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Digital Communications Warehouse, Inc. v. Allen Investments, LLC

Superior Court of Pennsylvania

November 15, 2019

DIGITAL COMMUNICATIONS WAREHOUSE, INC. AND STUART LACHEEN
v.
ALLEN INVESTMENTS, LLC AND ALLEN INVESTMENT PROPERTIES, LLC
v.
WILLIAM ALLEN, APPELLANT DIGITAL COMMUNICATIONS WAREHOUSE, INC., Appellee
v.
ALLEN INVESTMENTS, LLC,, Appellant

          Appeal from the Order Entered December 26, 2017 in the Court of Common Pleas of Philadelphia County Civil Division at No(s): August, 2010 No. 02381

          Appeal from the Order Entered June 19, 2018 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 100802381

          BEFORE: BENDER, P.J.E., GANTMAN, P.J.E. and COLINS, J. [*]

          OPINION

          BENDER, P.J.E.

         Appellant, William Allen, intervener in the underlying proceeding, appeals from the December 26, 2017 order, [1] granting his motion to open the October 10, 2010 default judgment entered against Allen Investments, LLC, and Allen Investment Properties, LLC (collectively "Allen Investments") and in favor of Digital Communications Warehouse, Inc., et al. ("Digital"). Additionally, Allen Investments appeals from the June 19, 2018 order denying its petition to strike and/or open the default judgment entered against it.[2]After careful review, we quash William Allen's appeal at No. 300 EDA 2018; we affirm in part and reverse in part the June 19, 2018 order underlying Allen Investments' appeal docketed at No. 2286 EDA 2018, and remand for further proceedings.

         The trial court has summarized the relevant facts and procedural history of this matter as follows:

The underlying matter in this case stems from a breach of contract claim for the purchase of televisions. On February 17, 2009, [Digital] entered into a contract for the purchase of television monitors with [Allen Investments]. Under the contract, [Digital] agreed to pay [Allen Investments] … []$3, 885, 000.00[] for delivery of … []3, 100[] television units, and [Allen Investments] warranted that it had legal title to the units as well as full authority to sell them to [Digital]. At the time of the contract's signing, [Digital] agreed to a … []$5, 000.00[] deposit and had already procured a buyer for the television units. Shortly thereafter, [Allen Investments] induced [Digital] to enter into a shipping contract in an effort to facilitate the product delivery, however, [Allen Investments] never delivered the television units, nor did [Allen Investments] ever actually have legal title or authority to the units.
[Digital] filed suit against [Allen Investments] in Pennsylvania on August 17, 2010, claiming damages [for] breach of contract, misrepresentation, and fraud. [Allen Investments] failed to respond to the complaint or enter an appearance, and on October 14, 2010, [a] default judgment was entered against [Allen Investments] in the amount of … []$14, 601, 000.00[].[3]

Trial Court Opinion ("TCO II"), 1/4/19, at 1-2 (unnecessary capitalization omitted).

On June 8, 2017, William Allen petitioned to intervene and [to] strike and/or open the default judgment. Mr. Allen alleged that his son, Marc Gregory Allen, had created [Allen Investments, LLC and Allen Investment Properties, LLC] 1 and had fraudulently assigned to Allen Investments, LLC ownership of multiple properties belonging to William Allen, including a Palm Harbor, Florida condominium complex. William Allen further alleged that Mr. Lacheen, who then held the judgment against [Allen Investments], was attempting to attach Mr. Allen's properties to collect on the outstanding default judgment.
1 Digital [] avers in its compliant [sic] that [Allen Investments, LLC and Allen Investment Properties, LLC] were both incorporated in Florida.
On July 21, 2017, the court issued a rule to show cause why Mr. Allen's petition to intervene should not be granted. After briefing, the court entered an order dated July 13, 2017, which granted the petition to intervene, added William Allen to the case as a party, and granted [him] 20 days to file "an appropriate petition or motion challenging the underlying judgment and/or execution."
On August 1, 2017, Mr. Allen filed a petition to strike [the] default judgment and/or open [the] default judgment and/or stay execution pending final termination of an action pending in Florida. The court entered an order on September 7, 2017, allowing the parties 60 days to conduct discovery on the issues of service and timeliness of the motion, and 30 additional days for briefing. On December 14, 2017, an order was entered granting Mr. Allen's petition to strike the default judgment as to damages only, and stating that an assessment of damages hearing would be scheduled forthwith. On December 21, 2017, [] Digital [] filed a motion for reconsideration of the December 14 order, asking that it be amended to make clear that the date of the judgment on liability remained October 10, 2010[, ] and that the December 14 order only affected the damages award. On December 26, 2017, an order was entered granting the motion for reconsideration, vacating the December 14 order, and clarifying that the motion to strike was granted only as to damages. Mr. Allen timely filed a notice of appeal of the December 26 order on January 18, 2018.

TCO I at 2-3 (unnecessary capitalization and citations to record omitted).[4], [5]

         Subsequently, on January 22, 2018, Allen Investments filed its own petition to strike and/or open the remaining default judgment. The court entered an order on June 19, 2018, which denied Allen Investments' petition. On July 10, 2018, Allen Investments filed a timely notice of appeal, followed by a timely, court-ordered Rule 1925(b) statement of errors complained of on appeal.

         William Allen now presents the following issues for our review:

A. Was there defective service so that the record for the 2010 default judgment contains a fatal error on its face requiring the default judgment to be stricken?
B. Did the [c]ourt lack power to enter the default judgment against [Allen Investments] because [Allen Investments was] not subject to general or specific jurisdiction in Pennsylvania and because proper service was never affected?
C. Even assuming service and jurisdiction had been proper, do the circumstances of this case nevertheless warrant the opening of the default judgment?
D. In his motion, did [William Allen] seek relief as to both damages and liability?
E. Should [William Allen] have been allowed to file a response in opposition to [Digital's] motion for reconsideration of the trial ...

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