J-A13003-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 NS/CS HIGHLAND, LLC                     :    IN THE SUPERIOR COURT OF
                                         :         PENNSYLVANIA
                                         :
                v.                       :
                                         :
                                         :
 TAMIMENT 503, L.P. , TAMIMENT           :
 902, L.P., TAMIMENT 18, L.P.,           :
 TAMIMENT LAKEFRONT, L.P.,               :    No. 3147 EDA 2018
 TAMIMENT DEVELOPMENT GROUP,             :
 L.P., AND MOUNTAIN LAUREL               :
 DEVELOPMENT GROUP                       :
                                         :
                     Appellant           :

            Appeal from the Order Entered September 25, 2018
  In the Court of Common Pleas of Pike County Civil Division at No(s): No.
                               2016-1621


BEFORE:       SHOGAN, J., NICHOLS, J., and STRASSBURGER*, J.

MEMORANDUM BY SHOGAN, J.:                        FILED OCTOBER 28, 2019

      Appellants, Tamiment 503, L.P, et al., appeal from the order granting

summary judgment in the amount of $156,736,437.10, plus interest accruing

at $18,505.97 per day, in this mortgage foreclosure action initiated by

Appellee, NS/CS Highland, LLC. We affirm.

      The trial court set forth the factual and procedural history of this case

as follows:

             On December 20, 2016, [Appellee] initiated this action by
      filing a commercial mortgage foreclosure action to enforce a
      mortgage given to secure a construction loan from [Appellee’s]
      assignor, CapitalSource Finance, LLC, to [Appellants].       The
      purpose of the construction loan was to allow [Appellants] to
      improve and expand the former Tamiment Resort and Unity House
      Resort, which comprises approximately 2,500 acres located at
____________________________________
* Retired Senior Judge assigned to the Superior Court.
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      Bushkill Falls Road, Lehman Township, Pike County, Pennsylvania
      18324 (“Mortgaged Property”).

           [Appellants] filed an Answer to Complaint and New Matter
      on February 8, 2017, and [Appellee] filed a Reply to [Appellants’]
      New Matter on February 27, 2017. [Appellee] attempted to
      engage in discovery but received either no response from
      [Appellants] or did not receive full and complete answers.
      Therefore, [Appellee] filed its Motion for Summary Judgment and
      accompanying brief on June 4, 2018.           [Appellants] filed a
      Response and Memorandum on June 29, 2018.

            Oral argument was held on August 27, 2018. On September
      25, 2018, [the trial court] granted summary judgment in the
      amount     of  $156,736,437.10      as    of   June    1,  2018.
      Defendants/Appellants filed their Notice of Appeal on October 25,
      2018.

Trial Court Opinion, 12/26/18, at 1-2. Appellants and the trial court complied

with Pa.R.A.P. 1925.

      Appellants present the following issues for our review:

      1. Did the Trial Court enter summary judgment in error because
      discovery was incomplete, in derogation of Pennsylvania Rule of
      Civil Procedure 1035.2?

      2. Did the Trial Court improperly enter judgment in rem in the
      amount of $156,736,437.10 as of June 1, 2018, with interest
      accruing at a per diem rate of $18,505.97, insofar as Appellants
      contested the amount due?

Appellants’ Brief at 3.

      Appellants first argue that the trial court improperly granted summary

judgment because material discovery was not completed, as required by

Pa.R.C.P. 1035.2(2).      Appellants’ Brief at 9-14.   Appellants contend that

discovery had been informally suspended by agreement of the parties while

settlement negotiations were conducted. Id. at 12. Appellants assert that

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“[t]he pending discovery may well have aided in the development of facts

material to the amount due to Appellee, which was contested before the [t]rial

[c]ourt.” Id. at 14.

      We observe that, in reviewing matters of summary judgment, we are

governed by the following well-established principles:

             Our scope of review of an order granting summary judgment
      is plenary. We apply the same standard as the trial court,
      reviewing all the evidence of record to determine whether there
      exists a genuine issue of material fact. We view the record in the
      light most favorable to the non-moving party, and all doubts as to
      the existence of a genuine issue of material fact must be resolved
      against the moving party. Chenot v. A.P. Green Services, Inc.,
      895 A.2d 55, 60-61 (Pa. Super. 2006) (citation omitted).

             Motions for summary judgment implicate the plaintiff’s proof
      of the elements of his cause of action. Chenot, 895 A.2d at 61
      (citation omitted). Summary judgment is proper “if, after the
      completion of discovery relevant to the motion, including the
      production of expert reports, an adverse party who will bear the
      burden of proof at trial has failed to produce evidence of facts
      essential to the cause of action or defense which in a jury trial
      would require the issues to be submitted to a jury.” Pa.R.C.P.
      1035.2(2). In other words, “whenever there is no genuine issue
      of any material fact as to a necessary element of the cause of
      action or defense which could be established by additional
      discovery or expert report,” Pa.R.C.P. 1035.2(1), and the moving
      party is entitled to judgment as a matter of law, summary
      judgment is appropriate. Thus, a record that supports summary
      judgment either (1) shows the material facts are undisputed or
      (2) contains insufficient evidence of facts to make out a prima
      facie cause of action or defense. Chenot, 895 A.2d at 61.

            When reviewing a grant of summary judgment, we are not
      bound by the trial court’s conclusions of law, but may reach our
      own conclusions. Id. We will disturb the trial court’s order only
      upon an error of law or an abuse of discretion. “Judicial discretion
      requires action in conformity with law on facts and circumstances
      before the trial court after hearing and consideration.” Chenot,
      895 A.2d at 61 (citation omitted). Consequently, the court abuses

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      its discretion if, in resolving the issue for decision, it misapplies
      the law, exercises its discretion in a manner lacking reason, or
      does not follow legal procedure. Id. (citation omitted).

             Where the discretion exercised by the trial court is
      challenged on appeal, the party bringing the challenge bears a
      heavy burden. It is not sufficient to persuade the appellate court
      that it might have reached a different conclusion if charged with
      the duty imposed on the court below; it is necessary to go further
      and show an abuse of the discretionary power. Chenot, 895 A.2d
      at 61 (citation omitted). An abuse of discretion is not merely an
      error of judgment, but if in reaching a conclusion the law is
      overridden or misapplied or the judgment exercised is manifestly
      unreasonable or the result of partiality, prejudice, bias or ill-will,
      as shown by the evidence or the record, discretion is abused. Id.
      at 61-62 (citation omitted).

Continental Casualty Company v. Pro Machine, 916 A.2d 1111, 1115-

1116 (Pa. Super. 2007).

      As previously indicated, Pa.R.C.P. 1035.2 governs motions for summary

judgment and provides the following, in relevant part:

      After the relevant pleadings are closed, but within such time as
      not to unreasonably delay trial, any party may move for summary
      judgment in whole or in part as a matter of law

            (1) whenever there is no genuine issue of any
            material fact as to a necessary element of the cause
            of action or defense which could be established by
            additional discovery or expert report, or

            (2) if, after the completion of discovery relevant to
            the motion, including the production of expert reports,
            an adverse party who will bear the burden of proof at
            trial has failed to produce evidence of facts essential
            to the cause of action or defense which in a jury trial
            would require the issues to be submitted to a jury.

Pa.R.C.P. 1035.2. The official note to Rule 1035.2 states, in pertinent part:




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          Note: Rule 1035.2 sets forth the general principle that a
     motion for summary judgment is based on an evidentiary record
     which entitles the moving party to judgment as a matter of law.

           The evidentiary record may be one of two types. Under
     subdivision (1), the record shows that the material facts are
     undisputed and, therefore, there is no issue to be submitted to a
     jury.

                                       ***

           Under subdivision (2), the record contains insufficient
     evidence of facts to make out a prima facie cause of action or
     defense and, therefore, there is no issue to be submitted to a jury.
     The motion in this instance is made by a party who does not have
     the burden of proof at trial and who does not have access to the
     evidence to make a record which affirmatively supports the
     motion. To defeat this motion, the adverse party must come forth
     with evidence showing the existence of the facts essential to the
     cause of action or defense.

                                       ***

         Only the pleadings between the parties to the motion for
     summary judgment must be closed prior to filing the motion.

Pa.R.C.P. 1035.2, Note.

     As our Supreme Court has explained, “[s]ummary judgment may be

entered prior to the completion of discovery in matters where additional

discovery would not aid in the establishment of any material fact. Thus, the

question   is   whether   additional   discovery   would   have   aided   in   the

establishment of any material fact.”          Manzetti v. Mercy Hosp. of

Pittsburgh, 776 A.2d 938, 950-951 (Pa. 2001) (citation omitted). Further,

we have recognized that “the party seeking discovery is under an obligation

to seek discovery in a timely fashion.”      Anthony Biddle Contrs., Inc. v.


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Preet Allied Am. St., LP, 28 A.3d 916, 928 (Pa. Super. 2011) (quoting

Reeves v. Middletown Athletic Ass’n, 866 A.2d 1115, 1124 (Pa. Super.

2004)).

      In addition, we have long stated that the court’s function in summary

judgment proceedings is not to determine the facts, but only to determine if

a genuine issue of fact exists. Johnson v. Harris, 615 A.2d 771, 775 (Pa.

Super. 1992). “When a motion for summary judgment is made and supported

. . . the non-moving party may not rest on the averments made in his

pleading. Rather, it is [the non-moving party’s] responsibility to show that a

genuine issue of fact exists by affidavit or otherwise.” Id. (citations omitted).

      Regarding mortgage foreclosure proceedings, we have stated that “[i]n

actions for in rem foreclosure due to the defendant’s failure to pay a debt,

summary judgment is proper where the defendant admits that he had failed

to make the payments due and fails to sustain a cognizable defense to the

plaintiff’s claim.” Gateway Towers Condo. Ass'n v. Krohn, 845 A.2d 855,

858 (Pa. Super. 2004). In addition, our Supreme Court has expressed that in

mortgage foreclosure cases, the entry of summary judgment is proper where

it is admitted that the mortgage is in default, the mortgagors have failed to

pay interest on the obligation, and that the recorded mortgage is in the

specified amount, even though the defendant never admits the amount of the

indebtedness in their pleadings.       Landau v. Western Pennsylvania

National Bank, 282 A.2d 335, 340 (Pa. 1971).


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     The trial court addressed this issue with the following discussion:

           [Appellee] filed its Motion for Summary Judgment pursuant
     to Pa.R.C.P. 1035.2(1)[.]

                                    ***

           [Appellants] executed a Mortgage in favor of CapitalSource,
     which was then partially assigned to CSE Highland on December
     31, 2008. Exhibit 1, Exhibit F. The assignment was recorded on
     August 4, 2009. Exhibit 1, Exhibit E. CSE Highland reassigned
     the Mortgage to CapitalSource on June 9, 2011. Exhibit 1, Exhibit
     G. On June 9, 2011, CapitalSource and Plaintiff executed an
     Assignment of Open-End Mortgage, Security Agreement,
     Assignment of Rents and Leases and Fixture Filings. In this
     document, CapitalSource “assign[ed], transfer[red] and set over
     unto [Appellee] all of its rights, title and interest in and to the
     Mortgage and the other Loan Documents [] together with all
     rights, remedies, and incidents thereunto and [Appellee] agreed
     to accept such assignment.” Exhibit 1, Exhibit J.

           [Appellee] established its prima facie case for mortgage
     foreclosure. The holder of a mortgage is entitled to summary
     judgment if the mortgag[or] admits that the mortgage is in
     default, the mortgagor has failed to pay on the obligation, and the
     recorded mortgage is in the specified amount. Cunningham v.
     McWilliams, 714 A.2d 1054, 1056-1057 (Pa. Super. 1998).

            In this case, [Appellee] established that [Appellants] were
     in default for failing to make the required installment payments.
     [Appellants] admitted that they were in default and that they
     failed to pay on the obligation in that they did not repay the entire
     principal balance of the loan on or before the scheduled maturity
     date of July 15, 2016. Furthermore, [Appellants] admitted that
     the recorded mortgage was in the specified amount.

           Furthermore, we note that [Appellee] moved for summary
     judgment pursuant to Pa.R.C.P. 1035.2[(1)], which does not
     require discovery to be closed. [Appellee] submitted, through its
     Motion for Summary Judgment, that there was no genuine issue
     of material fact as to a necessary element of its cause of action
     which could be established by additional discovery or expert
     report. [Appellee] established that it is entitled to summary
     judgment on the mortgage foreclosure claim and [Appellants] did

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       not submit any evidence to the contrary which could be
       established by additional discovery or expert.

Trial Court Opinion, 12/26/18, at 3-4 (emphasis in original).

       We disagree with Appellants’ overarching claim that discovery must be

completed prior to the entry of summary judgment.           Indeed, Appellants

incorrectly allege that the motion for summary judgment was brought under

Pa.R.C.P. 1035.2(2), which presupposes that discovery has been completed.

However, our review of the record reflects that Appellee filed its motion for

summary judgment pursuant to Pa.R.C.P. 1035.2(1), which deems summary

judgment appropriate when there are no genuine issues of any material fact

which could be established by additional discovery. As we noted, “[s]ummary

judgment may be entered prior to the completion of discovery in matters

where additional discovery would not aid in the establishment of any material

fact.” Manzetti, 776 A.2d at 950-951. Thus, there is no merit to Appellants’

sweeping allegation that summary judgment may be rendered only upon the

completion of discovery.1

       We next focus on the question of whether there were any genuine issues

of material fact that could be established by additional discovery. Specifically,

we address Appellants’ claim that “the discovery at issue directly pertains to


____________________________________________


1 With regard to Appellants’ allegation that discovery was stayed in this
matter, we note that Appellants have failed to set forth any citation or
reference to the record that would support the claim. Hence, we decline to
conclude that the trial court erred in granting summary judgment, if, in fact,
discovery had been stayed.

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the amount due to Appellee under the Loan, which was in dispute before the

[t]rial [c]ourt.” Appellants’ Brief at 12. As stated above, summary judgment

is proper where the mortgagor admits that the failure to make payments due

and fails to sustain a cognizable defense to the mortgagee’s claim. Gateway

Towers, 845 A.2d at 858.       “This is so even if the mortgagors have not

admitted the total amount of the indebtedness in their pleadings.”

Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998). See

Pa.R.C.P. 1029(b), (c), Note (providing that a party is not excused from “a

failure to admit or deny a factual allegation when it is clear that the pleader

must know whether a particular allegation is true or false.”); see also U.S.

Bank, N.A. v. Pautenis, 118 A.3d 386, 396 (Pa. Super. 2015) (stating that

“[u]nquestionably, apart from the mortgagee, the mortgagors are the only

parties who would have sufficient knowledge on which to base a specific

denial[.]” (citing New York Guardian Mort. Corp. v. Dietzel, 524 A.2d 951,

952 (Pa. Super. 1987)); Bank of America, N.A. v. Gibson, 102 A.3d 462,

467 (Pa. Super. 2014) (stating that “general denials by mortgagors that they

are without information sufficient to form a belief as to the truth of averments

as to the principal and interest owing on the mortgage must be considered an

admission of those facts.” (citation, quotation marks, and brackets omitted)).

      Our review of the record reflects that on June 23, 2017, Appellants filed

their “Responses and Objections to [Appellee’s] first Request for Admissions.”

In the response, Appellants offered boilerplate denials of requests for


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admissions. Responses and Objections, 6/23/17, at 2-5. Appellants’ general

denials regarding the default under the mortgage and the specific amount of

the default are deemed to be admissions.         Appellants offered nothing to

contradict Appellee’s claim except the general denials. Therefore, we conclude

that there were no genuine issues of fact regarding Appellants’ default or the

amount owed under the mortgage. Therefore, Appellants’ issue lacks merit.

      In their second issue, Appellants again argue that summary judgment

was not appropriate because there existed a dispute of fact regarding the

amount due under the loan. Appellants’ Brief at 15-17. Appellants assert the

amount due under the loan was “hotly disputed.” Id. at 16. Appellants claim

that there was not a sufficient basis for the trial court to conclude that in rem

judgment in excess of $156,000,000.00 was due or proper. Id. at 17. We

disagree.

      As presented in the legal authority cited above, Pennsylvania courts

have consistently found, in foreclosure actions, that a payment default

warrants summary judgment if the recorded mortgage is in a specified

amount. Landau, 282 A.2d at 340. Further, when confronted with a motion

for summary judgment setting forth evidence establishing the moving party’s

right to relief, “the adverse party may not rest upon the mere allegations or

denials of the pleadings,” Pa.R.C.P. 1035.3(a), but must identify evidence

controverting the evidence cited in support of the motion or establishing the

facts essential to the defense that the motion cites as not having been


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produced, Pa.R.C.P. 1035.3(a)(1)-(2). “[P]arties seeking to avoid the entry

of summary judgment against them . . . are required to show, by depositions,

answers to interrogatories, admissions[,] or affidavits, that there is a genuine

issue for trial.” Wash. Fed. Sav. & Loan Assn. v. Stein, 515 A.2d 980, 981

(Pa. Super. 1986).

      Additionally, in a mortgage foreclosure action, the mortgagors and

mortgagee are the only parties with sufficient knowledge upon which to base

a specific denial.    Dietzel, 524 A.2d 951, 952 (Pa. Super. 1987).       Thus,

responsive pleadings in a mortgage foreclosure action must contain specific

denials. Gibson, 102 A.3d at 466-467. General denials by mortgagors that

they are without information sufficient to form a belief as to the truth of

averments as to the principal and interest owing must be considered an

admission of those facts. First Wisconsin Trust Co. v. Strausser, 653 A.2d

688, 692 (Pa. Super. 1995).

      Our review of the certified record reflects that Appellee supported its

motion for summary judgment with a copy of the verified complaint and its

attending exhibits, i.e., the legal description of the mortgage property, the

construction   loan    agreement,   the   open-end   mortgage,    and   various

amendments and assignment documents.          Appellee’s Motion for Summary

Judgment, 6/4/18, at Exhibit 1; Complaint, 12/21/16, at Exhibits A-M.

Appellee also supported its motion with the affidavit of Michael Branigan, the

Vice President of Colony NorthStar Inc., an affiliate of Appellee and the


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servicer of the mortgage loan at issue.      Appellee’s Motion for Summary

Judgment, 6/4/18, at Exhibit 9. In his affidavit, Mr. Branigan attested that he

was an employee of Appellee, and that based on his personal knowledge and

review of Appellee’s business records, Appellants failed to make monthly

payments before the maturity date and failed to pay in full on the maturity

date. Id. at ¶¶ 1, 7. In addition, he avered that the total due, including

unpaid principal, interest, and fees is $156,736,437.10. Id. at ¶ 11.

      In response to Appellee’s motion for summary judgment setting forth

evidence establishing its right to relief, it was incumbent upon Appellants to

establish one or more issues of fact arising from the evidence cited in support

of the motion.   Stein, 515 A.2d at 981. However, Appellants offered no

evidence in opposition to the motion for summary judgment on the question

of default. Rather, Appellants asserted that (1) summary judgment should

not be entered because discovery is incomplete; (2) there is a genuine issue

of material fact in dispute because they challenge the nature of the default

and the amount due; and (3) they have a cognizable affirmative defense.

Response to Motion for Summary Judgment, 6/29/18. Hence, the trial court

did not err in determining that the evidence of record warranted the entry of

an in rem judgment in Appellee’s favor.

      Order affirmed.




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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 10/28/19




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