61 Entertainment, LLC, v. Neil Miranda

61 Entertainment, LLC, v. Neil Miranda

Civil Action-Contract Law-Breach of Contract-Business Lease Agreement-Default Judgment-Petition to Open Judgment-Pa.R.C.P. Rule 237.3-Timeliness-Reasonable Excuse

61 Entertainment, LLC, (“Plaintiff”) filed a Complaint in Breach of Contract, Unjust Enrichment and Tortious Business Interference alleging that it was a tenant of a commercial property that was owned by Miranda Trust Development, LLC (“Miranda Development”) pursuant to a lease with the property’s former owner, JL Audio Video LLC.  Plaintiff alleges that Miranda Development assumed the lease and accepted rental payments after purchasing the property from JL Audio Video LLC.  The Complaint identifies the address of the residence of Neil Miranda (“Defendant”) as the mailing address of Miranda Development.  Plaintiff alleges that Defendant unilaterally changed the locks of the property subject to the lease and prohibited Plaintiff from entering the property after June 3, 2022.  Following service of the Complaint by Sheriff upon Defendant on February 17, 2023, Defendant failed to file a responsive pleading, and default judgment was entered.  Defendant has filed a Petition to Open Judgment. 

1.  Pursuant to Pa.R.C.P. Rule 237.3, a default judgment may be entered if filed more than ten (10) days after the entry of the judgment if: (1) the moving party promptly has filed a petition to open the default judgment; (2) the moving party has provided a reasonable excuse or explanation for failing to file a responsive pleading; and (3) the moving party has pleaded a meritorious defense to the allegations of the Complaint. 

2.  The timeliness of the filing of a petition to open judgment is measured from the date that notice of the entry of default judgment is received.

3.  Where Defendant admits that he was served with the Complaint that identified 717 Brookside Lane as his address and that he received the Motion for Liquidation of Judgment that was mailed to him at that address and failed to provide an updated address where he could receive mailings related to the litigation, the mailing of the Notice of Intent to Enter Default Judgment and Notice of the Entry of Default Judgment were appropriate.

4.  The question as to whether a defendant provides a legitimate excuse for failing to respond to a complaint depends upon the specific circumstances of the case.

5.  Where the Complaint was handed to Defendant that advised him of the need to file a responsive pleading within twenty (20) days, the explanation provided by Defendant that he did not receive further pleadings and believed that the matter had been resolved fails to provide a reasonable excuse for failure to file a responsive pleading.

L.C.C.C.P. No. 2023-00163, Opinion by John C. Tylwalk, President Judge, March 4, 2025.   

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

                                                            PENNSYLVANIA

                                                            CIVIL DIVISION

61 ENTERTAINMENT, LLC,                                   :           NO. 2023-00163

                        Plaintiff                                   :

            v.                                                         :

                                                                        :

NEIL MIRANDA,                                         :

                        Defendant                               :

                                                            ORDER OF COURT

            AND NOW, this 4^th day of March, 2025, upon consideration of Defendant’s Amended Petition to Open or Strike Judgment, the briefs submitted by the parties and after Oral Argument, it is hereby Ordered that said Amended Petition is DENIED.

                                                                        BY THE COURT:

                                                                        ________________________, P.J.

                                                                        JOHN C. TYLWALK

JCT/jah

Cc:  Paul Bametzreider, Esquire/Brandon Griest, Esquire

        Tucker Hull, Esquire/108 West Main Street/P. O. Box 330/Annville, PA  17003

        Judith Huber, Esquire/Law Clerk

            IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

                                                            PENNSYLVANIA

                                                            CIVIL DIVISION

61 ENTERTAINMENT, LLC,                                   :           NO. 2023-00163

                        Plaintiff                                   :

            v.                                                         :

                                                                        :

NEIL MIRANDA,                                         :

                        Defendant                               :

APPEARANCES:

PAUL BAMETZREIDER, ESQUIRE                   FOR PLAINTIFF

BRANDON GRIEST, ESQUIRE

BARLEY SNYDER

TUCKER HULL, ESQUIRE                                              FOR DEFENDANT

LAW OFFICE OF TUCKER HULL, LLC

OPINION, TYLWALK, P.J., MARCH 4, 2025.

            On January 31, 2023, Plaintiff filed a Complaint alleging that it had been a tenant at a commercial property located at 40 North 7^th Street in Lebanon which was owned by Miranda Trust Development, LLC (“Miranda Development”) pursuant to a lease agreement with the property’s former owner, JL Audio Video LLC (“JL Video”).   Plaintiff alleges that Miranda Development assumed the lease and accepted rental payments after it purchased the property from JL Video on June 3, 2022.  (Exhibit “B” to Complaint)  The Complaint lists 717 Brookside Lane, Lebanon as the mailing address of Miranda Development and the residence of Defendant Neil Miranda (“Defendant”). 

The Complaint alleges that at some point after June 3, 2022, Defendant  unilaterally changed the locks to the property and prohibited Plaintiff from accessing numerous items of its personal property related to a restaurant/entertainment business that remained on the property after Plaintiff was locked out.  The Complaint sets forth causes of action for breach of contract, unjust enrichment, and tortious business interference.  Plaintiff seeks the value of its personal property and lost profits.  

            The record reflects that Defendant was served by the Sheriff as he was handed a copy of the Complaint on February 17, 2023 at 252 North Lincoln Avenue in Lebanon.  Defendant did not file a responsive pleading.  A Default Judgment was entered against him on August 30, 2023.  Defendant has filed an Amended Petition to Open Judgment which is presently before the Court.

            In his Amended Petition, Defendant admits that he was served with the Complaint on February 17, 2023; however, he claims that he received no further pleadings or filings until he received notice regarding Plaintiff’s filing of a Motion for Liquidation of Judgment less than thirty days prior to his filing his Petition to Open Judgment.  Defendant denies having received the Notice of Plaintiff’s intent to seek a default judgment as required by Pa.R.C.P. No. 237.1 and the notice of the entry of the judgment as required by Pa.R.C.P. No. 236.  He explains that he believed this matter had been resolved as Plaintiff’s representative visited the property during the summer of 2023 and did not seek return of Plaintiff’s possessions at that time.  Defendant claims that he filed the Petition to Open Judgment as soon as he was able to obtain counsel.

            The opening of a default judgment is governed by Pa.R.C.P. No. 237.3.  If a petition to open is filed more than ten days after the entry of judgment, as in this case, a default judgment may be opened if the moving party has (1) promptly filed a petition to open the default judgment, (2) provided a reasonable excuse or explanation for failing to file a responsive pleading, and (3) pleaded a meritorious defense to the allegations contained in the complaint.  Kelly v. Siuma, 34 A.3d 86, 92 (Pa. Super. 2011).  If a petition to open a default judgment fails to fulfill any one prong of this test, then the petition must be denied.  Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 178 (Pa. Super. 2009).  The timeliness of a petition to open judgment is measured from the date that notice of the entry of default judgment is received.  Peoples National Bank of Susquehanna County v. Hitchcock, 420 A.2d 589 (Pa. Super. 1980).

Defendant contends that he was unaware of the entry of the default judgment until he received Plaintiff’s Motion for Liquidation of Judgment which was mailed on May 24, 2024.  He points out that he filed his Petition to Open Judgment within thirty days of his receipt of the Motion for Liquidation.  He claims that he was justified in not filing a response to the Complaint because he believed that Plaintiff had abandoned the case and he did not receive any subsequent pleadings or filings. 

Defendant further claims that he has a meritorious defense.   In his proposed Answer, Defendant contends that he was justified in changing the locks to the property as Plaintiff had failed to make rental payments for three consecutive months and had ignored his attempts at communication.  He further claims that he was entitled to retain Plaintiff’s personal property under the terms of the lease agreement, and that he did not interfere with Plaintiff’s contractual relationship with a third party as required for a cause of action for tortious interference with a contractual relationship. 

Defendant indicates that he intends to file a counterclaim against Plaintiff for a $10,000.00 loan he made to Plaintiff in December 2021 which was never repaid.  He argues that the default judgment is invalid because it was entered without the required notice under Rule 237.1(a).

Plaintiff denies that Defendant only learned of the entry of the default judgment when he received the Motion of Liquidation of Judgment.  Plaintiff argues that Defendant received a ten-day notice of the intent to enter default judgment dated August 7, 2023.  Plaintiff claims that Defendant received a copy of the Praecipe for Default Judgment on or about August 24, 2023, and a copy of the Default Judgment and Rule 236 Notice on August 30, 2023, as noted on the docket.  All of these filings were mailed to Defendant at the Brookside Lane address.  Plaintiff also claims that it mailed a copy of the Default Judgment and Rule 236 Notice to Defendant on or about September 1, 2023. 

            Rule 237.1 provides, in part: 

Rule 237.1 Notice of Praecipe for Entry of Judgment of Non Pros for Failure to File Complaint or by Default for Failure to Plead

•  As used in this rule,

…

“judgment by default” means a judgment entered by praecipe pursuant to Rules 1037(b), … .^[1]

(2)  No judgment … by default for failure to plead shall be entered by the prothonotary unless the praecipe for entry includes a certification that a written notice of intention to file the praecipe was mailed or delivered:

(ii) in the case of a judgment by default, after the failure to plead to a complaint and at least ten days prior to the date of the filing of the praecipe to the party against whom judgment is to be entered and to the party’s attorney of record, if any.

The ten-day notice period in subdivision … (a)(2)(ii) shall be calculated forward from the date of the mailing or delivery, in accordance with Rule 106.

(3) A copy of the notice shall be attached to the praecipe.

(4) The notice and certification required by this rule may not be waived.

Note: A certification of notice is a prerequisite in all cases to the entry by praecipe of a judgment of non pros for failure to file a complaint or by default for failure to plead to a complaint. Once the ten-day notice has been given, no further notice is required by the rule even if the time to file the complaint or to plead to the complaint has been extended by agreement.

Pa.R.C.P. 237.1(a)(2)(ii), (3), (4). 

The purpose of this rule is to ensure that default judgments are not entered without a defendant’s prior knowledge, and to provide the defaulting party with an opportunity to cure the defect prior to the entry

of default judgment. Penn National Mutual Casualty Insurance Company v. Phillips, 276 A.3d 268, 277 (Pa. Super. 2022), citing Green Acres Rehabilitation and Nursing Center, 113 A.3d at 1271-72.

“A record that reflects a failure to comply with Rule 237.1 is facially defective and cannot support a default judgment.” Erie Ins. Co. v. Bullard, 839 A.2d 383, 387 (Pa.Super. 2003).  In this case, the default judgment was valid because Defendant was provided with proper service of the notice of intent to take default judgment.  

Service of the notice of intention by registered or certified mail is not required. Apple v. Grace, 555 A.2d 928 (Pa. Super. 1989).  Rule 237.1 does not require that the defendant receive actual notice of the intention to file a praecipe for entry of default judgment; mailing of the notice to the defendant’s principal address is sufficient to comply with the rule.  Central Penn National Bank v. Williams, 523 A.2d 1166 (Pa. Super 1987). 

 Rule 440 provides, in part:

Rule 440.  Service of Legal Papers other than Original Process

(a)(1)  Copies of all legal papers other than original process filed in an action or served upon any party to an action shall be served upon every other party to the action.  Service shall be made

(2)(i) If there is no attorney of record, service shall be made by handing a copy to the party or by mailing a copy to or leaving a copy for the party at the address endorsed on an appearance or prior pleading or the residence or place of business of the party, … .

Pa.R.C.P. 440(a)(1), (a)(2)(i). 

It appears from the docket that all mailings in this matter were sent by Plaintiff and the Prothonotary to the address listed as Defendant’s residence in the Complaint – 717 Brookside Lane in Lebanon.  Although the Sheriff’s return indicates that the Complaint was served by handing a copy to Defendant at a different address – 252 North Lincoln Avenue in Lebanon – in his proposed Answer, Defendant admits that 717 Brookside Lane is his address.  At Oral Argument, it was suggested that Defendant did not receive the mailings because 717 Brookside Lane was his marital home, but he was in the midst of a contentious divorce and was not living there when the documents were mailed.

Defendant may or may not have actually received the notice required under Rule 237.1.  However, he admits that he was served with the Complaint.  Thus, he was aware that 717 Brookside Lane was listed as his address.  He also admits that he received Plaintiff’s Motion for Liquidation of Judgment which was mailed to him at the Brookside Lane address on May 24, 2024.   If he was not living at that address, he should have been collecting his mail or he should have filed a request for the postal service to forward his mail to where he was living, especially in light of the fact that he was aware of this litigation.  He should have also provided the Court and Plaintiff with an updated address where he could receive mailings related to this litigation. 

We realize that Defendant was served with the Complaint at an address that differed from the one set forth as his residence in the Complaint; however, service at the Brookside Lane address was proper under Rule 440.  Based on these circumstances, we conclude that the mailing the of the Notice of Intent to Enter Default Judgment and the notice of the entry of the default judgment were appropriate and deny relief on this basis. 

            We further conclude that Defendant has failed to satisfy the requirements necessary for the opening of the default judgment.  As previously noted, one of those requirements is that Defendant must provide a reasonable explanation for his failure to respond to the Complaint in a timely manner.  The question of whether a defendant provides a legitimate excuse for failure to respond to a complaint is not easily answered and depends upon the specific circumstances of the case.  Kelly v. Siuma, 34 A.3d at 93.

In this case, the Sheriff’s return indicates that the Complaint was handed directly to Defendant on February 17, 2023.  A responsive pleading should have been filed within twenty days, by March 9, 2023; however, Defendant did not do so.   Defendant explains that he failed to respond to the Complaint because he never received any further pleadings and he believed that the matter had been resolved because Plaintiff’s representative did not demand possession of Defendant’s personal property during a visit to the property. 

These are not legitimate excuses.  The notice attached to the Complaint clearly indicated that Defendant was responsible for filing a pleading in response to the Complaint.  Moreover, Defendant avers that Plaintiff’s representative visited the property sometime during the summer of 2023, which was several months beyond the due date for Defendant to file a responsive pleading.  Defendant does not contend that Plaintiff’s representative made any representation regarding the abandonment of this lawsuit and Defendant apparently made no effort to ask Plaintiff’s representative about the status of the litigation or to investigate whether the lawsuit had been terminated with the Prothonotary. 

For these reasons, we do not find that Defendant had a reasonable excuse for his failure to respond to the Complaint or for his failure to cure the default in accordance with the Rule 237.1 notice.  Therefore, we must decline to grant him the relief from the default judgment entered against him. 

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[1] Rule 1037(b) provides that the prothonotary may enter judgment against a defendant for failure to file a pleading to a complaint which contains a notice to defend.  Pa.R.C.P. No. 1037(b).