First Citizens Community Bank v. SA Living Fund LLC (Pennsylvania Court Upholds $3.85 Million Confessed Judgment)

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The Superior Court of Pennsylvania, in a memorandum opinion by Judge Maria C. McLaughlin filed November 9, 2026, affirmed a Philadelphia trial court's denial of a borrower's and its guarantors' petition to strike or open a confessed judgment entered against them on a $3.85 million commercial mortgage loan. The decision in First Citizens Community Bank v. SA Living Fund LLC underscores how resilient confession-of-judgment clauses remain in Pennsylvania commercial lending, even when a reviewing court finds procedural fault with how the trial court reached its conclusion.

The loan traces to July 2022, when SA Living Fund LLC borrowed $3.85 million for an 18-month term, secured by mortgaged premises at 827 Spring Garden Street in Philadelphia. Individual guarantors Craig L. Grossman and Aaron Z. Cohen each personally guaranteed the loan under a Guaranty and Suretyship Agreement which, like the loan documents themselves, contained a confession-of-judgment provision allowing the lender to obtain judgment against the borrower and guarantors without a trial if a default occurred. The lender, First Citizens Community Bank, is the successor by merger to Huntingdon Valley Bank, the loan's original lender.

The loan was modified twice. In March 2024, the parties extended the maturity date by one month in exchange for an extension fee, with that first modification likewise containing a confession-of-judgment clause. In November 2024, the parties executed a second modification: SA Living Fund agreed to pay $103,433.33 to bring the loan current and to prepay an additional year of interest, in exchange for which the bank extended the maturity date to October 2029, subject to its right to call the loan sooner. That second modification also included a confession-of-judgment provision. According to the bank, SA Living Fund never fully made good on the payment terms of that second modification, leaving an outstanding balance of $18,463.33 on the modification payment and a further $30,010.55 in principal and interest that came due January 1, 2025. The bank sent a default letter in January 2025 giving the borrower 15 days to cure, and when it did not, filed a complaint for confessed judgment in March 2025. The Philadelphia County prothonotary entered the confessed judgment as a ministerial act, without judicial review of its merits, the hallmark of how confession-of-judgment clauses operate in Pennsylvania.

SA Living Fund, Grossman, and Cohen petitioned to strike or open the judgment, arguing the bank's complaint was facially defective because it alleged default only in conclusory terms, without specifying what payments were missed, when, or in what amount, and that they had a meritorious defense because the bank's own damages calculations were materially erroneous, serious enough that the trial court itself had directed the bank to file a motion to reassess damages. The trial court denied the petition, finding that although the complaint was not heavy on detail, the record as a whole, including a January 2025 default letter introduced at the hearing, showed the borrower had not met its obligations under the second modification and had no factual basis for a defense.

On appeal, the Superior Court found the trial court had technically erred in its approach, since a motion to strike a confessed judgment may only be evaluated against the record that existed at the moment judgment was entered, not against later-submitted testimony and evidence offered in connection with the separate petition to open. The appellate panel held that error was harmless, because the bank's underlying complaint, assessed strictly on its own terms under Pennsylvania Rule of Civil Procedure 2952, adequately alleged a default and the amount due to support the confessed judgment, and it affirmed denial of the motion to strike.

For commercial lenders and borrowers, the case is a reminder of how much leverage a confession-of-judgment clause still carries in Pennsylvania commercial finance: a borrower challenging a confessed judgment on procedural grounds faces a demanding standard that looks only at the four corners of the complaint and record as they stood when judgment was entered, and a bare-bones default allegation paired with an itemized computation of amounts due can be enough to survive that challenge even if a trial court's own reasoning is later found flawed. The case also shows that personal guaranties executed alongside a commercial mortgage loan travel with every subsequent modification, since Grossman and Cohen remained on the hook as the loan's terms, timeline, and balance evolved under each new confession-of-judgment clause over more than two years.

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