J-S05029-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
US BANK NATIONAL ASSOCIATION, AS IN THE SUPERIOR COURT OF TRUSTEE FOR CREDIT SUISSE FIRST PENNSYLVANIA BOSTON MORTGAGE SECURITIES CORP., HOME EQUITY ASSET TRUST 2004-7, HOME EQUITY PASS-THROUGH CERTIFICATES, SERIES 2004-7
v.
MICHAEL HARTMAN A/K/A MICHAEL A. HARTMAN, INDIVIDUALLY AND IN HIS CAPACITY AS ADMINISTRATOR OF THE ESTATE OF CAROL L. HARTMAN A/K/A CAROL LEE HARTMAN, UNKNOWN HEIRS, SUCCESSORS, ASSIGNS, AND ALL PERSONS, FIRMS, OR ASSOCIATIONS CLAIMING RIGHT, TITLE OR INTEREST FROM OR UNDER CAROL L. HARTMAN A/K/A CAROL LEE HARTMAN, DECEASED
Appellant No. 901 MDA 2016
Appeal from the Order Entered May 10, 2016 In the Court of Common Pleas of Berks County Civil Division at No(s): 13-3985
BEFORE: BENDER, P.J.E., PANELLA, J., and PLATT, J.*
MEMORANDUM BY PANELLA, J. FILED MARCH 10, 2017
Appellant, Michael Hartman, individually and as administrator of his
deceased wife, Carol Hartman’s (“Wife”) estate, appeals from the order
____________________________________________
* Retired Senior Judge assigned to the Superior Court. J-S05029-17
granting summary judgment to Appellee, US Bank National Association (“US
Bank”) in this mortgage foreclosure action. Hartman contends that the trial
court erred in granting summary judgment because (1) the amount owed on
the mortgage is not settled as a matter of law, (2) US Bank failed to
establish its chain of title to the note and mortgage, and (3) discovery in the
case was not complete. After careful review, we affirm.
In 2004, Wife executed a note and mortgage on her property in
Hamburg, Pennsylvania in favor of EquiFirst Corporation, with a principal
amount of $128,350. In 2007, EquiFirst assigned the mortgage to US Bank
as Trustee for Credit Suisse First Boston Heat 2004-7. This assignment was
corrected in 2012 to clarify that US Bank had at all relevant times been the
mortgagee of Hartman’s mortgage.
In 2008, Wife filed a voluntary petition for chapter 13 bankruptcy
relief. In her fifth amended plan pursuant to her petition, she acknowledged
that she owed arrears to US Bank on the mortgage, and indicated that she
intended to pay these arrears in full through a loan modification, a refinance
with her husband, or a lump sum payoff. Shortly after filing this plan, Wife
passed away.
Michael Hartman was appointed the administrator of Wife’s estate, and
in 2010, he filed an addendum to Wife’s plan. This addendum once again
acknowledged that the estate owed arrears on the mortgage, and signaled
-2- J-S05029-17
an intention to refinance or pay off the arrears within one year of the
confirmation of the plan.
In 2011, the bankruptcy court granted US Bank relief from the
automatic stay to foreclose on the mortgage. US Bank did not file the instant
action until March 21, 2013. After US Bank filed an amended complaint,
Hartman filed an answer with new matter, admitting that the mortgage was
in default, but asserting that US Bank had indicated that it would permit him
to modify the mortgage into his name, but then later refused to follow
through. Hartman also filed counterclaims asserting fraud and breach of an
implied contract. In a subsequent amendment, Hartman also asserted the
defenses of duress, consent, discharge in bankruptcy, estoppel, failure of
consideration, unclean hands, fraud, impossibility of performance,
justification and unconscionability.
The trial court subsequently granted US Bank’s preliminary objections
to Hartman’s counterclaims, striking them in their entirety. On May 7, 2014,
US Bank filed a reply to the amended new matter, and discovery ensued.
Other than indicating that he served requests for production upon US Bank,
which US Bank objected to, there is no indication in the record of any
discovery activity in this case. Hartman did not file a motion to compel.
On February 5, 2016, US Bank filed a motion for summary judgment.
In his response to the motion, Hartman asserted that the loan was not in
default, and that US Bank was required to modify the mortgage pursuant to
-3- J-S05029-17
the bankruptcy plan. Hartman did not contend that discovery had not closed
until oral argument on the motion. After hearing argument, the trial court
entered an order granting summary judgment and this timely appeal
followed.
We review a challenge to the entry of summary judgment as follows:
[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).
On appeal, Hartman first argues that the trial court erred in granting
summary judgment, as he believes that the amount owed on the loan is in
dispute and not settled as a matter of law. In its complaint, US Bank stated
the following:
-4- J-S05029-17
10. Defendants are in default under the terms of the aforesaid Mortgage for, inter alia, failure to pay the monthly installments of principal and interest due August 1, 2009.
11. As of 05/14/2013, the amount due and owing Plaintiff on the mortgage is as follows:
Principal Balance $123,504.11 Interest from 7/01/2009 to 05/14/2013 $38,941.48 Late Charges $762.37 Property Inspections $435.00 BPO/Appraisals $455.00 Escrow Deficit $15,408.56
TOTAL $179,611.52
Amended Complaint, at ¶¶ 10-11.
In Hartman’s answer, he denied defaulting on the payment obligation
under the Mortgage, and amounts due and owing under the Mortgage as
conclusions of law.
10. Denied. The averments in Paragraph 10 of Plaintiff’s Complaint constitute legal conclusions to which no responsive pleading is required. By way of further answer, the Plaintiff has refused to accept payments made by Defendants.
11. Denied. The averments in Paragraph 11 of Plaintiff’s Complaint constitute legal conclusions to which no responsive pleading is required.
Answer, at ¶¶ 10-11.
In First Wis. Trust. Co. v. Strausser, 653 A.2d 688, 694 (Pa. Super.
1995), the mortgagor similarly responded to the bank’s allegation in the
complaint regarding the total amount due by denying the allegation as a
conclusion of law. See id., at 694. The panel noted that such an assertion
Free access — add to your briefcase to read the full text and ask questions with AI
J-S05029-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
US BANK NATIONAL ASSOCIATION, AS IN THE SUPERIOR COURT OF TRUSTEE FOR CREDIT SUISSE FIRST PENNSYLVANIA BOSTON MORTGAGE SECURITIES CORP., HOME EQUITY ASSET TRUST 2004-7, HOME EQUITY PASS-THROUGH CERTIFICATES, SERIES 2004-7
v.
MICHAEL HARTMAN A/K/A MICHAEL A. HARTMAN, INDIVIDUALLY AND IN HIS CAPACITY AS ADMINISTRATOR OF THE ESTATE OF CAROL L. HARTMAN A/K/A CAROL LEE HARTMAN, UNKNOWN HEIRS, SUCCESSORS, ASSIGNS, AND ALL PERSONS, FIRMS, OR ASSOCIATIONS CLAIMING RIGHT, TITLE OR INTEREST FROM OR UNDER CAROL L. HARTMAN A/K/A CAROL LEE HARTMAN, DECEASED
Appellant No. 901 MDA 2016
Appeal from the Order Entered May 10, 2016 In the Court of Common Pleas of Berks County Civil Division at No(s): 13-3985
BEFORE: BENDER, P.J.E., PANELLA, J., and PLATT, J.*
MEMORANDUM BY PANELLA, J. FILED MARCH 10, 2017
Appellant, Michael Hartman, individually and as administrator of his
deceased wife, Carol Hartman’s (“Wife”) estate, appeals from the order
____________________________________________
* Retired Senior Judge assigned to the Superior Court. J-S05029-17
granting summary judgment to Appellee, US Bank National Association (“US
Bank”) in this mortgage foreclosure action. Hartman contends that the trial
court erred in granting summary judgment because (1) the amount owed on
the mortgage is not settled as a matter of law, (2) US Bank failed to
establish its chain of title to the note and mortgage, and (3) discovery in the
case was not complete. After careful review, we affirm.
In 2004, Wife executed a note and mortgage on her property in
Hamburg, Pennsylvania in favor of EquiFirst Corporation, with a principal
amount of $128,350. In 2007, EquiFirst assigned the mortgage to US Bank
as Trustee for Credit Suisse First Boston Heat 2004-7. This assignment was
corrected in 2012 to clarify that US Bank had at all relevant times been the
mortgagee of Hartman’s mortgage.
In 2008, Wife filed a voluntary petition for chapter 13 bankruptcy
relief. In her fifth amended plan pursuant to her petition, she acknowledged
that she owed arrears to US Bank on the mortgage, and indicated that she
intended to pay these arrears in full through a loan modification, a refinance
with her husband, or a lump sum payoff. Shortly after filing this plan, Wife
passed away.
Michael Hartman was appointed the administrator of Wife’s estate, and
in 2010, he filed an addendum to Wife’s plan. This addendum once again
acknowledged that the estate owed arrears on the mortgage, and signaled
-2- J-S05029-17
an intention to refinance or pay off the arrears within one year of the
confirmation of the plan.
In 2011, the bankruptcy court granted US Bank relief from the
automatic stay to foreclose on the mortgage. US Bank did not file the instant
action until March 21, 2013. After US Bank filed an amended complaint,
Hartman filed an answer with new matter, admitting that the mortgage was
in default, but asserting that US Bank had indicated that it would permit him
to modify the mortgage into his name, but then later refused to follow
through. Hartman also filed counterclaims asserting fraud and breach of an
implied contract. In a subsequent amendment, Hartman also asserted the
defenses of duress, consent, discharge in bankruptcy, estoppel, failure of
consideration, unclean hands, fraud, impossibility of performance,
justification and unconscionability.
The trial court subsequently granted US Bank’s preliminary objections
to Hartman’s counterclaims, striking them in their entirety. On May 7, 2014,
US Bank filed a reply to the amended new matter, and discovery ensued.
Other than indicating that he served requests for production upon US Bank,
which US Bank objected to, there is no indication in the record of any
discovery activity in this case. Hartman did not file a motion to compel.
On February 5, 2016, US Bank filed a motion for summary judgment.
In his response to the motion, Hartman asserted that the loan was not in
default, and that US Bank was required to modify the mortgage pursuant to
-3- J-S05029-17
the bankruptcy plan. Hartman did not contend that discovery had not closed
until oral argument on the motion. After hearing argument, the trial court
entered an order granting summary judgment and this timely appeal
followed.
We review a challenge to the entry of summary judgment as follows:
[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).
On appeal, Hartman first argues that the trial court erred in granting
summary judgment, as he believes that the amount owed on the loan is in
dispute and not settled as a matter of law. In its complaint, US Bank stated
the following:
-4- J-S05029-17
10. Defendants are in default under the terms of the aforesaid Mortgage for, inter alia, failure to pay the monthly installments of principal and interest due August 1, 2009.
11. As of 05/14/2013, the amount due and owing Plaintiff on the mortgage is as follows:
Principal Balance $123,504.11 Interest from 7/01/2009 to 05/14/2013 $38,941.48 Late Charges $762.37 Property Inspections $435.00 BPO/Appraisals $455.00 Escrow Deficit $15,408.56
TOTAL $179,611.52
Amended Complaint, at ¶¶ 10-11.
In Hartman’s answer, he denied defaulting on the payment obligation
under the Mortgage, and amounts due and owing under the Mortgage as
conclusions of law.
10. Denied. The averments in Paragraph 10 of Plaintiff’s Complaint constitute legal conclusions to which no responsive pleading is required. By way of further answer, the Plaintiff has refused to accept payments made by Defendants.
11. Denied. The averments in Paragraph 11 of Plaintiff’s Complaint constitute legal conclusions to which no responsive pleading is required.
Answer, at ¶¶ 10-11.
In First Wis. Trust. Co. v. Strausser, 653 A.2d 688, 694 (Pa. Super.
1995), the mortgagor similarly responded to the bank’s allegation in the
complaint regarding the total amount due by denying the allegation as a
conclusion of law. See id., at 694. The panel noted that such an assertion
by the mortgagor “amounted to nothing more than general denials which are
-5- J-S05029-17
considered admissions under Pa.R.C.P. 1029(b)….” Id. Thus, the panel found
the trial court’s entry of summary judgment was proper.
Here, as in Strausser, Hartman responded to US Bank’s allegation by
denying it as a conclusion of law. While it is true that mere conclusions of
law require no denial because they are deemed to be denied, US Bank’s
averments also include assertions of fact that required specific denials.
The assertion that Hartman is in default of the mortgage is indeed a
conclusion of law to which US Bank needs factual support and to which
Hartman need not reply. However, US Bank also makes factual assertions
that Hartman failed to pay the monthly installments due August 1, 2009.
Such assertions of fact are well within the knowledge of the mortgagor.
See, e.g., New York Guardian Mortg. Corp. v. Dietzel, 524 A.2d 951,
952 (Pa. Super. 1987). Because Hartman is the only party, aside from US
Bank, to have the specific knowledge to refute the assertion, his general
denial amounts to an admission under Pa.R.C.P. 1029(b).
Furthermore, the averments in paragraph 11 are entirely factual.
Thus, Hartman’s failure to plead specific facts in response to the amounts
due contained therein must also be considered admissions under Pa.R.C.P.
1029(b). As we find that Hartman effectively admitted to all of US Bank’s
allegations in the complaint regarding his failure to make payments under
the mortgage and the amounts due and owing, we agree with the trial court
-6- J-S05029-17
that there are no genuine issues of material fact regarding Hartman’s
default.
Hartman also contends that there is a disputed issue of material fact
regarding his defense of negligent misrepresentation. Initially, we note that
Hartman does not identify, and our search cannot locate, any document in
the record where he explicitly raised this defense. It is, therefore, arguably
waived. See Pa.R.A.P. 302(a). However, even assuming that it was properly
preserved, we note that Hartman has failed to provide any evidence to
support his assertion that US Bank promised him a loan modification.
Accordingly, we find no error in the trial court’s entry of summary judgment
in favor of US Bank.
Next, Hartman argues that the trial court erred in granting summary
judgment as Hartman believes that US Bank has not established that it has
standing to prosecute this foreclosure. Hartman has arguably waived this
issue, as he did not raise it in any pleading, or his written response to US
Bank’s motion for summary judgment. However, even assuming that the
issue was preserved in oral argument on the motion for summary judgment,
we conclude that US Bank had standing to prosecute this foreclosure action.
“[I]n an action based upon a contract, the complainant, to establish
standing, must plead and prove its right to sue under that instrument.” JP
Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1263 (Pa. Super.
2013). The holder of a note that is indorsed in blank is entitled to enforce
-7- J-S05029-17
the note under the UCC, “even if there remain questions as to the chain of
possession of the Note from the time of its making to its arrival” in the
holder’s possession. Id., at 1267.
Hartman does not contest that the note is subject to the UCC, or that
it is indorsed in blank. Instead, he focuses on the fact that US Bank did not
provide the original assignment of the mortgage. He then switches gears
and cites a bankruptcy case where the underlying note was not properly
indorsed to the plaintiff. See Appellant’s Brief, at 13. After reviewing the
record, we are satisfied that US Bank is indeed in possession of the
underlying note, which is indorsed in blank. It therefore had standing to
pursue this action, and Hartman’s second issue on appeal merits no relief.
In his final issue on appeal, Hartman argues that the trial court erred
in granting summary judgment, as discovery was still ongoing. Once again,
this issue is arguably waived, as it is not present in Hartman’s response to
the motion for summary judgment. However, once again, even assuming
that it has been preserved for our review through oral argument on the
summary judgment motion, we conclude that there is no merit to this issue.
Hartman filed a certificate of service for requests of production of
documents in June 2014. US Bank filed a certificate of service for its
objections to the request for production. Neither of the underlying
documents is in the certified record, just the certificates of service.
-8- J-S05029-17
From that point until the time US Bank filed the motion for summary
judgment in February 2016, there is no indication in the record that Hartman
made any attempt to (1) compel compliance with the request for production,
or (2) engage in any other form of discovery. Over a year and a half passed
with no activity. Hartman’s claim that he was engaged in active discovery on
this case is belied by the record. No relief is due on Hartman’s third and final
issue on appeal.
Order affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 3/10/2017
-9-