Osprey Portfolio, LLC v. Izett
32 A.3d 793
| Pa. Super. Ct. | 2011Background
- Izett Manufacturing executed a promissory note with First Union on 9/9/1999 for up to $50,000, signed by Izett as VP.
- Izett also executed a guaranty under seal on the same date securing timely payment.
- In 2001 the Bank sold the loan to Osprey Portfolio, LLC and assigned the note and guaranty.
- In 2005 Osprey notified Izett of default and demanded $50,000 principal plus about $25,000 interest.
- Osprey filed a confession of judgment in June 2010; Izett sought to strike/open claiming the four-year limit (42 Pa.C.S. § 5525) barred the action.
- Trial court held the twenty-year seal-instrument statute (42 Pa.C.S. § 5529(b)(1)) applied and denied the petition; on appeal, the issue is the correct limitations period for a sealed guaranty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Guaranty is an instrument under seal. | Izett: Guaranty is not an instrument under seal. | Osprey: Guaranty is an instrument under seal. | Guaranty is an instrument under seal; twenty-year period applies. |
| Whether § 5529(b)(1) governs the action despite § 5525(7)-(8). | Izett: Four-year limit should apply to the guaranty. | Osprey: Twenty-year limit applies to sealed instruments. | Twenty-year limitation governs the action. |
| Whether UCC definitions control the term 'instrument' for this case. | Izett: UCC defines instrument as negotiable instrument; Guaranty not negotiable. | Osprey: Judicial Code governs the term; dictionary definition applies. | Judicial Code interpretation; UCC definitions do not control here. |
Key Cases Cited
- In re Estate of Snyder, 13 A.3d 509 (Pa. Super. 2011) (defined instrument for § 5525/5529 analysis; seals presumptively create sealed instruments)
- Mattery Lumber Corp. v. B. & F. Assocs., Inc., 440 A.2d 579 (Pa. Super. 1982) (recognizes guaranties as instruments under seal under PA law)
- Indiana Township v. Acquisitions & Mergers, Inc., 770 A.2d 364 (Pa. Cmwlth. 2001) (discussed interplay of four-year vs twenty-year limitations for sealed instruments; supports instrument-under-seal view)
- Hazer v. Zabala, 26 A.3d 1166 (Pa. Super. 2011) (sets forth standard for reviewing petitions to strike/open and delineates record-based analysis)