J-S12044-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DEUTSCHE BANK NATIONAL TRUST : IN THE SUPERIOR COURT OF
COMPANY, AS TRUSTEE FOR GSAMP : PENNSYLVANIA
TRUST 2004-NC2, BY ITS ATTORNEY- :
IN-FACT, OCWEN LOAN SERVICING, :
LLC :
:
v. :
:
TUYEN T. TRAN & SHELIA A. TRAN, :
:
Appellants : No. 1348 MDA 2016
Appeal from the Order entered July 19, 2016
in the Court of Common Pleas of Lancaster County,
Civil Division, No(s): CI-03-04399
BEFORE: PANELLA, OTT and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED APRIL 19, 2017
Tuyen T. Tran and Shelia A. Tran (“the Trans”) appeal from the Order
granting summary judgment in favor of Deutsche Bank National Trust
Company, as Trustee for GSAMP Trust 2004-NC2 (“Deutsche Bank”), by its
attorney-in-fact, Ocwen Loan Servicing, LLC (“Ocwen”), in a mortgage
foreclosure action with respect to real property located at 1705 Drummers
Lane, Lancaster, Pennsylvania (“the Property”). We affirm.
On June 29, 2004, the Trans entered into a home mortgage loan
transaction with New Century Mortgage Corporation (“New Century”),
wherein the Trans executed an Adjustable Rate Note (“the Note”) for
$207,000, plus interest. The Note provides for initial monthly payments of
$1,370.24, to commence on September 1, 2004, and an initial interest rate
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of 6.95% per annum. The Note also specifies a “maturity date” of August 1,
2034, at which time any outstanding balance shall be paid in full. On the
same date, the Trans executed a mortgage on the Property to secure the
Note, which was recorded in the Lancaster County Recorder of Deeds Office
on August 5, 2004 (the Note and mortgage will hereinafter be collectively
referred to as “the Mortgage”).
On November 9, 2007, the Trans executed a Modification Agreement
for the remaining $202,716.52 balance on the Mortgage with Deutsche Bank
National Trust Company, as Trustee for GSAMP Trust 2004-NC2, Pooling and
Servicing Agreement dated as of October 1, 2004 (“Deutsche Pooling and
Servicing”). The Modification Agreement provides for monthly payments of
$1,465.28, and an interest rate of 7.5% per annum.
New Century assigned the Mortgage to Deutsche Pooling and Servicing
on May 8, 2012, and the assignment was recorded on June 15, 2012.1
On October 1, 2012, the Trans defaulted on the Mortgage by failing to
make their monthly payment. The Trans failed to make any subsequent
monthly payments. On February 1, 2013, the Trans were provided an Act 6
and Act 91 Combined Notice,2 which included a notice of default, and notice
of intention to foreclose.
1
The assignment was executed by New Century, through Ocwen as its
attorney-in-fact, and indicates that Ocwen’s power of attorney was recorded
on September 6, 2005.
2
See 41 P.S. §§ 101-605; 35 P.S. §§ 1680.401(c)-1680.410(c).
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Deutsche Pooling and Servicing assigned the Mortgage to Deutsche
Bank on March 19, 2013, and the assignment was recorded on April 12,
2013.
Deutsche Bank filed a Complaint in mortgage foreclosure on May 9,
2013, appending thereto the Mortgage and accompanying riders, and the Act
6 and Act 91 Combined Notice. The Trans, pro se, filed an Answer on May
18, 2013, which consisted primarily of general denials (they admitted only
their identities).
On February 18, 2015, the Trans, through counsel, filed a Petition for
Leave to Amend Answer, and a brief in support thereof. On February 19,
2015, the trial court issued a Rule to Show Cause, instructing Deutsche Bank
to file an answer to the Trans’ Petition for Leave to Amend within 20 days,
and stating that “[d]iscovery shall be completed within forty-five (45) days
of service of the [a]nswer.” Deutsche Bank did not respond, and on May 11,
2015, the trial court entered an Order instructing the Trans to file their
Amended Answer and New Matter within 20 days.
On May 13, 2015, the Trans filed an Amended Answer and New
Matter, alleging that Ocwen does not possess a valid power of attorney; the
assignment of the Mortgage to Deutsche Bank is invalid; and an unrelated
federal lawsuit against Ocwen, and the resulting Consent Judgment, gives
rise to the inference that the individual who verified the Complaint in this
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case did not have personal knowledge of the allegations. Deutsche Bank
filed a Reply on July 16, 2015.
On July 21, 2015, Deutsche Bank filed a Motion for Summary
Judgment, alleging that there were no genuine issues of material fact
regarding the Trans’ default on mortgage payments, the assignments of the
Mortgage, or Deutsche Bank’s entitlement to enforce the Mortgage. The
Trans filed a brief in response, and requested oral argument. On February
3, 2016, following oral argument, the trial court entered an Order granting
the parties 90 days to complete additional discovery, and submit
supplemental briefs and exhibits. Neither party filed any additional briefs or
exhibits. On July 19, 2016, the trial court granted summary judgment in
favor of Deutsche Bank, and awarded Deutsche Bank an in rem judgment
against the Trans in the amount of $273,818.51, together with interest,
costs and charges collectible.
The Trans filed a timely Notice of Appeal and a court-ordered Pa.R.A.P.
1925(b) Concise Statement of matters complained of on appeal.
On appeal, the Trans raise the following questions for review:
1. Does [Deutsche Bank’s] failure to respond to factual
allegations in [the Trans’] New Matter create genuine issues of
material fact precluding the grant[] of summary judgment?
2. Are there genuine issues of material fact as to whether
[Deutsche Bank] is the real party in interest as assignee of the
original [M]ortgage?
Brief for Appellants at 5 (issues renumbered).
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Our standard of review of an order granting a motion for summary
judgment is well-settled:
We view the record in the light most favorable to the non-
moving party, and all doubts as to the existence of a genuine
issue of material fact must be resolved against the moving party.
Only where there is no genuine issue as to any material fact and
it is clear that the moving party is entitled to a judgment as a
matter of law will summary judgment be entered. Our 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.
Daley v. A.W. Chesterton, Inc., 37 A.3d 1175, 1179 (Pa. 2012) (citation
omitted). Further, in mortgage foreclosure proceedings, “[t]he 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.” Bank of America,
N.A. v. Gibson, 102 A.3d 462, 465 (Pa. Super. 2014).
In their first claim, the Trans argue that they raised an affirmative
defense in the New Matter regarding ownership of the Mortgage. Brief for
Appellants at 14. The Trans state that they attached a Notice to Plead to
their Amended Answer and New Matter. Id. at 13. The Trans claim that
Deutsche Bank’s Reply was untimely, and therefore, the factual allegations
contained in the New Matter are admitted as a matter of law. Id. at 13-14.
The Trans contend that “[b]y virtue of these admissions, [Deutsche Bank]
cannot prove that it possesses an ownership interest in the [M]ortgage to
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maintain its Complaint[,] and its request for summary judgment must be
denied.” Id.
Pennsylvania Rule of Civil Procedure 1026 provides that “every
pleading subsequent to the complaint shall be filed within twenty days after
service of the preceding pleading, but no pleading need be filed unless the
preceding pleading contains a notice to defend or is endorsed with a notice
to plead.” Pa.R.C.P. 1026; see also Louis v. Clark, 323 A.2d 298, 299 (Pa.
Super. 1974) (stating that “[s]ince the reply is a pleading, it should be filed
(assuming there is an endorsement giving notice to plead) within twenty
days after service of the answer raising the new matter.”). However, “it is
within the sound discretion of the court to permit a late pleading to be filed
where the opposing party will not be prejudiced and justice so requires.”
Clark, 323 A.2d at 299-300; see also Pa.R.C.P. 126 (providing that “[t]he
court at every stage of any such action or proceeding may disregard any
error or defect of procedure which does not affect the substantial rights of
the parties.”).
Here, the Trans filed their Amended Answer and New Matter on May
13, 2015. Deutsche Bank filed its Reply on July 16, 2015, beyond the
twenty-day deadline established by Rule 1026.
Because the Trans did not file a motion with the trial court to obtain
judgment against Deutsche Bank, the trial court deemed this issue waived.
See Trial Court Opinion, 10/7/16, at 4. Notwithstanding, the trial court
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considered the Trans’ first claim, and concluded that “nothing suggests that
the substantial rights of either party were affected by allowing [Deutsche
Bank’s] late [R]eply…. [The Trans] were not prejudiced by this untimely
filing and have made no claim that they were.” Id. at 3; see also id. n.1
(stating that the Trans “appear willing to overlook the fact that their
[A]mended [A]nswer and [N]ew [M]atter was filed after the passage of a
much longer period of time.”). Additionally, the trial court concluded that no
response was necessary because the Trans failed to set forth facts to
support an affirmative defense, and instead, stated conclusions of law
relating to a lawsuit filed against Ocwen in federal court. See id. at 3-4;
see also Gotwalt v. Dellinger, 577 A.2d 623, 626 (Pa. Super. 1990)
(stating that “[i]f a party’s new matter does not contain facts supporting an
affirmative defense, but rather contains merely conclusions of law, no denial
is required because such averments are deemed to be denied.”); Pa.R.C.P.
1029(d) (providing that “[a]verments in a pleading to which no responsive
pleading is required shall be deemed to be denied.”). Upon review, we
discern no abuse of discretion in the trial court’s determination that
Deutsche Bank’s untimely Reply did not result in admissions of fact such that
would create genuine issues of material fact, thereby precluding the entry of
summary judgment. Accordingly, the Trans’ first claim is without merit.
In their second claim, the Trans assert that Deutsche Bank has not
proven it is the valid assignee of the original Mortgage. Brief for Appellants
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at 11. The Trans claim that New Century’s assignment to Deutsche Pooling
and Servicing was recorded by Ocwen in 2012 as New Century’s agent. Id.
The Trans also state that New Century filed for Chapter 11 bankruptcy in
2007, and accordingly, New Century’s assets were under the jurisdiction of
the bankruptcy court at the time of the purported assignment. Id. at 11-12.
The Trans argue that “[t]here are no documents in New Century’s
bankruptcy case which permitted New Century … to alienate any of its
property. As such, there was simply no authority for Ocwen as agent under
power of attorney for New Century to [] assign the [M]ortgage during the
pendency of the bankruptcy.” Id. at 12. The Trans contend, in the
alternative, that they entered into a Modification Agreement with another
entity in 2007. Id. at 12-13. While the Trans concede they are unable to
prove that the Modification Agreement resulted in a valid assignment, “as no
documentation has ever been provided that would show such[,]” they assert
that the Modification Agreement could create an inference that the Mortgage
had been assigned prior to 2012. Id. at 13.3
The Trans’ second claim challenges Deutsche Bank’s standing to bring
the foreclosure action. In a foreclosure action, the plaintiff can prove
standing either by showing that it (1) originated or was assigned the
mortgage, or (2) is the holder of the note specially indorsed to it or indorsed
3
We note that the Trans’ discussion of this claim includes only one citation
to authority. See Pa.R.A.P. 2119(a) (requiring that each point in an
argument contain “such discussion and citation of authorities as are deemed
pertinent.”). Nevertheless, we will consider the Trans’ claim.
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in blank. J.P. Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1267-
68, 1268 n.6 (Pa. Super. 2013); see also CitiMortgage, Inc. v. Barbezat,
131 A.3d 65, 69 (Pa. Super. 2016) (stating that “[w]here an assignment is
effective, the assignee stands in the shoes of the assignor and assumes all
of his rights.”).
Here, the Trans admit their identity and their execution of the
Mortgage in 2004 to secure the $207,000 loan. See Amended Answer and
New Matter, 5/13/15, at ¶¶ 2, 3. Paragraph 7 of the Complaint alleges that
the Mortgage is in default “as a result of the failure to pay the monthly
installments … due on October 1, 2012 and on the same day of each month
thereafter[,]” and Paragraph 8 details, by line item, the total due on the
Mortgage. Complaint, 5/9/13, ¶¶ 7, 8. The Trans denied both allegations as
conclusions of law. See Amended Answer and New Matter, 5/13/15, ¶¶ 7,
8. But see Brief for Appellants at 10 (wherein the Trans admit that “they
have not made a mortgage payment for a long time.”). As to Paragraph 8,
the Trans also indicated that “there is insufficient detail to determine the
various line items of alleged sums due.” Amended Answer and New Matter,
5/13/165 ¶ 8; see also Pa.R.C.P. 1029(c) Note (stating that “[r]eliance on
subdivision (c) does not excuse a failure to admit or deny a factual allegation
when it is clear that the pleader must know whether a particular allegation is
true or false.”); Gibson, 102 A.3d at 467 (stating that “general denials by
mortgagors that they are without information sufficient to form a belief as to
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the truth of averments as to the principal and interest owing on the
mortgage must be considered an admission of those facts.”) (citation,
quotation marks, and brackets omitted). Further, the Trans admit that the
assignment from New Century to Deutsche Pooling and Servicing, and the
subsequent assignment from Deutsche Pooling and Servicing to Deutsche
Bank, exist in the Lancaster County Recorder of Deeds Office. See Amended
Answer and New Matter, 5/13/15, ¶ 4.
Deutsche Bank attached to its Motion for Summary Judgment a copy
of both assignments identified in the Complaint. See Motion for Summary
Judgment, Exhibit 2A. Deutsche Bank also attached to its Brief in Support of
Summary Judgment copies of the relevant limited powers of attorney
appointing Ocwen as Deutsche Bank’s attorney-in-fact (the first became
effective as of June 7, 2012, and the second became effective as of
November 18, 2013). See Brief in Support of Motion for Summary
Judgment, Exhibit 10. Each limited power of attorney identifies Deutsche
Bank as Trustee for various trusts, including GSAMP Trust 2004-NC2, and
grants Ocwen authority to pursue mortgage foreclosures on its behalf. See
id.
In its Opinion, the trial court concluded that the Trans’ admission
regarding the assignments from New Century to Deutsche Pooling and
Servicing, and from Deutsche Pooling and Servicing to Deutsche Bank,
conferred prima facie standing on Deutsche Bank as a party in interest. See
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Trial Court Opinion, 8/7/16, at 5. Regarding the Trans’ alternative argument
that the Modification Agreement alienated New Century’s interest in the
Mortgage, the trial court concluded that even if New Century had alienated
its interest in the Mortgage, it had done so in favor of Deutsche Bank. See
id. at 6; see also id. (stating that the Trans acknowledged Deutsche Bank’s
interest in the Mortgage by signing the Modification Agreement). The trial
court also concluded that “the mere existence of the bankruptcy filing does
not create a genuine issue of material fact.”). Id. at 7.
Upon review, we agree with the trial court’s conclusion. Although the
Trans challenge Deutsche Bank’s standing to assert foreclosure rights under
the Mortgage, the evidence of record establishes that Deutsche Bank
properly holds the Mortgage by way of assignment, and is the party in
interest in the foreclosure action. See Murray, supra. The Trans failed to
offer evidence, in opposition to the Motion for Summary Judgment, that
establishes a genuine issue of material fact regarding the validity of the
assignments. See Gerber v. Piergrossi, 142 A.3d 854, 860 (Pa. Super.
2016) (concluding that, where the evidence of record established that
appellees held the mortgage by valid assignment, and appellants offered no
evidence to establish a genuine issue of material fact, the trial court did not
err by granting summary judgment in favor of appellees). Moreover, despite
receiving 90 days to conduct additional discovery, the Trans failed to file any
additional supplemental briefs or exhibits in support of their allegations.
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Accordingly, the trial court did not err or abuse its discretion in granting
Deutsche Bank’s Motion for Summary Judgment.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/19/2017
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