SDO Fund II D32, LLC v. Donahue, G.
234 A.3d 738
Pa. Super. Ct.2020Background
- Donahue personally guaranteed a $5.4M commercial loan via a Guaranty (7/1/2008) that included a warrant of attorney expressly allowing confession of judgment "from time to time as often as the Bank shall elect" until full payment.
- Donahue executed multiple amendments/consents (2011, 2012, 2013) and a forbearance (2016) that either contained fresh warrants or "ratified and confirmed" the original Guaranty and its confession-of-judgment clause.
- PNC confessed judgment against Donahue in January 2012 but voluntarily discontinued that judgment without prejudice in October 2012.
- SDO acquired PNC’s rights in March 2016 and, after defaults continued, confessed judgment against Donahue on August 23, 2017 for $5,689,780.41.
- Donahue petitioned to strike/open the admitted judgment, arguing the prior PNC confession exhausted the warrant so SDO’s later confession was invalid; the trial court denied relief.
- The Superior Court affirmed, holding the contracts permitted multiple exercises of the warrant and Donahue’s ratifications prevented exhaustion from operating as a defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a prior confessed judgment exhausted the warrant of attorney so a later assignee’s confession was invalid | SDO: The Guaranty (and later amendments/forbearance) expressly authorized repeated exercises; parties may contractually permit multiple confessions | Donahue: A warrant may be used only once for the same debt; PNC’s prior confession exhausted the warrant and ratifications cannot "revivify" an exhausted warrant | Court: Held for SDO — the Guaranty/amendments authorized multiple confessions; exhaustion defense fails |
Key Cases Cited
- Scott Factors, Inc. v. Hartley, 228 A.2d 887 (Pa. 1967) (establishes general rule that a warrant of attorney may not be exercised twice for the same debt)
- TCPF, Ltd. P’ship v. Skatell, 976 A.2d 571 (Pa. Super. 2009) (discussion of warrant-of-attorney principles and exhaustion rule)
- Dime Bank v. Andrews, 115 A.3d 358 (Pa. Super. 2015) (parties may contractually waive the single-exercise rule and permit repeated confessions)
- Dominic’s Inc. v. Tony’s Famous Tomato Pie Bar & Restaurant, Inc., 214 A.3d 259 (Pa. Super. 2019) (reiterates that notes can allow multiple confessions until payment in full)
- Atlantic Nat'l Trust, LLC v. Stivala Invs., Inc., 922 A.2d 919 (Pa. Super. 2007) (recognizes contractual scope of warrant of attorney can allow multiple exercises)
- Neducsin v. Caplan, 121 A.3d 498 (Pa. Super. 2015) (standard for opening a confessed judgment: promptness, meritorious defense, sufficient evidence)