Citifinancial Servicing v. Wilson, T.

J-S54033-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CITIFINANCIAL SERVICING, LLC, A : IN THE SUPERIOR COURT OF
DELAWARE LIMITED LIABILITY : PENNSYLVANIA
COMPANY, 300 ST. PAUL PLACE, :
BALTIMORE, MD 21202 :
:
:
v. :
:
: No. 267 WDA 2017
TRACEY A. WILSON, DARRELL A. :
ARBORE, A/K/A DARRELL ARBORE, :
690 ADELE DRIVE, NORTH :
HUNTINGDON, PA 15642 :
:
Appellants :
Appeal from the Order Dated January 9, 2017
In the Court of Common Pleas of Westmoreland County
Civil Division at No(s): 4288 of 2012
BEFORE: OTT, MOULTON, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED NOVEMBER 13, 2017
Appellants, Tracey A. Wilson (“Wilson”) and Darrell A. Arbore, A/K/A
Darrell Arbore (“Arbore”), appeal from the order entered in the
Westmoreland County Court of Common Pleas granting Appellee Citifinancial
Servicing, LLC’s motion for summary judgment in this mortgage foreclosure
action. Appellants claim that the entry of judgment against Arbore was
improper because he only signed the mortgage and not the note and that
Appellee lacked standing to foreclose because Appellee failed to establish it
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* Former Justice specially assigned to the Superior Court.
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was a holder of either the mortgage or the note. Additionally, Appellants
contend that the foreclosure action should be barred because Appellee failed
to provide notice under Act 91.1 We affirm.
The trial court summarized the facts of this case as follows:
[Appellee] alleges that [Appellants] executed a Mortgage
on November 29, 2007, and that [Wilson] executed a
Promissory Note in the principal sum of $203,993.65, to be
paid in equal, consecutive monthly installments of
$1,776.16. Said mortgage and Promissory Note were for
the purchase of the property located at 690 Adele Drive,
North Huntingdon, PA 15642. [Appellants] defaulted under
the Mortgage and Note by failing to make payments due
October 6, 2010 and each month thereafter.
Trial Ct. Op., 1/10/17, at 1.
On July 12, 2012, Citifinancial Service, Inc.,2 filed a complaint in
mortgage foreclosure. On June 16, 2014, Appellee filed an amended
complaint. Appellee averred that an assignment of the mortgage was
recorded on January 15, 20143 with the Westmoreland County Recorder of
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1 See 35 P.S. § 1680.403c.
2 The original mortgage was issued by Citifinancial Services, Inc. Id. at 46a,
23b. On October 1, 2013, Citifinancial Services, Inc., changed its name to
CFNA Receivables (PA), Inc. Id. at 37b. For the parties’ convenience, we
refer to the reproduced record where applicable. We note that Appellants’
reproduced record is demarcated “a” and Appellee’s reproduced record is
identified as “b.”
3CFNA Receivables assigned the mortgage to Appellee on January 13, 2014.
Id. at 61a, 39b.
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Deeds.4 On July 23, 2014, Appellants filed preliminary objections to the
amended complaint. The preliminary objections were overruled on February
17, 2015.5 On April 17, 2015, Appellants filed an answer and new matter
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4 See R.R. at 181a, 84(b). We note that in a mortgage foreclosure action,
the complaint shall state, inter alia, “the parties to and the date of the
mortgage, and of any assignments, and a statement of the place of record of
the mortgage and assignments . . . .” Pa.R.C.P. 1147(a)(1). “In pleading
an official document or official act, it is sufficient to identify it by reference
and aver that the document was issued or the act done in compliance with
law.” Pa.R.C.P. 1019(d).
5 The trial court held:
[Appellants’] Preliminary Objection #1, as to [Appellee’s]
lack of capacity to sue per Pa.R.C.P. 1028(a)(5), based on
the argument that [Appellee] failed to sufficiently plead a
chain of title for the mortgage, by identifying the Plaintiff
as Citifinancial Services, Inc. in its original Complaint, but
identifying Citifinancial Servicing, LLC as Plaintiff in its
Amended Complaint, is hereby OVERRULED, as the chain
of title for the mortgage is well-established by facts pled in
Paragraphs 3 and 4 of the Amended Complaint and
Exhibits thereto. The [c]ourt notes that [Appellants]
agreed to the submission of an Amended Complaint by
[Appellee] and that said Amended Complaint properly put
[Appellees] on notice of Citifinancial Servicing LLC’s claim
of interest to the subject mortgage.
[Appellants’] Preliminary Objection #2, pursuant to
Pa.R.C.P. 1019(h) and (i), for failure to conform to rule of
court, based upon [Appellee’s] failure to attach a signed,
written assignment of the mortgage, is hereby
OVERRULED, as [Appellee] has complied with Pa.R.C.P.
1147, by identifying the date of the assignment, along with
recording information for said assignment in its Amended
Complaint.
R.R. at 144b. See also R.R. at 181a, 84b.
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and a counterclaim. Appellants’ counterclaim was dismissed on July 20,
2015. Appellee filed a motion for summary judgment on January 4, 2016.
Although Appellants did not respond within thirty days, the trial court
granted them leave to conduct further discovery and file a responsive brief.
On June 10, 2016, Appellants filed a brief in opposition to Appellee’s motion
for summary judgment and motion for summary judgment on June 13,
2016. On January 9, 2017, the trial court denied Appellants’ motion for
summary judgment and granted Appellee’s motion for summary judgment.6
This timely appeal followed.
Appellants present the following questions for our review:
1. Whether the trial court erred as a matter of law or
abused its discretion by entering the in Rem Judgment in
the amount of $310,660.91 when that amount is a
material issue of fact that was not proved at trial or agreed
upon by the parties and was denied in [Appellants’]
pleadings.
2. Whether the trial court erred in granting summary
judgment to [Appellee] and denying [Appellants’] motion
for summary judgment where the assignment of the
Mortgage and the allonge to the note are invalid on their
face as those instruments are not signed by either the
assignor or the assignee to the instruments but instead by
a third party unrelated to the [Appellee].
3. Whether the trial court erred as a matter of law by
allowing the current [Appellee] to move forward with their
amended complaint when at the time of the filing of the
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6 An in rem judgment was entered in favor of Appellee and against
Appellants for $310,660.91 plus interest from December 16, 2015. See
Order, 1/9/17.
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initial complaint the current [Appellee] did not hold the
subject mortgage or note and also failed to properly
substitute a new party plaintiff.
Appellants’ Brief at vi.
Although Appellants present three questions for review, the argument
section of the brief is not set forth as required by Pennsylvania Rule of
Appellate Procedure 2119(a). See Pa.R.A.P. 2119(a). (“The argument shall
be divided into as many parts as there are questions to be argued . . . .”);
Krebs v. United Ref. Co. of Pa., 893 A.2d 776, 797 (Pa. Super. 2006)
(“We will not ordinarily consider any issue if it has not been set forth in or
suggested by an appellate brief’s statement of questions involved, Pa.R.A.P.
2116(a) . . . .”). Moreover, Appellants present arguments not farily
suggested by their questions. However, because this defect does not
impede our ability to conduct appellate review, we decline to find waiver,
and will address the arguments set forth in the brief. See Commonwealth
v. Kane, 10 A.3d 327, 331 (Pa. Super. 2010).
Appellants first assert that Appellee could not obtain a judgment
against Arbore because he did not sign the note. No relief is due.
Our review is governed 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
judgment as a matter of law. In considering the merits of
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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).
Appellants cite no legal authority in support of their claim that
judgment was improperly entered as to Darrell Arbore, nor do they attempt
to formulate a cogent response to the trial court’s determination that
Arbore’s failure to sign the note was irrelevant because both Willams and
Arbore signed the mortgage. Trial Ct. Op. at 3. Therefore, this issue could
be deemed waived. See Pa.R.A.P. 2119(a); In re Estate of Whitley, 50
A.3d 203, 209 (Pa. Super. 2012). In any event, because Arbore signed the
mortgage, we discern no basis to conclude that the foreclosure and the entry
of an in rem judgment against Arbore was improper. Cf. In re Hartje's
Estate, 28 A.2d 908, 910 (Pa. 1942)) (“It is well settled in Pennsylvania
that a mortgage may be executed without personal liability: ‘A mortgage
may be created as well without as with an accompanying personal obligation
of the mortgagor to pay the debt secured, or attempted to be secured,
thereby.’”).
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In their second and third arguments,7 Appellants contend the
assignment of the mortgage and the allonge8 to the note are invalid because
the assignment of the mortgage was not signed by the assignor or the
assignee. Appellants’ Brief at 6. Appellants aver “[i]t is incumbent upon
[Appellee] in this case to prove that the assignment of the mortgage which it
is attempting to enforce was, in fact, endorsed by the lender.” Id. at 7.
Appellants maintain that possessing the mortgage assignment and note does
not qualify Appellee as a “holder.” Id. Appellants claim that because “the
Note that is attached to [Appellee’s] Amended Complaint and their Brief in
Support is not an original, . . . the Complaint must be dismissed.” Id. at 8.
Thus, since [Appellee] was not the holder of the note
and mortgage at the time the cause of action was filed
then it cannot bring a foreclosure case regardless of
whether [Appellants] missed any payments. Without
possession of a valid, written assignment of the mortgage
and the note [Appellee] possesses no cause of action
against [Appellants] because [Appellants’] alleged breach,
if there was one, can be asserted only by the holder of
the note and mortgage.
Id. at 8-9. Appellants further claim that
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7 We address Appellants’ second and third arguments jointly as they are
interrelated.
8 See R.R. at 199a, 35b. “An allonge is defined as ‘[a] slip of paper
sometimes attached to a negotiable instrument for the purpose of receiving
further indorsements when the original paper is filled with indorsements.’
Black's Law Dictionary 76 (Deluxe 7th ed.).” Gerber v. Piergrossi, 142
A.3d 854, 858 n.5 (Pa. Super. 2016), appeal denied, 166 A.3d 1215 (Pa.
2017).
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because [Appellee] in the case at bar lacked any legal
interest in the subject mortgage and note (which is
undated) until January 13, 2014 and the mortgage
foreclosure action was filed on July 12, 2012 (assuming,
arguendo, that the January 13, 2014 assignment is found
to be valid), [Appellee] likewise lacked legal standing to
file the instant action until January 13, 2014 at the
earliest.
Id. at 10-11. Appellants also suggest that “because [Appellee] was not the
record holder of the subject note and mortgage on the date the suit was
filed, this case should be dismissed with prejudice.” Id. at 12.
In Crawford Cent. Sch. Dist. v. Com., 888 A.2d 616 (Pa. 2005), our
Supreme Court opined:
An assignment is a transfer of property or a right from
one person to another; unless qualified, it extinguishes the
assignor’s right to performance by the obligor and
transfers that right to the assignee. Under the law of
assignment, the assignee succeeds to no greater rights
than those possessed by the assignor. An assignee’s
rights, however, are not inferior to those of the assignor.
Ultimately, an assignee stands in the shoes of the
assignor. Privity is not an issue in cases involving
assignment claims; an assignee does not pursue a cause of
action in its own right.
Id. at 619-20 (citations and quotation marks omitted).
It is well-established that “the real party in interest” may prosecute a
legal action. Pa.R.C.P. 2002(a). In CitiMortgage, Inc. v. Barbezat, 131
A.3d 65 (Pa. Super. 2016), the appellant claimed that “appellee did not
establish it possessed a valid assignment of the mortgage, and that the note
was never assigned or otherwise transferred to appellee.” Id. at 68. The
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“[a]ppellant therefore assert[ed] that appellee was not the real party in
interest and lacked standing to bring this action.” Id.
In Barbezat, this Court opined:
In a mortgage foreclosure action, the mortgagee is the
real party in interest. This is made evident under our
Pennsylvania Rules of Civil Procedure governing actions in
mortgage foreclosure that require a plaintiff in a mortgage
foreclosure action specifically to name the parties to the
mortgage and the fact of any assignments. Pa.R.C.P.
1147. A person foreclosing on a mortgage, however, also
must own or hold the note.
***
. . . Here, appellee not only averred, but also produced
evidence that it was the holder of the mortgage.
Specifically, appellee alleged in its complaint that
“[Appellee] is [a] proper party . . . by way of an
Assignment of Mortgage recorded August 6, 2012 under
Instrument 2012032210.” Appellee produced copies of
the original recorded mortgage and its recorded
assignment to appellee. Where an assignment is
effective, the assignee stands in the shoes of the
assignor and assumes all of his rights.
Id. at 68-69 (some citations omitted and emphasis added).
In Gerber, this Court held:
[W]e have determined a note secured by a mortgage is a
negotiable instrument, as that term is defined by the PUCC
[the Pennsylvania Uniform Commercial Code], and stated
that “[p]ursuant to the PUCC, a debtor who satisfies his
obligations under a negotiable instrument cannot be
required to do so again, even if the recipient of the
debtor’s performance is not the holder of the note in
question.” We further reasoned that under the PUCC, a
borrower is not in peril of double liability or injury by an
allegedly defective assignment, for if the assignment to the
foreclosing party had been defective, the borrower would
not have to pay on the note to another party. Thus, we
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found a borrower lacks standing to challenge the
validity of the assignment.
Gerber, 142 A.3d at 862 (citations omitted and emphasis added).
In the instant case, the trial court opined:
[Appellee] argues that the assignment of the subject
Mortgage and Note was proper, presenting the original
Note to the Court at the time of Oral Argument to show
that [Appellee] is the Note holder. . . . Additionally,
[Appellee] argues that it has standing to enforce both
against [Appellants]. Additionally, [Appellee] argues that
because [Appellants] are not parties to the Assignment,
that they do not have standing to challenge it.
Based upon [Appellee’s] well-reasoned arguments and the
case law asserted in [Appellee’s] Brief and at Oral
Argument, the [c]ourt must agree with [Appellee] and
reject [Appellants’] challenge of the Assignment and Note.
Trial Ct. Op. at 4. We agree no relief is due.
We reject Appellants’ claim that because Appellee was not the holder
of the note and the mortgage at the time the cause of action was filed, it
cannot bring a foreclosure case. Appellee, as assignee, stands in the shoes
of the assignor and does not pursue a cause of action in its own right. See
Crawford Cent. Sch. Dist., 888 A.2d at 619-20. Instantly, Appellee was
the holder of the mortgage and was the real party in interest by virtue of the
assignment of the mortgage. See Barbezat, 131 A.3d at 68-69. Appellee
produced copies of the original recorded mortgage and recorded assignment.
See id. Furthermore, Appellants lack standing to challenge the validity of
the assignment. See Gerber, 142 A.3d at 859–60.
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Lastly, Appellants claim the court lacks subject matter jurisdiction
because Appellee did not comply with the notice requirements of Act 91 of
1983.9 Appellants’ Brief at 12. Appellants aver that the Act 91 notice was
sent by the original Plaintiff, not Appellee.10 Id. at 13. Appellants argue
that “[n]otice which complies with the requirements of Act 91 is a
jurisdictional prerequisite to a mortgage lender’s suit.” Id. at 12.
We note that “‘[t]he purpose of an Act 91 notice is to instruct the
mortgagor of different means he may use to resolve his arrearages in order
to avoid foreclosure on his property and also gives him a timetable in which
such means must be accomplished. 35 P.S. § 1680.403c.’” Wells Fargo
Bank, N.A. ex rel. Certificate Holders of Asset Backed Pass-through
Certificates Series 2004-MCWI v. Monroe, 966 A.2d 1140, 1142 (2009)
(quoting Fish v. Pennsylvania Housing Fin. Agency, 931 A.2d 764, 767
(Pa.Cmwlth.2007)). In Beneficial Consumer Discout Co. v. Vukman, 77
A.3d 547 (Pa. 2013), our Supreme Court opined:
[The a]ppellee’s entire argument relies on her incorrect
assumption that the Legislature has required the cause of
action in foreclosure to include a mortgagee’s compliance
with Act 91’s requirements. A cause of action is “a factual
situation that entitles one person to obtain a remedy in
court from another person.” Black’s Law Dictionary 235
(8th ed. 2004). In foreclosure, this factual situation
includes a mortgagor’s default on a duly executed
mortgage. See Pa.R.C.P. 1147(a) (itemizing factual
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9 This issue was not raised in the statement of questions.
10 R.R. at 67a.
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averments required in mortgage foreclosure complaint).
The cause of action does not include the procedural
requirements of acting on that cause. [The a]ppellee’s
overarching assertion that Act 91 imposes
jurisdictional prerequisites on mortgage foreclosure
actions is unsupportable.
Turning to the definitions of “procedural law” and
“procedure,” the Act 91 notice requirements appear to fit
comfortably in the procedural realm as they set forth the
steps a mortgagee with a cause of action must take prior
to filing for foreclosure. See Black’s Law Dictionary 1241
(8th ed. 2004) (Procedural law: “The rules that prescribe
the steps for having a right or duty judicially enforced, as
opposed to the law that defines the specific rights or duties
themselves.” Procedure: “1. A specific method or course
of action. 2. The judicial rule or manner for carrying on a
civil lawsuit or criminal prosecution.”). Contrary to [the]
appellee’s argument, the Act 91 notice requirements
certainly do not sound in jurisdiction as they do not
affect the classification of the case as a mortgage
foreclosure action. See In re Melograne, [812 A.2d
1164,] 1167 [(Pa. 2002)] (citation omitted) (“Jurisdiction
relates solely to the competency of the particular court or
administrative body to determine controversies of the
general class to which the case then presented for its
consideration belongs.”). Moreover, the lack of explicit
language in Act 91 prescribing that such requirements are
jurisdictional cautions against this Court treating them as
such.
Id. at 552-53 (emphases added).
Analogously, in the case sub judice, Appellants’ claim that the trial
court lacked jurisdiction over the case because the Act 91 notice was sent by
Citifinancial Services, Inc., rather than by Appellee, is meritless. See id.;
Cf. Fish, 931 A.3d at 767. Contrary to Appellants’ arguments, Act 91 notice
requirements are not jurisdictional. Vukman, 77 A.3d at 552-53. Thus, we
discern no abuse of discretion or error of law by the trial court in granting
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Appellee’s motion for summary judgment. See Varner-Mort, 109 A.3d at
246-47.
For the foregoing reasons, we affirm the order of the trial court
granting Appellee’s motion for summary judgment in this mortgage
foreclosure action.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/13/2017
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