J-A03025-16


                              2016 PA Super 82

GENERATION MORTGAGE COMPANY                    IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                         Appellee

                    v.

BUNG THI NGUYEN

                         Appellant                  No. 1069 EDA 2015


                  Appeal from the Order Dated April 6, 2015
            In the Court of Common Pleas of Philadelphia County
            Civil Division at No(s): APRIL TERM, 2013, NO. 1497

BEFORE: GANTMAN, P.J., MUNDY, J., and DUBOW, J.

OPINION BY MUNDY, J.:                                FILED APRIL 11, 2016

      Appellant, Bung Thi Nguyen, appeals from the order dated April 6,

2015, denying her motion for attorney’s fees filed after Appellee, Generation

Mortgage Company, discontinued its action for mortgage foreclosure. After

careful review, we affirm.

      The trial court provided the relevant procedural history of this case as

follows.

            This case commenced April 10, 2013, with the filing
            of a complaint in mortgage foreclosure on the
            premises of 6347 Kinsessing Avenue, Philadelphia,
            Pennsylvania 19142 by Appellee[]. The complaint
            averred that Appellant was in default on a
            mortgage[.]

                 On May 10, 2013, Appellant filed a praecipe to
            proceed in forma pauperis.

                 On May 17, 2013, Appellant filed an answer
            with new matter in response to the complaint,
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          raising four (4) affirmative defenses: (1) lack of
          subject matter jurisdiction due to premature
          commencement of the mortgage foreclosure action
          under the terms of the contract; (2) lack of subject
          matter jurisdiction due to premature commencement
          of    the   mortgage     foreclosure  action    under
          Pennsylvania’s Usury Law (Act 6 of 1974), 41 P.S.
          §[§] 101[-605] (“Act 6”); (3) lack of standing
          because Appellee is not a real party in interest; and
          (4) breach of contract.

                On June 19, 2013, Appellee filed its reply to
          new matter, denying Appellant’s averments and each
          of Appellant’s affirmative defenses.

                On August 21, 2013, Appellee filed a motion
          for summary judgment, arguing that the matter was
          ripe for disposition by way of summary judgment
          because neither Appellant’s answer to the complaint,
          nor her new matter created a genuine issue of
          material fact.     Specifically, Appellee argued that
          summary judgment was appropriate because
          Appellant admitted in her answer to the complaint
          that she is the real owner of the subject property
          and that she executed the mortgage, which was
          secured by the subject property, to Appellee, and
          she did not deny that she failed to maintain taxes
          and insurance on the property or that the mortgage
          was in default.        Consequently, Appellee was
          permitted under the terms of the signed documents
          to accelerate all amounts due.

                On September 23, 2013, Appellant filed an
          answer in opposition to the motion for summary
          judgment, denying Appellee’s averments in its
          motion for summary judgment because there are
          genuine issues of material facts. Appellant raised
          three (3) main arguments in opposition to summary
          judgment. Appellant argued that the foreclosure
          action should be dismissed: (1) pursuant to the
          coordinate doctrine rule; (2) for lack of subject
          matter jurisdiction; and (3) because Appellee has not
          proven whether Appellant is in default under the loan
          documents.

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                On October 15, 2013, Appellee filed a reply in
          support of motion for summary judgment, arguing
          that Act 6 does not apply to this matter because the
          mortgage is a reverse mortgage, not a residential
          mortgage under Act 6. Appellee also argued that
          even if the pre-foreclosure notice it provided to
          Appellant was deficient, [the trial court] retains
          subject matter jurisdiction over the case.

                On October 22, 2013, [the trial court] denied
          Appellee’s motion for summary judgment.

                On March 31, 2014, Appellee filed a second
          motion for summary judgment, arguing that the
          matter was ripe for disposition by way of summary
          judgment because neither Appellant’s answer to the
          complaint, nor her new matter created a genuine
          issue of material fact. [Appellee asserted the same
          basis for summary judgment contained in its first
          motion for summary judgment, discussed above.]

                On May 1, 2014, Appellant filed her answer in
          opposition to Appellee’s second motion for summary
          judgment[.] [Appellant’s arguments were identical
          to those contained in her answer to the first motion
          for summary judgment.]

                                      …

                On May 17, 2014, [the trial court] entered an
          order denying Appellee’s second motion for summary
          judgment as premature.

                On January 7, 2015, the parties completed a
          settlement conference.

                On January 15, 2015, Appellee filed a praecipe
          to discontinue and end, directing the prothonotary to
          withdraw Appellee’s complaint and mark same as
          discontinued and ended, without prejudice.

                On January     20,   2015,    the   case   was
          discontinued.

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J-A03025-16



                     On February 18, 2015, Appellant timely filed
              the instant motion [for] counsel fees with [an]
              accompanying declaration from Appellant’s counsel,
              arguing that as a result of the discontinuance,
              Appellant became the “prevailing party” in the
              matter under Pennsylvania law and, was therefore
              entitled to payment of reasonable attorneys’ fees
              and costs by Appellee pursuant to § 503 of Act 6.

                     On March 10, 2015, Appellee filed its answer in
              opposition of motion for counsel fees, arguing that a
              discontinuance does not terminate the civil action
              with an adjudication on the merits, which, in turn,
              cannot result in a “prevailing party” who would be
              entitled to recovery of attorney fees under the
              applicable statutes.

                    On April 6, 2015, [the trial court] denied
              Appellant’s motion for counsel fees.

Trial Court Opinion, 7/6/15, 1-4 (some capitalization and citations omitted).

On April 8, 2015, Appellant filed a timely notice of appeal.1

       On appeal, Appellant raises the following issues for our review.

              I.     Did the [trial] court commit an error of law in
                     determining that it had no jurisdiction to act on
                     [Appellant’s] timely fee motion, as required by
                     Miller Electric Co. v. DeWeese[, 907 A.2d
                     1051 (Pa. 2006), amended by, 918 A.2d 114
                     (Pa. 2007) (mem.)], because [Appellee]
                     discontinued the action prior to the fee motion
                     being filed?

              II.    Did the [trial] court abuse its discretion in
                     failing to determine whether a violation of
                     § 403 of [Act 6] occurred when no [Act 6]
____________________________________________


1
  Appellant and the trial court have complied with Pennsylvania Rule of
Appellate Procedure 1925.



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J-A03025-16


                     notice [of intention to foreclose] was sent prior
                     to foreclosure on a “residential mortgage” as
                     defined by § 101 of [Act 6]?

              III.   Did the [trial] court abuse its discretion in
                     failing to award mandatory counsel fees
                     because it determined that [A]ppellant was not
                     the “prevailing party” under § 503 of [Act 6]
                     despite this Court’s interpretation of § 503 in
                     Gardner v. Clark[, 503 A.2d 8 (Pa. Super.
                     1986)]?

Appellant’s Brief at 2.

      We review a trial court’s decision regarding attorney’s fees as follows.

              Trial courts have great latitude and discretion in
              awarding attorney fees when authorized by contract
              or statute. Generally, [t]he denial of a request for
              attorney’s fees is a matter within the sound
              discretion of the trial court, which will be reversed on
              appeal only for a clear abuse of that discretion.

Cummins v. Atlas R.R. Const. Co., 814 A.2d 742, 746 (Pa. Super. 2002)

(citations and internal quotation marks omitted).

      Further, to the extent that we must interpret a statute to resolve

Appellant’s issues, our standard of review is de novo and our scope of review

is plenary.    Gilbert v. Synagro Cent., LLC, 131 A.3d 1, 10 (Pa. 2015)

(citation omitted). We construe the meaning of a statute according to the

Statutory Construction Act, 1 Pa.C.S.A. §§ 1501-1991.

              Under the Statutory Construction Act, the object of
              all statutory construction is to ascertain and
              effectuate the General Assembly’s intention. When
              the words of a statute are clear and free from all
              ambiguity, the letter of the statute is not to be
              disregarded under the pretext of pursuing its spirit.


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J-A03025-16


Strausser Enters., Inc. v. Segal & Morel, Inc., 89 A.3d 292, 297 (Pa.

Super. 2014) (citation omitted).

       Appellant’s first argument is that the trial court erred in concluding

that it was without jurisdiction to act on Appellant’s timely motion for

attorney’s fees. Appellant’s Brief at 8. However, the trial court did not find

that it lacked jurisdiction to address the attorney’s fees issue. Instead, the

trial court denied the motion on its merits “because the case had been

discontinued and [] Appellant was not a ‘prevailing party.’”                Trial Court

Opinion,    7/6/15,      at   8.       Accordingly,   Appellant’s   first    argument

mischaracterizes the trial court’s reasoning and is therefore meritless.

       Next, Appellant contends that the trial court erred because it did not

determine whether Appellee violated Section 403 of Act 6 2 by purportedly

____________________________________________


2
  41 P.S. §§ 101-605 is commonly referred to as Act 6 because it was
enacted as the “Act of January 30, 1974 (P.L. 13, No. 6).” It is alternatively
referred to as the loan interest and protection law or the usury law.

              The preamble to Act 6 describes it as follows:

              An Act regulating agreements for the loan or use of
              money; establishing a maximum lawful interest rate in the
              Commonwealth; providing for a legal rate of interest;
              detailing exceptions to the maximum lawful interest rate
              for residential mortgages and for any loans in the principal
              amount of more than fifty thousand dollars and federally
              insured     or    guaranteed     loans    and    unsecured,
              uncollateralized loans in excess of thirty-five thousand
              dollars and business loans in excess of ten thousand
              dollars; providing protections to debtors to whom loans are
              made including the provision for disclosure of facts
(Footnote Continued Next Page)


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J-A03025-16


failing to provide the requisite notice of its intention to foreclose. Appellant’s

Brief at 13.     Appellant asserts “this refusal to consider the merits of

[Appellant’s] [Act 6] defense was a manifest error.” Id. However, Appellee

discontinued the action before the trial court decided the merits of

Appellant’s Act 6 defense. Once the case was discontinued, it was no longer

pending before the trial court.              See Motley Crew, LLC v. Bonner

Chevrolet Co., Inc., 93 A.3d 474, 476 (Pa. Super. 2014) (explaining “[t]he

general effect of a discontinuance is to terminate the action without an

adjudication of the merits and to place the [parties] in the same position as

if the action had never been instituted[]”), appeal denied, 104 A.3d 526 (Pa.

2014). Consequently, the discontinuance rendered Appellant’s Act 6 defense

moot. Id. (noting that a discontinuance deprives the court of jurisdiction to

reach the underlying merits of the case). Accordingly, the trial court did not

                       _______________________
(Footnote Continued)

             relevant to the making of residential mortgages, providing
             for notice of intention to foreclose and establishment of a
             right to cure defaults on residential mortgage obligations,
             provision for the payment of attorney’s fees with regard to
             residential mortgage obligations and providing for certain
             interest rates by banks and bank and trust companies;
             clarifying the substantive law on the filing of an execution
             on a confessed judgment; prohibiting waiver of provisions
             of this act, specifying powers and duties of the secretary of
             banking, and establishing remedies and providing penalties
             for violations of this act.

Glover v. Udren Law Offices, P.C., 92 A.3d 24, 26 n.2 (Pa. Super. 2014),
quoting Act of Jan. 30, 1974, P.L. 13, No. 6., appeal granted, 108 A.3d 28
(Pa. 2015).



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J-A03025-16


err in not resolving the merits of Appellant’s Act 6 defense, and Appellant’s

second issue on appeal does not warrant relief. Id.

     In her third issue, Appellant claims that the trial court erred by

denying her motion for attorney’s fees. Our Supreme Court has explained

“Pennsylvania law embodies the American rule, per which there can be no

recovery of attorneys’ fees from an adverse party in litigation, absent

express statutory authorization, clear agreement by the parties, or some

other established exception.”   Doctor’s Choice Physical Med. & Rehab.

Ctr., P.C. v. Travelers Pers. Ins. Co., 128 A.3d 1183, 1189 (Pa. 2015)

(citation omitted). Appellant cites Section 503 of Act 6 as a statutory basis

for attorney’s fees and asserts she was the “prevailing party” due to the

discontinuance. Appellant’s Brief at 23. Section 503 provides as follows.

           § 503. Reasonable attorney’s fees recoverable

           (a) If a borrower or debtor, including but not limited
           to a residential mortgage debtor, prevails in an
           action arising under this act, he shall recover the
           aggregate amount of costs and expenses determined
           by the court to have been reasonably incurred on his
           behalf in connection with the prosecution of such
           action, together with a reasonable amount for
           attorney’s fee.

41 P.S. § 503(a) (emphasis added). Appellant contends that she is entitled

to attorney’s fees because Appellee allegedly did not provide the notice

mandated by Section 403 before commencing the foreclosure action, and




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J-A03025-16


she prevailed when Appellee voluntarily discontinued the case.3 Appellant’s

Brief at 23. Section 403 provides, in part, as follows.

              § 403. Notice of intention to foreclose

              (a) Before any residential mortgage lender may
              accelerate the maturity of any residential mortgage
              obligation, commence any legal action including
              mortgage foreclosure to recover under such
              obligation, or take possession of any security of the
              residential mortgage debtor for such residential
              mortgage obligation, such person shall give the
              residential mortgage debtor notice of such intention
              at least thirty days in advance as provided in this
              section.

41 P.S. § 403(a).

       Here, Appellant is not entitled to attorney’s fees under the plain

language of Section 503 because a mortgage foreclosure action does not

arise under Act 6.4       Instead, Pennsylvania Rules of Civil Procedure 1141-

____________________________________________


3
   The certified record includes two letters Appellee sent to Appellant,
providing notice that she was in default and advising of its intention to
foreclose. The first was a “property charge delinquency letter,” which stated
the nature of the default, the right of Appellant to cure the default within 30
days, and that failure to comply would result in Appellee declaring the loan
due and payable and would entitle Appellee to foreclosure. See Complaint,
4/10/13, at Exhibit E, Property Charge Delinquency Letter, 10/7/11, at 1.
The second was a November 30, 2012 letter providing notice that Appellee
intended to foreclose because Appellant was still in default. See id. at
Exhibit F, Notice of Default Intent to Foreclose, at 1. Appellee sent both
letters before filing the foreclosure complaint on April 10, 2013.
4
  To the extent that our reasoning differs from that of the trial court, we
note that “[a]s an appellate court, we may uphold a decision of the trial
court if there is any proper basis for the result reached; thus we are not
constrained to affirm on the grounds relied upon by the trial court.” In re
(Footnote Continued Next Page)


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J-A03025-16


1150 govern mortgage foreclosure actions. Act 6 notice is a prerequisite to

commencing a residential mortgage foreclosure action. Wells Fargo Bank,

N.A. v. Spivak, 104 A.3d 7, 12 (Pa. Super. 2014) (citation omitted). “In

the residential mortgage context, Act 6 is typically raised as a defense to

mortgage foreclosure proceedings.”               Id. (citation omitted).   “Section 403

simply puts the residential homeowner on notice that the delinquent

mortgage is subject to foreclosure at some future date unless the owner

takes some action. It is not a foreclosure action[.]” CitiMortgage, Inc. v.

Barbezat, 131 A.3d 65, 72 (Pa. Super. 2016). “Remedies for a defective

Act 6 notice include setting aside the foreclosure or denying a creditor the

ability to collect an impermissible fee.” Spivak, supra (citations omitted).

      Here, even accepting Appellant’s argument that she prevailed in the

foreclosure action by virtue of the voluntary discontinuance, she is not

entitled to recover attorney’s fees under Section 503 because a mortgage

foreclosure action does not arise under Act 6.5 Instead, a lender must give

Act 6 notice prior to filing a residential mortgage foreclosure complaint.

Therefore, even if Appellant has the status of a prevailing party in the

foreclosure action, that does not mean she succeeded on her Act 6 defense

                       _______________________
(Footnote Continued)

Estate of Strahsmeier, 54 A.3d 359, 364 n.17 (Pa. Super. 2012) (citation
omitted), appeal denied, 69 A.3d 603 (Pa. 2013).
5
  Section 504 provides for an individual action for “[a]ny person affected by
a violation of the act[.]” 41 P.S. § 504.



                                           - 10 -
J-A03025-16


because an Act 6 notice is separate from the foreclosure action.6             See

Spivak, supra; Barbezat, supra.                    Moreover, there is no statutory

provision that authorizes the award of attorney’s fees to a residential

mortgagor who successfully defends a mortgage foreclosure action, and

there was not a clause in the mortgage or note allowing Appellant to pursue

attorney’s fees. See Doctor’s Choice, supra. For these reasons, Appellant

is not entitled to relief on this issue.

       Based on the foregoing, we conclude Appellant’s issues do not warrant

relief, and the trial court did not abuse its discretion in denying Appellant’s


____________________________________________


6
  Appellant relies on Gardner to support the argument that a discontinuance
is the equivalent to prevailing on the merits.       However, Gardner is
distinguishable because that case involved an action to enforce a confessed
judgment, which arose under Section 407(a) of Act 6. Gardner, supra at 9
(affirming attorney’s fees award when mortgagee discontinued its action to
enforce a confessed judgment against mortgagor’s residence brought under
Section 407(a) of Act 6). As we have explained above, the cause of action
for mortgage foreclosure does not arise under Act 6.

      Additionally, the remaining cases Appellant cites are distinguishable
because they involve debtors who prevailed on the merits of their defenses
to prevent lenders from executing on confessed judgments. See Beckett v.
Laux, 577 A.2d 1341, 1347-1348 (Pa. Super. 1990) (concluding that debtor
prevailed in stay of execution action because lender did not comply with
Section 407(a) of Act 6 before executing on confessed judgment); First
Nat’l Bank of Allentown v. Koneski, 573 A.2d 591, 595 (Pa. Super. 1990)
(declaring that debtors who succeeded on their petition to open judgment
and prevented lender from executing on a confessed judgment were entitled
to attorney’s fees as prevailing party); Drum v. Leta, 512 A.2d 36, 36 (Pa.
Super. 1986) (holding debtor who succeeded in striking a confession of
judgment is entitled to attorney’s fees under Section 407(b)).



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J-A03025-16


motion for attorney’s fees. See Cummins, supra. Accordingly, we affirm

the trial court’s April 6, 2015 order.

      Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/11/2016




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