JP Morgan Chase Bank v. Taggart, K.
JP Morgan Chase Bank v. Taggart, K. No. 470 EDA 2016
| Pa. Super. Ct. | Aug 25, 2017Background
- In 2005 Taggart executed a $120,000 promissory note and mortgage to Chase Bank for property at 7242 Saul Street, Philadelphia; he defaulted effective March 1, 2009.
- Chase (and successors) recorded the mortgage and made multiple assignments: to JP Morgan Chase, Ventures Trust 2013‑I‑H‑R, OHA Newbury Ventures, L.P., and ultimately Great Ajax (recorded Feb. 23, 2015).
- Chase/Morgan sent an Act 6/Act 91 notice to Taggart on April 22, 2010; Chase filed a foreclosure action in 2010 (later dismissed), and a new foreclosure complaint was filed July 26, 2013.
- Great Ajax was substituted as plaintiff in 2015; bench trial occurred May 27–28, 2015; trial court entered judgment for Great Ajax on Nov. 25, 2015; appeal followed.
- Taggart raised numerous challenges (defective statutory notice, authenticity/possession of the original note, invalid assignments, improper substitution, and related PUCC defenses).
Issues
| Issue | Plaintiff's Argument (Great Ajax) | Defendant's Argument (Taggart) | Held |
|---|---|---|---|
| 1) Act 6/Act 91 notice | Original Act 6/91 notice (Apr. 22, 2010) complied with statutory requirements and need not be re‑sent when plaintiff is substituted | Notice was defective because a prior foreclosure action was filed and dismissed; a new notice was required before the 2013 action (relying on Spivak) | Court: No new notice required here—earlier action was not voluntarily discontinued in a way that triggers Spivak; notice valid. Affirmed. |
| 2) Possession/authenticity of original note | Great Ajax produced the original note (signed) and demonstrated possession; it is indorsed in blank and entitled to enforce the note | Taggart contended the signature was forged, the note was altered/mutilated, and endorsements (allonge) were missing or defective | Court: Taggart had admitted executing the loan and did not specifically deny signature in pleadings; plaintiff met burden to prove authenticity. Note held to be original and enforceable. |
| 3) Substitution / party entitled to enforce note | Great Ajax lawfully substituted as plaintiff, possessed original note, and thus was the person entitled to enforce under the PUCC | Taggart challenged substitution as improper and argued Great Ajax was not the real party in interest | Court: Possession of original note establishes right to enforce; substitution proper. |
| 4) Validity of assignments / mortgage follows note | Great Ajax introduced recorded assignments and the original note; even if assignment chain had defects, possession of original note suffices to enforce | Taggart asserted various assignments were invalid and mortgage did not follow note, invalidating enforcement | Court: Assignments were properly executed/recorded; in any event possession of original negotiable instrument makes plaintiff entitled to enforce. |
Key Cases Cited
- Wells Fargo Bank, N.A. v. Spivak, 104 A.3d 7 (Pa. Super. 2014) (second Act 6 notice required when lender voluntarily discontinues first foreclosure and then re‑files)
- JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258 (Pa. Super. 2013) (possession of original note entitles holder to enforce despite chain‑of‑title questions)
- PHH Mortgage Corp. v. Powell, 100 A.3d 611 (Pa. Super. 2014) (signature on negotiable instrument is presumed authentic unless specifically denied; burden to prove authenticity explained)
- Carpenter v. Longan, 83 U.S. 271 (U.S. 1872) (assignment of the note carries the mortgage; note and mortgage are inseparable)
- Bensinger v. Univ. of Pittsburgh Med. Ctr., 98 A.3d 672 (Pa. Super. 2014) (standard of review for non‑jury trial judgments; abuse of discretion standard)