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Complete Business Solutions Group v. Suess

United States District Court, E.D. Pennsylvania

June 24, 2019

COMPLETE BUSINESS SOLUTIONS GROUP, Plaintiff,
v.
THOMAS ALAN SUESS, Defendant.

          MEMORANDUM

          C. DARNELL JONES, II J.

         I. INTRODUCTION

         Pending before the Court is Defendant's Motion for Reconsideration (ECF No. 20) of this Court's Order dated September 11, 2018 (ECF No. 19), which denied Defendant's Motion to Open Confession of Judgment (ECF No. 2). Defendant contends that: 1) newly discovered evidence, 2) caselaw previously overlooked, and 3) a misinterpretation of an agreement at issue warrant reconsideration. The Court agrees with Defendant's final argument, and will grant the Motion for Reconsideration, in part, and deny it, in part.

         II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         A. Background

         Plaintiff Complete Business Solutions Group, Inc. (“Plaintiff”) is a limited liability company formed under the laws of the Commonwealth of Pennsylvania. Removal Notice at Ex. A ¶ 1 (ECF No. 1.) Defendant Suess, a resident of the State of California, owns C.R. Stelling Insurance Agency - a sole proprietorship formed and operating under California law (collectively, the “Defendant”). (ECF No. 1 ¶¶ 2, 3.) Plaintiff entered into two “factoring agreements” with Defendant in December 2016 and April 2017 (collectively, the “Agreements”), whereby Plaintiff purchased certain of Defendant's accounts receivable for an interest rate of 106% and 133%, respectively. Opp'n Mot. Set Aside J. ¶ 2 (ECF No. 5.); Mem. ISO Mot. Open at pp. 7, 15, 20 (ECF No. 2-1.) The Agreements were individually guaranteed by Defendant Suess. (ECF No. 1 ¶ 7.) Under the Agreements, if Defendant failed to make a payment to Plaintiff, Defendant would be in default and Plaintiff would be entitled to a confession of judgment. (ECF No. 2-1, p. 6.) In July 2017, Defendant failed to tender payment to Plaintiff in accordance with the Agreements. Consequently, Plaintiff commenced this action by filing a complaint in confession of judgment for $254, 510.33 (the “Confessed Judgment”) in the Philadelphia Court of Common Pleas. Confession J. at 2 (ECF No. 5-5)

         B. Procedural History

         After Plaintiff commenced this action on July 11, 2017, Defendant properly removed the case to this Court. (ECF No. 1, p. 1). Subsequently, on September 20, 2017, Defendant filed a Motion to Open the Confessed Judgment (the “Motion to Open”). Mot. Open (ECF No. 2.) Defendant argued that the Agreements at issue are in fact loans that charge usurious interest rates in violation of California and New York usury laws. (ECF No. 2-1, pp. 9, 15.)

         On September 12, 2018, this Court denied Defendant's Motion to Open for failing to state a meritorious defense under Pennsylvania law. Order Denying Mot. Open (ECF No. 19, p. 1.) The Court reached this decision as to the December 2016 agreement after conducting a choice-of-law analysis between California and Pennsylvania. Importantly, the Court thoroughly considered whether applying Pennsylvania law would be contrary to a fundamental policy of California law or diminish the protection afforded to California citizens. (ECF No. 19, pp. 1-2.) The Court determined it would not. (Id.) The Court applied Pennsylvania law to the April 2017 agreement because it interpreted that contract as providing for either the application of New York law[1] or the law of the forum where Plaintiff chose to initiate a suit. (ECF No. 19, p. 2.) As Plaintiff initiated suit in the Philadelphia Court of Common Pleas, the Court applied Pennsylvania law to that agreement as well. (Id.)

         Disagreeing with this outcome, Defendant filed a Motion for Reconsideration of the denied Motion to Open based on purportedly: 1) newly discovered evidence that supports a public policy argument for the application of California law to the December 2016 agreement, 2) new law demonstrating an error in the Court's choice-of-law analysis with respect to the December 2016 agreement, and 3) an inaccurate interpretation of the governing law provision in the April 2017 agreement, which led to an incorrect application of Pennsylvania law rather than New York law. Mot. Recons. (ECF No. 20, pp. 4, 7, 8.) The Court will grant the Motion for Reconsideration, in part, and deny it, in part. Defendants have not provided the Court with any new evidence or identified any misapplication of law with respect to the Court's application of Pennsylvania law to the December 2016 agreement. However, the Court agrees with Defendant that an incorrect interpretation of the April 2017 agreement warrants the application of New York law.

         III. STANDARD OF REVIEW

         A. Motion for Reconsideration

         The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence. United States ex rel. Schumann v. AstraZeneca Pharm. L.P., 769 F.3d 837, 849 (3d Cir. 2014) (internal citation omitted). Consequently, and in accordance with Rule 59(e) of the Federal Rules of Civil Procedure, reconsideration of a judgment will be granted only when there is 1) an intervening change in controlling law, 2) newly available evidence, or 3) a need to correct an error of law or fact or to prevent manifest injustice. Generally, motions for reconsideration are highly disfavored by courts and are granted sparingly. Eichelberger v. City of Phila., No. 17-5795, 2018 WL 3730691, at *1 (E.D. Pa. Aug. 3, 2018). Mere dissatisfaction with a court's ruling will not warrant reconsideration. Jarzyna v. Home Props., L.P., 185 F.Supp.3d 612, 622 (E.D. Pa. 2016).

         B. Motion to Open a ...


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