FIRST COMMONWEALTH BANK v. FRESH HARVEST RIVER, LLC.

Filing 12

MEMORANDUM AND ORDER OF COURTR denying 9 Motion to Remand to State Court, and as more fully stated in said Memorandum and Order of Court. Signed by Judge Kim R. Gibson on 6/1/2012. (dlg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

FIRST COMMONWEALTH BANK,
Plaintiff,

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) CIVIL ACTION NO. 3:I0-232
) JUDGE KIM R. GIBSON

v.

FRESH HARVEST RIVER, LLC,
Defendant.

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MEMORANDUM AND ORDER OF COURT

This matter comes before the Court on Plaintiff First Commonwealth Bank's Motion for
Remand (Doc. No. 9) and Brief in Support (Doc. No. I 0). Defendant Fresh Harvest River, LLC
has filed a Brief in Opposition (Doc. No. II). For the reasons enumerated below, the Court will
DENY Plaintiffs Motion.

As Plaintiff sets forth in its Brief, the instant action arises from a legal dispute concerning
a loan obtained by Defendant from Plaintiff. Doc. No. I 0 at 2. The loan had been partially
secured through a provision that enabled Plaintiff to confess judgment against Defendant in
Pennsylvania state court should Defendant default on the loan. /d. at 2-3. Plaintiff asserts that
Defendant defaulted, and Plaintiff therefore filed a Complaint in Confession of Judgment in the
Court of Common Pleas of Clearfield County at docket number 20 I O-I4I 0-CD, pursuant to Pa.
R.C.P. 2951. That same day, the state court Prothonotary entered judgment in Plaintiffs favor
for $3,082, I46.24. 1 On September I 0, 20 I 0, pursuant to Pa. R.C.P. 2959, Defendant filed a
Petition to Open and/or Strike the Confession of Judgment in state court, and subsequently
removed the proceedings to this Court. Doc. No. I.
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Plaintiff also filed a separate Complaint in Confession of Judgment in the amount of $95,567.78 at
docket number 201 0-1409-CD, arising from the same controversy as the instant case. That proceeding
was also removed to this Court, at civil action number 3: I 0-231. Plaintiff has filed a Motion to Remand
in that case, presenting the same arguments, which the Court will address via separate Order.

I

Plaintiff argues that the Rooker-Feldman doctrine applies here to bar federal subject
matter jurisdiction for the instant suit. As Plaintiff notes, that doctrine - which is rooted in two
Supreme Court cases, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of

Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983)- stands for the proposition that
losing parties in state court cannot obtain district court review of "state court judgments rendered
before the district court proceedings commenced". Exxon Mobil Corp. v. Saudi Basic Industries

Corp., 544 U.S. 280, 284 (2005). As the Third Circuit has explained, the doctrine bars district
courts from reviewing final judgments of state courts. Walker v. Horn, 385 F.3d 321, 329 (3d
Cir. 2004). This is because 28 U.S.C. § 1257, which states that "[f]inal judgments or decrees
rendered by the highest court of a State in which a decision could be had, may be reviewed by
the Supreme Court", effectively limits the ability to review such judgments to the Supreme
Court's jurisdiction. Id
A review of the history of this case in state court reveals that the confessed judgment is
not a final judgment for Rooker-Feldman purposes. Although Plaintiff filed its Complaint in
Confession of Judgment in the Court of Common Pleas of Clearfield County and obtained an
entry of judgment in its favor the same day, Defendant subsequently filed a Petition to Open
and/or Strike the Confession of Judgment, pursuant to Pa. R.C.P. 2959. Under Pennsylvania
law, once the latter petition is filed, "the litigation becomes an adjudication upon the merits of
the defenses raised" - and therefore not a final judgment. Riverside Memorial Mausoleum, Inc.

v. UMET Trust, 581 F.2d 62, 67 (3d Cir. 1978); see also Rait Partnership, L.P. v. Nathan, 2012
WL 488253 at *1 (E.D.Pa. Feb. 14, 2012) (denying motion to remand and finding the Rooker-

Feldman doctrine not applicable because the entry of a confessed judgment, on its own, is not a
final judgment until the time to challenge it has passed).
To support its Motion, Plaintiff relies on two district court opinions - S&T Bank v.
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Zokaites, 2011 WL 1298171 (W.D.Pa. March 31, 2011) and In re Sabretooth, LLC, 443 B.R. 671

(E.D.Pa. 2011). However, neither of those decisions is controlling here. In Zokaites, the district
court granted the plaintiff's motion to remand largely because the defendant, who had removed
the case to federal court, never filed any responsive pleading to the confessed judgment in state
court prior to removal. As already noted, in the instant case Defendant properly filed its Petition
in state court prior to removal.

Nor does Sabretooth provide any support for Plaintiff's

argument; that case involved proceedings in federal bankruptcy court which were separate from
the state court proceedings- i.e., not removed to federal court from state court, as was the case
here. Finally, as Defendant rightfully notes, the Third Circuit has long recognized district courts'
jurisdiction over properly removed confessed judgment proceedings controlled by Pennsylvania
law. See FD.lC. v. Deglau, 207 F.3d 153 (3d Cir. 2000); Resolution Trust Corp. v. W W Dev.
& Mgmt., Inc., 73 FJd 1298, 1300 (3d Cir. 1996). Accordingly, Plaintiff's argument fails.

AND NOW, this 1st day of June 2012, upon consideration of Plaintiff First

Commonwealth Bank's Motion for Remand (Doc. No.9), IT IS HEREBY ORDERED that the
Motion is DENIED.

KIM R. GIBSON,
UNITED STATES DISTRICT JUDGE

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