Court Opinion

ID: 2786125
Source: CourtListenerOpinion
Date Created: 2015-03-13 18:06:15.906243+00
Date Added: 2024-06-11T12:45:53.675858
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

NATIONSTAR MORTGAGE, LLC                       IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                        Appellee

                   v.

MARK ELSESSER A/K/A
MARK JOSEPH ELSESSER

                        Appellant                  No. 1300 MDA 2014

                    Appeal from the Order July 7, 2014
              In the Court of Common Pleas of Berks County
                     Civil Division at No(s): 13-15154

BEFORE: LAZARUS, J., WECHT, J., and JENKINS, J.

MEMORANDUM BY LAZARUS, J.:                         FILED MARCH 13, 2015

     Mark Elsesser appeals pro se from an order, entered in the Court of

Common Pleas of Berks County, granting summary judgment to Nationstar

Mortgage, LLC (Nationstar). After careful review, we affirm.

     On December 29, 2006, Elsesser executed a promissory note (“Note”)

and Mortgage on the property at 3425 Fairchild Street, Alburtis, PA 18011-

2632, in consideration of his borrowing $173,000 from Countrywide Home

Loans, Inc. (Countrywide).   Both the Note and Mortgage were recorded in

the Berks County Recorder of Deeds Office.      Countrywide’s nominee was

Mortgage Electronic Registration Systems, Inc. (“MERS”).       On April 26,

2012, MERS assigned the Mortgage and Note and “all beneficial interest”
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thereunder to “Bank of America, NA, Successor by merger to BAC Home

Loans Servicing, LP FKA Countrywide Home Loans Servicing, LP.”

        The assignment was recorded in the Berks County Recorder of Deeds

Office on April 30, 2012.           The Mortgage and Note, and “all beneficial

interest” were again assigned on May 10, 2013, from Bank of America to

Appellee Nationstar. The assignment was also recorded in the Berks County

Recorder of Deeds Office on June 6, 2013.

        Nationstar alleged that Elsesser defaulted under the Mortgage and

Note by failing to make payments due March 1, 2012, and each month

thereafter. Per the account statement, supplied by Nationstar as Exhibit “C”

to the motion for summary judgment, the last payment applied to Elsesser’s

mortgage account was on March 27, 2012.              Elsesser has provided no

affidavit or other proof of payment since that time.

        Bank of America issued a combined Act 61/Act 912 Notice (Notice) to

Elsesser, dated February 5, 2013. Proof of mailing the Notice was attached

to the Motion for Summary Judgment as Exhibit “D.” It appears from the

United States Postal Service tracking sheet that Elsesser failed to claim the

mail. Elsesser, however had been afforded the opportunity to avail himself

of the protections provided by the Homeowner’s Emergency Mortgage

____________________________________________

1
    41 P.S. § 403(b).
2
    13 Pa.C.S. § 3205(b).

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Assistance Program3 (“HEMAP”). Despite this opportunity, he failed to take

advantage      of   HEMAP;      consequently,    Nationstar   proceeded   with   its

foreclosure action.

        Nationstar filed its complaint in mortgage foreclosure against Elsesser

on June 17, 2013.          Service of the complaint and Notice regarding the

mortgage foreclosure diversion program was made upon Elsesser on July 8,

2014.     On August 13, 2013, Elsesser filed preliminary objections that

contained a demand for a jury trial.               Nationstar’s Motion to Strike

Defendant’s Jury Trial Demand was granted on September 26, 2013.                 On

November 14, 2013, Elsesser’s preliminary objections were overruled after

argument. Elsesser filed his Answer to the Complaint on December 3, 2013.

On April 8, 2014, Nationstar filed its motion for summary judgment. On May

6, 2013, Elsesser filed a motion in opposition to Nationstar’s motion for

summary judgment.          After argument on July 7, 2014, the Court granted

Nationstar’s summary judgment motion.            Elsesser filed a timely Notice of

Appeal on July 30, 2014. On August 6, 2014, the Court ordered Elsesser to

file a Pa.R.A.P. 1925(b) Concise Statement of Errors Complained of on

Appeal, which he did on August 28, 2014.

        Elsesser raises the following issues on appeal:
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3
   HEMAP is a state loan program which offers remedies for Pennsylvania
citizens facing mortgage foreclosure. Citizens either may receive a short-
term loan to cure default, or may opt for continuing subsidies to aid in
avoiding future default. See 35 P.S. §§ 1680.401c-412c.

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      1. Whether the trial court considered the requirements of 41 P.S.
      § 101 et seq. (“Act 6”) in ruling that it had jurisdiction to hear
      the complaint thereby allowing the court to award summary
      judgment to Nationstar.

      2. Whether the trial court erred in ruling that Nationstar had
      standing to file its foreclosure complaint against Elsesser,
      thereby allowing the court to award summary judgment to
      Nationstar.

      3. Whether the trial court erred in ruling that the mortgage
      assignments were also evidence of an assignment of the note,
      and that Nationstar produced the original note, thereby allowing
      the court to award summary judgment to Nationstar.

      4. Whether the trial court applied 13 Pa.C.S.A. § 9203 properly
      in ruling that Nationstar conformed to 13 Pa.C.S.A. § 9203(b),
      thereby allowing the court to award summary judgment to
      Nationstar.

Appellant’s Brief, at 11.

      Our standard of review of an order granting summary judgment is

well-settled:

      A reviewing court may disturb the order of the trial court only
      where it is established that the court committed an error of law
      or abused its discretion. As with all questions of law, our review
      is plenary.

      In evaluating the trial court’s decision to enter summary
      judgment, we focus on the legal standard articulated in the
      summary judgment rule. Pa.R.C.P. 1035.2. The rule states that
      where there is no genuine issue of material fact and the moving
      party is entitled to relief as a matter of law, summary judgment
      may be entered. Where the non-moving party bears the burden
      of proof on an issue, he may not merely rely on his pleadings or
      answers in order to survive summary judgment. Failure of a
      non-moving party to adduce sufficient evidence on an issue
      essential to his case and on which it bears the burden of proof
      establishes the entitlement of the moving party to judgment as a
      matter of law. Lastly, we will view the record in the light most
      favorable to the non-moving party, and all doubts as to the

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      existence of a genuine issue of material fact must be resolved
      against the moving party.

JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-62 (Pa.

Super. 2013) (citations omitted).

      Initially, we must acknowledge that Elsesser has not attempted to

dispute that he is in default.        Rather, his arguments center around

Nationstar’s standing to bring the instant cause of action. Elsesser

challenges the lower court’s grant of summary judgment on the grounds that

he never received proper notice of the foreclosure action, as mandated by

Act 6 and Act 91. Rule 403 (“Act 6”) plainly states:

      Notice of intention to take action as specified in subsection (a) of
      this section [referring to foreclosure] shall be in writing, sent to
      the residential mortgage debtor by registered or certified mail at
      his last known address and, if different, at the residence which is
      the subject of the residential mortgage.

41 P.S. § 403(b). The record reflects, however, that Bank of America did

provide such notice, via certified mail, to Elsesser’s home address.          See

Exhibit “D” to Plaintiff’s Brief in Support of Motion for Summary Judgment.

Further, Exhibit “D” shows that Elsesser received notice of his certified mail,

and never acted to claim that mail.     We read this evidence in conjunction

with 35 P.S. § 1680.403c(e) (“Act 91”), which states, in pertinent part:

      All parties requiring notice pursuant to this article [debtors] shall
      be deemed to receive notice on the third business day following
      the date of the mailing of the notice as documented by a
      certificate of mailing obtained from the United States Postal
      Service.

35 P.S. § 1680.403c(e)

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     In response to the record, Elsesser produces nothing to dispute this

record evidence, instead arguing that “[t]he trial court conspicuously failed

to address Defendant’s averment at the hearing and merely assumed facts

not in evidence regarding the Act 6 Notice being sent to Defendant, when

Defendant has said all along that he did not receive the Notice.” Appellant’s

Brief, at 17. We do not find, therefore, that Elsesser has demonstrated a

question of fact, such that summary judgment was not appropriate.

     Elsesser argues concomitantly that because Nationstar, as the only

party to this action, did not, itself, send the Act 6/Act 91 Notice, then

Nationstar lacks standing to bring the instant suit.      In support of that

argument, Elsesser cites to Bankers Trust Co. v. Foust, 621 A.2d 1054

(Pa. Super. 1993), which we do not find controlling or on point.

     In Bankers Trust, the trial court dismissed a foreclosure action for

defective notice. That dismissal, however, was overturned, by this Court, on

the grounds that such a foreclosure notice need not contain complex

formulations of debt and interest, but merely the amount owed by the

debtor.   Id. at 1058.    As such, we find no legal precedent to support

Elsesser’s argument that Notice must come directly from the party

commencing a foreclosure action.    So long as notice “enables a financially

troubled residential homeowner to learn exactly what sum of money is

necessary to cure the mortgage default,” we do not find the purpose of Act 6

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and Act 91 offended. Wells Fargo Bank, N.A. v. Spivak, 104 A.3d 7, 14

(Pa. Super. 2014).

      Next, Elsesser challenges the validity of the chain of assignments of

the Mortgage and Note, and ultimately argues that there is a question of fact

as to the owner of the loan. Appellant’s Brief, at 19. Recently, this Court

has held that a promissory note to a mortgage that has been indorsed in

blank, constitutes a negotiable instrument, such that the Pennsylvania

Uniform Commercial Code (“PUCC”) dictates its use and enforceability.     In

J.P. Morgan Chase Bank v. Murray, 63 A.3d 1258 (Pa. Super. 2013), our

Court set forth a two-prong approach to determine if a foreclosing party has

standing to commence a foreclosure action. First, the court must determine

if the note in question can be considered an indorsed in blank note, thus

rendering it a “negotiable instrument” such that the PUCC applies.    Id. at

1262-63.   Second, the court must determine whether the party seeking

foreclosure can demonstrate possession of the note, as under the PUCC, that

is sufficient to prove standing. Id. at 1266.

      Turning to the instant case, then, we must first ascertain whether

Elsesser’s mortgage and note can be considered indorsed in blank.

Pennsylvania statute defines an indorsement as “a signature. . . that alone

or accompanied by other words is made on an instrument for the purpose of

. . . incurring liability on the instrument.”   13 Pa.C.S. § 3204(a).     An

indorsement in blank, then, is defined as, “[i]f an indorsement is made by

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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. §3205(b).

        Instantly, Nationstar submitted the original mortgage and note, which

bore Elsesser’s signature, as evidence to support its summary judgment

motion.     See Exhibits “A-A1” of Plaintiff’s Brief in Support of Motion for

Summary Judgment. The original Note contains a stamp, however, stating

“Pay to the Order of Countrywide Home Loans, Inc.” As such, per the PUCC,

the Note is specially indorsed, see 13 Pa.C.S. § 3205(a).4 This Court has

recently, ruled, however, that where a Note has a special indorsement, and

not an indorsement in blank, it may still satisfy the prongs set forth in J.P.

Morgan. See PHH Mortgage Corp. v. Powell, 100 A.3d 611 (Pa. Super.

2014).    In PHH Mortgage, this Court considered a pro se challenge to a

mortgage default, and held that even when the note had been specially

indorsed to a specific party, the ultimate bearer of that Note had standing to

bring a foreclosure action. Id. at 617; see 13 Pa.C.S. § 3104(a) (emphasis
____________________________________________

4
    PUCC defines a special indorsement as:

        If an indorsement is made by the holder of an instrument,
        whether payable to an identified person or payable to bearer,
        and the indorsement identifies a person to whom it makes the
        instrument payable, it is a special indorsement.

13 Pa.C.S. § 3205(a).

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added) (“[N]egotiable instrument means an unconditional promise or order

to pay a fixed amount of money, with or without interest or other charges

described in the promise or order, if it: (1) is payable to bearer or to order

at the time it is issued or first comes into possession of a holder.”); see also

18 Pa.C.S. § 3109(b) (promise is payable to order if it is indorsed as payable

to identified person). We apply the reasoning of PHH Mortgage, therefore,

to conclude that although the instant Note was specially indorsed, it can still

be construed as a negotiable instrument under the PUCC. As such, because

Nationstar also satisfied possession, through producing the original Note, we

find that Nationstar has standing to commence foreclosure.

       Based upon this recent jurisprudence, therefore, Elsesser’s argument

as to the chain of ownership of the loan fails as a matter of law. Where the

Note can be classified as a negotiable instrument, and Nationstar can

demonstrate possession of that instrument, the validity of the transfer of the

loan is ultimately not controlling.        There is no risk of double liability, 5 as

Elsesser argues, because even if the assignment to Nationstar was defective,

his liability would nonetheless be discharged by virtue of payment to

Nationstar.     See J.P. Morgan, 63 A.3d at 1258; 13 Pa.C.S. § 3602(a)

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5
  Although Elsesser terms this argument as one involving “double jeopardy”
concerns, J.P. Morgan, citing In re Walker, 466 B.R. 271, 285-85 (Bankr.
E.D.Pa. 2012), explains the issue as one where the debtor, due to 13 Pa.C.S.
§ 3602(a), “is in no danger of being subjected to double liability.” 63 A.3d
1265 (emphasis added).

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(discharging liability after payment to instrument holder). As such, with the

threat of double liability gone, Elsesser cannot demonstrate that he has or

will suffer injury if Nationstar is permitted to proceed.

      Finally, Elsesser challenges Nationstar’s security interest.       Under

Pennsylvania law, a security interest is enforceable only if: “(1) [v]alue has

been given[;] (2) [t]he debtor has rights in the collateral or the power to

transfer rights in the collateral to a secured party[; and] (3) [t]he debtor has

authenticated a security agreement[.]” 13 Pa.C.S.A. § 9203(b). Elsesser’s

argument attacks prongs (1) and (3) of section 9203(b).

      Elsesser first contends that Nationstar cannot demonstrate that value

was given. He grounds that argument not in any cited legal authority, but

on the bald assertion that “the only way for Plaintiff to prove value was

given is to provide its books and records showing the recordation of the

transaction, as well as a transfer receipt for the debt it purports to own.”

Appellant’s Brief, at 25.    We agree with the lower court, however, that

Elsesser has not raised a question of fact as to the value given. Nationstar

produced both the mortgage and note, showing that Elsesser was granted

$173,000 in exchange for an interest in his property.        Furthermore, the

record reflects that value was given through each assignment of the

mortgage and note, from Countrywide through Nationstar.           Elsesser has

simply failed to demonstrate a lack of value given, beyond merely stating

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that he never received $173,000, and that Nationstar has not produced its

accounting.

      Elsesser also challenges Nationstar’s security interest on the grounds

that he never authenticated the agreement. We are similarly unpersuaded

by this argument. Nationstar produced the original mortgage and note, each

bearing Elsesser’s signature.    Further, as the trial court acknowledged,

Elsesser was given the opportunity to inspect those documents at the court

proceedings below, and at no time voiced a challenge as to the validity of his

signature. See Pa.R.A.P. 302(a) (issues not raised in lower court are waived

and cannot be raised for first time on appeal). Again, Elsesser baldly asserts

that “[t]here has been no explicit admission by the Defendant that could

plausibly be construed as an authentication for purposes of § 9203(b)(3).”

Appellant’s Brief, at 27. We are unpersuaded by Elsesser’s argument, and

we do not find a question of fact exists as to the existence of Nationstar’s

security interest. Therefore, the trial court properly concluded that summary

judgment should be entered in favor of Nationstar. J.P. Morgan, supra.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/13/2015

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