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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LSF9 MASTER PARTICIPATION : IN THE SUPERIOR COURT OF
TRUST : PENNSYLVANIA
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v. :
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CHARLES MCGOWAN AND UNITED :
STATES OF AMERICA : No. 107 WDA 2018
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APPEAL OF: CHARLES MCGOWAN :
Appeal from the Order Entered December 20, 2017
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): MG-16-000709
BEFORE: OTT, J., MURRAY, J., and STEVENS, P.J.E.
MEMORANDUM BY OTT, J.: FILED MARCH 15, 2019
Charles McGowan appeals, pro se, from the order entered on December
20, 2017, in the Court of Common Pleas of Allegheny County. The court
granted LSF9 Master Participation Trust’s (“LSF9”) motion for summary
judgment against McGowan in a mortgage foreclosure action.1 On appeal,
McGowan argues the trial court erred in granting summary judgment because
(1) LSF9 did not properly serve the complaint; (2) LSF9 lacked standing
____________________________________________
Former Justice specially assigned to the Superior Court.
1 LSF9 named the United States of America as a defendant in this action
because of certain tax liens filed against McGowan. On June 22, 2017, the
trial court entered a consent order in favor of LSF9 and against the United
States for foreclosure of McGowan’s property. Thus, the United States is not
a party to this appeal.
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because the action was res judicata and because it did not possess McGowan’s
promissory note; (3) LSF9 did not prove McGowan defaulted on the mortgage;
(4) LSF9 did not send McGowan the proper notices of intent to foreclose; and
(5) LSF9 did not attach a notice of undisputed facts to its motion for summary
judgment.2 Based upon the following, we affirm.
The trial court set out the relevant facts and procedural history as
follows:
On March 30, 2006, [] Charles McGowan executed a Promissory
Note in which he promised to repay a mortgage loan extended by
Accredited Home Lenders, Inc. in the principal amount of
$171,000.00. At the same time, [] McGowan executed a
Mortgage granting Accredited Home Lenders a first priority
mortgage lien against the Property located at 540 New England
Road a/k/a 540 Lisa Drive, West Mifflin, PA 15122. The Mortgage
was recorded on April 10, 2006. By assignment of Mortgage dated
March 30, 2015, the Mortgage was assigned to [LSF9]. LSF9 is
the holder of the Mortgage. . . .
____________________________________________
2 McGowan raises a sixth issue in his statement of the questions involved.
See McGowan’s Brief, at 6. In it, McGowan alleges that LSF9 violated 15
U.S.C. § 1692g, relating to fair debt collection practices, because it filed the
mortgage foreclosure action despite knowing that the statute of limitations
had expired and that the action was res judicata. However, McGowan’s res
judicata claim is merely a reiteration of that argued in his second issue on
appeal, and he did not include the fair debt collection practice or the statute
of limitations claims in his Rule 1925(b) statement. As amended in 2007,
Pennsylvania Rule of Appellate Procedure 1925 provides that issues that are
not included in the Rule 1925(b) statement or raised in accordance with Rule
1925(b)(4) are waived. See Pa.R.A.P. 1925(b)(4)(vii); see also
Commonwealth v. Lord, 719 A.2d 306, 308 (Pa. 1998), superseded by rule
on other grounds as stated in Commonwealth v. Burton, 973 A.2d 428, 431
(Pa. Super. 2009). Thus, as McGowan’s sixth issue is both waived and
duplicative, we will not further discuss it.
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[] McGowan defaulted under the Mortgage by failing to make
payments due from December 1, 2009. On May [13], 2016, LSF9
filed its Complaint in Mortgage Foreclosure.
On November 7, 2016, [] McGowan filed Preliminary Objections.
[The trial court] overruled them on December 14, 2016. []
McGowan filed an Answer and New Matter on January 3, 2017.
LSF9 replied to the New Matter on February 7, 2017[,] and then
[] McGowan filed another Answer and New Matter on February 27,
2017. LSF9 filed a Motion for Summary Judgment on April 4,
2017. . . . [] McGowan filed a response to LSF9’s Motion for
Summary Judgment on April [2]8, 2017. [The trial c]ourt denied
LSF9’s Motion for Summary Judgment on June 26, 2017. LSF9
filed a Renewed Motion for Summary Judgment on September 22,
2017. [] McGowan responded to that Renewed Motion for
Summary Judgment on October 23, 2017. [The trial c]ourt
granted Summary Judgment on December [20], 2017, ordering in
rem Judgment to be entered in favor of LSF9 and against []
McGowan in the amount of $356,043.45 together with interest
from and after September 14, 2017. It was also ordered that LSF9
has the right to foreclose and sell the Property. It is from that
decision that [] McGowan appeals.
Trial Court Opinion, 3/22/2018, at 1-2. McGowan filed this timely appeal and
submitted a Pa.R.A.P. 1925(b) concise statement of matters complained of on
appeal.
On appeal, McGowan raises six issues in support of his contention that
the trial court erred in granting LSF9’s motion for summary judgment. See
McGowan’s Brief at 5-6. We have disposed of the sixth issue; we summarize
his arguments on the remaining issues as follows. The trial court erred in
granting summary judgment because LSF9 did not properly serve the
complaint. See id. At 9-11. The trial court did not have subject matter
jurisdiction over the action because LSF9 lacked standing to pursue the case
under the doctrine of res judicata and because it did not prove it had
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possession of McGowan’s promissory note. See id. at 12-23. The trial court
should not have granted summary judgment because LSF9 did not show that
McGowan defaulted on the mortgage. See id. at 24-35. The trial court
wrongly granted summary judgment because LSF9 did not send notice of
intent to foreclose as required by Pennsylvania law. See id. at 35-37. Lastly,
McGowan claims that LSF9 did not attach a statement of undisputed facts to
its motion for summary judgment as required by 25 Pa. Code §§
1021.94a(b)(1)(ii) and (d). See id. at 37-42.
Our standard of review is well-settled:
[o]ur 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.
Bayview Loan Servicing LLC v. Wicker, 163 A.3d 1039, 1043-44 (Pa.
Super. 2017), appeal granted in part by 178 A.3d 1289 (Pa. 2018) (citation
omitted). Moreover, “[i]n 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.” Bank of Am.,
N.A. v. Gibson, 102 A.3d 462, 464 (Pa. Super. 2014), appeal denied, 112
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A.3d 648 (Pa. 2015) (citation omitted). We have also stated, “[t]he 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.” Id. at 464-
465 (citation omitted). “This is so even if the mortgagors have not admitted
the total amount of the indebtedness in their pleadings.” Cunningham v.
McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998), appeal denied, 734
A.2d 861 (Pa. 1999).
Here, the trial court in its Rule 1925(a) opinion provided a thorough and
well-reasoned discussion of McGowan’s first four arguments on appeal.3 See
Trial Court Opinion, 3/22/2018, at 2-5 (finding (1) McGowan failed to provide
a material defense to this action; (2) the Sheriff personally served McGowan
with the complaint and there was no evidence of fraud; (3) LSF9 demonstrated
that it possessed the original note and was entitled to enforce it; (4) LSF9
____________________________________________
3 In his fifth argument on appeal, McGowan complains that the trial court erred
in granting summary judgment because LSF9 failed to comply with 25 Pa.
Code §§ 1021.94(b)(1)(ii) and (d). However, this section of the Pennsylvania
Code only applies to proceedings before the Pennsylvania Environmental
Hearing Board and is thus inapplicable to this action. See 25 Pa. Code
1021.1(a). To the extent that McGowan also maintains that LSF9 failed to
properly verify its motion for summary judgment, see McGowan’s brief at 39-
42, he has waived this issue because he did not raise it in his Rule 1925(b)
statement. See Lord, supra at 308.
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proved that McGowan was in default of the mortgage; (5) LSF9 did provide
McGowan with notice of its intent to foreclose as required by law;4 and (6) the
doctrine of res judicata does not bar this complaint because the trial court had
previously vacated the judgment in an earlier mortgage foreclosure action).
Our review of the record reveals ample support for the trial court’s
conclusions. Accordingly, we adopt the reasoning of the trial court and affirm
its order in favor of LSF9.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/15/2019
____________________________________________
4 We briefly note that, subsequent to the trial court’s writing of its opinion, the
Pennsylvania Supreme Court issued its decision in JPMC Bank, N.A. v.
Taggart, ___ A.3d ___, 2019 WL 692810 (Pa. Feb. 20, 2019). In Taggart,
our Supreme Court held that where there were two mortgage foreclosure
proceedings, the lender could not rely on a stale Act 6 notice issued in the
older proceeding but must send a new notice prior to initiating the second
action. Id. at *9. Here, our review of the record demonstrates that LSF9
sent out a new Act 6 notice in the fall of 2015, prior to filing the instant action
in the spring of 2016. Thus, this matter does not conflict with the holding in
Taggart.
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..
Circulated 03/11/2019 10:05 AM
IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
CIVIL DIVISION
CHARLES MCGOWAN, No. MG 16-000709
Appellant,
V.
LSF9 MASTER PARTICIPATION TRUST,
Appel lee.
OPINION
Honorable Joseph M. James
Copies Sent To:
Charles E. McGowan, Pro Se
Sarah K. Mccaffery, Esquire
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IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
CIVIL DIVISION
CHARLES MCGOWAN, No. MG 16-000709
Appellant,
V.
LSF9 MASTER PARTICIPATION TRUST,
Appellee.
OPINION
James, J. March 22, 2018
On March 30, 2006, Appellant Charles McGowan executed a Promissory Note in
which he promised to repay a mortgage loan extended by Accredited Home Lenders, Inc.
in the principal amount of $171,000.00. At the same time, Mr. McGowan executed a
Mortgage granting Accredited Home Lenders a first priority mortgage lien against the
Property located at 540 New England Road a/k/a 540 Lisa Drive, West Mifflin, PA 15122.
The Mortgage was recorded on April 10, 2006. By assignment of Mortgage dated March
30, 2015, the Mortgage was assigned to Appellee LSF9 Master Participation Trust
(LSF9). LSF9 is the holder of the Mortgage. The United States of America was named a
Defendant in this case because one or more federal tax liens were filed against Mr.
McGowan.
Mr. McGowan defaulted under the Mortgage by failing to make payments due from
December 1, 2009. On May 9, 2016, LSF9 filed its Complaint in Mortgage Foreclosure.
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I- On November 7, 2016, Mr. McGowan filed Preliminary Objections. Judge Timothy Patrick
O'Reilly overruled them on December 14, 2016. Mr. McGowan filed an Answer and New
Matter on January 3, 2017. LSF9 replied to the New Matter on February 7, 201 7 and then
Mr. McGowan filed another Answer and New Matter on February 27, 2017. LSF9 filed a
Motion for Summary Judgment on April 4, 2017. On June 22, -2017, Judge W. Terrence
O'Brien entered a Consent Order entering judgment in favor of LSF9 and against
Defendant United States of America for foreclosure of Mr. McGowan's property. Mr.
McGowan filed a response to LSF9's Motion for Summary Judgment on April 8, 2017.
This Court denied LSF9's Motion for Summary Judgment on June 26, 2017. LSF9 filed a
Renewed Motion for Summary Judgment on September 22, 2017. Mr. McGowan
responded to that Renewed Motion for Summary Judgment on October 23, 2017. This
Court granted Summary Judgment on December 19, 2017, ordering in rem Judgment to
be entered in favor of LSF9 and against Mr. McGowan in the amount of $356,043.45
together with interest from and after September 14, 2017. It was also ordered that LSF9
has the right to foreclose and sell the Property. It is from that decision that Mr. McGowan
appeals.
LSF9 alleges that it is entitled to Summary Judgment because there is no genuine
issue as to material fact in this case. LSF9 claims that Mr. McGowan defaulted on the
mortgage. Mr. McGowan filed an Answer but did not provide a material defense to the
mortgage foreclosure action. He did not contest the essential elements of LSF9's
Complaint.
Mr. McGowan admitted the existence of the Mortgage and the execution of the
Note knowing that he would be responsible for the payments. Summary judgment is
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appropriate when there are no genuine issues of material fact as to any necessary
element of the cause of action. Pa. R.C.P. 1035.2. A Motion for Summary Judgment may
I be granted if the pleadings, depositions, answers to interrogatories and admissions on
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filej show that there is no genuine issue as to any material fact, and that the moving party
lI is entitled to judgment as a matter of law. Myszkowski v. Penn Stroud Hotel, Inc., 634
A.2d 622, 625 (Pa. Super. 1993). In ruling on a motion for summary judgment, the facts
must be viewed in light most favorable to the non-movinq party. Ertel v. Patriot News,
Co., 674 A.2d 1038, 1041 (Pa. 1996). Pa.R.C.P. 1035.2(2) requires the party who
opposes the motion to provide the Court with 11
... evidence of facts essential to the ...
defense which, in a jury trial, would require the issues to be submitted to a jury."
Pa. R.C.P. 1035.3 states:
(a) the adverse party may not rest upon the mere allegations
or denials of the pleadings but must file a response within
thirty days after service of the motion identifying
(1) one or more issues of fact arising from evidence in the
record controverting the evidence cited in support of the
motion or from a challenge to the credibility of one or more
witnesses testifying in support of the motion, or
(2) evidence in the record establishing the facts essential to
the cause of action or defense which the motion cites as not
having been produced.
Mr. McGowan makes several assertions in his Statement of Errors Complained of
on Appeal. He claims that the Court lacked personal jurisdiction over him because he was
not served with the Complaint and the Sherriff's Return is fraudulent. LSF9 attached the
Sherriff's Return to the Complaint showing that Mr. McGowan was personally served on
May 19, 2016 and this Court found no evidence of fraud. He also claims that LSF9 does
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not have standing. LSF9 has established that it holds the original Note and is entitled to
enforce it against Mr. McGowan. A copy of the Note, endorsed in blank is attached to the
pleadings. Pennsylvania has adopted a version of the Uniform Commercial Code ("the
UCC") which pertains to negotiable instruments and promissory notes. Section 3301
states that, "a person entitled to enforce" an instrument is "the holder of the instrument".
A "holder" is "the person in possession of the instrument is payable to the bearer or, in
the case of an instrument payable to an identified person, if the identified person is in
possession." Mr. McGowan's Note meets all of the requirements of a negotiable
instrument under 13 Pa. C.S.A Section 3104. "A promissory note accompanied by a
mortgage is a negotiable instrument." See JP Morgan Chase Bank, N.A. v. Murray, 63
A.3d 1258, 1264 (Pa. Super. 2013). Enforcement is proper even if questions remain as
to the chain of possession. Id. at 1266. Mr. McGowan has not demonstrated any potential
injury as a result of LSF9 enforcing the Note. "Challenges to the chain of possession by
which Appellee came to hold the Note [are) immaterial to its enforceability by Appellee."
Id. LSF9 is a holder in possession of the original bearer instrument executed by Mr.
McGowan and therefore is entitled to enforce it. It is well-established that a "person
entitled to enforce" a note is not synonymous with the owner or investor of the note.
Furthermore, a change in the owner or investor on a note does not necessarily bring about
a change in the identity- of a person entitled to enforce the note. See Official Comment 1
to UCC Section 13 Pa. C.S. Section 3203. Mr. McGowan also alleges that LSF9 offered
no evidence of default. However, LSF9's Affidavit and the payment history of Mr.
McGowan's mortgage loan account both indicate that his mortgage loan is due for
December 1, 2009. Mr. McGowan also claims that LSF9 did not provide him with Notices
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of Intention to Foreclose and notices pursuant to the Homeowner's Emergency Mortgage
Assistance Act. However, the evidence shows that LSF9 sent those notices to Mr.
McGowan via regular mail postage prepaid and certified mail return receipt requested.
He also claims that because this Court entered judgment against him in a prior case with
identical issues docketed at GD 12-022001, that the Complaint is barred by Res Judicata
and Collateral Estoppal. In that case, judgment was entered against him but the case was
settled and discontinued and JMPC Specialty Mortgage filed a Praecipe to Vacate the
Judgment on September 8, 2014. Therefore, the Note and Mortgage still exist and Res
Judicata and Collateral Estoppal do not apply.
Based upon the foregoing, the Court has determined that no genuine issues of
material fact exist between the parties. LSF9 has produced evidence that Mr. McGowan
is in default and the amounts due and owing are a result of said default. Summary
judgment is appropriate.
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