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Capstone Capital Grp., LLC v. Alexander Perry, Inc.

Pennsylvania Superior Court

September 30, 2021

The Pennsylvania Superior Court affirmed the denial of an attempt to open a foreign default judgment. Appellants signed a settlement agreement and executed an affidavit for confession of judgment for $53,400 plus interest payable in the event of default on the settlement agreement. Following Appellants’ failure to pay the settlement amount, Capstone instituted an action in NY state court, which entered a default judgment. Capstone then filed in the trial court in PA a praecipe to enter the NY judgment. Appellants filed a petition in the PA trial court to open the foreign judgment. The trial court entered an order denying Appellants’ petition to open the NY judgment, and Appellants appealed. In their first issue, Appellants contended that they satisfied the three-part standard that a petitioner must meet, seeking to open a default judgment in PA. First, the Court noted the “case law makes clear that the Pennsylvania transferee court may not open the foreign judgment and revisit the merits of the underlying litigation as would be permitted of a domestic default judgment.” Appellants did not present an argument that the NY courts lacked jurisdiction over Capstone’s suit against them or that the NY judgment was procured in derogation of their due process rights. Thus, Appellants did not raise any grounds through which a PA court could have declined to afford full faith and credit to the foreign judgment. Therefore, the trial court did not err in denying the petition to open. In their second issue, Appellants argued that the trial court erred by denying the petition to open without first issuing a rule to show cause to allow for the development of an evidentiary record on the petition as required by Pennsylvania Rules of Civil Procedure 206.1 to 206.7. The Court disagreed and ruled that the trial court was not required to allow for discovery before ruling on the petition to open because there were no disputed issues of fact.

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