J-S77032-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
THE BANK OF NEW YORK MELLON : IN THE SUPERIOR COURT OF
F/K/A THE BANK OF NEW YORK, AS : PENNSYLVANIA
TRUSTEE FOR THE :
CERTIFICATEHOLDERS OF THE :
CWABS, INC., ASSET-BACKED :
CERTIFICATES SERIES 2004-12 :
:
:
v. : No. 731 MDA 2017
:
:
JEFFREY L. GOSS :
:
Appellant :
Appeal from the Order Entered April 3, 2017
In the Court of Common Pleas of Centre County Civil Division at No(s):
15-4484
BEFORE: BENDER, P.J.E., LAZARUS, J., and STEVENS*, P.J.E.
MEMORANDUM BY STEVENS, P.J.E.: FILED DECEMBER 01, 2017
Appellant Jeffrey L. Goss appeals from the Order entered in the Court of
Common Pleas of Centre County on April 3, 2017, granting the Motion for
Summary Judgment filed by Appellee, The Bank of New York Mellon. We
affirm.
On November 17, 2015, Appellee, the mortgagee by assignment, filed
a Complaint in Mortgage Foreclosure pertaining to the mortgaged property
located at 373 Tow Hill Road in Port Matilda, PA. The mortgage secured the
indebtedness of a Note Appellant had executed on October 11, 2004, in the
original principal amount of $160,000 payable in monthly installments with an
interest rate of 6.5%. See Civil Action Mortgage Foreclosure, filed 11/17/15,
____________________________________
* Former Justice specially assigned to the Superior Court.
J-S77032-17
at ¶ 4-5. The mortgage fell into default due to Appellant’s failure to make
monthly payments as of September 24, 2015. As a result, Appellee sought a
monetary judgment in the amount of $93,338.58 on the loan. Id. at ¶ 7.1
The Complaint was served upon Appellant on December 4, 2015, and
he filed an Answer with New Matter thereto on December 22, 2015. Appellee
filed its Reply to New Matter on January 11, 2016. Shortly thereafter, on
January 17, 2017, Appellee filed a Motion for Summary Judgment along with
a Memorandum of Law in support thereof. The next day, Appellee filed its
Motion to Strike Jury Demand. Appellant filed his Memorandum in Opposition
to Appellee’s Motion for Summary Judgment and his Memorandum in
Opposition to Appellee’s Motion to Strike Jury Demand on February 28, 2017.
The trial court held a hearing on Appellee’s summary judgment motion
on March 15, 2017. On April 3, 2017, the trial court issued an Opinion and
Order and granted Appellee’s motion for summary judgment. Therein, the
trial court observed Appellee established Appellant had executed and
defaulted on the Note and Mortgage. The court also deemed Appellant to have
admitted all the allegations Appellee had set forth in the Complaint in
Mortgage Foreclosure because he had set forth only general denials to
Appellee’s averments in his Answer thereto. Specifically, the trial court
concluded:
The amalgamation of [Appellant’s] express admissions and
general denials, which constitute admissions, results in the
____________________________________________
1 This amount included a principal balance of 73,177.42, interest to date,
accumulated late charges and fees, escrow balance, and property taxes.
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absence of any questions of material fact in this case. [Appellant]
has admitted to being mortgagor of the Property at issue (Answer
¶¶ 3,5,6), [Appellant’s] general denial of default acts as an
admission of the same (Answer ¶ 7), [Appellant’s] general denials
containing the response that the documents referenced in the
Complaint speak for themselves act as admissions to the validity
of such documents (Answer ¶¶3,4,8), and [Appellant’s] general
denial regarding the amount due on the Mortgage acts as an
admission of the alleged amount (Answer ¶7, 8).
Trial Court Opinion and Order, filed 4/3/17, at 5.
Appellant filed a timely appeal on May 1, 2017, and both Appellant and
the trial court have complied with Pa.R.A.P. 1925. In its Opinion issued
pursuant to Rule 1925(a), the trial court relied upon the reasoning it had set
forth in its Opinion and Order of April 3, 2017, and when considering the issues
Appellant raised on appeal held:
For the first issue, [Appellant] claimed the notice was
defective under 35 P.S. §1680.403c(b)(1). Notice under 35 P.S.
§1680.403c(b)(1) is to instruct the mortgagor of different means
he may use to resolve his arrearages in order to avoid foreclosure
on his property and gives him a timetable in which such means
must be accomplished. Wells Fargo Bank, NA., v. Monroe, 966
a.2d 1140, 1142 (Pa. Super. 2009). If an Act 91 notice is given
and it is defective, the mortgagors must show prejudice. Id. at
1143. The Superior court has previously found when a defective
notice is given and mortgagors still avail themselves of the
opportunity to pursue mortgage assistance, then the issue of
defective notice is without merit. Id. at 1143-1144. In the present
case [Appellant] applied for Homeowner's Emergency Mortgage
Assistance under the notice. [Appellee] also reviewed
[Appellant’s] circumstances for foreclosure alternatives including
a loan modification and/or forbearance. [Appellant] did not suffer
prejudice due to the slight defects of the notice and so there was
no merit to this issue.
For the second issue, [Appellant] claimed there was a
novation made between the parties. As [Appellant] stated in his
memorandum in opposition, proof of a novation should be clear
and the party seeking to establish a release must introduce some
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evidence of mutual assent to the purported novation. See,
Buttonwood Farms, Inc. v. Carson, 478 A.2d 484, 486 (Pa. Super
1984); First Pennsylvania Bank, N.A. v. Triester, 380 A.2d 826
(Pa. 1977). Statements by [Appellant] alone without evidence of
mutual assent are not enough to establish a novation was created.
Since the non-moving party had the burden of proof and failed to
adduce sufficient evidence on this issue, it established that the
moving party was entitled to judgment as a matter of law.
Trial Court Opinion, 6/7/17, at 2-3.
Appellant presents two issues for this Court’s review:
I. Whether the trial court committed an error of law or abused
its discretion in granting Appellee’s motion for summary judgment
in that the Act 6/Act 91 notice that was sent to Appellant failed to
comply with the dictates of 35 P.S. § 1680.403c(b)(1) and as
prescribed by the Pennsylvania Bulletin in several instances
including by adding a notice pursuant to the Fair Debt Collection
Practices Act, which additional language would be confusing to the
least sophisticated consumer since this document was provided in
contemplation of an in rem proceeding?
II. Whether the trial court committed an error of law or abused
its discretion in granting Appellee’s motion for summary judgment
since there was a genuine issue of material fact regarding a
novation agreement/settlement agreement that the parties had
previously reached that prevented summary judgment from being
granted, which facts were not considered by the trial court?
Brief for Appellant at 5 (unnecessary capitalization omitted).
In considering Appellant’s challenges to the trial court's order granting
Appellee’s motion for summary judgment, we employ a well-settled scope and
standard of review. “The trial court's entry of summary judgment presents a
question of law, and therefore our standard of review is de novo and our scope
of review is plenary.” Branton v. Nicholas Meat, LLC, 159 A.3d 540, 545
(Pa.Super. 2017) (citation omitted). “A motion for summary judgment is
based on an evidentiary record that entitles the moving party to a judgment
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as a matter of law.” Yenchi v. Ameriprise Financial, Inc., ___ Pa. ____,
____, 161 A.3d 811, 818 (2017) (citation omitted), reargument denied, May
31, 2017. “In considering a motion for summary judgment, a court views the
evidence 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.” Green v. Pennsylvania Prop. & Cas. Ins. Guar. Ass'n,
158 A.3d 653, 658 (Pa.Super. 2017) (citation omitted). “When the facts are
so clear that reasonable minds cannot differ, a trial court may properly enter
summary judgment.” Brown v. Everett Cash Mut. Ins. Co., 157 A.3d 958,
962 (Pa.Super. 2017) (citation omitted).
We first observe that the trial court granted Appellee’s motion for
summary judgment, in part, on the basis that Appellant’s express admissions
and general denials regarding the mortgage being in default were deemed to
be admissions. In a foreclosure action, “[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 Am., N.A. v. Gibson, 102 A.3d 462, 465
(Pa.Super. 2014) (citation omitted), appeal denied, 631 Pa. 722, 112 A.3d
648. Further, responsive pleadings in a mortgage foreclosure action must
contain specific denials as general denials constitute admissions. Id. at 466–
67; Pa. R.C.P. 1029(b).
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Viewing the record in a light most favorable to Appellant, we observe
that Appellant either admitted the allegations in the complaint or issued
general denials thereto. As the trial court stated, it is well-settled that general
denials and improper claims of lack of knowledge in an answer to a complaint
in a mortgage foreclosure action constitute admissions. Bank of America,
N.A. v. Gibson, 102 A.3d 462, 466–67 (Pa.Super. 2014), appeal denied, 631
Pa. 722, 102 A.3d 462 (2015); see also Pa.R.C.P. No. 1029(b). For example,
general denials by a mortgagor that he is without sufficient information as to
form a belief with respect to the amount of principal and interest due and
owing constitutes an admission of the amounts. Id. Therefore, there is no
dispute regarding the material facts at issue, and we could find the trial court
did not err when it granted summary judgment for this reason alone.
Notwithstanding, upon further review, we find the issues Appellant presents
for this Court’s consideration do not entitle him to relief.
Appellant first argues Appellee did not comply with the notice
requirements of Act 91, and specifically with the dictates of 35 P.S. §
1680.403(b)(1).2 Appellant avers Appellee “unlawfully inserted a ‘Notice
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2 This provision reads as follows:
(b)(1) The agency shall prepare a notice which shall include all the
information required by this subsection and by section 4031 of the
act of January 30, 1974 (P.L. 13, No. 6), referred to as the Loan
Interest and Protection Law and referred to commonly as the
Usury Law. This notice shall be in plain language and specifically
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Pursuant To The Fair Debt Collection Practices Act’ within this document,”
although an action in mortgage foreclosure is an in rem proceeding the
purpose of which is to effect a judicial sale of the mortgaged property, not a
debt collection action. Brief for Appellant at 19. Appellant states that the Fair
Debt Collection Practices Act has no applicability to the within action as it
would not result in a judgment for money damages and concludes that the
“inclusion of the ‘Notice Pursuant to the Fair Debt Collection Practices Act’ was
prejudicial and should have resulted in the Motion for Summary Judgment
being denied by the [t]rial [c]ourt.” Id. at 22.
____________________________________________
state that the recipient of the notice may qualify for financial
assistance under the Homeowner's Emergency Mortgage
Assistance Program. This notice shall contain the telephone
number and the address of a local consumer credit counseling
agency. This notice shall be in lieu of any other notice required by
law. This notice shall also advise the mortgagor of his delinquency
or other default under the mortgage, including an itemized
breakdown of the total amount past due, and that such mortgagor
has thirty (30) days, plus three (3) days for mailing, to have a
face-to-face meeting with a consumer credit counseling agency to
attempt to resolve the delinquency or default by restructuring the
loan payment schedule or otherwise. The mortgagee or other
person sending the notice to the mortgagor shall simultaneously
send a copy of each notice issued to the agency by regular mail,
facsimile, electronic mail or another means of electronic transfer
in accordance with agency guidelines. In lieu of sending a copy of
each notice, the mortgagee or other person charged with sending
the notice may provide the agency, within thirty (30) days of the
end of each calendar quarter, a report listing the notices sent
during the prior calendar quarter arranged by property address
including zip code.
35 Pa.C.S.A. § 1680.403c(b)(1).
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Appellant further reasons that by “intertwining two distinct types of
causes of actions, the Act 6/Act 91 Notice at issue [ ] constitutes a ‘threat to
take legal action that cannot legally be taken of that is not intended to be
taken.’ 73 P.S. § 2270.4(5)(v); Accord, 15 U.S.C. § 1692(d)(B0(2)[]” and an
“unfair or deceptive debt collection act or practice.” Id. at 24-25. Appellant
also posits that “[i]t would be confusing, coercive, and wasteful to have a
Debtor such as Appellant, [] place any focus on trying to preserve his other
remaining assets by defending against a debt claim instead of trying to avoid
foreclosure by refinancing or through some other means as happened in this
case.” Id. at 26.
“‘The purpose of an Act 91 notice is to instruct the mortgagor of different
means he may use to resolve his arrearages in order to avoid foreclosure on
his property and also gives him a timetable in which such means must be
accomplished. 35 P.S. § 1680.403c.’” Wells Fargo Bank, N.A. v. Monroe,
966 A.2d 1140, 1142 (Pa.Super. 2009) (citation omitted). Though not
dispositive herein, in Beneficial Consumer Discount Co. v. Vukman, 621
Pa. 192, 77 A.3d 547 (2013), the Pennsylvania Supreme Court held that the
provision of a defective Act 91 notice does not deprive a court of subject
matter jurisdiction, and in doing so reasoned as follows:
[The a]ppellee's entire argument relies on her incorrect
assumption that the Legislature has required the cause of action
in foreclosure to include a mortgagee's compliance with Act 91's
requirements. A cause of action is “a factual situation that entitles
one person to obtain a remedy in court from another person.”
Black's Law Dictionary 235 (8th ed. 2004). In foreclosure, this
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factual situation includes a mortgagor's default on a duly executed
mortgage. See Pa.R.C.P. 1147(a) (itemizing factual averments
required in mortgage foreclosure complaint). The cause of action
does not include the procedural requirements of acting on that
cause of action.
Id. at 201-02, 77 A.3d at 552-53.
The Act 91 notice provided to Appellant is introduced with a heading
indicated to be in at least thirty-point type which reads: “ACT 91 NOTICE TAKE
ACTION TO SAVE YOUR HOME FROM FORECLOSURE.” The body of the Notice
is comprised of six pages, the last of which is titled NOTICE PURSUANT TO
FAIR DEBT COLLECTION PRACTICES ACT and appears to be in ten-point type.
While Appellant states this Notice as a whole, hypothetically, “would be
confusing,” and even assuming, arguendo, that it is defective, Appellant failed
to show that it was, in fact, perplexing and prejudicial to him. See Wells
Fargo Bank, N.A., v. Monroe, supra (stating if an Act 91 notice is
determined to be defective, a mortgagor is not entitled to a presumption of
prejudice).
To the contrary, the record reveals Appellant was aware of the
opportunity to apply for mortgage assistance through the Pennsylvania’s
Homeowners’ Emergency Mortgage Assistance Program. Indeed, Appellant
applied for mortgage assistance, although his application was denied on
September 9, 2015. See “Exhibit F” to Plaintiff’s Motion for Summary
Judgment Against Defendants [sic]. In addition, Appellee reviewed with
Appellant his opportunities for alternatives to foreclosure as is evident in a
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letter addressed to Appellant from Green Tree Servicing, LLC, dated February
5, 2015, wherein the loss mitigation application Appellant had submitted was
referenced. See id “Exhibit G.” Accordingly, we agree with the trial court’s
conclusion that Appellant’s first issue is without merit.
In his second issue, Appellant argues that in light of the pleadings and
Appellant’s Affidavit attached to his Answer with New Matter to Appellee’s
Complaint in Mortgage Foreclosure, a genuine issue of material fact exists as
to “whether the parties had negotiated a valid Novation
Agreement/Settlement Agreement after he received the imperfect and
unlawful Act 6/Act 91 Notice.” Brief for Appellant at 28. Appellant explains
he assumed certain conversations he had had with Ms. Renee C. Lembke of
Ditech Financial, LLC, concerning an agreement to avoid foreclosure were
being recorded and maintains that:
If accepted as true by the fact finder, then Appellant[‘s] []
testimony about the compromise agreement that he reached with
Renee C. Lembke on November 6, 2015 and November 9, 2015
should have precluded the Motion for Summary Judgment from
being grated. For certain, based on the record that is before this
Court, the factfinder could find that a valid Settlement
Agreement/Novation was reached. Plain and simple, “the
credibility of the testimony is still a matter for the [factfinder],”
DeArmitt v. New York Life Ins, Co., 2013 PA Super 161, 73 A.3d
578, 595 (2013).
Id. at 30.
Initially, we note that because Appellant raises for the first time before
this Court a defense he did not present to the trial court, we deem this
argument to be waived See Pa.R.C.P. 1030(a) (discussing contents of New
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Matter); see also Commonwealth v. Baez, 169 A.3d 35, 41 (Pa.Super.
2017) (stating a defendant waived position that there was an affirmative
defense to crime by failing to raise it before trial court and that in light of
Pa.R.A.P. 302(a) which provides that “[i]ssues not raised in the lower court
are waived and cannot be raised for the first time on appeal” he was barred
from raising a new and different theory of relief for the first time on appeal).
Since Appellant never specifically asserted before the trial court that he and
Appellee had entered into an oral settlement/novation agreement, and his
representations in his New Matter contradict such a claim, it may not be
advanced now as grounds for reversal of the decision in question. See Baez,
supra.
Even had Appellant properly preserved this issue, in Buttonwood
Farms, Inc. v. Carson, 478 A.2d 484 (Pa.Super. 1984) this Court explained
that a novation, or a substituted agreement, supplants an earlier contract and
set forth the evidence one must produce to show a novation had been entered
into as follows:
The required essentials of a novation are the displacement
and extinction of a valid contract, the substitution for it of a valid
new contract, a sufficient legal consideration for the new contract,
and the consent of the parties. The party asserting a novation or
substituted contract has the burden of proving that the parties
intended to discharge the earlier contract. Such intention of the
parties to effect a novation or substituted contract may be shown
by other writings, or by words, or by conduct or by all three.
Id. at 486-87 (italics, citations and quotation marks omitted). “A party
seeking to establish that a renewal note was intended to discharge and
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substitute for an earlier note must overcome the presumption that the original
note is valid by introducing some evidence of mutual assent to the purported
novation; in the absence of such proof, no jury question exists.” First
Pennsylvania Bank, N.A. v. Triester, 380 A.2d 826, 831 (Pa.Super. 1977).
Despite Appellant’s representations to this Court, the record contains no
testimony of Appellant either in the form of a properly executed affidavit,
deposition, or statements at the hearing held on March 15, 2017, regarding
Appellee’s Motion for Summary Judgment that he and Appellee had entered
into a “settlement agreement/novation agreement.” Moreover, there is no
record evidence that any repayment agreement into which Appellant and
Appellee may have entered was intended to release Appellant from making
the contractual payments on his original mortgage obligation. To the contrary,
in his New Matter Appellant admitted he owed escrow payments of nearly
thirty-thousand dollars and represented that he was in a position to pay them
on November 9, 2015:
25. On or about November 6, 2015, Renee C. Lembke,
who is a supervisor in the debt collation department, at Ditech
Financial, LLC, which is located in Greensboro North Carolina and
which is the company who services the subject loan for [Appellee]
and its predecessors and its agents admitted to [Appellant] that
the escrow payments that are discussed in paragraph 15 above
were made in error, that we have charged you for real estate taxes
that were not paid by us, that the escrow amount being claimed
was incorrect, and that she would inform [Appellant] of the correct
reinstatement amount at 3:00 p.m. on or about November 9,
2015, but this did not occur at that time.
26. On or about November 6, 2015, Renee C. Lembke also
proposed allowing [Appellant] to repay the escrow shortage in
monthly installments over a sixty (60 mo.) month period as
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delineated in Exhibit “A”, which is referred to as the Escrow
Account Disclosure Statement and whose contents are
incorporated herein by reference as though set forth at length.
27. If Renee C. Lembke would have permitted [Appellant]
to proceed in accordance with the schedule for escrow payments
that is detailed in Exhibit “A” on November 9, 2015, the arrearage
from August, 2014 through December, 2015 would have only
been approximately Twenty-Eight Thousand Seven Hundred
Forty-Three ($28, 743.29) and 29/100 Dollars, and [Appellant]
was in a position to pay this sum in full on that date.
28. Instead, [Appellant] was not provided with a
reinstatement amount by [Appellee] and/or its predecessors and
its agents until November 23, 2015 when it was claimed that
foreclosure costs and counsel fees costs would total Thirty-Five
Thousand Nine Hundred Forty-Four ($35,944.56) and 56/100
Dollars, which demand failed to consider the contents of the
Escrow Account Disclosure Statement, to which Appellant had
agreed to pay See Exhibit “B”.
See [Appellant’s] Answer with New Matter to [Appellee’s] Complaint at ¶¶ 25-
28.
Accordingly, we find Appellant failed to raise any material issues of fact
or law that would refute the averments in the Complaint in Mortgage
Foreclosure, and Appellee established therein a prima facie case to institute
foreclosure. Our review of the certified record has not uncovered any error of
law and we conclude that the trial court did not abuse its discretion in finding
that Appellant had waived his issues based on his answer and new matter filed
in response to the Complaint or, in the alternative, that the Act 91 Notice
affixed thereto sufficiently apprised Appellant of his options with regard to the
aid to which he was entitled and that he failed to adduce sufficient evidence
to satisfy his burden of proof that a novation had been created. Accordingly,
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the trial court's grant of the motion for summary judgment filed by Appellee
was proper.
Order affirmed.
Bender, PJE joins the memorandum.
Lazarus, J. concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/1/2017
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