HSBC Bank USA v. Reyes, F.

J-A06012-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HSBC BANK USA, NATIONAL IN THE SUPERIOR COURT OF
ASSOCIATION, AS TRUSTEE (THE PENNSYLVANIA
TRUSTEE) FOR THE HOLDERS OF
DEUTSCHE ALT-A SECURITIES, INC.,
MORTGAGE LOAN TRUST, SERIES 2007-
RAMP 1
v.
FRANCISCA REYES A/K/A FRANCISCA M.
REYES
Appellant No. 2545 EDA 2016
Appeal from the Order June 15, 2016
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2014-32714
BEFORE: PANELLA, J., SHOGAN, J., and RANSOM, J.
MEMORANDUM BY PANELLA, J. FILED MAY 31, 2017
In this mortgage foreclosure action, Appellant, Francisca Reyes,
appeals from the order entered June 15, 2016, granting the motion for
summary judgment filed by Appellee, HSBC Bank USA, N.A., as trustee for
the holders of Deutsche Alt-A Securities, Inc., Mortgage Loan Trust, Series
2007-RAMP 1, awarding it judgment in rem for $962,421.45. At the time of
the filing of the motion for summary judgment, it had been a little over six
years since Reyes paid her mortgage. We affirm.
On June 27, 2006, Reyes, through her daughter as agent, executed a
promissory note in favor of GreenPoint Mortgage Funding, Inc., for
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$640,000. A mortgage on the property located at 1100 Valley Road, Elkins
Park, executed in favor of Mortgage Electronic Registration Systems, Inc.
(“MERS”), as nominee for GreenPoint, its successors and assigns, secured
the note. The mortgage was filed with the Recorder of Deeds of Montgomery
County.
Reyes stopped making mortgage payments on February 1, 2010. On
April 28, 2012, MERS transferred the mortgage to Residential Funding
Company, LLC., by way of assignment. The promissory note was later
transferred to HSBC, as trustee.
On December 11, 2014, HSBC filed a complaint in mortgage
foreclosure alleging that Reyes stopped paying on the mortgage on February
1, 2010. The complaint alleged that as of August 18, 2014, Reyes owed
$884,046.79, including interest, late charges, escrow deficit, and servicer
fees. HSBC sought a judgment in rem for foreclosure of the property in that
amount, plus other costs, fees, and charges.
Because no assignment existed transferring the mortgage from
Residential Funding to HSBC, HSBC moved to “re-establish chain of title of
mortgage,” averring that after the transfer to Residential Funding, the note
and mortgage were transferred by Residential Funding to HSBC. In the filing,
HSBC also claimed possession of the original note, endorsed in blank by
Residential Funding, which established HSBC’s right to enforce and foreclose
upon the mortgage. The trial court granted the motion on April 9, 2015,
deeming the mortgage assigned of record to HSBC.
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As that was ongoing, HSBC was unable to effect formal service on
Reyes, but Reyes was aware of the complaint as she filed, through counsel,
preliminary objections on April 4, 2015. On June 8, 2015, HSBC effected
service on Reyes. Reyes filed another set of preliminary objections, again
through counsel, on June 25, 2015. On October 30, 2015, Reyes entered her
appearance as proceeding pro se. Numerous filings over the months then
ensued between the parties (and third parties no longer part of this
litigation). We assume the parties’ familiarity with those filings and we need
not recount them here.
The trial court eventually denied Reyes’s preliminary objections. She
filed an answer with new matter, alleging duress, fraud, illegality, and
unclean hands, on February 23, 2016. HSBC moved for summary judgment
a month later. Counsel entered his appearance on behalf of Reyes on April
18, 2016, and timely filed a response to the motion for summary judgment.
On May 24, 2016, Reyes moved for reconsideration of the trial court’s April 9
order that deemed the mortgage assigned of record to HSBC. The trial court
denied the motion for reconsideration, and later granted HSBC’s motion for
summary judgment. Reyes appealed.
On appeal, Reyes argues that the trial court erred in granting
summary judgment when “discovery had not yet been taken” and when
“prior to any discovery being taken … an issue of material fact existed with
regard to the allegations that [Reyes] disputed.” Appellant’s Brief, at 2.
We review a challenge to the entry of summary judgment as follows:
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[We] may disturb the order of the trial court only where it is
established that the court committed an error of law or abused
its discretion. As with all questions of law, our review is plenary.
In evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. See Pa.R.C.P., Rule 1035.2. The rule
states that where there is no genuine issue of material fact and
the moving party is entitled to relief as a matter of law,
summary judgment may be entered. Where the nonmoving
party bears the burden of proof on an issue, he may not merely
rely on his pleadings or answers in order to survive summary
judgment. Failure of a non-moving party to adduce sufficient
evidence on an issue essential to his case and on which he bears
the burden of proof establishes the entitlement of the moving
party to judgment as a matter of law. Lastly, we will review 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.
E.R. Linde Const. Corp. v. Goodwin, 68 A.3d 346, 349 (Pa. Super. 2013)
(citation omitted).
The holder of a mortgage has the right, upon default, to bring a
foreclosure action. See Cunningham v. McWilliams, 714 A.2d 1054, 1056
(Pa. Super. 1998). The holder is entitled to summary judgment “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.” Id., at 1057 (citation omitted).
In its complaint, HSBC alleged the following:
3. On 06/27/2006, Defendant(s) and/or their predecessor:
FRANCISCA REYES A/K/A FRANCISCA M. REYES
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Promised to pay to the order of GreenPoint Mortgage
Funding, Inc., the principal sum of $640,000.00 payable
with interest thereon provided in the Note.
…
5. Said mortgage is in default in that payment due
02/01/2010, and all subsequent payments have
not been made, and by its terms, upon breach and
failure to cure said breach after notice, all sums
secured by said Mortgage, together with the other
charges authorized by said Mortgage and itemized
below, shall be immediately appealable.
6. After demand, the Defendant(s) continues to fail or
refused to comply with the terms of the Mortgage as
follows:
(a) By failing or refusing to pay the installments of
principal and interest when due in the amounts
indicated below;
(b) By failing or refusing to pay other charges, if
any, indicated below.
The following amounts are due on the said Mortgage
or modification agreement as of the date stated
below
Unpaid principal Balance $642,237.72
Accumulated Interest $156,884.12
Accumulated Late Charges $8,081.37
Escrow Deficit/(Reserve) $76,508.54
Prior Servicer Fees $335.00
Grand Total $884,046.79
Complaint, filed 12/11/14, at ¶¶ 3, 5-6.
In her answer, Reyes responded as follows:
3. Admitted.
…
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5. Deny. Defendant is not delinquent in all payments as
of February 1, 2010.
6. Deny. Defendant disputes Plaintiff’s calculation of
unpaid principal and interest. It is Defendants [sic]
belief that the following calculations are correct:
$0.00.
Answer, filed 2/23/16, at ¶¶ 5-6.
Reyes admitted the mortgage was in the specified amount. As for
delinquent payments, Reyes’s answer is not specific. She answered that she
was not delinquent “in all payments as of February 1, 2010” (emphasis
added). But the payments up to February 1 are not in dispute; it is the lack
of any payments after February 1 that is the issue. Thus, the answer in
paragraph five is nothing more than a general denial, constituting an
admission. See Pa.R.C.P. 1029(b). She has, however, specifically answered
that there was no amount due. This specific denial does not constitute an
admission. This specific denial in her answer is not enough, however, to
defeat the motion for summary judgment.
When a motion for summary judgment has been filed by the
mortgagee in a mortgage foreclosure action, the mortgagor, as the
nonmoving party, may not rest upon the averments contained in the
pleadings. See Pa.R.C.P. 1035.3. To raise a genuine issue of fact, Reyes had
“the burden to present ‘facts’ by counter-affidavits, depositions, admissions,
or answers to interrogatories.” New York Guardian Mortg. Corp. v.
Dietzel, 524 A.2d 951, 952 (Pa. Super. 1987) (citation omitted). Simply
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put, Reyes had to identify one or more issues of fact arising from evidence in
the record controverting the evidence cited in support of the motion. See
Pa.R.C.P. 1035.3.
Reyes first argues that it was improper for the trial court to grant
summary judgment as discovery had not taken place “in the mere four
weeks between the filing” of the answer and the filing for summary
judgment. Appellant’s Brief, at 2. But four weeks is not the appropriate time
frame for consideration.
“Parties must be given reasonable time to complete discovery before a
trial court entertains any motion for summary judgment…” Reeves v.
Middletown Athletic Ass’n, 866 A.2d 1115, 1124 (Pa. Super. 2004)
(citation omitted). Here, the trial court granted summary judgment prior to
the formal close of discovery. Rule 1035.2 provides that a party may move
for summary judgment at any time whenever there is no genuine issue of
material fact as to a necessary element of the cause of action or defense
that could be established by additional discovery, or after the completion of
discovery relevant to the motion. See Pa.R.C.P. 1035.2(1-2).
A party seeking discovery must do so “in a timely fashion.” Reeves,
866 A.2d at 1124 (citation omitted). The panel explained in Reeves that
where ample time for discovery has passed, the party seeking
discovery (and opposing summary judgment) is under an
obligation to show that the information sought was material to
their case and that they proceeded with due diligence in their
attempt to extend the discovery period.
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Id. (citation omitted).
As noted, Reyes filed preliminary objections on June 25, 2015.
Discovery may commence during the preliminary objection stage of
pleading. See, e.g., Kubik v. Route 252, Inc., 762 A.2d 1119, 1123 (Pa.
Super. 2000). For Reyes, the precise issues of the dispute, at that time,
were clear—the allegation that she defaulted on her mortgage and what she
owed. There was no need for her to wait.
And wait she did. In fact, Reyes “did not propound any discovery” in
this matter—at all. Trial Court Opinion, filed 9/13/16, at 3. As of the date of
the filing of the motion for summary judgment, eight months and 27 days
had elapsed since the filing of Reyes’s second preliminary objections. Under
these circumstances, we find the trial court did not abuse its discretion by
deciding HSBC’s summary judgment motion prior to the completion of
discovery.
Reyes next claims that material issues of fact exist and that permitting
discovery would confirm their existence. We have just found, however, that
Reyes’s failure to request any discovery forecloses her attempt to seek
additional discovery time. In any event, we briefly explain why the two
issues she identifies in her brief do not and would not, through further
discovery, result in a material issue of fact for either.
Reyes contends, “[h]ad the [t]rial [c]ourt allowed Defendant to take
discovery, a developed record could have shed light on several issues…”
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Appellant’s Brief, at 10. The only two she identifies in her brief are (1)
whether HSBC “actually does hold the original note with Defendant’s wet
signature, upon which Plaintiff entirely relies their standing upon in this
matter;” and (2) “what is the actual amount due and owing, in light of the
dispute among the parties on that issue, and Plaintiff’s inconsistencies
regarding the same.” Id., at 10. Neither raise or would raise a material issue
of fact.
As noted, HSBC filed a motion to “re-establish chain of title of
mortgage,” averring that after the transfer to Residential Funding, the note
and mortgage were transferred by Residential Funding to HSBC. In that
filing, HSBC also claimed possession of the original note, endorsed in blank
by Residential Funding. The note endorsed in blank conclusively establishes
HSBC’s right to enforce and foreclose upon the mortgage. See Bank of
America, N.A. v. Gibson, 102 A.3d 462, 466 (Pa. Super. 2014). Reyes
challenged that motion in the trial court and lost—and she does not
challenge that ruling in this appeal.
As for the amount due and owing, Reyes’s general denial in her answer
constituted an admission that she was in default beginning February 1,
2010. She specifically answered that the amount due was “$0.00.” In its
motion for summary judgment, HSBC claimed that the total amount due on
the mortgage was $962,421.15. See Plaintiff’s Motion for Summary
Judgment, filed 3/23/16, at ¶ 14 and Exhibit “H.”
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In her response to the motion for summary judgment, Reyes did not
claim that the amount due was “$0.00,” only that she “has made mortgage
payments that are not reflected in Plaintiff’s calculations.” Defendant’s
Opposition to Plaintiff’s Motion for Summary Judgment, 4/22/16, at ¶ 14.
She elaborated on this claim in her brief in support of her response to the
motion for summary judgment. There she claimed, “Bank of America, which
at one point represented itself as the servicer of the loan to Defendant, took
a payment of Defendant and, rather than deduct the amount paid from the
debt, added it to the principal amount due and owing.” Memorandum of Law
in Opposition to Plaintiff’s Motion for Summary Judgment, filed 4/22/16, at
3. See also Appellant’s Brief, at 5.
Reyes attached to her response the bank statement from Bank of
America evidencing mortgage payments. See R.R., at 167a.1 The “statement
period” is “06/2006 – 06/2015” and the “date prepared” is “06/26/2015.”
Reyes attached only one page to her response, which has payments from
December 15, 2008, to May 27, 2010. We, like the trial court, are unable to
determine “which payment was allegedly misapplied” and Reyes offers no
specific indication. Trial Court Opinion, filed 9/13/16, at 7.
____________________________________________
1
The documents cited in this memorandum by reference to the reproduced
record are contained in the certified record. We cite to the reproduced record
for ease of reference.
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We do observe that the statement reflects that she made a “regular
payment” on November 27, 2009, credited to the mortgage as payment for
December 2009. The next payment is on May 27, 2010, with a “regular
payment” of $3,461.02, credited to the mortgage as payment for January
2010—one month before she stopped paying her mortgage. The statement
indicates that the outstanding balance on the mortgage, after accounting for
the January payment, as $642,237.72.
Reyes has failed to identify one or more issues of fact arising from
evidence in the record controverting the evidence cited in support of the
motion.2 Over seven years have now passed since Reyes stopped paying her
____________________________________________
2
On appeal, Reyes states a fact not raised in her response to the motion for
summary judgment, but only in her brief in support. Reyes claims that
“Ocwen [Loan Serving, LLC], which has also represented itself as the
servicer of the loan has set forth two different per diem rates, each of which
contradict the per diem calculation set forth in Plaintiff’s moving papers and
calculation of the alleged amount due and owing.” Memorandum of Law in
Opposition to Plaintiff’s Motion for Summary Judgment, filed 4/22/16, at 3.
See also Appellant’s Brief, at 5. “Facts stated only in briefs or memoranda
of law cannot be considered by the court in adjudicating a motion for
summary judgment.” 3 Goodrich Amram 2d § 1035.3(a):8, Briefs or
memoranda of law.
Despite that, we note that Reyes attached a four-page document from
Ocwen Loan Serving, LLC, to her response to the motion for summary
judgment. See R.R. 168a-171a. As the trial court aptly noted, concerning
this “bald assertion,” “[n]owhere on this document is the subject [l]oan
identified,” and while the document does indicate that the per diem rate
differs from that claimed in the complaint, “Reyes does not establish what
the per diem should be or why HSBC’s claim is incorrect.” Trial Court
Opinion, filed 9/13/16, at 7-8.
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mortgage. The trial court committed no abuse of discretion in granting
summary judgment in favor of HSBC.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/31/2017
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