PHH MORTGAGE CORPORATION, Aрpellee v. Richard H. POWELL Rachel M. Powell 326 Hosack Road Jackson Center, Pa 16133-1428, Appellants.
No. 110 WDA 2014
Superior Court of Pennsylvania
September 10, 2014
100 A.3d 611
Submitted Aug. 4, 2014.
Edward J. Krug, Moon Township and Robert P. Wendt, Pittsburgh, for appellee.
BEFORE: DONOHUE, OLSON and PLATT
OPINION BY DONOHUE, J.:
Appellants, Richard H. Powell and Rachel M. Powell (together, the “Powells“), appeal pro se from the trial court‘s grant of summary judgment in favor of Appellee, PHH Mortgage Corporation (“PHH“), in this in rem mortgage foreclosure action.
On Januаry 12, 2010, PHH filed a mortgage foreclosure action against the Powells. PHH alleged that on September 28, 2007, the Powells executed a purchase money mortgage (“the Mortgage“) for $162,500, to Butler ARMCO Employees Credit Union (“ARMCO“) to purchase the property at 326 Hosack Road in Jackson Center, Pennsylvania. Amended Complaint, 8/16/2010, at ¶ 3. PHH further alleged that the Powells executed a promissory note (“the Note“) for the same amount in favor of ARMCO. Id. On September 28, 2007, the sellers transferred the deed to the property to the Powells, and on October 1, 2007, the deed and the Mortgage were reсorded in the Office of the Recorder of Deeds of Mercer County. Id. On November 13, 2007, an assignment of the Mortgage to PHH (“the Assignment“) was also recorded. Id.
According to PHH, the Powells defaulted on the payments under the Note in May 2009. Id. at ¶ 8. The Powells filed preliminary objections to PHH‘s initial complaint, and on September 16, 2010, PHH filed an amended complaint. Attached to the amended complaint as exhibits are the Mortgage, the Note, and the Assignment. Id. at ¶ 3 (Exhibits A, B, and C). Attached to the Note is an allonge1 dated October 4, 2007 (“the Allonge“), in which a representative of the original lender (Randall W. Cypher of ARMCO) indorsed the Note payable to the order of PHH. Id. at ¶¶ 3, 4 (Exhibit B). On January 5, 2011, the trial court overruled the Powells’ preliminary objections to the Amended Complaint, and on January 25, 2011, the trial court denied the Powells’ motion for reconsideration of its decision. On May 20, 2011, the Powells filed an answer and new matter, and on June 10, 2011, PHH filed a reply to the new matter.
On January 12, 2012, PHH filed a motion for summary judgment, which the trial court denied by order dated March 5, 2012. After taking discovery, on June 13, 2012, PHH filed its second motion for summary judgment, to which the Powells filed an opposition and brief with supporting documents and affidavits. After oral argument, on November 4, 2013, the trial court granted PHH‘s second motion for summary judgment, entering an in rem judgment in the amount of $223,536.22 plus interest from June 16, 2013 and other costs and charges. On November 18, 2014, the trial court denied the Powells’ motion for reconsideration.
On December 3, 2013, the Powells filed a notice of appeal, and on December 10, 2013, the trial court ordered the Powells to file a concise statement of errors to be presented on appeal pursuant to
Second, PHH‘s motion to quash the appeal is denied. The Powells’
Finally, with respect to PHH‘s contention that the Powells’ failure to attach a copy of the trial court‘s opinion violated
We turn then to the Pоwells’ appellate brief. In addition to the violation of
Finally,
Given these multiple violations of our appellate rules, it would be within our province to quash the Powells’ appeal. See, e.g., Commonwealth v. Maris, 427 Pa. Super. 566, 629 A.2d 1014, 1017 (1993) (“This Court possesses discretionary authority to quash, dismiss or deny allowance of appeal based upon the substantial defects of appellant‘s brief.
For their first issue on appeal, the Powells contend that PHH has not presented sufficient evidence to establish the existence of a debt because they claim that they never signed any of the loan documents. PHH has presented а substantial quantum of evidence that the Powells in fact signed the Mortgage, the Note, and a variety of related documents to obtain a loan to purchase their house at a closing on September 28, 2007. This evidence includes, but is not limited to, the documents themselves, the Powells’ bank statements,3 and deposition testimony from the attorney who handled the closing.4 Neverthe-
We begin with our standard of review of an order granting a motion for summary judgment:
“Our standard of review of an order granting summary judgment requires us to determine whether the trial court abused its discretion or committed an error of law[,] and our scope of review is plenary.” Petrina v. Allied Glove Corp., 46 A.3d 795, 797-798 (Pa. Super. 2012) (citations omitted). “We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.” Barnes v. Keller, 62 A.3d 382, 385 (Pa. Super. 2012), citing Erie Ins. Exch. v. Larrimore, 987 A.2d 732, 736 (Pa. Super. 2009) (citation omitted). “Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered.” Id.
Sokolsky v. Eidelman, 93 A.3d 858, 861 (Pa. Super. 2014).
With respect to the Powells’ contention that they never signed the loan documents, we first address the authenticity of their signatures on the Note. The parties agree that the Note is a “negotiable instrument” governed by Pennsylvania‘s Uniform Commercial Code (“PUCC“). PHH‘s Brief at 18-19; Powells’ Brief at 15.
(a) Definition of ‘negotiable instrument‘.—Except as provided in subsections (c) and (d), ‘negotiable instrument’ means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain:
(i) an undertaking or power to give, maintain or protect collateral to secure payment;
(ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral; or
(iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.
In the present case, the Note satis-
Now turning to the Powells’ contention that the trial court erred in granting summary judgment because they never signed the Note, we agree that the first requisite of negotiability under the PUCC is that the instrument be signed by the maker or drawer, and that no person is liable on a negotiable instrument unless his or her signature appears thereon. Triffin v. Dillabough, 448 Pa. Super. 72, 670 A.2d 684, 689 (1996), aff‘d, 552 Pa. 550, 716 A.2d 605 (1998). The validity of signatures on negotiable instruments is governed by
(a) Proof of signatures.—In an action with respect to an instrument,7 the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purpоrted signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature.
Pursuant to section 3308(a), a person denying the authenticity of a signature on a negotiable instrument must do so by specific denial in the pleadings. If specifically denied, the party claiming validity has the burden of proof to establish said validity, but a rebuttable presumption exists that the signature is authentic and authorized.
The Comment to section 3308 offers additional insight into the presumption of the validity of signatures on negotiable instruments:
The presumption rests upon the fact that in ordinary experience forged or unauthorized signatures are very uncommon, and normally any evidence is within the control of, or more accessible to, the defendant. The defendant is therefore required to make some sufficient showing of the grounds fоr the denial before the plaintiff is required to introduce evidence. The defendant‘s evidence need not be sufficient to require a directed verdict, but it must be enough to support the denial by permitting a finding in the defendant‘s favor. Until introduction of such evidence the presumption requires a finding for the plaintiff. Once such evidence is introduced the burden of establishing the signature by a preponderance of the total evidence is on the plaintiff.
In the present case, in their answer to PHH‘s Amended Complaint, the Powells specifically denied that they ever signed the Note, thus prоperly raising the issue of the validity of the signatures.8 In response to PHH‘s Second Motion for Summary Judgment, however, the Powells offered no evidence to support the denials in the pleadings. See Objection to [PHH‘s] Second Motion for Summary Judgment, 9/23/2013, at ¶ 38 (“The [Powells] have stated over (20) times in their pleadings that they have never had a legal indebtedness with either [ARMCO] or [PHH], and never admitted that they executed [or] delivered any legal promissory note and mortgage note and/or received any loan of money or benefit from [ARMCO] on or about September 28, 2007.“).
Because of the rebuttable presumption created under section 3308(a), in response to PHH‘s second motion for summary judgment, the Powells had the burden of coming forward with evidence to rebut the presumption. See
In this case, the deposition testimony of Attorney Parenti provided a sufficient basis to establish the authenticity of the Powells’ signatures on the Mortgage. She testified that she handled the loan closing on September 28, 2007, and that the Powells signed all of the necessary documents to complete the loan, including the Mortgage. Parenti Dep., 7/25/2012, at 11. Thе Powells’ identity as the signatories at this loan closing was further supported by Attorney Parenti‘s testimony that she made copies of the Powells’ driver‘s licenses at the closing, id. at 13, and the license numbers on these copies match the license numbers on copies of the Powells’ driver‘s licenses obtained during discovery. Second Motion for Summary Judgment, 6/12/2013, at ¶¶ 23-28 (Exhibits E, F, and G); Richard Powell Dep., 7/25/2012, at 8.
In response to this evidence as set forth in PHH‘s Second Motion for Summary Judgment, the Powells’ could not rely on the denials in their pleadings and instead had the obligation to present evidence controverting Attorney Parenti‘s testimony sufficient to create a genuine issue of material fact regarding the authenticity of their signatures on the Mortgage. They did not do so and as such, the trial court did not err in refusing to grant summary judgment on this basis.
The Powells’ second issue on appeal is essentially the mirror opposite of their first issue. For their second issue on appeal, the Powells appear to concede that they did sign the loan documents to borrow money to purchase their house, but contend that PHH does not have possession of the original Note and thus lacks the authority to enforce it. Powell‘s Brief at 54 (“The only real issue before this Court is [whether PHH] is the real party of interest ... and is the owner of the promissory and mortgage note with an attached allonge allowing [PHH] to foreclose.“). The Powells insist that the document in PHH‘s possession cannot be the original Note because they have presented evidence that the original Note must instead be in the possession of Fannie Mae. PHH, on the other hand, contends that the certified record establishes that it holds the original Note and is therefore entitled to enforce it against the Powells. PHH‘s Brief at 19.
This Court has held that the mortgagee is the real party in interest in a foreclosure action. Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919, 922 (Pa. Super. 2010) (quot-
The only issue here with respect to PHH‘s status as a holder in due course is whether it has possession of the original Note and Allonge. In Murray, this Court reversed a trial court‘s grant of summary judgment in a mortgage foreclosure action after concluding that the plaintiff mortgagee had not demonstrated that it was the holder of the original mortgage note as a matter of law. We did so for three reasons. First, prior to the grant of summary judgment, the plaintiff mortgagor had not included the allonge with the note, including a failure to include it as an attachment to the complaint. Murray, 63 A.3d at 1266-67. Second, the plaintiff mortgagee did not produce the purported original note and allonge for the trial court‘s inspection. Id. at 1267. Third, while the plaintiff mortgagee did produce the note and allonge to the defendant mortgagor for inspection, after said inspection, the defendant mortgagor insisted that what had been given to him was only a copy of the note and no allonge was attached. Id. For these reasons, in Murray we concluded thаt whether or not the plaintiff mortgagee possessed the original note and allonge came down to a battle of competing testimonial affidavits, which provide no basis for the entry of summary judgment. Id. (“Testimonial affidavits of the moving party or his witnesses, not documentary, even if uncontradicted, will not afford sufficient basis for the entry of summary judgment, since the credibility of the testimony is still a matter for the jury.“) (quoting Rosenberry v. Evans, 48 A.3d 1255, 1260 (Pa. Super. 2012)); see also Borough of Nanty-Glo v. Amer. Surety Co. of N.Y., 309 Pa. 236, 163 A. 523, 524 (1932).
Based upon our review of the certified record, we find the present case to be factually distinguishable from Murray. Unlike in Murray, here, PHH attached the Note and Allonge together as a single exhibit to all of its filings with the trial court, including to the complaint, the amended complaint, and both motions for summary judgment. In addition, PHH represented in its second motion for summary judgment that it presented the original Note and Allonge to the trial court for its inspection on November 26, 2012, and also handed it to the Powells to permit them to inspect it. Second Motion for Summary Judgment, 6/17/2013, at ¶ 65. In response, the Powells did not deny that counsel for PHH presented a note and allonge both to the trial court and to them for inspection. To the contrary, the Powells insisted that counsel for PHH “st[ood] up in open court and waive[d] what they alleged to be the original note as if it was the American flag.” Objection to [PHH‘s] Second Motion for Summary Judgment, 9/23/2013, at ¶ 91. The Powells also insist that counsel‘s intent was to “trick” both the trial court and them into thinking that the documents produced were originals. Id. at ¶ 46.
Most importantly, unlike in Murray, in this case, the Powells’ contention that
PHH, however, does not claim to be the “owner” of the Note, but rather avers that it is a “person entitled to enforce” the Note because it is the holder in due course based upon its possession of the original Note and Allonge. Ownership of the Note is irrelevant to the determination of whether PHH is a “person entitled to enforce” the Note, as the Comment to section 3203 of the PUCC makes clear:
The right to enforce an instrumеnt and ownership of the instrument are two different concepts. A thief who steals a check payable to bearer becomes the holder of the check and a person entitled to enforce it, but does not become the owner of the check.... Ownership rights in instruments may be determined by principles of the law of property, independent of Article 3, which do not depend upon whether the instrument was transferred under Section 3-203. Moreover, a person who has an ownership right in an instrument might not be a person entitled to enforce the instrument.... Although [a] document may be effective to give Y a claim to ownership of the instrument, Y is not a person entitled to enforce the instrument until Y obtains possession of the instrument.
In its Second Motion for Summary Judgment, including its affidavits and other exhibits (e.g., the Note, Allonge, Mortgage, and Assignment), PHH has established as a matter of law that it is a holder in due course of the Powells’ Note and thus is “entitled to enforce” it pursuant to
Order granting summary judgment is affirmed. Motion to Quash Appeal is denied. Motion to Strike Affidavits and Alleged Transcript Attached tо Appellants’ Brief is granted.