Marjer, Inc. v. Poplawski, K. ( 2016 )

J-S34003-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MARJER, INC. IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
KIMBERLY POPLAWSKI, DECISION ONE
MORTGAGE COMPANY, LLC, MERS,
THEIR HEIRS, EXECUTORS,
ADMINISTRATORS, ASSIGN AND ALL
PERSONS CLAIMING ANY RIGHT, TITLE,
AND INTEREST IN THE LAND DESCRIBED
AS 624 BOULEVARD AVENUE,
DICKINSON CITY, PENNSYLVANIA,
LACKAWANNA COUNTY PIN 12408 040
049
Appellee No. 1591 MDA 2015
Appeal from the Order Entered August 13, 2015
In the Court of Common Pleas of Lackawanna County
Civil Division at No(s): 2011-05082
BEFORE: PANELLA, J., STABILE, J., and JENKINS, J.
MEMORANDUM BY PANELLA, J. FILED JUNE 06, 2016
Appellant, Marjer, Inc., appeals from the order entered August 13,
2015, granting the motion for summary judgment filed by Appellee,
Mortgage Registration Systems, Inc. (“MERS”)1 and denying Appellant’s
cross-motion for summary judgment. On appeal, Appellant argues that the
____________________________________________
1
MERS aims to facilitate “by streamlining, successive interbank sales of
mortgages.” Union County, Ill. v. MERSCORP, Inc., 735 F.3d 730, 732
(7th Cir. 2013).
J-S34003-16
trial court’s determination that MERS has standing to defend the underlying
action to quiet title was in error. For the following reasons, we affirm.
The trial court summarized the facts and procedural history of this
case as follows.
On May 13, 2004, Defendant Kimberly Poplawski executed
a mortgage (“the mortgage”) with Decision One Mortgage
Company, LLC, with MERS acting as Nominee, on real property
located at 624 Boulevard Avenue, Dickinson City, Pennsylvania
(“the Property”). The Mortgage was properly recorded in the
Lackawanna County Recorder of Deeds Office in Book 1233,
Page 520. MERS is listed as the mortgagee in the terms of the
mortgage.
About seven (7) years later, on August 10, 2011,
[Appellant] purchased the Property from Ms. Poplawski. Shortly
thereafter, (about eight days later) on August 18, 2011,
[Appellant] filed the instant action seeking to quiet title to the
Property, alleging that the deed for the property, now in
possession of [Appellant], divested any claims MERS or any
Defendant had in the Property. On October 31, 2011, MERS
answered Plaintiff’s complaint. However, default judgments were
entered on November 4, 2011 against Decision One Mortgage
Company, LLC and Ms. Poplawski.
MERS requested discovery of [Appellant], seeking
information regarding the basis of their quiet title claim.
[Appellant] produced no discovery that the mortgage executed
on the property with Decision One Mortgage with MERS as the
nominee had been satisfied at the time [Appellant] filed the
quiet title action. Therefore, MERS filed a Motion for Summary
Judgment on October 9, 2012.
[Appellant] filed a Response to MERS[’] Motion and also
filed a Cross-Motion for Summary Judgment on November 21,
2012. After hearing oral argument on the dueling motions, [the
trial court] granted MERS’ Motion for Summary Judgment by
[c]ourt [o]rder dated March 6, 2013.
Plaintiff appealed [the trial court’s] decision to the Superior
Court of Pennsylvania. By Opinion and Order dated December
23, 2013, the Superior Court remanded this matter to the
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Lackawanna County Court of Common Pleas, [with instructions]
to consider MERS’ standing and authority to proceed in this
matter before disposing of the Motions for Summary Judgment.
By [c]ourt [o]rder dated October 21, 2014, [the trial court]
ordered that the Parties were to submit supplemental briefs
regarding the aforementioned issues. …
Trial Court Opinion, 8/13/15 at 1-3. By order entered August 13, 2015, the
trial court determined that MERS did have standing to defend the quiet title
action and granted MERS’ motion for summary judgment. This timely appeal
followed.
Appellant raises the following issue for our review.
Did the trial court commit an error of law and abuse its
discretion in granting the Appellee, MERS[’] Motion for Summary
Judgment when MERS lacks standing to pursue defend [sic] the
instant action?
Appellant’s Brief at 3.
We review a decision granting summary judgment according to the
following standard.
A reviewing court may disturb the order of the trial court only
where it is established that the court committed an error of law
or abused its discretion. As with all questions of law, our review
is plenary.
In evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. Pa.R.C.P. 1035.2. The rule states that
where there is no genuine issue of material fact and the moving
party is entitled to relief as a matter of law, summary judgment
may be entered. Where the non-moving party bears the burden
of proof on an issue, he may not merely rely on his pleadings or
answers in order to survive summary judgment. Failure of a
nonmoving party to adduce sufficient evidence on an issue
essential to his case and on which it bears the burden of proof
establishes the entitlement of the moving party to judgment as a
matter of law. Lastly, we will view the record in the light most
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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.
JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-62 (Pa.
Super. 2013) (citation omitted).
Preliminarily, we are obliged to note the peculiarity of Appellant’s
argument. Appellant contends that MERS has no standing to defend or
otherwise proceed in the quiet title action, despite the fact that Appellant in
its complaint named MERS as a defendant to that action. Appellant
completely ignores this obvious conundrum. Even more perplexing,
Appellant fails to advance a focused argument against MERS’ standing in this
action,2 but rather focuses solely on MERS’ authority to assign the
underlying mortgage. The relevance of this issue to MERS’ standing to
defend against the quiet title action is lost on this Court. Nonetheless, we
observe that in Bank of America, N.A. v. Gibson, 102 A.3d 462, 465-466
(Pa. Super. 2014), appeal denied, 112 A.3d 648 (Pa. 2015), this Court
expressly held that MERS, as holder of legal title to the interests granted by
the mortgagor in the mortgage, clearly has the authority to assign the
mortgage.
____________________________________________
2
Appellant’s brief, in its entirety, contains not so much as a passing
reference to this Commonwealth’s case law underlying the legal concept
standing.
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In essence, Appellant has created a manufactured controversy by
claiming that a named defendant to a lawsuit has no power to defend its
interest therein. This argument is patently baseless. As the trial court
correctly noted, the mortgage states that MERS is the mortgagee and is
acting “as a nominee for Lender and Lender's successors and assigns.”
Mortgage at 1 ¶C. (emphasis added). The mortgage further provides that “if
necessary to comply with law or custom, MERS (as nominee for Lender and
Lender’s successors and assigns) has the right: to exercise any or all of
those interests, including but not limited to, the right to foreclose and sell
the property; and to take any action required of Lender including, but not
limited to, releasing and canceling this Security Instrument.” Id. at 3
(emphasis added).
In Mortgage Elec. Registrations Systems, Inc. v. Ralich, 982 A.2d
77, 81 (Pa. Super. 2009), a panel of this Court, construing a mortgage with
language identical to the mortgage in this case, held the mortgage vests
MERS with the authority to enforce the loan. This authority clearly
encompasses MERS’ ability to defend its interests in the quiet title action.
Appellant’s argument to the contrary, such that it is, is clearly without
merit.3
____________________________________________
3
Appellant correctly notes that the trial court’s citation to this Court’s
memorandum decision in Deutsche Bank Trust Co. v. Kravitz, 1911 EDA
2013 (Pa. Super., filed July 2, 2014) (unpublished memorandum), was in
error. Citing our memorandum decisions is prohibited by Superior Court
(Footnote Continued Next Page)
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J-S34003-16
Appellant’s brief focuses solely on the trial court’s determination of
MERS’ standing and therefore fails to address the court’s August 13, 2015
order to the extent that it entered summary judgment in favor of MERS in
the quiet title action. Nonetheless, we note that we agree with the reasoning
the trial court advanced in its August 13, 2015 opinion supporting this
decision. We therefore affirm the trial court’s order granting summary
judgment in MERS’ favor on that basis. See Trial Court Opinion, 8/13/15 at
6-8.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/6/2016
_______________________
(Footnote Continued)
Internal Operating Procedure § 65.37(A): “An unpublished memorandum
decision shall not be relied upon or cited by a Court or a party in any other
action or proceeding....” 210 Pa.Code § 65.37. (There are exceptions
provided in § 65.37(A) that are not pertinent here.)
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j I MARIER, INC. fN THE COURT OF COMMON
PLEAS OF
Plaintiff LACKAWANNA COUNTY
I v
CIVIL ACTION-LAW
I. QUIET TITLE ACTION
I
I
KIMBERLY POPLAWSKI,
DECISION ONE MORTGAGE
COMPANY, LLC,
MERS,
Their heirs, executors, administrators,
Assigns and all persons claiming any
Right, title and interest in the land
Described as 624 Boulevard Avenue,
Dickson City, PA,
Lackawanna County, PIN
12408 040 049
2011 CV 5082
)··· Defendants
C·
.·., ,:_·.•·.?.·
c:_?_ c'· \ OPINION
........
- ~· .... ' ·'·"'·
·-- . . (__)
... ......
r.~-.
,.;-·" SAXTON, S.J.
r····,
····I. INTRODUCTION
c::
The following Opinion addresses this Court's holding regarding the
):'\standing and the authority to proceed of Mortgage Electronic Registration
Systems, Inc. ("MERS"), as nominee for Decision One Mortgage Company,
LLC in the above captioned quiet title action.
II. FACTUAL/PROCEDURAL HISTORY
On May 13, 2004, Defendant Kimberly Poplawski executed a
mortgage ("the Mortgage") with Decision One Mortgage Company, LLC,
with MERS acting as Nominee, on real property located at 624 Boulevard
11
Avenue, Dickson City, Pennsylvania ("the Property"). The Mortgage was
11
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properly recorded in the Lackawanna County Recorder of Deeds Office in
Book 1233, Page 520. MERS is listed as the mortgagee in the terms of the
mortgage.
About seven (7) years later, on August 10, 2011, Plaintiff, Marjer, Inc.
("Marjer" or "Plaintiff') purchased the Property from Ms. Poplawski. Shortly
thereafter, ( about eight days later) on August 18, 2011, Plaintiff filed the
instant action seeking quiet title to the Property, alleging that the deed for the
property, now in possession of Plaintiff, divested any claims MERS or any
Defendant had in the Property. On October 31, 2011, MERS answered
Plaintiff's complaint. However, default judgments were entered on November
4, 2011 against Decision One Mortgage Company, LLC and Ms. Poplawski.
MERS requested discovery of Plaintiff, seeking information regarding
the basis of their quiet title claim. Plaintiff produced no discovery that the
mortgage executed on the property with Decision One Mortgage with MERS
as the nominee had been satisfied at the time Plaintiff filed the quiet title
action. Therefore, MERS filed a Motion for Summary Judgment on October 9,
· 2012.
Plaintiff filed a Response to MERS Motion and also filed a Cross-
Motion for Summary Judgment. on November 21, 2012. After hearing oral
argument on the dueling motions, this Court granted MERS' Motion for
Summary Judgment by Court Order and Opinion dated March 6, 2013.
Plaintiff appealed this Court's decision to the Superior Court of
Pennsylvania. By Opinion and Order dated December 23, 2013, the Superior
2
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I Court remanded this matter to the Lackawanna County Court of Common
I Pleas, ordering this Court to consider MERS' standing and authority to
proceed in this matter before disposing of the Motions for Summary
Judgment. By Cami Order dated October 21, 2014, this Court ordered that the
Parties were to submit supplemental briefs regarding the afore mentioned
issues. By agreement of the Parties, the Parties' relied on their briefs for this
Court's decision.
III. DISCUSSION
A. MERS has Standing to Proceed in this Quiet Title Action
. .~~:J·:r '. .~j~f ·
. ·"A':'(Jii:wffel: seeking judicial resolution of a controversy m this
Commonwealth must, as a prerequisite, establish that he has standing to
maintain the action." Bergdoll v. Kane, 731 A.2d 1261, 1268 (Pa. 1999). "An
'immediate' interest involves the nature of the causal connection between the
action complained of and the injury to the party challenging it." Id. "The
requirement of standing is critical because only when parties have sufficient
interests in a matter is it ensured that there is a legitimate controversy before
the court." In re. Hickson, 821 A.2d 1238, 1243 (Pa. 2003). Therefore, before
this Court can dispose of the competing Motions for Summary Judgment in
the case at hand, this Court must determine if Defendant MERS' has standing
to proceed in this matter.
Upon review of the relevant statutory and case law, and the facts of
this case, it is clear to this Court that MERS has standing to proceed in this
action. First, the mortgage expressly provides that MERS, as mortgagee of
3
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record and nominee for the originating lender, has full legal authority to act as
a mortgagee. This Court believes this includes the ability to defend against a
quiet title action that is seeking to extinguish the mortgage for which MERS
serves as the nominee.
Second, the case law clearly demonstrates that MERS has standing. In
Mortgage Elec. Registration Systems, Inc. v. Ralich, 982 A.2d 77, 81
(Pa.Super. 2009), as cited by MERS in its brief, the Pennsylvania Superior
Court upheld the authority of MERS to foreclose on a property, even though
the defendant borrowers in that case objected to MERS' standing. The Court
held that the language of the mortgage gave MERS this power. Similarly, in
the case at hand, the language of the mortgage gives MERS full legal
authority to defend the mortgage.
Further, a number of cases have held that MERS has the authority to
assign a mortgage. For example, Deutsch Bank Trust Co. v. Kravitz, 1911
EDA 2013 (Pa. Super. 2014) and Bank of America v. Blair, No. 2011-1433
(C.P. Ct. Crawford Cnty., Pa. Jan 13, 2012) are recent cases that have held
that MERS has the authority to act as a mortgagee under Pennsylvania law,
even though it was identified by the mortgage as a nominee.
The case law in Pennsylvania recognizes that MERS has the authority
to foreclose and assign under mortgage terms that reflect the mortgage in this
case. This Court holds that this demonstrates that MERS has the ability to act
as a mortgagee and therefore, it is clear the MERS has the ability to defend
against a case in which MERS was specifically named, and in which Plaintiff
4
is seeking to extinguish a mortgage in which MERS has an interest. The
extinguishment of this mortgage would have an adverse affect on MERS.
Therefore, MERS has standing to proceed.
B. MERS also has Authority to Proceed in this Quiet Title Action even
though a Default Judgment was Entered against the Originating Lender.
Plaintiff argues that MERS lacks the authority to proceed in this matter
because a default judgment was entered against the originating lender,
Decision One. This Court does not agree with Plaintiff, and holds that MERS
does have the authority to proceed.
The default judgment against Decision One has no bearing on MERS
standing to proceed. The mortgage, by its terms, provides that MERS is the
mortgagee, as nominee for Decision One and Decision One's successors and
assigns. Any default judgment against Decision One does not affect MERS
because MERS holds the Mortgage interest.
Moreover, Plaintiff specifically named MERS as a separate Defendant
from Decision One, signifying to this Court that Plaintiff acknowledges that
MERS is separate and apart from Decision One and further proving to this
Court that a default against Decision One has no effect on MERS' standing.
Therefore, Plaintiffs allegation that MERS' cannot proceed due to the default
judgment entered against Decision One is without merit.
C. MERS' Assignment of the Mortgage During the Pendency of the Case
at hand does not Extinguish MERS' Authority to Proceed
During the pendency of this quiet title action, on March 1, 2012,
MERS assigned the mortgage on the real property in question to Wells Fargo.
5
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11 Plaintiff argues that this assignment to Wells Fargo prevents MERS from
I defending against Plaintiffs quiet title action. This Court does not agree with
I Plaintiff, and holds that the assignment does not affect MERS' ability to
proceed.
In Ralich, 982 A.2d at 79~81, as cited in MERS' supplement brief
regarding standing, the Pennsylvania Superior Court held that MERS had the
authority to continue with a sheriffs sale despite an assignment of the
mortgage by MERS. This Court holds that Ralich is applicable here. Even
though an assignment was made, MERS still maintains the ability to act as a
mortgagee, which gives MERS the authority to enforce the loan including the
authority to defend against Plaintiffs quiet title claim.
Therefore, this Court holds that MERS' assignment of the mortgage
does not extinguish MERS' authority to defend against Plaintiffs quiet title
claim.
D. MERS is entitled to SummaryJudgmenton Plaintiff'sQuiet Title
Action
Because this Court held above that MERS has standing and the
authority to proceed in this action, this Court must next dispose of the
competing Motions for Summary Judgment filed by both Parties.
Summary judgment is proper when the pleadings, depositions, answers
to interrogatories, admissions on file, and affidavits demonstrate that there
exists no genuine issue of material fact and the moving party is entitled to
judgment as a matter oflaw. Pa.R.C.P. 1035.2. In determining whether to
6
11
j J grant summary judgment, a trial court must resolve all doubts against the
moving party and examine the record in a light most favorable to the non-
moving party. Id. Summary judgment may only be granted in cases where it is
clear and free from doubt the moving party is entitled to judgment as a matter
of law. Id; Sebelin v. Yamaha Motor Corp., 705 A.2d 904, 907 (Pa. Super.
1998).
A party may bring an action in quiet title:
(2) where an action of ejectment will not lie, to
determine any right, lien, title or interest in the land or
determine the validity or discharge of any document,
obligation or deed affecting any right, lien, title or
interest in land;
(3) to compel an adverse party to file, record, cancel,
surrender or satisfy of record, or admit the validity,
invalidity or discharge of, any document, obligation or
deed affecting any right, lien, title or interest in land; or
Pa.R.C.P. No. 1061.
The law in Pennsylvania is clear that a properly recorded mortgage
binds a subsequent purchaser of property. 21 Pa. Cons. Stat. Ann. § 357
provides:
"the legal effect of the recording of such agreements shall be to
give constructive notice to subsequent purchasers, mortgagees,
and/or judgment creditors of the parties to said agreements of
the fact of the granting of such rights or privileges and/or of the
execution of said releases, and the rights of the subsequent
purchasers, mortgagees, and/or judgment creditors of the
parties to said agreements shall be limited thereby with the
same force and effect as if said subsequent purchasers,
mortgagees, and/or judgment creditors had actually joined in
the execution of the agreement or agreements aforesaid."
21 Pa. Cons. Stat. Ann. § 357
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Plaintiff purchased the real property in question after a mortgage on
the property, executed by Kimberly Poplawski to MERS, as nominee for
Decision One Mortgage Company, LLC was properly recorded. As such,
Plaintiff purchased the property subject to the MERS mortgage and is bound
by its terms. MERS has a valid interest in the real property. MERS took the
proper steps to defend its interest in the property. Pennsylvania Law is clear
that a recorded mortgage binds a subsequent purchaser of property. Therefore,
there is no triable issue of fact, Plaintiff's quiet title action is without merit
and MERS is entitled to summary judgment.
IV. CONCLUSION
For the reasons set forth above, it is clear to this Court that MERS has
standing and the authority to proceed in this matter. Further, the law is clear
that a subsequent purchaser with constructive notice of any prior, properly
recorded mortgages at the time of purchase is bound by the mortgage.
Because Plaintiff admittedly had notice of MERS' properly recorded
mortgage, Plaintiff has no legal basis for its Quiet Title Action and therefore,
MERS is entitled to Summary Judgment.
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Therefore, this Court grants MERS' Motion for Summary Judgment,
11
'1 I and denies Plaintiffs Cross Motion for Summary Judgment. Accordingly,
I
Plaintiffs Action to Quiet Title is dismissed with prejudice. An appropriate
Order follows.
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j I MARIER, INC. fN THE COURT OF COMMON
PLEAS OF
Plaintiff LACKAWANNA COUNTY
I v
CIVIL ACTION-LAW
I. QUIET TITLE ACTION
I
I
KIMBERLY POPLAWSKI,
DECISION ONE MORTGAGE
COMPANY, LLC,
MERS,
Their heirs, executors, administrators,
Assigns and all persons claiming any
Right, title and interest in the land
Described as 624 Boulevard Avenue,
Dickson City, PA,
Lackawanna County, PIN
12408 040 049
2011 CV 5082
)··· Defendants
C·
.·., ,:_·.•·.?.·
c:_?_ c'· \ OPINION
........
- ~· .... ' ·'·"'·
·-- . . (__)
... ......
r.~-.
,.;-·" SAXTON, S.J.
r····,
····I. INTRODUCTION
c::
The following Opinion addresses this Court's holding regarding the
):'\standing and the authority to proceed of Mortgage Electronic Registration
Systems, Inc. ("MERS"), as nominee for Decision One Mortgage Company,
LLC in the above captioned quiet title action.
II. FACTUAL/PROCEDURAL HISTORY
On May 13, 2004, Defendant Kimberly Poplawski executed a
mortgage ("the Mortgage") with Decision One Mortgage Company, LLC,
with MERS acting as Nominee, on real property located at 624 Boulevard
11
Avenue, Dickson City, Pennsylvania ("the Property"). The Mortgage was
11
11 1
iI
iI
l !
properly recorded in the Lackawanna County Recorder of Deeds Office in
Book 1233, Page 520. MERS is listed as the mortgagee in the terms of the
mortgage.
About seven (7) years later, on August 10, 2011, Plaintiff, Marjer, Inc.
("Marjer" or "Plaintiff') purchased the Property from Ms. Poplawski. Shortly
thereafter, ( about eight days later) on August 18, 2011, Plaintiff filed the
instant action seeking quiet title to the Property, alleging that the deed for the
property, now in possession of Plaintiff, divested any claims MERS or any
Defendant had in the Property. On October 31, 2011, MERS answered
Plaintiff's complaint. However, default judgments were entered on November
4, 2011 against Decision One Mortgage Company, LLC and Ms. Poplawski.
MERS requested discovery of Plaintiff, seeking information regarding
the basis of their quiet title claim. Plaintiff produced no discovery that the
mortgage executed on the property with Decision One Mortgage with MERS
as the nominee had been satisfied at the time Plaintiff filed the quiet title
action. Therefore, MERS filed a Motion for Summary Judgment on October 9,
· 2012.
Plaintiff filed a Response to MERS Motion and also filed a Cross-
Motion for Summary Judgment. on November 21, 2012. After hearing oral
argument on the dueling motions, this Court granted MERS' Motion for
Summary Judgment by Court Order and Opinion dated March 6, 2013.
Plaintiff appealed this Court's decision to the Superior Court of
Pennsylvania. By Opinion and Order dated December 23, 2013, the Superior
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I
I Court remanded this matter to the Lackawanna County Court of Common
I Pleas, ordering this Court to consider MERS' standing and authority to
proceed in this matter before disposing of the Motions for Summary
Judgment. By Cami Order dated October 21, 2014, this Court ordered that the
Parties were to submit supplemental briefs regarding the afore mentioned
issues. By agreement of the Parties, the Parties' relied on their briefs for this
Court's decision.
III. DISCUSSION
A. MERS has Standing to Proceed in this Quiet Title Action
. .~~:J·:r '. .~j~f ·
. ·"A':'(Jii:wffel: seeking judicial resolution of a controversy m this
Commonwealth must, as a prerequisite, establish that he has standing to
maintain the action." Bergdoll v. Kane, 731 A.2d 1261, 1268 (Pa. 1999). "An
'immediate' interest involves the nature of the causal connection between the
action complained of and the injury to the party challenging it." Id. "The
requirement of standing is critical because only when parties have sufficient
interests in a matter is it ensured that there is a legitimate controversy before
the court." In re. Hickson, 821 A.2d 1238, 1243 (Pa. 2003). Therefore, before
this Court can dispose of the competing Motions for Summary Judgment in
the case at hand, this Court must determine if Defendant MERS' has standing
to proceed in this matter.
Upon review of the relevant statutory and case law, and the facts of
this case, it is clear to this Court that MERS has standing to proceed in this
action. First, the mortgage expressly provides that MERS, as mortgagee of
3
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t I
record and nominee for the originating lender, has full legal authority to act as
a mortgagee. This Court believes this includes the ability to defend against a
quiet title action that is seeking to extinguish the mortgage for which MERS
serves as the nominee.
Second, the case law clearly demonstrates that MERS has standing. In
Mortgage Elec. Registration Systems, Inc. v. Ralich, 982 A.2d 77, 81
(Pa.Super. 2009), as cited by MERS in its brief, the Pennsylvania Superior
Court upheld the authority of MERS to foreclose on a property, even though
the defendant borrowers in that case objected to MERS' standing. The Court
held that the language of the mortgage gave MERS this power. Similarly, in
the case at hand, the language of the mortgage gives MERS full legal
authority to defend the mortgage.
Further, a number of cases have held that MERS has the authority to
assign a mortgage. For example, Deutsch Bank Trust Co. v. Kravitz, 1911
EDA 2013 (Pa. Super. 2014) and Bank of America v. Blair, No. 2011-1433
(C.P. Ct. Crawford Cnty., Pa. Jan 13, 2012) are recent cases that have held
that MERS has the authority to act as a mortgagee under Pennsylvania law,
even though it was identified by the mortgage as a nominee.
The case law in Pennsylvania recognizes that MERS has the authority
to foreclose and assign under mortgage terms that reflect the mortgage in this
case. This Court holds that this demonstrates that MERS has the ability to act
as a mortgagee and therefore, it is clear the MERS has the ability to defend
against a case in which MERS was specifically named, and in which Plaintiff
4
is seeking to extinguish a mortgage in which MERS has an interest. The
extinguishment of this mortgage would have an adverse affect on MERS.
Therefore, MERS has standing to proceed.
B. MERS also has Authority to Proceed in this Quiet Title Action even
though a Default Judgment was Entered against the Originating Lender.
Plaintiff argues that MERS lacks the authority to proceed in this matter
because a default judgment was entered against the originating lender,
Decision One. This Court does not agree with Plaintiff, and holds that MERS
does have the authority to proceed.
The default judgment against Decision One has no bearing on MERS
standing to proceed. The mortgage, by its terms, provides that MERS is the
mortgagee, as nominee for Decision One and Decision One's successors and
assigns. Any default judgment against Decision One does not affect MERS
because MERS holds the Mortgage interest.
Moreover, Plaintiff specifically named MERS as a separate Defendant
from Decision One, signifying to this Court that Plaintiff acknowledges that
MERS is separate and apart from Decision One and further proving to this
Court that a default against Decision One has no effect on MERS' standing.
Therefore, Plaintiffs allegation that MERS' cannot proceed due to the default
judgment entered against Decision One is without merit.
C. MERS' Assignment of the Mortgage During the Pendency of the Case
at hand does not Extinguish MERS' Authority to Proceed
During the pendency of this quiet title action, on March 1, 2012,
MERS assigned the mortgage on the real property in question to Wells Fargo.
5
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11 Plaintiff argues that this assignment to Wells Fargo prevents MERS from
I defending against Plaintiffs quiet title action. This Court does not agree with
I Plaintiff, and holds that the assignment does not affect MERS' ability to
proceed.
In Ralich, 982 A.2d at 79~81, as cited in MERS' supplement brief
regarding standing, the Pennsylvania Superior Court held that MERS had the
authority to continue with a sheriffs sale despite an assignment of the
mortgage by MERS. This Court holds that Ralich is applicable here. Even
though an assignment was made, MERS still maintains the ability to act as a
mortgagee, which gives MERS the authority to enforce the loan including the
authority to defend against Plaintiffs quiet title claim.
Therefore, this Court holds that MERS' assignment of the mortgage
does not extinguish MERS' authority to defend against Plaintiffs quiet title
claim.
D. MERS is entitled to SummaryJudgmenton Plaintiff'sQuiet Title
Action
Because this Court held above that MERS has standing and the
authority to proceed in this action, this Court must next dispose of the
competing Motions for Summary Judgment filed by both Parties.
Summary judgment is proper when the pleadings, depositions, answers
to interrogatories, admissions on file, and affidavits demonstrate that there
exists no genuine issue of material fact and the moving party is entitled to
judgment as a matter oflaw. Pa.R.C.P. 1035.2. In determining whether to
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j J grant summary judgment, a trial court must resolve all doubts against the
moving party and examine the record in a light most favorable to the non-
moving party. Id. Summary judgment may only be granted in cases where it is
clear and free from doubt the moving party is entitled to judgment as a matter
of law. Id; Sebelin v. Yamaha Motor Corp., 705 A.2d 904, 907 (Pa. Super.
1998).
A party may bring an action in quiet title:
(2) where an action of ejectment will not lie, to
determine any right, lien, title or interest in the land or
determine the validity or discharge of any document,
obligation or deed affecting any right, lien, title or
interest in land;
(3) to compel an adverse party to file, record, cancel,
surrender or satisfy of record, or admit the validity,
invalidity or discharge of, any document, obligation or
deed affecting any right, lien, title or interest in land; or
Pa.R.C.P. No. 1061.
The law in Pennsylvania is clear that a properly recorded mortgage
binds a subsequent purchaser of property. 21 Pa. Cons. Stat. Ann. § 357
provides:
"the legal effect of the recording of such agreements shall be to
give constructive notice to subsequent purchasers, mortgagees,
and/or judgment creditors of the parties to said agreements of
the fact of the granting of such rights or privileges and/or of the
execution of said releases, and the rights of the subsequent
purchasers, mortgagees, and/or judgment creditors of the
parties to said agreements shall be limited thereby with the
same force and effect as if said subsequent purchasers,
mortgagees, and/or judgment creditors had actually joined in
the execution of the agreement or agreements aforesaid."
21 Pa. Cons. Stat. Ann. § 357
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Plaintiff purchased the real property in question after a mortgage on
the property, executed by Kimberly Poplawski to MERS, as nominee for
Decision One Mortgage Company, LLC was properly recorded. As such,
Plaintiff purchased the property subject to the MERS mortgage and is bound
by its terms. MERS has a valid interest in the real property. MERS took the
proper steps to defend its interest in the property. Pennsylvania Law is clear
that a recorded mortgage binds a subsequent purchaser of property. Therefore,
there is no triable issue of fact, Plaintiff's quiet title action is without merit
and MERS is entitled to summary judgment.
IV. CONCLUSION
For the reasons set forth above, it is clear to this Court that MERS has
standing and the authority to proceed in this matter. Further, the law is clear
that a subsequent purchaser with constructive notice of any prior, properly
recorded mortgages at the time of purchase is bound by the mortgage.
Because Plaintiff admittedly had notice of MERS' properly recorded
mortgage, Plaintiff has no legal basis for its Quiet Title Action and therefore,
MERS is entitled to Summary Judgment.
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Therefore, this Court grants MERS' Motion for Summary Judgment,
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'1 I and denies Plaintiffs Cross Motion for Summary Judgment. Accordingly,
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Plaintiffs Action to Quiet Title is dismissed with prejudice. An appropriate
Order follows.
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