Iron Worker's Savings & Loan Ass'n v. IWS, Inc.

622 A.2d 367, 424 Pa. Super. 255, 1993 Pa. Super. LEXIS 958
CourtSuperior Court of Pennsylvania
DecidedMarch 24, 1993
Docket283-285
StatusPublished
Cited by38 cases

This text of 622 A.2d 367 (Iron Worker's Savings & Loan Ass'n v. IWS, Inc.) 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
Iron Worker's Savings & Loan Ass'n v. IWS, Inc., 622 A.2d 367, 424 Pa. Super. 255, 1993 Pa. Super. LEXIS 958 (Pa. Ct. App. 1993).

Opinion

POPOVICH, Judge.

Herein, we address three appeals from related orders of the Court of Common Pleas of Chester County. The first order in question was entered on January 3, 1991, and denied appellants’ petition to open a confessed judgment. The second order was entered on January 4, 1991, and denied appellants’ motion to compel production of the joint report of examination performed on Iron Worker’s Savings and Loan Association by the Pennsylvania Department of Banking and the Federal *261 Home Loan Bank, Office of Regulatory Functions. Finally, the third order in question was entered on January 4, 1991, and denied appellants’ motion to compel production of documents and reconvene the deposition of John R. Larkin. Finding no error below, we affirm all three orders.

We will first address that appeal docketed at 283 Philadelphia 1991, wherein appellants Eagleview Construction, Inc. and the joint venture trading as Royalwood Estates (hereafter “Eagleview”) contend: 1) The lower court erroneously employed an incorrect standard in analyzing the evidence presented in support of the amended petition to open the confessed judgment; 2) The lower court erred in applying the parol evidence rule to this case; and 3) The evidence was sufficient to raise a jury question on whether appellee (hereafter “Iron Worker’s”) breached its confidential relationship with Eagle-view. We find no merit to Eagleview’s contentions.

When the denial of a petition to open a confessed judgment is appealed, we will not disturb the lower court’s denial unless it is shown that the court committed an error of law or a manifest abuse of discretion. Fountain Hill Millwork Bldg. v. Belzel, 402 Pa.Super. 553, 555-556, 587 A.2d 757, 759 (1991); Suburban Mechanical Contractors, Inc. v. Leo, 348 Pa.Super. 324, 325, 502 A.2d 230, 231 (1985), citing Lambakis v. Exar, 340 Pa.Super. 483, 488, 490 A.2d 882, 884 (1985). Traditionally, a confessed judgment will be opened in only a limited number of circumstances, and only when the person seeking to open acts promptly, alleges a meritorious defense and presents sufficient evidence of that defense to require submission of the issues to the jury. Fountain, 587 A.2d at 759; Suburban, 502 A.2d at 231, citing First Seneca Bank v. Laurel Mt. Development Corp., 506 Pa. 439, 443, 485 A.2d 1086, 1088 (1984). In making such a determination, the court employs the same standard as that of the directed verdict— “viewing all the evidence in the light most favorable to the petitioner and accepting as true all evidence and proper inferences therefrom supporting the defense while rejecting adverse allegations of the party obtaining the judgment.” Suburban, 502 A.2d at 232, quoting Germantown Manufactur *262 ing Co. v. Rawlinson, Jr., 341 Pa.Super. 42, 46-47, 491 A.2d 138, 140-141 (1985).

Rule 2959(e) of the Pennsylvania Rules of Civil Procedure provides that “in a proceeding to open a confessed judgment, 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.” Fountain, 587 A.2d at 759. Pa.R.C.P. 2959(e) has been interpreted to require the judgment debtor to offer clear, direct, precise and “believable” evidence of its meritorious defense. Suburban, 502 A.2d at 232; First Pennsylvania Bank, N.A. v. Lehr, 293 Pa.Super. 189, 201-202, 438 A.2d 600, 607 (1981). 1

Viewing the evidence in a light most favorable to Eagleview, the lower court set forth the facts as follows:

In September or October of 1987, John R. Larkin approached Dennis Meinhart, the principal of Eagleview, regarding a formation of a joint venture between IWS, Inc. (IWS) and Meinhart (Eagleview). IWS is a wholly owned subsidiary of Iron Worker’s [Savings and Loan Association]. Various meetings were held regarding this possible joint venture, and Meinhart found a suitable tract of land, later known as Royalwood Estates.
In December of 1987, Larkin, who had previously represented Meinhart [as legal counsel], told Meinhart he could no longer represent him, as he had a conflict of interest; namely, Larkin was a member of the Iron Worker’s Board. Larkin referred Meinhart to the law firm of Petrikin, Well-man, Damico, Carney & Brown, a firm with which Meinhart had previously dealt. Steven Brown, Esquire, undertook representation of Meinhart (Eagleview) and another member of the firm, Dennis Dunn, later represented Meinhart at the closing on March 31, 1988. On January 4, 1988, Mein *263 hart signed an Agreement of Sale for the tract of land for $1,500,000.00.
Additional meetings were held before the March 31, 1988 closing date and several terms were discussed with regard to the loan agreement. One of the terms discussed was the length of the loan. Various notes indicate a period of eighteen (18) months to two (2) years. On March 29, 1988, two days before settlement, Meinhart was informed that the loan period would be eighteen (18) months. Meinhart objected to this shorter time period and was obstensibly told by John Whitig, Iron Worker’s President, not to worry, that the loan period would be extended.
Notwithstanding the fact that the loan documents clearly stated a loan period of eighteen (18) months, Meinhart signed the documents. It must be mentioned here that Meinhart admitted he was a sophisticated businessman; that he was represented by Mr.Brown and his firm; that he had an opportunity to read the loan documents at closing, but chose not to; that the documents were clearly readable and understandable, and finally, that he knew the repayment period was eighteen (18) months.

Trial Court Opinion, pp. 2-3.

First, Eagleview complains that the lower court applied an incorrect standard of review. Specifically, Eagleview contends that “[b]y holding that Eagleview had to present evidence that was “believable”, the Lower Court not only improperly increased Eagleview’s burden, but it weighed the presented evidence in violation of Pa.R.C.P. 2959(e).” Eagle-view’s Brief, p. 21. Requiring the petitioner to present “believable” evidence of a meritorious defense does not violate Pa.R.C.P. 2959(e). Rather, doing so insures proper application of Pa.R.C.P. 2959(e), by mandating that the decision whether to open a judgment will be based on credible evidence which, in a jury trial, would preclude the entry of a directed verdict and which, if believed by a jury, would not be reversed by the entry of judgment non obstante verdicto. See First Pennsylvania,

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Bluebook (online)
622 A.2d 367, 424 Pa. Super. 255, 1993 Pa. Super. LEXIS 958, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iron-workers-savings-loan-assn-v-iws-inc-pasuperct-1993.