J-A29019-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
VERTONIX, LTD., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellee
v.
YURI AND OLGA LYUBARSKY,
Appellants
v.
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA,
Appellee No. 3787 EDA 2016
Appeal from the Order November 8, 2016
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: February Term, 2011 No. 03388
VERTONIX, LTD., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellee
v.
YURI AND OLGA LYUBARSKY, H/W
Appellants
v.
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA,
Appellee No. 477 EDA 2017
J-A29019-17
Appeal from the Order Entered January 27, 2017
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: February Term, 2011 No. 03388
VERTONIX, LTD., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellee
v.
YURI AND OLGA LYUBARSKY,
Appellants
v.
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA,
Appellee No. 2943 EDA 2017
Appeal from the Order Entered August 15, 2017
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: February Term, 2011 No. 03388
BEFORE: LAZARUS, J., PLATT, J.,* and STRASSBURGER, J.*
MEMORANDUM BY PLATT, J.: FILED FEBRUARY 06, 2018
In these consolidated appeals, Appellants, Yuri and Olga Lyubarsky,
appeal from the orders of the trial court denying their petition to strike a
confessed judgment; granting the motion of Appellee, Vertonix, Ltd. (Vertonix
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* Retired Senior Judge assigned to the Superior Court.
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Ltd.), for a judgment against Appellee Garnishee, The Guardian Life Insurance
Company of America (Guardian Life); and denying Appellants’ motion for
partial summary judgment.1 We affirm.
We take the factual and procedural history in this matter from our
review of the certified record and the trial court’s February 13, 2017, May 25,
2017, and November 21, 2017 opinions.
On January 14, 2009, Appellants and Vertonix, Ltd. executed a
Settlement Agreement to settle a civil action that Vertonix, Ltd. filed against
Appellants in the Superior Court of New Jersey. (See Settlement Agreement
and Release, 1/14/09, at 1-3). The Settlement Agreement provided Vertonix,
Ltd. the right to confess judgment against Appellants, per the terms of an
attached Surety Agreement. (See id. at 1-2 ¶ 3; see also Surety Agreement,
1/14/09, at 1-5). The Surety Agreement included a section concerning
confession of judgment wherein Appellants “irrevocably authorize[d] and
empowere[d] the prothonotary or clerk . . . to waive the issuance and service
of process[.]” (Surety Agreement, at 4 ¶ 7). It further provided that: “In
granting the above warrant of attorney to confess judgment, [Appellants]
hereby knowingly, intentionally, and voluntarily waive[] any and all
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1 On February 28, 2017, this Court sua sponte consolidated the appeal of the
trial court’s November 8, 2016 order at Docket No. 3787 EDA 2016, and the
appeal of the court’s January 27, 2017 order at Docket No. 477 EDA 2017.
On September 19, 2017, this Court granted Appellants’ application for
consolidation and continuance and consolidated their appeal of the trial court’s
August 15, 2017 order at Docket No. 2943 EDA 2017, with the appeal at
Docket Nos. 3787 EDA 2016 and 477 EDA 2017.
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constitutional rights [Appellants have] . . . either upon the confession of
judgment . . . or . . . upon execution process thereon[.]” (Id.).
On February 24, 2011, after Appellants failed to make timely payment,
Vertonix, Ltd. confessed judgment against them for $184,264.19. During
post-judgment discovery, Appellants filed various motions to compel and
motions for sanctions seeking to enforce their judgment. On October 30,
2015, Appellants filed a praecipe to issue a writ of execution in attachment to
Guardian Life. On November 18, 2015, Guardian Life filed an answer,
objections and new matter.
On May 25, 2016, Appellants filed a motion to sustain claim for
exemption for all interest in and proceeds from four insurance policies issued
by Guardian Life; two life insurance policies and two disability insurance
policies. On July 7, 2016, the trial court denied Appellants’ motion to sustain
claim for exemption. Appellants did not timely appeal the court’s order;
however, on May 31, 2017, they filed a motion for reconsideration, which the
court denied on June 6, 2017.
On June 23, 2016, Appellants filed a petition to strike the confessed
judgment. The court conducted a hearing on September 21, 2016, and denied
the petition on November 8, 2016. Appellants timely appealed. 2
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2 The trial court did not order Appellants to file a statement of errors
complained of on appeal. It filed its opinion on February 13, 2017. See
Pa.R.A.P. 1925.
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On December 16, 2016, Vertonix, Ltd. filed a motion for judgment
against Guardian Life seeking the proceeds or net cash surrender value of the
two individual life insurance policies that the court had deemed not subject to
exemption in the July 7, 2016 order. On January 27, 2017, the trial court
granted Vertonix, Ltd.’s motion for judgment and ordered that Guardian Life
surrender to Vertonix, Ltd. the net cash surrender value of the two life
insurance policies. Appellants timely appealed.3
On July 11, 2017, Appellants filed a motion for partial summary
judgment arguing that the disability insurance policies were exempt from
execution. The trial court denied the motion on August 15, 2017. Appellants
timely appealed.4
Appellants present eight questions on appeal.
I. Order of November 7, 2016—3787 EDA 2016
1. Is the confessed judgment of February 24, 2011 fatally
defective on its face and void ab initio due to the omission
of an address from the record where original process may
be effectuated on [Appellants]?
2. Is the confessed judgment fatally irregular on its face where
the complaint’s affidavit of mailing avers original process
was sent by regular mail to “19 Shallow Brook Road
Morganville, NJ 07751” which is inconsistent and non-
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3 The trial court did not order Appellants to file a statement of errors
complained of on appeal. It filed its opinion on May 25, 2017. See Pa.R.A.P.
1925.
4 Pursuant to the trial court’s order, Appellants filed a statement of errors
complained of on appeal on October 5, 2017. The trial court entered its
opinion on November 21, 2017. See Pa.R.A.P. 1925.
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compliant with the terms of the Surety Agreement’s venue
and exclusive jurisdiction section requiring service by
certified mail to an address included in the agreement
containing the confession of judgment clause?
3. Was the trial court without jurisdiction to enter the
confessed judgment against [Appellants] due to a failure of
proper service of process, in violation of Pa.R.C.P. 2958.1,
Pa.R.C.P. No. 403, and the terms of the Surety Agreement,
where original process was sent by regular mail and to an
address on which the agreement was entirely silent?
4. Did the trial court err by finding waiver in that [Appellants]
“agreed to waive all arguments with regard to due process,
service, and their constitutional rights,” in light of the Surety
Agreement’s language reserving service of process to
[Appellants] by certified mail to an address contained in the
agreement?
5. Did the trial court improperly cite to matters dehors the
record in footnote 5 of its opinion of February 13, 2017 and
thereby commit reversible error when it assumed without
any factual support in the record that “the parties all knew”
what the service address was?
6. Did the trial court err by ruling in its opinion “that actual
service was not in issue” despite the issue being plainly pled
in the petition to strike—“this effectuation of process being
missing”—and over defense counsel’s three objections at
oral argument that the trial court may not look to extrinsic
evidence regarding service and must confine its inquiry to
the record?
7. Did the trial court fail to strictly construe and resolve any
doubts or ambiguities regarding the validity of the judgment
in favor of [Appellants] in accordance with the established
rules of construction that any doubts as to the judgments’
validity are to be resolved against the party entering such
judgments and that a written instrument must be strictly
construed against its maker?
II. Order of November 7, 2016
8. Whether the trial court erred as a matter of law in its
statutory interpretation and failure to apply Pennsylvania
Supreme Court precedent by granting Vertonix, Ltd.’s
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motion for judgment and denying [Appellants’] claim of
immunity from execution on the life insurance policy in
contravention of 42 Pa.C.S.[A.] § 8124(c)(6) and the
holding of Resolute Ins. Co. v. Pennington, [224 A.2d
757] ([Pa.] 1966)?
(Appellants’ Brief, at 3-5) (unnecessary capitalization omitted).
Preliminarily, we note that Appellants did not file a supplemental brief
after this Court consolidated their appeal at Docket No. 2943 EDA 2017 with
the other cases in this matter. None of the questions presented in Appellants’
brief addresses the trial court’s August 15, 2017 order. (See Appellants’ Brief,
at 3-5). “No question will be considered unless it is stated in the statement
of questions involved or is fairly suggested thereby.” Pa.R.A.P. 2116(a).
Therefore, because Appellants did not raise any issues to be resolved with
respect to the trial court’s August 15, 2017 order, they have abandoned their
appeal, and we dismiss the appeal at Docket No. 2943 EDA 2017.
In their first issue, set forth in questions one through three,5 Appellants
argue that “the confessed judgment of February 24, 2011 is fatally flawed and
must be stricken as it contains a critical omission causing improper service
and lack of jurisdiction[.]” (Appellants’ Brief, at 14) (unnecessary
capitalization omitted). Specifically, they argue that because the address at
which service was supposed to be made is not included in the surety
agreement, the surety agreement is fatally defective by way of omission and
____________________________________________
5 In the argument portion of their brief, Appellants offered a combined
argument for questions 1-3, 4-7, and 8. (See Appellants’ Brief, at 14-30).
Accordingly, for ease of disposition, we have similarly grouped the issues in
our discussion.
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the judgment was fatally flawed because of improper service. (See id. at 14-
23). We disagree.
“In examining the denial of a petition to strike or open a confessed
judgment, we review the order for an abuse of discretion or error of law.”
Ferrick v. Bianchini, 69 A.3d 642, 647 (Pa. Super. 2013) (citation omitted).
“A petition to strike a judgment is a common law proceeding
which operates as a demurrer to the record. A petition to strike a
judgment may be granted only for a fatal defect or irregularity
appearing on the face of the record.” Resolution Trust Corp. v.
Copley Qu–Wayne Associates, 546 Pa. 98, 106, 683 A.2d 269,
273 (1996).
In considering the merits of a petition to strike,
the court will be limited to a review of only the record
as filed by the party in whose favor the warrant is
given, i.e., the complaint and the documents which
contain confession of judgment clauses. Matters
dehors the record filed by the party in whose favor the
warrant is given will not be considered. If the record
is self-sustaining, the judgment will not be stricken. .
. . An order of the court striking a judgment annuls
the original judgment and the parties are left as if no
judgment had been entered.
Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa. Super. 2011) (quoting
Resolution Trust Corp., supra). In other words, the petition to
strike a confessed judgment must focus on any defects or
irregularities appearing on the face of the record, as filed by the
party in whose favor the warrant was given, which affect the
validity of the judgment and entitle the petitioner to relief as a
matter of law. [See] ESB Bank v. McDade, 2 A.3d 1236, 1239
(Pa. Super. 2010). “[T]he record must be sufficient to sustain the
judgment.” Id. The original record that is subject to review in a
motion to strike a confessed judgment consists of the complaint
in confession of judgment and the attached exhibits. Resolution
Trust Corp., supra at 108, 683 A.2d at 274.
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Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 622–23 (Pa. Super.
2013).
Here, Appellants contend that the trial court should have stricken the
confessed judgment as fatally defective because the Surety Agreement does
not set forth an address where process may be effectuated. (See Appellants’
Brief, at 15). The provision at issue in the Surety Agreement states:
Surety waives personal service of the summons, complaint and
any other process issued in any such action or suit and agrees
that service of such summons, complaint, and any other process
may be made by registered or certified mail, postage prepaid,
addressed to the Surety at the address set forth below and that
service so made shall be deemed completed upon the providing of
such notice. . . .
(Surety Agreement, at 3 ¶ 4). Consistent with Appellants’ claim, the Surety
Agreement does not contain an “address set forth below[.]” (Id.).
However, the trial court found that there was not any fatal defect, which
would have mandated striking the judgment, and that Appellants waived any
challenge to improper service. (See Trial Court Opinion, 2/13/17, at 4). It
explained that “[t]he record indicates that [Appellants] signed a Settlement
Agreement and Release, a Surety Agreement, and a Disclosure and Waiver of
Rights Regarding Confession of Judgment, in which they agreed to waive all
arguments with regard to due process, service, and their constitutional
rights.” (Id.).
Upon review, we conclude that the trial court did not abuse its discretion
when it denied Appellants’ petition to strike the confessed judgment.
Appellants’ argument that, although service was waived, the Surety
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Agreement lacked an address at which service may be effectuated, does not
prove a fatal defect. Furthermore, we agree that the Surety Agreement is
clear that Appellants waived all arguments with regard to service. (See
Surety Agreement, at 3 ¶ 4, 4 ¶ 7). Appellants did not meet their burden of
showing that the trial court abused its discretion. See Ferrick, supra at 647.
Appellants’ first issue (as set forth in questions one through three) does not
merit relief.
In their next issue (set forth in questions four through seven),
Appellants claim that “the petition to strike was properly pled, and it was error
for the trial court to find waiver of [Appellants’] right to service as specified in
the agreement and waiver of the argument of improper service and failure to
apply established rules of construction[.]” (Appellants’ Brief, at 23)
(unnecessary capitalization omitted). Appellants contend that the trial court
erred when it found waiver because it did not resolve in their favor any doubts,
ambiguities, and irregularities in the record. (See id. at 25). We disagree.
As discussed, we review the denial of a petition to strike a confessed
judgment for an abuse of discretion or error of law. See Ferrick, supra at
647.
It is a firmly established rule of construction in the case of
warrants of attorney to confess judgments that the authority thus
given must be clear, explicit and strictly construed, that if doubt
exists it must be resolved against the party in whose favor the
warrant is given, and that all proceedings thereunder must be
within the strict letter of the warrant. . . .
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Dime Bank v. Andrews, 115 A.3d 358, 364 (Pa. Super. 2015) (citation
omitted).
Here, the Surety Agreement is clear and unambiguous that Appellants
“irrevocably authorize[] . . . any attorney of any court of record to waive the
issuance and service of process and . . . confess judgment . . . against” them.
(Surety Agreement, at 4 ¶ 7; see also id. (waiving all constitutional rights
upon confession of judgment or execution process); id. at 2 ¶ 2(a) (waiving
notice); id. at 3 ¶ 4 (waiving personal service of summons and complaint)).
Furthermore, the Settlement Agreement provides that it “shall be deemed as
having been jointly drafted by the parties and shall not be construed in favor
or against either of the parties, but will be given its plain meaning.”
(Settlement Agreement, at 2 ¶ 8).
Therefore, we conclude that the trial court did not abuse its discretion
when it interpreted the plain meaning of the Surety Agreement and concluded
that Appellants waived their right to service. See Ferrick, supra at 647.
Appellants’ second issue (questions four through seven) does not merit relief.
Lastly, in their final issue, Appellants claim that the trial court erred
when it ruled that Guardian Life must surrender the cash value of two life
insurance policies.6 (See Appellants’ Brief, at 25-30). They contend that the
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6 In addition to denying exemption for the life insurance policies, the court
denied Appellants’ claimed exemption for two disability insurance policies. In
their brief, Appellants did not raise the issue of whether the disability policies
are exempt. (See Appellants’ Brief, at 8, 13, 25-30). Therefore, Appellants
have waived that claim. See Pa.R.A.P. 2101, 2116(a), 2119(a)-(c).
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policies are exempt under 42 Pa.C.S.A. § 8124(c)(6), because Appellant Olga
Lyubarsky, the spouse of the insured, is the beneficiary of the policy. (See
id. at 26, 29). We disagree.
Appellants claim that the trial court erred in its interpretation of Section
8124(c)(6). Because this presents a purely legal question, our standard of
review is de novo and our scope of review is plenary. See Allstate Life Ins.
Co. v. Com., 52 A.3d 1077, 1080 (Pa. 2012).
The General Assembly has directed in the Statutory
Construction Act, 1 Pa.C.S.[A.] § 1501 et seq., that the object of
interpretation and construction of all statutes is to ascertain and
effectuate the intention of the General Assembly. Generally
speaking, the best indication of legislative intent is the plain
language of a statute. Furthermore, in construing statutory
language, “[w]ords and phrases shall be construed according to
rules of grammar and according to their common and approved
usage . . . .” 1 Pa.C.S.[A.] § 1903. . . .
Rodgers v. Lorenz, 25 A.3d 1229, 1231 (Pa. Super. 2011) (case citation
omitted).
Section 8124(c)(6) states:
(c) Insurance proceeds.—The following property or other rights
of the judgment debtor shall be exempt from attachment or
execution on a judgment:
(6) The net amount payable under any annuity
contract or policy of life insurance made for the benefit
of or assigned to the spouse, children or dependent
relative of the insured, whether or not the right to
change the named beneficiary is reserved by or
permitted to the insured. The preceding sentence
shall not be applicable to the extent the
judgment debtor is such spouse, child or other
relative.
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42 Pa.C.S.A. § 8124(c)(6) (emphasis added).
Here, Appellant Olga Lyubarsky is both the beneficiary of Appellant Yuri
Lyubarsky’s life insurance policies, and also a judgment debtor. (See Motion
to Sustain Claim for Exemption, 5/25/16, at 1). Therefore, based upon the
plain meaning of the statute, we conclude that the trial court did not err when
it found that the life insurance policies were not exempt pursuant to Section
8124(c)(6). Appellants’ final issue does not merit relief.7
Orders affirmed. Appeal at Docket 2943 EDA 2017 dismissed.
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7 Furthermore, although Appellants argue that the final sentence should not
apply because their children are named beneficiaries on the policy as well as
Appellant Olga Lyubarsky, (see Appellants’ Brief, at 28-30), Appellants base
their argument on Resolute Ins. Co., supra, which relied on the language
of 40 P.S. § 517. Section 517 was the predecessor to section 8124(c), and
did not include the sentence concerning judgment debtor beneficiaries.
Therefore, we decline to apply its holding in the instant case. Additionally, we
note that Appellants’ children are contingent beneficiaries under the policy
whose rights do not arise until the death of the primary beneficiary, Appellant
Olga Lyubarsky. (See Trial Ct. Op., 5/25/17, at 3-4). Finally, Appellants’
motion to sustain claim for exemption only argues that the policies are exempt
because Appellant Olga Lyubarsky is the beneficiary; it does not mention the
children. (See Motion for Exemption, at 1-2). “Issues not raised in the lower
court are waived and cannot be raised for the first time on appeal.” Pa.R.A.P.
302(a).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date:2/6/18
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Vertonix, Ltd. v. Lyubarsky, Y.
Combined Opinion