J-S23033-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
U.S. BANK NATIONAL ASSOCIATION, : IN THE SUPERIOR COURT OF
AS TRUSTEE, SUCCESSOR-IN- : PENNSYLVANIA
INTEREST TO WACHOVIA BANK, N.A., :
AS TRUSTEE FOR PARK PLACE :
SECURITIES, INC., ASSET-BACKED :
PASS-THROUGH CERTIFICATES, :
SERIES 2004-WWFI C/O WELLS FARGO :
BANK, N.A. :
:
v. :
:
TODD W. LONGSTREET AND DONNA M. :
LONGSTREET, :
:
Appellants : No: 1437 EDA 2016
Appeal from the Order entered March 29, 2016
in the Court of Common Pleas of Bucks County,
Civil Division, No(s): 2013-06183
BEFORE: OLSON, SOLANO and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED May 19, 2017
Todd W. Longstreet and Donna M. Longstreet (“the Longstreets”)
appeal from the Order granting summary judgment in favor of U.S. Bank
National Association, as Trustee, Successor-in-Interest to Wachovia Bank,
N.A., as Trustee for Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WWF1 c/o Wells Fargo Bank, N.A. (“U.S. Bank”), in
a mortgage foreclosure action with respect to real property located at 420
East Rockhill Road, Sellersville, Pennsylvania (“the Property”). We affirm.
On November 17, 2004, the Longstreets entered into a home
mortgage loan transaction with Argent Mortgage Company, LLC (“Argent”),
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wherein the Longstreets executed an Adjustable Rate Note (“the Note”) for
$200,100, plus interest. The Note provides for initial monthly payments of
$1,538.60, to commence on January 1, 2005, and an initial interest rate of
8.5% per annum. On the same date, the Longstreets executed a Mortgage
on the Property to secure the Note, which was recorded in the Bucks County
Recorder of Deeds Office on February 4, 2005.
On November 22, 2004, Argent assigned the Mortgage to Ameriquest
Mortgage Company (“Ameriquest”). On the same date, Ameriquest assigned
the Mortgage to Wachovia Bank, N.A., as Trustee, Pooling and Servicing
Agreement, dated as of November 1, 2004, Asset-Backed, Pass-Through
Certificates, Series 2004-WWF1 (“Wachovia”). Both assignments were
recorded on January 2, 2007.
The Longstreets executed a Loan Modification Agreement with
America’s Servicing Company (“ASC”),1 dated December 19, 2008, wherein
the Longstreets acknowledged that the unpaid principal balance under the
Mortgage was $201,992.10. The Loan Modification Agreement provides for a
modified unpaid principal balance of $209,146.00, and a fixed interest rate
of 8.5% per annum.
In a second Loan Modification Agreement with ASC, dated September
25, 2009, the Longstreets acknowledged that the unpaid principal balance
under the Mortgage was $208,389.62. The second Loan Modification
1
ASC is a division of Wells Fargo Bank, N.A., Wachovia’s attorney-in-fact.
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Agreement provides for a modified unpaid principal balance of $225,230.67,
and a fixed interest rate of 6.0% per annum.
The Longstreets executed a third Loan Modification Agreement with
ASC, dated September 30, 2010, wherein the Longstreets acknowledged
that the unpaid principal balance under the Mortgage was $223,929.25. The
third Loan Modification Agreement provides for a modified unpaid principal
balance of $236,520.87 and a fixed interest rate of 4.0% per annum, and
extends the maturity date of the mortgage to November 1, 2050.
On October 1, 2011, the Longstreets defaulted on the Mortgage by
failing to make their monthly payment. The Longstreets failed to cure their
default.
On July 16, 2013, the Mortgage was assigned to U.S. Bank. The
assignment was recorded on July 22, 2013.
U.S. Bank filed a Complaint in mortgage foreclosure on August 12,
2013, appending thereto the Note and the legal description of the Property.
The Longstreets did not file an answer to U.S. Bank’s Complaint, and on
October 21, 2013, U.S. Bank was awarded a default judgment in the amount
of $267,462.01.
On January 24, 2014, the Longstreets filed a Petition to Open Default
Judgment/Motion to Vacate Judgment, and a brief in support thereof. By
Order dated August 19, 2014, the trial court granted the Longstreets’
Petition, and instructed them to file a responsive pleading within 20 days.
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On October 2, 2014, the Longstreets filed an Answer and New Matter,
alleging, inter alia, that U.S. Bank has no ownership interest in the Note,
and is not the assignee of the Mortgage; U.S. Bank failed to properly or
timely record the assignment; and U.S. Bank lacks standing to initiate a
foreclosure action. On the same date, the Longstreets filed a Motion to
Request Additional Time for Conducting Depositions, which the trial court
granted. U.S. Bank filed a Reply on December 8, 2014, and an Amended
Reply on December 12, 2014.
On October 27, 2015, U.S. Bank filed a Motion for Summary
Judgment, and a brief in support thereof, alleging that there were no
genuine issues of material fact in dispute. The Longstreets filed a Response.
On March 29, 2016, the trial court granted summary judgment in favor of
U.S. Bank, and awarded U.S. Bank an in rem judgment against the
Longstreets in the amount of $310,767.13, plus interest, costs and charges
collectible for the foreclosure and sale of the Property.
The Longstreets 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 Longstreets raise the following questions for our
review:
I. Was [U.S. Bank’s] Motion for Summary Judgment
improvidently granted?
II. Did the [trial] court err in granting [U.S. Bank’s] Motion for
Summary Judgment under the circumstances, where [the
Longstreets] have raised genuine issues of material fact as to:
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(1) whether [U.S. Bank] is in possession of the original [] Note;
[and] (2) whether the responses contained in [the Longstreets’]
Answer constitute judicial admissions[?]
III. Did the [trial] court err in granting [U.S. Bank’s] Motion for
Summary Judgment where discovery [has] not yet been
completed[?]
Brief for Appellants at 4.2
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).
“The holder of a mortgage has the right, upon default, to bring a
foreclosure action.” Bank of America, N.A. v. Gibson, 102 A.3d 462, 464
(Pa. Super. 2014). 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
2
We observe that the Longstreets failed to structure their appellate brief
such that the argument section is “divided into as many parts as there are
questions to be argued[.]” Pa.R.A.P. 2119(a).
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the obligation, and the recorded mortgage is in the specified amount.” Id.
at 465.
The Longstreets’ first claim, as set forth in their Statement of
Questions Involved, includes only the bare assertion that the trial court
erred in granting U.S. Bank’s Motion for Summary Judgment. Brief for
Appellants at 4. Because the Longstreets’ first claim encompasses their
remaining claims, and their brief includes no separate argument as to this
issue, we decline to address the Longstreets’ first question as an
independent claim. See Pa.R.A.P. 2119(a).
In their second claim, the Longstreets argue that the trial court erred
in finding that U.S. Bank has standing to enforce the Mortgage. Brief for
Appellants at 11-14, 15-20. The Longstreets challenge U.S. Bank’s status as
the holder of the Note. Id. at 15-17. The Longstreets claim that U.S.
Bank’s Complaint does not aver that U.S. Bank is in possession of the Note.
Id. at 16-17. The Longstreets also claim that the affidavit of Cynthia A.
Thomas (“Thomas”), Vice President of Loan Documentation at Wells Fargo
Bank, N.A., U.S. Bank’s servicing agent, “states merely that it has
possession of the Note ‘either directly or through an agent’ and is ‘either the
original payee of the [] Note or the [] Note has been duly indorsed.’” Id. at
17. Additionally, the Longstreets assert that in its Motion for Summary
Judgment, U.S. Bank “unequivocally admitted that it has not yet established
possession.” Id.
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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 in blank. See J.P.
Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1267-68, n.6 (Pa.
Super. 2013).
A promissory note accompanied by a mortgage is a negotiable
instrument under the Pennsylvania Uniform Commercial Code (“PUCC”).3
Id. at 1265-66. A holder of a negotiable instrument is a “person entitled to
enforce” it under the PUCC. 13 Pa.C.S.A. § 3301(1). A “holder” is defined,
in relevant part, as “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[.]” Id. § 1201(b)(21)(i). Under the PUCC, a note is payable to
its bearer if it is indorsed “in blank,” i.e., it is not indorsed to an identified
person or to the bearer. See id. § 3205(b).4
Here, U.S. Bank attached to its Complaint and Motion for Summary
Judgment a copy of the Note, which contains two indorsements: a special
3
See 13 Pa.C.S.A. §§ 1101 et seq.
4
Section 3205(b) provides that “[i]f an indorsement is made by the holder
of an instrument and it is not a special 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.A. § 3205(b). By contrast, a “special indorsement” is
one made by the holder of an instrument that “identifies a person to whom it
makes the instrument payable[.]” Id. § 3205(a). “When specially indorsed,
an instrument becomes payable to the identified person and may be
negotiated only by the indorsement of that person.” Id.
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indorsement by Argent to Ameriquest, and an indorsement in blank by
Ameriquest. See Complaint, 8/12/13, Exhibit A; see also Motion for
Summary Judgment, 10/27/15, Exhibits A-1. U.S. Bank also attached to its
Motion for Summary Judgment Thomas’s affidavit, attesting that U.S. Bank
is in possession of the Note, either directly or through its agent. See Motion
for Summary Judgment, 10/27/15, Exhibit B. The Longstreets failed to offer
evidence, in opposition to the Motion for Summary Judgment, that
establishes a genuine issue of material fact regarding U.S. Bank’s status as
the holder of the Note.5 See Gibson, 102 A.3d at 466 (affirming the trial
court’s entry of summary judgment in favor of the bank, where the record
established that the bank held the note, and appellant failed to offer
evidence or legal authority to the contrary). Thus, the trial court did not err
or abuse its discretion in determining that U.S. Bank, as the holder of the
Note, which is indorsed in blank, has standing to enforce the Longstreets’
Mortgage.
5
The trial court concluded, and we agree, that U.S. Bank also established
standing by proving ownership of the Mortgage via assignment. See Trial
Court Opinion, 6/28/16, at 8; see also Motion for Summary Judgment,
10/27/15, Exhibit A-5, A-6, A-7; 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);
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.”).
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The Longstreets also challenge the trial court’s conclusion that general
denials contained in their Answer and New Matter constitute admissions.
Brief for Appellants at 11-13. The Longstreets argue that, contrary to the
trial court’s findings, the responses set forth in their Answer “go far beyond
a mere general denial.” Id. at 12. Additionally, the Longstreets point to this
Court’s decision in U.S. Bank, N.A. v. Pautenis, 118 A.3d 386 (Pa. Super.
2015),6 and assert that “it is actually quite likely that [the Longstreets] do
not have sufficient knowledge or information to determine the accuracy of
[U.S. Bank’s] claims regarding the precise amount allegedly due[,]” because
the Mortgage is subject to an adjustable rate and has been assigned and
modified several times. Brief for Appellants at 14.
Pennsylvania Rule of Civil Procedure 1029 provides, in relevant part,
as follows:
Rule 1029. Denials. Effect of Failure to Deny
(a) A responsive pleading shall admit or deny each averment of
fact in the preceding pleading or any part thereof to which it is
responsive. A party denying only a part of an averment shall
specify so much of it as is admitted and shall deny the
remainder. Admissions and denials in a responsive pleading
shall refer specifically to the paragraph in which the averment
admitted or denied is set forth.
6
In Pautenis, this Court upheld the trial court’s conclusion that the
homeowner could deny sufficient information to admit or deny the amount
owed on her mortgage, where the homeowner provided specific evidence
(i.e., accountings provided by the bank that inexplicably increased the
principal on the mortgage) that she was unable to ascertain the amount
owed. Pautenis, 118 A.3d at 396-97.
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(b) Averments in a pleading to which a responsive pleading is
required are admitted when not denied specifically or by
necessary implication. A general denial or a demand for proof,
except as provided by subdivisions (c) and (e) of this rule, shall
have the effect of an admission.
(c) A statement by a party that after reasonable investigation
the party is without knowledge or information sufficient to form
a belief as to the truth of an averment shall have the effect of a
denial.
Note: Reliance 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. See Cercone v. Cercone, 254 Pa. Super.
381, 386 A.2d 1 (1978).
Pa.R.C.P. 1029(a)-(c); see also Pautenis, 118 A.3d at 396 (stating that
“[u]nquestionably, apart from the mortgagee, the mortgagors are the only
parties who would have sufficient knowledge on which to base a specific
denial[.]” (brackets omitted) (citing New York Guardian Mortgage Corp.
v. Dietzel, 524 A.2d 951, 952 (Pa. Super. 1987)).
In its Complaint, U.S. Bank alleges that the Longstreets executed a
Mortgage in favor of Argent in the amount of $200,100; U.S. Bank has
possession of the Note, either directly or through an agent, and is either the
original payee of the Note or the Note has been duly indorsed; and the
Mortgage is in default as a result of the Longstreets’ failure to pay monthly
installments due October 1, 2011. See Complaint, 8/12/13, ¶¶ 3-4, 7.
Paragraph 8 of the Complaint also details, by line item, the total amount due
on the Mortgage. Id. ¶ 8. The Longstreets admitted only their identity, and
that they are the real owners of the Property. See Answer and New Matter,
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10/2/14, ¶ 2, 6. As to all remaining allegations (most relevantly,
paragraphs 7 and 8), the Longstreets provided the following response:
Denied. The allegations contained within [Paragraphs 7 and 8]
contain conclusions of law to which no responsive pleading is
required. By way of further denial, only the Note Holder is
entitled to declare a default. It is affirmatively alleged that [U.S.
Bank] is not the legal holder of the Note/Mortgage, nor has the
Note been properly [i]ndorsed and/nor has the Mortgage been
properly and legally assigned. Moreover, [U.S. Bank] has not
proven that the alleged documents filed of public record are in
fact authentic and/or proper, and therefore, has failed to attach
the subject documents in their entirety to the Complaint. Strict
proof is demanded at the time of trial.
Id. ¶¶ 7-8.
The trial court concluded that the Longstreets’ response constitutes “a
boilerplate general denial that serves as an admission of [U.S. Bank’s]
allegations.” Trial Court Opinion, 6/28/16, at 10. Upon review, we agree
with the trial court’s conclusion. The Longstreets argue that the trial court’s
conclusion is erroneous because they did not rely on Rule 1029(c) in
responding to U.S. Bank’s allegations concerning the amount owed on the
Mortgage. Brief for Appellants at 13. Nevertheless, the Longstreets failed to
plead specific facts regarding how much they claim to have paid, when those
payments were made, or what amounts they claim are due under the
Mortgage. Because U.S. Bank’s Complaint includes averments of fact to
which a responsive pleading was required, the Longstreets’ general denials
constitute admissions pursuant to Rule 1029(b). See Pa.R.C.P. 1029(b);
see also First Wisconsin Trust Co. v. Strausser, 653 A.2d 688, 692 (Pa.
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Super. 1995) (concluding that a mortgagor’s general denial regarding the
amount owed under his mortgage constitutes an admission). Accordingly,
the trial court did not err or abuse its discretion in concluding that the
Longstreets’ general denials constitute admissions, and that, as a result,
there was no genuine issue of material fact to prevent the entry of summary
judgment in favor of U.S. Bank. See Gibson, 102 A.3d at 465.7
In their third claim, the Longstreets assert that the trial court erred in
concluding that additional discovery would not have assisted in establishing
of a genuine issue of material fact. Brief for Appellants at 20. The
Longstreets claim that U.S. Bank’s “continual obstruction for the taking of
depositions and withholding documentation significantly contributed to the
lack of progress of discovery[,]” and that U.S. Bank’s “obstinate behavior
simply should not be rewarded[.]” Id. at 20 n.7. The Longstreets argue
that additional discovery “would be of assistance” in establishing whether
U.S. Bank is in possession of the Note. Id. at 22.
Pennsylvania Rule of Civil Procedure 1035.2 provides the following:
7
To the extent that the Longstreets argue, in their brief, that it is likely that
they would not have sufficient knowledge to determine the accuracy of U.S.
Bank’s averments as to the amount owed on the Mortgage, we note that
their reliance on Pautenis is misplaced. The Longstreets did not produce
specific evidence to explain any such lack of knowledge. See contra
Pautenis, 118 A.3d at 396-97. Moreover, the Longstreets executed three
Loan Modification Agreements, and in each agreement, the Longstreets
acknowledged the unpaid principal balance, and agreed to a modified unpaid
principal balance and a fixed interest rate.
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After the relevant pleadings are closed, but within such time as
not to unreasonably delay trial, any party may move for
summary judgment in whole or in part as a matter of law
(1) 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, or
(2) if, after the completion of discovery relevant to the
motion, including the production of expert reports, an
adverse party who will bear the burden of proof at trial has
failed to produce evidence of facts essential to the cause of
action or defense which in a jury trial would require the
issues to be submitted to a jury.
Pa.R.C.P. 1035.2. Additionally, “[s]ummary judgment may be entered prior
to the completion of discovery in matters where additional discovery would
not aid in the establishment of any material fact. Thus, the question is
whether additional discovery would have aided in the establishment of any
material fact.” Manzetti v. Mercy Hosp. of Pittsburgh, 776 A.2d 938,
950-51 (Pa. 2001) (internal citation omitted).
The trial court addressed the Longstreets’ second claim as follows:
In this case, the parties were afforded extensive time to
partake in discovery prior to the entry of summary judgment.
The Complaint was filed on August 12, 2013, and judgment was
opened by this [c]ourt on August 29, 2014. This [c]ourt did not
enter summary judgment in favor of [U.S. Bank] until March
[29], 2016, which is over twenty (20) months from when
judgment was opened. Additionally, the last activity on the
docket[,] prior to [U.S. Bank’s] October 2015 filing of its Motion
for Summary Judgment[,] was [U.S. Bank’s] December 2014
Amended Reply to [the Longstreets’] thirty-[eight (38) c]ounts
of New Matter. [The Longstreets] themselves did not register
any activity on the docket following their October 2, 2014
Answer and New Matter. In consideration of the timeline
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provided above, [the Longstreets] clearly received ample time to
conduct any desired discovery.
Moreover, extensive discovery was conducted in this case
prior to the filing of [U.S. Bank’s] Motion. For instance, [the
Longstreets] responded to [U.S. Bank’s] Requests for Production
of Documents and Interrogatories, and [the Longstreets] were
additionally able to conduct multiple depositions during this time.
We further observe that additional discovery would not
have aided in the establishment of a genuine issue of material
fact. Based on the record in this case, [U.S. Bank] had already
demonstrated that it was the holder of the Note and Mortgage[,]
and provided documentation supporting its allegations that [the
Longstreets] were in default of their obligations under that
Mortgage. Coupled with [the Longstreets’] admissions, there
was no genuine issue of material fact that could have been
established through additional discovery.
Trial Court Opinion, 6/28/16, at 11-12.
Upon review, having already determined that the trial court properly
concluded that U.S. Bank is the holder of the Note, we agree with the trial
court’s conclusions. See id. We further observe that the Longstreets have
not explained how any additional discovery would aid them in establishing a
genuine issue of material fact. See Reeves v. Middletown Athletic Ass’n,
866 A.3d 1115, 1124 (Pa. Super. 2004) (stating that “[w]here ample time
for discovery has passed, the party seeking discovery (and opposing
summary judgment) is under an obligation to show that the information
sought was material to their case….”). Accordingly, the trial court did not
err or abuse its discretion in granting U.S. Bank’s Motion for Summary
Judgment.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/19/2017
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