PACCAR Financial v. Waterboyz
PACCAR Financial v. Waterboyz No. 1127 WDA 2016
| Pa. Super. Ct. | May 8, 2017Background
- PACCAR acquired assigned installment contracts financing 28 commercial trucks sold to Somerset Regional Water Resources, LLC (Somerset) and Waterboyz, Inc. (Waterboyz).
- Senior signed contracts for Somerset and personally guaranteed ten contracts; Junior signed for Waterboyz and both Juniors and Senior signed identical personal guarantees for six contracts.
- Somerset and Waterboyz defaulted on payments; PACCAR repossessed collateral and sued guarantors for the unpaid contractual balances in two separate actions (dockets 137 and 179 Civil 2016).
- Defendants answered by labeling many averments as conclusions of law and asserted generally that proceeds from commercially reasonable sales of collateral should satisfy the debts; they did not specifically deny defaults or the amounts owed.
- The trial court granted PACCAR’s motions for judgment on the pleadings. Defendants appealed, raising (1) whether their answers were treated improperly as general denials/admissions, and (2–3) whether the court erred by not requiring PACCAR to prove collateral value or credit Defendants for repossessed collateral.
- The Superior Court affirmed: PACCAR pleaded contract, breach, and damages; Defendants’ non-specific denials constituted admissions; guaranties obligated guarantors to pay immediately and PACCAR could obtain a money judgment while still disposing of collateral, with post-judgment remedies available for any surplus or alleged commercially-unreasonable sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether judgment on the pleadings was proper where defendants’ answers labeled averments as conclusions of law | PACCAR: pleadings and attached contracts establish contract, breach, and specific amounts due; non-specific denials are admissions | Defendants: their answers preserved a defense that collateral sale proceeds should satisfy debts and thus factual issues about credits/values preclude judgment | Held: Judgment proper; non-specific ‘‘conclusion of law’’ responses operate as admissions under Pa.R.C.P. 1029(b) and jurisprudence, so no factual dispute bars judgment |
| Whether PACCAR had to prove the value of collateral before entry of judgment | PACCAR: not required; guaranties obligate immediate payment regardless of collateral disposition; value proofs relate to separate accounting/credit remedies | Defendants: PACCAR must prove collateral value or face factual disputes about credits reducing judgment amount | Held: PACCAR need not prove collateral value to obtain judgment for full contractual amount; collateral value is relevant to post-judgment setoff/credit claims |
| Whether defendants are entitled to credits for collateral repossessed/sold at the judgment stage | PACCAR: credits/surplus are governed by the UCC and handled after judgment; PACCAR must sell commercially reasonably and account for any surplus | Defendants: sale proceeds should have been credited now; unresolved issue prevents judgment | Held: Credits/surplus claims do not prevent entry of judgment; defendants may pursue remedies (setoff, surplus) post-judgment if PACCAR fails to account or sale was not commercially reasonable |
| Whether PACCAR can obtain money judgment and still proceed against collateral simultaneously | PACCAR: guaranties and UCC permit obtaining a money judgment and disposing of collateral; remedies are cumulative | Defendants: simultaneous remedies could result in double recovery absent proof and accounting | Held: Court allowed money judgment and collateral disposition concurrently; UCC and case law permit this so long as creditor accounts for surplus and sells commercially reasonably |
Key Cases Cited
- LSI Title Agency, Inc. v. Evaluation Servs., Inc., 951 A.2d 384 (Pa. Super. 2008) (standard of review and scope for judgment on the pleadings)
- 412 N. Front St. Assocs., LP v. Spector Gadon & Rosen, P.C., 151 A.3d 646 (Pa. Super. 2016) (elements required to establish breach of contract claim for judgment)
- First Wisconsin Trust Co. v. Strausser, 653 A.2d 688 (Pa. Super. 1995) (an answer asserting averments are conclusions of law operates as admission)
- Frazier v. Ruskin, 199 A.2d 513 (Pa. Super. 1964) (non-specific denials to fact allegations are admissions)
- Spellman v. Indep. Bankers' Bank of Florida, 161 So.3d 505 (Fla. Dist. Ct. App. 2014) (secured creditor may obtain a money judgment for full amount and still dispose of collateral; remedies are cumulative)