Court Opinion

ID: 4196354
Source: CourtListenerOpinion
Date Created: 2017-08-16 17:10:09.081473+00
Date Added: 2024-06-11T09:21:35.509433
License: Public Domain

J-S41014-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

FEDERAL NATIONAL MORTGAGE                          IN THE SUPERIOR COURT OF
ASSOCIATION,                                             PENNSYLVANIA

                            Appellee

                       v.

TERRENCE AND ANDREA RILEY,

                            Appellants                  No. 2038 MDA 2016

               Appeal from the Order Entered November 23, 2016
                in the Court of Common Pleas of Franklin County
                         Civil Division at No.: 2015 593

BEFORE: GANTMAN, P.J., LAZARUS, J., and PLATT, J.*

MEMORANDUM BY PLATT, J.:                              FILED AUGUST 16, 2017

        Appellants, Terrence and Andrea Riley, appeal from the trial court’s

November 23, 2016 order granting the motion for summary judgment of

Appellee, Federal National Mortgage Association. We affirm.

        In its opinion, the trial court fully and correctly sets forth the relevant

facts and procedural history of this case.1           (See Trial Court Opinion,

2/09/17, at 0-22).3 Therefore, we have no reason to restate them.

____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
1
  On December 19, 2016, the trial court ordered Appellants to file a concise
statement of errors complained of on appeal. See Pa.R.A.P. 1925(b). On
January 9, 2017, Appellants filed a timely Rule 1925(b) statement. See id.
On February 9, 2017, the court filed an opinion that was a modified version
of its November 23, 2016 opinion granting summary judgment.             See
(Footnote Continued Next Page)
J-S41014-17

      On appeal, Appellants raise the following issues for our review:

      (I).   Did the trial court err in entering summary judgment in
             favor of [Appellee]?

      (II). Did the trial court correctly apply the Nanty-Glo Rule[4]
            and is the “Anderson Affidavit” sufficient to demonstrate
            the absence of a genuine issue of material fact?

(Appellants’ Brief, at 23).

      We briefly note our standards of review.

            Our scope of review of an order granting summary
      judgment is plenary. We 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.

            Motions for summary judgment necessarily and directly
      implicate the plaintiff’s proof of the elements of his cause of
      action. Thus, a record that supports summary judgment will
                       _______________________
(Footnote Continued)

Pa.R.A.P. 1925(a); (see also Order of Court, 2/09/17, at unnumbered page
1).
2
  The first page of the February 9, 2017 opinion is unnumbered, its second
page is numbered page one. In the interest of simplicity, we will keep the
trial court’s numbering and designate the first page of the opinion as page
zero.
3
  We note that on page one of its opinion, the trial court incorrectly states
the address of the property in question as 12417 Gilbert Road, rather than
13417 Gilbert Road. (See Trial Ct. Op., at 1).
4
  Borough of Nanty-Glo v. Am. Surety Co. of N.Y., 163 A. 523 (Pa.
1923).

                                            -2-
J-S41014-17

     either (1) show the material facts are undisputed or (2) contain
     insufficient evidence of facts to make out a prima facie cause of
     action or defense and, therefore, there is no issue to be
     submitted to the fact-finder. Upon appellate review, we are not
     bound by the trial court’s conclusions of law, but may reach our
     own conclusions. The appellate court may disturb the trial court’s
     order only upon an error of law or an abuse of discretion.

Dibish v. Ameriprise Financial, Inc., 134 A.3d 1079, 1084-85 (Pa. Super.

2016), appeal denied, 141 A.3d 481 (Pa. 2016) (citation omitted).

Moreover,

           [t]he holder of a mortgage has the right, upon default, to
     bring a foreclosure action. The holder of a mortgage is entitled
     to summary judgment if the mortgagor admits that the
     mortgage is in default, the mortgagor has failed to pay on the
     obligation, and the recorded mortgage is in the specified
     amount.

Bank of America, N.A. v. Gibson, 102 A.3d 462, 464-65 (Pa. Super.

2014), appeal denied, 112 A.3d 648 (Pa. 2015) (citations omitted).

     Lastly, the Nanty–Glo Rule controls the use of oral testimony (either

through affidavits or depositions) to determine the outcome of a case in

motions practice.   The Rule states “. . . the party moving for summary

judgment may not rely solely upon its own testimonial affidavits or

depositions, or those of its witnesses, to establish the non-existence of

genuine issues of material fact.” Dudley v. USX Corp., 606 A.2d 916, 918

(Pa. Super. 1992), appeal denied, 616 A.2d 985 (Pa. 1992) (emphasis

added) (citation and footnote omitted).   Three (3) factors determine the

applicability of the Nanty–Glo Rule:

                                   -3-
J-S41014-17

            Initially, it must be determined whether the plaintiff has
      alleged facts sufficient to establish a prima facie case. If so, the
      second step is to determine whether there is any discrepancy
      as to any facts material to the case.          Finally, it must be
      determined whether, in granting summary judgment, the trial
      court has usurped improperly the role of the [fact-finder] by
      resolving any material issues of fact. It is only when the third
      stage is reached that Nanty–Glo comes into play.

DeArmitt v. New York Life Ins. Co., 73 A.3d 578, 594–95 (Pa. Super.

2013) (citation omitted) (emphasis added).        Therefore, in order for the

Nanty–Glo Rule to apply in the instant matter, there must be a genuine

discrepancy or dispute as to a material fact.

      After a thorough review of the record, the parties’ briefs, the

applicable law, and the well-reasoned opinion of the trial court, we conclude

that there is no merit to the issues Appellants have raised on appeal. The

trial court opinion properly disposes of the questions presented. (See Trial

Ct. Op., at 7, 11-14) (finding that: (1) Appellants have failed to meet their

burden to respond to the motion for summary judgment with evidence of

record that would rebut Appellee’s factual claims or establish a legal

defense; (2) Appellants failed to establish the second prong of the Nanty-

Glo applicability test because they did not demonstrate a discrepancy in any

material fact; (3) Appellants only presented legal arguments in their

pleadings which cannot create a dispute of material fact; and (4) Appellants

wrongly sought relief under Nanty-Glo, because there was no factual

dispute to which the trial court could apply the rule).   Accordingly, we affirm

based on the trial court’s opinion.

                                      -4-
J-S41014-17

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/16/2017

                          -5-
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     IN THE COURT OF COMMON PLEAS OF THE 39TH JlJDICIAL
    DISTRICT OF PENNSYLVANIA -- FRANKLIN COUNTY BRANCH

Federal National Mortgage                    Civil Action - Law
Association,
                  Plaintiff
       v.                                    No. 2015-593

 Terrence J. Riley and
 Andrew L. Riley,
                    Defendants
-----------------·--·---·-
                                             Honorable Shawn ~ers                                      _

                              ORDER OF COURT

      AND NOW THIS 9111 day of February, 2017, the Court has reviewed the

Defendant's Statement ofMatters Complained of on Appeal and is of the opinion

that the issues raised are adequately addressed by the Court's November 23, 20 J 6

Opinion granting Plaintiff's Motion for Summary Judgment: Therefore, the Court

directs the Superior Court to that Opinion, as modified to comport with Pa. R.A.P.

124, a copy of which is attached.

                                                                                                            3IPage
      JT JS ORDERED            that the Franklin County Prothonotary promptly transmit

to the Prothonotary of the Superior Court the record in this matter.

       Pursuant to Pa.R.C.P. 236, the Prothonotary shall give written notice of the
entry of this Order, including a copy of this Order, to each party, and shall note in
the docket the giving of such notice and the time and manner thereof.

The Prothonotary shall give notice and serve:
      Joseph L. Riga, Esq.
      J. McDowell Sharpe, Esq.
      Daniel A. Pallen, Esq ..
     &l,t..(.\- Mrf\li'\\ ~tm::h.01'\

                                                                                         41Page
         IN THE COURT OF COMMON PLEAS OF THE 39TH JUDICIAL
        DISTRICT OF PENNSYLVANIA -- FRANKLIN COUNTY BRANCH
                                                                                                                  '".')
     Federal National Mortgage                       Civil Action - Law                                           "'.')
                                                                                                                        ~ -q
     Association,                                                                                      -q
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           v.                                        No. 2015-593                    ~.: ~   •.   ")
                                                                                                       \D                    •,\

                                                                                                                        ..
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                                                                                                                             "'{

    Terrence J. Riley and                                                                                               .-·<
                                                                                                                   .,
                                                                                                                 .. ~
    Andrew L. Riley,
                       Defendants                _______ _I_ionorable Sha~n D. Mey~~-----

                                           OPINION

    PROCEDURAL HISTORY

          HSBC Bank USA, N.A. ("HSBC Bank") filed a Complaint in Mortgage

    Foreclosure against Terrence and Andrea Riley ("the Rileys") on February I 2,

    20 I 5. After disposition of Preliminary Objections, the Rileys filed an Answer and

    New Matter on December 7, 2015. Federal National Mortgage Association

    (FNMA) was substituted as successor to HSBC Bank on February 26, 20 I 6.1

HSBC Bank responded to this New Matter on July 11, 20 I 6.

         On August 8, 20 J 6, FNMA simultaneously filed a Motion for Summary

Judgment, Affidavits from Joseph F. Riga and Van Anderson in support of that

motion, and a Praecipe to list the Motion for Argument. On August 22, 2016, the
I
  For clarity purposes, when discussing the contents of pleadings throughout this opinion, the
court will refer to the actions of both HSBC Bank and FNMA as actions of FNMA even though
FNMA may not yet have been a substitute plaintiff at the time of the respective. pleadings.

                                                                                                                          SI Page
    RiJeys filed a Response     in Opposition     to FNMA's Motion for Summary          Judgment

    and a corresponding      Memorandum      of Law in opposition   to FNMA's Motion for

    Summary Judgment.        Oral argument      on this Motion took place on October 6, 2016

    before the undersigned    judge.                           I          I
           Based on representations by the Rileys ' counsel, this courted granted both

    parties twenty days leave to file supplemental briefs limited to tscussion of Bank

    of America v. Wicker, (C.P. Jefferson Cty., Dec. 19, 2014), cited by the Rileys'

    counsel during argument." FNMA filed a Supplemental Brief Addressing Nanty-

    Glo and Its Motion for Summary Judgment on October 26, 2016. The Rileys did

    not file a supplemental brief.

          This matter is now ripe for decision by this court,

    FACTUAL HISTORY

          The Rileys own property al I 2417 Gilbert Road, Upper Strasburg,

Pennsylvania 17265. Plaintiffs Complaint, ~2. On August 27, 2008, the Rileys

executed a Note for $137,750.00 and mortgaged the Gilbert Road property.'

Plaintiff's Complaint, Exhibits A, B. FNMA is the last assignee of the Mortgage as

of December 14, 2015. Plaintiff's Motion for Summary Judgment,                iJ6.   In support

2
  This court's order dated October 6, 2016, granting leave for further briefing on this case
incorrectly named the case as Bayview Loan Servicing v. Wicker.
3
  Both documents were notarized at the time of signing. These acknowledgements establish that
the RiJeys have signed these documents. See 57 Pa. C.S.A. §302(a) (defining an
Acknowledgment as "a declaration by an individual before a notarial officer that the individual
has signed a record for the purpose stated in the record.")

                                                                                                   6IPage
 of their Mortgage    Foreclosure   Complaint,   the FNMA attached photostatic      copies

 of the promissory    note, the mortgage,   and the assignment   of the mortgage    from

 HSBC Bank to FNMA. Plaintiffs          Complaint,   ilif3,4,6. However,   the Rileys deny

 the truth and accuracy of these documents. Defendants' Answer and New Matter,

          In short, the Rileys have denied FNMA's factual averments based on legal

 arguments which this court will address in turn.

 DISCUSSION

    I.       APPLICABLE STANDARD: SUMMARY JUDGMENT IN
             MORTGAGE FORECLOSURE

         To evaluate a motion for summary judgment, the court must apply the

following standard laid out by the Supreme Court of Pennsylvania in Washington

v. Baxter:

          As with all summary judgment cases, we must 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. In order to withstand a motion for summary
         judgment, a non-moving party must adduce sufficient evidence on an
         issue essential to his case and on which he bears the burden of proof
         such that a jury could return a verdict in his favor. Failure to adduce
         this evidence establishes that there is no genuine issue of material fact
         and the moving party is entitled to judgment as a matter of law.
         Finally we stress that summary judgment will be granted only in those
         cases which are free and clear from doubt.

719 A.2d 733, 737 (Pa. J 998) (internal citations and quotations omitted).

                                             2

                                                                                             71Page
          In a mortgage foreclosure action, summary judgment shou Id be granted if

 "the mortgagors admit that the mortgage is in default, that they have failed to pay

 interest on the obligation, and that the recorded mortgage is in the specified

 amount." Cunningham v. Mc Williams, 714 A.2d I 054, I 05 7 (Pa. Super. 1998)

 (citing Landau v. Western Pennsylvania National Bank, 282 A.2d 335, 340 (Pa.

 J   971 )). Furthermore, the non-moving party is obligated under Pennsylvania Rule

 of Civil Procedure I 035.3 to respond to a motion for summary judgment within

 thirty days of service indicating either of the following:

         (I) one or more issues of fact arising from evidence in the record
             controverting the evidence cited in support of the motion or from a
             challenge Lo the credibility of one or more witnesses testifying in
             support of the motion, or
         (2)evidence in the record establishing the facts essential to the cause
             of action or defense which the motion cites as not having been
             produced.

Pa. R.C.P. I 035.3(a) (emphasis added). Even though the movant must bear the

burden of establishing an absence of genuine issues of material fact, the responding

party "may not merely rely on his pleadings or answers in order to survive

summary judgment." t,Jordi y,._]:CJ~ystone Health Plan West, Ins:_,, 989 A.2d 376, 379

(Pa. Super. 20 I 0). The responding party "must set forth specific facts

demonstrating a genuine issue of material fact." Bank of America, N.A. v. Gibso1!,

I 02 A.3d 462, 464 (Pa. Super. 20 I 4) (referencing Pa. R.C.P. I 035.3 ).

                                           3

                                                                                         SI Page
          If a mortgage foreclosure defendant admits that a fixed-rate mortgage has

 been recorded and that they have failed to make payments or pay interest on the

 mortgage, then no genuine issues of material fact remain, and the plaintiff should

 be granted summary judgment. See Landau v. Western Pennsylvania Nat. Bank,

 282 A.2d 335, 340 (Pa. 197 l); Cunningham v. Mc Williams, 714 A.2d l 054, 1057

 (Pa. Super. 1998).

         The Rileys claim here that "[i]t is not the Defendant's obligation to rebut the

 Plaintiffs case by way of record supported evidence." Defendants' Response, ~115

 (internal quotations omitted). However, to survive summary judgment, the Rileys

 must present actual specific facts which would establish a genuine issue of material

 fact. See Pa. R.C.P. l 035.3; Gibson, 102 A.3d at 464. Here, the Rileys have

disputed averments of fact with arguments of law.

   II.      ANALYSIS

            A. STANDING

               i. Under the Best Evidence rule, must FNMA present the original

                  note to have standing?

         Under Pa. R. E. I 002, "[a]n original writing ... is required in order to prove

its content unless these rules, other rules prescribed by the Supreme Court, or a

statute provides otherwise." However, according to Pa R.C.P. l l 47(a), the Plaintiff

must set forth only the following to have standing in a mortgage foreclosure action:

                                            4

                                                                                           9   I   Page
       (1) 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;
       (2) a description of the land subject to the mortgage;
       (3) the names, addresses and interest of the defendants    in the action
       and that the present real owner is unknown if the real     owner is not
       made a party;
       (4) a specific averment of default;
       (5) an itemized statement of the amount due; and
       (6) a demand for judgment for the amount due.

 Pa R.C.P. J 147(a). The Rules do not require attachment of a copy of the mortgage

 or note, let alone an original document. A mortgage foreclosure complaint cannot

 be deficient when a copy of the promissory note is not attached, but the Complaint

 has specifically averred each requirement under the rule.~~~ Bank of New York

Mellon v. Johnson, I 21 A.3d l 056 (Pa. Super. 2015). In accordance with the

Pennsylvania Rules of Civil Procedure, FNMA has set forth the required

averments and statements in its Complaint and bas supplemented those averments

with copies of relevant documents. The Best Evidence rule does not apply here to

establish standing where the document itself is irrelevant to standing under the

Rules of Civil Procedure.

      The Rileys claim that In re Walker establishes the court must review the

indorsements of an original note in camera. Defendants' Answer and New Matter,

13 (citing In re Walker, 466 B.R. 271 (Bankr, E.D. Pa. 2012)). However, in In re

Walker, the court held that a blank indorsement indicates that the Note is "payable

                                         5

                                                                                      10   I   Page
      to bearer and may be negotiated      by transfer     of possession   alone until specially

     indorsed."     In re Walker, 466 at 281 (citing Pa. UCC §3205(b)).          Since the note was

     indorsed in blank and the subject bank had presented            evidence   of its possession   of

     the note, the court held that the Bank was in fact the holder of the note. Id.

             Here, FNMA has incorporated        into the record three assignments        which

     establish    the chain of ownership of this Note. It is evident to the court from the

     copy attached to FNMA's Complaint          that the Note is endorsed in blank.        Plaintiff's

     Complaint,     Exhibit A; see also Plaintiffs       Response to Defendant's     New Matter,

     ~116. Since the Rules of Civil Procedure do not require an original Note be attached

     to have standing, and because FNMA has evidenced its possession of the Note

     through various assignments, FNMA is the holder of the Note and has standing to

     bring the current action.

                   ii. Does conversion of negotiable instrument to a security separate

                       the note from the mortgage, thereby destroying the negotiable

                       instrument'?

           The Rileys' brief lays out numerous allegations of fact to support this

 argument with respect to the methods by which mortgages and notes are assigned

 and conveyed." However, the Rileys' have failed to present any affidavits,

'1In support ofthe their argument that bifurcation destroys the negotiable instrument, the Rilcys
rely primarily on a federal case, Montgomery Coun.!Y. Pa. v. MERSCORP, Inc., which held that
"the Pennsylvania Recording Act does in fact require the transfer ofsecured deb! [i.e. the
                                                     6

                                                                                                         111Page
  depositions,      interrogatories    or other record evidence      that would support these

  factual and legal assumptions.          Here, the Rileys are prompting       this court to take

  judicial     notice of assumptions      of facts which have not been established        in the

  record. As such, the Rileys         have failed to meet their burden of responding            to

  FNMA's        Motion for Summary        Judgment       under Pa. R.C.P.   1035 with evidence of

 record which can rebut FNMA's factual claims or establish                  a legal defense.?

             For example,     the Rileys argue that FNMA is not in possession          of the note

 because       the mortgage    document    did not give MERS the power to assign the note.

 Defendants'       Brief,   Part A. However, Section 20 of the Mortgage document states

 that "the Note or a partial interest in the Note (together with this Security

 Instrument) can be sold one or more times without prior notice to the borrower."

 Plaintiff's Complaint, Exhibit B. Each of the three assignments of record in this

 case state that the assignment has been made in consideration for a certain sum or

"other good and valuable consideration" paid to the Assignor. Plaintiff's

Complaint, Exhibit C, D; Anderson Affidavit, Exhibit C. Therefore, each
---------------------------·····--··--··-·-----·--····- -----
  mortgage note) to first be documented in a form suitable for recording and then recorded in the
 land records because it creates in the transferee an equitable interest in the mortgage."
 Montgomery County. Pa. v. MERSCORl', Inc., l 6 F.Supp.3d 542, 557 (E.D. Pa. 2014).
 However, the Third Circuit Court of Appeals overturned the District Court's decision, holding
 Pennsylvania's Recording Act "does not create a duty to record all land conveyances."
Montgomery County, Pa. v. MERSCORP, Inc., 795 F.3d 372, 374 (3d. Cir. 2015). Furthermore,
the Third Circuit Court of Appeals found no merit in appellant's argument that "MERSCORP
[was] violating (state law] by failing lo record its transfer of mortgage debts, thus depriving the
county governments of recording fees." lg. al 379.
5
   Despite presenting numerous allegations in their New Matter, the Rileys presented no evidence
of record to successfully create disputes of material fact which would allow them to survive
summaryjudgment.
                                                     7

                                                                                                      12   I   Page
  assignment of the note and mortgage has been made for compensation in

  accordance with Section 20 of the mortgage document.

          In addition, the Rileys allege that when they closed on their property, the

 original lender signed a Pooling and Servicing Agreement (PSA) which "detailed

 the closing date by which the horneowner's loan must be 'sold' to the REM!C, and

 described exactly how the homeowner's note is to find its way from the original

 lender to the REMIC trust." Defendants' Brief, Pait A. However, the Rileys fail to

 refer to any part of the record that establishes the existence or enforcement of this

 alleged PSA and have therefore failed to establish that the note has in fact been

 securi ti zed.

         Therefore, since the Rileys' legal argument regarding the bifurcation of the

 note and mortgage are not based in facts established within the record, the court

finds that FNMA has standing as the current holder of the note.

              iii. Docs bifurcation of the note and mortgage discharge obligation

                  to pay debt?

         For the purpose of completeness, the court will address whether separation

of the note and mortgage would discharge the Rileys' obligation to pay the debt at

issue.

         At oral argument, counsel for the Rileys relied upon a Pennsylvania

Common Pleas case, which the court attached as part of the record pursuant to
                                                                    I
                                           8

                                                                                         Bl   Page
 court order on October 6, 2016. See Bank of America v. Wicker (C.P. Jefferson

 Cty., Dec. 19, 20 I 4). Counsel argued       that this case supported his present

 arguments     with respect to bifurcation    of the mortgage and destruction        of the

negotiable     instrument.   In reality, the court in Wicke1: expressly rejects the

argument      that the mortgage foreclosure     plaintiff lacks standing   because    the Note

had been expressly conveyed with the mortgage in all relevant assignments.

Wicker at 3 ("Consequently,        the Assignment's     clear conveyance    of the note

eliminates any question      regarding   the Bank's   standing as its current holder").

       The Rileys asserted that the negotiable        instrument   was destroyed      and

therefore    unenforceable   because only the mortgage was assigned without the Note.

However, the specific language        ofthe May 18, 201 I assignment        from Mortgage

Electronic Registration      Systems (MERS) as nominee for HSBC Mortgage

Corporation     to HSBC Mortgage Corporation          reads as follows:

       Assignor hereby assigns unto the above-named    Assignee,   the said
       Mortgage having an original principal    sum of $13 7, 750.00 with
       interest, secured thereby, with all moneys now owing or that may
      hereafter become due or owing in respect thereof, and the full benefit
      of all the powers and of all the covenants and provisos therein
      contained, and the said assignor hereby grants and conveys unto the
      said assignee the assignor's beneficial interest under the security
      instrument.

                                               9

                                                                                                 14   I   Page
    Plaintiff's   Complaint,   Exhibit C (emphasis      added)." The April 6, 2012 assignment

    from HSBC Mortgage Corporation          to HSBC Bank USA, N.A. contains identical

    language.     Plaintiff's Complaint, Exhibit D.     In Wicker, the court reasoned the

    language "and the indebtedness thereby secured" blatantly referred to the note and

    therefore negated any claim by the defendants that the note and mortgage had been

    separated. Wicker at 3. Here, the language "secured thereby, with all moneys now

    owing or that may hereafter become due or owing in respect thereof" similarly

    refers to the Note which the Rileys claim was separated from the mortgage via

    assignment. Defendants' Response,       ~I I 7. 7
           More specifically, the December 14, 2015, assignment from HSBC Bank

    (predecessor plaintiff) to FNl\1A (current plaintiff) expressly states that the "all

    beneficial interest under that certain Mortgage described below together with the

    note(s) and obligations therein described and the money due and to become due

thereon wit interest and all rights accrued or to accrues under said mortgage."

Anderson Affidavit, Exhibit C. As in Wick.er, clear conveyance of the note

eliminates any questions regarding FNMA's standing as current holder. This most

recent assignment establishes FNMA's interest in continuing the suit originally

brought by HSBC Bank by granting all the rights and benefits under both the
6
  This assignment was recorded 011 May 20, 201 I with the Franklin County Recorder of Deeds.
1
  The Rileys claimed "[a]n assignment of a mortgage can never also assign the note, especially
when, us in the instant case, the purported note was securitized and separated from the
mortgage." Defendants' Brief in Opposition to Plaintiff's Motion for Summary Judgment, Part B
[no page numbers provided). However,
                                                  JO

                                                                                                 15   I   P age
 mortgage and the note. Clearly, based on the language          of the assignments,         there

 has been no bifurcation     of the mortgage    and note which would dissolve         the

 negotiable    instrument   and negate FNMA's standing.

           Therefore, since the note and mortgage      have been assigned together          in

 accordance     with the language    of the mortgage   document,   the court. finds that

 FNMA has standing to bring the current action because it is the present holder of

 the Note.

              B. MORTGAGE           IN DEFAULT

                i. Under the Nantv-Glo rule, is the Anderson Affidavit sufficient

                   to establish default?

       The Nanty-Glo rule establishes that summary judgment may not be granted

where the movant "relies exclusively upon oral testimony, through affidavits or

depositions, to establish the absence of a genuine issue of material fact." Kee v,

Pennsylvania Turnpike Commission, 743 A.2d 546, 550 (Pa. Cmwlth, 1999). The

Superior Court has outlined three steps to determine whether the Nanty-Glo rule

applies:

       Initially, it must be determined whether the plaintiff has alleged facts
       sufficient to establish a prima facie case. If so, the second step is to
       determine whether there is any discrepancy as to any facts material to
      the case. Finally is must be determined whether in granting summary
      judgment, the trial court has usurped improperly the role of the jury
      by resolving any material issues of fact.

                                               11

                                                                                                    16   I   P age
 Kirby v. Kirby, 687 A.2d 385, 388 (Pa. Super. 1997). When no disputed issues of

 material     fact have been presented, Nanty-Glo            does not preclude consideration       of

 affidavits establishing      default in mortgage         foreclosure.   Beal Bank v. PIDC

 Financing      Corp, WL 31012320         (C.P. Phi la. Cty. 2002).

            The Rileys argue that under the Nanty-Glo             rule, the affidavit of one

 individual cannot be considered          conclusive on the issue of whether the mortgage is

 in default. Defendants'      Response;     i/8, 14. However,       the Rileys do not sufficiently

 establish    the Nanty-Glo    rule in fact applies to this case based on the three step

 analysis    outlined by the Superior Court. The Complaint               alleges that the mortgage is

 in default, that the Rileys have failed to pay interest, and that the recorded

mortgage is in a specified       amount.    Plaintiff's     Complaint, i/i/8, I 0. In support of

these allegations,    FNMA attached copies of the mortgage Note, the notarized

Mortgage document, relevant         assignments        of the mortgage establishing      their

interest,    and required notices which had been mailed to the Rileys. Complaint,

Exhibits A, B, C, D, E, and F. Fl-!MA established a prima facie case, thereby

satisfying the first prong of the Nanty-Glo applicability test. However, the second

prong of the Nanty-Glo applicability test has not been established. To create a

discrepancy in material fact, the Rileys "had the burden to present facts by counter-

affidavits, depositions, admissions, or answers to interrogatories." Washington

Federal Savings and Loan Association v. Stein, 515 A.2d 980 (Pa. Super. 1986)

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                                                                                                        171Page
 (holding reliance on pleadings      without additional   evidence   does not create dispute

 of material fact). The Ri Ieys have presented only legal argument in their pleadings

 and supporting brief, which cannot create a dispute of material fact under Pa.

 R.C.P. l 035. Whereas disputes of law were raised by the Rileys and decided

 herein, the Nanty-Glo rule does not apply in the instant case because no genuine

 disputes of material facts exist.

       Simply, the Rileys have put the cart before the horse by seeking relief under

 Nanty-Glo without creating a factual dispute to which the rule could be applied.

 For example, in its Complaint, FNMA alleged that the mortgage is in default

 because the payments had not been made since August 2010. Plaintiffs Complaint,

~8. In response to this factual averment, the Rileys argue that as a matter of law,

the mortgage cannot be in default because it has been destroyed. Defendants'

Answer and New Matter,        il8. Nowhere   in that responsive paragraph do the Rileys

present factual averrnents which could create a genuine issue of material fact with

regard to whether the mortgage is in default for failure to make payments. Id.

Furthermore, they implicitly admit their failure to make payments by citing an

obscure legal theory which seeks to defend their failure to pay. Id.

      The Rileys contend that since Van Anderson is not an employee of FNMA,

he does not have competency to testify under Pa. R.E. 601, 602. Defendants'

Response,   i/7.   "Actual knowledge and observation on the part of the lay witness are

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  the essential bases for the reception of the opinion." Krauss v. Trane U.S. Inc., I 04

 A.3d 556, 567 (Pa. Super. 20 J 4) (holding affidavit regarding presence of asbestos

 was too speculative to be based on personal knowledge). In addition, summary

 judgment cannot be granted where "mere speculation would be required for the

 jury to find in plaintiffs favor." Id. at 568.

        Here, Mr. Anderson's affidavit is based on actual know ledge he possesses

 based on his position as Foreclosure Specialist for the Mortgage Servicing Agent

 for FNMA. Anderson Affidavit,      ~II. He kept the records in the ordinary course of

 business, analyzed the documents, delivered logic-based opinions, and is therefore

 competent in delivering a lay opinion of the mortgage documents in question. Id. at

,r2. Furthermore, the Rileys have presented no specific evidence as to what specific

personal knowledge Mr. Anderson lacks and based this unfounded allegation

solely on the fact that Mr. Anderson is not directly employed by FNMA.

Defendants' Response, if7-8. In the absence of any evidence to the contrary in the

form of counter-affidavits, depositions, or interrogatories, the Rileys have failed to

establish not only that Mr. Anderson Jacks competency, but also that there is no

genuine issue of material fact as to whether the mortgage is in default.

      Moreover, counsel for the Rileys during oral argument relied upon the

above-referenced common pleas case, Bank of America v. Wicker, which found

that the mortgage foreclosure plaintiff Bank's affidavit confirming dare o.f default

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  was inconclusive        of that fact under Nanty-Glo.          Bank of Ame1:ica v. Wicker (C.P.

  Jefferon Cty, 2015)        at 5. However,      unlike the instant    case, in Wicker,   the

  defendants       bad created a dispute of material          fact only as to the dare of the default

  and had implicitly admitted by presenting legal defenses that the mortgage was in

  fact in default. For the limited purpose of determining on what date the default

  took place, the court held that Nanty-Glo prohibited conclusiveness where the

  Bank's only evidence was an affidavit. Therefore, the Rileys' reliance on this case

 to affirm their arguments is misplaced.

          Therefore, based on the Rileys' failure to establish a dispute of material fact

 and thereby the applicability of Nanty-Glo, the court finds there is no dispute of

 material fact: even viewing the facts in the light most favorable to the Rileys, the

 mortgage is in default.

              C. FAILURE TO PAY INTEREST

         For the same reasons asserted above with respect to default of the mortgage,

there is also no genuine dispute of material               fact as to whether the Rileys have

failed to pay interest. The Rileys have failed to present specific evidence which

contradicts FNMA's factual averments and inappropriately present legal arguments

which are inapplicable given their failure to create disputes of material fact.8 Just

as the Rileys implicitly admitted to default because they argued no legal obligation

s See discussion    above (Section B) as to inapplicability    ofNanty-GIQ.

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     existed which would require such payments,         here too, the Rileys have implicitly

     admitted, by claiming     a legal defense   to their actions, that they have not paid

     .
     interest on t I ie mortgage. 9

            Therefore, based on the same reasoning it found default, the court finds that

     no dispute of material fact exists: even viewing the facts in the light most favorable

     to the Rileys, they have failed to make interest payments on the mortgage.

               D. RECORDED MORTGAGE IS IN SPECIFIED AMOUNT

           FNMA's Complaint alleges the specific amount due based on the terms and

     conditions of the mortgage and the date which the Rileys discontinued making

    payments." Plaintiff's Complaint, ill 0. In response, the Rileys argue that "a

    witness with personal knowledge must establish this fact." Defendants' Answer,

    ,r10. When FNMA filed its Motion for Summary Judgment, it also filed the

    affidavit of Mr. Anderson who had personal knowledge of the mortgage

documents and established logic-based conclusions to support FNMA's averment

and valuations of the amount due. As stated above, although the Rileys have

challenged the competency of Mr. Anderson, they presented no evidence or

specific allegations as to where specifically Mr. Anderson's personal knowledge is

lacking. The Rileys argue only that Mr. Anderson cannot have personal knowledge

9
  See discussion above (Section B) discussing implicit admission by raising legal a legal defense.
10
   Amount due includes the principal balance, interest through February 6, 2015, taxes, hazard
insurance, private mortgage insurance, late charges, broker's price opinion, and property
inspection.
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 because he is not employed by FNMA or its predecessor plaintiff: HSBC Bank.

 Defendants' Response,   ~1~17-8.
       Therefore, because the Rileys have presented no record evidence which

 challenges specific reasons why Mr. Anderson lacks personal knowledge, no

 genuine dispute of material fact has been established: even viewing the facts in the

 light most favorable to the Rileys, the recorded mortgage is in a specified amount.

 CONCLUSION

       The Rileys have denied allegations of fact based on arguments of law.

However, these arguments of law are based on presumptions of fact which are not

established in the record. Since they have presented no factual basis for their pied

denials and have relied solely on the pleadings, they have failed to establish

disputes of material fact which would survive summary judgment. As such, their

reliance on Nanty-Glq to exclude Mr. Anderson's affidavit is misplaced as it

cannot apply where there are no disputes of material fact.

      Even viewing the facts in the light most favorable to the Rileys, no dispute

of material fact exists as to whether the mortgage was in default, the Rileys failed

to make payments, and the recorded mortgage is in a specified amount. Therefore,

FNMA's Motion for Summary Judgment is hereby GRANTED.

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