KTMT Newbury v. Krautheim, T. ( 2015 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KTMT NEWBURY IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
TODD KRAUTHEIM
Appellant No. 943 EDA 2014
Appeal from the Order Entered on February 24, 2014
In the Court of Common Pleas of Bucks County
Civil Division at No.: 2013-07214
BEFORE: GANTMAN, P.J., WECHT, J., and JENKINS, J.
MEMORANDUM BY WECHT, J.: FILED JANUARY 07, 2015
Todd Krautheim appeals pro se from the order of February 24, 2014,
granting summary judgment in favor of KTMT Newbury (“KTMT”), successor-
in-interest of First Savings Bank of Perkasie (“First Savings”) in this
mortgage foreclosure action. In addition, Krautheim has filed a “Notice of
Challenge to Constitutionality of Statute,” in which he seeks relief from the
allegedly unconstitutional application of Rule 1.6 of the Pennsylvania Rules
of Professional Conduct. We affirm the trial court’s order and deny the
motion.
The trial court set forth the facts of this case as follows:
On April 15, 2002, [First Savings] secured a Note (hereinafter,
“Mortgage”) signed by Krautheim upon the residential premises
at 186 East Ashland St., Doylestown, PA 18901. The Mortgage
is recorded in the Office of the Recorder of Deeds of Bucks
County. The Mortgage was for $400,000 (four hundred
thousand dollars) total, with interest at the rate of 5.75% (five
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point seven five percent) per annum, and payments to be made
monthly. On September 18, 2013, First Savings filed a
Complaint in Mortgage Foreclosure. The Complaint alleges
“[Krautheim] defaulted under the aforesaid documents by failing
to timely make the required monthly installment payments of
principal and interest [that were] due for the March 2013
monthly payment and remain[] currently due for the August
2013 payment and the months thereafter.”
On October 11, 2013, Krautheim filed a Response to the
Complaint. Krautheim argued that First Savings “has failed to
make the previously arranged transfer of funds between
accounts held at their institution,” and that “[t]he transfers of
funds between the accounts is not a function which can be
accomplished by [Krautheim].” Krautheim also generally denied
the allegations of the Complaint, stating, “[Krautheim] has not
defaulted on the mortgage. The bank has simply neglected to
make the appropriate transfer of funds.” Krautheim failed to
supplement his Answer with any accompanying evidence
showing a prior arrangement for the transfer of any funds.
On October 23, 2013, First Savings filed a Motion for Summary
Judgment. In its Motion, First Savings stated that
“[Krautheim’s] Answer, as a whole, is non-responsive to [First
Savings’] Complaint. [Krautheim] attempts to allege that he has
not defaulted on his loan, but rather, that [First Savings] has
failed to move funds between two accounts. [Krautheim] offers
no support for this allegation.” In its Motion for Summary
Judgment, First Savings attached an affidavit from their
representative verifying the default status of the loans and the
amounts due. They also attached a copy of the Mortgage.
On November 27, 2013, Krautheim filed a Reply to First Savings’
Motion for Summary Judgment. In his Reply, Krautheim
reiterated the statements made in his Answer, and again failed
to attach any documents supporting his assertion that First
Savings failed to transfer funds. Krautheim’s Reply also
suggests that First Savings should be responsible for showing
the alleged transfer of funds agreement, and that First Savings’
attorneys acted in an inappropriate manner.
On February 24, 2014, the [trial c]ourt granted First Savings’
Motion for Summary Judgment.
On March 10, 2014, KTMT, as an assignee of First Savings, filed
a Praecipe to Substitute Plaintiff, and requested that the
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prothonotary list KTMT as the only party in the action by virtue
of assignment of the parties.13
13
This praecipe and substitution of Plaintiff had no effect
on the legal conclusions reached by the [c]ourt, or its
analysis.
On March 24, 2014, Krautheim filed his [pro se] Notice of Appeal
with the Pennsylvania Superior Court.
Trial Court Opinion (“T.C.O.”), 5/29/2014, at 1-3 (record citations and most
footnotes omitted). On April 7, 2014, the trial court ordered Krautheim to
file a concise statement of errors complained of on appeal pursuant to
Pa.R.A.P. 1925(b), and Krautheim timely complied on April 28, 2014. The
trial court entered its opinion pursuant to Pa.R.A.P. 1925(a) on May 29,
2014.
Initially, we note that Krautheim’s pro se brief violates several rules of
appellate procedure. While we are willing to liberally construe materials filed
by a pro se appellant, see Grose v. P&G Paper Prods. (In re Grose), 866
A.2d 437, 439-40 (Pa. Super. 2005), our review is hampered by Krautheim’s
failure to include a statement of jurisdiction, a statement of the scope and
standard of review, a statement of questions involved, a statement of the
case, a summary of the argument, a separate argument section, and a short
conclusion stating the precise relief sought. See Pa.R.A.P. 2111(a), 2114,
2116(a), 2117, 2118 and 2119(a). Krautheim’s brief consists of three
unnumbered pages with no citations to relevant case law or statutory
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authority. Notwithstanding these glaring errors, we have carefully reviewed
his brief and have gleaned the following issues therefrom1: Krautheim
challenges the jurisdiction of this Court, alleges a “failure to hold
proceedings,” and challenges KTMT’s standing. Krautheim’s Brief at
unnumbered pages 1-2.
Our standard of review of an order granting summary judgment is
well-settled:
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
non-moving 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
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.
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1
This Court may quash or dismiss an appeal where the appellant fails to
adhere to the requirements set forth in the Pennsylvania Rules of Appellate
Procedure. See Pa.R.A.P. 2101. In the case sub judice, we will address
only those arguments we can reasonably discern from Krautheim’s
substantively defective brief. See Kring v. Univ. of Pittsburgh, 829 A.2d
673, 675 (Pa. Super. 2003).
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JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-62 (Pa.
Super. 2013) (case citation omitted).
In an action for mortgage foreclosure, the entry of summary
judgment is proper if the mortgagors admit that the mortgage is
in default, that they have failed to pay interest on the obligation,
and that the recorded mortgage is in the specified amount. This
is so even if the mortgagors have not admitted the total amount
of the indebtedness in their pleadings.
Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. 1998)
(citations omitted).
First, we address, to the extent possible, Krautheim’s allegation that
the “jurisdiction of this Court and the elements of jurisdiction have not been
enumerated.” Krautheim’s Brief at 1. This claim is undeveloped and would
not merit relief.
It is well-settled that “[t]he test for whether a court has subject matter
jurisdiction inquires into the competency of the court to determine
controversies of the general class to which the case presented for
consideration belongs.” In re Admin. Order No. 1-MD-2003, 936 A.2d 1,
5 (Pa. 2007). “It is the law of this Commonwealth that a judgment may be
attacked for lack of jurisdiction at any time, as any such judgment or decree
rendered by a court that lacks subject matter or personal jurisdiction is null
and void.” Bell v. Kater, 943 A.2d 293, 298 (Pa. Super. 2008) (citation
omitted).
The Rules of Civil Procedure govern mortgage foreclosure actions, see
Pa.R.C.P. 1141, et seq., and our courts of common pleas generally have
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unlimited original jurisdiction over all actions and proceedings in this
Commonwealth. See 42 Pa.C.S.A. § 931(a). However, in the context of
mortgage foreclosures, “if adequate notice of the foreclosure action was not
given, the court lacked jurisdiction to enter judgment.” Meritor Mortgage
Corp.—E. v. Henderson, 617 A.2d 1323, 1326 (Pa. Super. 1992) (quoting
Vichosky v. Boucher, 60 A.2d 381, 382 (Pa. Super. 1948)).
In the instant case, Krautheim does not state why he believes the trial
court or this Court lacks jurisdiction over a grant of summary judgment in a
mortgage foreclosure action. See 42 Pa.C.S.A. § 931(a). Nor does he
challenge the notice of foreclosure as inadequate. See Meritor, 617 A.2d at
1326. In its complaint, KTMT states that, “[p]ursuant to applicable
Pennsylvania law, a Notice of Demand was forwarded to [Krautheim] on or
about August 16, 2013.” Complaint, 9/18/2013, at 3 ¶ 9. Krautheim’s
response does not allege any defect in the notice of foreclosure, instead
making the unsupported claim that “[t]he bank has simply neglected to
make the appropriate transfer of funds.” Response to Complaint,
10/11/2013, at 1 ¶ 6. Upon our review of the record, we discern no defect
that would prevent the trial court, and consequently this Court, from
exercising jurisdiction in this mortgage foreclosure case. See Bell, 943 A.2d
at 298; Meritor, 617 A.2d at 1326. Accordingly, Krautheim’s assertion
regarding subject matter jurisdiction does not merit relief.
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Second, Krautheim appears to allege trial court error in failing to hold
a hearing before granting KTMT’s motion for summary judgment. The
entirety of his argument on this issue is as follows:
The [c]ourt neglected to review, consider or hold any proceeding
on the matter.
The [c]ourt ignored the responses, motions and documents filed
by [Krautheim] in the matter.
The [c]ourt neglected to address the misinformation in the
documents filed by [KTMT] including but not limited to deliberate
logical fallacies intended to distract, misrepresent and misinform.
Krautheim’s Brief at 1 (unnumbered). We disagree.
Preliminarily, Krautheim fails to identify with any specificity which
“responses, motions and documents” the trial court allegedly failed to
review, nor does he explain what “misinformation in the documents filed by
[KTMT]” misled the court. Id. Thus, we cannot address these bald,
undeveloped claims. See Pa.R.A.P. 2119(a).
However, we will address his allegation that the court erred in failing
to hold a hearing in this matter. Pennsylvania Rule of Civil Procedure 1035.2
provides:
Rule 1035.2. Motion
After the relevant pleadings are closed, but within such time as
not to unreasonably delay trial, any party may move for
summary judgment in whole or in part as a matter of law
(1) whenever there is no genuine issue of any
material fact as to a necessary element of the cause of
action or defense which could be established by additional
discovery or expert report, or
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(2) if, after the completion of discovery relevant to
the motion, including the production of expert reports, an
adverse party who will bear the burden of proof at trial has
failed to produce evidence of facts essential to the cause of
action or defense which in a jury trial would require the
issues to be submitted to a jury.
Pa.R.C.P. 1035.2. Rule 1035.2 does not mandate that a court hold a hearing
prior to granting summary judgment, nor in our research have we found any
requirement that a trial court hold a hearing “after the relevant pleadings
are closed, but within such time as not to unreasonably delay trial.” Id. On
the contrary, the trial court explained:
Bucks County Rule of Civil Procedure 208.3(b)(6) states that
“[u]nless oral argument has been requested by the moving party
in the praecipe, or by any other party within the 10-day period
specified in subsection (2) hereof, the matter shall be disposed
of by written order . . . .” After a movant has filed a praecipe
and the accompanying documents, the opposing party “shall file
a brief or memorandum of law with the clerk of the court,
serving copies of same on all other parties.” During the next ten
days, the opposing party may request an oral argument by filing
an appropriate praecipe. Pursuant to Bucks County Rule of Civil
Procedure 208.3(a), once receiving a motion, the Court may
enter an appropriate order disposing of the motion.
T.C.O. at 7 (footnotes omitted). Our independent review of the record
confirms the trial court’s assertion that First Savings did not request oral
argument. In fact, on December 4, 2013, First Savings filed a praecipe
explicitly stating, “Oral argument is NOT requested.” Praecipe under Rule
208.3(b), 12/4/2013, at 1. At no point did Krautheim praecipe the court
himself or attempt to schedule oral argument. Thus, the trial court did not
abuse its discretion in granting summary judgment upon the basis of the
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parties’ filings where there was no genuine issue of material fact, and
neither party requested a hearing. Murray, 63 A.3d at 1261-62. This issue
does not merit relief.
Third, Krautheim contends that First Savings and KTMT lack standing.
Specifically, he argues that First Savings “failed to produce evidence of
lawful standing to file the civil action against [Krautheim]” and KTMT “has
not produced evidence of [its] ownership of the note.” Krautheim’s Brief at
2-3 (unnumbered). Thus, “[t]he clear lack of standing in the claim permits
the Superior Court to return the matter to the [trial] court for proceedings,
or a withdrawal or dismissal as appropriate.” Id. We disagree.
Pa.R.C.P. 2002 provides, in relevant part, that “[e]xcept as
otherwise provided . . . all actions shall be prosecuted by and in
the name of the real party in interest, without distinction
between contracts under seal and parol contracts.”
Pa.R.C.P. 2002(a). In Cole v. Boyd, 719 A.2d 311, 312-13 (Pa.
Super. 1998), this Court indicated that a real party in interest is
a “[p]erson who will be entitled to benefits of action if
successful. . . . [A] party is a real party in interest if it has the
legal right under the applicable substantive law to enforce the
claim in question.” . . . See generally Levitt v. Patrick, 976
A.2d 581 (Pa. Super. 2009) (indicating a mortgage secures the
note); Brown v. Esposito, 42 A.2d 93 (Pa. Super. 1945)
(indicating assignee may sue as real party in interest);
American Society for Testing & Materials v. Corrpro
Companies, Inc., 292 F.Supp.2d 713 (E.D. 2003) (indicating
assignee stands in shoes of the assignor, assumes his rights, and
since he has a right to be enforced, is a “real party in interest”).
Simply put, . . . the recording of an assignment of the mortgage
[is] not a prerequisite to [an a]ppellee having standing to seek
enforcement of the mortgage via a mortgage foreclosure action.
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US Bank N.A. v. Mallory, 982 A.2d 986, 993-94 (Pa. Super. 2009)
(citations formatted; footnotes omitted).
In its motion for summary judgment, First Savings identifies the
mortgage executed by Krautheim with First Savings, which sets forth his
obligations and First Savings’ remedies upon default. See Motion for
Summary Judgment, 10/23/2013, Exhibit C; see also Pa.R.C.P. 1019(d)
(“In pleading an official document or official act, it is sufficient to identify it
by reference and aver that the document was issued or the act done in
compliance with law.”). Therefore, First Savings had standing to initiate
mortgage foreclosure proceedings when Krautheim defaulted on his
mortgage because it held the mortgage which secured the note. See
Mallory, 982 A.2d at 993-94.
Subsequently, First Savings assigned the mortgage to KTMT, which
filed a praecipe to substitute plaintiff with the trial court, asserting that “the
parties have agreed KTMT Newbury, LP, as an assignee of First Savings Bank
of Perkasie, shall be Plaintiff in this action.” Praecipe to Substitute Plaintiff,
3/10/2014, at 1. As an assignee, KTMT “stands in shoes of the assignor,
assumes [its] rights, and since [it] has a right to be enforced, is a ‘real party
in interest.’” Mallory, 982 A.2d at 993-94 (citing Am. Soc. for Testing &
Materials, 292 F.Supp.2d at 713). Thus, KTMT has standing to pursue the
underlying litigation, and need not produce the note in order to establish
that it is a real party in interest. Krautheim’s challenge does not merit relief.
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Accordingly, the trial court did not err or abuse its discretion where
Krautheim’s challenges fail to raise a genuine issue of material fact that
would preclude the court from granting summary judgment in favor of KTMT.
Finally, we turn to the “Notice of Challenge to Constitutionality of
Statute” filed by Krautheim with this Court on August 4, 2014. In it, he
contends that Rule 1.6 of the Pennsylvania Rules of Professional Conduct 2
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2
Rule 1.6, Confidentiality of Information, provides:
(a) A lawyer shall not reveal information relating to
representation of a client unless the client consents after
consultation, except for disclosures that are impliedly authorized
in order to carry out the representation, and except as stated in
paragraphs (b) and (c).
(b) A lawyer shall reveal such information if necessary to
comply with the duties stated in Rule 3.3.
(c) A lawyer may reveal such information to the extent that
the lawyer reasonably believes necessary:
(1) to prevent the client from committing a criminal
act that the lawyer believes is likely to result in death or
substantial bodily harm or substantial injury to the
financial interests or property of another;
(2) to prevent or to rectify the consequences of a
client’s criminal or fraudulent act in the commission of
which the lawyer’s services are being or had been used; or
(3) to establish a claim or defense on behalf of the
lawyer in a controversy between the lawyer and the client,
to establish a defense to a criminal charge or civil claim or
disciplinary proceeding against the lawyer based upon
conduct in which the client was involved, or to respond to
allegations in any proceeding concerning the lawyer’s
representation of the client.
(Footnote Continued Next Page)
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“collaterally affect[s] and negate[s] ‘the substantive rights of the litigant.’
Specifically, Rule 1.6 Confidentiality of Information causes a mandatory
conspiracy of silence within the courts [that] ignores the damage and harm
caused to litigants and prevents resolution.” Notice of Challenge to
Constitutionality of Statute, 8/4/2014, Attachment (Letter to Attorney
General Kathleen Kane, 8/2/2014). We agree with KTMT that Krautheim’s
challenge is “irrelevant to the above-captioned appeal.” KTMT’s Answer to
Krautheim’s Notice of Challenge to Constitutionality of Statute, 8/21/2014,
at 1.
Preliminarily, we observe that the Rules of Professional Conduct and
the Rules of Disciplinary Enforcement are promulgated by our Supreme
Court, which is vested with the authority to regulate the conduct of
attorneys pursuant to Article V, Section 10 of the Pennsylvania Constitution.
See Commonwealth v. Stern, 701 A.2d 568, 571 (Pa. 1997). Thus, Rule
1.6 is not, as Krautheim claims, a statute. Moreover, we must consider the
threshold question of whether Krautheim has standing to raise a challenge to
Rule 1.6:
_______________________
(Footnote Continued)
(d) The duty not to reveal information relating to
representation of a client continues after the client-lawyer
relationship has terminated.
Pa.R.P.C. 1.6.
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[T]he requirement of standing under Pennsylvania law is
prudential in nature, and stems from the principle that judicial
intervention is appropriate only where the underlying
controversy is real and concrete, rather than abstract.
Under the concept of prudential standing, the challenger to a
statute must demonstrate, inter alia, how he or she falls within
the zone of interests intended to be protected by the statute,
rule, or constitutional provision on which the claim is based.
Johnson v. Amer. Std., 966 A.2d 573, 577 (Pa. Super. 2009) (citations
and internal quotation marks omitted). “[A] general allegation of harm is
insufficient in the absence of a link to the specific constitutional violation
being asserted.” Id. at 578.
We have carefully reviewed Krautheim’s filings and nowhere does he
set forth which constitutional provisions are allegedly violated by Rule 1.6.
He makes passing reference to “substantive rights guaranteed by the U.S.
Constitution” but fails to demonstrate that any specific constitutional
provision has been violated in this case. See Johnson, 966 A.2d at 577.
Furthermore, as noted by KTMT, “[a]t no time during this action[] has KTMT
used . . . Rule 1.6 to support its ability to obtain a judgment against
Krautheim for defaulting on his loan. At no time during this action[] did the
[trial] court use . . . Rule 1.6 to support its ability to grant a judgment
against Krautheim for defaulting on his loan.” KTMT’s Answer, 8/21/2014,
at 1.
Krautheim has not established his standing to challenge Pennsylvania
Rule of Professional Conduct 1.6 in the instant mortgage foreclosure case.
Even if we were able to discern the nature of his objection to the rule, we
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would decline to develop an argument for him. See Commonwealth v.
Beshore, 916 A.2d 1128, 1140 (Pa. Super. 2007) (“We shall not develop an
argument for [the appellant], nor shall we scour the record to find evidence
to support an argument; consequently, we deem this issue waived.”).
Order affirmed. Motion denied.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/7/2015
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