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WILLIAM R. DUFFY v. KENNETH C. GERST (05/01/81)

filed: May 1, 1981.

WILLIAM R. DUFFY
v.
KENNETH C. GERST, RALPH D. TAMBURRO, FREEMAN, FOLTZ & VALICENTI REALTY, INC., EUGENE GOTTESMAN AND ANTHONY D. VALICENTI. APPEAL OF KENNETH C. GERST AND RALPH D. TAMBURRO



No. 744 April Term, 1979, Appeal from the Order of the Court of Common Pleas of Allegheny County, Civil Division, at No. G.D. 78-21072.

COUNSEL

Alfred C. Maiello, Pittsburgh, for appellants.

Reuben Fingold, Pittsburgh, for appellee.

Spaeth, Wickersham and Lipez, JJ.

Author: Spaeth

[ 286 Pa. Super. Page 526]

This is an appeal from an order denying a petition to strike or open a default judgment. So far as the order denies the petition to strike, we shall affirm, for we find no such defect on the face of the record as warrants striking the judgment. So far as the order denies the petition to open, however, we shall reverse and remand for further proceedings as provided by Pa.R.C.P. 209, for we have concluded that the lower court should not have ruled on the basis of the petition and answer alone.

On June 2, 1978, appellants, Kenneth C. Gerst and Ralph D. Tamburro, entered into an agreement with appellee, William R. Duffy, for the sale of a parcel of real estate in Millvale. The agreement provided that appellants would convey the property free and clear of all encumbrances for a consideration of $105,000, appellee to pay $5,000 earnest money upon the signing of the agreement. The agreement also provided for the parties' remedies. If appellee as buyer defaulted, appellants as seller could elect to (a) retain the earnest money, or (b) apply the earnest money towards the purchase price and proceed with an action for specific performance, or (c) apply the earnest money towards seller's loss on resale and proceed with an action at law for damages. If appellants as seller defaulted, appellee as buyer could elect (a) to waive any claim for loss of bargain, in which event appellants as seller would repay the earnest money and, in addition, the cost of title examination, survey, and attorney's fees, or (b) an action for specific performance, or (c) an action at law for damages.

Appellee paid the $5,000 earnest money, and it was held in escrow by Freeman, Foltz & Valicenti Realty, Inc., and real estate agents Eugene Gottesman and Anthony D. Valicenti. When title examination disclosed two mortgages on the property and several judgment liens, appellee, on September 6, 1978, filed a complaint in equity against appellants, Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti, alleging:

[ 286 Pa. Super. Page 52718]

. Due to the state of the record, defendants Gerst and Tamburro [appellants] are unable to convey subject property to plaintiff [appellee] with a fee simple title free and clear of encumberances [sic].

19. Plaintiff has requested defendants Gerst, Tamburro, Realty [Freeman, Foltz & Valicenti, Inc.] Gottesman and Valicenti to rescind the agreement . . . and return the hand money to him, but defendants have failed and refused to comply.

20. Defendants have threatened plaintiff that they will convey subject property to a third party at a substantially lessor [ sic ] amount than the consideration provided for in the agreement . . . and bring an action at law against plaintiff for the difference in the amount between the consideration in the agreement . . . and the amount they sell the property to another party.

The relief prayed for was a decree restraining appellants from conveying the property pending final determination of the action, declaring the agreement of sale between appellants and appellee null and void, directing Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti to return the $5,000 earnest money plus interest, and "[s]uch other relief as the Court may deem necessary and proper."

In response to the complaint, Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti, returned the $5,000 earnest money to appellee, though not with interest. Thereupon, on October 19, 1978, appellee moved to dismiss the action as to them. This motion was granted. Also on October 19, 1978, the prothonotary, on appellee's praecipe, entered a default judgment against appellants. On November 3, 1978, the lower court, FLAHERTY, J., ordered that a hearing should be held on November 21, 1978, for the framing and entry of a final decree. The hearing was held, as scheduled, before NARICK, J. Appellants failed to appear. Judge NARICK entered a final decree declaring the agreement of sale null and void, and entering judgments against the appellants for the following amounts:

[ 286 Pa. Super. Page 528]

Interest on $5,000 at 6% from August

8, 1978 to October 18, 1978 $57.53

Reimbursement for cost of title search 250.00

Counsel fees 3,500.00

Total 3,807.53

And costs

On March 22, 1979, appellants filed their petition to strike or open the judgment. At this point, the history of the case becomes a bit complex. Appellee filed an answer to the petition to strike or open, and the petition and answer came before Judge FLAHERTY. After argument on the petition and answer, Judge FLAHERTY, on May 23, 1979, issued a rule to show cause why the judgment should not be opened. It does not appear that the judge ruled on the petition so far as it asked that the judgment be stricken. Apparently, counsel for neither side received notice of the rule to show cause why the judgment should not be opened. Shortly after issuing the rule, Judge FLAHERTY ascended to the Supreme Court of Pennsylvania. Accordingly, the case was reassigned to Judge NARICK, who by order of June 19, 1979, announced that he would dispose of "[the case] [u]pon consideration of said Petition and Answer . . . unless either or both counsel request the opportunity to argue their respective positions on or before July 17, 1979." When Judge NARICK heard argument on the petition and answer, on July 17, he discovered that counsel had no knowledge of the rule that had been issued by Judge FLAHERTY on May 23. Judge NARICK thereupon advised counsel that notwithstanding the rule, he would dispose of the case on petition and answer alone, and on August 2, 1979, he issued an order revoking the rule and dismissing the petition to strike or open the judgment. It is appellant's appeal from this order that brings the case before us.

-1-

In their petition, appellants assign only one reason why the judgment should be stricken, namely, appellee's "failure to comply with Rule 236." Petition, para. 30. In their brief to us, appellants assign as an additional reason that the

[ 286 Pa. Super. Page 529]

    judgment "is excessive and improper on the face of the record." Appellants' brief at 5.

-a-

Pa.R.C.P. 236 provides ...


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