Court Opinion

ID: 4109737
Source: CourtListenerOpinion
Date Created: 2016-12-21 20:13:13.010008+00
Date Added: 2024-06-11T14:30:24.521845
License: Public Domain

J-A28028-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BAYVIEW LOAN SERVICING, LLC,                      IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellant

                       v.

CHINA L.B. RUTLEDGE,

                            Appellee                    No. 609 EDA 2016

             Appeal from the Judgment Entered February 11, 2016
             In the Court of Common Pleas of Philadelphia County
             Civil Division at No(s): January Term 2011 No. 03691

BEFORE: PANELLA, SHOGAN, and PLATT,* JJ.

MEMORANDUM BY SHOGAN, J.:                         FILED DECEMBER 21, 2016

       Appellant, Bayview Loan Servicing, LLC (“Bayview”), appeals from the

judgment entered in favor of Appellee, China L.B. Rutledge (“Rutledge”) and

against Bayview, following entry of nonsuit in this mortgage foreclosure

action.1 We affirm.

       The trial court summarized the factual and procedural history of this

case as follows:

              On January 26, 2011, Wells Fargo, N.A., as certificate
       trustee not in its individual capacity solely as certificate trustee,
       in trust for registered holders of VNT Trust Series 2010-2 (“Wells
____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
1
  “[I]n a case where nonsuit was entered, the appeal properly lies from the
judgment entered after denial of a motion to remove nonsuit.” Billig v.
Skvarla, 853 A.2d 1042, 1048 (Pa. Super. 2004).
J-A28028-16

     Fargo”), commenced this foreclosure action against [Rutledge],
     as real owner of the mortgaged property located at 2007 West
     68th Avenue, in Philadelphia (“Property”). On April 6, 1990, the
     mortgagor, Brenda E. Lewis, borrowed $36,745 from American
     Residential Mortgage Corporation (“American Residential”).
     Ms. Lewis signed a promissory note (“Note”) and secured the
     loan with a mortgage (“Mortgage”) on the property to American
     Residential. The Complaint asserts that Ms. Lewis died on
     April 1, 2000. Annie Ruth Harris, the mother and sole heir of the
     Estate of Brenda E. Lewis (“Lewis Estate”), transferred the
     Property to [Rutledge] by deed dated March 16, 2001 and
     recorded in Philadelphia County on December 24, 2001 under
     Document No. 50379562 (“Deed”). These facts concerning the
     transfer of the Property from the Lewis Estate to [Rutledge] are
     not alleged in the Complaint. Also, neither Ms. Lewis’ mother as
     heir nor the Lewis Estate are named as a defendant in the
     action.

           The Complaint alleges American Residential assigned the
     Mortgage to GMAC Corporation of Iowa by assignment dated
     October 10, 1990 and recorded in Philadelphia County. The
     Complaint then lists thirteen (13) subsequent mortgage
     assignments made and recorded throughout the years. The last
     assignment listed in the Complaint was made by Vantium REO
     Capital Markets, L.P. to Wells Fargo on December 15, 2010 and
     recorded in Philadelphia County at Document No. 52294039.
     The Complaint alleges the Mortgage has been in default by
     reason of Ms. Lewis’s failure to make payments under the
     Mortgage since December 1, 1993. The Complaint attaches only
     a copy of the Property’s legal description and the Notice of
     Intention to Foreclose sent in June 2010 to Ms. Lewis, Deceased,
     and [Rutledge]. The Complaint does not attach the Mortgage,
     Note or any of the mortgage assignments.            Rather, the
     Complaint simply incorporates these documents by reference,
     but does not do so pursuant to Pa.R.C.P. 1019(g).

           [Rutledge] filed Preliminary Objections to the Complaint
     objecting only to the Complaint’s verification. [Rutledge] was
     represented by counsel at the time. [Wells Fargo] filed an
     Amended Complaint, to which [Rutledge] again filed Preliminary
     Objections objecting only to the verification. The Amended
     Complaint also fails to attach the Mortgage, Note or any of the
     mortgage assignments.        The Preliminary Objections were
     sustained and [Wells Fargo] filed a substitute verification.

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           Thereafter, [Rutledge] filed an Answer to the Complaint
     with New Matter.       [Rutledge’s] New Matter raised several
     affirmative defenses, including lack of standing.   [Rutledge]
     alleged both the general defense of lack of standing and more
     detailed defenses concerning standing which attack the
     numerous mortgage assignments. The Answer with New Matter
     attached as exhibits eight (8) of the mortgage assignments.
     Wells Fargo replied to the New Matter.

           In February 2014, Wells Fargo filed a Motion to Compel
     [Rutledge’s] answers to interrogatories and requests for
     admissions. The Motion was granted and [Rutledge] was given
     thirty (30) days to respond to the discovery requests or risk
     sanctions.

           This [c]ourt later permitted [Rutledge’s] attorney to
     withdraw as counsel for [Rutledge].    [Rutledge] thereafter
     proceeded pro se.

           Wells Fargo later filed a Motion for Sanctions based on
     [Rutledge’s] failure to comply with the [trial court’s] previous
     discovery order. Wells Fargo asked the [c]ourt for the requests
     for admissions to be deemed admitted and [Rutledge’s] Answer
     to the Amended Complaint [to] be stricken. An order was issued
     which granted the Motion and precluded [Rutledge] from offering
     evidence and/or testimony at trial. [The trial court] did not
     grant Wells Fargo’s specific demand for the requests for
     admissions to be deemed admitted and [Rutledge’s] Answer to
     be stricken.

           In September 2015, [Appellant], Bayview Loan Servicing,
     LLC, was substituted as Plaintiff by Praecipe based on a
     mortgage assignment from Wells Fargo dated December 3, 2013
     (“Bayview Assignment”). The copy of the Bayview Assignment
     attached to the Praecipe is not certified and has no markings
     indicating the Bayview Assignment [had] been recorded.

          The action was subsequently deferred due to [Rutledge’s]
     bankruptcy. The case was removed from deferred status in July
     2015 and listed for trial.

          The matter proceeded to a bench trial on September 8,
     2015. [Bayview] was present but [Rutledge] did not appear.
     [Bayview] offered several documents to the [c]ourt as evidence,

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      including, inter alia, a certified copy of the Mortgage, the original
      Note and a copy thereof, a copy of the Bayview Assignment and
      a certified copy of the Deed. [Bayview] produced an employee
      witness, Terrance Schonleber, who testified regarding the
      documents.

                                   * * *

            At the conclusion of [Bayview’s] case, [the trial court]
      found [Bayview] failed to establish standing based on the
      documents offered at trial.     Specifically, the Note was not
      endorsed in blank and the Bayview Assignment was neither
      recorded nor certified. Accordingly, [the trial court] entered a
      nonsuit against [Bayview] and in favor of [Rutledge].

            [Bayview] timely filed [a] Motion for Post Trial Relief. The
      Note, [Bayview’s] Motion to Compel and all mortgage
      assignments, including all preceding assignments not previously
      of record, were attached as exhibits. The Motion also include[d]
      a copy of the unrecorded and uncertified Bayview Assignment
      presented at trial and a copy of the Bayview Assignment with
      markings from the Philadelphia Commissioner of Records
      showing the Bayview Assignment was recorded on September
      12, 2014 at Document No. 52827574. This [was] the first time
      [Bayview] provided the [c]ourt with a copy of the recorded
      Bayview Assignment.

            On October 8, 2015, prior to [the trial court’s] ruling on
      the Motion, [Bayview] filed a direct appeal of the nonsuit with
      [this Court]. The appeal was quashed on December 4, 2015[,]
      as the Post Trial Motion had not yet been ruled on.

Trial Court Opinion, 2/11/16, at 1-9.

      By order entered February 11, 2016, the trial court denied Bayview’s

post-trial motion and entered judgment in Rutledge’s favor. Bayview timely

appealed.

      Bayview presents the following issues for our review:

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      1.    Whether the lower Court erred in not finding that
      [Rutledge] waived the issue of standing by failing to raise it in
      either of her preliminary objections?

      2.   Whether the Lower Court erred in failing to find that
      [Bayview] had standing by virtue of [Rutledge’s] failure to
      respond to Requests for Admissions pursuant to Pa.R.C.P.
      4014(b).

      3.    Whether [Bayview] proved standing by entering the
      original Note indorsed in blank in to evidence at trial?

      4.    Whether assuming, arguendo, that the Court finds that the
      note was not negotiated, [Bayview] was nevertheless entitled to
      enforce the note pursuant to Section 3203(b) of the
      Pennsylvania Uniform Commercial Code (“PUCC”)?

      5.    Whether assuming, arguendo, the Court finds that the note
      was not negotiated, [Bayview] has standing as Mortgagee by
      assignment?

      6.   Whether the Assignment of the Mortgage to Bayview,
      whether or not it was recorded, demonstrates possession of the
      Note under Section 3204(c) of the PUCC.

      7.    Whether [Bayview] named all proper parties and released
      [Brenda E. Lewis], in accordance with Pa.R.C.P. 1144(b), giving
      the Trial Court subject matter jurisdiction over all proper parties.

Bayview’s Brief at 4-5.

      In its first claim, Bayview asserts that Rutledge waived the issue of

standing by failing to raise it in either of her preliminary objections.

Bayview’s Brief at 15. While Bayview acknowledges that Rutledge raised the

issue of standing in her Answer with New Matter, it asserts that such

pleading does not preserve the issue if it is not raised in preliminary

objections. Id. at 16-17. Moreover, Bayview maintains that “if standing is

contested in an answer as in this case, [Rutledge] waived the issue because

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she was required to raise it in her first responsive pleading.”      Id. at 17.

Additionally, Bayview posits that the court cannot sua sponte raise standing

issues. Id. at 16.

      Rule 1032 of the Pennsylvania Rules of Civil Procedure provides, inter

alia, as follows:

      Rule 1032. Waiver of Defenses. Exceptions. Suggestion
      of Lack of Subject Matter Jurisdiction or Failure to Join
      Indispensable Party

      a) A party waives all defenses and objections which are not
      presented either by preliminary objection, answer or reply,
      except a defense which is not required to be pleaded under Rule
      1030(b), the defense of failure to state a claim upon which relief
      can be granted, the defense of failure to join an indispensable
      party, the objection of failure to state a legal defense to a claim,
      the defenses of failure to exercise or exhaust a statutory remedy
      and an adequate remedy at law and any other nonwaivable
      defense or objection.

Pa.R.C.P. 1032. As this Court has held: “[t]he issue of incapacity to sue is

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

or in the answer to the complaint.” Huddleston v. Infertility Center of

America, 700 A.2d 453, 457 (Pa. Super. 1997) (emphasis added); see also

In re Estate of Alexander, 758 A.2d 182, 189 (Pa. Super. 2000)

(“[c]hallenges to a litigant’s capacity to sue must be raised by way of

preliminary objections or answer.”). The term “capacity to sue” relates to

standing.   Hall v. Episcopal Long Term Care, 54 A.3d 381, 399 (Pa.

Super. 2012). Moreover, “our Supreme Court has made clear that we may

not question a party’s standing sua sponte.” U.S. Bank, N.A. v. Pautenis,

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118 A.3d 386, 393 n.8 (Pa. Super. 2015) (Where trial court did not address

standing, and it was not clear whether mortgagee had standing to bring a

foreclosure action, this Court did not have authority to raise standing sua

sponte because homeowner did not challenge bank’s standing to bring

action.)

      Herein, Rutledge raised Bayview’s lack of standing in her answer and

new matter. See Answer and New Matter, 7/4/12 at ¶ 5 (Rutledge denies

that Bayview is the holder of the mortgage); ¶¶ 9-20 (Rutledge denies valid

assignment of the Mortgage or Note to Bayview);       ¶¶ 39-99 (“SECOND

AFFIRMATIVE DEFENSE: LACK OF STANDING”). Thus, Bayview’s first claim

lacks merit. Accordingly, we proceed to address the remainder of Bayview’s

claims.

      Bayview’s next five issues challenge the nonsuit entered by the trial

court and consist of various arguments asserting that it did indeed have

standing in this matter.

      In reviewing the entry of a nonsuit, our standard of review is
      well-established: we reverse only if, after giving appellant the
      benefit of all reasonable inferences of fact, we find that the
      factfinder could not reasonably conclude that the essential
      elements of the cause of action were established. Indeed, when
      a nonsuit is entered, the lack of evidence to sustain the action
      must be so clear that it admits no room for fair and reasonable
      disagreement.... The fact-finder, however, cannot be permitted
      to reach a decision on the basis of speculation or conjecture.

Vicari v. Spiegel, 936 A.2d 503, 509 (Pa. Super. 2007) (internal citations

and quotation marks omitted).

                                   -7-
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      In its second issue, Bayview asserts that Rutledge is deemed to have

admitted standing by failing to respond to Bayview’s request for admissions

pursuant to Pa.R.C.P. 4014(b). Bayview’s Brief at 17. Specifically, Bayview

claims that the trial court erred in failing to find that Rutledge’s failure to

respond to the chain of mortgage assignments is deemed an admission. Id.

Bayview further asserts that Rutledge’s failure to respond to all of the

requests for admissions made by Bayview resulted in her admission that the

then-plaintiff, Wells Fargo, held and possessed the mortgage at the time.

Id. at 18-19. Morever, it asserts, Rutledge’s failure to appear at trial and

failure to move for withdrawal of her admissions as required by Pa.R.C.P.

4014(d) results in her admission of Bayview’s standing. Id. at 19.

      As this Court has explained:

      Rule 4014 governs requests for admissions. It permits a party
      to serve upon another party a written request for the admission
      of the truth of certain matters relating to statements or opinions
      of fact or the application of the law to fact. Pa.R.C.P. 4014(a).
      This includes questions regarding the execution, correctness,
      genuineness, authenticity, signing, delivery, mailing, or receipt
      of any document described in the request for admissions. Id.
      “The purpose of this discovery tool is to clarify and simplify the
      issues raised in prior pleadings in order to expedite the litigation
      process.”    Christian v. Pennsylvania Fin. Responsibility
      Assigned Claims Plan, 454 Pa.Super. 512, 686 A.2d 1, 5
      (1996) (citation omitted), appeal denied, 548 Pa. 678, 699 A.2d
      733 (1997). Unless the party responds to the request within 30
      days (45 days for a defendant), the matter is deemed admitted.
      Pa.R.C.P. 4014(b). The trial court may extend or shorten the
      timeframe in which the responding party has to answer the
      request. Id.

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Estate of Borst v. Edward Stover Sr. Testamentary Trust, 30 A.3d

1207, 1210 (Pa. Super. 2011).

      Conclusions of law are not within the permissible scope of
      requests for admissions; requests must call for matters of fact
      rather than legal opinions and conclusions. Rule 4014 provides
      that a party may deny a request for admission that the party
      considers a genuine issue for trial. This denial, however, is
      subject to the discovery sanctions of Rule 4019(d).

Christian v. Pennsylvania Fin. Responsibility Assigned Claims Plan,

686 A.2d 1, 5 (Pa. Super. 1996) (internal citations omitted).

      In this case, Rutledge failed to respond to the requests for admission

filed by Wells Fargo, the plaintiff at that point in the proceeding. A review of

the requests for admission reveals that, even if all requests were deemed to

be true, none would establish that Bayview has standing.         There was no

request for admission as to the chain of mortgage assignments in the

document. Motion to Compel, 2/26/14, Exhibit A, Request for Admission at

¶¶ 1-15 (two paragraphs were numbered “14”).            The only request for

admission that could arguably establish Bayview’s standing is request

number five which provides as follows: “[Wells Fargo] currently holds and

possesses the Note and Mortgage.” Id. at ¶ 5.

      We first note that asking Rutledge to admit or deny that Wells Fargo

then held and possessed the Note and Mortgage is a legal question. As will

be discussed subsequently, the determination as to whether a bank is a

holder in due course of a note and mortgage is a legal conclusion. Thus, this

request was for a conclusion of law and therefore not within the permissible

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scope of requests for admissions. Christian, 686 A.2d at 5. Moreover, as

outlined, Bayview was subsequently substituted for Wells Fargo in this

litigation, and such admission would not in and of itself establish that

Bayview has standing to proceed with the current action against Rutledge.

Again, as will be discussed in greater detail in addressing Bayview’s

additional issues related to standing, the question of whether Bayview has

standing to proceed against Rutledge has not been established.           We also

note the trial court’s observation that Bayview did not request that the

unanswered     requests   for   admission     be   deemed   admitted    at   trial.

Accordingly, the trial court did not err in failing to conclude that Rutledge

admitted to Bayview having standing in this matter as a result of Rutledge’s

failure to respond to the request for admissions.

      In its next two issues, Bayview asserts that it proved standing at trial

by entering the original Note into evidence at trial. Bayview’s Brief at 19.

Bayview contends that the Note is indorsed in blank and therefore Bayview’s

possession of the Note entitles it to enforce the Note in this action. Id. at

21-22. Accordingly, Bayview asserts, the trial court abused its discretion in

failing to find that it had standing on this basis. Id. at 22.

      The holder of a mortgage has the right, upon default, to bring a

foreclosure action. Bank of Am., N.A. v. Gibson, 102 A.3d 462, 464 (Pa.

Super. 2014), appeal denied, 112 A.3d 648 (Pa. 2015).            In a foreclosure

action, the plaintiff can prove standing either by showing that it (1)

                                     - 10 -
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originated or was assigned the mortgage, or (2) is the holder of the note

specially indorsed to it or indorsed in blank. J.P. Morgan Chase Bank, NA.

v. Murray, 63 A.3d 1258, 1267-1268 and n.6 (Pa. Super. 2013).

      Under the Pennsylvania Uniform Commercial Code (PUCC), the
      note securing a mortgage is a negotiable instrument.     J.P.
      Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258
      (Pa.Super.2013). A note endorsed in blank is a “bearer note,”
      payable to anyone on demand regardless of who previously held
      the note. 13 Pa.C.S.A. §§ 3109(a), 3301.

Gibson, 102 A.3d at 466; see also PHH Mortg. Corp. v. Powell, 100 A.3d

611, 621 (Pa. Super. 2014) (“Evidence that some other entity may be the

“owner” or an “investor” in the Note is not relevant to this determination, as

the entity with the right to enforce the note may well not be the entity

entitled to receive the economic benefits from payments received thereon.”).

The Pennsylvania Uniform Commercial Code (“PUCC”) defines a blank

indorsement as follows: “If an indorsement is made by 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).    A special indorsement is defined as follows:     “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.’ When specially indorsed, an instrument becomes payable to

                                    - 11 -
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the identified person and may be negotiated only by the indorsement of that

person.” 13 Pa.C.S. § 3205(a).

       Bayview presented the Note at trial.        The trial court provided the

following summary regarding the Note:

       The Note is dated April 6, 1990 and states the original loan
       amount of $36,745. The Note is in the name of the original
       lender, American Residential [Mortgage Corporation], and Ms.
       Lewis is the named borrower.       The Note is a [two]-page
       document which contains a blank indorsement from GMAC
       Mortgage Corporation [of Iowa] at the bottom of the page. The
       indorsement is made by the Assistant Vice President, C. Tann.

             Several allonges[2] are included with the Note. The first
       allonge after the Note is date[d] April 1, 1997 and is specially
       endorsed to the order of Berkeley Federal Bank & Trust FSB from
       the U.S. Department of Housing and Development (“HUD”) by its
       attorney-in-fact of Berkeley Federal Bank & Trust FSB. The
       indorsement is made by the Director of Mortgage Operations,
       Donald L. St. John. The allonge lists a loan number, the Note’s
       execution date and names Ms. Lewis as the borrower.

             The following allonge is date[d] May 1, 1997 and is
       specially endorsed to the order of Girard Savings Bank, FSB from
       Ocwen Federal Bank FSB, f/k/a Berkeley Federal Bank & Trust
       FSB. The indorsement is made by the Director of Mortgage
       Operations, Donald L. St. John. The allonge lists a loan number,
       the Note’s execution date and names Ms. Lewis as the borrower.

             The next allonge is not dated, but includes a loan number
       and names Ms. Lewis as the borrower. The allonge contains a
       special endorsement to the order of WMFC 1997-4 Inc. a
       Delaware Corporation from First Bank of Beverly Hills, FSB,
       formerly known as Girard Savings Bank, FSB. The indorsement
____________________________________________

2
    An allonge is “[a] slip of paper sometimes attached to a negotiable
instrument for the purpose of receiving further indorsements when the
original paper is filled with indorsements.” Black’s Law Dictionary 88 (9th
ed. 2009).

                                          - 12 -
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      is made by Senior        Vice   President,   Chief   Credit   Officer,
      William Schack.

            The subsequent allonge is also not dated, but includes a
      loan number and names Ms. Lewis as the borrower. The allonge
      is specially endorsed to Ocwen Federal Bank FSB by WMFC
      1997-4 Inc. a Delaware Corporation. The indorsement is made
      by June Fogg, authorized signor.

            The next allonge is dated May 18, 2001 and contains a
      special endorsement to the order of Franklin Credit Management
      Corporation from Ocwen Federal Bank FSB. The allonge lists a
      loan number, the Note’s execution date, the Note amount and
      names Ms. Lewis as the borrower.

            The following allonge contains a special endorsement [to]
      Sky Bank [from] Tribeca Loan Corporation. It is not dated and
      includes no information evidencing it was executed in connection
      with the Note at issue, including a loan number, a borrower
      name, a loan amount or an execution date. The indorsement is
      made by an individual named Frank Esposito, but there is no
      indication of his title or whether he is an authorized agent.

           The final document is titled “Endorsement” and contains a
      blank indorsement from Wells Fargo, Franklin Credit
      Management Corporation, Attorney in Fact. The indorsement is
      made by Kelli J. Airis, Vice President. The document is not
      dated, but includes the Note’s execution date, the original loan
      amount and lists Ms. Lewis as the original maker.

             At trial [Terrence Schonleber, a Bayview employee]
      testified regarding the terms of the Note and that [Bayview] is in
      possession of the Note. When questioned by the [c]ourt about
      the allonges, [Bayview’s] counsel indicated the last allonge is
      that which is specially indorsed from Ocwen Federal Bank FSB to
      Federal Credit Corporation.         [Bayview’s] counsel further
      explained that his office had the original Note prior to [Bayview]
      serving the loan, therefore the next allonge would be with
      [Bayview]. Counsel however, did not have said allonge at trial
      and did not offer it into evidence at trial.

Trial Court Opinion, 2/11/16, at 6-8 (internal citations omitted).

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     A review of the Note reflects that the trial court’s summary of the Note

and multiple allonges is correct.   Furthermore, its summation of Terrence

Schonleber’s testimony and Bayview’s counsel’s comments is accurate.

     The trial court provided the following analysis in addressing Bayview’s

claim that it had standing because it was in possession of the Note which

was indorsed in blank:

            Here, the allonges to the Note presented at trial contain so
     many inconsistencies and irregularities that this [c]ourt finds
     [Bayview] has not proven the Note is indorsed in blank. Initially,
     except for the blank indorsements on the Note itself and on the
     “Endorsement” document from Wells Fargo, all other allonges
     are specially indorsed to banks other than [Bayview]. Further,
     several of the allonges, including the Endorsement from Wells
     Fargo, are not dated. At trial, [Bayview] never established
     whether the allonges and Endorsement were in the proper
     chronological order. [Bayview] also did not establish whether
     the allonges and Endorsement were properly affixed to the Note
     so as to become part of the instrument pursuant to the Uniform
     Commercial Code. See UCC § 3-202(2) (“An endorsement must
     be written by or on behalf of the holder and on the instrument or
     on a paper so firmly affixed thereto as to become part thereof.”)
     Official Comment 3 (“A purported endorsement...pinned or
     clipped to an instrument is not sufficient for negotiation. The
     endorsement must be on the instrument itself, or on a paper
     intended for the purpose which is so firmly affixed to the
     instrument as to become as extension or part of it.”[)]
     Accordingly, [Bayview] did not prove the final document titled
     “Endorsement”, which contains the blank indorsement from
     Wells Fargo, is the final indorsement entitling [Bayview] to
     enforce the Note. In fact, as indicated above, [Bayview’s]
     counsel stated on the record that the last allonge to the Note is
     the allonge which is specially indorsed from Ocwen Federal Bank
     FSB to Federal Credit Corporation. While counsel speculated
     there would be another allonge to [Bayview], nothing was
     presented to the [c]ourt.

          Further, [Bayview] never explain[ed] how the allonge from
     Sky Bank to Tribeca Loan Corporation relates to the Note at

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       issue or why it was included amongst the other allonges. Said
       allonge is undated and includes no information evidencing it was
       executed in connection with the Note. It contains no loan
       number, no borrower name, no loan amount and no execution
       date.    There is also no indication it was executed by an
       authorized agent.

             Accordingly, due to these irregularities and inconsistencies,
       and [Bayview’s] counsel’s statement at trial that the allonge
       specially indorsed from Ocwen Federal Bank FSB to Federal
       Credit Corporation is the last allonge, this [c]ourt finds
       [Bayview] has not proven the Note is indorsed in blank.
       Furthermore, because [Bayview] has not established the Note is
       specially indorsed over to [Bayview], [Bayview] lacks standing to
       enforce the Note.

Trial Court Opinion, 2/11/16, at 11-12 (internal citations omitted).

       We agree with the trial court’s analysis. As outlined above, Bayview

has failed to establish that the Note is indorsed in blank, as it failed to

establish that the “Endorsement” from Wells Fargo is the final indorsement

entitling Bayview to enforce the Note.         Additionally, Bayview’s counsel

testified that the last allonge to the Note was the special indorsement from

Ocwen Federal Bank FSB to Federal Credit Corporation. N.T., 9/8/15, at 14-

15. Bayview also failed to establish that the Note was specially indorsed to

it.   Id. at 15.   Because the evidence does not establish that the Note is

indorsed in blank, simple possession of the Note, even if obtained by

transfer, is insufficient.   Thus, we cannot conclude that the trial erred in

concluding that Bayview lacked standing to enforce this Note on the basis of

its possession of said Note.

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      Next, Bayview contends that even if it was not in possession of the

duly indorsed Note, it has standing as assignee of the mortgage. Bayview’s

Brief at 23.   Bayview maintains that it is the holder of the mortgage by

virtue of a valid assignment of mortgage from the last record holder of the

mortgage, namely Wells Fargo.       Id. at 23.    Bayview also asserts that it

introduced the final assignment of mortgage to Bayview at trial. Id. at 24.

Accordingly, Bayview posits that the trial court erred in finding that it did not

have standing in this action. Id.

      In a mortgage foreclosure action, the mortgagee is the real 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 (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, 112 A. 636, 637 (Pa.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.

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

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      “An assignment is a transfer of property or some other right from one

person to another, and unless in some way qualified, it extinguishes the

assignor’s right to performance by the obligor and transfers that right to the

assignee.”   Legal Capital, LLC v. Med. Prof’l Liab. Catastrophe Loss

Fund, 750 A.2d 299, 302 (Pa. 2000). “Where an assignment is effective,

the assignee stands in the shoes of the assignor and assumes all of his

rights.” Barbezat, 131 A.3d at 69. “[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).

      In addressing this issue, the trial court provided the following analysis:

             [Bayview] also failed to establish it is the current holder of
      the Mortgage by valid assignment. At trial, [Bayview] only
      presented to the [c]ourt a copy of the Bayview Assignment with
      no indication it was ever recorded. It was also not certified by
      the Philadelphia Commissioner of Records as a true and correct
      copy of the original. [Bayview] furthermore had not tendered
      proof of the chain of assignments from American Residential to
      [Bayview], as these assignments were not previously of record
      and were not provided to the [c]ourt at trial. While [Bayview]
      attached a copy of the recorded Bayview Assignment and all
      preceding mortgage assignments to the Motion for Post Trial
      Relief, these documents were not provided to the [c]ourt as
      proof at the time of trial and [Bayview] failed to prove the
      proper chain of title.

Trial Court Opinion, 2/11/16, at 12-13.

      In Pennsylvania, several statutes mandate that mortgages and

documents conveying an interest in land be recorded. Pennsylvania permits

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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. “No deed or mortgage, or defeasible deed, in the nature of

mortgages, hereafter to be made, shall be good . . . unless such deed be

acknowledged or proved and recorded within six months after the date

thereof[.]” 21 P.S. § 621. Additionally,

           “Every such deed, conveyance, contract, or other
     instrument of writing which shall not be . . . recorded, as
     aforesaid, shall be adjudged fraudulent and void as to any
     subsequent bona fide purchaser or mortgagee . . . without actual
     or constructive notice unless such deed, conveyance, contract,
     or instrument of writing shall be recorded . . . before the
     recording of the deed or conveyance[.]”

21 P.S. § 351.

            “All deeds and conveyances . . . shall be recorded in the
     office for the recording of deeds . . . within ninety days after the
     execution . . . and every such deed and conveyance that
     shall . . . be made . . . which shall not be . . . recorded as
     aforesaid, shall be adjudged fraudulent and void against any
     subsequent purchaser or mortgagee[.]”

21 P.S. § 444.   Rule 1147(a) of the Pennsylvania Rules of Civil Procedure

requires that a plaintiff in a mortgage foreclosure action set forth in the

complaint, inter alia, “the parties to and the date of the mortgage, and of

any assignments, and a statement of the place of record of the

mortgage and assignments.” Pa.R.C.P. 1147(a)(1) (emphasis added).

     While what was purported to be an assignment of mortgage from

Wells Fargo to Bayview was presented at trial, the trial judge noted on the

record that there was no evidence that the assignment had been recorded or

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that it was a certified copy. Thus, Bayview failed to establish that it was the

possessor of the mortgage via a valid assignment from Wells Fargo.

Moreover, there was no evidence presented at trial that established that the

mortgage had been properly assigned and conveyed to Wells Fargo from the

original mortgagee, American Residential Mortgage Corporation.

      As noted, while not presented to the court prior to trial, a recorded

assignment from Wells Fargo to Bayview was presented to the trial court for

the first time as an attachment to the post-trial motion. The assignments

from American Residential Mortgage Corporation to Wells Fargo were also

attached to Bayview’s post-trial motion.      However, these documents were

not of record at the time the trial court entered nonsuit. Thus, we cannot

agree that the trial court erred in concluding that Bayview failed to establish

that it was the mortgagee via a valid assignment.       See Barnes v. Alcoa,

Inc., 145 A.3d 730, 738 (Pa. Super. 2016) (explaining that this Court is

prohibited from considering evidence not presented at trial when considering

whether the trial court properly granted a nonsuit.).

      Next, Bayview argues that the assignment of the mortgage to

Bayview, whether recorded or not, demonstrates possession of the Note

under section 3204(c) of the PUCC.           Bayview’s Brief at 25.   Bayview

contends that the trial court erred in failing to find that it had standing by

virtue of an assignment of mortgage, regardless of whether it was recorded,

which demonstrated possession of the Note under section 3204(c) of the

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PUCC. Id. Bayview asserts that “the Assignment of Mortgage to [Bayview],

which was produced at trial, operates as an unqualified indorsement of the

Note.” Id.

      Section 3204(c) of the PUCC provides as follows, in relevant part: “For

the purpose of determining whether the transferee of an instrument is a

holder, an indorsement that transfers a security interest in the instrument is

effective as an unqualified indorsement of the instrument.”        13 Pa.C.S.

§ 3204(c). For reasons explained previously, however, we cannot agree that

Bayview has established that it was a holder in due course of the Note.

Moreover, we determined that the trial court did not err in concluding that

Bayview failed to establish that it was the mortgagee via a valid assignment.

Thus, we cannot agree with Bayview’s argument that the assignment of the

mortgage demonstrated possession of the Note.           This claim also fails.

Accordingly, we conclude that the trial court did not err in entering nonsuit

against Bayview.

      In its final issue, Bayview asserts that it named all proper parties in

this action and released Brenda E. Lewis in accordance with Pa.R.C.P.

1144(b). Bayview Brief at 26. Therefore, the trial court erred in finding that

it did not have subject matter jurisdiction over this case. Id.

      In its opinion, the trial court, sua sponte, concluded that it lacked

subject matter jurisdiction over the foreclosure action because the Lewis

Estate is an indispensable party and is not named a defendant. Trial Court

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Opinion, 2/11/16, at 13.   The trial court determined that Wells Fargo was

required to name Ms. Lewis’s mother or the Lewis Estate as a defendant

pursuant to Pa.R.C.P. 1144. Id.

      Rule 1144 of the Pennsylvania Rules of Civil Procedure, pertaining to

mortgage foreclosure actions provides as follows:

      Rule 1144. Parties. Release of Liability

      (a) The plaintiff shall name as defendants

            (1) the mortgagor;

            (2) the personal representative, heir or devisee of a
            deceased mortgagor, if known; and

            (3) the real owner of the property, or if the real
            owner is unknown, the grantee in the last recorded
            deed.

      (b) Unless named as real owner, neither the mortgagor nor the
      personal representative, heir or devisee of the mortgagor, need
      be joined as defendant if the plaintiff sets forth in the complaint
      that the plaintiff releases such person from liability for the debt
      secured by the mortgage.

Pa.R.C.P. 1144.

      We note that the amended complaint consists of a single statement,

incorporating by reference the original complaint.       Amended Complaint,

4/5/12, at unnumbered 3.         The following paragraph is included in the

original complaint: “Pursuant to Pennsylvania Rule of Civil Procedure 1144,

the Plaintiff releases from liability for the debt secured by the mortgage any

mortgagor, personal representative, heir or devisee of the mortgagor who is

not a real owner of the property at the time of the filing of this Complaint.”

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Complaint, 1/26/11, at ¶ 25.     The Complaint named Rutledge as the real

owner of the property. Id. at ¶ 4. Thus, Wells Fargo, as party in interest

prior to Bayview, complied with the requirement of Pa.R.C.P. 1144(b) by

releasing the mortgagor, Brenda E. Lewis, and her personal representative

or heir from liability for the debt secured by the mortgage.

      Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/21/2016

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