While a party’s showing that their attorney neglected their case due to a serious illness might be enough to convince a court to open a default judgment, it does not meet the higher standard required to open a final judgment in a contested proceeding, a split Pennsylvania Superior Court panel has ruled.
In Becrett v. R&H Resources, a three-judge panel ruled 2-1 to uphold a trial judge’s denial of strip mall owner Becrett’s bid to reopen a lease dispute involving one of its tenants that had been tossed out on summary judgment.
The company had sued National Cooperative Bank in the Luzerne County Court of Common Pleas, seeking funds held in escrow after the bank sold off the inventory of a shuttered hardware store operated by R&H Resources, according to the Superior Court majority’s unpublished memorandum opinion. R&H had been Becrett’s tenant in the strip mall and had obtained a $630,000 loan from National Cooperative, which granted the bank first priority security interest in R&H’s equipment, fixtures, inventory and accounts. Becrett argued that it was entitled to those funds because R&H had allegedly failed to make rent and other payments under the lease.
After Becrett filed its complaint, the bank filed an answer with counterclaims, to which Becrett then responded, according to the Superior Court’s memorandum. The bank followed up with a motion for summary judgment, to which Becrett also responded, and the trial judge denied it. However, about two years later, the trial judge ultimately did grant summary judgment in favor of the bank after Becrett failed to provide discovery and calls and emails to its former attorney by the bank went unanswered.
In seeking to reopen the judgment, Becrett argued that its failure to respond to discovery requests was the result of inaction and neglect by its former attorney, Denville, New Jersey-based solo Michael Rowland, which occurred after he suffered a number of strokes and was diagnosed with retinopathy, rendering him unable to read.
The trial court denied the request, however, finding that, in order to reopen a judgment in a contested proceeding Becrett was required to show fraud or extraordinary cause, a standard that was not met by its showings regarding Rowland’s conduct.
On appeal, Becrett argued that it had shown “proper cause” to reopen the judgment, but Judge Mary Murray, writing for the Superior Court majority, agreed with the trial judge that the standard for reopening judgment in contested cases is higher.
“Unlike a default judgment, which is entered simply when a complaint is filed and the defendant fails to answer, in this case, appellant filed a complaint, the bank filed an answer and counterclaims, and appellant filed an answer to those counterclaims,” Murray said. “Additionally, when the bank filed its first motion for summary judgment in February of 2015, appellant filed a response, and the trial court denied the motion. When the bank filed its January 2016 motion to compel and January 2017 motion for summary judgment, both with rules to show cause upon appellant, appellant had—attorney Rowland’s health issues notwithstanding—’a full opportunity to present [its] positions on the issues.’”
Murray was joined by Judge Jack Panella.
But Judge Kate Ford Elliott filed a dissenting memorandum, arguing that, under the state Supreme Court’s 1966 ruling in Thorn v. Borough of Clearfield and its 1979 ruling in Estate of Gasbarini v. Medical Center of Beaver County, Becrett should have been allowed to reopen the judgment because it had been in the dark about Rowland’s inability to handle the case until it was too late.
“As in Thorn and Gasbarini, appellant did not know that attorney Rowland was not providing adequate representation and was not diligently representing its interests,” Ford Elliott said.
But the majority also rejected Becrett’s argument that it had show extraordinary cause to reopen the judgment. Murray noted that, unlike Gasbarini, in which an attorney failed to inform his client that he was suspended from the practice of law, Rowland testified that he had no excuse for why he failed to communicate with both the bank and his client.
“Furthermore, appellant has not alleged any court action or oversight which operated to deny it knowledge of the entry of judgment,” Murray said.
Becrett’s attorney, Joseph Hanyon of Merwine, Hanyon & Kaspszyk in Pocono Summit, could not immediately be reached for comment. Counsel for National Cooperative, Patrick Troy of Sirlin Lesser & Benson in Philadelphia, also could be reached.
(Copies of the 18-page opinion in Becrett v. R&H Resources, PICS No. 18-1165, are available at http://at.law.com/PICS.)