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The Wolf Organization, Inc. v. TNG Contractors, LLC

Court of Appeals of Tennessee, Nashville

July 3, 2019

THE WOLF ORGANIZATION, INC.
v.
TNG CONTRACTORS, LLC

          Session July 10, 2018

          Appeal from the Circuit Court for Davidson County No. 16C819 Kelvin D. Jones, Judge

         Judgment creditor petitioned to enforce Pennsylvania default judgment under the Uniform Enforcement of Foreign Judgments Act. See Tenn. Code Ann. §§ 26-6-101 to -108 (2017). Judgment debtor moved for summary judgment, claiming that the Pennsylvania judgment was void because the court lacked personal jurisdiction. The trial court denied the judgment debtor's motion for summary judgment and later granted summary judgment to the judgment creditor. The trial court also denied the judgment creditor's subsequent motion to supplement the balance of the judgment to include post-judgment attorney's fees and expenses. Both parties raise issues on appeal. We conclude that the judgment debtor waived its personal jurisdiction defense in the Pennsylvania court. We further conclude that the judgment creditor could not seek an award of post-judgment attorney's fees and expenses in this enforcement action. So we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

          Benjamin E. Goldammer and Michael A. Johnson, Nashville, Tennessee, for the appellant, TNG Contractors, LLC.

          Joseph P. Rusnak, Nashville, Tennessee, for the appellee, The Wolf Organization, Inc.

          W. Neal McBrayer, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P.J., M.S., and Andy D. Bennett, J., joined.

          OPINION

          W. NEAL McBRAYER, JUDGE

         I.

         The Wolf Organization, Inc. is a distributor of kitchen cabinets and other products, headquartered in York, Pennsylvania. Wolf received a credit application from TNG Contractors, LLC, a Tennessee limited liability company. After completing a credit check, Wolf opened a customer account for TNG. TNG purchased goods from Wolf, which Wolf shipped to Tennessee. But TNG did not pay all amounts Wolf invoiced for the goods.

         In the Court of Common Pleas of York County, Pennsylvania, Wolf filed a complaint against TNG for breach of contract. When TNG did not respond to the complaint, Wolf sought entry of a default judgment.

         A.

         A brief explanation of Pennsylvania civil procedure is necessary here. One unique aspect to civil procedure in Pennsylvania is the role of the prothonotary. The office of prothonotary is "a creation of Pennsylvania law or statewide procedure." Edward C. Sweeney, Essential Practice Rules and Concepts in Offices of the Prothonotary-Part I, 75 Pa. B. Ass'n Q. 104, 105 (2004). Each county has a prothonotary who functions as the clerk of the court of common pleas. See 42 Pa. Stat. and Cons. Stat. Ann. § 2731 (West, Westlaw through 2019 Regular Sess. Act 9); Brown v. Levy, 73 A.3d 514, 519 (Pa. 2013). The prothonotary's role is ministerial, not judicial. Gotwalt v. Dellinger, 577 A.2d 623, 625 (Pa. Super. Ct. 1990). The prothonotary's authority to act is derived from Pennsylvania's statutes and procedural rules. Id.; see 42 Pa. Stat. and Cons. Stat. Ann. § 2737 (West, Westlaw through 2019 Regular Sess. Act 9) (prescribing the powers and duties of the office of the prothonotary).[1]

         Default judgments in Pennsylvania are entered by the prothonotary without judicial participation upon praecipe[2] of a party. See Pa. R. Civ. P. 237.1(a)(2), 1037(b). After receipt of the necessary documentation, the prothonotary will review the court record to see if it supports entry of a default judgment. See id. 237.1, 1037(b); Gotwalt, 577 A.2d at 625; Bank One Del. N.A. v. Mitchell, 70 Pa. D. & C.4th 353, 365-66 (Ct. Com. Pl. 2005), aff'd sub nom. Bank One v. Mitchell, 897 A.2d 512 (Pa. Super. Ct. 2006). Entry of a default judgment by the prothonotary "precludes the opponent from challenging his or her liability." Mother's Rest. Inc. v. Krystkiewicz, 861 A.2d 327, 335 (Pa. Super. Ct. 2004).

         If the amount of the plaintiff's legal damages can be calculated from the verified complaint, the prothonotary will also assess damages. Pa. R. Civ. P. 1037(b)(1) (directing the prothonotary to assess damages if the amount "is a sum certain or which can be made certain by computation"). But the prothonotary is not authorized to order equitable relief. See id. 1037(d). So if the amount of damages is uncertain or the complaint requests equitable relief, "the trial court has the independent obligation to fashion the appropriate relief at a future date." Mother's Rest. Inc., 861 A.2d at 335; see Pa. R. Civ. P. 1037(b)(1), (d).

         An aggrieved party may petition the court for relief from a default judgment by filing a petition to strike and/or to open a default judgment. Cintas Corp. v. Lee's Cleaning Servs., Inc., 700 A.2d 915, 918-19 (Pa. 1997). These are two distinct remedies under Pennsylvania law. Id. at 918. A petition to strike a default judgment "operates as a demurrer to the record." Id. The petition will be granted "if a fatal defect appears on the face of the record." Id. at 919; see Pa. R. Civ. P. 206.5(e). A petition to open a judgment is an equitable remedy. Cintas Corp., 700 A.2d at 919. The petitioner must prove that the petition was timely, the failure to respond to the complaint was excusable, and the existence of a meritorious defense. See Schultz v. Erie Ins. Exch., 477 A.2d 471, 472 (Pa. 1984). But see Pa. R. Civ. P. 237.3(b)(2) (providing that if the petition is filed within ten days of entry of the default judgment, the petitioner must only show a meritorious defense).

         B.

         Wolf sent TNG a ten-day notice of intent to take a default. See Pa. R. Civ. P. 237.1(a)(2)(ii). TNG did not respond. On July 13, 2015, Wolf filed a praecipe to enter default judgment "in the amount of $22, 493.59 together with interest compounded monthly at the rate of 1.5%, from March 30, 2015, and legal fees plus costs to be determined." The prothonotary entered a default judgment against TNG that same day. The prothonotary then sent written notice to TNG of the entry of the default judgment. See Pa. R. Civ. P. 236.

         On August 14, 2015, TNG filed a petition to open default judgment accompanied by a proposed answer.[3] In its petition, TNG explained that, although it received a copy of the complaint and the notice of default, it did not file an answer because it was in "active negotiations with Plaintiff [about] defects and other issues with the products sent to Defendant by Plaintiff." TNG asked the court to set aside the default and allow it to file an answer disputing the amount owed. The court denied the petition on November 16, 2016. ...


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