J-S71005-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JOSE L. PENA                             :   IN THE SUPERIOR COURT OF
                                          :        PENNSYLVANIA
                                          :
              v.                          :
                                          :
                                          :
 GRAN PALMA, LLC D/B/A DEJA VU            :
 NIGHTCLUB AND DEJA VU                    :
 RESTAURANT & LOUNGE OF PA, LLC           :   No. 2239 EDA 2019
 F/K/A DEJA VU NIGHTCLUB, LLC             :
 D/B/A DEJA VU NIGHTCLUB                  :
                                          :
                    Appellants            :

                 Appeal from the Order Entered July 1, 2019
   In the Court of Common Pleas of Lehigh County Civil Division at No(s):
                               2019-C-0101


BEFORE: BOWES, J., MURRAY, J., and McLAUGHLIN, J.

MEMORANDUM BY BOWES, J.:                               FILED MAY 20, 2020

      Gran Palma, LLC d/b/a Deja Vu Nightclub and Deja Vu Restaurant &

Lounge of PA, LLC f/k/a Deja Vu Nightclub, LLC d/b/a Deja Vu Nightclub

(collectively “Appellants”) appeal from the July 1, 2019 order denying their

petition to open/strike a default judgment entered in favor of Jose L. Pena.

After careful review, we affirm.

      This dispute concerns a civil action filed by Mr. Pena seeking a judgment

and damages against Appellants under a theory of negligence.         Mr. Pena

alleged that on February 24, 2017, he was a “business invitee” at Appellants’

place of business, which is located at 343-345 Hamilton Street, Allentown,

Pennsylvania. See Complaint, 1/9/19, at ¶¶ 6-8. Mr. Pena averred that he

was “brutally and savagely assaulted” by individuals that he recognized as
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“employees” and “patrons” of Appellants. Id. at ¶¶ 9-13. Mr. Pena claimed

that, as a result of the beating, he sustained severe injuries,1 loss of income,

and various other damages.           Specifically, he claimed that Appellants had

violated their “non-delegable duty to protect their patrons and insure the

presence of qualified, mature and conscientious security” for the protection

of, inter alia, Mr. Pena. Id. at ¶¶ 7-8, 18-19, 24, 37.

       Mr. Pena’s counsel first contacted Appellants on April 6, 2017, by

sending a certified letter notifying them that Mr. Pena had retained counsel

and advising them to preserve any “surveillance video” or “incident report”

related to Mr. Pena’s claims. See Response to Petition to Open/Strike, 4/8/19,

at Exhibit B.       The certified mail receipt indicates that the letter was

successfully delivered on April 20, 2017.        Id.   Receiving no response, Mr.

Pena’s counsel sent a follow-up letter on July 6, 2017.

       Mr. Pena filed his complaint on January 9, 2019. On January 22, 2019,

a deputy of the Lehigh County Sheriff served a copy of Mr. Pena’s complaint

at Appellants’ place of business,2 which was accepted by an individual named

____________________________________________


1  Mr. Pena averred that he sustained a “closed displaced bicondylar fracture
of the left tibia requiring external fixation and fasciotomy with popliteal repair
and skin granting, left popliteal artery injury, left leg pain, leg edema, tibial
fracture, acute kidney injury, compartment syndrome of left lower extremity,
laceration of face, abrasion of right upper extremity, [and a] closed head
injury with loss of consciousness.” See Complaint, 1/9/19, at ¶ 25. It is
unclear what precipitated the underlying altercation.

2   Separate certified copies of the complaint were sent to each Appellant.



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Osiris Guzman3 who was identified as the “person in charge.”          Return of

Service, 1/22/19. On February 6, 2019, Mr. Pena’s counsel filed an affidavit

of service. On February 11, 2019, Mr. Pena sent notice of his intent to enter

a default judgment against Appellants. See Notice of Intent to Enter Default

Judgment, 2/11/19, at unnumbered 1. Mr. Pena sent this notice via certified

mail to Appellants’ place of business, where it was delivered and signed-for by

an unidentified individual.4       The USPS tracking website indicates that the

notice was delivered to Appellants’ place of business on February 13, 2019.

See Response to Petition to Open/Strike, 4/8/19, at Exhibit E.

       On February 27, 2019, Mr. Pena filed a praecipe for default judgment

based upon Appellants’ failure to file a responsive pleading. See Praecipe for

Judgment by Default, 2/27/19, at unnumbered 1. That same day, the Lehigh

County Prothonotary sent notice of the default to judgment to Appellants at

the same place of business.          See Notice of Filing Judgment, 2/27/19, at

unnumbered 1. Furthermore, Mr. Pena sent the same notice via certified mail,

which the USPS tracking website confirms was delivered to Appellants’ place

____________________________________________


3 In an affidavit, Mr. Guzman identified himself as a “Member” of the corporate
entities operating the nightclub and named in Mr. Pena’s lawsuit, i.e.,
Appellants. See Petition to Open/Strike Default Judgment, 4/3/19, at Exhibit
B. Appellants have offered no other description of the nature or discussion of
the membership of these corporate entities. Id. at ¶ 4 (stating only that Mr.
Guzman’s mother, Anna Valentin, is “involved in the family business.”).
4 In his affidavit, Mr. Guzman averred that “[t]he signature on the certified

mail card for both of [Appellants] is unknown to me, is not a relative or
acquaintance nor is it an employee of the subject nightclub.” See Petition to
Open/Strike Default Judgment, 4/3/19, at Exhibit B. Mr. Guzman’s mother,
Anna Valentin, submitted an affidavit stating the same thing. Id.

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of business on March 2, 2019.           See Response to Petition to Open/Strike,

4/8/19, at Exhibit G. On March 19, 2019, the trial court entered a scheduling

order fixing a date for a damages hearing with respect to Mr. Pena’s default

judgment. Notice of this scheduling order was sent to Appellants at the same

address.

       On April 3, 2019, counsel for Appellants entered his appearance and

filed a petition to open/strike the default judgment. In that filing, Appellants

confirmed that service of Mr. Pena’s complaint was accepted by Mr. Guzman

on January 22, 2019. See Petition to Open/Strike Default Judgment, 4/3/19,

at ¶¶ 2-3, Exhibit B.       Mr. Guzman submitted an affidavit stating that he

delivered the complaint to his mother, Anna Valentin, who is the president of

both the corporate entities named in Mr. Pena’s lawsuit. Id. at Exhibit B. Ms.

Valentin also submitted an affidavit, stating that she held the complaint for

several days to “review [her] personal records.” Id. On January 25, 2019,

she delivered it to Appellants’ insurance agent, the Teets Insurance Group in

Kutztown, Pennsylvania.5 Id.


____________________________________________


5 In particular, Appellants hold “liquor liability and commercial general liability
insurance” policies from Teets Insurance Group. See Petition to Open/Strike
Default Judgment, 4/3/19, at ¶ 4. In the petition to open/strike, Appellants
averred that they “believed” that the insurance company “thereafter
submitted the Complaint to the appropriate insurance carriers for review and
further action.” Id. at ¶ 5. However, Mr. Guzman’s affidavit stated that at
some point before Appellants submitted the petition to open/strike, the
insurance company advised Appellants “that insurance coverage would not be
provided due to a variety of factors regarding the type of coverages we had
paid for [versus] the allegations made in the Complaint.” Id. at Exhibit B.

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      Both Mr. Guzman and Ms. Valentin stated that they had no notice of the

default judgment until some point in March 2019, when they received

scheduling notice of the damages hearing. Id. In addition to these affidavits,

Appellants also attached an answer and new matter.           Id. at Exhibit A.

Appellants asserted that the “attack” described by Mr. Pena “occurred at least

one (1) block away from [Appellants’] facility and as a result, [Appellants] had

no control over the intentional, purposeful and/or negligent acts of the

unidentified alleged assailant(s).” Id.

      Mr. Pena filed a response that included, inter alia, copies of the

correspondence described supra. Mr. Pena averred that he had followed all of

the necessary procedural requirements for the entry of a default judgment.

On July 1, 2019, the trial court denied Appellants’ petition. Appellants filed a

timely notice of appeal, and both Appellants and the trial court timely complied

with their obligations under Pa.R.A.P. 1925. The trial court relied upon the

reasoning set forth in its July 1, 2019 memorandum opinion.

      Appellants present a single issue for our consideration:

      Whether the trial court abused its discretion and/or committed an
      error of law in ruling against [Appellants] where [they] met all
      three required prongs to open the default judgment especially
      where, as here, the trial court took no testimony, made no findings
      of credibility, and ignored unrefuted statements contained in
      affidavits submitted by [Appellants] in support of the motion to
      open?

Appellants’ brief at 5.




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      At the outset, we note that “[a] petition to strike a judgment and a

petition to open a judgment are separate and distinct remedies and [are] not

interchangeable.”   U.S. Bank Nat. Assoc. for Penna. Housing Finance

Agency v. Watters, 163 A.3d 1019, 1027 (Pa.Super. 2017).              Although

Appellants initially sought both remedies in the trial court, their claim before

this Court is confined to an argument in favor of opening the default judgment

below, which is “an appeal to the equitable powers of the court.” Id. at 1028.

Our standard of review in this context is well-established: “The decision to

grant or deny a petition to open a default judgment is within the sound

discretion of the trial court, and we will not overturn that decision absent a

manifest abuse of discretion or error of law.” Id.

      “In general, a default judgment may be opened when the moving party

establishes three requirements: (1) a prompt filing of a petition to open the

default judgment; (2) a meritorious defense; and (3) a reasonable excuse or

explanation for its failure to file a responsive pleading.” Smith v. Morrell

Beer Distributors, Inc., 29 A.3d 23, 25 (Pa.Super. 2011). “If a petition to

open a default judgment fails to fulfill any one prong of this test, then the

petition must be denied.” Watters, supra at 1028 (citing Myers v. Wells

Fargo Bank, N.A., 986 A.2d 171, 178 (Pa.Super. 2009)).

      We first consider whether the trial court abused its discretion in

determining that Appellants had not presented a reasonable excuse or

explanation for the failure to file a responsive pleading prior to default. See,


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e.g., McCoy v. Public Acceptance Corp., 305 A.2d 698, 700 (Pa. 1973)

(holding that a defendant’s failure to adequately explain failure to answer,

alone, justified trial court’s refusal to open a judgment).

       “Whether an excuse is legitimate is not easily answered and depends

upon the specific circumstances of the case.” Seeger v. First Union Nat.

Bank, 836 A.2d 163, 166 (Pa.Super. 2003). In this context, “mere allegations

of negligence or mistake, absent more, will not suffice to justify a failure to

appear or answer a complaint so as to warrant granting relief from a default

judgment.”      Duckson v. Wee Wheelers, Inc., 620 A.2d 1206, 1210

(Pa.Super. 1993).         Rather, “[e]xcusable negligence must establish an

oversight rather than a deliberate decision not to defend.” Seeger, supra at

166 (quoting Duckson, supra at 1211). Our Supreme Court’s jurisprudence

suggests that the proper touchstone in this arena is a “justifiable excuse” that

indicates that “the defendant has been without fault.”          McFarland v.

Whitham, 544 A.2d 929, 931 (Pa. 1988).

       The trial court’s discussion of this portion of Appellants’ claim was

succinct but persuasive:

       As to the assertion that the default was the result of the
       [Appellants’] insurance carriers[6] reviewing the claim, this court
       does not find that such [an] allegation absolves the [Appellants]
____________________________________________


6  While it appears that Appellants obtained insurance coverage through the
Teets Insurance Group, the record indicates that Appellants had coverage
from multiple insurers that potentially related to Mr. Pena’s lawsuit. For the
sake of our analysis, we will assume that Appellants’ delivery of Mr. Pena’s
complaint to the Teets Insurance Group was sufficient to inform their insurers.

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      of their responsibility in this case. Neither insurance carrier ever
      informed [Appellants] that it would be protecting [Appellants’]
      interests, and, in fact, both the liquor liability insurance carrier
      and the commercial general liability carrier rejected the claim,
      albeit after the default judgment was entered. Accordingly, the
      fact that the insurance carriers were reviewing the claim does not
      provide a reasonable excuse or explanation for the default in this
      case.

Trial Court Opinion, 7/1/19, at 7. Appellants argue that the trial court has

abused its discretion because Appellants transmitted a copy of Mr. Pena’s

complaint to the Teets Insurance Group in January 2019, which they claim

should fully explain their failure to file a responsive pleading in a timely

fashion. See Appellants’ brief at 22-24. We disagree.

      This Court has previously adjudicated claims stemming from allegations

that an insurance carrier’s actions have resulted in a default judgment being

issued against a defendant-insured.           “Generally speaking, a default

attributable to a defendant’s justifiable belief that his legal interests are being

protected by his insurance company is excusable.”            Autologic Inc. v.

Cristinzio Movers, 481 A.2d 1362, 1363 (Pa.Super. 1984). In addition to

being justifiable, there must also be some mistake or error that is attributable

to the insurance company and which results in a default judgment. See Balk

v. Ford Motor Co., 285 A.2d 128, 131-32 (Pa. 1971) (collecting cases); see

also Duckson, supra at 1209-10 (finding legitimate excuse where insurance

company misassigned case to multiple attorneys during year-end holidays).

      Instantly, Appellants have not identified any actual or alleged

mishandling of the claim by their respective insurance agent and/or carriers.

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There is no allegation that papers were mislaid, or that a clerical mishap

occurred. Rather, Appellants merely sent a copy of Mr. Pena’s complaint to

their insurance agent, and then sat idle for three months awaiting some

manner of coverage determination.              See Petition to Open/Strike Default

Judgment, 4/3/19, at Exhibit B.           Overall, Appellants’ non-response to Mr.

Pena’s complaint appears to be the result of a deliberate decision to await the

conclusion of the insurance company’s coverage review process before taking

further action. Cf. McFarland, supra at 931; Seeger, supra at 166.

       On this point, we find the case of Bethlehem Apparatus Co., Inc. v.

H.N. Crowder, Jr., Co., 364 A.2d 358 (Pa.Super. 1976), instructive.7            In

Bethlehem, an insured received service of a complaint naming it as a

defendant in a breach of contract action. The insured alerted his insurance

carrier of the receipt of the complaint, explained the circumstances, and

asserted his belief that the matter was covered by his liability insurance. Id.

at 360. The insured received no response from the carrier, and took no action

to defend against the action until it learned of the entry of a default judgment.

Id. at 359-60. This inaction proved dispositive, as this Court explained:

       Thus, although the appellant realized that there existed some
       possibility that the insurance carrier would not be responsible for
____________________________________________


7 The reasoning in Bethelhem Apparatus Co., Inc. v. H.N. Crowder, Jr.,
Co., 364 A.2d 358 (Pa.Super. 1976), has been reaffirmed multiple times in
the intervening years. See Baskerville v. Philadelphia Newspapers, Inc.,
419 A.2d 1355, 1357 (Pa.Super. 1980); Autologic Inc. v. Cristinzio
Movers, 481 A.2d 1362, 1363 (Pa.Super. 1984); Duckson v. Wee
Wheelers, Inc., 620 A.2d 1206, 1210 (Pa.Super. 1993).

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      its defense and that, in any event, a timely response was
      necessary, it failed to inquire as to the status of its claim or even
      to seek any assurances from the insurance carrier that it was
      being represented.

Id. at 360. The insured in Bethlehem offered no explanation or information

regarding why the insurance carrier failed to mount a defense on its behalf.

Accordingly, this Court concluded that “the record clearly shows that the

[insured] has not acted in a manner that would have enabled it to rely

justifiably upon legal representation by the insurance carrier.” Id.

      As in Bethlehem, the certified record in this case does not support a

conclusion that Appellants have “acted in a manner which would reasonably

result in the protection of [their] legal interests.” Id. Instead, Appellants

acted in a dilatory fashion by neglecting to follow-up with their insurance

representatives to ensure that a timely response to Mr. Pena’s complaint was

effectuated, or to confirm the existence and extent of coverage. As such, this

“invalidates” the claim that Appellants’ justifiably relied upon their insurance

carrier to protect their legal interests. Id.

      Based on the foregoing discussion, we discern no abuse of discretion in

the trial court’s conclusion that Appellants failed to offer a reasonable

explanation for the failure to respond to Mr. Pena’s complaint.          Having

confirmed that Appellants failed to proffer a reasonable explanation, we may

affirm the trial court on that ground, alone. Accord McCoy, supra at 700;

Watters, supra at 1028. Thus, Appellants are not entitled to relief.

      Order affirmed. Case remanded. Jurisdiction relinquished.

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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 5/20/2020




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