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ROBERT W. SCHULTZ v. ERIE INSURANCE EXCHANGE (01/14/83)

filed: January 14, 1983.

ROBERT W. SCHULTZ
v.
ERIE INSURANCE EXCHANGE, APPELLANT



No. 2287 October Term, 1979, Appeal from an Order of the Court of Common Pleas, Civil Division, of Philadelphia County, No. 491 February Term, 1979.

COUNSEL

Mark R. Bosniak, Philadelphia, for appellant.

James F. Mundy, Philadelphia, for appellee.

Cercone, P.j., and Hester and McEwen, JJ. McEwen, J., files a dissenting statement.

Author: Hester

[ 309 Pa. Super. Page 263]

We here review an appeal from an order denying a petition of appellant to open a default judgment entered against it in an action in assumpsit for failure to comply with the Pennsylvania No-Fault Act.

Appellant was served with the complaint in assumpsit at its Erie, Pennsylvania office on February 14, 1979. Appellee provided for the entry of a default judgment in favor of the plaintiff twenty-eight days thereafter, on March 14, 1979. Appellant proceeded to secure representation, but the matter was not received in the office of its Philadelphia County counsel until March 8, 1979, twenty days after service. While counsel for appellant acted on March 15, 1979 to secure a routine extension, that effort was delayed by administrative difficulties in the office of appellant's counsel until March 26, 1979. Counsel for appellant learned of the default judgment on March 28 and proceeded to file the petition to open, although it is not clear as to whether that petition was filed on March 30, 1979, as alleged by counsel for appellant, or on April 10, 1979, as alleged by counsel for appellee, or April 12, 1979, as reflected by the docket.

The parties agree that a petition to open a judgment is addressed to equity and is a decision within the judicial discretion of the chancellor who must be persuaded by the petitioner that three prerequisites have been fulfilled: (1) the petition to open must have been promptly filed; (2) the petitioner must show a meritorious defense; and (3) the petitioner must provide a reasonable explanation for the failure to file an answer in timely fashion. Commonwealth v. Dept. of Transp. v. Nemeth, 497 Pa. 580, 442 A.2d 689 (1982); Balk v. Ford Motor Corp., 446 Pa. 137, 285 A.2d 128 (1971); Kraynick v. Hertz, 443 Pa. 105, 277 A.2d 144 (1971).

While the parties differ as to the date upon which counsel for appellant initiated the proceedings to open the judgment, we share the conclusion of the chancellor, the Honorable

[ 309 Pa. Super. Page 264]

Edward Rosenwald, that the petition to open was promptly filed.

A review of the claim of appellee and the purported defense indicates there is a valid legal dispute between the parties. While appellee dismisses the claimed defense as meritless, appellant fervently contends the defense is not only meritorious but is absolute. An examination of the defense reveals that a trial court will be confronted with issues concerning statutory interpretation of the no-fault laws of both Pennsylvania and also New Jersey and as well with the need to rule upon issues involving conflicts of law.

The remaining requirement, namely, that the petitioner provide a reasonable explanation for his failure to file an answer in timely fashion, requires the chancellor to carefully engage in his most basic duty -- a balancing of the equities. It is true that appellant did not proceed in expeditious fashion to refer the matter to counsel and again failed to proceed with dispatch to notify its counsel of the default judgment. On the other hand, appellee had engaged in discussions with officials of appellant concerning the claim and knew, as is clear from the letter of December 22, 1978, from appellant to counsel for appellee, that appellant was convinced of the validity of the defense that we earlier mentioned. It is also likely that counsel for appellee was aware when the complaint was filed of the identity of counsel whom the appellant would select. In any event, appellee entered the default on the twenty-eighth day, without any prior attempt to communicate with ...


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