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HomeMy WebLinkAbout00-0634 civil termWINDSOR PARK SHOPPING IN THE COURT OF COMMON PLEAS OF CENTER, LLP, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF DON SAN LEE and LI FEN LEE, Individually and t/d/b/a HUNG YU, d/b/a: SUNNY GARDEN RESTAURANT, DEFENDANTS 00-0634 CIVIL TERM IN RE__: PETITION TO STRIKE OR OPEN A CONFESSED JUDGMENT BEFORE BAYLEY, J- ORDER OF COURT. AND NOW, this ~I~ day of June, 2000, the judgment confessed against defendants on February 3, 2000, IS STRICKEN. Edgar B. Bayley, J. David L. Lanza, Esquire For Plaintiff Bruce D. Foreman, Esquire For Defendants :saa WINDSOR PARK SHOPPING IN THE COURT OF COMMON PLEAS OF CENTER, LLP, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF Vo DON SAN LEE and LI FEN LEE, Individually and tJd/b/a HUNG YU, d/b/a: SUNNY GARDEN RESTAURANT, DEFENDANTS 00-0634 CIVIL TERM IN RE: PETITION TO STRIKE OR OPEN A CONFESSED JUDGMENT BEFORE BAYLEY, J, OPINION AND ORDER OF COURT Bayley, J., June 28, 2000:-- On April 21, 1997, plaintiff, Windsor Park Shopping Center, LLP, leased its property at 5202 Simpson Ferry Road, Suite 108-10, Mechanicsburg, Cumberland County, to Chun Lan Cheng. The written lease was for ten years, at an annual rent of $52,800. The lease contained a provision prohibiting assignment or subletting without the landlord's consent. Paragraph 28(0, titled "Tenant Default," provides: The said Tenant hereby confesses judgment for the rent reserved under this agreement of the lease, together with an attorney fee of five percent (5%) for collection, and execution may be issued thereon from time to time for any rent due and owing under this lease, and judgment in ejectment as herewith provided may be entered concurrently therewith. (Empha, sis added.) On April 29, 1999, plaintiff and Chun Lan Cheng entered into a written "Lease Assignment Agreement" with defendants, Don San Lee and Li Fen Lee, d/b/a Sunny Garden Restaurant, in which all of Cheng's rights, title, and interest in the lease dated 00-0634 CIVIL TERM April 21, 1997, were assigned to defendants. The assignment provides: Assignee hereby assumes the said Lease for the balance of the term thereof, and agrees to faithfully perform all of the covenants, stipulations and agreements contained therein, and, particularly, to pay the rent and additional rent as therein provided, all to the same extent and as though the Assignee were the Tenant under the said Lease. (Emphasis added.) The assignment does not contain a sPecific clause authorizing the lessor, upon default, to confess judgment against the assignees, on February 3, 2000, plaintiff confessed judgment against defendants, as follows: Unpaid rent from November 1999 through . September 2007: $437,600.00 Interest at 6% from November 1, 1999 Through January 1, 2000: $ 2,376.00 5% attorney fees: $ 22,098.80 TOTAL $464,074.80 Defendants filed a petition to strike and/or open the judgment. They aver inter alia, that "Because there is no confession of judgment signed by the defendants individually, the instant confessed judgment should be opened and/or stricken with regard to the individual defendants." Plaintiff maintains that defendant's written agreement to faithfully perform all of the covenants, stipulations, and agreements contained in the lease dated April 21, 1997, constitutes sufficient warrant to confess judgment against them, the assignees, upon default. A petition to strike a judgment by confession will be granted where there is an -2- 00-0634 CIVIL TERM apparent defect on the face of the record on which the judgment was entered. Franklin Interiors v. Wall of Fame Management Co., 510 Pa. 597 (1986). In Ahem v. Standard Realty Co., 267 Pa. 404 (1920), the Supreme Court of Pennsylvania stated: The appellee is the assignee of a lease containing a warrant for the confession of judgment against the lessee for breach of its covenants. The assignment of it was accepted by the appellee 'according to its fully tenor and effect.' In view of these words appellants claim the right to enter judgment against the appellee; but this overlooks the fact that it signed no warrant for the confession of judgment. The warrant to confess judgment given by the original lessee is not the warrant of the appellee, his successor, and the judgment entered against it was properly stricken off as not being self-sustaining: Stewart v. Jackson et al., 181 Pa. 549. (Emphasis added.) ... In Stewart v. Jackson, 181 Pa. 549 (1897), plaintiff leased a hotel to W.P. Jackson. The lease contained a provision for entering an amicable action of ejectment, with a power of attorney to confess judgment in favor of the lessor and against the lessee or any subtenant, in the event of the nonpayment of the rent as it fell due. J.G. Lawson later entered into exclusive possession of the hotel, with the knowledge and consent of the lessor, but whether under an agreement with him or as a subtenant of Jackson was in dispute. Subsequently, the lessor entered an amicable action of ejectment against Jackson and Lawson. Judgment was confessed by the warrant of attorney contained in the lease, which was signed by Jackson, not Lawson. Lawson petitioned to strike the judgment. Plaintiff argued that the confessed judgment against Lawson was proper in that he was a subtenant and bound by the terms of the lease. The Supreme Court of Pennsylvania concluded: -3- 00-0634 CIVIL TERM [w]e find no authority for entering a judgment against Lawson. He had not signed the warrant of attorney, and his coming in as a subtenant gave no one authority to confess judgment against him. Judgment by confession must be self-sustaining on the record, and as there is nothing on this record to sustain a judgment against Lawson the rule to strike it off should have been made absolute. (Emphasis added.) Based on Ahern and Stewart, we conclude that for a landlord to confess judgment for nonpayment of rent against an assignee of a lease, the assignee must have signed a separate warrant of attorney to confess judgment upon default. A warrant to confess judgment against a lessee, even where an assignee agrees to abide by all of the terms in a lease which contains a confession of judgment clause, is not sufficient to confess judgment against the assignee. Accordingly, since on the face of the record there is no warrant of attorney signed by defendants to support the confession of judgment against them, the judgment entered on February 3, 2000, must be stricken? ORDER OF COURT AND NOW, this ~ day of June, 2000, the judgment confessed against defendants on February 3, 2000, IS STRICKEN. Edgar B. Bayley, J. L ~ This resolution makes it unnecessary to address the issues raised by defendants in their petition for alternate relief to open the judgment of February 3, 2000. -4- 00-0634 CIVIL TERM David L. Lanza, Esquire For Plaintiff Bruce D. Foreman, Esquire For Defendants :saa -5-