Nationstar Mortgage v. Beaver-McKeon, T.

J. S52014/16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

NATIONSTAR MORTGAGE, LLC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
v. :
:
TRACY BEAVER-McKEON AND :
MICHAEL McKOEN, : No. 3432 EDA 2015
:
Appellants :

Appeal from the Order Dated October 8, 2015,
in the Court of Common Pleas of Chester County
Civil Division at No. CV-2013-05089-RC

BEFORE: FORD ELLIOTT, P.J.E., STABILE AND STRASSBURGER,* JJ.

MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED AUGUST 18, 2016

Tracy Beaver-McKoen and Michael McKoen appeal pro se from the

October 8, 2015 order entered in the Court of Common Pleas of Chester

County granting summary judgment in favor of Nationstar Mortgage, LLC

(“Nationstar”) in its mortgage foreclosure action against appellants. We

affirm.

The record reflects that on March 14, 2005, appellants jointly made,

executed, and delivered a mortgage to Mortgage Electronic Registration

Systems, Inc., and that Tracy Beaver-McKeon solely executed the

promissory note. Following several assignments, the mortgage was

ultimately assigned by U.S. Bank National Association, as trustee for the

benefit of Harborview 2005-3 Trust Fund (U.S. Bank), to Nationstar.

* Retired Senior Judge assigned to the Superior Court.
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Appellants stopped making payments on the mortgage on or about

August 1, 2010. Appellants received the requisite pre-foreclosure notice

pursuant to Act 91, see 35 P.S. §§ 1680.401c-1680.412c, but took no

further action.

On May 24, 2013, U.S. Bank filed a complaint in mortgage foreclosure

against appellants, alleging that the mortgage was in default and that

appellants owed payments for the amounts due from August 1, 2010,

forward. In their June 21, 2013 answer with new matter, appellants

responded to the material portions of the complaint with general denials and

demands for strict proof at trial. Following assignment of the mortgage to

Nationstar by U.S. Bank, Nationstar became successor plaintiff to the

underlying mortgage foreclosure action pursuant to Pa.R.C.P. 2352.

Thereafter, on July 18, 2014, Nationstar filed a motion for summary

judgment. Appellants filed a timely response. On September 3, 2014, the

trial court denied Nationstar’s motion for summary judgment, without

prejudice. Despite the denial, appellants continued to file responses to

Nationstar’s motion for summary judgment. Appellants also filed a series of

motions for leave to file amended pleadings, and Nationstar filed several

motions for continuance.

On March 9, 2015, Nationstar renewed its motion for summary

judgment. Appellants filed a timely response, followed by additional motions

for leave to file amended pleadings. Nationstar, once again, filed several

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motions for continuance. On September 16, 2015, argument on Nationstar’s

renewed motion for summary judgment took place. On October 9, 2015, the

trial court granted summary judgment in favor of Nationstar. Appellants

filed a timely appeal, followed by a court-ordered Pa.R.A.P. 1925(b) concise

statement of errors complained of on appeal. The trial court filed a

Rule 1925(a) opinion.

Appellants raise the following issues for our review:

1. The Trial Court committed prejudicial error
and/or abused its discretion when it granted
plaintiffs [sic] second motion for summary
judgment, by refusing to examine the record in
the light most favorable to the non-moving
party, accept as true all well pleaded facts in
the non-moving party’s pleadings, and give
him [sic] the benefit of all reasonable
inferences drawn there from [sic].

2. The Trial Court committed prejudicial error
and/or abused its discretion when it granted
plaintiffs [sic] second motion for summary
judgment, by failing to apply the correct
standard to consider said motion when the
record clearly demonstrates that genuine
issues of material fact exist and/or not clear of
doubt, by failing to consider the entire record
before it. Appellant’s [sic] provided sufficient
proof and knowledge and proof to be deemed
genuine issues of material fact as to one
or [sic] elements of the cause of action in
mortgage foreclosure.

3. The Trial Court committed prejudicial error
and/or abused its discretion when it refused to
acknowledge Nationstar Mortgage LLC failed to
produce clear, definitive proof of the original
Consumer Mortgage Services, Inc. mortgage
note. The Note originator testified at [sic]

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Summary Judgment hearing the Note
presented by plaintiff was not genuine, and did
not contain the signature of Michael McKeon
(note originator), nor did Tracy Beaver-McKeon
clarify the signature contained on the
document was that of the home owner.

4. The Trial Court committed prejudicial error
and/or abused its discretion when it found that
Nationstar Mortgage LLC had “standing to sue”
and bring the foreclosure action when
Nationstar Mortgage LLC is not entitled to
enforce the note as a “holder in due course”.

5. The Trail [sic] Court committed prejudicial
error and/or abused its discretion when it
refused to acknowledge mortgagors denied
specifically and disputed the allegations made
by plaintiff in their [sic] complaint referencing
the amount owed and due. The mortgagors
adduced evidence in the record controverting
the evidence provided by plaintiff.
Plaintiffs [sic] failed to present complete,
accurate and trustworthy records evincing the
actual amount due and owing from
defendant [sic]. A judgment in mortgage
foreclosure action must be in sum certain or it
cannot be executed. Defendants dispute the
Trail [sic] Courts [sic] finding that the amount
due and owing from defendant [sic] is
$823,524.28 and interest.

6. The Trial Court committed prejudicial error
and/or abused its discretion to permit the
admission of the assignment of mortgage
plaintiff proffered into evidence and
determined it to be a valid assignment.

7. The Trail [sic] Court committed prejudicial
error and/or abused its discretion when it did
not apply Rule 803(6) and 42 Pa.C.S.A. in its
determination of the plaintiffs [sic] exhibits or
the plaintiffs [sic] corporate designee to be a
‘qualified witness’ to establish circumstantial

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trustworthiness. The records themselves are
not admissible under Rule 803(6).

8. The Trial Court committed prejudicial error
and/or abused its discretion when it failed to
recognize the defendants specifically denied
plaintiff’s assertion, supported in the motion
for summary judgment with the affidavit of
plaintiff’s officer and defendants [sic] loan
history, that defendant [sic] has not made
payments on the mortgage for any months
after July 1, 2010 but offered proof refuting
plaintiff’s evidence.

9. The Trial Court committed prejudicial error
and/or abused its discretion when it failed to
consider defendants [sic] six (6) counterclaims
against the plaintiff under Pa.R.C.P. 1148.

Appellants’ brief at 6-8.

Before addressing appellants’ issues on appeal, we begin with our

well-settled standard and scope of review for challenges to summary

judgment:

[This court’s] 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.

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CitiMortgage, Inc. v. Barbezat, 131 A.3d 65, 67 (Pa.Super. 2016)

(citations omitted). “Summary judgment in mortgage foreclosure actions is

subject to the same rules as any other civil action.” Id.; Pa.R.C.P. 1141(b).

For ease of discussion, we will address appellants’ issues in the most

logical order.

Appellants’ Issues 1 and 2 challenge the trial court’s entry of summary

judgment based on their contention that they raised genuine issues of

material fact which the trial court either ignored or applied an incorrect legal

standard to when making its determination.

. . . A party bearing the burden of proof at trial is
entitled to summary judgment “whenever there is no
genuine issue of any material fact as to a necessary
element of the cause of action or defense which
could be established by additional discovery or
expert report[.]” Pa.R.C.P. No. 1035.2(1). In
response to a summary judgment motion, the
nonmoving party cannot rest upon the pleadings, but
rather must set forth specific facts demonstrating a
genuine issue of material fact. Pa.R.C.P. No. 1035.3.

The holder of a mortgage has the right, upon
default, to bring a foreclosure action. The holder of
a mortgage is entitled to summary judgment if the
mortgagor admits that the mortgage is in default,
the mortgagor has failed to pay on the obligation,
and the recorded mortgage is in the specified
amount.

....

. . . General denials [to averments in a complaint]
constitute admissions where . . . specific denials are
required. See Pa.R.C.P. No. 1029(b).
Furthermore, “in mortgage foreclosure actions,

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general denials by mortgagors that they are
without information sufficient to form a belief
as to the truth of averments as to the principal
and interest owing [on the mortgage] must be
considered an admission of those facts.” First
Wis. Tr. Co. v. Strausser, 653 A.2d 688, 692
([Pa.Super.] 1995); see Pa.R.C.P. No. 1029(c)
Note. . . .

Bank of America, N.A. v. Gibson, 102 A.3d 462, 464-467 (Pa.Super.

2014), appeal denied, 112 A.3d 648 (Pa. 2015) (citation omitted;

emphasis added) (determining entry of summary judgment proper where

mortgagor effectively admitted material allegations of complaint with

ineffective denials and improper claims of lack of knowledge). In a

mortgage foreclosure action, “[u]nquestionably, apart from

appellee[/mortgagee], appellants[/mortgagors] are the only parties who

would have sufficient knowledge on which to base a specific denial.”

Strausser, 653 A.2d at 692.

Here, appellants responded to the averments of default and the

amount of the mortgage in the foreclosure complaint with nothing more than

general denials. In the complaint, U.S. Bank averred as follows:

5. The mortgage is in default because the
monthly payments of principal and interest are
due and unpaid for August 01, 2010 and each
month thereafter and by the terms of the
Mortgage, upon default in such payments for a
period of one month or more, the entire
principal balance and all interest due and other
charges are due and collectible.

6. The following amounts are due to Plaintiff on
the Mortgage:

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Principal Balance . . . . . . . $722,424.89
Variable Interest from
07/01/2010 through
01/02/2013 . . . . . . . . . $52,206.95
Late Charges . . . . . . . . . . $345.77
Escrow Advances . . . . . . . $48,406.67
Fee Due Advances . . . . . . $140.00
$823,524.28

Complaint, 5/24/13 at ¶¶ 5 & 6.

Appellants answered with the following general denials:

5. Denied. Strict Proof is demanded at Trial.

6. Denied. Strict Proof is demanded at Trial.

Answer, 6/21/13 at 1, at ¶¶ 5 & 6.

Due to their failure to include pleadings of specific facts in response to

the foreclosure complaint, especially pertaining to their default and the

amount due on the mortgage, appellants are deemed to have admitted the

allegations pursuant to Strausser. See also New York Guardian Mortg.

Corp. v. Dietzel, 524 A.2d 951, 952 (Pa.Super. 1987) (mortgagors’ general

denial of mortgagee’s averment as to the principal and interest due is

deemed an admission of those facts because the mortgagor and the

mortgage holder are the only parties “who would have sufficient knowledge

on which to base a specific denial”); Cercone v. Cercone, 386 A.2d 1, 3

(Pa.Super. 1978) (a demand for proof without a reasonable investigation by

a nonmoving party is deemed to be an admission).

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Therefore, we find that appellants’ general denials concerning their

default on the mortgage and the amount due on the mortgage constitute

admissions to the facts averred in the foreclosure complaint. As a result,

appellants failed to sustain their burden of presenting material facts in

dispute, and the trial court properly granted summary judgment. See

Gibson, 102 A.3d at 465 (Pa.Super. 2014) (holding that the mortgage

holder is entitled to summary judgment when the mortgagor admits that the

mortgage is in default, the mortgagor has failed to pay on the obligation,

and the recorded mortgage is in the specified amount). Accordingly,

appellants’ first two issues lack merit.

In their Issues 5 and 8, appellants contend that they specifically

denied the allegations set forth in the foreclosure complaint with respect to

their default and the amount owed and due. Their answer to the complaint,

however, belies their contentions because their answer fails to plead specific

facts in response to the foreclosure complaint. (Answer, 6/21/13 at 1.) As

discussed above, a failure to do so constitutes an admission. See

Strausser, 653 A.2d at 692; Dietzel, 524 A.2d at 952; Cercone, 386 A.2d

at 3; see also Pa.R.C.P. 1029. Therefore, appellant’s fifth and eighth issues

lack merit.

In their Issues 4 and 6, appellants challenge the standing of U.S.

Bank, which instituted the underlying foreclosure action and subsequently

assigned the mortgage to Nationstar. Appellants contend that “U.S. Bank

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cannot overcome its lack of standing by offering into evidence an unoriginal

version of the note.” (Appellants’ brief at 15.) Appellants additionally claim

that a 2011 assignment of the note was “robo-signed” and “fraudulent” and

that appellants “[stand] to lose a home to a party who comes to court with

unclean hands; a party who has not demonstrated its standing to sue and

committed fraud upon the court.” (Appellants’ brief at 16-17.)

This court has held that under the Uniform Commercial Code, a debtor

lacks standing to challenge defects in the chain of possession of a valid note.

See JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1266

(Pa.Super. 2013). This is due to the fact that the debtor’s liability under the

note is completely discharged by paying the holder, even if another party is

ultimately determined to be the real party in interest. See id. at 1265.

Appellants further contend that the promissory note was defective

because it “was missing the required signature of the defendant and note

maker Michael McKeon.” (Appellants’ brief at 14.) Appellants also raise this

claimed defect, which bears on the note’s validity, in their Issue 3. We will,

therefore, also dispose of Issue 3 here.

While appellant Michael McKeon may not have signed the promissory

note, he co-signed the mortgage. (Nationstar’s Motion for Summary

Judgment, 3/9/15, at Exhibit B, Mortgage, 3/14/05 (“Mortgage”).) The

mortgage secures the repayment of the note. (Id. at 3, ¶ 2.) Specifically,

under the terms of the mortgage, both appellants, as “Borrowers,” incurred

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the obligation to pay the debt evidenced by the note. (Id. at 1, ¶ (B)

(defining appellants as “Borrowers”).) Nationstar has not released the

mortgage or the lien on the mortgaged property. Accordingly, when

appellants defaulted on the mortgage, the mortgagee’s remedy was to seek

foreclosure and the sale of the property to satisfy the outstanding debt. (Id.

at 9, ¶ 22.)

The Pennsylvania Rules of Civil Procedure govern actions in mortgage

foreclosure, which are strictly in rem proceedings. See Strausser, 653

A.2d at 693 n.4 (stating that an action on a promissory note seeks an

in personam judgment, whereas a mortgage foreclosure action is strictly

in rem). Rule 1147 provides that the complaint must plead the following

elements:

(a) The plaintiff shall set forth in the complaint:

(1) the parties to and the date of the
mortgage, and of any assignments,
and a statement of the place of
record of the mortgage and
assignments;

(2) a description of the land subject to
the mortgage; the names,
addresses and interest of the
defendants in the action and that
the present real owner is unknown
if the real owner is not made a
party;

(4) a specific averment of default;

(5) an itemized statement of the
amount due; and

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(6) a demand for judgment for the
amount due.

Pa.R.C.P. 1147(a). As this action is in rem only, Nationstar is not seeking

to hold appellants personally liable for the debt. Accordingly, because the

mortgage is in default, Nationstar can proceed in rem to foreclose on the

mortgage and force a sale of the property. The record reflects that

Nationstar satisfied the requirements of Rule 1147. Therefore, appellants’

Issues 3, 4, and 6 lack merit.

In their Issue 7, appellants complain that Pa.R.E. 803(6) (Exceptions

to the Rule Against Hearsay, Records of Regularly Conducted Activity)

precluded the trial court from admitting into evidence certain of Nationstar’s

evidence. A review of the record, however, reveals that appellants failed to

raise this claim with the trial court. Therefore, appellants waive this issue on

appeal. Pa.R.A.P. 302(a) (providing that “[i]ssues not raised in the lower

court are waived and cannot be raised for the first time on appeal[]”); see

also Moranko v. Downs Racing LP, 118 A.3d 1111, 1115-1116 (Pa.Super.

2015) (en banc) (stating that “[a]rguments not raised initially before the

trial court in opposition to summary judgment cannot be raised for the first

time on appeal[]” (citations and internal quotation marks omitted)).

Finally, in their Issue 9, appellants complain that the trial court abused

its discretion by failing to consider their counterclaims against Nationstar. In

support, appellants set forth the following two-sentence argument: “A

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defendant may state in his answer in a section titled ‘Counterclaim’, any

claim he has against the plaintiff at the time the answer is filed. Pa.R.C.P.

1031(a). [Appellants] did in fact list the Counterclaim in its brief for the

lower court to consider.” (Appellants’ brief at 19.)

Appellants waive this issue for lack of development in the argument

section of their brief. Pa.R.A.P. 2119(a) (an appellate brief must contain

“discussion and citation of authorities” to each issued raised); see also

Butler v. Illes, 747 A.2d 943, 944 (Pa.Super. 2000) (“When issues are not

properly raised and developed in briefs, when briefs are wholly inadequate to

present specific issues for review, [this] court will not consider the merits

thereof.” (citations omitted)). We also note that the record reflects that

appellants failed to set forth counterclaims against Nationstar in their answer

to Nationstar’s complaint. (See answer, 6/21/13.) See Pa.R.C.P. 1031(a)

(“The defendant may set forth in the answer under the heading

‘Counterclaim’ any cause of action cognizable in a civil action which the

defendant has against the plaintiff at the time of filing the answer.”). As

such, even if appellants had not waived this claim, their contention that they

“list[ed] the Counterclaims in [their] brief” would lack merit because

counterclaims must be raised in an answer.

Order affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/18/2016

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