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KLECHA v. BEAR

March 23, 1989

JOHN F. KLECHA and FRED B. SPATT, Plaintiffs,
v.
LESLIE L. BEAR and VICKIE BEAR, his wife, et al., Defendants



The opinion of the court was delivered by: NEALON

 WILLIAM J. NEALON, UNITED STATES DISTRICT JUDGE.

 Currently before the court in the above-captioned diversity action is defendants' motion for summary judgment on the grounds of res judicata. For the reasons that follow, defendants' motion will be granted and this action will be dismissed.

 BACKGROUND

 On August 29, 1987, plaintiffs, citizens of New Jersey, entered into an agreement of sale with defendants, citizens of Pennsylvania, related to the operation and business of the Trimline Fitness Center Health Club. The total purchase price of the transaction was six hundred and seventy thousand dollars ($ 670,000). As part of the purchase price, plaintiffs executed two (2) promissory notes payable to defendants for a total of one hundred thirty thousand dollars ($ 130,000). Plaintiffs allege in their complaint that they were induced to enter into the contemplated transaction in reliance on defendants' representations that the active club membership list consisted of at least 800 members and that accounts receivable on the closing date would total twelve thousand six hundred and fifty dollars ($ 12,650). After the closing date of the transaction, September 23, 1987, plaintiffs learned that the active membership list consisted of only 305 names and that accounts receivable totaled only one thousand two hundred and ten dollars ($ 1,210).

 Plaintiff filed the instant action on February 29, 1988. See document 1 of record. The complaint contains counts for breach of contract, breach of warranty, misrepresentation, fraud, and indemnification. Plaintiffs request restitution, rescission, and compensatory and punitive damages. See generally id.

 The Monroe County Court of Common Pleas issued a rule to show cause and stayed all enforcement proceedings on the judgment for possession. Defendants filed an answer contesting any proceedings to strike or open the judgment for possession. To date, the judgment for possession has neither been stricken nor opened. As stated previously, plaintiffs have not challenged the judgment for damages in the state court. See document 13 of record, at p. 5.

 On November 1, 1988, this matter was placed on the court's January trial list. See documents 8 and 9 of record. Defendants filed their motion for summary judgment on December 9, 1988. See document 11 of record. A supporting affidavit and brief were filed on the same date. See documents 12 and 13 of record. Plaintiffs submitted their brief in opposition to the motion on December 30, 1988. See document 16 of record. At the pretrial conference on January 12, 1989, the court continued the case so the parties could file supplemental briefs on the res judicata issue. See document 19 of record. Plaintiffs submitted their brief on January 29, 1989 and the court received defendants' reply brief on February 21, 1989. See documents 20 and 21 of record, respectively. This matter is now ripe for disposition.

 DISCUSSION

 When examining a motion for summary judgment, the court must view all facts in the light most favorable to the party opposing the motion. Betz Laboratories, Inc. v. Hines, 647 F.2d 402, 404 (3d Cir. 1981). If there exists a genuine issue as to any material fact, summary judgment must be denied. Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id. (citing 10A C. Wright, A. Miller and M. Kane, Federal Practice & Procedure ยง 2725, at pp. 93-95 (1983)). In addition, summary judgment will not lie if the dispute about a material fact is "genuine," that is, "if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party." Id. In opposing a motion for summary judgment, a party must present evidentiary affidavits or risk having the undisputed statements contained in the movant's affidavits taken as true. See Fed.R.Civ.P. 56(c); see also Sierra v. Lehigh County Pennsylvania, 617 F. Supp. 427, 429 (E.D. Pa. 1985).

 While many factual disputes exist surrounding the sales transaction that forms the basis for this action, the court does not find them to be "material." Defendants contend that the present action is barred on res judicata grounds because of the judgments by confession entered by the Monroe County court. Plaintiffs argue in turn that res judicata is not here applicable because the judgments in confession cannot be considered final. As this is a pure question of law, defendants' summary judgment motion is clearly appropriate. See, e.g., Reedy v. State of Florida, Department of Education, 605 F. Supp. 172, 172 (N.D. Fla. 1985) (summary judgment was appropriate on issue as to whether unappealed decision by State Human Relations Commission should be accorded preclusive effect, which was purely a question of law); Odom v. Tripp, 575 F. Supp. 1491, 1492-1493 (E.D. Mo. 1983); Mellon Nat'l Bank and Trust Co. v. Nationwide Mutual Insurance Co., 32 F.R.D. 365, 366 (W.D. Pa. 1962) ("Any questions of law existing after an answer is filed may, despite issues of fact, be raised in proper motions under F.R.Civ.P. 12 or 56, and be resolved before trial").

 According to Pennsylvania law, a judgment by confession operates as res judicata and bars examination "of that judgment or any other claims arising out of the same transaction or nucleus of events." Delahanty v. First Pennsylvania Bank, N.A., 318 Pa. Super. 90, 139-140, 464 A.2d 1243, 1268 (1983) (citing Devlin v. Piechoski, 374 Pa. 639, 99 A.2d 346 (1953); Stradley v. Bath Portland Cement Co., 228 Pa. 108, 77 A. 242 (1910); Weaver v. Adams, 132 Pa. 392, 19 A. 271 (1890)). In Weaver v. Adams, plaintiffs attempted to introduce parol evidence to show that a judgment by confession obtained by defendant against plaintiffs in a prior action contained certain implied conditions. Distinguishing a previous case, the Weaver court *fn1" stated as follows:

 
To admit parol evidence to show that Jacob Griel was not liable as surety for Stark, was quite a different thing from permitting the [plaintiff] Weavers in this action to prove by parol that the judgment in Adams's favor is to be read as if it contained an obligation on Adams' part to pay debts which the Weavers owed to other parties, and to perform the other conditions above set forth. In the former case, the evidence ruled to be admissible was upon the question whether anything was due according to the terms of the judgments. In the case in hand, to submit the question above stated to the jury, would be asking them to determine whether an absolute judgment is to be accepted as such, or, whether there is to be superadded a contract that the plaintiff therein shall pay money for the defendants' benefit; and such issue would be in a collateral proceeding, in this action of assumpsit brought by the defendants in the judgment against the plaintiff therein. For such a course there is no warrant in the law. It would be an inquiry into the validity of a judgment in a collateral ...

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