Court Opinion

ID: 4053772
Source: CourtListenerOpinion
Date Created: 2016-09-29 04:21:44.249952+00
Date Added: 2024-06-11T14:31:22.991069
License: Public Domain

J-A16013-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

U.S. BANK NATIONAL ASSOCIATION, AS               IN THE SUPERIOR COURT OF
TRUSTEE FOR J.P. MORGAN MORTGAGE                       PENNSYLVANIA
ACQUISITION TRUST 2006-CH2, ASSET
BACKED PASS-THROUGH CERTIFICATES,
SERIES 2006-CH2,

                       v.

DAVID SCHRAVEN, KELLY SCHRAVEN,
THE UNITED STATES OF AMERICA C/O
THE UNITED STATES ATTORNEY FOR
THE WESTERN DISTRICT OF
PENNSYLVANIA,

APPEAL OF: DAVID SCHRAVEN AND
KELLY SCHRAVEN

                                                     No. 1153 WDA 2015

                      Appeal from the Order July 16, 2015
              In the Court of Common Pleas of Allegheny County
                     Civil Division at No(s): MG-09-001176

BEFORE: SHOGAN, OLSON, and STRASSBURGER,* JJ.

MEMORANDUM BY SHOGAN, J.:                      FILED SEPTEMBER 28, 2016

       Appellants, David and Kelly Schraven (“the Schravens”), appeal from

the July 16, 2015 order that denied their petition to set aside a sheriff’s sale

and open/strike a default judgment in this mortgage foreclosure action.

After careful review, we dismiss the appeal for mootness.

____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
J-A16013-16

      The relevant facts and procedural history of this matter were set forth

by the trial court as follows:

             On May 14, 2009, [U.S. Bank National Association, as
      trustee for J.P. Morgan Mortgage Acquisition Trust 2006-Ch2,
      Asset Backed Pass-Through Certificates, Series 2006-Ch2
      (“Appellee”)] filed a Complaint in Mortgage Foreclosure against
      the Schravens. Paragraph 6 of the Complaint avers the
      Schravens were served with the proper notices required prior to
      filing such a complaint. The docket reveals, and the Schravens
      do not deny, they were served with the Complaint.1 The
      Schravens did not file an answer to the Complaint and on July
      21, 2009, were sent notice of [Appellee’s] intention to take a
      default judgment.
            1
             The docket entries reveal, and the Schravens do
            not deny, that they were served with every pleading
            and document filed by [Appellee] in this action.

             [Appellee] filed a Praecipe for a Default Judgment on
      August 4, 2009. At that time, judgment was entered in the
      amount of $141,660.32. On September 29, 2009, [Appellee]
      filed a Praecipe for Writ of Execution. Upon motion of [Appellee],
      on April 27, 2010, the sale was postponed for settlement
      purposes. On April 29, 2010, [Appellee] presented a Motion to
      Reassess Damages, requesting damages be adjusted to reflect
      current interest, real estate taxes, insurance premiums, cost of
      collection and other expenses. The Court reassessed damages at
      $149,189.87, plus 6% interest from May 3, 2010, until the date
      of sale. The Schravens did not appeal the Order. [Appellee] filed
      an Affidavit of Stay on May 7, 2010, as a result of a loan
      modification and having received a payment from the Schravens.

            On July 22, 2010, [Appellee] filed a Praecipe to Reissue
      Writ of Execution. On March 11, 2011, [Appellee] filed another
      Affidavit of Stay because the Schravens filed for bankruptcy on
      October 1, 2010. The Schravens were represented by counsel
      and [Appellee] was listed as a creditor. The bankruptcy was
      dismissed without prejudice and on November 14, 2013,
      [Appellee] filed a Praecipe to Reissue Writ of Execution. The sale
      was again continued until May 5, 2014. [Appellee] filed another
      Affidavit of Stay, on May 7, 2014, as a result of a loan
      modification. On June 17, 2014, [Appellee] filed a Praecipe to

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     Reissue Writ of Execution. The sheriff’s sale finally occurred
     December 1, 2014.

           Although Attorney Michael P. Malakoff entered his
     appearance on behalf of the Schravens on October 2, 2014, no
     action was taken of record prior to the sheriff’s sale. On January
     6, 2015, approximately three months after Attorney Malakoff
     entered his appearance and one month after the Sheriff’s Sale,
     the Schravens filed a Petition to Set Aside Sheriff’s Sale and to
     Strike/Open Default Judgment. Even though the Schravens were
     served with every pleading and document filed of record by the
     [Appellee], this was the first filing by the Schravens since being
     served with the Complaint on June 30, 2009.

            The Schravens contend in their Petition filed January 6,
     2015, that various praecipes for writs of execution and
     reissuance of the writs were not verified despite the fact that
     “non-liquidated fees and costs were demanded in addition to
     liquidated interest.”2 They additionally assert the Complaint in
     Mortgage Foreclosure fails to plead compliance with the notice
     requirements of Act 6, 41 P.S. §403(a), and Act 91, 35 P.S.
     §1680.403c, because the Complaint fails to plead the date
     notice(s) were sent.3 The Schravens aver the default judgment
     and sheriff’s sale are void/fatally defective because the
     Complaint fails to set forth the date notice was sent and they are
     unable to determine whether the Note was properly accelerated
     or whether the Complaint was filed prematurely. The Petition
     fails to allege (1) why the Schravens failed to file preliminary
     objections or an answer to the Complaint in Mortgage
     Foreclosure; (2) that the Petition to Strike/Open Default
     Judgment was promptly filed; or (3) that they had a reasonable
     explanation or excuse for the default.
          2
              See paragraphs 5,7,12, and 14 of the Petition.
          3
            The Complaint avers the required notices were
          sent. The Schravens do not aver that they failed to
          receive the Act 6/Act 91 notice. In fact, at paragraph
          13 of their petition they acknowledge notice was sent
          on April 3, 2009.

          On February 9, 2015, the Honorable Alan D. Hertzberg
     denied the Petition to Strike/Open Default Judgment. The
     Schravens neither appealed this ruling nor requested

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     reconsideration. Judge Hertzberg issued a rule to show cause
     “why Petitioners are not entitled to the relief requested relative
     to the Petition to Set Aside Sheriff’s Sale only.” [Appellee] filed
     an Answer and New Matter to the petition on March 16, 2015. In
     footnote 1, [Appellee] emphasizes the Petition to Strike/Open
     Default Judgment had already been denied by the Court. As to
     the Schravens’ contention that they did not learn the date the
     Act 6/Act 91 notice was sent until May 14, 2014, [Appellee]
     avers it submitted this with the Notice of Sheriff’s Sale filed not
     only on May 14, 2014, but also with the Notice of Sheriff’s Sale
     filed four years previously, on May 20, 2010. This was not
     refuted by the Schravens. The Schravens filed no reply to
     [Appellee’s] New Matter.4
           4
             Since [Appellee’s] New Matter did not contain
           averments of fact, the Schravens’ failure to reply
           thereto did not result in any admissions.

            On May 15, 2015, without leave of Court, the Shravens
     filed a Motion to Strike. Neither the caption nor the body of the
     Motion clarify what the Shravens were asking the Court to strike.
     The prayer for relief requests that “... this Motion to Strike be
     granted and the Sheriff’s Sale be set aside until it can be
     determined what amounts [Appellee] is entitled to recover post
     April 29, 2010.” This Motion acknowledges the prior Petition to
     Strike/Open Default Judgment had been denied on February 9,
     2015. The grounds in support of this Motion are essentially the
     same as those in the Schravens’ Petition to Set Aside Sheriff’s
     Sale and to Strike/Open Default Judgment. The only difference is
     the Schravens allege [Appellee] had refused to provide
     discovery5 in order for them to determine the basis for
     foreclosure related attorney’s fees, costs and interest that
     [Appellee] demanded, citing EMC Mortgage, LLC v. Biddle, 114
A.3d 1057 (Pa. Super. 2015). It is clear from paragraph 8 of
     their Motion filed May 15, 2015, that the Schravens are not
     contesting the Order of April 29, 2010, wherein the default
     judgment was reassessed to include interest through May 3,
     2010; late fees; legal fees; costs of suit and title search;
     payment of the escrow deficiency; and interest at 6% per annum
     from May 3, 2010, until the date of sale.
           5
             Despite the assertion that [Appellee] failed to
           comply with discovery requests, the Schravens failed
           to file a motion for sanctions or other appropriate

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            relief. See, e.g., Irwin Union National Bank and Trust
            v. Famous, 4 A.3d 1099 (Pa. Super. 2010).

             On June 18, 2015, the Schravens, without leave of Court,
      filed an Amended Motion to Strike. In the body of the motion the
      Schravens state[d] it was an Amended Motion to Strike Default
      Judgment, thus clarifying that both the May 15th and June 18th
      motions were motions to strike the default judgment. The
      grounds in support of this Amended Motion are identical to those
      asserted in their June 18th Motion to Strike.

            Pa.R.C.P. 206.1(b) provides:

            A petition shall specify the relief sought and state the
            material facts which constitute the grounds
            therefore. All grounds for relief, whether to strike or
            open a default judgment, shall be asserted in one
            petition.

      On July 16, 2015, I denied the Petition to Set Aside Sheriff’s Sale
      and, in an abundance of caution, the previously filed petitions to
      strike and/or open. As previously noted, the Schravens did not
      appeal Judge Hertzberg’s Order of February 9, 2015, which
      denied their original Petition to Strike/Open Default Judgment.
      There was no petition to open before me, as the Schravens’
      motions filed after February 9, 2015, sought only to strike the
      default judgment. They were denied because they violated
      Pa.R.C.P. 206.1(b) and the coordinate jurisdiction rule.
      Moreover, the Schravens did not establish grounds to warrant
      striking the default judgment.

Trial Court Opinion, 12/4/15, at 1-5.

      As noted, the trial court entered an order on July 16, 2015, that

denied the Schravens’ petition to set aside sheriff’s sale and reiterated the

denial of the petition to open and strike, which had been denied five months

earlier in an order filed on February 9, 2015.      The Schravens filed their

notice of appeal on July 27, 2015.

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J-A16013-16

       In their appeal to this Court, the Schravens purport to raise the

following issues:

       1. Did the lower court err when it held that the Default Judgment
       should not be stricken/opened?

       2. Did the lower court err when it failed to consider the
       Schravens’ Amended Motion to Strike on the merits?

       3. Did the lower court err when it held that the sheriff’s sale
       should not be set aside?

       4. Did the lower court err in failing to follow this Court’s holdings
       in EMC Mortgage, LLC v. Biddle, 114 A.3d 1057 (Pa.Super.
       2015)?

The Schravens’ Brief at 2-3.

       Before we may address the issues raised by the Schravens, we must

determine whether this appeal is moot due to the Schravens’ failure to file a

bond pursuant to Pa.R.A.P. 1733.1

       Rule 1733 provides as follows:

       Requirements for Supersedeas on Agreement or Application

       (a) General rule. An appeal from an order which is not subject
       to Rule 1731 (automatic supersedeas of orders for the payment
       of money) shall, unless otherwise prescribed in or ordered
       pursuant to this chapter, operate as a supersedeas only
       upon the filing with the clerk of the court below of
       appropriate security as prescribed in this rule. Either court
       may, upon its own motion or application of any party in interest,
____________________________________________

1
  “Generally, an actual claim or controversy must be present at all stages of
the judicial process for the case to be actionable or reviewable.... If events
occur to eliminate the claim or controversy at any stage in the process, the
case becomes moot.” Deutsche Bank Nat. Co. v. Butler, 868 A.2d 574,
576 (Pa. Super. 2005) (citation omitted).

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       impose such terms and conditions as it deems just and will
       maintain the res or status quo pending final judgment or will
       facilitate the performance of the order if sustained.

       (b) Tangible property. When the order determines the
       disposition of the property in controversy as in real actions,
       replevin, and actions to foreclose mortgages or when such
       property is in the custody of the sheriff, or when the proceeds of
       such property or appropriate security for its value is in the
       possession, custody or control of the court, the amount of the
       additional security shall be fixed by agreement of the parties, or
       by the court, at such sums only as will secure any damages for
       the use and detention of the property, interest, the costs of the
       matter and costs on appeal.

Pa.R.A.P. 1733 (emphases added).

       Here, it is undisputed that the Schravens failed to file a bond, and the

deed to the subject property was delivered to Appellee, acknowledged by the

Sheriff, and recorded in the Allegheny County Department of Real Estate on

October 6, 2015.2 However, the Schravens contend that this appeal is not

moot based on Jefferson Bank v. Newton Associates, 686 A.2d 834 (Pa.

Super. 1996). The Schravens’ Reply Brief at 1-3.

       In Jefferson Bank, Newton Associates was the record owner of

condominium units. Id. at 836. Jefferson Bank held a first mortgage on the

units. Id. In December of 1991, the Middleton Condominium Association

filed suit against Newton Associates alleging that it had failed to pay its

assessment dues. Id. at 836-837. In May of 1993, Middleton Condominium

____________________________________________

2
 A copy of the Sheriff’s Deed was filed of record in the instant matter on
November 3, 2015. Certified Record at 59.

                                           -7-
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Association obtained a judgment against Newton Associates. Id. Middleton

Condominium Association then commenced an action against the primary

mortgage holder, Jefferson Bank. Id. Middleton Condominium Association’s

theory of recovery was that Jefferson Bank was a mortgagee in possession

and liable for the debt. Id.

      Thereafter, Jefferson Bank initiated mortgage-foreclosure actions

against Newton Associates due to their failure to pay taxes.        Jefferson

Bank, 686 A.2d at 837. Newton Associates did not challenge the actions.

Id.   Jefferson Bank secured a $254,783.89 judgment and filed a writ of

execution in order to sell the units at a sheriff’s sale. Id. However, before

the sheriff’s sale was held, Jefferson Bank assigned its interest to a company

named Shell Real Estate. Id. Shell Real Estate had agreed to re-sell

the units to third parties, and to accomplish this goal, Shell assigned

its interest to the third-party buyers, and issuance of title would be

directly from the sheriff to the buyer.       Id.   After the sheriff’s sale to

Shell Real Estate, the Middleton Condominium Association’s liens were

extinguished by operation of law. Id.

      Middleton Condominium Association filed petitions to set aside the

sheriff’s sale due to fraud.   On that basis, and without further discussion,

this Court concluded the sheriff’s issuance of deeds to the prospective third

party buyers was automatically stayed. Jefferson Bank, 686 A.2d at 837.

Additionally, in its petitions, Middleton Condominium Association argued that

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Shell Real Estate was simply the alter ego of Jefferson Bank and was created

to act as Jefferson Bank’s agent at the sale. Id.

       Jefferson Bank filed motions to strike. Jefferson Bank, 686 A.2d at

837.    The motions to strike the petitions were partially granted, and

Middleton Condominium Association’s motions to strike the sheriff’s sale

were denied.      Id.    Middleton Condominium Association appealed and

challenged the order partially granting Jefferson Bank’s motions to strike the

petitions and the order denying the petitions to strike the sheriff’s sale. Id.

       On appeal, Jefferson Bank and Shell Real Estate claimed that the

appeal was moot because the titles to the properties had been transferred to

third parties after the condominium association filed its appeal. Jefferson

Bank, 686 A.2d at 837. This Court addressed that claim of mootness as

follows:

       This is a specious argument, for it ignores the essential fact that,
       in the present appeal, it was appellees who transferred the
       properties after appellant took its appeal. This is a distinction
       with a difference, because our courts have never held that an
       adverse party may create mootness through deliberate factual
       manipulation.

Jefferson Bank, 686 A.2d at 838. Importantly, however, that prior panel

of this Court never discusses Pa.R.A.P. 1733 and the ramifications of the

failure to file a bond or obtain a stay.

       After reviewing the relevant authority, we are satisfied that this matter

is not controlled by our decision in Jefferson Bank. Therein, there was an

accusation of manipulation in that it was alleged that Jefferson Bank created

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Shell Real Estate for the sole purpose of acting as the bank’s agent at sale.

This resulted in the transfer of the sheriff’s deeds directly to third parties.

Jefferson Bank, 686 A.2d at 837. More importantly, and as noted above,

the Jefferson Bank Court never addressed Pa.R.A.P. 1733 and the question

of how a failure to obtain a bond and supersedeas impacts a determination

of mootness.        See Deutsche Bank, 868 A.2d at 578 n.1 (directly

addressing mootness caused by a party’s failure to obtain a stay). As such,

we agree with Appellee that Jefferson Bank is readily distinguishable, and

we conclude this appeal is moot.           Ultimately, the Schravens are asserting

that the mere filing of an appeal acts as a supersedeas; however, there is no

support for this argument, and such a conclusion would render Pa.R.A.P.

1733 a nullity.3

       For the reasons set forth above, we conclude that the Schravens’

failure to file a bond and stay the proceedings render the instant matter

moot. Accordingly, we hereby dismiss the appeal.

       Appeal dismissed as moot.

       Judge Olson Concurs in the Result.

       Judge Strassburger files a Dissenting Memorandum.

____________________________________________

3
  Despite their protestations (The Schravens’ Reply Brief at 1-4), the
Schravens have provided no authority that any issue or challenge raised
below overcomes mootness.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/28/2016

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