Land Tycoon, Inc. v. Wells Fargo Bank, N.A., PICS Case No. 14-0188 (C.P. Monroe Dec. 9, 2013) Zulick, J. (8 pages).

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Land Tycoon, Inc. v. Wells Fargo Bank, N.A., PICS Case No. 14-0188 (C.P. Monroe Dec. 9, 2013) Zulick, J. (8 pages).

Where defendant filed motion to open default judgment within ten days of the entry of judgment and stated a defense that would be meritorious if proved, the court shall open the judgment. Granted.

Plaintiff Land Tycoon purchased a certain parcel of real property in East Stroudsburg, Pennsylvania, at an upset tax sale. The property was subject to a mortgage taken out by a previous owner and held at all times relevant to the action by defendant Wells Fargo. Wells Fargo had instituted a foreclosure action at the time the property was purchased by Land Tycoon and another entity.

Land Tycoon moved to intervene in the foreclosure action, which was denied by the presiding judge. Land Tycoon appealed, which appeal was pending at the time of the instant decision. Land Tycoon then instituted a quiet title action; it served Wells Fargo at a branch in South Carolina unrelated to the foreclosure action and which was not Wells Fargo's principal place of business, and provided no notice to Wells Fargo's counsel. Wells Fargo did not respond, and Land Tycoon obtained a default judgment.

The instant court noted that a petition to open default judgment should be granted where the petition was promptly filed, stated an adequate excuse as to why a timely answer was not filed, and showed a meritorious defense. The court also noted P.R.C.P. 237.3(b), which states that where a petition was filed within ten days after the entry of judgment, the court shall open the judgment where the proposed complaint or answer states a meritorious cause of action or defense. Essentially, Rule 237.3 presumes a petition filed within ten days is promptly filed and to provide an adequate excuse why a timely answer was not filed.

The court found that Wells Fargo had satisfied the requirement of Rule 237.3 by filing its petition the day after entry of judgment, as well as by stating defenses that, were they proved, would be meritorious. Wells Fargo argued that the quiet title action was barred by the doctrine of res judicata, contending that the issue in the quiet title action is substantially similar to the issue presented in Land Tycoon's motion to intervene in the foreclosure action, namely, that the sheriff had accidentally granted title to Wells Fargo upon the foreclosure sale of a second mortgage on the property, which merged with Wells Fargo's mortgage. Wells Fargo also asserted that Land Tycoon had purchased the property at tax sale subject to Wells Fargo's superior and outstanding mortgage. Finally, Wells Fargo argued that even if plaintiff's merger argument was correct, the tax sale to Land Tycoon was not valid as Wells Fargo was not provided with its statutorily required notice.