HomeMy WebLinkAbout93-1973 Civil VINCE LOOSE and RUTH H. : IN THE COURT OF COMMON PLEAS OF
LOOSE, Husband and Wife, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs :
:
V.
: CIVIL ACTION - LAW
:
JEFFREY TAYLOR HOMES, INC. :
and JEFFREY TAYLOR, :
Defendants
: NO. 1973 CIVIL 1993
IN RE: DEFENDANTS, PETITION TO OPEN DEFAULT JUDGMENT
BEFORE HOFFER, BAYLEY* and OLER, Jj.
ORDER OF COURT
AND NOW, this~day of May, 1994, upon careful consideration
of Defendants, Petition To Open Default Judgment, for the reasons
stated in the accompanying Opinion, the Petition is DEEMED
WITHDRAWN, and the Rule heretofore issued is DISCHARGED, as to
Defendant Jeffrey Taylor Homes, Inc., and the Petition is GRANTED,
and the Rule heretofore issued is MADE ABSOLUTE, as to Defendant
Jeffrey Taylor.
BY THE COURT,
J. Jay Cooper, Esq.
320 Market Street
Strawberry Square
P.O. Box 1268
Harrisburg, PA 17108-1268
Attorney for Plaintiffs
John D. Briggs, Esq.
3464 Trindle Road
Camp Hill, PA 17011
Attorney for Defendants
: rc
* Bayley, j., did not participate in the consideration or decision
of this matter.
VINCE LOOSE and RUTH H. : IN THE COURT OF COMMON PLEAS OF
LOOSE, Husband and Wife, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs : ·
:
v. : CIVIL ACTION - LAW
JEFFREY TAYLOR HOMES, INC. :
and JEFFREY TAYLOR, :
Defendants : NO. 1973 CIVIL 1993
IN RE: DEFENDANTS' PETITION TO OPEN DEFAULT JUDGMENT
BEFORE HOFFER, BAYLEY and OLER, JJ.
OPINION AND ORDER OF COURT
Oler, J.
This case presents the issue of whether a default judgment
against a defendant may be opened, where the Defendant reasonably
assumed that his legal interests were being protected by his
counsel, where failure of the counsel to act prior to entry of the'
judgment was a concomitant of health difficulties of counsel's
spouse and discovery of a conflict of interest precluding his
representation of defendant, where a petition to open was filed
within a month of entry of the judgment, and where a meritorious
defense was averred by defendant. For the reasons stated in this
Opinion, the default judgment will be opened.
Statement of Facts
Plaintiffs are Vincent Loose and Ruth Loose. Defendants are
Jeffrey Taylor Homes, Inc., and Jeffrey Taylor individually.
On May 17, 1994, Plaintiffs obtained judgment against
Defendant Jeffrey C. Taylor Homes, Inc., from the Honorable Susan
K. Day, District Justice, in Mount Holly Springs, Cumberland
No. 1973 CIVIL 1993
County, Pennsylvania.~ The judgment arose out of an alleged breach
of warranty by the corporate defendant with respect to a home
purchased by Plaintiffs.2
On June 14, 1993, the corporate defendant appealed from the
district justice judgment.3 Pursuant to praecipe, a rule was
entered upon Plaintiffs by the Prothonotary to file a complaint.4
On July 14, 1993, Plaintiffs filed a complaint naming Jeffrey
Taylor Homes, Inc., as a defendant and adding Jeffrey Taylor
individually as a second Defendant. The claims against the
corporation were for breach of contract,s breach of express
warranty,6 and violation of Pennsylvania's Unfair Trade Practices
and Consumer Protection Law? in connection with a house which was
built by and purchased from the corporate defendant and which
~ .See Notice of Appeal from District Justice Judgment, filed
June 14, 1993.
See id.
Id.
4 Praecipe To Enter Rule To File Complaint and Rule To File
Complaint, filed and entered June 14, 1993.
Plaintiffs' Complaint, count I.
Id., count II.
? Id., count III; see Act of December 17, 1968, P.L. 1224, as
reenacted, 73 P.S. S§201-1 et seq.
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No. 1973 CIVIL 1993
allegedly displayed water problems in the basement.8 The claim
against the individual defendant, Jeffrey Taylor, was for
misrepresentation in connection with the water problems.9
On August 5, 1993, according to affidavits of service of one
John Granoff, Defendants were served with copies of the complaint.~0
On August 13, 1993, Mr. Taylor secured legal representation with
respect to the litigation in the form of Sadis, Guido & Masland, a
Cumberland County law firm.~ An associate of the firm with whom
he conferred on that date discussed procedural and substantive
issues with him and obtained information for preparation of a
responsive pleading.~2
The file was given to a second associate in the firm for the
purpose of research and the drafting of an answer.~3 In the absence
of an extension, a responsive pleading appeared to be due on August
Plaintiffs' Complaint, paragraphs 1-18.
Id., count IV.
~0 Affidavits of Service, filed September 17, 1993. Because
of the Court's disposition of this case, it is not necessary to
consider the individual defendant's contention that service upon
him, as a previous non-party, was defective for failure to utilize
the sheriff. Brief in Support of Petition To Open Default
Judgment, at 13.
Deposition of William C. Vohs, Esq., N.T. 5.
Id.
Id.
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No. 1973 CIVIL 1993
26, 1993,TM and the associate commenced work immediately;~S by August
19, 1993, he had completed research on the advisability of filing
preliminary objections to the complaint and had drafted an answer.~
Unfortunately, the associate's wife became ill during
pregnancy and on August 26, 1993, at 4:00 a.m. her condition had
reached a point that an admission to a hospital emergency room had
to be undertaken by the associate.~7 Their daughter was born on
August 28, 1993.~8 It appears that the associate stayed in the
hospital that weekend until Monday, August 30, 1993,~9 and remained
at home with his wife and child immediately thereafter.20
On August 30, 1993, Mr. Taylor met with the first associate in
the law firm to review and revise as necessary the draft of the
answer which had been prepared by the second associate.2~ On
September 1, 1993, he telephoned the firm's office, apparently to
receive an update on progress on the case.22
Id., N. T. 6.
Id., N.T. 5-6.
Id., N.T. 5.
Id.
Id.
Id.
Id., N.T. 14.
Deposition of Jeffrey C. Taylor, N.T. 28-29.
Id., N.T. 29-30.
4
No. 1973 CIVIL 1993
On that same date, notices from Plaintiffs' counsel of
intention to file a praecipe for entry of default judgment were
received at a business owned by Mr. Taylor's father in Cumberland
County, addressed to Defendants, sent by certified mail, and
receipted by a receptionist.23 The notices were delivered to Mr.
Taylor "around September 5th or 6th," 1993.24
According to his testimony in a deposition, Mr. Taylor stated
that upon receipt of the notices he "would have called [the first
associate in the law firm] ... and let her know that [he had]
gotten that, to let her in on that at least [he] got some more
23 Id., N.T. 11; see Praecipes for Entry of Judgment, filed
September 17, 1993. The notices were mailed on August 31, 1993.
See Plaintiffs' Answer to Rule To Show Cause, paragraph 13 (new
matter); Defendants' Reply to New Matter of Plaintiffs, paragraph
13.
The reason that the notices were mailed to a business owned by
Mr. Taylor's father is not entirely clear from the record. It
appears that Mr. Taylor may have been an employee of his father's
business. Deposition of Jeffrey C. Taylor, N.T. 11-12, 30. An
allusion by Plaintiffs' counsel in a deposition question to having
also sent the notices by certified and regular mail to the address
given on the notice of appeal from district justice judgment
prompted a response from Mr. Taylor that he assumed he had received
at least the regular mail through postal forwarding. Id., N.T. 32.
In earlier testimony, he indicated that he had moved from the
address given on the notice of appeal from district justice
judgment as of August 15, 1993. Id., N.T. 3.
The default judgments eventually entered herein were
predicated on the notices which came into Mr. Taylor's possession
by way of his father's business. See Praecipes for Entry of
Judgment, filed September 17, 1993.
24 Deposition of Jeffrey C. Taylor, N.T. 32.
5
No. 1973 CIVIL 1993
paperwork pertaining to this problem.-25 He could not, however,
recall a specific conversation to this effect.26 Nor could he say
for a fact that he gave a copy of the notices to the firm.27
At some time prior to a telephone conversation on September
16, 1993, with Mr. Taylor, the second associate in the law firm
remembered an occasion in April or May of 1993 when Plaintiffs had
met with him and discussed his possible representation of them in
a suit against Defendants.~8 He brought this fact to the attention
of the first associate, who suggested to him that Mr. Taylor be
advised to return to a former attorney, Craig Diehl.29 Because of
this unexpected discovery of a conflict of interest, a meeting
scheduled with Mr. Taylor was not held and in a telephone
conversation with Mr. Taylor on September 16, 1993, the second
associate advised him that the firm's representation had to be
withdrawn.3° Mr. Taylor retained Mr. Diehl on the same day.3~
Id., N.T. 32.
Id.
Id., N.T. 33.
Deposition of William C. Vohs, Esq., N.T. 4, 7, 10, 11-12.
His services were not ultimately retained. Id., N.T. 11.
~ Id., N.T. 18-19.
~o Id., N.T. 4, 13, 23. Until that telephone conversation,
the firm was "actually representing him," according to the
associate. Id., N.T. 23. Mr. Taylor was billed for the firm's
services. Id., N.T. 8.
~ Deposition of Jeffrey C. Taylor, N.T. 15.
6
No. 1973 CIVIL 1993
According to testimony of the second associate, he called the
Plaintiffs' attorney,32 and on September 17, 1993, sent a letter to
Mr. Taylor confirming the withdrawal of representation and
recommending the consultation with Mr. Diehl.33
On the morning of the same day the letter was sent, September
17, 1993, Mr. Taylor physically delivered his legal file to Mr.
Diehl's office.34 At 3:30 and 3:31 p.m. in the afternoon, praecipes
for entry of default judgments against Defendant Jeffrey Taylor and
Defendant Jeffrey Taylor Homes, Inc., were filed on behalf of
Plaintiffs. The judgment entered against Mr. Taylor was
unliquidated; the judgment against the corporate defendant was in
the amount of $27,921.00.
By letter dated September 21, 1993, Defendants' new counsel
wrote to Plaintiffs' attorney requesting an additional ten days
within which to answer the complaint, citing the recent discovery
of a conflict of interest by prior counsel.35 However, Plaintiffs'
counsel responded by letter dated September 23, 1993, advising of
the entry of default judgments against the Defendants on September
32 Deposition of William C. Vohs, Esq., N.T. 16-17.
33 Id., N.T. 9; Defendant's Petition To Open Default Judgment,
Exhibit B.
34 Deposition of Jeffrey C. Taylor, N.T. 15.
35 Defendants, Petition To Open Default Judgement, paragraph
5, Exhibit C; Plaintiffs' Answer to Rule To Show Cause, paragraph
5.
7
No. 1973 CIVIL 1993
17, 1993, and explaining that as a consequence he was not in a
position to facilitate the filing of an answer.36
On October 15, 1993, Defendants filed a Petition To Open
Default Judgment, reciting the procedural history of the case and
including as an exhibit a proposed answer with new matter to the
complaint.37 The proposed responsive pleading contained averments
contradicting, on behalf of the corporate defendant, the
propositions that any contractual deficiencies in the construction
of Plaintiffs' home had not been remedied, that any breach of
warranty had occurred, and that a violation of the Unfair Trade
Practices and Consumer Protection Law had been committed.~8 It also
contained averments contradicting, on behalf of the individual
defendant, the allegation that he made a misrepresentation as to
water problems in the home.TM
A Rule To Show Cause was issued upon Plaintiffs by the
Honorable Kevin A. Hess with respect to Defendants' petition to
open. An answer, containing new matter, was thereafter filed by
36 Defendants' Petition To Open Default Judgement, paragraph
7, Exhibit D; Plaintiffs' Answer to Rule To Show Cause, paragraph
7.
Defendants' Petition To Open Default Judgement, Exhibit E.
Id., paragraphs 1-35, 43-46.
Id., paragraphs 36-42.
8
No. 1973 CIVIL 1993
Plaintiffs,4° and a reply to the new matter was filed by
Defendants.4~
Depositions were then taken of Mr. Taylor and the aforesaid
second associate.~2 In his deposition, Mr. Taylor presented, inter
alia, an exculpatory version of his dealings with the Plaintiffs."3
The matter was subsequently listed for argument, briefs were
submitted by the parties, and oral argument was held on March 30,
1994. In his brief and at oral argument, Defendants' counsel
indicated that he was withdrawing the petition to open as to
Defendant Jeffrey Taylor Homes, Inc., because of the corporation's
filing of a bankruptcy petition.~4
Statement of Law
It has been observed by a distinguished Cumberland County
jurist and writer that "[d]efault judgments are not favored in the
law." Shughart, Pennsylvania Civil Practice ~7.8, at 115 (2d ed.
1993).
"The dislike of default judgments has resulted in the
40 Plaintiffs' Answer to Rule To Show Cause, filed November
12, 1993.
4~ Defendants' Reply to New Matter of Plaintiffs, filed
January 6, 1994.
~2 These depositions were filed in the Prothonotary's Office
on March 30, 1994.
43 Deposition of Jeffrey C. Taylor, N.T. 16-24.
44 Defendants' Brief in Support of Petition To Open Default
Judgment, at 4.
9
No. 1973 CIVIL 1993
requirement of a special notice to the delinquent party of an
intention to enter same.-45 This requirement, contained in
Pennsylvania Rule of Civil Procedure 237.1, was designed to
"ameliorate to some extent the default judgment problem." Pa.
R.C.P. 237.1, Explanatory Note -- 1979. The Rule recognizes that
"'It]here must be some point at which our courts must refuse to
accept an attorney's negligent representation of his client when it
interferes with orderly administration of justice.,-46
Consequently, the Rule "influence[s] the courts in defining the
turning point at which grounds for opening judgments will no longer
exist." Id. Thus, where the requisite notice of intention to
enter a default judgment has been sent, it is believed that courts
should be particularly circumspect before granting a petition to
open.
On the other hand, it is well recognized that "Ia] petition to
open judgment is governed by equitable principles and is directed
to the sound discretion of the court." 2B Anderson, Pennsylvania
Civil Practice S1037.11, at 377 (1969). In this regard, it must be
remembered that "[t]he purpose of the rules in authorizing the
entry of default judgments is to prevent a dilatory defendant from
impeding the plaintiff in establishing his claim. The rules are
45 Shughart, Pennsylvania Civil Practice §7.8, at 115-16 (2d
ed. 1993).
~6 Pa. R.C.P. 237.1, Explanatory Note -- 1979, quoting Dupree
v. Lee, 241 Pa. Super. 259, 266, 361 A.2d 331, 335 (1976).
10
No. 1973 CIVIL 1993
not primarily intended to provide the plaintiff with a means of
gaining a judgment without the difficulties which arise from
litigation." Moyer v. Americana Mobile Homes, Inc., 244 Pa. Super.
441, 445, 368 A.2d 802, 804 (1976). "Generally, three conditions
must be met before a judgment can be opened: (1) the petition must
be promptly filed; (2) the petitioner must aver a meritorious
defense; and (3) there must be a reasonable excuse given for the
failure to take the action resulting in the default judgment."
Shughart, Pennsylvania Civil Practice S7.8, at 116-17 (2d ed.
1993).
With respect to promptness of filing, "[i]t has been held ...
that filing a petition to open a default judgment within ...
generally less than 1 month, after the entry of the default
judgment, meets the requirement of prompt filing." 12 Standard
Pennsylvania Practice 2d §71.53, at 80 (1983).
With respect to a meritorious defense, one commentator has
stated as follows:
Generally, a meritorious defense must be
pleaded in a manner which shows that the
defense asserted is genuinely meritorious and
which shows that it can be established at
trial. It has been stated that the petition
must set forth facts which would support a
verdict in favor of the petitioner. Unless
the facts alleged in the petition in support
of a defense to the original action are
sufficient to have prevented a judgment in the
original action, the petition is insufficient.
In other words, if the statement of defense in
the petition to open would have been a
sufficient statement of defense in the
11
No. 1973 CIVIL 1993
original action, the statement will be taken
as sufficient for purposes of the petition to
open. 47
"[I]f the testimony taken [on the allegedly meritorious
defense] would be sufficient to justify the submission of the
question to the jury and to sustain a verdict in the petitioner's
favor, the judge may ... open the judgment." 12 Standard
Pennsylvania Practice 2d S71.137, at 239-40 (198~3).
With.respect to a reasonable excuse for a defendant's failure
to take the action resulting in the default judgment, a number of
principles may be cited. First, it has been said that "pertinent
case law reveals that the power to open judgment should be
exercised when the default is the result of oversight or mistake by
counsel." Versak v. Washington, 359 Pa. Super. 454, 460, 519 A.2d
438, 441 (1986). On the other hand, "while it is true that a
mistake or inadvertence of counsel will often justify the opening
of a default judgment ..., a reasonable excuse for the default must
be offered." Vorhauer v. Miller, 311 Pa. Super. 395, 404, 457 A.2d
944, 949 (1983) (emphasis omitted).
In this regard, an attorney's "dilatoriness, failure to act
with knowledge of the implications, or deliberate decision not to
defend" are to be distinguished from less culpable errors of the
practitioner. See Davis v. Burton, 365 Pa. Super. 160, 163, 529
47 12 Standard Pennsylvania Practice 2d S71.123, at 217
(1983).
12
No. 1973 CIVIL 1993
A.2d 22, 23 (1987), allocatur denied, 518 Pa. 655, 544 A.2d 1342
(1988). Illustrative of this distinction is the statement that
"[a] default judgment may be opened where the defendant's attorney
was prevented from looking after his client's interests because ...
of an illness in his family .... " 12 Standard Pennsylvania
Practice 2d S71.87, at 164 (1983).
Second, delays precipitated by the discovery of a conflict of
interest by counsel have factored into decisions by courts to
exercise their discretion to open default judgments entered in
technical compliance with the rules. See, e.g., Moyer v. Americana
Mobile Homes, Inc., 244 Pa. Super. 441, 368 A.2d 802 (1976) (lower
court's refusal to open judgment reversed). A withdrawal of
counsel is similarly treated. See, e.g., Williams v. Allegheny
Union Plaza, Inc., 231 Pa. Super. 170, 332 A.2d 493 (1974) (lower
court's refusal to open judgment reversed).
Third, a mistaken and reasonable belief on the part of a
defendant that counsel was protecting his or her interests is
another factor that has been held to militate in favor of opening
a judgment entered by default. See, e.g., Versak v. Washington,
359 Pa. Super. 454, 519 A.2d 438 (1986); Ferguson v. King, 43
Beaver L.J. 71 (1984).
Application of Law to Facts
In this case, the petitioner promptly moved to open the
judgment entered by default. In addition, he alleged, and
13
No. 1973 CIVIL 1993
sufficiently demonstrated, a meritorious defense. Finally, he
provided a reasonable excuse for failure to take the action
resulting in the default judgment.
In the latter regard, the petitioner clearly relied upon his
counsel to protect his interests. In addition, several factors
which have traditionally weighed in favor of opening a default
judgment - illness within counsel's family, unexpected discovery of
a conflict of interest by counsel, and withdrawal of legal
representation - contributed to the delay which facilitated entry
of the default judgment. Furthermore, the actions of counsel belie
any suggestion of dilatoriness, failure to act with knowledge of
the implications, or deliberate decision not to defend.
Bearing in mind the purpose of the rules in authorizing the
entry of default judgments as expressed heretofore, and without
intending to suggest in any way any impropriety on the part of
Plaintiffs' counsel in furthering the interest of his clients by
causing entry of the judgment, the Court believes that the judgment
should be opened. For this reason, the following Order will be
entered:
ORDER OF COURT
AND NOW, this~day of May, 1994, upon careful consideration
of Defendants' Petition To Open Default Judgment, for the reasons
stated in the accompanying Opinion, the Petition is DEEMED
WITHDRAWN, and the Rule heretofore issued is DISCHARGED, as to
Defendant Jeffrey Taylor Homes, Inc., and the Petition is GRANTED,
and the Rule heretofore issued is MADE ABSOLUTE, as to Defendant
14
No. 1973 CIVIL 1993
Jeffrey Taylor.
BY THE COURT,
J. Wesley Oler, /Jr.~, J. ' ~ ~
J. Jay Cooper, Esq.
320 Market Street
Strawberry Square
P.O. Box 1268
Harrisburg, PA 17108-1268
Attorney for Plaintiffs
John D. Briggs, Esq.
3464 Trindle Road
Camp Hill, PA 17011
Attorney for Defendants
: rc
15