J-A07043-17


NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37

ERIC SCOTT NEFF AND NAOMA D. NEFF, :          IN THE SUPERIOR COURT OF
                                   :                PENNSYLVANIA
            Appellants             :
                                   :
     v.                            :
                                   :
PENNYMAC CORP.,                    :
                                   :
           Appellee                :           No. 1568 WDA 2016

                 Appeal from the Order September 16, 2016
               in the Court of Common Pleas of Butler County
                  Civil Division at No(s): A.D. No. 16-10379

BEFORE:     OLSON, STABILE, and STRASSBURGER,* JJ.

MEMORANDUM BY: STRASSBURGER, J.:              FILED: June 19, 2017

      Eric Scott and Naoma D. Neff (the Neffs, collectively) appeal from the

September 16, 2016 order1 that sustained the preliminary objections of

PennyMac Corp. (PennyMac) and dismissed the Neffs’ complaint in this

slander-of-title action. We affirm.

      The facts of the case giving rise to the instant appeal are intertwined

with two other actions filed in Butler County with which the instant case had

been consolidated.      Although the order consolidating the cases was

ultimately vacated, we must discuss somewhat the other cases that are not

presently before us, a process that is made difficult by the fact that we have



1
  The Neffs purport to appeal from a September 15, 2016 order. While the
order in question was dated September 15, it was not entered on the docket
until September 16, 2016.       We have amended the appeal paragraph
accordingly.
*Retired Senior Judge assigned to the Superior Court.
J-A07043-17


the trial court record for only the instant case.   As we write only for the

parties, any minor discrepancies in our recitation of the history of the other

cases can be overlooked.

      It all began in 2007, when the Neffs executed a mortgage in favor of

PNC Bank that was immediately assigned to Citibank.2       The Neffs contend

that at some point after they executed the documents, the mortgage

instrument was altered improperly by an agent of PNC or Citibank to

encumber an additional parcel of land that the Neffs had expressly excluded

from the agreement. The Neffs sought, but were denied, modification of the

loan. The Neffs stopped making payments in 2010, and in 2011, Citibank

initiated a foreclosure action.   Citibank then assigned the mortgage to

PennyMac. PennyMac recorded the assignment of the mortgage on October

3, 2011, and filed an amended complaint in the foreclosure action

substituting itself as plaintiff. The Neffs responded with allegations that the

original mortgage was void, and that PennyMac knew or should have known

that the mortgage had been fraudulently altered.3



2
  Citibank appears to be the successor to the entity to which PNC Bank
assigned the mortgage. However, we need not go through the full history
the mortgage assignments because the identities of the entities that held the
mortgage prior to its assignment to PennyMac are not pertinent to this
appeal.
3
  The certified record before us does not contain the Neffs’ answer to
PennyMac’s complaint in the foreclosure action. Thus, we are unable to
confirm the Neffs’ contention that they had stated as counterclaims in the
foreclosure the same claims raised in the subsequent complaint filed in the
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J-A07043-17


     In 2012, the Neffs filed a complaint against Citibank, PNC, and PNC’s

agent Lucille Ontko, stating claims related to the alleged fraudulent,

unilateral modification of the mortgage document. The Neffs also sought to

join Citibank, PNC, and Ontko as party defendants in the foreclosure action,

claiming that, if the Neffs were to be found liable to PennyMac, then

Citibank, PNC, and Ontko are liable over to PennyMac.

     On May 18, 2016, the Neffs filed the action that is the subject of this

appeal.   Therein they alleged that at the time PennyMac obtained the

assignment of the mortgage, it knew or should have known that the original

mortgage document had been altered wrongfully, and yet PennyMac willfully

and wantonly proceeded with the recording of the document and the

prosecution of the foreclosure action, causing the Neffs to sustain damages.

Complaint, 5/18/2016, at 5-6.   The Neffs did not indicate which particular

causes of action they were pursuing.

     PennyMac filed preliminary objections in the nature of a demurrer,

asserting that the Neffs’ complaint failed to state a viable cause of action

because it did not allege that PennyMac engaged in fraud or had direct

knowledge of any fraudulent alteration of the mortgage, and that fraud is

not obvious and clear from the face of the document.            Preliminary

Objections, 6/20/2016, at 5-6. Further, PennyMac contended, because the



instant case, but the trial court ruled that the counterclaim was improper.
See Neffs’ Brief at 8 n.3.
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Neffs admit that at least one parcel is properly encumbered by the mortgage

and that the Neffs are in default for failure to pay, the foreclosure action is

warranted and proper, not a malicious action.             Id. at 8-9.    The Neffs

responded by indicating that they were not seeking recovery on either

theory objected to by PennyMac; rather, they raised a claim of slander of

title. Brief in Opposition to Preliminary Objections, 8/16/2016, at 3.

      On August 23, 2016, the trial court heard argument on PennyMac’s

preliminary objections in this case along with objections filed by other

parties in the consolidated cases.           The Neffs subsequently filed a

supplemental brief. By order of September 16, 2016, the trial court, inter

alia, sustained PennyMac’s preliminary objections and dismissed the Neffs’

complaint. The Neffs timely filed a notice of appeal.4         Both the Neffs and

the trial court have complied with Pa.R.A.P. 1925.

      On appeal, the Neffs contend that the trial court erred in sustaining

the   preliminary    objection   and   dismissing   the    complaint    because   it

erroneously held that PennyMac’s recording of the assignment was not

publication of a false statement that could support an action for slander of

title. Neffs’ Brief at 6.

      We consider the Neffs’ claims mindful of the following.



4
  The September 16, 2016 order also granted the Neffs 20 days to file
amended pleadings. Rather than do so in this case, they filed a praecipe for
the entry of a final order dismissing the complaint and a notice of appeal on
October 14, 2016. See Pa.R.A.P. 301(d).
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J-A07043-17


      Preliminary objections in the nature of a demurrer should be
      [sustained] where the contested pleading is legally insufficient.
      Preliminary objections in the nature of a demurrer require the
      court to resolve the issues solely on the basis of the pleadings;
      no testimony or other evidence outside of the complaint may be
      considered to dispose of the legal issues presented by the
      demurrer. All material facts set forth in the pleading and all
      inferences reasonably deducible therefrom must be admitted as
      true.

      In reviewing a trial court’s [sustaining] of preliminary objections,
      the standard of review is de novo and the scope of review is
      plenary.

Kilmer v. Sposito, 146 A.3d 1275, 1278 (Pa. Super. 2016) (internal

citations and quotation marks omitted).

      “Disparagement of title, variously labeled slander of title, defamation

of title, or in other contexts, slander of goods, trade libel or injurious

falsehood, is the false and malicious representation of the title or quality of

another’s interest in goods or property.”    Pro Golf Mfg., Inc. v. Tribune

Review Newspaper Co., 809 A.2d 243, 246 (Pa. 2002) (quoting Triester

v. 191 Tenants Ass’n, 415 A.2d 698, 701 (Pa. Super. 1979)). Publication

of a statement gives rise to such a claim where

      (1) the statement is false; (2) the publisher either intends the
      publication to cause pecuniary loss or reasonably should
      recognize that publication will result in pecuniary loss; (3)
      pecuniary loss does in fact result; and (4) the publisher either
      knows that the publication is false or acts in reckless disregard of
      its truth or falsity.

Maverick Steel Co. v. Dick Corp./Barton Malow, 54 A.3d 352, 354 (Pa.

Super. 2012) (quoting Pro Golf Mfg., Inc., 809 A.2d at 246).



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J-A07043-17


       In the instant case, the Neffs alleged that PennyMac is liable to them

because the original mortgage was altered by PNC or Citibank by adding

parcel #1F104-3B to the document in pen and ink without the knowledge or

consent of the Neffs; PennyMac knew or should have known that it did not

acquire any security interest in parcel #1F104-3B; and, thus, PennyMac

published a false statement when it recorded the assignment of the

mortgage that it obtained from Citibank.                   Neffs’ Brief at 16 (quoting

Complaint, 5/18/2016, at ¶¶ 19, 25).

       We agree with the trial court that the Neffs failed in their complaint to

point to any false statement published by PennyMac. There is not a single

reference to parcel #1F104-3B within the four corners of the recorded

assignment. See Complaint, 5/18/2016, at Exhibit 5. Further, the original

mortgage       that    contains     the   allegedly-slanderous      statement   was      not

republished by being attached to the assignment.                 Rather, the assigment

merely states facts that the Neffs do not claim are false: that Citibank

assigned whatever interest it had in the January 16, 2007 mortgage on the

property at 331 St. Joe Rd., Chicora, PA 16025, recorded on January 19,

2007 as instrument 200701190001559, to PennyMac. Id.

       The Neffs cite no Pennsylvania authority to support their position in

this   case,    and     we   find   their   cases   from    other   jurisdictions   to   be

unpersuasive.         For example, the Neffs claim relief is due based upon the

reasoning of the “strikingly similar” case of Childers v. Commerce Mortg.

                                            -6-
J-A07043-17


Investments, 579 N.E.2d 219 (Ohio App. 1989). Neffs’ Brief at 21 n.6. In

that case, the original lender and CMI, the subsequent assignee of the

mortgage, were located in the same building, had an overlap of personnel,

and regularly did business together in that CMI purchased all of the original

lender’s notes.   Id. at 220.   Through this close relationship, CMI knew or

should have known that the lender had never disbursed the loan to the

Childerses, yet CMI went ahead and recorded its purchase of the mortgage.

The trial court held that CMI’s recording of the mortgage in those

circumstances was done in reckless disregard for the Childerses’ rights. Id.

      The instant case is distinguishable, in that the Neffs do not contend

that PennyMac had a relationship with PNC or Citibank such that it knew that

one or the other had a history of selling invalid mortgages.       Instead, the

Neffs contend that anyone who saw the hand-written addition of parcel

#1F104-3B to the document should have known that fraud was present.

However, they allege no facts or authority to support the proposition that

the handwritten alteration in this instance implicates fraud rather than a

routine correction of a clerical error, and we decline to adopt that view.

      The Neffs also rely upon Lomah Elec. Targetry, Inc. v. ATA

Training Aids Australian Party Ltd., 828 F.2d 1021 (4th Cir. 1987), for

the proposition that “[s]lander of title is committed by the recordation of a

false or fraudulent assignment.”    Id. at 1023. However, the issue in that

case was personal jurisdiction, not the sufficiency of the allegations. In any

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J-A07043-17


event, the issue there involved John Kennelly, a former president of Lomah

and then-president of ATA, who, falsely representing that he was still

president of Lomah, assigned Lomah’s interest in certain patents to ATA.

The court indicated that the complaint filed by Lomah alleged slander of title

committed by Kennelly and ATA in Virginia, where “Kennelly, individually and

as an officer of ATA, slandered Lomah’s title to its patents and pending

application for a patent by employing counsel in Virginia to record in Virginia

an allegedly fraudulent and unauthorized assignment.” Id.

      Thus, it was the assignment itself that was fraudulent in Lomah, and

the cause of action was brought against the perpetrator of the fraud.

PennyMac here is not accused of creating and recording a false assignment

that was not authorized by the assignee. As such, Lomah has no bearing

on this case.

      The only false statement the Neffs allege to have been made by

anyone was that parcel #1F104-3B was included in the mortgage they

executed in favor of PNC.    The document alleged in this case to have been

published by PennyMac does not reference parcel #1F104-3B, but merely

indicates that it has obtained the interest previously held by Citibank, which

Citibank obtained from PNC. Because the Neffs’ complaint does not allege

that PennyMac published a false statement, the trial court properly held that

the Neffs failed to state a claim against PennyMac for slander of title.

      Order affirmed.

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J-A07043-17




Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/19/2017




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