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HomeMy WebLinkAbout2006-4729 Civil EVERHOME : IN THE COURT OF COMMON PLEAS OF MORTGAGE : CUMBERLAND COUNTY, PENNSYLVANIA COMPANY, : Plaintiff : : CIVIL ACTION—LAW v. : : HOWARD A. HAY, JR., : HOWARD A. HAY, SR., : KIMBERLY HAY, : Defendants : No. 06-4729 CIVIL TERM IN RE: OPINION PURSUANT TO PA. R.A.P. 1925 OLER, J., January 8, 2009. In this mortgage foreclosure action, which has now been pending for more than two years and dates back, in terms of a default on the mortgage, to 2005, Defendants Howard A. Hay, Sr., and Kimberly Hay (hereinafter “Appellants”) have appealed pro se to the Pennsylvania Superior Court from a September 9, 2008, order denying their request to strike or, alternatively, open a default 1 judgment entered October 5, 2006. The bases for the appeal have been expressed in a statement of matters complained of on appeal, as follows: 1. Whether the Court lacked jurisdiction when the record clearly shows plaintiff at the time of filing their complaint was not a true party in interest? 2. Whether the Court erred in failing to properly determine if plaintiff ever became a true party in interest? 3. Whether the Court abused its discretion when defendant(s) had previously filed a criminal charge of forgery with respect to signatures on an alleged mortgage note and the criminal investigation remained incomplete? 4. Whether the Court abused its discretion where no other record exists showing the defendants liable to the alleged mortgage note? 5. Whether the Court erred by failing to compel production of the original mortgage note, which is the heart of the controversy, prior to rendering a determination against the defendants. 1 Appellants’ Notice of Appeal and Order of Transcript, filed October 7, 2008; see Praecipe for In Rem Judgment for Failure To Answer and Assessment of Damages, filed October 5, 2006. 6. Whether defendants, are being denied procedural and substantive due 2 process by the Court. From an earlier filing of Appellants, it is apparent that their reference in the statement of matters complained of on appeal to the “mortgage note” is a reference 3 to the mortgage and not to the promissory note that the mortgage secured. This opinion in support of the order denying the request of Appellants to strike or, in the alternative, to open the default judgment is written pursuant to Pennsylvania Rule of Appellate Procedure 1925(a). STATEMENT OF FACTS In the instant mortgage foreclosure action, where (a) Appellants requested that an in rem judgment against them be stricken or opened, (b) the court issued a rule upon Plaintiff pursuant to Pennsylvania Rule of Civil Procedure 206 to show cause why the relief requested should not be granted, (c) Plaintiff filed an answer in response to the rule to show cause, and (d) no further evidentiary record was made by Appellants, Appellants were deemed to have admitted all facts responsive 4 to their request and properly pleaded in Plaintiff’s answer. Based upon this principle, as well as a review of the balance of the record, an examination of 5 judicially-noticeable records in this court, and consideration of matters not disputed by Appellants, the pertinent facts may be summarized as follows: Appellants, residents of 5038 Erbs Bridge Road, Mechanicsburg, 67 Cumberland County, Pennsylvania, and their son, Defendant Howard A. Hay, Jr., received title to the Erbs Bridge Road property by virtue of a deed dated July 2 Appellants’ Concise Statement of Matters Complained [sic], filed October 29, 2008. 3 See Appellants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, filed October 31, 2007. 4 See Pa. R.C.P. 206.7(c). 5 See Pa. R.E. 201. 6 See Appellants’ Notice of Appeal, and Order of Transcript, filed October 7, 2008. 7 This relationship was acknowledged by Appellants in their Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, para. 4. 2 8 1, 2004. They (and their son, Defendant Howard A. Hay, Jr.) became mortgagors 9 of the property by virtue of their execution of a July 1, 2004, mortgage, which 10 secured a promissory note executed by the son. The mortgage was subsequently 11 assigned by the mortgagee to Plaintiff herein. On August 17, 2006, Plaintiff filed the instant complaint in mortgage 12 foreclosure. The complaint contained a verification signed by counsel for Plaintiff in the person of Francis S. Hallinan, Esq., reading as follows: FRANCIS S. HALLINAN, ESQUIRE hereby states that he is attorney for PLAINTIFF in this matter, that Plaintiff is outside the jurisdiction of the court and or the Verification could not be obtained within the time allowed for the filing on the pleading, that he is authorized to make this verification pursuant to Pa.R.C.P. 1024(c) and that the 8 See Deed, dated July 1, 2004, and recorded July 6, 2004, in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Deed Book 263, Page 4986; see also Deed, dated March 27, 2006, and recorded November 27, 2006, in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Deed Book 277, Page 3572 (correcting description). 9 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., Exhibit A, filed December 6, 2007. Appellants baldly asserted in their petition to open or strike that, although they were present at the time the paperwork was signed, they did not execute the mortgage. See Appellants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, para. 2 and Ex. C. However, a copy of the mortgage attached to Plaintiff’s answer to the petition contained what purported to be their signatures, and the mortgage as recorded included a notary’s certification that Appellants had personally appeared before her and acknowledged their signatures on the document. See Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay, Sr., Ex. A; Mortgage, filed July 6, 2004, in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania, in Mortgage Book 1872, Page 3135. As noted in the text, Appellants made no evidentiary record pursuant to the rule issued by this court to support their contention that they had not executed the mortgage. 10 Appellants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, para. 1; Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alterative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay, Sr., para. 1. 11 See Assignment of Mortgage, dated September 13, 2006, and recorded February 23, 2007, in the Office of the Recorder of Deeds in and for Cumberland County, Pennsylvania in Miscellaneous Book 734, Page 3015. Plaintiff’s standing to prosecute the action was thus established long before its counsel filed the praecipe for default judgment at issue herein. 12 Plaintiff’s Complaint in Mortgage Foreclosure, filed August 17, 2006. 3 statements made in the foregoing Civil Action in Mortgage Foreclosure are based upon information supplied by Plaintiff and are true and correct to the best of his knowledge, information and belief. The undersigned understands that this statement is made subject to the penalties of 18 Pa. C.S. Sec. 4904 relating to unsworn falsification to 13 authorities. The complaint alleged that a default on monthly mortgage payments had 14 occurred beginning September 1, 2005, and continuing every month thereafter. Service of the complaint was made at the residence by Deputy Sheriff David 15 McKinney by serving Matthew Hay, an adult member of the family. This service 16 was effective as to Appellants. 13 Plaintiff’s Complaint in Mortgage Foreclosure, filed August 17, 2006. The court was unable to agree with Appellants’ position that this verification by Plaintiff’s attorney, facially in conformity with Pennsylvania Rule of Civil Procedure 1024(c), was comparable to the affidavit signed by a paralegal and found defective in Atlantic Credit and Financial, Inc. v. Giuliana, 2003 Pa. Super. 259, 839 A.2d 340. 14 Plaintiff’s Complaint in Mortgage Foreclosure, para. 5. 15 See Sheriff’s Returns, filed August 25, 2006; Pa. R.C.P. 402(a)(2)(i). Appellants did not challenge the capacity of Matthew Hay to receive the service for purposes of the rule of procedure. See Appellants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, para. 6. 16 Appellants contend the service of the complaint was not effective as to them, because the deputy sheriff made only one service of the complaint and that the record so indicated. Appellants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, para. 6. However, the record does not support this allegation. The record contains three separate returns of service, one for each defendant. See Sheriff’s Returns, filed August 25, 2006. The costs specified on the returns of service were also corroborative of service upon three individuals. See Act of July 6, 1984, P.L. 614, §1 et seq., as amended, 42 P.S. §21101 et seq. (2008 Supp.). Thus, the return for Defendant Howard A. Hay, Jr., indicated total costs of $38.56. See Sheriff’s Return, Howard A. Hay, Jr., filed August 25, 2006. This figure was comprised of $18.00 for docketing, $10.56 for “service,” and $10.00 for a surcharge. Under 42 P.S. §21103(a)(1), (2), the $18.00 for docketing was comprised of $9.00 for receiving, docketing and making the return of service and of $9.00 for the first service. Under 42 P.S. §21116, the $10.56 “service” figure was for mileage incurred by the server. Under 42 P.S. §21119, the $10.00 “surcharge” figure was for miscellaneous expenses associated with the service. The returns for Howard A. Hay, Sr., and Kimberly Hay each contained a $6.00 docketing charge. See Sheriff’s Returns, Howard A. Hay, Sr., and Kimberly Hay, filed August 25, 2006. This $6.00 figure was consistent with the fee under 42 P.S. §21103(a)(2)(ii) for “each additional defendant or person served or copy posted.” The absence of a mileage “service” fee on the returns for Appellants was attributable to the fact that service upon them was made at the same location as that at which Howard A. Hay, Jr., was served, not to the fact that they were not served. See 4 None of the defendants filed an answer to Plaintiff’s complaint within twenty days from the date of service. Plaintiff served upon the defendants ten-day 17 notices of intent to take a default judgment on September 14, 2006. Thereafter, on October 5, 2006, a default in rem judgment was entered upon praecipe against 18 the defendants, in the nominal amount of $187,528.29. The praecipe contained the Erbs Bridge Road address of the defendants by way of attached copies of the 19 notices of intent previously sent to them. The copies of the notices of intent 20 contained the name, but did not replicate the signature, of counsel for Plaintiff. Appellants took no further action until filing a Chapter 13 bankruptcy 21 petition on September 4, 2007. They withdrew their bankruptcy petition on 22 November 9, 2007, shortly after filing pro se in this court a Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, on October 31, 23 2007—more than a year after the judgment had been entered. The allegations in this petition may be summarized as follows: (1) Appellants did not execute the generally 42 P.S. §§21116 (duplicate mileage fees discouraged). The presence of separate $10.00 surcharge fees on Appellants’ returns also tended to refute their contention that the record showed that only Howard A. Hay, Jr., was served. See Sheriff’s Returns, Howard A. Hay, Sr., and Kimberly Hay, filed August 25, 2006; 42 P.S. §21119. As noted in the text, Appellants made no evidentiary record by way of deposition testimony to support their contention that service of the complaint was defective as to them. 17 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., para. 9. 18 Praecipe for In Rem Judgment for Failure To Answer and Assessment of Damages, filed October 5, 2006. 19 Praecipe for In Rem Judgment for Failure To Answer and Assessment of Damages, filed October 5, 2006. 20 Praecipe for In Rem Judgment for Failure To Answer and Assessment of Damages, filed October 5, 2006. 21 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., para. 10. 22 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., para. 11. 23 Defendants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, filed October 31, 2007. 5 aforesaid promissory note; (2) Appellants did not execute the mortgage; (3) only one copy of the complaint was served upon Matthew Hay, effecting service upon Howard A. Hay, Jr., only; and (4) Plaintiff filed its mortgage foreclosure action 24 prior to having any right to bring a claim. On November 16, 2007, this court issued a rule upon Plaintiff to show cause why the relief requested by Appellants should not be granted, pursuant to 25 Pennsylvania Rule of Civil Procedure 206.6. Plaintiff filed a response to the 26 petition on December 6, 2007. The response to Appellants’ petition may be summarized as follows: (1) Appellants concededly did not execute the promissory note; (2) Appellants were, however, mortgagors, along with Defendant Howard A. Hay, Jr.; (3) Matthew Hay was served three copies of the complaint, each intended for one of the defendants; and (4) Plaintiff had standing because it was the legal 27 owner of the mortgage. Under the November 16, 2007, rule to show cause, Appellants had 49 days 28 from the date of the order to take depositions on disputed issues of material fact. As noted previously, Appellants failed to take depositions for purposes of establishing an evidentiary record in support of their position. A sheriff’s sale of the mortgaged Erbs Bridge Road realty was postponed from December 5, 2007, to February 6, 2008, based upon the pendency of 29 Appellants’ request to strike or open. This postponement was subsequently 24 Defendants’ Petition To Strike Default Judgment or in the Alternative Petition To Open Judgment, filed October 31, 2007. 25 Order of Court, November 16, 2007. 26 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., filed December 6, 2007. 27 Plaintiff’s Response to Petition To Strike Default Judgment, or in the Alternative, Petition To Open Judgment, Filed on Behalf of Kimberly Hay and Howard A. Hay Sr., filed December 6, 2007. 28 Order of Court, November 16, 2007. 29 Order of Court, December 5, 2007. 6 extended to the date scheduled for argument on Appellants’ request, February 13, 30 2008, and further order of court. On February 12, 2008, the day before the 31 scheduled argument, Appellants filed a motion for continuance. A continuance 32 was granted and argument was rescheduled for February 27, 2008. On February 27, 2008, Defendant Howard A. Hay, Jr., filed a Chapter 13 bankruptcy petition, 33 resulting in an automatic stay of the proceedings. The argument was again rescheduled, this time for May 1, 2008, in anticipation of a lifting of the automatic 34 stay as to the property in question. Plaintiff obtained relief from the automatic 35 stay on April 9, 2008. Upon receipt of a belated notice of the termination of the automatic stay, the court again scheduled the argument, this time for July 7, 36 2008. On May 12, 2008, Appellants, by their newly-retained attorney, Douglas R. 37 Goldhaber, Esq., filed a further Petition To Strike Default Judgment, based upon 38 “defects appearing on the face of the record.” The allegations in this petition may be summarized as follows: (1) only one copy of the complaint was served upon Matthew Hay, intended for Howard A. Hay, Jr.; (2) the verification on Plaintiff’s complaint in mortgage foreclosure was “wholly deficient”; (3) Plaintiff’s praecipe for default judgment was defective in that the address of the defendants did not 30 Order of Court, January 7, 2008. 31 Appellants’ Continuance Motion, filed February 12, 2008. 32 Order of Court, February 12, 2008. 33 See Defendant’s Suggestion of Bankruptcy, filed February 28, 2008. 34 Order of Court, February 29, 2008. 35 Plaintiff’s Notice of Termination of Automatic Stay in Bankruptcy Case Filed by Defendant, Howard A. Hay, Jr., filed May 28, 2008. 36 Order of Court, May 29, 2008. 37 Appellants’ Petition To Strike Default Judgment, filed May 12, 2008. 38 Appellants’ Petition To Strike Default Judgment, para. 17. 7 appear on the praecipe itself; and (4) the copies of the notices of intent attached to 39 the praecipe did not show a replicated signature of Plaintiff’s counsel. 40 On June 30, 2008, Appellants filed another continuance motion. 41 Argument was again rescheduled to September 3, 2008, on which date it was 42 finally held. Following the argument, and based upon the record, the court 43 denied Appellants’ request that the in rem judgment be stricken or opened. 44 Appellants’ pro se appeal from this denial was filed on October 7, 2008. The bases for the appeal have been stated at the beginning of this opinion. DISCUSSION General. A petition to strike a judgment and a petition to open a judgment involve distinct remedies and are generally not interchangeable. Aquilino v. Philadelphia Catholic Archdiocese, 2004 PA Super 339, ¶23, 884 A.2d 1269, 1280. Under Pennsylvania Rule of Civil Procedure 126, it is provided that [t]he rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties. As a general rule, challenges with respect to the absence of counsel’s signatures on documents must be made prior to the entry of judgment in a case. See Pa. R.C.P. 1023.2(c). Finally, issues may not be raised for the first time in an appellant’s statement of matters complained of on appeal. Pa. R.A.P. 302(a); see, e.g., Clayton v. City of Philadelphia, 910 A.2d 93, 98 (Pa Commw. Ct. 2006). 39 Appellants’ Petition To Strike Default Judgment. 40 Appellants’ Continuance Motion, filed June 30, 2008. 41 Order of Court, July 7, 2008. 42 See Order of Court, September 9, 2008. 43 Order of Court, September 9, 2008. 44 Appellants’ Notice of Appeal and Order of Transcript, filed October 7, 2008. 8 Petition to strike judgment. With regard to a petition to strike a judgment, a court may look only at the facts of record at the time judgment was entered to decide if the record supports the judgment. Acquilino v. Philadelphia Catholic Archdiocese, 2004 PA Super 339, ¶24, 884 A.2d 1269, 1280. In the present case, the record on its face did not warrant the relief requested by Appellants on any of the grounds recited in their statement of matters complained of on appeal. More specifically, and for the reasons stated in the text and supporting footnotes in the Statement of Facts above, the record at the time the judgment was entered did not show that Plaintiff lacked standing, that the mortgage in question was a forgery as to Appellants, that Appellants were not liable on the mortgage for some other reason, or that any deficiencies in the process rose to the level of a denial of procedural and substantive due process. In addition, the suggestion that Appellants’ signatures on the mortgage were a product of forgeries appears nowhere in the record, let alone the record at the time of judgment. Accordingly, it is believed that Appellants’ request that the judgment be stricken was properly denied. Petition to open judgment. A petition to open a judgment is an appeal to the court’s equitable powers and its disposition is within the sound discretion of the court. Aquilino v. Philadelphia Catholic Archdiocese, 2004 PA Super 339, ¶33, 884 A.2d 1269, 1283. The burden of proof on such a petition is on the petitioner. Continental Bank v. Schaler, 362 Pa. Super. 610, 616, 525 A.2d 388, 391 (1987). This burden includes a responsibility to provide sufficient evidence to show at least a plausible defense. See Weitzman v. Ulan, 304 Pa. Super. 204, 209, 450 A.2d 173, 176 (1982). In viewing such evidence, a court is to view it in the light most favorable to the petitioner. Id. A petition to open a judgment is the proper method of seeking relief from a judgment where the irregularity of the judgment is dependent on matters outside the record. Aquilino v. Philadelphia Catholic Archdiocese, 2004 PA Super 339, ¶33, 884 A.2d 1269, 1283. 9 To open a default judgment, a party must: (1) promptly file a petition to open judgment; (2) provide a meritorious defense; and (3) offer a legitimate excuse for the delay in filing a timely answer. Whether an excuse is legitimate is not easily answered and depends upon the specific circumstances of the case. Id. In the present case, the record did not support a conclusion that any of the elements necessary to justify an opening of the in rem judgment against Appellants had been established. First, Appellants delayed filing a petition to open for more than a year after the judgment had been entered, without justification. Second, Appellants did not take advantage of the procedure set forth in the rule issued by the court to make a record by deposition in support of their contentions as to a meritorious defense. Third, no reasonable excuse for Appellants’ failure to file a timely answer to Plaintiff’s complaint was established. Based upon the foregoing, it is believed that the court properly denied Appellants’ request to open the in rem judgment against them. BY THE COURT, _________________ J. Wesley Oler, Jr., J. Jenine R. Davey, Esq. Phelan, Hallinan & Schmieg, LLP One Penn Center at Suburban Station 1617 J.F.K. Blvd. Philadelphia, PA 19103-1814 Attorney for Plaintiff Howard A. Hay, Jr. 4420 Old Gettysburg Road Camp Hill, PA 17011 Defendant, Pro Se 10 Howard A. Hay, Jr. 611 Mallard Road Apartment B-1 Camp Hill, PA 17011 Defendant, Pro Se Howard A. Hay, Sr. Kimberly Hay 5038 Erbs Bridge Road Mechanicsburg, PA 17050 Defendants, Pro Se 11