J-A13019-18, J-A13020-18, J-A13021-18, J-A13022-18, J-A13023-18


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 NORTHWEST BANK, FORMERLY,             :   IN THE SUPERIOR COURT OF
 NORTHWEST SAVINGS BANK                :        PENNSYLVANIA
                                       :
                                       :
            v.                         :
                                       :
                                       :
 EMKEY GAS PROCESSING, LLC             :
                                       :   No. 1338 WDA 2017
                  Appellant            :

                Appeal from the Order September 12, 2017
 In the Court of Common Pleas of Crawford County Civil Division at No(s):
                              DSB 2016-659

 NORTHWEST BANK, FORMERLY,             :   IN THE SUPERIOR COURT OF
 NORTHWEST SAVINGS BANK                :        PENNSYLVANIA
                                       :
                                       :
            v.                         :
                                       :
                                       :
 MID AMERICAN NATURAL                  :
 RESOURCES, LLC, AND EMKEY             :   No. 1339 WDA 2017
 ENERGY, LLC                           :
                                       :
                  Appellants           :

                Appeal from the Order September 12, 2017
 In the Court of Common Pleas of Crawford County Civil Division at No(s):
                              DSB 2016-660

 NORTHWEST BANK, FORMERLY,             :   IN THE SUPERIOR COURT OF
 NORTHWEST SAVINGS BANK                :        PENNSYLVANIA
                                       :
                                       :
            v.                         :
                                       :
                                       :
 OIVIND RISBERG AND EMKEY GAS          :
 PROCESSING, LLC                       :   No. 1340 WDA 2017
                                       :
                  Appellants           :
J-A13019-18, J-A13020-18, J-A13021-18, J-A13022-18, J-A13023-18



           Appeal from the Order Entered September 12, 2017
 In the Court of Common Pleas of Crawford County Civil Division at No(s):
                            DSB 2016*661

 NORTHWEST BANK, FORMERLY,              :   IN THE SUPERIOR COURT OF
 NORTHWEST SAVINGS BANK                 :        PENNSYLVANIA
                                        :
                                        :
            v.                          :
                                        :
                                        :
 EMKEY GAS PROCESSING, LLC              :
                                        :   No. 1341 WDA 2017
                  Appellant             :

                Appeal from the Order September 12, 2017
 In the Court of Common Pleas of Crawford County Civil Division at No(s):
                              DSB 2016-662

 NORTHWEST BANK, FORMERLY,              :   IN THE SUPERIOR COURT OF
 NORTHWEST SAVINGS BANK                 :        PENNSYLVANIA
                                        :
                                        :
            v.                          :
                                        :
                                        :
 MID AMERICAN NATURAL                   :
 RESOURCES, LLC                         :   No. 1342 WDA 2017
                                        :
                  Appellant             :

           Appeal from the Order Entered September 12, 2017
 In the Court of Common Pleas of Crawford County Civil Division at No(s):
                           No. DSB 2016-663


BEFORE: OLSON, J., DUBOW, J., and MUSMANNO, J.

MEMORANDUM BY DUBOW, J.:                    FILED SEPTEMBER 21, 2018




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        In these consolidated appeals,1 Appellants, Emkey Gas Processing, LLC,

Mid American Natural Resources, LLC, Emkey Energy, LLC, and Oivind Risberg

(collectively “Appellants”), appeal from the Orders entered in the Crawford

County Court of Common Pleas denying their Petitions to Open and/or Strike

five separate confessed judgments.2 After careful review, we affirm.

        The trial court summarized the facts and procedural history as follows:

        The judgments arise from a banking relationship between the
        [Appellee] bank and [Appellants]. [Appellants] obtained loans
        from [Appellee] by entering into Loan Agreements and Notes
        containing confession of judgment clauses. Problems arose in
        June of 2015 when [Appellants] reported an issue with their
        borrowing base. The bank demanded payment, and [Appellants]
        made certain payments in an effort to become current. In March
        of 2016, [Appellants] stopped making payments to the bank. In
        July of 2016, [Appellee] confessed judgment against [Appellants]
        with the judgments totaling $1,674,505.53.

Trial Ct. Op., 9/13/17, at 2.

        On August 29, 2016, Appellants filed a Petition to Strike and/or Open

Judgment by Confession at each of five dockets.        Appellants argued that

Appellee made misleading representations and acted in bad faith with a course

of conduct designed to ultimately induce Appellants to default under the Loan

Agreements.       See Brief in Support of Petitions, 7/17/17, at 7-12.       In

particular, Appellants claimed that they detrimentally relied on Appellee’s

statements that Appellants’ payments would cure any default.         They also
____________________________________________


1   We consolidated these matters sua sponte.

2Appellee, Northwest Bank, filed the confessed judgments at Docket Nos. DSB
2016-659, DSB 2016-660, DSB 2016-661, DSB 2016-662, and DBS 2016-
663.

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argued that the court should open the Judgments because Appellee’s claimed

damages—including attorneys’ fees and interest—were excessive. Id. at 12-

15.

       After the parties conducted discovery3 and the court held a hearing on

Appellants’ Petitions, the trial court denied Appellants’ requested relief. The

court concluded that there were no defects on the face of the record and no

facts in dispute as to Appellants’ defaults. Relevant to the instant appeal, the

court specifically found that: (1) Appellee had the right to demand payment

under the Loan Agreements; (2) Appellants had defaulted on their obligations

under the Loan Agreements; (3) the parties had not modified in writing the

terms of the Loan Agreements; (4) Appellee had not waived in writing the

terms of the Loan Agreements; and (5) the parties had not entered into a

forbearance agreement. See Trial Ct. Op. at 9-12.

       Appellants timely appealed.             Appellants complied with Pa.R.A.P.

1925(b), and the trial court adopted its September 13, 2017 Memorandum

and Order in lieu of filing a Rule 1925(a) Opinion.

       Appellants raise the following seven issues on appeal:4

       1. Did the [c]ourt err in refusing to strike the judgment by
          confession?

____________________________________________


3 In the course of discovery, the parties deposed Keith Farrell, the Chief
Accounting Officer of the Appellant entities, and Oivind Risberg, the Managing
Partner, Chief Executive Officer, and owner of the Appellant entities.

4Appellants’ Briefs are identical; we, thus, refer to the Briefs in the singular
as “Brief.”

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      2. Did the [c]ourt err in refusing to open the judgment by
         confession?

      3. Did the [c]ourt err by holding that there was not sufficient
         evidence in dispute to submit the issues raised in the Petitions
         to a jury?

      4. Did the [c]ourt err by failing to recognize that [] Appellee’s
         conduct violated the duty of good faith and fair dealing?

      5. Did the [c]ourt err by holding that the attorneys’ fees contained
         in the confession of judgment were not excessive?

      6. Did the [c]ourt err by including a pre[-]payment penalty in the
         amount confessed against [] Appellants?

      7. Did the [c]ourt err by finding that [] Appellee’s request for
         post[-]judgment interest is not contrary to applicable law?

Appellants’ Brief at 4 (reordered for ease of disposition).

      In their first issue, Appellants claim that the court erred in denying their

Petition to Strike the Confessed Judgment.          They have not, however,

presented any argument in their Brief in support of this issue. It is, therefore,

waived. See Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959

A.2d 438, 444 (Pa. Super. 2008) (“The Rules of Appellate Procedure state

unequivocally that each question an appellant raises is to be supported by

discussion and analysis of pertinent authority. Failure to do so constitutes

waiver of the claim.” (citations omitted)); Pa.R.A.P. 2119(a) and (b).

      Appellants’ second, third, and fourth claims are interrelated. We, thus,

address them together. In these issues, Appellants argue that the trial court

erred in denying their Petition to Open the Confessed Judgments. Appellants’

Brief at 14-21.


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         We review an order denying a petition to open a confessed judgment

for an abuse of discretion.      Neducsin v. Caplan, 121 A.3d 498, 506 (Pa.

Super. 2015). “[T]he court abuses its discretion if, in resolving the issue for

decision, it misapplies the law or exercises its discretion in a manner lacking

reason.” Id. Our scope of review is 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.”             Hazer v.

Zabala, 26 A.3d 1166, 1169 (Pa. Super. 2011).

         In adjudicating a petition to open a 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.”    Ferrick v. Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013) (citing

Homart Development Co. v. Sgrenci, 662 A.2d 1092 (Pa. Super. 1995) (en

banc)). “When determining a petition to open a judgment, matters dehors

the record filed by the party in whose favor the warrant is given, i.e.,

testimony, depositions, admissions, and other evidence, may be considered

by the court.” Graystone Bank v. Grove Estates, LP, 58 A.3d 1277, 1282

(Pa. Super. 2012).

         A petition to open a confessed judgment is governed by Pa.R.C.P. No.

2959 and is an appeal to the trial court’s equitable powers:

         Ordinarily, if a petition to open a judgment is to be successful, it
         must meet the following test: (1) the petition to open must be
         promptly filed; (2) the failure to appear or file a timely answer


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        must be excused; and (3) the party seeking to open the judgment
        must show a meritorious defense....

Century Surety Co. v. Essington Auto Center, LLC, 140 A.3d 46, 53 (Pa.

Super. 2016).

        Here, Appellants focus their argument on the third factor, i.e., the trial

court’s determination that they did not present a meritorious defense.          A

meritorious defense is one upon which relief could be granted if proven at

trial. Ferrick, 69 A.3d at 647.

        Pa.R.[C.]P. [No.] 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.

Neducsin, 121 A.3d at 506–07 (internal citations and quotation marks

omitted, emphasis added).

        Referencing Pa.R.C.P. No. 2959(e), Appellants aver that they have set

forth   facts   establishing   a   meritorious   defense   which   would   require

presentation of the disputed issues to a jury.       Appellants’ Brief at 15.   In

particular, Appellants allege that there is evidence indicating that: (1) there


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was a mutual mistake as to an agreed term in the Loan Agreements; (2)

Appellee materially breached the Loan Agreements; (3) Appellee breached its

duty of good faith and fair dealing; and (4) it was foreseeable that Appellee’s

subsequent material breach and breach of duty of good faith and fair dealing

would result in a cash-flow crisis for Appellants. Id. at 15, 17-25.

      Essentially, Appellants claim that the trial court should have opened the

Confessed Judgments because Appellee’s employees’ oral representations

justified Appellants having defaulted on the payments due under the written

Loan Agreements.

      “The fundamental rule in contract interpretation is to ascertain the intent

of the contracting parties.” Ins. Adjustment Bureau, Inc. v. Allstate Ins.

Co., 905 A.2d 462, 468 (Pa. 2006).” “To discern the parties’ intent, the court

must give effect to clear and unambiguous terms without reference to matters

outside the contract.” Anchel v. Shea, 762 A.2d 346, 352 (Pa. Super. 2000)

(internal citations and quotation marks omitted).

      After considering the deposition testimony of Keith Farrell, the trial court

concluded that “there is no dispute that [Appellee] had the right to demand

payment.” Trial Ct. Op., 9/13/17, at 10. The court further considered Farrell’s

testimony that the parties had not executed either a written waiver of

Appellants’ obligation to make monthly payments under the Loan Agreements

or a written forbearance agreement.         Id. at 10-11, citing N.T. Farrell,

10/27/16, at 46-48.    Farrell also testified that Appellants defaulted on the

Loan Agreements when they stopped making payments on them in February

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or March of 2016. Id. at 11, citing N.T. Farrell at 128. Last, the court noted

that Farrell’s undisputed testimony showed that the parties never executed

any written documents that modified the rights or obligations of the parties to

the Loan Agreements. Id. at 11-12, citing N.T. Farrell at 44.

      The court also considered the deposition testimony of Oivind Risberg,

and similarly concluded that Risberg’s testimony failed to raise any disputed

issues of fact regarding the existence of a meritorious defense that would

require submission to a jury. See id. at 12. The court, thus, concluded that:

      [Appellants] have produced no facts to contradict: (A) the terms
      of the Loan Agreements; (B) the existence of a default under the
      terms of the Agreement(s); or (C) that there is no written
      modification or forbearance agreement that would modify the
      terms of the original Loan Agreements.

Id.

      The record supports the trial court’s conclusions that: (1) Appellants

admitted that the parties had not modified the terms of the Loan Agreements;

(2) they had defaulted on the Loan Agreements; and (3) that the Loan

Agreements’ terms permitted Appellee to confess judgment as a result of

Appellants’ default.   Importantly, Farrell and Risberg both conceded that

Appellee had the right to monthly payments under the Loan Agreements, and

that Appellants failed to make those payments. See N.T. Farrell at 54; N.T.

Risberg, 10/27/16, at 62-63.

      Owing to these admissions, Appellants failed to demonstrate that they

could put forth a meritorious defense as a matter of law to the Confessed



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Judgments.      In the absence of any disputed issues, the trial court did not

abuse its discretion in denying Appellants’ Petitions to Open the Confessed

Judgments. Appellants are, therefore, not entitled to relief on these issues. 5

       In their fifth issue, Appellants baldly claim that the attorneys’ fees

contained in the Confessed Judgments were excessive, and the trial court

should have opened the Judgments on that basis.6 Appellants’ Brief at 25-27.

Notably, however, they do not complain that the amount of attorneys’ fees

was in violation of the terms of the Loan Agreements or the terms of the

Notes.

       This Court has upheld the inclusion and enforcement of attorneys’ fees

collection provisions in loan agreements.          RAIT Partnership, L.P. v. E

Pointe Properties I, Ltd., 957 A.2d 1275, 1279 (Pa. Super. 2008), citing

Dollar Bank v. Northwood Cheese Co., 637 A.2d 309, 314 (Pa. Super.

1994) (attorney’s fees provision of 15% enforceable where it was “specifically

authorized by the warrant of attorney”).
____________________________________________


5 Further undermining Appellants’ arguments, we observe that Paragraph
14(b) of the parties’ Multiple Draw Non-Revolving Term Note expressly
provides that the Note contains the “entire agreement between” the parties,
and “supersedes every course of dealing, other conduct, oral agreement,
commitment letter or other correspondences[.]” Multiple Draw Non-Revolving
Term Note, 9/25/13, at ¶ 14(b).

6 Appellants have not indicated in their Brief the amount of attorneys’ fees
included in the Confessed Judgments. Rather, they merely noted that “the
confessed judgment includes attorneys’ fees in the amount of five (5%)
percent of the judgment amount, whether or not these fees were actually
earned.” Appellants’ Brief at 25.



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       In the instant case, Appellants expressly granted Appellee a warrant of

attorney to enter judgment against them in an amount that included a 5%

attorneys’ commission.          See Multiple Draw Non-Revolving Term Note,

9/25/13, at ¶ 17. Because Appellants have not averred that the amount of

attorneys’ fees assessed against them is in excess of the amount authorized

by the warrant of attorney, we cannot conclude that the trial court abused its

discretion in refusing to open the Confessed Judgments.7

       In their sixth issue, Appellants claim the trial court erred in permitting

Appellee to include a prepayment penalty in the amount confessed against

them. Appellants’ Brief at 27-28.

       The trial court noted in its Opinion Sur Pa.R.A.P. 1925(a) that Appellants

raised this issue for the first time in their Rule 1925(b) Statement. Our review

of the record confirms that Appellants failed to brief or argue the issue

regarding prepayments before the trial court. Thus, this issue is waived. See

Irwin Union Nat. Bank and Trust Co. v. Famous, 4 A.3d 1099, 1104 (Pa.

Super. 2010) (noting that issues cannot be raised for the first time in a Rule

1925(b) Statement). See also Pa.R.A.P. 302(a) (“Issues not raised in the

lower court are waived and cannot be raised for the first time on appeal.”).

____________________________________________


7 Appellants rely on McMullen v. Kutz, 985 A.2d 769 (Pa. 2009), for the
proposition that “attorney fee awards must always be reasonable, regardless
of the language in the contract.” Appellants’ Brief at 26. We find McMullen
distinguishable from the instant case in that it arose within the context of a
separation and property settlement agreement and pertains to breach of
contract actions generally, and not, as here, to confessions of judgments by
sophisticated lenders against sophisticated borrowers.

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      In their final issue, Appellants claim the trial court erred in permitting

Appellee to assess post-judgment interest in an amount in excess of the legal

rate. Appellants’ Brief at 28-29. Relying on Stendardo v. Federal National

Mortgage Association, 991 F.2d 1089 (3rd Cir. 1993), Appellants argue that

the “request for post[-]judgment interest in excess of the legal rate is contrary

to established law under the merger doctrine.” In other words, Appellants

argue that once Appellee entered a Confessed Judgment the terms of the Loan

Agreements merged into the Judgment and Appellee no longer had the right

to enforce the post-judgment interest provision in the Loan Agreements.

      Appellants’ reliance on Stendardo is misplaced. As noted by the trial

court and Appellee, Stendardo also found that requests for post-judgment

interest in excess of the legal rate are permissible where the contract

evidences the parties’ intent to preserve the same rate of interest after the

lender obtains a judgment against the borrowers.        Id. at 1095.   In those

instances, the merger doctrine does not terminate the interest provision. Id.

      In this case, the “Interest Rate Provisions” paragraph of the instant

Multiple Draw Non-Revolving Term Notes provides, in relevant part, that once

an event of default has occurred, interest shall continue to “accrue at

a rate per annum equal to the aggregate of 6% plus the rate otherwise

applicable (the “Default Rate”)[.]” Multiple Draw Non-Revolving Term Note at

¶ 5(c) (emphasis added). Thus, the express language of the interest provision

clearly evinces the parties’ intent that after Appellee obtains a Judgment

interest shall accrue at the Default Rate. Therefore, the parties’ intentions

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supersede the merger doctrine and the trial court properly permitted Appellee

to collect interest at the Default Rate. Accordingly, the trial court did not err

in denying Appellants’ requested relief.

      Orders affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 9/21/2018




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