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[U] Equicredit Corporation of America v. Brandau

Superior Court of Pennsylvania

February 28, 2014



Appeal from the Order September 21, 2012 In the Court of Common Pleas of Allegheny County Civil Division at No(s): MG-10-002351




Appellant, Cathryn Brandau, appeals from the order entered by the Honorable Robert J. Colville, Court of Common Pleas of Allegheny County. Judge Colville's order denied Brandau's petition to strike the default judgment entered pursuant to Appellee, Equicredit Corporation of America's ("Equicredit") complaint in foreclosure. After careful review, we affirm.[1]

In 1997, Brandau borrowed $235, 000 from Equicredit Corporation of Pennsylvania ("Equicredit PA") and granted Equicredit PA a first mortgage on her home. Shortly thereafter, Equicredit PA assigned its rights to U.S. Bank, N.A. Brandau subsequently fell behind in her mortgage payments, and in 1999, U.S. Bank, N.A., filed a foreclosure action in Allegheny County.

After extensive litigation in the Common Pleas Court and in federal Bankruptcy Court, U.S. Bank, N.A. purchased Brandau's home at Sheriff's sale in 2005. Less than six months later, Brandau and U.S. Bank, N.A. reached an agreement to vacate the Sheriff's sale. However, U.S. Bank, N.A. did not terminate its foreclosure action.

In October 2010, Equicredit initiated the instant foreclosure action against Brandau. The parties proceeded to conciliation conferences, which ultimately were unproductive. On July 19, 2011, Equicredit mailed a Notice of Intent to Take a Default Judgment. On August 8, 2011, Equicredit filed a praecipe to substitute verification on its complaint, as well as a praecipe to enter default judgment. The Allegheny County Prothonotary entered default judgment in favor of Equicredit on that same date.

After attempting to obtain relief in federal Bankruptcy Court and failing, Brandau filed a motion to strike the default judgment on April 26, 2012. The trial court denied the motion via order dated September 21, 2012, and this timely appeal followed.

On appeal, Brandau raises the following issues for our review:

1. Whether the lower court erred in concluding that it had subject matter jurisdiction over the action, despite the fact that EquiCredit Corporation of America failed to join indispensable parties.
2. Whether the lower court erred, as a matter of law, in determining that the record contained sufficient note related facts to support the default judgment.
3. Whether the foreclosing plaintiff on the pleadings demonstrated that it may have had an interest in the lost note.
4. Whether the lower court applied erroneous legal principles when it failed to grant Ms. Brandau's Motion to Strike Default Judgment that included substantial unauthorized amounts.

Appellant's Brief, at 3.

All of Brandau's issues on appeal challenge the trial court's decision to deny her motion to strike the default judgment. In Knickerbocker Russell Co., Inc. v. Crawford, 936 A.2d 1145 (Pa. Super. 2007), we explained a petition to strike and our concomitant standard of review as follows:

A petition to strike a judgment is a common law proceeding which operates as a demurrer to the record. A petition to strike a judgment may be granted only for a fatal defect or irregularity appearing on the face of the record.... An order of the court striking a judgment annuls the original judgment and the parties are left as if no judgment had been entered.
In determining whether fatal defects exist on the face of the record for the purpose of striking a judgment, a court may look only at what was in the record when the judgment was entered. We review a trial court's refusal to strike a judgment for an abuse of discretion or an error of law.

Id., at 1146-1147 (citations omitted).

It is useful to contrast the remedy requested by a petition to strike with the remedy provided by a petition to open. A petition to open judgment is reviewed for an abuse of discretion. Id. A petition to open judgment is an appeal to the equitable powers of the court. See PNC Bank v. Kerr, 802 A.2d 634, 638 (Pa. Super. 2002). As such, it is committed to the sound discretion of the hearing court and will not be disturbed absent a manifest abuse of discretion. See Bluestream Technology, at 835. Brandau did not file a petition to open her judgment. As such, in order to succeed on appeal, she must demonstrate the existence of a fatal flaw that exists on the face of the record.

First, Brandau argues that Equicredit failed to join an indispensable party, U.S. Bank, N.A., causing a fatal defect. However, based upon the face of the record, U.S. Bank, N.A. is not an appropriate party to this litigation. Equicredit's complaint in foreclosure asserts that Equicredit is the current legal holder of the mortgage at issue. Complaint, 10/6/2010, at ¶ 1. If Brandau desired to dispute this assertion, the proper filing would have been a petition to open the judgment. As it stands, this assertion is sufficient to establish Equicredit's right to enforce the terms of the mortgage. See 13 Pa.Cons.Stat.Ann. § 3301; U.S. Bank, N.A. v. Mallory, 982 A.2d 986, 992-994 (Pa. Super. 2009).

This same assertion defeats Brandau's second and third enumerated issues on appeal. In her second issue, Brandau contends that Equicredit's complaint contains insufficient allegations of fact regarding the note underlying the mortgage. Similarly, in her third issue, Brandau argues that Equicredit does not have standing as it has lost the underlying note. However, as noted above, Equicredit has asserted that it is the legal holder of the mortgage, which permits Equicredit to enforce the terms of the mortgage. Brandau was required to file a petition to open the judgment in order to explore issues with the underlying note.

In her final issue on appeal, Brandau challenges the amount of the award contained in the default judgment. In support of this argument, Brandau cites to cases involving confessed judgments, not default judgments. This distinction is crucial, as a confessed judgment may be entered before an opponent may challenge any of the supporting facts. In contrast, a default judgment is entered where, as here, the opponent has failed to utilize the opportunity afforded to her to challenge the factual assertions supporting the judgment. Once again, if Brandau desired to challenge the factual averments supporting Equicredit's entry of judgment, a petition to open the judgment was required to be filed. The face of the record reveals no fatal error regarding the sums claimed by Equicredit.

Accordingly, we conclude that all of Brandau's issues on appeal merit no relief. We therefore affirm the order denying her petition to strike.

Order affirmed. Motion to Strike denied. Jurisdiction relinquished.

Judgment Entered.

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