Wells Fargo Bank v. Dixon, D.K. ( 2018 )

J-A11015-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
WELLS FARGO BANK NATIONAL IN THE SUPERIOR COURT
ASSOCIATION AS TRUSTEE FOR ABFC OF PENNSYLVANIA
2006-OPT1 TRUST, ASSET BACKED
FUNDING CORPORAION, ASSET BACKED
CERTIFICATES, SERIES 2006-OPT1 C/O
OCWEN LOAN SERVICING, LLC
Appellee
v.
DENNIS KEITH DIXON AND HEATHER E.
MERRITT
Appellants No. 1143 MDA 2017
Appeal from the Order Entered June 19, 2017
In the Court of Common Pleas of Berks County
Civil Division at No.: 15-14763
BEFORE: STABILE, NICHOLS, and PLATT,* JJ.
MEMORANDUM BY STABILE, J.: FILED SEPTEMBER 18, 2018
Appellants, Dennis Keith Dixon and Heather E. Merritt, husband and
wife, pro se, appeal from the June 19, 2017 order of the Court of Common
Pleas of Berks County (“trial court”) entering judgment in rem in favor of Wells
Fargo Bank, National Association as Trustee for ABFC 2006-OPT1 Trust, Asset-
Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1
(“Appellee” or “Wells Fargo”), and against Appellants in this mortgage
foreclosure action. Upon review, we affirm.
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A11015-18
The facts and procedural history of this case are undisputed. As
summarized by the trial court:
On May 26, 2006, [Appellant] Dennis Keith Dixon executed
a promissory note for a loan of $252,000. The note was secured
by a mortgage on a property at 639 Old Airport Road in Amity,
Pennsylvania, executed the same day by both Dixon and
[Appellant] Heather E. Merritt. The lender and mortgagee was
Option One Mortgage Corporation [(“Option One”)]. There are
two assignments of the mortgages, both representing a transfer
from Option One under a later name, Sand Canyon Corporation,
[Appellee] Wells Fargo, National Association as Trustee for ABFC
2006-OPT1 Trust, Asset Backed Funding Corporation Asset-
Backed Certificates, Series 2006 OPT1: once on October 31, 2013,
and again on January 22, 2014. The original mortgage and both
assignments were recorded with the Berks County Recorder of
Deeds. In the assignments, both assignor and assignee are listed
with addresses as “c/o Ocwen Servicing, LLC.” The officers signing
both assignments were Ocwen employees.
[Appellant] Dixon (the sole obligor on the note) failed to
make the payment due on April 1, 2013, and it appears that no
payments have been made since that time. As a result, [Wells
Fargo] filed a complaint in mortgage foreclosure on July 6, 2015.
After the [trial c]ourt granted leave to effect service by posting,
[Appellants] filed preliminary objections which the [trial c]ourt
overruled and dismissed. [Appellants] then filed a responsive
pleading entitled “Combined Amended Answer to [Wells Fargo’s]
Complaint and Combined New Matter (As affirmative Defenses)
Filed as a Matter of Course Under Pa. R.C.P. 1028(c)(1).”
[On November 11, 2015, Appellants filed a 112-page
document with the Record of Deeds for Berks County titled “Notice
of Counterfeit Assignment of Mortgage Instrument No.
2014006671 Recorded 03/24/2014, Evidenced by Forged
Signature, False Representations, and Notary Fraud, Submitted
for Recording by Terra Abstract and Stern & Eisenberg, PC (with
Proof Attached)” (“Counterfeit Notice”)].
Th[e trial c]ourt set a hearing for May 9, 2016, ordering
[Appellee] to produce the original “wet ink” note and mortgage.
At the hearing, [Appellant] Merritt did not appear, and [Appellant]
Dixon, after inspecting the documents, did not deny his signature
appeared on them. The [trial c]ourt accordingly entered an
[o]rder on May 12, 2016, finding that [Wells Fargo] possesses the
original note [“Note”] and mortgage. [The trial court] . . . also
struck [Appellants’] “Combined Amended New Matter (As
Affirmative Defenses),” as well as all allegations within
[Appellants’] “Combined Amended Answers” that relate to
[Appellants’] position that [Wells Fargo] lacks standing because of
problems with the assignments.
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Trial Court Opinion, 9/18/17, at 1-3. On April 12, 2017, Wells Fargo moved
for summary judgment, arguing that it was entitled to judgment as a matter
of law. Among other things, Wells Fargo attached to the motion an affidavit
from Sean Flannery, Contract Management Coordinator from Ocwen Loan
Servicing, LLC. Mr. Flannery attested that Appellants’ mortgage was assigned,
and that Appellants had not made the required payments since April 2013.
Following a hearing,1 the trial court granted Wells Fargo’s motion for summary
judgment on June 19, 2017, entering an in rem judgment in favor of Wells
Fargo for $318,274.16 (as of June 3, 2016) plus $51.04 in daily interest. The
trial court also ordered that the document titled “Counterfeit Notice” to be
stricken from the record and declared void. Appellants pro se timely appealed
to this Court. The trial court directed Appellants to file a Pa.R.A.P. 1925(b)
statement of errors complained of on appeal. Appellants complied, raising
fourteen assertions of error. In response, the trial court issued a Pa.R.A.P.
1925(a) opinion, wherein it attempted to consolidate and identify the issues
Appellants were raising on appeal. The trial court concluded that Appellants’
issues did not merit relief.
On appeal, Appellants raise the following issues which we quote
verbatim.
1. Did the trial court err by granting Appellee summary
judgment, when there were numerous material facts in dispute
____________________________________________
1In a supplemental motion for summary judgment and at the hearing, Wells
Fargo requested the trial court to strike the Counterfeit Notice. N.T. Hearing,
5/1/17, at 21.
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revealing Appellee was not a real-party-in-interest and lacked
standing for at least the following reasons?
a. Appellee’s assignments postdated the alleged default
date, and could not pass retroactive enforcement rights or
legal title relating back in time as a matter of law.
b. A complete stranger to the trust publicly admitted it
didn’t own any residential real estate mortgages, but was
listed as the assignor on the assignments;
c. A valid chain of 4 assignments was dehors the record.
d. The assignments were executed and recorded almost
eight years after the Trust closed 8/10/06.
e. Appellee admitted its assignments were fabricated, and
was confirmed by the court and proven by Mr. Dixon.
f. Appellee was not a holder of a completely assembled
Note with a permanently affixed allonge containing an
original ink-signature endorsement.
2. Do Appellants possess standing to challenge recorded
assignments of mortgage that the record below proves were VOID
ab initio?
3. Did the trial court err by granting judgment against Appellant
Merritt when the record revealed she did not sign the subject Note,
and pursuant to PUCC §3401 she could not be held liable without
her signature thereon, since a Note signed by Merritt is an
essential element to the mortgage foreclosure action against her.
4. Did the trial court err by striking and declaring as void,
Appellant Dixon’s 112-page public record Notice, which revealed
assignments to Appellee were indeed fabrications containing
forged signatures, false representations, and notary fraud, with
proof attached thereto?
5. Did the trial court err by granting Appellee’s motion for
summary judgment in light of the Nanty-Glo Rule, when said
motion exhibited a sworn affidavit, but Appellee failed to elicit any
in-court oral testimony from the affiant before a jury, so the jury
could determine the credibility of the affidavit testimony?
Appellant’s Brief, at 5-6. (Emphasis in original).
After careful review of the record and relevant case law, we conclude
that the trial court accurately and thoroughly addressed the merits of
Appellants’ claims and properly granted Appellee’s motion for summary
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judgment.2 See Trial Court Opinion, 9/18/17. In particular, we agree with
the trial court’s conclusions that (1) Appellants’ attack on the validity of the
assignments already had been ruled upon twice by another court and
therefore, the issue now was precluded by collateral estoppel, (2) since
Appellant Dixon is not a party to the assignments and can discharge his
liability under the Note by paying the current holder of the mortgage, he lacks
standing to contest the validity of the assignments, (3) a note secured by a
mortgage may be considered a negotiable instrument thus, challenges to the
____________________________________________
2Summary judgment is proper in mortgage foreclosure litigation where the
defendant admits the failure to make payment and fails to state a cognizable
defense to the plaintiff’s claim. Gateway Towers Condominium Ass’n v.
Krohn, 845 A.2d 855 (Pa. Super. 2004). It is well-settled that
[o]ur 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.
Summary judgment is appropriate only when the record clearly
shows that there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law. The
reviewing court must view the record in the light most favorable
to the nonmoving party and resolve all doubts as to the existence
of a genuine issue of material fact against the moving party. Only
when the facts are so clear that reasonable minds could not differ
can a trial court properly enter summary judgment.
Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013) (quoting
Cassel-Hess v. Hoffer, 44 A.3d 80, 84-85 (Pa. Super. 2012)). Moreover,
“[w]here the non-moving party bears the burden of proof on an issue, he may
not merely rely on his pleadings or answers to survive summary judgment.”
Krauss v. Trane U.S. Inc., 104 A.3d 556, 563 (Pa. Super. 2014) (citation
omitted). “Failure of a non-moving party to adduce sufficient evidence on an
issue essential to his case and on which he bears the burden of proof
establishes the entitlement of the moving party to judgment as a matter of
law.” Id.
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chain of possession by which a foreclosing party came to hold a note are
immaterial to its enforceability, (4) Appellee possessed the original Note and
mortgage with true signatures and therefore could foreclose without resolving
the validity of any assignments, (5) an assignment executed after a complaint
is filed is sufficient to make a plaintiff the real party in interest entitled to
enforce a mortgage, this being more so the case when an assignment is
executed after the beginning of a default but before the filing of a complaint,
(6) the mortgage assignments were not fraudulent when executed by
employees of the loan servicer operating on behalf of the Appellee as noted in
the assignments, (7) entry of summary judgment against Appellant Merritt
was not against the law even where she did not sign the Note, since this
foreclosure action concerns only the property itself, an in rem proceeding that
does not include an in personam action to enforce personal liability, and (8)
the Nanty-Glo rule3 was not triggered because Wells Fargo did not rely solely
upon the Flannery affidavit, but additionally, relied upon Appellant Dixon’s
testimony and the Appellants’ failure to effectively deny that the loan was in
____________________________________________
3 Borough of Nanty–Glo v. American Surety Co. of N.Y., 163 A. 523 (Pa.
1932) (holding that a motion for summary judgment may not be granted
based on the deposition testimony of the moving party and his or her
witnesses alone). “An exception to this rule exists, however, where the
moving party supports the motion by using admissions of the opposing
party. . . .” Sherman, 660 A.2d at 1372. Such admissions include facts
admitted in pleadings. Durkin v. Equine Clinics, Inc., 546 A.2d 665, 670
(Pa. Super. 1988). Also, general denials, as contained in Appellants’ amended
answer, constitute admissions where specific denials are required. See
Pa.R.C.P. No. 1029(b).
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default for failure to make payments. Additionally, although not addressed in
the trial court’s 1925(a) opinion, we conclude also that the trial court likewise
did not err in striking the Counterfeit Notice based upon Appellants’ argument
that the record did not show Appellee acquired any rights in the assignments.
The trial court correctly concluded that Appellee properly possessed the Note
and mortgage and was entitled to commence this foreclosure action.
Accordingly, we affirm the trial court’s June 19, 2017 order granting the
motion for summary judgment in favor of Appellee Wells Fargo. We further
direct that a copy of the trial court’s September 18, 2017 opinion be attached
to any future filings in this case.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 09/18/2018
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Circulated 08/31/2018 10:55 AM
WE:... L.S FARGO BANK, N.A., as IN THE COURT OF COMMON PLEAS
Trustee for ABFC 2006-·0PTl TRUST, OF BERKS COUNTY, PENNSYLVANIA
AS:�[';' HACKED FUNDING CIVIL DIVISION
COILF1·JJATION ASSET-BACKED
CEF.'.'iFICATES, SERIES 2006 OPTl NO. 15-14763
c/o OCVv E\J LOAN SERVICING, LLC,
Plaintiff,
v.
DENNIS KElTH DIXON a/k/a
DENJ\IJ5; K. DIXON, HEATHER E.
MERIUd, and UNITED STATES OF
Al\'I :'.RICA,
Defendants. ASSIGNED: MADELYN S. FUDEMAN, J.
Jess.ca N. Manis, Attorney for Plaintiff
De:11 is Keith Dixon and Heather E. Merritt, Defendants Pro Se
Tnis matter ii; a simple mortgage foreclosure in which the facts are clear that
Defendants have been in default for failing to make required payments for over four
yeas Defendants' vehement arguments opposing foreclosure are not only meritlcss, but
haw, a.ready been found rneritless by prior rulings in federal court, This Court's grant of
sur.i.nary j udgrnent in Plaintiff's favor was appropriate.
Factua., ::.nd Procedural History
On May 26, W06, Defendant Dennis Keith Dixon executed a promissory note for
a lour: ::if $252,000. The note was secured by a mortgage on a property at 639 Old Airport
Rorl i, Amity, Pennsylvania, executed the same day by both Dixon and Defendant
He,L .l.er E. Merritt. The lender and mortgagee was Option One Mortgage Corporation.
There arr. two assignments of the mortgage, both representing a transfer from Option One
under n later name, Sand Canyon Corporation, to Plaintiff, Wells Fargo Bank, National
Association as Trustee for ABFC 2006-0PTl Trust, Asset Backed Funding Corporation
Asset-Backed Certificates, Series 2006-0PTl: once on October 31, 2013, and again on
Jaruary :;'.2, 2014. The original mortgage and both assignments were recorded with the
Berks County Recorder of Deeds. In the assignments, both assignor and assignee are
listed with addresses as "ck: Ocwen Loan Servicing, LLC." The officers signing both
assignments were Ocwen employees.
Defendant Dixon (the sole obligor on the note) failed to make the payment due on
A pr' I I, ;:o l 3, and it appears that no payments have been made since that time. As a
result, Plaintiff filed a complaint in mortgage foreclosure on July 6, 2015. After the Court
granted leave to effect service by posting, Defendants filed preliminary objections, which
the Corrt overruled and dismissed, Defendants then filed a responsive pleading entitled
"Co.r.l.ined Amended Answer to Plaintiff's Complaint and Combined New Matter (As
Affirmative Defenses) Filed as a Matter of Course Under Pa. R.C.P. 1028(c)(l)."
This Court set a hearing for May 9, 2016, ordering Plaintiff to produce the
origir.al "wet ink" note and mortgage. At the hearing, Defendant Merritt did not appear,
and Defendant Dixon, after inspecting the documents, did not deny his signature
appeared on them. Tne Court accordingly entered an Order on May 12, 2016, finding that
Pia; 11 i ff possesses the original note and mortgage. For other reasons discussed in this
opinion, the Order also struck Defendants' "Combined Amended New Matter (As
Affirmative Defenses)," as well as all allegations within Defendants "Combined
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Amended Answers" that relate to Defendants' position that Plaintiff lacks standing
because of problems with the assignments.
Also during the pcndency of this case, and as noted in the Court's May 12, 2016,
Order, the United States District Court for the Eastern District of Pennsylvania issued
rulings rejecting Defendants' arguments in two separate actions. See Dixon v. Option One
Mc.rtgnge Corp., No. 5:13-cv-3199 (E.D. Pa. April 15, 2014); Dixon v. Stern &
Eisenberg, PC, No. 5:14--CV-455 i, 2015 WL 3833782 (E.D. Pa. June 22, 2015), aff'd sub
noin. Dixon v. Stern & Eisenburg, PC, 652 F. App'x 128 (3d Cir. 2016).
Plain tiff filed a motion for summary judgment on April 12, 2017, supported by a
number of exhibits, including the note and mortgage, the assignments, and the affidavit of
Senn Flannery, a Contract Management Coordinator with Ocwen Loan Servicing, LLC,
which attests to the execution and assignment of the mortgage and the failure to make
required payments since April 2013. Following oral argument, the Court entered an Order
on Ju 1,: 19, 20] 7, granting in rem judgment in favor of Plaintiff and striking a document
Defendants recorded with the Recorder of Deeds, which purported to give notice that the
second assignment described above was counterfeit. Defendants filed a timely notice of
appeal on July 19, 2017.
Defendants' statement of errors complained of on appeal is ten pages long and
enumerates fourteen errors. There is substantial overlap in the errors noted and the
arguments are not always clear. Defendants question the Court's subject matter
3
jurisdiction, Plaintiff's standing, the Court's perceived exercise of in personam
jurisdiction over De fondants, and of course the grant of summary judgment.
Most of Defendants' listed errors concern Plaintiffs alleged reliance on "ex post
facto assignments." There are several clear legal reasons that allegations about problems
with the assignments present no obstacle to a foreclosure judgment in favor of Plaintiff.
First, Defendants' attack on the validity of the assignments has already been ruled
upon-c-twice=-by another court. Col!ateral estoppel, or issue preclusion, bars re-litigation
f .rssi.e ·rr:
oran r
l) the issue decided in the prior adjudication was identical with the one
presented in the later action, 2) there was a final judgment on the merits,
:�) the party against whom the plea is asserted was a party or in privity
with a party to the prior adjudication, 4) the party against whom it is
asserted has had a full and fair opportunity to litigate the issue in question
in a prior action.
Shiidi,.1· r. Smith, 673 A.2d 872, 874 (Pa. 1996). Defendant Dixon filed two actions in the
United Surles District Court for the Eastern District of Pennsylvania. lu one of those
cases, Dixon argued the assignments were invalid because "they were recorded after
Defendants mailed the Act 6/Act 91 notices, the assignments missed the closing date for
the ·:,l'l!SL by almost eight years, and Option One/Sand Canyon did not own any
residential mortgages to have assigned to Wells Fargo.'' Dixon v. Stern & Eisenberg, PC,
:20 •. :i WL 3833782, at " l l . The latter two arguments, at least, are reasserted in
Defendants' statement of errors here. ln an opinion entering summary judgment against
Dixon, the Honorable Joseph F. Leeson held that Plain tiff, because he is not a party to the
assignments and because he can discharge his liability under the note by paying the
current holder of the mortgage, "lacks standing to contest the validity of the Assignment
ofvloitgage from Option One/Sand Canyon to Wells Fargo." Id. Dixon was a patty in
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that case' and had a full opportunity to litigate the issues; the opinion accompanied a final
entry cfjudgment on the merits; and the issues are identical to issues here, including two
of the specific arguments against the validity of the assignments and, importantly,
whether Defendants may challenge the assignments at all. Moreover, Judge Leeson also
ruled that re-litigation of these issues was already precluded by an earlier decision in
which the Honorable Mitchell S. Goldberg held that Dixon's "legal theory of invalidity is
mer t.ess." Id. (quoting Dixon v. Option One Mortgage Corp., No. 5:13-cv-3 I 99 (E.D.
Pa. ,\pri: 15, 2014)).
C liven these prior decisions, further reconsideration of the substance of
De loudants' arguments is not strictly necessary here, but the legal points can be easily
stated, as they were in this Court's May 12, 2016, Order. Under Pennsylvania law, a note
secured by a mortgage may be considered a negotiable instrument; thus, "challenges to
the l:hdr: of possession by which [a foreclosing plaintiff] came to hold the Note [are]
imrr.atorial to its enforceability." JP Morgan Chase Bank, l\1.A. v. Murray, 63 A.3d 1258,
1266 (0r. Super. Ct. 2013); see also Nationstar Mortg., LLC v. Elsesser, No. 1300 MDA
20 ,1., :'.O 15 WL 7454141, at *4 (Pa. Super. Ct. Mar. 13, 2015) ("Where the Note can be
classified as a negotiable instrument, anc [the plaintiff] can demonstrate possession of
that instrurnent, the validity of the trans for of the loan is ultimately not controlling."). The
evidence, along with Dixon's own inspection, conclusively indicates that Plaintiff
posses ,e'i the original note and mortgage with Defendants' true signatures. The
assi g11ments recite consideration of ten dollars. The notation on the allonge to the note
that ti is payable to the order of Option One does not prevent it from being a negotiable
instrument. See Nat ionstar Mortg., LLC v. Elsesser, 2015 WL 7454141, at *4 (citing
I
Me ·r r. was not a party in the federal cases but executed the very same mortgage document.
5
PHI! Mortg. Corp. v. Powell, l 00 A.3d 611, 616--17 (Pa. Super. Ct. 2014)). There is no
foci here: that sets th is case apart from those that have considered the possessor of a note
and mortgage to be a holder who may foreclose without resolving the validity of any
ass i gmncnts.
Even if the validity of the assignments were at issue, Defendants have not raised a
legitimate challenge, Defendants' insistence that the assignments were ex post facto
misses the mark for a simple practical reason. It is clear from the statement of errors that
Defendants consider the assignments ex post facto in the sense that they "postdated (as ex
postfacto assignments) the alleged default date" (emphasis in original). But the default is
not momentary. Defendant Dixon's default on his obligations under the note continues to
this day because he has not made any payments or cured the default in any way.
Moreover, the Superior Cou11 has held that an assignment executed after the complaint
ww: //l:1c/ is sufficient to make the plaintiff the real party in interest entitled to enforce the
rnongage. See US Bank N.A. v. Mallory, 982 A.2d 986, 994 (Pa. Super. Ct. 2009). An
assignment executed after the beginning of the default but before the filing of the
cornplaint is even more acceptable.
l\ny implication by Defendants that the assignments were fraudulent because the
people: who executer them were employees of Ocwen Loan Servicing fails to recognize
the I ole of Joan servicers and the fact that Ocwen was evidently operating on behalf of
both Option One and Wells Fargo as noted in the addresses on the assignments.
Defendants' statement of errors makes a few arguments not based on alleged
problems with the assignments. In errors six and seven, Defendants take issue with the
Courl ',; supposed assumption of in personam jurisdiction over Defendants, particularly
6
with respect to Merritt, who did not sign the note. But this action only concerns a
foreclosure judgment regarding the property itself. Any deficiency judgment on the note
would be a separate proceeding. "It is well-established that an action in mortgage
foreclosure is strictly in rem and thus may not include an in personam action to enforce
personal liability." Newtown Vil!. P'ship v. Kimmel, 621 A.2d 1036, 1037 (Pa. Super. Ct.
199};.
Defendants also make what is framed as a standard of review argument,
suggesting that the Court did not view the evidence in the light most favorable to
Defendants. But because the validity and timing of the assignments are immaterial for the
reasons discussed above, the evidence to which Defendants point did not present any
genuine issue of material fact. See Bartlett v. Bradford Publ'g, Inc., 885 A.2d 562, 568
(PB. �;·Lp�:-. Ct. 2005) ("A material fact is one that directly affects the outcome of the case.
Dispi.ter: facts which are not critical lo the issue in the petition will not preclude
surnrnery judgment." (internal quotations and citations omitted)).
Defendants' final enumerated error concerns the rule of Borough of Nanty-Glo v.
American Surety Company ofNew York, 163 A. 523, 524 (Pa. 1932), a.s it relates to
Plai.ui ff' s reliance on an affidavit But Plaintiff did not rely solely on the affidavit.
Rather, in-court testimony, including that of Dixon himself, provided evidence that
Pl a: 11 i ff holds the original note and mortgage. Plaintiff is also entitled to rely on facts
established by Defendants' failure to effectively deny, in their Amended Answer, that the
loan is in default for failure to make monthly payments. See Pa. R.C.P. 1029(b).
Defendants' arguments against the assignments of the mortgage have been
repeatedly rejected both on their substance and because Defendants do not have standing
7
to challenge the assignments. Even if Defendants could point to some technical issue
preventing a judgment of foreclosure in this case, which they cannot, they have at no time
denie i that Defendant Dixon has failed to make mortgage payments since April 2013,
over fou: years ago. Under those circumstances, Dixon's statement that Plaintiff is
making an "attempt to steal my property" (Arg. Tr. May 9, 2016, at 8) rings quite hollow.
For the above reasons, the Court respectfully recommends that the instant appeal
The Prothonotary shall forward the file to the Superior Court forthwith.
BY THE COURT:
�j�
MADE�\J" S. FUDEMAN, J.
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