Wells Fargo Bank, N.A. v. Ortolani, J.

• Court: Superior Court of Pennsylvania
• Decided: January 7, 2019
• Docket: 1383 EDA 2018
• Status: Unpublished

Opinion

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

WELLS FARGO BANK, N.A. : IN THE SUPERIOR COURT OF PENNSYLVANIA

v.

JACQUELYN ORTOLANI AND ANTHONY ORTOLANI : No. 1383 EDA 2018

APPEAL OF: JACQUELYN ORTOLANI

Appeal from the Order Entered April 3, 2018 In the Court of Common Pleas of Montgomery County Civil Division at No(s): No. 14-23915

BEFORE: OTT, J., DUBOW, J., and STEVENS*, P.J.E.

MEMORANDUM BY STEVENS, P.J.E.: FILED JANUARY 07, 2019

Appellant Jacquelyn Ortolani ("Mrs. Ortolani") appeals from the April 3,

2018, order entered in the Court of Common Pleas of Montgomery County

granting Appellee Wells Fargo Bank, N.A.'s ("Wells Fargo Bank") motion for

summary judgment in this in rem mortgage foreclosure action.' After a

careful review, we affirm.

The relevant facts and procedural history are as follows: On October

27, 2000, Anthony and Jacquelyn Ortolani (collectively "the Ortolanis"), in

' During this matter, a default judgment was entered in favor of Wells Fargo Bank and against Anthony Ortolani ("Mr. Ortolani"), who is divorced from Mrs. Ortolani. Mr. Ortolani did not seek to open the default judgment, and he is not a party to this appeal. We note the order at issue is a final order disposing of all parties and all claims. See Pa.R.A.P. 341(b)(1).

Former Justice specially assigned to the Superior Court. J -A29043-18

consideration of a loan in the principal amount of $210,000.00, executed a

promissory note ("note") in favor of World Savings Bank, FSB ("World Savings

Bank"). As security for their obligations under the note, the Ortolanis

executed and delivered to World Savings Bank a mortgage for property located

on Gwynmont Drive, Montgomery Township, Pennsylvania; World Savings

Bank duly recorded the mortgage. Thereafter, World Savings Bank changed

its name to Wachovia Mortgage, FSB, and then changed its name to Wells

Fargo Bank Southwest, N.A, and as of November 1, 2009, merged into Wells

Fargo Bank, resulting in Wells Fargo Bank as the surviving corporation.

On August 19, 2014, Wells Fargo Bank filed a civil complaint in mortgage

foreclosure alleging the Ortolanis had made no mortgage payments since

September 15, 2010; Wells Fargo Bank was the eventual successor of World

Savings Bank via merger; Wells Fargo Bank was the holder of the mortgage

and note; and Wells Fargo Bank had possession of the note. Wells Fargo Bank

indicated that it sent to the Ortolanis a Notice of Intention to Foreclose, a

Notice of Homeowner's Emergency Assistance Program, and a Notice of

Default. Wells Fargo Bank noted that a judicial sale of the premises was

intended.

Wells Fargo Bank attached to its complaint a certification from the

Comptroller of the Currency Administrator of National Banks in support of its

allegation of merger. See Wells Fargo Bank's Complaint, filed 8/19/14, Exhibit

A. It also attached to its complaint a copy of the duly -recorded mortgage,

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which was executed between the borrowers (the Ortolanis) and the lender

(World Savings Bank, its successors, and/or assignees), as well as a copy of

the note, which was executed between the borrowers (the Ortolanis) and the

lender (World Savings Bank, its successors, and/or assignees).

After the Ortolanis failed to respond to the complaint, on May 25, 2016,

Wells Fargo Bank obtained a default judgment against them. However, Mrs.

Ortolani filed a petition to open the default judgment, which the trial court

granted.

On October 11, 2017, Mrs. Ortolani filed a counseled answer with new

matter to Wells Fargo Bank's complaint, and Wells Fargo Bank filed a reply to

the new matter. On January 23, 2018, Wells Fargo Bank filed a motion for

summary judgment averring, inter alia, that there is no dispute the mortgage

is in default, Wells Fargo Bank is the holder of the note and mortgage, and

Wells Fargo Bank complied with the applicable notice requirements.

Additionally, Wells Fargo Bank attached an affidavit from Cynthia A. Thomas,

the vice president of loan documentation for Wells Fargo Bank. Ms. Thomas

confirmed, inter a/ia, that Wells Fargo Bank has possession of the original

note.

Mrs. Ortolani filed a response to the motion for summary judgment. By

order entered on April 3, 2018, the trial court granted Wells Fargo Bank's

motion for summary judgment and entered judgment in favor of Wells Fargo

Bank.

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On May 1, 2018, Mrs. Ortolani contemporaneously filed a "Motion to

Enforce Proposed Consent Judgment Stipulation," a "Motion for

Reconsideration of Summary Judgment," and a notice of appeal to this Court

from the trial court's April 3, 2018, summary judgment order.

In the "Motion to Enforce Proposed Consent Judgment Stipulation," Mrs.

Ortolani averred that, while Wells Fargo Bank's summary judgment motion

was pending in the trial court, "the parties were engag[ed] in extensive

discussion as to resolution of the matter." Mrs. Ortolani's Motion to Enforce

Proposed Consent Judgment Stipulation, filed 5/1/18. She further averred

that Wells Fargo Bank conveyed a written proposal to Mrs. Ortolani on March

29, 2018. See id. The cover letter to the proposal indicated, "Kindly review,

execute and return it [to] our office within ten (10) business days from the

date of this letter."2 See id. She noted the tenth business day was April 9,

2018; however, before the expiration of the proposal date, the trial court

entered summary judgment on April 3, 2018. See id. Mrs. Ortolani noted

she contacted Wells Fargo Bank on April 5, 2018, after receiving the summary

judgment order, and indicted she wanted to accept Wells Fargo Bank's

proposal. See id. However, Wells Fargo Bank emailed Mrs. Ortolani on April

9, 2018, indicating the proposal had been rescinded. Mrs. Ortolani averred

Wells Fargo Bank was not permitted to withdraw the offer after she verbally

2 Mrs. Ortolani attached to her motion a copy of the written consent judgment stipulation. We note the stipulation has not been signed by any of the parties. - 4 - J -A29043-18

accepted it on April 5, 2018. Accordingly, she sought to have the summary

judgment order opened/stricken and the proposed consent judgment

stipulation enforced.

In the "Motion for Reconsideration of Summary Judgment," Mrs. Ortolani

averred the summary judgment order should be opened/stricken since she

accepted Wells Fargo Bank's consent judgment proposal prior to the Bank

withdrawing the offer.

The trial court never ruled on Mrs. Ortolani's "Motion to Enforce

Proposed Consent Judgment Stipulation" or "Motion for Reconsideration of

Summary Judgment." Instead, by order entered on May 18, 2018, the trial

court directed Mrs. Ortolani to file a statement pursuant to Pa.R.A.P. 1925(b).3

Mrs. Ortolani timely complied on June 6, 2018, and the trial court filed a

responsive Pa.R.A.P. 1925(a) opinion on June 27, 2018.

On appeal, Mrs. Ortolani presents the following issues in her statement

of questions involved:

1. Was summary judgment properly granted when [Wells Fargo Bank] failed to produce clear, definite proof of its actual ownership of the original mortgage note as [] an alleged successor in interest in order to establish that it was the proper real property in interest? 2. Was summary judgment properly granted when [Wells Fargo Bank] provided and relied on a self-serving Affidavit from Cynthia A. Thomas in support of its motion for summary

3The trial court's order complied with Pa.R.A.P. 1925(b)(3) pertaining to the required contents.

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judgment and its contention that [Wells Fargo Bank] had the original note and that it was duly endorsed? 3. Did the trial court err in failing to open/strike the summary judgment in this mortgage foreclosure case entered April 5, 2018[,] so that [Mrs. Ortolani's] motion for reconsideration filed May 1, 2018[,] and/or motion to enforce proposed consent judgment stipulation filed May 1, 2018[,] could be ruled on as right before summary judgment was entered, [Wells Fargo Bank] had proposed a consent judgment stipulation to [Mrs. Ortolani], open until April 9, 2018, but revoked same on April 9, 2018[,] after summary judgment was entered? The docket reflects the filing of the Motions as well as the Affidavit of Service of same. If [Mrs. Ortolani] cannot proceed with this appeal, then she would be foreclosed from challenging [Wells Fargo Bank's] revocation of the proposed Consent Judgment Stipulation and its alleged validity until and on April 9, 2018.

Mrs. Ortolani's Brief at 4-5 (suggested answers omitted).4

It is well -settled that: Our scope of review of a trial court's order granting or denying summary judgment is plenary, and our standard of review is clear: 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. Summary judgment is appropriate only when the record clearly shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. The reviewing court must view the record in the light most favorable to the nonmoving party and resolve all doubts as to the existence of a genuine issue of material fact against the moving party. Only when the facts are so clear that reasonable minds could not differ can a trial court properly enter summary judgment.

4We have renumbered Mrs. Ortolani's appellate issues for the sake of effective appellate review. We note that Mrs. Ortolani's issues raised in her Rule 1925(b) statement and her statement of the questions involved are identical. - 6 - J -A29043-18

Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa.Super. 2013) (quoting Cassel -Hess v. Hoffer, 44 A.3d 80, 84-85 (Pa.Super. 2012)). "[P]arties

seeking to avoid the entry of summary judgment against them may not rest

upon the averments contained in their pleadings. On the contrary, they are

required to show, by depositions, answers to interrogatories, admissions or

affidavits, that there is a genuine issue for trial." Washington Fed. Say. &

Loan Ass'n v. Stein, 515 A.2d 980, 981 (Pa.Super. 1986) (citing Pa.R.C.P.

1035(d)).

Combining her argument for her first and second issues, Mrs. Ortolani

avers the trial court improperly granted Wells Fargo Bank's motion for

summary judgment since Wells Fargo Bank did not have standing to

commence the instant mortgage foreclosure action.5 Specifically, Mrs.

Ortolani claims Wells Fargo Bank failed to prove "ownership and possession of

the original note" so as to permit it to commence the instant mortgage

foreclosure action. Mrs. Ortolani's Brief at 14. See J.P. Morgan Chase

Bank, N.A. v. Murray, 63 A.3d 1258 (Pa.Super. 2013) (holding a debtor's

claim that bank was not a real party in interest to bring a foreclosure action

was a challenge to the bank's standing).

The law is clear that only "the real party in interest" may prosecute a

legal action. Pa.R.C.P. No. 2002(a).

5 Mrs. Ortolani indicates that, "[f]or judicial expedience," she is combining her first two issues into one argument section. Mrs. Ortolani's brief at 14. - 7 - J -A29043-18

In a mortgage foreclosure action, the mortgagee is the real party in interest. See Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919, 922 n.3 (Pa.Super. 2010). 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. No. 1147. A person foreclosing on a mortgage, however, also must own or hold the note. This is so because a mortgage is only the security instrument that ensures repayment of the indebtedness under a note to real property. See Carpenter v. Longan, 83 U.S. 271, 275, [] 21 L.Ed. 313 (1872) (noting "all authorities agree the debt is the principal thing and the mortgage an accessory."). A mortgage can have no separate existence. Id. When a note is paid, the mortgage expires. Id. On the other hand, a person may choose to proceed in an action only upon a note and forego an action in foreclosure upon the collateral pledged to secure repayment of the note. See Harper v. Lukens, 271 Pa. 144, 112 A. 636, 637 (1921) (noting "as suit is expressly based upon the note, it was not necessary to prove the agreement as to the collateral."). For our instant purposes, this is all to say that to establish standing in this foreclosure action, [the Bank] had to plead ownership of the mortgage under Rule 1147, and have the right to make demand upon the note secured by the mortgage.'

1The rules relating to mortgage foreclosure actions do not expressly require that the existence of the note and its holder be pled in the action. Nonetheless, a mortgagee must hold the note secured by a mortgage to foreclose upon a property. "The note and mortgage are inseparable; the former as essential, the latter as an incident." Longan, 83 U.S. at 274.

CitiMortgage, Inc. v. Barbezat, 131 A.3d 65, 68 (Pa.Super. 2016).

Based upon our review of the record, the facts are clear and no

reasonable minds could differ as to the conclusion that Wells Fargo Bank had

standing in this matter. Mrs. Ortolani admitted that she obtained a loan from

World Savings Bank and executed a note and mortgage in favor of World

Savings Bank. See Mrs. Ortolani's Answer to Complaint, filed 10/11/17. Wells

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Fargo Bank averred in its complaint that the original bank, World Savings

Bank, changed its name to Wachovia Mortgage, and then changed its name

to Wells Fargo Bank Southwest, and as of November 1, 2009, merged with

Wells Fargo Bank, resulting in Wells Fargo Bank as the surviving corporation.

See Wells Fargo Bank's Complaint, filed 8/19/14. Mrs. Ortolani indicated "no

response" to this averment was necessary. See Mrs. Ortolani's Answer to

Complaint, filed 10/11/17. Wells Fargo Bank also averred that it was the

holder of Mrs. Ortolani's mortgage and note via the merger of the banks. See

Wells Fargo Bank's Complaint, filed 8/19/14. Mrs. Ortolani denied these

assertions generally based on lack of her independent knowledge. See Mrs.

Ortolani's Answer to Complaint, filed 10/11/17. Wells Fargo Bank attached to

its complaint a certification from the Comptroller of the Currency

Administrator of National Banks in support of its allegation of merger. See

Wells Fargo Bank's Complaint, filed 8/19/14, Exhibit A. It also attached to its

complaint a copy of the mortgage, which was executed between the borrowers

(the Ortolanis) and the lender (World Savings Bank, its successors, and/or

assignees), as well as a copy of the note, which was executed between the

borrowers (the Ortolanis) and the lender (World Savings Bank, its successors,

and/or assignees).

It is well -settled that when the original mortgage company merges with

another company, the surviving corporation becomes the mortgagee under

the mortgage agreement, as it "succeeds to both the rights and obligations of

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the constituent corporations." See Park v. Greater Delaware Valley Say.

& Loan Ass'n, 523 A.2d 771, 775-76 (Pa.Super. 1987). As a result, the

surviving corporation becomes the real party in interest in a mortgage

foreclosure action. See 12 U.S.C.A. § 215a(e). No assignment or

endorsement is necessary to bestow upon the surviving bank the status of the

real party in interest to enforce a debt owed to its predecessor. See id. 12

U.S.C. § 215a(e); 7 P.S. § 1606. The surviving corporation, however, has

only the same rights with respect to the debt that its predecessor had at the

time of merger. See J.P. Morgan Chase Bank, N.A, supra (suggesting

succession by merger is sufficient proof to show ownership of note and

mortgage). If the predecessor in interest was entitled to enforce the note at

the time of merger, then the surviving corporation may do the same. See id.

This assumes, however, that the predecessor in interest was, at the time of

the merger, itself entitled to enforce the note. See id.; 13 Pa.C.S.A. §

3302(c).

Here, there is no genuine issue of material fact that the original bank,

World Savings Bank, although renamed several times, merged into Wells

Fargo Bank and, at the time of merger, could have enforced the mortgage and

note. Thus, as a matter of law, given the fact Wells Fargo Bank is the surviving

corporation that succeeded World Savings Bank, Wells Fargo Bank's right to

enforce the mortgage and note arises by operation of its ownership of the

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asset through mergers and acquisitions. See J.P. Morgan Chase Bank,

N.A., supra; Park, supra.

Regarding Mrs. Ortolani's suggestion Wells Fargo Bank failed to prove it

had possession of the original note, assuming such possession is material,

Mrs. Ortolani denied generally Wells Fargo Bank's allegation that it had

possession of the note and she demanded proof. Mrs. Ortolani's Answer to

Complaint, filed 10/11/17. The trial court noted Wells Fargo Bank attached

a copy of the original note to its complaint. Further, Wells Fargo Bank

produced and attached to its motion for summary judgment a sworn affidavit

from Ms. Thomas, who indicated that, during the regular performance of her

job duties and record keeping for Wells Fargo Bank, she was able to confirm

that Wells Fargo Bank was in possession of the note. Mrs. Ortolani responded

that the sworn affidavit is "self-serving."6 She submitted no evidence during

discovery contrary to Wells Fargo Bank's allegation of possession. See

Washington Fed. Say. & Loan Ass'n, 515 A.2d at 983 ("In order to properly raise a genuine issue of fact, [the appellant] had the burden to present 'facts'

by counter -affidavits, depositions, admissions, or answers to

interrogatories."). Thus, we conclude Mrs. Ortolani failed to establish a

6 To the extent Mrs. Ortoloni contends that, in granting summary judgment, the trial court may not rely upon "self-serving" sworn affidavits, we conclude she has not properly developed an argument with regard thereto on appeal. See Pa.R.A.P. 2119. J -A29043-18

genuine issue of material fact as to this issue, and the trial court did not err

in entering summary judgment as a matter of law in favor of Wells Fargo Bank.

In her final issue, Mrs. Ortolani avers the trial court abused its discretion

in failing to open/strike the summary judgment order and considering her

motion for reconsideration and/or motion to enforce the proposed consent

judgment stipulation.7 Specifically, Mrs. Ortolani avers the trial court should

have exercised its power under 42 Pa.C.S.A. § 5505 since there were

"extraordinary circumstances relating to the proposed consent judgment

stipulation" present in this case. See Mrs. Ortolani's Brief at 13.

Initially, we note that, after the trial court entered its April 3, 2018,

order granting summary judgment, on May 1, 2018, Mrs. Ortolani filed a

notice of appeal, as well as her motion for reconsideration and motion to

enforce the proposed consent judgment stipulation. Pennsylvania Rule of

Appellate Procedure 1701 and Section 5505 generally prohibit a trial court

from proceeding further in the matter after an appeal is taken, but there are

exceptions. See Pa.R.A.P. 1701; 42 Pa.C.S.A. § 5505.

As this Court has recognized:

Rule 1701(a) of the Rules of Appellate Procedure states that, "after an appeal is taken ... the trial court ... may no longer proceed further in the matter." Pa.R.A.P. 1701(a); see also 42 Pa.C.S.A. § 5505 (stating that a court may modify any order within thirty days after its entry so long as no appeal from such

Mrs. Ortolani does not dispute that her motion to enforce the prosed consent judgment stipulation sought reconsideration of the trial court's summary judgment order, and therefore, we shall treat it as such on appeal. - 12 - J -A29043-18

order has been taken). However, according to Rule 1701(b)(3), "[a]fter an appeal is taken," the trial court may "[g]rant reconsideration of the order which is the subject of the appeal," if "an application for reconsideration of the order is filed in the trial court ... within the time provided or prescribed by law" and "an order expressly granting reconsideration of such prior order is filed in the trial court ... within the time prescribed by these rules for the filing of a notice of appeal." Pa.R.A.P. 1701(b)(3).

Commonwealth v. Haughwout, 816 A.2d 247, 249-50 (Pa.Super. 2003). Accordingly, relevant to the case sub judice, notwithstanding the fact

Mrs. Ortolani filed a timely notice of appeal, since she filed her motion for

reconsideration and motion to enforce the proposed consent judgment

stipulation "within the time provided or prescribed by law" (i.e., within thirty

days after the trial court's order granting summary judgment), the trial court

had the authority to rule on, and in fact expressly grant reconsideration if it

were so inclined, as long as it did so within thirty days of its April 3, 2018,

summary judgment order. See Haughwout, supra. See also Pa.R.A.P.

1701; 42 Pa.C.S.A. § 5505. However, contrary to Mrs. Ortolani's suggestion,

the trial court was not required to act on the motions. Rather, the trial court's

authority in this regard was "almost entirely discretionary[.]" Verholek v.

Verholek, 741 A.2d 792, 798 (Pa.Super. 1999) (en banc). See Moore v.

Moore, 535 Pa. 18, 634 A.2d 163, 167 (1993) (indicating the trial court's

authority to reconsider its own judgment "is left to the sound discretion of the

trial court"). Simply put, in the case sub judice, Mrs. Ortolani has not

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convinced us that the trial court abused its discretion in failing to open/strike

the summary judgment order and rule on the motions at issue.8

For all of the foregoing reasons, we affirm.

Affirmed.

Judgment Entered.

, Jseph D. Seletyn, Prothonotary

Date: 1/7/19

8 In its Rule 1925(a) opinion, the trial court relevantly noted: By asserting in her concise statement only that th[e] [trial] court erred in failing to open/strike the entry of summary judgment [and rule on her motions], [Mrs. Ortolani] has waived any claim that th[e] [trial] court abused its discretion in not granting reconsideration. See Moore, supra (stating that a request for reconsideration is addressed to the sound discretion of the trial court)[.] Trial Court Opinion, filed 6/27/18, at 4 n.4. We agree with the trial court and, thus, to the extent Mrs. Ortolani argues on appeal the trial court erred in expressly granting her motions, we find the claim to be waived. See Pa.R.A.P. 1925(b)(4)(vii) ("Issues not included in the Statement and/or not raised in accordance with the provisions of this paragraph (b)(4) are waived.").

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