J-A27013-18


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JPMORGAN CHASE BANK, NATIONAL           :     IN THE SUPERIOR COURT OF
 ASSOCIATION                             :          PENNSYLVANIA
                                         :
                                         :
              v.                         :
                                         :
                                         :
 SEAN GALLAGHER AND HAIRONG              :
 WANG                                    :     No. 169 EDA 2018
                                         :
                   Appellants            :

             Appeal from the Order Entered December 6, 2017
   In the Court of Common Pleas of Northampton County Civil Division at
                       No(s): C-48-CV-2012-5631


BEFORE: BOWES, J., STABILE, J., and McLAUGHLIN, J.

MEMORANDUM BY BOWES, J.:                               FILED MAY 02, 2019

      Sean Gallagher and Hairong Wang appeal from the entry of summary

judgment in favor of JPMorgan Chase Bank, National Association (“Bank”), in

this mortgage foreclosure action. We affirm.

      On October 17, 2006, Appellants executed a mortgage and promissory

note in the principal sum of $407,000.00 for the purchase of property located

at 980 Cosenza Court, Folks Township, Pennsylvania (“the property”).

Pursuant to the note, the loan amount was to be payable in equal, consecutive,

monthly installments of principal and interest in the amount of $2,606.07.

The mortgage, which was executed in favor of Mortgage Electronic

Registration Systems, Inc. (“MERS”), as nominee for Weichert Financial

Services (“WFS”), was duly recorded by the Northhampton County Recorder
J-A27013-18


of Deeds on October 26, 2006. The mortgage was subsequently transferred

to Bank.1

       Appellants defaulted under the terms of the loan documents by failing

to pay the monthly mortgage payment due on February 1, 2011, and every

month thereafter.      On May 4, 2011, a notice of intent to foreclose on the

mortgage was mailed to Appellants at the property. Appellants failed to cure

their default within the time proscribed by the notice. On June 11, 2012, Bank

filed a complaint in mortgage foreclosure seeking an in rem judgment against

Appellants in the amount of $429,861.82, plus interest, costs, and fees.

Appellants filed an answer, new matter, and a counterclaim. Bank filed a reply

to the new matter and counterclaim.

       Appellants subsequently filed a petition for leave to file an amended

answer, new matter, and counterclaims.           The proposed amended answer

attached to the petition contained eighty-four assertions of new matter, and

four counterclaims seeking damages based on breach of contract, and

violations of the federal Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-

1616, federal Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§

2601-2617, and Pennsylvania’s Unfair Trade Practices and Consumer




____________________________________________


1 The record is unclear as to when the transfer occurred. Bank avers in its
brief that it has had the note since 2007. However, it appears undisputed that
the assignment of the mortgage was not recorded by the Northhampton
County Recorder of Deeds until March 22, 2012.

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Protection Law (“UTPCPL”), 73 P.S. §§ 201-1-2-1-9.3.         Bank opposed the

petition.

      Following a hearing, the trial court granted in part and denied in part

Appellants’ petition. Specifically, the trial court ruled that because the action

was strictly an in rem proceeding, Appellants were not permitted to file their

proposed counterclaims, all of which sought money damages and none of

which arose from the execution of the mortgage documents. See Trial Court

Opinion, 12/18/15, at 3-5. The trial court additionally determined that “much

of the offered new matter contained in the proposed answer appears to

attempt to bolster and/or lay a factual foundation for [Appellants’] proposed

counterclaims, which the court has already found to be impermissible in this

action.”    Id. at 5-6 (cleaned up). Accordingly, the trial court forbade any

amendment that added new matter pertaining to any of the prohibited

counterclaims. Id. at 6. Further, because Bank had averred that it possessed

the original promissory note and attached to its reply to new matter a copy of

the original promissory note signed by Appellants, the trial court determined

that the pleadings had already introduced the issue of whether Bank would be

able to prove that it was the real party in interest, and prohibited any

additional averments in the amended answer challenging the chain of

possession or Bank’s possession of the note. Id. at 7. Nevertheless, the trial

court determined that Appellants could amend their answer to include new

matter alleging non-receipt of notice of default and acceleration or notice of


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transfer of the mortgage, and challenging the authenticity of their signatures

on the mortgage documentation. Id. at 8. Given the extent of the limitations

imposed by the trial court, however, it specifically cautioned Appellants “to

forgo filing the entire proposed answer, mostly notably its overabundance of

legal conclusions, [and] to carefully tailor any amended answer and new

matter they may file to conform to the [trial c]ourt’s analysis.” Id. at 8 n.2

(cleaned up).

       On January 7, 2017, Appellants filed an amended answer which, like the

proposed amended answer, contained eighty-four assertions of new matter.

Bank filed preliminary objections on the basis that the filing failed to conform

to the trial court’s order because it was “virtually identical” to the proposed

amended answer and new matter the trial court prohibited Appellants from

filing. Bank’s Preliminary Objections, 1/26/16, at 3. The trial court agreed,

and on April 4, 2016, it entered an order sustaining Bank’s preliminary

objections and dismissing the amended answer and new matter, with

prejudice.2

       Bank ultimately filed a motion for summary judgment supported by,

inter alia, the affidavit of Bank employee Joseph G. Devine. Attached to Mr.

Devine’s affidavit were copies of the promissory note signed by Appellants and

____________________________________________


2 Because Appellants’ amended answer and new matter was dismissed, it
never became the operative pleading, and Appellants’ original answer, new
matter, and counterclaim is, therefore, the operative pleading.



                                           -4-
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indorsed in blank without recourse,3 as well as the mortgage, the assignment

of mortgage to Bank, and the records of Appellants’ payment history and

default. Bank additionally relied on Appellants’ admissions and general denials

in their answer, the latter of which Bank claimed should be deemed as

admissions to the averments in the complaint. Appellants filed a response in

opposition.     The trial court determined that Appellants’ general denials

constituted admissions, and by order dated December 6, 2017, granted

summary judgment in Bank’s favor. Appellants filed a timely notice of appeal

and a court-ordered Pa.R.A.P 1925(b) concise statement of errors complained

of on appeal raising twenty-two issues.4 The trial court responded by filing a



____________________________________________


3If the holder of an instrument indorses it in blank, the instrument becomes
payable to the bearer, and may be negotiated by transfer of possession alone
until specially indorsed. J.P. Morgan Chase Bank, N.A. v. Murray, 63 A.3d
1258, 1266 (Pa.Super. 2013) (citing 13 Pa.C.S § 3205(b)).

4 Although Rule 1925(b) dictates that, without more, the number of issues
raised in a concise statement will not be grounds for finding waiver, this
principle applies only “[w]here non-redundant, non-frivolous issues are set
forth in an appropriately concise manner[.]” Pa.R.A.P. 1925(b)(4)(iv)
(emphasis added); see also Mahonski v. Engel, 145 A.3d 175, 181
(Pa.Super. 2016). However, Pennsylvania courts have repeatedly held that
an appellant waives all matters for review where he identifies an outrageous
number of issues in the concise statement. See Jones v. Jones, 878 A.2d
86 (Pa.Super. 2005) (holding that a seven-page, twenty-nine issue statement
resulted in waiver); see also Kanter v. Epstein, 866 A.2d 394, 401
(Pa.Super. 2004) (holding that by raising an outrageous number of issues in
a Rule 1925(b) statement, an appellant impedes the trial court’s ability to
prepare an opinion addressing the issues on appeal, thereby effectively
precluding appellate review).      Here, the twenty-two issues raised in
Appellants’ concise statement are excessive, as well as redundant. While we
could find waiver on this basis, we decline to do so.

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Pa.R.A.P 1925(a) opinion which incorporated by reference its December 6,

2017 order.

       Appellants raise the following issues for our review:

       1. Did the court below err as a matter of law or abuse its discretion
          in limiting the new matter that the Appellants could assert,
          along with barring any counterclaims that the Appellants could
          assert against the Bank?

       2. Did the court below err as a matter of law in dismissing the
          Appellants’ new matter that asserted defenses to the claims
          made in the mortgage foreclosure complaint?

       3. Did the court below err as a matter of law in granting the Bank’s
          preliminary objections and in dismissing the Appellants’ new
          matter, as they were integral to the entire case, particularly
          the creation of the mortgage and note, upon which the [Bank]
          is relying?

       4. Did the court below err as a matter of law in granting the
          [Bank’s] motion for summary judgment?

Appellants’ brief at 4 (cleaned up).5

       In their first issue, Appellants challenge the trial court’s order denying,

in part, their petition to file the proposed amended answer, new matter, and


____________________________________________


5 Appellants’ issues, as presented in the argument section of their brief, do
not conform to the issues as stated in their statement of questions presented.
See Pa.R.A.P. 2119(a) (providing that “[t]he argument shall be divided into
as many parts as there are questions to be argued; and shall have at the head
of each part—in distinctive type or in type distinctively displayed—the
particular point treated therein”). Whereas Appellants raise four issues in their
statement, their argument contains only three sections. See id. Further, in
their argument, Appellants do not discuss the issues in the order indicated in
the statement. We will address the issues in the order presented in the
statement.



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counterclaims.6 An appellate court’s standard of review of a trial court’s order

denying a party leave to amend a pleading is limited to considering whether

the trial court erred as a matter of law or abused its discretion.

Schwarzwaelder v. Fox, 895 A.2d 614, 621 (Pa.Super. 2006).

       Pennsylvania Rule of Civil Procedure 1033(a) permits amendment of

pleadings and provides that “[a] party, either by filed consent of the adverse

party or by leave of court, may at any time . . . amend the pleading.”

However, while Rule 1033(a) provides a method for amending a pleading, it

does not provide any party the automatic right to amend its pleading. See

id. (requiring consent or leave of court to amend a pleading). While the right

to amend should not be withheld when there is some reasonable possibility


____________________________________________


6 Bank argues that Appellants may not appeal the trial court’s December 18,
2015 and April 4, 2016 orders because they are interlocutory orders, and
Appellants failed to seek permission to appeal them under Pa.R.A.P. 1311
within thirty days of their entry. Bank’s brief at 14. Bank is correct in that
the trial court’s December 18, 2015, and April 4, 2016 orders are, indeed,
interlocutory orders that were not appealable of right under Pa.R.A.P. 311.
However, those orders became appealable upon entry of a final order, see
Pa.R.A.P. 341, which, in this case, occurred when the trial court entered
summary judgment in favor of Bank. See Betz v. Pneumo Abex, LLC, 44
A.3d 27, 54 (Pa. 2012) (stating that “an appeal of a final order subsumes
challenges to previous interlocutory decisions”); see also K.H. v. J.R., 826
A.2d 863, 871 (Pa. 2003) (holding that in the context of a single action, a
notice of appeal filed from the entry of judgment will be viewed as drawing
into question any prior non-final orders that produced the judgment). While
Appellants could have requested permission to appeal those interlocutory
orders under Pa.R.A.P. 1311, they were not required to do so, and their
decision not to do so did not divest them of their ability to appeal those orders
upon entry of a final order in the case. See Pa.R.A.P. 311(g)(1) (providing
that, generally, a failure to file an appeal of an interlocutory order does not
waive any objections to the interlocutory order).

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that the amendment can be accomplished successfully, “where allowance of

an amendment would . . . be a futile exercise, the [pleading] may be properly

dismissed without allowance for amendment.” Wiernik v. PHH U.S. Mortg.

Corp., 736 A.2d 616, 624 (Pa.Super. 1999).

      Further, Rules of Civil Procedure 1141 to 1150 govern mortgage

foreclosure actions in Pennsylvania. Rule 1141(a) provides that a mortgage

foreclosure action “shall not include an action to enforce a personal liability.”

This restriction is equally applicable to a mortgagee and a mortgagor. See

Newtown Village P’ship v. Kimmel, 621 A.2d 1036, 1037 (Pa.Super.

1993). As this Court has explained:

      Mortgage foreclosure in Pennsylvania is strictly an in rem or “de
      terries” proceeding. Its purpose is solely to effect a judicial sale
      of the mortgaged property.      The holder of a mortgage note can
      decide whether to file a foreclosure action or to file an in personam
      assumpsit action on the note, but the actions are not usually
      combined.

      Rule of Civil Procedure 1148, which governs which counterclaims
      are permissible in a mortgage foreclosure action, states:

            A defendant may plead a counterclaim which arises
            from the same transaction or occurrence or series of
            transactions or occurrences from which the plaintiff’s
            cause of action arose.

      We have held that this rule is to be interpreted narrowly, and only
      counterclaims that are part of or incident to the creation of the
      mortgage relationship itself are to be permitted. Therefore, Rule
      1148 does not permit a counterclaim arising from a contract
      related to the mortgage, such as a contract for sale of real
      property. Nor does it permit counterclaims where the facts giving
      rise to the counterclaims occur after the creation of the mortgage
      and after the mortgagors were in default. Thus, in Pennsylvania,
      the scope of a foreclosure action is limited to the subject of the

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      foreclosure, i.e., disposition of property[,] subject to any
      affirmative defenses to foreclosure or counterclaims arising from
      the execution of the instrument(s) memorializing the debt and the
      security interest in the mortgaged property. While Rule 1148 does
      not govern affirmative defenses listed as new matter, such
      defenses must be more than a restatement or continuation of an
      impermissible counterclaim.

Nicholas v. Hofmann, 158 A.3d 675, 696-97 (Pa.Super. 2017) (cleaned up).

      Appellants claim that the trial court erred in restricting the new matter

and counterclaims that they were permitted to file in their amended answer.

According to Appellants, their petition to amend “not only stated meritorious

and valid defenses to the Bank’s complaint in mortgage foreclosure, they also

set forth technical defenses to the manner in which the mortgage, note[,] and

assignment of mortgages were handled.” Appellants’ brief at 34 (unnecessary

capitalization omitted). Appellants further claim that “[a]s [they] averred that

this information was only proven through discovery and expert witnesses,

after their original answer, new matter[,] and counterclaim had already been

filed, [they] should have been allowed to conform their pleadings with the

evidence that had been discovered.” Id. (unnecessary capitalization omitted).

      While Appellants assert that they should have been granted leave to file

their amended pleading, as proposed, they provide only vague and

generalized argument in support of their position.     See Pa.R.A.P. 2119(a)

(providing that the parties’ briefs must include a discussion of each question

raised on appeal and a “citation of authorities as are deemed pertinent”).

Appellants do not identify any particular counterclaim or averment of new


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matter prohibited by the trial court from inclusion in the amended answer.

Thus, we are unable to discern which counterclaims or averments of new

matter Appellants are challenging in this appeal.      Moreover, the argument

portion of Appellants’ brief does not contain meaningful discussion of, or

citation to, relevant legal authority.   Appellants’ brief at 32-35. While the

portion of the argument pertaining to Appellants’ issue does contain reference

to boilerplate case law discussing the general preference for liberal

amendment of pleadings in this Commonwealth, this section completely lacks

any citation to case law pertinent to the proposed counterclaims and new

matter, nor any discussion or developed analysis relevant to the propriety of

their inclusion in the amended answer. As we have explained:

      The Rules of Appellate Procedure state unequivocally that each
      question an appellant raises is to be supported by discussion and
      analysis of pertinent authority. Appellate arguments which fail to
      adhere to these rules may be considered waived, and arguments
      which are not appropriately developed are waived. Arguments not
      appropriately developed include those where the party has failed
      to cite any authority in support of a contention. This Court will
      not act as counsel and will not develop arguments on behalf of an
      appellant. Moreover, we observe that the Commonwealth Court,
      our sister appellate court, has aptly noted that mere issue spotting
      without analysis or legal citation to support an assertion precludes
      our appellate review of a matter.

Coulter v. Ramsden, 94 A.3d 1080, 1088-89 (Pa.Super. 2014) (cleaned up).

      Here, the argument portion of Appellants’ brief is entirely bereft of any

citation to pertinent legal authority or developed analysis relevant to the issue.

Appellants’ brief at 32-35. This lack of comprehensible legal discussion or




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analysis precludes meaningful appellate review.     Accordingly, we conclude

that the issue is waived.

       Apparently advocating their second and third issues, Appellants argue

that the trial court erred by sustaining Bank’s preliminary objections to the

amended answer and new matter, and by dismissing that pleading with

prejudice. Appellants’ brief at 36-40. Our standard of review of an order of

the trial court overruling or granting preliminary objections is to determine

whether the trial court committed an error of law.     Khawaja v. RE/MAX

Cent., 151 A.3d 626, 630 (Pa.Super. 2016).7            When considering the

appropriateness of a ruling on preliminary objections, the appellate court must

apply the same standard as the trial court. Id.

       Appellants do not deny that they defied the trial court’s directive by

including in their amended answer the proposed eighty-four assertions of new


____________________________________________


7 While we are mindful that, when preliminary objections are asserted in the
nature of a demurrer, see Pa.R.Civ.P. 1028(a)(4), our standard of review is
different. See Kuren v. Luzerne Cty., 146 A.3d 715, 753 (Pa. 2016) (stating
that, in examining the propriety of an order sustaining a preliminary objection
in the nature of a demurrer, a court may do so “only when, based on the facts
pleaded, it is clear and free from doubt that the complainant will be unable to
prove facts legally sufficient to establish a right to relief”). Here, however,
Bank did not assert preliminary objections in the nature of a demurrer.
Rather, its preliminary objections were based on the failure of Appellants’
amended pleading to conform to the trial court’s explicit order limiting the
content of the new matter, and its failure to state their defenses in a concise
and summary form with sufficient specificity. See Pa.R.Civ.P. 1019(a),
Pa.R.Civ.P. 1028(a)(2), (3).




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matter without redaction of the content expressly prohibited by the trial court.

Nor do they dispute that their amended answer and new matter failed to

conform to Pa.R.Civ.P. 1019(a) and Pa.R.Civ.P. 1028(a)(3). Appellants cite

to no legal authority suggesting that their decision to violate the trial court’s

explicit order, or the Pennsylvania Rules of Civil Procedure, can simply be

overlooked. See Pa.R.A.P. 2119(a).             Instead, Appellants essentially argue

that they purposefully ignored the trial court’s ruling and included in the

amended new matter defenses related to the prohibited counterclaims to

prevent waiver and create a record in the event of an appeal.8 Appellants’

brief at 37. Appellants also superficially argue that “[t]his case presents many

issues regarding the involvement in the execution and recording of the instant

mortgage and note, the existence and/or legality of mortgage assignment,

and other legal rights and duties of [MERS].” Id. at 38-39.

       Here, the trial court determined that the amended answer and new

matter filed by Appellants was virtually identical to the proposed answer and

new matter previously rejected by the court. As the trial court explained:

       [Appellants] evidently ignored the bulk of the court’s directives,
       filing . . . an amended answer and new matter, which, save for
____________________________________________


8In support of their position, Appellants rely on BAC Home Loans v. Gubrud,
3285 EDA 2012 (Pa.Super. 2014) (unpublished memorandum). Appellants’
brief at 37. Presently, Pennsylvania law does not permit Appellants to rely on
unpublished memoranda decisions of this Court as controlling or persuasive
authority. But see Order Amending Rule 126 of the Pennsylvania Rules
of Appellate Procedure, No 278 (Pa. 2019) (recently amending Pa.R.A.P.
126, and providing that non-precedential unpublished memoranda decisions
of this Court filed after May 1, 2019 may be cited for their persuasive value).

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          the elimination of . . . “counterclaims,” this pleading was identical
          to that which the court had previously found to contain
          impermissible averments. In no way did [Appellants] carefully
          tailor their pleading to conform to the court’s . . . analysis, and,
          contrary to the court’s prior directive, it continues to contain,
          under the heading “new matter,” “affirmative defenses that are
          nothing more that restatements or continuations of [the
          prohibited] counterclaims.” [Trial Court Opinion, 12/18/15,] at 6.

          Furthermore, [Appellants’] pleading fails to conform to
          Pa.R.C[iv].P. 1019(a) and Pa.R.C[iv].P. 1022, which provide,
          respectively, that “[t]he material facts on which a cause of action
          is based shall be stated in a concise and summary form,” and that
          “[e]ach [consecutively numbered] paragraph shall contain as far
          as practicable only one material allegation.” Given [Appellants’]
          failure to conform their pleading to the Rules of Civil Procedure
          and choice to deliberately ignore this court’s directives after the
          court granted them an opportunity to file a late amendment, we
          find that said pleading should be dismissed.

Trial Court Opinion, 4/4/16, at 2 (unnecessary capitalization omitted).

          Given Appellants’ deliberate failure to conform their amended pleading

to the trial court’s explicit directive, see Pa.R.Civ.P. 2018(a)(2), and failure to

adhere to applicable procedural rules, see Pa.R.Civ.P. 1019(a) and Pa.R.Civ.P.

1022, we cannot conclude that the trial court erred in sustaining Bank’s

preliminary objections.9 Thus, Appellants’ second and third issues warrant no

relief.




____________________________________________


9  We additionally observe that Appellants had already created a record of the
defenses they wanted to assert by including them in their petition for leave to
file an amended answer, new matter, and counterclaims.

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     In their final issue, Appellants challenge the trial court’s order granting

Bank’s motion for summary judgment. This Court’s scope and standard of

review of a trial court’s order granting summary judgment is well-settled:

     We review an order granting summary judgment for an abuse of
     discretion. Our scope of review is plenary, and we view the record
     in the light most favorable to the nonmoving party. A party
     bearing the burden of proof at trial is entitled to summary
     judgment 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. In
     response to a summary judgment motion, the nonmoving party
     cannot rest upon the pleadings, but rather must set forth specific
     facts demonstrating a genuine issue of material fact.

Bank of Am., N.A. v. Gibson, 102 A.3d 462, 464 (Pa.Super. 2014) (citations

omitted). Furthermore, we are guided by the following:

     [t]he holder of a mortgage has the right, upon default, to bring a
     foreclosure action. The holder of a mortgage is entitled to
     summary judgment if the mortgagor 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.

Id. at 464-65 (citation omitted); see also First Wisconsin Trust Co. v.

Strausser, 653 A.2d 688, 694 (Pa.Super. 1995). (providing that summary

judgment is proper in mortgage foreclosure actions where the mortgagor

admits the delinquency of his mortgage payments). “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).

     Additionally, in a mortgage foreclosure action, the mortgagors and

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

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a specific denial. New York Guardian Mortg. Corp. v. Dietzel, 524 A.2d

951, 952 (Pa.Super. 1987); see also Pa.R.C.P. 1029(b), 1141(b).           Thus,

responsive pleadings in a mortgage foreclosure action must contain specific

denials. Gibson, supra at 466-67; Pa.R.C.P. 1029(b). 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. Strausser, supra at 692.

      We first observe that the trial court granted Bank’s motion for summary

judgment, in part, on the basis of Appellants’ admissions and general denials

to the averments in the foreclosure complaint, the latter of which it deemed

to be admissions.    Trial Court Opinion, 12/6/17, at 2-3.     In their answer,

Appellants admitted that, on October 17, 2006, they executed the mortgage

to the property in favor of MERS, as the mortgagee, and that the mortgage

was duly recorded in the Office of the Recorder of Deeds of Northhampton

County. Answer, 8/6/12, at ¶3. Appellants further admitted that the property

is the subject of the mortgage at issue in this foreclosure action. Id. at ¶4.

Appellants claimed that they did not have to respond to, and thus offered only

a general denial to the averment that they failed to make the monthly

payment of principal and interest due February 1, 2011, and each month

thereafter, and that, upon such failure, the entire principal and balance and

all interest due thereon became collectible.      Id. at ¶5.    Appellants also

generally denied that “notice of intention to foreclose as set forth in Act 6 of


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1974 and/or notice of default as required by the mortgage document, as

applicable, has been sent to [Appellants] on the date(s) set forth thereon.”10

Id. at ¶8 (cleaned up).

       In light of Appellants’ admission in their answer that they executed the

relevant promissory note and mortgage, Appellants possessed sufficient

knowledge to specifically admit or deny Bank’s allegations in the complaint.

Dietzel, supra at 952. In particular, their denial of averments that they failed

to make payments and the calculation of sums due provided by Bank are

factual situations of which Appellants had knowledge, and therefore constitute

admissions if generally denied.          See Bayview Loan Servicing, LLC v.

Wicker, 163 A.3d 1039, 1044 (Pa.Super. 2017) (holding that “general denials

constitute admissions where . . . specific denials are required”); see also

Strausser, supra at 692 (stating that general denials “as to the principal and

interest owing [on the mortgage] must be considered an admission of those

facts”).    Here, Appellants’ general denials relating to mortgage default

constitute admissions. See Wicker, supra at 1044. Accordingly, the trial

court properly found that there were no issues of material fact and Bank was

entitled to summary judgment.

       While we could end our analysis here, we will nevertheless address the

additional bases upon which Appellants challenge the entry of summary


____________________________________________


10Appellants specifically denied that any amount was due on the promissory
note, and claimed that it was paid in full. Answer, 8/6/12, at ¶6.

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judgment for Bank.         See Appellants’ brief at 15-31.           Appellants initially

challenge the evidence supporting Bank’s motion for summary judgment on

the basis that the affidavit of Mr. Devine was “a mirror image of the motion

for summary judgment and add[ed] nothing by way of fact or proof to the

[Bank’s] allegations as set forth in the complaint.”          Appellants’ brief at 16

(cleaned up).      According to Appellants, Mr. Devine’s affidavit is deficient

because he did not attest to his personal knowledge of Bank’s record-keeping

practices and procedures, thereby rendering any records he relied upon as

inadmissible     under    the    business      records   exception    at   34    Pa.Code

§ 131.6911 and Pa.R.E. 6108. Relying on Nanty-Glo v. American Surety

Co., 163      A. 523 (Pa. 1932),12             Appellants claim that       Mr.   Devine’s

uncontradicted affidavit could not support a grant of summary judgment.

       Appellants are correct that, under Nanty-Glo, entry of summary

judgment based on the moving party’s oral testimony is ordinarily prohibited.

The record reflects, however, that Mr. Devine’s affidavit referenced and

attached copies of the promissory note signed by Appellants and endorsed in


____________________________________________


11Section 131.69 is inapplicable to the instant proceedings, as it pertains to
an affidavit of a records custodian in response to a subpoena duces tecum in
administrative practice before workers’ compensation judges.         See 34
Pa.Code § 131.69.

12 In Nanty-Glo, our Supreme Court ruled that oral testimony alone, either
through testimonial affidavits or depositions, of the moving party or the
moving party’s witnesses, even if uncontradicted, is generally insufficient to
establish the absence of a genuine issue of material fact for purposes of
summary judgment.

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blank without recourse, as well as the mortgage, the assignment of mortgage

to Bank, and the records of Appellants’ payment history and default. Devine

Affidavit, 7/24/17, at ¶¶3, 4, 5, 11, Exhibits A, B, C, D, and F. Hence, this

was not a mere “testimonial affidavit” barred by Nanty-Glo. Instead, it was

documentary evidence supported by Mr. Devine’s affidavit. See Telwell Inc.

v. Grandbridge Real Estate Capital, LLC, 143 A.3d 421, 427-28 (Pa.Super.

2016) (holding that Nanty-Glo is not implicated when an affidavit is

supported by documentary evidence, including the promissory note).

Moreover, Nanty-Glo is not implicated when an affidavit in a mortgage

foreclosure action is also supported by the defendants’ admissions.          See

Gibson, supra at 466; see also Sherman v. Franklin Regional Med. Ctr.,

660 A.2d 1370, 1372 (Pa.Super. 1995) (“An exception to [the Nanty-Glo]

rule exists . . . where the moving party supports the motion by using

admissions of the opposing party.”). Here, in moving for summary judgment,

Bank did not rely solely on Mr. Devine’s affidavit, but also relied on Appellants’

admissions and general denials, which were deemed admissions by the trial

court. Thus, the Nanty-Glo rule was not implicated herein.

      Additionally, Mr. Devine’s affidavit complied with the standards

applicable to affidavits offered in support of motions for summary judgment

in civil proceedings filed in this Commonwealth. Rule 1035.4 of our Rules of

Civil Procedure provides that, in reference to motions for summary judgment,

“[s]upporting . . . affidavits shall be made on personal knowledge, shall set


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forth such facts as would be admissible in evidence, and shall show

affirmatively that the signer is competent to testify to the matters stated

therein.” Additionally, pursuant to § 6108(b) of the Uniform Business Records

as Evidence Act:

      (b) General Rule.-A record of an act, condition or event shall,
      insofar as relevant, be competent evidence if the custodian or
      other qualified witness testifies to its identity and the mode of its
      preparation, and if it was made in the regular course of business
      at or near the time of the act, condition or event, and if, in the
      opinion of the tribunal, the sources of information, method and
      time of preparation were such as to justify its admission.

42 Pa.C.S.A. § 6108(b). “As long as the authenticating witness can provide

sufficient information relating to the preparation and maintenance of the

records to justify a presumption of trustworthiness of the business records of

a company, a sufficient basis is provided to offset the hearsay character of the

evidence.” Boyle v. Steiman, 631 A.2d 1025, 1032-33 (Pa.Super. 1993).

      In his affidavit, Mr. Devine attested that

      I make this Affidavit based upon my review of those records
      relating to the [promissory note and mortgage] and from my own
      personal knowledge of how they are kept and maintained. The
      business records are maintained by [Bank] in the course of its
      regularly conducted business activities and are made at or near
      the time of the event, by or from information transmitted by a
      person with first-hand knowledge. It is the regular practice of
      [Bank] to keep such records in the ordinary course of a regularly
      conducted business activity.

Devine Affidavit, 7/24/17, at ¶6. Mr. Devine’s affidavit clearly satisfied the

requirements of Rule 1035.4 and § 6108(b). He attested that he was a Bank

employee authorized to execute the affidavit, and that he did so based on his


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personal knowledge and review of Bank’s records, which were prepared in the

regular course of business at or near the time of the events described therein.

Devine Affidavit, 7/24/17, at ¶¶1, 6. Attached to Mr. Devine’s affidavit were

copies of the promissory note signed by Appellants and endorsed in blank

without recourse, as well as the mortgage, the assignment of mortgage to

Bank, and the records of Appellants’ payment history and default. Id. at ¶¶3,

4, 5, 11, Exhibits A, B, C, D, and F. Mr. Devine’s affidavit and supporting

documents, coupled with Appellants’ admissions and general denials,

established a prima facie case of mortgage foreclosure. Accordingly, we find

no merit to Appellants’ challenge to the evidence supporting Bank’s motion for

summary judgment.

      Appellants also argue that summary judgment was inappropriate

because discovery had not yet been completed on unidentified “open

discovery issues.” Appellants’ brief at 17. Appellants claim that they sought

through discovery the production of documents within the exclusive

possession of Bank, “[y]et the bank objected to much of the discovery, and

did not or could not produce original documents.” Id. at 24.

      Appellants fail to identify any particular discovery request directed to

Bank, nor any allegedly deficient response thereto. See Pa.R.A.P. 2119(c)

(providing that “[i]f reference is made to the pleadings, evidence, charge,

opinion or order, or any other matter appearing in the record, the argument

must set forth, in immediate connection therewith, or in a footnote thereto, a


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reference to the place in the record where the matter referred to appears”).

Moreover, Appellants fail to identify the place in the record where they

preserved any discovery challenge for our review.     See Pa.R.A.P. 2119(e)

(providing that “[w]here under the applicable law an issue is not reviewable

on appeal unless raised or preserved below, the argument must set forth, in

immediate connection therewith or in a footnote thereto, either a specific

cross-reference to the page or pages of the statement of the case which set

forth the information relating thereto”). Notably, nowhere on the docket is

there any motion filed by Appellants to compel Bank’s discovery responses.

See Pa.R.A.P. 302(a) (providing that “[i]ssues not raised in the lower court

are waived and cannot be raised for the first time on appeal”). Therefore, we

deem this argument waived.

      Appellants assert that summary judgment was improper because they

denied “key elements” of Bank’s claim in their answer and in their response

to Bank’s motion for summary judgment. Appellants’ brief at 18. Appellants

additionally argue that the issues and claims raised in their amended answer

and new matter “were still in issue at the time of the Bank’s [m]otion for

[s]ummary [j]udgment,” and precluded the entry of summary judgment.

Appellants’ brief at 20-23.

      We find no merit in Appellants’ contention that the defenses asserted in

the amended answer and new matter were “in issue” so as to preclude the

entry of summary judgment for Bank. The trial court dismissed Appellants’


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amended answer and new matter on April 4, 2016, rendering it a legal nullity.

Bank filed its motion for summary judgment more than one year later, on July

31, 2017. Thus, Appellants’ amended answer and new matter clearly was not

“in issue” when the trial court ruled on Bank’s motion for summary judgment.

Moreover, in response to a motion for summary judgment, the non-moving

party may not rest upon mere allegations or denials of the pleadings.

Pa.R.C.P. 1035.3(a); see also Dietzel, supra at 952 (holding that summary

judgment was appropriate where appellants offered nothing to contradict

appellee’s claims except the denial in their answer). Thus, in order to avoid

the entry of summary judgment, it was not sufficient for Appellants to simply

rely on the denials asserted in their answer or assertions made in their

response to Bank’s motion for summary judgment. Rather, Appellants were

required to come forward with “evidence in the record controverting the

evidence cited in the motion [for summary judgment]” or “evidence in the

record establishing the facts essential to the cause of action or defense which

the motion [for summary judgment] cites as not having been produced.”

Pa.R.C.P. 1035.3(a)(1), (2).

      Here, Appellants offered no evidence of record demonstrating that they

made any monthly mortgage payment on or after February 1, 2011, such that

the mortgage was not in default. Indeed, Appellants point us to no place in

the record where they presented the trial court with any evidence to raise a

genuine issue of fact in response to Bank’s motion for summary judgment.


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See Washington Fed. Sav. & Loan Ass'n, 515 A.2d 980, 983 (Pa.Super.

1986) (“In order to properly raise a genuine issue of fact, [the appellant] had

the burden to present ‘facts’ by counter-affidavits, depositions, admissions, or

answers to interrogatories.”). Accordingly, we find no merit to this claim.

      Appellants also challenge Bank’s standing to enforce the note, claiming

that Bank did not provide proof that it controls the note through the production

of records establishing transfer and assignment to Bank. Appellants assert

that, because Bank failed to produce any evidence documenting the transfer

or assignment of the note from Weichert Financial Services to Bank, it has not

demonstrated that it controlled the note or is entitled to enforce it.

      It is well-established that the mortgagee is the real party in interest in

a mortgage foreclosure action, even when it is the assignee of the mortgage.

CitiMortgage, Inc. v. Barbezat, 131 A.3d 65, 68-69 (Pa.Super. 2016). The

holder of the mortgage maintains the right, upon a borrower’s default, to

initiate a foreclosure action. McWilliams, supra at 1056-57; Gibson, supra

at 464-65. The foreclosing party can prove standing either by showing that it

(1) originated or was assigned the mortgage, or (2) is the holder of the note

specially indorsed to it or indorsed in blank. J.P. Morgan Chase Bank, N.A.

v. Murray, 63 A.3d 1258, 1267-68 n.6; Barbezat, supra at 68. Here, the

trial court concluded, based on the evidence Bank produced in support of its

motion for summary judgment, that Bank had standing to enforce the note

because it established (1) the complete chain of assignments and that it is the


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J-A27013-18


current mortgagee and real party in interest; and (2) that it is the current

holder of the original note. See Trial Court Opinion, 12/6/17, at 3. As the

record amply supports the trial court’s determination, we will not disturb its

ruling.

      Appellants next argue that Bank shredded the original loan documents

and improperly converted the loan into an Electronic Signatures in Global and

National Commerce Act (“ESIGN”) document, thereby transforming the paper

note that they executed into an e-note. According to Appellants, MERS, as

the original lender, did not disclose in the note, mortgage, or other loan

documents that Appellants executed that the loan and loan documents would

be converted to an ESIGN document. Appellants assert that Bank and MERS

inserted a new paragraph permitting them to change a paper note into an e-

note. Appellants claim that enforcement of the note would violate both ESIGN

and the Uniform Electronic Transactions Act (“UETA”).

      Appellants’ claim concerns matters occurring after the mortgage

documentation was executed. See Strausser, supra at 695. Thus, it does

not raise a valid defense to Bank’s complaint in these in rem mortgage

foreclosure proceedings. Id. Moreover, the trial court specifically determined




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that Bank possessed the original note. See Trial Court Opinion, 12/6/17, at

3. Accordingly, this claim warrants no relief.13

       Finally, relying on Green Tree Consumer Disc. Co. v. Newton, 909

A.2d 811, 814 (Pa.Super. 2006), Appellants request this Court to exercise its

equitable powers to vacate the trial court’s entry of summary judgment in

favor of Bank.      Green Tree has no applicability here as it involved the

assertion of counterclaims to recoup or set off damages for claims under the

Home Improvement Finance Act with respect to a home improvement loan.

The Court in Green Tree observed that “the general rule is that a recoupment

claim is an improper defense to a mortgage foreclosure.” Green Tree, supra

at 815. Nevertheless, the Court in Green Tree recognized an exception to

this general rule where the mortgage was made as an integral part of the

home improvement loan, incorporated the terms of the home improvement

contract, was recorded with that contract, and was signed by a person alleged

to be incompetent and legally incapable of signing. See id. at 815. This case,

which presents what the Court in Green Tree called “a typical mortgage



____________________________________________


13  Even if this claim was properly related to the execution of the mortgage
documents, it was not raised in Appellants’ answer to the complaint;
therefore, it was not preserved for our review. See Pa.R.C.P. 1032(a)
(enumerated exceptions inapplicable). Raising an affirmative defense for the
first time in response to a motion for summary judgment waives the issue.
See Joyce v. Mankham, 465 A.2d 696, 697 (Pa.Super. 1983) (holding that
because an affirmative defense must be part of the pleadings, the subsequent
averment such a defense in an answer to a motion for summary judgment
fails to preserve the issue).

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J-A27013-18


foreclosure where the owners have taken out a loan to fund the purchase of

a home and then defaulted on the payments,” id., exhibits none of the facts

that gave rise to Green Tree’s exception to the normal rule.

      We conclude that the trial court did not commit an error of law or abuse

its discretion in entering the orders complained of herein.

      Orders affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 5/2/19




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