Neff, E. v. PNC Bank ( 2020 )

J-A29034-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ERIC SCOTT NEFF AND NAOMA D. : IN THE SUPERIOR COURT OF
NEFF : PENNSYLVANIA
:
Appellants :
:
:
v. :
:
: No. 728 WDA 2019
PNC BANK, NATIONAL :
ASSOCIATION, LUCILLE J. ONTKO :
AND CITIBANK, NATIONAL :
ASSOCIATION
Appeal from the Order Entered April 11, 2019
In the Court of Common Pleas of Butler County Civil Division at No(s):
A.D. No. 2012-11119
BEFORE: BENDER, P.J.E., KUNSELMAN, J., and PELLEGRINI, J.*
MEMORANDUM BY PELLEGRINI, J.: FILED FEBRUARY 20, 2020
Eric Scott Neff and Naoma D. Neff, husband and wife (Neffs),
appeal from an order of the Court of Common Pleas of Butler County
(trial court) denying their motion for summary judgment and granting
the motions for summary judgment of PNC Bank, N.A. and Lucille J.
Ontko (collectively, PNC) and Citibank, N.A. (Citibank).
I.
Like other cases involving the parties, this appeal arose out of the
Neffs’ desire to refinance a 2006 mortgage and loan (Loan) it had with
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* Retired Senior Judge assigned to the Superior Court.
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PNC Bank, National Association (PNC) that encumbered the property
they owned located on or near Saint Joe Road, Chicora, Pennsylvania,
16025 (Property). Within two weeks of the 2006 Loan’s closing, the
Neffs took steps to subdivide the 20-acre Property that had been used
to secure that Loan. (Record (R.) 634a-35a). Effective October 20,
2006, the Property was subdivided into two separate parts: (i) a 1.39-
acre parcel which retained the Property’s original tax ID number 250
1F104-3 (Parcel One) on which the house was located and, (ii) an
18.33-acre parcel that was given the new tax ID number 250 1F104-
3B (Parcel Two).
The Neffs contend that in early 2007, they spoke to a PNC branch
employee named Marilou Hollinger requesting an increase over the
2006 mortgage but only wanted to encumber Parcel One on which the
house stood. They also claim that Ms. Hollinger informed them that
PNC agreed that the 2006 mortgage would be secured only by Parcel
One. (R. 2156a).
At that time, PNC participated in an Expanded Credit Program
aimed at borrowers whose credit scores were too low to meet PNC’s
ordinary underwriting guidelines to refinance their home equity loans.
(R. 645a). Under this program, Citibank made the underwriting
decision about whether to extend the loan, but PNC made the loan. Id.
PNC employees communicated with borrowers, processed their loan
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applications, and did everything necessary to close the loans. (R. 645a,
1727a-28a.) After closing, PNC would assign the loan to Citibank,
which both owned and serviced it. (R. 645a).
On January 16, 2007, the Neffs executed a mortgage (Mortgage)
as security for payments and other obligations of the principal sum of
$256,498. Eric Scott Neff signed a promissory note on the same day
with the same terms and conditions. The loan was payable in equal,
consecutive monthly installments of principal and interest of $2,152.29.
Importantly, when the 2007 Mortgage was executed, it identified only
“Tax Parcel No. 250-1F104-3” (Parcel One) as being encumbered by
the Mortgage.
After closing on the 2007 Mortgage documents but prior to
recording, Lucille Ontko (Ontko), a clerk at PNC, added Tax Parcel No.
250-1F104-3B (Parcel Two) to the Mortgage in pen and ink prior to
recording. This addition meant the 2007 Mortgage encumbered the
same property subject to the prior 2006 mortgage.
On January 19, 2007, PNC assigned the mortgage, promissory
note and indebtedness to Citibank. The Neffs remained current on their
obligations until they missed the $2,834 monthly payment due in
February 2010. (R. 477a). The Neffs submitted a payment of $2,834
on or about March 17, 2010, but it was insufficient to cover both the
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payment missed in February 2010 and the payment due in March 2010.
Id.
On March 15, 2010, Mr. Neff sought a loan modification from
Citibank. He maintains that certain Citibank employees informed him
by phone that to be considered for a loan modification, he had to be in
arrears on the mortgage payments and they “strongly implied” that if
the Neffs allowed the Mortgage to go into default, they would be eligible
for a modification of the loan. Acting in reliance upon those
instructions, the Neffs contend that they stopped making the monthly
mortgage payments in order to be eligible for the loan modification.
They did not receive a mortgage modification from Citibank.
Because the Neffs failed to make the obligated monthly mortgage
payments as well as required escrow payments for real estate taxes
and insurance since April 2010, on June 27, 2011, Citibank filed a
complaint in mortgage foreclosure seeking foreclosure and sale of the
Property. Then, on October 3, 2011, Citibank assigned the Mortgage,
promissory note and indebtedness to PennyMac Corporation
(PennyMac), who then filed an amended complaint.1
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1PennyMac Corp v. Eric Scott Neff and Naoma D. Neff, Court of Common
Pleas of Butler County, No. 2011-10829. The trial court granted partial
summary judgment and ordered foreclosure against Parcel One. The Neffs
appealed to this court at 727 WDA 2019.
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Based on the aforesaid, the Neffs filed a five-count complaint
seeking compensatory and punitive damages2 of which only four are
before us in this appeal.3
 Count I is against PNC and Ontko claiming that PNC
breached the Mortgage contract by altering the Mortgage to
add Parcel Two to what was encumbered by the Mortgage
adding the additional parcel.
 Count II is a claim against the same defendants claiming
that they were fraudulently induced to sign the Mortgage
because they claimed that a PNC employee (Ms. Hollinger) had
persuaded them to sign the 2007 Note and Mortgage by
assuring them that the mortgage would apply only to Parcel
One, even though she allegedly knew that these assurances
were false. They also sought to hold Citibank liable for the
purported fraud on the theory that Ms. Ontko was acting as
Citibank’s agent.4
 Count III is a claim that Citibank made fraudulent
misrepresentations to Mr. Neff with regard to a mortgage
modification he was seeking. They alleged that Citibank
employees orally falsely told Mr. Neff (i) that to be considered
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2 The specific damages that they alleged are injury to their credit and
increased interest and insurance rates; inability to obtain financing for
personal and business needs; loss of a potentially lucrative oil and gas lease,
including bonus payments, royalties and possible well pad fees; possible loss
of the value of Parcels One and Two. In the event that the mortgage
foreclosure action is successful, punitive damages; attorneys’ fees and costs;
and such other and further damages as may become apparent.
3Count IV was a Slander of Title action that was dismissed by the trial court
because they failed in their complaint to point to any false statement published
by PennyMac. On appeal, we affirmed. Neff v. PennyMac Corp., No. 1568
WDA 2016, 2017 WL 2629458, at *1 (Pa. Super. Ct. June 19, 2017).
4Because of the way we have resolved this matter, we not need address
whether Ms. Ontko was Citibank’s agent when she made the alteration to the
Mortgage.
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for a loan modification, his loan had to be “in arrears,” (ii) that
he would “easily qualify” for a loan modification, (iii) that if he
accepted the terms proposed to him and made a mortgage
payment on June 30, 2010, no mortgage foreclosure process
would begin while his modification request was being
considered, and (iii) that his loan modification request was
“qualified” on Citibank’s computer. The Neffs contend that
relying on those false misrepresentations caused them to stop
making mortgage payments that led to foreclosure.
 Count V is a claim against Citibank, based on the same
allegations described in Count III that constituted a violation
of the Pennsylvania’s Unfair Trade Practices and Consumer
Protection Law. They also claimed that PNC’s alteration of the
Mortgage violated the same Act.
II.
A.
After the pleadings were closed, discovery commenced. Regarding
the negotiation and execution of the Mortgage, Mr. Neff testified that he went
to PNC's Moraine Pointe branch office and spoke with PNC's financial sales
consultant, Marilou Hollinger, about refinancing a 2006 mortgage on their
property that they had with PNC. That mortgage, entered into before the
Property was subdivided, necessarily encumbered both Parcels One and Two.
He testified that he had subdivided the Property and desired to have only one
parcel of their Property, the one upon which their home was located,
encumbered by the Mortgage, not the other 18.66-acre parcel and was
assigned No. 250-1F104-3B as its tax identification number (Parcel Two). (R.
909a-10a).
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Mr. Neff stated that Ms. Hollinger told him that she would need to have
this approved by others at PNC, and later Ms. Hollinger informed him that his
request for the loan to be secured only by the parcel on which his and his
wife's home was located had been approved. Id. He also testified that he
witnessed Ms. Holinger speak with Gino Perri, who worked in the Expanded
Credit Program with PNC, after which Ms. Hollinger confirmed that PNC was
willing to accommodate their request. (R. 2171a-72a).
He went on to testify that the Mortgage he and his wife executed at
closing clearly identified only Tax Parcel No. 250-1F104-3 (Parcel One) as
being the only parcel encumbered by the Mortgage. He testified that
sometime after they executed the Mortgage, the Mortgage was altered without
their knowledge or permission to add the 18.66-acre parcel of land to the
Mortgage in clearly visible pen and ink, Tax Parcel No. 250-1F104-3B (Parcel
Two). (R. 912a–13a).
Both Neffs testified that the Mortgage documents presented to them at
closing did not contain Exhibit A to the mortgage. (R. 912a). They admitted,
though, that they did not believe that PennyMac had any direct involvement
in altering the mortgage. They also admitted that they had no contact with
Ontko, the person at PNC who made the alteration. (R. 936a-37a).
Ms. Hollinger, in her deposition, testified that she could not remember
whether the Neffs told her that they only wanted one parcel encumbered by
the Mortgage or that the Property was subdivided for that purpose. (R. 2319a-
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23a). She testified that mortgage documents for mortgages originating from
her office are prepared by the mortgage department at PNC Bank and she
simply has the borrowers execute the documents at closing. She testified that
at the time the Mortgage was executed, the alteration was not present and
she did not know who made it. (R. 2317a-18a). She testified that she did
not know or have not have any contact with Ms. Ontko, the person who had
made the alteration. (R. 2241a, 2249a-50a).
Lucille Ontko testified that she had no contact with the Neffs or Ms.
Hollinger about this transaction, and that she was not aware that a subdivision
had occurred or that the Neffs allegedly wanted only one parcel listed on the
Mortgage. (R. 2213a-14a). She also testified that her sole responsibility with
PNC was to review mortgages for accuracy using property/collateral
information provided to her by the bank and underwriting prior to recording,
and to correct any errors on the face of mortgages based upon the
property/collateral information she had. (R. 2212a-14a.). Her alteration on
the Mortgage was simply intended to correct an error because she believed,
based upon the Property report, that the second tax parcel number should be
listed on the Mortgage prior to recording. (R. 335a, 337a-39a). She also
testified that she made those changes without consultation with anyone else.
(R. 2209a, 2012a). She was unaware that adding the second parcel number
to the Mortgage was contrary to the Neffs’ alleged intent. (R. 2217a-18a).
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Gino Perri, who worked in the Expanded Credit Program with PNC at the
time, confirmed that Ms. Ontko’s role was to correct errors on the documents
and the property information report provided to her. He does not recall any
communication with the Neffs or Ms. Ontko during the transaction or Mortgage
(R. 2337a-39a). He does not remember Ms. Hollinger or speaking with her
during the process of this transaction. (R. 2329).
B.
Regarding his claim that misrepresentations by Citibank employees
caused him to stop making payments, in his deposition, Mr. Neff testified
that he called Citibank to inquire about getting the interest rate on his loan
reduced. He contended that he spoke with an agent, servant and/or
employee of Citibank who identified herself as “Victoria.” He testified that
Victoria told him that he had to get behind on the loan payments before
Citibank could modify his loan. (R. 915a). Based upon the “tone” of the
conversation, he testified that he believed that Victoria was encouraging him
that this was the path he should follow to get the lower rate.
Contending that he acted on reliance upon Victoria's statement that if
he got behind on his payments on the loan, he could be eligible for a loan
modification, Mr. Neff testified that he stopped making the loan payments in
order to be eligible for a loan modification. Id. He contended that in the
months that followed, he had numerous telephone calls and e-mail and fax
communications with Citibank representatives, most of whom either
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reiterated the remarks of their colleagues or otherwise assured and
reassured Mr. Neff that he would “easily qualify” for a loan modification, and
that it was not necessary that he make payments on the loan as his
modification request was being considered, as they would be added on at
the end of the loan period, and that no foreclosure action would commence
while his request for loan modification was being considered. See Affidavit
of Eric Scott Neff dated October 2, 2018. (R. 814a).
As outlined in its brief and from our independent review, the numerous
contacts that Mr. Neff had with Citibank and its contemporaneous business
records of notes of the phone calls between Mr. Neff and Citibank show that
on March 26, 2010, Mr. Neff called Citibank to inquire about possible
payment relief options. (R. 438a-39a). A Citibank representative suggested
that Mr. Neff submit an online application for mortgage assistance. Id. Mr.
Neff followed up with a call to Citibank in April 2010 to inquire about what
loss mitigation options might be available. (R. 440a-42a). A Citibank
representative told Mr. Neff that he was “not prequalified” for a modification
under the federal government’s Home Affordable Modification Program
(HAMP),5 and that there were “no other options available” for accounts that
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5 HAMP aims to provide relief to borrowers who have defaulted on their
mortgage payments or who are likely to default by reducing mortgage
payments to sustainable levels. See HSBC Bank v. Donaghy, 101 A.3d 129
(Pa. Super. 2014).
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were current. Id. At that time, HAMP was available to borrowers who were
“in default” or “at imminent risk of default.” (R. 647a, 649a).
Citibank’s contemporaneous business records showed that on May 5,
2010, Mr. Neff again spoke with a Citibank representative about a loan
modification. (R. 446a-48a). During this call, Citibank suggested that Mr.
Neff consider establishing recurring payments for the account. (R. 446a-
48a). Those records showed Mr. Neff “declined,” stating that he did not
“know when he is going to make another [payment] on this account” and
that he wanted to wait until after he spoke with someone in Citibank’s loan
modification department. Id. One week later, Mr. Neff called Citibank and
told representatives that “he does not want to get [the] loan caught up &
not get [a] mod[ification].” (R. 443a-45a). During that call, the Citibank
representative explained to Mr. Neff that a payment was still due. Id.
Throughout June 2010, Citibank repeatedly urged Mr. Neff to make his
regular mortgage payments. On June 7, 2010, Mr. Neff called Citibank to
complain about receiving “collection calls even though he is working on a
modification. (R. 453a-54a). The Citibank representative explained that
regular payments “are to be m[ade] until” he receives a “letter telling him
to start mod trial [payments].” Id. A few days later, Mr. Neff announced
that he refused to make any further payments “because of the high interest
rate.” (R. 451a-52a). The Citibank representative explained that the
monthly payments were still due despite the Neffs’ efforts to obtain a loan
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modification. Id. Mr. Neff disagreed, claiming that he had been “told that
he would only have to make a lower trial [payment] amount once that is
determined.” Id. The Citibank representative “apologized” and said that
Mr. Neff “was misinformed.” Id. Mr. Neff hung up before any further
clarification could be given. Id.
On June 29, 2010, Mr. Neff called Citibank “to talk about what he felt
was supposed to happen” regarding his loan modification. (R. 455a-56a).
Mr. Neff stated “he was supposed to get a rate reduction as of June 4th and
still hadn’t heard anything.” Id. The Citibank representative explained to
Mr. Neff that he was mistaken and that his request for a loan modification
had not yet been sent to him. He advised Mr. Neff that a monthly payment
was needed “by tomorrow” to prevent the account from “being assigned for
foreclosure.” Id. The Neffs made a single regular payment approximately
one week later, on July 8, 2010. (R. 475a). Even after making this payment,
they were still three months behind on their payments. (R. 469a-75a).
In July 2010, a HAMP application was sent to the Neffs. On or about
July 22, 2010, the Neffs submitted a HAMP loan modification application to
Citibank. (R. 524a-25a). On the first page of the application, the Neffs were
asked whether the property was “Owner Occupied,” “Renter Occupied” or
“Vacant.” The Neffs marked “Owner Occupied” with a notation “part-time
due to working out of town.” (R. 524a). On the next page, however, the
Neffs certified “under penalty of perjury” that “my property is owner-
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occupied” and that they intended “to reside in this property for the next
twelve months.” (R. 525a.) At that time, HAMP was limited to “owner-
occupied single family properties” and Citibank was required to verify
“occupancy.”
However, at the time they submitted their HAMP application to
Citibank, the Neffs were living at their home in Tennessee for much of the
year. (R. 578a, 587a-89a). The letter that Citibank sent to Mr. Neff along
with the HAMP application explained that they should complete the
application and provide “the required documentation of your income” so that
Citibank could determine if the Neffs “meet the eligibility criteria” for a HAMP
loan modification. (R. 527a). The letter also instructed the Neffs to
“[c]ontinue to pay your current monthly mortgage payments” while their
application was pending. Id. It explained that “[i]f you meet the eligibility
criteria, you will be offered a Trial Period Plan” under which the “monthly
trial period payments will be based on the income documentation that you
provide” and would be an “estimate of what your payments will be if we are
able to modify your loan under the terms of the program.” Id. The letter
also explained that Citibank would not “determine whether you qualify for a
Home Affordable Modification of your loan” until after “we receive all of your
documentation and verify your information.” (R. 530a). Finally, Citibank
stated that if plaintiffs did “not qualify for a loan modification” then Citibank
would “work with you to explore other options.” (R. 527a, 537a).
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Citibank records then showed that throughout the second half of 2010
and early 2011, Citibank worked with Mr. Neff to collect the information it
needed to evaluate the Neffs’ eligibility for a loan modification. (R. 435a-
36a, 460a-61a, 527a-44a). On or about March 1, 2011, Citibank discovered
that the Neffs’ home on Parcel One was vacant. It determined that Mr. Neff
did not qualify for any kind of loan modification because “[n]either HAMP or
a Supplemental Mod policy allow for the property to be vacant.” (R. 432a,
434a). Days later, a Citibank representative spoke with Mr. Neff to inform
him that his request for a modification “has been declined due to the property
being vacant.” (R. 431a). During this call, Mr. Neff acknowledged, “there’s
nobody in the home,” but claimed that the Neffs were “moving back in a
month.” In July 2011, Mr. Neff spoke with a Citibank representative and said
that he “was temporarily reassigned out of state” but that he would be
returning to the Property in approximately “45 days and would then be
interested in pursuing [a] mod again.” (R. 428a). In fact, the Neffs did not
return to permanently reside in Pennsylvania until 2014. (R. 589a).
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III.
After discovery was closed, motions for summary judgment were filed
by the parties.6 In its motion for summary judgment, PNC contended that
there is no material fact that would establish that:
 It intended to defraud the Neffs;
 They engaged in any deceptive conduct cognizable under
the Unfair Practice Act;
 That any damages were caused by the alteration of
mortgages but stem from the foreclosure action due to the Neff’s
failure to pay their mortgage; and
 That there was any breach of contract because of Ontko’s
alteration because, again, any claimed damages stem from the
foreclosure action.
Citibank argued that it was entitled to summary judgment for similar
reasons contending that the Neffs could not establish that it:
 made a false statement with the intent to deceive or that
their injury was proximately caused by the fraud;
 made a false representation in regard to their loan
modification request because there is no evidence of any intent to
mislead, that there was a lack of justifiable reliance on the Neffs’
part, and, even if a misrepresentation occurred, there was a lack
of proximate causation for any damages that they incurred;
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6 The Neffs also filed a motion for summary judgment claiming that PNC would
be unable to establish the elements necessary to proceed with a counterclaim
for reformation of the Mortgage because they impermissibly altered the
Mortgage. We have dealt with that issue in PennyMac Corp v. Eric Scott
Neff and Naoma D. Neff, 727 WDA 2019 (filed ______. 2020).
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 engaged in any deceptive conduct cognizable under the
UTPCPL in connection with the origination of the 2007 Mortgage
or the 2010 request for loan modification, no justifiable reliance,
and that the damages alleged are not an “ ascertainable loss
of money or property” as required by the UTPCPL.
The trial court granted PNC and Citibank’s motions for summary
judgment as to all counts.7 As to PNC, the trial court found that the facts of
record did not support a fraud claim because there was no evidence that PNC
or any PNC employee or agent made any misrepresentations or intended to
deceive the Neffs during any discussions about the Mortgage. It pointed out
that the Neffs only spoke with Ms. Hollinger regarding the terms of the
Mortgage and there was no evidence that she made a false representation. It
also pointed out that the Neffs did not have any communication, directly or
indirectly, with Ms. Ontko regarding the Mortgage, which meant that Ms.
Ontko could not have made any misrepresentations to the Neffs. The trial
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7 “When a party seeks summary judgment, a court shall enter judgment
whenever there is no genuine issue of any material fact as to a necessary
element of the cause of action or defense that could be established by
additional discovery. A motion for summary judgment is based on an
evidentiary record that entitles the moving party to a judgment as a matter
of law. In considering the merits of a motion for summary judgment, a court
views 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. Finally, the court may grant summary judgment
only when the right to such a judgment is clear and free from doubt. An
appellate court may reverse the granting of a motion for summary judgment
if there has been an error of law or an abuse of discretion.” Swords v.
Harleysville Insurance Companies, 883 A.2d 562, 566–67 (Pa. 2005)
(citations omitted).
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court also found that there was no violation of Pennsylvania’s Unfair Trade
Practices and Consumer Protection Law (UTPCPL), 73 P.S. §§ 201-1, et seq.,
because there was no evidence of deceptive conduct by Ms. Hollinger, Ms.
Ontko or any other PNC employee.
It went on to find that alleged damages were caused by the Neffs’ failure
to make payments resulting in the mortgage foreclosure action because they
were not even aware of the alteration to the Mortgage when they decided to
stop making mortgage payments. Correspondingly, it also found that there
was no breach of contract because there was no causal connection between
the material alteration of the Mortgage and the damages they claim because
those damages stem from the foreclosure action, not from the alleged
alteration of the Mortgage.
As to Citibank, the trial court concluded that there was no evidence of
any misrepresentations or deception by Citibank with respect to the
documentation of the 2007 Mortgage or Mr. Neff’s efforts to obtain a loan
modification. (R. 2918a-19a). The court found no evidence to support the
Neffs’ assertion that Ms. Ontko was acting as an agent for Citibank when she
altered the 2007 Mortgage. After the trial court denied their motion for
summary judgment, the Neffs filed this appeal.
IV.
On appeal, the Neffs contend that the trial court erred in granting PNC
and Citibank’s motions for summary judgment because neither PNC nor
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Citibank intended to engage in a fraudulent representation of the terms of the
Mortgage. They argue that the trial court erred because they did not plead a
claim in fraudulent representation but, in fraud, which is broader than
fraudulent representation. Citing to La Course v. Kiesel, 77 A.2d 877 (Pa.
1951), “the word ‘fraud’ is a generic term which embraces a great variety of
actionable wrongs and may be actual or constructive accordingly as it is
knowingly or innocently made.” Here, they contend that the fraud that PNC
and Citibank committed is when Ms. Ontko altered the Mortgage after it had
been executed. (R. 404a). Simply, the Neffs now contend that even if the
alteration of the Mortgage by adding Parcel Two was a mistake, innocently
made, nonetheless, PNC and Citibank still committed fraud.
In Delahanty v. First Pennsylvania Bank, 464 A.2d 1243, 1251–
1252 (Pa. 1983), our Supreme Court provided an expansive definition of what
is “fraud in general” as follows:
Fraud consists of anything calculated to deceive, whether by single
act or combination, or by suppression of truth, or suggestion of
what is false, whether it be by direct falsehood or by innuendo, by
speech or silence, word of mouth, or look or gesture. It has been
said that fraud may induce a person to assent to something which
he would not otherwise have done, or it may induce him to believe
that the act which he does is something other than it actually is.
To be actionable, the misrepresentation need not be in the form
of a positive assertion. It is any artifice by which a person is
deceived to his disadvantage. It may be by false or misleading
allegations or by concealment of that which should have been
disclosed, which deceives or is intended to deceive another to act
upon it to his detriment. It is well settled that fraud is proved
when it is shown that the false representation was made
knowingly, or in conscious ignorance of the truth, or recklessly
without caring whether it be true or false. It has also been
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established that “the deliberate nondisclosure of a material fact
amounts to a culpable misrepresentation no less than does an
intentional affirmation of a material falsity.” Neuman v. Corn
Exchange National Bank & Trust Co., 356 Pa. 442, 450–52, 51
A.2d 759, 764 (1947). Yet, a misrepresentation innocently
made is also actionable if it relates to a matter material to
the transaction involved; while if the misrepresentation is made
knowingly or involves a non-privileged failure to disclose,
materiality is not a requisite to the action. The elements of fraud
are as follows: “ ‘there must be (1) a misrepresentation, (2) a
fraudulent utterance thereof, (3) an intention by the maker that
the recipient will thereby be induced to act, (4) justifiable reliance
by the recipient upon the misrepresentation, and (5) damage to
the recipient as the proximate result.’ ” “[I]f [a]
misrepresentation is knowingly made or involves a non-privileged
failure to disclose, materiality is not a requisite to the action.”
Shane v. Hoffmann, supra 227 Pa. Super. at 182, 324 A.2d at
536, citing DeJoseph v. Zambelli, 392 Pa. 24, 139 A.2d 644
(1958).
***
A misrepresentation is material when it is of such a character that
if it had not been made, the transaction would not have been
entered into. (Citations omitted; emphasis added).
While Delahanty set forth this expansive definition of fraud, in Bortz
v. Noon, 729 A.2d 555, 560 (Pa. 1999), our Supreme Court refined that
definition by explaining that “fraud” can be made out under three different
types of misrepresentation:
1. intentional or fraudulent misrepresentation - occurs when a party
to a contract knowingly makes an untrue statement of fact which
induces the other party to enter that contract. Id. at 560; Gibbs
v. Ernst, 538 Pa. 193, 207, 647 A.2d 882, 889 (1994), citing,
Restatement (Second) of Torts § 525 (1977).
2. Negligent misrepresentation - occurs when there is a
misrepresentation of a material fact where the person, under the
circumstances ought to have known its falsity and is made with
the intent to induce the other party to act. Bortz at 561. See
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Restatement (Second) Torts § 552. See, e.g., DeJoseph v.
Zambelli, 392 Pa. 24, 139 A.2d 644 (1958). Moreover, like any
action in negligence, there must be an existence of a duty owed
by one party to another. Id.
3. Innocent misrepresentation - occurs when the person making the
material misrepresentation had reasonable grounds for believing
it was true at the time that induced the other party to enter into
the contract. Bortz at 563-564. See, e.g., DeJoseph v.
Zambelli, 392 Pa. 24, 139 A.2d 644 (1958); La Course.
While the Neffs have previously advanced a fraudulent inducement
claim which requires an intentional misrepresentation,8 they appear now to
shift their argument to one that Ms. Ontko’s alteration of the Mortgage to
encumber Parcel Two, even though innocently made, was nonetheless
actionable fraud.
Because the addition of Parcel Two was a material representation, the
Neffs were only required to establish that PNC and/or Citibank made a
misrepresentation to them that caused them to enter into the Mortgage that
they otherwise would not have entered. A misrepresentation is “[a]ny
manifestation by words or other conduct by one person to another that, under
the circumstances, amounts to an assertion not in accordance with the facts.
An untrue statement of fact. An incorrect or false representation. That which,
if accepted, leads the mind to an apprehension of a condition other and
different from that which exists.” Black's Law Dictionary 1001 (6th ed.
____________________________________________
8Paragraph 58 of their amended complaint provides that the Mortgage was
“wrongfully, fraudulently, dishonestly and deceitfully altered . . . “
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1990); Office of Disciplinary Counsel v. Anonymous Attorney A, 714
A.2d 402, 405 (Pa. 1998).
When the Mortgage was executed, it only encumbered what the Neffs
agreed was to be encumbered - Parcel One. Necessarily, that means that no
PNC employee could have made a material misrepresentation to them up until
the Mortgage was executed. The purported fraud - Ms. Ontko’s alteration -
while it may or may not have been improper – could not be considered fraud
of any sort because she made no misrepresentation to the Neffs because they
had no contact whatsoever with her. Accordingly, the trial court did not err in
dismissing the fraud count.
V.
The Neffs also contend that the trial court erred in granting PNC’s
summary judgment claim on violations of the UTPCPL. PNC claims there is no
evidence that any PNC employee engaged in any deceptive conduct.
The objective of the UTPCPL to “place on more equal terms seller and
consumer.” Commonwealth v. Monumental Prop., Inc., 329 A.2d 812,
816 (Pa. 1974). Specifically, Section 3 of the UTPCPL provides that “[u]nfair
methods of competition and unfair or deceptive acts or practices in the conduct
of any trade or commerce as defined by ... section 2 of th[e] act and
regulations promulgated under section 3.1 of this act are hereby declared
unlawful.” 73 P.S. 201–3. Section 2 of the UTPCPL enumerates 17 specific
acts which constitute unfair or deceptive acts or practices. The Neffs contend
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that PNC’s conduct falls within the catch-all provision which makes unlawful
“[e]ngaging in any other fraudulent conduct which creates a likelihood of
confusion or of misunderstanding.” 73 P.S. § 201-2(4)(xxi).
In Bennett v. A.T. Masterpiece Homes, 40 A.3d 145 (Pa. Super.
2012), we held that a consumer was not required to prove that the business
acted with the intent to defraud in order to state a claim under the catch-all
provision. However, we did not address whether there would be good faith
defenses available even if their conduct created a misunderstanding. We
answered that question in Gregg v. Ameriprise Financial, Inc., 195 A.3d
930 (Pa. Super. 2018), reargument denied (Nov. 21, 2018), permission
for allowance of appeal granted, 216 A.3d 222 (Pa. 2019), where we held
that the catch-all provision imposed strict liability on businesses. We held that
if there is a likelihood of confusion or misunderstanding by the consumer, it
does not matter whether the conduct was “committed intentionally (as in a
fraudulent misrepresentation), carelessly (as in a negligent
misrepresentation), or with the utmost care (as in strict liability).” 195 A.3d
at 939. In other words, a consumer need not establish that the business was
negligent or acted intentionally. Rather, to succeed on a claim under the
catch-all provision, a consumer need only prove that the business’s conduct
“has the tendency or capacity to deceive.”
We reasoned that if the General Assembly had intended to limit the
catch-all provision to negligent misrepresentation claims, it could have
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outlawed only “fraudulent or negligent conduct” rather than “any deceptive
conduct.” We went on to observe that a UTPCPL violation “is not amenable to
excuses” because a commercial transaction “occurs in a designed setting
entirely of the vendor’s creation via preplanned marketing schemes.” We
noted that consumers are at a disadvantage because they “may be especially
reliant upon a vendor’s specialized skill, training and experience in matters
with which consumers have little or no expertise.” As a result, we held that
“the legislature has placed the duty of UTPCPL compliance squarely and solely
on vendors.”
The Neffs contend that there is substantial evidence of deceptive
conduct by PNC in the origination and post-closing alteration of their
Mortgage. They contend that the communications they had with Ms. Hollinger
were that they intended to limit the coverage of the Mortgage to only Parcel
One and Mr. Perri approved that request. (R. 908a-09a). They also contend
that PNC drafted the closing documents and that it is undisputed that the
Mortgage that they executed only encumbered Parcel One, and it undisputed
that Ms. Ontko added Parcel Two post-closing.
However, accepting all of that as true, as well as recognizing that there
is strict liability under the UTPCPL for any conduct that deceives or creates a
misunderstanding, the Neffs are still required to establish that they were
deceived in entering the Mortgage.
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Again, at the time the Mortgage was executed, there is no evidence
that any one was deceived as to what the Mortgage encumbered simply
because it encumbered what the Neffs, Ms. Hollinger and Mr. Perri all agreed
to encumber. Any purported harm to them was caused by Ms. Ontko’s
alteration by adding Parcel Two after the Mortgage had been executed. A
misrepresentation requires someone to convey by word or action something
that is not true, causing that person to act in reliance on that
misrepresentation. Because the Neffs never had any contact whatsoever with
Ms. Ontko, there is no way that she could have deceived them or created
some misunderstanding on their part. Accordingly, because they have failed
to establish any deception or misunderstanding at all by PNC and/or Citibank
that caused them to enter into the Mortgage as a result of Ms. Ontko’s
unilateral alteration, they have failed to make out a claim under the UTPCPL.
VI.
As to the trial court’s grant of summary judgment on the breach of
contract claim, the Neffs are required to establish (1) the existence of a
contract; (2) the breach of a duty imposed by the contract; and (3) the
resultant damages. Burlington Coat Factory of Pennsylvania, LLC v.
Grace Const. Mgmt. Co., LLC, 126 A.3d 1010, 1018 (Pa. Super. 2015).
“Resultant damages” are those “damages suffered from the breach.” 412 N.
Front St. Assocs., LP v. Spector Gadon & Rosen, P.C., 151 A.3d. 646, 657
(Pa. Super. 2016) (quoting from McShea v. City of Philadelphia, 995 A.2d
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334, 340 (Pa. 2010). See also, Logan v. Mirror Printing Co. of Altoona,
Pa., 600 A.2d 225, 226 (Pa. Super. 1991) (“In order to recover for damages
pursuant to a breach of contract, the plaintiff must show a causal connection
between the breach and the loss.”).
The Neffs contend that the trial court erred in granting PNC’s motion
because any damages they claimed from a change in oil and gas lease terms
stemmed from the mortgage foreclosure action, not the alteration of the
Mortgage. It is undisputed that the Neffs have entered into the following
oil and gas leases since the Mortgage was recorded encumbering both
properties:
 In January 2007, after the Property had been subdivided,
the Neffs granted a mineral lease on the entire property to Phillips
Production Company. (R. 2386a, 2388a).
 After the commencement of the foreclosure action, the Neffs
negotiated with XTO a new oil and gas lease (New Lease), dated
January 27, 2012, to replace the existing 52-acre lease. (R.
2281a-85a). Upon discovering the pending foreclosure action,
XTO declined to approve the New Lease. (R. 2390a).
 The Neffs then entered into a 32-acre lease with XTO
covering parcel 1F104-4 dated February 22, 2012 (“First Lease”).
(R. 2292a-96a). The First Lease had the same royalty and rental
payment terms as the unapproved New Lease. (R. 2281a-85a and
2292a-96a).
 Over a year later, the Neffs leased their remaining 20 acres
with XTO (Second Lease). (R. 2306a-08a).
They contend that as a direct result of the Mortgage alteration, the
negotiated terms between the First Lease were less favorable than the Second
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Lease causing them direct and substantial damages. However, the evidence
shows no such correlation.
What the evidence shows is that the foreclosure action and the alteration
of leases occurred prior to the negotiations of all three leases with XTO. In a
February 1, 2012 letter to the Neffs from Holland Services, XTO’s leasing agent
states that the New Lease was not approved because of the pending
foreclosure action, stating:
on review of the property title, our Title Department has found a
pending foreclosure which has the possibility of taking ownership
out of your name. Until foreclosure proceedings are completed,
we are unable to approve your lease. (R. 2390a).
John Maloy, XTO’s corporate designee, also testified that XTO’s decision
not to approve the New Lease was related entirely to the foreclosure
proceedings. (R. 2401a at 53:2-10). Mr. Maloy found no evidence in XTO’s
records indicating that XTO had any concerns about the alleged alteration of
the 2007 Mortgage. Nor did he have any independent knowledge of any such
concern by anyone at XTO. (R. 2401a at 53:6-10). He went on to testify that
the Neffs’ various oil and gas leases were set to expire and would not be
renewed because their Property was outside of unitized acreage. This decision
had nothing to do with any litigation. (R. 2397a at 29:12-30:1; R. 2399a at
46:10; and R. 2400a at 47:21).
Because there is no evidence to show that XTO’s decision to not approve
the New Lease had anything to do with PNC and/or Ms. Ontko’s alleged
“alteration” of the 2007 Mortgage or that anything other than the foreclosure
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action was the reason it did not approve the New Lease, none of the Neffs’
claimed damages flow from the alteration of the lease. Accordingly, because
no damages flow from the alteration of the Mortgage, the trial court properly
entered summary judgment to PNC on the breach of contract claim.
VII.
The Neffs contend that the trial court erred in dismissing their UTPCPL
claim because there was no evidence of fraud, misrepresentation or deception
on the part of Citibank. They contend that there is sufficient evidence to show
that Citibank made material misrepresentations when they told Mr. Neff:
 that to be considered for a loan modification, his loan had to be
“in arrears;”
 that he would “easily qualify” for a loan modification; and
 that if he accepted the terms proposed to him and made a
mortgage payment on June 30, 2010, no mortgage foreclosure
process would begin while his modification request was being
considered.
The Neffs contend that they relied on those misrepresentations that
caused them to stop making mortgage payments that led to foreclosure that
led to their purported damages.
As to the representation that Mr. Neff had to get behind on payments to
be eligible for loan relief, he stated that “Victoria," a Citibank employee, told
him that he had to get behind on the loan payments before Citibank could
modify his loan and based upon the “tone” of the conversation, he believed
that Victoria was encouraging him to do so and that this was the path that he
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should follow to get the lower rate which he sought. Deposition of Eric Scott
Neff at 62-65 (R. at 915a).9
Even if Mr. Neff’s subjective interpretation of a “tone” in a person’s voice
was sufficient for him that he needed to “get behind” on his loan payments in
order to be eligible for a loan modification, that was not a misrepresentation.
At that time, eligibility for a HAMP loan modification required that the
borrower be “in default” or “at imminent risk of default.” (R. 647a). Because
the purported representations as Mr. Neff himself described were not false, he
was not deceived in that claim. See, e.g., Walkup v. Santander Bank,
N.A., 147 F. Supp. 3d 349, 362 (E.D. Pa. 2015) (“All Plaintiffs have alleged is
that PHH told them—accurately—that they could not be considered for HAMP
modification while their loan payments were current … a factual response
about HAMP eligibility in response to Plaintiffs’ loan modification inquiry is not
deceptive.”); Rich v. BAC Home Loans Servicing LP, 2014 WL 7671615, at
____________________________________________
9 “[L]oan history documents are records of regularly conducted activity, or
business records, and would be admissible at trial with proper foundation.”
Bank of Am. v. Gibson, 102 A.3d 462, 467 (Pa. Super. 2014) (citing Pa.R.E.
803(6) (affirming summary judgment); MB Fin. Bank v. Rao, 201 A.3d 784,
789-790 (Pa. Super. 2018) (trial court erred in declining to apply hearsay
exception to bank’s authenticated business record). Recently, the
Pennsylvania Supreme Court held that the business records exception to the
hearsay rule extends to business records generated by a prior loan servicer.
Bayview Loan Servicing LLC v. Wicker, 206 A.3d 474, 486 (Pa. 2019).
Thus, there can be no doubt that Citibank’s business records were admissible
to show what the parties said to one another.
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*9 (D. Ariz. Oct. 9,2014), aff’d, 666 F. App’x 635 (9th Cir. 2016) (“[the bank
representative] was correct that Plaintiffs could be considered for HAMP only
if they were behind on at least two mortgage payments”). We also note that
at the time he made his first inquiry, he was already two months behind on
his loan payments.
As a result of his inquiry, Mr. Neff received the HAMP application,10 and
the letter Citibank sent to him with the HAMP application, explained, among
other things, that they should “[c]ontinue to pay your current monthly
mortgage payments” while their application was pending. Id.
Mr. Neff alleges that Citibank representatives purportedly told him that
he could “easily qualify” for a loan modification and, once approved, he could
“start over clean.” (R. 152a-53a). However, the Neffs do not contend that
Citibank representatives guaranteed that they would receive a loan
modification. At no point did Citibank tell the Neffs that they were approved
for a modification. (R. 579a). As Mr. Neff acknowledged: “Nobody said
____________________________________________
10
The Neffs contend that they were erroneously routed into Citibank’s program
set up pursuant to HAMP, a federal program to allow lenders to service
homeowners who had defaulted on their mortgage payments or were likely to
do so. Mr. Neff contends that all he was seeking was rate relief from the terms
of the existing Mortgage. We do not see how that is a misrepresentation
within the meaning of the UTPCPL. In any event, the letter sent by Citibank
with his HAMP application stated that if they did “not qualify for a loan
modification” then Citibank would “work with you to explore other options.”
(R. 527a, 537a).
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‘you’re qualified.’ No one told me that.” (R. 576a). At most, Citibank stated
that “if approved” the Neffs would “start over clean.” (R. 153a).
Moreover, a person cannot qualify for a HAMP loan modification when
he does not meet one of its prerequisites. At the time of their application,
HAMP only applied to owner-occupied properties. In their July 2010 HAMP
application, the Neffs indicated under the penalty of perjury that the Property
was “Owner Occupied” with a notation “part-time due to working out of town.”
They also certified that they intended “to reside in this property for the next
twelve months.” (R. 525a). Citibank was required to verify “occupancy.”
At the time the Neffs submitted this HAMP application in July 2010,
they were living at their home in Tennessee for much of the year. (R. 578a,
587a-89a). When Citibank determined that the Property was vacant, they
determined that Mr. Neff did not qualify for any kind of loan modification
because “[n]either HAMP nor a Supplemental Mod policy allow for the
property to be vacant.” (R. 432a, 434a). During this call informing him that
his application had been denied because the Property was vacant, Mr. Neff
acknowledged that “there’s nobody in the home,” but claimed that they were
“moving back in a month.” In July 2011, Mr. Neff spoke with a Citibank
representative and said that he “was temporarily reassigned out of state”
but that he would be returning to the Property in approximately “45 days
and would then be interested in pursuing [a] mod again.” (R. 428a). In
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fact, the Neffs did not return to permanently reside in Pennsylvania until
2014. (R. 589a).
Finally, the Neffs claim that they were told that Citibank “would not
commence a mortgage foreclosure proceeding while Eric Scott Neff was being
considered for a loan modification.” (R. 154a). However, Citibank did not
begin foreclosure proceedings until after the Neffs modification application was
denied: the denial occurred on or around March 1, 2011, and the foreclosure
action was filed in April 2011. (R. 432a, 53a).
Because there is no evidence that Citibank made any misrepresentation
or engaged in any deceptive conduct, the trial court properly granted
summary judgment on the UTPCPL claim in regard to the Neffs’ loan
modification on the part of Citibank.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/20/2020
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