Neducsin, D. v. Caplan, S.
121 A.3d 498
Pa. Super. Ct.2015Background
- Appellant Caplan founded Sweat Gyms; Sweat obtained a Wells Fargo line of credit guaranteed by Appellee Neducsin.
- On 12/31/2011, Caplan and Neducsin executed the Bedrock Note; Appellee reviewed it via Caplan’s counsel.
- On 3/9/2012, Caplan and Sweat shareholders executed a new note for $2,000,000 with a grant of a confession-of-judgment provision.
- Appellee’s demand for confession was triggered by Caplan’s misrepresentation of a line-of-credit draw-down (actual $170,000 vs. alleged $50,000).
- Appellee filed a confession-of-judgment for $2,005,970.50 on 9/24/2012; Caplan petitioned to strike/open in 11/2012.
- The trial court denied the petition to open on 2/25/2014 after oral argument; Caplan appealed and the Superior Court affirmed the denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 3/9/12 note’s confession clause was ambiguous and should be struck | Caplan argues the note’s default provisions are unclear and cut-and-paste from Bedrock Note. | Neducsin contends the warrant of attorney is explicit and unambiguous. | No; the warrant was explicit and self-sustaining, so the judgment was not subject to strike. |
| Whether Caplan was entitled to an evidentiary hearing on due-process waiver | Caplan asserts he did not knowingly, voluntarily, and intelligently waive rights because reviewed moment before signing. | Neducsin argues waiver was clear and signed; due-process violation not shown. | No evidentiary hearing required; waiver valid and effective. |
| Whether Caplan presented meritorious defenses to open the confessed judgment | Caplan claims misrepresentation and other defenses would raise issues for a jury. | Neducsin contends defenses are-insufficient or non-meritorious given clear default facts. | Caplan failed to present meritorious defenses; open denied. |
| Whether the record supports opening the judgment on grounds of a lack of knowing waiver | Caplan argues details show lack of knowing waiver; record allegedly contains inconsistent/false statements. | Record shows Caplan knowingly signed and understood the waiver; misstatements were material and constitute default. | Record does not warrant opening; judgment properly denied. |
Key Cases Cited
- Resolution Trust Corp. v. Copley Qu–Wayne Associates, 546 Pa. 98 (Pa. 1996) (limits and standards for striking confessed judgments; record must be self-sustaining)
- Hazer v. Zabala, 26 A.3d 1166 (Pa.Super. 2011) (petition to strike/open; ambiguities resolved against the waiving party)
- Midwest Financial Acceptance Corp. v. Lopez, 78 A.3d 614 (Pa. Super. 2013) (confession of judgment warrants strict construction; self-sustaining)
- PNC Bank v. Kerr, 802 A.2d 634 (Pa. Super. 2002) (opening a confessed judgment requires meritorious defense and evidence)
- Foerst v. Rotkis, 368 A.2d 805 (Pa. Super. 1976) (standard for opening: issues to be submitted to jury if defense would require it)