Penn Security Bank v. Holtzman, A. ( 2015 )

J-A16016-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PENN SECURITY BANK & TRUST IN THE SUPERIOR COURT OF
COMPANY, PENNSYLVANIA
Appellee
v.
DR. ALEXANDER J. HOLTZMAN AND
NANCY HOLTZMAN,
Appellants No. 3201 EDA 2014
Appeal from the Judgment Entered October 17, 2014
In the Court of Common Pleas of Monroe County
Civil Division at No(s): 2613-CV-2013
BEFORE: LAZARUS, OLSON and PLATT,* JJ.
MEMORANDUM BY OLSON, J.: FILED OCTOBER 30, 2015
Appellants, Dr. Alexander J. Holtzman and Nancy Holtzman, appeal
from an order entered on October 17, 2014 that granted summary judgment
in this mortgage foreclosure action in favor of Penn Security Bank & Trust
Company (the Bank). After careful review, we affirm.
On December 15, 2010, Appellants executed a promissory note in
favor of the Bank to obtain a residential home loan in the amount of
$175,000.00. The note was repayable in monthly installments of principal,
together with accrued interest, in the amount of $1,477.16 for a five-year
term, followed by a balloon payment of $133,015.92. To secure the note,
Appellants granted the Bank a mortgage interest in real property located in
Pocono Township in Monroe County, Pennsylvania.
*Retired Senior Judge assigned to the Superior Court.
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In August 2012, Appellants defaulted under the terms and conditions
of the loan documents by failing to make monthly payments in accordance
with their note. On October 2, 2012, counsel for the Bank forwarded a
letter demanding payment from Appellants of all past due sums owed under
the parties’ loan agreements. Thereafter, in accordance with Acts 91 and 6,
the Bank again advised Appellants that the mortgage on their home was in
default. In addition, the Bank informed Appellants that it intended to
foreclose on its mortgage interest in their property and that it would
accelerate their mortgage debt if Appellants did not cure the arrearage.
Appellants were also informed of corrective actions they could take to avoid
foreclosure on their property. Appellants did not cure the default or seek
emergency assistance.
On April 1, 2013, the Bank filed a complaint against Appellants. The
complaint contained two counts, one asserting mortgage foreclosure claims
and one sounding in breach of contract. The Bank attached the loan
documents to its complaint and alleged, in relevant part, that Appellants,
“failed to repay the indebtedness pursuant to the terms and conditions of
the Lending documents in that the [Appellants’] last loan payment was made
to the Bank [in August 2012].” Complaint, 4/1/13, at 3 ¶11. The Bank also
alleged that Appellants owed a principal balance of $164,762.68 on the
mortgage with accrued interest totaling $6,844.21. Id. at 4 ¶19. Together
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with other fees recoverable under the parties’ lending agreement, the Bank
alleged that Appellants owed a total of $173,533.20.1 Id.
Appellants filed a timely answer and new matter to the Bank’s
complaint on April 22, 2013. Appellants asserted general denials in
response to the material allegations of the complaint, alleging that they were
without knowledge or information sufficient to form a belief as to the truth of
the Bank’s allegations. See Answer and New Matter, 4/22/13, at 5, 8-9
¶¶’s11 and 19. Appellants did not aver specific facts that contravened the
Bank’s assertions.
Neither side conducted discovery in this case. On April 11, 2014, just
over one year after filing its complaint, the Bank moved for summary
judgment on its mortgage foreclosure claims. To support its motion, the
Bank attached an affidavit executed by Edward Walsh, a senior vice
president employed by the lender. Walsh’s affidavit included a schedule of
indebtedness owed as of the filing date of the Bank’s motion showing an
unpaid balance of $308,382.86. The schedule reflected the same unpaid
principal balance alleged in the complaint, updated sums for accrued interest
and document preparation fees, and a claim for counsel fees totaling
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1
The Bank’s complaint listed attorneys’ fees as a component of its damages
but did not specify a sum certain for this expense. Instead, the complaint
alleged that this expense would be determined later.
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$123,344.80. Appellants filed their response to the Bank’s motion on April
25, 2014.
On October 17, 2014, the trial court issued an opinion and order in
which it granted the Bank’s motion and entered summary judgment in its
favor for $175,533.29. In reaching its decision, the court did not entertain
oral argument or adversarial briefs on behalf of the parties. Instead, the
court reasoned that Appellants’ general denials to the material allegations of
the complaint must be deemed admissions in the context of a mortgage
foreclosure case since Appellants would be aware of any arrearage and
unpaid balance on their mortgage. See Trial Court Opinion, 10/17/14, at
4-6. As such, the court determined that Appellants failed to raise a genuine
issue of material fact and that the Bank was entitled to judgment as a
matter of law.
Appellants filed a timely notice of appeal on November 7, 2014. By
order entered on November 14, 2014, the court directed Appellants to file a
concise statement of errors complained of on appeal pursuant to Pa.R.A.P.
1925(b). Appellants timely complied by filing their concise statement on
December 5, 2014. On December 16, 2014, the trial court issued a brief
statement under Pa.R.A.P. 1925(a) asking this Court to vacate and remand
this matter for oral argument and the submission of briefs in view of the
Bank’s failure to file a praecipe for argument under Mon.R.C.P. 1035.2 at the
time it filed the motion for summary judgment.
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Appellants challenge an order granting the Bank’s motion for summary
judgment. Our standard of review over such a claim is well settled.
[O]ur standard of review of an order granting summary
judgment requires us to determine whether the trial court
abused its discretion or committed an error of law. Our scope of
review is plenary. In reviewing a trial court's grant of summary
judgment, we apply the same standard as the trial court,
reviewing all the evidence of record to determine whether there
exists a genuine issue of material fact. We 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. Only where there is no
genuine issue as to any material fact and it is clear that the
moving party is entitled to a judgment as a matter of law will
summary judgment be entered. All doubts as to the existence of
a genuine issue of a material fact must be resolved against the
moving party.
***
Upon appellate review, we are not bound by the trial court's
conclusions of law, but may reach our own conclusions.
Rule of Civil Procedure 1035 governs motions for summary
judgment and provides, in relevant part, as follows:
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
(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.
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Pa.R.C.P. 1035.2. This Court has explained the application of this
rule as follows:
Motions for summary judgment necessarily and directly
implicate the plaintiff's proof of the elements of a cause of
action. Summary judgment is proper 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. In other words, 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 and the
moving party is entitled to judgment as a matter of law,
summary judgment is appropriate. Thus, a record that
supports summary judgment either (1) shows the material
facts are undisputed or (2) contains insufficient evidence of
facts to make out a prima facie cause of action or defense.
Criswell v. Atlantic Richfield Co., 115 A.3d 906, 908 (Pa. Super. 2015)
(case citations omitted).
In their first issue, Appellants argue that they were denied a full and
fair opportunity to be heard because of the Bank’s failures to comply with
local procedural rules. Specifically, Appellants point out that the Bank failed
to file and serve a praecipe for argument pursuant to Mon.R.C.P. 1035.2 at
the time it moved for summary judgment. Appellants claim that the Bank’s
procedural oversight deprived them of a fair chance to contest the Bank’s
motion and that, as a result, the court’s adverse summary judgment order
denied them of their right to due process of law. We disagree.
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Although a trial court must afford parties a full and fair opportunity to
oppose a motion for summary judgment, a court may enter summary
judgment in the absence of oral argument or the filing of responsive briefs
where the record obviates the need for such proceedings and neither side is
prejudiced. Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d 622, 624
(Pa. Super. 1993); Gerace v. Holmes Protection of Phila., 516 A.2d 354,
359 (Pa. Super. 1986). In this case, Appellants received the Bank’s
complaint and motion and, in response to each filing, timely filed their
answer and new matter as well as their response to the motion for summary
judgment. As the Bank points out, “neither party filed a brief or participated
in oral argument.” Bank’s Brief at 18. Thus, neither party secured an
advantage over the other on this basis and the trial court disposed of the
Bank’s motion based upon the admissions that emerged from the parties’
pleadings and submissions. While Appellants complain that they were
denied the opportunity to file a supportive brief and participate in oral
argument, they point to no facts that raise a genuine issue requiring a trial
and no case law that demonstrates how they are entitled to a favorable
ruling. The trial court did not rule in the Bank’s favor because Appellants
procedurally defaulted on their claims. Instead, the trial court determined
that Appellants effectively admitted that their mortgage was in default and
that they continued to owe the Bank an accelerated debt pursuant to the
lending documents. Under these circumstances, we discern no error or
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abuse of discretion in the trial court’s order granting summary judgment
without first allowing the parties to participate in oral argument and submit
briefs.
In their second issue, Appellant’s claim that the Bank relied exclusively
on the Walsh affidavit in seeking summary judgment and that the trial court
violated the rule in Borough of Nanty-Glo v. American Surety Co. of
New York, 163 A. 523, 524 (Pa. 1932) in ruling in the Bank’s favor. In
Nanty-Glo, our Supreme Court held that oral testimony, even if
uncontradicted, is generally insufficient to establish the absence of a genuine
issue of material fact. Id. Appellants’ contention merits no relief.
An exception to the Nanty-Glo rule applies where a party moving for
summary judgment supports its motion with the admissions of the opposing
party or the opposing party’s witnesses. Porterfield v. Trustees of the
Hospital of the University of Pennsylvania, 657 A.2d 1293, 1295 (Pa.
Super. 1995). Our review of the party’s submissions, the opinion of the trial
court, and the record certified on appeal confirms that the trial court based
its decision on the admissions of fact that emerged from Appellants’ general
denials of the claims set forth in the Bank’s complaint, and not on the Walsh
affidavit. See infra; see also Trial Court Opinion, 10/17/14, at 4-6.
Specifically, Appellants generally denied their failure to repay the
indebtedness under the terms and conditions of the loan documents, as well
as the Bank’s allegations with respect to the unpaid balance of Appellants’
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mortgage. Such responses are ineffective and the corresponding allegations
may be deemed admitted for purposes of the Bank’s summary judgment
motion. See First Wisconsin Trust Co. v. Strausser, 653 A.2d 688, 692
(Pa. Super. 1995) (summary judgment properly entered where mortgagors
admit by way of general denials that they are without knowledge or
information sufficient to form a belief as to the truth of alleged past due
interest and principal balances). Since Appellants are deemed to have
admitted the material allegations set forth in the Bank’s complaint, we
conclude that the Nanty-Glo rule did not apply and the Bank was entitled to
summary judgment.2
Judgment affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/30/2015
____________________________________________
2
Only one component of the Bank’s damage claim was included in the Walsh
affidavit, but not set forth in the Bank’s complaint. We refer here to the
Bank’s request for $123,344.80 in attorneys’ fees in this mortgage
foreclosure case. Since the trial court wisely excluded this amount from its
award, and because the Bank has not challenged the trial court’s order on
appeal, we see no basis to disturb the judgment on this ground.
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