Court Opinion

ID: 3180907
Source: CourtListenerOpinion
Date Created: 2016-02-26 22:31:58.541072+00
Date Added: 2024-06-11T08:39:31.351156
License: Public Domain

J-A34016-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

OCWEN LOAN SERVICING                          IN THE SUPERIOR COURT OF
                                                    PENNSYLVANIA
                        Appellant

                   v.

JAYNIE BEARD

                        Appellee                   No. 641 MDA 2015

            Appeal from the Judgment Entered March 30, 2015
             In the Court of Common Pleas of Dauphin County
                 Civil Division at No(s): 2014-CV-00274-MF

BEFORE: PANELLA, J., OTT, J., and JENKINS, J.

MEMORANDUM BY OTT, J.:                        FILED FEBRUARY 26, 2016

     Ocwen Loan Servicing (Ocwen) appeals from the judgment entered

against it on March 30, 2015, in the Court of Common Pleas of Dauphin

County.   This judgment made final prior orders of court dated April 29,

2014, December 4, 2014, January 12, 2015 and March 13, 2015.            In this

timely appeal, Ocwen presents six issues, raising a variety of substantive

and procedural issues regarding the trial court’s dismissal of Ocwen’s

attempt to foreclose on Beard’s property.   After a thorough review of the

submissions by the parties, relevant law, and the certified record, we agree

with the trial court that substantial flaws existed in Ocwen’s attempt, and

therefore, we affirm the judgment entered against Ocwen, without prejudice

for Ocwen to seek foreclosure in another action, as may be necessary.
J-A34016-15

      This appeal presents mixed questions of law and fact.        As such, we

examine the entire certified record.         See 42 Pa.C.S. § 5105(d)(1).

Regarding issues of law, our standard of review is de novo and our scope of

review is plenary. First Citizen’s Nat’l Bank v. Sherwood, 879 A.2d 178,

180 (Pa. 2005).     We are bound by the trial court’s factual findings and

credibility determinations insofar as they are supported by the record. In re

Condemnation by Urban Redevelopment Auth. of Pittsburgh, 93 A.2d
178, 183 (Pa. 2006). Additionally, regarding issues reviewed for abuse of

discretion,

      An abuse of discretion exists when the trial court has rendered a
      judgment that is manifestly unreasonable, arbitrary, or
      capricious, has failed to apply the law, or was motivated by
      partiality, prejudice, bias, or ill will. An abuse of discretion will
      not be found where an appellate court simply concludes that it
      would have reached a different result than the trial court. If the
      record adequately supports the trial court's reasons and factual
      basis, an appellate court may not conclude the court abused its
      discretion.

Gall v. Crawford, 982 A.2d 541, 547 (Pa. Super. 2009).

      The procedural and factual history of this matter is complex, and we

adopt the trial court’s recitation and quote it herein:

      This case was initiated by the filing of Complaint in mortgage
      foreclosure by [Ocwen] against [Beard] on January 9, 2014.
      [Beard] signed a Mortgage and Note on April 25, 2003, for the
      purchase of real property located at 3515 Schoolhouse Lane,
      Harrisburg, Pennsylvania. The Mortgage and Note were between
      [Beard] and Columbia National Incorporated, the lender.

      The Complaint avers that [Ocwen] is the legal holder of the
      Mortgage that is the subject of this action through an
      assignment of mortgage. [Ocwen] alleged that the Mortgage

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     was in default beginning December 1, 2012. The Complaint also
     avers that the “breach letters” were sent in accordance with Act
     6 and Act 91. The Act 91 notice attached as an exhibit is dated
     November 26, 2012, lists the current lender as Homeward
     Residential, and states that the mortgage was in default as of
     August 1, 2012. [Beard] filed timely preliminary objections
     arguing that:

       (1) The subject Mortgage does not specify any time of
       payment, thus there is no basis upon which [Beard] could
       be found in default;

       (2) [Ocwen] does not allege that it is the owner or in
       possession of the Note, and is not the proper party to
       bring the foreclosure action;

       (3) A copy of the Note was not attached to the Complaint
       as required by Pa.R.Civ.P. 1019(i);

       (4) The Act 91 Notice attached as an exhibit was not sent
       by the mortgagee [Ocwen], and was sent by Homeward
       Residential instead; and

       (5) The Verification was defective because it was signed by
       an “Authorized Signer” and not a person with personal
       knowledge of the facts contained in the pleading.

     This Court sustained [Bread’s] preliminary objections on April
     29, 2014, and granted [Ocwen] leave to amend the complaint
     within twenty (20) days.

     On May 16, 2014, [Ocwen] filed an Amended Complaint that was
     substantially similar to the original Complaint. [Ocwen] failed to
     allege any new facts that were not included in the original
     Complaint. However, [Ocwen] did attach additional documents
     as exhibits, such as Assignment of Mortgage from Columbia
     National to Homeward Residential, the Assignment of Mortgage
     from Homeward Residential to [Ocwen], the original Note
     between [Beard] and Columbia National, and the original
     Mortgage between [Beard] and Columbia National.

     [Beard] again filed timely preliminary objections, raising the
     following issues:

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       (1) The Assignment of Mortgage between Columbia
       National and Homeward Residential was not executed by
       an officer of the recorded owner of the mortgage, thus the
       assignment of the mortgage is invalid. By virtue of this
       fact, the Assignment of Mortgage between Homeward
       Residential and [Ocwen] is also invalid.        Therefore,
       [Ocwen] is not a proper party and does not have standing
       to bring a foreclosure action;

       (2) The Assignment of Mortgage between Homeward
       Residential and [Ocwen] was not executed by an officer of
       the recorded owner of the mortgage, thus the assignment
       of mortgage is invalid and [Ocwen] does not have standing
       to bring a foreclosure action;

       (3) The Act 91 Notice attached as an exhibit was not sent
       by the mortgagee [Ocwen], and was sent by Homeward
       Residential instead;

       (4) The Verification was defective because it was signed by
       a “Contract Management Coordinator” and not a person
       with personal knowledge of the facts contained in the
       pleading; and

       (5) [Ocwen] failed to serve an Act 91 Notice upon [Beard]
       prior to the commencement of the foreclosure
       proceedings.

     This Court sustained [Beard’s] preliminary objections on
     December 4, 2014, and granted [Ocwen] leave to amend the
     complaint within twenty (20) days. [Ocwen] was directed to
     attach evidence that it is the owner of the subject Note, and to
     prove that valid Act 91 Notices were sent prior to commencing
     the instant action.

     On January 5, 2015, [Ocwen] filed a motion for Reconsideration
     of the Order of December 4, 2014. [Ocwen] failed to file an
     amended complaint, and instead filed its Motion outside the time
     frame for which to file an amended complaint. On January 12,
     2015, this Court denied [Ocwen’s] Motion for Reconsideration.
     Thereafter, [Beard] filed a Motion to Enter Judgment for Failure
     to File an Amended Complaint. [Ocwen] filed a response to
     [Beard’s] Motion, and a cross-motion for an extension of time for
     which to file an amended complaint. On March 13, 2015, this

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        Court denied [Ocwen’s] cross-motion for an extension of time,
        and granted [Beard’s] motion to enter judgment. Judgment for
        [Beard] was entered on March 30, 2015.

        On April 13, 2015, [Ocwen] filed a Notice of Appeal, and a
        concise statement of matters complained of on appeal. [Ocwen]
        lists four (4) separate court orders that it is appealing – April 30,
        2014,[1] December 4, 2014,[2] January 12, 2015,[3] and March
        13, 2015.[4]

Trial Court Opinion, 6/18/2015, at 1-4 (footnotes omitted).

        Ocwen now raises six major issues plus eight sub-issues.               However,

the trial court entered judgment in favor of Beard based upon fatal defects in

the Act 91 notice and the verification, finding the other issues raised by

Ocwen to have been waived. Our review of the certified record leads us to

conclude that the trial court’s rulings on those two issues are both correct

and     dispositive,   regardless    of   the   other   issues   raised   by   Ocwen. 5
____________________________________________

1
  The order sustained the preliminary objections to the original complaint.
The order is actually dated April 29, 2014. The certified docket shows copies
of the order were distributed on April 30, 2014.
2
    This order sustained the preliminary objections to the amended complaint.
3
    This order denied Ocwen’s motion for reconsideration.
4
  This is the final appealable order that denied Ocwen’s motion for extension
of time and granted Beard’s motion to enter judgment in her favor. This
order was not docketed until March 30, 2015.
5
  Procedurally, we agree with the trial court that any current argument by
Ocwen regarding the first complaint was made moot when Ocwen filed its
amended complaint. However, we agree with Ocwen that the December 4,
2014 and January 12, 2015 orders were interlocutory and could not be
appealed until judgment was entered on March 13, 2015 and docketed on
March 30, 2015.

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Accordingly, we will address only those issues specifically relied upon by the

trial court in making its determination and we need not address Ocwen’s

remaining claims.

       The Act 91 notice requirements are statutory and are found at 35 P.S.

§ 1680.403c.      Relevant to this matter, Act 91 requires the mortgagee to

provide the mortgagor with specific information regarding the foreclosure

process including methods to avoid foreclosure. This notice may not be sent

to the mortgagor until the mortgagor is “at least sixty (60) days

contractually    delinquent     in   his   mortgage   payments.”   See   Section

1680.403c(a). Additionally, the mortgagee is not required to send another

notice to the delinquent mortgagor “[u]nless the mortgagor has cured his or

her mortgage delinquency by means of a mortgage assistance loan or

otherwise.” See Section 1680.403c(g).

       Here, Homeward Residential (Homeward), possessor of the mortgage

immediately prior to Ocwen, sent Beard the Act 91 notice that was dated

November 26, 2012.6 The notice indicated Beard was delinquent in payment

____________________________________________

6
  Technically, Homeward was not the mortgagee at this time. Exhibit “A” to
the amended complaint is the mortgage assignment from Columbia to
Homeward. This document was prepared by an entity named “Security
Connections, Inc.” in Idaho Falls, Idaho. This document indicates that the
process of assigning the mortgage to Homeward began on November 27,
2012, one day after the Act 91 notice was issued in Homeward’s name.
However, the assignment was not executed until March 12, 2013. See
Amended Complaint, Exhibit “A”.

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from August 1, 2012. Accordingly, there was no issue with the timing of the

notice, i.e. sixty days post the claimed August 1, 2012 delinquency.

       However, both the original and amended complaints, dated January 9,

2014 and May 16, 2015, respectively, filed by Ocwen, assert that Beard was

not delinquent in her mortgage payments until December 1, 2012.           See

Original Complaint, ¶ 5; Amended Complaint, ¶ 5.           The Act 91 notice

provided to Beard predates the alleged delinquency by four days.          The

statute clearly forbids the notice from being sent until the mortgagor is at

least 60 days delinquent.         Accordingly, the November 26, 2012, Act 91

notice is statutorily invalid as applied to the claimed December 1, 2012

delinquency.      Pursuant to Section 1680.403c(g), Ocwen was required to

send Beard another notice once the mortgage delinquency was greater than

60 days past the December 1, 2012 delinquency asserted in the complaint. 7

We are unwilling to accept this Act 91 notice, although it complies with the

statutory timing requirements regarding the August 2012 delinquency, it

does not statutorily comply with the December 2012 delinquency allegations

of the complaint.      If we were to accept the Act 91 notice, we believe this

course would allow a lender to foreclose, after a delinquency was cured and

____________________________________________

7
  If the August 1, 2012 delinquency date listed on the Act 91 notice
remained correct, it would seem obvious that Ocwen merely needed to
correct the December 1, 2012 date set forth in the complaint.

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a new delinquency incurred without sending the statutorily required

subsequent Act 91 notice.

     Ocwen argues it was not required to send a second notice; that it

could rely on Homeward’s Act 91 notice. However, this argument is based

on Ocwen’s assertion that Homeward’s Act 91 notice was effective even after

the mortgage had been transferred to Ocwen.        Ocwen’s argument misses

the fact that Homeward’s Act 91 notice predates the claimed mortgage

delinquency. A new notice is required because Homeward’s Act 91 notice is

premature, based upon the allegations in Ocwen’s complaint.

     The trial court also determined that the verification of the complaint

was improper. The Pennsylvania Rules of Civil Procedure require that:

     Every pleading containing an averment of fact not appearing of
     record in the action or containing a denial of fact shall state that
     the averment or denial is true upon the signer’s personal
     knowledge or information and belief and shall be verified.

Pa.R.C.P. 1024(a).

     Further, the rule requires:

     The verification shall be made by one or more of the parties
     filing the pleading unless all the parties (1) lack sufficient
     knowledge or information, or (2) are outside the jurisdiction of
     the court and the verification of none of them can be obtained
     within the time allowed for filing the pleading. In such cases,
     the verification may be made by any person having sufficient
     knowledge or information and belief and shall set forth the
     source of the person’s information as to matters not stated upon
     his or her own knowledge and the reason why the verification is
     not made by a party.

Pa.R.C.P. 1024(c).

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       Here, the verification for the amended complaint is signed by Lori Ann

Dasch, who is listed as a “Contract Management Coordinator”.                   The

verification states, in toto:

       The undersigned states that he/she is authorized to make this
       verification on behalf of the Plaintiff, and that the facts set forth
       in the foregoing pleading are true and correct to the best of the
       information and belief of the undersigned.

       The undersigned understands that this statement is made
       subject to the penalties of 18 Pa.C.S. Section 4904 relating to
       unsworn falsification to authorities.

See Verification, Amended Complaint.

       This verification does not meet the requirements of Rule 1024.          The

Rule requires the verification be made by the party. Dasch has verified the

information on behalf of Ocwen, but there is no indication that she is an

officer or even an employee of Ocwen. In the preliminary objections to the

amended complaint, Beard asserts that Dasch is not an “authorized officer of

the Plaintiff Ocwen Loan Servicing, LLC.”         See Preliminary Objections to

Amended Complaint at ¶ 47.8 In answering this allegation, Ocwen did not

assert that Dasch was an authorized officer.        Ocwen merely asserted that

Ocwen made the verification.              See [Ocwen’s] Response to [Beard’s]

____________________________________________

8
  In paragraph 48, Beard also asserted, upon information and belief, Dasch
to be an officer of other corporations, including GMAC Mortgage Corporation
and Mortgage Electronic Registration Systems, Inc.          While we are
independently aware of other cases in which such allegations have been
proven true, Beard has supplied no evidence in support of the claim against
Dasch. In its response, Ocwen denied the allegation made in paragraph 48.

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Preliminary Objections at ¶ 47.          Accordingly, the trial court found that the

verification was not made by a party.

       While the Rule allows for someone other than a party to verify the

information contained in the pleading, it also requires the verification to

contain a statement of why the party could not verify the pleading. Further,

the non-party who makes the verification must indicate the source of the

information and belief upon which the verification rests.          This verification

contains neither.

       In its response to Beard’s preliminary objection to the amended

complaint, Ocwen argued that even if the verification was defective,

       [t]he Rules of Civil Procedure are designed to achieve ends of
       justice and are not to be accorded the status of substantive
       objectives requiring [rigid] adherence.    As we have often
       repeated ‘courts should not be astute in enforcing technicalities
       to defeat apparently meritorious claims.’ Lewis v. Erie Ins.
       Exchange, 281 Pa.Super. 193, 199 (Pa.Super. 1980).

[Ocwen’s] Response to [Beard’s] Preliminary Objections [to Amended

Complaint] at ¶ 47. We are not persuaded by Ocwen’s argument.

       Given the failure to send proper Act 91 notice, we do not believe it is

in the best interest of justice to overlook the defects in the instant

verification.9
____________________________________________

9
  Here, the Note is specifically payable to Columbia National Incorporated.
See Note, 4/26/2003 at ¶ 1. Paragraph 1 also contain language allowing
the lender to transfer the Note and that anyone who takes the Note by
transfer and who is entitled to receive payments becomes the holder of the
note. Id. The last page of the Note also states, “Without Recourse Pay to
(Footnote Continued Next Page)

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      Finally, we note Ocwen’s objection to the trial court’s final order in that

it does not specifically state that the complaint was dismissed without

prejudice.    However, in its Pa.R.A.P. 1925(a) opinion the trial court

unequivocally stated:

      Judgment in this case was not entered with prejudice. [Ocwen]
      is free to re-file a complaint in mortgage foreclosure against
      [Beard] in the event that the Pennsylvania Rules of Civil
      Procedure, and statutory safe-guards are properly followed, i.e.
      Act 6, Act 91 and Rule 1024 (verification of pleading).
      Therefore, judgment was properly entered in favor of [Beard]
      and against [Ocwen], and [Ocwen] has not been prejudiced by
      the entry of that judgment.

Trial Court Opinion, 6/17/2015, at 9.

      Accordingly, our review of the certified record leads us to affirm the

trial court’s determination that judgment was entered without prejudice to

Ocwen to file a subsequent complaint in mortgage foreclosure, should the

facts so warrant.

                       _______________________
(Footnote Continued)

the Order of Columbia National Incorporated”, implying that Columbia
anticipated formal transfer of the Note. While there was no determination
by the trial court regarding whom or what entity was the note holder, and
we make no finding thereto, the fact that this question exists further
supports our determination that the verification is insufficient.

Regarding the status of Ocwen as the note holder, we are aware that notes
and accompanying mortgages are routinely transferred from financial
institution to financial institution in packets. Ocwen may well be the note
holder by virtue of this procedure. However, we make no determination
regarding the transfer of the Note with the mortgage.

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     Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/26/2016

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