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M.N.C. CORPORATION v. MOUNT LEBANON MEDICAL CENTER (06/03/86)

decided: June 3, 1986.

M.N.C. CORPORATION, A DELAWARE CORPORATION, APPELLEE,
v.
MOUNT LEBANON MEDICAL CENTER, INC., A PENNSYLVANIA CORPORATION, AND WILLIAM J. BARTRAM, PRESIDENT, AND WILLIAM J. BARTRAM, AN INDIVIDUAL, APPELLANTS



Appeal from the Order of the Superior Court, No. 00361, Pittsburgh, 1982, dated September 14, 1984, reversing the Order of the Court of Common Pleas of Allegheny County, Civil Division, at No. GD80-18430, March 17, 1982

COUNSEL

John B. Nicklas, Jr., Donald J. Strunk, McCrady & Nicklas, Pittsburgh, for appellants.

Rochelle S. Friedman, Carl Max Janavitz, Pittsburgh, for appellee.

Nix, C.j., and Larsen, Flaherty, McDermott and Hutchinson, JJ. Zappala and Papadakos, JJ., did not participate in the consideration or decision of this matter.

Author: Larsen

[ 510 Pa. Page 492]

Opinion OF THE COURT

In this appeal we are asked to review the Superior Court's reversal of the trial court's order granting appellants', Mt. Lebanon Medical Center and William J. Bartram's, petition to open judgment confessed on a note issued by appellants to appellee, M.N.C. Corporation. 344 Pa. Super. 359, 483 A.2d 490.

In 1979, appellee leased a building owned by appellants. Unbeknownst to appellants, appellee was in the business of storing and distributing pornographic material. Soon after appellee moved in, the Township of Mt. Lebanon began issuing to appellee daily citations for building code and zoning violations. Appellee brought a suit in equity against the Township seeking to enjoin the Township from continuing

[ 510 Pa. Page 493]

    to issue the citations. As a result, the Court of Common Pleas of Allegheny County ordered that the building be padlocked until further notice of the court. Appellants then sought permission to intervene, which was granted, and appellants entered a claim against appellee for damages and back rent. After extensive negotiations among the three parties, the matter was "resolved" and a consent decree was entered on April 18, 1980. That decree ordered that appellee vacate the premises, that appellee leave its permanent improvements intact, and that appellants issue to appellee a ninety day judgment note, immediately recordable, in the amount of $15,000, which amount represented the agreed-upon value of the permanent improvements. Appellants immediately issued the required note to appellee and on April 23, 1980, appellee obtained a judgment on the note.

On May 5, 1980, appellee vacated the premises. Appellants thereafter discovered that some of the permanent improvements made by appellee had been removed from the premises and appellants therefore refused to pay the $15,000, due July 15, 1980. On July 30, 1980, appellee executed judgment by garnishing appellants' bank account. On August 8, 1980, appellants petitioned the court to open the judgment.

Pursuant to appellants' petition to open, the court issued a rule to show cause why the judgment should not be opened. Appellee filed an answer and a hearing was held on October 8, 1980. In support of the petition, appellants alleged that appellee had failed to comply with the consent decree by removing some of the permanent improvements, and that there had thus been a failure of consideration for the issuance of the note. The trial court construed appellants' claim as a set-off and held that, as such, it was not a basis for opening judgment. The court therefore dismissed the rule and denied the petition to open.

Appellants appealed to the Superior Court. The trial court thereafter filed an opinion pursuant to Pa.R.A.P. 1925. In that opinion, the trial court concluded that appellants had offered a defense sufficient to justify opening ...


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