Bayview Loan v. Lindsay, R. ( 2016 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BAYVIEW LOAN SERVICING LLC IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
RODGER LINDSAY
Appellant No. 2364 EDA 2015
Appeal from the Order Entered July 9, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): 130501170
BEFORE: GANTMAN, P.J., LAZARUS, J., and PLATT, J.*
MEMORANDUM BY GANTMAN, P.J.: FILED JULY 27, 2016
Appellant, Rodger Lindsay, appeals from the order entered in the
Philadelphia County Court of Common Pleas that dismissed his application
for an award of statutory attorney’s fees and costs under the Loan Interest
and Protection Law (“Act 6”).1 We affirm.
The relevant facts of this appeal are as follows. On February 17,
2006, Appellant and his wife, Kelley Lindsay obtained a mortgage loan for
$75,000.00 through Equity One, Inc. d/b/a Popular Financial Services
(“Equity One”). Appellant and his wife then purchased, on the same day, a
two-unit property located at 2115 East Chelten Avenue, Philadelphia, PA
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1
41 P.S. § 503. The LIPL is alternatively referred to as the usury law or Act
6.
_____________________________
*Retired Senior Judge assigned to the Superior Court.
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19138 (“property”). The lower portion of the property was a storefront
commercial unit; above that was a residential apartment unit. The loan
application indicated that the property was intended as an investment and
was not the primary or secondary residence of Appellant and/or his wife.
Likewise, Appellant and his wife signed an affidavit of occupancy on February
17, 2006, stating they would not use the property as a primary or secondary
residence. That same day, Appellant and his wife executed and delivered a
note for $75,000.00 to Equity One. The note dealt with the loan for the
subject property and further secured the mortgage obligations. Appellant
and his wife agreed to various riders to the note, which altered the mortgage
document by removing certain clauses. One of the modifications included a
rent rider stipulating the property was not the couple’s primary place of
residence. The rent rider expressly required any change of occupancy to be
in writing and authorized by Equity One before any change ensued. On April
29, 2011, Mortgage Electronic Registration Systems, Inc. (“MERS”), as a
nominee for Equity One, assigned the mortgage rights to Appellee, Bayview
Loan Servicing, LLC (“Bayview”).
Sometime after Appellant and his wife purchased the property,
Appellant began to use it as his primary residence. No evidence in the
record indicates that Appellant submitted the occupancy modification in
writing to Bayview or that Bayview allowed the change. Appellant failed to
make the monthly mortgage payment for December 1, 2012, and Bayview
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received no payments in the ensuing months.
In its opinion, the trial court fully and correctly set forth the procedural
history of the case:
On May 14, 2013, [Bayview] filed a Complaint in mortgage
foreclosure related to the [property]. Bayview
subsequently filed an Amended Complaint on April 21,
2014. On May 12, 2014, [Appellant] filed an Answer with
New Matter, to which Bayview filed a Reply. On February
2, 2015, Bayview filed a Motion for Summary Judgment,
which [Appellant] opposed, and [the trial court] scheduled
a hearing for April 22, 2015. At the conclusion of the
hearing on April 22, 2015, [the trial court] denied
Bayview’s Motion for Summary Judgment and on April 29,
2015, Bayview filed a Praecipe to Settle, Discontinue, and
End the matter.[2] On May 29, 2015, [Appellant] filed a
Motion for an Award of Statutory Attorney’s Fees and
Costs, to which Bayview filed a response on June 22, 2015.
On July 9, 2015, [the trial court] docketed an Order
denying [Appellant’s] motion. On July 23, 2015,
[Appellant] filed a Notice of Appeal to the Superior Court
and on August 4, 2015, was served an Order directing him
to file a concise statement of [errors] complained of on
appeal pursuant to Pa.R.A.P. 1925(b). On August 17,
2015, [Appellant] filed a timely [Rule 1925(b) statement].
(Trial Court Opinion, filed December 9, 2015, at 1-2).
Appellant raises the following issue on appeal:
DID THE [TRIAL] COURT [ERR] AS A MATTER OF LAW IN
DETERMINING THAT [APPELLANT] WAS NOT THE
“PREVAILING PARTY” AND THEREFORE NOT ENTITLED TO
ATTORNEY[‘S] FEES UNDER [SECTION] 503(A) OF THE
LIPL [LOAN INTEREST AND PROTECTION LAW] AND AS
REQUIRED BY GARDNER V. CLARK, WHERE PLAINTIFF
DISCONTINUED ITS ACTION, THUS GRANTING
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2
In other words, Bayview voluntarily discontinued the foreclosure action
without prejudice.
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[APPELLANT] “SUBSTANTIALLY THE RELIEF SOUGHT?”
(Appellant’s Brief at 3).
Appellant argues he is entitled to an award of attorney’s fees, because
Bayview failed to adhere to its mandated pre-foreclosure obligations.
Appellant insists the mortgage at issue was residential and not commercial.
Appellant avers he should have received notice of Bayview’s intention to
foreclose prior to the filing of the foreclosure action. Appellant maintains
that Bayview acknowledged it had failed to provide the necessary
notification. Appellant asserts the court further justified Appellant’s claim for
attorney’s fees when it denied Bayview’s motion for summary judgment
because there was a question of material fact regarding Appellant’s right to
pre-foreclosure notice under Act 6.
Appellant submits the court failed to consider the relevant case law
defining him a “prevailing party” for purposes of Section 503 attorney’s
fees, where he essentially obtained the relief he requested when Bayview
withdrew its foreclosure action. Appellant claims the frequent and
longstanding use of the concept of “prevailing party” has become an
essential part of interpreting the statutes governing pre-foreclosure
proceedings. Appellant also contends that the possibility of a future
foreclosure action does not deny him status as a “prevailing party” in this
foreclosure case, because there is no difference between a court’s dismissal
of a foreclosure action and a plaintiff’s voluntary discontinuance of a
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foreclosure action; either scenario concludes the action in favor of the
defendant. Appellant submits the court should have awarded him attorney’s
fees under section 503 when Bayview withdrew its foreclosure action,
regardless of Bayview’s ability to file another foreclosure action against
Appellant, because Appellant substantially obtained the relief he was after
and became the “prevailing party” in the present foreclosure action.
Appellant claims the court ignored the legal precedent awarding
attorney’s fees in cases involving judgments of confessions. Appellant urges
there is no logical difference between Appellant’s case and those cases
involving confessed judgments, and the court provided no clarification on the
supposed distinction. Appellant concludes he is eligible for attorney’s fees as
the prevailing party under Section 503 of Act 6, and the trial court erred
when it denied his request. We disagree.
Initially we observe:
Trial courts have great latitude and discretion in
awarding attorney fees when authorized by contract
or statute. Generally, [t]he denial of a request for
attorney’s fees is a matter within the sound
discretion of the trial court, which will be reversed on
appeal only for a clear abuse of that discretion.
Further, to the extent that we must interpret a statute to
resolve Appellant’s issues, our standard of review is de
novo and our scope of review is plenary. We construe the
meaning of a statute according to the Statutory
Construction Act, 1 Pa.C.S.A. §§ 1501–1991.
Under the Statutory Construction Act, the object of
all statutory construction is to ascertain and
effectuate the General Assembly’s intention. When
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the words of a statute are clear and free from all
ambiguity, the letter of the statute is not to be
disregarded under the pretext of pursuing its spirit.
Generation Mortg. Co. v. Nguyen, ___ A.3d ___, 2016 PA Super 82 *3
(filed April 11, 2016) (internal citations omitted). We further observe:
“Pennsylvania generally adheres to the American Rule, under which a litigant
cannot recover counsel fees from an adverse party unless there is express
statutory authorization, a clear agreement of the parties, or some other
established exception.” Samuel-Bassett v. Kia Motors America, Inc.,
613 Pa. 371, 464, 34 A.3d 1, 57 (2011). Pennsylvania courts can award
counsel fees to a party who “prevails” in an action but only “when authorized
by statute or rule of court, upon agreement of the parties, or pursuant to
some other recognized case law exception.” Olympus Corp. v. Canady,
962 A.2d 671, 677 (Pa.Super. 2008).
The statute commonly known as Act 6, at 41 P.S. §§ 101-605, allows
for the recovery of reasonable attorney’s fees as follows:
§ 503. Reasonable attorney’s fees recoverable
(a) If a borrower or debtor, including but not limited to a
residential mortgage debtor, prevails in an action arising
under this act, he shall recover the aggregate amount of
costs and expenses determined by the court to have been
reasonably incurred on his behalf in connection with the
prosecution of such action, together with a reasonable
amount for attorney’s fee.
41 P.S. § 503(a) (emphasis added). The statute does not give rise to a
mortgage foreclosure action “because a mortgage foreclosure action does
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not arise under Act 6. Instead, Pennsylvania Rules of Civil Procedure 1141–
1150 govern mortgage foreclosure actions.” Generation Mortg. Co.,
supra at *4. Act 6 serves as “a prerequisite to commencing a residential
mortgage foreclosure action.” Id. “In the residential mortgage context, Act
6 is typically raised as a defense to mortgage foreclosure proceedings.” Id.Section 403 of Act 6 is the provision that requires notice to the residential
homeowner “that the delinquent mortgage is subject to foreclosure at some
future date unless the owner takes some action. It is not a foreclosure
action[.]” Id. “Remedies for a defective Act 6 notice include setting aside
the foreclosure or denying a creditor the ability to collect an impermissible
fee.” Id. Significantly, a voluntary discontinuance of a mortgage
foreclosure action does not entitle the mortgagor to recover attorney’s fees
under Section 503 “because a mortgage foreclosure action does not arise
under Act 6.” Id. at *5. Because a mortgage foreclosure action does not
arise under Act 6, the mortgagor cannot be a “prevailing party” for purposes
of recovering reasonable attorney’s fees under Section 503 of Act 6. Id.
Significantly, no statutory provision allows for an award of attorney’s fees to
a mortgagor who successfully defends a foreclosure action; without a clause
in the mortgage or note allowing for the recovery of attorney’s fees, none
are available. Id.
Instantly, the trial court reasoned as follows:
This [c]ourt did not make any determination as to whether
the instant mortgage foreclosure action was subject to the
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requirements imposed by [Act 6], but merely denied
[Appellant’s] motion based upon [his] failure to establish
that he had “prevailed” in the action.
On April 22, 2015, this [c]ourt heard and denied
[Bayview’s] Motion for Summary Judgment, having found
that various issues of material fact remained, including
issues of notice as well as issues of eligibility for
government programs related to mortgage repayment. On
April 29, 2015, [Bayview] filed a Praecipe to Settle,
Discontinue, and End the mortgage foreclosure action
without prejudice. This [c]ourt found that such
proceedings did not confer a prevailing status upon
[Appellant]. Although our Superior Court has consistently
held that a party prevails if he…succeeds in obtaining
substantially the relief sought, the existing precedent flows
from circumstances involving confessed judgments and is
not comparable to circumstances of the instant proceeding.
As such, this [c]ourt properly found that [Appellant] had
not satisfied the requirement of being the prevailing party
in the action and properly denied the motion for statutory
attorney’s fees and costs.
(Trial Court Opinion at 3) (some internal quotation marks omitted). We
agree with the court’s decision to deny Appellant’s application for an award
of statutory attorney’s fees and costs under Act 6, based on Bayview’s
voluntary discontinuance of the foreclosure action. This Court’s ruling in
Generation Mortg. Co. makes clear that a mortgage foreclosure action,
either residential or commercial, does not arise under Act 6. Thus, Appellant
cannot be a “prevailing party” under Section 503 of Act 6. Therefore,
Appellant is ineligible to receive attorney’s fees pursuant to that statute.
Accordingly, we affirm.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/27/2016
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