USA Federal v. Garges, K.
3422 EDA 2015
| Pa. Super. Ct. | Oct 14, 2016Background
- USA Federal Credit Union sued Katherine Garges in 2005 for unpaid loans totaling $11,156.14; Garges answered, raised new matter, and counterclaimed for unfair/deceptive debt-collection practices.
- After discovery, the court denied Garges’s summary-judgment motion and granted USA’s on August 18, 2008, leaving only USA’s claim against Garges.
- The case had no docket activity for five years; Montgomery County issued a Termination Notice on October 20, 2014 under Local Rule 1901, requiring a statement of intent to proceed within 60 days; neither party responded and the docket shows termination on January 5, 2015.
- Garges timely filed a petition to reinstate on January 20, 2015; the trial court denied the petition on October 9, 2015, reasoning she waived challenge by not responding to the Termination Notice.
- On appeal, the Superior Court reviewed whether Montgomery County Rule 1901 complied with Pa. R.J.A. 1901 and whether Garges established "good cause" for reinstatement under the three-part Setty test.
- The Superior Court held that the local rule satisfied statewide notice requirements and that Garges failed to show reasonable explanation for inactivity or other elements of good cause, so reinstatement was properly denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Montgomery County Rule 1901 satisfies Pa. R.J.A. 1901(c) notice/hearing requirements | Garges: local rule is deficient because it does not require a pre-termination hearing | USA/County: local rule provides written pre-termination notice and chance to respond, satisfying the rule | Court: Local Rule 1901 satisfies Pa. R.J.A. 1901 because it provides written notice and opportunity to respond before termination |
| Whether Garges waived right to challenge termination by not responding to Termination Notice | Garges: she should still be able to seek reinstatement despite not responding | USA: failure to respond = waiver of challenge to termination | Court: waiver doctrine (Tucker/Shope) applies to appeals from termination orders, but Garges appealed denial of reinstatement, so waiver was not dispositive here |
| Whether Garges demonstrated "good cause" to reinstate the case | Garges: poverty and alleged conduct by USA prevented action; delay attributable to USA | USA: inactivity was the parties’ (and particularly plaintiff’s) responsibility; no reasonable explanation provided | Court: Garges failed the Setty good-cause test (timely filed petition yes; no reasonable explanation for five-year inactivity; no meritorious showing), so reinstatement denied |
| Appropriate standard and scope of appellate review of denial of reinstatement | Garges: trial-court errors in pre-termination rulings justify reinstatement | USA: trial court acted within discretion; reinstatement is discretionary and requires cause | Court: review limited to abuse of discretion or legal error; affirmed denial because no good cause shown |
Key Cases Cited
- Setty v. Knepp, 722 A.2d 1099 (Pa. Super. 1998) (articulates good-cause test for reinstatement after termination)
- Tucker v. Ellwood Quality Steels Co., 802 A.2d 663 (Pa. Super. 2002) (appellant’s failure to respond to termination rule can constitute waiver)
- Shope v. Eagle, 710 A.2d 1104 (Pa. 1998) (nonresponse to termination notice may waive right to challenge dismissal)
- Samaras v. Hartwick, 698 A.2d 71 (Pa. Super. 1997) (local notice procedure satisfied Pa. R.J.A. 1901’s minimum protections)
- Clinger v. Tilley, 620 A.2d 529 (Pa. Super. 1993) (requirement that parties receive written notice before termination)
- Taylor v. Oxford Land, Inc., 488 A.2d 59 (Pa. Super. 1985) (pre-termination notice is required under Rule 1901)
- Pilon v. Bally Eng’g Structures, 645 A.2d 282 (Pa. Super. 1994) (plaintiff bears risk for failing to move case forward)
- In re Jacobs, 15 A.3d 509 (Pa. Super. 2011) (appellate courts may affirm on any correct basis)