J-S84032-16


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

FEDERAL NATIONAL MORTGAGE                          IN THE SUPERIOR COURT OF
COMPANY, SUCCESSOR TO JP                                 PENNSYLVANIA
MORGAN CHASE BANK, N.A.

                      v.

MATTHEW DUNLEAVY

                              Appellant                  No. 235 EDA 2016


              Appeal from the Judgment Entered February 17, 2016
         in the Court of Common Pleas of Delaware County Civil Division
                               at No(s): 13-11543

BEFORE: OLSON, SOLANO, and FITZGERALD,* JJ.

MEMORANDUM BY FITZGERALD, J.:                            FILED APRIL 19, 2017

        Appellant, Matthew Dunleavy, appeals from the in rem judgment

entered in the Delaware County Court of Common Pleas after the trial court

entered a decision in favor of Appellee, Federal National Mortgage Company,

in this mortgage foreclosure action. Appellant contends that the trial court

erred     by   admitting   several   exhibits   into   evidence   without   proper

authentication. We affirm.

        The trial court summarized the facts and procedural posture of this

case as follows:

             James F. Reilly, III executed and delivered a mortgage
           upon property known as 4026 Taylor Avenue, Upper Darby
           Township, Drexel Hill, Pennsylvania 19026 (“the property”)
           to Mortgage Electronic Registration Systems, Inc.

*
    Former Justice specially assigned to the Superior Court.
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       (“MERS”), as nominee for PHH Mortgage Corp., on or
       about June 15, 2007, which is recorded in the Office of the
       Recorder of Delaware County in Mortgage Book 4143, Page
       2261. Said mortgage secured a promissory note in favor
       of PHH Mortgage Corp. executed by Mr. Reilly on the same
       date in consideration of a loan in the amount of one
       hundred fifty-five thousand dollars ($155,000.00). MERS
       assigned the mortgage on the property to JP Morgan
       Chase Bank, N.A. on February 10, 2012, which assignment
       was recorded on February 24, 2012 in the Office of the
       Recorder of Delaware County in Mortgage Book 05072,
       Page 1347.      JP Morgan Chase Bank, N.A. thereafter
       assigned the mortgage on the property to [Appellee],
       Federal National Mortgage Association, on March 15, 2014,
       which assignment was recorded on April 28, 2014 in the
       Office of the Recorder of Delaware County in Mortgage
       Book 06487, Page 2096.

          On September 15, 2010, the Tax Claim Bureau of
       Delaware County sold the property to Tri State Properties,
       Inc. at an upset tax sale. The Tax Claim Bureau issued Tri
       State Properties, Inc. a deed on February 4, 2011, which
       was recorded in the Office of the Recorder of Delaware
       County in Deed Book 4888, Page 1029.             Tri State
       Properties, Inc. transferred the property to [Appellant] by
       Deed dated June 20, 2012, which is recorded in the Office
       of the Recorder of Delaware County in Deed Book 5153,
       Page 1599. [Appellant] is the last record owner of the
       property.

           JP Morgan Chase Bank, National Association (“JP
       Morgan”) initiated the instant mortgage foreclosure action
       against Tri State Properties, Inc. (“Tri State”) on
       November 20, 2013 with the filing of a complaint. Tri
       State filed an answer with new matter to the complaint on
       January 9, 2014 asserting that they were no longer record
       owners of the subject property. A stipulation between JP
       Morgan and Tri State was filed on February 10, 2014 to
       allow for the filing of an amended complaint. JP Morgan
       filed an amended complaint on March 12, 2014 naming
       [Appellant] as the sole defendant in the action.
       [Appellant] filed an answer with new matter on June 23,
       2014 containing only general denials and claims of lack of
       knowledge. JP Morgan filed a reply to [Appellant’s] new


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         matter on June 30, 2014. Thereafter, JP Morgan filed a
         motion for summary judgment, which was denied by Order
         dated December 29, 2014. [Appellee] substituted itself for
         JP Morgan as the plaintiff in this matter on December 30,
         2014.

            Trial was held on March 11, 2015 and [Appellant]
         objected to the admission of certain exhibits offered by
         [Appellee], including an account activity statement (Ex. P-
         7), a payment history for the escrow account associated
         with the mortgage (Ex. P-8), billing statements from
         [Appellee’s] attorney (Ex. P-9), a breakdown of judgment
         figures sought by [Appellee] (Ex. P-10), and a limited
         power of attorney authorizing Seterus, Inc. to act on
         behalf of [Appellee] (Ex. P-11).[1] Both parties submitted
         post-trial briefs on the admissibility of the exhibits. An
         Order was entered on July 27, 2015 admitting the exhibits
         into evidence. The parties then filed proposed findings of
         fact and conclusions of law and, subsequently, a Decision
         was entered on August 27, 2015 in favor of [Appellee] and
         against [Appellant] for in rem mortgage foreclosure in the
         amount of two hundred fifty thousand, eight hundred
         dollars and fifty-five cents ($250,800.55). [Appellant] filed
         a post-trial motion on September 10, 2015 arguing that it
         was error to admit [Appellee’s] exhibits into evidence.
         [Appellant’s] motion was denied by [o]rder dated
         December 14, 2015 and [Appellant] filed his notice of
         appeal on January [26], 2016.[2]

1
  At trial, Appellee presented the testimony of Kevin Foster, a representative
of Seterus, Inc., the servicing agent for Appellee. Mr. Foster testified
regarding exhibits, including the various business records maintained by
Seterus and other account records regarding the mortgage at issue. N.T.
3/11/15, at 20-37. Mr. Foster admitted that Seterus had only begun serving
the instant loan in 2012 but provided testimony regarding how the business
records of other providers were verified and incorporated into the Seterus
records. Id.
2
  Appellant prematurely filed his appeal from the December 14, 2015 order
denying his post-trial motion. See Brown v. Phila. Coll. of Osteopathic
Medicine, 760 A.2d 863, 865 n.1 (Pa. Super. 2000) (stating appeal does
not properly lie from order denying post-trial motions, but rather upon
judgment entered following disposition of post-trial motions). The trial court,



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Trial Ct. Op., 3/22/16, at 1-3.

       Appellant filed a timely Pa.R.A.P. 1925(b) statement of errors

complained of on appeal and the trial court filed a responsive opinion.

      Appellant raises the following single issue for our review:

           Did the trial court err in awarding judgment in favor of
           [Appellee] notwithstanding [Appellant’s] trial objections to
           Exhibits P-7 through P-11 and testimony related thereto,
           where those third party records constituted pure hearsay
           and were never properly authenticated?

Appellant’s Brief at 5.

      Appellant contends that the trial court erred by admitting trial exhibits

consisting of mortgage payment histories generated by MERS and JP

Morgan, the past servicers of the loan at issue.           Appellant avers that

because Appellee did not provide any testimony from representatives of

MERS or JP Morgan, the exhibits in question were not properly authenticated

and constituted inadmissible hearsay.      Likewise, Appellant argues that Mr.

Foster’s    testimony     regarding   Seterus’   records   was   insufficient   to

authenticate the prior mortgage records because he did not have personal

knowledge as to how the records were generated or kept by either MERS or



however, subsequently entered judgment on February 17, 2016. Thus, we
will consider Appellant’s appeal as filed after the entry of judgment. See
Pa.R.A.P. 905(a)(5); Johnston the Florist, Inc. v. TEDCO Constr. Corp.,
657 A.2d 511, 513 (Pa.Super. 1995) (en banc) (stating that “jurisdiction in
[the] appellate courts may be perfected after an appeal notice has been filed
upon the docketing of a final judgment”).




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JP Morgan.    To this end, Appellant relies on this Court’s decisions in

Commonwealth Financial Systems, Inc. v. Smith, 15 A.3d 492 (Pa.

Super. 2011), and U.S. Bank, N.A. v. Pautenis, 118 A.3d 386 (Pa. Super.

2015), for the proposition that the mortgage records should have been

authenticated by the parties directly responsible for their creation and

maintenance. No relief is due.

      We begin by noting our narrow standard of review regarding the

admission of evidence:

        Admission of evidence is within the sound discretion of the
        trial court and a trial court’s rulings on the admission of
        evidence will not be overturned absent an abuse of
        discretion or misapplication of law. An abuse of discretion
        is not merely an error of judgment, but if in reaching a
        conclusion the law is overridden or misapplied, or the
        judgment exercised is manifestly unreasonable, or the
        result of partiality, prejudice, bias or ill-will, as shown by
        the evidence or the record, discretion is abused.

        To constitute reversible error, an evidentiary ruling must
        not only be erroneous, but also harmful or prejudicial to
        the complaining party. . . . A party suffers prejudice when
        the trial court's error could have affected the verdict.
.
Schuenemann v. Dreemz, LLC, 34 A.3d 94, 100-01 (Pa. Super. 2011)

(citations and internal quotations omitted); see also B & L Asphalt Indus.,

Inc. v. Fusco, 753 A.2d 264, 270-71 (Pa. Super. 2000) (“[a]n evidentiary

ruling which [does] not affect the verdict will not provide a basis for

disturbing the fact-finder’s judgment.”) (citation and some punctuation

omitted)).




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     Regarding hearsay and business records, this Court has previously

explained:

        “Hearsay” is an out of court statement offered in court for
        the truth of the matter asserted. Pa.R.E. 801(c). A
        writing constitutes a “statement” as defined by Rule
        801(a).    See Pa.R.E. 801(a).        Subject to certain
        exceptions, hearsay is inadmissible at trial. Pa.R.E. 802.
        One such exception is contained in Rule 803(6), which
        permits the admission of a recorded act, event or condition
        if:

             (A) the record was made at or near the time by—or
             from information transmitted by—someone with
             knowledge;

             (B) the record was kept in the course of a regularly
             conducted activity of a “business”, which term
             includes    business,    institution,   association,
             profession, occupation, and calling of every kind,
             whether or not conducted for profit;

             (C) making the record was a regular practice of that
             activity;

             (D) all these conditions are shown by the testimony
             of the custodian or another qualified witness or by a
             certification that complies with Rule 902(11) or (12)
             or with a statute permitting certification; and

             (E) neither the source of information nor other
             circumstances indicate a lack of trustworthiness.

        Pa.R.E. 803(6) []. Furthermore, the Uniform Business
        Records as Evidence Act states:

             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


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J-S84032-16


            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 for 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) (internal
         citations omitted), appeal denied, [], 649 A.2d 666 (Pa.
         1994).

U.S. Bank, N.A., 118 A.3d at 401.

      Further, it is beyond cavil that the holder of a mortgage is entitled to

judgment as a matter of law where “the mortgage is in default, the

mortgagor has failed to pay on the obligation, and the recorded mortgage is

in the specified amount.”   Bank of America N.A., v. Gibson, 102 A.3d

462, 465 (Pa. Super. 2014) (citation omitted).    It is also well settled that

general denials constitute admissions in mortgage foreclosure actions.    Id.

at 466-67; see also Pa.R.C.P. 1029(b).        Moreover, “general denials by

mortgagors that they are without information sufficient to form a belief as to

the truth of averments as to the principal and interest owing [on the

mortgage] must be considered an admission of those facts.”        U.S. Bank,

N.A., 118 A.3d at 396 (citations omitted).

      In the case sub judice, the trial court determined that Mr. Foster’s

testimony was credible and sufficient to authenticate the exhibits in question

for purposes of the business records exception to the hearsay rule.       See

U.S. Bank, N.A., 118 A.3d at 401. Mr. Foster testified regarding Seterus’s


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J-S84032-16


“loan boarding team” and “data integrity group.” N.T. at 20-21. According

to Mr. Foster, Seterus personnel in these groups were charged with verifying

the payment history of loans previously serviced by other institutions. Id.

Further, Mr. Foster explained that after the loan histories are properly

verified, Seterus maintains the records through the normal course of

business. Id. at 28-29. When concluding that the records in question were

admissible, the trial court emphasized Mr. Foster’s personal familiarity with

the creation and maintenance of the records after April 2012, and also his

testimony regarding the procedure for the verification of the loan payment

records created prior to that date. The trial court determined that Mr. Foster

was qualified to testify as to the reliability of the records.   We discern no

reason to disturb the trial court’s credibility findings. See Schuenemann,

34 A.3d at 100-01.

      Further, we find Appellant’s reliance on Commonwealth Financial

Systems and U.S. Bank, N.A. to be unavailing.            Although this Court

affirmed the exclusion of similar evidence in both cases, the instant case is

factually distinguishable.

      In Commonwealth Financial Systems, we considered whether the

trial court acted within its discretion by barring the admission of previously

generated account statements regarding credit card debt as hearsay.        We

specifically declined “to adopt the federal ‘rule of incorporation[,]’ which

provides that the record a business takes custody of is ‘made’ by [an



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acquiring] business” for purposes for the business records exception to the

hearsay rule.     Commonwealth Financial Systems, 15 A.3d at 496

(citation and footnote omitted).      We held that the trial court properly

concluded that the testimony of the sole authenticating witness was not

sufficiently reliable to establish that the records from different financial

institutions were trustworthy. Id. at 499-500. The trial court, in that case,

emphasized mistakes and inconsistencies in the evidence presented.           Id.

Specifically, the court found that factual mistakes belied “the integrity” of

the evidence and this Court affirmed, reiterating that the trial court is “in the

best position to determine the trustworthiness of . . . the evidence.” Id. at

499. In this case, the trial court found Mr. Foster’s testimony to be reliable

regarding the business records in question, and we recognize that the trial

court was in the best position to make this credibility determination. See id.

      Furthermore, in U.S. Bank, N.A., we held that the defendant in a

foreclosure action could successfully dispute allegations of default, where the

defendant could credibly testify that she had made all payments in a timely

fashion and where there was an inexplicable increase in the amount owing

on the loan. U.S. Bank, N.A., 118 A.3d at 396-97. We also affirmed the

trial court’s determination that the loan servicer’s documentary evidence was

untrustworthy and incomplete because of discrepancies in these records, and

because the only authenticating witness had no knowledge of the previous

loan servicer’s business practices. Id. at 401.    In contrast, in this case, the



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trial court found the evidence in question to be trustworthy and Appellant did

not present any evidence of discrepancies.     Thus, we conclude that U.S.

Bank, N.A, is factually distinguishable from the instant case. Accordingly,

we conclude that the trial court did not abuse its discretion by finding that

the evidence in question was sufficiently reliable to be admitted pursuant to

the business records exception to the hearsay rule.

      Moreover, even if the admission of the exhibits in question was

erroneous, the error did not affect the verdict. See B & L Asphalt Indus.,

Inc., 753 A.2d at 270-71. As noted by the trial court, Appellee was entitled

to judgment as a matter of law due to Appellant’s admissions of default:

           [Appellee’s]  standing   was    established   with  the
         uncontested admission of the note, the recorded mortgage
         and the recorded assignments of the mortgage. Default
         under the mortgage was established by [Appellant’s]
         failure to admit or deny the allegation in the [c]omplaint
         that monthly payments had not been received pursuant to
         the terms of the mortgage since May 2, 2010. Default was
         also established by [Appellant’s] specific admission that
         the mortgage was in default as of May 2010.

            Finally, the amount of damages was established by
         [Appellant’s] failure to deny the allegation in the
         [c]omplaint itemizing the damages with specificity. It is
         well settled that merely denying such allegations without
         specificity or claiming a lack of information sufficient to
         form a belief as to their truth must be considered an
         admission to those facts. Furthermore, even if [Appellant]
         is not deemed to have admitted the amount of damages,
         they are established by [Appellant’s] admission of the date
         of default, the terms of the mortgage and the note, the
         lack of a record of any payments on the account activity
         statements, and the record of payments made by
         [Appellee] after they acquired the mortgage.         Taken
         together, this evidence establishes a lack of payment since


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            May 1, 2010, the amount of the past due and owing
            monthly payments since that default, including principal,
            interest and escrow, the late charge due and the amount
            paid by [Appellee] pursuant to the terms of the mortgage.
            Therefore, as of the date of trial, [Appellant] was entitled
            to judgment as a matter of law.

Trial Ct. Op. at 5-6 (citations omitted).

      We concur with the trial court’s conclusion that Appellee was entitled

to judgment as a matter of law. See Bank of America N.A., 102 A.3d at

465; Pa.R.C.P. 1029(b). Accordingly, Appellant’s argument on appeal must

fail, and we affirm the trial court’s decision.

      Judgment affirmed. Application to file post-submission communication

denied. 3

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/19/2017

3
   Appellant filed an application for leave to file post-trial submission
communication, and Appellee filed an answer thereto. In his application,
Appellant seeks a remand in order to present additional information
regarding his potential eligibility to participate in a class action award
against Seterus for overcharging mortgagors in the context of lender placed
insurance. Appellee responds that Appellant has not established that he
would be entitled to relief under this class action and even if he did, he could
still recover regardless of the outcome of this case. We agree with Appellee
in that we conclude that the class action is not relevant to the issue
presented on appeal, as Appellant failed to present any evidence challenging
the accuracy of the exhibits at trial.        Therefore, we deny Appellant’s
application for remand.



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