Beech Mtn. Lakes Assoc. v. Maurer, S.

Superior Court of Pennsylvania·Decided November 26, 2024·No. 1468 MDA 2023·Unpublished

Opinion

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

BEECH MOUNTAIN LAKES : IN THE SUPERIOR COURT OF ASSOCIATION : PENNSYLVANIA :

:

v. :

:

:

SETH MAURER AND CHRISTINA :

FORTIN-MAURER, BLOOMING : No. 1468 MDA 2023 DREAMS DEVELOPMENT, LLC, DEEP :

WOODS LAKE, LLC, JAMES POPSON :

ANDDEBORAH POPSON AND :

MICHAEL W. GIEDOSH :

:

:

APPEAL OF: BLOOMING MOUNTAIN :

DREAMS DEVELOPMENT, LLC :

Appeal from the Order Dated September 13, 2023 In the Court of Common Pleas of Luzerne County Civil Division at No(s):

2022-02647

BEFORE: PANELLA, P.J.E., KING, J., and STEVENS, P.J.E.* MEMORANDUM BY STEVENS, P.J.E.: FILED: NOVEMBER 26, 2024 Blooming Dreams Development, LLC (“Blooming Dreams”) appeals from the order entered in the Court of Common Pleas of Luzerne County, which denied its motion to strike and/or open the default judgment obtained by Beech Mountain Lakes Association, Inc. (“Beech Mountain”). We affirm.

The trial court aptly set forth the factual and procedural history underlying this litigation in its opinion, which we adopt.

* Former Justice specially assigned to the Superior Court.

On March 18, 2022, [Beech Mountain] initiated the underlying action with the filing of a complaint setting forth claims for declaratory and injunctive relief. [Beech Mountain] is a Pennsylvania non-profit corporation whose members consist of various owners of interests in real estate comprising a pair of residential developments (referred to hereinafter collectively as the “Development”) surrounding a lake (referred to hereinafter as the “Lake”) in Butler Township, Luzerne County, Pennsylvania.

[Beech Mountain]’s claims were filed against, inter alia, Deep Woods Lake, LLC (DWL)—the then-owner of certain tracts in close proximity to the Development—seeking: (1) our declaration in adjudication of the issue as to whether rights to access the Lake are or continue to be held by the various defendants, including DWL; and (2) an order restraining DWL from marketing the lots comprising its tracts as inclusive of an attendant right to access the Lake.

On April 14th, 2022, DWL executed a deed transferring to [Blooming Dreams] ownership of the subject tracts and reserving certain interests related to an ongoing well-water operation. On June 7, 2022, [Beech Mountain] filed, with an accompanying notice to defend, its Second Amended Complaint and therein named [Blooming Dreams] as a new co-defendant to the underlying action. …

On September 16, 2022, [Beech Mountain] filed a ten-day notice of default, which along with cover letter was served upon [Blooming Dreams] at its certified registered office provider on the same date. On October 14, 2022, [Beech Mountain] filed a praecipe for entry of default judgment against [Blooming Dreams], which along with cover letter was served upon [Blooming Dreams] at its certified registered office provider on the same date. On October 14, 2022, the prothonotary indexed to the record entry of judgment against [Blooming Dreams] and in favor of [Beech Mountain] on the issue of liability.

On January 5, 2023, [Beech Mountain] filed a motion to enter final default judgment against [Blooming Dreams] in accordance with the procedure set forth in Pa.R.C.P. 1037(d).

[Blooming Dreams] filed a response to the motion on January 31, 2023.

Trial Court Opinion (TCO), 11/27/23, at 2-4 (footnotes omitted).

This January 31, 2023, response to the motion to enter final default judgment referenced by the trial court was not a motion to open or strike the default judgment. Instead, it was captioned as a brief in opposition to the motion for final default judgment, arguing that Beech Mountain “never perfected service” of the second amended complaint. Brief in opposition, 1/31/23, at 1. The brief argued that the trial court “lack[ed] jurisdiction to enter the final default judgment[.]” Id. at 3. The court held a hearing, stating at the outset that “[t]here has not been a motion to open or vacate a default judgment. But you had filed a response … why you believe that default judgment may not have been entered properly.” N.T., 5/30/23, at 5. Blooming Dreams agreed with that summary and presented testimony from one witness, Shlomo Kanarek, who identified himself as “the main owner” of Blooming Dreams. Id. at 11. He explained that he purchased Blooming Dreams because the “fellow who formed the corporation … couldn’t close on the property so I took over. … I took over the [Deep Woods] contract and closed on the property.” Id. He did not receive any notice about the suit, and learned of its existence through a “fellow named John who … I used to call him for advice. He told me, ‘you know there’s a suit on your property.’” Id. at 16. On cross-examination, Mr. Karanek agreed that he was “well aware of this complaint [i.e., the first complaint] against the lake.” Id. at 24. However, he stated that the “seller told me, don’t worry about it. It’s taken care of. … I

wasn’t aware of any judgment served to me. I thought it was being dealt with by the firm.”

The trial court issued an order the next day with accompanying findings of fact, concluding that Beech Mountain properly served Blooming Dreams.1 The order also scheduled a hearing for July 25, 2023, to address the outstanding motion for entry of final default judgment. On June 30, 2023,

1 The trial court opinion relates the facts relevant to service as follows:

On June 3, 2021, a certificate of organization was filed with the Pennsylvania Department of State organizing [Blooming Dreams] as a Pennsylvania limited liability company. In its certificate of organization, [Blooming Dreams] certified its commercial registered office provider as “c/o Registered Agents Inc.” of Montgomery County, Pennsylvania. Registered Agents Inc. at that time utilized a business address within Montgomery County. On January 3, 2022, Registered Agents Inc. filed with the Pennsylvania Department of State a letter of December 29, 2021, certifying that “[a]ll entities that have Registered Agents Inc, as their [commercial registered office provider] have been notified of the change to the address and county” of 502 W 7th St Ste 100 Erie PA 16502 in Erie County.

As noted, [Beech Mountain]’s Second Amended Complaint was filed to the record on June 7, 2022, along with an accompanying notice to defend. The return of service filed on July 27, 2022, indicates that on June 7, 2022, the Sheriff of Luzerne County deputized the Sheriff of Erie County to serve a copy of the Second Amended Complaint with notice to defend “on Blooming Dreams Development LLC at 502 W 7th St, Ste 100, Erie, PA 16502. On July 5, 2022, the Erie County Sheriff served a copy of the said complaint and notice on "Sara Simmons Paralegal, who accepted as ‘Adult Person in Charge’ for BLOOMING DREAMS DEVELOPMENT LLC at 502 W. 7th ST., SUITE 100, ERIE, PA 16502.”

TCO at 2-3 (footnotes omitted).

Blooming Dreams filed a petition to open/strike the default judgment, which the court denied on September 13, 2023. The company timely filed a notice of appeal and complied with the order to file a concise statement.

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