J-S68036-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HSBC BANK USA IN THE SUPERIOR COURT OF
NATIONAL ASSOCIATION TRUSTEE PENNSYLVANIA
Appellee
v.
KEVIN A. KRONBERG
Appellant No. 3365 EDA 2014
Appeal from the Order October 21, 2014
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2010-08737
BEFORE: BENDER, P.J.E., DONOHUE, J., and MUNDY, J.
MEMORANDUM BY MUNDY, J.: FILED DECEMBER 28, 2015
Appellant, Kevin A. Kroberg, appeals from the October 21, 2014 order
denying his “Motion to Set-Aside Sheriff’s Foreclosure Sale.” After careful
consideration, we affirm on the basis expressed in the thorough and well-
supported opinion of the Honorable Thomas C. Branca.
The trial court summarized the procedural and factual history of this
case in its April 27, 2015 opinion, and we need not repeat it here in full. We
highlight a few salient points for clarity. This matter commenced with the
filing of a mortgage foreclosure complaint by Appellee, HSBC Bank, NA
Trustee (HSBC Bank), on April 5, 2010. HSBC Bank obtained a default
judgment on May 28, 2010, and the matter proceeded to a sheriff’s sale on
December 18, 2013. Throughout this time, Appellant took no responsive
action in the case except to move to adjourn the sheriff’s sale on September
J-S68036-15
23, 2013, which was withdrawn later that same day. The motion was refiled
on December 17, 2013 and denied the following day. The property was sold
at a sheriff’s sale on February 10, 2014. The sheriff’s deed was delivered
and recorded on February 20, 2014. Not until March 5, 2014, did Appellant
file the instant petition to set aside the sheriff’s sale. After hearing
argument, and receiving briefs from the parties, the trial court denied
Appellant’s petition on October 23, 2014. Appellant filed a timely notice of
appeal on November 19, 2014.1
On appeal, Appellant raises the following issues for our review.
(1) Did the trial court commit an error of law in
denying Kronberg’s Motion to Set-Aside Sheriff’s
[F]oreclosure Sale when [HSBC Bank] (Plaintiff
below), foreclosing lender did not have
“authority”/standing to execute on its foreclosure
judgment for want of a pre-judgment record
assigned mortgage and negotiated transferred note
such as to allow foreclosing lender to have conducted
its Sheriff’s Sale?
(2) Did the trial court commit an error of law in
denying a requested evidentiary hearing, or,
alternatively, discovery towards oral argument?
Appellant’s Brief at 8.2
____________________________________________
1
Appellant and the trial court have complied with Pennsylvania Rule of
Appellate Procedure 1925.
2
Appellant failed to include his second issue in his Rule 1925(b) statement.
Therefore, we conclude this issue is waived. See Commonwealth v. Hill,
16 A.3d 484, 494 (Pa. 2011) (holding “any issues not raised in a Rule
1925(b) statement will be deemed waived”).
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We note the following standards guiding our review of this appeal.
Pursuant to Rule 3132 of the Pennsylvania
Rules of Civil Procedure, a sheriff’s sale may be set
aside upon petition of an interested party “upon
proper cause shown” and where the trial court
deems it “just and proper under the circumstances.”
Pa.R.C.P. 3132. The burden of proving
circumstances warranting the exercise of the court’s
equitable powers is on the petitioner. Equitable
considerations govern the trial court’s decision to set
aside a sheriff’s sale, and this Court will not reverse
the trial court’s decision absent an abuse of
discretion. An abuse of discretion occurs where, for
example, the trial court misapplies the law.
Nationstar Mortgage, LLC v. Lark, 73 A.3d 1265, 1267 (Pa. Super.
2013).
[Pennsylvania] Rule [of Civil Procedure] 3135 makes
it clear that a party has 20 days to take exceptions
before the sheriff executes a sheriff’s deed.
Taken together, Rule 3132 and 3135(a) make
clear a party must raise a challenge to a sheriff’s sale
within a period of time after the sale, but before the
deed is delivered.
Mortgage Elec. Registration Sys., Inc. v. Ralich, 982 A.2d 77, 80 (Pa.
Super. 2009), appeal denied, 992 A.2d 889 (Pa. 2010). “There is an
exception to this time bar, however. A sheriff’s sale may be set aside after
delivery of the sheriff’s deed based on fraud or lack of authority to make the
sale.” Id. (citations omitted).
Instantly, Appellant’s petition was patently late. However, Appellant
asserts that he has demonstrated lack of authority for the sheriff’s sale,
because “[t]he failure of a pre-judgment record assigned mortgage and
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negotiated transferred note through the chain of loan title precludes
foreclosing lender’s authority/standing to have executed thereupon its
default judgment ….” Appellant’s Brief at 14. Essentially, Appellant claims
the sheriff had no authority to sell the property because HSBC Bank
allegedly lacked standing at the time it brought the suit. Id.
We agree with the trial court that Appellant’s claim is meritless.
Standing is a non-jurisdictional and waivable issue. In re Condemnation
by Urban Redev. Auth. of Pittsburgh, 913 A.2d 178, 181 n.6 (Pa. 2006).
Any challenges to a party’s capacity to sue must be raised in preliminary
objections or in an answer to the complaint. In re Estate of Alexander,
758 A.2d 182, 189 (Pa. Super. 2000); see also Pa.R.C.P., Rule 1028(a)(5).
The issue of standing to sue is waived unless specifically raised in a
preliminary objection or in the answer to the complaint. Erie Indem. Co. v.
Coal Operators Cas. Co., 272 A.2d 465, 467 (Pa. 1971). Appellant never
challenged HSBC Bank’s standing during the foreclosure proceedings, and
has waived the issue. We also agree with the trial court that HSBC Bank’s
various pleadings and averments were adequate on their face to indicate
HSBC Bank’s standing was proper. Trial Court Opinion, 4/27/15, at 6-7.
Accordingly, we adopt the April 27, 2015 opinion of the Honorable
Thomas C. Branca as our own for the purposes of our disposition of this
appeal. We conclude the trial court did not abuse its discretion when it
denied Appellant’s petition to set aside the sheriff’s sale in this case. See
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Lark, supra. Accordingly, we affirm the trial court’s October 21, 2014
order.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/28/2015
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IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
HSBC BANK USA, NATIONAL NO. 10-08737
ASSOCIATION TRUSTEE 3365 EDA 2014
Plaintiff
v.
KEVIN A. KRONENBERG
Defendant
111 rJiM(~J~Dll 1
2010-08737-0061 4/27/2015 11:46 AM # 10273856
Opinion
Rcpt#Z2388802 foi:$0.00
Mark L~,'Y - MontCo Prothonotary
OPINION OF THE COURT
Branca,J. April 27, 2015
I. INTRODUCTION
Defendant, Kevin Kronenberg appeals to the Superior Court this CoU11's Order
dated October 21, 2014, denying his Petition to Set Aside Sheriff's Foreclosure Sale.1
For the following reasons, the Court's Order should be AFFIRMED.
II. STATEMENT OF THE CASE
This suit commenced on April 5, 2010 with Plaintiff's filing of a Complaint in
Mortgage Foreclosure, seeking an in rem judgment in the amount of $157,125. 92,
together with interest, other costs, fees and applicable charges, against
Defendant/Mortgagor of the property located at 926 Columbia A venue, Lansdale,
Pennsylvania.' Thereafter, on May 28, 2010, Plaintiff filed a Praecipe for Judgment For
Failure to Answer and Assessment of Damages, at which point the Montgomery County
Prothonotary entered judgment against Defendant. Defendant did not file a Petition to
Strike and/or Open the Default Judgment. On June 23, 2010, Plaintiff filed a Praecipe to
Issue Writ of Execution. [Praecipe, 6/23/1 OJ.
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Order is docketed 10/23/14.
2
In its Complaint, Plaintiff identifies itself as "HSBC Bank USA, National Association, as Trustee, Under
the Pooling and Servicing Agreement, dated May I, 2004, Fremont Home Loan Trust 2004-B, Asset-
Backed Certificates, Series 2004-B 4828 Loop Central Drive Houston, Tx. 7708102226."
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More than three years later, on December 18, 2013, the property was sold at
Sheriff's Sale on the Writ for the sum of $2,360.67. [Sheriff's Certification of Sale of
Property, 2/10/14]. On, January 13, 2014, the Deed was "Sealed and Delivered in the
presence of' Greg Womelsdorf, the Acting Sheriff, and recorded on February 11, 2014.
[Pl.'s Resp., 3/20/14, Ex. A].3 On February 20, 2014, the Montgomery County Recorder
of Deeds further certified that a Sheriff's Deed, conveying the subject property to
Plaintiff, was delivered on December 18, 2013, and recorded on February 11, 2014.
[Recorder's Certification, 2/20/14].
On March 5, 2014, nearly two months after delivery of the Deed, Defendant
sought relief from the Sheriff's Sale, by filing an untimely Motion to Set Aside. [Def.' s
Mot., 3/5/14]. The following sets forth the entirety of Defendant's Motion:
1. This is an action in mortgage foreclosure with sheriff's foreclosure
sale of Defendant's property having concluded.
2. Upon information and belief, the Sheriff's Deed Poll has been
recorded to Plaintiff.
3. For "want of authority" or "fraud," a Sheriff's foreclosure Sale may be
set-aside subsequent to the Sheriff's Deed Poll recordation. Concord-
Liberty Savings & Loan Assoc., et al. v. NTC Properties, Inc., 454 Pa.
472 (1973) (citing Panison v. Erb, 424 Pa. 306 (1967)).
4. Upon information and belief (for preservation, discovery, and
evidentiary examination at hearing or otherwise), Plaintiff's judgment
and thus execution thereupon by Sheriff's Sale was without
"authority" and therefore was a "fraud" upon this Honorable Court for
failure of Plaintiff to have been the pre-judgment (if not pre-Sale)
record mortgage assignee and note transferee through the chain of loan
title. U.S. Bank, N.A. v. Mallory, 982 A.2d 986 (Pa. Super. 2009).
5. For the foregoing, the within Sheriff's foreclosure Sale should be set-
aside.
3
The record also reflects the document entitled "Deed Poll Acknowledged & Returned to Sheriffs Office,"
was filed on February I 0, 2014. See Montco. Local Rule 3135.
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6. WHEREFORE, Defendant, Kronenberg, respectfully requests this
Honorable Court set-aside Plaintiffs Sheriffs foreclosure Sale
consistent with the attached proposed Order. To the extent this
Honorable Court entertains denying Defendant's within motion,
Defendant respectfully requests an evidentiary hearing or, in the
alternative, oral argument before this Honorable Court as to Plaintiffs
"want of authority"/"fraud".
[Def.'s Mot. to Set-Aside, ,r ,r 1-5, 3/5/14] (transcribed exactly as drafted). In addition to
repeating the prayer for relief set forth in his Motion, Defendant's Memorandum of Law
in Support of his Motion lacked any legal analysis and, instead, was limited to the
following sentence:
Incorporating by reference Defendant's attached motion, Defendant
reserves the right to supplement this motion through discovery and/or at
hearing or otherwise as more information becomes available.
[Def.'s Mem., 3/5/14].
After argument and submission of Defendant's post-argument Supplemental
Memorandum of Law in Support of Defendant's Motion to Set Aside Sheriffs
Foreclosure Sale, as well as Plaintiffs Supplemental Memorandum of Law in Opposition
to Defendant's Reply Memorandum in Support of Defendant's Motion to Set-Aside
Sheriffs Foreclosure Sale, the undersigned denied Defendant's Motion by Order dated
October 21, 2014.4 Defendant filed a timely Notice of Appeal on November 19, 2014.
Thereafter, on January 8, 2015, Defendant timely filed and served upon the undersigned
the following Concise Statement of Matters Complained Of On Appeal (Pa. R.A.P.
"l 925(b) Statement"):
l. Whether the trial court erred in denying Defendant-Appellant's Motion
to Set Aside Plaintiffs Sheriffs foreclosure Sale?
2. Whether the trial court erred in finding Plaintiff was the pre-judgment
record assigned mortgagee and recipient of the negotiated transferred note
such as to allow it to have conducted its Sheriffs Sale?
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Order is docketed I 0/23/ 14.
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3. Whether the trial court erred in finding Plaintiff had standing/authority
to have conducted its Sheriffs' Sale?
III. DISCUSSION
An appellate court will not reverse a trial court's decision denying a petition to set
aside sheriffs sale absent an abuse of discretion. Nationstar Mortg., LLC v. Lark, 73
A.3d 1265 (Pa. Super. Ct. 2013). Pursuant to Pa. R.C.P. 3132:
Upon petition of any party in interest before delivery of the personal
property or of the sheriffs deed to real property, the court may, upon
proper cause shown, set aside the sale and order a resale or enter any other
order which may be just and proper under the circumstances.
Id. (emphasis added). To be timely, a petition to set aside must be filed before the
sheriffs delivery of the deed. Id.; See Mortgage Electronic Registration Systems, Inc. v.
Ralich, 982 A.2d 77, 79 (Pa. Super. Ct. 2009). Petitioner bears the burden of proving
circumstances warranting relief, and only "upon proper cause shown," will the trial court
exercise its equitable powers to set aside. Nationstar Mortg., LLC, 73 A.3d 1265 at 1267;
Mortgage Electronic Registration Systems, Inc., 982 A.2d at 79.
Moreover, it is well-settled that delivery of the deed divests the court of the
authority to set aside a sheriff's sale. Mortgage Electronic Registration Systems, Inc. v.
Ralich, 982 A.2d at 79 ("The trial judge struck the Ralichs' Petition as untimely because
delivery of a sheriff's deed divests the court of the authority to set aside a sheriff's sale."
(internal citation omitted)). A narrow exception to Pa. R.C.P. 3 l 32's strict time bar
applies in limited circumstances which may permit a Court to set aside a sheriffs sale
after delivery of the deed, but only where the movant demonstrates fraud or lack of
authority to make the sale. See Mortgage Electronic Registration Systems, Inc. v. Ralich,
982 A.2d at 80.
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The Court Properly Denied Defendant's Motion To Set Aside Where
Defendant Failed to Demonstrate The Requisite Fraud or Lack of Authority.
Despite Defendant's bald assertions, and as discussed below, the Court properly
denied Defendant's Motion to Set Aside where he failed to establish that the Sheriffs
Sale was tainted by fraud or lack of authority. While not entirely clear from Defendant's
pleading, the basis of Defendant's claim appears to be that the underlying judgment,
taken by default on May 28, 2010, was entered without the requisite legal basis because
the assignment of the Mortgage to Plaintiff had not yet been recorded, nor was Plaintiff in
possession of the note, and therefore, the subsequent Sheriffs Sale was conducted
without authority. As Defendant acquiesced at every critical stage effectively conceding
authority to the Sheriff to conduct the sale, and the judgment was not void ab initio,
Defendant's assertion is meritless.
As previously discussed, because Defendant filed his Motion after the Deed was
delivered on January 13, 2014, he was required to demonstrate fraud or lack of authority
to merit relief from the Court. See Pa. R.C.P. 3123; see Ralich, 982 A.2d 77, 80. A
cursory review of the record, including the recorded mortgage assignments, reflects that
despite Defendant's claim regarding the underlying judgment, the Sheriff did indeed,
have the authority to conduct the Sale which occurred on December 18, 2013. [See
Mortgage, Bk. 11009, PG. 02144; see also, Assignment of Mortgage, Bk. 12595, PG
00870, et seq.].
In US. Bank, NA. v. Mallory, the Superior Court held that the recording of an
assignment of the mortgage is not a prerequisite to mortgagee's standing to seek
enforcement of the mortgage via a mortgage foreclosure action. US. Bank, NA. v.
Mallory, 982 A.2d 986, 994 (Pa. Super. Ct. 2009) ("Simply put, contrary to Appellant's
suggestion, the recording of an assignment of the mortgage was not a prerequisite to
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Appellee having standing to seek enforcement of the mortgage via a mortgage
foreclosure action.") In this case, Plaintiff initiated suit by filing a Complaint on April 5,
2010. In that Complaint, which went unanswered, Plaintiff asserted:
On 02/03/2004 mortgagor(s) made, executed and delivered a mortgage ...
which mortgage is recorded in the Office of the Recorder of Montgomery
County, in Mortgage Book No. 11009, Page 2144. By Assignment of
Mortgage recorded 02/27 /2008 the Mortgage was assigned to Fremont
Investment & Loan which Assignment is recorded in Assignment of
Mortgage Book No. 12332, Page 2671. The Plaintiff is now the legal
owner of the mortgage and is in the process of formalizing an assignment
of same.
[Comp I., at ~3, 4/5/1 OJ. That assignment and all subsequent assignments were recorded
as of the date of the Sheriff's Sale. While Defendant asserts that Plaintiff lacked
authority to initiate the entry of default judgment by the Prothonotary on May 28, 2010, a
review of the May 17, 2010 assignment reflects that the Mortgage had been assigned to
Plaintiff at the time it sought entry of default judgment. The fact that the assignment was
not recorded until November 16, 2010 did not deprive Plaintiff of standing to seek entry
of judgment, nor did it undermine the legality of that judgment. See US. Bank, NA., 982
A.2d at 994.
Moreover, with regard to Defendant's bald assertion that Plaintiff was not the
transferee of the note, it is now well-established that an averment in a complaint in
mortgage foreclosure that the foreclosing party is the legal owner of the mortgage, as
asserted in the instant case, sufficiently indicates that the foreclosing party is the holder
of the mortgage's note. US. Bank, NA., 982 A.2d at 994 (Determining that mortgagee's
averment in its complaint that it was the "legal owner" of the mortgage sufficiently
indicated it was the holder of the mortgage's note.") As Defendant failed to answer the
Complaint or seek to open or strike the default judgment entered thereon for want of an
answer, Defendant has conceded to the legal inference that at all relevant times Plaintiff
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was in possession of the note which the mortgage, clearly assigned to Plaintiff, secures.5
6
Without question the judgment was not void ab initio under these circumstances.
Finally, the fact that another similar entity may have held legal ownership of the
property at various points throughout this action against Defendant does not serve as a
basis to invalidate the subsequent Sale. Pursuant to Pa. R.C.P. 2004:
If a plaintiff has commenced an action in his or her own name and
thereafter transfers the interest therein, in whole or in part, the action may
continue in the name of the original plaintiff, or upon petition of the
original plaintiff or of the transferee or of any other party in interest in the
action, the court may direct the transferee to be substituted as plaintiff or
joined with the original plaintiff.
As discussed above, the record amply supports Plaintiffs authority to both seek
entry of default judgment and to proceed to Sheriffs Sale on the unchallenged default
judgment upon which a writ of execution issued granting to the Sheriff authority to
7
conduct that Sale. For all of the aforementioned reasons, Defendant's appeal is without
merit.
5
It should be noted that Defendant is not at risk to being twice held to satisfy the debt of the note even if
Plaintiff was not the holder of the note as the debt was satisfied by the Sheriffs Sale. 13 Pa. C.S. 3602(a);
JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1263 (Pa. Super. Ct. 2013).
6
See Bank of New York f/k/a The Bank of New York, As Trustee for the Certificate Holders of the CWMBS
Inc., CHL Mortgage Pass-Through Trust 200 7- 17, Mortgage Pass-Through Certificate, Series 200 7-17 v.
Chughtai, No. 1376 EDA 2014, 1.0.P. 65.37, Concurr., at *5 (Pa. Super. Ct. Mar. 20, 2015)) ("That the
assignment had not in fact been recorded at the time that the complaint was filed did not render the record
deficient on its face such that the judgment was void; at most it merely was voidable.") (internal citation
omitted); Id. at *4 ("A voidable judgment may be stricken only when the petition is filed 'within a
reasonable period foJJowing the entry of the judgment."') (internal citation omitted).
7
Bank of New York Pk/a The Bank of New York, As Trustee for the Certificate Holders of the CWMBS Inc.,
CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass-Through Certificate, Series 2007-17,
Concurr., at *2-3 ("The difficulty here is that, despite undisputedly having received personal service of
BNY's foreclosure complaint on the subject property, Chughtai did not contest BNY's complaint, which
led to the entry of a default judgment. Chughtai also did not later seek to open or strike that default
judgment in a timely manner, effectively acquiescing to the judgment. Because the sheriffs authority Jay
in the writ of execution entered upon the default judgment, which Chughtai also did not chaJJenge, only by
establishing that the default judgment was void ab initio might Chughtai prevail in his challenge to the
sheriffs sale.")
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IV. CONCLUSION
For all of the aforementioned reasons, the trial court's Order dated October 21,
2014, denying Defendant's Motion to Set Aside should be AFFIRMED.
Copies of the above Opinion
mailed onl{ /J.l /15 to:
By First Class Mail:
Lauren Tabas, Esquire
Matthew B. Weisberg, Esquire
By Interoffice Mail:
Court Administration
Chum/\
Secretary \
~J\JlQJ\
....._
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