J-A16024-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LOWELL FUNDING GROUP, LLC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
WADE MOORE : No. 1931 EDA 2017
Appeal from the Judgment Entered July 17, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 151202974
BEFORE: BENDER, P.J.E., LAZARUS, J., and FORD ELLIOTT, P.J.E.
MEMORANDUM BY LAZARUS, J.: FILED AUGUST 30, 2018
Lowell Funding Group, LLC, appeals from the judgment, entered in the
Court of Common Pleas of Philadelphia County, after the trial court dismissed
its quiet title action seeking to strike a mortgage satisfaction piece. After
careful review of the record, we vacate and remand for further proceedings.
On April 12, 2006, Wade Moore borrowed $20,000.00 from Chase Bank,
USA, N.A. (“Chase”). The loan was evidenced by a note and was secured by
a mortgage, also dated April 12, 2006. On April 2, 2007, Chase assigned the
mortgage to JPMorgan Chase Bank, N.A. (“JPMorgan Chase”). On January 24,
2008, JPMorgan Chase assigned the mortgage to B&B Funding, LLC (“B&B”).
On January 25, 2008, B&B assigned the mortgage to Lowell.
Moore made payments on the mortgage, to Lowell, from February 4,
2008, through May 23, 2014. On October 23, 2013, more than five years
after it assigned away its interest in the loan, JPMorgan Chase filed a
J-A16024-18
satisfaction of mortgage. It is not disputed that Moore did not complete his
payment obligations under the mortgage before the note was satisfied and,
indeed, continued to make payments for seven months after the date of the
satisfaction. On January 26, 2015, Moore entered into a reverse mortgage
with Net Equity Financial, Inc., with Mortgage Electronic Registration Systems,
Inc. (hereafter “MERS”) as nominee.
On December 23, 2015, Lowell filed a quiet title action seeking to strike
the mortgage satisfaction piece filed by JPMorgan Chase on October 23, 2013,
claiming it was filed in error and that Lowell, not JPMorgan Chase, was the
actual holder of the note. Moore filed preliminary objections on May 16, 2016,
requesting MERS and JPMorgan Chase be joined as indispensable parties. On
July 6, 2016 the trial court overruled Moore’s preliminary objections and
ordered him to file an answer. Ultimately, a bench trial was held before the
Honorable John M. Younge, who denied Lowell relief, concluding that: (1)
Lowell failed to join JPMorgan Chase as a necessary party; (2) Lowell did not
prove that it had the right to enforce the note; and (3) Lowell did not prove
that JPMorgan Chase did not have the right to enforce the note.
On May 8, 2017, Lowell filed a motion for post-trial relief, which was
denied on May 24, 2017. On June 12, 2017, Lowell filed a notice of appeal.
However, because no judgment had been entered on the trial court docket as
required by Pa.R.A.P. 301, this Court issued an order directing Lowell to
praecipe the trial court Prothonotary to enter judgment. A judgment in favor
-2-
J-A16024-18
of Moore was entered on July 17, 2017, and the appeal now proceeds. Lowell
raises the following questions for our review:
1. Whether or not the [trial court] erred in its verdict for the
Defendant Wade Moore and in its Findings of Fact and Conclusions
of Law?
2. Whether or not the [trial court] erred in its conclusion that the
[s]atisfaction of [m]ortgage issued by JPMorgan Chase Bank, NA
("JPMorgan") was valid, even though it was issued after JPMorgan
assigned its rights in the [m]ortgage of record[?]
3. Whether or not the [trial court] erred in its conclusion that the
[s]atisfaction of [m]ortgage issued by JPMorgan was valid, even
though the unrefuted testimony of a witness of JPMorgan was that
the said [s]atisfaction was filed due to an inadvertent mistake[?]
4. Whether or not the [trial court] erred in refusing to strike the
[s]atisfaction of [m]ortgage filed of record by JPMorgan where
Wade Moore admitted to owing the balance of the loan and that
the said loan was not paid off[?]
5. Whether or not the [s]atisfaction of the subject [m]ortgage by
JPMorgan, executed and recorded after JPMorgan assigned away
its interest in the [m]ortgage, was legally ineffective and invalid[?]
6. Whether or not the [trial court] erred in its conclusion that
Plaintiff Lowell Funding, LLC [does not have] standing to bring a
[q]uiet [t]itle [a]ction with respect to the subject [m]ortgage
which both parties stipulated was assigned to Lowell Funding,
LLC[?]
Brief of Appellant, at 4-5.
We begin by noting our standard of review of nonjury verdict:
Our appellate role in cases arising from nonjury 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
-3-
J-A16024-18
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.
Allegheny Energy Supply Co., LLC v. Wolf Run Min. Co., 53 A.3d 53, 60-
61 (Pa. Super. 2012) (citation omitted).
Although Lowell presents multiple issues for our review, the crux of this
appeal is whether the trial court’s finding that Lowell did not have the authority
to enforce the mortgage is supported by the record. In concluding that Lowell
did not have authority to enforce the note, the court found that Lowell “did
not establish a clear chain of title for the mortgage.” Findings of Fact and
Conclusions of Law, 4/24/17, at ¶ 25. The trial court based this conclusion on
the fact that there was no record evidence of the transfer of the mortgage
from the original mortgage holder, Chase, to JPMorgan Chase. The court also
found that, because the allonge1 accompanying the assignment of the note
from B&B to Lowell is undated, there is insufficient proof that Lowell had the
right to enforce the mortgage on the date JPMorgan Chase filed its satisfaction.
Finally, the court found there was sufficient evidence to prove JPMorgan did
not have the right to enforce the note on the date the satisfaction was filed.
____________________________________________
1 An allonge is “[a] slip of paper sometimes attached to a negotiable
instrument for the purpose of receiving further indorsements when the original
paper is filled with indorsements.” JPMorgan Chase Bank, N.A. v. Murray,
63 A.3d 1258, 1259 (Pa. Super. 2013), quoting Black’s Law Dictionary 76
(Deluxe 7th ed.).
-4-
J-A16024-18
Upon review, we conclude that the trial court’s findings are in error and not
supported in the record.
[A s]atisfaction of a mortgage, while prima facie evidence of
payment, is not conclusive and can be tested in a hearing
notwithstanding the fact that the record was marked satisfied. St.
Clement’s Building & Loan Ass’n v. McCann, [] 190 A. 393,
394 ([Pa. Super.] 1937). Equity affords relief where an
encumbrance has been discharged through a mistake. Id. As we
stated in St. Clement’s:
The record is not necessarily conclusive upon the parties as
there is nothing so sacrosanct about the satisfaction of a
mortgage that stops the truth from being shown. All that is
incumbent upon the part of this plaintiff to attain the relief
it seeks is to prove that the defendants were not entitled to
have the mortgage satisfied[.] On the same principle, a
release or satisfaction entered by accident or inadvertence,
as where it is made to apply to the wrong mortgage, or by
a mistake as to an essential fact, so that it is not in
accordance with the real intention of the party, may be set
aside and the mortgage reinstated, except as the rights of
third persons may prevent.
[Id.] at 394. This principle applies even where the exact nature
of the mistake is not disclosed. Id.
All. Funding Co. v. Stahl, 829 A.2d 1179, 1181 (Pa. Super. 2003).
Additionally, it is well-settled that a note is a negotiable instrument
under the Pennsylvania Uniform Commercial Code2 and that the holder of the
note has the power to enforce the note. See JPMorgan Chase Bank, N.A.
v. Murray, 63 A.3d 1258, 1266 (Pa. Super. 2013). Thus, challenges to the
chain of possession of a note are “immaterial to its enforceability.” See id.
Moreover, an allonge need not be dated in order to be valid and enforceable.
____________________________________________
2 13 Pa.C.S.A. §§ 1101-9809.
-5-
J-A16024-18
See Bank of America, N.A. v. Gibson, 102 A.3d 462, 466 (Pa. Super. 2014)
(note’s lack of date did not affect enforceability); see also 13 Pa.C.S.A. §
3113 (“If an instrument is undated, its date is the date of its issue or, in the
case of an unissued instrument, the date it first comes into possession of a
holder.”). Finally, a history of payments may be persuasive evidence of who
possesses the note. Cf. Gibson, supra at 466 (history of payments
persuasive in determining mortgagee had authority to enforce mortgage).
Here, Lowell presented the original note at trial. While the allonge
transferring the note from B&B to Lowell was undated, the assignment from
B&B to Lowell was dated January 25, 2008, more than five years before the
mortgage satisfaction was filed. Moreover, it is undisputed that Moore made
regular payments on the note to Lowell from February 4, 2008 through May
23, 2014, a time span which encompasses October 23, 2013, the date on
which the satisfaction piece was filed. Only after Lowell sought to strike the
satisfaction did Moore contend that Lowell was operating under an improperly
transferred mortgage.
Additionally, Albert Smith, Jr., a corporate representative of JPMorgan
Chase, testified at trial that JPMorgan Chase sold the loan, and all of its
interest therein, in 2008, and it never reacquired any interest in the loan
thereafter. See N.T. Trial, 3/20/17, at 75-76. Smith testified that the
mortgage satisfaction was filed in error and that JPMorgan Chase had no
interest in the loan at the time the satisfaction was filed.
-6-
J-A16024-18
In light of the foregoing, even viewed in a light most favorable to Moore
as verdict winner, we conclude that the findings of the trial court are not
supported by the evidence presented at trial that Lowell possessed the note
at the time the satisfaction was filed and that JPMorgan Chase had no interest
in the loan when it erroneously filed the mortgage satisfaction. Furthermore,
the trial court committed an error of law by finding that Lowell did not have
standing because it failed to establish a clear chain of title for the mortgage.3
As stated above, the noteholder has the power of enforcement, and the
evidence established that Lowell held the note at the time JPMorgan filed its
mortgage satisfaction.
The trial court also concluded that JPMorgan Chase was an indispensable
party to the action and that Lowell’s failure to join it was fatal to its claim. We
disagree.
[A] party is indispensable “when his or her rights are so connected
with the claims of the litigants that no decree can be made without
impairing those rights.” City of Phila. v. Commonwealth, []
838 A.2d 566, 581 ([Pa.]2003), quoting Sprague v. Casey, []
550 A.2d 184, 189 ([Pa.]1988). “If no redress is sought against
____________________________________________
3 We note that the trial court’s conclusions of law are internally contradictory.
Specifically, the court concluded that there was no evidence of an assignment
of the mortgage and accompanying note from Chase to JPMorgan Chase. In
the court’s view, this fact was determinative of Lowell’s inability to establish a
clear chain of title from Chase to itself, thus depriving Lowell of standing to
bring the action to enforce its right in the mortgage and note. However,
assuming, arguendo, that Chase did not transfer the loan to JPMorgan Chase,
then it follows that JPMorgan Chase never controlled the mortgage and,
therefore, never had the authority to satisfy the mortgage. However, as noted
above, it is not chain of title, but possession, which confers authority to
enforce the note. Murray, supra.
-7-
J-A16024-18
a party, and its rights would not be prejudiced by any decision in
the case, it is not indispensable with respect to the litigation.”
Grimme Combustion, Inc. v. Mergentime Corp., [] 595 A.2d
77, 81 ([Pa. Super.] 1991), citing Sprague, supra.
Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super. 2015). All parties
claiming title to the property are considered indispensable in a quiet title
action. Id.
Here, JPMorgan Chase does not claim an interest in the property at
issue. Corporate representative Smith specifically testified that the bank did
not have an interest in the property at the time it filed the mortgage
satisfaction, and that the satisfaction was filed in error. Smith further testified
that JPMorgan Chase has not had an interest in the property since it assigned
its interest in the loan to B&B Funding in January 2008. Lowell seeks no
redress against JPMorgan, and JPMorgan does not challenge Lowell’s efforts
to strike the satisfaction. Indeed, Smith testified at trial that JPMorgan sought
to assist in correcting its mistake:
Q: Mr. Smith, were there any attempts made by JPMorgan to
undo the satisfaction of the mortgage dissatisfaction [sic] piece?
A: Well, normally we would res[cind] the transaction. It is my
understanding that in this particular case, there has to be a court
order to do that. We had – we completed an affidavit testifying
to the fact that we didn’t have any interest in the property, but
we’re here today in an effort to undo what was done in error.
N.T. Trial, 3/20/17, at 76-77 (emphasis added).
Based on the foregoing it is readily apparent that JPMorgan is not an
indispensable party to this action and the trial court erred in so concluding.
-8-
J-A16024-18
However, our inquiry does not end here. Because it concluded that
Lowell was not entitled to strike the mortgage satisfaction, the trial court did
not reach a determination setting the priority status of the liens on the Moore
property. While we conclude that sufficient evidence exists to reverse the trial
court’s denial of Lowell’s application to strike the mortgage satisfaction piece,
we are unable address whether the right of MERS, as current first-position lien
holder, prevails. Accordingly, we remand for proceedings, in which MERS is
joined as an indispensable party, to establish the existence of any and all liens
and then to set the priority status of the liens on the Moore property. See
Stahl, supra (satisfaction entered by accident or inadvertence may be set
aside and mortgage reinstated, except as rights of third persons may
prevent).
Judgment vacated; case remanded for proceedings consistent with the
dictates of this memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/30/18
-9-