Court Opinion

ID: 4106069
Source: CourtListenerOpinion
Date Created: 2016-12-09 19:10:10.065118+00
Date Added: 2024-06-11T14:30:11.586477
License: Public Domain

J-S82033-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

VFC PARTNERS 8, LLC                               IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellee

                       v.

HASSAN HADJ MOHAMMADI, TANNAZ
HADJ MOHAMMADI AND SANAZ HADJ
MOHAMMADI,

                            Appellants                  No. 738 MDA 2016

                Appeal from the Judgment Entered April 25, 2016
              in the Court of Common Pleas of Huntingdon County
                         Civil Division at No.: 2011-1151

BEFORE: OTT, J., DUBOW, J., and PLATT, J.*

MEMORANDUM BY PLATT, J.:                          FILED DECEMBER 09, 2016

        Appellants, Hassan Hadj Mohammadi, Tannaz Hadj Mohammadi, and

Sanaz Hadj Mohammadi, appeal from the judgment entered against them

and in favor of Appellee, VFC Partners 8, LLC, after a trial on the damages

portion of this mortgage foreclosure action. We affirm.

        The trial court aptly set forth the facts of this case in its July 5, 2016

opinion as follows.

              This action in mortgage foreclosure was filed on June 22,
        2011. See [Pa.R.C.P.] 1141[-1150]. [Appellee] is the assignee
        of a mortgage dated November 1, 2006 executed by [Appellant
        Hassan] in favor of Branch Banking and Trust Company of
        Virginia (hereafter BB & T) in the amount of $1,000,000.00. The
____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
J-S82033-16

     mortgage encumbers real estate located in Huntingdon and
     Fulton Counties, and was recorded November 3, 2006 in
     Huntingdon County Record Book 828, Page 948 and in Fulton
     County Record Book 469, Page 948. The assignment of this
     mortgage to [Appellee] was recorded in Huntingdon County on
     March 7, 2011. On September 3, 2010, [Appellant Hassan]
     conveyed the real estate encumbered by the mortgage to his
     daughters Tannaz Hadj Mohammadi and Sanaz Hadj Mohammadi
     (hereafter [Appellant] Terre-Tenants).  The conveyance was
     without consideration.

            The background for the mortgage is not complex.
     [Appellee’s] predecessor and assignor BB & T loaned
     Watchwood, LLC        (hereafter  Watchwood) the      sum of
     $5,650,000.00 on November 1, 2006. As a concomitant part of
     the loan transaction, [Appellant Hassan] executed a promissory
     note pledging $1,000,000.00 toward repayment of the loan.
     Also, [Appellant Hassan] executed a Guaranty Agreement limited
     to $1,000,000.00 plus accrued interest, late fees, and costs of
     collection (including attorney’s fees).    In that agreement,
     [Appellant Hassan] granted a security interest and lien on the
     real estate located in Huntingdon and Fulton counties.
     Watchwood was owned by [his] brother.

            Watchwood defaulted on the loan and subsequently sought
     relief in the United States Bankruptcy Court for the District of
     Maryland on August 10, 2009. In the bankruptcy proceeding,
     Watchwood indicated that $5,452,977.35 was owed to BB & T on
     account of the 2006 loan.

           After discovery was completed in this action, [Appellee]
     moved for partial summary judgment on the issue of liability.
     On September 22, 2015, the motion was granted. Th[e trial
     c]ourt found that [Appellant Hassan] was liable under the
     guarantee agreement and mortgage. In addition, th[e c]ourt
     found that the interests of [Appellant] Terre-Tenants [were]
     subject to the lien of the mortgage.

            The issue of damages was tried to the [c]ourt on October
     7, 2015. The verdict of the [c]ourt was entered February 29,
     2016 and awarded damages in the amount of $1,269,400[.00]
     plus attorney’s fees, costs, and additional interest from the date
     of trial to the date of judgment. . . . No motion for Post-Trial
     Relief pursuant to Pa.R.C.P. 227.1 was filed; however,

                                   -2-
J-S82033-16

       [Appellants] did file within ten days of the verdict a “Motion to
       Alter Verdict, Find in Favor of [Appellants] for Lack of Jurisdiction
       on the Alleged Debt, and for a Written Opinion.” . . . In this
       motion, in six paragraphs, [Appellants] challenged the
       jurisdiction of th[e trial c]ourt on the basis that the underlying
       debt instruments vested exclusive jurisdiction in the
       Commonwealth of Virginia. [On April 21, 2016, the trial court
       denied the motion. It entered judgment on the verdict on April
       25, 2016. Appellants timely appealed.1]

(Trial Court Opinion, 7/05/16, at 1-2).

       Appellants raise one issue for this Court’s review: “Did the trial court

err when it exercised jurisdiction over debt instruments which by their terms

vest[] jurisdiction in the [s]tate of Virginia?”      (Appellants’ Brief, at 2).

Notably, Appellants do not argue that the trial court improperly determined

the amount of the judgment, only that, because the promissory note and

guaranty agreement vest Virginia with exclusive jurisdiction, the trial court

did not have jurisdiction to consider this mortgage foreclosure action. (See

id. at 8-13). Appellant’s issue lacks merit.

       “Because the question of whether a court has subject matter

jurisdiction is a question of law, our standard of review is de novo and the

scope of our review is plenary.” Bastian v. Sullivan, 117 A.3d 338, 342-43

(Pa. Super. 2015) (citation omitted).

____________________________________________

1
  Appellants filed a timely statement of errors complained of on appeal on
May 24, 2016. See Pa.R.A.P. 1925(b). The trial court filed an opinion on
July 5, 2016. See Pa.R.A.P. 1925(a).

                                           -3-
J-S82033-16

       “It is well-established that an action in mortgage foreclosure is strictly

in rem[.]” Rearick v. Elderton State Bank, 97 A.3d 374, 383 (Pa. Super.

2014) (citations omitted). It has long been recognized that “[t]he basis of

jurisdiction over property is the presence of the subject property within the

territorial jurisdiction of the forum state[.]”      Whitmer v. Whitmer, 365
A.2d 1316, 1319 (Pa. Super. 1976), cert. denied, 434 U.S. 822 (1977)

(citations omitted).      “[P]arties to an action cannot . . . confer jurisdiction

upon a court for which jurisdiction would otherwise be lacking.” Coleman v.

Coleman, 522 A.2d 1115, 1117-118 (Pa. Super. 1987) (citations omitted).

       This case involves a mortgage foreclosure action, which is an in rem

proceeding. See Rearick, supra at 383. The property encumbered by the

lien of the mortgage is in Huntingdon County, Pennsylvania. Therefore, the

trial court, which is located in Huntingdon County, Pennsylvania, has

jurisdiction over this case.      See Whitmer, supra at 1319.       Regardless of

the language contained in the note and mortgage, the parties could not

confer jurisdiction on Virginia where it does not properly exist.             See

Coleman, supra at 1117-118.             Hence, the trial court properly found that

“[t]he provisions of the loan documents regarding venue and jurisdiction

cannot and do not deprive [it] of jurisdiction.” (Trial Ct. Op., at 3).2

____________________________________________

2
  Appellants’ argument that the trial court might have had jurisdiction over
the property, but not “over the debt instruments which formed the basis for
the underlying judgment[,]” (Appellants’ Brief, at 9), is specious at best.
(Footnote Continued Next Page)

                                           -4-
J-S82033-16

      We also observe that the cases cited by Appellants in support of their

argument, that parties can agree to jurisdiction in a forum other than the

one in which the property is situated, are not legally persuasive.        (See

Appellants’ Brief, at 10-11).         For example, Nat’l. Equip. Rental Ltd. v.

Szukhent, 375 U.S. 311 (1964), involved “whether a party to a private

contract may appoint an agent to receive service of process within the

meaning of Federal Rule of Civil Procedure 4(d)(1), where the agent is not

personally known to the party, and where the agent has not expressly

undertaken to transmit notice to the party.”         Nat’l. Equip. Rental Ltd.,

supra at 316. This is inapposite to the issue presented here.

      In Continental Bank v. Brodsky, 311 A.2d 676 (Pa. Super. 1973),

which involved a contract dispute, this Court considered “whether in

personam jurisdiction may be obtained by the Pennsylvania courts over a

California resident who, in the contract, had agreed to such jurisdiction and

to service of process on an agent in the event of suit.” Continental Bank,

supra at 676-77. This too is not pertinent to our review.

      Finally, Central Contracting Co. v. C.E. Youngdahl & Co., 209 A.2d
810 (Pa. 1965), an action in assumpsit, directly contradicts Appellants’

position when it observes, “private parties cannot change by contract the
                       _______________________
(Footnote Continued)

Appellants provide absolutely no pertinent authority to support this claim,
and we are not aware of any. See Pa.R.A.P. 2119(a)-(b). This claim lacks
merit.

                                            -5-
J-S82033-16

rules of jurisdiction or venue embodied in the various laws of this

Commonwealth. Jurisdiction over the party or the subject matter or venue

of the cause is not a thing to be determined by private bargaining.” Central

Contracting Co., supra at 816. We acknowledge that, in contradiction of

this principle, the Court then stated “a court in which venue is proper and

which has jurisdiction should decline to proceed with the cause when the

parties have freely agreed that litigation shall be conducted in another forum

and where such agreement is not unreasonable at the time of litigation.”

Id. (citations omitted).        However, that case is not pertinent because it

involved an action in assumpsit, not mortgage foreclosure. Moreover, our

research reveals that, in the fifty-one years since its pronouncement,

Central Contracting Co. has never been extended to override the long-

standing principle that, in an in rem action, regardless of the parties’

attempt to bargain otherwise, jurisdiction lies in the forum in which the

property is situated. See Whitmer, supra at 1319. Appellants’ claim lacks

merit.3

____________________________________________

3
  Appellants also argue that “the mere holding of the note does not establish
jurisdiction thereover” and “the expectation that the same outcome would
result in a Virginia court does not confer jurisdiction.” (Appellants’ Brief, at
11, 12) (unnecessary capitalization omitted). Because we decided this issue
on the basis that the subject property is in Huntingdon County, consideration
of Appellants’ two other arguments are not necessary for our disposition of
this matter, and we decline to address them.

                                           -6-
J-S82033-16

     Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/9/2016

                          -7-