Holland, J. &. S. v. Hartsocks Custom Cabinets

Citation: Not availableDocket: 1655 MDA 2021

Court: Superior Court of Pennsylvania; March 17, 2023; Pennsylvania; State Appellate Court

Original Court Document: View Document

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Hartsocks Custom Cabinets and Home Improvements LLC and Charles T. Hartsock, III (Appellants) appeal an order from the Huntingdon County Court of Common Pleas denying their petition to open or strike a default judgment and granting James D. Holland and Sandra C. Holland (Hollands) attorney’s fees. The Hollands hired the LLC for kitchen renovations in September 2019, paying a $3,000 deposit, but the project was left incomplete in December 2019. Following this, the Hollands filed a civil complaint on January 2, 2020, which resulted in a judgment against the Appellants for $2,986.47 in the magisterial district court. The LLC subsequently appealed this judgment.

On August 20, 2020, the Hollands filed a complaint in the Court of Common Pleas, serving Appellants at their joint address via First Class Mail. Appellants did not respond, prompting the Hollands to send a notice of intention to seek default judgment on October 7, 2020. A default judgment was entered on February 1, 2021, for $4,795.72. After attempting to execute the judgment, Appellants filed an emergency motion to stay the execution, which was granted. They then filed a petition to open or strike the default judgment on September 8, 2021, which was denied on December 9, 2021, alongside the granting of the Hollands’ motion for attorney’s fees. The court required the Hollands to submit an itemized list of fees but Appellants appealed before this was completed. The appellate court affirmed the denial of the petition and quashed the appeal regarding attorney's fees.

Orders denying petitions to open or strike default judgments are classified as interlocutory but are immediately appealable as a matter of right under Pennsylvania law. Despite unresolved issues regarding attorney's fees, the denial of the petition to open or strike is appealable. Appellants assert three main legal errors: (1) the trial court incorrectly excused violations of the Rules of Civil Procedure related to document service and denied the motion to strike the default judgment; (2) the court erred in denying the petition to open the default judgment; and (3) the awarding of attorney fees to Appellees was unwarranted, as the trial court did not provide factual findings or cite specific sections of the law justifying the fee award. 

The distinction between petitions to strike and open judgments is emphasized; striking involves addressing fatal defects in the record, while opening is viewed through the court's equitable powers. For a petition to open a default judgment, the moving party must (1) file promptly, (2) provide a reasonable excuse for not responding, and (3) plead a meritorious defense. Failure to satisfy any of these criteria results in denial. 

Appellants contend that a fatal defect exists because the Hollands served only one copy of the complaint and subsequent documents to both Appellants, violating the requirement for individual service to each defendant. They argue the court improperly referenced Rule 126 to excuse this service error. Additionally, the process for appealing judgments from magisterial district courts is outlined, stipulating a 30-day window to appeal and specific procedural requirements for defendants.

Pursuant to Rule 1005, a complaint must be served to the opposing party at the address listed in the magisterial district court records. The Hollands properly served the complaint to the Appellants by mailing it to their recorded address, which was undisputed. Appellants argued that a default judgment should be stricken because the notice of intent to file for default was sent to both Appellants in one communication rather than individually. However, Rule 237.1(a) does not mandate separate notices and allows for the possibility of joint notification. The Hollands complied with the rule by sending the notice to the correct address and clearly listing both Appellants. Even if separate notices were required, the principle of substantial compliance allows courts to overlook procedural defects that do not prejudice a party's rights. The trial court determined that no significant procedural error occurred, as the Appellants did not claim they suffered any harm from receiving a single notice. Additionally, the Appellants contended that the court erred by denying their petition to open judgment, citing a reasonable excuse for their failure to respond. Hartsock testified that he assigned the matter to a former assistant after the judgment was entered.

Hartsock claimed he was unaware of his assistant filing an appeal and believed the judgment was against the LLC only, not himself personally. His assistant received key documents related to the case but failed to inform him, instead filing them in the LLC’s records. Hartsock discovered the judgment against him when a sheriff arrived to issue a sale notice in August 2021 and subsequently hired an attorney within a week. The appellants contended they had valid defenses, arguing no proper cause of action was pled against Hartsock individually and that the LLC did not breach the contract, attributing project delays to the Hollands. The court found the appellants did not meet the standards to open a default judgment, stating the petition was not filed promptly and their explanation for the delay was unreasonable. Specifically, the petition was filed approximately seven months after the judgment was entered on February 1, 2021, which the court deemed not timely. The legitimacy of excuses for not responding to the original complaint was evaluated, and the court found Hartsock's rationale of relying solely on his assistant's oversight implausible.

The court found that Defendant Hartsock, acting on behalf of himself and the LLC, engaged in unreasonable conduct that placed him at risk. Hartsock’s assertion of ignorance regarding his status as a personal defendant in a magisterial district court action was rejected; he had participated in the case and was aware of judgments against him and the LLC. The court identified no abuse of discretion, noting that the Appellants provided no reasonable excuse for their failure to act. Hartsock testified that he assigned his assistant to manage the case, yet he acknowledged that relevant documents were accessible in the LLC's records. The Appellants did not present the assistant as a witness or provide supporting evidence, failing to meet the burden required for challenging a default judgment. The court emphasized that the LLC, as a corporate entity, should have established adequate measures to monitor legal matters. It determined that the situation did not constitute an oversight or mistake justifying the opening of the default judgment, attributing any harm to Hartsock's choice to delegate to a non-lawyer without oversight. The Appellants’ challenge to the award of attorney’s fees to the Hollands was also addressed; since the trial court had not finalized the fee amount, this aspect of the appeal was deemed interlocutory and subsequently quashed. The court affirmed the denial of the petition to open or strike the judgment and relinquished jurisdiction. Judgment was entered on 3/17/2023 by Joseph D. Seletyn, Esq., Prothonotary.