Lafferty v. Estep

24 Pa. D. & C.5th 353
CourtPennsylvania Court of Common Pleas, Delaware County
DecidedMay 19, 2011
DocketNo. 10-11907
StatusPublished

This text of 24 Pa. D. & C.5th 353 (Lafferty v. Estep) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Delaware County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lafferty v. Estep, 24 Pa. D. & C.5th 353 (Pa. Super. Ct. 2011).

Opinion

BURR, S.J.,

The defendant/petitioner, Ralph V. Estep (hereinafter, “defendant”), has appealed from this court’s order, following a hearing, denying his petition to open the judgment confessed against him by the plaintiff/respondent, David T. Lafferty (hereinafter, “plaintiff’), subsequent to the defendant’s default on payments due on a mortgage balloon note issued by the plaintiff as consideration for the defendant’s purchase of plaintiff’s real property situated at 42 Woodland Drive in Chadds Ford Township, Pennsylvania (hereinafter [355]*355“premises”).1

The plaintiff’s complaint for confession of judgment sets forth the following allegations against the defendant: (1) that, on or about January 3, 2007, the defendant executed and delivered to the plaintiff a balloon note in the original principal sum of $ 1,300,000.00 evidencing his indebtedness to the plaintiff and that the defendant failed to pay all of the monthly installments due and owing on that indebtedness to the plaintiff; (Id., ¶¶ 3-5; a copy of the balloon note is appended as “Exhibit A” to the plaintiff’s complaint for confession of judgment);2 (2) that by virtue of defendant’s default, and by the terms of the balloon note, the entirety of its principal became due, payable and collectible in full without notice to the defendant. (Id., ¶ 6); (3) that the defendant was sent notice of default and acceleration on or about August 20, 2010, as well as the plaintiff’s demand for payment in full of the entire unpaid balance, principal, interest and other sums due and owing under the balloon note; (Id., ¶¶ 7-9)(a copy of the default [356]*356notice sent to the defendant is appended as “Exhibit B” to the plaintiff’s complaint for confession of judgment); and (4) that the defendant has failed to remit the foregoing payment in this non-consumer credit transaction upon notice and demand upon him to do so, and the plaintiff has confessed judgment as authorized under paragraph 7 of the balloon note pursuant to a warrant of attorney that is less than twenty years old. (Id., ¶¶ 10-13).

Paragraph 7 of the subject balloon note states that the defendant granted Warrants of Attorney for the confession of judgment upon default and that he “knowingly, intentionally, voluntarily, and unconditionally waive(s) any and all rights [he] may have to prior notice and opportunity for hearing under the respective Constitutions and laws of the Commonwealth of Pennsylvania and the United States of America.” (Id., Exhibit Ato the complaint for confession of judgment, p. 3). The confession of judgment clause which follows this statement and which was initialed by the defendant is set forth in its entirety below:

“Upon the occurrence of an event of default, maker, without further consent or notice, does hereby irrevocably and unconditionally authorize and empower any attorney o[r] the prothonotary of any court of record of the commonwealth of Pennsylvania or elsewhere to appear for maker in any such court, and with or without a complaint or declaration filed, in an appropriate action brought against maker on this note, to enter and confess judgment against maker in favor of payee or its successors and assigns, for all or [357]*357any portion of the entire amount due to payee upon such event of default as provided herein, together with costs of suit and attorneys’ commission in an amount equal to ten (10%) percent of the principal amount outstanding under this note, but in no event less than five thousand dollars ($5,000.00); and for so doing this note or a copy hereof verified by affidavit shall be a sufficient warrant. The authority herein granted to appear, enter and confess judgment shall not be exhausted by any one or more exercise thereof or by any defective exercise thereof, but shall continue and be exercisable from time to time until the full payment of all amounts due from maker to payee hereunder and under the loan documents is made. The foregoing right and remedy is in addition to and not in lieu of any other right or remedy available to payee under this note or otherwise.
Maker acknowledges having had the assistance of legal counsel or the opportunity to retain legal counsel in the review and execution of this note for the purpose of explaining the meaning and effect of the foregoing provisions concerning confession of judgment....” (Exhibit a to the respondent’s complaint for confession of judgment, pp. 3-4).

The defendant contended in response to the complaint for confession of judgment that the plaintiff knew at the time of defendant’s purchase of the premises that the latter had intended to use it both as a residence and as a place of business, but that plaintiff had failed to inform him of a township requirement that a sewer hookup was [358]*358necessary before any portion of the premises could be used commercially. (Petition to open judgment, ¶¶ 7, 10). The defendant additionally averred that the plaintiff had fraudulently misrepresented to him that the premises were being conveyed free of all liens and encumbrances subject only to the mortgage of the plaintiff and that the wiring of the premises was compliant with all local codes. (Id., ¶¶ 8-9, 11). The defendant asserted that, when he attempted, through Artisans Bank in June of 2008, to restructure his financial obligations including the borrowing of sufficient funds with which to pay off the balloon note, Artisans discovered and reported to the defendant that the premises were encumbered by several preexisting obligations of the plaintiff totaling over $350,000.00. (Id., ¶¶ 17-19, 26; Exhibit B - Title Insurance Report dated June 28, 2010). The defendant asserted that, although he had “immediately” notified the plaintiff ofthe bank’s discovery and that he would be unable to restructure his financial obligations through Artisans Bank unless the plaintiff “immediately” satisfied the existing encumbrances, the plaintiff’s refusal or inability to clear the encumbrances rendered defendant’s effort to obtain sufficient financing with which to pay off the balloon note futile. (Id., ¶¶ 20-25). The defendant claimed that the inability to refinance the obligation on the balloon note due to the plaintiff’s failure to convey clear title prevented him from making the payments thereupon during the calendar year, 2010, which lapse on the part of the defendant led to the filing of the complaint for confession of judgment by the plaintiff. (Id., ¶¶ 28-29).

[359]*359The defenses raised in six counts pleaded by the defendant in his petition to open judgment are: (I) fraudulent inducement of the sale of the premises with misrepresentations that they were being conveyed free and clear of all liens and that the property was electrical code compliant; (II) fraud with regard to the same misrepresentations alleged in count I; (III) rescission of the sale contract for the premises on grounds of the plaintiff’s alleged misrepresentations that he was conveying clear title thereto and that it was electrical code compliant; (IV) breach of the sale contract for the premises on grounds of the plaintiff’s alleged misrepresentations that he was conveying clear title thereto and that it was electrical code compliant; (V) setoff of any damages awarded to the defendant from any judgment awarded by the court; (VI) denial or reduction of the 10% attorney fees allowed pursuant to the balloon note for confession of judgment against the defendant. (Id., ¶¶ 30-69).

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Cite This Page — Counsel Stack

Bluebook (online)
24 Pa. D. & C.5th 353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lafferty-v-estep-pactcompldelawa-2011.