J-A11018-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

HAUSER HOLDINGS, LLC                               IN THE SUPERIOR COURT OF
                                                         PENNSYLVANIA
                            Appellee

                       v.

THE FORCE CORPORATION

                            Appellant                  No. 1696 MDA 2016


               Appeal from the Order Entered September 19, 2016
                In the Court of Common Pleas of Columbia County
                       Civil Division at No(s): 471-CV-2013


BEFORE: SHOGAN, J., MOULTON, J., and STEVENS, P.J.E.*

MEMORANDUM BY MOULTON, J.:                          FILED OCTOBER 18, 2017

       The Force Corporation (“Force”) appeals from the September 19, 2016

order entered in the Court of Common Pleas of the 26th Judicial District

(Columbia County Branch) granting summary judgment in favor of Hauser

Holdings, LLC (“Hauser”) and denying Force’s cross-motion for summary

judgment. We affirm.

       The relevant factual and procedural history of this matter is as follows.

On October 17, 1994, Force granted a mortgage to Thomas X. Flaherty on

property located at 501 East Street, Bloomsburg, Columbia County, to

secure a debt of $96,500.00. See Amend. Compl., Ex. B. Sharon K. Babb

signed the mortgage contract in her capacity as president and secretary of
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       *   Former Justice specially assigned to the Superior Court.
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Force, a Pennsylvania corporation.             Also on October 17, 1994, Babb and

Flaherty entered an “Agreement” wherein Babb personally agreed to pay

Flaherty $96,500.00, plus 10% interest per annum, by August 1999 in

exchange for all of Flaherty’s shares1 in Force and another Pennsylvania

corporation, Bar-B Corporation.2 See Amend. Compl., Ex. A.

       On October 19, 1999, Babb and Flaherty signed an “Extension

Agreement” and Babb signed a “Mortgage-Promissory Note,” wherein Babb

agreed to pay Flaherty $152,158.22, plus 10% interest per annum, by

September 15, 2000. See First Amend. Compl., Exh. E. Babb and Flaherty

also signed a “Loan Agreement,” dated October 19, 1999, confirming the

loan. On October 22, 1999, Flaherty signed a “Subordination Agreement,”

subordinating his October 1994 mortgage to one held by Equity One, Inc.

See First Amend. Compl., Exh. A.

       On December 1, 2011, Flaherty assigned all of his rights, title, and

interests in the above to Mountain View Financial, LLC (“Mountain View”).

See First Amend. Compl., Exh. G.                On April 22, 2013, Mountain View

initiated this action by filing a complaint in mortgage foreclosure against


____________________________________________


       1While the Agreement states that Flaherty owned 50% of the shares
of each of the corporations, Babb maintains that she has been the sole
owner of both corporations since their inception. See Force’s Br. at 7-8;
Flaherty Aff., Ex. B, at 14.

       2As the trial court notes, the certified record contains only the first
three pages of the Agreement, without a signature page.



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Force and Babb.         On May 13, 2013, Force and Babb filed preliminary

objections, which the trial court sustained in part and denied in part on July

9, 2013.

       On July 29, 2013, Mountain View filed an amended complaint,

removing Babb as an individual defendant, and alleging that Force had not

paid the full amounts due under the loan.              Mountain View alleged the

outstanding balance due totaled $376,147.96, including: (1) $156,158.22 in

principal; (2) $214,989.75 in interest from October 19, 1999 to July 26,

2013; and (3) $5,000.00 in counsel fees. Thereafter, on October 10, 2013,

Mountain View assigned its rights, title, and interests to VAI Inc.          See

Flaherty Aff., Exh. E.      On April 17, 2015, VAI Inc. assigned the same to

Hauser.     See Flaherty Aff., Exh. F.           On July 17, 2015, Hauser filed a

substitution of successor in this matter.

       On June 8, 2016, Hauser filed a motion for summary judgment, and on

July 1, 2016, Force filed a cross-motion for summary judgment.                On

September 19, 2016, the trial court granted Hauser’s motion, denied Force’s

cross-motion, and entered judgment in favor of Hauser for $193,000.003

plus $5,000.00 in counsel fees.           On September 30, 2016, Hauser filed a

praecipe to enter judgment.           On October 11, 2016, Force timely filed a

notice of appeal.

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       The trial court entered judgment “only to the maximum lien of
       3

$193,000.00 authorized by the mortgage.” Trial Ct. Op., 9/19/16, at 7.



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      Force raises the following issues on appeal:

         I. Did the court err in granting [Hauser]’s motion for
         summary judgment as to whether or not [Hauser] is a real
         party in interest as there exist defects in the assignment of
         the chose [sic] in action by Thomas Flaherty?

         II. Did the court err in granting [Hauser]’s motion for
         summary judgment as there has been shown to be no
         consideration received by [Force], for its alleged mortgage
         obligation?

         III. Did the court err in failing to grant [Hauser]’s motion
         for summary judgment by failing to find that the
         extinguishment of underlying bond or note also
         extinguishes the mortgage?

         IV. Did the court err in failing to determine that
         enforcement of the mortgage is time barred by the statute
         of limitations?

Force’s Br. at 4-5 (suggested answers and full capitalization omitted).

      It is well-established that “summary judgment is appropriate only in

those cases where the record clearly demonstrates that there is no genuine

issue of material fact and that the moving party is entitled to judgment as a

matter of law.” Truax v. Roulhac, 126 A.3d 991, 996 (Pa.Super.) (quoting

Atcovitz v. Gulph Mills Tennis Club, Inc., 812 A.2d 1218, 1221 (Pa.

2002)), app. denied, 129 A.3d 1244 (Pa. 2015).       The moving party bears

the burden of proving that no genuine issue of material fact exists.

Stimmler v. Chestnut Hill Hosp., 981 A.2d 145, 159 (Pa. 2009). “[T]he

trial court must take all facts of record and reasonable inferences therefrom

in a light most favorable to the non-moving party.      In so doing, the trial

court must resolve all doubts as to the existence of a genuine issue of



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material fact against the moving party . . . .”     Truax, 126 A.3d at 996

(internal citation omitted).

      We have explained our standard of review as follows:

         [A]n appellate court may reverse a grant of summary
         judgment if there has been an error of law or an abuse of
         discretion. But the issue as to whether there are no
         genuine issues as to any material fact presents a question
         of law, and therefore, on that question our standard of
         review is de novo. This means we need not defer to the
         determinations made by the lower tribunals.

Id. (quoting Weaver v. Lancaster Newspapers, Inc., 926 A.2d 899, 902–

03 (Pa. 2007)).

      For ease of analysis, we begin with Force’s third and fourth issues,

which implicate the appropriate statutes of limitations for the instant action.

First, Force alleges that because the statute of limitations has run for

commencement of an action upon the note accompanying the mortgage, the

note has been “effectively extinguished,” Force’s Br. at 23, and thus, an

action on the mortgage itself also is time-barred. We conclude that Hauser’s

ability to foreclose on the property is not affected by the statute of

limitations for commencement of an action on the note, regardless of

whether the note is subject to a four- or twenty-year statute of limitations.

      This Court has concluded that the right of action on a mortgage

survives the extinction of a right of action upon the accompanying note, and

the right of action on the mortgage continues until the underlying debt is




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paid or extinguished. See Brackenridge v. Cummings, 18 Pa.Super. 64,

68 (1901).4 Accordingly, Force’s third issue does not merit relief.

       Force next claims that enforcement of the mortgage itself is barred by

the statute of limitations. Under section 5529(b) of the Judicial Code, “an

action upon an instrument in writing under seal must be commenced within

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       4 In support of its argument, Force relies in part on In re Estate of
Snyder, 13 A.3d 509 (Pa.Super. 2011), in which we held that an appellant
could not collect on the debt on two mortgage liens because his action was
filed after the expiration of the statute of limitations for the underlying
instruments secured by those liens. Snyder, 13 A.3d at 514. We noted
that “[t]he payment of either a mortgage or [an underlying] bond discharges
both, ‘and a release or extinguishment of either, without actual payment, is
a discharge of the other, unless otherwise intended by the parties.’” Id.
(quoting Morgan Guar. Trust Co. of New York v. Mowl, 705 A.2d 923,
929 (Pa.Super. 1998)) (alterations in original). In Mowl, the mortgagee
was unable to recover under the bond underlying the mortgage because the
mortgagors had satisfied the judgment entered against them following an
action in mortgage foreclosure, by paying the sheriff the judgment amount
plus costs. 705 A.2d at 925, 929. “[T]he trial court [had] made an explicit
ruling that [the] judgment in the mortgage foreclosure action was satisfied
when [the mortgagors] tendered the face amount on the writ of execution to
the sheriff.” Id. at 928.

       We conclude that Snyder is distinguishable because, there, the
appellant did not file an action in mortgage foreclosure. Rather, he sought
to collect on the debt on the mortgage liens, and the record contained no
indication “the parties intended the mortgage liens to be considered separate
from the underlying debts.” Id. Here, in contrast, Hauser filed an action in
mortgage foreclosure, which “is strictly an in rem action and may not include
an in personam action to enforce personal liability.” Insilco Corp. v.
Rayburn, 543 A.2d 120, 123 (Pa.Super. 1988). Thus, because “[t]he sole
purpose of a judgment obtained through mortgage foreclosure is to effect a
judicial sale of the mortgaged real estate, . . . the judgment obtained in a
mortgage foreclosure action is only in rem.” Id. Hauser’s right to foreclose
on the house in rem survives irrespective of its ability to proceed in
personam against Force, so long as the underlying debt remains unpaid.



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20 years.” 42 Pa.C.S. § 5529(b). Because the October 17, 1994 mortgage

“defines the rights, duties, entitlements, and liabilities of the parties

involved,” it is an “instrument” pursuant to section 5529. In re Estate of

Snyder, 13 A.3d 509, 513 (Pa.Super. 2011).            Nevertheless, Force argues

that section 5529(b)’s 20-year limitation period does not apply because the

mortgage was not filed “under seal.”

      “‘[T]his [C]ourt has held, in accord with many cases written by our

Supreme Court, that when a party signs [an instrument] which contains a

pre-printed   word    ‘SEAL,’   that   party    has   presumptively   signed   [an

instrument] under seal.’”       Snyder, 13 A.3d at 513 (quoting Beneficial

Consumer Discount v. Dailey, 644 A.2d 789, 790 (Pa.Super. 1994)).

Babb signed the 1994 mortgage next to the pre-printed word “SEAL” in

parentheses. See Amend. Compl., Ex. B. The 1994 mortgage is therefore

an instrument in writing under seal, and the statute of limitations for an

action on the mortgage is 20 years. The instant action was filed in 2013 and

thus falls within the statute of limitations.

      In sum, we conclude that Force’s third and fourth issues are without

merit. Under either theory, there is no genuine issue of material fact as to

whether Hauser is barred from recovery due to the statute of limitations.

      Because we have concluded that Hauser’s right of action on the

mortgage is not time-barred, we turn to Force’s claim that there was no

consideration for the mortgage obligation.


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     Pennsylvania’s Uniform Written Obligations Act (“UWOA”) “applies to

notes and mortgages, just as it does to other contract documents.”

Nicholas v. Hofmann, 158 A.3d 675, 690 (Pa.Super. 2017).           This Court

has previously explained:

           Section 1 of the UWOA, 33 P.S. § 6, reads in its
        entirety:

              A written release or promise, hereafter made
              and signed by the person releasing or
              promising, shall not be invalid or unenforceable
              for lack of consideration, if the writing also
              contains an additional express statement, in
              any form of language, that the signer intends
              to be legally bound.

           Under this provision, if an agreement is accompanied by
        an intentional, binding statement, it does not require
        further consideration:

              Our caselaw has explained that, generally, this
              section provides that a written agreement will
              not be deemed to be void for lack of
              consideration if it contains an express
              statement that the signer intends to be legally
              bound, Yocca v. Pittsburgh Steelers Sports,
              Inc., 578 Pa. 479, 854 A.2d 425, 433 (2004),
              and, more explicitly, has interpreted this
              provision to supply the necessary consideration
              for an agreement. See Morgan’s [Home
              Equip. Corp. v. Martucci], 390 Pa. 618, 136
              A.2d [838,] at n. 12 [ (1957) ] (parties’
              express intention to be legally bound within
              meaning of UWOA has the same effect in
              importing consideration as a seal on the
              agreement). . . . [A]ny party challenging the
              validity of a contract containing an express
              intent to be legally bound will not be entitled to
              relief from the agreement on the basis that the
              promises made therein lack consideration.




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Nicholas, 158 A.3d at 689–90. Here, the mortgage document notes that

the mortgagor “stand[s] firmly bound unto the . . . mortgagee.”          This

language satisfies 33 P.S. § 6. Thus, because Force is not entitled to relief,

there is no genuine issue of material fact whether there was adequate

consideration for the mortgage obligation.

      Finally, Force challenges Hauser’s status as a real party in interest

pursuant to Pennsylvania Rule of Civil Procedure 2002(a), which requires

that actions “be prosecuted by and in the name of the real party in interest.”

Pa.R.C.P. 2002(a).    Force argues that there was a defect in the first

assignment between Flaherty and Mountain View.        However, we conclude

that Force lacks standing to challenge the validity of the assignment. This

Court has previously stated:

            The court [in In re Walker, 466 B.R. 271, 285
         (Bankr.E.D.Pa. 2012), found] that the debtor lacked
         standing to question the validity of the assignment(s) of
         the note:

               [The threshold inquiry in analyzing a party’s
               standing is to evaluate whether the party can
               demonstrate that the party has suffered or will
               suffer “injury in fact.”] If a borrower cannot
               demonstrate      potential  injury   from   the
               enforcement of the note and mortgage by a
               party acting under a defective assignment, the
               borrower lacks standing to raise the issue.

JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1264–65

(Pa.Super. 2013) (quoting Walker, 466 B.R. at 285) (alterations added).

Furthermore,



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         a note secured by a mortgage is a negotiable instrument,
         as that term is defined by the [Pennsylvania Uniform
         Commercial Code], and . . . “[p]ursuant to the PUCC, a
         debtor who satisfies his obligations under a negotiable
         instrument cannot be required to do so again, even if the
         recipient of the debtor’s performance is not the holder of
         the note in question.”

Gerber v. Piergrossi, 142 A.3d 854, 862 (Pa.Super. 2016) (quoting

Murray, 63 A.3d at 1263), app. denied, 142 A.3d 854 (Pa. 2017).

Accordingly, “a borrower is not in peril of double liability or injury by an

allegedly defective assignment, for if the assignment to the foreclosing party

had been defective, the borrower would not have to pay on the note to

another party.”   Id.   Because Force has not demonstrated potential injury

from the enforcement of its obligations under the mortgage even if the

assignment was defective, Force lacks standing to challenge the validity of

the assignment.

      Accordingly, we conclude that the trial court properly granted

summary judgment in Hauser’s favor.

      Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 10/18/2017




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