Sales and Marketing Group, Inc. v. PHRC
198 C.D. 2017
| Pa. Commw. Ct. | Jan 4, 2018Background
- Employee (Jason Scott) filed a PHRC complaint alleging discriminatory discharge (race and sex) against Sales and Marketing Group, Inc. (SMG); SMG was served directly because its counsel (Koller) had not yet entered an appearance.
- SMG failed to file an answer within the 30-day period; the Commission sent additional warnings (February and March letters), a rule to show cause, and an April Rule setting a new deadline, all served on SMG.
- The Commission entered default judgment as to liability on May 18, 2015. Counsel Koller entered an appearance in mid-June 2015 (by letter) but did not file a petition to open the judgment until September 16, 2015.
- SMG sought to open the default judgment, claiming (a) it reasonably believed counsel was handling the matter, and (b) any failure was due to attorney error; it also asserted it had a meritorious defense.
- The Commission denied the petition to open; after a hearing on damages the Commission entered a final order awarding Employee lost earnings and interest. SMG appealed to this Court challenging denial of the petition to open.
Issues
| Issue | Plaintiff's Argument (Employee / Commission) | Defendant's Argument (SMG) | Held |
|---|---|---|---|
| Whether the Commission abused discretion in denying SMG’s petition to open default judgment | Default judgment valid because SMG received complaint and multiple notices and failed to answer | SMG argued it had excusable neglect (believed counsel was handling the case) and timely filed to open after learning of judgment; also claimed meritorious defense | Denied: SMG did not satisfy all three factors required to open judgment; denial affirmed |
| Timeliness of Petition to Open | Petition untimely because SMG knew of the April Rule and judgment and waited months without action | SMG argued promptness should be measured from counsel Koller’s discovery of the judgment and that it filed within a month of counsel learning of it | Denied: Petition was not prompt (121 days from SMG’s notice; even using counsel’s notice the delay exceeded the general one‑month parameter) |
| Whether SMG had a reasonable excuse (client’s mistaken belief that counsel was handling matter) | Notices and rules served on SMG established adequate notice; failure to contact counsel despite warnings undermines excuse | SMG said layperson reasonably believed counsel would handle matter based on prior settlement correspondence | Denied: Court found the belief unreasonable given repeated notices and lack of contact with counsel; ignorance of law is not excusable |
| Whether attorney error excused the default | Commission argued that filings were served on SMG, not counsel, so attorney neglect was not enough; counsel had notice and did not show inadvertent oversight | SMG argued attorney Koller’s failure to act after notice was excusable attorney error | Denied: Counsel did not identify mistake or inadvertence; delay after counsel’s notice showed no oversight warranting relief |
Key Cases Cited
- Bebee v. Pa. Human Rel. Comm’n, 55 A.3d 1280 (Pa. Cmwlth. 2012) (adopting common‑law three‑factor test for opening default judgment)
- Kennedy v. Black, 424 A.2d 1250 (Pa. 1981) (limits on counsel confusion as excuse for default)
- McCoy v. Pub. Acceptance Corp., 305 A.2d 698 (Pa. 1973) (all three factors must be satisfied to open default judgment)
- U.S. Bank N.A. v. Mallory, 982 A.2d 986 (Pa. Super. 2009) (timeliness standard: delays over ~50–80 days are generally not prompt)
- Dep’t of Transp. v. Nemeth, 442 A.2d 689 (Pa. 1982) (attorney neglect can justify opening judgment when due to oversight rather than deliberate inaction)
- Flynn v. Am. W. Airlines, 742 A.2d 695 (Pa. Super. 1999) (oversight or inadvertent omission can support opening default)
- Seeger v. First Union Nat’l Bank, 836 A.2d 163 (Pa. Super. 2003) (excusable negligence must show oversight, not deliberate decision)