Court Opinion

ID: 3191668
Source: CourtListenerOpinion
Date Created: 2016-04-06 01:08:19.722138+00
Date Added: 2024-06-11T09:17:54.330568
License: Public Domain

J-A03034-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

HSBC BANK USA, NATIONAL ASSOC AS                  IN THE SUPERIOR COURT OF
TRUSTEE FOR THE HOLDERS OF THE                          PENNSYLVANIA
CERTIFICATES ISSUED BY DEUTCHE
ALT-A SECURITIES MORTGAGE LOAN
TRUST SERIES 2007-ARI

                            Appellee

                       v.

PATRICK CARNEY

                            Appellant                   No. 877 EDA 2015

                Appeal from the Judgment Entered May 5, 2015
               In the Court of Common Pleas of Delaware County
                       Civil Division at No(s): 10-010108

BEFORE: GANTMAN, P.J., MUNDY, J., and DUBOW, J.

MEMORANDUM BY GANTMAN, P.J.:                            FILED APRIL 05, 2016

       Appellant, Patrick Carney, appeals pro se from the judgment entered

in the Delaware County Court of Common Pleas, in favor of Appellee, HSBC

Bank, in this mortgage foreclosure action. We affirm.

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

facts and procedural history of this case. We add Appellant timely filed post-

trial motions pro se on March 6, 2015, which the court denied on March 11,

2015. Appellant filed a pro se notice of appeal on March 23, 2015.1           The

____________________________________________

1
  Ordinarily, an appeal properly lies from the entry of judgment, not from
the order denying post-trial motions. See generally Johnston the Florist,
(Footnote Continued Next Page)
J-A03034-16

court ordered Appellant on March 25, 2015, to file a concise statement of

errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).        Appellant

timely filed his Rule 1925(b) statement pro se on April 13, 2015. On May 5,

2015, the court entered judgment in favor of Appellee.         Thereafter, on

August 3, 2015, this Court quashed Appellant’s separate appeal at docket

No. 838 EDA 2015 without prejudice to Appellant to raise any issues

pertaining to the foreclosure action within the context of the current appeal

at docket No. 877 EDA 2015.

      Appellant raises the following issues for our review:

          DID THE [TRIAL] COURT COMMIT AN ERROR OF LAW AND
          ABUSE ITS DISCRETION WHEN IT DID NOT CONSIDER
          THE   CUMULATIVE    EFFECT   OF   THE   NUMEROUS
          INTENTIONAL DECEITS AND MISREPRESENTATIONS OF
          [APPELLEE] AND ITS VARIOUS COUNSELS, THEREBY
          DEPRIVING THE [TRIAL] COURT OF JURISDICTION TO
          HEAR THE MATTER WHEN APPELLEE DID NOT HAVE
          STANDING TO INVOKE THE COURT’S JURISDICTION AND
          DEPRIVE APPELLANT OF HIS PROPERTY RIGHTS?

                       _______________________
(Footnote Continued)

Inc. v. TEDCO Constr. Corp., 657 A.2d 511, 516 (Pa.Super. 1995) (en
banc). Nevertheless, a final judgment entered during pendency of an appeal
is sufficient to perfect appellate jurisdiction. Drum v. Shaull Equipment
and Supply, Co., 787 A.2d 1050 (Pa.Super. 2001), appeal denied, 569 Pa.
693, 803 A.2d 735 (2002). Here, Appellant filed a pro se notice of appeal
prematurely on March 23, 2015, prior to the entry of judgment. The court
entered final judgment on May 5, 2015. Thus, Appellant’s notice of appeal
relates forward to May 5, 2015, the date judgment was entered. See
Pa.R.A.P. 905(a) (stating notice of appeal filed after court’s determination
but before entry of appealable order shall be treated as filed after such entry
and on day of entry).        Hence, there are no procedural/jurisdictional
impediments to our review.

                                            -2-
J-A03034-16

            DID THE [TRIAL] COURT MAKE AN ERROR IN FACT
            AND AN ERROR OF LAW IN FAILING TO UPHOLD
            PA.R.C.P. 2002 BY IGNORING GOVERNMENT-
            CERTIFIED AND AUTHENTICATED EVIDENCE, THAT
            THE TRIAL COURT ADMITTED, WHICH CLEARLY
            ESTABLISHES APPELLEE LACKED STANDING AND
            WAS THEREFORE NOT A REAL PARTY IN INTEREST?

            DID THE [TRIAL] COURT MAKE AN ERROR IN FACT
            AND AN ERROR IN LAW WHEN [MS. ROMANO]
            ROBO-SIGNED    APPELLANT’S  ASSIGNMENT   OF
            MORTGAGE?

            DID THE [TRIAL] COURT ABUSE ITS DISCRETION
            AND SHOW BIAS IN FAVOR OF APPELLEE, THEREBY
            DEPRIVING APPELLANT HIS RIGHT OF DUE PROCESS
            TO A FAIR AND EQUITABLE TRIAL?

(Appellant’s Brief at 3-4).

      As a preliminary matter, we note Appellant proceeds in this appeal pro

se. While this Court is willing to construe liberally materials filed by a pro se

litigant, pro se status generally confers no special benefit upon an appellant.

Strawn v. Strawn, 664 A.2d 129 (Pa.Super. 1995).             See also Cole v.

Czegan, 722 A.2d 686, 687 (Pa.Super. 1998) (stating pro se status does

not entitle appellant to any particular advantage because appellant lacks

legal training). “[A]ppellant has a duty to file a comprehensible brief and to

raise and develop properly his appellate issues.” Cole, supra. Accordingly,

a pro se litigant must comply with the procedural rules set forth in the

Pennsylvania Rules of Court.        Jones v. Rudenstein, 585 A.2d 520

(Pa.Super. 1991), appeal denied, 529 Pa. 634, 600 A.2d 954 (1991). This

Court may quash or dismiss an appeal if an appellant fails to conform

                                      -3-
J-A03034-16

substantially to the requirements set forth in the Pennsylvania Rules of

Appellate Procedure.   Pa.R.A.P. 2101; Laird v. Ely & Bernard, 528 A.2d

1379 (Pa.Super. 1987), appeal denied, 520 Pa. 576, 549 A.2d 136 (1988).

      Instantly, Appellant’s brief complies in form with most of the pertinent

rules of Pennsylvania’s appellate procedure. Nevertheless, Appellant’s brief

fails to provide us with an adequate argument section, pursuant to the

applicable rules, which require the argument section to contain a discussion

of Appellant’s contentions on appeal plus legal arguments and citations

supporting those contentions.    See Pa.R.A.P. 2119(a).     Here, Appellant’s

fourth issue challenges the trial court’s bias, but contains no citations to

authority.   See Dalrymple v. Kilishek, 920 A.2d 1275 (Pa.Super. 2007)

(stating failure to support argument with pertinent authority results in

waiver on appeal). Instead, this issue consists of a string of contentions and

references to Appellant’s version of the facts. Thus, Appellant’s fourth issue

is waived. See id.

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

applicable law, and the well-reasoned opinion of the Honorable G. Michael

Green, we conclude Appellant’s remaining issues merit no relief.     The trial

court’s opinion comprehensively discusses and properly disposes of these

questions presented. (See Trial Court Opinion, filed May 8, 2015, at 9-15)

(finding: (1)-(3) as security for Note, Appellant executed Mortgage in favor

of Mortgage Electronic Registration Systems, Inc. (“MERS”), acting solely as

                                    -4-
J-A03034-16

nominee for American Brokers Conduit (“ABC”), and its successors and

assigns; Mortgage specifically lists MERS as mortgagee and nominee for

Lender, ABC; thus, MERS may execute Mortgage as nominee for Lender,

ABC; MERS granted signing authority to Ms. Romano, MERS’ certifying

officer, to execute Assignment of Mortgage (“AOM”); therefore, MERS acted

within its specific authority to execute AOM to Appellee, and Ms. Romano

had express authority to execute AOM with Recorder of Deeds; Appellant is

not third-party beneficiary of AOM, he is not party to AOM, and he did not

sign AOM; thus, Appellant lacks standing to challenge validity of transfer and

assignment of Note and Mortgage to Appellee; Appellee is owner and holder

of Mortgage and Note; Appellant’s failure to make monthly payments

constituted default under Mortgage and Note; Appellee issued proper pre-

foreclosure notifications, and Appellant failed to cure default; Note was

endorsed by Lender, ABC, and made payable in blank; Appellee holds and

possesses original Note, which it produced at trial). The record supports the

trial   court’s   decision;   therefore,   we    have   no   reason   to   disturb   it.

Accordingly, we affirm on the basis of the trial court’s opinion.

        Judgment affirmed.

                                           -5-
J-A03034-16

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/5/2016

                          -6-
                                                                              Circulated 03/22/2016 10:47 AM

           IN THE COURT OF COMMON PLEAS OF DELAWARE COUNTY,
                              PENNSYLVANIA
                            CIVIL ACTION-LAW

HSBC BANK, USA, NATIONAL                                        NO. 2010-010108
ASSOCIATION, AS TRUSTEE FOR
THE HOLDERS OF THE
CERTIFICATES ISSUED BY
DEUTSCHE ALT-A SECURITIES
MORTGAGE LOAN TRUST SERIES
2007-ARl

               v.

PATRICK T. CARNEY

Elizabeth Gallard, Esquire
Patrick T. Carney,pro se

                                              OPINION

GREEN, J.                                                                    FILED: M~y s, Jo\5_

         Appellant, Patrick T. Carney, filed the instant appeal following a (Y)C\rv\.\ 1\, 2015

Order denying a Motion to Vacate Judgment Based on Judicial Bias and Judge's Lack

of Knowledge and Lack of Understanding of the Securitization Process.1 Appellant's

Concise Statement of Errors Complained of on Appeal was filed on April 13, 2015.2

Therein, Appellant neglects to specifically enumerate the errors complained of on

1
    Said Motion was considered as a Motion for Post-Trial Relief pursuant to Pa. R.C.P. 227.1.
2
 The companion case of HSBC Bank, USA, National Association, as Trustee for the Holders of the
Certificates Issued by Deutsche Alt-A Securities Mortgage Loan Trust Series 2007-ARl v. Patrick
T. Carney, 2010-008543 was tried in conjunction with the instant matter.
appeal over the course of his sixteen (16) page statement. Nevertheless, Appellant

raises the following issues for appellate review:

1.     HSBC Bank, USA, National Association, as Trustee for the Holders of the
Certificates Issued by Deutsche Alt-A Securities Mortgage Loan Trust Series
2007-ARl (hereinafter "HSBC" or Appellee) is not a real party in interest as "it
did not have standing to bring this wrongful foreclosure action" and "that no
securitization has been proven to have ever taken place";

2.    Both the Mortgage and the Note are void ab initio;

3.   The Trial Court failed to find that American Brokers Conduit was a legal
corporation or that it was properly licensed to operate as a licensed lender;

4.    The blank indorsement found in the Note is ineffective;

5.    Plaintiff failed to produce evidence that it is the owner of the Note or that it
is a holder in due course;

6.    "The manufactured assignment of mortgage ... is a fabricated document
that had no authority to assign ownership interest of said mortgage because
Mortgage Electronic Registration Systems, Inc. (:MERS-as nominee for ABC-
assignor) was not the owner of the subject mortgage and was only the nominee for
ABC, an alleged New York Corporation, which was a non-existent Corporation.
IvIERS, never has written instruction, nor written authorization to transfer the
Mortgage or the Note.";

7.    The assignment of the Mortgage is void ab initio;

8.   The assignment of the Mortgage is a "fabricated document" and MERs
lacked the authorization to transfer either the Mortgage or the Note;

9.    Appellee should not have been permitted to file non-party verifications;

10. The Trial Court "showed bias in protecting and shielding witnesses from
Defendant's examination in violation of his federal civil right to due process";

                                           2
    11. The Trial Court "showed bias when [the Trial Court] refused Defendant
    access to the notary witness's logbook";

    12. The Trial Court "showed bias and a lack of adherence to the rules of
    evidence in allowing hearsay documents of a generic nature .... "

    13. The Trial Court erred by "failing to find that fraud was established in a clear
    and convincing manner."

         On November 16, 2006, Appeliant, Patrick T. Carney, executed a thirty-year

adjustable rate promissory          note (hereinafter "Note") in the principal sum of

$74,175.00 in favor of lender, American Brokers Conduit (hereinafter "ABC"). (P-1;

P-133;    ,r,r 3-4, N.T.   10/27/14, p. 41). The last page of the Note contains an undated

indorsement signed by Ryan Criscione, as Assistant Secretary of American Brokers

Conduit, which states: "PAY TO THE ORDER OF __                    WITHOUT RECOURSE".

(P-1). ABC indorsed the Note and made it payable in blank, without recourse. (P-1).

Appellant, HSBC Bank, USA, National Association, as Trustee for the Holders of

the Certificates Issued by Deutsche Alt-A Securities Mortgage Loan Trust Series

2007-ARl (hereinafter "HSBC" or Appellee) is currently in possession of the Note.

(P-1).

3
  HSBC served discovery, including Requests for Admission and Defendant failed and/or refused to
respond. (P-13). Given Defendant's failure to respond to the Requests for Admission, said Requests
were deemed admitted pursuant to Pa.R.C.P. 4014. (June 23, 2014 Order).

                                                 3
         On November 16, 2006, Appellant executed a mortgage ("Mortgage") in favor

of Mortgage Electronic Registration Systems, Inc., ("MERS"), as mortgagee, as

nominee for ABC, the Lender, and Lender's successors and assigns, which secured

the indebtedness of the Note. l\1ERS is the identified mortgagee in the Mortgage.

(P-2; P-13;    ,r,r 1-2, N.T. 10/27/14, p.38).    The Property subject to the Mortgage is real

property located at 3921 Gideon Road, Brookhaven, Pennsylvania 19015

("Property"). The Mortgage was recorded in the Office of the Recorder of Deeds of

Delaware County on December 14, 2006 in Mortgage Book No. 003981, Page 1879.

(P-2).

         At the time of the execution of the Note and Mortgage, Appellant was the

owner and President of Golden Mortgage Services, Inc., which did business as

Golden Mortgage Services. (P-39, N.T. 10/27/14, p. 9). Appellant through Golden

Mortgage Services selected American Brokers Conduit to serve as the Lender in the

underlying transaction. (N.T. 08/04/14, p. 25). Appellant through Golden Mortgage

Services had used American Brokers Conduit as Lender in prior real estate

transactions.4 Appellant was also the owner5 and President of Golden Abstract

Services, Inc., which did business as Golden Abstract Services. (P-39, N.T. 1027/14,

4   At trial, Mr. Camey testified that he worked with ABC "often." (N.T. 10/27/14, p. 14).

5
 Based upon Mr. Camey's testimony, this Court assumes he was the sole shareholder of Golden
Abstract Services, Inc., at all times relevant to this civil action.

                                                   4
p. 10). Golden Abstract Services acted as the settlement agent for American Brokers

Conduit at the closing of the loan. (P-20, N.T. 10/27/14, pp.10-11).

      Appellant's mortgage loan was fully funded. (N.T. 08/04/14, p. 25). Appellee,

HSBC, purchased the Note in January 2007.             On September 1, 2009, the last

mortgage payment was tendered by Appellant. (P-13; ~ 7). Appellant did not apply

for a loan modification. (P-13; 18).

      The Note provides that failure to pay the full amount of each monthly payment

on the date it is due is a default. (P-1, 1 7(B)). The Note and Mortgage provide that

upon default of such monthly payments for a period of one (1) month and upon

written notice of default which is left uncured, then the entire debt is collectible,

immediately. (P-1, 17(C); P-2,   ,r 22; P-3, 1 10).
      On or about June 21, 2010, counsel for HSBC sent Appellant, via certified

mail and regular mail, at both the Property's address and his last known address,

Notice of Intention to Foreclosure, and Notice of Intent to accelerate the debt, as set

forth in Act 6 of 1974, 41 P.S. §403(a) and a Notice of Homeowners' Emergency

Mortgage Assistance, pursuant to Act 91 of 1983, as amended in 1998, 35 P.S.§1680,

401(c) ("Act 6/91 Notice") due to the failure to make monthly mortgage payments.

(P-4). The Act 6/91 Notice explained to Appellant that his Mortgage was in default,

the nature of the foreclosure proceedings and how to take action to avoid foreclosure.

Appellant did not seek Act 6/91 assistance within the applicable time periods
                                             5
provided under the Homeowners'               Emergency Assistance Act with respect to the

Mortgage at issue. (P-13; 1 11).             Appellant received the Act 6/91 Notice at least

thirty (30) days prior to the commencement of this foreclosure proceeding.                        See

Exhibit C to P-13. (P-13; 113). Despite this written notice, Appellant failed to make

any payments that were due and owing. (P-13, 118).

         On or about July 30, 2010, HSBC commenced the instant mortgage

foreclosure action against the Appellant. Appellant is the mortgagor and real owner

of the Property.        Select Portfolio Servicing, Inc. is the current servicer of the

mortgage loan. The total amount alleged and owing in the Complaint totaled

$93,819.62. (P-13, 116).

         The Mortgage provides that the borrower pay taxes and property insurance

premiums on the Property. (P-2,            ,r,r 3, 4,   5). The Mortgage also provides that the

Lender may obtain insurance coverage at Lender's option and at the borrower's

expense. (P-2,     ,r,r 5, 9). Appellant    did not pay taxes or homeowners insurance owed.

on the Property.' The loan servicer(s) on behalf of Plaintiff paid the taxes and

property insurance         premiums        on the Property       totaling $13,562.42         ("escrow

advance") which are set forth in detail at Exhibit P-36. (P-36; P-2,          ,r 9).6

6   The total disbursements in exhibit P-36 are shown as "escrow advance" on exhibit P-35.

                                                        6
       At trial, Appellee produced the original Note, made it available for inspection,

and Appellant inspected the original Note and confirmed that he signed the original

Note. (N.T. 10/15/14, pp.224, 230-233, N.T. 10 /27/14, p.41.) Appellee's attorney

currently has possession of the original Note.

       Judith Romano, Assistant Secretary and Vice President of MERS testified at

trial. Ms. Romano had authority to execute an assignment of mortgage on behalf of

MERS. (P-16). The Assignment of Mortgage dated June 15, was recorded on July 7,

2010, in the Office of the Recorder of Deeds of Delaware County in Record Book

4766, Page 2370. (P-3).

       As of October 15, 2014, HSBC alleged the total amount due under the terms of

the Mortgage and Note were as follows:

Principal Balance                                    $ 74,175.00

Interest from 8/1/2009 through 10/15/2014            $ 16,686.44

Cumulative Late Charges                              $   251.16

Recoverable Balance                                  $ 1,093.70

Escrow Advance                                       $ 13,562.42

TOTAL                                                $105,769.14

Pursuant to the terms of the Mortgage and Note, the total amount due is accruing

interest at the rate of $5.33 per day. (P-35).

                                                 7
       At trial, Appellant was granted leave to pursue and prove a theory of fraud as a

counterclaim.7      Following trial, a review of post-trial submissions and closing

arguments, an in rem judgment was entered in favor of HSBC, and against Patrick T.

Carney, in the amount of $105,769.14 together with interest and other costs and

charges collectible under the mortgage, for foreclosure and sale of the mortgaged

property. On the counterclaim, judgment was entered in favor of HSBC, and against

Patrick T. Carney. Appellant did not through competent evidence prove concise facts

supporting a theory of a fraud and failed to prove any harm, injury, or damages he

sustained.

REAL PARTY IN INTEREST
       Pennsylvania Rule of Civil Procedure 2002(a) provides that "[e]xcept as

otherwise provided . . . all actions shall be prosecuted by and in the name of the real

party in interest.... " Pa.R.C.P. 2002(a). A 'real party in interest,' as required to have

standing to maintain an action, is the person who has the power to discharge the

claim upon which suit is brought and to control the prosecution of the action brought

to enforce rights arising under the claims. See Spires v. Hanover Fire Ins. Co., 70

A.2d 828, 831 (Pa. 1950), overruled in part on other grounds by Guy v. Liederbach,

7
 The decision to permit Appellant to present evidence in support of this counterclaim for fraud
occurred in a pre-trial conference that was placed on the record. (N.T., 10/15/14, pp.148-153, 2010-
008543, 2010-010108).

                                                  8
459 A.2d 744 (Pa. 1983); Collins v. Allstate Indemn. Co., 626 A.2d 1162, 1166 (Pa.

Super. 1993). Where an assignment is effective, however, the assignee stands in the

shoes of the assignor and assumes all of his rights. See Smith v. Cumberland, Ltd.,

687 A.2d 1167m 1172 (Pa. Super. 1997).

      Although Appellant contends that l\t1ERS did not have the authority to assign

the Mortgage to HSBC, he provided no support for this claim. As security for the

Note and contemporaneously with the execution of the Note on November 16, 2006,

Appellant executed a mortgage ("Mortgage") in favor of Mortgage Electronic

Registration Systems, Inc. ("MERS"), acting solely as a nominee for American

Brokers Conduit and its successors and assigns. The Mortgage lists MERS as the

mortgagee under the security instrument and as nominee for the lender, American

Brokers Conduit, the mortgage further provides that:

      This Security Instrument secures to Lender: (i) the repayment of the
      Loan, and all renewals, extensions and modifications of the Note; and
      (ii) the performance of Borrower's covenants and agreements under
      this Security Instrument and the Note. For this purpose, Borrower
      does hereby mortgage, grant and convey to l\t1ERS (solely as nominee
      for Lender and Lender's successors and assigns) and to the successors
      and assigns ofl\.1ERS, the following described property....
(P-2, page 3 of 16).
      The Mortgage executed by the Appellant, specifically provides, inter alia, that

MERS was the mortgagee, as a nominee for the Lender, and Lender's successors and

assigns. (P-2 at p.1 ). As such, MERS acted within its specific authority by executing
                                           9
the Assignment of Mortgage.      rvIBRS may execute mortgage assignments as the

nominee for a lender. Mortgage Electronic Registration Systems, Inc. v. Ralich, 982

A.2d 77 (Pa. Super. 2009).

      Further, rvIBRS granted signing authority to the individual who executed the

Assignment of Mortgage, Judith Romano, pursuant to an Agreement for Signing and

Corporate Resolution. (P-16). The Agreement for Signing Authority and Corporate

Resolution expressly identified Ms. Romano as a Certifying Officer and gave her

permission to execute ". . . any and all documents necessary to foreclose upon the

property securing any mortgage loan registered on the MERS System that is shown

to be registered to the Member .... " (P-16). rvIBRS had authority to execute the

Assignment of Mortgage to HSBC and Ms. Romano, as a Certifying Officer of

MERS, had express authority to execute the Assignment of Mortgage recorded with

the Recorder of Deeds. (P-2, P-16).

TIDRD PARTY BENEFICIARY

      MERS, as nominee for Lender and its assigns, assigned Defendant's Mortgage

to HSBC and the Assignment of Mortgage was duly recorded with the Delaware

County Recorder of Deeds on      0u l y 7J     2010. (P-2). The recording of an

assignment of mortgage has no legal import between the parties to the assignment as

it is "not a prerequisite to [a bank] having standing to seek enforcement of the

mortgage via a mortgage foreclosure action." U.S. Bank, N.A. v. Mallory, 982 A.2d
                                         10
986, 994 (Pa. Super. 2009). A mortgage is a written instrument that both conveys

and creates a security interest in real estate. "A mortgage is in essence a defeasible

deed, requiring the grantee to re-convey the property held as a security to the grantor

upon satisfaction of the underlying debt or the fulfillment of established conditions."

Hahnemann Medical College & Hospital v. Com., 416 A.2d 604 (Pa. Commw.

1980).

      A mortgage is generally accompanied by a promissory note. The note is

evidence of the debt obligation for which the mortgage is given. The mortgage and

the note, while separate instruments, secure the same debt. However, the note is a

personal obligation of the obligor (mortgagor). Judgment on the mortgage is on the

encumbered real estate, only. In Pennsylvania, the mortgage follows the note. 13

Pa.C.S. §9203(g). One who is not a party to a contract lacks standing to argue that

the contract is invalid. Shuster v. Pa. Turnpike Commonwealth. 395 Pa. 441, 149

A.2d 447, 452 (\'I 59J;'.Ira G. Steffy & Son. Inc., 7 A.3d 278, 287-88 (Pa. Super.

2010). Appellant is not a party to the Assignment of Mortgage and did not sign the

Assignment of Mortgage.

      A party becomes a third party beneficiary only where both parties to the

contract express an intention to benefit the third party in the contract itself. Melley v.

Pioneer Bank, N.A., 834 A.2d 1191, 1202 (Pa. Super. 2003). Appellant is not a third

party beneficiary of the Assignment of Mortgage. Accordingly, Appellant lacks
                                            11
standing to challenge the validity of the transfer and assignment of the Note and the

Mortgage to Plaintiff. A defendant lacks standing to challenge a transfer of the Note

unless the defendant demonstrates potential injury from the enforcement of the Note

and the Mortgage by a party acting under an alleged defective assignment. J.P.

Morgan Chase Bank v. Murray. 63 A.3d 1~1.iv, 1a1,1o (Pa: Super. 2013). Appellant has no

interest in the Assignment of Mortgage. He is also not at risk for a "potential injury"

as he is not at risk of paying the same claim twice; there is only one party, HSBC,

who is seeking enforcement of the Note and Mortgage.

Mortgage Foreclosure

       HSBC, is the owner and holder of the Mortgage and Note. Appellant is the

owner of the property 3921 Gideon Road, Brookhaven, Pennsylvania 19015-1220

secured by the Mortgage. Appellant's failure to make monthly payments is a default

under the Mortgage and Note. This Court also found that HSBC issued the proper

pre-foreclosure notifications and Appellant failed to cure the default.

      The Note at issue is a negotiable instrument governed by Pennsylvania's

Uniform Commercial Code. Section 3104 of the PUCC offers, in relevant part, the

following definition of a negotiable instrument:

      Except as provided in subsections ( c) and (d), "negotiable instrument"
      means an unconditional promise or order to pay a fixed amount of
      money, with or without interest or other charges described in the
      promise or order, if it:

                                           12
      (1) is payable to bearer or to order at the time it is issued or first
      comes into possession of a holder;

      (2) is payable on demand or at a definite time; and

      (3) does not state any other undertaking or instruction by the person
      promising or ordering payment to do any act in addition to the
      payment of money, but the promise or order may contain:

             (i) an undertaking or power to give, maintain or protect
             collateral to secure payment;

             (ii) an authorization or power to the holder to confess
             judgment or realize on or dispose of collateral; or

             (iii) a waiver of the benefit of any law intended for the
             advantage or protection of an obligor.

      13 Pa.C.S. § · 3\ ot..{ (o..')

      The Note at issue meets all of these qualifications. A holder in due course of a

negotiable instrument is defined as the holder of an instrument if "the instrument

when issued or negotiated to the holder does not bear such apparent evidence of

forgery or alteration or is not otherwise so irregular or incomplete as to call into

question its authenticity;" and the holder took the instrument for value and in good

faith. Id. § 3302. The PUCC defines a blank indorsement as follows: "If an

indorsement is made by the holder of an instrument and it is not a special

indorsement, it is a 'blank indorsement.' When indorsed in blank, an instrument

becomes payable to bearer and may be negotiated by transfer of possession alone
                                          13
until specially indorsed." Id.§ 3205(b). A note is payable to bearer if it (1) states that

it is payable to bearer or to the order of bearer or otherwise indicates that the person

in possession of the promise or order is entitled to payment; (2) does not state a

payee; or (3) states that it is payable to or to the order of cash or otherwise indicates

that it is not payable to an identified person. JP Morgan Chase Bank, N.A. v. Murray,

63 A.3d 1258, 1265-66 (Pa. Super. 2013).

   When a negotiable instrument, such as the subject Note, is transferred from one

party to another, the transfer of the instrument "vests in the transferee such rights as

the transferor has therein." 13 Pa. C.S. § 3~0!J(b). When indorsed in blank, "an

instrument becomes payable to bearer and may be negotiated by transfer of

possession alone until specially indorsed." 13 Pa.C.S. § 3205(b). "A note indorsed in

blank is a 'bearer note', payable to anyone on demand regardless of who previously

held the note" pursuant to 13 Pa.C.S. §3109(a), 3301. Bank of Am., N.A. v. Gibson,

102 A.3d 462, 466 (Pa. Super. 2014).

      The Note was indorsed by the lender, American Brokers Conduit and made

payable in blank, without recourse making it bearer paper. 13 Pa.C.S. §3109(a).

HSBC holds and possesses the original Note and produced the original Note at trial.

In light of Appellant's default for failure to make monthly payments and the failure

to cure the default, an in rem judgment was entered in favor of HSBC, and against

Appellant in the amount of $105,769.14, together with interest and other costs and
                                            14
charges collectible under the mortgage, for foreclosure and sale of the mortgaged

property.

Fraud

        A prima facie case of fraud requires a party to establish: (1) a representation;

(2) that is material; (3) that is made with knowledge or reckless indifference of its

falsity; (4) with intent to mislead another; (5) justifiable reliance; and (6) injury.

Blumenstock v. Gibson, 811 A.2d 1029, 1034 (Pa. Super. 2002). The elements of

fraud must be proven by clear and convincing evidence. Pittsburgh Live, Inc. v.

Servov, 615 A.2d 438, 441 (Pa. Super. 1992). Appellant did not through competent

evidence prove concise facts supporting a theory of a fraud perpetrated upon him,

and failed to prove any harm, injury, or damages he purportedly sustained.

        For the aforementioned reasons, the trial court respectfully requests that its

decision be AFFIRMED.

                                                 BY THE COURT:

                                                                                    I',:)

                                                                    ~~
                                                                                    =
                                                                                    ~-r
                                                                      ;-D           :::If   J. "'T"!
                                                                     >Ge            >         ,-
                                                                     :~--·,        -<
                                                                     )>>-~:
                                                                     ::ur--        co   '     '
                                                                                              rri
                                                                     f11U>"'r:-1              0
                                                                     c,C:o         ~
                                                                     .0 -o..,,
                                                                        -u         ::g
                                                                                              L
                                                                     -oa
                                                                     ;p.;:o
                                                                         ~
                                                                                   ..
                                                                                   Q)

                                                                                   0
                                                                                              ......_~!$'

                                                                                              .. ~(
                                                                                   U)

                                            15