J-S88019-16


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

LSF8 MASTER PARTICIPATION TRUST                      IN THE SUPERIOR COURT OF
                                                           PENNSYLVANIA


                         v.

SEAN P. HIGGINS

                              Appellants                 No. 1077 EDA 2016


                  Appeal from the Order Entered March 2, 2016
                 in the Court of Common Pleas of Bucks County
                       Civil Division at No(s): 2014-05665


BEFORE: OLSON, J., RANSOM, J., and STRASSBURGER, J.*

MEMORANDUM BY RANSOM, J.:                             FILED JANUARY 31, 2017

        In this mortgage foreclosure action, Sean P. Higgins (“Appellant”)

appeals from the order entered March 2, 2016, granting LSF8 Master

Participation    Trust    (“Appellee”)     summary   judgment   and   awarding   it

judgment in rem for $334,000.08, plus interest and costs. We affirm.

        On July 3, 2003, Appellant executed a promissory note in favor of

Appellee for the amount of $251,250.00. See Promissory Note, 7/3/03, at

1-4.     The note was secured by a mortgage concurrently executed by

Appellant, and delivered to Appellee on certain real property owned by

Appellant located at 142 Durham Road, Tinicum Township, Bucks County,

Pennsylvania, 18972-9768. See Mortgage, 7/3/03, at 1-14. The mortgage

____________________________________________


*
    Retired Senior Judge assigned to the Superior Court.
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was assigned three times, with all assignments properly recorded.1 In March

2012, Appellant defaulted on the obligations due under the note by failing to

make the required monthly payments. See Account Summaries.

       Appellee commenced the instant action in August, 2014.         Appellant

filed preliminary objections to the complaint in the nature of a demurrer,

arguing that Appellee was not the real party in interest, which the trial court

overruled.     Appellant filed an answer to the complaint with new matter,

making general denials or demands for strict proof, again arguing Appellee

was not the real party in interest. Appellee filed a reply to the new matter.

In the course of discovery, Appellant admitted to signing the promissory

note and mortgage. See Objections and Response to Plaintiff’s Request for

Admissions, 6/29/15, at 4.

       In November 2015, Appellee filed a motion for summary judgment.

Appellant timely responded in the form of a “motion to strike.”         In this

motion, Appellant argued that the mortgage was not signed in the presence

of a notary, and was therefore fraudulent and void. See Appellant’s Motion

to Strike, 12/7/15, at 1.         Appellant reiterated the argument, previously
____________________________________________


1
   The mortgage was first assigned to Mortgage Electronic Registration
Systems, Inc. (“MERS”) and recorded in the Office of the Recorder of Deeds
for Bucks County in Book 4305, Page 1572. See Assignment of Mortgage,
7/3/03, at 1-2. It was then assigned to Household Finance Consumer
Discount Company and recorded as instrument number 2012076873. See
Assignment of Mortgage, 9/14/12, at 1-2. Finally, it was assigned to
Appellee and recorded as instrument number 2014008726. See Assignment
of Mortgage, 1/23/14, at 1-2.



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rejected by the trial court, that Appellee was not legally entitled to enforce

the note. The trial court granted the motion for summary judgment.

      Appellant timely appealed and filed a court-ordered Pa.R.A.P. 1925(b).

The trial court issued a responsive opinion.

      On appeal, Appellant raises the following issues:

      1. Should the lower court have entered an order that granted
      summary judgment to [Appellee] when the parties were still
      engaged in discovery, and where [Appellee] failed to respond to
      [Appellant’s] discovery, especially where there were material
      facts in dispute?

      2. Should the lower court have entered an order that granted
      summary judgment to [Appellee] when there was no assignment
      attached of either the note or the mortgage to [Appellee]
      evidencing ownership or possession of the note or mortgage?

      3. Should the lower court have entered an order that granted
      summary judgment to [Appellee] where [Appellee] failed to
      prove, and there was a dispute as to whether [Appellee] is a real
      party in interest under the Pennsylvania Uniform Commercial
      Code (“PUCC”) that entitled [Appellee] to enforce the note, and
      therefore the mortgage?

      4. Should the lower court have entered an order that granted
      summary judgment to [Appellee] as [Appellee] never proved it
      was the holder of the note, a nonholder in possession of the note
      who has the rights of a holder, or a person not in possession of
      the note who is entitled to enforce the instrument pursuant to
      PUCC § 3309?

      5. Should the lower court have entered an order that granted
      summary judgment to       [Appellee] where [Appellee] never
      proved it was in possession of the original note and therefore,
      was maintain [sic] in foreclosure. See J.P. Morgan Chase
      Bank v. Murray, 63 A.3d 1258, 1268 (Pa. Super. 2013).




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Appellant’s Brief at 4-5 (unnecessary capitalization and quotation marks

omitted).

     Our scope and standard of review of an order granting summary

judgment are well-settled.

     [S]ummary judgment is properly granted where there is no
     genuine issue as to any material fact and ... the moving party is
     entitled to a judgment as a matter of law. Summary judgment
     may be granted only where the right is clear and free from
     doubt. The moving party has the burden of proving that there is
     no genuine issue of material fact. The record and any inferences
     therefrom must be viewed in the light most favorable to the
     nonmoving party, and any doubt must be resolved against the
     moving party. The trial court will be overturned on the entry of
     summary judgment only if there has been an error of law or a
     clear abuse of discretion.

First Wisconsin Trust Co. v. Strausser, 439 Pa. Super. 192, 198 (Pa.

Super. 1995) (internal citations and quotations omitted).

     Under the Pennsylvania Uniform Commercial Code, the note securing a

mortgage is a negotiable instrument.    J.P. Morgan Chase Bank, N.A. v.

Murray, 63 A.3d 1258 (Pa. Super. 2013).       Enforcement is proper even if

questions remain as to the chain of possession, and questions as to that

chain are immaterial to its enforceability so long as the holder can prove it

holds said note. Id. The holder of a mortgage has the right, upon default,

to bring a foreclosure action. Cunningham v. McWilliams, 714 A.2d 1054,

1056–57 (Pa. Super. 1998). The holder of a mortgage is entitled to

summary judgment if the mortgagor admits that the mortgage is in default,




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the mortgagor has failed to pay on the obligation, and the recorded

mortgage is in the specified amount. Id.

       Appellant first claims that the court erred in entering an order granting

summary judgment where the parties were still engaged in discovery and

where genuine issues of material fact remained. Appellant’s Brief at 15-17.

Appellant points to three issues allegedly in dispute: 1) Appellee had not

produced the original note, was not the real party in interest, and had no

standing to bring the action; 2) Appellee had not complied with the notice

requirements of Act 91; and 3) Appellee could not rest on an affidavit to

support default.2 Appellant’s Brief at 18.

       The trial court did not err in granting summary judgment prior to the

formal close of discovery. Pa.R.C.P. 1035.2 provides that a party may move

for summary judgment at any time whenever there is no genuine issue of

material fact as to a necessary element of the cause of action or defense

which could be established by additional discovery, or after the completion of

discovery relevant to the motion.

       With regard to discovery, in the instant case, Appellant had over a

year in which to engage in discovery relevant to the case, or any issues he

wished to raise.     Appellee commenced this action in August 2014, but the

record indicates that Appellant did not send discovery requests until October
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2
  Citing in support Nanty-Glo v. American Surety Co., 163 A. 523 (Pa.
1932).



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2015. Thus, the trial court did not abuse its discretion in granting summary

judgment in favor of Appellee despite the fact that discovery had not closed.

See, e.g., Jacques v. Akzo Int'l Salt, Inc., 619 A.2d 748, 750–51 (Pa.

Super. 1993) (stating that a motion for summary judgment was not

premature where plaintiff failed to conduct any discovery during the six

month period between the plaintiff's filing of the complaint and the

defendant's motion for summary judgment).

      With regard to material facts in dispute, Appellant first avers that

Appellee was not the real party in interest because it had not produced the

original note. The Pennsylvania Rules of Civil Procedure provide that, except

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 is a

person who will be entitled to the benefits of the action if successful, and has

the legal right under the applicable substantive law to enforce the claim in

question. See U.S. Bank N.A. v. Mallory, 982 A.2d 986, 994 (Pa. Super.

2009). Where an assignment is effective, the assignee stands in the shoes

of the assignor and assumes all of his rights.             CitiMortgage, Inc. v.

Barbezat, 131 A.3d 65, 69 (Pa. Super. 2016).

      In a mortgage foreclosure action, the mortgagee is the real party in

interest. See Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919, 922 n. 3 (Pa.

Super. 2010); see also Pa.R.C.P. 1147 (requiring a plaintiff in a mortgage

foreclosure   action   to   name   the    parties   to   the   mortgage   and   any


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assignments).     To establish standing in a mortgage foreclosure action, a

plaintiff must plead ownership of the mortgage under Rule 1147, as well as

possess the right to make demand upon the note secured by the mortgage.

Barbezat, 131 A.3d at 69. A mortgagee must hold the note secured by a

mortgage, as the note and mortgage are inseparable. Id. at 75 n.3.

        Appellant relies upon Murray to support his argument that Appellee

does not hold the original note. Appellant argues that Murray held that a

plaintiff in a mortgage foreclosure action must provide requisite proof of its

right to maintain the action, and questionable documents do not furnish

sufficient proof. Appellant’s Brief at 22 (citing in support Murray, 63 A.3d

at 1268).     Murray is distinguishable, as in that case, the plaintiff had not

filed of record a copy of the note including the allonge until after the trial

court granted summary judgment.        Murray, 63 A.3d at 1266-1268.          The

defendant’s     assertions   were   based   upon    a   visual   inspection   and

contradictory evidence of record.    Id.    The record here is not in question,

and the allonge was provided to the trial court for inspection prior to the

grant of summary judgment.

        We reject Appellant’s contention that Appellee cannot establish

ownership of the note. The note produced by Appellee identifies Appellant

as the borrower and Equity Financial Inc. as the Lender.         See Promissory

Note.    The note was endorsed by Equity without recourse to the order of

Household Financial Consumer Discount Company.               Id.    The allonge


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attached to the note endorses the note to Appellee.        See Allonge at 1.

Accordingly, the note, as negotiable instrument, entitles Appellee to

enforcement of the obligation.     See 13 Pa.C.S. § 3109(a); 13 Pa.C.S. §

3301. It is incumbent upon Appellant to establish one or more issues of fact

arising from the evidence that controvert the evidence cited in support of the

motion, and he has not established such a fact. See Barbezat, 131 A.3d at

69-70.

      Second, Appellant argues that Act 91 Notice was deficient, because

although Appellee attached an Act 91 notice to its motion, the certified mail

receipt was blank. Appellant’s Brief at 20. Thus, he avers he had no notice

of default. Id.    Appellant did not raise this issue in his Pa.R.A.P. 1925(b)

statement, and thus, has waived it on appeal.       See Commonwealth v.

Lord, 719 A.2d 306, 309 (Pa. 1998) (holding that any issues not raised in a

1925(b)   statement    will   be   deemed   waived);   see   also   Pa.R.A.P.

1925(b)(4)(vii).

      Third, Appellant argues that the trial court erred in granting summary

judgment where Appellee relied solely on an affidavit, in violation of the

Nanty-Glo rule. This rule:

      prohibits summary judgment where the moving party relies
      exclusively on oral testimony, either through testimonial
      affidavits or deposition testimony, to establish the absence of a
      genuine issue of material fact except where the moving party
      supports the motion by using admissions of the opposing party
      or the opposing party's own witness.




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Lineberger v. Wyeth, 894 A.2d 141, 149 (Pa. Super. 2006) (citing First

Philson Bank, N.A. v. Hartford Fire Ins. Co., 727 A.2d 584, 587 (Pa.

Super. 1999), appeal denied, 747 A.2d 901 (Pa. 1999)). In the instant case,

the trial court properly concluded that the Nanty-Glo rule was not

implicated, as Appellant admitted particular facts and has not sufficiently

denied other facts.

      Namely, Appellant admitted to signing the promissory note and that

his signature appears on the mortgage.       See Appellant’s Responses to

Request for Admissions at 4. Further, in foreclosure actions, general denials

constitute admissions where specific denials are required.         Bank of

America, N.A. v. Gibson, 102 A.3d 462, 466–67 (Pa. Super. 2014), appeal

denied, 631 Pa. 722 (2015); see also Pa.R.C.P. 1029(a), (b). Appellant did

not specifically deny default, but stated only that there was never a default

declared under the note by the mortgagee who is the holder of the note.

Accordingly, by his ineffective denials, Appellant admitted the material

allegations of the complaint.   Id.   Thus, the trial court properly entered

summary judgment on those admissions, and the Nanty-Glo rule did not

apply, as the affidavit was not the sole piece of evidence relied upon for

summary judgment.

      Appellant’s remaining allegations are merely restatements of his

contention that Appellee was not the real party in interest, and did not hold

the note. As we have already determined that this assertion is unavailing,


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we need not address his remaining claims.    Accordingly, the record shows

that Appellee held the promissory note and the mortgage. Enforcement of

that note was proper. See Mallory, 982 A.2d at 994. The trial court was in

compliance with the Nanty-Glo rule and correctly entered summary

judgment in favor of Appellee, as no material fact remained in issue as to

any element of the foreclosure action.     See Cunningham, 714 A.2d at

1057.

        Judgment affirmed.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 1/31/2017




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