse in part.

      The trial court sets forth the relevant facts and procedural history of this

appeal as follows.

                                   BACKGROUND

          On February [29], 2016, [A]ppellant…executed a
          promissory note ([“Note”]), in favor of [A]ppellee…. The
          Note arose out of an "AGREEMENT OF SALE," whereby
          [Appellee] sold to [Appellant] a tavern, its building, and
          equipment.    The Note contained a warrant-of-attorney
          empowering [Appellee] to confess judgment upon the
          occurrence of a default committed by [Appellant]. On
          October 11, 2018, [Appellee] confessed judgment against

____________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A15027-19


          [Appellant] on the grounds that [Appellant] had failed to
          make two monthly payments as required under the Note.
          On November 6, 2018, [Appellant] filed its petition to strike
          or open the judgment. On November 30, 2018, this court
          entered an Order denying the petition to strike or open the
          judgment. The court included in its Order an expansive
          footnote explaining the grounds for its decision.         On
          December 27, 2018, [Appellant] appealed to the
          Pennsylvania Superior Court and subsequently filed, on
          January 15, 2019, a [Rule] 1925(b) statement of errors
          complained of on appeal.

(Trial Court Opinion, filed January 31, 2019, at 2). In support of the relevant

facts, we add that the parties’ Agreement of Sale included the following:

          29. Entire Agreement.            This Agreement, including
          exhibits, contains all of the agreements and understandings
          between the parties hereto; this Agreement supersedes and
          replaces any and all prior or contemporaneous agreements,
          understandings, warranties or representations of the parties
          or their counsel or anyone on the their behalf, of every
          nature and kind and whenever or wherever made, written
          or oral; and this Agreement may not be altered or amended
          except by a writing executed by all of the parties hereto.

(Agreement of Sale, dated 12/31/15, at 14; R.R. at 103a). Further, the Note

states:

                Events of Default. Each of the following shall
          constitute an Event of Default if not cured by Borrower
          within ten (10) days after notice from Lender unless a
          longer notice cure period is specified herein:

                     (a) There shall occur any default by Borrower
          in the payment of any principal of or interest under this Note
          or any other amounts due hereunder or any other loan
          document when due; or

                                   *    *    *

               Remedies of Lender. Upon the determination by
          Lender that there has been the occurrence of an Event of

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J-A15027-19


       Default, and following the expiration of any applicable grace
       or cure period, the Lender may if it so elects, without any
       notice or demand to Borrower whatsoever (which notice or
       demand is expressly waived, except to the extent
       otherwise specifically provided herein), exercise any or
       all (or none) of the following rights and remedies (all of
       which rights and remedies shall be cumulative) as the
       Lender, in its sole discretion, may deem necessary or
       appropriate:

                   (a) Declare immediately due and owing all
       outstanding Loan sums due to Lender hereunder or under
       any of the loan documents.

                               *    *    *

           CONFESSION OF JUDGMENT:         BORROWER
       HEREBY   AUTHORIZES     AND   EMPOWERS     ANY
       ATTORNEY OR THE PROTHONOTARY OR CLERK OF
       ANY   COURT    IN   THE   COMMONWEALTH      OF
       PENNSYLVANIA, OR IN ANY OTHER JURISDICTION
       THAT PERMITS THE ENTRY OF JUDGMENT BY
       CONFESSION, TO APPEAR FOR BORROWER AT ANY
       TIME AFTER THE OCCURRENCE OF ANY EVENT OF
       DEFAULT UNDER THIS NOTE OR AT ANY TIME AFTER
       THE MATURITY DATE HEREUNDER IN ANY ACTION
       BROUGHT AGAINST BORROWER HEREUNDER BY
       LENDER, WITH OR WITHOUT COMPLAINT OR
       DECLARATION     FILED,   WITHOUT     STAY   OF
       EXECUTION, AS OF ANY TERM OR TIME, AND THEREIN
       TO CONFESS OR ENTER JUDGMENT AGAINST
       BORROWER FOR ALL, OR ANY PART OF, THE UNPAID
       PRINCIPAL BALANCE HEREUNDER AND ACCRUED
       INTEREST THEREON, TOGETHER WITH ALL COSTS
       AND OTHER EXPENSES INCURRED IN CONNECTION
       THEREWITH AND AN ATTORNEYS' COLLECTION
       COMMISSION OF FIVE (5%) PERCENT OF THE
       AGGREGATE AMOUNT OF THE FOREGOING SUMS, BUT
       IN NO EVENT LESS THAN FIVE THOUSAND ($5,000)
       DOLLARS; AND FOR SUCH PURPOSE THE ORIGINAL
       OR ANY PHOTOCOPY OF THIS NOTE AND AN
       AFFIDAVIT OF LENDER OR LENDER'S COUNSEL
       AVERRING TO THE EVENT OF DEFAULT SHALL BE A
       GOOD AND SUFFICIENT WARRANT OF ATTORNEY.

                                   -3-
J-A15027-19


       SUCH AUTHORIZATION SHALL NOT BE EXHAUSTED BY
       ONE EXERCISE THEREOF, BUT JUDGMENT MAY BE
       CONFESSED AS AFORESAID FROM TIME TO TIME.
       BORROWER HEREBY WAIVES ALL ERRORS AND
       RIGHTS OF APPEAL, AS WELL AS RIGHTS TO STAY OF
       EXECUTION AND EXEMPTION OF PROPERTY, IN ANY
       ACTION TO ENFORCE ITS LIABILITY HEREON.

       BORROWER HEREBY ACKNOWLEDGES AND AGREES
       THAT BORROWER'S REASONABLE EXPECTATION
       WITH RESPECT TO THE AUTHORIZATION GRANTED
       PURSUANT TO ANY WARRANT OF ATTORNEY OR
       POWER OF ATTORNEY HEREUNDER, IS THAT LENDER
       OR ITS ATTORNEY MAY CONFESS JUDGMENT AS SET
       FORTH HEREIN, SEEK TO FORECLOSE ON COLLATERAL
       AND TAKE ALL OTHER ACTIONS WITH RESPECT TO
       THE EXERCISE OF LENDER'S RIGHTS HEREUNDER.
       BORROWER HEREBY WAIVES ALL OTHER DUTIES OF
       LENDER THAT MAY ARISE UNDER 20 PA. C.S.A. §
       5601.3(b). BORROWER HEREBY REMISES, RELEASES,
       AND FOREVER DISCHARGES, AND WAIVES ALL
       CLAIMS, CAUSES OF ACTION AND ANY OTHER RIGHTS
       AGAINST, TD BANK, N.A. AND ITS PREDECESSORS,
       LEGAL REPRESENTATIVES, PAST AND PRESENT
       PARENT    COMPANIES,   SUBSIDIARIES,   AGENTS,
       EMPLOYEES, SERVANTS, INSURERS, ATTORNEYS,
       OFFICERS,      DIRECTORS,       STOCKHOLDERS,
       AFFILIATES,     AFFILIATE     COUNTERPARTIES,
       SUCCESSORS IN INTEREST, AND ASSIGNS OF AND
       FROM ANY AND ALL CLAIMS, DEMANDS, DAMAGES,
       FEES, AND COSTS, SUMS OF MONEY, RIGHTS, CAUSES
       OF ACTIONS, OBLIGATIONS AND LIABILITIES OF ANY
       KIND   OR   NATURE    WHATSOEVER    INCLUDING
       ATTORNEYS' FEES, ARISING UNDER OR RELATING TO
       ANY DUTIES OF AN AGENT UNDER 20 PA.C.S.A. §
       5601.3 OR OTHERWISE.

       THE AUTHORITY GRANTED HEREIN TO CONFESS
       JUDGMENT SHALL NOT BE EXHAUSTED BY ANY
       EXERCISE THEREOF, BUT SHALL CONTINUE FROM
       TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN
       FULL OF ALL THE AMOUNTS DUE HEREUNDER.
       BORROWER ACKNOWLEDGES THAT IT HAS BEEN
       REPRESENTED BY COUNSEL IN CONNECTION WITH

                            -4-
J-A15027-19


        THE   EXECUTION   AND   DELIVERY  OF  THIS
        INSTRUMENT (OR HAS MADE THE UNILATERAL
        DECISION NOT TO CONSULT WITH COUNSEL IN
        CONNECTION WITH THE EXECUTION AND DELIVERY
        OF THIS INSTRUMENT) AND THAT IT KNOWINGLY
        WAIVES ITS RIGHT TO BE HEARD PRIOR TO THE
        ENTRY OF SUCH JUDGMENT AND UNDERSTANDS
        THAT, UPON SUCH ENTRY, SUCH JUDGMENT SHALL
        BECOME A LIEN ON ALL REAL PROPERTY OF
        BORROWER IN THE COUNTY WHERE SUCH JUDGMENT
        IS ENTERED.

            PRIOR TO SIGNING THIS INSTRUMENT,
        BORROWER READ AND UNDERSTOOD ALL THE
        PROVISIONS OF THIS INSTRUMENT.    BORROWER
        AGREES TO THE TERMS OF THIS INSTRUMENT AND
        ACKNOWLEDGES RECEIPT OF A TRUE AND COMPLETE
        COPY OF THIS INSTRUMENT.

(Note, 2/29/16, at 3, 5-7; R.R. at 19a, 21a-23a) (some emphasis added).

Appellant’s signature appears directly under this paragraph.

     On appeal, Appellant raises three issues:

        DID THE [TRIAL] COURT ERR IN DENYING APPELLANT’S
        REQUEST FOR ENTRY OF A RULE TO SHOW CAUSE
        REQUESTING DISCOVERY WHERE APPELLANT PROPERLY
        FILED A PETITION TO STRIKE AND/OR OPEN JUDGMENT
        AND PRESENTED A PRIMA FACIE DEFENSE TO THE CAUSE
        OF ACTION?

        DID THE [TRIAL] COURT ERR IN DENYING APPELLANT’S
        PETITION TO STRIKE AND/OR OPEN JUDGMENT WHERE
        THE PETITION DEMONSTRATED MERITORIOUS DEFENSES
        OF BREACH OF CONTRACT BY APPELLEE IN PROVIDING
        FALSE FINANCIAL INFORMATION AND FAILING TO
        DISCLOSE STRUCTURAL PROBLEMS WITH THE PROPERTY,
        MISREPRESENTING THE VALUE OF EQUIPMENT GIVEN FOR
        THE NOTE, AND FAILURE TO GIVE REQUIRED NOTICE
        UNDER THE TERMS OF THE NOTE, WHICH FORM THE BASIS
        OF THE CONFESSED JUDGMENT, THAT SHOULD BE
        PRESENTED TO A JURY?


                                    -5-
J-A15027-19


           DID THE [TRIAL] COURT ERR IN DENYING APPELLANT’S
           PETITION TO STRIKE AND/OR OPEN JUDGMENT WHERE
           THE RECORD DEMONSTRATED ERRORS IN THE RECORD
           CONSISTING OF A FAILURE TO GIVE REQUIRED NOTICE
           BEFORE DECLARING THE DEFAULT THAT LED TO THE
           CONFESSED JUDGMENT, AVERRING A DEFAULT OF
           $6,459.22 BUT CONFESSING JUDGMENT FOR A FIGURE 33
           TIMES HIGHER ($212,381.83), WHICH IS EXCESSIVE AND
           WITHOUT AVERRING ANY ACCELERATION OF THE NOTE,
           AND FOR SEEKING AN UNREASONABLE ATTORNEY FEE
           GIVEN THE AMOUNT OF WORK INVOLVED IN THE
           CONFESSION OF JUDGMENT?

(Appellant’s Brief at 4).

      In its first issue, Appellant claims the trial court should have used

Appellant’s proposed rule to show cause, attached to its petition to strike

and/or open the confessed judgment, because in its proposed rule, Appellant

sought discovery and a stay of execution on the confessed judgment.

Appellant insists it was entitled to discovery on disputed facts, which was

necessary to provide a proper record for the trial court to decide the matter.

Appellant submits the purpose behind the rule to show cause was thwarted,

because the court did not allow discovery.

      In its second issue, Appellant argues Appellee committed various

defaults under the Agreement of Sale.          Specifically, Appellant contends

Appellee    misrepresented   the   financial   information   of   the   business,

misconstrued the worth of the equipment purchased, and overvalued the

building, which was structurally unsound. Appellant claims these “defaults”

constituted meritorious defenses to the confession of judgment.         Appellant

submits Appellee’s general denials to allegations in the petition to strike

                                     -6-
J-A15027-19


and/or open constituted admissions of fact, which provided a defense to

Appellee’s judgment on the Note.        Appellant concludes this Court should

reverse and remand at least to allow for discovery to create a proper record

in order to open the confession of judgment and conduct a trial on the matter.

We disagree.

      “[W]e review the order denying Appellant’s petition to open the

confessed judgment for an abuse of discretion.” Neducsin v. Caplan, 121

A.3d 498, 506 (Pa.Super. 2015).

         Judicial discretion requires action in conformity with law on
         facts and circumstances before the trial court after hearing
         and consideration. Consequently, the court abuses its
         discretion if, in resolving the issue for decision, it misapplies
         the law or exercises its discretion in a manner lacking
         reason.

Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000) (internal

citations omitted).

      “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.” Neducsin, supra at 504. “A petition

to open a confessed judgment is an appeal to the equitable powers of the

court.” Id. The trial court may open a confessed judgment “if the petitioner

(1) acts promptly, (2) alleges a meritorious defense, and (3) can produce

sufficient evidence to require submission of the case to a jury.” Id. at 506

(emphasis in original). The test to open a confessed judgment is conjunctive;

petitioner must meet all three prongs to succeed. See id.

                                       -7-
J-A15027-19


         A meritorious defense is one upon which relief could be
         afforded if proven at trial.

            Pa.R.Civ.P. 2959(e) sets forth the standard by which
            a court determines whether a moving party has
            properly averred a meritorious defense. If evidence
            is produced which in a jury trial would require the
            issues to be submitted to the jury the court shall open
            the judgment. Furthermore, the court must view the
            evidence presented in the light most favorable to the
            moving party, while rejecting contrary evidence of the
            non-moving party. The petitioner need not produce
            evidence proving that if the judgment is opened, the
            petitioner will prevail. Moreover, we must accept as
            true the petitioner’s evidence and all reasonable and
            proper inferences flowing therefrom.


         In other words, a judgment of confession will be opened if
         a petitioner seeking relief therefrom produces evidence
         which in a jury trial would require issues to be submitted to
         a jury. The standard of sufficiency here is similar to the
         standard for a directed verdict, in that we must view the
         facts most favorably to the moving party, we must accept
         as true all the evidence and proper inferences in support of
         the defense raised, and we must reject all adverse
         allegations. The trial court can make this decision as a
         matter of law when the defense presented is without
         adequate substance, because contract construction and
         interpretation is generally a question of law for the court to
         decide.

Id. at 506-07 (internal citations and quotation marks omitted) (emphasis

added). “Generally, the court will dispose of the rule on petition and answer,

along with other discovery and admissions.”       Id. at 506.    See Pa.R.C.P.

2959(e) (stating: “(e) The court shall dispose of the rule on petition and

answer, and on any testimony, depositions, admissions and other evidence.

The court for cause shown may stay proceedings on the petition insofar as it


                                     -8-
J-A15027-19


seeks to open the judgment pending disposition of the application to strike off

the judgment. If evidence is produced which in a jury trial would require the

issues to be submitted to the jury the court shall open the judgment”).

      When the court is addressing a contract claim, the law states:

         A contract’s language is unambiguous if it can be
         determined without any other guide than knowledge of the
         simple facts on which its meaning depends. When the
         contract is clear and unambiguous, the meaning of the
         contract is ascertained from the writing alone. A court must
         not distort the meaning of the language or resort to a
         strained contrivance to find an ambiguity. Additionally, a
         mere disagreement between the parties regarding the
         proper construction of the language does not render the
         contract ambiguous. In the context of a petition to open a
         confessed judgment, the function of our Court is not to
         weigh the evidence in support of the defense, but merely to
         determine whether there was sufficient evidence to go to
         the jury.

         Whether a judge has correctly interpreted a writing and
         properly determined the legal duties which arise therefrom
         is a question of law for the appellate court. The legal effect
         or enforceability of a contract provision presents a question
         of law accorded full appellate review and is not limited to an
         abuse of discretion standard. Likewise, if the matter under
         review involves the interpretation of the Pennsylvania Rules
         of Civil Procedure, we have before us a question of law,
         where our standard of review is de novo and our scope of
         review is plenary.

Neducsin, supra at 507 (internal citations and punctuation omitted). As a

general rule, “clauses in a contract should not be read as independent

agreements thrown together without consideration of their combined effects.”

Trombetta v. Raymond James Financial Services, Inc., 907 A.2d 550,

560 (Pa.Super. 2006). “Terms in one section of the contract, therefore, should


                                     -9-
J-A15027-19


never be interpreted in a manner which nullifies other terms in the same

agreement.”    Id.   “Furthermore, the specific controls the general when

interpreting a contract.” Id.

      Instantly, with respect to the petition to open the confession of

judgment, the trial court reasoned as follows:

         The petition to open asserted that the judgment should be
         opened because [Appellee] had misrepresented the financial
         conditions   and    profitability of   the   tavern,   had
         misrepresented the soundness of the building and the value
         of the equipment therein, had depleted foodstuff inventory
         in violation of the sale agreement, and had improperly
         discontinued power and cable services to the premises.

                                  *     *      *

         Preliminarily, it is noted that in this confession-of-judgment
         action, an automatic Rule-to-Show-Cause Order was issued
         as of course, notwithstanding [Appellant’s] assertion to the
         contrary. The docket shows that on the same day when
         [Appellant] filed its petition, the Motion Court of the Court
         of Common Pleas of Philadelphia County generated an
         automatic Order for a “Response Date” to the petition. The
         automatic Order generated by the Motion Court conformed
         not only to the Pennsylvania Rules of Civil Procedure, but
         also to the Philadelphia County Rules of Court. Specifically,
         Pa.R.C.P. 206.6 states that:

            [a] rule to show cause shall be issued as of course
            upon the filing of the petition. The rule shall direct
            an answer be filed to the petition within twenty
            days after service of the petition to respondent.

         In addition, the Philadelphia County Rules of Court instruct
         that:

            [t]he Rule to Show Cause…set forth in Pa.R.C.P. 206.6
            is hereby adopted…. Upon the filing of a petition,
            a rule to show cause order shall be issued as of
            course by the Motion Court clerk on behalf of the

                                      - 10 -
J-A15027-19


          Court. The form of rule to show cause shall be
          substantially as set forth hereunder.

       Upon a reading of the afore-quoted Rules, this [c]ourt
       determined that the automatic Order, and the response date
       therein, conformed to the requirements of Pa.R.C.P. 206.6
       because it directed that an answer be filed within twenty
       days. For this reason, it is respectfully suggested that this
       [c]ourt did not err in failing to issue an Order captioned
       “Rule-to-Show-Cause” because the equivalent to such an
       Order had been automatically issued by the clerk of the
       Motion Court of this Court of Common Pleas.

       Next, [Appellant] complains that this [c]ourt erred by failing
       to allow discovery. The law protecting the due process
       rights of petitioners in a confession-of-judgment action is
       settled:

          in the context of a judgment confessed on a judgment
          note, the hearing required to comport with due
          process means simply an opportunity to be heard; it
          does not require a proceeding comparable to a full
          trial, but may be satisfied by other procedural
          opportunities to be heard, such as a petition to open
          judgment, a stay of execution, a rule to show cause
          why the judgment should not be opened, depositions
          to support the allegations in the petition, and oral
          argument.

       In this case, it is respectfully suggested that [Appellant] did
       not suffer a deprivation of due process rights when this
       [c]ourt abstained from ordering discovery, or from holding
       oral argument and a hearing.15 There was no deprivation of
       due process rights because [Appellant] did avail itself of a
       petition to strike or open the judgment, and did enjoy an
       opportunity to file a petition to stay execution proceedings.
       Moreover, [Appellant] received the benefit of an automatic
       Order which was equivalent to a Rule-to-Show-Cause. For
       the reasons stated above, it is respectfully suggested that
       this court did not err when it abstained from ordering
       discovery, or from holding an argument and a hearing.

          15The form-order adopted by the Philadelphia County
          Rules of Court clearly states that “[a] Hearing or

                                   - 11 -
J-A15027-19


          Argument shall be scheduled at the discretion of
          the Assigned Judge….” Phila.Civ.R.206.4(c) (2018)
          (emphasis supplied).

       Finally, [Appellant] complains that the judgment should
       have been opened because [Appellant] had been
       fraudulently induced by [Appellee] to enter into a
       contractual relation. Specifically, [Appellant] averred in its
       petition that [Appellee] had misrepresented the financial
       strength of the tavern, the soundness of its building, and
       the conditions of its equipment. This [c]ourt respectfully
       suggests that it did not err for two reasons: first, any
       evidence to show fraud in the inducement, as is the case
       here, is inadmissible by operation of the parol evidence rule.
       In Pennsylvania:

          parol evidence of prior representations is inadmissible
          as to a matter covered by the written agreement with
          an integration clause….

       However:

          parol evidence is admissible only to prove fraud in the
          execution, not the inducement….

       In this case, [Appellant] executed an Agreement of Sale
       containing an integration clause. Under Pennsylvania law,
       [Appellant] might have been able to assert against the
       confessed judgment a defense based on fraud-in-the-
       execution; here however, [Appellant] alleged that it had
       been induced to enter into a contractual relation with
       [Appellee] by its fraudulent misrepresentations regarding
       the tavern’s financial viability, the structural conditions of
       the building, and the soundness of its equipment. These
       averments can only lead to one conclusion: [Appellant]
       alleged fraud-in-the-inducement and may not rely on this
       defense in an effort to open the judgment.

       Second, this [c]ourt would not have erred even if
       [Appellant] had averred fraud-in-the-execution.           This
       [c]ourt would not have erred because [Appellant] had failed
       to offer in its petition any evidence tending to show that the
       tavern was in poor financial conditions, or that the building
       and equipment lay in a state of disrepair.22

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J-A15027-19



                                  *     *      *

         22 “The petitioning party [in a confession of judgment] bears
         the burden of producing sufficient evidence to substantiate
         its alleged defenses.” Haggerty v. Fetner, 481 A.2d 641,
         644 (Pa. Super. 1984).

(Trial Court Opinion at 3-7) (internal citations/footnotes omitted). Under the

circumstances of this case, we agree with the court’s decision. Appellant cites

no relevant law to support its argument claiming the trial court should have

used Appellant’s proposed rule-to-show-cause order. Additionally, the trial

court had full discretion to allow or deny discovery or a hearing.          See

Phila.Civ.R.206.4(c) (2018).    Furthermore, the integration clause in the

parties’ Agreement of Sale subsumed Appellant’s claims of fraudulent

inducement and negated Appellant’s alleged “meritorious defenses.”          See

Hart v. Arnold, 884 A.2d 316, 340 (Pa.Super. 2005) (stating “parol evidence

of prior representations is inadmissible as to a matter covered by the written

agreement with an integration clause…”).           Moreover, the record fails to

support Appellant’s allegations that Appellee made only general denials in

answer to Appellant’s claims, resulting in admissions of fact. To the contrary,

Appellee specifically denied Appellant’s allegations and made no admissions in

the pleadings to create a meritorious defense to the confessed judgment on

the Note. Because Appellant failed to plead a sufficient meritorious defense

to the confessed judgment, Appellant did not meet the three-prong test to

open the judgment.      Therefore, we conclude the court properly denied


                                      - 13 -
J-A15027-19


Appellant’s petition to open the confessed judgment without discovery or a

hearing. Thus, we see no reason to disturb that decision.

      In its third issue, Appellant contends Appellee did not properly allege

the occurrence of a default, as required in a complaint for confession of

judgment. Specifically, Appellant claims the warrant of attorney in the Note

authorizes a confession of judgment upon an event of default. As defined in

the Note, an event of default requires proper notice and ten days to cure the

non-payment before accelerating the Note for the full amount due and

exercising the warrant of attorney. Appellant maintains Appellee did not plead

in its complaint in confession of judgment the giving of the required notice

and cure period.

      Appellant also contends the judgment entered was grossly excessive, in

proportion to the amount in default.         Specifically, Appellant claims the

confessed judgment of $212,381.83 plus attorneys’ fees was thirty-three

times larger than the $6,459.22 past due. Additionally, Appellant avers the

attorney fees associated with the confession of judgment were unreasonable.

Appellant contends the Note provides for “reasonable attorney fees” and given

the straightforward complaint filed, the fees claimed were grossly excessive.

Appellant concludes this Court should reverse and remand for further

proceedings. We agree in part.

      In contrast to a petition to open, a petition to strike a confessed

judgment is a distinct remedy; these remedies are not interchangeable.


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J-A15027-19


Neducsin, supra at 504.         Pennsylvania courts are fully aware of the

possibility of abuse that can arise from judgments by confession, so courts

are strict in ruling upon their validity. Scott Factors, Inc. v. Hartley, 425

Pa. 290, 291, 228 A.2d 887, 888 (1967).         “Entry of a valid judgment by

confession must be ‘made in rigid adherence to the provisions of the warrant

of attorney; otherwise, such judgment will be stricken.’” Neducsin, supra at

505.

       “A petition to strike a judgment is a common law proceeding which

operates as a demurrer to the record. A petition to strike a judgment may be

granted only for a fatal defect or irregularity appearing on the face of the

record.” Id. at 504 (quoting Resolution Trust Corp. v. Copley Qu-Wayne

Associates, 546 Pa. 98, 106, 683 A.2d 269, 273 (1996)). “A petition to strike

is not a chance to review the merits of the allegations of a complaint.” City

of Philadelphia v. David J. Lane Advertising, Inc., 33 A.3d 674, 677

(Pa.Cmwlth. 2011). “Rather, a petition to strike is aimed at defects that affect

the validity of the judgment and that entitle the petitioner, as a matter of law,

to relief.” Id.

       “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.” Neducsin, supra at 504 (citing Resolution Trust

Corp., supra at 108, 683 A.2d at 274). “Factual disputes by definition cannot

be raised or addressed in a petition to strike off a confession of judgment,


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J-A15027-19


because factual disputes force the court to rely on matters outside the relevant

record to decide the merits of the petition.”      Neducsin, supra at 504-05

(citing Resolution Trust Corp., supra at 109, 683 A.2d at 275). “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.”          Neducsin, supra at 504 (quoting

Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa.Super.2011)). “We review a trial

court’s order denying a petition to strike a confessed judgment to determine

whether the record is sufficient to sustain the judgment.”       ESB Bank v.

McDade, 2 A.3d 1236, 1239 (Pa.Super. 2010).

      Generally:

         It has always been held that formal defects, mistakes, and
         omissions in confessions of judgment may be corrected by
         amendment where the cause of the action is not changed,
         where the ends of justice require the allowance of such
         amendment, and where the substantive rights of defendant
         or of any third persons will not be prejudiced thereby.

West Penn Sand & Gravel Co. v. Shippingport Sand Co., 367 Pa. 218,

222, 80 A.2d 84, 86 (1951).          Nevertheless, in this context, the law

distinguishes between a formal defect that can be cured by simple amendment

and a fatal defect on the face of the record that invalidates the judgment.

Dime Bank v. Andrews, 115 A.3d 358, 367 (Pa.Super. 2015) (holding

complaint in confession of judgment was fatally defective and should have

been stricken, where agreement called for giving written notice of default at

least 10 days before entry of confessed judgment; complete failure to allege

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giving of notice in complaint and attached exhibits constituted fatal defect on

face of record). Compare West Penn Sand & Gravel Co., supra (holding

failure to attach copy of required written notice of default to complaint in

confession of judgment constituted formal defect that could be corrected by

amendment, where attached affidavit of default incorporated by reference

written notice of default that had been served on borrower).

      Where a contract includes a warrant of attorney that is hinged to the

terms of the instrument, the terms of the instrument are essential elements

to the lawful exercise of the warrant of attorney. Dime Bank, supra at 367-

68.   For example, if the agreement defines an “event of default” as

nonpayment of a specific amount plus the requirement of notice and an

opportunity to cure, the notice and cure period is an essential element or

condition precedent to the proper exercise of a warrant of attorney. Id. The

complete failure to aver, in the complaint to confess judgment and attached

exhibits, the fulfillment of the notice/cure elements required in the parties’

agreement is more than just a technical or formal pleading defect; it is a fatal

defect that compels the court to strike off the judgment. Id. See also A. B.

& F. Contracting Corp. v. Matthews Coal Co., 166 A.2d 317 (Pa.Super.

1960) (holding allegation of 10 days’ notice was essential to exercise of

warrant of attorney; failure to allege giving of required notice was fatal defect

on face of record and not formal defect that could be corrected by amendment,

because record was devoid of one of essential elements required for lawful


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exercise of warrant of attorney). “Thus, a court must review the contract in

its entirety, and a provision will not be construed to result in a forfeiture unless

no other reasonable construction is possible.” Kalina v. Eckert, 497 A.2d

1384, 1385 (Pa.Super. 1985).

      In the instant case, the parties executed a Note for $275,000.00 that

contained various provisions relevant to the confession of judgment and

Appellant’s petition to strike. Appellant agreed to pay Appellee a sum certain

of $3,229.61 on the fifteenth of each month for 96 months. Appellant paid

per the Note for approximately two years, until it failed to pay for two months,

leaving a balance due on the Note of $201,729.35. Based on the two months

of nonpayment, Appellee executed a warrant of attorney and filed a confessed

judgment against Appellant.

      Appellant averred in ¶33 of its petition to strike the confessed judgment,

that Appellee “does not properly allege that a default occurred and proper

notice to cure was given before seeking the entire amount” of the Note. (See

Appellant’s Petition to Strike or Open Judgement Entered By Confession by

[Appellee], filed 11/6/18, at 6; R.R. at 49a.) Therefore, we reject Appellee’s

contention that Appellant waived its objection to the lack of any averment of

notice in the complaint for confession of judgment or attachments.

      As read in its entirety, the Note defines an “Event of Default” to include

notice to Appellant with a ten-day cure period. Per the Remedies of Lender

provision in the Note, Appellee could not exercise its rights under the Note


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until the nonpayment occurred, notice was given to Appellant and a cure

period had expired. The warrant of attorney in the Note authorizes Appellee

to enter a confessed judgment against Appellant after the occurrence of an

“Event of Default,” which includes notice and the ten-day cure period.       In

failing to aver it had given proper notice and time to cure in the complaint and

attached exhibits, Appellee did not adhere strictly to the terms of the Note

upon which the warrant of attorney is based.      Due to Appellee’s complete

failure to aver the giving of notice and time to cure, the record was missing

an essential element to the lawful exercise of the warrant of attorney.

Therefore, a fatal defect appears on the face of the record, and the trial court

should have stricken the judgment of confession. Accordingly, the judgment

before us must be stricken under controlling case law.       See Dime Bank,

supra; A. B. & F. Contracting Corp., supra.

      With respect to Appellant’s argument that the confessed judgment was

grossly excessive, given the amount in default, Appellant relies on various

cases to support its proposition. See Roche v. Rankin, 406 Pa. 92, 176 A.2d

668 (1962) (holding money judgment for principal sum and interest was not

authorized under warrant of attorney, which allowed payment of principal sum

only; warrant of attorney must be strictly construed to conform precisely to

its terms; judgment was entered in good faith and could be modified to

exclude unauthorized items); Homart Development Co. v. Sgrenci, 662

A.2d 1092 (Pa.Super. 1995) (holding judgment was grossly excessive when


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party in whose favor warrant was given had confessed judgment for money

damages and possession of leased premises, where judgment provided for

double recovery based on single wrong; warrant holder could confess

judgment for future rents under acceleration clause or judgment in ejectment

but not both). Compare Dollar Bank, Federal Sav. Bank v. Northwood

Cheese Co., Inc., 637 A.2d 309 (Pa.Super. 1994) (holding award of

attorneys’ fees of 15% of judgment amount was not grossly excessive, where

warrant of attorney specifically authorized amount, and Appellants provided

no evidence concerning excessiveness of fee).

     Here, the warrant of attorney in the parties’ Note authorized Appellee

to enter a confession of judgment for the entire unpaid principal balance and

accrued interest under the acceleration clause of the Note, plus costs and

other expenses incurred in connection with the judgment, plus attorneys’

collection commission of 5% of the aggregate amount, but in no event less

than $5,000.00.   (See Note, 2/29/16, at 6; R.R. at 22a.)     Nothing in the

record indicates Appellee was seeking a double recovery based on a single

wrong. Therefore, we agree with Appellee that Appellant’s reliance on these

cases is misplaced and the judgment cannot be stricken on the ground of gross

excessiveness.

     The Note also expressly provided for attorneys’ fees in an amount equal

to 5% of the total of the accelerated amount and interest owed under the Note

plus costs and other expenses incurred in the collection. Theoretically, the


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counsel fees of $10,113.42 were consistent with the terms of the Note and

therefore, not “unreasonable.”     Appellant stopped paying early into the

payment    schedule,   so   the   amount     Appellant   owed   was   still   high.

Nevertheless, under the facts of this case, Appellee did not properly aver

notice of nonpayment and a cure period.          Counsel’s failure to draft the

complaint in confession of judgment consistent with the terms of the Note

precludes an award of counsel fees related to the stricken judgment. The

Note, however, allows Appellee to confess judgment as many times as

necessary until payment in full of all amounts due; so, Appellee did not

exhaust the warrant of attorney in this flawed attempt to confess judgment.

On the other hand, Appellant should not have to pay the counsel fees and

costs related to a defective exercise of the warrant of attorney.

      Based upon the foregoing, we affirm the order denying Appellant’s

petition to open the confessed judgment.        We reverse the order denying

Appellant’s petition to strike the confessed judgment as well as the award of

counsel fees and costs related to that judgment.         Our decision is without

prejudice to Appellee to try again for relief authorized under the Note,

including commencement of another proceeding in strict compliance with the

terms of the Note, including proper averment of notice and a cure period. See

Neducsin, supra; Dime Bank, supra; A. B. & F. Contracting Corp.,

supra.

      Order affirmed in part and reversed in part.


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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 7/2/19




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