Wells Fargo Bank v. Kananavicius, R.

J-A05018-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

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

v.

RITA A. KANANAVICIUS

Appellant No. 1258 EDA 2015

Appeal from the Judgment Entered April 23, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): November Term, 2009 No. 510

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

MEMORANDUM BY OTT, J.: FILED AUGUST 16, 2016

Rita A. Kananavicius appeals from the judgment entered on April 27,

2015, in favor of Wells Fargo Bank, N.A. (“Wells Fargo”) and against

Kananavicius in the amount of $230,904.33. After a thorough review of the

record, the parties’ briefs, and the applicable law, we affirm.

The facts and procedural history are as follows. On November 29,

2006, Kananavicius entered into a home mortgage loan transaction with

Fremont Investment and Loan (“Freemont”), wherein Kananavicius executed

a promissory note and promised to repay Fremont $149,500, plus interest.

That same day, as security for the loan, Kananavicius executed a mortgage

on the property located at 4025 Mitchell Street, Philadelphia, Pennsylvania,
____________________________________________

*
Former Justice specially assigned to the Superior Court.
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in favor of Fremont with Mortgage Electronic Registration Systems, Inc.

(“MERS”),1 as the nominee2 for Fremont and its successors. On February 2,

2007, the mortgage was recorded in the Philadelphia County Office of

Deeds. Kananavicius also signed a notice of right to cancel and a truth-in-

lending disclosure statement.3

Sometime thereafter, Kananavicius began to default on the loan by

making insufficient payments. On August 17, 2009, EMC Mortgage

Corporation (“EMC”), the servicer of the loan, sent Kananavicius a notice of

____________________________________________

1
MERS is

a national electronic loan registry system that permits its
members to freely transfer, among themselves, the promissory
notes associated with mortgages, while MERS remains the
mortgagee of record in public land records as “nominee” for the
note holder and its successors and assigns. MERS facilitates the
secondary market for mortgages by permitting its members to
transfer the beneficial interest associated with a mortgage—that
is, the right to repayment pursuant to the terms of the
promissory note—to one another, recording such transfers in the
MERS database to notify one another and establish priority,
instead of recording such transfers as mortgage assignments in
local land recording offices. It was created, in part, to reduce
costs associated with the transfer of notes secured by mortgages
by permitting note holders to avoid recording fees.

Montgomery Cnty. v. MERSCORP Inc., 795 F.3d 372, 374 (3d Cir. 2015).
2
A “nominee” is defined as a “person designated to act in place of another,
usually in a very limited way” or a “party who holds bare legal title for the
benefit of” another. Black’s Law Dictionary 1149 (9th ed. 2009).
3
On July 15, 2008, Kananavicius entered into a loan modification
agreement.

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default pursuant to 41 P.S. § 403. Subsequently, on September 28, 2009,

the mortgage and note were assigned4 from MERS to Wells Fargo.5

When Kananavicius failed to cure her default, Wells Fargo initiated this

foreclosure action on November 4, 2009. Originally, a default judgment was

entered in favor of Wells Fargo in September of 2010. However,

Kananavicius filed a motion to strike, which was granted on April 9, 2012.

On June 5, 2012, Wells Fargo filed an amended complaint.

Kananavicius filed preliminary objections on June 25, 2012, for lack of

capacity to sue pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(5).

See Preliminary Objections of [Kananavicius] to [Wells Fargo]’s Amended

Complaint, 6/25/2012, at 1. In her objections, she indicated there was a

discrepancy as to the date the mortgage was assigned to Wells Fargo and

stated:

7. In either event, on June 18, 2008, Fremont, the alleged
assignor, filed for Chapter 11 bankruptcy.

8. Fremont had been ordered out of business in 2007 and
ceased to hold assets by 2008.

…
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4
“An assignment is a transfer of property or some other right from one
person to another, and unless in some way qualified, it extinguishes the
assignor’s right to performance by the obligor and transfers that right to the
assignee.” Legal Capital, LLC v. Med. Prof'l Liab. Catastrophe Loss
Fund, 750 A.2d 299, 302 (Pa. 2000) (citation omitted).
5
On September 17, 2010, the assignment was recorded in the Office of
Deeds.

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9. Furthermore, [Wells Fargo] failed to allege that it held the
promissory note that it attached to the amended complaint….

10. [Wells Fargo], therefore, was not the real party in interest in
this action.

11. Accordingly, [Wells Fargo] lacks capacity to sue, pursuant to
Pennsylvania Rule of Civil Procedure 2002(a), which requires
that all actions shall be prosecuted by and in the name of the
real party in interest.

Id. at 2.

On July 20, 2012, the court entered an order, finding “there is a

factual dispute as to whether [Fremont] as the originating lender in this

matter had filed for bankruptcy and become nonexistent prior to the grant of

authority to MERS as nominee and/or the transfer to Wells Fargo.” Order,

7/30/2012. It also granted the parties leave to conduct additional discovery

and submit supplemental memoranda. See id.

On December 10, 2012, after receiving the parties’ additional material,

the court entered an order, overruling Kananavicius’ preliminary objections

and requiring her to file an answer.

On December 31, 2012, Kananavicius filed an answer and new matter.

In the new matter, Kananavicius alleged the following, in pertinent part:

“[Wells Fargo]’s claims are barred and/or limited because, on December 31,

2012, [Kananavicius] canceled the loan transaction pursuant to the

Pennsylvania Unfair Trade Practices and Consumer Protection Law

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(“UTPCPL”), 73 P.S. § 201-7(a).” Answer and New Matter of [Kananavicius]

to [Wells Fargo]’s Amended Complaint, 12/31/2012, at 3.6

On December 2, 2013, Wells Fargo filed a motion for summary

judgment, alleging Kananavicius failed to set forth any “record-supported

evidence” to rebut the allegation that she was in default on her loan

payments since March 1, 2009, and that she admitted her deficiency in her

response to Wells Fargo’s request for admissions. Wells Fargo’s Motion for

Summary Judgment, 12/2/2013, at 4 and Exhibit E, Response to Request for

Admissions at ¶ 1 (“It is admitted that [Kananavicius] has not made

payment on the loan purportedly secured by said mortgage for a period of

time.”). On January 21, 2014, the court entered an order denying Wells

Fargo’s motion.7

The matter proceeded to a non-jury trial on April 24, 2014.

Subsequently, on December 8, 2014, the trial court issued its verdict, which

found in favor of Wells Fargo in the amount of $230,904.33. The court

made the following legal and factual findings:

1. [Wells Fargo] was the real party in interest,

2. Although there was no evidence submitted at trial that the
note was a copy, [Wells Fargo]’s Counsel subsequently
submitted an affidavit attesting that she had possession of
____________________________________________

6
Wells Fargo responded to the answer and new matter on January 21,
2013.
7
The order was timestamped on February 7, 2014.

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the original note at trial and maintains possession of the
original note. The note submitted at trial was signed in blank,
which makes the note a Bearer note,[8] which was in the
possession of [Wells Fargo] and is therefore valid and
enforceable,

3. Mortgage ownership by [Wells Fargo] was demonstrated at
trial,

4. Both the mortgage and note were in the possession of [Wells
Fargo],

5. [Kananavicius] had no standing to object to an assignment of
the mortgage or note as [Kananavicius] did not prove she will
suffer any harm from the enforcement of the note and
mortgage by [Wells Fargo].

6. A finding for Defendant Kananavicius would result in unjust
enrichment to Defendant Kananavicius.

Order, 12/8/2014.

Kananavicius filed a post-trial motion, which was denied on April 23,

2015. Three days later, judgment was entered in favor of Wells Fargo and

against Kananavicius in the amount of $230,904.33. That same day,

Kananavicius filed a notice of appeal.9

____________________________________________

8
“A note endorsed in blank is a ‘bearer note,’ payable to anyone on demand
regardless of who previously held the note. 13 Pa.C.S.A. §§ 3109(a), 3301.”
Bank of Am., N.A. v. Gibson, 102 A.3d 462, 466 (Pa. Super. 2014).
9
On May 12, 2015, the trial court ordered Kananavicius to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
Kananavicius filed a concise statement one day later. The trial court
provided its December 8, 2014, decision in lieu of a formal Rule 1925(a)
opinion.

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While Kananavicius sets forth 11 issues in her “Statement of the

Questions Involved,”10 her argument is divided into four claims. Therefore,

our analysis will be confined to those four arguments.

Our standard of review following a non-jury trial is well-settled:

Our appellate role in cases arising from non-jury trial
verdicts is to determine whether the findings of the trial court
are supported by competent evidence and whether the trial court
committed error in any application of the law. The findings of
fact of the trial judge must be given the same weight and effect
on appeal as the verdict of a jury. We consider the evidence in a
light most favorable to the verdict winner. We will reverse the
trial court only if its findings of fact are not supported by
competent evidence in the record or if its findings are premised
on an error of law. However, [where] the issue ... concerns a
question of law, our scope of review is plenary.

The trial court’s conclusions of law on appeal originating
from a non-jury trial are not binding on an appellate court
because it is the appellate court’s duty to determine if the trial
court correctly applied the law to the facts of the case.

Wyatt, Inc. v. Citizens Bank of Pennsylvania, 976 A.2d 557, 564 (Pa.

Super. 2009) (internal citations omitted).

In Kananavicius’ first argument, she claims that because the contract

for the sale of mortgage refinancing services was consummated at her

residence, it is governed by the Section 201-7 of the UTPCPL,11 and

____________________________________________

10
See Kananavicius’ Brief at 3-4.
11
At oral argument, Wells Fargo conceded that the UTPCPL applies to the
present matter because Kananavicius signed the documents at her house.

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therefore, is subject to cancellation by the consumer. Kananavicius’ Brief at

11. Kananavicius contends:

In order to provide additional protection for the consumer,
an in-home contract must contain, in immediate proximity to the
buyer’s signature, in bold type face of a minimum size of ten
points, the statement:

You, the buyer, may cancel this transaction at any
time prior to midnight of the third business day after the
date of this transaction. See the attached notice of
cancellation form for an explanation of this right.

73 P.S. § 201-7(b)(1)(2015). Here, neither the note nor the
mortgage contained the required statement. Furthermore, the
note and mortgage failed to attach the “Notice of Cancellation”
form required by UTPCPL, 73 P.S. § 201-7(b)(2), and referred to
in the above statement. Even had Kananavicius signed and
received some “Notice of Right to Cancel,” no evidence was
adduced that this was attached, 73 P.S. § 201-7(b)(2)
(“attached to the contract ….”), to the note and mortgage. Even
had it been attached, this was not the notice required by
UTPCPL, § 201-7(b)(2).

Kananavicius’ Brief at 12-13 (reproduce record citations omitted). Moreover,

she states the UTPCPL requires that the consumer also be orally notified at

the time she signs the contract of her right to cancel and Wells Fargo

presented no evidence that she was orally informed of such a right. Id. at

13. Consequently, Kananavicius states, “Because these statutory

requirements were never met, [her] right to cancel continued indefinitely.”

Id. Further, she indicates she properly canceled the loan and mortgage and,

therefore, “nothing remained upon which to foreclose.” Id. at 14.

We are guided by the following:

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“The UTPCPL must be liberally construed to effect the law’s
purpose of protecting consumers from unfair or deceptive
business practices.” Id. at 1093 (citation omitted). “In
addition, the remedies of the UTPCPL are not exclusive, but are
in addition to other causes of action and remedies.” Id.
(citations omitted). “The UTPCPL’s ‘underlying foundation is
fraud prevention.’” Weinberg v. Sun Co., Inc., 565 Pa. 612,
777 A.2d 442, 446 (Pa. 2001), quoting Commonwealth v.
Monumental Properties, Inc., 459 Pa. 450, 329 A.2d 812,
816 (Pa. 1974).

Boehm v. Riversource Life Ins. Co., 117 A.3d 308, 321 (Pa. Super.

2015), appeal denied, 126 A.3d 1281 (Pa. 2015).

Section 201-7 of the UTPCPL provides, in pertinent part:

(a) Where goods or services having a sale price of twenty-five
dollars ($ 25) or more are sold or contracted to be sold to a
buyer, as a result of, or in connection with, a contact with or call
on the buyer or resident at his residence either in person or by
telephone, that consumer may avoid the contract or sale by
notifying, in writing, the seller within three full business days
following the day on which the contract or sale was made and by
returning or holding available for return to the seller, in its
original condition, any merchandise received under the contract
or sale. Such notice of rescission shall be effective upon
depositing the same in the United States mail or upon other
service which gives the seller notice of rescission.

(b) At the time of the sale or contract the buyer shall be
provided with:

(1) A fully completed receipt or copy of any contract
pertaining to such sale, which is in the same language
(Spanish, English, etc.) as that principally used in the oral
sales presentation, and also in English, and which shows
the date of the transaction and contains the name and
address of the seller, and in immediate proximity to the
space reserved in the contract for the signature of the
buyer or on the front page of the receipt if a contract is not
used and in bold face type of a minimum size of ten points,
a statement in substantially the following form:

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“You, the buyer, may cancel this transaction at any
time prior to midnight of the third business day after
the date of this transaction. See the attached notice
of cancellation form for an explanation of this right.”

(2) A completed form in duplicate, captioned “Notice of
Cancellation,” which shall be attached to the contract or
receipt and easily detachable, and which shall contain in
ten-point bold face type the following information and
statements in the same language (Spanish, English, etc.)
as that used in the contract:

NOTICE OF CANCELLATION

(Enter Date of Transaction)

You may cancel this transaction, without any penalty or
obligation, within three business days from the above date.

If you cancel, any property traded in, any payments made
by you under the contract or sale, and any negotiable
instrument executed by you will be returned within ten
business days following receipt by the seller of your
cancellation notice, and any security interest arising out of
the transaction will be cancelled.

If you cancel, you must make available to the seller at
your residence in substantially as good condition as when
received, any goods delivered to you under this contract or
sale; or you may, if you wish, comply with the instructions
of the seller regarding the return shipment of the goods at
the seller’s expense and risk.

If you do make the goods available to the seller and the
seller does not pick them up within twenty days of the date
of your notice of cancellation, you may retain or dispose of
the goods without any further obligation. If you fail to
make the goods available to the seller, or if you agree to
return the goods to the seller and fail to do so, then you
remain liable for performance of all obligations under the
contract.

To cancel this transaction, mail or deliver a signed and
dated copy of this cancellation notice or any other written

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notice, or send a telegram, to (name of seller), at (address
of seller’s place of business) not later than midnight of
(date).

I hereby cancel this transaction.

(Date) Buyer’s Signature

(c) Before furnishing copies of the “Notice of Cancellation” to
the buyer, both copies shall be completed by entering the name
of the seller, the address of the seller’s place of business, the
date of the transaction, and the date, not earlier than the third
business day following the date of the transaction, by which the
buyer may give notice of cancellation.

(d) Each buyer shall be informed at the time he signs the
contract or purchases the goods or services, of his right to
cancel.

(e) The cancellation period provided for in this section shall not
begin to run until buyer has been informed of his right to cancel
and has been provided with copies of the “Notice of
Cancellation.”

(f) Seller shall not misrepresent in any manner the buyer’s right
to cancel.

73 P.S. § 201-7.

Here, the record reveals that on November 29, 2006, Kananavicius

signed numerous documents including the mortgage, a notice of right to

cancel, and a truth-in-lending disclosure statement. See Wells Fargo’s

Plaintiff Exhibits 1, 4, and 5. The notice of the right to cancel stated, in

pertinent part:

YOUR RIGHT TO CANCEL

You are entering into a transaction that will result in a
mortgage/lien/security interest on/in your home. You have a
legal right under federal law to cancel this transaction, without

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cost, within THREE BUSINESS DAYS from whichever of the
following events occurs last:

(1) The date of the transaction, which is November 29,
2006

or

(2) The date you received your Truth in Lending
disclosures;

or

(3) The date you received this notice of your right to
cancel.

If you cancel the transaction, the mortgage/lien/security interest
is also cancelled.

Wells Fargo’s Plaintiff Exhibit 4. The document then provided the proper

procedure for a borrower/owner to cancel her mortgage. Id. Kananavicius

signed and acknowledged that she received two copies of the notice on

November 29, 2006. Id.12

We note Kananavicius’ argument is of a technical nature. It is

apparent that while she argues the form was incomplete insofar as the

document was not specifically attached to the mortgage, we find that all of

the information as required by Section 201-7 was contained in the notice of

right to cancel document. Moreover, Kananavicius signed the document

____________________________________________

12
It merits mention that when counsel for Wells Fargo introduced the three
documents into evidence and stated “they are part of one transaction of [a]
commercial document,” N.T., 4/24/2014, at 10-11, counsel for Kananavicius
did not object.

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along with the mortgage on the same day. One can reasonably conclude

that she read the document in conjunction with the mortgage information.

Furthermore, our review of the statute and case law presents no authority

that even if the form was not specifically attached, a borrower was permitted

to rescind the mortgage contract at any time. Kananavicius also fails to

present any authority, which would allow her to do so. Accordingly,

Kananavicius’ purported December 31, 2012, cancellation letter, which was

sent over six years after she signed the notice of right to cancel, is not

binding.

Furthermore, to the extent Kananavicius contends she was not “orally”

notified of her right to cancel, we find this argument too is unavailing. As

stated above, Section 201-7(d) provides: “Each buyer shall be informed at

the time he signs the contract or purchases the goods or services, of his

right to cancel.” 73 P.S. § 201-7(d) (emphasis added). Kananavicius again

presents no authority that in addition to written notice, oral notification is

required under Section 201-7(d).13 Accordingly, Kananavicius’ first

argument fails.

____________________________________________

13
We note that Kananavicius cites to a 2010 federal bankruptcy district
court case, Fowler v. Rauso (In re Fowler), 425 B.R. 157 (Bankr. E.D.
Pa. 2010), which stated in a footnote, “Presumably, the seller must orally
inform the buyer(s) of the right to cancel. Irv Ackelsberg, et. al,
Pennsylvania Consumer Law 137-138 (Carolyn L. Carter ed., George T.
Bissel Co., Inc. 2d ed. 2003 & 2009 Suppl.).” In re Fowler, 425 B.R. at
187 n.42. It clear from our review of In re Fowler that the court’s
(Footnote Continued Next Page)

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In her second issue, Kananavicius sets forth an array of sub-

arguments. Initially, she asserts the court erred in holding that she had no

authority to object to the assignment of the mortgage and note because she

did not demonstrate that she would suffer any harm from the enforcement

of the documents. Kananavicius’ Brief at 15. Kananavicius states, “This was

erroneous, because a mortgagor does have standing to challenge the

standing of a party seeking to foreclose on his or her home.” Id. (citations

omitted).14

Second, she contends the court erred in finding that Wells Fargo was a

real party in interest to the foreclosure. Id. at 14. Kananavicius argues

only a holder of the note can bring a foreclosure action and Wells Fargo

failed to present any evidence that it owned, held, or possessed the note.

Id. at 16-17. She states, “Although Wells Fargo presented a copy of the
_______________________
(Footnote Continued)

statement was based on a presumption and is purely dicta. Moreover, it
merits mention “this Court is not bound by the decisions of federal courts,
other than the United States Supreme Court, or the decisions of other states’
courts.” Eckman v. Erie Ins. Exch., 21 A.3d 1203, 1207 (Pa. Super.
2011). Therefore, we are not bound by In re Fowler.
14
In support of this sub-issue, Kananavicius cites to Mruk v. Mortg. Elec.
Registration Sys., 82 A.3d 527 (R.I. 2013), Wells Fargo Bank, NA v.
Norton, 2012 Phila. Ct. Com. Pl. LEXIS 398 (Pa. C.P. Nov. 26, 2012), and
Am. Home Mortg. Servicing, Inc. v. Tarantine, 2011 Pa. Dist. & Cnty.
Dec. LEXIS 108 (Pa. C.P. June 10, 2011). None of these decisions are
binding on this Court. See Eckman, supra; see also U.S. Bank Nat.
Ass’n v. Powers, 986 A.2d 1231, 1234 (Pa. Super. 2009) (holding this
Court is not bound by decisions of the Pennsylvania courts of common
pleas).

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alleged note, it offered no testimony as to who, if anyone, had the original.”

Id. at 17 (reproduced record citations omitted). She contends that even

though the court found Wells Fargo was in possession of the note, it “needed

to rely on a post-trial affidavit in which Wells Fargo’s counsel claimed to

have possession of the original note.” Id. Kananavicius states counsel for

Wells Fargo was not subject to cross-examination and that evidence may not

be introduced once the record is closed. Id. at 17-18. Furthermore, she

alleges, “[M]ere ownership or possession of a note, even were that

established, is insufficient to qualify an individual other than the original

lender as its holder.” Id. at 18.

Lastly, Kananavicius states the original owner of the note was Fremont

and Wells Fargo failed to demonstrate that possession of the note had been

transferred to Fremont’s successors. Id. at 19. Kananavicius argues Wells

Fargo could not foreclose on the property at issue because it lacked a chain

of assignment of the mortgage. Id. She points to the following: (1) the

rights to the mortgage followed the note and when Fremont assigned the

loan on April 5, 2007, it no longer possessed rights to the mortgage; (2)

Fremont filed for bankruptcy in June of 2008 and therefore, could not assign

anything; (3) while MERS may have been authorized to act as a nominee for

Fremont and its successors, no evidence was offered to show that these

successors were MERS members; and (4) the assignment was unauthorized.

Id. at 21-26.

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We begin with the following. Pennsylvania permits assignment15 of

mortgages and, in order to be effective as against third parties, written

assignments must be recorded in accordance with 21 Pa.C.S. § 621 et seq.

Upon occurrence of a default, the owner of a note and mortgage can proceed

with an action for damages on the note, a foreclosure action on the

mortgage, or both (albeit not in the same complaint under Pa.R.C.P. 1146).

See Bank of Pennsylvania v. G/N Enterprises, Inc., 463 A.2d 4, 6 (Pa.

Super. 1983). Mortgage foreclosure actions are governed by Pa.R.C.P.

1141-1150, and 3180-3183. Moreover, “all [civil] actions shall be

prosecuted by and in the name of the real party in interest.” Pa.R.C.P.

2002(a).16

In a mortgage foreclosure action, the mortgagee is the real
party in interest. See Wells Fargo Bank, N.A. v. Lupori, 2010
PA Super 205, 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.
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
____________________________________________

15
“Where an assignment is effective, the assignee stands in the shoes of
the assignor and assumes all of his rights.” CitiMortgage, Inc. v.
Barbezat, 131 A.3d 65, 69 (Pa. Super. 2016) (citation omitted).
16
“[A] real party in interest is a [p]erson who will be entitled to benefits of
an action if successful.... [A] party is a real party in interest if it has the
legal right under the applicable substantive law to enforce the claim in
question.” US Bank N.A. v. Mallory, 982 A.2d 986, 993-994 (Pa. Super.
2009) (citation and quotation marks omitted).

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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.

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 appellee-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.FN 1
FN 1
The 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., 131 A.3d at 68.

Turning to the present matter, Wells Fargo demonstrated at trial that it

had standing with respect to both the mortgage and note. With respect to

the mortgage, Wells Fargo offered into evidence documentation of the

mortgage and proof that it was the holder of the mortgage “by assignment”

from Fremont via MERS, which was duly recorded in the office of the records

for Philadelphia County on September 17, 2010. See Wells Fargo’s Trial

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Exhibits 1 (Mortgage) and 2 (Assignment of Mortgage).17 Therefore, upon

assignment of the mortgage by MERS to Wells Fargo, Wells Fargo became

the legal owner of the mortgage and had the right to institute foreclosure

proceedings against Kananavicius for failure to make timely payments.

Furthermore, Wells Fargo also presented the adjustable rate note at

trial. See Wells Fargo’s Trial Exhibit 3 (Adjustable Rate Note). This Court

has previously determined that a promissory note accompanied by a

mortgage is a negotiable instrument governed by Pennsylvania’s Uniform

Commercial Code (“UCC”).18 JP Morgan Chase Bank, N.A. v. Murray, 63

A.3d 1258, 1265 (Pa. Super. 2013). Pursuant to the UCC, a “[p]erson

entitled to enforce” an instrument means “the holder of the instrument.” 13

Pa.C.S. § 3301(1). A “holder” is “the person in possession of a negotiable

instrument that is payable either to the bearer or to an identified person that

is the person in possession.” 13 Pa.C.S. § 1201(b)(21)(i). A “bearer” is

defined as “[a] person in control of a negotiable electronic document of title

or a person in possession of a negotiable instrument, negotiable tangible

document of title or certificated security, that is payable to bearer or

indorsed in blank.” 13 Pa.C.S § 1201(b)(5). The UCC also provides, “[i]f an

[i]ndorsement is made by the holder of the instrument and it is not a special
____________________________________________

17
Counsel for Kananavicius did not object to the admission of Exhibits 1 and
2. See N.T., 4/24/2014, at 13.
18
13 Pa.C.S. §§ 1101-9809.

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indorsement, 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.” 13 Pa.C.S. § 3205(b). Moreover,

[a] note is payable to bearer if it

(1) states that it is payable to bearer or to the order of
bearer or otherwise indicates that the person in possession
of the promise or order is entitled to payment;

(2) does not state a payee; or

(3) states that it is payable to or to the order of cash or
otherwise indicates that it is not payable to an identified
person.

13 Pa.C.S. § 3109(a). Further reinforcing the right of a
possessor of a note to enforce it, at least one court has held that
one need not be a “holder” as defined by the UCC to enforce a
note in its possession, notwithstanding doubts regarding how it
came to be transferred to the possessor. See Bank of N.Y. v.
Raftogianis, 418 N.J. Super. 323, 13 A.3d 435 (N.J. Super. Ct.
2010).

JP Morgan Chase Bank, N.A., 63 A.3d at 1266.

Here, Wells Fargo is the current holder of the original note, which

neither party disputes was indorsed “in blank,” without recourse. See

Plaintiff’s Trial Exhibit 3 (Adjustable Rate Note).19 This means the note did

____________________________________________

19
Counsel for Kananavicius only objected to Exhibit 3 as to its
authentication, not to whether it was the original note or that the note was
indorsed in blank. See N.T., 4/24/2014, at 13. Therefore, any claims she
now raises that Wells Fargo improperly presented a copy of the note or
incorrectly admitted the note via a post-trial affidavit are waived for failure
to make to make a timely objection before the trial court. See Pa. R.A.P.
(Footnote Continued Next Page)

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not specify the person to whom the instrument is payable, and instead is

payable to the person or entity in possession of the note. As such, the note

meets the requirements of a negotiable instrument under the UCC, and

Wells Fargo is in present possession of the original bearer instrument that

was executed by Kananavicius.

Nevertheless, our discussion does not end there. It merits mention

that this Court recently stated:

[A] note secured by a mortgage is a negotiable instrument, as
that term is defined by the PUCC, and stated that “[p]ursuant to
the PUCC, a debtor who satisfies his obligations under a
negotiable instrument cannot be required to do so again, even if
the recipient of the debtor’s performance is not the holder of the
note in question.” [J.P. Morgan Chase, N.A., 63 A.3d] at
1263, 1265 (citing 13 Pa.C.S. § 3602(a)). We further reasoned
that under the PUCC, a borrower is not in peril of double liability
or injury by an allegedly defective assignment, for if the
assignment to the foreclosing party had been defective, the
borrower would not have to pay on the note to another party.
Thus, we found a borrower lacks standing to challenge the
validity of the assignment. Id. at 1266; see also In re
Walker, 466 B.R. 271, 285-286 (Bankr.E.D.Pa. 2012) (stating
“If a borrower cannot demonstrate potential injury from the
enforcement of the note and mortgage by a party acting under a
defective assignment, the borrower lacks standing to raise the
issue”) (citation omitted).

…

[The J.P. Morgan Chase, N.A.] Court stressed therein that “the
chain of possession by which [a party] c[o]me[s] to hold the
[n]ote [is] immaterial to its enforceability by [the party].” Id.,
63 A.3d at 1266. [A party], as the holder of the Note, a
_______________________
(Footnote Continued)

302(a) (issues not raised in the lower court cannot be raised for the first
time on appeal).

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J-A05018-16

negotiable instrument the authenticity of which is not challenged
herein, is entitled to make demand upon and to enforce [the
opposing party’s] obligations thereunder.

Gerber v. Piergrossi, __ A.3d __, 2016 PA Super 130, *19-20 [1533 EDA

2015] (Pa. Super. June 17, 2016) (emphasis added).

Therefore, in accordance with J.P. Morgan Chase, N.A. and Gerber,

and contrary to Kananavicius’ arguments, we conclude the court was correct

in determining Kananavicius, sitting as the borrower, lacked standing to

object to the validity of the assignments. The chain of possession is

immaterial to Wells Fargo’s ability to enforce the loan because it is the

present holder of the note.20 Accordingly, Kananavicius’ second argument

fails.

Next, Kananavicius asserts the trial court improperly admitted certain

evidence. See Kananavicius’ Brief at 26. We note the relevant standard of

review:

The admission or exclusion of evidence is within the sound
discretion of the trial court, and in reviewing a challenge to the
admissibility of evidence, we will only reverse a ruling by the
trial court upon a showing that it abused its discretion or
committed an error of law. Thus[,] our standard of review is
very narrow . . . . To constitute reversible error, an evidentiary
ruling must not only be erroneous, but also harmful or
prejudicial to the complaining party.
____________________________________________

20
Even if the assignment to Wells Fargo was defective and Fremont or its
other successors retained ownership rights in the note, any payments
Kananavicius makes to Wells Fargo would discharge her liability under the
note. See 13 Pa.C.S. § 3602(a). Indeed, she would not be in danger of
being exposed to double liability.

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J-A05018-16

Croyle v. Smith, 918 A.2d 142, 146 (Pa. Super. 2007) (citation omitted).

First, Kananavicius complains the court abused its discretion by

admitting the note, the notice of right to cancel, the truth-in-lending

disclosure statement, and the loan modification over her objection because

the documents had not been properly authenticated. Kananavicius’ Brief at

26. Specifically, she states, “No provision of Pennsylvania commercial law,

however, allows a negotiable instrument to be self-authenticating as

commercial paper.” Id. at 26-27 (citation omitted).

“To satisfy the requirement of authenticating or identifying an
item of evidence, the proponent must produce evidence
sufficient to support a finding that the item is what the
proponent claims it is.” Pa.R.E. 901(a). Tangible evidence is
authenticated properly by the establishment, through direct or
circumstantial evidence, of a reasonable inference that the
identity and condition of the item remained unimpaired until it
was presented at trial. See Commonwealth v. Judge, 437 Pa.
Super. 51, 648 A.2d 1222, 1224 (Pa. Super. 1994).

Koller Concrete, Inc. v. Tube City IMS, LLC, 115 A.3d 312, 316 (Pa.

Super. 2015). Moreover, the Pennsylvania Rules of Evidence also state that

certain documents are self-authenticating, including commercial paper and

related documents. See Pa.R.E. 902(9)(“The following items of evidence are

self-authenticating; they require no extrinsic evidence of authenticity in

order to be admitted: … Commercial paper, a signature on it, and related

documents, to the extent allowed by general commercial law.”).

Additionally, the comment to Rule 902 states: “Pa.R.E. 902(9) is identical to

F.R.E. 902(9). Pennsylvania law treats various kinds of commercial paper

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J-A05018-16

and documents as self-authenticating. See, e.g., 13 Pa.C.S. § 3505

(evidence of dishonor of negotiable instruments).” Pa.R.E. 902 cmt.

While no provision of Rule 902 explicitly indicates a negotiable

instrument is considered to be self-authenticating as commercial paper,

general commercial law does. See 13 Pa.C.S. § 3308(a) (“(a) Proof of

signatures. — In an action with respect to an instrument, the

authenticity of, and authority to make, each signature on the

instrument is admitted unless specifically denied in the pleadings. If

the validity of a signature is denied in the pleadings, the burden of

establishing validity is on the person claiming validity, but the signature is

presumed to be authentic and authorized unless the action is to enforce the

liability of the purported signer and the signer is dead or incompetent at the

time of trial of the issue of validity of the signature. If an action to enforce

the instrument is brought against a person as the undisclosed principal of a

person who signed the instrument as a party to the instrument, the plaintiff

has the burden of establishing that the defendant is liable on the instrument

as a represented person under section 3402(a) (relating to signature by

representative).”) (emphasis added).21 Here, a review of the record reveals

____________________________________________

21
PHH Mortg. Corp. 2001 Bishop’s Gate Blvd. v. Powell, 100 A.3d 611
(Pa. Super. 2014) (affirmed finding for appellee-mortgage company in a
foreclosure action because appellant-homeowners, who denied signing the
note, did not offer any evidence to rebut the statutory presumption of
validity of signatures).

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J-A05018-16

that Kananavicius did not challenge the authenticity of the signatures on the

documents. Accordingly, we conclude the trial court properly admitted the

note as a self-authenticating document and the remaining contested exhibits

as “related” documents pursuant to Rule 902(9).

Furthermore, Kananavicius asserts the court improperly admitted

Plaintiff Exhibits 6, 7, and 9 (the July 11, 2008 modification agreement, the

EMC Mortgage Corporation payment loan history, and the April 22, 2014,

payoff statement, respectively) because they were not produced in discovery

and were hearsay. Kananavicius’ Brief at 27. Other than a bald assertion,

Kananavicius does not explain how the failure to produce in discovery

prejudiced her and constituted reversible error. Croyle, 918 A.2d at 146.

Therefore, this argument is meritless.

Kananavicius also contends the court erred in allowing Frank Dean, a

home loan research officer of Morgan Chase Bank (“Chase”),22 to testify

because he had not been disclosed as a witness.23 Kananavicius’ Brief at 27.

____________________________________________

22
As will be discussed below, Chase was the subsequent servicer to
Kananavicius’ loan after EMC.
23
In a related matter, Kananavicius mentions Dean was permitted to testify
about Plaintiff Exhibit 8 (the notice of default). Kananavicius’ Brief at 27.
However, in her argument, she fails to list the exhibit with the other
documents she claims were not produced in discovery. Id. Moreover, her
counsel did not object to Plaintiff Exhibit 8 being at trial. See N.T.,
4/24/2014, at 30. Assuming arguendo counsel did object, we find
Kananavicius does not explain how the failure to produce this exhibit in
(Footnote Continued Next Page)

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J-A05018-16

Again, Kananavicius fails to demonstrate how the alleged lack of disclosure

prejudiced her or constituted reversible error. See Croyle, 918 A.2d at

146.24

Additionally, Kananavicius claims the court erred in allowing Dean to

authenticate business record documents, Plaintiff Exhibits 7, 8, and 9,

because of Dean’s untrustworthiness. Kananavicius’ Brief at 27. She states:

To take advantage of the hearsay exception for records of a
regularly conducted activity, Pennsylvania Rule of Evidence
803(6) requires the proponent of documentary evidence to
establish circumstantial trustworthiness. E.g., Cmwlth. Fin.
Sys., Inc. v. Smith, 15 A.3d 492, 499 (Pa. Super. 2011)
(Shogan, J.) (citing Pa.R.E. 803(6)). Mere acceptance or
incorporation into an assignee’s business records is not enough
to satisfy the trustworthiness requirements of Rule 803(6). See
id. at 499-500 (“Regardless of a ‘nationwide trend’ and ‘clear
federal precedent’ for allowing the introduction of business
records consisting of documents generated by third parties, the
Pennsylvania Supreme Court has not seen fit to adopt the rules
of incorporation.”).

Dean testified that he was, since 2011, “Home Loan
Research Officer” for servicer Chase, and until 2011, was a
Chase Bank branch manager in Lancaster, Ohio. Dean testified
that, in this capacity, he had, only within the last month,
reviewed the documents to which he was to testify. The
servicing of Kananavicius’[] alleged loan was not assigned by
_______________________
(Footnote Continued)

discovery prejudiced her and constituted reversible error. Croyle, 918 A.2d
at 146.
24
Furthermore, contrary to Kananavicius’ allegation, Dean was disclosed as
a witness. At trial, counsel for Wells Fargo explained: “My understanding
was when Mr. Gush was here prior to the previously scheduled court date,
he had said that he was bringing a witness and that he had disclosed it as
Mr. Dean from JP Morgan Chase, the servicer of the loan.” N.T., 4/24/2014,
at 19.

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J-A05018-16

EMC to Chase until April 1, 2011. Dean admitted that he never
worked for EMC. Therefore, Dean was not qualified to attest to
any purported records of EMC or any event prior to, at the
earliest, April 1, 2011. Dean’s testimony should have been
stricken, together with his exhibits.

Id. at 27-28 (reproduced record citations omitted).

Pennsylvania Rule of Evidence 802 provides: “Hearsay is not

admissible except as provided by these rules, by other rules prescribed by

the Pennsylvania Supreme Court, or by statute.” Pa.R.E. 802. “‘Hearsay’ is a

statement, other than one made by the declarant while testifying at the trial

or hearing, offered in evidence to prove the truth of the matter asserted.”

Pa.R.E. 801(c). The Pennsylvania Rules of Evidence provide that certain

statements are not excluded under the hearsay rule, even when the

declarant is not present. Pertinent to this appeal is the “business record

exception,” which permits the admission of a recorded act, event or

condition if certain requirements are met. See Pa.R.E. 803(6).

Furthermore, the Uniform Business Records as Evidence Act
states:

A record of an act, condition or event shall, insofar as
relevant, be competent evidence if the custodian or other
qualified witness testifies to its identity and the mode of its
preparation, and if it was made in the regular course of
business at or near the time of the act, condition or event,
and if, in the opinion of the tribunal, the sources of
information, method and time of preparation were such as
to justify its admission.

42 Pa.C.S.A. § 6108(b). “As long as the authenticating witness
can provide sufficient information relating to the preparation and
maintenance of the records to justify a presumption of
trustworthiness for the business records of a company, a

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sufficient basis is provided to offset the hearsay character of the
evidence.” Boyle v. Steiman, 429 Pa. Super. 1, 631 A.2d
1025, 1032-33 (Pa. Super. 1993) (internal citations omitted),
appeal denied, 538 Pa. 663, 649 A.2d 666 (Pa. 1994).

U.S. Bank, N.A. v. Pautenis, 118 A.3d 386, 401 (Pa. Super. 2015). See

also Keystone Dedicated Logistics, Inc. v. JGB Enters., 77 A.3d 1, 13

(Pa. Super. 2013) (indicating a qualified business records witness need not

have personal knowledge as long as he or she has sufficient information

relating to the preparation and maintenance of the records).

Turning to the present matter, Dean stated he was a loan research

officer for Chase and Chase was the present servicer for the loan at issue.

N.T., 4/24/2014, at 20-21. Dean explained what a servicer does, the

records pertaining to a loan, and how it keeps track of when a loan goes into

default. Id. at 21. He indicated EMC was the previous servicer of the loan,

prior to Chase’s acquisition of the company in 2008, and that both

corporations kept similar record keeping practices. Id. at 22-23. Moreover,

Dean testified EMC’s records were kept in the ordinary course of regularly

conducted activity after the acquisition. Id. at 24-25. In reviewing Dean’s

testimony, we decline to disturb the trial court’s assessment that he was a

qualified witness for purposes of authenticating the documents.25

____________________________________________

25
As indicated above, Kananavicius cited Commonwealth Financial
Systems v. Smith, 15 A.3d 492 (Pa. Super. 2011), wherein a panel from
this Court refused “to adopt the federal ‘rule of incorporation[,]’ which
provides that the record a business takes custody of is ‘made’ by the
(Footnote Continued Next Page)

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J-A05018-16

Accordingly, Kananavicius’ evidentiary arguments fail and the trial court did

not abuse its discretion in admitting the evidence in question.

In Kananavicius’ fourth issue, she claims the trial court erroneously

determined that a finding for her would result in unjust enrichment in her

favor because such a determination was not supported by the record or law.

Kananavicius’ Brief at 28-29.

Unjust enrichment is a quasi-contractual doctrine based in
equity; its elements include benefits conferred on defendant by
plaintiff, appreciation of such benefits by defendant, and
acceptance and retention of such benefits under such
circumstances that it would be inequitable for defendant to
retain the benefit without payment of value. When considering
the validity of a claim for unjust enrichment, we must focus on
whether the enrichment of the defendant is unjust. The doctrine
does not apply simply because the defendant may have
benefited as a result of the actions of the plaintiff.

Wiernik v. PHH U.S. Mortg. Corp., 736 A.2d 616, 622 (Pa. Super. 1999)

(citations and quotation marks omitted), appeal denied, 751 A.2d 193 (Pa.

2000).

Kananavicius specifically complains:
_______________________
(Footnote Continued)

[acquiring] business” for purposes of the business records exception to the
hearsay rule. Commonwealth Financial Systems, 15 A.3d at 496 and
500.

However, Commonwealth Financial Systems is distinguishable from
the present matter because it was fact-specific. In that case, the court
determined the witness was not qualified to authenticate the records of
another company based on his testimony. Here, the court determined Dean
did possess sufficient knowledge of the records and could establish the
documents’ trustworthiness. Accordingly, Commonwealth Financial
Systems does not apply to this case.

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J-A05018-16

Now, Pennsylvania Rules of Civil Procedure 1141-1150
govern actions for mortgage foreclosure, e.g., Rearick v.
Elderton State Bank, 97 A.3d 374, 383 (Pa. Super. 2014).
Rule 1141(a) provides that an action at law to foreclose a
mortgage upon any estate, leasehold or interest in land shall not
include an action to enforce a personal liability, e.g., id., such as
restitution for unjust enrichment. It is well-established that an
action in mortgage foreclosure is strictly in rem and thus may
not include an in personam action to enforce a personal liability.
E.g., id. These procedural requirements must be strictly
followed. E.g., Forest Highlands Cmty. Ass’n v. Hammer,
903 A.2d 1236, 1240 (Pa. Super. 2006) (citing First Fed. Sav.
& Loan Ass’n of Greene County v. Porter, 183 A.2d 318 (Pa.
1962)). Therefore, a personal liability for unjust enrichment,
even if there would be evidence to support it, cannot be grounds
for a judgment in mortgage foreclosure.

Kananavicius’ Brief at 29-30 (emphasis in original).

While Kananavicius may be correct that the doctrine of unjust

enrichment is inapplicable when the relationship between parties is based on

a written agreement,26 it is clear from Wells Fargo’s June 5, 2012, amended

complaint that it never brought a personal liability claim against

Kananavicius. The basis for the suit was only a foreclosure cause of action.

Therefore, the issue before the trial was not unjust enrichment but rather,

whether Wells Fargo was the real party in interest and was entitled to

enforce the mortgage and note agreements. Further, one can reasonably

infer that the court’s statement regarding the doctrine was merely a notation
____________________________________________

26
See Rearick, 97 A.3d at 383 (“[I]n Pennsylvania, the scope of a
foreclosure action is limited to the subject of the foreclosure, i.e., disposition
of property subject to any affirmative defenses to foreclosure or
counterclaims arising from the execution of the instrument(s) memorializing
the debt and the security interest in the mortgaged property.”).

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that any other ruling (that was not in favor of Wells Fargo) would be

inequitable. Accordingly, Kananavicius’ final argument is unavailing.

Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/16/2016

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