Devon Service, LLC v. Herman, J. M. ( 2020 )

J-A20015-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DEVON SERVICE, LLC, AN : IN THE SUPERIOR COURT OF
ASSIGNEE OF CUSTOMERS BANK, : PENNSYLVANIA
SUCCESSOR TO BERKSHIRE BANK :
:
Appellee :
:
v. :
:
JOHN M. HERMAN A/K/A JOHN :
HERMAN :
:
Appellant : No. 2103 MDA 2016
Appeal from the Judgment Entered December 20, 2016
In the Court of Common Pleas of Berks County
Civil Division at No(s): 14-18895
BEFORE: GANTMAN, P.J., PANELLA, J., and FORD ELLIOTT, P.J.E.
MEMORANDUM BY GANTMAN, P.J.: FILED MARCH 26, 2020
Appellant, John M. Herman a/k/a John Herman, appeals from the
deficiency judgment entered against him, in the Berks County Court of
Common Pleas, in favor of Appellee, Devon Service, LLC (“Devon”), an
assignee of Customers Bank, Successor to Berkshire Bank. We affirm.
In its opinion, the trial court fully and correctly set forth the relevant
facts and procedural history of this case as follows:
[Appellant] secured a Commercial Line of Credit Agreement
with Berkshire Bank in a principal amount up to
$250,000.00 in October 2005. As security for the
commercial line of credit, [Appellant] granted an open-
ended mortgage (Mortgage) on [Appellant’s] real property
at 41-45 North 23rd Street, Mt. Penn, Berks County,
Pennsylvania (Premises). The Mortgage was recorded on
March 7, 2006, as Instrument #2006022875. The Credit
Agreement was subsequently modified in [the] name of
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Customers Bank, as successor to Berkshire Bank, in
February 2012, with a Change in Terms Agreement and a
restated Promissory Note. In October 2013, Customers
Bank made demand under the Note for payment of the full
balance of the Note and when the balance was not paid by
[Appellant], the Note and Mortgage were placed into
default. [Appellant] and Customers Bank entered into an
agreement whereby [Appellant] consented to the Bank’s
filing a mortgage foreclosure action upon the Premises and
the entry of a judgment in foreclosure by consent order.
The mortgage foreclosure action was filed to docket number
13-24770 in the Court of Common Pleas of Berks County
with a stipulated entry of judgment. On or about February
4, 2014, Customers Bank, for value received, assigned all
of its right, title, and interest in and to the Note and the
Mortgage, as well as to the Judgment, to [Devon]. Devon
purchased the Premises at sheriff’s sale on February 7,
2014[, for $3,700.00]. Devon then proceeded under the
foreclosure docket by filing a Petition to Fix Fair Market
Value (Fair Market Value Petition).
Counsel for [Devon] served the Fair Market Value
Petition…on July 10, 2014, along with a Rule to Show Cause,
Notice to Defend and a Proposed Order by certified mail
return receipt requested to [Appellant] at 3970 Perkiomen
Avenue, Reading, PA 19606. On August 14, 2014, [Devon]
served [Appellant] by mail, at the same address, with a
Motion for an Order Making the Rule to Show Cause
Absolute.[1] On August 20, 2014, the [court] entered an
order fixing the fair market value of the property at
$181,046.02. [Appellant] did not appeal that order.
[Devon] filed a Complaint in September 2014[,] to docket
number 14-18895 seeking to recover a deficiency judgment
____________________________________________
1 In the foreclosure action, Appellant agreed to accept service at his business
address. Devon filed its Fair Market Value petition as part of the foreclosure
action and sent the petition and accompanying documents to Appellant at the
agreed-upon address. No certified mailings related to the Fair Market Value
petition were returned to Devon as either rejected or unclaimed. Appellant
and Devon communicated about the Fair Market Value petition, which
indicated Appellant’s actual notice of the filings; but he did not object to the
form of service or formally respond to any of the Fair Market Value filings.
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from [Appellant] in the amount of $96,979.85 plus interest
at the rate of $15.24 per diem from August 26, 2014, the
date of filing of the suit. In response to the Complaint,
[Appellant] asserted by Preliminary Objection that he had
not been properly served with the Petition to Fix Fair Market
Value and moved to strike [Devon’s] request for attorneys’
fees. The [trial court overruled] all of [Appellant’s]
Preliminary Objections on April 7, 2015.
In January 2016, the [deficiency judgment] matter was
reassigned to this [court]. Trial was scheduled for July
2016, but counsel for both parties agreed to postpone trial
and submit competing motions for summary judgment upon
the sole issue in controversy: whether the Petition to Fix Fair
Market Value had been properly served.[2]
The parties filed their respective Motions for Summary
Judgment in June 2016, argument was held on September
19, 2016, and additional briefs were filed, at the [c]ourt’s
request, on the issue of concurrent jurisdiction. The [c]ourt
determined that concurrent jurisdiction doctrine did not
foreclose this Judge’s review of the service question on
Summary Judgment, even though [another jurist had]
previously ruled on the issue when raised by Preliminary
Objection. On November 29, 2016, the [c]ourt entered an
order granting [Devon’s] Motion for Summary Judgment
and denying [Appellant’s] Motion for Summary Judgment.
This [c]ourt filed an amended order on December 15, 2016,
entering [a deficiency] judgment in favor of [Devon] for the
amount of $96,979.85 plus interest. [Appellant] filed a
timely appeal on December 23, 2016, followed by a Concise
Statement of Errors Complained of on Appeal on December
30, 2016.
____________________________________________
2 Resolution of the service issue would decide the deficiency judgment matter
without the need for a trial. To summarize, if service of Devon’s Fair Market
Value petition was deemed valid (or waived), then Appellant would be liable
for the sums claimed because he failed to dispute them. On the other hand,
if service of the Fair Market Value petition was deemed invalid, under
applicable law Appellant could be discharged from all personal liability to
Devon, upon Appellant’s filing of a petition to have the judgment marked
satisfied, released and discharged as a matter of law. See 42 Pa.C.S.A. §
8103(d).
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(Trial Court Opinion, filed March 13, 2017, at 2-4).
Appellant now raises eight issues on appeal:
(1) WHETHER APPELLATE REVIEW OF A FINAL ORDER
ENTERING JUDGMENT ON ALL ISSUES SHOULD CONSIDER
ALL ISSUES RAISED BY SUMMARY JUDGMENT MOTIONS
EVEN WHEN THE [TRIAL] COURT’S [RULE] 1925[(A)]
OPINION IS LIMITED TO ONE ISSUE?
(2) WHETHER THE DISPUTED FACT OF WHETHER [OFFICE
MANAGER] WAS [APPELLANT]’S AUTHORIZED AGENT IS AN
ISSUE OF MATERIAL FACT PRECLUDING SUMMARY
JUDGMENT IN DEVON’S FAVOR?
(3) WHETHER SUMMARY JUDGMENT SHOULD HAVE BEEN
GRANTED IN [APPELLANT]’S FAVOR DUE TO DEVON’S
FAILURE TO PRODUCE EVIDENCE OF AUTHORIZED
AGENCY?
(4) WHETHER, AS A MATTER OF FIRST IMPRESSION, THE
SUPERIOR COURT SHOULD FIND THAT AN OFFICE
MANAGER AUTHORIZED TO ACCEPT CERTIFIED MAIL FOR
THE OFFICE IS NOT AUTHORIZED TO ACCEPT SERVICE OF
PROCESS UNRELATED TO THE OFFICE ABSENT EXPRESS
AUTHORITY?
(5) WHETHER RULES OF CONSTRUCTION REQUIRE THAT
AUTHORIZED AGENTS MUST HAVE EXPRESS
AUTHORIZATION?
(6) WHETHER THE DEFICIENCY JUDGMENT ACT REQUIRES
LEGAL SERVICE OF PROCESS AND NOT MERE INFORMAL
NOTICE?
(7) WHETHER THE AMOUNT OF THE ALLEGED DEBT IS A
QUESTION OF DISPUTED FACT AND THUS IS A JURY
QUESTION?
(8) WHETHER THE JUDGMENT ENTERED FOR $96,979.85
IMPROPERLY INCLUDES $30,000.00 IN LEGAL FEES?
(Appellant’s Brief at 3-4).
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As a prefatory matter, in civil cases generally, the failure to include
issues in a Rule 1925(b) statement waives the issues for appellate review.
T.M.W. v. N.J.W., ___ A.3d ___, 2020 PA Super 17 (filed January 31, 2020)
(citing Lineberger v. Wyeth, 894 A.2d 141 (Pa.Super. 2006) and
McKeeman v. Corestates Bank, N.A., 751 A.2d 655 (Pa.Super. 2000)).
Likewise, the trial court is not expected to guess what issues an appellant
wants to raise on appeal; and an appellant’s Rule 1925(b) statement must be
distinct enough for the trial court to identify and address the issues presented
for review. Lineberger, supra at 148. Thus a Rule 1925(b) statement that
is too vague to allow the court to identify the issues raised on appeal can lead
the court to find waiver and disregard any argument. Id.Moreover, arguments, defenses, or other grounds for relief must be
raised at the first opportunity before the trial court in summary judgment
proceedings; otherwise, those grounds are waived on appeal. Devine v.
Hutt, 863 A.2d 1160 (Pa.Super. 2004) (citing Grandelli v. Methodist Hosp.,
777 A.2d 1138, 1147-48 (Pa.Super. 2001) and Harber Philadelphia Center
City Office Ltd. v. LPCI Ltd. Partnership, 764 A.2d 1100 (Pa.Super. 2000),
appeal denied, 566 Pa. 664, 782 A.2d 546 (2001)). This Court has explained:
Because, under Rule 1035.3, the non-moving party must
respond to a motion for summary judgment, he…bears the
same responsibility as in any proceeding, to raise all
defenses or grounds for relief at the first opportunity. A
party who fails to raise such defenses or grounds for relief
may not assert that the trial court erred in failing to address
them. To the extent that our former case law allowed
presentation of arguments in opposition to summary
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judgment for the first time on appeal it stands in derogation
of Rules 1035.2 and 1035.3 and is not dispositive in this
matter. The Superior Court, as an error-correcting court,
may not purport to reverse a trial court’s order where the
only basis for a finding of error is a claim that the
responsible party never gave the trial court an opportunity
to consider. …
More recently, we have reaffirmed the proposition that a
non-moving party’s failure to raise grounds for relief in the
trial court as a basis upon which to deny summary judgment
waives those grounds on appeal. See Payton v.
Pennsylvania Sling Co., 710 A.2d 1221, 1226 (Pa.Super.
1998) (concluding that party’s choice to argue that evidence
was sufficient to establish element of cause of action in
accordance with Rule 1035.3(a)(2) waived argument first
raised on appeal that record should be supplemented under
Rule 1035.3(b) to allow collection of additional evidence
through discovery). Our application of the summary
judgment rules in Payton establishes the critical
importance to the non-moving party of the defense to
summary judgment he…chooses to advance. A decision to
pursue one argument over another carries the certain
consequence of waiver for those arguments that could have
been raised but were not. This proposition is consistent with
our Supreme Court’s efforts to promote finality, and
effectuates the clear mandate of our appellate rules
requiring presentation of all grounds for relief to the trial
court as a predicate for appellate review. …
Id. at 1105 (some internal citations omitted).
Instantly, Appellant filed his court-ordered Rule 1925(b) statement,
raising issues regarding (1) whether Devon is the assignee of the mortgage;
(2) whether Appellant owes Devon any sum of money, as an issue of material
fact generally; (3) whether Devon supported its claim for deficiency judgment
against Appellant personally with sufficient evidence, as an issue of material
fact generally; (4) whether Devon has a valid claim for legal fees in the
amount claimed , as an issue of material fact generally; (5) whether Appellant
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should be discharged from all personal liability to Devon because of improper
service of the Fair Market Value petition, where Nadia Muret was not
“authorized” to accept service of the petition, as her agency is an issue of
material fact generally; (6) whether Nadia Muret was an “authorized agent”
to accept certified mail for Appellant personally at the business address, as an
issue of material fact generally; (7) whether Devon’s failure to serve Appellant
personally with the Fair Market Value petition results in Appellant’s discharge
from all personal liability to Devon. (See Appellant’s Rule 1925(b) Statement,
filed 12/30/16, at 1-2; R.R. at 261a-262a).
Appellant’s issues five and six on appeal are presented as questions of
law on whether the Deficiency Judgment Act requires “express authorization”
to accept service of a Fair Market Value petition and whether the law allows
for “actual notice” in this context. These issues were not identified, included
in, or reasonably suggested by the Rule 1925(b) statement. Appellant’s Rule
1925(b) statement complains in a very general manner about the lack of
personal service of the Fair Market Value petition and refers to his own
affidavit declaring that his office manager was not his “authorized agent” to
accept certified mail for Appellant personally and only he could accept service,
but the Rule 1925(b) statement does not suggest any question of whether the
Deficiency Judgment Act requires affirmative, express authorization to accept
service of the Fair Market Value petition or the absolute prerequisite of
personal service of the Fair Market Value petition or the adequacy of actual
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notice in this context. Consequently, Appellant has waived issues five and six
for appeal purposes, and we give them no further attention. See id.
Furthermore, the record makes clear the only issue before the trial court
during summary judgment proceedings was Appellant’s challenge to service
of the Fair Market Value petition. Contrary to Appellant’s contention, his
motion for summary judgment called into question only the service of Devon’s
Fair Market Value petition and Devon’s compliance with Section 8103 of the
Deficiency Judgment Act. In the summary judgment proceedings, Appellant
did not present or develop argument on any of the line items or exact amounts
due other than to state an alleged discrepancy in the total deficiency judgment
claimed and contend generally that he was excused from all personal liability
on the basis of lack of proper service of the Fair Market Value petition. (See
Appellant’s Motion for Summary Judgment, filed 6/24/16; R.R. at 136a-151a).
Appellant simply restated the alleged discrepancy in ¶ 33 of his answer to
Devon’s summary judgment motion. (See Appellant’s Answer to Devon’s
Motion for Summary Judgment, filed 6/24/16; R.R. at 131a). Therefore, the
sole issue presented to the trial court on summary judgment was service of
the Fair Market Value petition.
Moreover, the trial court was correct in limiting its consideration to the
issue of service of the Fair Market Value petition, because resolution of the
service issue would decide the case without the need for a deficiency judgment
trial. In other words, if service of the Fair Market Value petition was valid,
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then Appellant would be liable for the sums claimed because he failed to
dispute them in answer to the Fair Market Value petition and rule to show
cause or in a timely appeal from the Fair Market Value order. If service of the
Fair Market Value petition was invalid, applicable law would discharge all of
Appellant’s personal liability to Devon, and the sums claimed would not
matter. Thus, the summary judgment motions were limited to the issue of
service of the Fair Market Value petition, which in turn would dispose of the
deficiency judgment action. Consequently, Appellant’s seventh and eighth
issues regarding the precise amounts of the claimed debt and counsel fees are
inappropriate for this appeal, as they were not properly before the trial court
in the summary judgment proceedings or otherwise reserved for challenge in
the deficiency judgment action. Therefore, Appellant cannot introduce his
damages claims for the first time on this appeal.3 See Grandelli, supra.In Appellant’s remaining issues one through four, he complains his office
manager, Ms. Nadia Muret, had no authority to sign for the certified mail
containing the Fair Market Value petition because he did not expressly
“authorize” her to accept service for Appellant personally. Appellant contends
Ms. Muret’s agency at Appellant’s place of business extended only to normal
business matters but did not extend to his personal dealings. Appellant
complains Devon did not attempt service by Sheriff or court order but only by
____________________________________________
3 Although there was some discrepancy in the total damages sought, any
inconsistency was resolved in the trial court; and the court’s amended order
entered judgment for the corrected amount.
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mail and, given the protections afforded debtors under the Deficiency
Judgment Act, Devon had to prove proper service of the Fair Market Value
petition. Appellant asserts Ms. Muret failed to check the “agent” box on the
return receipt and her affidavit does not say Appellant “authorized” her to
perform actions unrelated to the business, which left open a material issue of
fact on the extent of Ms. Muret’s authority as Appellant’s agent. Appellant
claims Devon failed to produce sufficient evidence to show Ms. Muret was an
authorized agent to accept service of the Fair Market Value petition, which in
turn precluded summary judgment in Devon’s favor. Appellant submits his
“actual notice” of the Fair Market Value petition was not enough to require him
to respond to the petition. Appellant concludes this Court should reverse the
order entering summary judgment for Devon, as the court should have
entered summary judgment for Appellant; in the alternative, Appellant insists
the case should be remanded for a trial. We disagree.
Appellate review of an order granting summary judgment asks us
whether the trial court abused its discretion or committed an error of law.
Mee v. Safeco Ins. Co. of America, 908 A.2d 344, 347 (Pa.Super. 2006).
Judicial discretion requires action in conformity with law on
facts and circumstances before the trial court after hearing
and consideration. Consequently, the court abuses its
discretion if, in resolving the issue for decision, it misapplies
the law or exercises its discretion in a manner lacking
reason. Similarly, the trial court abuses its discretion if it
does not follow legal procedure.
Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000) (internal
citations and quotation marks omitted). Our scope of review is plenary.
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Pappas v. Asbel, 564 Pa. 407, 418, 768 A.2d 1089, 1095 (2001), cert.
denied, 536 U.S. 938, 122 S.Ct. 2618, 153 L.Ed.2d 802 (2002).
[W]e apply the same standard as the trial court, reviewing
all the evidence of record to determine whether there exists
a genuine issue of material fact. We view 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. Only where there is
no genuine issue as to any material fact and it is clear that
the moving party is entitled to a judgment as a matter of
law will summary judgment be entered. All doubts as to the
existence of a genuine issue of a material fact must be
resolved against the moving party.
Motions for summary judgment necessarily and directly
implicate the plaintiff’s proof of the elements of [a] cause of
action. Summary judgment is proper if, after the
completion of discovery relevant to the motion, including
the production of expert reports, an adverse party who will
bear the burden of proof at trial has failed to produce
evidence of facts essential to the cause of action or defense
which in a jury trial would require the issues to be submitted
to a jury. In other words, whenever there is no genuine
issue of any material fact as to a necessary element of the
cause of action or defense, which could be established by
additional discovery or expert report and the moving party
is entitled to judgment as a matter of law, summary
judgment is appropriate. Thus, a record that supports
summary judgment either (1) shows the material facts are
undisputed or (2) contains insufficient evidence of facts to
make out a prima facie cause of action or defense.
Upon appellate review, we are not bound by the trial court’s
conclusions of law, but may reach our own conclusions.
Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 61 (Pa.Super. 2006)
(internal citations and quotation marks omitted).
The Deficiency Judgment Act was first passed during the Great
Depression of the twentieth century “to deal with the inequity that an
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execution creditor could purchase real estate for a [nominal] amount at a
forced sale and still retain the full amount of his judgment against the debtor.
The solution to this problem was to reduce the judgment by the fair market
value of the property instead of the actual sale price.” Philip Green & Son,
Inc. v. Kimwyd, Inc., 410 Pa. 202, 232-33, 189 A.2d 231, 205 (1963).
The Deficiency Judgment Act applies whenever real property
of the debtor has been sold in execution to the judgment
creditor for a sum less than the amount of the judgment,
interest and costs. Under the Deficiency Judgment Act, the
creditor’s judgment against the debtor is reduced by the fair
market value of the property purchased by the creditor
rather than by the actual sale price of the property. The
objective of the Deficiency Judgment Act is to relieve a
debtor from further personal liability to the judgment
creditor when the real property taken by the judgment
creditor on an execution has a fair market value on the date
of sale sufficient so that the judgment creditor can dispose
of the property to others without a further loss.
Horbal v. Moxham Nat. Bank, 548 Pa. 394, 403, 697 A.2d 577, 581-82
(1997). A petition to fix fair market value is necessary only if the judgment
creditor seeks to collect the balance due on a judgment. Devon Service, LLC
v. S & T Realty, 171 A.3d 287, 291 (Pa.Super. 2017). To recoup any unpaid
indebtedness not satisfied by the sale of the property, a judgment creditor
must file a petition to fix fair market value within six months of the sale of
collateral. 42 Pa.C.S.A. § 5522(b) (relating to six months’ limitation). A
judgment creditor must file the Fair Market Value petition “as a supplementary
proceeding in the matter in which the real property was sold to the judgment
creditor in execution proceedings (i.e. in the foreclosure action). Home Sav.
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and Loan Co. of Youngstown, Ohio v. Irongate Ventures, LLC, 19 A.3d
1074, 1080 (Pa.Super. 2011), appeal denied, 611 Pa. 670, 27 A.3d 225(2011). “If the judgment creditor fails to file a [Section] 8103(a) petition to
fix the fair market value of the property within six months of the sheriff's sale,
then the debtor may file a petition to have the judgment marked satisfied,
released and discharged as a matter of law.” Id. at 1078 (citing 42 Pa.C.S.A.
§ 8103(d)).
Section 8103 of the Deficiency Judgment Act in relevant part provides:
§ 8103. Deficiency judgments
(a) General rule.─Whenever any real property is sold,
directly or indirectly, to the judgment creditor in execution
proceedings and the price for which such property has been
sold is not sufficient to satisfy the amount of the judgment,
interest and costs and the judgment creditor seeks to collect
the balance due on said judgment, interest and costs, the
judgment creditor shall petition the court to fix the fair
market value of the real property sold. The petition shall
be filed as a supplementary proceeding in the matter
in which the judgment was entered. …
(b) Effect of failure to give notice.─ Any debtor and any
owner of the property affected thereby, who is neither
named in the petition nor served with a copy thereof or
notice of the filing thereof as prescribed by general
rule, shall be deemed to be discharged from all personal
liability to the judgment creditor on the debt, interest and
costs, but any such failure to name such person in the
petition or to serve the petition or notice of the filing thereof
shall not prevent proceedings against any respondent
named and served.
(c) Action on petition.─
(1) If no answer is filed within the time prescribed by
general rule…, the court shall determine and fix as the
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fair market value of the property sold the amount thereof
alleged in the petition to be the fair market value.
* * *
(d) Action in absence of petition.─If the judgment
creditor shall fail to present a petition to fix the fair market
value of the real property sold within the time after the sale
of such real property provided by section 5522 (relating to
six months limitation), the debtor, obligor, guarantor or any
other person liable directly or indirectly to the judgment
creditor for the payment of the debt, or any person
interested in any real estate which would, except for the
provisions of this section, be bound by the judgment, may
file a petition, as a supplementary proceeding in the matter
in which the judgment was entered, in the court having
jurisdiction, setting forth the fact of the sale, and that no
petition has been filed within the time limited by section
5522 to fix the fair market value of the property sold,
whereupon the court, after notice as prescribed by general
rule, and being satisfied of such facts, shall direct the clerk
to mark the judgment satisfied, released and discharged.
42 Pa.C.S.A. § 8103(a)-(d) (some emphasis added).
Pennsylvania Rule of Civil Procedure 3283 governs service of a Fair
Market Value petition and provides:
Rule 3283. Service
(a)(1) If there is an attorney of record, service shall be
made upon the respondent’s attorney of record pursuant to
Rule 440(a)(1)(i) or (ii).
(2) If there is no attorney of record, service shall be made
(i) by the sheriff or a competent adult in the manner
prescribed by Rule 402(a) for service of original process,
or
(ii) by the petitioner mailing a copy in the manner
prescribed by Rule 403, or
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(iii) if service cannot be made as provided in
subparagraphs (i) or (ii), pursuant to special order of
court as prescribed by Rule 430.
(b) The person serving the petition shall file a return of
service as provided by Rule 405.
Pa.R.C.P. 3283 (emphasis added). Rule 403 provides:
Rule 403. Service by Mail
If a rule of civil procedure authorizes original process to be
served by mail, a copy of the process shall be mailed to the
defendant by any form of mail requiring a receipt signed by
the defendant or his authorized agent. Service is
complete upon delivery of the mail.
(1) If the mail is returned with notation by the postal
authorities that the defendant refused to accept the mail,
the plaintiff shall have the right of service by mailing a
copy to the defendant at the same address by ordinary
mail with the return address of the sender appearing
thereon. Service by ordinary mail is complete if the mail
is not returned to the sender within fifteen days after
mailing.
(2) If the mail is returned with notation by the postal
authorities that it was unclaimed, the plaintiff shall make
service by another means pursuant to these rules.
Note: The United States Postal Service provides for
restricted delivery mail, which can only be delivered to the
addressee or his authorized agent. Rule 403 has been
drafted to accommodate the Postal Service procedures with
respect to restricted delivery.
Pa.R.C.P. 403. If the judgment debtor fails to respond to the petition to fix
fair market value, then “the court shall determine and fix as the fair market
value of the property sold the amount thereof alleged in the petition to be the
fair market value.” 42 Pa.C.S.A. § 8103(c)(1). The petition to fix fair market
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value is a supplementary proceeding in the original foreclosure action. 42
P.C.S.A. § 8103(a). An order fixing fair market value is immediately
appealable. See, e.g., Walnut St. Federal Sav. and Loan Ass’n v.
Bernstein, 394 Pa. 353, 147 A.2d 359 (1959) (reviewing appeal from order
fixing fair market value and stating order is award equivalent to assessment
of damages in personal injury case or accounting balance in equity); Union
Nat. Bank of Pittsburgh v. Crump, 349 Pa. 339, 37 A.2d 733 (1944)
(reviewing appeal from trial court order fixing fair market value); Devon
Service, supra (reviewing appeal from trial court order granting petition to
fix fair market value and decree fixing fair market value).
Instantly, Customers Bank filed a mortgage foreclosure action at docket
no. 13-24770 on November 4, 2013, with a stipulated entry of judgment.
Customers Bank assigned its rights to Devon, who purchased Appellant’s
property at a sheriff’s sale on February 7, 2014. In the foreclosure action,
Appellant agreed to accept service at his business address. Counsel for Devon
timely filed and served the Fair Market Value petition on July 10, 2014, along
with a Rule to Show Cause, Notice to Defend and a Proposed Order by certified
mail/return receipt requested on Appellant at the agree-upon address of 3970
Perkiomen Avenue, Reading, PA 19606. Ms. Muret signed the return receipt
requested as the office manager at the agreed-upon business address. No
certified mailings related to the Fair Market Value petition were returned to
Devon by the postal service as either rejected or unclaimed. Further,
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Appellant and Devon communicated about the Fair Market Value petition,
which indicated Appellant’s actual notice of the filings. Nevertheless,
Appellant did not object to the form of service or formally respond to any of
the Fair Market Value filings. On August 20, 2014, the court fixed the fair
market value of the property sold. Appellant did not appeal that order. Thus,
Appellant waived any issue regarding service of the Fair Market Value petition
by failing to object during the Fair Market Value proceedings.
Moreover, nothing in the record suggests Devon knew or had reason to
know that service might have been flawed. Therefore, under the rules
governing service in this context, service was complete upon delivery of the
mail. See Pa.R.C.P. 403. If Appellant had timely objected to the manner of
service, then Devon would have been able to correct any alleged problems
expeditiously. Appellant chose to ignore the pleadings and engage in a risky
strategy. Further, Appellant did not appeal the court’s order fixing fair market
value, which arguably was the last stage in the proceedings where he could
have challenged service of the Fair Market Value petition. See Walnut St.
Federal Sav. and Loan Ass’n, supra.
Instead, Appellant waited until Devon filed its deficiency judgment
action to argue improper service of the Fair Market Value petition. At a pre-
trial conference, both parties agreed to postpone trial and submit motions for
summary judgment on the issue of service of the Fair Market Value petition.
The trial court reasoned as follows:
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In the instant matter, [Devon] served [Appellant] with the
Petition to Fix Fair Market Value by certified mail, return
receipt requested, to 3970 Perkiomen Avenue, Reading, PA
19606, the address [Appellant] had designated for service
on his Acceptance of Service of the Complaint in
Foreclosure. The mail was accepted and signed for by Nadia
Muret, the Office Manager of NAI Keystone Commercial &
Industrial, LLC (NAI), where [Appellant] kept his office as a
part owner and sales agent of NAI. As [Appellant] himself
did not sign for the mail, [Devon] must provide an
evidentiary basis to show that Ms. Muret was an authorized
agent of [Appellant].
The business which [Appellant] owned in part, NAI,
employed Ms. Muret as an Office Manager at the time when
the Petition to Fix Fair Market Value was served on July 10,
2014. In an Affidavit, Ms. Muret freely admits that in the
course of her duties as Office Manager she routinely signed
for certified mail addressed to the real estate sales agents
at NAI, including [Appellant]. It was regular practice for Ms.
Muret to sign for certified mail and then place it on the desk
of the addressee. At no time did [Appellant] instruct Ms.
Muret, his Office Manager, not to sign for certified mail
addressed to him. Ms. Muret also confirmed her signature
on the return receipt card for the Petition to Fix Fair Market
Value.
Furthermore, [Appellant] admitted that on or about July 10,
2014[,] he had knowledge that the Petition to Fix Fair
Market Value was filed to the foreclosure docket.
[Appellant] also later emailed Customers Bank to arrange a
time to discuss the deficiency judgment and at no point did
[Appellant] file a Notice of Appeal or a response to the
Petition or Order.
In light of the totality of the evidence presented by [Devon]
and the evidence in the record, this [c]ourt determined that
Ms. Muret, [Appellant’s] Office Manager, who accepted mail
and documents for [Appellant] without restriction or
limitation, was, in fact, an agent of [Appellant] authorized
to accept the delivery of certified mail. Accordingly, the
[c]ourt found that [Appellant] was properly served with the
Petition to Fix Fair Market Value. [The court] agrees with
[Devon] that [Appellant’s] after-the-fact effort to deny the
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authority of his Office Manager and agent should fail.
Thus, [the court] determined that [Devon was] entitled to
summary judgment as a matter of law and [Appellant] was
not.
(Trial Court Opinion at 7-8). We accept the court’s analysis. Devon
consistently and steadfastly argued that Appellant had waived any objection
to service of the Fair Market Value petition. The trial court saw fit to consider
the service issue by way of summary judgment because it would remove the
need for a trial in the deficiency judgment action. Based upon the foregoing,
we conclude Appellant waived his challenge to service of the Fair Market Value
petition when he failed to raise it in the Fair Market Value proceedings. Even
if Appellant had properly preserved the issue, the trial court concluded the
issue failed on the merits. Accordingly, we affirm. See Boyer v. Walker,
714 A.2d 458 (Pa.Super.1998) (stating appellate court may affirm decision of
trial court on any basis if that decision is correct); Alco Parking Corp. v.
Public Parking Authority of Pittsburgh, 706 A.2d 343 (Pa.Super.1998),
appeal denied, 555 Pa. 725, 725 A.2d 178 (1998) (stating where trial court
has reached correct result, appellate court can sustain decision for any
reason).
Judgment affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 03/26/2020
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