Holland, J. &. S. v. Hartsocks Custom Cabinets

• Court: Superior Court of Pennsylvania
• Decided: March 17, 2023
• Docket: 1655 MDA 2021
• Status: Unpublished

Opinion

J-A27019-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JAMES D. HOLLAND AND SANDRA C. : IN THE SUPERIOR COURT OF HOLLAND : PENNSYLVANIA : : v. : : : HARTSOCKS CUSTOM CABINETS : AND HOME IMPROVEMENTS LLC AND : No. 1655 MDA 2021 CHARLES T. HARTSOCK, III : : Appellants :

Appeal from the Order Entered December 9, 2021 In the Court of Common Pleas of Huntingdon County Civil Division at No(s): 2020-00902

BEFORE: DUBOW, J., McLAUGHLIN, J., and COLINS, J.*

MEMORANDUM BY McLAUGHLIN, J.: FILED: MARCH 17, 2023

Hartsocks Custom Cabinets and Home Improvement LLC (“LLC”) and

Charles T. Hartsock, III (“Hartsock”), (collectively, “Appellants”), appeal from

the order denying their petition to open and/or strike a default judgment and

granting James D. Holland and Sandra C. Holland’s (collectively, the

“Hollands”) motion for attorney’s fees. We affirm the portion of the order

denying the petition and quash the appeal from the portion of the order

granting attorney’s fees.

According to the Hollands’ complaint, in September 2019, the Hollands

hired the LLC to renovate their kitchen. Hartsock solely owns the LLC and

serves as its primary employee. The Hollands paid Appellants a deposit of ____________________________________________

* Retired Senior Judge assigned to the Superior Court. J-A27019-22

$3,000, and the work was to be completed by early November 2019. However,

the project was delayed and in December 2019, Appellants left the project

while it was still incomplete. The Hollands hired a different contractor to finish

the work.

On January 2, 2020, the Hollands filed a civil complaint against both the

LLC and Hartsock, individually, in magisterial district court. The magisterial

district judge found in favor of the Hollands and awarded them damages, plus

fees and costs, in the amount of $2,986.47.

On July 30, 2020, the LLC filed a notice of appeal of the magisterial

district court’s judgment to the Court of Common Pleas of Huntington County.

The Prothonotary issued a rule to file a complaint. The Hollands filed a

complaint against Appellants on August 20, 2020, naming both the LLC and

Hartsock as separate defendants. The Hollands served the complaint upon

Appellants by sending a single copy, addressed to both the LLC and Hartsock

in a cover letter, to their joint address of record via First Class Mail. Their

addresses of record were set forth in the magisterial district court case record

and were the same for both the LLC and Hartsock, namely 2764 Lincoln Way

West, Suite 3, Chambersburg, PA 17202. In addition to the damages originally

sought in the magisterial district court case, the Hollands’ complaint also

asserted a claim for attorney’s fees, raising the total damages to $4,795.72.

Appellants failed to file an answer to the complaint. The Hollands sent a

notice of intention to take default judgment on October 7, 2020 to Appellants

via First Class Mail at their joint address of record. The Hollands sent a single

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copy of the notice to Appellants, addressed to both the LLC and Hartsock in a

cover letter. The notice itself bore a caption naming both the LLC and Hartsock

as separate defendants. Appellants failed to respond. The Hollands filed a

praecipe to enter default judgment and the Prothonotary entered a default

judgment against Appellants on February 1, 2021, in the amount of

$4,795.72.

Approximately seven months later, the Hollands attempted to execute

on their judgment by having a sheriff’s sale scheduled for August 27, 2021.

Appellants filed an emergency motion to stay the execution of judgment the

day before the sheriff’s sale, which was granted. On September 8, 2021,

Appellants filed a petition to open and/or strike the default judgment. The

court heard argument on the petition and denied it on December 9, 2021. In

its order denying the petition, the court also granted the Hollands’ motion for

attorney’s fees. The court ordered the Hollands to submit an itemized list of

their attorney’s fees within 14 days of the date of the order so the court could

determine the appropriate amount of fees. However, Appellants filed the

instant appeal before the court had the opportunity to rule on the amount of

fees.1

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1 Although orders denying petitions to open/strike default judgments are interlocutory, they are immediately appealable as of right. See Pa.R.A.P. 311(a)(1); Keller v. Mey, 67 A.3d 1, 3 (Pa.Super. 2013). Therefore, although the issue of the determination of the amount of attorney’s fees is outstanding, the portion of the order denying Appellants’ petition to open and/or strike is appealable as of right.

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Appellants raise the following issues:

1. Did the trial court err, as a matter of law, by excusing violations of the Rules of Civil Procedure regarding service of documents through the application of Pa. R. Civ. P. 126 and denying Appellants’ petition to strike default judgment?

2. Did the trial court err by denying Appellants’ petition to open default judgment?

3. Did the trial court err by awarding attorney fees to Appellees when Appellants did not act in a manner supporting fees under 42 Pa. C.S.[A.] § 2503, no findings of fact were made by the trial court as to the awarding of attorney fees, and the trial court 1925 opinion does not identify a single section of § 2503(7) or § 2503(9) to which the parties’ conduct would support a fee award?

Appellants’ Br. at 9.

Opening and striking a judgment are different remedies subject to

different standards. “A petition to strike a judgment is a common law

proceeding which operates as a demurrer to the record.” Resolution Trust

Corp. v. Copley Qu-Wayne Assocs., 683 A.2d 269, 273 (Pa. 1996) (citation

omitted). “A petition to strike a judgment may be granted only for a fatal

defect or irregularity appearing on the face of the record.” Id. (citation

omitted). “When deciding if there are fatal defects on the face of the record

for the purposes of a petition to strike a judgment, a court may only look at

what was in the record when the judgment was entered.” Cintas Corp. v.

Lee’s Cleaning Servs., Inc., 700 A.2d 915, 917 (Pa. 1997). On appeal, “our

standard of review is de novo and our scope of review is plenary.” U.S. Bank

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Nat'l Ass'n for Pa. Hous. Fin. Agency v. Watters, 163 A.3d 1019, 1028

n.9 (Pa.Super. 2017).

“A petition to open a default judgment is an appeal to the equitable

powers of the court.” Smith v. Morrell Beer Distribs., Inc., 29 A.3d 23, 25

(Pa.Super. 2011) (citation omitted). We review an order ruling on a petition

to open a default judgment for “a manifest abuse of discretion or error of law.”

Id. (citation omitted). A default judgment may be opened when the moving

party has: “(1) promptly filed a petition to open the default judgment, (2)

provided a reasonable excuse or explanation for failing to file a responsive

pleading, and (3) pleaded a meritorious defense to the allegations contained

in the complaint.” Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 175-76

(Pa.Super. 2009). The failure to satisfy any one prong of this test will result

in denial of the petition to open. Watters, 163 A.3d at 1028.

Appellants first claim the court erred in denying the petition to strike

because there is a fatal defect on the face of the record. Appellants point out

that the Hollands served only one copy of the complaint and subsequent

documents, including the notice of intention to take default judgment, to both

Appellants. They assert the Rules of Civil Procedure require service upon each

defendant individually and the trial court improperly excused the allegedly

improper service of the default notice by reference to Rule 126. Appellants

thus argue the judgment should have been stricken.

The procedures for appealing a judgment from a magisterial district

court are set forth in the Pennsylvania Rules of Civil Procedure Governing

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Actions and Proceedings Before Magisterial District Judges. Under Rule 1002,

an aggrieved party has 30 days after the date of the entry of judgment to

appeal from that judgment “by filing with the prothonotary of the court of

common pleas a notice of appeal[.]” Pa.R.C.P.M.D.J. 1002(A). Thereafter, if

the appellant was the defendant in the action before the magisterial district

judge, as in the instant case, the appellant “shall file” with the notice of appeal

“a praecipe requesting the prothonotary to enter a rule as of course upon the

appellee to file a complaint within twenty (20) days after service of the rule

or suffer entry of a judgment of non pros.” Pa.R.C.P.M.D.J. 1004(B).

Then, pursuant to Rule 1005, “[t]he party filing a complaint under Rule

1004 shall forthwith serve it upon the opposite party in the appeal by leaving

a copy for or mailing a copy to the address as shown in the magisterial district

court records[.]” Pa.R.C.P.M.D.J. 1005(D). “The address of the appellee for

the purpose of service shall be the address as listed on the complaint form

filed in the office of the magisterial district judge or as otherwise appearing in

the records of that office.” Pa.R.C.P.M.D.J. 1005(A).

Here, the record reflects that the Hollands sent via First Class Mail a

cover letter addressed to both Appellants, along with one copy of the

complaint. The complaint clearly captioned both Appellants as defendants in

the action. The complaint was mailed to Appellants’ address set forth in the

magisterial district court records – 2764 Lincoln Way West, Suite 3,

Chambersburg, PA 17202 – which was the same address for both Appellants.

Appellants do not dispute that this address was their address of record. Rule

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1005 only requires that the complaint be served at the opposite party’s

address of record. The Hollands did just that. The Hollands thus properly

served the complaint upon Appellants.

Appellants similarly claim the default judgment should be stricken

because a single notice of the intention to take default judgment was mailed

to both Appellants, instead of being sent to each Appellant individually.

Pennsylvania Rule of Civil Procedure 237.1(a) provides:

(2) No judgment of non pros for failure to file a complaint or by default for failure to plead shall be entered by the prothonotary unless the praecipe for entry includes a certification that a written notice of intention to file the praecipe was mailed or delivered

***

(ii) in the case of a judgment by default, after the failure to plead to a complaint and at least ten days prior to the date of the filing of the praecipe to the party against whom judgment is to be entered and to the party’s attorney of record, if any.

(4) The notice and certification required by this rule may not be waived.

Pa.R.C.P. 237.1(a)(2)(ii), (4).

Here, the Hollands complied with the letter of the rule. Rule 237.1 on its

face does not require separate notice (or prohibit joint notice). The Hollands

mailed their notice of intention to take default judgment to the address of

record for both Appellants, and the caption in the notice clearly listed both

Appellants as parties. Appellants, once again, do not dispute that they

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received the notice or that the address to which it was sent was their address

of record.

Moreover, even if the Hollands were required to send two copies of the

notice, under the doctrine of substantial compliance, the trial court may

“overlook any procedural defect that does not prejudice a party’s rights.”

Womer v. Hilliker, 908 A.2d 269, 276 (Pa. 2006) (citation omitted)

(emphasis removed); see also Pa.R.C.P. 126 (“The court at every stage of

any such action or proceeding may disregard any error or defect of procedure

which does not affect the substantial rights of the parties”). Appellants do not

allege they suffered any harm or were prejudiced in any way by receiving only

one copy of the notice, instead of two. The trial court here did not find waiver,

which Rule 237.1(a)(4) prohibits, but rather found the allegedly improper

service excused as not affecting any party’s substantial rights. Thus, we agree

with the trial court’s determination that no fatal defect or irregularity was

apparent on the face of the record. Accordingly, this claim fails.

Appellants next argue the court erred in denying their petition to open

judgment. They claim they had a reasonable excuse for failing to file a

responsive pleading and promptly filed the petition when they learned of this

lawsuit. Hartsock testified at his deposition that after judgment was entered

in the magisterial district court, he entrusted his former assistant to “handle”

the matter. N.T. Deposition of Charles T. Hartsock, III, 10/13/21, at 42-43.

He stated that his assistant filed the instant appeal and that he was not aware

that she filed it. Id. at 41, 51-52. He also said he did not realize that he was

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personally a defendant in the magisterial district court case, and he thought

the judgment was entered against only the LLC. Id. at 17-18.

Hartsock further testified that his assistant received the complaint, the

notice of intention to take default judgment, and the entry of default judgment

at the Lincoln Way West address as part of her standard duties, but she never

brought these filings to his attention and instead filed them in the LLC’s regular

business records. Id. at 19-20, 63-64, 80-81. Hartsock asserted he did not

learn that a judgment had been entered against him until the sheriff arrived

at his house to issue a sheriff’s sale notice in August 2021. Id. at 13-14. He

stated he then looked at his business files and found the documents. Id. at

64. Hartsock testified he hired an attorney within one week of locating the

filings. Id. at 14-15, 71-72.

Appellants also argue they set forth meritorious defenses to the

complaint. They note there is no cause of action properly pled against Hartsock

in his individual capacity and there are no allegations suggesting that piecing

the corporate veil is appropriate. Appellants’ Br. at 36, 39. Appellants further

aver the LLC did not breach the contract and the delay in the kitchen project

was caused by the Hollands.

The court found Appellants failed to satisfy the first two prongs of the

test for opening a default judgment. It determined the petition was not

promptly filed and Appellants’ explanation for failing to file a responsive

pleading was not reasonable. Trial Ct. Op. at 20-21.

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Regarding the first prong of the test for opening a default judgment,

“[t]he timeliness of a petition to open a judgment is measured from the date

that notice of the entry of the default judgment is received.” Digital

Communications Warehouse, Inc. v. Allen Investments, LLC, 223 A.3d

278, 285 (Pa.Super. 2019) (citation omitted). The law does not establish a

specific time within which a petition to open a judgment must be filed to qualify

as timely. Rather, it directs the court to consider the length of time between

discovery of the entry of the default judgment and the reason for the delay.

Id. at 285-86. “In cases where the appellate courts have found a ‘prompt’ and

timely filing of the petition to open a default judgment, the period of delay has

normally been less than one month.” US Bank N.A. v. Mallory, 982 A.2d

986, 995 (Pa.Super. 2009) (citations omitted) (emphasis added).

Here, the default judgment was entered on February 1, 2021.

Appellants’ petition to open and/or strike the default judgment was filed on

September 8, 2021, approximately seven months later. Accordingly, we agree

with the trial court that this was not a prompt filing, and therefore, we discern

no abuse of discretion on the first prong.

As to the second prong, “[w]hether an excuse is legitimate is not easily

answered and depends upon the specific circumstances of the case. The

appellate courts have usually addressed the question of legitimate excuse in

the context of an excuse for failure to respond to the original complaint in a

timely fashion.” Mallory, 982 A.2d at 995 (citations omitted).

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In concluding Appellants did not provide a reasonable explanation for

failing to file a responsive pleading, the court found Hartsock’s attempt to

blame his assistant for failure to respond not credible. Trial Ct. Op. at 18. The

court stated:

If Defendant Hartsock is to be believed, he engaged [his secretary] to serve as attorney for both himself and the LLC, and relied on her to litigate [Appellants’] appeals before this [c]ourt with no meaningful oversight whatsoever. . . .[I]t defies belief that any business owner would have his secretary serve as his attorney. Even assuming, arguendo, that this is precisely what occurred, such an act is patently unreasonable, and was taken by Defendant Hartsock, acting on behalf of himself and the LLC, at his own peril.

Id. at 19 (footnote omitted). The court also rejected Hartsock’s claim that he

was unaware he was personally a defendant in the magisterial district court

action because he participated in that case and the notice of entry of judgment

clearly showed judgments entered against him and the LLC separately. Id. at

17-18.

We find no abuse of discretion. Appellants failed to offer a reasonable

excuse for their inaction. According to Hartsock’s testimony, he designated his

assistant to “handle” this matter. Although he claims that she did not bring

the complaint or the notice of intention to take default judgment to his

attention, he admitted that they were filed in the LLC’s business records, which

were readily accessible to him. See N.T. Hartsock Depo. at 64. Appellants also

failed to produce the assistant as a witness or offer any other evidence to

support their claim. See Dominic’s Inc. v. Tony's Famous Tomato Pie &

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Restaurant, Inc., 214 A.3d 259, 270 (Pa.Super. 2019) (stating that the

petitioning party in a default judgment bears the burden of producing

sufficient evidence to substantiate its claims). Moreover, the LLC is a corporate

entity, not a layperson, and should have had in place the proper means to

monitor its legal claims. See Kelly v. Siuma, 34 A.3d 86, 94 (Pa.Super.

2011); Myers, 986 A.2d at 178. We agree with the court that the facts in this

case do not amount to an oversight, an unintentional omission, or a mistake

that would permit the opening of the default judgment. See Flynn v. Am. W.

Airlines, 742 A.2d 695, 699 (Pa.Super. 1999). Rather, any harm suffered by

Appellants was the result of Hartsock’s decision to delegate responsibility for

the matter to a non-lawyer, without supervision or follow-up. Thus, Appellants’

argument fails.2

In their final issue, Appellants claim that the court erred in awarding

attorney’s fees to the Hollands. Since the trial court has not yet determined

the amount of attorney’s fees, the portion of the order granting the Holland’s

motion for attorney’s fees is not a final order because the order did not dispose

of all claims as required by Pa.R.A.P. 341(b)(1). We therefore quash that

portion of the appeal as interlocutory.

2 Since we find that Appellants failed to satisfy the “prompt filing” and “reasonable excuse” prongs, we do not address their argument regarding the “meritorious defense” prong. See Siuma, 34 A.3d at 94.

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Appeal from that portion of the order denying Appellants’ petition to

open and/or strike is affirmed. Appeal from that portion of the order granting

attorney’s fees is quashed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 3/17/2023

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