Court Opinion

ID: 4664895
Source: CourtListenerOpinion
Date Created: 2021-03-04 17:13:20.754606+00
Date Added: 2024-06-11T08:02:38.793180
License: Public Domain

J-A04023-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    RESIDENTIAL CREDIT                         :   IN THE SUPERIOR COURT OF
    OPPORTUNITIES TRUST II                     :        PENNSYLVANIA
                                               :
                       Appellee                :
                                               :
                v.                             :
                                               :
    TWO EASY ENTERPRISE, LLC AND               :
    MATTHEW D. DUPEE, ESQUIRE AS               :
    ADMINISTRATOR OF THE ESTATE OF             :
    SEAN O. PERRIN, DECEASED                   :
                                               :
                       Appellants              :      No. 1751 EDA 2020

                  Appeal from the Order Entered April 16, 2020
              In the Court of Common Pleas of Philadelphia County
                     Civil Division at No(s): No. 190400007

BEFORE:      STABILE, J., KING, J., and PELLEGRINI, J.*

MEMORANDUM BY KING, J.:                                FILED: MARCH 4, 2021

        Appellants, Two Easy Enterprise, LLC and Matthew D. Dupee, Esquire as

administrator of the estate of Sean O. Perrin, deceased, appeal from the order

entered in the Philadelphia County Court of Common Pleas, which granted

summary judgment in favor of Appellee, Residential Credit Opportunities Trust

II, in this mortgage foreclosure action. We affirm.

        The trial court opinion set forth the relevant facts and procedural history

of this appeal as follows:

           On January 7, 2016, Sean Perrin, on behalf of [Appellant]
           Two Easy Enterprise, LLC, executed a promissory note in the
           amount of $60,750 to Visio Financial Services, Inc., … and
____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
J-A04023-21

         granted Visio Financial Services, Inc. a mortgage upon the
         property located at 2551 N. Marston Street, Philadelphia,
         PA. The mortgage was recorded with the Recorder of Deeds
         on January 19, 2016. On February 12, 2016, Visio Financial
         Services, Inc. assigned the mortgage and promissory note
         to [Appellee]; the assignment was recorded with [the]
         Recorder of Deeds on March 30, 2016. Sean Perrin died on
         April 17, 2018 and letters of administration were granted to
         Matthew Dupee on July 27, 2018.

         [Appellee] commenced this action on March 31, 2019 by
         filing a complaint. The amended complaint, filed July 17,
         2019, alleges, inter alia, the mortgage is in default because
         [Appellants] failed to make the July 1, 2018 payment and
         every payment thereafter; the amended complaint sought a
         de terris judgment in mortgage foreclosure in the amount
         of $69,838.37 plus interest, attorneys’ fees, and costs.
         [Appellants], through counsel, filed an answer with new
         matter in which they challenge [Appellee’s] standing to
         bring this action.       [Appellee] filed a reply denying
         [Appellants’] standing argument as a conclusion of law.

         On February [6], 2020, [Appellee] filed a motion for
         summary judgment in which it argued no question of
         material fact existed as to any issue raised by the amended
         complaint. Attached to the motion was, inter alia, an
         affidavit attesting to the fact [that Appellee] held the
         mortgage and the promissory note, the mortgage was in
         default because no payment had been made since July
         2018, and certifying the amount of interest, costs, and
         attorneys’ fees incurred. [Appellants] filed a response in
         opposition which raised a single argument—there was a
         disputed question of fact as to whether [Appellee] held title
         to the promissory note on the date this action was filed.

         By order dated April 16, 2020, [the trial c]ourt granted
         summary judgment in favor of [Appellee] and against
         [Appellants], and entered a judgment in mortgage
         foreclosure in favor of [Appellee], with damages assessed
         at $78,308.87 plus interest from February 1, 2020 to the
         date of sheriff’s sale.

(Trial Court Opinion, filed July 6, 2019, at 1-2) (internal record citations and

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some capitalization omitted).

      Appellants timely filed a notice of appeal on May 13, 2020. On May 18,

2020, the court ordered Appellants to file a Pa.R.A.P. 1925(b) concise

statement of errors complained of on appeal. Appellants timely filed their Rule

1925(b) statement on June 5, 2020.

      Appellants now raise one issue for our review:

         Did the trial court commit an error of law by granting
         summary judgment in favor of a mortgage foreclosure
         company where the record failed to conclusively prove title,
         interest, and possession of the original promissory note
         sufficient to establish the requisite standing to pursue a
         foreclosure action?

(Appellants’ Brief at 5).

      Our standard of review of an order granting summary judgment requires

us to determine whether the trial court abused its discretion or committed an

error of law.   Mee v. Safeco Ins. Co. of America, 908 A.2d 344, 347

(Pa.Super. 2006).

         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.

Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000) (internal

citations and quotation marks omitted).        Our scope of review is plenary.

Pappas v. Asbel, 564 Pa. 407, 418, 768 A.2d 1089, 1095 (2001), cert.

denied, 536 U.S. 938, 122 S.Ct. 2618, 153 L.Ed.2d 802 (2002). In reviewing

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a trial court’s grant of summary judgment:

         [W]e apply the same standard as the trial court, reviewing
         all the evidence of record to determine whether there exists
         a genuine issue of material fact. We view the record 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. Only where there is
         no genuine issue as to any material fact and it is clear that
         the moving party is entitled to a judgment as a matter of
         law will summary judgment be entered. All doubts as to the
         existence of a genuine issue of a material fact must be
         resolved against the moving party.

         Motions for summary judgment necessarily and directly
         implicate the plaintiff’s proof of the elements of [a] cause of
         action.    Summary judgment is proper if, after the
         completion of discovery relevant to the motion, including
         the production of expert reports, an adverse party who will
         bear the burden of proof at trial has failed to produce
         evidence of facts essential to the cause of action or defense
         which in a jury trial would require the issues to be submitted
         to a jury. In other words, whenever there is no genuine
         issue of any material fact as to a necessary element of the
         cause of action or defense, which could be established by
         additional discovery or expert report and the moving party
         is entitled to judgment as a matter of law, summary
         judgment is appropriate. Thus, a record that supports
         summary judgment either (1) shows the material facts are
         undisputed or (2) contains insufficient evidence of facts to
         make out a prima facie cause of action or defense.

         Upon appellate review, we are not bound by the trial court’s
         conclusions of law, but may reach our own conclusions.

Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 61 (Pa.Super. 2006)

(internal citations and quotation marks omitted).

      On appeal, Appellants agree with many of the trial court’s conclusions,

including “that the record reflects that, by virtue of possession of the original

promissory note indorsed ‘in blank,’ [Appellee] had standing at the time the

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amended complaint was filed on July 17, 2019.”          (Appellants’ Brief at 19)

(emphasis omitted).        Appellants insist, however, that the certified record,

including the summary judgment motion, does not demonstrate that Appellee

possessed the promissory note when it filed the original complaint on March

31, 2019. Citing Bank of New York v. Raftogianis, 13 A.3d 435 (N.J.Super.

2010), Appellants argue a plaintiff must provide evidence that it possesses

the original promissory note at the time the cause of action is originally filed.1

Appellants conclude a genuine issue of material fact exists regarding whether

Appellee possessed the promissory note when it commenced the instant cause

of action, and this Court must reverse the order granting summary judgment

in favor of Appellee. We disagree.

       “[A]ll [civil] actions shall be prosecuted by and in the name of the real

party in interest[.]” Pa.R.C.P. 2002(a). “[A] real party in interest is a [p]erson

who will be entitled to benefits of an action if successful…. [A] party is a real

party in interest if it has the legal right under the applicable substantive law

to enforce the claim in question.” US Bank N.A. v. Mallory, 982 A.2d 986,

994 (Pa.Super. 2009) (internal citation and quotation marks omitted).

          In a mortgage foreclosure action, the mortgagee is the real
____________________________________________

1 In response, Appellee correctly notes that Appellants cite “no Pennsylvania
authority which stands for the proposition that a foreclosure plaintiff must
have physical possession of the original note at the time of the filing of the
complaint.” (Appellee’s Brief at 12). See also Ford v. Oliver, 176 A.3d 891,
902 (Pa.Super. 2017) (reiterating that out-of-state court decisions are not
binding on this Court, although we may use them for guidance to degree we
find them useful and compatible with Pennsylvania law).

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        party in interest. See Wells Fargo Bank, N.A. v. Lupori,
        8 A.3d 919, 922 n. 3 (Pa.Super. 2010). This is made evident
        under our Pennsylvania Rules of Civil Procedure governing
        actions in mortgage foreclosure that require a plaintiff in a
        mortgage foreclosure action specifically to name the parties
        to the mortgage and the fact of any assignments. Pa.R.C.P.
        1147. A person foreclosing on a mortgage, however, also
        must own or hold the note. This is so because a mortgage
        is only the security instrument that ensures repayment of
        the indebtedness under a note to real property. See
        Carpenter v. Longan, 83 U.S. 271, 275, 16 Wall. 271, 21
        L.Ed. 313 (1872) (noting “all authorities agree the debt is
        the principal thing and the mortgage an accessory.”). A
        mortgage can have no separate existence. Id. When a note
        is paid, the mortgage expires. Id. On the other hand, a
        person may choose to proceed in an action only upon a note
        and forego an action in foreclosure upon the collateral
        pledged to secure repayment of the note. See Harper v.
        Lukens, 271 Pa. 144, 112 A. 636, 637 (1921) (noting “as
        suit is expressly based upon the note, it was not necessary
        to prove the agreement as to the collateral.”). For our
        instant purposes, this is all to say that to establish standing
        in this foreclosure action, appellee had to plead ownership
        of the mortgage under Rule 1147, and have the right to
        make demand upon the note secured by the mortgage.1

           1 The rules relating to mortgage foreclosure actions do
           not expressly require that the existence of the note
           and its holder be pled in the action. Nonetheless, a
           mortgagee must hold the note secured by a mortgage
           to foreclose upon a property. “The note and mortgage
           are inseparable; the former as essential, the latter as
           an incident.” Longan, 83 U.S. at 274.

CitiMortgage, Inc. v. Barbezat, 131 A.3d 65, 68 (Pa.Super. 2016).

     Further, Pennsylvania permits assignment of mortgages and, in order to

be effective as against third parties, written assignments must be recorded in

accordance with 21 P.S. § 621 et seq. “Where an assignment is effective, the

assignee stands in the shoes of the assignor and assumes all of his rights.”

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Barbezat, supra at 69.

      Instantly, the trial court determined Appellee owned the promissory

note when it commenced its action against Appellants:

         Visio Financial Services, Inc. assigned both the mortgage
         and the promissory note to [Appellee]. See [Appellee’s]
         Motion for Summary Judgment at Ex. 5 (Assignment), p. 1
         (stating “Visio Financial Services, Inc., … does by these
         presents assign to [Appellee] … a certain MORTGAGE dated
         1/7/2016 made by Two Easy Enterprise, LLC on real
         property located at 2551 N. Marston St., Philadelphia, PA …
         TOGETHER with the Bond, Note or other Obligation therein
         described …”). The assignment, which was made and
         recorded three years prior to the commencement of this
         action, established [Appellee] was the holder of both the
         mortgage and the promissory note.

                                 *    *     *

         Accordingly, by virtue of the assignment, recorded prior to
         the commencement of this action, and the fact that
         [Appellee] possessed the note, as evidenced by its inclusion
         as Ex. A to the amended complaint and Ex. 6 to the motion
         for summary judgment, [Appellee] had standing to pursue
         this action.

(Trial Court Opinion at 5-6).

      Our review of the record confirms the court’s assertions. Significantly,

Appellee produced copies of the original recorded mortgage and its recorded

assignment. (See Memorandum of Law in Support of Summary Judgment

Motion, filed 2/6/20, at Exhibits 4-5).    Thus, the record indicates Appellee

properly held the mortgage by way of assignment. See Barbezat, supra.

Further, Appellee’s summary judgment motion included an affidavit from the

mortgage servicer, confirming that Appellee is in possession of the original

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promissory note. (See Summary Judgment Motion, filed 2/6/20, at Attached

Affidavit). Although Appellants suggest Appellee lacked standing due to its

failure to demonstrate possession of the note when the original complaint was

filed in March 2019, Appellants offer no relevant authority to support this

assertion. See Oliver, supra. Absent more, the trial court did not abuse its

discretion or commit an error of law by entering summary judgment in favor

of Appellee. See Mee, supra. Accordingly, we affirm.

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/4/21

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