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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
FREEDOM MORTGAGE CORPORATION IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
PATRICIA E. DENNIS
Appellant No. 3423 EDA 2015
Appeal from the Order October 26, 2015
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2014-07116
BEFORE: BOWES, OTT AND SOLANO, JJ.
MEMORANDUM BY BOWES, J.: FILED SEPTEMBER 30, 2016
Patricia E. Dennis appeals, pro se, from the October 26, 2015 order
granting summary judgment in favor of Freedom Mortgage Corporation
(“Freedom”). We affirm.
On March 29, 2013, Ms. Dennis executed a mortgage and associated
promissory note in the amount of $149,469.00, and secured by the real
property located at 652 Haws Avenue, Norristown, Pennsylvania. The
mortgage was recorded on April 10, 2013. Ms. Dennis provided the
mortgage to Mortgage Electronic Registration System (“MERS”) as nominee
for Freedom, in consideration of her loan, with payments to commence on
April 1, 2013. MERS assigned the mortgage to Freedom on March 11, 2014,
and that assignment was properly recorded on March 25, 2014.
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On September 1, 2013, Ms. Dennis defaulted on the note and
mortgage by failing to make her monthly payment. Freedom provided her
with the requisite notice of default, and Act 6 and Act 91 combined notice,
including notice of its intent to foreclose. Freedom commenced the
underlying mortgage foreclosure action on April 1, 2014, attaching the note
and mortgage thereto. Ms. Dennis unsuccessfully attempted to remove the
case to United States District Court for the Eastern District of Pennsylvania.
Freedom then obtained a default judgment against Ms. Dennis, but the court
granted a petition to open default judgment on August 8, 2015.
Subsequently, Ms. Dennis filed an answer to Freedom’s original complaint
alleging, inter alia, that Freedom did not possess the original note or
mortgage, and therefore lacked standing to bring a foreclosure action on her
property.
Freedom filed a motion for summary judgment, attaching copies of the
note, mortgage, assignment, and an affidavit averring that Freedom
possessed the original note and mortgage encumbering Ms. Dennis’s
property. The court granted Freedom’s motion for summary judgment, and
Ms. Dennis filed a timely appeal. The court directed Ms. Dennis to file a Rule
1925(b) concise statement of errors complained of on appeal, with which
she complied, and then authored its Rule 1925(a) opinion.
Ms. Dennis raises seven questions for our review:
1. Can the Trial Court render in rem judgment for a debt
collector?
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2. Did the mortgage get separated from the Note prior to the
foreclosure action being commence[d]?
3. Does a mortgage being assigned alone nullif[y] the
enforceability of it?
4. Was Government National Mortgage Association the holder of
the Note?
5. Is [Freedom] an Approved Document Custodian for
Government National Mortgage Association?
6. Is [Freedom] in possession of the original Note?
7. Can [Freedom] proceed with the foreclosure action?
Appellant’s brief at 5-6.
Our scope and standard of review of a trial court’s order granting
summary judgment is as follows.
In reviewing an order granting summary judgment, our
scope of review is plenary, and our standard of review is the
same as that applied by the trial court . . . [a]n appellate court
may reverse the entry of a summary judgment only where it
finds that the lower court erred in concluding that the matter
presented no genuine issue as to any material fact and that it is
clear that the moving party was entitled to judgment as a matter
of law. In making this assessment, we view the record in the
light most favorable to the nonmoving party, and all doubts as to
the existence of a genuine issue of material fact must be
resolved against the moving party. Where our analysis involves
solely questions of law, our review is de novo.
Thus, our responsibility as an appellate court is to
determine whether the record either established that the
material facts are undisputed or contains insufficient evidence of
facts to make out a prima facie cause of action, such that there
is no issue to be decided by the fact finder.
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Gerber v. Piergrossi, 2016 WL 3414993 (Pa.Super. 2016) at *3 (citation
omitted).
Ms. Dennis devotes the majority of her brief to her contention that the
court lacked subject-matter jurisdiction when it granted Freedom’s motion
for summary judgment. While her statement of the question does not state
her contention in those words, we construe Ms. Dennis’s issue on appeal as
encompassing this question. See Ir re Ullman, 995 A.2d 1207, 1211-12
(Pa.Super. 2010) (“[T]his Court is willing to liberally construe materials filed
by a pro se litigant, [however] pro se status confers no special benefit upon
the appellant.”).
Ms. Dennis first asserts that Freedom is a “debt collector,” as defined
in the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.
She maintains that since Freedom is a New Jersey-based debt collector
engaging in interstate commerce, and she is a resident of Pennsylvania, the
Montgomery County Court of Common Pleas lacked jurisdiction to grant
summary judgment in favor of Freedom, and the federal courts maintain
jurisdiction over this dispute.
Subject matter jurisdiction refers to the court’s competency to hear
and decide the type of controversy presented. Sheard v. J.J. DeLuca Co.,
Inc., 92 A.3d 68, 75 (Pa.Super. 2014). Jurisdiction over the subject matter
refers to “the nature of the cause of action and of the relief sought; and this
is conferred by the sovereign authority which organizes the court, and is to
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be sought for in the general nature of its powers, or in authority specially
conferred.” Id. (quoting Mid-City Bank & Trust Co. v. Myers, 23 A.2d
420, 423 (Pa. 1942)). The question of subject matter jurisdiction may be
raised at any time, by any party, or by the court sua sponte. In re Estate
of Ciuccarelli, 81 A.3d 953, 958 (Pa.Super. 2013) (citation omitted).
Notwithstanding exceptions inapplicable to this matter, our courts of
common pleas have unlimited jurisdiction over all proceedings in this
Commonwealth, unless otherwise provided by law. Beneficial Consumer
Discount Co. v. Vukman, 77 A.3d 547, 552 (Pa. 2013); 42 Pa.C.S. §
931(a).
At the outset, we observe that it is unclear whether Ms. Dennis is
arguing that federal question or diversity subject matter jurisdiction is
invoked by this matter. Furthermore, she does not reference any legal
authority indicating how Freedom’s status as a “debt collector” affects state
jurisdiction. Nonetheless, since the Montgomery County Court of Common
Pleas exercises jurisdiction over all proceedings arising in that county,
including complaints in mortgage foreclosure, we find jurisdiction was
properly within that court. 42 Pa.C.S. § 931(a).
Additionally, we note Ms. Dennis’s previous attempt to remove this
matter to federal court under diversity jurisdiction was found to be improper
since Ms. Dennis, as the defendant in the underlying complaint, is a citizen
of Pennsylvania. See 28 U.S.C. § 1441(b)(2) (“a civil action otherwise
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removable solely on the basis of the jurisdiction under [diversity of
citizenship] may not be removed if any of the parties in interest properly
joined and served as defendants is a citizen of the State in which the action
is brought.”).
Furthermore, despite Freedom’s admission that it is a “debt collector,”
see Appellee’s brief at 3, Freedom does not meet the definition of that term
under the FDCPA. The FDCPA defines “debt collector” as:
any person who uses any instrumentality of interstate commerce
or the mails in any business the principal purpose of which is the
collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be
owed or due another. Notwithstanding the exclusion provided by
clause (F) . . . [t]he term does not include--
***
(F) any person collecting or attempting to collect any debt
owed or due or asserted to be owed or due another to the
extent such activity . . . (ii) concerns a debt which was
originated by such person[.]
15 U.S.C. § 1692a(6). Freedom, as the original mortgagee of the loan,
attempted to collect its own debt owed to it by Ms. Dennis. Under the plain
meaning of the FDCPA, Freedom is not a “debt collector,” as Ms. Dennis’s
default concerns a debt originated by Freedom. This analysis is consistent
with the Third Circuit’s interpretation of the FDCPA. See Police v. National
Tax Funding, L.P., 225 F.3d 379, 403 (3rd Cir. 2000) (quoting Staub v.
Harris, 626 F.2d 275, 277 (3rd Cir. 1980) (“The [FDCPA] does not apply to
persons or businesses collecting debts on their own behalf.”)). As Freedom’s
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attempts to recover its debt from Ms. Dennis did not implicate the FDCPA,
no federal question of law arises in this matter, and federal jurisdiction is not
invoked on that ground. See 28 U.S.C. § 1331 (“The district courts shall
have original jurisdiction of all civil actions arising under the Constitution,
laws, or treaties of the United States.”). Hence, Ms. Dennis’s arguments
that the federal courts have jurisdiction over this dispute are without merit.
When liberally construed, Ms. Dennis’s second, fourth, and fifth claims
all contest the trial court’s finding that Freedom held the mortgage and note
at all relevant times during this proceeding. As her second and third issues
are also interrelated, we will discuss these four issues jointly.
The following principles apply to courts reviewing summary judgments
in mortgage foreclosure proceedings. Specifically, upon default, a mortgage
holder has the right to pursue a mortgage foreclosure action. Bank of
America, N.A. v. Gibson, 102 A.3d 462, 464 (Pa.Super. 2013) (citation
omitted). The mortgage holder:
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.
Id. at 465 (citations omitted).
Ms. Dennis’s contentions in this regard focus on Freedom’s purported
possession of the mortgage and note, thereby implicating its authority to
bring a foreclosure action against her. Ms. Dennis presented a letter from
Freedom’s loan servicer, LoanCare, that, as of October 23, 2013, the
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Government National Mortgage Association (“Ginnie Mae”) held her note.
She claims that, on March 11, 2014, MERS assigned the mortgage to
Freedom. She further argues that Freedom is not in possession of the
original note, and since the documents have been separated, they are no
longer enforceable. Thus, she contends, genuine issues of material fact
remain that should have precluded the entry of summary judgment.
First, we reject Ms. Dennis’s assertion that the assignment of the
mortgage alone rendered the note unenforceable. She cites no persuasive
authority in support of this claim. Instantly, Freedom presented evidence
that Ms. Dennis defaulted on her obligations under the note on September 1,
2013. It demonstrated that MERS assigned Freedom the mortgage on March
10, 2014, with that assignment being recorded on March 25, 2014. Thus,
Freedom had the right to bring a foreclosure action when it filed its
complaint in foreclosure on April 1, 2014. Gibson, supra.
Freedom moved for summary judgment on June 3, 2015. In its
motion for summary judgment, Freedom confirmed its status as the
assignee of the mortgage by appending a copy of that assignment from
MERS. Significantly, Freedom also attached an affidavit averring it was in
possession of the original note. Although Ms. Dennis provided evidence that
Ginnie Mae held the note as of October 23, 2013, she provided no evidence
that it remained in Ginnie Mae’s possession on June 3, 2015, the day
Freedom moved for summary judgment. Hence, upon review of the
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evidence of record, Freedom was entitled to enforce Ms. Dennis’s obligations
under the note. See JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d
1258, 1265-66 (Pa.Super. 2013) (finding that a note secured by a mortgage
is a negotiable instrument, and the possessor thereof has the right to
enforce it).
Finally, we observe that Ms. Dennis’s fifth and seventh issues were not
asserted before the trial court or included in her Rule 1925(b) concise
statement of matters complained of on appeal. It is axiomatic that “issues
not raised in the lower court are waived and cannot be raised for the first
time on appeal.” Pa.R.A.P. 302(a); Pa.R.A.P. 1925(b)(4)(vii) (”Issues not
included in the Statement and/or not raised in accordance with the
provisions of this paragraph (b)(4) are waived.”). Therefore, these issues
are waived.
In sum, Ms. Dennis failed to produce any evidence of record to
demonstrate a genuine issue of material fact as to the holder of the note and
mortgage. Therefore, the trial court properly granted summary judgment in
favor of Freedom.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/30/2016
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