J-S50018- 14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ROBERT C. FITZSIMMONS AND AMBRA FITZSIMMONS,

Appellants

v.

THE OFFICE OF ECONOMIC AND
COMMUNITY DEVELOPMENT OF THE CITY OF BRADFORD,

Appellee : IN THE SUPERIOR COURT OF

: PENNSYLVANIA

:

:

:

:

:

:

:

:

: : No. 23 WDA 2014

Appeal from the Order Entered December 3, 2013, In the Court of Common Pleas of McKean County, Civil Division, at No. 1358 C.D. 2012.

BEFORE: FORD ELLIOTT, P.J.E., SHOGAN and ALLEN, JJ

.

MEMORANDUM BY SHOGAN, J.: FILED SEPTEMBER 08, 2014

Appellants Robert C. Fitzsimmons and Ambra Fitzsimmon s, his wife,

appeal from the order entering summary judgment in f avor of The Office of

Economic and Community Development of the City of Br adford (“OECD”).

We affirm.

The trial court summarized the facts and procedural h istory as follows:

Patricia Rodgers purchased the property located at [28 Onofrio] Street, Bradford, Pennsylvania [on February 10, 2001 ]. To help with the purchase, she received a $22,000 loan from [O ECD]. The loan was secured with a mortgage. Robert Fitzsimmo ns

ma rried Patricia Rodgers in March 2004. On December 13, 2006, Robert Fitzsimmons was added as a title owner to the property in question via a quit claim deed. In Septe mber 2009 Robert Fitzsimmons and Patricia Rodgers were divorced. As part of the distribution of property, Mr. Fitzsimmons was givenJ-S50018- 14

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ownership of the property located at [28 Onofrio] Str eet, Bradford, Pennsylvania. On April 16, 2011, Robert F itzsimmons and Ambra Fitzsimmons were married. On December 23, 2009, Robert Fitzsimmons executed a Mortgage Assumption Agree ment with [OECD] and assumed the mortgage issued to Patrici a Rodgers. On June 20, 2012, at a real estate closing, [OECD] took the net proceeds of the sale of the property at [ 28 Onofrio] Street Bradford, Pennsylvania ($16,319.96), over the objection of [Appellants]. [OECD] took the net proceeds to satis fy the $22,000 mortgage issued to Patricia Rodgers and assumed by [Appellants]. [According to Appellants, OECD] should ha ve never taken the proceeds because the $22,000 loan was forgiven, per the mortgage, because Robert Fitzsimmons and Patricia Rodgers met the residency requirements.

[Appellants filed a complaint on October 22, 2012.] O n November 20, 2012, [OECD] filed an Answer and New Ma tter denying that it inappropriately took the net proceed s of the sale and alleged the following facts: The mortgage and n ote entered into by Patricia Rodgers explicitly required her to p ay back the $22,000. [ 1 ] Through the Mortgage Assumption Agreement Robert Fitzsimmons assumed that obligation. Robert Fitzsimmons sold the property at [28 Onofrio] Street o n June 20, 2012. Prior to the sale, [Appellants] acknowledged t hat they owed [OECD] $22,000, but indicated they did not have sufficient funds to pay the full amount and agreed to pay [OECD ] the net amount of proceeds from the sale ($16,319.96) if [OECD ] would accept the same in return for satisfaction of the mortga ge. [OECD] agreed.

On December 28, 2012, [Appellants] filed an Answer to [OECD’s] New Matter denying that [they] owed any mon ey to [OECD] because the loan was forgiven.

1 According to Sara Andrews, Executive Director of OECD, t he $22,000.00 down pa yment assistance loan “was authorized by City Council on January 9, 2001 by Resolution #24519. This resolution specifically provides that these monies are repayable in full

— without interest

— upon the sale of the property.” Affidavit of Sara Andrews, 10/24 /13, at unnumbered 2 and
attachment.J-S50018- 14

-3- On October 24, 2013, [OECD] filed a Motion for Summa ry Judgment with a Brief in Support. On November 7, 2 013 [Appellants] filed an Answer. On November 14, 2013, [Appellants] filed a Brief in Opposition.

Trial Court Opinion, 12/3/13, at unnumbered 1

– 2.

The trial court granted OECD’s motion for summary judg ment on

December 3, 2013. This appeal followed. Appellants a nd the trial court

have complied with Pa.R.A.P. 1925.

On appeal, Appellants present the following question for review:

Did the Trial Court err in granting summary judgmen t against [Appellants] on claims against [OECD] based u pon the Mortgage that was executed by the parties? Specifically , did the Trial Court err by finding as a matter of law that [ Appel lants’] obligation to repay the $22,000 loan was not forgive n pursuant to the terms of the Mortgage and that [Appellants] we re obligated to repay such loan?

Appellants’ Brief at 2.

Initially, we observe our scope and standard of rev iew:

Our scope of review of an order granting summary judg ment is plenary. [W]e apply the same standard as the trial cour t, reviewing all the evidence of record to determine whe ther there exists a genuine issue of material fact. We view the record in the light most favorable to the non-moving party, an d all doubts as to the existence of a genuine issue of material fact m ust be resolved against the moving party. Only where there is no genuine issue as to any material fact and it is clear t hat the moving party is entitled to a judgment as a matter of law will summary judgment be entered.

Motions for summary judgment necessarily and directly imp licate the plaintiff’s proof of the elements of his cause of action.... Thus, a record that supports summary judgment will eith er (1) show the material facts are undisputed or (2) contain in sufficientJ-S50018- 14

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evidence of facts to make out a prima facie cause of action or defense and, therefore, there is no issue to be submitt ed to the [fact-finder]. Upon appellate review, we are not bo und by the

t rial court’s conclusions of law, but may reach our own conclusions. The appellate Court may disturb the trial court’s order only upon an error of law or an abuse of discret ion.

Judicial discretion requires action in conformity with
law on facts and circumstances before the trial court after hearing and consideration. Consequently, the court abuses its discretion if, in resolving the issue for decision, it misapplies the law or exercises its discretion in a manner lacking reason. Similarly, the
trial court abuses its discretion if it does not follow legal procedure.

Where the discretion exercised by the trial court is chall enged on appeal, the party bringing the challenge bears a hea vy burden.

DeArmitt v. New York Life Ins. Co. , 73 A.3d 578, 585

– 586 (Pa. Super.

2013) (citations and quotation marks omitted). The q uestion of whether

there exist any genuine issues of material fact is subject to a de novo

standard of review. Drelles v. Manufacturers Life Ins. Co. , 881 A.2d

822, 830

– 831 (Pa. Super. 2005).

Pennsylvania Rule of Civil Procedure 1035.2 provides f or summary

judgment, in pertinent part, as follows:

Rule 1035.2. Motion

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party ma y move for summary judgment in whole or in part as a matter of l aw

(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defenseJ-S50018- 14

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which could be established by additional discovery or exp ert report[.]

* * *

Note : Rule 1035.2 sets forth the general principle that a motion for summary judgment is based on an evidentiary record which entitles the moving party to judgment as a
matter of law.

The evidentiary record may be one of two types. Und er subparagraph (1), the record shows that the material f acts are undisputed and, therefore, there is no issue to be submitted to a [fact-finder].

An example of a motion under subparagraph (1) is a motion supported by a record containing an admission. By virtue of the admission, no issue of fact could be established by further discovery or expert report.

* * *

Oral testimony alone, either through testimonial affi davits or depositions, of the moving party or the moving par ty’s witnesses, even if uncontradicted, is generally insufficien t to establish the absence of a genuine issue of material
fact.

Pa.R.C.P. 1035.2 (internal citations omitted).

When faced with questions of contractual interpretation , our standard

and scope of review are well settled:

Because contract interpretation is a question of law, this Court is not bound by the trial court’s interpretation. Our standard of review over questions of law is de novo and to the extent necessary, the scope of our review is plenary as the appellate court may review the entire record in making its decision. However, we are bound by the trial court’s credibility determinations.J-S50018- 14

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Ruby v. Abington Memorial Hospital , 50 A.3d 128, 132 (Pa.Super.2012) (internal quotations omitted). More over, we have stated:

Determining the intention of the parties is a paramount consideration in the interpretation of any contract. The intent of the parties is to be
ascertained from the document itself when the terms are clear and unambiguous. However, as this Court
stated in Herr Estate , 400 Pa. 90, 161 A.2d 32 (1960), “where an ambiguity exists, parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is created by the language of the instrument or by
extrinsic or collateral circumstances.”

We first analyze the contract to determine whether an ambiguity exists requiring the use of extrinsic evidence. A contract is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense. The court, as a matter of law, determines the existence of an ambiguity and interprets the contract whereas the resolution of conflicting parol evidence relevant to what the parties intended by the ambiguous provision is for the trier of fact.

Missett v. Hub International Pennsylvania, LLC , 6 A.3d 530, 541 (Pa.Super.2010). “Where the language of the contr act is ambiguous, the provision is to be construed against the d rafter.” State Farm Fire and Casualty Company v. PECO , 54 A.3d 921, 928 (Pa.Super.2012).

Keystone Dedicated Logistics, LLC v. JGB Enterprises, Inc. , 77 A.3d 1,

6

– 7 (Pa. Super. 2013).

Appellants argue that, “[p]ursuant to the specific terms of the

Mortgage, the $22,000 loan was forgiven as a result of the satisfaction of

the condition that Patricia F. Rodgers and Robert C. F itzsimmons occupy theJ-S50018- 14

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Residence as their principal residence for a period in ex cess of five years.”

Appellants’ Brief at 6. In response, OECD contends that :

Robert C. Fitzsimmons assumed the debt of Patricia Rodg ers under the Note and Mortgage. The Note and Mortgage unambiguously required Rodgers to repay the $22,000. 00 down payment assistance loan to the OECD upon the sale of t he Property. . . Robert C. Fitzsimmons expressly acknowled ged the obligation to repay the down payment assistance loan w hen he executed the Mortgage Assumption Agreement.

OECD’s Brief at 14. OECD explains that the five-year residency period reli ed

upon by Appellants “related to funds disbursed for th e actual rehabilitation of

the Property under the HOME program[, a program to improve the quality of

housing stock in a community]. This language was designed to prevent a

purchaser from receiving the enhanced value and benef it of a publiclyfunded home renovation and then flipping the home sh ortly after purchasing

it.” OECD’s Brief at 9– 10; see also Affidavit of Sara Andrews, 10/24/13, at

unnumbered 3 (explaining that the residency provision s were related to the

HOME rehabilitation monies and not the $22,000.00 do wn payment

assistance monies).

The trial court reviewed the following document pro visions as relevant:

1. Mortgage between Patricia Rodgers and [OECD] securing $22,000 loan, recorded February 20, 2001:

a. “This debt provides for the full repayment of the loan to OECD upon the sale of the real estate, without
interest.”J-S50018- 14

-8- b. “Borrower and Lender Covenant and agree as follows: 1. Payment of this debt in full without interest upon the sale of the property.”

c. “Occupancy, preservation, maintenance and protection of Property; Borrowers Loan Application; leaseholds. Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within sixty days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for the entire five (5) year forgiveness peri od. Should Borrower establish and occupy as Borrower’s principal residence at another location, Borrower will be required to repay the sum provided by lender. . .”

2. Note for $22,000 dated February 20, 2001:

a. “FOR VALUE RECEIVED, Patr icia F. Rodgers, borrower, whose address is 28 Onofrio Street, Bradford, Pennsylvania 16701, hereby promises to pay the order of Office of Economic and Community Development of the City of Bradford, Payee, whose address is 20 Russell Boulevard, Bradford, Pennsylvania 16701, the principal sum of $22,000. Payment of this debt may be made in full without interest upon the sale of the property.”

3. Mortgage Assumption Agreement between OECD and Robert Fitzsimmons dated December 23, 2009:

a. “WHEREAS, Lender is hol der and owner of the following documents (hereinafter sometimes collectively referred to as the ‘Loan Documents’): 1. Mortgage Note dated February 20, 2001, in the original principal amount of $22,000 executed and delivered by PATRICIA F. RODGERS (hereinafter referred to as the ‘Original Borrower’) in favor of Lender (hereinafter referred to as the ‘Note’); and, 2. Mortgage given by Original Borrower as ‘Mortgagor’ to Lender as ‘Mortgagee’ dated February 20, 2001 . . . and which Mortgage encumbers the
real property described herein.”J-S50018- 14

-9- b. WHEREAS, the Borrower [Robert Fitzsimmons] desires to receive said Property and formally assume
all of the covenants and conditions contained in the Mortgage and all other Loan Documents. . .”

c. NOW THEREFORE, for and in consideration of the sum of One Dollar ($1.00) in hand paid, receipt of which is hereby acknowledged and in consideration
of the Premises and of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto agree as follows:

i. Assumption. Borrower [Robert Fitzsimmons] expressly assumes the Loan Documents and agrees to perform all covenants, conditions, duties and obligations contained therein and agrees to pay the Note and the obligations evidenced thereby in a prompt and timely
manner in accordance with the terms
thereof.”

Trial Court Opinion, 12/3/13, at unnumbered 2

– 4 (emphasis omitted;

brackets in original).

Applying the laws of summary judgment and contract int erpretation to

the mortgage and note provisions, the trial court opi ned as follows:

[OECD’s] Motion for Summary Judgment is granted because the contracts at issue in this case required [Appell ants] to repay the $22,000 loan. Both parties agree that [Appellants] assumed the Mortgage and Note that belonged to Patri cia Rodgers. The dispute is based on how to interpret the Mortgage. [OECD] argues that the Mortgage should be interpret ed to require [Appellants] to re-pay the $22,000 loan. [ Appellants] argue that the Mortgage should be interpreted to gra nt [them] loan forgiveness due to meeting the residency requireme nt. The Court must use the cannons [sic] of interpretation to det ermineJ-S50018- 14

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if these clauses can be reconciled or if one must trump the other. The Mortgage has at least two clauses that expli citly state that Ms. Rodgers had to repay the loan and one clause which suggests that the loan could be forgiven if she liv ed in the residence for five years. The clauses cannot cancel each oth er out and cannot be reconciled. Thus, under [ Hoover to Use of Chambersburg Trust Co. v. Alexander , 163 A. 389, 390 (Pa. Super. Ct. 1932)], the earlier clauses requiring re-pa yment must trump the latter clause that suggests loan forgiveness.

Further, the differing clauses create an ambiguity in t he mortgage. Based on that ambiguity the Court must asce rtain the intent of the parties. The best evidence for ascer taining the parties’ intent is the mortgage itself and the contract s and documents surrounding the mortgage. The Court has all of these documents properly before it, so it will use them to decipher the intent of Patricia Rodgers when she entere d into the Mortgage and Note and the intent of Robert Fitzsimmo ns when he entered into the Mortgage Assumption Agreement.

First, Patricia Rodgers intended to pay the loan back to [OECD]. The Mortgage contains two clauses that require Ms. Rodgers to re-pay the loan when she sells the house. Ne ither clause mentions loan forgiveness, but requires the loan t o be repaid once the house is sold. Along with the Mortgage, Ms. Rodgers signed a Note for $22,000 that explicitly stat ed that she was responsible for paying back the loan when she sold t he house. The Note also makes no mention of loan forgive ness, but instead makes the sale of the house the trigger for pay ing back the loan. Ms. Rodgers intended to pay back the loan.

Second, Robert Fitzsimmons intended to pay back the loan. The Mortgage Assumption agreement contains multi ple clauses that require Mr. Fitzsimmons to pay back the loan . He assumed the mortgage, the note, and all obligations a rising therefrom. The Agreement makes no mention of loan forgiveness. Also, Mr. Fitzsimmons signed this Agreement l ong after he would have met any alleged residency require ment for loan forgiveness. If he thought the loan was forgiven , then he would not have assumed the Note and Mortgage because t he loan obligations arising therefrom would have alrea dy beenJ-S50018- 14

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fulfilled. He knew, or should have known through th e representations of his counsel, what he was assuming.

. . . Based on a basic interpretation of the Mortgage and after ascertaining the Parties’ intent, no reasonable minds co uld disagree that [Appellants] were required to re-pay th e $22,000
loan.

Trial Court Opinion, 12/3/13, at unnumbered pages 7

– 8.

Applying our standard of review to the record at han d, we discern no

abuse of discretion or error of law in the trial court’ s analysis and

determination. The agreement of sale between Patri cia Rodgers and the City

of Bradford for 28 Onofrio Street indicates that she received “Downpayment

assistance of $22,000 to be financed as a second mortgage

– no monthly

payment required. Must be paid in full upon sale of property or change of

ownership.” Agreement of Sale, 1/ 16/01, at ¶ 6(E). The mortgage and note

expressly require repayment of the $22,000 down-payme nt-assistance loan

to OECD upon sale of the property. Mortgage, 2/20/0 1, at 1; Note, 2/20/01,

at 1. Mr. Fitzsimmons assumed that obligation when h e executed the

mortgage assumption agreement, which was recorded in McK ean County

Record Book 647, Page 344. Mortgage Assumption Agreem ent, 12/23/09.

Indeed, Appellants averred in their complaint that M r. Fitzsimmons

“executed a Mortgage Assumption Agreement with [OEC D] to assume the

mortgage previously issued from Patricia F. Rodgers mor tgage dated

February 20, 2001.” Complaint, 10/22/12, at ¶ 16; E xhibit H.J-S50018- 14

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Additionally, the mortgage disallowed transfer of the property without

OECD’s prior written consent, and, purs uant to the mortgage assumption

agreement, OECD was “unwilling to give its consent to t he transfer of the

Property to [Mr. Fitzsimmons] unless [he] shall assume al l of the obligations

heretofore imposed by the Loan Documents upon [Patricia Rodgers].”

Mortgage, 2/20/01, at ¶ 15; Mortgage Assumption Agree ment at 1. The

record also contains a memo drafted by Sara Andrews on J uly, 13, 2012,

explaining the context of the five-year forgiveness la nguage which was

erroneously included in the mortgage. Sara Andrews al so indicated that Mr.

Fitzsimmons “was well aware of the [repayment] require ments prior to the

transfer of the property from Ms. Rodgers as [Sara Andr ews] had a

conversation with him on the matter and [she] also requ ired him to provide

income informat ion to meet the affordability requirements.” Complai nt,

10/22/12, at Exhibit I.

Lastly, Mr. Fitzsimmons acknowledged the following fact s under oath:

the agreement of sale, the mortgage, and the note con tained repayment

provisions related to the $22,000.00 down payment assi stance loan; he was

not aware of any documents that provided otherwise; OE CD had to give

consent in writing to any transfer of the property; to receive such consent,

he was required to assume Patricia Rodgers’ obligations to OECD; before the

closing on June 20, 2012, he signed a settlement agreem ent, whichJ-S50018- 14

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“provided that part of where the money was going at cl osing was to pay off

the second loan to OECD.” Mr. Fitzsimmons Deposition, 6/13/13, at 24– 39.

Based on this evidentiary record and deferring to the trial court’s

credibility determinations, we agree with the trial co urt that no reasonable

mind could disagree that Appellants were required to r e-pay the $22,000

loan to OECD. 2 Thus, we conclude that OECD was entitled to judgment as a

ma tter of law, and we affirm the order granting OECD’ s motion for summary

judgment.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 9/8/2014

2 We also agree with the trial court that this case was pr operly decided on the basis of contract interpretation. Therefore, “it is unnecessary to address the equitable arguments [of collateral estoppel and acc ord and satisfaction] set forth by [OECD].” Trial Court Opinion, 12/9/13, at 8.