Deustche Bank National Trust Company v. Bey, H.

• Court: Superior Court of Pennsylvania
• Decided: September 19, 2016
• Docket: 3329 EDA 2015
• Status: Unpublished

Opinion

J-A24005-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DEUSTCHE BANK NATIONAL TRUST IN THE SUPERIOR COURT OF COMPANY, AS INDENTURE TRUSTEE FOR PENNSYLVANIA AEGIS ASSET BACKED SECURITIES TRUST 2006-1, MORTGAGE BACKED NOTES, BY ITS SERVICER, OCWEN LOAN SERVICING, LLC

v.

HANIF BEY AND HANIFAH EL

Appellants No. 3329 EDA 2015

Appeal from the Order Entered September 30, 2015 In the Court of Common Pleas of Pike County Civil Division at No(s): 1662 CV 2013

BEFORE: BOWES, OTT AND SOLANO, JJ.

MEMORANDUM BY BOWES, J.: FILED SEPTEMBER 19, 2016

Hanif Bey and Hanifah El (collectively the “Mortgagors”) appeal from

the September 30, 2015 order granting summary judgment in favor of

Deustche Bank National Trust Company, as Indenture Trustee for Aegis

Asset Back Securities Trust 2006-1, Mortgage Backed Notes, By its Servicer,

Ocwen Loan Servicing, LLC (“Deustche”). We affirm.

We summarize the facts as provided by the trial court. See Trial Court

Opinion, 12/23/15, at 1-4. The Mortgagors executed a mortgage, which was

recorded, securing the real property located at 3580 Section 37, Warwick

Circle, Lehman Township, Pennsylvania. This mortgage secured a J-A24005-16

promissory note, which the Mortgagors provided to Mortgage Electronic

Registration System (“MERS”) as a nominee for Aegis Funding Corporation

(“Aegis”), in consideration of a loan to them in the amount of $195,000.00,

with payments to commence on October 1, 2006. This note was endorsed

by Aegis without recourse payable to the order of Aegis Mortgage

Corporation. Aegis Mortgage Corporation in turn endorsed the note without

recourse in blank. The mortgage was assigned to Deutsche, and properly

recorded.

On July 1, 2012, Mortgagors defaulted on the note and mortgage by

failing to make their monthly payment. Subsequently, Deutsche provided

them with the requisite notice of default, and an Act 6 and Act 91 combined

notice, which included notice of its intention to foreclose. Deutsche

commenced the underlying mortgage foreclosure action on October 15,

2013, by the filing of a complaint in mortgage foreclosure, appending the

mortgage and assignment thereto. The Mortgagors filed an answer to

Deutsche’s complaint admitting to executing a mortgage with MERS, but

denying they executed a note with MERS or Deutsche, and disputing the

amount owed to Deutsche.

Deutsche then filed a motion for summary judgment, and attached a

copy of the note to that filing. The court granted summary judgment in

Deutsche’s favor, and the Mortgagors filed a timely notice of appeal. The

court directed Mortgagors to file a Rule 1925(b) concise statement of errors

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complained of on appeal, they complied, and the court authored its Rule

1925(a) opinion.

Mortgagors raise three questions for our review:

A. Did the trial court err in granting summary judgment in favor of [Deutsche], where the record fails to show [Deutsche’s] ownership of the original promissory note of the [Mortgagors’] mortgage transaction?

B. Did the trial court [err] in granting summary judgment in favor of [Deutsche] where the record fails to show [Deutsche’s] right to enforce the recorded mortgage as [Deutsche] is not the [holder] of the [Mortgagors’] original mortgage, as recorded in the Pike County Recorded of Deed’s Office, or where the record otherwise fails to show [Deutsche’s] right to enforce the [Mortgagors’] mortgage?

C. Did the trial court err in granting summary judgment in favor of [Deutsche] where the record fails to contain evidence of [Deutsche’s] status as a proper party to this litigation?

Appellant’s brief at 4-5.

Our scope and standard of review of a trial court’s order granting

summary judgment is as follows.

In reviewing an order granting summary judgment, our scope of review is plenary, and our standard of review is the same as that applied by the trial court . . . [a]n appellate court may reverse the entry of a summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to judgment as a matter of law. In making this assessment, we view 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. Where our analysis involves solely questions of law, our review is de novo.

Thus, our responsibility as an appellate court is to determine whether the record either established that the

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material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact finder.

Gerber v. Piergrossi, 2016 WL 3414993 (Pa.Super. 2016) at *3 (citation

omitted).

Mortgagors first argue that, pursuant to our holding in CitiMortgage

v. Barbezat, 131 A.3d 65 (Pa.Super. 2016), Deutsche must prove it holds

the underlying promissory note in order to foreclose on their property.

Mortgagors suggest that until Deutsche provides evidence that it holds their

note, there exists a genuine issue of material fact, and summary judgment

is inappropriate.

The Honorable Joseph F. Kameen authored a thorough and well-

reasoned opinion rejecting the Mortgagors’ contention. After reviewing the

certified record, we affirm on this issue on the basis of the trial court’s

opinion. See Trial Court Opinion, 12/23/15, at 7-8 (concluding that

Deutsche provided a copy of the note and Mortgagors admitted at oral

argument that Deutsche possessed the original note).

In addition, we note that Mortgagors’ reliance upon Barbezat, supra,

is misplaced. In Barbezat, we found, under substantially similar

circumstances, that the bank therein had authority to enforce its rights

under the mortgage. Barbezat, supra at 69. We reasoned that since the

note was endorsed in blank, it was payable to the bearer by transfer of

possession alone. Id. We concluded that the bank therein, as the holder of

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the note, was entitled to enforce those obligations. Id. Similarly here,

Deutsche has provided evidence that the mortgage was assigned to it, and

that it is currently the holder of the note which is endorsed in blank. Hence,

it is authorized to make demand upon Mortgagors to enforce their

obligations under the note.

Mortgagors next contend that summary judgment is inappropriate

since Deutsche did not produce evidence of the assignment by which it

received its foreclosable mortgage interest. After reviewing the certified

record, we affirm on the basis of the trial court’s opinion. See Trial Court

Opinion, 12/23/15, at 8-9 (concluding that the assignment of the original

mortgage from MERS to Deutsche established that Deutsche possessed and

owned the mortgage as the express language of the mortgage granted MERS

the right to assign the mortgage).

Finally, Mortgagors assert that Deutsche did not demonstrate that it

has standing to bring an action in foreclosure against them since Deutsche

was not a party to the original mortgage and note, and they did not

otherwise demonstrate a valid assignment of an interest in their property.

After review of the certified record, we again affirm on the basis of the trial

court opinion. See Trial Court Opinion, 9-15 (concluding that as the holder

in due course of a negotiable instrument, Deutsche had the right, as the

party in interest, to seek mortgage foreclosure against Mortgagors).

Order affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 9/19/2016

-6- Circulated 08/31/2016 03:11 PM

IN THE COURT OF COMMON PLEAS OF PIKE COUNTYt PENNSYLVANIA CMLDMSION

DEUTSCHE BANK NATIONAL TRUST CO., as lndenture Trustee for Aegis Al.let Backed S«orities Tru!t 2006-1, Mortgage Backed Notes, by Its Servicer, Ocwen Loan Servicing, LLC,

Appellee. v. No. 166l-2013 CML

HANIF BEY Jlfld HANIF AH EL, Appellants.

QPINION SUBMII[ED tURSUANT TO PENNSYLvANIA RULE OF APPELLATE PROCEDUREl!M AND NOW, this,Zl,~y of December, 2015, after careful review of th¢ record,

this Court continues to stand by its decision in the ebove-capnoned matter and respectfully

requests the Superior Court uphold this Court's Order of September 30, 2015. This CoW1

would also like to add, pursuant to Pennsylvania Rule of Appellate Procedure 1925, the

following:

L FACTUALAND PROCEDURAL IUSTORY

The instant appeal arises from a September 30, 2015 Summary Judgment Order in a

mortgage foreclosure proceeding. Following the close of pleadings, exchange of documents

supporting and opposing summary judgement, and oral argument on summary judgement, this

Court granted an in rem judgement in favor of the Plaindff/Appellec mortgagee. Order,

Deuuche Bank Nat'l Trust Co. v. Bey, No. 1662-2013 (Sept. 30, 2015).

The Appellee claimed that starting on July 1, 2012, and following every· month

7 ',I IAlll 7 C : 0 (. I I\ 7 '(I[ '., :l fl thereafter, the Defendants/ Appellants failed to make monthly Joan payments and thus defaulted

on their mortgage. Pl. 's Compl., Civil Action-Mortgage Foreclosure at 1 71 Deutsche Bank

Nat'! Trust Co. v. Bey, No. 1662-2013 (Oct. 15, 2013). Although the Appellant denied the

veracity of the following documents, Defs.' Answer to Pl.'s Motion for Summary Judgement

at, 6, 8 Deutsche Bank Nat'! Trust Co. v. Bey, No. l662-2013 (Sept. 24, 2015), in support of

its default claim, the Appellee provided a printout of the loan's transactional history and a

signed affidavit from the loan servicer. PI.1s Motion for Summary Judgment at Exhibit B, C,

Deutsche Bank Not'l Trust Co. v. Bey, No. 1662-2013 (July 16, 2015). The Appellee also

averted that the Appellants executed and delivered the original mortgage to Mortgage

Electronic Registration Services ("MERS'\ lnc., as the original nominee for the original

lender, Aegis Funding Corporation (''Aegis"). Pl. 's Compl, at 1 3. A copy of the original mortgage corroborates that averment. id at Bxhtblt A p. l. The mortgage also states that the

Mongagor/Borrower is obligated to make payments under the Note and mortgagef'Sec;urity

Instrument" and expressly gives the lender the authority, if the borrower defaults on the loan.

to seek foreclosure through judicial proceed mg and sale. Id. at Exhibit A p.4, l 6. The Appellee also averred that it is the holder of the Note at issue. Pl. 's Reply to Defs.'

New Matter at 'a 10, Deutsche Bank Not'! Trust Co. v. Bey, No. 1662~2013 (Jan. ~l, 2014);

. averred that the Note is indorsed in blank; and provided a copy of the Note. Pl. 's Motion for

Summary Judgment at 1 4, Exhibit A· l. The Appellee also consistently averred that the

mortgage was assigned to it from MERS, Inc., Pl.ts Compl. at 14; and provided a recorded

copy of said assignment. PL 's Brief Contrn Defs.' Prellm, Objections at l, Exhibit A, Deutsche

Bank Nat 'I Trust Co. v. Bey, No. 1662-2013 (Dec. 9, 2013). Additionally, the mortgage expressly states that "(t]he Note or a partial interest" therein, "together with" the mortgage 11S

JJ, the security instrumenl, "can be sold multiple times." PJ. 's Brief Contra Defs.' Prellm.

Objections at 6, Exhibit B p.lS; Pl.ts Comp!. et Exhibit A p.15.

The Appellants admitted to executing a mortgage with MERS, lnc., but denied

executing a Note with MBRS, Inc .• or the Appellee. Answer and New Matter at 1 3, Deutsche

Bank Na:'! Trust Co. v. Bey, No. 1662-2013 [Jan. 241 2014). The Appellants did admit to

stopping mortgage payments on July 1, 2012, but disputed the amount owed and denied th9t it

was due to Appellee, Defs.' Oral Argument, Deutsche Bank Nat'! Trust Co. v. Bey, No. 1662-

2013 (Sept. 28, 2015); Answer and New Matter at 17, 8; Defs.' Answer to Pl.'s Motion for

Summary Judgement at 1 7, 14. Appellants at first denied that Aegis transferred the Note to

MERS, Inc., Id. 11t 14, but later stated that "the mortgage was assigned to MERS, Inc.," Defs.'

Brief in Opp'n to PI.' s Motion for Summary Judgment at 1, Deutsche Bank Nat 'I Trust Co. v.

Bey, No. 1662-2013 (Sept. 25, 201 S). Appellants also admitted that the mortgage was assigned .

from MERS, lnc., as Aegis' nominee to the Appellee and that the assignment was recorded on

October 2, 2013 with the Pike County Recorder of Deeds. Answer and New Matter at 14;

Defs,' Brief in Support of Defs.' Prelim, Obj'ns and Motion to Dlsmlss Pl.'s Mortgage

Foreclosure Compl, at 1, Deutsche. Bank Nat 'I Trust Co, v. Bey. No. 1662-2013 (Oct 29. 2013).

Despite that admission and the submitted recordation of that assignment, Appellants later

claimed that Appellant provided no evidence of assignment from MERS, Inc., to Appellant,

Defs.' Brief in Opp'n to Pl.'s Motion for Summary Judgment at 1-3. Appellants repeatedly

averred that Appellee did not own the original Note. Answer and New Matter at 1 JO; Defs.'

Brief in Opp'n to PJ.'s Motion for Summary Judgment at 1-2; Defs.' Answer to Pl.ts Motion

for Summary Judgement at 14. However. at Oral Argument, Appellant admitted that Appellee

held the original Note and instead questioned how Appellee .obtained the Note and mortgage,

3 Drfs.' Oral Argument. In large part, the Appellants claimed that the Appellee lacked standing

and that the Complaint violated Pa. R.C.P. 2002. Answer and New Matter at 1 12. l 3. The

Appellants' challenge to Appellee's standing rested significantly If not entirely on what

Appellant characterized as the absence of a record of direct line of assignment of the mortgage and Note from Aegis to Appellee expressly listing Aegis as the assignor. Set gtneral/y Defs.'

Brief in Support of Defs.' Prelim. Objections. Appellant also appeared to try to raise lack of

privity with the Appellee as a possible defense. Answer and New Matter at CV 14.

Appellants' Concise Statement of Matters Complained of under Pennsylvania Rule of Appellate Procedure 1925(b), Deutsche Bank Nat'! TrUJt Co. v. Bey, No. 1662~2013 (Nov. 18

2015) raises the following three (3) issues;

l. The triel court erred in granting summary judgment in favor of the

Plaintiff where the record fails to show the Plaintiffs ownership of the

original promissory Note of the Defendants' mortgage transaction, 2., The trial court erred in granting summary judgment in favor of the

Plaintiff where the record fails to show that the Plaintiff's right to enforce the recorded mortgage as the Plaintiff is not the holder of the original of

the Defendants' original mortgage, whether recorded in the Pike County

Recorder of Deed's Office, or otherwise produced in the record.

3. The record does not contain evidence of the Plaintiff's status as a proper

party to this litigation. Because the Appellee's standing and status as a proper party in the original

matter binges on possession of the Note and mortgage> JP Morgan Chase Bank, N.A.

v Murray, 63 A.3d 1258, 1266-69, n.6, (Pa. Super. 2013), this brief will address

4 matters in the order presented.

II. STANDARD OF REVIEW

The scope of review of a trial court's order granting or denying summary judgment is

plenary. Poppas v. Asbet, 564 Pa. 407, 418 (2001). The trial court's order will be reversed

only where it is established that the court committed an error of law or abused its discretion.

Id., citing Cochran v. GAF Corp., 666 A.2d 245, 248 (Pa. 199S). "An abuse of discretion is

not merely an error in judgment; rather it occurs when the law is overridden or misapplied, or

where the judgment exercised is manifestly unreasonable or the result of partiality, prejudice,

bias Qr ill will." Pilon v. Bally Engineering Structures, 645 A.2d 282, 285 (Pa. Super. 1994).

Ill. DISCUSSION

A. The Summary Judgement Standard in a Mortgage Foreclosure

The primary issue presented in this appeal is whether this Court erred in determining

Appellee was entitled to Summary Judgment when the Appellee presented evidence that it

possessed the Note, the Mongage, and the right to enforce both, while the Appellant made

certain admissions to the aforesaid matters and made inconsistent and contradictory claims regarding the chain of possession of the Note and mortgage.

With designated exceptions not relevant to the instant maner, mortgage foreclosure

actions shall follow the same procedures set forth in the Pennsylvania Rules of Civil Procedure.

Pa. R.C.P. l 141(b). Regarding summary judgment, those rules indicate:

After the relevant pleadings are closed, but within such time es 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 ...

Pa. R.C.P. 1035.2. The party moving for summaryjudgment has the burden of demonstrating

(I 'J C !,0 f\ 'n II 111~111~91llllllll ~ ~Uf\ f\!111 u10r r · r'I r I fl 1 •r. r ·,~I\ that there are no genuine issues of material fact, Acker v. Palena, 393 A.2d 1230, 1232 (Pa.

Super, 1978). All doubts as to whether a genuine issue of'material fact exists are to be resolved

against the rnovant, Thompson Coal Co. v. Pike Coal Co., 4 l 2 A.2d 466, 469 (Pa. J 979).

Furthermore. the non-movingparty may not claim that the averments of their pleadings

alone are sufficient to raise a genuine issue of material fact so as to defeat the motion. Phaff

v. Gerner. 303 A.2d 826 (Pa. 1973). The RuJes of Civil Procedure specifically provide that

the non-moving party 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 for summary judgment and

identify one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion. Pa. R.C.P. 1035.3(a)(l). If'the non-movingparty fails

to "adduce evidence essential to [its] case and on which it bears the burden proof," then the

moving party ls entitled to judgment Ma matter of law. Murr(ly, 63 A.3d at 1261, (quoting

Murphy v. Duquesne Univ. of the Holy Ghost, 77 A.2d 41 R, 429 (Fa. 2001)).

The courts have applied additional standards in reviewing summary judgments in

mortgage foreclosure proceedings. Upon default, a mortgage holder has the right to pursue a

mortgage foreclosure action. Bank of America, N.A. \/, Gtbson, 102 A.3d 4621 464 {Pa. Super.

2013) (citation omitted). The mortgage holder:

Is entitled to summary judgment if the mortgagor admits that the mortgage is in defaun, the mortgagor has failed to pay on the obligation, and the recorded mortgage is in the specified amount,

Id at 465 (citations omitted). Additionally, a moving party may support its motion by using the opposing party's admissions, "includllog] facts admitted in the pleadings." Id. at 466

(citations omitted). A)SQ, when denials require specificity, general denials constitute

admissions. Id at 466..67 (citing Pa. R.C.P. 1029(b)). Finally, a mortgagor's general denial

-"·-· ··~-...L..'--1-----------------......1 that he/she lacks sufficient information to form a belief regarding the truth of'averred principal

and interest owed constitutes an admission of the principal and interest. Id at 467 (citing First

Wu. Tr. Co. v. Strausser, 653 A.2d 688, 692 (Pa. Super 1995); Pa. R.C.P. I029(c) Note). B. The Record Estab~hes That Plaintiff/Appellee Possesses the Note

Despite the Appellant's claim on appeal, the Appellee as moving party clearly met its

burden of proving that no question of material fact existed regarding the fact that the Appellee

possessed the Note. See Acker, 393 A.2d at 1232; Pa. R.C.P. 114J(b). First and foremost, the

Appellant provided a copy of the Note to support its claim that it held the note endorsed in

b]ank. Pl.ts Motion for Summary Judgment at 'i 4, Exhibit A·J. Additionally, while the Appellant claimed in some of'hs pleadings that the Appellee did not possess the original Note,

Answer and New Matter at~ 10; Defs. Briefin Opp'n to Pl. 's Motion for Summary Judgment 1

at 1-2; Defs.' Answer to Pi.'s Motion for Summary Judgement at 14, Appellant admitted at

oral argument th.at the Appellee possessed the original 'Note, Defs.' Oral Argument, thus

negating Appellant's contention on the matter and failing to provide evidence sufficient to

counter Appellee's motion for summary judgment. Gibson, 102 A.3d at 466. See also Pa.

R.C.P. 1035.3(aXl); Murray, 63 A.3d at 1261. Cf. Murray. 63 A.3d at 1267-68 (cot1Cluding

that where the moving party failed to establish that it possessed the original Now and said

possession remained a material fact at issue, summary judgment was not appropriate).

Moreover, $11y question of how Appellee came into possession of the Note (a matter that

remained Appellant's fixation), see, e.g., Defs.' Brief in Support of'Defs.' Prellm, Objections,

does not negate the fact that Appellee possessed the Note. Murray. 63 A.3d at 1266-68.

In addition to Appellee's providing a copy of the Note and stating that it possessed the

Note indorsed in blank, the assignment of the mortgage to Appellee may further "substantiate"

A 1'L 0 'J (ti O (I '0 ~I I l!Jlll:ljl'PIIPl.lJ JSP"I "\IAIJ IAI\J C (. ' 0 (. I (\ 7 'A C ' 1 ~ 11 Appellee's "possession of the Note." Murray, 63 A.3d at l268, n.6. (citing 13 Pa. C.S.A §

3204(c)). See also US Bank N.A. v. Mallory, 982 A.2d 986. 994 (Pa. Super. 2009) (stating that

an averment that one legally owns a mortgage indicates that he/she also holds the note). 13 Pa.

C.S.A. § 3204(c) states that in determining if an instrument's transferee is also a holder, "an

indorsement that transfers ~ security interest in the instrument is effective as an unqualified

indorsement in the instrument." While the definition of "indorsement" refers only to a

signature on the instrument (here, the Note) and not the security interest (here the mortgage),

13 Pa. C.S.A § 3204(a), the Murr(l)' dicta appears to suggest that possession of a mortgage in

a chain of possession dispute can corroborate possession of the accompanying note. See

Murray, 63 A.3d ~ 1268, n.6. The Appellee's clear showing that it legally held the mortgage

corroborates that it held the original Note, a copy of which it provided to the Appellant.

Compare Murray, 63 A.3d at 1268, n.6.; Mallory, 982 A.2d at 994 with Pl.'s Motion for

Summary Judgment at 14, Exhibit A· I,

C. ~ Record Establlshes That Plaintiff/Ap_pellee Possessed the Mongage

Despite the Appellant's claim on appeal, the Appellee as moving party clearly met its

burden of proving that no question of material fact existed regarding the fact that the Appellee

possessed the mortgage. See Acker, 393 A.2d at 1232; Pa. R.C.P. l 14I(b). In reviewing a

mortgage with language similar to that found in the mortgage at issue, comf)OTe Gibson, 102

A.3d at 465.66 with Pl!s Compl. at Exhibit A. p.3, the Gibson Court held that where a

mortgage granted MERS, Inc., as nominee, ''the right to exercise any and an interests incidental to legal title," that grant ••inctudc(d] the ability to assign the mortgage." 102 A.3d at 466.

Through its averments, the copy of the original mortgage, and the assignment of the

original mortgage from MERS, lnc., to Appellee, the Appellee clearly established that It

8 possessed and owned the mortgage. Compare Gibson, 102 A.3d at 465·66, Acker, 393 A.2d at

1232; Pa. RC.P. 1141(b) wlrh Pl.'s Compl. at 1: 4 Pl.ts Brief Contra Defs.' Prelirn. Objections

at 1, Exhibit A. Cf. Murray, 63 A.3d at 1267-68 (concluding that where the moving party failed

to establish that it possessed the original Note and said possession remained a material fact at

issue, summary judgment WM not appropriate). Additionally, Pennsylvania c~ law clearly

establishes th.at in this case, the express language of the mortgage granted MERS, lnc., the

right to assign the mortgage to the Appellee, Compare Gibson, 102 A.3d at 465-66; Pl.'s

Cornpl. at Exhibit A, p.3, further supporting the claims and evidence presented by Appellee

that it possessed the mortgage. In addition, the Appellant took a contradictory position by first

admitting to the recorded mortgage assignment, Defs. • Brief in Support of Defs.' Prelim.

Obj'ns at J, then denying the existing of the admitted recordatien, Defs.' Brief in Opp'n to

Pl. 's Motion for Summary Judgment at i-a, and finally stating at oral argument that the

Appellee possessed the mortgage, yet still question how that possession occurred, Defs. Oral

Argument In light of the evidence presented and admitted to and the relevant case law, the

Appellant clearly failed to provide evidence giving rise to a question of fact regarding the

Appellee's possession of the mortgage. See Gibson, 102 A.3d at 466; Pa. R.C.P. J035.3(a)(l);

Murr(])', 63 A.3d at 1261.

D. The Record Establishes P)aintiff/Appellee Was/Is a Real Party in Interest with the

Right to Enforce the Mortgage in the Mortgage Foreclosure Proceedings

lu required by Pa. R.C.P. 2002(a), in order to prosecute the mortgage foreclosure, the

AppeUant established that as holder of the Note and mortgage, regardless of the chain of

possession/transfer, it was a real party in interest with the right to enforce the Note and

mortgage agalnst the Appellant. Compare Mwray, 63 A.3d at 1266-68 (citing J3 Pa. C.S.A. §

···-··- --·----~----.._..I 3109{a)) with Defs, Oral Argument (admitting that Appellee possessed the Note iadorsed in

blank). With exceptions not relevant to the instant mater, Pa. R.C.P. § 2002(a) requires that the

real party in interest prosecute the issue, "without distinction between contracts under seal and parol contracts," A real party in interest is one who, if successful, is entitled to the actions'

benefits and has "the leg;u right under the applicable substantive Jaw to enforce the claim in

question." Mallory, 982 A.2d at 994. In the instant matter, at least in part, the Pennsylvania

Uniform Commercial Code ("PUCC'1 provides the substantive law giving the holder of a Note

the right to enforce it. Pennsylvania Uniform Commerclal Code. See Murrary, 6'.3 A.3d at

1265:66 (citing 13 Pa. C.S.A. §§ 3104-, 3J09(a), 3205(b), 3302) (analyzing the Note holder's

enforcement rights under the PUCC).

With exceptions not relevant to the instant matter, the PUCC at 13 Pa. C.S.A. § 3104(a)

defines a ''negotiable instrument" as,

an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, ifit: (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (2) ls payable on demand or at a definite time; and (3) does not state any other undertaking or lnstruction by the person promising or ordering payment to do any act in addition to the payment of money. but the promise or order JI111Y contain: (0 an undertaking or power to give, maintain or protect collateral to secure payment; (il) an authorization or power to the holder to confess judgment or realize on or dispose of collateral; or (ill) a waiver of the benefit of any law intended for the advantage or protection of an obliger.

The PUCC at 13 Pa. C.S.A. § 3302(a) deflnes a "holder in due course" as

the holder of art instrument lf: (1) the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alterauon or is not otherwise so irregular or incomplete as ta call into question its authenticity; and (l) the holder took the instrument:

A'~ -··. --~-------" (i) for value; (ii) . in good faith; (iii) without notice that the instrument ls overdue or has been dishonored or th.at there Is an uncured default with respect to payment of another instrument issued as part of the same series; (iv) without notice that the instrument contains an unauthorized signature or has been altered; (v) without notice of any claim ro the instrument described in section 3306 (relating to claims to an instrument); and (vi) without notice that any party bas a defense or claim in recoupment described in section 3305(a) (relating to defenses and claims in recoupment).

Additionally, even if the holder in due course has only a security Interest in the instrument and

the obliger has a defense, "a claim in recoupmentl.] or claim to the instrument" against the

granter, the holder still rights only to the amount payable at the ti.me of enforcement not in

excess of secured, unpaid obligation. 13 Pa. C.S.A. § 3302(e).

Per the PUCC at Pa. 13 C.S.A. § 3205(b)

If an lndorsement is made by the bolder of an instrument and it is not a special lndorsement, it is a "blank indorsement," When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed,

A specially endorsed instrument is indorsed to iUl identifiable person to whom the instrument

is payable and is only payable to and may only be negotiated by the identified person's

indorsement, Pa. C.S.A. § 320S(a).

M determined by the Murray Court, an authentic Note secured by a mortgage, held by

a holder in due course, and indorsed in blank is a negotiable instrument under the PUCC. 63

A.3d at 1265--66 (citing 13 Pa. C.S.A. §§ 3104, 3l09(a), 3205(b), 3302). As a negotiable

instrument, the chain of possession does not impact the Note holder's right and ability to

enforce the Note against the other party. Id. at 1266. The issue of enforceability of a Note arises

when the parties dispute possession of the original Note. Id. at t 266. The Murray Court

established that under the PUCC, if a party holds the Note as a negotiable instrument, then that

11 party has standing as a property party to seek judicial enforcement of~ Note. Id 1269.

Additionally, because an assignee has the same enforcement rights as the assignor, the assignee

is a real party in interest, Mallory, 982 A.2d at 994 (citations and quotations omitted).

First and foremost, per the PUCC and the Murray Court's interpretation thereof, the

Note at issue is a negotiable instrument, and, therefore, the holder may enforce it. Compare

Murray 63 A.3d at 1265-66 (citations omitted); 13 Pa, C.S.A. §§ 3104(a), 3 l09(a), 3205(il),

(b). 3302 with Pl.ts Motion for Summary Judgment at 14, Exhibit A?l. The Note in question

Is an "unconditional promise to pay a fixed amount" "with interest" to the "holder" "on

demand:' Compare 13 Pa. C.S.A. § 3104(a) with Pl.'s Motion for Summary Judgment at 14,

Exhibit A-1. There are no undertakings or instructions in addition to the payment aside from

the provision of collateral authorization for enforcement Compare 13 Pa. C.$.A. § 3 l04(a) with Pl.'s Motion for Summary Judgment at, 4, Exhibit A,l.

Second, the Appellee is a holder in due course. Compare 13 Pa. C.S.A. § 3302(a) wfrh

Defs.' Briefin Support of Defs.' Pre1im. Obj'ns at IS-21. The Appellants' claims against the

credibility of the Note's chain of possession do not go to the authenticity of the Note itself, nor

do they rise to the level of creating serious question about whether the Appellee took the Note

for value, in good faith, and without notice of dishonor, defauh, an unauthorized signature, a

claim to the instMnent, or "that any party has a defense or claim in recoupment," Compare 13

Pa. C,S,A. § 3302(a) with Defs.' Brief in Support of Defs.' Prelim, Obj'ns at 15-21.

Additionally, even if the Appellant only has a security interest in the Note and the Appellants

has a defense, "a claim in recoupment[,] or claim to the instrument" against the granter, the

Appellee still has rights to the amount payable at the time of enforcement not in excess of

secured, unpaid obllgaticn. 13 Pa. C.S.A. § 3302(e).

11 Third. the Note is endorsed in bl9.tlk and not specially endorsed, thus rendering it

payable to the holder Appellant. Compare 13 Pa. C.S.A. § 3205(a), (b) with Pl.'s Motion for

Summary Judgment at ',J 4, Exhibit A-1; Defs. Oral Argument. While the Appellants at first

averred that Appellee did not possess the original Note, Answer and New Matter at, 1 O; Defs.'

Brief in Opp'n to Pl. 's Motion for Summary Judgment at 1-2; Defs,' Answer to PJ.'s Motion

for Summary Judgement at t 4, the Appellants' admitted at oral argument that the Appellee

held the original Note, Defs, Oral Argument, thus rendering Appellan~' argument again.st

enforceability moot. Murray, 63 A.3d at 1266. See also Gibson, 102 A.3d at 466. By failing to

adduce evidence raising a question of fact regarding whether the Note was a negotiable

instrument held by the Appellee in due course and indorsed in blank, AppeUant failed to raise

a reasonable, factual question as to the Appellee's entitlement to enforce the Note as a matter

oflaw. Compare Murray,6.3 AJd at 1266-68; 13 Pa, C.S.A. §§ 3104(a)> 3109(a), 320S(a), (b),

3302 with Pa. R.C.P. 103SJ(a){l); Pa. ~C.P. 103S.2; Muttay, 63 A.3d at 1261.

Furthermore, the Appellants' arguments appear to overlook the fact that they expressly

granted to MERS, lne., via the mortgage the right to enforce and a5$ign the mortgage. Compare

Gib.1on, 102 A.3d 41t 465-66; Mortgage Electronic Registration Systems, Inc. v, Ralich, 982

A.2d 77, 80 (Pa. Super. 2009); with Pl. 's Compl. at Exhibit A, p.3. ln holding that MERS1 Inc.,

had the authority to enforce the loan and complete a sheriffs sale in the case before it, the

Ralich Court reviewed mortgage clause that matches a clause in the: instant mortgage. Compare

Ralich, 982 A.2d at 80 with Pl.'s Compl, at Exhibit A, p.3. Both mortgages state that the

Borrower agrees that MERS holds only legal title to the interests granted by Borrower in this Security lnstrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the 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 can~eling th.ls Security

-;--- - --- \ 0 - . .... '' r ' ,.. , ' ,., ... • ",. , • • ,. .LI • I r I I\,\ '~ 11 Instrument.

Ralich, 982 A.2d at 80 (citing the Mortgage); PJ. 's Compl, at Exhibit A> p.3. Because MERS. Inc., had the authority to enforce and assign the mortgage,

R.alich, 982 A.2d at 80~ Gibson, 102 A.3d et 465, and because the facts QR record

establish that MERS did assign the mortgage and its interest therein, Pl. 's Oral Argument. Defs.' Oral Argument; Pl.ts Brief Contra Defs.' Prelim. Objections at 1,

Exhibit A. then the right 10 enforce loan through foreclosure would have passed to the

assignee Appellant. Mallory, 982 A.2d at 994. As assignee to and holder of the

mortgage, including all clauses and covenants thereto, Appellant had the right as a

proper pmy to seek mortgage foreclosure against the Appellees. Mallory, 982 A.2d at

994. See also Ralich, 982 A.2d at 80 (discussing the nominee's authority as granted in

the mortgage); Murray, 63 A.3d at ]266-68 (discussing the enforcement rights oi a

Note and mortgage holder). Although the Appellant's Concise Statement speaks in terms of the right to pursue the Ii foreclosure via possesslon of the mortgage and note, it seems appropriate to address and I dismiss the Appellants' earlier claim that lack ofprhity affected the Appellee's right to seek a I I mortgage foreclosure. See Answer and New Matter at 'l l 4. Because the Note at issue is a I negotiable instrument governed by the PUCC, if the debtor Appellants satisfy the Note, they

cannot be. required to do so twice. M11rri1)', 63 A.3d at 1263-65 (citations omitted). Because Il the Appellants faced no risk of double jeopardy lo «he foreclosure, the Appellee did not have I I i I to show privily with the Appellants in order to proceed as a property party. Id at 1263-65. l I Hoving established that the Appellee was a property party In possession of the Note '! and mortgage, this Court was entirely justified in ~ting sunun~· judgment in the instant

II I 14

,--- ... .._ -----..---- \9 •• - C') •• ·- •• •• .. - •• • • ••• matter, Gibson, l 02 A.Jd at 464, Because the mortgagor Appellants admitted in their pleadings

and at oral argument that it had not made a payment since July l. 2012. Defs, t Oral Argument;

Answer and New Matter at 17, 8; Defs.' Answer to Pl.' s Motion for SummaryJudgement at 1

7, 14, thus being in default, and because the recorded mortgage was in the amount specified, see Pl.1s Motion for Swnmary Judgment at Exhibit A~t, p.l, Exhibit B, Exhibit C, the Appellee

was entitled to summary judgment. Gibson, 102 A.3d at 464.

JV, CONCLUSION

After thorough review of the record in this case, this court did not commit any error of

law or override or misapply any law. This Court's judgment was not manifestly unreasonable

or the result of partiality, prejudice, bias, or ill will. As this decision was a sound application

of the law and supported by the facts, circumstances, and evidence ln the case, th.is Court

respectfully requests the Superior Court uphold its Order of September 30, 2015,

BY THE COURT: ~'l 7. J:!-, ;,it (T' "'::e fTI - N c::,

c:, rr, (I \)- t" m~' ':Dec ;,i:;-4"Tl Oo N :c~ o"" (.,) oo- ..,z~ <=c .l:;o ~ ..,, :")QI"" c~c cc: Scott Amon, Esq. . .. "'Cr. -- -<.::ti ~ :JC (":";; .... :,o,:, ~ .... M. troy Frfflima.n, Esq. >o Q Court Adminlsrratlon 7.J 0 CJ' "" wss