Wells Fargo Bank N.A. v. Spivak, 2913 EDA 2013

• Decision Date: 31 October 2014
• Docket Number: No. 2913 EDA 2013,2913 EDA 2013
• Citation: 104 A.3d 7,2014 PA Super 250
• Court: Pennsylvania Superior Court
• Parties: WELLS FARGO BANK N.A., Appellee v. Louis I. SPIVAK, Appellant.

104 A.3d 7

2014 PA Super 250

WELLS FARGO BANK N.A., Appellee

v.Louis I. SPIVAK, Appellant.

No. 2913 EDA 2013

Superior Court of Pennsylvania.

Submitted May 19, 2014.

Filed Oct. 31, 2014.

Reargument Denied Jan. 8, 2015.

Michael H. Gaier, Philadelphia, for appellant.

Robert W. Cusick, Cherry Hill, NJ, Steven J. Adams, Reading, and Christine M. Kovan, King of Prussia, for appellee.

BEFORE: GANTMAN, P.J., JENKINS, J., and FITZGERALD, J.^*

Opinion

OPINION BY JENKINS, J.:

¶ 1 Louis I. Spivak (“Spivak”) appeals from the order of the Court of Common Pleas of Montgomery County granting Wells Fargo Bank, N.A.'s (“Wells Fargo”) motion for summary judgment in a mortgage foreclosure action. We reverse and remand. We conclude that when a residential mortgagee delivers an Act 6 notice, commences a foreclosure action against a mortgagor (“first action”), discontinues that foreclosure action, and re-files another foreclosure action against a mortgagor for the same premises (“second action”), the lack of a new notice prior to the second action is fatal to the second action.

¶ 2 On or about March 29, 2007, Spivak secured a mortgage loan from Trident Mortgage Company, L.P. (“Trident”) in the amount of $223,750.00 (“Loan”). Plaintiff's Reply to Defendant's New Matter, Exhibit A, Assignment of Mortgage, p. 1 (page number supplied). To evidence his obligation to repay the Loan, Spivak executed a promissory note in favor of Trident, its successors and assigns (the “Note”). Id, at Exhibit C, Note, pp. 1–2 (page numbers supplied). To secure his obligations under the Note, Spivak executed a purchase money mortgage (the “Mortgage”) in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”), as mortgagee and nominee for Trident, its successors and assigns, granting Trident a lien and security interest in the Property. Id, at Exhibit B, Mortgage, generally. On April 19, 2007, MERS recorded the Mortgage in the Office of the Recorder of Deeds for Montgomery County (the “Recorder of Deeds”).

¶ 3 After the Loan closing, on December 14, 2010, MERS sold the Note and assigned the Mortgage to Wells Fargo. See id, at Exhibit A, Assignment of Mortgage, p. 1 (page number supplied). On February 10, 2011, Wells Fargo recorded the assignment of Mortgage with the Recorder of Deeds.

¶ 4 In January 2010, Spivak defaulted on his obligations due under the Note and Mortgage by failing to make timely payments due under the Note on January 1, 2010 and each month thereafter. On October 30, 2010, Wells Fargo sent Spivak the combined notice of intention to foreclose in accordance with the Loan Interest and Protection Law, 41 P.S. §§ 101 et seq. (“Act 6”), and the Homeowner's Emergency Mortgage Assistance Act of 1983, 35 P.S. §§ 1680.401c et seq. (“Act 91”) (the “Notice” or the “2010 Notice”). See generally , Plaintiff's Brief in Support of its Motion For Summary Judgment, Exhibit F, Act 91 Notice Take Action to Save Your Home From Foreclosure.¹

¶ 5 Spivak failed to cure his default under the Note and Mortgage. In December 2010, Wells Fargo filed a foreclosure action, which it subsequently discontinued in 2011 due to mortgage assignment deficiencies. Appellant's Brief at 7.

¶ 6 On May 24, 2012, Wells Fargo commenced the instant action,² its second in rem mortgage foreclosure action. On July 16, 2012, Spivak filed an answer with new matter wherein he admitted that he defaulted on his obligations under the Mortgage, and that Wells Fargo served him with the Notice in October 2010—approximately two years earlier, before instituting its prior action, and before it had any ownership interest in the Note or the property. See Notes 1 & 2; R. 12b. On July 25, 2012, Wells Fargo filed its reply to the new matter.

¶ 7 On April 25, 2013, Wells Fargo filed a motion for summary judgment, attaching a copy of the Notice along with proof of mailing of the Notice and the affidavit of Jeremiah Herberg, Vice President of Loan Documentation at Wells Fargo Bank, N.A. (the “Affidavit”). Herberg averred that: (a) Spivak had defaulted on his obligations under the Mortgage by failing to make the monthly payments due on January 1, 2010 and thereafter, (b) Wells Fargo provided Spivak with the Notice in 2010, and (c) Spivak had failed to cure the default under the Mortgage or take the necessary steps to avoid foreclosure.

¶ 8 On May 24, 2013,³ Spivak filed a response to the motion, asserting that the motion should be denied because the Notice: (a) failed to accurately state the amounts due and owing or to properly identify the lender⁴ and (b) had not been provided to him “within the prescribed one year period preceding the filing of the foreclosure action.” R. 186b–187b.⁵ Additionally, he argued that he was never provided a notice of intention to foreclose in connection with the pending foreclosure action; rather, the Notice was sent in connection with Wells Fargo's prior foreclosure action. Id.

¶ 9 On September 19, 2013, the trial court granted summary judgment to Wells Fargo and entered an in rem judgment in its favor. On October 14, 2013, Spivak filed a timely notice of appeal. On January 2, 2014, the trial court, without ordering Spivak to file a concise statement of errors complained of on appeal pursuant to Pennsylvania Rule of Appellate Procedure 1925(b), issued its opinion pursuant to Pennsylvania Rule of Appellate Procedure 1925(a).⁶

¶ 10 Spivak now raises the following issue for our review:

I. Whether [ ], Wells Fargo Bank, which previously sued [Spivak] in a mortgage foreclosure action which was voluntarily withdrawn, should be required to send a new Notice of Intention to Foreclose to [Spivak] prior to filing a second mortgage foreclosure lawsuit against [Spivak].

Appellant's Brief at 4.⁷ For the reasons that follow, we find Wells Fargo was required to send a new Act 6 notice to Spivak prior to commencing the second foreclosure action against him.

¶ 11 When reviewing an order granting summary judgment we must determine whether the trial court abused its discretion or committed an error of law. Mee v. Safeco Ins. Co. of Am., 908 A.2d 344, 347 (Pa.Super.2006).⁸ “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.” Roth v. Ross, 85 A.3d 590, 592–93 (Pa.Super.2014) (citing Grossi v. Travelers Pers. Ins. Co., 79 A.3d 1141, 1163 (Pa.Super.2013) ). A grant of summary judgment “presents a question of law, for which our scope of review is plenary.” Sevast v. Kakouras, 591 Pa. 44, 915 A.2d 1147, 1152 (2007) (citation omitted).

¶ 12 In analyzing a trial court's grant of summary judgment, we review the evidence in the light most favorable to the non-moving party, Spivak, and resolve all doubts as to the existence of a genuine issue of material fact against the moving party, Wells Fargo. Erie Ins. Exchange v. Weryha, 931 A.2d 739, 741 (Pa.Super.2007).

¶ 13 Spivak argues that Act 6 requires a mortgagee to send a new Notice prior to commencing its second foreclosure action where it withdrew its prior foreclosure action.⁹ Spivak reasons that because Wells Fargo sent the Notice before commencing and withdrawing its prior suit, its failure to provide a new Notice prior to the second action “deprived [ ][him] of an opportunity to know how much money was needed to cure the default[,] which is the very reason the [Notice] is required in the first place.” Appellant's Brief at 7.¹⁰

¶ 14 Section 403 of Act 6 sets forth the pre-foreclosure notice requirements imposed upon residential mortgage lenders for certain residential mortgages as follows:

Before any residential mortgage lender may accelerate the maturity of any residential mortgage obligation, commence any legal action including mortgage foreclosure to recover under such obligation, or take possession of any security of the residential mortgage debtor for such residential mortgage obligation, such person shall give the residential mortgage debtor notice of such intention at least thirty days in advance as provided in this section.

41 P.S. § 403(a) (emphasis added).

¶ 15 Section 403(c) of Act 6 states:

(c) The written notice shall clearly and conspicuously state:

(1) The particular obligation or real estate security interest;

(2) The nature of the default claimed;

(3) The right of the debtor to cure the default as provided in section 404 of this act and exactly what performance including what sum of money, if any, must be tendered to cure the default;

(4) The time within which the debtor must cure the default;

(5) The method or methods by which the debtor's ownership or possession of the real estate may be terminated; and

(6) The right of the debtor, if any, to transfer the real estate to another person subject to the security interest or to refinance the obligation and of the transferee's right, if any, to cure the default.

41 P.S. § 403(c) (emphasis added).

¶ 16 Section 404 of Act 6 permits a residential mortgage debtor to cure his default, “after a notice of intention to foreclose has been given pursuant to section 403 of this act, at any time at least one hour prior to the commencement of bidding at a sheriff sale or other judicial sale ... by tendering the amount or performance specified in subsection (b) of this section.” 41 P.S. § 404(a). Statutory notice, including the amount of default and the debtor's right to cure the default, is mandatory and must precede any action by a residential mortgage lender whereby it accelerates the maturity of the obligation, institutes legal action including foreclosure, or repossesses any security of the debtor. General Elec. Credit Corp. v. Slawek, 269 Pa.Super. 171, 409 A.2d 420, 422–23 (1979).

Federal and state courts—in explaining and applying the provisions of Act 6 ...—have consistently defined the Act in the following manner. Act 6 is a comprehensive interest and usury law with

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