Ferrick v. Bianchini
69 A.3d 642
| Pa. Super. Ct. | 2013Background
- Tenant signed a ten-year Net Lease with 12th Street Property LLC containing a cognovit clause allowing Landlord to confess judgment for defaults.
- Tenant later assigned the lease to SAB, LLC, with guaranty and assignment also containing cognovit clauses; amendment reduced rent but reaffirmed the confession of judgment provisions.
- Tenant defaulted on rent and charges; Landlord filed a confession of judgment alleging arrears and acceleration through the remaining term.
- Tenant petitioned to strike/open the confessed judgment and sought a stay; court denied, and Tenant appealed.
- Key dispute centered on whether the cognovit clause was properly incorporated via the amendment, and whether prior uses of the warrant exhausted or double recovery issues arose.
- Court held the amendment republished and bound Tenant to the cognovit clauses, and that the warrant was not exhausted; abandonment and improvements issues did not warrant opening the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule to show cause and discovery | Tenant asserts discovery should follow for gross excessiveness | Landlord says rule not mandatory; discovery not required | No rule to show cause required by law; discovery not mandatory |
| Proper incorporation of cognovit clause in amendment | Original cognovit must be expressly included in amendment | Amendment republished and bound Tenant; explicit reference unnecessary | Cognovit properly incorporated and binding |
| Whether prior exercise exhausted the warrant | Prior judgment exhausted the warrant and prohibits reuse | Warrant may be exercised multiple times for separate, distinct debts | Warrant not exhausted; may be used for separate debt |
| Abandonment and double recovery | Landlord cannot recover accelerated rent after abandonment | Abandonment justified acceleration; credit for new tenant rents at execution | Abandonment found; credit to Tenant for new rents at execution; no double recovery |
| Equitable relief for improvements or stay | Tenant seeks equitable credit for permanent improvements; stay requested | Improvements do not create entitlement to credit or relief; no stay warranted | No equitable credit or stay; judgment affirmed |
Key Cases Cited
- Graystone Bank v. Grove Estates, LP, 58 A.3d 1277 (Pa. Super. 2012) (strict standards for confessed judgments; prima facie defects control relief)
- Crum v. F.L. Shaffer Co., 693 A.2d 984 (Pa. Super. 1997) (open if meritorious defense shown; evidence required)
- Hazer v. Zabala, 26 A.3d 1166 (Pa. Super. 2011) (cognovit clause must be explicit and properly incorporated)
- L.B. Foster Co. v. Tri-W Constr. Co., 409 Pa. 318 (1962) (signature must directly relate to warrant; no implied signing)
- Frantz Tractor Co. v. Wyoming Valley Nursery, 384 Pa. 213 (1956) (cognovit clause must be in body of contract; not on unsigned forms)
- Egyptian Sands Real Estate, Inc. v. Polony, 222 Pa. Super. 315 (1972) (strict construction; cognovit clause must be explicit)
- Scott v. 1523 Walnut Corp., 301 Pa. Super. 248 (1982) (amendments referencing cognovit clauses must bind party)
- Turnway Corp. v. Soffer, 461 Pa. 447 (1975) (abandonment analysis requires intent and conduct)