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CONTINENTAL BANK v. JOHN J. SCHALER (05/05/87)

SUPERIOR COURT OF PENNSYLVANIA


filed: May 5, 1987.

CONTINENTAL BANK, APPELLEE,
v.
JOHN J. SCHALER, III AND EDMUND C. GEATENS, APPELLANTS. APPEAL OF EDMUND C. GEATENS

Appeal from the order of the Court of Common Pleas of Philadelphia County, Civil, at No. 3307 August Term, 1985.

COUNSEL

William W. Spalding, Philadelphia, for appellants.

T.J. Scully, Philadelphia, for appellee.

Cavanaugh, Montemuro and Beck, JJ.

Author: Montemuro

[ 362 Pa. Super. Page 611]

This appeal lies from an Order denying appellant's petition to strike/open a judgment against him. In 1979 and 1981, the parties entered into loan agreements*fn1 on which the balance due in 1983, when litigation commenced, was

[ 362 Pa. Super. Page 612]

$55,000. As collateral for the debt, appellee accepted the title documents for appellant's 1966 Rolls Royce. Appellant defaulted, but sometime prior to foreclosure had attempted to sell the car in satisfaction of the loan. To this end the car had been transported from Philadelphia, where it was registered and where appellant maintained his principal residence, to Dallas, Texas. There it was offered for sale by the dealer (Schaler) from whom appellant had originally purchased it. No buyers were found. Appellee entered default judgment against appellant in Texas, and after transferring the judgment to the Philadelphia Court of Common Pleas, seized the car and returned it to Pennsylvania, where it was sold at auction for $25,000.*fn2 Appellant petitioned unsuccessfully to open/strike the foreign judgment, and this appeal followed.

Four issues are raised which we will address seriatim.

Appellant first argues that the trial court committed reversible error when it refused to strike the foreign default judgment for lack of in personam jurisdiction.

The test for whether a default judgment should be stricken asks whether the judgment is factually valid. It is proper for the court to strike when the judgment has a fatal defect on its face . . . . The standard for 'defects' asks whether the procedures mandated by law for the taking of default judgments have been followed.

Continental Bank v. Rapp, 336 Pa. Super. 160, 166, 485 A.2d 480, 483 (1984) (citations omitted, emphasis supplied).

Appellant has alleged that the court lacked power to pass judgment, but not for any procedural dereliction. His argument that the judgment should be stricken is therefore inapposite. However, the error is one of semantics rather than substance, and since it concerns a jurisdictional challenge, is properly before us as a petition to open the judgment.

[ 362 Pa. Super. Page 613]

It is by now well settled that "a petition to open a default judgment is an appeal to the court's equitable powers and its decision will not be overturned absent clear abuse of its discretion." Autologic, Inc. v. Cristinzio Movers, 333 Pa. Super. 173, 176, 481 A.2d 1362, 1363 (1984). The trial court in analyzing appellant's jurisdictional claim, reiterated the principles upon which foreign judgments are recognized, as must we.

The power of a court to exercise in personam jurisdiction over a non-resident defendant turns upon two considerations: (1) jurisdiction must be conferred by the state long-arm statute, and, (2) the exercise of jurisdiction under the statute must meet constitutional standards of due process.

Eastern Continuous Forms, Inc. v. Island Business Forms, Inc., 355 Pa. Super. 352, 354, 513 A.2d 466, 467 (1986) (citation omitted).

Appellant has alleged no statutory deficiencies. His claim is solely that there was lacking those minimum contacts with the forum state required by due process under the test enunciated in International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). It is contended that such contacts could not have existed because appellant had visited Texas only once, in a capacity unconnected to the present litigation, and that his sole association there was the temporary presence of his automobile for what is characterized as a "determination of its value and possible sale." (Appellant's Brief at 16-17). The trial court found, justifiably given appellant's deposition testimony, that the car had been shipped to Dallas specifically for sale in order to satisfy the loan, not to establish its theoretical worth. Moreover, appellant Schaler had been engaged as an agent at a 10% commission in order to accomplish this purpose. This court has already held that "a single act by a foreign defendant within the forum state may support jurisdiction." Skinner v. Flymo, Inc., 351 Pa. Super. 234, 243, 505 A.2d 616, 621 (1986) (citation omitted). The substance or strength of that sole contact must meet the

[ 362 Pa. Super. Page 614]

    requirement that the actor purposefully or deliberately availed himself of the privilege of conducting an activity in the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). Once the element of deliberation is established, the actor's lack of physical presence becomes irrelevant.

Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, but obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are 'purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there.

Burger King, supra, 105 S.Ct. at 2184. See generally Skinner, supra. We find, as did the trial court, that appellant's placement of his property for public sale on the Texas market satisfies these conditions. Further,

There is no question that, in determining whether a foreign judgment is entitled to full faith and credit under the United States Constitution, Pennsylvania may inquire into the questions of the foreign state's jurisdiction and whether the foreign judgment was obtained in derogation of the debtor's basic due process rights, that is, whether the debtor had an opportunity to appear and defend. However, it is equally clear that a foreign judgment transferred to Pennsylvania is presumptively valid. The foreign judgment is presumed to have been entered by a court with jurisdiction to do so and that its proceedings were regular and not in derogation of the debtor's due process rights.

[ 362 Pa. Super. Page 615]

    auction given its uniqueness.*fn4 We find this reasoning unpersuasive as the car already had, without success, been offered for sale under what appellant presumably considered optimum conditions. Despite the commercially advantageous market, a chosen agent, and an apparently acceptable valuation, appellant received no offers within or without his asking price. For him to claim now that the car was marketed in an commercially unreasonable manner seems disingenuous at best.

Next appellant claims the judgment should be opened because it was excessive. The judgment amount was $73,333, which comprises the original debt of $55,000, plus interest at 9% per year, attorneys fees and all costs. The judgment was opened and appellant credited with the $25,000 realized at the sale, leaving a balance of $48,333. We take judicial notice of the fact that one owing a debt to be repaid at a certain amount of interest, still owes the interest even after default on the loan, and as well, whatever outlays are necessary for the creditor to recoup his money. Appellant's denial of an obligation for anything other than principal is without basis in either law or common sense.

Finally, appellant claims that there was no evidence presented by appellee on which the court was able to base its denial of the petition to open. In fact, appellee submitted no brief, and as a result was barred from oral argument. However, where certain facts necessary to justify opening a judgment have not been established and are denied in the answer, the burden of proof is upon the petitioner. D'Amore v. Erthal, 421 Pa. 417, 219 A.2d 674 (1966). See generally Hudgins v. Jewel T. Discount Store, 351 Pa. Super. 329, 505 A.2d 1007 (1986). Appellant has failed to supply us with anything save his own deposition,

[ 362 Pa. Super. Page 617]

    and an unsworn letter from his agent, appellant Schaler. We are not convinced by either.

Judgment affirmed.

Disposition

Judgment affirmed.


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