J. A06014/16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CADLES OF GRASSY MEADOWS, II , LLC, : IN THE SUPERIOR COURT OF
SUBSTITUTED PLAINTIFF TO BROWN : PENNSYLVANIA
BARK I, L.P., ASSIGNEE OF SOVEREIGN :
BANK, SUCCESSOR BY MERGER TO MAIN:
STREET BANK :
:
v. :
:
BET SHAVEI-TZION A/K/A BET :
SHAVEI-TZION, INTERNATIONAL :
AND/OR BET SHAVEI-TZIO, LTD., :
INTERNATIONAL, :
:
Appellant : No. 1003 MDA 2015
Appeal from the Judgment Entered July 29, 2015
In the Court of Common Pleas of Wyoming County
Civil Division No(s).: 2007-CV-331
BEFORE: LAZARUS, J., STABILE ,J., and DUBOW, J.
MEMORANDUM BY DUBOW, J.: FILED JUNE 07, 2016
Appellant, Bet Shavei-Tzion, appeals from the November 19, 2014
Order entered in the Court of Common Pleas of Wyoming County, finding the
promissory note and mortage at issue in this case in default, and lifting all
stays imposed with respect to the foreclosure and sale of the mortgaged 95-
acre property owned by Appellant. After careful review, we affirm.
The relevant factual and procedural history of this case is summarized
as follows. In 2000, Rabbi Harry Dombek served in at least two capacities:
(i) as president/trustee of Mount Laurel Cemetery Association (“Mount
Laurel”), and (ii) as president of Appellant, a synagogue. Mount Laurel
J.A06014/16
sought a $250,000.00 loan from Main Street Bank. Trial Ct. Op., filed
11/19/14, at 2. Needing additional collateral to secure the loan, Mount
Laurel approached Appellant. Appellant owns two properties: one 95-acre
property, and one 275-acre property. Appellant and Mount Laurel reached
an oral agreement whereby Appellant would pledge the 95-acre property as
collateral for Mount Laurel’s loan in exchange for Mount Laurel’s promise to
donate certain funds to Appellant. Id. at 6. Appellant passed two corporate
resolutions; one authorizing Rabbi Dombek to mortgage property as
collateral for Mount Laurel’s loan, and one specifically authorizing Rabbi
Dombek to encumber the 95-acre property in order to use it as collateral.
Id. at 4-6.
Thereafter, Main Street Bank as Lender executed two agreements: (i)
a debt instrument (“Promissory Note”) signed by Mount Laurel for the
$250,000 loan; and (ii) a mortgage document (“Mortgage Agreement”)
signed by Appellant describing the 95-acre property to secure the
Promissory Note. Id. at 4.
The Mortgage Agreement itself contains, in relevant part, the following
definitions:
Borrower. The word "Borrower" means Mount Laurel Cemetery
Association, and all other persons signing the Notice in whatever
capacity.
...
Grantor. The word "Grantor" means BET SHAVEI –TZION
[Appellant].
-2-
J.A06014/16
...
Indebtedness. The word "Indebtedness" means all principal,
interest, and other amounts, costs and expenses payable under
the Note or Related Documents, together with all renewals of,
extensions of, modifications of, consolidations of and
substitutions for the Note or Related Documents and any
amounts expended or advanced by Lender to discharge Grantor's
obligations or expenses incurred by Lender to enforce Grantor's
obligations under this Mortgage, together with interest on such
amounts as provided in this Mortgage. The liens and security
interests created pursuant to this Mortgage covering the
Indebtedness which may be created in the future shall relate
back to the date of this Mortgage.
...
Note. The word "Note" means the promissory note dated
November 16, 2000, in the original principal amount of
$250,000.00 from Borrower to Lender, together with all
renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for the promissory note or
agreement. The maturity date of this Mortgage is June 1, 2016.
Mortgage, recorded 11/27/00, Register and Recorder Wyoming County, Book
0416, Page 0771 (emphasis in original).
The relevant terms of the Mortgage Agreement include the following:
GRANT OF MORTGAGE. For valuable consideration, Grantor
grants, bargains, sells, conveys, assigns, transfers, releases,
confirms and mortgages to Lender all of Grantor's right, title and
interest in and to the following real property . . . located in
WYOMING COUNTY County, (sic) Commonwealth of
Pennsylvania:
See the exhibit or other description document
which is attached to this Mortgage and made a
part of this Mortgage as if fully set forth herein.
-3-
J.A06014/16
Id. at 0767 (emphasis in original). Attached to the Mortgage Agreement is
a description of Appellant’s 95-acre property. Id. at 0772-75. Regarding
securitization, the Mortgage Agreement provides as follows:
CROSS COLLATERALIZATION. In addition to the Note, this
Mortgage secures all obligations, debts and liabilities, plus
interest thereon of Borrower to Lender, or any one or more of
them, as well as all claims by Lender against Borrower or any
one or more of them[.]
...
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF
RENTS AND THE SECURITY INTEREST IN THE RENTS AND
PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT
OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY
AND ALL OBLIGATIONS UNDER THIS MORTGAGE.
Id. at 0767 (emphasis in original).
Finally, regarding default, the Mortgage Agreement provides as
follows:
EVENTS OF DEFAULT. Each of the following, at Lender's option,
shall constitute an Event of Default under this Mortgage:
Payment Default. Borrower fails to make any
payment when due under the Indebtedness.
...
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence
of an Event of Default and at any time thereafter, Lender, at
Lender’s option, may exercise any one or more of the following
rights and remedies, in addition to any other rights and remedies
provided by law:
...
Judicial Foreclosure. Lender may obtain a judicial
decree foreclosing Grantor's interest in all or any
part of the Property.
-4-
J.A06014/16
Id. at 0769-70 (emphasis in original).
In 2005, Mount Laurel filed for bankruptcy protection under Chapter 7
of the Bankruptcy Code, and ceased making payments on the Promissory
Note. Brown Bank, a predecessor in interest of Appellee,1 brought a
mortgage foreclosure action against Appellant on March 26, 2007, seeking to
foreclose on both the 95-acre property and the 275-acre property.
Appellant filed a Motion for Summary Judgment, arguing, inter alia,
that (i) foreclosure was improper where Appellant had only executed the
Mortgage Agreement and not a note or suretyship agreement; and (ii)
Appellant had not pledged or mortgaged the 275-acre parcel. Motion for
Summary Judgment, filed 4/30/09, at 2.
On August 26, 2009, the trial court granted in part the Motion for
Summary Judgment, dismissing from the mortgage complaint the 275-acre
property after “concluding that [Appellant’s] 275 acre parcel of land is not
sufficiently described in the mortgage so as to create a lien on said parcel.”
Order of Court, filed 8/26/09. The court denied the Motion as to the 95-acre
parcel, “concluding that there exist genuine issues of material fact as to
whether the mortgage creates a lien[.]” Id.
1
Main Street Bank merged with Sovereign Bank, and Sovereign Bank later
assigned the Mortgage Agreement and Promissory Note to Brown Bank. At
some time after the instant mortgage foreclosure action was filed, Appellee
purchased the Mortgage Agreement and Promissory Note from Brown Bank.
Trial Ct. Op., filed 11/19/14, at 2-3.
-5-
J.A06014/16
Following a non-jury trial, on November 19, 2014, the trial court found
the Promissory Note and Mortgage Agreement in default, and lifted all stays
imposed with respect to the foreclosure and sale of “the mortgaged premises
located on Mount Zion Road, Eaton Township, Wyoming County,
Pennsylvania known as Parcels Nos. 03-38-65 and 03-38-65-01.” Trial Ct.
Op., filed 11/19/14, at 1.
Appellant timely appealed, raising the following three issues in his
Brief to this Court:
1. Whether the trial court committed plain error in its Court
Order by mistakenly permitting the Appellee to foreclose upon a
275-acre parcel of land, despite the fact that the immediate
past-President Judge of Wyoming County had previously granted
summary judgment, dismissing the 275 parcel (sic) from the
mortgage foreclosure action?
2. Whether the findings of fact of the trial court were
supported by substantial evidence?
3. Whether the findings of the trial court are premised on
errors in the application of the law?
Appellant’s Brief at 4.
Appellant first argues that the trial court’s November 19, 2014 Order
improperly permitted foreclosure on both the 95-acre property and the 275-
acre property. The use of various Parcel Numbers has led to some confusion
in this case. In documents submitted to the trial court, both parties
identified the 95-acre property by the Parcel Number 03-38-65-00, and the
275-acre property by the Parcel Number 03-38-67-01. The trial court’s
-6-
J.A06014/16
November 19, 2014 Order does not use either of these numbers, but instead
permits foreclosure on Parcel Numbers 03-38-65 and 03-38-65-01.
Appellant is correct that, because the 275-acre property was dismissed
from the instant case in the August 26, 2009 Order, any subsequent order
authorizing foreclosure on that property would be in error. Pennsylvania’s
well-established Law of the Case Doctrine bars a judge from revisiting
rulings previously decided by another judge of the same court. See
Commonwealth v. Starr, 664 A.2d 1326, 1333 (Pa. 1995). Appellant has
not presented this court with any factual basis for establishing that either
Parcel Number referenced in the Order at issue in this appeal in fact refers to
the 275-acre property. Because the prior order dismissed the 275-acre
parcel from the action, we hold that the trial court’s November 19, 2014
Order pertains only to the 95-acre property. Thus, Appellant’s claim that the
November 11, 2014 Order improperly permitted foreclosure on the 275-acre
parcel is incorrect and merits no further review.
Appellant’s next two issues present two sides of the same argument:
whether the trial court’s factual findings are supported by the evidence and
properly applied to the law.
“Upon default, the holder of a mortgage can legally proceed to enforce
the terms of the mortgage . . . by foreclosure proceedings[.]” Cunningham
v. McWilliams, 714 A.2d 1054, 1056 (Pa. Super. 1998). The entry of
judgment in an action for mortgage foreclosure is proper “if the mortgagors
-7-
J.A06014/16
admit that the mortgage is in default . . . and that the recorded mortgage is
in the specified amount.” Id. at 1057.
Appellant does not contest that Mount Laurel has failed to make
payments on the Promissory Note when due and is in default on its
indebtedness to Appellees. Nonetheless, Appellant argues the entry of the
foreclosure order was improper because (i) Appellee’s failed to prove the
existence of a surety agreement between Appellant and Mount Laurel, and
(ii) absent proof of such a surety agreement, the Mortgage Agreement
cannot be enforced. We reject Appellant’s arguments.
Appellant challenges the factual finding of the trial court, arguing the
evidence adduced at trial shows Appellant did not really intend to enter into
a binding mortgage agreement. According to Appellant’s version of the
facts, Appellant only intended to offer the 95-acre property as collateral “if
needed” and that the parties agreed the additional collateral was “not
needed.” Appellant’s Brief at 21.
Our standard of review in non-jury cases is limited to a determination
of whether competent evidence supports the findings of the trial court and
whether the trial court erred in applying the law. Company Image
Knitware, Ltd. v. Mothers Work, Inc., 909 A.2d 324, 330 (Pa. Super.
2006). We consider the evidence in a light most favorable to the verdict
winner and will reverse the trial court only if its findings of fact lack the
support of competent evidence or its findings are premised on an error of
-8-
J.A06014/16
law. Allegheny County Housing Authority v. Johnson, 908 A.2d 336,
340 (Pa. Super. 2006). “In a written contract the intent of the parties is the
writing itself and when the words are clear and unambiguous the intent is to
be determined only from the express language of the agreement.” Robert
F. Felte, Inc. v. White, 302 A.2d 347, 351 (Pa. 1973).
In the instant case, the plain language of the Mortgage Agreement,
reproduced supra, clearly and unambiguously created a mortgage securing
Mount Laurel’s indebtedness to Appellee. In addition, the plain language of
the Mortgage Agreement clearly and unambiguously demonstrates that the
mortgage is now in default due to Mount Laurel’s failure to make payments
to Appellee. There is nothing in the language of the Mortgage Agreement
that suggests it was a conditional agreement or that the parties otherwise
intended for it to only be legally binding “if needed.” Therefore, pursuant to
Robert F. Felte, Inc., we need look no further than the Mortgage
Agreement to conclude that the trial court’s finding that Appellant intended
to grant a mortgage on the 95-acre property is supported by the evidence
and the applicable law.
However, even if there were some ambiguity (which there is not),
Appellant would still not be entitled to relief. Looking outside of the
language of the Mortgage Agreement, the trial court concluded that:
It is clear, beginning with the loan commitment letter and the
testimony of the parties that the intent of the parties was to
have [Appellant’s 95-acre property] used as collateral for the
-9-
J.A06014/16
loan in question. The promissory note and mortgage are in
default.
Trial Ct. Op., filed 11/19/14, at 9-10.
After a careful review of the record, we find ample competent evidence
to support the trial court’s finding that Appellant signed the Mortgage
Agreement intending to use the 95-acre property as collateral to secure
Appellee’s loan to Mount Laurel. This includes the commitment letter and
testimony cited by the trial court, as well as the corporate resolutions
discussed supra. To the extent that Appellant’s witnesses testified that
Appellant did not truly intend to be bound by the Mortgage Agreement, the
trial court as fact finder was free to find that this testimony was not credible.
This Court will not second-guess those credibility determinations.2
Therefore, Appellant is not entitled to relief on his claim that the findings of
the trial court are not supported by competent evidence.
Finally, Appellant avers that the trial court’s findings are premised on
errors in the application of the law. It argues that the Mortgage Agreement,
without a written and signed surety agreement between Appellant and
Mount Laurel, violates the Statute of Frauds and is therefore unenforceable
2
“It is well established that the credibility of witnesses is an issue to be
determined by the trier of fact. On appeal this Court will not revisit the trial
court’s determinations . . . regarding the credibility of the parties. Thus, this
argument, which would require this Court to revisit and essentially reverse
the [trial court] on his credibility determinations, provides no grounds for
relief.” Woods v. Cicierski, 937 A.2d 1103, 1105 (Pa. Super.
2007) (internal citations omitted).
- 10 -
J.A06014/16
as a matter of law. This argument is without support in law and is, in any
event, waived.
Mortgages are subject to the Statute of Frauds as they represent
interests in real property. Eastgate Enterprises, Inc. v. Bank and Trust
Co. of Old York Road, 345 A.2d 279, 281 (Pa. Super. 1975). The Statute
of Frauds as applied to mortgages requires only that, “[t]o be valid, a
mortgage must be in writing.” Id. (emphasis added). Surety agreements
promising to pay the debts of another may also be subject to the Statute of
Frauds in this Commonwealth. Berks Products Corporation v. Arch
Insurance Company, 72 A.3d 315, 321 (Pa. Cmwlth 2013). However,
there is nothing in the Statute of Frauds requiring that, in order for a
mortgage to be valid, any surety agreements that may have motivated the
granting of the mortgage must also be in writing.3
Appellant fails to cite to any controlling authority to support its claim
that a mortgage cannot be valid absent a written surety agreement.
Accordingly, we find Appellant waived his argument that the trial court erred
in the application of law. See Pa.R.A.P. 2119(a); In re Estate of Whitley,
50 A.3d 203, 209-10 (Pa. Super. 2012) (“Failure to cite relevant legal
authority constitutes waiver of the claim on appeal.”).
3
Whether or not a written or oral surety agreement exists between
Appellant and Mount Laurel, Appellee is not seeking to enforce a surety
agreement. Appellee seeks only to enforce the terms of the signed, written
Mortgage Agreement between itself and Appellant.
- 11 -
J.A06014/16
Order affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/7/2016
- 12 -