Bac Home Loans v. Gubrud, K.

J-A29024-13
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BAC HOME LOANS SERVICING, LP : IN THE SUPERIOR COURT OF
f/k/a COUNTRYWIDE HOME LOANS : PENNSYLVANIA
SERVICING, LP, :
:
Appellee :
:
v. :
:
KENT GUBRUD, :
:
Appellant : No. 3285 EDA 2012
Appeal from the Judgment Entered November 10, 2012,
In the Court of Common Pleas of Northampton County,
Civil Division, at No. C 48 CV 2010-8820.
BEFORE: GANTMAN, SHOGAN and PLATT*, JJ.
MEMORANDUM BY SHOGAN, J.: FILED SEPTEMBER 11, 2014
pro se from the order
granting judgment in favor of BAC Home Loans Servicing, LP f/k/a
foreclosure action. We affirm.
We summarize the history of this case as follows. The mortgage at
issue in this matter, dated October 7, 2005 for $359,600.00, was recorded
on October 18, 2005, in Northampton County. The mortgage was originally
being Key Bank National Association).
__________________
*Retired Senior Judge assigned to the Superior Court.
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Gubrud failed to make several mortgage payments. In anticipation of
filing a foreclosure action against Gubrud, Appellee, which became holder of
the first lien mortgage, sent Gubrud pre-foreclosure Act 91 cure notices
dated June 1, 2010, via certified mail. The notices were served upon
Gubrud, who signed for them. On August 13, 2010, Appellee filed an action
in mortgage foreclosure against Gubrud. Gubrud filed an answer to the
complaint containing general denials. Gubrud did not file preliminary
objections and did not file a new matter. On May 16, 2011, assignment of
the mortgage from MERS to Appellee was recorded.
On April 11, 2012, Appellee filed a motion for summary judgment for
On May 25, 2012, Gubrud filed a reply
opposing the motion for summary judgment and a cross-motion for
summary judgment, claiming that Appellee did not have standing to proceed
with the underlying foreclosure action. On June 25, 2012, Appellee filed a
repl -motion for summary judgment. On September 4,
2012, oral argument was held on both motions for summary judgment. On
Supplemental Brief In Support Of Its Summary Judgment
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motion for summary j
for summary judgment, in the amount of $368,717.38, and in the same
followed.
Gubrud presents the following issues for our review:
attorney had failed to verify the complaint on behalf of
[Appellee] in accordance with Rule 1024 and also falsely claimed
personal knowledge?
Summary Judgment Motion which established that [Appellee]
failed to establish possession of the Note?
C. Did the trial Court
Motion for Summary Judgment which established that [Appellee]
(a stranger to the Note and Mortgage) failed to demonstrate that
it had acquired from MERS the right to enforce the Note because
MERS (also a stranger to the Note) had acquired a sufficient
ownership interest in the Note?
because [Gubrud] established that [Appellee] was unable to cure
its lack of standing at the time it filed its complaint via
subsequent Assignment?
Judgment Motion when [Gubrud] established that [Appellee]
failed to join an indispensible [sic] party?
]
complaint failed to allege whether its Assignment was oral or
written and failed to attach a copy of the Note?
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G. Did the trial court err in granting [Appellee] Summary
] alleged failure to specifically
deny Paragraphs 4-8 of the complaint, despite the court and
[Appellee] admitting that [Gubrud] had sufficiently disputed
Paragraphs 1 and 3?
Initially, we observe that in reviewing matters of summary judgment,
we are governed by the following well-established principles:
Our scope of review of an order granting summary
judgment is plenary. We 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. Chenot v. A.P.
Green Services, Inc., 895 A.2d 55, 60-61 (Pa. Super. 2006)
(citation omitted).
proof of the elements of his cause of action. Chenot, 895 A.2d
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
of any material fact as to a necessary element of the cause of
action or defense which could be established by additional
d
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. Chenot, 895 A.2d
at 61.
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When reviewing a grant of summary judgment, we are not
own conclusions. Id
discretion requires action in conformity with law on facts and
circumstances before the trial court after hearing and
Chenot, 895 A.2d at 61 (citation omitted).
Consequently, the court abuses its discretion if, in resolving the
issue for decision, it misapplies the law, exercises its discretion
in a manner lacking reason, or does not follow legal procedure.
Id. (citation omitted).
Where the discretion exercised by the trial court is
challenged on appeal, the party bringing the challenge bears a
heavy burden. It is not sufficient to persuade the appellate court
that it might have reached a different conclusion if charged with
the duty imposed on the court below; it is necessary to go
further and show an abuse of the discretionary power. Chenot,
895 A.2d at 61 (citation omitted). An abuse of discretion is not
merely an error of judgment, but if in reaching a conclusion the
law is overridden or misapplied or the judgment exercised is
manifestly unreasonable or the result of partiality, prejudice,
bias or ill-will, as shown by the evidence or the record, discretion
is abused. Id. at 61-62 (citation omitted).
Continental Casualty Company v. Pro Machine, 916 A.2d 1111, 1115-
1116 (Pa. Super. 2007).
Gubrud first argues that the trial court erred when it failed to grant his
attorney failed to verify the complaint on behalf of Appellee. Specifically,
Gubrud contends that the verification of the complaint filed by Appellee,
which initiated this matter, was not in accordance with Pa.R.C.P. 1024 and
h he
did not have.
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Before we may address the merits of this issue, we must first
determine whether Gubrud has properly preserved the issue before the trial
court. Pennsylvania Rule of Civil Procedure 1032 addresses waiver of
defenses and provides, in relevant part, as follows:
Rule 1032. Waiver of Defenses. Exceptions. Suggestion
of Lack of Subject Matter Jurisdiction or Failure to Join
Indispensable Party
(a) A party waives all defenses and objections which are not
presented either by preliminary objection, answer or reply,
except a defense which is not required to be pleaded under Rule
1030(b) [the affirmative defenses of assumption of the risk,
comparative negligence and contributory negligence], the
defense of failure to state a claim upon which relief can be
granted, the defense of failure to join an indispensable party, the
objection of failure to state a legal defense to a claim, the
defenses of failure to exercise or exhaust a statutory remedy
and an adequate remedy at law and any other nonwaivable
defense or objection.
Pa.R.C.P. 1032(a).
Pennsylvania Rule of Civil Procedure 1017 specifies the list of
permissible pleadings allowed in civil matters and provides, in relevant part,
as follows:
Rule 1017. Pleadings Allowed
(a) Except as provided by Rule 1041.1 [addressing
asbestos litigation], the pleadings in an action are limited to
(1) a complaint and an answer thereto,
(2) a reply if the answer contains new matter,
a counterclaim or a cross-claim,
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(3) a counter-reply if the reply to a
counterclaim or cross-claim contains new matter,
(4) a preliminary objection and a response
thereto.
Pa.R.C.P. 1017(a).
Pennsylvania Rule of Civil Procedure 1028 addresses preliminary
objections and provides, in relevant part, as follows:
Rule 1028. Preliminary Objections
(a) Preliminary objections may be filed by any party to any
pleading and are limited to the following grounds:
***
(2) failure of a pleading to conform to law or rule
of court . . . .
Pa.R.C.P. 1028(a)(2).
Our review of the record reflects that, while Gubrud did file an answer
answer contained only cursory denials of the facts pled within the complaint.
ter. Furthermore, our review
of the record reflects that Gubrud failed to follow Rule 1028(a)(2) and file
preliminary objections to the complaint, in which he would have properly
P.
1024. Thus, we are constrained to conclude that, pursuant to Rule 1032,
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been waived.1
In his second issue, Gubrud again argues that the trial court erred in
failing to grant his motion for summary judgment. Specifically, Gubrud
contends that summary judgment should have been granted in his favor
because Appellee failed to establish possession of the original note, which
precipitated the instant mortgage foreclosure action. Essentially, Gubrud
instant mortgage foreclosure action. In support of his contention, Gubrud
JP Morgan Chase Bank, N.A. v. Murray, 63
A.3d 1258 (Pa. Super. 2013). For the following reasons, we conclude that
this issue is waived. In addition, we conclude that our decision in Murray
does not provide grounds for relief.
the instant action in mortgage foreclosure, we are constrained to conclude
1
In addition, to the extent that Gubrud relies upon our decision in JP
Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258 (Pa. Super. 2013) to
we note that Murray, discussed infra, is readily distinguishable because the
defendant in Murray actually filed preliminary objections to the complaint
and included a challenge to the verification in his preliminary objections.
Such was not the case in the instant matter.
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cursory denials of the facts pled and did not contain any new matter. Thus,
we must conclude that, under Pa.R.C.P. 1032, the challenge to standing due
to an alleged lack of possession of the note in question is waived.
Also, we must observe that our decision in Murray is distinguishable
from the instant case. In Murray, the defendant challenged the standing of
the mortgage holder to initiate the foreclosure proceedings in preliminary
objections. Instantly, Gubrud failed to make any such challenge in either his
answer to the complaint in mortgage foreclosure, or by filing preliminary
objections. Thus, we must conclude that Murray does not provide Gubrud
with the relief he seeks.
In his third issue, Gubrud further argues that the trial court erred in
failing to grant his motion for summary judgment on the basis that proper
possession of the note was not established. He alleges that Appellee failed
to demonstrate that MERS had ever acquired any relevant ownership
interest in the note, which would have permitted MERS to transfer title to
Appellee. Gubrud concludes that, as a result, Appellee failed to prove a right
to enforce the note.
In MERS v. Ralich, 982 A.2d 77 (Pa. Super. 2009), we addressed a
somewhat similar argument wherein the Ralichs alleged MERS lacked the
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were transferred from MERS to American Home Mortgage Servicing, Inc.
The mortgage and note were then transferred through bankruptcy from
American Home Mortgage Servicing, Inc. to AH Mortgage Acquisition Co. Inc.
In concluding that MERS had the authority to act under the language
of the appropriate documents, we observed the following:
The Mortgage provides at ¶ C that MERS is the mortgagee
successors and assigns.
The Mortgage also provides:
Borrower understands and agrees that MERS holds
only legal title to the interests granted by Borrower
in this Security Instrument, but, if necessary to
comply with law or custom, MERS (as nominee for
right: to exercise any or all of those interests,
including, but not limited to, the right to foreclose
and sell the Property; and to take any action
required of Lender including, but not limited to,
releasing and canceling this Security Instrument.
Id. at 3 (emphasis added).
As the trial court correctly found, the Mortgage vests MERS
with the authority, as nominee, to enforce the loan. The trial
and deed must be set aside for want of authority is directly at
odds with the explicit acknowledgement by [the] Ralich[s] at the
time of refinancing that MERS would have precisely the authority
Ralich, 982 A.2d at 81 (emphasis in original).
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Our review of the record reflects that the mortgage at issue in this
case contains the identical language as the mortgage cited above in our
decision in Ralich. See
Summary Judgment at p. 3 of 16. Accordingly, as this Court held in Ralich,
we are constrained to conclude that MERS had a valid ownership interest in
the security documents and the authority to enforce the loan in question.
Appellee lacks merit.
In his fourth and fifth issues, Gubrud presents interrelated arguments.
Gubrud asserts that the trial court erred in failing to grant his motion for
summary judgment because Appellee was unable to cure its lack of standing
at the time it filed its complaint,
favor was necessary because Appellee failed to join as a plaintiff an
indispensable party who owned the note. Essentially, Gubrud believes that
Appellee could not cure its alleged lack of standing at the time it filed its
complaint in August of 2010, by subsequently obtaining possession of the
relevant documents by assignment from MERS in May of 2011.
A plaintiff in a foreclosure action is required to set forth, in the
complaint, all assignments of the mortgage. Pa.R.C.P. 1147(a)(1). This
Court has previously held that setting forth the chain of assignments of a
mortgage in the complaint was critical to establishing standing in a
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foreclosure action. See Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919,
922 (Pa. Super. 2010) (holding allegations by a purported mortgagee that it
owned the subject mortgage and that there was a pending assignment to
that mortgagee were sufficient to establish standing for foreclosure action);
US Bank N.A. v. Mallory, 982 A.2d 986, 993 (Pa. Super. 2009) (holding
interest with regard to the subject mortgage; Pa.R.C.P. 1147(a)(1) does not
require recorded assignment as prerequisite to filing complaint in mortgage
foreclosure).
Our review of the record reflects that Appellee set forth the
assignment of the mortgage from MERS to Appellee and stated that Appellee
Assignment of Mortgage to be sent for Complaint, 8/11/10, at ¶
1. This language is sufficiently similar to the language found adequate in
Lupori, and we conclude that it adequately establishes the assignment of
the mortgage from MERS to Appellee. Lupori, 8 A.3d at 922.
In addition, with regard to the note, in Murray this Court held that a
note secured by a mortgage is a negotiable instrument under the
possession by which [a party] come[s] to hold the [n]ote [is] immaterial to
Id. at 1266. To have standing to bring a
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foreclosure action on property used to secure a note, a party need only
establish actual possession of the note. Id.
Here, Gubrud argues that Appellee was required to produce the
original documents making the assignment of the mortgage and note to
Appellee. However, in Mallory, we held that to establish standing, the
assignment need not even be recorded or finalized, so long as the bank
avers that it is the owner of the mortgage and that an assignment is
pending. Mallory, 982 A.2d at 994. We therefore discern no merit to
In his sixth issue, Gubrud attempts to present yet another challenge to
judgment should
whether its assignment was oral or written and failed to attach a copy of the
mortgage note.
As we previously discussed, an assignment need not be recorded prior
to the commencement of foreclosure proceedings. Lupori, 8 A.3d at 922;
Mallory, 982 A.2d at 993. As the complaint in mortgage foreclosure states,
formalizing the Assignment of Mortga
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contrary assertion lacks merit.
n that the mortgage note
was not attached to the complaint, our review of the record reflects that
such was indeed the case. However, Gubrud failed to raise this challenge to
the trial court either in a new matter or the filing of preliminary objections.
Therefore, we are constrained to conclude that the claim is waived for
purposes of this appeal.
In his final issue presented on appeal, Gubrud argues that the trial
court erred in granting summary judgment in favor of Appellee based upon
to specifically deny various paragraphs contained in the
complaint filed by Appellee. Gubrud contends that it was not necessary for
him to specifically deny every paragraph of the complaint filed by Appellee.
For the following reasons, we conclude this claim lacks merit.
We have long stated that in a mortgage foreclosure action, summary
judgment is proper if there is no genuine dispute that: (1) the recorded
mortgage is in the specified amount, (2) the mortgage is in default, and (3)
the mortgagor failed to pay interest on the obligation. Cunningham v.
McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998). This is true even if
the mortgagor has not admitted the specific amount of indebtedness in their
pleadings. Id.-14-
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Pennsylvania Rule of Civil Procedure 1029 requires a defendant to
admit or deny each averment of fact within a complaint with specificity.
Rule 1029 addresses the effect of denials in responsive pleadings and
provides, in relevant part, as follows:
Rule 1029. Denials. Effect of Failure to Deny
(a) A responsive pleading shall admit or deny each averment of
fact in the preceding pleading or any part thereof to which it is
responsive. A party denying only a part of an averment shall
specify so much of it as is admitted and shall deny the
remainder. Admissions and denials in a responsive pleading
shall refer specifically to the paragraph in which the averment
admitted or denied is set forth.
(b) 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, except as provided by subdivisions (c) and
(e) of this rule, shall have the effect of an admission.
(c) A statement by a party that after reasonable investigation
the party is without knowledge or information sufficient to form
a belief as to the truth of an averment shall have the effect of a
denial.
Note: Reliance on subdivision (c) does not
excuse a failure to admit or deny a factual
allegation when it is clear that the pleader
must know whether a particular allegation is
true or false. See Cercone v. Cercone, 254 Pa.
Super. 381, 386 A.2d 1 (1978).
Pa.R.C.P. 1029(a)-(c) (emphasis added). While Pa.R.C.P. 1029(c) allows a
response to a pleading to deny allegations by indicating that, after
reasonable investigation, the pleader is without sufficient information to
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form a belief as to the truth of the allegation, the rule does not excuse a
pleader from admitting or denying a factual allegation when it is clear that
the pleader must know whether a particular allegation is true or false.
Pa.R.C.P. 1029(c) Note.
It is well settled that lack of knowledge constitutes an admission where
it is clear that the responder should possess adequate knowledge or that the
means of obtaining information are within the control of the responder. Elia
v. Olszewski, 84 A.2d 188 (Pa. 1951). See Cercone v. Cercone, 386
A.2d 1, 3 (Pa. Super. 1978) (finding defendant was required to specifically
deny factual allegations in complaint where defendant was in position to
know truth or falsity of allegation). In a mortgage foreclosure action, the
mortgagors and mortgagee are the only parties with sufficient knowledge
upon which to base a specific denial. New York Guardian Mortg. Corp. v.
Dietzel, 524 A.2d 951, 952 (Pa. Super. 1987). General denials by
mortgagors that they are without information sufficient to form a belief as to
the truth of averments 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).
As the mortgagor, Gubrud possessed sufficient knowledge to
Dietzel,
524 A.2d at 952. However, our review of the certified record reflects that,
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with the exception of two paragraphs, the general denials set forth in
-8.2 Thus,
calculation of sums due provided by Appellee is an
averment that offers factual situations of which Gubrud had knowledge, and
therefore constitutes an admission. Indeed, the sums due to Appellee are
easily calculable under the terms of the mortgage, the contents of which
knowledge of, and the means necessary for obtaining the denied
information, including the total sums due. Hence, the denials purportedly
presented by Gubrud in his answer amounted to admissions of facts and
the trial court in granting summary judgment in this matter.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/11/2014
2
Gubrud as the defendant in the complaint and paragraph 3 addresses the
recording of the mortgage in Northampton County.
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