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PROVIDENT CREDIT CORPORATION v. CHARLES THOMAS YOUNG (05/14/82)

filed: May 14, 1982.

PROVIDENT CREDIT CORPORATION, A CORPORATION,
v.
CHARLES THOMAS YOUNG, JR., JOAN YOUNG AND ETHEL B. DAVIS. APPEAL OF ETHEL B. DAVIS



No. 1679 Oct. Term, 1978, Appeal from the Order of the Court of Common Pleas, Trial Division, Civil Section of Phila. County at No. 4281 July Term 1972.

COUNSEL

Theodore Clattenburg, Jr., Philadelphia, for appellant.

Alan B. Liss, Philadelphia, for appellee.

Cercone, President Judge, and Price, Spaeth, Hester, Cavanaugh, Wickersham and Brosky, JJ. Cavanaugh, J., files a dissenting opinion in which Price and Hester, JJ., join.

Author: Spaeth

[ 300 Pa. Super. Page 119]

This appeal is from an order denying a petition to open or strike a default judgment. Appellant does not argue that the lower court erred in refusing to strike the judgment, but she does argue that the court abused its discretion in refusing to open the judgment. We agree and therefore reverse.*fn1

-1-

In no sort of case is closer attention to the facts required than in a case arising on petition to open judgment. Here the facts may be found in appellant's deposition, which was the only testimony, the petition and answer, and the docket entries.

Appellant is an unemployed widow with a 10th grade education. On December 20, 1971, at her brother's request, she went to the Peter James Buick Agency in Ardmore so that she might serve as co-signer for an automobile her brother was interested in buying. Appellant drove separately

[ 300 Pa. Super. Page 120]

    in her own car because she was on her way to Washington to visit another brother, who was ill. She was in a hurry and did not have much time to spend at the agency. While her brother was out on the lot looking at automobiles, appellant was asked to sign some papers in blank. She was told that if her brother did not buy an automobile, the papers would be torn up. She understood that being a co-signer meant that if her brother did buy an automobile but then could not be found, she would be asked to find him, and that her availability to find her brother was why the person she was talking to was interested in the fact that she owned a house and did not move about the city.

Appellant signed the papers, in blank, and continued on her trip to Washington. She was not given copies of the papers she had signed, nor were they sent to her later. The papers included a motor vehicle installment sale contract, which named Peter James Buick as the seller and provided for assignment to appellee, and a judgment note and federal truth-in-lending disclosure statement, both of which named appellee as the lender, and neither of which gave any indication of having been executed in connection with the installment sale of an automobile.

Appellant's brother fell behind in his payments almost immediately. On August 1, 1972, he and his wife were served with a complaint in assumpsit, and on August 25, a default judgment was taken against them. The complaint also named appellant as a party defendant, and on September 7, it was served on appellant by being left with an adult person -- a baby-sitter -- who was in charge of her residence, and on October 3, 26 days later, a default judgment was taken against her. The complaint made no reference to the fact that the judgment note that appellant had signed had been given in connection with the installment sale of an automobile. Damages were assessed at $4,100.90 -- the unpaid balance of the note -- plus a collection charge of $738 -- 18% of the amount due, as provided for in the note -- for a total of $4,838.90.

[ 300 Pa. Super. Page 121]

Appellant testified that she never received the complaint. She explained that at the time it was served -- as shown by the sheriff's return -- she and her daughter, who lived with her, were at church. At some point the baby-sitter told appellant's daughter that a man had come with papers for Charles and Joan Young -- appellant's brother and sister-inlaw, whose names appear on the complaint ahead of appellant's -- and that she had refused to take them. The first appellant knew of any proceeding against her was when she received in the mail a card requesting her to call appellee. When she called she was told that her brother had failed to make his payments, and that because she had signed for the automobile they could go after her without making any effort to find him, and her home was going to be taken from her.

Appellant went to see a lawyer, Allan Getson, who had evidently previously represented her in some matter, but he said that he could not represent her because he was representing her brother in another case. Appellant immediately went to see another lawyer with offices in the same building, Cassandra Maxwell Birnie. Birnie evidently made inquiries on appellant's behalf, determined the amount that would be necessary to bring her brother's payments up-to-date, advised her to try to get her brother to pay that amount, and looked into the status of an attachment by appellee of the proceeds of a personal injury action brought by appellant's brother. Birnie also told appellant that going to court to try to get the judgment against her opened would cost a great deal of money. Birnie did not refer appellant to Community Legal Services, nor explain that if she were found eligible for representation by Community Legal Services, she would be able to file a petition to open the judgment without incurring legal expenses that would be difficult or impossible for her to pay.

Twice during 1973 and once in 1974 appellant received notification that various amounts, totaling $2,140.98, had been paid to appellee on her brother's behalf. She believed that two of these payments resulted from actions taken in her interest by Birnie, and that the 1974 payment, which

[ 300 Pa. Super. Page 122]

    was $1,261.92, was "going to be paid over with the provision that the house would be returned back to me." N.T. 19. In both respects, appellant was mistaken. The payments had resulted from attachments filed by appellee, and by the time she received notice of the 1974 payment, her house had already been sold. Specifically, the sheriff had sold it on February 4, 1974, on appellee's writ of execution, for $800 to the attorney on the writ. The assignee of the sale, one Carl Inker, received the sheriff's deed to appellant's house on September 10, 1974, but even before receiving his deed Inker had filed a complaint in ejectment, which was served on appellant sometime in August 1974.

After being served with the complaint in ejectment appellant tried to consult Birnie. When she was unsuccessful, she consulted a Lieutenant Kirby at the Naval Base,*fn2 who gave her the name of another lawyer. When he proved to be on vacation, appellant was referred to Richard Carl Smulker. Smulker agreed to represent her but said she would first need to obtain her file from Birnie, in the course of doing which she learned that Birnie had died. It is not clear just what Smulker did on appellant's behalf, but the record does include a letter from him to Inker's lawyer proposing a repurchase agreement under which appellant would pay $75 a month toward the repurchase of her home. Appellant testified that she had told Smulker that she could not afford to pay more than $50 a month. Smulker told her that any attempt to open the judgment would cost a great deal of money, and that if she did not have the money, there was nothing he could do for her. Although he knew that appellant was of limited means -- indeed there is a reference to her lack of means in the letter he wrote Inker's lawyer -- he did not suggest that she might be able to receive assistance from Community Legal Services in trying to get the judgment opened.

When it appeared that Smulker would be unable to help her further, appellant asked the Federal Housing Administration

[ 300 Pa. Super. Page 123]

    whether it could help her. It was a representative of the F.H.A. who finally advised appellant to seek help from Community Legal Services. C.L.S. began work on appellant's case early in 1975, but before it got very far, appellant became marginally ineligible for its services because of an increase in her Social Security and Veterans Administration benefits. Her case was then referred to the Lawyers Reference Service, which tried unsuccessfully to refer the case to several lawyers in private practice. In August 1975 C.L.S. was specially reauthorized to represent appellant, and on September 8, 1975, the petition to open or strike the judgment was filed.

On October 15, 1975, appellant, in support of the petition, filed interrogatories directed to appellee. On February 26, 1976, appellee's motion for a protective order was granted. On July 5, 1977, appellant filed a second set of interrogatories, and on September 16, her deposition was taken.*fn3 On November 16, appellee's motion for a protective order with respect to appellant's second set of interrogatories was granted. On May 16, 1978, the lower court, without a hearing and with only appellant's deposition in the record, denied appellant's petition.

-2-

A petition to open a judgment by default is addressed to the equity side of the court:

In determining whether a judgment by default should be opened, we must ascertain whether there are present any

[ 300 Pa. Super. Page 124]

    equitable considerations in the factual posture of the case which require that we grant to a defendant against whom the judgment has been entered an opportunity to have his "day in court" and to have the cause decided upon the merits. In so doing, we act as a court of conscience. Raymond J. Brusco Funeral Home v. Sicilia, 277 Pa. Superior Ct. 115, 123, 419 A.2d 688, 692 (1980), quoting Kraynick v. Hertz, 443 Pa. 105, 111, 277 A.2d 144, 147 (1971).

In an assumpsit case, in exercising its equitable powers the court must look to the promptness with which the petition to open was filed, the reason given for the default, and the merits of the defense asserted. Balk v. Ford Motor Company, 446 Pa. 137, 285 A.2d 128 (1971). Because the decision whether to open a judgment is an equitable one, it depends on the particular facts of each case; there are no bright line tests, Quatrochi v. Gaiters, 251 Pa. Superior Ct. 115, 380 A.2d 404 (1977), and the cases are not easy to reconcile. Duffy v. Gerst, 286 Pa. Superior Ct. 523, 429 A.2d 645 (1981). Although the lower court's decision will be upheld absent an abuse of discretion, both the Supreme Court and this court have not hesitated to find an abuse of discretion in a lower court's refusal to grant a petition to open a judgment when we have found that the equities clearly favored opening the judgment. E.g., Queen City Electrical Supply Company, Inc. v. Soltis Electric Company, 491 Pa. 354, 421 A.2d 174 (1980); Raymond J. Brusco Funeral Home v. Sicilia, supra; Brooks v. Surman Dental Labs, Inc., 262 Pa. Superior Ct. 369, 396 A.2d 799 (1979); Toplovich v. Spitman, 239 Pa. Superior Ct. 327, 361 A.2d 425 (1976).

In the opinion filed in response to appellant's appeal, the lower court found that appellant had not satisfactorily explained either the default or the delay in filing her petition to open. The court did not consider the merits of her defense to the action. We have concluded that the court's findings are inconsistent with the clear equities of the case, and that in refusing to grant appellant's petition to open, the court abused its discretion.

[ 300 Pa. Super. Page ...


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