Wells Fargo Bank N.A. v. Spivak
104 A.3d 7
| Pa. Super. Ct. | 2014Background
- In 2007 Spivak took out a residential mortgage; MERS recorded the mortgage and later assigned the note and mortgage to Wells Fargo (assignment recorded 2011).
- Spivak defaulted beginning January 2010. Wells Fargo mailed a combined Act 6/Act 91 pre-foreclosure notice on October 30, 2010 (before Wells Fargo recorded the assignment).
- Wells Fargo filed a foreclosure action in December 2010 but discontinued it in 2011 due to assignment deficiencies.
- Wells Fargo re-filed a second in rem foreclosure action on May 24, 2012 without sending a new Act 6 notice specifying the then-current amount necessary to cure.
- Spivak opposed summary judgment, arguing the 2010 notice was not within the one-year period preceding the second action and that no new Act 6 notice was sent for the second suit.
- The trial court granted summary judgment for Wells Fargo; the Superior Court reversed and remanded, holding a new Act 6 notice was required before the second foreclosure action.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Spivak) | Held |
|---|---|---|---|
| Whether a lender must send a new Act 6 notice before re-filing a foreclosure after voluntarily withdrawing an earlier foreclosure | The original Act 6 notice (2010) satisfied notice requirements; no new notice necessary before the second suit | Withdrawal of the prior suit makes the earlier notice insufficient; Act 6 requires notice before "any" legal action, so a new notice is required for each action | Court held a new Act 6 notice was required before commencing the second foreclosure action |
| Whether Act 91/Fish controls the result | Act 91/combined notice satisfied Act 6; Fish permits no additional Act 91 notice after withdrawal | Fish is distinguishable: Fish addressed Act 91 and pre-2008 law, is not binding here, and Act 6 has stricter content requirements | Court rejected Wells Fargo’s reliance on Fish and distinguished Act 91 jurisprudence |
| Whether debtor must show prejudice from lack of a second notice | Implied: defendant must show prejudice (invoking later legislation re: Act 91 remedies) | Prejudice is inherent because debtor lacked an accurate, current cure amount and payment information | Court found prejudice from absence of current cure information and required a new notice |
| Whether the statutory text of Act 6 permits reuse of an earlier notice for subsequent suits | The 2010 notice was a notice of intention to foreclose and thus sufficient for later action | The text uses "any" legal action—read as "each/every"—so notice must precede every foreclosure action | Court interpreted "any" to mean each and every foreclosure action requires a separate Act 6 notice |
Key Cases Cited
- Benner v. Bank of Am., N.A., 917 F. Supp. 2d 338 (E.D. Pa. 2013) (describing Act 6 as a comprehensive consumer-protection scheme designed to avoid foreclosures)
- In re Smith, 866 F.2d 576 (3d Cir. 1989) (remedying defective Act 6 notice can include setting aside foreclosure and damages)
- General Elec. Credit Corp. v. Slawek, 409 A.2d 420 (Pa. Super. 1979) (statutory pre-foreclosure notice is mandatory before acceleration or foreclosure)
- Fish v. Pennsylvania Hous. Fin. Agency, 931 A.2d 764 (Pa. Cmwlth. 2007) (interpreting Act 91 notice requirements; distinguished by the Superior Court)
- In re Miller, 90 B.R. 762 (Bankr. E.D. Pa. 1988) (emphasizing that Act 6 notice must allow borrower to ascertain precise cure amount)
- Bennett v. Seave, 554 A.2d 886 (Pa. 1989) (recognizing Act 6’s role in avoiding mortgage foreclosures)