Phila. judge files opinion outlining reason denying defense motion to open default judgment in breach of contract case

A Philadelphia Common Pleas Court judge has filed an opinion in which he explains his

justification for denying a defense motion to open default judgment in a breach of contract case between a clothing manufacturer and a retail operation.

In a July 15 opinion, Judge Albert Snite, Jr., urged a state appellate court panel to affirm his May 1 decision to deny a petition by Denim Kin New York Inc. to open a default judgment in a case initiated by Shun Da Clothes Inc.

The record shows that Shun Da Clothes filed suit against Denim Kin last summer alleging counts of breach of contract, unjust enrichment and tortuous interference with business relationship.

The plaintiff requested liquidated damages in the amount of $368,532.60 for its breach of contract claims, which Shun Da Clothes asserts was related to an outstanding balance due to a price reduction in a business deal between the two.

The dispute at the heart of the complaint involved the wholesale of retail clothing and five sale contracts for the purchase of women’s jeans between October 2011 and December of that year.

Shun Da Clothes stated in its complaint that instead of manufacturing the jeans itself, it arranged to have a Chinese company make the product and deliver it directly to the buyer, Denim Kin.

Following the delivery, it was learned that there were problems with the sizing of the jeans and the manner in which certain embellishments were attached, the complaint stated.

As a result of the problems, Shun Da and Denim Kin negotiated, and in January 2012, the two agreed to a price reduction.

In its complaint, Shun Da alleged there was an outstanding balance in the amount of $368,532.60 to which it was entitled.

Soon after the suit’s filing, counsel for the defendant requested an extension of time by which to file its reply, the record shows.

But because the plaintiff never obtained proof of service for filing with the court, the complaint had to be reissued, triggering a new timeframe for a response.

While Denim Kin’s attorney entered an appearance on Feb. 5 of this year, more than a month went by without an answer to the complaint from the defendant.

The plaintiff soon filed a notice of intention to enter default judgment.

Again, no response was given, so Shun Da filed for default judgment in late March.

Nine days later, the defendant filed its petition to open default judgment.

In his opinion, Judge Snite noted that while Denim Kim filed its petition within the allotted 10 days of the entry of default judgment, the judge determined that the defendant failed to assert a meritorious defense.

“A defendant may not simply set forth in its petition conclusions of law and challenges to the plaintiff’s proof,” Snite wrote. “Here, Denim Kin’s Petition does not provide facts upon which any alleged meritorious defenses are based.”

Snite wrote that it is unclear what basis the defendant could have for asserting a statute of limitations defense when the contracts at issue are from October and December 2011, and the current lawsuit was filed in April of this year, “certainly within the four year statute of limitations for a contract action in Pennsylvania.”

The judge also notes the fact that while Denim Kin alleges a defense of Shun Da’s own breach of contract, in the defendant’s verified answer, Denim Kin admits that although it received defective materials, Shun Da made a price reduction.

“It is impossible to glean any further defense beyond what Denim Kin admits: that the original contract price was reduced by Shun Da. “Likewise, there are no facts to support Denim Kin’s assertions of Shun Da’s failure to state a cause of action for breach of contract, or how/why Shun Da’s claims are barred by the doctrines of laches, waiver, unclean hands, or estoppel.”

Snite wrote that while Denim Kin asserts that it was understood by the plaintiff’s lawyer that Shun Da had given Denim Kin additional time by which to file its answer, “in no way is this unsupported statement a reasonable explanation or legitimate excuse for the failure to respond within the prescribed time period.”

Snite asked that Superior Court judges affirm his May 1 order because, as he contends, Denim Kin failed to meet the requirements for the court to consider opening the default judgment.

The court docket in the case shows that Shun Da Clothes is being represented by Blank Rome attorney Bridget Eileen Mayer while Denim Kin is being represented by Eric F. Spade of The Spade Law Firm and John M. Willis, another Philadelphia litigator.