Digital Communication v. Allen Investments
223 A.3d 278
| Pa. Super. Ct. | 2019Background
- Digital Communications contracted with Allen Investments (Feb 17, 2009) to buy 3,100 TV units for $3,885,000; Allen Investments never delivered and lacked title/authority.
- Digital sued Allen Investments in Pennsylvania (Aug 17, 2010) for breach, misrepresentation, and fraud; default judgment entered Oct 14, 2010 for $14,601,000 and later assigned to Stuart Lacheen.
- William Allen (intervener, father of Marc Allen) petitioned to intervene (June 2017), claiming his Florida properties were fraudulently assigned to Marc/Allen Investments and targeted to satisfy the judgment; court allowed intervention.
- Trial court issued orders in Dec. 2017 that purported to strike the judgment as to damages only (and scheduled an assessment hearing); William Allen appealed that order.
- Allen Investments separately moved to strike/open the default judgment (filed Jan 22, 2018); the trial court denied that petition (June 19, 2018). Appeals were consolidated; Superior Court quashed William Allen’s appeal for lack of jurisdiction, affirmed the denial of the petition to strike, reversed the denial of the petition to open, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Appealability of Dec. 26, 2017 order | William Allen treated the order as appealable and sought review of the court’s grant striking damages. | Digital (and court) argued the order was interlocutory and not appealable as of right. | Appeal by William Allen quashed for lack of jurisdiction because an order opening/striking a judgment is interlocutory and not appealable as of right. |
| 2. Validity of service (jurisdiction over Allen Investments) | Allen Investments: service was improper — certified mail was signed by D.M. Thomas who was not an authorized agent; thus judgment is void. | Digital: certified-mail receipt shows an agent signed; Florida receivership authorized Broderick & Associates and its agent to manage property and accept service. | The record contained a signed certified-mail receipt; no fatal defect on the face of the record for a petition to strike, so denial of strike was affirmed. But the service dispute must be resolved on a petition to open. |
| 3. Whether the default judgment should be opened | Allen Investments: judgment should be opened because service/jurisdiction is in dispute and the court lacked power to enter judgment. | Digital: trial court relied on delay (7 years) and lack of a meritorious defense to deny opening. | Superior Court reversed the denial to open because the trial court erred by deciding delay/merits without first resolving the service/jurisdiction issue; remand for further proceedings. |
| 4. Proper procedural route to challenge judgment (strike vs open) and scope of relief | William Allen sought relief as to damages and liability and contested court’s reconsideration procedure. | Digital and trial court treated the Dec. 2017 order as affecting damages only and proceeded with assessment scheduling. | Court treated the Dec. 2017 order as effectively opening the judgment (interlocutory). William Allen’s interlocutory appeal was improper and thus quashed. Trial court should assess service issues on a petition to open rather than on a petition to strike. |
Key Cases Cited
- Resolution Trust Corp. v. Copley Qu–Wayne Associates, 683 A.2d 269 (Pa. 1996) (striking a judgment annuls it and returns parties to pre-judgment status)
- Cintas Corp. v. Lee’s Cleaning Services, Inc., 700 A.2d 915 (Pa. 1997) (if service is challenged, court may consider facts not in original record and petition to open is proper route)
- Myers v. Wells Fargo Bank, N.A., 986 A.2d 171 (Pa. Super. 2009) (three-part test for opening a default judgment: prompt filing, reasonable excuse, meritorious defense)
- Aquilino v. Philadelphia Catholic Archdiocese, 884 A.2d 1269 (Pa. Super. 2005) (limited inquiry on a petition to strike regarding whether return receipt indicates acceptance by an authorized agent)
- Green Acres Rehabilitation & Nursing Ctr. v. Sullivan, 113 A.3d 1261 (Pa. Super. 2015) (jurisdictional defects render judgments void and may be attacked at any time)