Court Opinion

ID: 4033401
Source: CourtListenerOpinion
Date Created: 2016-09-14 03:38:16.168704+00
Date Added: 2024-06-11T14:36:37.622942
License: Public Domain

J. A18018/16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

NATIONSTAR MORTGAGE, LLC                :    IN THE SUPERIOR COURT OF
                                        :          PENNSYLVANIA
                    v.                  :
                                        :
MARK JOSEPH ELSESSER,                   :          No. 83 MDA 2016
                                        :
                         Appellant      :

              Appeal from the Order Entered December 18, 2015,
                in the Court of Common Pleas of Berks County
                        Civil Division at No. 2013-15154

BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., AND STEVENS,* P.J.E.

MEMORANDUM BY FORD ELLIOTT, P.J.E.:           FILED SEPTEMBER 13, 2016

      Mark Joseph Elsesser appeals from the order entered December 18,

2015, denying his Petition to Strike Judgment. We affirm.

      This court summarized the history of this case in a prior memorandum

as follows:

                    On December 29, 2006, Elsesser executed a
              promissory note (“Note”) and Mortgage on the
              property at 3425 Fairchild Street, Alburtis, PA
              18011[-]2632, in consideration of his borrowing
              $173,000 from Countrywide Home Loans, Inc.
              (Countrywide). Both the Note and Mortgage were
              recorded in the Berks County Recorder of Deeds
              Office.    Countrywide’s nominee was Mortgage
              Electronic Registration Systems, Inc. (“MERS”). On
              April 26, 2012, MERS assigned the Mortgage and
              Note and “all beneficial interest” thereunder to
              “Bank of America, NA, Successor by merger to BAC

* Former Justice specially assigned to the Superior Court.
J. A18018/16

          Home Loans Servicing, LP FKA Countrywide Home
          Loans Servicing, LP.”

                The assignment was recorded in the Berks
          County Recorder of Deeds Office on April 30, 2012.
          The Mortgage and Note, and “all beneficial interest”
          were again assigned on May 10, 2013, from Bank of
          America to Appellee Nationstar. The assignment was
          also recorded in the Berks County Recorder of Deeds
          Office on June 6, 2013.

                Nationstar alleged that Elsesser defaulted
          under the Mortgage and Note by failing to make
          payments due March 1, 2012, and each month
          thereafter. Per the account statement, supplied by
          Nationstar as Exhibit “C” to the motion for summary
          judgment, the last payment applied to Elsesser’s
          mortgage account was on March 27, 2012. Elsesser
          has provided no affidavit or other proof of payment
          since that time.

                Bank     of   America   issued   a    combined
          Act 6[Footnote 1]/Act 91[Footnote 2] Notice (Notice)
          to Elsesser, dated February 5, 2013.         Proof of
          mailing the Notice was attached to the Motion for
          Summary Judgment as Exhibit “D.” It appears from
          the United States Postal Service tracking sheet that
          Elsesser failed to claim the mail. Elsesser, however
          had been afforded the opportunity to avail himself of
          the protections provided by the Homeowner’s
          Emergency Mortgage Assistance Program[Footnote
          3] (“HEMAP”). Despite this opportunity, he failed to
          take advantage of HEMAP; consequently, Nationstar
          proceeded with its foreclosure action.

               [Footnote 1] 41 P.S. § 403(b).

               [Footnote 2] 13 Pa.C.S. § 3205(b).

               [Footnote 3] HEMAP is a state loan
               program which offers remedies for
               Pennsylvania citizens facing mortgage
               foreclosure. Citizens either may receive
               a short-term loan to cure default, or may

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                 opt for continuing subsidies to aid in
                 avoiding future default.  See 35 P.S.
                 §§ 1680.401c-412c.

                 Nationstar filed its complaint in mortgage
           foreclosure against Elsesser on June 17, 2013.
           Service of the complaint and Notice regarding the
           mortgage foreclosure diversion program was made
           upon Elsesser on July 8, 201[3]. On August 13,
           2013, Elsesser filed preliminary objections that
           contained a demand for a jury trial. Nationstar’s
           Motion to Strike Defendant’s Jury Trial Demand was
           granted on September 26, 2013. On November 14,
           2013, Elsesser’s preliminary objections were
           overruled after argument. Elsesser filed his Answer
           to the Complaint on December 3, 2013. On April 8,
           2014, Nationstar filed its motion for summary
           judgment. On May 6, 201[4], Elsesser filed a motion
           in opposition to Nationstar’s motion for summary
           judgment. After argument on July 7, 2014, the
           Court granted Nationstar’s summary judgment
           motion. Elsesser filed a timely Notice of Appeal on
           July 30, 2014.     On August 6, 2014, the Court
           ordered Elsesser to file a Pa.R.A.P.1925(b) Concise
           Statement of Errors Complained of on Appeal, which
           he did on August 28, 2014.

Nationstar Mortg., LLC v. Elsesser, 2015 WL 7454141 at *1 (Pa.Super.

March 13, 2015) (unpublished memorandum).

     In a memorandum decision filed March 13, 2015, this court affirmed

the order granting summary judgment in favor of Nationstar, concluding,

inter alia, that Nationstar had standing to commence foreclosure where it

produced the original Note. Id. at *4. This court also rejected appellant’s

argument regarding the chain of ownership of the loan:

           Where the Note can be classified as a negotiable
           instrument, and     Nationstar  can  demonstrate
           possession of that instrument, the validity of the

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           transfer of the loan is ultimately not controlling.
           There is no risk of double liability, as Elsesser
           argues, because even if the assignment to Nationstar
           was defective, his liability would nonetheless be
           discharged by virtue of payment to Nationstar. See
           J.P. Morgan [Chase Bank, N.A. v. Murray],
           63 A.3d [1258] at [1265] [(Pa.Super. 2013)];
           13 Pa.C.S. § 3602(a) (discharging liability after
           payment to instrument holder). As such, with the
           threat of double liability gone, Elsesser cannot
           demonstrate that he has or will suffer injury if
           Nationstar is permitted to proceed.

Id. (footnote omitted).

     Appellant did not file a petition for allowance of appeal with the

Pennsylvania Supreme Court.      However, on December 9, 2015, appellant

filed a Petition to Strike Judgment, alleging that the judgment was void and

unenforceable because the process of securitization of the Note stripped

Nationstar of any standing.    Appellant’s Petition to Strike Judgment was

denied on December 18, 2015. Appellant filed a motion for reconsideration

which was denied on January 6, 2016. A timely notice of appeal was filed on

January 13, 2016.    On January 21, 2016, appellant was ordered to file a

concise statement of errors complained of on appeal within 21 days pursuant

to Pa.R.A.P. 1925(b); appellant complied on February 6, 2016, and the trial

court filed a Rule 1925(a) opinion on February 16, 2016.

     Appellant has raised the following issues for this court’s review:

           (I)[.]   Has the Promissory Note been destroyed
                    voluntarily within the meaning of the Uniform
                    Commercial Code through securitization?

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            (II).     At any point in the lifetime of this case, was
                      the Promissory Note ever a negotiable
                      instrument within the meaning of the Uniform
                      Commercial Code[?]

            (III).    Did the trial court err in failing to strike
                      (vacate) the judgment in this matter where
                      [appellant] made a showing of both fraud and
                      extraordinary cause (i.e. securitization of the
                      Note)?

            (IV).     Has the act of securitization of the Promissory
                      Note obliterated the Plaintiff’s standing and
                      status as a “real party in interest” (as
                      previously upheld by this Court and the
                      Superior Court) and can standing be lost by a
                      party, post-judgment, where a demonstration
                      is made, as here, that said judgment was
                      obtained on the basis of fraud?

Appellant’s brief at 9.

      Initially, we note that appellant took an appeal from the order entering

summary judgment in favor of Nationstar, and this court affirmed that order

on the merits.       Whether or not, as appellant argues, MERS voluntarily

destroyed the Note, by splitting it from the Mortgage during the process of

securitization, was an argument which could have been raised on the first

appeal. As Nationstar contends, appellant is asking for another “bite at the

apple,” essentially seeking reconsideration of this court’s decision affirming

summary judgment. (Appellee’s brief at 9.)

                     The law of the case doctrine refers to a
                     family of rules which embody the concept
                     that a court involved in the later phases
                     of a litigated matter should not reopen
                     questions decided by another judge of
                     that same court or by a higher court in

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                the earlier phases of the matter . . . .
                The various rules which make up the law
                of the case doctrine serve not only to
                promote the goal of judicial economy . . .
                but also operate (1) to protect the
                settled expectations of the parties; (2) to
                insure uniformity of decisions; (3) to
                maintain consistency during the course
                of a single case; (4) to effectuate the
                proper and streamlined administration of
                justice; and (5) to bring litigation to an
                end.

          Commonwealth v. McCandless, 880 A.2d 1262,
          1267 (Pa.Super. 2005), appeal dismissed as
          improvidently granted, 593 Pa. 657, 933 A.2d 650
          (2007) (quoting Commonwealth v. Starr, 541 Pa.
          564, 664 A.2d 1326, 1331 (1995)).

Commonwealth v. Gacobano, 65 A.3d 416, 419-420 (Pa.Super. 2013).

          Thus, under the doctrine of the law of the case,

                when an appellate court has considered
                and decided a question submitted to it
                upon appeal, it will not, upon a
                subsequent appeal on another phase of
                the case, reverse its previous ruling even
                though convinced it was erroneous. This
                rule has been adopted and frequently
                applied in our own State.         It is not,
                however, inflexible. It does not have the
                finality of the doctrine of res judicata.
                “The prior ruling may have been followed
                as the law of the case but there is a
                difference between such adherence and
                res judicata; one directs discretion, and
                the other supercedes it and compels
                judgment. In other words, in one it is a
                question of power, in the other of
                submission.” The rule of the “law of the
                case” is one largely of convenience and
                public policy, both of which are served by
                stability in judicial decisions, and it must

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                   be accommodated to the needs of justice
                   by the discriminating exercise of judicial
                   power.

              Commonwealth v. McCandless, supra at 1268
              (Pa.Super. 2005) (quoting Benson v. Benson, 425
              Pa.Super. 215, 624 A.2d 644, 647 (1993)).

Id. at 420.

        As stated above, this court already determined that as bearer of the

Note, Nationstar had standing to bring a foreclosure action.                       See

CitiMortgage, Inc. v. Barbezat, 131 A.3d 65, 69 (Pa.Super. 2016) (“The

note as a negotiable instrument entitles the holder of the note to

enforcement of the obligation.”), citing 13 Pa.C.S.A. §§ 3109(a), 3301.

Nationstar produced both the original Note and Mortgage, showing that

appellant was granted $173,000 in exchange for an interest in his property.

As such, Nationstar had an enforceable security interest.            Elsesser, 2015

WL 7454141 at *4-5. Appellant did not attempt to dispute that he was in

default. Id. at *2. Appellant has offered no compelling reason to revisit this

court’s prior determination.

        Appellant cites case law for the proposition that a petition to strike a

judgment as void may be brought at any time.                (Appellant’s brief at 16.)

See Helms v. Boyle, 637 A.2d 630, 632 n.2 (Pa.Super. 1994) (“Absent

fraud    or   extraordinary    cause,   a   petition   to    open,   vacate   or   for

reconsideration must be brought within thirty (30) days of the entry of

judgment in a contested proceeding, however, a motion to strike a judgment

                                        -7-
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as void, may be brought at any time.” (citations omitted)).         See also

Williams v. Wade, 704 A.2d 132, 134 (Pa.Super. 1997), appeal denied,

729 A.2d 1130 (Pa. 1998) (“void judgments should be stricken regardless of

the passage of time”).

      Nevertheless, appellant’s argument that the process of securitization

somehow “destroyed” the Note and it ceased to be a secured asset or

negotiable instrument tied to any collateral or debt obligation is nonsense.

Notably, appellant cites no binding Pennsylvania authority for such a

proposition, and this court is aware of none.     However, courts in other

jurisdictions, including the federal courts, have consistently rejected the

notion that securitization of mortgages separates the mortgage from the

note, thereby converting the note into a security which destroys its

negotiability:

            Attempts to base claims on the securitization of a
            mortgage and the alleged separation of the
            mortgage and note have not been well received by
            courts around the country.           See Leone v.
            Citigroup, No. 12-10597, 2012 WL 1564698, at *4
            (E.D.Mich. May 2, 2012) (collecting cases); Mitchell
            v. Mortgage Electronic Registration Systems,
            Inc., No. 1:11-cv-425, 2012 WL 1094671, at *3
            (W.D.Mich. Mar. 30, 2012); Bhatti v. Guild Mortg.
            Co., No. C11-0480JLR, 2011 WL 6300229, at *5
            (W.D.Wash. Dec. 16, 2011) (“Securitization merely
            creates a separate contract, distinct from the
            Plaintiffs’ debt obligations under the Note, and does
            not change the relationship of the parties in any
            way.”).

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Keyes v. Deutsche Bank Nat. Trust Co., 921 F.Supp.2d 749, 762-763

(E.D.Mich. 2013). See also Rodenhurst v. Bank of Am., 773 F.Supp.2d

886, 898 (D.Haw. 2011) (collecting cases and noting, “[C]ourts have

uniformly rejected the argument that securitization of a mortgage loan

provides the mortgagor with a cause of action.”); In re Williams, 395 B.R.

33, 47 (S.D.Ohio 2008) (securitization of indebtedness irrelevant to validity

of mortgage).

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/13/2016

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