Bank of New York Mellon v. Bach, S.
159 A.3d 16
Pa. Super. Ct.2017Background
- In 2004 the Bachs bought a home and executed a $479,200 note secured by a mortgage; they defaulted in December 2008 and made no payments thereafter.
- Appellee (Bank of New York Mellon) filed a foreclosure complaint in July 2014, alleging two prior mortgage assignments (Financial Mortgage Corp. → First Horizon → Appellee).
- At trial Appellee produced the original promissory note endorsed in blank and in its possession; the Bachs did not dispute the note’s authenticity or their default.
- The Bachs (pro se on appeal) challenged Appellee’s standing, arguing a prior transfer (First Horizon → First Horizon Asset Securities, Inc.) omitted from the complaint invalidated the later assignment to Appellee.
- Trial court found Appellee had standing based on possession of the original note endorsed in blank, overruled procedural objections as waived, entered an in rem foreclosure judgment, and this Court affirmed.
Issues
| Issue | Plaintiff's Argument (Bank) | Defendant's Argument (Bachs) | Held |
|---|---|---|---|
| Whether Appellee had standing to enforce the note | Appellee possessed the original note endorsed in blank and therefore may enforce it | The assignment chain was defective and thus Appellee lacked standing | Appellee had standing; a blank-endorsed note in possession is enforceable (affirmed) |
| Whether failure to list an earlier transfer in the complaint (Pa.R.C.P. 1147) requires relief | Listing assignments is a procedural requirement but does not affect substantive entitlement to enforce a blank-endorsed note | Omission of the Prior Transaction from the complaint violated Rule 1147 and deprived Appellee of standing / failed to state a claim | Claim waived: Rule 1147 is procedural; defendants failed to raise it in preliminary objections/answer, so objection was waived; no entitlement to relief |
Key Cases Cited
- Gerber v. Piergrossi, 142 A.3d 854 (Pa. Super. 2016) (chain of possession immaterial where note is endorsed in blank; holder in possession may enforce)
- JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258 (Pa. Super. 2013) (note endorsed in blank is payable to bearer and transferable by possession)
- Stephan v. Waldron Elec. Heating and Cooling LLC, 100 A.3d 660 (Pa. Super. 2014) (standard of review for non-jury trial verdicts)
- Beneficial Consumer Discount Co. v. Vukman, 77 A.3d 547 (Pa. 2013) (definition of "cause of action" for pleading purposes)