J-A03019-17

                             2017 PA Super 405



WELLS FARGO BANK, N.A., AS THE                   IN THE SUPERIOR COURT
TRUSTEE FOR THE REGISTERED                                 OF
HOLDERS OF THE GE BUSINESS LOAN                       PENNSYLVANIA
TRUST CERTIFICATES, SERIES 2005-2

                         Appellee

                    v.

PREMIER HOTELS GROUP, LLC

                         Appellant                  No. 941 MDA 2016


               Appeal from the Order Entered May 10, 2016
           In the Court of Common Pleas of Lackawanna County
                     Civil Division at No: 2015-05776


BEFORE: LAZARUS, J., STABILE, J., and DUBOW, J.

OPINION BY STABILE, J.:                        FILED DECEMBER 21, 2017

     Appellant, Premier Hotels Group, LLC (“Premier”), appeals from the May

10, 2016 order entered in the Court of Common Pleas of Lackawanna County,

granting summary judgment in favor of Appellee, Wells Fargo Bank, N.A., as

the Trustee for the registered holders of the GE Business Loan Trust

Certificates, Series 2005-2 (“Wells Fargo”).   Following review, we reverse.

     The record reveals that in September 2005 Premier executed a

promissory note (the “Note”) and mortgage (the “Mortgage”) in favor of

General Electric Capital Corporation (“GECC”) in the amount of $4,400,000.00

for property located at 200 Tigue Street, Dunmore, Pennsylvania (“the
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Property”). GECC assigned the Mortgage and other loan documents to Wells

Fargo by assignment recorded on June 27, 2012.

       In its capacity as Trustee, Wells Fargo filed a complaint on September

30, 2015, alleging that Premier was in default under the loan documents; that

Premier had sold the Property in response to a foreclosure action initiated by

Wells Fargo in federal court and had remitted the proceeds of the sale to Wells

Fargo; that the proceeds were insufficient to satisfy the Note in full; and that

Wells Fargo was entitled to collect from Premier the sum of $1,772,957.371

plus per diem interest in the amount of $275.50 from August 5, 2015 forward.

Complaint, 9/30/15, at ¶¶ 6-16. In Count I of the complaint, styled “Breach

of Note,” Wells Fargo incorporated its allegations of default and alleged it was

entitled to recover the amounts due as well as attorney fees and other

expenses as agreed upon under the terms of the Note. Id. at ¶¶ 17-24.

       Premier filed its answer and new matter on December 2, 2015. Premier

denied it was in default; acknowledged it sold the property and remitted the

proceeds in exchange for which the Mortgage was released; denied the

proceeds were insufficient to satisfy the Note in full; and denied any principal,

interest, fees or other balance was due to Wells Fargo.       Answer and New

Matter, 12/2/15, at ¶¶ 6-24. Premier also raised several affirmative defenses.



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1  The sum claimed consisted of $1,260,246.64 of unpaid principal,
4446,174.78 in accrued interest, and $66,535.95 in accrued late fees and
return items fees.

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Id. at ¶¶ 25-41. However, from the record it appears that Premier did not

endorse its answer and new matter with a notice to plead, and Wells Fargo

did not file a reply to new matter. Therefore, the pleadings were closed at

that time.

       Ten weeks later, on February 12, 2016, Wells Fargo filed a motion for

summary judgment and a memorandum in support, contending there was “no

genuine issue of material fact as to the enforceability of the Note, [Premier’s]

breach, and the obligations due the Trustee, nor does [Premier’s] Answer raise

any issue of material fact.” Motion for Summary Judgment, 2/12/16, at 4.

Attached to the motion was an affidavit of Wells Fargo Assistant Vice President

Mark Farr (“Farr Affidavit”). In the Farr Affidavit, Farr represented that the

relevant electronic loan payment records were voluminous and that he based

the sums claimed in the complaint on his review of those documents. Farr

Affidavit at ¶¶ 41-42. Farr further represented that the summary of sums

claimed was “prepared from ‘duplicates’ (see Pa.R.Evid. 1001(e)) of the

electronic loan records previously produced in discovery.” Id. at ¶ 43.2 He


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2  The record does not reflect any discovery undertaken by the parties prior to
Wells Fargo’s filing of its summary judgment motion. Therefore, we can only
surmise that the mention of discovery in the Farr Affidavit was either made in
error or was a reference to discovery in a similar action between the parties
filed in the United States District Court for the Middle District of Pennsylvania
in which that court denied Wells Fargo’s motion for summary judgment,
concluding there were genuine issues of material fact as to whether Premier
defaulted under the Mortgage or the Note. See Wells Fargo Bank, N.A. v.



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suggested that “[t]he summary should be admissible as the best evidence

thereof pursuant to Pa.R.Evid. 1002 and as relevant under Pa.R.Evid. 402.”

Id. at ¶¶ 43-44.

       Premier filed a response to Wells Fargo’s summary judgment motion

contending, inter alia, that it was current with its payments until Wells Fargo

refused to accept them and that no event of default occurred as alleged by

Wells Fargo. Premier’s Response to Motion for Summary Judgment, 3/29/16,

at ¶¶ 1, 4-9. Premier presented evidence filed in federal court in response to

Well Fargo’s motion for summary judgment, including the declaration of

Premier’s general manager, Umesh Matta, explaining that Wells Fargo claimed

Premier was in default when Wells Fargo discovered that Premier was

disputing real estate taxes on the Property.     Id. at Exhibit “A;”   see also

Exhibit “5” (Fanucci Sworn Declaration) explaining that Premier rightfully

contested taxes, negotiated a payment plan with the Lackawanna Tax Claim

Bureau, made payments to satisfy all amounts due, and did so without the

Property ever being scheduled for tax sale.3 Premier also claimed that the


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Premier Hotel Group, LLC, 2015 WL 404549, at *8-9 (M.D. Pa. January 29,
2015).

3 Under the terms of the Mortgage, Premier was authorized to “withhold
payment of any tax . . . in connection with a good faith dispute over the
obligation to pay, so long as [Wells Fargo’s] interest in the Property is not
jeopardized.” Mortgage, 9/26/05, at 3 (Taxes and Liens—Right to Contest.)




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motion for summary judgment should fail because it was based solely on the

testimonial Farr Affidavit in violation of the Nanty-Glo rule.4 Id. at ¶¶ 1, 10-

11. “The Nanty-Glo rule means ‘the party moving for summary judgment

may not rest solely upon its own testimonial affidavits or depositions, or those

of its witnesses, to establish the non-existence of genuine issue of material

fact.’” DeArmitt v. New York Life Ins. Co., 73 A.3d 578, 595 (Pa. Super.

2013) (quoting Dudley v. USX Corp., 606 A.2d 916, 918 (Pa. Super. 1992)).

       Following oral argument on May 10, 2016, the trial court granted

summary judgment in favor of Wells Fargo. Order, 5/10/16, at 1. The order

signed by the trial judge was the proposed order submitted by Wells Fargo

and simply provided that Wells Fargo’s “[m]otion is GRANTED and summary

judgment is entered in favor of [Wells Fargo] and against [Premier] in the

amount of $1,772,959.37 as of August 5, 2015, together with per diem

interest at $275.50 from and after August 5, 2015, together with attorney’s

fees and costs.” Id. This timely appeal followed.

       By letter dated August 5, 2016, this Court advised the trial court that a

Rule 1925(a) opinion (or statement in lieu of) was missing from the record.

The trial court was directed to resubmit the record or submit a supplemental

record with the missing item by August 19, 2016.        The trial court did not

comply with that instruction.


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4Borough of Nanty-Glo v. American Surety Co. of New York, 163 A. 523
(Pa. 1932).

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J-A03019-17


       On July 10, 2017, we remanded the case to the trial court for

preparation of a Rule 1925(a) opinion within thirty days of this Court’s

directive. The trial court filed its opinion on September 11, 2017.5           In its

opinion, the trial court explained that Wells Fargo established there were no

material facts in dispute and, therefore, the court granted the motion for

summary judgment.           Trial Court Rule 1925(a) Opinion, 9/11/17, at 2

(unnumbered).       Specifically, the trial court determined that the Note and

Mortgage were valid and that Premier unambiguously and unconditionally

promised to repay the Note in full under the terms of that document. Id. at

3 (unnumbered).        The trial court found that various defaults or events of

default   under     the    loan   documents      had   occurred,   as   reflected   in

correspondence from Wells Fargo’s counsel dated October 29, 2013 and

December 4, 2013. Id. In light of the events of default, Wells Fargo advised

Premier that it was accelerating Premier’s obligations under the Note. Id. In

response to a complaint in mortgage foreclosure filed by Wells Fargo against

Premier in the United States District Court for the Middle District of

Pennsylvania, Premier sold the real property subject to the mortgage. Those

proceeds were accepted by Wells Fargo but were insufficient to satisfy the

Note in full. Consequently, the loan was determined to be in default and Wells


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5In our July 10, 2017 memorandum remanding for a Rule 1925(a) opinion,
we offered the parties the opportunity to file supplemental briefs within thirty
days of the trial court’s issuance of an opinion. Wells Fargo elected to do so
while Premier did not.

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Fargo had standing to enforce Premier’s obligations under the Note by virtue

of an assignment. Id. at 3-4 (unnumbered). The trial court concluded:

       Based on this [c]ourt’s determination the loan and documentation
       were valid, the loan was in default, and that the trustee was the
       appropriate person to [enforce] the obligation under the note. As
       such there remains no material issues of material fact and
       summary judgment was appropriately granted in favor of
       appellee, Wells Fargo.

Id. at 4 (unnumbered).6

       Premier asks us to consider four issues in this appeal:

       A. Whether the trial court erred in granting summary judgment in
          favor of [Wells Fargo] based solely upon Wells Fargo’s own
          testimonial affidavit in violation of Pennsylvania’s Nanty-Glo
          Rule?

       B. Whether the trial court erred in granting summary judgment in
          favor of Wells Fargo when there are disputed issues of material
          fact, including the amount purportedly owed to Wells Fargo
          that a federal court found in a related action precluded
          summary judgment?

       C. Whether the trial court erred in granting summary judgment in
          favor of Wells Fargo prior to the exchange of any discovery in
          the case?

       D. Whether the trial court erred in granting summary judgment in
          favor of Wells Fargo by failing to apply Missouri law?

Premier’s Brief at 4.



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6 Although the trial court recognized the original principal amount of the Note
was $4,400,000 and recognized Premier’s promise to pay full amount of the
Note, the trial court did not discuss the basis for determining the amount of
the judgment entered against Premier in the trial court’s May 10, 2016 order,
i.e., $1,772,957.37 plus per diem interest of $275.50 from August 5, 2015,
plus attorney fees and costs. See id. at 1-4 (unnumbered).

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      As a challenge to the grant of summary judgment, we must “determine

whether the trial court abused its discretion or committed an error of law, and

our scope of review is plenary.” Rodriguez v. Kravco Simon Co., 111 A.3d

1191, 1193 (Pa. Super. 2015) (citation and brackets omitted). Further,

      we apply the same standard as the trial court, reviewing all the
      evidence of record to determine whether there exists a genuine
      issue of material fact. We view the record in the light most
      favorable to the non-moving party, and all doubts as to the
      existence of a genuine issue of material fact must be resolved
      against the moving party. Only where there is no genuine issue
      as to any material fact and it is clear that the moving party is
      entitled to a judgment as a matter of law will summary judgment
      be entered.

DeArmitt, 73 A.3d at 585 (internal quotations, citations and brackets

omitted). “[T]he party who brought the motion has the burden of proving

that no genuine issue of fact exists. All doubts as to the existence of a genuine

issue of material fact are to be resolved against the granting of summary

judgment.” Id. at 595.

      Premier’s first three issues are interrelated. Therefore, we shall address

them collectively.

      In its Complaint, Wells Fargo alleged that Premier was in default under

the loan documents and failed to make payments when they were due.

Complaint at ¶¶ 6 and 7. In response, Premier denied allegations of default

as legal conclusions and specifically denied it failed to make payments when

due. Answer at ¶¶ 6 and 7. Wells Fargo alleged it advised Premier of its

default and Wells Fargo’s election to accelerate payments by letters of October


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J-A03019-17


29, 2013 and December 4, 2013, respectively, both of which were attached

as exhibits to the Complaint. Complaint at ¶¶ 9 and 10. As the letters reveal,

Wells Fargo complained that real estate taxes on the property were

delinquent, constituting an event of default (October 29, 2013 letter).

Further, Premier failed to make its November 1, 2013 payment and remained

delinquent on property taxes constituting events of default and warranting

acceleration of the sums due under the Note (December 4, 2013 letter).

Premier denied the averments of Paragraphs 9 and 10 of the Complaint as

based on written documents that speak for themselves.        Further, Premier

specifically denied the allegations as legal conclusions. Answer to Complaint

at ¶¶ 9 and 10.

      As noted previously, the parties did not undertake discovery in the ten

weeks that elapsed between the filing of Premier’s answer and the filing of

Wells Fargo’s motion for summary judgment.          Therefore, there are no

discovery materials of record to support or refute Wells Fargo’s allegations or

Premier’s specific denials.

      In its summary judgment motion, Wells Fargo asserted that “[t]he

undisputed facts establish that [Premier] breached the unambiguous terms

and conditions of the [Note], by failing to pay the amounts due to [Wells

Fargo] when due.”     Motion for Summary Judgment, 2/12/16, at ¶ 1.         In

response, Premier denied the assertions and countered that it “timely made




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payments until Wells Fargo refused to accept payments.”            Response to

Summary Judgment Motion, 3/29/16, at ¶ 1.

      Wells Fargo backs its allegations of default with a “Statement of

Undisputed Material Facts,” which is a document upon which Wells Fargo relies

and incorporates by reference in its Memorandum of Law in support of its

summary judgment motion. With the exception of Paragraphs 1 through 4,

which identify the parties and note the dates of filing of the complaint and

answer, the Statement of Undisputed Material Facts is based almost

exclusively on statements that appear in the Farr Affidavit as the basis for

concluding that Premier was in default and owed Wells Fargo a sum in excess

of $1.77 million dollars.

      Premier filed a response to the “purported” statement, disputing Farr’s

assertions regarding events of default and reiterating that Premier made

repeated attempts to make payments, attempts that were rejected by Wells

Fargo. Premier’s Response to Wells Fargo’s “Purported ‘Undisputed Material

Facts,’” 4/12/16, at ¶¶ 13-29.

      Based on our review of the record, and recognizing that doubts as to

the existence of genuine issues of material fact must be resolved against Wells

Fargo as the moving party, we find the trial court erred in concluding there

were no genuine issues of material fact.     We do not take issue with the trial

court’s determination that the loan documents are valid and enforceable.

However, when we look at the record in a light most favorable to Premier as


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J-A03019-17


the non-moving party, it is clear the only support in the record for finding

events of default is contained in the Farr Affidavit. While the trial court does

not mention the affidavit in its Rule 1925(a) opinion, it appears the trial court

accepted the assertions in the affidavit while ignoring Premier’s counter-

assertions that its attempted payments were rejected by Wells Fargo and

similarly ignoring the terms of the Mortgage that authorized Premier to contest

tax liability in good faith. Moreover, the only support for the sums claimed by

Wells Fargo appear in the Farr Affidavit. Therefore, we conclude that the trial

court’s apparent reliance on the affidavit as the basis for concluding that no

genuine issues of material fact exist is, as Premier argues, a violation of the

Nanty-Glo rule and requires that we reverse the order granting summary

judgment and remand for further proceedings.

      Consideration of Premier’s fourth issue is moot in light of our reversal of

summary judgment. Nevertheless, we note that Missouri law, which governs

both the Note and Mortgage by virtue of the express terms of those

documents, requires proof to a “reasonable certainty” of the existence of a

balance due and owing. Fannie Mae v. Bostwick, 414 S.W.3d 521, 527 (Mo.

Ct. App. 2013). The “proof” of the claimed amount here was based on the

Farr Affidavit and its affiant’s assertion that he determined the amounts due

based on his review of the voluminous loan payment records. Farr Affidavit




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at ¶¶ 41-42.7      We agree with Premier’s contention that the unsupported

statements in the Farr Affidavit fall woefully short of providing proof to a

reasonable certainty as to the existence of amounts claimed to be owed.

       Order reversed. Case remanded. Jurisdiction relinquished.




Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 12/21/2017




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7As mentioned above, the affidavit includes a statement that the summary of
amounts due was prepared from records produced in discovery. Again, there
was no discovery undertaken in the case before us. See n.2, supra.



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