Federal National Mortgage v. Dunleavy, M., Federal National Mortgage v. Dunleavy, M. No. 235 EDA 2016

In 2007 James Reilly executed a mortgage on property in Upper Darby; the mortgage and subsequent assignments to JP Morgan and then Federal National Mortgage Association (Fannie Mae) were duly recorded.
The Tax Claim Bureau sold the property at an upset tax sale in 2010; Tri State acquired title and later transferred it to Matthew Dunleavy, the current record owner and appellant.
JP Morgan (later substituted by Fannie Mae) initiated a foreclosure action; Dunleavy filed general denials and claimed lack of knowledge but did not supply specific denials to allegations of default and damages.
At trial the plaintiff relied on documentary exhibits (payment histories, escrow/payment statements, attorney bills, judgment figures, and a limited power of attorney) and the testimony of Kevin Foster, a Seterus, Inc. representative who described verification and maintenance of loan records after Seterus began servicing the loan in 2012.
The trial court admitted the challenged exhibits under the business‑records exception to the hearsay rule, found plaintiff entitled to in rem judgment for $250,800.55, and denied Dunleavy’s post‑trial motion; Dunleavy appealed on authentication/hearsay grounds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether exhibits (payment histories and related records) were properly authenticated under the business‑records exception to hearsay	Foster’s testimony explained Seterus’s verification, loan‑boarding, and record‑keeping procedures; he was a qualified witness to authenticate records	Exhibits were generated by prior servicers (MERS, JP Morgan) and lacked direct testimony from those creators; Foster lacked personal knowledge of prior practices, so records were inadmissible hearsay	Trial court did not abuse discretion: Foster’s testimony adequately authenticated records as trustworthy business records and court credited his credibility
Whether admission error (if any) was prejudicial and required reversal	Admission was proper and necessary to prove amounts due	Even if admission was erroneous, appellant’s general denials and failure to specifically dispute default/damages admitted liability and established damages	Any evidentiary error would be harmless because plaintiff proved entitlement to judgment as a matter of law based on admissions and recorded mortgage documents

Commonwealth Financial Systems, Inc. v. Smith, 15 A.3d 492 (Pa. Super. 2011) (rejected treating records taken into custody by a new business as automatically qualifying under business‑records exception when authentication was unreliable)
U.S. Bank, N.A. v. Pautenis, 118 A.3d 386 (Pa. Super. 2015) (upheld exclusion where loan‑servicer records were incomplete and the authenticating witness lacked knowledge of prior servicer practices)
Bank of America N.A. v. Gibson, 102 A.3d 462 (Pa. Super. 2014) (holder entitled to judgment as matter of law where mortgage in default, mortgagor failed to pay, and recorded mortgage specifies amount)
Schuenemann v. Dreemz, LLC, 34 A.3d 94 (Pa. Super. 2011) (standard of review for admission of evidence: abuse of discretion required to overturn)
Boyle v. Steiman, 631 A.2d 1025 (Pa. Super. 1993) (authentication sufficient where witness explains preparation and maintenance of records to justify trustworthiness)