Appeal from the Order entered March 12, 1986 in the Court of Common Pleas of Lackawanna County, Civil Division, at No. 85 Equity 19.
Arthur L. Piccone, Wilkes-Barre, for appellant.
Michael H. Roth and Michael J. Donohaue, Scranton, for appellees.
Wickersham, Hoffman and Beck, JJ.
[ 360 Pa. Super. Page 235]
This appeal arises from the grant of summary judgment to plaintiffs-appellees Robert C. Bolus, D.B. & B. Realty Company, Inc. and Key Brockway, Inc. ("Bolus") in an action for a declaratory judgment. The defendant-appellant is The United Penn Bank (the "Bank").
[ 360 Pa. Super. Page 236]
Robert C. Bolus and the two appellee corporations, both of which are solely owned by Bolus, have for some time been engaged in the trucking business. In connection with this business, beginning in 1977 Bolus secured various types of financing from the Bank. One of the loans the Bank extended to Bolus was a $500,000 loan made on June 13, 1977 and evidenced by a confession of judgment Note. Repayment of ninety percent (90%) of this loan was guaranteed by the Small Business Administration (the "SBA"). In Bolus' declaratory judgment action he sought a declaration that the Bank had no perfected security interest in certain escrowed insurance proceeds. The Bank claimed that these funds were subject to a security interest in its favor and constituted a portion of its security for the Note.
Because we find that the trial court lacked subject matter jurisdiction over this action as a result of Bolus' failure to join the SBA as a party defendant, we vacate the trial court's order and dismiss the action.
The crucial event giving rise to this action was a fire at one of Bolus' business locations. This fire resulted in the destruction or partial destruction of real estate consisting of a building and personal property located therein. It is apparently conceded by Bolus that the Bank did have a security interest, a mortgage, in the destroyed building which secured the Note. However, Bolus denies that the Bank had a security interest in the destroyed personal property. At the time of the fire, it would appear that Bolus was already in default in its payments on the Note and that the Bank had confessed judgment against Bolus under the Note.
In 1981, presumably shortly after the fire,*fn1 Bolus instituted a related action in the Lackawanna County Court of Common Pleas against its fire insurance carriers to recover the value of the destroyed property. The carriers denied coverage and the parties prepared for trial. On March 15, 1984, shortly before the beginning of the trial, the Bank filed a Petition to Intervene in the action. The Bank
[ 360 Pa. Super. Page 237]
claimed that it had an interest in the fire insurance proceeds that the action might produce based on the Bank's alleged ...