Court Opinion

ID: 6330916
Source: CourtListenerOpinion
Date Created: 2022-04-13 16:12:17.007346+00
Date Added: 2024-06-11T09:23:06.537747
License: Public Domain

J-A03035-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    FIRSTRUST BANK                             :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    WILKINSON ROOFING AND SIDING,              :
    INC., EQUITABLE PROPERTY                   :
    INVESTMENTS, I, LLC 20 WEST                :   No. 1108 EDA 2021
    PARK, LLC, KENNETH S. BALAGUR,             :
    KIMBERLY A. REITZ RICHARD                  :
    BALAGUR                                    :
                                               :
                                               :
    APPEAL OF: 20 WEST PARK, LLC               :
    AND RICHARD BALAGUR                        :

                  Appeal from the Order Entered May 6, 2021
    In the Court of Common Pleas of Chester County Civil Division at No(s):
                               2019-02916-MJ

BEFORE: STABILE, J., DUBOW, J., and McCAFFERY, J.

MEMORANDUM BY McCAFFERY, J.:                             FILED APRIL 11, 2022

       20 West Park, LLC (20 West Park), and Richard Balagur (collectively

Appellants)1 appeal from the order entered in the Chester County Court of

____________________________________________

1  As will be discussed below, Wilkinson Roofing and Siding, Inc. (Wilkinson),
Equitable Property Investments, I, LLC (EPI), Kenneth S. Balagur, and
Kimberly A. Reitz were named defendants in the underlying action. However,
they were not listed on the notice of appeal or in the appellant’s brief.
Additionally, neither the corporations nor the individuals filed a notice with
this Court pursuant to Pa.R.A.P. 908, indicating they had no interest in the
outcome of the appeal. Therefore, pursuant to Rule 908, Wilkinson, EPI,
Kenneth S. Balagur, and Reitz shall be deemed appellees. Moreover, 20 West
Park and Richard Balagur are the only proper appellants.
J-A03035-22

Common Pleas, granting summary judgment to Firstrust Bank (Firstrust)

against Wilkinson, EPI, 20 West Park, Reitz, Kenneth S. Balagur, and Richard

Balagur.     The order also denied Appellants’ cross-motion for summary

judgment.      The central issue on appeal concerns a question of contract

interpretation in a mortgage agreement. After careful review of the contract

and the relevant law, we affirm.

       This case arises from a dispute regarding the extent of Firstrust’s

mortgage lien on a commercial property located at 20 West Park Street,

Lebanon, New Hampshire (the New Hampshire Property).        See Order and

Memorandum, 5/6/21, at 2. 20 West Park is the owner of the Property. See

id. It is a limited liability company with Richard Balagur as the managing

member.      See Appellants’ Motion for Summary Judgment Against Firstrust

Bank Pursuant to Pa.R.C.P. 1035, 2/1/21, at ¶¶ 6, 8. The sole asset of the

company is the New Hampshire Property. See id. at ¶ 7. Additionally, the

company’s membership interests at the time were as follows: (1) 45% by

Richard Balagur; (2) 45% by Kenneth Balagur; and (3) 10% by a third party.

See Firstrust’s Motion for Summary Judgment, 1/28/21, at ¶ 7; see also

Appellants’ Answer to Firstrust’s Motion for Summary Judgment, 2/26/2021,

at ¶ 7.2

____________________________________________

2  As indicated in the Appellants’ brief, Richard and Kenneth Balagur are
brothers. See Appellants’ Brief at 26.

                                           -2-
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       On February 19, 2015, Firstrust made a small business administration

loan to Wilkinson3 in the principal amount of $1,300,000.00, which was

evidenced by a note (Note), dated the same day.              See Order and

Memorandum at 2.          Kenneth Balagur executed the Note as president of

Wilkinson. See Appellants’ Motion for Summary Judgment Against Firstrust

Bank Pursuant to Pa.R.C.P. 1035 at ¶ 5.

       Wilkinson’s indebtedness under the Note was guaranteed by 20 West

Park pursuant to an Unconditional Limited Guarantee (Guarantee), as

executed by 20 West Park. See Firstrust’s Complaint, 3/19/19, at ¶¶ 12-13.

The Guarantee contained a collateral provision pertaining to the New

Hampshire Property, which provided, in relevant part:

       COLLATERAL/RECOURSE: The guarantee is limited to the amount
       Lender obtains from the following Collateral pledged by
       Guarantor:

       20 West Park Street, City of Lebanon, County of Grafton, State of
       New Hampshire a/k/a/ Tax Map#: 91-232.

Firstrust’s Motion for Summary Judgment, Exhibit C, Unconditional Limited

Guarantee, 2/19/15, at 2. The lender is identified as Firstrust and the

guarantor is 20 West Park. See id. at 1.

____________________________________________

3 Wilkinson primarily performed commercial roofing and siding projects, and
was owned and operated by Kenneth Balagur. See Firstrust’s Motion for
Summary Judgment at ¶ 5; see also Appellants’ Answer to Firstrust’s Motion
for Summary Judgment at ¶ 5. According to the complaint, Wilkinson, EPI,
Kenneth Balagur, and Reitz all shared the last known address of 731 Pheasant
Run, West Chester, Pennsylvania. See Complaint at ¶¶ 2-3, 5-6.

                                           -3-
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       To secure the Note and 20 West Park’s Guarantee, 20 West Park

executed and delivered to Firstrust a Mortgage, Assignment of Rents, Security

Agreement and Fixture Filing (Mortgage), which granted Firstrust a mortgage

lien in and upon the New Hampshire Property. See Firstrust’s Complaint at ¶

15.   Pertinent to this appeal, the Mortgage set forth a secured obligations

provision and Paragraph 2.1(e) provided, in relevant part:

       The amount of this mortgage is $1,300,000.00. Notwithstanding
       that, upon the sale of the Property the Mortgagee agrees to
       release its lien and to limit its interest in the Property to 45%
       of the proceeds received from the sale of the Property after
       the first lien to Mascoma Savings Bank in the original amount of
       $1,045,000.00 and second lien to Mascoma Savings Bank in the
       original amount of $300,000.00 (and a maximum amount of
       $450,000.00) are satisfied. The 45% represents Kenneth S.
       Balagur’s membership interest in [20 West Park], which is
       the owner of the [New Hampshire] Property.

Firstrust’s Motion for Summary Judgment, Exhibit D, Mortgage, Assignment

of Rents, Security Agreement and Fixture Filing, 2/19/15, at 3 (emphasis

added).4 As mentioned, the New Hampshire Property “was encumbered by

____________________________________________

4   The Assignment of Rents provided, in relevant part:

       1. Until payment in full of all Obligations is made, the Assignee is
          authorized to either in its own name or in the name of the
          Assignors to do any and all things with reference to the
          Collateral that the Assignors might or could have done but for
          this Assignment including the rights:

          1.1    To receive, collect and receipt for any and all rents or
                 other payments due under the Collateral; the receipt
                 of the Assignee for such payments to be a full
                 discharge therefore[.]
(Footnote Continued Next Page)

                                           -4-
J-A03035-22

two mortgages held by Mascoma Savings Bank (MS Bank). Those mortgages

were in the amounts of” $1,045,000 and $300,000.              See Order and

Memorandum at 2.          Notably, the lien held by Firstrust “pursuant to the

Mortgage sat in third position.” Id.

       Firstrust, Wilkinson, EPI, 20 West Park, Kenneth Balagur and Reitz also

executed a Loan and Security Agreement (Loan Agreement). See Appellants’

Memorandum in Support of Motion for Summary Judgment Against Firstrust

Bank Pursuant to Pa.R.C.P. 1035, 2/1/2021, at 5.         The Loan Agreement

provided, in relevant part, similar language as set forth in the Mortgage:

       2.2    Security. As security for the due and punctual payment of
              the Note, performance under the Loan Documents, and to
              secure any and all other loans and credit accommodations
              made by the Lender to the Obligors (hereinafter the
              “Obligations”):

       2.1.1. One or more Obligors, by executing and delivering the
             Mortgage and Security Agreement to the Lender
             simultaneously herewith, has granted to the Lender a first
             mortgage lien in the amount of the Loan on the property
             known as 1218 Caln Meetinghouse Road, Township of Caln,
             County of Chester, Commonwealth of Pennsylvania a/k/a
____________________________________________

                                        *      *   *

       4.     The Assignors hereby authorize the Assignee to give notice
              in writing of this Assignment at any time to any tenant or
              other person having an interest in the Collateral.

Firstrust’s Motion for Summary Judgment, Exhibit E, Assignment of Leases,
Rents and Other Agreements, 2/19/15, at 2-3. In other words, Firstrust could
give notice to the tenants of the New Hampshire Property that it was
authorized to collect rents.

                                            -5-
J-A03035-22

            Parcel Number 39-4-167 on the Tax Map (the “Caln
            Property”), a second mortgage lien in the amount of the
            Loan on the property known as 731 Pheasant Run, Township
            of Birmingham, County of Chester, Commonwealth of
            Pennsylvania a/k/a Parcel Number 65-4-40.37 on the Tax
            Map (the “Pheasant Run Property”) and a third mortgage
            lien in the amount of the Loan on the property known as 20
            West Park Street, City of Lebanon, County of Grafton, State
            of New Hampshire a/k/a Tax Map #:91-232 (the “New
            Hampshire Property”)*, as more particularly described in
            the Mortgage and Security Agreement (collectively the
            “Premises”);

            * The amount of the Lender’s mortgage on the New
            Hampshire Property is $1,300,000.00. Notwithstanding
            that, upon the sale of the New Hampshire Property the
            Lender agrees to release its lien and to limit its interest
            in the New Hampshire Property to 45% of the
            proceeds received from the sale of the New
            Hampshire Property after the first lien to Mascoma
            Savings Bank in the original amount of $1,045,000.00 and
            second lien to Mascoma Savings Bank in the original amount
            of $300,000.00 (and a maximum amount of $450,000.00)
            are satisfied.    The 45% represents Kenneth S.
            Balagur’s member interest in 20 West Park, LLC,
            which is the owner of the New Hampshire Property.

Firstrust’s Motion for Summary Judgment, Exhibit F, Loan and Security

Agreement, 2/19/15, at 3 (emphasis added).

      Wilkinson    defaulted   on   the   Note,   and   consequently,   Firstrust

commenced non-judicial foreclosure proceedings against the New Hampshire

Property pursuant to the terms of the Mortgage. See Firstrust’s Motion for

Summary Judgment, Exhibit G, Complaint with Petition for Declaratory Relief,

8/2/18, at ¶ 13.

      Appellants originally filed a declaratory judgment action in New

Hampshire, seeking a declaration that Firstrust’s interest in the Property was

                                      -6-
J-A03035-22

limited to the value of Kenneth Balagur’s membership interest in 20 West

Park. See Firstrust’s Motion for Summary Judgment, Exhibit G, Complaint

with Petition for Declaratory Relief, 8/2/18, at ¶ 34. The Superior Court of

New Hampshire dismissed the action due to the forum selection clause in the

Loan Documents, “which provided that Pennsylvania has exclusive jurisdiction

to decide disputes regarding the Loan Documents.” Trial Ct. Op., 7/23/21, at

1.5 The court also stayed Firstrust’s “real estate foreclosure action on the New

Hampshire Property in anticipation of th[e Pennsylvania] court’s interpretation

of the Loan Documents at issue and [its] declaration of the scope of

[Firstrust]’s mortgage lien.” Id.

____________________________________________

5  The Loan Agreement provided the following: “Any and all disputes arising
out of or under the loan documents shall be litigated in the Commonwealth of
Pennsylvania and decided by a judge, sitting without a jury[.]” Firstrust’s
Motion for Summary Judgment, Exhibit F, Loan and Security Agreement at 11
(most capitalization removed). Whereas the Mortgage contained language
that it “shall be governed by the laws of the State of New Hampshire.”
Firstrust’s Motion for Summary Judgment, Exhibit D, Mortgage, Assignment
of Rents, Security Agreement and Fixture Filing at 15. The New Hampshire
court found that the latter provision articulated notice requirements that the
mortgagee must follow to conduct a lawful non-judicial foreclosure and in
Appellant’s complaint, they did not allege improper foreclosure or a dispute
regarding the terms and conditions of the mortgage. See Firstrust’s Motion
for Summary Judgment, Exhibit H, New Hampshire Ct. Order, 2/26/19, at 8.
As the court pointed out, the Appellants sought a judicial determination as to
the actual sum of money that 20 West Park owed as the guarantor of the loan
at issue. Id. Moreover, the court stated that if Appellants had alleged the
foreclosure was improper, the statutorily mandated notice requirements would
apply but the forum selection clause would not because the claims would
relate only to the foreclosure proceedings and not the loan agreement. Id.

                                           -7-
J-A03035-22

       Firstrust subsequently instituted this lawsuit in March 2019, by filing a

complaint for declaratory judgment6 against Appellants. In the complaint, the

bank alleged it was entitled to 45% of the proceeds of the sale of the Property

following payment of the two senior MS Bank mortgages.

       Appellants filed an answer and new matter, asserting, inter alia, that

Firstrust’s mortgage and lien was limited to Balagur’s membership interest in

20 West Park, and not the proceeds from the sale of the New Hampshire

property.

       In January 2021, Firstrust filed a motion for summary judgment.7

Appellants filed a response, and subsequently, a cross-motion for summary

judgment. On April 22, 2021, oral argument was held regarding both motions.

On May 6, 2021, the trial court issued an order, granting Firstrust’s motion

and denying Appellants’ motion.8               The court “declared that the scope of

[Firstrust]’s lien is controlled by the plain meaning of [Paragraph] 2.1(e) of

____________________________________________

6   See 42 Pa.C.S. §§ 7531 and 7541.

7 Wilkinson, EPI, Kenneth Balagur, and Reitz did not respond to Firstrust’s
motion for summary judgment.

8   Since Wilkinson, EPI, Kenneth Balagur, and Reitz did not respond to
Firstrust’s motion, the court granted summary judgment for Firstrust against
them as well.

                                           -8-
J-A03035-22

the Mortgage[.]” Trial Ct. Op. at 2. Appellants then filed a timely notice of

appeal.9

       Appellants raise the following issues on appeal:

       A. Whether the Trial Court erred in concluding that the Appellants’
       understanding/interpretation of the Mortgage contradicts the plain
       language of the various loan documents, and that Appellants’
       argument with respect to the sentence in dispute, results in
       changing the meaning of the prior sentence in the Mortgage[?]

       B. Whether the Trial Court erred in granting Firstrust Bank’s
       Motion for Summary Judgment, and denying the Appellants’
       Motion for Summary Judgment, by misinterpreting the provision
       in the Mortgage describing how the Mortgage interest of the Bank
       is measured[?]

       C. In the alternative, to the extent that there is any ambiguity in
       the Mortgage, it should be resolved in favor of the Appellants, as
       Firstrust Bank was the drafter of the loan documents.

       D. Whether the Trial Court erred in concluding the intent of the
       parties would have been to execute a pledge agreement if there
       was an intent to limit the lien to Kenneth Balagur’s membership
       interest[?]

       E. Whether the Trial Court erred in failing to consider that there
       was no consideration provided to 20 West Park, LLC[?]

Appellants’ Brief at 4-5.

       Based on the nature of Appellants’ claims, we will address their first four

arguments together. First, Appellants contend that the trial court “incorrectly

ruled that [the] 45% language present in [Paragraph 2.1(e) of] the Mortgage

____________________________________________

9 Appellants timely complied with the trial court’s directive to file a Pa.R.A.P.
1925(b) concise statement of errors complained of on appeal.

                                           -9-
J-A03035-22

represents 45% of the equity in the Property after payment of the first and

second mortgages, instead of [Kenneth] Balagur’s membership interest.”

Appellants’ Brief at 16. They allege it is “undisputed” that the 45% did not

reference “an equity interest in the [New Hampshire] Property after payment

of the first and second mortgage[s].” Id.

       Next, Appellants assert that the trial court “incorrectly conclude[d] that

the second and third sentences of the Mortgage should not be read together”

because in their view, it is “nonsensical” and “contradicts the plain meaning

of the documents” Firstrust drafted. Appellants’ Brief at 19. In support of this

argument, Appellants point to the deposition testimony of Marcus Mies,

Esquire,10 wherein he answered that membership interest is different than

property interest and that Paragraph 2.1(e) references membership interest.

Id. at 20. Appellants argue the court “cannot erase the third sentence [of

Paragraph 2.1(e)] with the stroke of a pen to rewrite and change the deal the

parties negotiated. Appellant did not agree to this interpretation, nor did they

authorize it[.]” Id. at 20-21.

       Third, Appellants claim that to extent the court determined any

ambiguity existed in the Mortgage, “it was required to be resolved in favor of

the Appellants” since Firstrust drafted the document. Appellants’ Brief at 21.

____________________________________________

10 Mies worked for the law firm representing Firstrust at the time with respect
to different types of loans and loan documentation. See Appellants’ Motion
for Summary Judgment Against Firstrust Bank Pursuant to Pa.R.C.P. 1035,
Exhibit F, Oral Deposition of March Mies, 11/17/20, at 9.

                                          - 10 -
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They contend the “writing must be construed most strongly against the party

drafting it, and the interpretation which makes a rational and probable

agreement must be preferred.” Id. at 22.

      Fourth, Appellant argue, in the alternative, that while they “do not

concede the Mortgage is ambiguous, . . . if the Trial Court believed the

Mortgage to be ambiguous, then it should have examined parol evidence[,]”

which would have “confirmed that the Mortgage is limited to [Kenneth]

Balagur’s membership interest” in 20 West Park. Appellants’ Brief at 23. For

example, Appellants rely on statements made by Kenneth Balagur concerning

his ownership interest in 20 West Park to Mies and Carl Bieber, Vice President

of Firstrust.   See id. at 26 (October 2014 email from Kenneth Balagur to

Bieber discussing limited guarantors).        Appellants refer to electronic

communications evidence by Kenneth Balagur, in which he expressed

“concerns about how the language of the Mortgage was drafted.” Id. at 27.

Appellants also point to deposition testimony by Mies and Bieber where they

were asked whether they clarified with Kenneth Balagur that the 45%

represented property interest as opposed to membership interest. Id. at 26-

27.   Both testified they believed that this understanding was conveyed to

Kenneth Balagur. Id. Nevertheless, Appellants argue that Bieber “has no

documents to support that statement, and the Mortgage, Loan Agreement,

and Resolution directly contradict his position.” Id. at 30 (emphasis omitted).

                                    - 11 -
J-A03035-22

      In addressing the grant of a motion for summary judgment, our

standard of review is limited:

      When a party seeks summary judgment, a court shall enter
      judgment whenever there is no genuine issue of any material fact
      as to a necessary element of the cause of action or defense that
      could be established by additional discovery. A motion for
      summary judgment is based on an evidentiary record that entitles
      the moving party to a judgment as a matter of law. In considering
      the merits of a motion for summary judgment, a court views 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. Finally, the court may
      grant summary judgment only when the right to such a judgment
      is clear and free from doubt. An appellate court may reverse the
      granting of a motion for summary judgment if there has been
      an error of law or an abuse of discretion.

Gallagher v. Geico Indem. Co., 201 A.3d 131, 136-37 (Pa. 2019) (citations

and quotation marks omitted).

      Since the crux of Appellants’ arguments concern a dispute over the

terms of a contract, we are guided by the following: “Because a mortgage is

a contract, it is subject to principles of contract law. We have explained that

contract interpretation is a question of law over which our standard of review

is de novo. Therefore, this Court is not bound by the trial court’s interpretation

of a contract.” Enterprise Bank v. Frazier Family Ltd. P’ship, 168 A.3d

262, 265 (Pa. Super. 2017) (citations and quotation marks omitted).

      Moreover,

      [t]he cardinal rule in interpreting a contract is to ascertain the
      parties’ intent. The court must construe the entire contract to
      arrive at its intent.      If contractual terms are clear and
      unambiguous, they are deemed the best reflection of the parties’
      intent. If they are ambiguous, it is permissible to ascertain their

                                     - 12 -
J-A03035-22

      meaning through parol (i.e., extrinsic) evidence. Contractual
      terms are ambiguous if they are subject to more than one
      reasonable interpretation when applied to a particular set of facts.
      A contract is not ambiguous, however, merely because the parties
      do not agree on its construction. Nor does ambiguity exist if it
      appears that only a lawyer’s ingenuity has made the language
      uncertain.

Pass v. Palmiero Auto. of Butler, Inc., 229 A.3d 1, 5 (Pa. Super. 2020)

(citations and quotation marks omitted). Additionally, “[w]here the language

of the contract is ambiguous, the provision is to be construed against the

drafter.” State Farm Fire and Casualty Company v. PECO, 54 A.3d 921,

928 (Pa. Super. 2012).

      In granting the motion for summary judgment, the trial court explained

its rationale as follows:

            During oral argument, both parties conceded that the
      second sentence of the relevant section is clear if it stood on its
      own: “Notwithstanding that, upon the sale of the Property the
      Mortgagee agrees to release its lien and to limit its interest in the
      [New Hampshire] Property to 45% of the proceeds received from
      the sale of the Property after the first lien to Mascoma Savings
      Bank in the original amount of $1,045,000.00 and second lien to
      Mascoma Savings Bank in the original amount of $300,000.00 and
      (maximum amount of $450,000.00) are satisfied.” Mortgage, ¶
      2.1(e). The dispute hinges on whether the clarity of that second
      sentence is muddied, or, as [Appellants] argue, the meaning
      altered by the addition of the third sentence -- “The 45%
      represents Kenneth S. Balagur’s membership interest in [20 West
      Park], which is the owner of the [New Hampshire] Property.” Id.

            [Appellants] argue that [Kenneth Balagur] could only pledge
      the value of his membership interest in the entity that owned the
      [New Hampshire] Property and could not and did not pledge the
      interest to the Property. Moreover, [Appellants] state that “45%
      of the proceeds received from the sale” should really read and be
      modified by the third sentence to give the effect of reading a

                                     - 13 -
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     pledge of 45% of the value of the membership interest of
     [Kenneth Balagur].

            Such a reading flies in the face of the plain language of the
     various loan documents.          The mortgage granted was for
     $1,300,000.00 and, as noted by [Appellants], the mortgage and
     guaranty were necessarily executed by [20 West Park] as the
     owner of the [New Hampshire] Property. It is [20 West Park] that
     granted a security interest in the Property – not [Kenneth
     Balagur]. [Firstrust] did agree to release its lien after receipt of
     45% of the proceeds after [20 West Park] satisfied the senior
     lienholders. It defies logic to suggest that the third sentence
     noting the reason for using 45% in the portion of the second
     sentence reading “45% of the proceeds from the sale of the
     Property” transforms that plain and ambiguous language into 45%
     of the value of [Kenneth Balagur]’s membership interest.3
     Instead, the third sentence can be read in conjunction with the
     second sentence without need to changing wholesale the meaning
     of the second sentence – namely, that [Firstrust] agreed to limit
     its lien on the [New Hampshire] Property to net proceeds in a
     percentage equal to that of the percentage of interest [Kenneth
     Balagur] then owned in [20 West Park] as owner of the Property.

     __________________

        3 In fact, the parties agreed that [Kenneth Balagur] now
       only owns approximately 11% of the entity and [Appellants]
       suggest that such reduction means the language should be
       further modified to allow payment of only 11% of the value
       of [Kenneth Balagur]’s membership interest.
     __________________

            Pledge agreements, convertible notes, and various other
     mechanisms exist by which the parties could have limited the
     amount of the lien to a value based on [Kenneth Balagur]’s
     membership interest. No such agreements were provided. There
     is no indicia of that being the intent of the parties within in Loan
     Documents as no pledge agreement exists, no restrictions or
     comments on the ability of [Kenneth Balagur] to transfer or
     encumber his membership interest in [20 West Park], no
     agreement to subordinate the bank’s lien to any third parties
     (including [Appellants]), no method of calculating a minority
     member’s interest in a closely-held entity, or the like. Instead,
     the parties executed a straight-forward mortgage pledging an

                                    - 14 -
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     interest in real estate to secure a loan by one of the property
     owner’s members.

           To the extent that [Appellants] (which notably does not
     include [Kenneth Balagur]) object now to the fact that it
     guaranteed a loan to [him] and pledged 45% of the net proceeds
     after payment of two senior liens from the sale of the Property as
     security and wish to limit it to the value of [Kenneth Balagur]’s
     membership interest in the entity,4 that objection is too late.
     [Appellants] signed clear and unambiguous documents granting a
     security interest in property owned by [20 West Park] and gave a
     straight-forward and simple explanation of the amount required
     from a sale to release [Firstrust]’s lien on the [New Hampshire]
     Property.
     __________________

        4 As [Firstrust] notes in its reply to the Motion for Summary
        Judgment by [Appellants], it is unclear if the argument of
        [Appellants] is that the security was an encumbrance on
        [Kenneth Balagur]’s membership interest or the value of
        [his] membership interest. The result is the same no matter
        the argument.

Order and Memorandum at 4-6 (emphasis and one footnote omitted).

     We agree with the trial court’s well-reasoned conclusion that the

document at issue is clear and unambiguous. First, we emphasize the fact

that the document is a mortgage. Black’s Law Dictionary defines “mortgage”

as “[a] conveyance of title to property that is given as security for the

payment of a debt or the performance of a duty and that will become void

upon payment or performance according to the stipulated terms[;]” “[a] lien

against property that is granted to secure an obligation (such as a debt) and

that is extinguished upon payment or performance according to stipulated

terms[;]” and “[l]oosely, any real-property security transaction, including a

deed of trust.”    MORTGAGE, Black’s Law Dictionary (11th ed. 2019)

                                   - 15 -
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(emphasis).   See also Estate of Dutton, 37 A. 582, 586 (Pa. 1897) (“A

mortgage is defined to be ‘the conveyance of an estate or property by way of

pledge for the security of the debt, and to become void upon payment of it.’”).

Simply stated, a mortgage concerns property.

      This leads us to the language of the Mortgage at issue – Paragraph

2.1(e), which we recite again:

      The amount of this mortgage is $1,300,000.00. Notwithstanding
      that, upon the sale of the Property the Mortgagee agrees to
      release its lien and to limit its interest in the Property to 45%
      of the proceeds received from the sale of the Property after
      the first lien to Mascoma Savings Bank in the original amount of
      $1,045,000.00 and second lien to Mascoma Savings Bank in the
      original amount of $300,000.00 (and a maximum amount of
      $450,000.00) are satisfied. The 45% represents Kenneth S.
      Balagur’s membership interest in [20 West Park], which is
      the owner of the [New Hampshire] Property.

Firstrust’s Motion for Summary Judgment, Exhibit D, Mortgage, Assignment

of Rents, Security Agreement and Fixture Filing at 3 (emphasis added).

      Appellants’ argument focuses solely on the exact wording of the third

sentence and asks to ignore the preceding language. However, we “may not

disregard a provision in a contract if a reasonable meaning may be ascertained

therefrom . . . each and every part of it must be taken into consideration and

given effect, if possible, and the intention of the parties must be ascertained

from the entire instrument.”     Newman Dev. Grp. of Pottstown, LLC v.

Genuardi's Family Mkt., Inc., 98 A.3d 645, 654 (Pa. Super. 2014) (citation

and quotation marks omitted).

                                    - 16 -
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       Moreover, we also note that although the loan documents, including the

Mortgage, were drafted by Firstrust, the sentence in question was included at

the direction of Kenneth Balagur who reviewed and consented to its inclusion.

In a January 22, 2015, email from Kenneth Balagur to Bieber, Balagur wrote:

“I am not a lawyer but in theory the mortgage could include wording 3rd lien

for 45% of the building representing the ownership position of Kenneth

Balagur.” Firstrust’s Reply to Defendants’ Objection to Firstrust’s Motion for

Summary Judgment, 3/23/2021, at Exhibit A, January 22, 2015 Email from

Kenneth Balagur to Carl Bieber.11              Thus, it cannot be construed against

Firstrust. See State Farm Fire and Casualty Company, 54 A.3d at 928.

       The third sentence that the parties have spent much time dissecting and

arguing about does nothing to modify or alter the Mortgage, nor does it create

an ambiguity.       To the contrary, the sentence was included-at Kenneth

Balagur’s insistence, to explain why Firstrust’s recovery was limited to “45%

of the proceeds from the sale of the Property.”             Rather than creating an

ambiguity, this sentence is declaratory and explanatory and confirms the

____________________________________________

11  See also N.T., 4/22/21, at 24 (counsel for Firstrust stating: “Membership
interest. That language actually comes from Kenneth Balagur’s email where
he says, including wording, third lien for 45 percent of the building
representing the owner – he says ownership position of Kenneth Balagur,
clearly it wasn’t ownership position. It was membership interest.”).

       Appellant’s counsel confirmed Kenneth Balagur was the drafter of the
third sentence at argument on January 27, 2022.

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parties understanding that Kenneth Balagur owned only 45% of the LLC that

owned the property. Therefore, Firstrust was precluded from attempting to

recover, in a foreclosure proceeding, more of “the proceeds from the sale of

the Property” than Kenneth Balagur would be entitled upon the sale of the

Property. Read in context to the transaction as a whole, this sentence appears

to have been included by Kenneth Balagur to insulate the 55% interests of his

partners from execution by Firstrust.

       We are mindful that these were sophisticated business parties12

negotiating the terms of a loan and mortgage agreement concerning a

considerable amount of money.              While Appellants refer to a couple of

comments made by Kenneth Balagur during negotiations, there is nothing in

the loan documents to suggest that these sophisticated parties intended

Kenneth Balagur’s interest to be confined to his membership interest in 20

West Park, which owned the property, and not the actual property itself.

Likewise, based on the facts, we can discern that the question of “membership

interest” versus “property interest” is a distinction without a difference as the

____________________________________________

12 While Appellants mention that Kenneth Balagur was not represented at the
time of negotiations, that was at his own peril as a party’s pro se status confers
no special benefit on that individual.

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J-A03035-22

sole asset of 20 West Park was the New Hampshire Property.13 Therefore,

Kenneth Balgur’s interest solely derived from that property.

       Furthermore, as the trial court emphasizes as evidence of the parties’

intent, or lack thereof, no other documents were provided which would have

established that the amount of the lien was based on Kenneth Balagur’s

membership interest.         See Order and Memorandum at 5 (“[N]o pledge

agreement exist[ed], no restrictions or comments on the ability of [Kenneth

Balagur] to transfer or encumber his membership interest in [20 West Park],

no agreement to subordinate the bank’s lien to any third parties (including

[Appellants]), no method of calculating a minority member’s interest in a

closely-held entity, or the like.”).14 Appellants do not address this finding or

____________________________________________

13 We reiterate the fact that the loan was guaranteed by 20 West Park, which
identified the New Hampshire Property as the only collateral.

14 At oral argument, the following exchange took place between the parties
and the trial court which demonstrates Appellants’ misconception:

       THE COURT: … If I stated to you[, counsel for Appellants] that
       generally speaking when I see a bank take a membership interest
       as a pledge that there’s a whole different set of documents that
       goes along with that.

       [Appellants’ Counsel]: Yes, your Honor, but those are not the
       documents that the bank drafted.      The bank drafted these
       documents and that was relied upon by Mr. Balagur that the bank
       was drafting what everyone was in agreement to of what he
       actually owed.

(Footnote Continued Next Page)

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J-A03035-22

refute otherwise in their brief. As for Appellants’ argument concerning parol

evidence, we need not address this claim in light of our above analysis. See

Pass, 229 A.3d at 5. Accordingly, Appellants’ first four arguments lack merit.

       With respect to their remaining claim, Appellants assert that the trial

court “failed to factor in that [20 West Park] received no consideration for the

transaction.” Appellants’ Brief at 32. They state, “There is no reason for [20

West Park] to further encumber [its] sole asset to the detriment of [its] other

members who had no interest in [Firstrust]’s loan, and received no benefit for

allowing the Mortgage to be placed on the Property.” Appellants’ Brief at 32.15

____________________________________________

       THE COURT: Essentially, you’re telling me the bank made a large
       mistake because they use[d] property documents when what they
       should have been using was . . . pledge agreement documents?

       [Appellants’ Counsel]: Yes, your Honor.

                                       *       *    *

       [Firstrust’s Counsel]: I’ll reiterate that this was not a pledge of
       membership interest. This is a mortgage. There’s a major
       difference between those two types of collateral. [Appellants’]
       argument . . . convolutes the issues as to whether the mortgage
       is a pledge agreement or not, which it’s not. It’s a mortgage and
       . . . the guarantee says . . . it’s a lien on real estate. It’s not a
       lien on the membership interest.

N.T., 4/22/21, at 22-23 (emphasis added).

15 While Appellants did raise this issue in their concise statement, the trial
court did not address it in its Rule 1925(a) opinion.

                                           - 20 -
J-A03035-22

     As Firstrust points out, this appeal concerns a declaratory judgment

action, which sought a declaration as to the meaning of the contract at issue

and the extent of its mortgage lien on the New Hampshire Property – this is

not an action to enforce the mortgage and the issue of whether the mortgage

is enforceable was not before the trial court. See Appellee’s Brief at 27. As

such, the question is not properly before this Court.    However, it merits

mention that 20 West Park executed the Mortgage. This fact is not in dispute

and there is no mention in the record that Kenneth Balagur signed the

documents on behalf of 20 West Park without the consent of its other

members.

     Accordingly, we conclude the trial court appropriately determined there

were no genuine issues of material fact and properly entered summary

judgment in favor of Firstrust. See Gallagher, 201 A.3d at 136-37.

     Order affirmed.

     Judge Dubow joins the Memorandum.

     Judge Stabile files a Concurring/Dissenting Memorandum.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/11/2022

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