Nos. 752, 753, 754 October Term, 1978, Appeals from the Orders dated December 29, 1977, by the Court of Common Pleas of Montgomery County, Pennsylvania, Civil Action Nos. 76-8240, -8241, and -8243.
Jeffrey A. Less, Philadelphia, for appellants.
Henry W. Sawyer, III, Philadelphia, for appellee, Institutional Investors Trust.
Jacobs, President Judge, and Cercone and Lipez, JJ.
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The three appeals consolidated for argument and decision in this case arise from separate orders by the court below dismissing appellants' petition to open three confessed judgments. The issue we must decide is whether the lower court abused its discretion by refusing to open the judgments after it found that appellants failed to produce sufficient evidence to submit the case to a jury. For the reasons that follow, we find no error, and therefore affirm the orders appealed from.
In December, 1973, Institutional Investors Trust (IIT) loaned $16,800,000 to appellants for development of apartments, a shopping center, and a country club. Due to a restriction on the amount IIT could lend on a single note, four separate notes and mortgages evidencing the aggregate loan amount were executed. Each mortgage encumbered four tracts of land owned by appellants. One of the notes, the $9,000,000 apartment house loan, was subsequently purchased by Fidelity Bank, leaving IIT as holder of the three remaining mortgage notes.
Howard A. Gellis, an IIT trustee, stated in deposition that at the time the loans were made, IIT was aware of a deficit in the income from the properties, even though the occupancy rate was 94% for the apartments and 90% for the shopping center. Gellis also indicated that IIT realized the loans could only be repaid if the apartments were converted to tenant ownership. To this end, paragraph 3.13 of the loan agreement between the parties provides in part that none of the Cedarbrook Companies shall change its business, except
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to convert the apartments to cooperative apartments or condominium units as authorized.*fn1
The contemplated conversion to cooperative or condominium ownership was not accomplished, however, because Prudential Insurance Company, the senior mortgagee on the apartment house tract, would not grant the necessary approval. As a result, Merriam devised a conversion plan designated "unilease," providing for a long-term lease by tenants with an option to purchase after thirty-five years.*fn2 Prudential approved the unilease plan, whereupon appellants sought covenants of non-disturbance from IIT.*fn3 IIT consented to the non-disturbance agreements, subject to certain
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conditions.*fn4 When the conditions were not satisfied, the covenants were not given, and the unilease plan became unmarketable. Without conversion of the apartments, the loans fell into default, and IIT confessed judgment on the three notes on May 28, 1976. Appellants petitioned to open the judgments, and ...