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Home My WebLink About96-4943 CivilA. WAYNE HARTZELL and ANNE HARTZELL, his wife, Plaintiffs V® GUDJON J. OLAFSSON, a.k.a. GUDJON OLAFSSON and GUDLAUG B. OLAFSSON, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 96-4943 EQUITY TERM IN RE: DEFENDANTS' PETITION TO OPEN DEFAULT JUDGMENT BEFORE SHEELY, P.J., HESS and OLER, JJ. ORDER OF COURT AND NOW, this ~ ~ day of February, 1997, after careful consideration of Defendants' Petition To Open Default Judgment, and for the reasons stated in the accompanying opinion, Defendants' petition is GRANTED and the judgments entered against them on November 19, 1996, are OPENED. Allen E. Hench, Esq. 224 Market Street Newport, PA 17074 Attorney for Plaintiffs BY THE COURT, Anna Marie Sossong, Esq. 204 State Street Harrisburg, PA 17101 Attorney for Defendant Gudjon J. Olafsson Elizabeth B. Stone, Esq. 414 Bridge Street New Cumberland, PA 17070 Attorney for Defendant Gudlaug B. Olafsson : rc A. WAYNE HARTZELL and ANNE HARTZELL, his wife, Plaintiffs Ve GUDJON J. OLAFSSON, a.k.a. GUDJON OLAFSSON and GUDLAUG B. OLAFSSON, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 96-4943 EQUITY TERM IN RE: DEFENDANTS' PETITION TO OPEN DEFAULT JUDGMENT BEFORE SHEELY, P.J., HESS and OLER, JJ. OPINION and ORDER OF COURT Oler, J., February 28, 1997. This equity action arises out of a conveyance between Defendants which was allegedly designed to defraud Plaintiffs as creditors of Defendant Gudjon J. Olafsson. For disposition at this time is a petition filed by Defendants to open default judgments entered against them. For the reasons stated in this opinion, the petition to open will be granted. STATEMENT OF FACTS This action was commenced on September 5, 1996, by the filing of a complaint. An amended complaint was filed on October 9, 1996. Notice of Defendants' intention to file praecipes for entry of default judgments were mailed on November 6, 1996. Default judgments were taken against the Defendants on November 19, 1996. On November 22, 1996, Defendants filed a joint petition to open the judgments. The petition alleged, inter alia, the following: NO. 96-4943 EQUITY TERM 15. The conveyance alleged by the Plaintiff to be a fraudulent one was supported by valid consideration in that it was a conveyance to a judgment lien holder in order to provide further security for the continued advancement of funds in addition to those already memorialized in the judgment lien. The transfer therefore was a transfer for value under 12 Pa. C.S.A. §5103(a) and (b) .... ~ A rule to show cause why the default judgments should not be opened was issued by the court upon Plaintiffs on November 26, 1996. Plaintiffs filed an answer to the petition on December 16, 1996. The answer responded to the averment quoted above as follows: 15. [Defendants' a]verment presents a conclusion of law to which no responsive pleading is required. As way of further answer, the Petition fails to set forth a meritorious defense and so is fatally deficient and consequently must be denied, in regard to both the challenged deed and challenged note. As way of further answer, the suggestion that the deed transfer was for value is expressly denied; the same was fraudulent. As way of further answer, no claim of validity of the note is even averred in the Petition and so no suggestion of Defendants' Petition To Open Judgment, paragraph 15. NO. 96-4943 EQUITY TERM meritorious defense with regard thereto is even hinted.2 DISCUSSION Under Pennsylvania Rule of Civil Procedure 237.3, it is provided as follows with respect to a petition to open a default judgment: 2 By order of court dated December 24, 1996, the parties were directed to proceed in accordance with Pennsylvania Rule of Civil Procedure 206.7. This rule provides as follows: RULE 206.7. SHOW CAUSE PROCEDURE AFTER ISSUANCE OF RULE TO (a) If an answer is not filed, all averments of fact in the petition may be deemed admitted for the purposes of this subdivision and the court shall enter an appropriate order. (b) If an answer is filed raising no disputed issues of material fact, the court on request of the petitioner shall decide the petition on the petition and answer. (c) If an answer is filed raising disputed issues of material fact, the petitioner may take depositions on those issues, or such other discovery as the court allows, within the time.set forth in the order of the court. If the petitioner does not do so, the petition shall be decided on petition and answer and all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted for the purpose of this subdivision. (d) The respondent may take depositions, or such other discovery as the court allows. No depositions were taken by any party, nor was the court requested to permit another form of discovery. On December 31, 1996, counsel for Defendant/Petitioner Gudlaug B. Olafsson listed the matter for argument. Argument was held on February 5, 1997. NO. 96-4943 EQUITY TERM RULE 237.3 RELIEF FROM JUDGMENT OF NON PROS OR BY DEFAULT (a) A petition for relief from a judgment of non pros or of default entered pursuant to Rule 237.1 shall have attached thereto a verified copy of the complaint or answer which the petitioner seeks leave to file. (b) If the petition is filed within ten days after the entry of the judgment on the docket, the court shall open the judgment if the proposed complaint or answer states a meritorious cause of action or defense. "A petition to open a judgment is addressed to the equitable powers of the court and is a matter of judicial discretion." Schultz v. Erie Insurance Exchange, 505 Pa. 90, 93, 477 A.2d 471, 472 (1984). "The court will only exercise this discretion when (1) the petition has been promptly filed; (2) a meritorious defense can be shown; and (3) the failure to appear can be excused." Id. (emphasis omitted). "Rule 237.3[, which became effective July 1, 1995,] does not change the law of opening judgments." Note, Pa. R.C.P. 237.3. "Rather, the rule supplies two of the three requisites for opening such judgments by presupposing that a petition filed as provided by the rule is timely and with reasonable explanation or legitimate excuse for the inactivity or delay resulting in the entry of the judgment." Id.; see Till v. Steffey, No. 95-1919 Civil Term, slip op. at 3 (Cumberland Co., February 12, 1996) (Hess, J.). The use of "shall" in the second clause of the Rule suggests that a refusal to open a default judgment upon a petition filed within ten days of 4 NO. 96-4943 EQUITY TERM its entry and stating a meritorious defense will generally be viewed as an abuse of discretion. In the present case, Defendants' petition to open was filed within ten days of the entry of the default judgments against them. The petition avers that the conveyance challenged as fraudulent was in fact a transfer for valid consideration; the response of Plaintiffs to this defense does not conclusively show otherwise. Under these circumstances, and mindful of the provision of the Rules encouraging a liberal construction and application,3 the court will grant Defendants' petition to open.4 ORDER OF COURT AND NOW, this 28th day of February, 1997, after careful consideration of Defendants' Petition To Open Default Judgment, and for the reasons stated in the accompanying opinion, Defendants' 3 "The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. 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." Pa. R.C.P. 126. Defendants' petition to open contains a proposed answer to Plaintiffs' amended complaint by Defendant Gudjon J. Olafsson, but none by Defendant Gudlaug B. Olafsson. The requirement that such an answer be appended to the petition is contained in Rule 237.3(a). 4 In view of this disposition, it is unnecessary to consider several other grounds for opening the judgments asserted in Defendants' petition. NO. 96-4943 EQUITY TERM petition is GRANTED and the judgments entered against them on November 19, 1996, are OPENED. BY THE COURT, Allen E. Hench, Esq. 224 Market Street Newport, PA 17074 Attorney for Plaintiffs Anna Marie Sossong, Esq. 204 State Street Harrisburg, PA 17101 Attorney for Defendant Gudjon J. Olafsson Elizabeth B. Stone, Esq. 414 Bridge Street New Cumberland, PA 17070 Attorney for Defendant Gudlaug B. Olafsson : rc s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 6