Humphreys v. v. Wells Fargo Bank

J-A27038-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
VIRGINIA HUMPHREYS AND BRIAN IN THE SUPERIOR COURT OF
HUMPHREYS PENNSYLVANIA
v.
WELLS FARGO BANK N.A.
APPEAL OF: BRIAN HUMPHREYS
No. 2786 EDA 2015
Appeal from the Order Entered August 13, 2015
in the Court of Common Pleas of Northampton County Civil Division
at No(s): C-48-CV-2014-12252
WELLS FARGO BANK N.A. IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
VIRGINIA L. HUMPHREYS AND BRIAN C.
HUMPHREYS
APPEAL OF: BRIAN HUMPHREYS
No. 2787 EDA 2015
Appeal from the Order Entered August 13, 2015
in the Court of Common Pleas of Northampton County Civil Division
at No(s): C-48-CV-2011-3134
BEFORE: PANELLA, LAZARUS, FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED JANUARY 25, 2017
Pro se Appellant, Brian Humphreys, appeals from two separate orders
entered in the Northampton County Court of Common Pleas respectively
granting summary judgment in favor of Appellee, Wells Fargo Bank, in a
*
Former Justice specially assigned to the Superior Court.
J-A27038-16
foreclosure action and dismissing Appellant’s second amended complaint
against Appellee in a quiet title action.1 Appellant contends, in this
consolidated appeal, that Appellee was not the proper “note holder” in
connection with the mortgage at issue and therefore did not have the
authority to pursue a foreclosure action against him. We affirm.
We adopt the facts and procedural history set forth in the trial court’s
opinion. See Trial Ct. Op., 3/31/16, at 1-4. On April 6, 2011, Appellee2
filed a mortgage foreclosure action (“foreclosure action”) against the parties
because Appellee had not received the required monthly payments after
November 2010. On August 25, 2011, the parties filed an answer consisting
of general denials and three paragraphs of affirmative defenses. Thereafter,
on October 17, 2011, the parties filed a motion for summary judgment,
which the trial court denied on December 7, 2011. Appellee filed its own
motion for summary judgment on April 27, 2015, which the trial court
granted via an order and opinion dated August 13, 2015 (“Foreclosure
Opinion”). Appellant filed a timely notice of appeal on September 10, 2015
and a court-ordered Pa.R.A.P. 1925(b) statement on October 1, 2015. The
1
Initially, Appellant and his Mother, Virginia L. Humphreys (collectively the
“parties”) were jointly involved in both actions in this consolidated case.
After Virginia Humphreys passed away in March 2015, Appellant continued
to pursue this appeal individually.
2
We note that Appellee is the successor in interest, by way of merger, to
Wachovia Bank.
-2-
J-A27038-16
trial court filed a responsive Pa.R.A.P. 1925(a) statement, referencing the
court’s Foreclosure Opinion.
Meanwhile, on December 30, 2014, the parties initiated a quiet title
action against Appellee regarding the same property that is the subject of
the foreclosure action. Appellee filed timely preliminary objections, and the
parties filed an amended complaint on February 9, 2015. Appellee filed
additional preliminary objections on March 2, 2015, and the parties filed a
second amended complaint. On April 8, 2015, Appellee filed preliminary
objections in response to the second amended complaint. After the trial
court conducted oral argument on May 26, 2015, the court ultimately
sustained Appellee’s objections and dismissed the parties’ second amended
complaint by order and opinion, also dated August 13, 2015 (“Quiet Title
Opinion”). Appellant filed a timely notice of appeal on September 10, 2015
and a court-ordered Pa.R.A.P. 1925(b) statement on October 1, 2015. The
trial court filed a responsive Pa.R.A.P. 1925(a) statement, referencing the
court’s Quiet Title Opinion.
On November 9, 2015, this Court consolidated the two above-
referenced appeals. Appellant filed a single brief incorporating his issues
regarding both cases.
Appellant raises the following issues for our review:
On its own accord, should the Court have claimed that the
argument put forth in PHH Mortgage Corp. v. Powell,
100 A.3d 611, 619 (Pa. Super. 2014), was
“indistinguishable” from that presented in the instant case?
-3-
J-A27038-16
The Appellant’s 2011 Answer to Wells Fargo’s Foreclosure
Complaint contained general denials; most of which were
argued in great detail in later pleadings. Did the Court
unjustly presume that [Appellant’s] Answer was dishonest?
Appellant’s Brief at 3-4.3
The crux of Appellant’s issues is his contention that Appellee was not
legally permitted to pursue a foreclosure action against him because
Appellee was not the legal “note holder” in connection with the mortgage at
issue. No relief is due.
Regarding summary judgment, our review is guided by the following
principles:
The standards which govern summary judgment are well
settled. 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
3
Appellant initially raised seventeen issues. Appellant’s Brief at 2-9.
However, in his reply brief, Appellant indicated his intention to abandon all
but two issues for purposes of appellate review. Appellant’s Reply Brief at 1.
As set forth by Appellant, his “core issues” are encapsulated within his two
remaining issues. Id. We note that on December 14, 2015, Appellee filed a
motion to quash Appellant’s appeal based upon the many “material” defects
within Appellant’s Brief. We note that Appellant’s pro se arguments are
difficult to discern. We remind Appellant that his pro se status does not
relieve him of his obligation to raise and develop his appellate claims
properly and this court will not act as appellate counsel. Smathers v.
Smathers, 670 A.2d 1159, 1160 (Pa. Super. 1996). However, Appellant’s
brief does provide argument and citation to legal authority regarding his two
remaining issues. See Pa.R.A.P. 2119. Therefore, we decline to quash his
appeal.
-4-
J-A27038-16
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 non-moving 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. . . .
Varner-Mort v. Kapfhammer, 109 A.3d 244, 246-47 (Pa. Super. 2015)
(citation omitted).
This Court’s standard of review of orders sustaining preliminary
objections in the nature of a demurrer is well-settled:
In determining whether the trial court properly sustained
preliminary objections, the appellate court must examine
the averments in the complaint, together with the
documents and exhibits attached thereto, in order to
evaluate the sufficiency of the facts averred. The impetus
of our inquiry is to determine the legal sufficiency of the
complaint and whether the pleading would permit recovery
if ultimately proven. This Court will reverse the trial
court's decision regarding preliminary objections only
where there has been an error of law or abuse of
discretion. When sustaining the trial court's ruling will
result in the denial of claim or dismissal of suit, preliminary
objections will be sustained only where the case is free and
clear of doubt.
Donaldson v. Davidson Bros., Inc., 144 A.3d 93, 100 (Pa. Super. 2016)
(citation omitted). The trial court’s decision to grant or deny a demurrer
involves a matter of law; therefore, “our scope of review is plenary, allowing
us to review the whole record.” Mistick, Inc. v. Northwestern Nat. Cas.
Co., 806 A.2d 39, 42 (Pa. Super. 2002) (citation omitted).
-5-
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Integral to this case is the legal precept that “[o]wnership of [a] Note
is irrelevant to the determination of whether [an entity] is entitled to enforce
the Note.” PHH Mort. Corp. v. Powell, 100 A.3d 611, 621 (Pa. Super.
2014) (quotation marks and citation omitted) (holding that holder of
promissory note had standing to enforce the attendant mortgage regardless
of petitioner’s claim that another entity, Fannie Mae, owned the note).
After a thorough review of the record, the briefs of the parties, the
applicable law, and the well-reasoned opinions of the Honorable Anthony S.
Beltrami, we conclude Appellant’s issues merit no relief. The trial court’s
opinions comprehensively discuss and properly dispose of the questions
presented. See Foreclosure Opinion at 6-14; Quiet Title Opinion at 3-6;
(finding that Appellee had proper standing to pursue a foreclosure action
against Appellant and, accordingly, Appellant’s quiet title action was legally
insufficient). Accordingly, we affirm on the basis of the trial court’s opinions.
Orders affirmed. Motion to quash denied.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/25/2017
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IN THE COURT OF COMMON PLEAS OF •• • T ......- -· ~
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NORTHAMPTON COUNTY, PENNSYLVANIA .
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CIVIL ACTION • ...!..")
VIRGINIA L. HUMPHREYS and )
BRIAN C. HUMPHREYS, ) No.C-48-CV-2014-12252
Plaintiffs )
)
v. )
)
WEL'-S FARGO BANK, N.A., )
Defendant )
OPINION OF THE COURT
This matter is before the Court on "Defendant's Preliminary Objections
to Plaintiffs1 Second Amended Cornplalnt." Plaintiffs initiated this action to
quiet title against Defendant by filing a Complaint on December 30, 2014.
The Complaint was met with "Defendant's Preliminary Objections to
Plaintiff's Complaint," which were filed on January 20, 2015. Rather than
respond to those objections, Plaintiffs filed an Amended Complaint on
February 9, 2015. Defendant filed Preliminary Objections to the Amended
Complaint on March 2, 2015. Again, rather than rebut the objections,
1
Iu
Plaintiffs filed a Second Amended Complaint on March 19, 2015.1 On April 8,
2015, Defendant filed the instant Preliminary Objections. On April 28, 2015,
Defendant filed a Brief in support of its Preliminary Objections. On May 20,
2015, Plaintiffs filed a Brief in opposition to the same. Oral argument was
heard on May 26, 2015, and the matter is now ready for disposition.
Defendant's first objection is a demurrer in which Defendant argues
that Plaintiffs' Second Amended Complaint fails to state a valid action to
quiet title. In the Second Amended Complaint, Pia intiffs aver that Plaintiff
Virginia L. Humphreys owned real estate located at 2253 Linden Street, in
Bethlehem, Northampton County, Pennsylvania (the "Property"). (Second
Am. Campi. ,i 2.) Plaintiffs further aver that although "Defendant claims a
lien against said [P]roperty adverse to Plaintiff[s,] Defendant's claim is
without any right whatsoever, and Defendant has no estate, right, title, lien,
or interest whatsoever in or to said [P] roperty." (Id. ,i 3.) Plaintiffs allege
that Defendant's claimed interest in the Property is based on two mortgages
executed by Plaintiffs on April 16, 2007. (Id. ,i 4.) Plaintiffs go on to aver,
in their own pleading, that the first mortgage was recorded on May 8, 2007,
in the Northampton County Recorder of Deeds Office at Book 2007-1, page
170260 and that the second mortgage was recorded on the same date in the
same book at page 170279. (Id. ,i 4(a)-(b).) Plaintiffs then claim that the
The Second Amended Complaint states that Plaintiff Virginia L. Humphreys passed
away on March 61 2015. (Second Arn. Cornpl. at 1.) The Court will continue to refer to
"Plaintiffs" in the plural, in accordance with the caption.
2
mortgages are invalid because "Defendant transferred its enforcement rights
to others ... and has since acted only in the capacity of servicer of the"
mortgage accounts. (Id. 11 5.) In their Second Amended Complaint,
Plaintiffs attempt to establish an action to quiet title by alleging that
"Defendant is in a position neither to perform its eventual obligation to clear
the Plaintiff's title to her property, nor to enforce the applicable mortgages."
(Id. at 1-2.) The Second Amended Complaint spans thirty pages and
suggests myriad reasons why, in Plaintiffs' opinion, Defendant is not the
proper entity to enforce the aforementioned mortgages.
The question presented by a demurrer is whether, on the facts
pleaded, the law says, with certainty, that no recovery is possible. Orange
Stones Co. v. City of Reading, 87 A.3d 1014, 1021 n.7 (Pa. Commw. 2014).
The Court must resolve a demurrer solely on the basis of the pleadings,
without reference to testimony or other outside evidence. Hill v. Ofalt, 85
A.3d 540, 546 (Pa. Super. 2014). However, in a case such as this, the Court
can take judicial notice of public documents, such as recorded mortgages,
when ruling on a demurrer. See Solomon v. U.S. Healthcare Sys. of Pa.,
Inc., 797 A.2d 346, 352 (Pa. Super. 2002). When considering a demurrer,
the Court must accept, as true, all material facts averred in the challenged
pleading, as well as all inferences that can be reasonably deduced
therefrom. Schemberg v. Smicherko, 85 A.3d 1071, 1073 (Pa. Super.
2014).
3
Preliminary objections which seek the dismissal of a cause of
action should be sustained only in cases in which it is clear and
free from doubt that the pleader will be unable to prove facts
legally sufficient to establish the right to relief. If any doubt
exists as to whether a demurrer should be sustained, it should
be resolved in favor of overruling the preliminary objections.
Id.An action to quiet title may be brought, inter alia, "to determine any
right, lien, title or interest in the land or determine the validity or discharge
of any document, obligation or deed affecting any right, lien, title or interest
in land" or "to compel an adverse party to flle, record, cancel, surrender or
satisfy of record, or admit the validity, invalidity or discharge of, any
document, obligation or deed affecting any right, lien, title or interest in
land." Pa.R.C.P. No. 1061(b)(2)-(3). "The purpose of an action to quiet title
is to resolve a conflict over an interest in property." Nat'/ Christian
Conference Ctr. v. Schuylkill Twp., 597 A.2d 248, 250 (Pa. Commw. 1991).
"In Pennsylvania[,] a mortgage duly executed will be presumed to be valid
until the contrary is shown, and the burden is on the party attacking the
mortgage to prove its invalidity.'' Pitti v. Pocono Bus. Furniture, Inc., 859
A.2d 523, 526 n.3 (Pa. Commw. 2004). A mortgage is valid, on its face, if it
dearly states that it is a mortgage, describes the property to be mortgaged,
is signed by the mortgagor, is notarized, and is duly recorded within six
months of execution. See In re Berry, 11 B.R. 886, 891 (W.D. Pa. 1981);
21 P.S. § 621.
4
In their Second Amended Complaint, Plaintiffs specifically identify the
two mortgages that were executed in Defendant's favor, and Defendant has
attached copies of the same to its Preliminary Objections. (Second Am.
Compl. 11 4(a)-(b); Prelim. Objections Exs. E, G.) The mortgages were
originally executed in favor of Wachovia Bank, National Association, to which
Defendant is the successor in interest by way of merger, a succession
Plaintiffs concede. (Second Am. Compl. ,1 8; Prelim. Objections Exs. E, G,
H .) Upon inspection, the mortgages are plainly valid, as they clearly state
that they are mortgages, describe the Property mortgaged, bear Plaintiffs'
signatures, which are notarized, and were duly recorded within six months of
execution in a manner consistent with that described in the Second
Amended Complaint. Moreover, there are no facts pleaded in the Second
Amended Complaint that can be fairly characterized as an attack on the
validity of the mortgages. In fact, Plaintiffs do not really dispute the validity
of the mortgages. Rather, Plaintiffs' allegations primarily concern
Defendant's purported lack of authority and/or standing to enforce the
mortgages. For a discussion of why this argument has no merit, see Wells
Fargo Bank, N.A, s/i/i/t/ Wachovia Bank v. Humphreys, No. C-48-CV-2011-
3134, slip op. (C.P. of Northampton Cnty. Aug. *, 2015), an opinion that is
being filed contemporaneously with this Opinion and that grants summary
judgment in the related mortgage foreclosure action involving the same
parties and the first mortgage described above.
5
Because Plaintiffs have pleaded no facts to rebut the presumptively
valid mortgages, the Second Amended Complaint creates no "conflict over
an interest in property." Nat'/ Christian, 597 A.2d at 250. Thus, the action
to quiet title is legally insufficient, and Defendant's demurrer will be
sustained.2 Finally, because the Court cannot discern any way in which an
additional pleading in this matter will vault Plaintiff's purported claims into a
place of legal sufficiency, and in light of the Court's opinion granting
summary judgment in the related mortgage foreclosure action, the Court will
dismiss Plaintiffs' Second Amended Complaint with prejudice and will not
grant leave to file any further amended complaints.3 See Hill, 85 A.3d at
557 (leave to amend following sustaining of demurrer may be refused where
there is no reasonable probability that amendment will cure defect).
WHEREFORE, the Court enters the following:
2
For this reason, the Court need not reach Defendant's second objection asserting the
pendency of a prior action.
3
It should be noted that Plaintiffs filed an almost identical action at docket number C-
48-CV-2014-1703. In an Order filed on October 22, 2014, in response to preliminary
objections, the Honorable Stephen G. Baratta, President Judge, dismissed Plaintiffs'
Complaint without prejudice. Plaintiffs did not file an amended complaint within twenty
days in that action, as required by Pennsylvania Rule of Civil Procedure 1028(e). Rather,
Plaintiffs filed the instant action. Thus, Plaintiffs may not file an amended complaint at
either docket number.
6
IN THE COURT OF COM MON PLEAS OF
NORTHAMPTON COUNTY, PENNSYLVANIA
CIVIL ACTION
VIRGINIA L. HUMPHREYS and )
BRIAN C. HUMPHREYS, )
Plaintiffs )
)
v. )
)
WELLS FARGO BANK, N.A., )
Defendant )
ORDER OF COURT
AND NOW, this 13th day of August, 2015, "Defendant's Preliminary
Objections to Plaintiffs' Second Amended Complaint," filed on April 8, 2015,
are hereby SUSTAINED. Plaintiffs' Second Amended Complaint, filed on
March 19, 2015, is hereby DISMISSED, with prejudice.
BY THE COURT:
J.
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IN THE COURT OF COMMON PLEAS OF .
NORTHAMPTON COUNTY, PENNSYLVANIA ~· .: .: •. ~. ",
,:.:.·i
CIVIL ACTION
WELLS FARGO BANK, N.A. s/i/i/t/ )
WACHOVIA BANK, N.A., ) No. C-48-CV-2011-3134
Plaintiff )
)
v. )
)
BRIAN C. HUMPHREYS and )
VIRGINIA L. HUMPHREYS, )
Defendants )
OPINION OF THE COURT
This matter is before the Court on Plaintiffs Motion for Summary
Judgment. Briefs have been filed, oral argument was heard on May 26,
2015, and the matter is ready for disposition. For the reasons that follow,
Plaintiff's Motion will be granted.
On April 6, 2011, Plaintiff filed a Mortgage Foreclosure Complaint that
alleges the following facts. On April 16, 2007, Defendants executed and
delivered a mortgage ("Mortgage") to Wachovia Bank, N .A.1 on property
located at 2253 Linden Street, in Bethlehem, Northampton County,
As discussed infra, Wachovia Bank, N.A. merged into Plaintiff and no longer exists.
1
Pennsylvania. (Comp!. id. ,i,i 5-6.)
Defendants also claim that they are "in receipt of a letter, dated October 9,
2012, from [Fannie Mae] stating that [Fannie Mae] now owns the
mortgage." (Id. ,i 14.)
Defendants' Response also includes a section entitled "Factual
Allegations." However, upon further review, this section is actually identical
to Defendants' Brief. Nevertheless, Defendants concede therein that
"[s]uccession of [Defendants'] Note from Wachovia Bank, N.A. (Wachovia)
to [Plaintiff] is not an issue in this case." (Resp., Factual Allegations ,i 1.)
In addition, Defendants assert that an "Experian credit report Exhibited in
the Complaint is intended to offer evidence that [Plaintiff] transferred
3
Throughout their Response, Defendants often mislabel themselves as "the Plaintiffs."
This is likely due to Defendants' status as the plaintiffs in Humphreys v, Wells Fargo Bank,
N.A., an action to quiet title docketed in Northampton County at No. C-48-CV-2014-12252
(the "Action to Quiet Title"). An Opinion and Order are being filed in that case
contemporaneously with the flling of the instant Opinion.
4
Although the Response includes a "Statement of Facts," it does not contain a
verification or notice to plead.
4
[Defendants'] Equity Account to another lender, and no-longer holds the
Account. If (Id. 'fl 2.)
Neither the letter from Fannie Mae informing Defendants that Fannie
Mae owns the Mortgage nor the Experian credit report appear in the instant
record, but they are attached to Defendants' Second Amended Complaint in
the Action to Quiet Title. "[A] court may not ordinarily take judicial notice in
one case of the records of another case." Gulentz v. Schanno Trensp., Inc.,
513 A.2d 440, 443 (Pa. Super. 1986). Nevertheless, even if the Court could
consider these materials, they would not be helpful to Defendants in
opposing summary judgment.
The letter from Fannie Mae, which is attached to the Second Amended
Complaint in the Action to Quiet Title as Exhibit E, does confirm that Fannie
Mae owns/invests in the Mortgage and that Plaintiff is the servicer.
However, as will be discussed in greater detail infra, this does nothing to
inhibit Plaintiff's ability to enforce the Mortgage through foreclosure
proceedings. As for the Experian credit report, which is attached to the
Second Amended Complaint in the Action to Quiet Title as Exhibit G,
Defendants contend that said report indicates that Plaintiff "reported to
Experian that it had transferred the Account, making it obvious, if correct,
that [ Plaintiff] is not in a position to litigate over the Account, which they
apparently admittedly no-longer own." (Resp. Factual Allegations ~ 2.)
Again, Defendants conflate the concepts of ownership of the Mortgage and
5
the right to enforce the same through foreclosure, a distinction that, as will
be shown infra, is fatal to Defendants' argument.
Pennsylvania Rule of Civil Procedure 1035.2 establishes the standard
of review for a motion for summary judgment as follows:
After the relevant pleadings are closed, but within such
time as not to unreasonably delay trial, any party may move for
summary judgment in whole or in part as a matter of law
(1) 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, or
(2) 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.
Pa.R.C.P. No. 1035.2. These two prongs represent the
two main avenues per which summary relief may be granted.
Employing the first of these, a movant may rely on
uncontroverted facts, and/or allow that the factual allegations
made by the non-moving party could be true, while contending
that, even accepting such facts, judgment should be rendered
for the movant as a matter of law. See Pa.R.C.P. No. 1035.2(1).
Alternatively, after discovery, a party may challenge the ability
of the non-moving party to adduce evidence of facts material to
establishing a claim or defense. See id. No. 1035.2(2).
Lance v. Wyeth, 85 A.3d 434, 449-450 (Pa. 2014).
Under either avenue, summary judgment may only be granted when
the record clearly shows that no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. Summers v,
6
Certainteed Cotp., 997 A.2d 1152, 1159 (Pa. 2010). The moving party
bears the burden of proving that no genuine issue of material fact
exists. Barnish v. KWI Bldg. Co., 916 A.2d 642, 645 (Pa. Super. 2007). In
deciding a motion for summary judgment, the record must be viewed in the
light most favorable to the non-moving party, and any doubt as to the
existence of a genuine issue of material fact must be resolved against the
moving party. Ario v. Ingram Micro, Inc., 965 A.2d 1194, 1200 (Pa. 2009).
Even where the facts are agreed upon, summary judgment cannot be
entered if the facts can support conflicting inferences. Washington v.
Baxter, 719 A.2d 733, 740 n.10 (Pa. 1998).
The party opposing a motion for summary judgment
may not rest upon the mere allegations or denials of the
pleadings but must file a response within thirty days after
service of the motion identifying
(1) one or more issues of fact arising from
evidence in the record controverting the evidence
cited in support of the motion or from a challenge to
the credibility of one or more witnesses testifying in
support of the motion, or
(2) evidence in the record establishing the facts
essential to the cause of action or defense which the
motion cites as not having been produced.
Pa.R.C.P. No. 1035.3(a)(1)-(2). In other words, the "[f]ailure of a non-
moving party to adduce sufficient evidence on an issue essential to its case
and on which it bears the burden of proof such that a jury could return a
verdict in its favor establishes the entitlement of the moving party to
7
judgment as a matter of law." Young v. Commonwealth, Dep 't of Transp.,
744 A.2d 1276, 1277 (Pa. 2000). In deciding a motion for summary
judgment, the "record" available for the court's examination includes the
pleadings, discovery materials, affidavits, and expert reports. Pa.R.C.P. No.
1035.1.
In a mortgage foreclosure action, summary judgment is
appropriate if the mortgagors "admit that the mortgage is in
default, that they have failed to pay interest on the obligation,
and that the recorded mortgage is in the specified amount."
Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. Ct.
1998) (citing Landau v. W. Pa. Nat'/ Bank, 445 Pa. 217, 282
A. 2d 335, 340 (Pa. 1971) ). Summary judgment may be granted
"even if the mortgagors have not admitted the total amount of
the indebtedness in their pleadings." Id.U.S. Bank, Nat. Ass'n v. Zimmer, No. 3: 12-CV-644, 2015 WL 412389, at *2
(M.D. Pa. Jan. 30, 2015). In the instant case, Defendants admit these
requisite elements, because the general denials contained in their Answer
act as admissions to all of the relevant allegations in Plaintiff's Complaint.5
As a result, there is no dispute that Defendants executed the Mortgage in
favor of Wachovia Bank, to which Plaintiff is the successor in interest by way
of merger, and that the Mortgage is in default. In addition to the deemed
5
"Averments in a pleading to which a responsive pleading is required are admitted
when not denied specifically or by necessary implication. A general denial or a demand for
proof ... shall have the effect of an admission." Pa.R.C.P. No. 1029(b). Generally
speaking, "for a denial to be specific, it must deny what is averred and then must
affirmatively aver what did occur in place of the facts that are denied." 5 STANDARD
PENNSYLVANIA PRACTICE 2d § 26:41. General denials by mortgagors in a foreclosure action,
"as to the principal and interest owing[,] must be considered an admission of those facts."
First Wisconsin Trust Co. v. Strausser, 653 A.2d 688, 692 (Pa. Super. 1995). In this case,
Defendants' Answer simply states "the allegation ... is denied" in response to each relevant
averment contained in Plaintiff's Complaint. (Answer ,i,i 5-11.) Thus, paragraphs five
through eleven of Plaintiff's Complaint are deemed admitted.
8
admissions, Defendants affirmatively admit the relevant allegations of
Plaintiff in their Response. (Resp., Statement of Facts ~«Jl 1, 8, 9.) Despite
this, Defendants oppose the entry of summary judgment on a ground that is
quickly becoming a tired one in this Commonwealth-that Plaintiff is not
entitled to enforce the Mortgage and/or is not the real party in interest.
To begin with, this argument is, in essence, a claim that Plaintiff lacks
the capacity to sue. "[P]reliminary objections [are] the appropriate method
by which to challenge a [plaintiff's] capacity to sue. 11 In re Adoption of
S.P. T., 783 A.2d 779, 782 (Pa. Super. 2001); Pa.R.C.P. No. 1028(a)(S).
"Lack of capacity to sue is waived if not raised on preliminary objections. 11
Carroll v. Exeter Twp., No. 1580 C.D.2013, 2014 WL 3812323, at *6 n. 18
(Pa. Commw. Aug. 4, 2014). Defendants did not file preliminary objections.
Thus, Defendants have waived this argument.
Even if this argument had not been waived, it is without merit.
Initially, the Court notes that there are no facts pleaded in Defendants'
response to Plaintiff's Complaint to support this argument. Further,
Defendants have adduced no evidence in response to Plaintiff's Motion to
support this argument. Rather, Defendants reply upon bald assertions in
their unverified Response to the Motion and documents contained in the
record of the Action to Quiet Title which suggest that Fannie Mae has
invested in or owns the Note. As noted above, a party opposing a motion
for summary judgment may not rest upon the mere allegations or denials of
9
the pleadings, nor the record in a collateral case, but must identify evidence
in the record which establishes an issue of material fact or supports a valid
defense. Defendants have done neither.
Finally, even if the Court accepted Defendants' bald assertions as true
and substantively considered the record in the Action to Quiet Title,
Defendants' argument lacks merit. Defendants' argument is focused on an
allegation that Fannie Mae is the true owner of the Note and, thus, must be
the one to enforce it. However, a similar argument was recently rejected by
the Superior Court. In PHH Mortgage Corp. v. Powell, 100 A.3d 611, 619
(Pa. Super. 2014), the appellant mortgagors "insist[ed] that the document
in [the appellee mortgage company]'s possession [could not] be the original
Note because they ha[d] presented evidence that the original Note must
instead [have] be[en] in the possession of Fannie Mae." A recitation of the
court's response to this argument is necessary and is as follows:
The Powells' claim that PHH does not possess the original
Note and Allonge is based solely on their insistence that the
documents in PHH's possession cannot be the originals because
they produced evidence showing that Fannie Mae possesses the
originals. Specifically, the Powells attached to their response to
PHH's second motion for summary judgment an affidavit from
Mary Gutowski ("Gutowski"), in which she represents that she
has expertise in searching for, obtaining, and understanding
business and corporate records. According to Gutowski, two
documents (one obtained from the office of Congressman Mike
Kelly and another from a search of a Fannie Mae database)
describe Fannie Mae as the "investor" and "owner" of the
Powells' loan. Gutowski concludes that these documents call into
question PH H's "claim of ownership" of the Powells' Note.
10
PHH, however, does not claim to be the "owner" of the
Note, but rather avers that it is a "person entitled to enforce" the
Note because it is the holder in due course based upon its
possession of the original Note and Allonge. Ownership of the
Note is irrelevant to the determination of whether PHH is a
"person entitled to enforce" the Note, as the Comment to section
3203 of the PUCC makes clear:
The right to enforce an instrument and ownership of
the instrument are two different concepts. A thief
who steals a check payable to bearer becomes the
holder of the check and a person entitled to enforce
it, but does not become the owner of the check ....
Ownership rights in instruments may be determined
by principles of the law of property, independent of
Article 3, which do not depend upon whether the
instrument was transferred under Section 3-203.
Moreover, a person who has an ownership right in an
instrument might not be a person entitled to enforce
the instrument. ... · Although [a] document may be
effective to give Y a claim to ownership of the
instrument, Y is not a person entitled to enforce the
instrument until Y obtains possession of the
instrument.
13 Pa.C.S.A. § 3203 Comment.
In its Second Motion for Summary Judgment, including its
affidavits and other exhibits (e.g., the Note, Allonge, Mortgage,
and Assignment), PHH has established as a matter of law that it
is a holder in due course of the Powells' Note and thus is
"entitled to enforce" it pursuant to section 3301 of the PUCC.
Evidence that some other entity may be the "owner" or an
"investor" in the Note is not relevant to this determination, as
the entity with the right to enforce the Note may well not be the
entity entitled to receive the economic benefits from payments
received thereon. The Powells have produced no evidence that
creates a genuine issue of material fact with respect to PHH's
claim of entitlement to enforce the Note, including no evidence
that Fannie Mae (rather than PHH) has possession of the original
Note.
Powell, 100 A.3d at 620-21 (citations omitted) (emphasis added).
11
The Powell court went 011 to affirm the trial court's entry of summary
judgment in favor of the appellee mortgage company. Id. at 621. Here, like
the Powells, Defendants argue that "[t] he facts in the record prove that
Wachovia transferred [Defendants'] Note to [Fannie Mae] before Wachovia's
merger with [Plaintiff]." (Defs.' Br. at 4.) But the instant record does not
reveal any evidence in support of that contention, and Defendants have
produced none. Continuing on, Defendants argue that the proper parties to
enforce the Note may well be the "investors who purchased shares of Fannie
Mae." (Id. at 5.) In line with Powell, this argument is meritless.
Defendants additionally argue, "The [Uniform Commercial] Code is clear: A
person either owns the instrument, with all of its associated rights, or does
not own the instrument, and has none of the associated rights." (Id. at 7.)
Again, even assuming, arguendo, that Fannie Mae is the true owner of the
Note/debt, Powell makes clear that the concepts of ownership and
enforcement rights are wholly distinct. That is, an entity can enforce a
mortgage debt without owning it, and vice versa. As Defendants' array of
arguments and sub-arguments continue, they begin to trip themselves up by
acknowledging that "there is nothing in the record to indicate that the Note
was ever held by any singular entity other than [Plaintiff]." (Id. at 8.)
Defendants are correct in at least that respect. The Note is payable to
Plaintiff's predecessor by merger, as the original lender, and has not been
assigned to another servicer as in Powell, making this an even stronger case
12
than Powell when it comes to any a_lleged claim that Fannie Mae must be the
one to enforce the Note.
Quite simply, Plaintiff has attached a copy of the Note to its Motion,
and the Note is clearly signed by Defendants. The fact that the section of
the Note labeled "Endorsement" is completely blank is irrelevant because
there is no evidence that anyone other than Pia inti ff or its predecessor by
merger ever held the Note. Furthermore, the Court sees no material
difference between Powell, where the mortgagee produced the original note,
and this case, where Plaintiff has produced a copy bearing Defendants'
signatures and an affidavit stating that it possesses the original, especially
when there are no issues in this case, as there were in Powell, concerning
any assignments, transfers, or endorsements of payment rights to any entity
other than the original lender. Keeping in mind that Defendants, in opposing
a motion for summary judgment, bear the burden of coming forward with
evidence that rebuts the evidence in support of Plaintiff's Motion, it is clear
that the instant case is indistinguishable from Powell, as well as an ever-
growing list of similar cases where mortgage debtors fail to deny the prime
facie elements of a mortgage foreclosure action yet oppose the entry of
judgment due to an allegedly faulty chain of possession of the pertinent
mortgage documentation. See Bank of America, N.A. v. Gibson, 102 A.3d
462 (Pa. Super. 2014); see also Jobe v. Wells Fargo Bank, N.A., Civil Action
No. 3:10-1710 2014 WL 271654 (M.D. Pa. Jan. 23, 2014); Nationstar
13
Mortgage LLC v. Masucci, No. 201303627 2014 WL 7896604 (C.P. of
Montgomery Cnty. Feb. 3, 2014); BAC Home Loans Servicing, L.P. v. Viola,
No. 00101 2014 WL 786387 (C.P. of Phila. Cnty. Jan. 28, 2014). For all of
the above reasons, even if the issue Defendants now raise had not been
waived, it would not assist Defendants in demonstrating that Plaintiff is not
entitled to judgment as a matter of law.
As all of the elements of Plaintiff's claim have been established, and
since Defendants have not identified any genuine issue of material fact
arising from evidence in the record, Plaintiff is entitled to judgment as a
matter of law.
WHEREFORE, the Court enters the following:
14
IN THE COURT OF COMMON PLEAS OF
NORTHAMPTON COUNTY, PENNSYLVANIA
CIVIL ACTION
WELLS FARGO BANK, N,A. s/i/i/t/ )
WACHOVIA BANK, N.A., ) No.C-48-CV-2011-3134
Plaintiff )
)
r--'
v. ) C::::>
)
BRIAN C. HUMPHltEYS and )
VIRGINIA L. HUMPHREYS, )
Defendants )
ORDER OF COURT
Summary Judgment is hereby GRANTED. An in rem judgment is hereby
entered in favor of Plaintiff and against Defendants in the amount of
$137,770.28, plus costs and interest, at the per diem rate of $17.67, from
December 8, 2014, and for foreclosure and sale of the mortgaged premises.
BY THE COURT:
],
1