First Pennsylvania Bank, N.A. v. Lehr

438 A.2d 600, 293 Pa. Super. 189, 1981 Pa. Super. LEXIS 2120
CourtSuperior Court of Pennsylvania
DecidedFebruary 6, 1981
Docket2987
StatusPublished
Cited by17 cases

This text of 438 A.2d 600 (First Pennsylvania Bank, N.A. v. Lehr) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Pennsylvania Bank, N.A. v. Lehr, 438 A.2d 600, 293 Pa. Super. 189, 1981 Pa. Super. LEXIS 2120 (Pa. Ct. App. 1981).

Opinions

HESTER, Judge:

Presently before the court is appellant Carl Lehr’s (sometimes Lehr) appeal from the order of the lower court dated November 30, 1978 wherein the court denied appellant’s petition to open judgment and denied appellant’s petition to strike off the judgment, excepting for interest payments made subsequent to the entry of said judgment.

On July 29, 1977, appellee, First Pennsylvania Bank, N.A. (sometimes bank) confessed judgment against the appellant in the amount of $3,782,160.00 1 pursuant to a warrant of attorney contained in a personal Guaranty dated April 25, 1972. On December 7, 1977, appellant filed a Petition to Strike or Open the Judgment. Depositions of the appellant and other individuals involved in this matter were taken and oral argument was heard by the court en banc on September 8 and November 8, 1978.

On November 30, 1978, appellant’s petition to strike off the judgment was granted but only in regard to interest payments made subsequent to the entry of the judgment; in all other respects it was denied. Appellant’s petition to open judgment was also denied. Thereafter, this timely appeal followed.

[192]*192We reverse and open the judgment taken by confession and remand to the lower court for a trial on the merits.

Our scope of review on appeal from either the opening or the denial of opening a judgment taken by confession has been clearly delineated over numerous years. We reiterate as we have done on numerous occasions, our scope of review on appeals from the lower court’s grant or denial of a petition to open judgment is very narrow. A petition to open judgment is first an appeal to the equitable and discretionary powers of the lower court and as such, the exercise of the lower court’s discretion in either opening or refusing to open a judgment taken by confession, will not be disturbed on appeal unless the lower court has committed a manifest abuse of discretion or an error of law. M. H. Davis Estate Oil v. Sure Way Oil, 266 Pa.Super. 64, 403 A.2d 95 (1979); Fidelity Bank v. Act of America, Inc., 258 Pa.Super. 261, 392 A.2d 784 (1978); Christie v. Open Pantry Marts, 237 Pa.Super. 243, 352 A.2d 165 (1975).

It is well settled that “(o)ne who petitions to open a confessed judgment must act promptly and aver a meritorious defense”, Wenger v. Ziegler, 424 Pa. 268, 272, 226 A.2d 653, 655 (1967). There is no question that the appellant herein acted promptly; thus the sole issue is whether he set forth a meritorious defense.

The standard to be applied by a court in determining whether a moving party has properly averred a meritorious defense so as to require that a confessed judgment be opened and the moving party let into a defense is succinctly set forth at Pa.R.C.P. 2959(e), effective December 1, 1973, which provides in relevant part:

“. . . If evidence is produced which in a jury trial would require the issues to be submitted to a jury the court shall open the judgment.” (Emphasis added).

In testing the. sufficiency of the evidence, the facts as alleged must be viewed by the court in the exercise of its discretion in the light most favorable to the moving party (the appellant herein) and further, the lower court must [193]*193accept as true all evidence and reasonable and proper inferences flowing therefrom. (Emphasis added). Greenwood v. Kadoich, 239 Pa.Super. 372, 357 A.2d 604 (1976); M. H. Davis Estate Oil v. Sure Way Oil, supra. As Judge Van der Voort of our court in M. H. Davis Estate Oil v. Sure Way Oil, supra, declared:

“.. . the test in evaluating the petitioners’ evidence is not whether the evidence will probably win a verdict from the jury, but only whether there is sufficient evidence to allow the disputed issue to go to the jury.”

Rule 2959(e) has been interpreted since its promulgation in 1973 as prohibiting a court from “weighing” the sufficiency of the evidence. See Christie v. Open Pantry Marts, supra; Joseph A. Puleo & Sons, Inc. v. Rossi et ux., 234 Pa.Super. 612, 340 A.2d 557 (1975); Wolgin v. Mickman, 233 Pa.Super. 218, 335 A.2d 824 (1975); Commonwealth ex rel. Mazza v. Sarvice, 227 Pa.Super. 38, 323 A.2d 41 (1974).

With the above statement of the law as our guide, the record reveals the following: Appellant Lehr was one of several individuals who provided capital for the construction and operation of the Pocono International Raceway, Inc., (hereinafter Raceway), when a group of investors, including Lehr, decided to expand the Pocono Racetrack into a super speedway. At divers time, Lehr was a stockholder, director of the corporation, treasurer of same and creditor, personally holding $400,000.00 in judgment notes for loans to the corporation. Additionally, Lehr held warrants to purchase additional shares of common stock. Finally, a family enterprise owned by Lehr also was a $100,000.00 creditor of the Raceway. Dr. Joseph R. Mattioli was then chief executive officer and chairman of the board at the time of the completion of the Raceway in 1971. At that time, the investors realized that additional capital was needed to meet both current and future short-term operating obligations. Following extensive negotiations, the bank, the appellee herein, was chosen to provide this financing and a complex loan agreement package was structured. In return for five million dollars, the Raceway executed a note, at 4% over prime [194]*194(16% at that time), which note was collateralized by a first mortgage on the Raceway’s real estate. To further secure said loan, the investors, which obviously included appellant Lehr, were called upon to execute a pledge agreement with respect to their equity in the Raceway, a subordination agreement of their debt obligations in favor of the bank’s loan, a joint indemnification agreement, and personal guaranty agreements (Exhibit 1 to appellee’s complaint in confession of judgment).

It is this guaranty agreement, purportedly executed by appellant Lehr, which is at the heart of this litigation. Contained in said guaranty agreement at paragraph 5 is a warranty of attorney provision authorizing any attorney to appear for the guarantor and confess judgment against him for the amount for which the guarantor may be or become liable under said guaranty agreement, plus 2% thereof as attorney’s fees. Further contained in said document, entitled Guaranty, appeared the following paragraphs:

1. The Guarantor hereby unconditionally guarantees to Bank, its successor and assigns, the prompt and punctual payment of $3,500,000 of the principal amount of the Note, when due by acceleration on account of default, maturity or otherwise, together with interest on the said $3,500,000 in principal amount at the rate specified in the Note.

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First Pennsylvania Bank, N.A. v. Lehr
438 A.2d 600 (Superior Court of Pennsylvania, 1981)

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Bluebook (online)
438 A.2d 600, 293 Pa. Super. 189, 1981 Pa. Super. LEXIS 2120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-pennsylvania-bank-na-v-lehr-pasuperct-1981.