Herb v. CitiMortgage, Inc.

• Decision Date: 08 July 2013
• Docket Number: No. 3:11–CV–1637.,3:11–CV–1637.
• Citation: 955 F.Supp.2d 441
• Parties: Terry L. HERB, Plaintiff v. CITIMORTGAGE, INC., Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

955 F.Supp.2d 441

Terry L. HERB, Plaintiff

v.CITIMORTGAGE, INC., Defendant.

No. 3:11–CV–1637.

United States District Court, M.D. Pennsylvania.

July 8, 2013.

Darrell C. Dethlefs, Dethiefs Pykosh Law Group LLC, Camp Hill, PA, Michael A. Farnan, The Farnan Law Office, Pittsburgh, PA, for Plaintiff.

Daniel JT McKenna, Martin C. Bryce, Jr., Ballard Spahr LLP, Philadelphia, PA, for Defendant.

MEMORANDUM

WILLIAM J. NEALON, District Judge.

On July 21, 2011, Plaintiff, Terry L. Herb, filed a complaint to quiet title in the Court of Common Pleas of York County, Pennsylvania against Defendant, Citimortgage, Inc., seeking an order quieting the title to the property at 333 Newcomer Road, Windsor, Pennsylvania and an order stating that a certain mortgage is not a lien on the property. (Doc. 1–2, pp. 3–26). Defendant removed the matter to this Court on August 31, 2011 based on diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 1). Following discovery, Plaintiff moved for summary judgment on February 27, 2013 by filing a motion, statement of facts, and brief in support with exhibits. (Docs. 13–15). On April 4, 2013, Defendant filed a cross-motion for summary judgment, brief with exhibits, and statement of facts. (Docs. 18–20). On April 22, 2013, Plaintiff filed a brief in opposition and answer to the statement of facts and on May 6, 2013 Defendant filed a reply brief. (Docs. 21–23). The cross motions for summary judgment are now ripe for disposition and, for the reasons set forth below, both motions will be denied.

I. STANDARD OF REVIEW

Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); Turner v. Schering–Plough Corp., 901 F.2d 335, 340 (3d Cir.1990). The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once such a showing has been made, the non-moving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Lujan v. National Wildlife Federation, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). All inferences “should be drawn in the light most favorable to the nonmoving party, and where the nonmoving party's evidence contradicts the movant's, then the non-movant's must be taken as true.” Pastore v. Bell Tel. Co., 24 F.3d 508, 512 (3d Cir.1994)quoting Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir.1992), cert. denied,507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).

II. STATEMENT OF FACTS

Plaintiff was the sole owner of the subject property, 333 Newcomer Road, Windsor, Pennsylvania, from July 27, 1987 until June 18, 1999. (Doc. 14, ¶¶ 3 & 5) admitted in (Doc. 20, ¶¶ 3 & 5). Plaintiff married Scott Herb in 1990. (Doc. 14, ¶ 4) admitted in (Doc. 20, ¶ 4). On June 18, 1999, Plaintiff deeded the subject property to herself and her husband, Scott W. Herb, forming a tenancy by the entirety.¹ (Doc. 15–6, pp. 1–3) (deed dated June 18, 1999 with Grantees “Scott W. Herb and Terry L. Herb, husband and wife”). A house was constructed on the property and Scott Herb used credit cards to pay off the debt incurred from the construction. (Doc. 14, ¶ 6) admitted in (Doc. 20, ¶ 6). Plaintiff and Scott Herb took out loans to consolidatethe credit card debt. (Doc. 14, ¶ 7) admitted in (Doc. 20, ¶ 7). On June 18, 1999, Plaintiff and Scott Herb signed a thirty-year loan in the amount of $138,000 with The Drovers & Mechanics Bank and a mortgage on the subject property securing the loan which were both filed with the Recorder of Deeds of York County, Pennsylvania. (Doc. 19–6); see also (Doc. 19–3, pp. 25–26). On April 23, 2002, Plaintiff and Scott Herb signed a five-year loan in the amount of $28,000 and a fifteen-year loan in the amount of $50,000 with Drovers Bank, a Division of Fulton Bank. (Docs. 19–7 & 19–8) see also (Doc. 19–3, pp. 25–26). Mortgages securing both loans with the subject property were signed by Plaintiff and Scott Herb, and both the loans and the mortgages were filed with the Recorder of Deeds of York County, Pennsylvania. (Docs. 19–7 & 19–8); see also (Doc. 19–3, pp. 25–26). Plaintiff interchangeably signed these documents as “Terry L. Herb” and as “TL Herb.” (Docs. 19–6, 19–7, & 19–8); see also (Doc. 19–3, p. 26).

On April 28, 2003, the three loans were refinanced into one loan with Allfirst, a Division of M & T Trust Company, in the amount of $207,544.00. (Doc. 19–10); (Doc. 14, ¶ 9) admitted in (Doc. 20, ¶ 9); see also (Doc. 19–3, p. 27) and (Doc. 19–14). The Allfirst loan is solely in the name of Scott W. Herb and was solely signed and initialed by him. (Doc. 19–10); (Doc. 14, ¶ 9) admitted in (Doc. 20, ¶ 9). The Allfirst loan was secured by a mortgage listing “Borrower” as “Scott W Herb, A MARRIED MAN, and TERRY L. HERB, his wife,” and initialed “SH” and “TLH” on every page and signed “TL Herb” under Terry L. Herb. (Doc. 19–11) and (Doc. 19–3, p. 31) ². Plaintiff was not present at the April 28, 2003, closing for the refinance. See (Doc. 14, ¶ 10); (Doc. 19–12, ¶ 9) (Declaration of Scott W. Herb); (Doc. 19–3, pp. 10–11) (Deposition of Plaintiff); see also (Doc. 15–7, p. 18) (Deposition of Notary Public Shelley Pinckney); (Docs. 19–9 & 19–10) (Closing documents including a U.S. Department of Housing & Urban Development Settlement Statement and a “SIGNATURE/NAME AFFIDAVIT” signed solely by Scott Herb).

Plaintiff testified that she knows for a fact that she did not sign or initial the mortgage document at any time. (Doc. 19–3, p. 32). Whereas, Plaintiff's husband, Scott Herb, declares that, subsequent to the closing held on April 28, 2003, Plaintiff signed and initialed the mortgage. (Doc. 19–12, ¶ 9) (Declaration of Scott W. Herb). A “FINAL TRUTH–IN–LENDING DISCLOSURE” and a “NOTICE OF RIGHT TO CANCEL,” bank closing documents for the loan in question, contain the signature “Scott W. Herb” with the date “4/28/03” and the signature “TL Herb” with the date “4–29–03.” (Docs. 19–18 & 19–19).

III. DISCUSSIONA. Plaintiffs motion for summary judgment

Plaintiff argues that “[t]he undisputable facts show that the signature and initials that appear on the recorded mortgage documents are not her signature and initials and were not placed there by her hand,” and because “[t]here is no dispute of fact that the mortgage was forged” it should be held invalid. (Doc. 15, pp. & 12). Plaintiff also states that “[t]here is no evidence contradicting the fact that Plaintiff had no part in the execution of the mortgage.”(Doc. 15, p. 15). The Undersigned does not agree with these contentions. Based on the declaration of Plaintiff's husband, Scott W. Herb, that the Plaintiff did sign and initial the mortgage, a genuine issue of material fact exists. See (Doc. 19–12, ¶ 9). Accordingly, Plaintiff's motion for summary judgment based on this premise, that there is no dispute that Plaintiff did not sign the mortgage, will be denied.

Secondly, Plaintiff points out that the alleged forged signature was not properly notarized prior to recording. (Doc. 15, pp. 10 & 12). Plaintiff argues that such an acknowledgment before a Notary Public prior to recording is required by 21 P.S. § 42 and 21 P.S. § 291.1. (Doc. 15, p. 10). In other words, Plaintiff is arguing that even if the signature on the mortgage is Plaintiff's, because it was added after the closing and not properly notarized, the mortgage was defectively acknowledged and is, therefore, invalid. Defendant argues that 21 P.S. § 42 and 21 P.S. § 291.1 only govern deeds and not mortgages and, regardless, a defective acknowledgment of a mortgage may affect the recordation and perfection of a mortgage but does not affect the validity of the mortgage between the parties. (Doc. 19, p. 15), citing Krasny v. Deutsche Bank Nat'l Trust Co. (In re Batipps), 460 B.R. 841, 844 (Bankr.E.D.Pa.2011).

The statutes in question are applicable to mortgages as mortgages are conveyances under Pennsylvania law. See U.S. v. Crissman, 2011 U.S. Dist. LEXIS 110705, *15 n. 2, 2011 WL 4527838, *5 n. 2 (M.D.Pa.2011), citing Sovereign Bank v. Schwab, 414 F.3d 450, 453 n. 5 (3d Cir.2005); see also Pines v. Farrell, 577 Pa. 564, 574, 848 A.2d 94 (Pa.2004) (finding a mortgage is in essence a defeasible deed and is a conveyance of title). However, Defendant is correct in that the cited statutes as well as 21 P.S. §§ 444 and 621, which pertain to the proper acknowledgment and recording of conveyances in land, were intended to protect subsequent mortgagees and purchasers. See Crissman, 2011 U.S. Dist. LEXIS 110705 at n. 3, 2011 WL 4527838 at n. 3 (21 P.S. §§ 621, 444 and 351 read together, establish that a deed or mortgage not timely recorded is not an absolute void, but is void only to the extent necessary to protect the rights of a subsequent bona fide mortgagee or purchaser for value.). “An acknowledgment is an essential prerequisite for recording a mortgage, but is not necessary for the validity of the instrument.” Schwab v. Home Loan & Inv. Bank, FSB (in re Messinger), 281 B.R. 568, 573 (Bankr.M.D.Pa.2002), citing Abraham v. Mihalich, 330 Pa.Super. 378, 382, 479 A.2d 601, 603 (1984) and 21 P.S. § 42. “When a deed has been signed and delivered, it is valid and binding between the parties. The acknowledgment and certificate thereof are not part of the document. The acknowledgment does not relate to the validity of the deed in any way, and only establishes recording eligibility.” Id. at 574;see also Batipps, 460 B.R. at 844 (“It is settled law in Pennsylvania that, while a defective acknowledgment may affect the recordation and perfection of a mortgage, such a defect does not affect the validity of the mortgage between the parties inter sese.”)....