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Zimmerman v. Customers Bank

Supreme Court of Delaware

June 10, 2014

MICHAEL A. ZIMMERMAN, CONNIE JO ZIMMERMAN, BBC PROPERTIES, INC., and GOVERNORS CLUB PROFESSIONAL CENTER, LLC, Defendants-Below, Appellants,
v.
CUSTOMERS BANK, formerly known as New Century Bank, Plaintiff-Below, Appellee

Submitted May 28, 2014.

Revised June 12, 2014.

Case Closed June 26, 2014.

Court Below: Superior Court of the State of Delaware, in and for Kent County. C.A. No. K13J-00649 WLW.

Peter K. Schaeffer, Jr., Esquire, Avenue Law, Dover, Delaware, Attorney for Appellants.

Richard M. Beck, Esquire, Sally E. Veghte, Esquire, Klehr Harrison Harvey Branzburg, LLP, Wilmington, Delaware, Attorney for Appellee.

Before STRINE, Chief Justice, HOLLAND, and RIDGELY, Justices.

OPINION

Page 740

STRINE, Chief Justice:

I. Introduction

This appeal arises out of the entry of a judgment by confession against the defendants, Michael A. Zimmerman and Connie Jo Zimmerman, by the Superior Court. The Zimmermans argue that the Superior Court erred in two ways. First, the Zimmermans argue that they were residents of Florida at the time the document authorizing judgment by confession was executed, and that -- because the plaintiff, Customers Bank, did not file the affidavit that 10 Del. C . § 2306(c) and Superior Court Civil Rule 58.1(a)(3) require to be filed before the prothonotary can enter judgment by confession against a non-resident -- the entry of judgment by confession against them was barred by § 2306(c) and Rule 58.1. Second, the Zimmermans argue that the Superior Court erred in finding that they

Page 741

had knowingly, intelligently, and voluntarily waived their right to notice and a hearing before judgment was entered against them.

Although the Zimmermans are correct that § 2306(c) and Rule 58.1(a)(3) require the plaintiff to file an affidavit before the prothonotary can enter a judgment by confession against a defendant who was not a resident of Delaware at the time the document authorizing judgment by confession was executed, there is no such requirement for a judgment by confession that is entered by the Superior Court itself. In fact, 10 Del. C . § 2306(h) specifically permits the Superior Court to adopt its own rules governing the entry of judgment by confession by the Superior Court itself, and the implementing rule, Superior Court Rule 58.2, does not require the affidavit specified in § 2306(c). Because the judgment by confession in this case was entered by the Superior Court, and all of the requirements of Rule 58.2 -- which governs judgments by confession that are entered by the Superior Court -- were satisfied, Customers Bank's failure to file the affidavit that would have been required by Rule 58.1 if the prothonotary had entered the judgment by confession is not a reason for reversal. Furthermore, as required by Rule 58.2, the Superior Court held a hearing at which the Zimmermans appeared and where they had the opportunity to present evidence and arguments on the question of whether they had knowingly, intelligently, and voluntarily waived their right to notice and a hearing before judgment was entered against them. After the hearing, the Superior Court issued an opinion finding that the Zimmermans had knowingly, intelligently, and voluntarily waived their rights, and only then entered judgment by confession against the Zimmermans. Because that finding was supported by the record, we affirm the Superior Court's entry of judgment by confession against the Zimmermans.

II. Background

In 2006, the Zimmermans obtained two separate commercial loans, totaling $602,163.30 and $1,558,792.95 respectively, from Eagle National Bank, the predecessor in interest to Customers Bank. It is undisputed that the Zimmermans later defaulted on these loans and entered into a forbearance agreement on June 21, 2011 ...


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