J-A24019-16


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BAYVIEW LOAN SERVICING, LLC                    IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                        Appellee

                   v.

ADEL ETREIH AND RAID ALBARKAWI

                        Appellants                  No. 3278 EDA 2015


           Appeal from the Judgment Entered November 4, 2015
            In the Court of Common Pleas of Philadelphia County
         Civil Division at No(s): No. 130801821 August Term, 2013


BEFORE: BOWES, J., OTT, J., and SOLANO, J.

MEMORANDUM BY OTT, J.:                        FILED NOVEMBER 01, 2016

     Adel Etreih and Raid Albarkawi appeal from the in rem judgment,

entered on November 4, 2015, in the Court of Common Pleas of Philadelphia

County, pursuant to the court’s May 18, 2015 order, finding in favor of

Bayview Loan Servicing, LLC (“Bayview”), and entering an in rem judgment

in the amount of $178,657.07, with a foreclosure and sale of the mortgaged

property, against Appellants.   Appellants claim (1) the trial court erred in

entering the in rem judgment in the amount of $178,657.07 in favor of

Bayview and against Albarkawi, as Bayview’s claim was based on a Note,

Mortgage and Loan Modification Agreement, and Albakawi was not a

signatory to the Note or Loan Modification Agreement, and (2) the trial court

erred in entering the in rem judgment in the amount of $178,657.07 in favor

of Bayview and against Appellants, as Bayview’s claim for counsel fees was
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not properly proven. See Appellants’ Brief at 2. Based upon the following,

we affirm.

       The trial court has summarized the facts and procedural history

underlying this appeal:

    A. FACTS

          On August 28, 2007, in consideration of a loan in the principal
       amount of $87,500.00, Defendant Adel Etreih (“Defendant
       Etreih”) executed and delivered to Interbay Funding, LLC
       (“Interbay”) a Note (the “Note”). The Note specified an interest
       rate at 12.375% per annum, payable as to the principal and
       interest in equal monthly installments of $997.53 commencing
       October 1, 2007.

          That same day, in order to secure the obligations under the
       Note, both Defendant Etreih and Defendant Raid Albarkawi
       (“Defendant Albarkawi”) executed and delivered a mortgage (the
       “Mortgage”) via a Mortgage and Security Instrument (“Security
       Instrument”) to Interbay. The Mortgage was dated August 28,
       2007 and recorded on September 4, 2007 in the Department of
       records for the County of Philadelphia as Mortgage Instrument
       51765624. The Mortgage secures the real property commonly
       known as 431 East Wyoming Avenue, Philadelphia, PA 19120.[1]
       Interbay transferred the Note and assigned the Mortgage to
       Plaintiff on November 14, 2007.

         On November 19, 2009, Defendant Etreih and Plaintiff agreed
       to a Loan Modification Agreement (“Modification”).         The
       Modification increased the unpaid principal balance due on the
       Note to $105,635.24, consisting of the amounts loaned to
       Defendants [sic] by Plaintiff, including past due principal

____________________________________________


1
  Etreih and Albarkawi are the owners of the subject property, which is a
commercial property.    See Bayview’s Amended Complaint in Mortgage
Foreclosure, 12/4/2013, at ¶¶2, 13; Appellants’ Answer, New Matter, and
Counterclaim, 2/26/2014, at ¶¶2, 13.



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        payments, interest, fees and costs capitalized. The interest rate
        decreased to 6% per annum effective December 1, 2009.

           The Defendants are in default of their obligations pursuant to
        the Note and Mortgage because due payments have not been
        made since November 1, 2012.

     B. PROCEDURAL HISTORY

           On May 6, 2015, following a non-jury trial,[2] this Court[, on
        May 18, 2015,] entered an in rem judgment in favor of Plaintiff
        against Defendants in the amount of $178,657.07.[3] On [May
        28, 2015], 2015, Defendants filed a Motion for Post-Trial Relief,
        which [Bayview] opposed. On September 16, 2015, this Court
        heard oral argument on Defendants’ Motion for Post-Trial Relief,
        which was denied that same day.

____________________________________________


2
    Albarkawi did not appear at the trial.
3
  At trial, Bayview presented a Pay Off Statement and History, Exhibit P-6,
showing total indebtedness in the amount of $178,652.07, as of the date of
the May 6, 2015 hearing.        The in rem judgment in the amount of
$178,657.07 reflects a $5.01 difference that appears to be a scrivener’s
error, and is de minimus. The Notes of Testimony reflects the following
amounts:

Unpaid Principal Balance                       $   101,810.15
Interest                                       $    16,086.00
Outstanding Late Charges                       $       551.60
Default Interest                               $    25,791.90
Prepayment Penalties                           $    19,428.77
Property Inspections                           $       671.00
Property Appraisals                            $       250.00
Property Preservation Fees                     $        70.00
Advanced Legal Fees                            $     8,253.46
Advanced Taxes                                 $     2,733.96
Advanced Insurance                             $     3,005.22

        Total Debt                             $ 178,652.06

See, N.T. 5/6/2015 at 23-24.



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Trial Court Opinion, 1/21/2016, at 1–2 (unnumbered) (record citations

omitted).

       On October 16, 2015, Appellants filed their Notice of Appeal. 4        On

November 4, 2015, Appellants filed a praecipe for entry of judgment, which

was entered on the docket pursuant to the trial court’s May 18, 2015 order,

entering an in rem judgment in favor of Bayview against Appellants in the

amount of $178,657.07, with a foreclosure and sale of the mortgaged

property.

       At the outset, we state our standard of review:

       Our appellate role in cases arising from non-jury trial verdicts is
       to determine whether the findings of the trial court are
       supported by competent evidence and whether the trial court
       committed error in any application of the law. The findings of the
       trial judge in a non-jury case must be given the same weight
       and effect on appeal as the verdict of a jury, and the findings will
       not be disturbed on appeal unless predicated upon errors of law
       or unsupported by competent evidence in the record.
       Furthermore, our standard of review demands that we consider
       the evidence in a light most favorable to the verdict winner.

Levitt v. Patrick, 976 A.2d 581, 588-89 (Pa. Super. 2009) (citation

omitted). “If we conclude the trial court abused its discretion or committed

an error of law, then we may reverse the denial of a motion for a new trial.”

Id. (citation omitted).
____________________________________________


4
  On October 21, 2015, the trial court issued a Pa.R.A.P. 1925(b) order,
directing Appellants to file a concise statement of errors complained of on
appeal, and Appellants filed a concise statement on November 18, 2015.




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     In the first issue raised in this appeal, Appellants contend that the in

rem judgment in the amount of $178,657.07 cannot stand as to Albarkawi.

Appellants make three arguments.

     First, Appellants contend that Bayview’s claim was based on the

Mortgage, Note and Loan Modification Agreement, and Albarkawi has no

liability as he was not a party to the Note or Loan Modification Agreement

and had only signed the Mortgage. Appellants further argue the Mortgage

required any modification to be in writing and signed by the party against

whom it is asserted.       Appellants maintain that as Albarkawi was not a

signatory nor gave consent for the Loan Modification Agreement, his liability

and any security posted by Albarkawi in the form of the Mortgage is

discharged.

     Second, Appellants argue the trial court erred in finding that Albarkawi

ratified the Loan Modification Agreement.           In this regard, Appellants

acknowledge that the trial court correctly cited relevant case law dealing

with ratification. See Trial Court Opinion, 1/21/2016, at 4 (“An agreement

can be ratified by a party through his actions when he shows an acceptance

or adoption of the agreement with intent to ratify and knowledge of the

material consequences. Allegany Gas Co., to Use of E. Pennsylvania v.

Kemp, 174 A. 289 (Pa. 1934)[.]”). Appellants argue, however, that Etreih’s

testimony     regarding   Alkarkawi’s   knowledge   of   the   Loan   Modification




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Agreement was “rather equivocal”5 and cannot support a finding of

ratification.    See Appellant’s Brief at 13–14 (citing N.T., 5/6/2015, at 57–

58).     Appellants also claim that the evidence falls short of showing that

Albarkawi made any payments following the Loan Modification Agreement.

In this regard, Appellant contend Plaintiff’s Exhibit P-6, cited by the trial

court, “is without any information whatsoever indicating that Albarkawi

made the payments nor even that he had knowledge of them.” Appellants’

Brief at 15.

        Third, Appellants state that “if [] Albarkawi’s interest in the subject

property secures the debt created by the Note, said liability can only extend

to his interest securing the original [$87,000.00] loan created by the Note.”

Appellant’s Brief at 16 (emphasis in original).            Appellants maintain any

judgment based in whole or in part on the Loan Modification Agreement

cannot be entered against Albarkawi.             Appellants claim “[i]t is immaterial

that [Bayview] cannot proceed against Albarkawi personally as a result of

the judgment.”      Id. at 17.      Appellants reason that the judgment amount

“fixes an amount which [Bayview] may recover through the sale of the

subject property, including Albarkawi’s interest therein,” that “[a]ny amount

recovered at [the] sale of the property in excess of the proper amount due

to Bayview would be returned to [Appellants],” and “[a]s such, Albarkawi is

____________________________________________


5
    Appellants’ Brief at 13.



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being deprived of his interest in the property to the extent that the

judgment amount exceeds any proper liability under the original Mortgage.”

Id. at 17.

       Our review confirms the determination of the trial court that

Appellants’ position is meritless. Because Albarkari co-signed the mortgage,

Bayview had the right to seek an in rem judgment against Albarkawi for the

debt due under the Note and Modification Agreement.         As the Honorable

Denis P. Cohen ably explained:

       The Security Instrument[6] stated that: “By its execution hereof,
       Borrower desires to secure the payment of the Debt (hereinafter
       defined) and the performance of all of its obligations under the
       Note and the Other Obligations (hereinafter defined) and any
       and all other indebtedness now or hereafter owing by the
       Borrower to Lender.” The Security Instrument defined “debt” as
       “all sums advanced and costs and expenses incurred by the
       Lender in connection with the Debt or any part thereof, any
       renewal, extension, or change or substitution for the Debt or any
       part thereof, or the acquisition or perfection of the security
       thereof, whether made or incurred at the request of Borrower or
       Lender.” Finally, the Security Instrument provided that: “If
       Borrower consist of more than one person, the obligations and
       liabilities of each person hereunder shall be joint and several.”
       By the plain language of the Security Instrument, Defendant
       Albarkawi was bound to the obligations of the Mortgage, even
       when those obligations were slightly altered by the Modification.



____________________________________________


6
  “Security Instrument” refers to the Mortgage. As the trial judge stated
earlier in his opinion, “both Defendant Etreih and Defendant Raid Albarkawi
(“Defendant Albarkawi”) executed and delivered a mortgage (the
“Mortgage”) via a Mortgage and Security Instrument (“Security
Instrument”)[.] Trial Court Opinion, 1/21/2016, at 1 (unnumbered).



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     The Defendants’ claim that the Modification created separate and
     additional obligations for which Defendant Albarkawi was not a
     party is meritless. The Modification incorporated only debt which
     was previously due under the original loan documents.
     Specifically, the Modification incorporated the “unpaid interest
     late charges, fees and costs” and “if applicable, any advances for
     unpaid property taxes, insurance premiums” that was explicitly
     contemplated by the Security Instrument.

                                   ****

     Assuming arguendo that Defendant Albarkawi was not bound by
     the terms of the Note or Modification, the judgment amount is
     irrelevant because [Bayview] cannot pursue a deficiency action
     against Defendant Albarkawi. An action in mortgage foreclosure
     is strictly an in rem proceeding, and the purpose of a judgment
     in mortgage foreclosure is solely to effect a judicial sale of the
     mortgaged property. Meco Realty Co., v. Burns, 200 A.2d
     869, 871 (Pa. 1964); U.S. Bank, N.A. v. Pautenis, 118 A.[3]d
     386, 394 (Pa. Super. 2015).          Once a default has been
     established under the terms of the mortgage, the court must
     enter a judgment in a certain amount.           Landau v. W.
     Pennsylvania National Bank, 282 A.2d 335, 340 (Pa. 1971)
     (“Judgment in a mortgage foreclosure action must be entered for
     a sum certain or no execution could ever issue on it”). However,
     an in rem judgment can be issued even when personal liability
     cannot be established. See Meco, 200 A.2d at 871.

     If Defendant Albarkawi is not bound by the Note or Modification,
     then he cannot be held liable for any additional judgments. He
     can only be held to an in rem judgment under the original
     Mortgage and not held to be personally liable in this matter or
     any deficiency action. At trial, Plaintiff’s counsel conceded this
     point and reiterated their request for solely an in rem judgment
     against Defendant Albarkawi. Thus, Defendant Albarkawi could
     only be held liable for an in rem judgment under the original
     Mortgage and not an in personam judgment in a deficiency
     action.

Trial Court Opinion, 1/21/2016, at 4–7 (unnumbered) (emphasis supplied).

     We agree with the trial court’s sound analysis. Although Albarkawi did

not sign the Note or Modification Agreement, he signed the Mortgage. Under

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the terms of the Mortgage, Albarkawi, as a “Borrower,” agreed to secure the

payment of the debt “evidenced by the Note,” and “any and all indebtedness

now or hereafter owing by Borrower to Lender.” Mortgage and Security

Agreement, 8/28/2007, §§ 2.1(a); 2.2(d). The Mortgage provides:            “If

Borrower consists of more than one person, the obligations and liabilities of

each such person hereinunder shall be joint and several.”        Id., § 18.2.

When payments on the indebtedness ceased, default occurred under the

Mortgage, Note and Loan Modification Agreement.          Therefore, although

Albarkawi is not personally liable on the Note or Modification Agreement,

Bayview can proceed against Albarkawi to seek foreclosure and sell the

property to satisfy the outstanding debt.7

       Finally, Appellants argue the trial court erred in entering judgment in

the amount of $178,657.07 in favor of Bayview and against Appellants

because Bayview’s claim for counsel fees was not properly proven.

       In Pennsylvania, “a mortgagee is entitled on foreclosure to recover

reasonable expenses, including attorney’s fees.” Citicorp Mortgage, Inc. v.

Morrisville Hampton Vill. Realty Ltd. Partnership, 662 A.2d 1120, 1123

(Pa. Super. 1995). “The test of a legal fee must be its reasonableness,

determined by the circumstances of the particular case.” Id., citing Federal
____________________________________________


7
  In light of our agreement with the trial court’s analysis that Albarkawi can
be held to the in rem judgment based upon the Mortgage, there is no need
to address the issue of Albarkawi’s ratification of the Modification
Agreement.



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Land Bank of Baltimore v. Fetner, 410 A.2d 344 (Pa. Super. 1979).

“[R]elevant Pennsylvania law finds attorney’s fees of 10% to be reasonable.”

Citicorp Mortgage, Inc., supra at 1123.

        Here, the trial court concluded:

        The instant case is similar to other cases that have found a 10%
        fee to be reasonable. In Federal Land Bank, a 10% fee on a
        judgment of $137,194.45 on a case that involved “preliminary
        objections, briefs, depositions, a trial and this appeal” was found
        to be reasonable. 410 A.2d at 347. Likewise, the instant case
        saw the Defendant file two sets of Preliminary Objections, a
        counterclaim requiring further Preliminary Objections, briefs for
        Summary Judgment, trial preparation and attendance, and
        Motions Post-Trial Relief on an outstanding balance of
        $101,810.15.[8] See id. Thus, the 10% fee here is similarly
        reasonable and should be upheld. See id.

Trial Court Opinion, 1/21/2016, at 8 (unnumbered).

        We find no basis upon which to disturb the determination of the trial

court. In support of its claim for attorneys’ fees in the amount of $8,253.46,

Bayview presented a document that itemized the “total debt owed” and

showed, inter alia, “legal fees advanced,” in the amount of “8,253.46.” See

Exhibit P-6. Appellants complain that because Bayview failed to produce any

fee agreement or time sheets evidencing attorney hours rates or time spent

on the case, Bayview failed to produce sufficient and proper evidence in

support of the amount claimed. However, the amount claimed by Bayview is

reasonable under the above-cited Pennsylvania law regarding mortgage

____________________________________________


8
    See Footnote 3, supra.



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foreclosure and Appellants do not challenge the amount as unreasonable.

Therefore, Appellants’ final claim fails.

       Judgment affirmed.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 11/1/2016




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