U.S. Bank National Assoc. v. McGowan, C.
1843 WDA 2015
| Pa. Super. Ct. | Dec 22, 2016Background
- In 2006 McGowan executed a mortgage on property in Greensburg; BNC Mortgage later assigned the mortgage to U.S. Bank as trustee. Ocwen serviced the loan.
- U.S. Bank filed a foreclosure complaint in July 2014 alleging default beginning January 1, 2012 and seeking in rem relief; the complaint was verified by an Ocwen employee and included an Act 91 notice of default.
- Service issues: initial sheriff attempts at two residential addresses failed; service was effected at a UPS store (10 Old Clairton Road, Suite 12A), where the store manager accepted process; court also ordered service by posting and mail to last known addresses.
- McGowan filed preliminary objections and an answer asserting lack of service, lack of standing (no possession/assignment of the note), lack of default proof, and other defenses (including LIBOR manipulation and FDCPA claims).
- U.S. Bank moved for summary judgment with an Ocwen affidavit and produced the promissory note with an allonge endorsed in blank; the trial court granted summary judgment awarding $106,412.29 plus interest and costs. McGowan appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Pre-acceleration notice/Act 91 | Act 91 notice was sent to McGowan’s last-known address; compliance with mortgage notice requirement. | No adequate pre-acceleration/default notice was sent; so plaintiff lacked standing. | Court: Act 91 notice in the record was sufficient; plaintiff did not lack standing on that basis. |
| Personal jurisdiction / service of process | Service at the UPS store (manager accepted) and by ordered posting/mail complied with Pa.R.C.P. 402 and the court’s directive. | Sheriff only attempted home service once; UPS manager was not authorized; lack of service deprives court of personal jurisdiction. | Court: Sheriff's return creates presumption of valid service; service was proper and any objection was waived by answering. |
| Standing / possession of the note | Plaintiff produced the note with an allonge endorsed in blank and was the holder entitled to enforce the note; chain defects immaterial. | Plaintiff did not prove possession/endorsements or holder status at filing; therefore lacked standing. | Court: Note endorsed in blank makes plaintiff holder entitled to enforce; possession established standing. |
| Existence of default / summary judgment sufficiency | Affidavit from Ocwen contract coordinator and complaint itemization established amount due and default; defendant’s general denials insufficient. | Affidavit lacked detail on source knowledge; complaint did not plead note default specifically; procedural defects in motion (no statement of undisputed facts). | Court: Evidence met Cunningham standard (amount, default, interest); McGowan’s general denials deemed admissions or waived; summary judgment affirmed. |
Key Cases Cited
- Gutteridge v. A.P. Green Services, Inc., 804 A.2d 650 (Pa. Super. 2002) (summary judgment standards in Pennsylvania).
- Wright v. Allied Signal, Inc., 963 A.2d 511 (Pa. Super. 2008) (appellate review and standards for summary judgment).
- Hollinger v. Hollinger, 206 A.2d 1 (Pa. 1965) (presumption of valid sheriff’s return; conclusive absent fraud).
- J.P. Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258 (Pa. Super. 2013) (chain defects in note possession do not defeat enforcement by a holder).
- Bank of America, N.A. v. Gibson, 102 A.3d 462 (Pa. Super. 2014) (holder of note may enforce negotiable instrument despite gaps in assignment chain).
- Carpenter v. Longan, 83 U.S. 271 (1872) (note is the principal obligation; mortgage is accessory security).
- Cunningham v. McWilliams, 714 A.2d 1054 (Pa. Super. 1998) (elements necessary for summary judgment in foreclosure: amount, default, interest).
- Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919 (Pa. Super. 2010) (mortgagee is the real party in interest in foreclosure actions).