Appeal from Judgment of the Court of Common Pleas, Civil Division, Allegheny County, No. GD85-17732.
Alden E. Bowen, Pittsburgh, for appellant.
Barry M. Simpson, Pittsburgh, for appellee.
Wieand, Kelly and Popovich, JJ. Kelly, J., concurs in the result.
[ 367 Pa. Super. Page 95]
The procedural nightmare in this appeal came about because of a failure to distinguish between proceedings to open a judgment and a petition for a deficiency judgment. We shall attempt to place the matter in its proper procedural posture. Only then does the need for additional proceedings become clear.
John D. Mahony and his wife, now deceased, purchased a tract of real estate, with twenty rental units erected thereon, from Jack Holzapfel on June 1, 1981. As part of the consideration, Mahony executed in favor of Holzapfel a mortgage in the amount of $139,000.00 and a judgment note in double the amount of the mortgage. The principal indebtedness was to be repaid in monthly installments of $1,483.39 each. Beginning in January, 1984, Mahony defaulted in the monthly payments; and on October 9, 1985, Holzapfel confessed judgment for unpaid principal, interest, and counsel fees in the amount of $164,907.55. When he also caused a writ of execution to issue, Mahony filed a petition to stay the sale. He alleged that the parties had been negotiating and had agreed that Mahony would reconvey the premises to Holzapfel and pay Holzapfel the additional sum of $5,000.00 in settlement of all claims. In response, the trial court stayed the sale and sua sponte issued a rule to show cause why the judgment should not be opened. Holzapfel filed an answer to Mahony's petition in
[ 367 Pa. Super. Page 96]
which he denied that a settlement had been reached and requested that the stay order be removed. The court thereafter lifted its stay order, allowed the sheriff's sale to proceed, and directed that issues pertaining to a deficiency judgment await determination of the rule to show cause why judgment should not be opened. On January 6, 1986, the sheriff sold the real estate to Holzapfel.
The parties then took depositions and presented arguments to assist the court in determining whether the judgment should be opened. The trial court found that there had been an agreement as alleged by Mahony and not only opened the confessed judgment but entered judgment in favor of Holzapfel for only five thousand ($5,000.00) dollars. Holzapfel appealed from this judgment.
In fact, the rule to show cause why the judgment should not be opened was moot. The judgment had been enforced by a writ of execution, and the real estate had been sold to Holzapfel. No challenges to the validity of the sale had been made. That sale, therefore, was no longer an issue, and the judgment underlying the writ of execution could not properly be questioned or opened by the trial court. Rather, at this stage of the proceedings, the issue was the amount which Holzapfel could recover from Mahony. This could be ascertained only in deficiency judgment proceedings. See: 42 Pa.C.S. § 8103. The existence of an agreement that Holzapfel should be paid only an additional five thousand ($5,000.00) dollars could also have been ascertained in such proceedings.
Moreover, even if the confessed judgment could have been properly opened by the trial court, we would be constrained to reverse the order entering final judgment on the underlying claim. Mahony's alleged defense to the judgment was that there had been a novation. He contended that the parties had mutually agreed to a new contract which extinguished the obligations which had formed the basis for the judgment. Holzapfel, of course, denied that ...