Court Opinion

ID: 4653743
Source: CourtListenerOpinion
Date Created: 2021-01-22 18:12:28.618822+00
Date Added: 2024-06-11T07:54:14.046217
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 HEIGHTS PLAZA PARTNERS, LLC             :    IN THE SUPERIOR COURT OF
                                         :         PENNSYLVANIA
                                         :
              v.                         :
                                         :
                                         :
 WILD BLUE MANAGEMENT, L.P.              :
                                         :
                    Appellant            :    No. 1626 WDA 2019

              Appeal from the Order Entered October 1, 2019
     In the Court of Common Pleas of Allegheny County Civil Division at
                          No(s): GD 18-010964

BEFORE: SHOGAN, J., STABILE, J., and KING, J.

MEMORANDUM BY SHOGAN, J.:                         FILED JANUARY 22, 2021

      Appellant, Wild Blue Management, L.P. (“Wild Blue”), appeals from the

order granting summary judgment in favor of Appellee, Heights Plaza

Partners, LLC (“Heights Plaza”), on October 1, 2019. After review, we affirm.

      The trial court summarized the relevant facts and procedural history of

this matter as follows:

            This is a mortgage foreclosure action brought under
      Pennsylvania law by original Plaintiff and first assignee Valvest,
      Inc. (“Valvest”), and continued by current Plaintiff-Appellee and
      second assignee Heights Plaza Partners, LLC (“Heights Plaza”),
      against Appellant Wild Blue Management, L.P. (“Wild Blue”). The
      action arises out of a $16,250,000.00 loan from Sedona Capital
      Ltd. (“Sedona Capital”) to Wild Blue. The loan carried a ten
      percent yearly interest rate and was subject to escalation to a
      twenty four percent yearly rate in the event of a default. The loan
      was secured by a recorded mortgage note on the property known
      as Lots 1519-G-180, 1519-L-10, 1519-K-190, 1519-G-195 on the
      Tax Map of Harrison Township, Allegheny County, Pennsylvania.
      Wild Blue also executed an assignment of leases and rents, which
      granted the holder of the mortgage note the “right, title, and
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       interest, as landlord, in and to any and all leases and
       subleases.…”[] The mortgage and related rights were twice
       transferred. Initially, Sedona Capital assigned half its rights to
       Valvest effective May 8, 2017, before assigning Valvest the
       remaining half effective December 6, 2017.1       Subsequently,
       Valvest assigned its rights to Heights Plaza effective July 31,
       2018.2

          1   The assignment remained unsigned until May 30, 2018.

          2   The assignment remained unsigned until August 28, 2018.

              Under the mortgage, the loan principal and any unpaid
       accrued interest became immediately due upon its maturity date,
       April 30, 2018. Wild Blue did not pay the loan principal and the
       accrued unpaid interest prior to April 30, 2018; nor has it made
       any such payment to date. On May 18, 2018, Valvest provided
       Wild Blue a ten-day demand letter for payment in full and notice
       that unless payment in full occurred, Valvest would exercise all
       the rights and remedies available to it. On May 29, 2018 Valvest
       provided Wild Blue further notice that it had not received payment
       in response to its May 18 demand. Next, on June 18, 2018,
       Valvest filed a Complaint in Confession of Judgment against Wild
       Blue at GD 18-007355.[1] Valvest then initiated this action by
       filing a Complaint in Mortgage Foreclosure on August 23, 2018. In
       response, Wild Blue filed an Answer and New Matter to the
       Complaint in Mortgage Foreclosure on October 15, 2018. On
       November 6, 2018, Val[v]est filed a Reply to New Matter.
       Additionally, on September 6, 2018, Valvest filed a Motion to
       Appoint Receiver. On October 29, 2018, the [c]ourt entered a
       Consent Order stipulating that jurisdiction as well as venue were
       proper and appointing a receiver. On January 15, 2019, the
       caption was amended to list Heights Plaza rather than Valvest as
       Plaintiff. Heights Plaza proceeded to file a Motion for Summary
       Judgment on February 19, 2019. With the issue fully briefed, this
       [c]ourt granted Heights Plaza’s Motion for Summary Judgment on
       October 1, 2019. On October 22, 2019, [Heights Plaza] filed a
       Motion for Entry of Judgment for Sum Certain.

____________________________________________

1 Wild Blue asserts that this confessed judgment was opened by order dated
January 18, 2019. Wild Blue’s Objection to Subpoena, 1/29/19, at ¶3.

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            On [October 29], 2019 Wild Blue brought the present
      appeal, Docket Number 1626 WDA 2019, although the Motion for
      Entry of Judgment for Sum Certain had not been adjudicated. …

Trial Court Opinion, 2/11/20, at 1-2.

      It is well settled that an appeal lies only from a final order, unless

permitted by rule or statute. A.J.B. v. A.G.B., 180 A.3d 1263, 1270 (Pa.

Super. 2018). The order filed by the trial court on October 1, 2019, provided

as follows:

             AND NOW, on this 30th day of September, 2019, upon
      consideration of Plaintiff Heights Plaza LLC's Motion for Summary,
      and any response thereto, it is hereby ORDERED, ADJUDGED, and
      DECREED that said Motion is GRANTED. Judgment in Mortgage
      Foreclosure is hereby entered in favor of Plaintiff, Heights Plaza
      LLC, and against Defendant, Wild Blue Management, L.P., and the
      mortgaged property, foreclosing all right, title, lien, and equity of
      redemption which Defendant and all those claiming by, through,
      or under them have or had in the mortgaged property and
      ordering that the mortgaged property be sold at foreclosure sale
      in accordance with applicable law. It is further ORDERED that the
      amount due under the Note and Mortgage as of August 20, 2018
      is fixed at $17, 452, 499.73; together with continuing interest and
      all collection costs, property protection advances, real estate
      taxes paid, costs of insurance paid and attorneys’ fees and costs
      recoverable under the Loan Documents.

Order, 10/1/19 (strikethrough in original). This order utilized the proposed

order that was attached to Heights Plaza’s motion for summary judgment;

however, as illustrated in the material quoted above, the trial court struck out

the portion of the proposed order relating to a monetary recovery.

      On October 22, 2019, Heights Plaza filed a motion for the entry of a

monetary judgment in a sum certain.       Before the trial court could address

Heights Plaza’s motion regarding specific monetary aspects, Wild Blue filed an

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appeal on October 29, 2019. On December 6, 2019, Heights Plaza filed a

motion to quash the appeal as interlocutory and relied on Landau v. Western

Pennsylvania Nat. Bank, 282 A.2d 335 (Pa. 1971) for the proposition that

in a mortgage foreclosure action, the judgment must be entered for a sum

certain.   This Court denied Heights Plaza’s motion without prejudice on

January 27, 2020.    Heights Plaza filed a motion for reconsideration on

February 3, 2020, which this Court denied on February 26, 2020.

      The interlocutory nature of an appeal affects jurisdiction and may be

raised on appeal sua sponte. A.J.B., 180 A.3d at 1270. Although Landau

stated “Judgment in a mortgage foreclosure action must be entered for a sum

certain or no execution could ever issue on it[,]” Landau, 282 A.2d at 340,

we point out that the subsequent adoption of the Pennsylvania Rules of

Appellate Procedure in 1976 and ensuing case law provide exceptions. See

Pa.R.A.P. 311 (concerning interlocutory appeal as of right); see also U.S.

Bank, N.A. v. Pautenis, 118 A.3d 386, 394 n.11 (Pa. Super. 2015)

(explaining the holding in Landau concerned an instance where the amount

owed to the lender was unknown at the time of the foreclosure proceeding

and an accounting was required prior to a sheriff’s sale); see also

Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998)

(holding that summary judgment was proper in a mortgage foreclosure action

where the appellee’s complaint alleged that appellants undertook a mortgage

in a specific amount and at a specific rate of interest, the mortgage was

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recorded, the appellants defaulted on the payments due under the mortgage,

and the appellants admitted these allegations).

       Herein, the record reveals that the mortgage at issue was given as a

security for a note in the amount of $16,250,000.00, with an interest rate of

ten percent per annum and a default rate of twenty-four percent.            The

mortgage was recorded in the Allegheny County Court of Common Pleas on

May 12, 2016, in Mortgage Book Volume 46433, at page 257. Complaint in

Foreclosure, 8/23/18, at ¶¶1-36; Mortgage Note, 4/29/16, at 1-16; Mortgage

(incorporating by reference the Mortgage Note), 4/29/16, at 7.

       In its complaint, Heights Plaza asserted Wild Blue was in default.

Complaint, 8/23/18, at ¶20. In its Answer and New Matter, Wild Blue did not

dispute the terms of the mortgage or deny that it had defaulted in making its

required payments.2 Answer and New Matter, 10/15/18, at ¶20. Wild Blue’s

failure to specifically deny that it defaulted in its payments to Heights Plaza

resulted in an admission. See Pa.R.C.P. 1029(b) (failing to specifically deny

an allegation in the complaint results in an admission).      Accordingly, the

instant case is analogous to Cunningham: Heights Plaza alleged Wild Blue

____________________________________________

2  In its Answer, Wild Blue did not deny that it was in default because it had
failed to make the required payment of all accrued and unpaid interest and
the unpaid principal balance and all other amounts due. Rather, Wild Blue
asserted that Heights Plaza collected rent payments from Wild Blue’s tenants
at the property. Answer and New Matter, 10/15/18, at ¶20. Insofar as Wild
Blue contends it was not in default due to Heights Plaza collecting rents from
third-party tenants, we address this assertion in our disposition of Wild Blue’s
fourth issue.

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undertook a mortgage in a specific amount and at a specific rate of interest,

the mortgage was recorded, Wild Blue defaulted on the payments due under

the   mortgage,   and   Wild   Blue   admitted   Heights   Plaza’s   allegations.

Cunningham, 714 A.2d at 1057.

      Moreover, Pa.R.A.P. 311 provides as follows:

      (a) General rule.--An appeal may be taken as of right and
      without reference to Pa.R.A.P. 341(c) from:

                                      * * *

         (2) Attachments, etc.--An order confirming, modifying,
         dissolving, or refusing to confirm, modify or dissolve an
         attachment, custodianship, receivership, or similar matter
         affecting the possession or control of property ….

Pa.R.A.P. 311(a)(2).     Herein, the October 1, 2019 order affected the

possession and control of the property and specifically directed that the

property was to be sold at a foreclosure sale. Order, 10/1/19. After review,

we are satisfied that the instant appeal is an interlocutory appeal as of right

pursuant to Pa.R.A.P. 311(a)(2), and this appeal is properly before our Court.

      On appeal, Wild Blue raises the following issues for this Court’s

consideration:

      1. Whether the original Plaintiff, Valvest, Inc., had standing to
      bring this mortgage foreclosure action in the first instance?

      2. Whether … Heights Plaza … has standing to maintain this
      action?

      3. Whether Valvest, Inc. had assigned its interest in the Mortgage
      and underlying Loan Obligations to Heights Plaza … prior to the
      time Valvest brought this action?

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       4. Whether [Heights Plaza] waived its claim of default through its
       acceptance of payment after its declaration of default?

Wild Blue’s Brief at 4.3

       We review an order disposing of a motion for summary judgment under

the following standards:

       [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.

Village of Four Seasons Ass’n, Inc. v. Elk Mountain Ski Resort, Inc.,

103 A.3d 814, 819 (Pa. Super. 2014) (internal brackets and citations omitted).

       Wild Blue’s first three issues challenge Heights Plaza’s and its

predecessor’s standing to initiate the underlying mortgage foreclosure action.

Accordingly, we address them concurrently.

       “[W]hether a party has standing to maintain an action is not a

jurisdictional question.”      Grimm v. Grimm, 149 A.3d 77, 83 (Pa. Super.

2016) (citation omitted). Therefore, a challenge to a party’s standing can be

waived.    Id. (citation omitted).       “The issue of incapacity to sue is waived

____________________________________________

3   Both the trial court and Wild Blue complied with Pa.R.A.P. 1925.

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unless it is specifically raised in the form of a preliminary objection or in the

answer to the complaint.” Erie Indemnity Co. v. Coal Operators Casualty.

Co., 272 A.2d 465, 467 (Pa. 1971); see also Hall v. Episcopal Long Term

Care, 54 A.3d 381, 399 (Pa. Super. 2012) (standing and lack of capacity to

sue are related concepts and they must be raised at the earliest possible

opportunity); see also Kuwait & Gulf Link Transport Co. v. Doe, 92 A.3d

41, 45 (Pa. Super. 2014) (an issue of standing is waived if not raised at first

opportunity).

      Initially, the trial court found that Wild Blue’s Pa.R.A.P. 1925(b)

statement “lack[ed] sufficient detail for a responsive opinion ….” Trial Court

Opinion, 2/11/20, at 4. Although a vague Pa.R.A.P. 1925(b) statement may

result in waiver of the issues on appeal, Pasquini v. Fairmount Behavioral

Health System, 230 A.3d 1190, 1193 n.2 (Pa. Super. 2020), the trial court

proceeded to address the issues.      We conclude that Wild Blue’s Pa.R.A.P.

1925(b) statement, although general, is sufficiently specific, and we decline

to find the issue waived on appeal due to a deficient Pa.R.A.P. 1925(b)

statement.

      Nevertheless, the trial court also concluded that Wild Blue waived its

challenge to standing because it failed to present it in a timely manner. Trial

Court Opinion, 2/11/20, at 4. The trial court stated as follows:

      [U]nder the Pennsylvania Rules of Civil Procedure, Appellant Wild
      Blue waived its right to challenge the standing of original Plaintiff
      Valvest or Appellee Heights Plaza. A party must raise the failure
      of a pleading to conform to law or rule of court by preliminary

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      objection. Pa. R. Civ. P. 1028(a)(2). Further, a party waives all
      defenses and objections which are not presented by preliminary
      objection, answer or reply Pa. R. Civ. P. 1032(a).

             Thus, Wild Blue’s failure to raise any argument relating to
      standing via preliminary objections in response to the complaint,
      or, for that matter, at any point prior to its … Brief in Opposition
      to Plaintiffs Motion for Summary Judgment (and therefore not in
      any pleading of record) constitutes a waiver. See Roberts v. Estate
      of Pursely, 700 A.2d 475, 479 (Pa. Super. 1997) …. That Wild Blue
      stipulated without objection, in the October 29, 2018 Consent
      Order Appointing Receiver, to the assignments from Sedona
      Capital to Valvest further underscores this point.

             Appellant Wild Blue cites no cases supporting its position
      that it had not waived objections to standing. Because the Wild
      Blue failed to raise objections to standing in its Answer and New
      Matter—no Preliminary Objections were ever filed—it waived its
      right to challenge the standing of Valvest and Heights Plaza.
      Summary judgment was properly granted.

Trial Court Opinion, 2/11/20, at 4-5.

      After review, we agree with the trial court. Wild Blue failed to properly

and timely present a challenge to Heights Plaza or its predecessor’s standing,

and this failure resulted in waiver. Erie Indemnity Co., 272 A.2d at 467.

      In its fourth issue, Wild Blue asserts that Heights Plaza waived Wild

Blue’s default by accepting rent payments directly from Wild Blue’s tenants.

Wild Blue’s Brief at 23. Wild Blue contends that a mortgagee’s acceptance of

partial payments after declaring a mortgagor in default and accelerating the

loan obligation constitutes waiver of the default. Id.

      Wild Blue is correct in that in some instances, when a mortgagee

declares the mortgagor in default and accelerates the loan obligation, the

mortgagee may waive the default if it accepts partial payments from

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the mortgagor. See Bell Federal Sav. and Loan Ass'n of Bellevue v.

Laura Lanes, Inc., 435 A.2d 1285, 1287 (Pa. Super. 1981) (providing that

in a commercial mortgage, once there is a default and an acceleration, the

mortgagee need not accept less than the full accelerated amount from the

mortgagor, and a mortgagee who accepts lesser amounts risks having its right

to insist on the accelerated amount deemed waived) (emphasis added).

However, the instant case is readily distinguishable because the mortgagor,

Wild Blue, failed to make any payments after default, partial or otherwise.

Thus, Wild Blue’s argument is meritless.

     It is undisputed that Heights Plaza declared that Wild Blue was in default

and accelerated the loan obligation. After Heights Plaza asserted that Wild

Blue was in default, Heights Plaza procured rent payments from Wild Blue’s

tenants. These rent payments were obligations that the third-party tenants

owed Wild Blue. Due to Wild Blue’s default, and pursuant to the terms of

Heights Plaza’s loan to Wild Blue, Heights Plaza was permitted to receive

these rent payments directly. Assignments of Leases and Rents, 4/29/16, at

unnumbered 1. Thus, there was no waiver of default pursuant to Bell Federal

Sav. and Loan Ass'n of Bellevue, because the mortgagor, Wild Blue, made

no payments. In other words, not one of these rent payments was tendered

by Wild Blue; the rent payments at issue were made by third parties.

     Wild Blue provides no authority for the proposition that when a

mortgagor is in default, and a mortgagee accepts rent payments from its

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mortgagor’s third-party tenants, there is waiver of the default. We agree with

the trial court that Wild Blue was in default, and Heights Plaza did not waive

Wild Blue’s default by accepting rent payments from third parties.

        After review, we conclude that Wild Blue undertook a mortgage in a

specific amount and at a specific rate of interest, that mortgage was recorded,

Wild Blue defaulted on its obligation, and Wild Blue admitted these allegations.

Thus,    summary     judgment    was    proper   pursuant   to   the   criteria   in

Cunningham. Moreover, Wild Blue waived its challenge to standing, and we

agree with the trial court that Heights Plaza did not waive Wild Blue’s default.

Accordingly, there was no error of law or abuse of discretion in the trial court’s

conclusion that Heights Plaza was entitled to judgment as a matter of law.

Village of Four Seasons Ass’n, Inc., 103 A.3d at 819. Therefore, we affirm

the trial court’s order granting Heights Plaza’s motion for summary judgment.

        Order affirmed.

        Judge King joins the Memorandum.

        Judge Stabile concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/22/2021

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