TD Bank v. Burton2Assoc. & Bucks Co. Industrial

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TD BANK. N.A., IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant

BURTON2ASSOCIATES, LLC & BUCKS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

Appellees No. 56 EDA 2014

Appeal from the Order Entered December 5, 2013 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2011-09088

TD BANK. N.A., IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant

BURTON2ASSOCIATES, LLC & BUCKS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

Appellees No. 340 EDA 2014

Appeal from the Order Entered December 26, 2013 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2011-09088

TD BANK. N.A., IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant

BURTON2ASSOCIATES, LLC & BUCKS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

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Appellees No. 343 EDA 2014

Appeal from the Order Entered December 26, 2013 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2011-09088

BEFORE: BENDER, P.J.E., FITZGERALD, J.* and PLATT, J.* MEMORANDUM BY BENDER, P.J.E.: FILED NOVEMBER 05, 2014

In this mortgage foreclosure action, TD Bank, N.A. (TD Bank) appeals from the orders entered December 5, and 26, 2013, which, collectively, granted the petitions filed by Steven Gross (Gross) and Wayne and Barbara Schur (the Schurs) and directed the Bucks County Prothonotary to mark the judgment entered December 28, 2011, “satisfied, released, and discharged,” pursuant to 42 Pa.C.S. § 8103(d).1 We affirm.

On August 8, 2007, Burton2Associates, LLC, of which both Gross and Wayne Schur are members, borrowed $4,083,000 from TD Bank, to purchase and renovate a commercial property located at 625 Winks Lane, ____________________________________________

* Former Justice specially assigned to the Superior Court. ** Former Senior Judge assigned to the Superior Court. 1 At No. 56 EDA 2014, the order appealed was dated December 4, 2012, and entered on the docket on December 5, 2012. At No. 340 EDA 2014, the order appealed was dated December 20, 2012, and entered December 26, 2012. At No. 343 EDA 2012, the order appealed was dated December 23, 2012, and entered December 26, 2012. This Court sua sponte consolidated these appeals. See Pa.R.A.P. 513.

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Bensalem, Bucks County, Pennsylvania (the Property).2 The loan was secured by a mortgage. In addition, Gross and Wayne Schur guaranteed the loan individually.3

Burton2Associates, LLC defaulted on its loan. On March 4, 2011, TD Bank confessed judgment against Burton2Associates, LLC, Gross, Wayne Schur, et al., in Chester County. See Chester County Civil Action No. 11-02426. Thereafter, TD Bank transferred the confessed judgment to Bucks and Montgomery Counties and commenced a complaint in mortgage foreclosure against the Schurs’ personal residence. See Bucks County Civil Action No. 2011-02419; Montgomery County Civil Action No. 2011-30497. In response, Gross petitioned to open and/or strike the confessed judgment in Chester County. On November 29, 2012, Gross sought and thereafter obtained an emergency stay of execution against his personal assets in Montgomery County, pending disposition of his petition to open and/or strike. The stay remained in effect until terminated on May 6, 2013.

In parallel proceedings, on October 14, 2011, TD Bank commenced this mortgage foreclosure action. On December 28, 2011, judgment was

entered on its behalf (the Property judgment). On July 13, 2012, the ____________________________________________

2 TD Bank is the successor-in-interest to Commerce Bank, with whom the initial loan originated. 3 Wayne Schur gave TD Bank a mortgage on his personal residence located in Montgomery County.

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Property was sold to TD Bank for costs in the amount of $1,217.89. The deed was dated October 11, 2012, and recorded on October 26, 2012.

On May 14, 2013, Gross filed a petition pursuant to 42 Pa.C.S. § 8103(d), asserting TD Bank had failed to file timely a petition to set the fair market value of the Property and seeking to have the foreclosure judgment marked satisfied, released and discharged. The Schurs filed a similar petition on May 13, 2013, and an amended petition on June 4, 2013. Thereafter, TD Bank filed a petition to set the fair market value on September 13, 2013. Following argument and briefing, the trial court granted their petitions in a series of orders, and TD Bank timely appealed. TD Bank filed court-ordered Pa.R.A.P. 1925(b) statements, and the court filed a responsive opinion.

TD Bank raises the following issues on appeal:

1. Whether TD Bank was required to file a petition to set fair market value in a mortgage foreclosure proceeding during the pendency of a stay of “all actions in furtherance of execution or transfer of [a] confessed judgment” where a) the mortgage foreclosure action and confessed judgment are predicated on the same underlying debt, b) the language of the order directing a stay was broadly drafted by Appellant Gross, c) and [sic] where Gross was a necessary party to any petition to set fair market value?

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2. Whether the scope of the stay order drafted by Gross could be retroactively interpreted to TD Bank’s detriment by considering facts outside the language of the stay order?

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3. Whether, in interpreting the language of the stay order, it was appropriate for the trial court to narrowly and retroactively construe the language of the stay order to TD Bank’s detriment under the premise that the Deficiency Judgment Act should be liberally construed in favor of debtors where 1) interpreting the stay order did not require interpretation of any provision of the Deficiency Judgment Act and 2) where the Pennsylvania Savings Statute is to be liberally construed in favor of TD Bank?

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4. Whether the trial court was required to create an evidentiary record and hold a trial pursuant to Pa.R.C.P. 3291 where 1) TD Bank denied the material allegations of the petitions to mark the judgment satisfied by [Appellees] Gross and the Schurs, 2) where the court expressly considered matters outside the record and made credibility determinations and 3) where TD Bank repeatedly demanded a trial in writing?

Appellant’s Brief, at 6-7.

In addressing these issues, our review is limited to

‘assessing whether sufficient evidence exists to sustain the trial court’s order, or whether the court committed a reversible error of law. The creditor must carry the burden to demonstrate its compliance with the Deficiency Judgment Act.’ … Moreover, the Deficiency Judgment Act is to be liberally interpreted in favor of judgment creditors.

Home Sav. & Loan Co. of Youngstown, Ohio v. Irongate Ventures, LLC, 19 A.3d 1074, 1078 (Pa. Super. 2011) (Irongate Ventures) (quoting and citing First Fed. Sav. & Loan Ass’n of Carnegie v. Keisling, 746 A.2d 1150, 1153-54 (Pa. Super. 2000)). To the extent TD Bank challenges the trial court’s interpretation of the Deficiency Judgment Act, our review is plenary and de novo. See Wilson v. Transp. Ins. Co., 889 A.2d 563, 570 (Pa. Super. 2005).

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We have reviewed the certified record, the briefs of the parties, the applicable law, and the opinion authored by the Honorable Jeffrey L. Finley of the Court of Common Pleas of Bucks County, entered April 28, 2014. The principal dispute between the parties involves the proper application of the Deficiency Judgment Act, specifically whether an emergency stay of execution against Gross’ personal assets located in Montgomery County tolled the six-month time limit to file a petition to set the fair market value of the Property. In this regard, the trial court determined that (1) TD Bank was required to file a petition to set the fair market value of the Property within six months of recording its deed on October 26, 2012; (2) the six-month period expired on April 26, 2013; (3) TD Bank’s petition, filed in September 2013, was untimely; (4) the stay of execution was relevant only to the confessed judgment pending in Montgomery County and did not impact TD Bank’s obligation to file a petition in the mortgage foreclosure proceeding; and (5) therefore, pursuant to the Deficiency Judgment Act, the debtors were entitled to have the Property judgment marked satisfied, released, and discharged.4 ____________________________________________

4 The trial court opinion includes typographical errors on pages 9 and 11, suggesting that the time expired for TD Bank’s petition to set fair market value on “April 26, 2012.” Trial Court Opinion, 04/28/2014, at 9, 11. Clearly, this was inadvertent. The six-month period expired on April 26, 2013.

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We observe that TD Bank did not dispute material facts before the trial court, averring rather that this matter called for a legal determination to be made by the court. Further, we discern no error in the court’s interpretation and application of the Deficiency Judgment Act. See 42 Pa.C.S. § 8103; see also Irongate Ventures, 19 A.3d at 1078-80. To the extent TD Bank draws a comparison between the limited stay of execution granted in Montgomery County and the broad, automatic stay granted debtors in the context of bankruptcy proceedings, we deem its arguments unpersuasive. See 11 U.S.C.A. § 362. Finally, TD Bank’s reliance on the Pennsylvania Savings Statute, codified at 42 Pa.C.S. § 5535(b), is misplaced. Accordingly, TD Bank is not entitled to relief.

We conclude that Judge Finley’s opinion is dispositive of the issues presented in this appeal. Accordingly, we adopt the opinion as our own for purposes of further appellate review.

Orders affirmed.

Judge Platt joins the memorandum.

Justice Fitzgerald concurs in the result.

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 11/5/2014

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