An assignee mortgagee has filed a motion for summary judgment in this mortgage foreclosure proceeding, and seeks an in rem judgment against the borrowers for principal balance, accrued interest, insurance, taxes, counsel fees and expenses allegedly due under the mortgage. The assignee contends that the borrowers’ averments in their responsive pleading are mere general denials under Pa.R.C.P. 1029(b) and constitute binding admissions that the borrowers are in default and owe the amounts claimed. The assignee alternatively argues that the affidavit of the mortgage service’s “default service officer” conclusively establishes that there is no genuine issue of material fact and that the assignee is entitled to judgment as a matter of law.
In their answer to the complaint, the borrowers specifically denied the default and damages allegations of the mortgage assignor, and further averred that certain mortgage payments were not credited by the assignor and that other payments were rejected by the assignor with the
I. FACTUAL BACKGROUND
On July 2, 2013, HSBC Mortgage Services, Inc. (“HSBC”) instituted this mortgage foreclosure action against defendants, Brandy Tanana and Timothy Tanana (the “Tananas”). (Docket entry no. 1 at ¶1; Docket entry no. 3 at ¶1). The parties admit that on August 31, 2006, Brandy Tanana executed a note with her original lender, Wilmington Finance, Inc., pursuant to which she promised to repay the sum of $335,000.00 in monthly payments of $2,790.02 beginning on October 1,2006, and concluding on September 1, 2036. (Id. at ¶3 & Exhibit A). In connection with that note, Brandy Tanana and Timothy Tanana provided a mortgage to Wilmington Finance, Inc., with respect to their property at 417 Varsity Drive, Throop, Pennsylvania. (Id. at ¶4 & Exhibit B). The mortgage identifies Wilmington Finance, Inc., as the
The original plaintiff, HSBC, asserts in the complaint that on October 26, 2010, MERS executed an assignment of the Tananas’ mortgage to HSBC. (Id., Exhibit C). The assignment of the Tananas’ mortgage to HSBC was duly recorded as Instrument No. 20102230 in the Office of the Recorder of Deeds of Lackawanna County on November 10, 2010. (Docket entry No. 11, Exhibit A2). The current plaintiff, LSF8 master participation trust (“LSF8”), contends in its motion for summary judgment that the Tananas’ mortgage was later assigned to LSF8 on October 10, 2013, and that “said assignment is in the process of being recorded.”
In their answer to the compliant, the Tananas “specifically deny the principal and mortgage due and unpaid, and the interest in pursuing charges, as asserted in plaintiff’s complaint, to be correct.” (Docket entry no. 3 at ¶¶7-9). The Tananas maintain that “[sjpecific payments were either not credited or incorrectly credited,” and that “other payments by the [Tananas] were rejected.” (Id.). Furthermore, the Tananas aver “that plaintiff has taken intentional actions to force the default by rejecting payments of the [Tananas] and miscalculating payments that have been made.” (Id.). Additionally, the Tananas assert that “[t]he notices of intention to foreclose fail to comply with the requirements of Act 6 of 1974,41 Pa.C.S. § 403, in that said Notices were stale” and “failed to contain sufficient information for the [Tananas] to readily calculate the precise amount of monies due and owing to plaintiff in order to avoid sheriff’s sale and foreclosure.” (Id. at ¶14).
LSF8 has filed a motion for summary judgment, and argues that it is entitled to an in rem judgment against the Tananas for the principal balance, interest, late charges, counsel fees and costs and “for foreclosure and sale of the mortgaged property.” (Docket entry no. 11 at p. 4). Although the complaint that was filed by LSF8’s purported assignor specifically alleges that the Tananas’ mortgage has been delinquent since “the March 2010 payment and
LSF8’s case dispositive motion avers that “[i]n their answer, [the Tananas] effectively admitted all the averments of the complaint as is further explained in Plaintiff’s brief.” (Docket entry no. 11 at ¶ 13). Citing New York Guardian Mortgage Corp. v. Dietzel, 362 Pa. Super. 426, 524 A.2d 951 (1987), LSF8 argues in its brief that the Tananas’ “answers appear to be general denials or denials improperly based upon conclusions of law,” and that those purported “general denials in their answer to the complaint must be considered admissions.” (Plaintiff’s memorandum of law at p. 5). Notwithstanding the fact that the complaint expressly avers that “plaintiff has decided to forgo collecting” any “late fees, inspection charges, property preservation expenses, and attorney’s fees,” (Docket entry no. 1 at ¶ 9), LSF8 also seeks the entry of judgment for “its attorney’s fees and costs” in its summary judgment motion. (Docket entry no. 11 at ¶ 18). Neither LSF8’s motion, nor its supporting brief, quantifies the amount of the counsel fees being sought, and the affidavit of Melinda Girardeau does not include any attorney’s fees
In opposing LSF8’s motion for summary judgment, the Tananas assert that “[throughout this process, [they] have attempted to make payment arrangements to bring the loan absolutely current,” but that LSF8 “will not accept any monthly payments or any other type of payment.” (Docket entry no. 12 at p. 1). The Tananas submit that there are legitimate disputes regarding the alleged “amount that is outstanding, proper credits in terms of payments, the assessment of attorney’s fees and costs...and the Notices that were provide pursuant to Act 6 and Act 91.” (Id.). Specifically, they argue that “the notices under Act 6 and Act 91 were sent approximately one (1) year before the actual service of the foreclosure complaint,” and were “stale” and “by no means gave [the Tananas] the proper idea of what was necessary to bring the account current” at the time that suit was filed. (Id. at pp. 2-3). The parties’ have stipulated to submit this matter for a decision without the necessity of oral argument, and upon the filing of the Tananas’ opposing brief on February 24,2014, this matter became ripe for disposition.
II. DISCUSSION
(A) STANDARD OF REVIEW
“A motion for summary judgment should only be granted if there is no genuine issue regarding any material fact, and the moving party is entitled to judgment as a matter of law.” Smith v. Township of Richmond, 82 A.3d 407, 414-415 (Pa. 2013). The party seeking summary
Summary judgment may be entered in a mortgage foreclosure action “if the mortgagors admit that the mortgage is in default, that they have failed to pay interest on the obligation, and that the recorded mortgage is in the specified amount.” Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998), app. denied, 557 Pa. 653, 734 A.2d 861 (1999); Sovereign Bank v. Gawron, 13 Pa. D. & C. 5th 71, 77 (Lacka. Co. 2010). Under the Nanty-Glo rule enunciated in Borough of Nanty-Glo v. American Surety Co. of New York, 309 Pa. 236, 163 A. 523 (1932), the party moving for summary judgment may not rely solely upon its own testimonial affidavits or depositions, or those of its witnesses, to establish the non-existence of genuine issues of material fact. Shamis v. Moon, 81 A.3d 962, 965 (Pa. Super. 2013); Dearmitt v. New York Life Insurance Company, 73 A.3d 578, 595 (Pa. Super. 2013). “Our Supreme Court recently cautioned that ‘the function of the summary judgment proceedings...is not, and cannot, be used to provide for trial by affidavits or
(B) SUFFICIENCY OF BORROWERS’ DENIALS
LSF8 first argues that the Tananas have conclusively admitted the lender’s allegations that the subject mortgage is in default and that the claimed principal, interest and fees are owed since their responses to the relevant averments of the complaint constitute general denials under Pa.R.C.P. 1029(b). (Plaintiff’s brief at pp. 4-5). Rule 1029(b) states that factual “[ajverments in a pleading to which a responsive pleading is required are admitted when not denied specifically or by necessary implication,” and that except as provided in Rule 1029(e) governing actions for bodily injury, death or property damage, a “general denial...shall have the effect of an admission.” Pa.R.C.P. 1029(b). See also Swift v. Milner, 371 Pa. Super. 302, 308, 538 A.2d 28, 31 (1988) (stating that since “paragraphs three through ten of appellant’s answer merely contain the single word ‘Denied’..., these general denials effectively manifested appellant’s admission to the facts averred in paragraphs three through ten of appellee’s complaint”). In determining whether an answer “is a general denial under 1029(b), the court must examine the pleadings
As LSF8 has noted in its brief, summary judgment may be entered in a mortgage foreclosure action if the borrowers admit their default under the mortgage and generally aver that they “are without information sufficient to form a belief as to the truth of the lender’s averment as to the principal and interest due by virtue of that default, even though the borrowers are clearly “parties who would have sufficient knowledge on which to base a specific denial.” Dietzel, 361 Pa. Super. at 429, 524 A.2d at 952. Accord First Wisconsin Trust Company v. Strausser, 439 Pa. Super. 192, 199-200, 653 A.2d 688,692 (1995). Flowever, if the borrowers admit their original default but further aver that they “have made repeated tenders of the full amount due and owing” and that their “tenders have been refused” by the lender, such a response is tantamount “to a denial ‘by necessary implication’ of any default” and cannot be considered an admission under Rule 1029(b). Mellon Bank. N.A. v. Joseph, 267 Pa. Super. 307,312 & n. 5,406 A.2d 1055, 1057 & n. 5 (1979) (quoting Pa.R.C.P. 1029(b)). Therefore, an answer by a borrower in a mortgage foreclosure proceeding, which acknowledges a default but alleges attempted tenders of the amount due, states a valid defense in the foreclosure action. Id. at 313,
Unlike the borrowers in Dietzel and Strausser, the Tananas have not generally denied the allegations of the complaint, nor have they claimed that they are without infonnation sufficient to form a belief as to the truth or falsity of those allegations. To the contrary, the Tananas specifically deny that the principal and interest alleged to be owed under the mortgage are due and unpaid, and further assert that LSF8’s assignor refused to accept the Tananas’ payments and failed to properly credit payments that were made. In addition, the Tananas aver that the predecessor lender took “intentional actions to force the default by rejecting payments...and miscalculating payments that have been made.”
(C) BORROWERS’ASSERTION OF COGNIZABLE DEFENSE
“In actions for in rem foreclosure due to the defendant’s failure to pay a debt, summary judgment is proper where the defendant [1] admits that [s]he had failed to make the payments due and [2] fails to sustain a cognizable defense to the plaintiff’s claim.” Gateway Towers Condominium Association v. Krohn, 845 A.2d 855, 858 (Pa. Super. 2004) (citing Strausser, supra). As discussed in Section 11(B) above, the Tananas have expressly denied their liability for the principal and interest claimed by LSF8. Moreover, the Tananas have asserted a valid, affirmative defense by maintaining that their tendered payments of the amounts due were rejected by LSF8’s assignor who intended “to
LSF8 is not entitled to summary judgment based upon the affidavit of a “default service officer of Caliber Home Loans, Inc.” attesting that $481,480.49 is allegedly due and owing for principal balance, accrued interest, insurance and taxes. “Pennsylvania courts long have disapproved of trial by affidavit.” Murray, 63 A.3d at 1267. It is well settled in this Commonwealth that “testimonial affidavits of the moving party or [its] witnesses, even if uncontroverted, will not afford sufficient basis for the entry of summary judgment, because the credibility of the testimony is still a matter for the jury.” Weaver v. Lancaster Newspapers, Inc., 592 Pa. 458, 472, 926 A.2d 899, 907 (2007); Wells Fargo Equipment Finance. Inc. v. Knitney Lines. Inc., 2013 WL 5768196, at * 2 n. 2 (Lacka. Co. 2013).
The fact-finder in this case must ultimately determine whether LSF8’s assignor attempted to intentionally trigger a default and corresponding acceleration of payments due by affirmatively rejecting mortgage payments that were allegedly tendered by the Tananas. If the fact-finder concludes that the predecessor lender engaged in such conduct, the Tananas may secure a verdict in their favor. See Joseph, supra. As a result, LSF8 has not satisfied its burden of establishing the absence of a genuine issue of material fact and its entitlement to judgment as a matter of law. Accordingly, LSF8’s motion for summary judgment will be denied.
And now, this 2nd day of April, 2014, upon consideration of “plaintiff’s motion for summary judgment” and the exhibits and memoranda of law submitted by the parties,
. “Pennsylvania law requires that mortgage assignments must be in writing and filed with the counties’ recorders of deeds within six months of origination, 21 P.S. §621....” County of Washington. PA v. U.S. Bank N.A., 2012 WL 3860474, at * 2 (W.D. Pa.2012). The Tananas do not raise any argument based upon LSF8’s lack of a duly recorded assignment at the time that it filed the instant motion for summary judgment. Compare U.S. Bank, N.A. v. Mallory, 982 A.2d 986, 994 (Pa. Super. 2009) (holding that recording of assignment of mortgage was not prerequisite to mortgage assignee’s standing to institute mortgage foreclosure action, where assignee averred in its complaint that it was the “legal owner” of the mortgage and the holder of the mortgage’s note and was in the process of formalizing the assignment) with J. P. Morgan Chase Bank. N.A. v. Murray, 63 A.3d 1258, 1263 (Pa. Super. 2013) ('“Mallory does not stand for the proposition that a party that avers, but never substantiates, its entitlement to prosecute a foreclosure action due to assignment or succession is entitled to judgment thereupon”), and Wells Fargo Bank. N.A. v. Lupori, 8 A.3d 919,922(Pa. Super. 2010) (concluding that purported mortgagee lacked standing to prosecute foreclosure action, distinguishing holding in Mallory, and finding that “[sjince the complaint contains no mention of the alleged assignment from [First Franklin Financial] Corporation to Wells Fargo or any allegation that Wells Fargo was the owner of the Lupori’s mortgage, the
. LSF8 has not claimed that its right to recover in this case is unaffected by the actions of the assignor(s). In previously rejecting such an argument and finding that a mortgage assignee’s rights against mortgagors are subject to any affirmative defenses that the mortgagors could assert against the assignor, we reasoned:
Under the law of assignment, the assignee stands in the shoes of the assignor and “succeeds to no greater rights than those possessed by the assignor.” Crawford Central School District v. Com., 585 Pa. 131, 137, 888 A.2d 616, 619-620 (2005). “Conversely, an assignee’s right against the obligor is subject to all of the limitations of the assignor’s right, to all defenses thereto, and to all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” Smith v. Cumberland Group. Ltd., 455 Pa. Super. 276,286, 687 A.2d 1167, 1172 (1997) (citing Peoples Pittsburgh Trust Company v. Com., 359 Pa. 62, 627-28,60 A.2d 53, 56 (1948)). Accord, American Lumber Corp. v. National R.R. Passenger Corp., 886 F.2d 50, 55 (3d Cir. 1989) (“[A]n assignee of a chose of action takes it subject to all defenses...existing at the time of the assignment” (quoting General Electric Credit Corp. v. Security Bank, 244 A.2d 920, 923 (D. C. App. 1968))); E-Time System. Inc. v. Voicestream Wireless Corp.,*426 2002 WL 1917697, at * 9 (E.D. Pa. 2002) (“Importantly, it is a universal and uncontroversial tenet of contract law that an assignee of a claim takes the same subject to all defenses that could validly have been raised by the defendant against the assignor at the time of the assignment.”) (citing North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co., 152 U.S. 596 (1894)); Restatement (Second) of Contracts §336(2) (“The right of an assignee is subject to any defense... of the obligor which accrues before the obligor receives notification of the assignment....”).
Gawron, 13 Pa. D. & C. 5th at 81-82.
. In light of the denial of LSF8’s case dispositive motion on that basis, it is unnecessary to address the Tananas’ alternate argument that