Citimortgage, Inc. v. Barbezat, E.

J-A34044-14
2016 PA Super 7CITIMORTGAGE, INC. IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
EDWARD F. BARBEZAT
Appellant No. 536 MDA 2014
Appeal from the Order entered February 25, 2014
In the Court of Common Pleas of Berks County
Civil Division at No: 12-211627
BEFORE: FORD ELLIOTT, P.J.E., SHOGAN, and STABILE, JJ.
CONCURRING AND DISSENTING OPINION BY STABILE, J.:FILED JANUARY 07, 2016
I join fully in the Majority’s Opinion to the extent it addresses and
disposes of Appellant’s first issue. The Majority correctly concludes that
Appellee had standing to initiate the underlying foreclosure action. I,
however, must part paths with the Majority with respect to its disposition of
Appellant’s second issue. For the reasons set forth below, I respectfully
disagree with the Majority’s conclusion that the Act 6 Notice here was
proper.
In considering Appellant’s second issue, I conclude that the trial court
erred in determining that the Notice sub judice under Act 6 was proper. As
the Majority aptly noted, in 1974, the Pennsylvania Legislature enacted Act
No. 6, 41 P.S. § 101 et seq., commonly referred to as “Act 6.” Bankers
Trust Co. v. Foust, 621 A.2d 1054, 1056 (Pa. Super. 1993), appeal
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denied, 631 A.2d 1007 (Pa. 1993). “Act 6 is essentially a comprehensive
interest and usury law with numerous functions.” Id. (citation omitted).
The Act’s provision regulating notice of foreclosure for owners of relatively
modest homes was intended to afford homeowners who are in dire economic
straits a measure of protection from overly zealous residential mortgage
lenders. Id.Section 403 of Act 6 sets forth the pre-foreclosure notice requirements
imposed upon residential mortgage lenders for certain residential
mortgages. Section 403 provides in part:
(a) Before any residential mortgage lender may accelerate
the maturity of any residential mortgage obligation,
commence any legal action including mortgage
foreclosure to recover under such obligation, or take
possession of any security of the residential mortgage debtor for
such residential mortgage obligation, such person shall give
the residential mortgage debtor notice of such intention at
least thirty days in advance as provided in this section.
(b) Notice of intention to take action as specified in subsection
(a) of this section shall be in writing, sent to the residential
mortgage debtor by registered or certified mail at his last known
address and, if different, at the residence which is the subject of
the residential mortgage.
(c) The written notice shall clearly and conspicuously state:
(1) The particular obligation or real estate security
interest;
(2) The nature of the default claimed;
(3) The right of the debtor to cure the default as provided
in section 404 of this act and exactly what performance
including what sum of money, if any, must be tendered
to cure the default;
(4) The time within which the debtor must cure the
default;
(5) The method or methods by which the debtor's
ownership or possession of the real estate may be
terminated; and
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(6) The right of the debtor, if any, to transfer the real
estate to another person subject to the security interest or
to refinance the obligation and of the transferee's right, if
any, to cure the default.
41 P.S. § 403(a)-(c) (emphasis added). Act 6 further defines a “residential
mortgage lender” as “any person who lends money or extends or grants
credit and obtains a residential mortgage to assure payment of the debt.
The term shall also include the holder at any time of a residential mortgage
obligation.” 41 P.S. § 101.
When interpreting a statute, this Court is guided by the Statutory
Construction Act (Act) of 1972, 1 Pa.C.S.A. §§ 1501-1991, which provides
that “[t]he object of all interpretation and construction of statutes is to
ascertain and effectuate the intention of the General Assembly.” 1 Pa.C.S.A.
§ 1921(a). “The clearest indication of legislative intent is generally the plain
language of a statute.” Walker v. Eleby, 842 A.2d 389, 400 (Pa. 2004).
“When the words of a statute are clear and free from all ambiguity, the letter
of it is not to be disregarded under the pretext of pursuing its spirit.” In re
S.T.S., Jr., 76 A.3d 24, 30 (Pa. Super. 2013) (citing to Section 1921(b) of
the Act, 1 Pa.C.S.A. § 1921(b)). Only “[w]hen the words of the statute are
not explicit” may this Court resort to statutory construction. 1 Pa.C.S.A.
§ 1921(c). Indeed, “[e]very statute shall be construed, if possible, to give
effect to all its provisions.” 1 Pa.C.S.A. § 1921(a). It is presumed “[t]hat the
General Assembly intends the entire statute to be effective and certain.” 1
Pa.C.S.A. § 1922(2). Thus, no provision of a statute shall be “reduced to
mere surplusage.” Walker, 842 A.2d at 400. Finally, it is presumed “[t]hat
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the General Assembly does not intend a result that is absurd, impossible of
execution or unreasonable.” 1 Pa.C.S.A. § 1922(1).
Based on my review of Section 403 of Act 6, I must conclude that the
Notice sent to Appellant did not comply with Act 6, because Appellee was not
the mortgage lender to Appellant at the time Appellee sent the Act 6 Notice
to the Appellant. As acknowledged by the Majority, the record here
demonstrates that the Notice was sent by Appellee to Appellant on June 21,
2012, almost two months prior to when it actually received the mortgage by
way of an assignment on August 2, 2012. Section 403(a), as emphasized
above, plainly identifies that it is the residential mortgage lender who is
required to provide a residential mortgage debtor notice of its intention to
foreclose a residential mortgage before it may accelerate or commence suit
on the obligation. 41 P.S. § 403(a).
The plain letter and spirit of this language require that the lender who
holds the mortgage is the one legally able to provide the Act 6 notice to the
residential mortgage debtor. To permit someone other than the holder of
the mortgage to send notice would essentially require us to rewrite Section
403(a) of Act 6 to allow any person, regardless of whether the person
possesses any interest in the debt obligation, to send the Act 6 notice. This
cannot be sanctioned by this Court, as it is obligated to give full effect to the
clear and unambiguous language employed by the legislature and not to
render any language superfluous. Construing Section 403(a) to permit any
person to send the Act 6 notice would violate the clear language of this
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statute, and reduce the express reference to a “residential mortgage lender”
to mere surplusage. To construe Section 403 to permit persons without an
interest in a mortgage obligation to send an Act 6 notice might also invite
chaos and uncertainty into this process. Section 403(c) lends support to this
construction because Section 403(c) requires that the content of the Act 6
notice include “exactly what performance . . . must be tendered to cure the
default.” 41 P.S. § 403(c)(3). Clearly, it is the mortgage lender (or its
authorized agent) who possesses binding authority to make demand on the
obligation and upon whom a debtor may justifiably rely to provide the
required information to cure a default. Moreover, the act of sending the
Notice prior to Appellee’s actual ownership of the mortgage suggests the
type of precipitous action by an overzealous lender that the legislature
sought to avoid by enacting Act 6.
I also reject the trial court’s reasoning that the Notice was not
defective because Section 403(c) does not require the name of the
mortgagee in the notice of intention to foreclose. It is true Section 403(c)
does not require that the name of the mortgagee or the chain of possession
of the note and the mortgage be identified in the notice.1 However, Section
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1
The Majority observes that the protections provided to the debtor under
Section 403 do not require the disclosure of how the holder gained
possession of the note and mortgage and asserts that its interpretation of
Section 403 “is consistent with the real world buying and selling of mortgage
instruments.” Maj. Op. at 13, n.2. I, however, disagree. The requirements
for an Act 6 notice should not be analogized to the buying and selling of
(Footnote Continued Next Page)
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403(a) does make it explicitly clear that it is the residential mortgage lender
who is to provide this notice. The flaw in the trial court’s reasoning is that it
failed to give full effect to all the provisions of Section 403. Section 403(a)
identifies the procedural prerequisite that must be satisfied before a
residential mortgage lender may file a foreclosure action, i.e., the residential
mortgage lender is to send notice before exercising any remedy or
commencing any action on the residential mortgage obligation. Section
403(b) addresses the manner in which the notice must be prepared and sent
to the residential mortgage debtor. Section 403(c) details what information
the notice must conspicuously state to the debtor. These three provisions
operate in tandem with respect to the notice to be given to the residential
mortgage debtor. To reiterate, this Court is obligated to give full effect to
each provision and not render any parts surplusage.
I, likewise, disagree with the Majority’s conclusion that anyone can
send an Act 6 notice so long as they were a mortgagee “at any time.” Maj.
Op. at 14. If this Court were to adopt the Majority’s construction of Section
403, then we certainly would be inviting chaos. Again, to construe Section
_______________________
(Footnote Continued)
mortgage instruments. Mortgagors experience minimal disruptions or
consequences when mortgage instruments are bought and sold. Here, as
explained above, when an Act 6 notice is issued, the effect and consequence
on borrowers is often severe, with the possibility of foreclosure looming.
Thus, it is imperative that borrowers receive an Act 6 notice from the proper
mortgage lender, detailing what performance is required to stave off
foreclosure.
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403 to permit persons without an interest in a mortgage obligation to send
an Act 6 notice would invite uncertainty into this process. The Majority also
claims that an Act 6 notice “is not a foreclosure action.” Id. Although true,
I emphasize that the issuance of an Act 6 notice is an important prerequisite
to filing an action in foreclosure. Therefore, the importance of such notice
cannot be minimized.
To the extent the Majority approves the trial court’s and Appellee’s
reliance on the non-binding decision in Federal National Mortgage
Association. v. Woody, 25 Pa. D. & C. 3d 604, 1982 WL 531 (Phila. Com.
Pl. 1982) in support of the proposition that a mortgage lender’s name need
not appear on a notice of intention to foreclose, I must disagree. Unlike this
case, the entity that issued the notice of intention to foreclose in Federal
National was either the residential mortgage lender or its agent. Id. at 606
(“Since this notice makes it clear that Lomas & Nettleton Company is either
the mortgagee or the service agent for it and that the payments referred to
therein if made to that company would cure the default, it is the opinion of
the court that this is sufficient.”). Instantly, the facts of record indicate
Appellee here was neither the mortgagee nor its servicing agent when
Appellee issued the Notice.
Viewing the record in the light most favorable to the non-moving party
and resolving all doubts as to the existence of a genuine issue of material
fact against the moving party, I conclude that the trial court erred in
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granting Appellee’s motion for summary judgment as a matter of law on its
foreclosure complaint. Accordingly, I would reverse the trial court’s order.
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