Fannie Mae v. Kratz, J. ( 2016 )

J-A19037-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
FANNIE MAE, FEDERAL NATIONAL IN THE SUPERIOR COURT OF
MORTGAGE ASSOCIATION PENNSYLVANIA
v.
JEFFREY F. KRATZ AND MARGUERITE F.
KRATZ
APPEAL OF: JEFFREY F. KRATZ
No. 1534 EDA 2014
Appeal from the Order Entered May 5, 2014
in the Court of Common Pleas of Montgomery County Civil Division
at No(s): 2011-25916
BEFORE: FORD ELLIOTT, P.J.E., OTT, and FITZGERALD,* JJ.
JUDGMENT ORDER BY FITZGERALD, J.: FILED OCTOBER 21, 2016
Appellant, Jeffrey F. Kratz, appeals from the order granting summary
judgment in favor of Appellee, Fannie Mae, Federal National Mortgage
Association, in this mortgage foreclosure action. Appellant contends (1) that
because the United States government “bailed out” the banks, he owes no
money under the mortgage; (2) every assignment of Appellant’s mortgage
was defective and thus the mortgage was never properly transferred from
the original holder; and (3) thus, Appellee lacks standing to bring suit
because it is not the owner and holder of the mortgage. We affirm.
We adopt the facts and procedural history set forth in the trial court’s
opinion.1 See Trial Ct. Op., 6/23/15, at 2-7. Appellant timely appealed and
*
Former Justice specially assigned to the Superior Court.
J-A19037-16
timely filed a court-ordered Pa.R.A.P. 1925(b) statement. Appellant raises
the following issue: “Have the pleadings and discovery of [Appellant] shown
that there is a genuine issue as to material facts and that [Appellee] is not
entitled to a judgment as a matter of law pursuant to Pa.R.C.P. 1035.2.”
Appellant’s Brief at 7.
In support of his issue, Appellant raises three arguments. First,
because the United States government “bailed out” Wall Street and the
banks, Appellee has been paid-in-full and Appellant owes no money. In
support of this argument, Appellants generally refers this Court to a fifty-six
page expert report and cites no law. Second, Appellant states that all the
assignments were invalid because the assignments were not executed by the
“appropriate officers of the bank involved in the actual assignments of the
note and mortgage.” Appellant’s Brief at 18. Appellant cites no law for this
proposition, either. Lastly, citing a single trial court opinion, Appellant
opines that because the assignments were invalid, Appellee lacks standing to
bring suit. Id. at 16. We affirm.
We adhere to the following standard of review:
We view the record in the light most favorable to the
nonmoving party, and all doubts as to the existence of a
genuine issue of material fact must be resolved against the
moving party. Only where there is no genuine issue as to
any material fact and it is clear that the moving party is
1
We note this appeal was stayed when Appellant filed for bankruptcy. The
stay was lifted on April 18, 2016. Order, 4/18/16.
-2-
J-A19037-16
entitled to a judgment as a matter of law will summary
judgment be entered. Our scope of review of a trial
court's order granting or denying summary judgment is
plenary, and our standard of review is clear: the trial
court's order will be reversed only where it is established
that the court committed an error of law or abused its
discretion.
NASDAQ OMX PHLX, Inc. v. PennMont Secs., 52 A.3d 296, 303 (Pa.
Super. 2012) (citation omitted).
When a party cites no legal authority in support of its claim, the claim
is waived. Commonwealth v. Natividad, 938 A.2d 310, 340 (Pa. 2007);
Commonwealth v. Jette, 947 A.2d 202, 205 (Pa. Super. 2008) (same).
Instantly, Appellant cites no law for the propositions that because Appellee
was “bailed out” by the federal government, Appellant owes nothing for the
mortgage and the assignments were invalid. Because Appellant cites no
legal authority, he has waived his claims. See Natividad, 938 A.2d at 340;
Jette, 947 A.2d at 205. Appellant’s third argument derives from his second
argument. Because Appellant has waived his claim that the assignments
were invalid, Appellant cannot establish his derivative claim that Appellee
lacks standing. Accordingly, we affirm.
Order affirmed.
-3-
J-A19037-16
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/21/2016
-4-
Circulated 09/29/2016 11:20 AM
THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY,
PENNSYLVANIA
CIVIL ACTION - LAW
FEDERAL NATIONALMORTGAGE SUPERIOR COURT
ASSOCIATION NO. 1534 EDA 2014
NO. 1545 EDA 2014
v. CONSOLIDATED
MARGUERITE KRATZ
and JEFFREY KRATZ TRIAL COURT
a/k/a JEFFREY F. KRATZ NO. 2011-25916
ROGERS, J. JUNE 23, 2015
OPINION
I. INTRODUCTION
Appellant Marguerite Kratz and Appellant Jeffrey Kratz (jointly
"Appellants") have appealed to the Superior Court of Pennsylvania ("Superior
Court"] from this court's order dated and docketed on May 6, 2014, granting
Federal National Mortgage Association's! ("Appellee") motion for summary
judgment. For the reasons set forth below, the undersigned respectfully
requests that the Superior Court affirm the judgment in rem.
I
Federal National Mortgage Association is also sometimes referred to as "Fannie Mae" in
the record.
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Opinion
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II. FACTUAL AND PROCEDURAL HISTORY
The relevant facts and procedural history underlying this appeal are as
follows. On November 27, 2002, Jeffrey Kratz executed a promissory note
("note") in the amount of $169,800.00 and mortgage for property located at
415 East Broad Street, Souderton, Pennsylvania ("property"), as security for
the sums due under the note to Financial Mortgage Corporation. (Motion for
Summary Judgment, filed 7 /24 / 13, Exhibit B (substituted on 10/28/ 13)
and Exhibit C). On the same day, Financial Mortgage Corporation assigned
the Mortgage to First Horizon Home Loan Corporation. (Id. at Exhibit D).
First Horizon had the mortgage assignment recorded on December 12, 2002.
(Id.). On November 14, 2008, Jeffrey Kratz executed a deed which conveyed
title to the property to himself and Marguerite Kratz as tenants by the
entireties.? (Id. at Exhibit E). First Horizon Home Loans, a division of First
Tennessee Bank National Association, as successor in interest by merger to
First Horizon Home Loan Corporation, assigned the Mortgage on June 3,
2010, to Mortgage Electronic Registration Systems, Inc. ("MERS") as
nominee for First Horizon Home Loans. (Id. at Exhibit F). The Montgomery
County Recorder of Deeds recorded the Assignment of Mortgage on July 28,
2010. (Id.).
Appellants failed to make their monthly payments due on the first of
the month beginning with the payment due on September 1, 2010.
2
Counsel for Jeffrey Kratz, Gerald M. Barr, Esquire, prepared the deed to transfer ownership
"from Husband to Husband and Wife" which Jeffrey Kratz executed on November 14, 2008,
and recorded on the same day. (Motion for Summary Judgment, Exhibit E).
2
(Amended Complaint in Mortgage Foreclosure, filed 5/21/ 12, at ,r 9). On
August 30, 2011, MERS, as nominee for First Horizon Home Loans, assigned
the mortgage to Appellee. (Motion for Summary Judgment, Exhibit G).
Appellee recorded the mortgage assignment on September 6, 2011. (Id.).
Appellee sent the proper notices of intent to foreclose to Appellants.
(Amended Complaint at ,r 11; Jeffrey Kratz Answer, filed 6/21 / 12). On
September 15, 2011, Appellee filed a complaint in mortgage foreclosure.
Appellants each filed preliminary objections. On May 21, 2012, Appellee
filed an amended complaint alleging that Appellants were in default and
seeking $172,064.32 in principal, interest, attorney's fees and other charges.
(Amended Complaint at ,r 10).
In response, Jeffrey Kratz did not deny his failure to make payments.
Rather, Appellant baldly claimed that the mortgage was not in default
because the original lender and owner of the mortgage had been paid in full
by virtue of the "massive United States Government bailout of Wall Street
and the Banks and/ or a payment received under the well-publicized "Credit
Default Swaps" Insurance Agreements in place covering the mortgage
derivative market;" (Jeffrey F. Kratz's Answer, filed 6/21/ 12, at ,r,r 9, 10;
Jeffrey F. Kratz's Answers to [Appellee's] Request for Admissions, filed
4/11/13, at ,r,r 1-3, 6; Motion for Summary Judgment, filed 7/24/13,
Exhibit R). In his new matter, Jeffrey Kratz alleged that all of the
assignments had been fraudulently signed by "Robo-Signers" and that MERS
could not have legally held an ownership interest to assign. (Jeffrey F.
3
Kratz's New Matter at ,i,i 13-18). Jeffrey Kratz also filed a counterclaim
seeking damages for fraud and wrongful misconduct in bringing the action
in mortgage foreclosure which allegedly resulted in great financial and
physical harm. (Id.).
For her part, Marguerite Kratz either admitted or generally denied
Appellee's averments in her answer. (Answer and New Matter of Marguerite
Kratz, filed 6/22/ 12). In her new matter, Appellant claimed that
unbeknownst to her, Jeffrey Kratz had tricked her into signing a consent to
divorce in 2001. According to Appellant, the parties remarried in November
of 2008 and, thereafter, Jeffrey Kratz deeded the property over to both
Appellants. Marguerite Kratz challenged the validity of the mortgage based
upon "the divorce improperly obtained by [Appellant] Jeffrey F. Kratz." (Id.
at ,i,i 15-24).
Appellee filed preliminary objections to Jeffrey Kratz's counterclaim on
July 11, 2012. Following oral argument, the undersigned sustained
Appellee's preliminary objections by order dated September 19, 2012, and
dismissed Jeffrey Kratz's counterclaim. Jeffrey Kratz filed a motion for
reconsideration and a separate application for determination of finality of
order on October 10, 2012. This court denied Appellant's requests by order
docketed on October 22, 2012. The Superior Court denied Appellant's
petition for review per curiam. on December 26, 2012, and the Pennsylvania
Supreme Court denied his petition for review per curiam. on July 11, 2013.
4
On July 24, 2013, Appellee filed a motion for summary judgment,
seeking judgment in rem against Appellants. Appellee attached as exhibits
to the motion copies of documents, including the: 1) recorded deed
conferring title to the property solely to Jeffrey Kratz, dated November 27,
2002, 2) Note executed by Jeffrey Kratz on November 27, 2002, 3) Mortgage
executed by Jeffrey Kratz on November 27, 2002, 4) Assignment of Mortgage
recorded on December 12, 2002, 5) Deed conferring title to the property to
both Appellants executed on November 14, 2008, 6) Assignment of Mortgage
recorded July 28, 2010, 7) Assignment of Mortgage recorded on September
6, 2011, 8) Notice of Intention to Foreclose to Marguerite Kratz, 9) Notice of
Intention to Foreclose to Jeffrey Kratz, 10) Requests for Admissions sent to
both Appellants, 11) Marguerite Kratz's Answers signed April 2, 2013, 12)
Jeffrey Kratz's Answers signed April 9, 2013, and 13) an Affidavit by Lisa
Lubbess, a Foreclosure Specialist at Seterus, Inc., the mortgage servicing
agent for Appellee.
Jeffrey Kratz filed an answer to the motion for summary judgment on
August 23, 2013. Therein, Appellant argued that 1) MERS is not an entity
which may receive assignment or assign a mortgage, 2) the Affidavit by Lisa
Lubbess failed to establish any default, and 3) the motion was premature as
Appellant had not had the opportunity to pursue discovery. The court held
argument on Appellee's motion on October 28, 2013. Based upon Jeffrey
Kratz's claim that he needed more time for discovery, the undersigned
deferred his decision and scheduled reargument for February 4, 2014. The
5
undersigned continued reargument twice at the request of Counsel. In the
meantime, Appellee filed an Acknowledgment executed by Jeffrey Kratz's
Counsel acknowledging that Counsel "reviewed and inspected the original
Promissory Note of November 27, 2002 and original Mortgage of the same
date at the offices of [Appellee's Counsel]". In addition, Jeffrey Kratz filed a
supplemental memorandum of law on February 25, 2014 with the following
exhibits: 1) a copy of the original Note dated November 27, 2002, along with
an endorsement page marked "original" and a Note Allonge listing the payee
as "[Appellee] by Seterus" as well as the original Mortgage, 2) a report signed
by Richard M. Kahn, a principal of and Mortgage Foreclosure Fraud
Examiner for Forensic Professionals Group USA, Inc. and 3) a deposition
transcript of the testimony of Roger Meadows, a corporate litigation officer
for Seterus as servicer of loans for Fannie Mae.
On April 25, 2014, the undersigned held reargument on Appellee's
motion for summary judgment. Appellee's Counsel brought the original note
and original mortgage for inspection by the court. Instead, the undersigned
noted Jeffrey Kratz's Counsel's confirmation that the documents were, in
fact, the originals. Following a thorough review of the record, the court
granted Appellee's motion on May 6, 2014, and entered judgment in rem in
the amount of $205,256.19 together with interest.
Jeffrey Kratz filed a notice of appeal to the Superior Court on May 13,
2014. The undersigned issued an order on May 16, 2014, directing
Appellant to file a Concise Statement of the Errors Complained of on Appeal
6
("concise statement"). Marguerite Kratz filed a notice of appeal to the
Superior Court on May 22, 2014. The undersigned issued an order dated
May 29, 2014, directing Appellant to file her concise statement. Jeffrey
Kratz filed a concise statement on June 3, 2014, and Marguerite Kratz filed
her concise statement on June 18, 2014. The Superior Court sua sponte
consolidated the appeals by per curiam. order entered on June 10, 2014.
III. ISSUES
Jeffrey Kratz raises the following issues on appeal:
1. The Order of the Honorable Thomas P. Rogers dated May
6, 2014 provides no reason why Judge Rogers granted Plaintiff's
Motion for Summary Judgment. A copy of Judge Rogers [sic]
Order is attached hereto as Exhibit "A".
2. A Motion for Summary Judgment is available only where
the Pleadings, Depositions, Answers to Interrogatories and
Admissions on file together with the Affidavits, if any, show there
is no genuine issue as to any material fact and the moving party
is entitled to a judgment as a matter of law. Pa.R.Civ. (sic] P.
Rule 1035(b).
3. An uncontradicted Affidavit of the moving party or its
witness will not support a grant of Summary Judgment because
of the factual issue the Affidavit raises concerning the credibility
of its maker. Godlewski v. Pars Manufacturing Company [sic]
408 Superior Court 425 [sic] 597 A.2nd 106 (1991).
4. The Honorable Thomas P. Rogers erred in determining
that there were no genuine issues of material fact. The following
material facts are at issue:
a. The Note upon which Plaintiff is suing was never
properly transferred from the original holder of the Note,
Financial Mortgage Corporation to First Horizon Home Loans.
b. Each transfer and assignment thereafter was also
deficient in some manner and therefore, Federal National
Mortgage Association has no standing to bring the within
7
Foreclosure Action because they are not the true owner or
holder of the original mortgage or note.
c. Plaintiff relies on an "Affidavit in Support of
Plaintiff's Motion for Summary Judgment" allegedly executed by
Lisa Lubbess. An uncontradicted Affidavit of the moving party
or its witness will not support a grant of Summary Judgment.
d. Plaintiff has been unable to produce the original
assignments of the Note.
e. One of the assignees of the Note was MERS which
Plaintiff's witness admitted in his Deposition that MERS was
never an owner or a holder of the mortgage or note. Therefore,
said assignment was invalid.
f. The Honorable Thomas P. Rogers failed to address
Plaintiff's ownership and possession of the Note as a prerequisite
in the Foreclosure Action.
g. The Honorable Thomas P. Rogers erred by granting
Plaintiff's Motion for Summary Judgment when Plaintiff
produced no evidence that it is the proper Holder of the Note.
5. The Honorable Thomas P. Rogers erred in determining
that the Plaintiff has standing to pursue the within action.
{Jeffrey Kratz's concise statement filed June 3, 2014, at Docket No. 1534
EDA 2014).
Marguerite Kratz raises the following issues on appeal:
1. Judge Rogers has filed no opinion nor provided reasons
for the Order of May 6, 2014, the Appeal of which is the matter
at issue. A true and correct copy of said Order is attached
hereto as Exhibit "A".
2. Summary Judgment is proper only when the pleadings
and discovery show there is no genuine issue as to any material
fact and the moving party is entitled to a judgment as a matter
of law. Pa.R.C.P. No. 1035.2.
3. In granting a summary judgment the Court must examine
the record in a light most favorable to the non-moving party. In
8
re: Estate of Shelly, 2008 Pa. Super. 116, 950 A.2d 1021
(2008).
4. Defendant, Marguerite Kratz, alleged in her New Matter
that Defendant, Jeffrey Kratz obtained a divorce from her in
2001 by wrongfully taking advantage of her mental status
condition at the time in question.
5. The Plaintiff in its general denial of said allegations and in
its Memorandum of Law in support of its Motion for Summary
Judgment, has apparently conceded the accuracy of those
allegations, while disputing the legal significance thereof. To the
extent the Plaintiff did not so concede, a genuine issue of
material fact exists relating to this question.
6. The Honorable Thomas P. Rogers in granting the Motion
for Summary Judgment filed by the Plaintiff against the
Defendant, Marguerite Kratz, has erred in ruling that the
circumstances surrounding the Defendants' marital status were
not significant to the mortgage foreclosure action.
7. The Honorable Thomas P. Rogers has also erred in failing
to exercise the equitable powers of the Court to promote
economic justice on behalf of the Defendant, Marguerite Kratz,
by sanctioning the conduct of Defendant, Jeffrey Kratz in
obtaining a divorce by fraudulent means. This allowed him to
use marital assets to acquire the property in question and, in
turn, to lien said property without the joinder of Defendant,
Marguerite Kratz. The mortgage foreclosure will result in a loss
to Marguerite Kratz of what should have been marital property
as defined in 23 Pa.C.S.A. Sec. 3501(a).
8. The Honorable Thomas P. Roger]s] erred in failing to allow
Marguerite Kratz the opportunity to prove that the Mortgage in
question should be revoked as it affects and applies to her
interest in the property in question.
9. Defendant, Marguerite Kratz hereby reserves the right to
file additional matters complained of when the Honorable
Thomas P. Rogers issues his opinion in support of his Order
granting the Motion for Summary Judgment.
(Marguerite Kratz's concise statement filed June 18, 2014, at Docket No.
1545 EDA 2014).
9
IV. DISCUSSION
Appellants assert that the court erred in granting summary judgment,
albeit for different reasons. First, Jeffrey Kratz sets forth two basic
arguments: 1) Appellee lacked standing to bring this action in mortgage
foreclosure because of the improper or deficient transfer and assignment of
the Mortgage and Note and 2) Appellee improperly relied on the Affidavit of
Lisa Lubbess in support of its motion. Second, Marguerite Kratz insists that
genuine issues regarding material facts remain regarding her marital status
which precluded summary judgment. Appellants are both mistaken.
Preliminarily, the applicable standards on review of an order granting
summary judgment are as follows. Summary judgment is appropriate only
where there is no genuine issue of material fact and it is clear that the
moving party is entitled to judgment as a matter of law. 401 Fourth Street,
Inc. v. Investors Insurance Group, 583 Pa. 445, 461 n.4, 879 A.2d 166, 175
n.4 (2005) (citing Pa.R.C.P. 1035.2(1)); PHH Mortgage Corporation v. Powell,
100 A.3d 611, 616 (Pa.Super. 2014). Summary judgment is also "proper in
cases in which an adverse party who will bear the burden of proof at trial
has failed to produce evidence of facts essential to a cause of action or
defense in which a jury trial would require the issues to be submitted to a
jury." 401 Fourth Street, supra (citing Pa.R.C.P. 1035.2(2)).
In considering the merits of a motion for summary judgment, a
court views the record in the light most favorable to the non-
moving party, and all doubts as to the existence of a genuine
issue of material fact must be resolved against the moving party.
In considering whether there exists a genuine issue of material
fact, the court does not weigh the evidence, but determines
10
whether a reasonable jury, faced with the evidence presented,
could return a verdict for the non-moving party .... [T]he court
may grant summary judgment only when the right to such
judgment is clear and free from doubt.
401 Fourth Street, supra (citations omitted).
Although the moving party bears the initial burden of establishing the
absence of a genuine issue of material fact, the adverse party may not rest
upon mere allegations or denials in the pleadings to defeat the motion for
summary judgment. Nordi u. Keystone Health Plan West, Inc., 989 A.2d 376,
379 (Pa.Super. 2010). Rather, the nonmoving party must produce evidence
of specific material facts demonstrating a genuine issue for trial. Bank of
America, N.A. v. Gibson, 102 A.3d 462, 464 (Pa.Super. 2014) (citing Pa.R.C.P.
1035.3); Nordi, supra. Failure of the nonmoving party to adduce sufficient
evidence on an issue essential to his case or defense establishes the moving
party's entitlement to judgment as a matter of law. JP Morgan Chase Bank,
N.A. v. Murray, 63 A.3d 1258, 1261 (Pa.Super. 2013); Nordi, supra. "[A)
factual issue is considered 'material' for summary judgment purposes if its
resolution could affect the outcome of the case under the governing law."
Strine v. Commonwealth, 586 Pa. 395, 402, 894 A.2d 733, 738 (2006)
(citation omitted).
The governing law provides that an action in mortgage foreclosure is
strictly an in rem proceeding, and its purpose is solely to effectuate a judicial
sale of the mortgaged property. First Wisconsin Trust Company v. Strausser,
653 A.2d 688, 693 n.4 (Pa.Super. 1995) (citing New York Guardian Mortgage
11
Corporation v. Dietzel, 524 A.2d 951, 953 (Pa.Super. 1987). The Gibson
Court recently explained as follows:
The holder of a mortgage has the right, upon default, to bring a
foreclosure action. Cunningham v. McWilliams, 714 A.2d 1054,
1056-57 (Pa.Super. 1998). The holder of a mortgage is entitled
to summary judgment if the mortgagor admits that the mortgage
is in default, the mortgagor has failed to pay on the obligation,
and the recorded mortgage is in the specified amount. Id.
Gibson, supra at 464-65.
"Under the Pennsylvania Uniform Commercial Code (PUCC), the note
securing a mortgage is a negotiable instrument." Id. at 466 (citing Murray,
supra). "A note endorsed in blank is a 'bearer note/ payable to anyone on
demand regardless of who previously held the note." Id. (citing 13
Pa.C.S.A. §§ 3109(a), 3301) (emphasis added). In addition,
[the Superior] Court has held that the mortgagee is the real
party in interest in a foreclosure action. Wells Fargo Bank, N.A.
v. Lupori, 8 A.3d 919, 922 (Pa.Super. 2010) (quoting US Bank
N.A. v. Mallory, 982 A.2d 986, 994 (Pa.Super. 2009)). Section
3301 of the PUCC provides that a holder of a negotiable
instrument is a "person entitled to enforce" it. 13 Pa.C.S.A. §
3301 ( 1). Section 3302 defines a "holder in due course" of a
negotiable instrument as the holder of an instrument if "the
instrument when issued or negotiated to the holder does not
bear such apparent evidence of forgery or alteration or is not
otherwise so irregular or incomplete as to call into question its
authenticity;" and the holder took the instrument for value and
in good faith. Id. § 3302(a). Finally, Section 1201 defines a
"holder," in relevant part, as "the person in possession of a
negotiable instrument that is payable either to the bearer or to
an identified person that is the person in possession." Id. §
1201 (b)(21)(i).
Powell, supra at 619-20.
12
Instantly, Jeffrey Kratz challenges the chain of assignment and
transfer of the mortgage and note in this matter. More important, however,
is what he does not challenge. Appellant does not dispute that Appellee is
the holder of the original mortgage and note. (See Acknowledgment of
Inspection of Original Documents, filed 4/25/ 14). The record in this case
clearly shows that Appellee holds the original note and original mortgage
indorsed in blank and Note Allonge and, therefore, has standing to bring this
action. Accordingly, Appellant's challenge to Appellee's standing based upon
the chain of assignment must fail. See Gibson, supra; Powell, supra; Murray,
supra.
In his second issue on appeal, Jeffrey Kratz complains that the court
erred in considering the Affidavit of Lisa Lubbess that Appellee submitted in
support of its motion for summary judgment. Appellant's second claim is
also unavailing.
Pennsylvania law disfavors trial by affidavit. Murray, supra at 1267.
Testimonial affidavits by the moving party or its witnesses, even if
uncontradicted, will not support the entry of summary judgment since
credibility remains a matter for the jury. Id.; see Nanty-Glo v. American
Surety Company, 309 Pa. 236, 163 A. 523 (1932). An exception to this rule
exists, however, where the moving party uses the admissions of the opposing
party, including facts admitted in the pleadings. Gibson, supra at 466
(citations omitted). Further, in mortgage foreclosure actions, general denials
13
constitute admissions where specific denials are required. Id. (citing
Strausser, supra at 692; Pa.R.C.P. 1029{b),(c)).
Instantly, Lisa Lubbess, a Foreclosure Specialist with Seterus, Inc.,
the mortgage servicing agent for Appellee, provided the affidavit at issue. In
the affidavit, Ms. Lubbess explained her credentials and how the Seterus
business records are kept. (Motion for Summary Judgment, Exhibit S). The
affidavit contains nine (9) paragraphs of allegations based on the evidence,
the majority of which Appellants previously admitted in their answers to the
amended complaint or in response to Appellee's requests for admissions. In
this court's review, the only contested issue alleged in the affidavit is one of
default. However, the contesting on Appellant's part is by the assertion of
unsupported allegations.
Specifically, Jeffrey Kratz has never denied that Appellants have failed
to make payments on the mortgage on or after September 1, 2010. Rather,
he claims that there is no default because the original lender on his
mortgage and note has been paid off by the "government bailout" of certain
unnamed banks. Arguably, under the recent cases cited above, whether or
not the original lender has been paid off by anyone other than the borrower
is irrelevant. Furthermore, while a novel claim, the unsupported allegation
does not create a genuine issue of material fact contrary to Appellant's
protestations otherwise. The undersigned properly granted summary
judgment.
14
Marguerite Kratz raises several claims that can be distilled into one.
Appellant alleges that her husband Jeffrey Kratz took advantage of her
mental state in 2001 and wrongfully obtained a divorce. In 2008, after the
couple remarried, Jeffrey Kratz executed a new deed on the property which
he alone had purchased on November 27, 2002. The new deed transferred
ownership to Jeffrey F. Kratz and Marguerite Kratz as tenants by the
entireties. Had Jeffrey Kratz not fraudulently obtained a divorce in 2001,
Marguerite Kratz's signature would have been required on the note and
mortgage in November 2008. According to Marguerite Kratz, the fraud
committed by Jeffrey Kratz renders the mortgage invalid. Appellant's claim
warrants no relief on appeal.
The Superior Court addressed an analogous claim in Strausser, 653
A.2d at 692-93. There, the appellant, Strausser, asserted defenses of
duress, fraud and unjust enrichment resulting from alleged influence
brought to bear by the second mortgagor appellant, Perlberger, as the reason
the mortgage was invalid. Specifically, Strausser claimed Perlberger had
taken advantage of her while the two were romantically involved and had
«through manipulation, fraud and deceit, pressured her into purchasing the
mortgaged premises." Id. at 692. The Court concluded "Strausser's
allegations of wrongdoing [were) directed at Perlberger and not at [the
appellee]. Strausser's affirmative defense, therefore, [was] without merit."
Id. at 693.
15
Instantly, Marguerite Kratz's allegations of wrongdoing are directed at
Jeffrey Kratz and not at Appellee. Accordingly, Appellant's claim lacks merit.
Moreover, even were this court to consider Marguerite Kratz's appeal to
exercise its equitable powers, Appellant did not provide a shred of evidence
in support of her allegations. She may not rest upon mere allegations or
denials in her pleadings to defeat the motion for summary judgment.
Appellants have produced no evidence which creates a genuine issue
of material fact. Thus, Appellee is entitled to judgment as a matter of law.
V. CONCLUSION
Based upon the reasoning set forth herein, the undersigned
respectfully requests that the Superior Court affirm the judgment in rem.
BY THE COURT:
Court of Common P
Montgomery County,
Pennsylvania
3gth Judicial District
A copy of the above Opinion was
sent to the following on 06/23/ 15:
By First~Class Mail:
Gerald M. Barr, Esquire, Counsel for Appellant,
Jeffrey F. Kratz
16
Douglas A. Gifford, Esquire, Counsel for Appellant,
Marguerite Kratz
Andrew L. Markowitz, Esquire, Counsel for Appellee,
Federal National Mortgage Association
17