Wilmington Trust v. Brolley, J.
219 A.3d 1173
Pa. Super. Ct.2019Background
- 2003: Helen Brolley executed a $65,000 mortgage on 150 Laurel Drive; deed to her son recorded Nov. 2003; Helen died in 2006.
- No payments were made after April 1, 2006. Wells Fargo filed foreclosure in 2007 (Docket No. 8805 of 2007); in rem judgment entered in 2009 (amended 2010).
- Servicer sent an Act 91 notice on Oct. 28, 2011. EMC Mortgage LLC filed a second foreclosure complaint Mar. 12, 2012 (No. 2985 of 2012) after assignments of the mortgage.
- This Court previously vacated a trial-court judgment and remanded for consideration of res judicata and collateral estoppel; a bench trial on remand produced an in rem judgment Mar. 9, 2017 for $128,313.64 based on defaults from Oct. 1, 2010 onward.
- On appeal, Superior Court held that the earlier foreclosure judgment merged the mortgage into that judgment, precluding any later foreclosure on subsequent alleged defaults; the March 9, 2017 judgment was vacated and the action dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument (Mortgagee) | Defendant's Argument (Brolley) | Held |
|---|---|---|---|
| Whether res judicata or collateral estoppel bars the second foreclosure | Continuing installment contract allows new defaults and a new foreclosure | Prior in rem foreclosure judgment bars any subsequent foreclosure; collateral estoppel/res judicata apply | Judgment vacated and action dismissed with prejudice: prior foreclosure judgment merged into and supplanted the mortgage, so no new defaults could arise |
| Whether Act 91 pre-foreclosure notice was required or was defective | Notice was not required because statutory pre-foreclosure notice was temporarily suspended | Notice was defective because amounts were incorrect after res judicata ruling | Not reached on the merits; Superior Court disposed the case on merger/res judicata grounds |
| Whether issues were waived by failing to file post-trial motions after the remand trial | Issues waived for failure to file post-trial motions | Rule 227.1(i) governing remands meant post-trial motions were not required, so issues preserved | No waiver: remand did not direct a new-trial post-trial motion and trial-court did not require one, so issues preserved for appeal |
Key Cases Cited
- EMC Mortg., LLC v. Biddle, 114 A.3d 1057 (Pa. Super. 2015) (discussing merger of mortgage into foreclosure judgment)
- In re Stendardo, 991 F.2d 1089 (3d Cir. 1993) (principle that mortgage terms merge into foreclosure judgment)
- Faulkner v. M&T Bank (In re Faulkner), 593 B.R. 263 (Bankr. E.D. Pa. 2018) (bankruptcy court applying merger doctrine to bar subsequent foreclosure)
- Wilkes ex rel. Mason v. Phoenix Home Life Mut. Ins. Co., 902 A.2d 366 (Pa. 2006) (elements of res judicata)
- R. W. v. Manzek, 888 A.2d 740 (Pa. 2005) (elements of collateral estoppel)