The opinion
J-A25019-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MTGLQ INVESTORS, L.P. : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
LIBRO J. CIARMATORI AND MARY :
JANE CIARMATORI A/K/A MAY JANE :
CIARMATORI, THE UNITED STATES : No. 501 MDA 2019
OF AMERICA C/O THE UNITED :
STATES ATTORNEY FOR THE MIDDLE :
DISTRICT OF PA :
:
:
APPEAL OF: LIBRO J. CIARMATORI :
AND MARY JANE CIARMATORI A/K/A :
MAY JANE CIARMATORI :
Appeal from the Order Entered February 28, 2019
In the Court of Common Pleas of Luzerne County Civil Division at No(s):
201604377
BEFORE: STABILE, J., McLAUGHLIN, J., and MUSMANNO, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED: FEBRUARY 5, 2020
Libro J. Ciarmatori and Mary Jane a/k/a May Jane Ciarmatori (“the
Ciarmatoris”) appeal from the order entering summary judgment against
them in this mortgage foreclosure action. The Ciarmatoris argue that the
mortgagee, Wells Fargo Financial Pennsylvania, Inc. (“Wells Fargo”),1 failed
to provide proper notice under Act 6. We affirm.
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1 During the proceedings below, Wells Fargo USA Holdings, Inc. became
successor by merger to Wells Fargo Financial Pennsylvania, Inc., and was
substituted as plaintiff. For ease of understanding, we refer to both entities as
“Wells Fargo.” After the Ciarmatoris filed notice of appeal, Wells Fargo
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The Ciarmatoris executed a $260,232.01 mortgage with Wells Fargo in
2006. Trial Court Opinion, filed 5/21/19, at 1. In August 2015, Wells Fargo
sent Act 6 notice to the Ciarmatoris of its intention to foreclose. Id. at 2. Wells
Fargo filed a Complaint in foreclosure in October 2015, but discontinued that
action in January 2016. Id. at 2-3, 4 n.2.
Wells Fargo filed a new Complaint in mortgage foreclosure against the
Ciarmatoris in April 2016. Id. at 1.2 The Ciarmatoris filed an Answer and New
Matter, arguing that Wells Fargo had not sent notice under Act 6 prior to filing
the Complaint. Id. at 2. Wells Fargo filed a Motion for Summary Judgment,
relying on the Act 6 notice it had sent in 2015, prior to the first foreclosure
action. Id. at 2. The trial court held the Motion for Summary Judgment in
abeyance, and ordered Wells Fargo to send the Ciarmatoris new Act 6 notice.
Id. at 3.
Wells Fargo sent new Act 6 notice in early May 2017, indicating the
Ciarmatoris could cure the default by paying $46,114.38. Id. The court stayed
action while the Ciarmatoris twice entered, and were twice removed from, a
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assigned the mortgage to MTGLQ Investors, L.P. (“MTGLQ”), which has been
substituted as the appellee. Id. at 1 n.1.
2 The Complaint listed The United States of America as an additional
defendant, asserting the federal government had filed tax liens against the
property. Complaint at ¶ 12. Wells Fargo and The United States of America
later entered into a stipulation that The United States of America was not
indebted to Wells Fargo, and that the proceeds of a judicial sale of the
Ciarmatoris’ property would be distributed to the parties under the state and
federal priority lien laws. Stipulation, 10/11/16, at ¶ 3, 5. The United States
of America did not otherwise participate in the proceedings below, and has not
participated in this appeal.
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mortgage foreclosure diversionary program. Id. at 3-5. In late February 2019,
nearly two years after Wells Fargo had sent new Act 6 notice, the trial court
granted Wells Fargo’s Motion for Summary Judgment. Id. at 5.
The Ciarmatoris appealed, and raise the following issues:
1. Did the Trial Court commit an error of law in granting Wells
Fargo Bank’s (the “Bank”) Motion for Summary Judgment even
though the Bank failed to send an Act 6 Notice to Defendants,
Libro Ciarmatori and Mary Jane Ciarmatori (“Ciarmatoris”), at
least 30 days in advance of the commencement of the instant
action as required by Section 403 of Act 6, but relied upon an Act
6 Notice provided to Ciarmatoris before commencing a prior
Mortgage Foreclosure action which had been discontinued by the
Bank?
2. Did the Trial Court commit an error of law in finding that the
Ciarmatoris’ mortgage did not qualify as a residential mortgage
under Act 6 because the original amount of the mortgage was
more than $50,000 even though [Wells Fargo] submitted itself to
the authority of Act 6 by sending Act 6 Notices to the [Ciarmatoris]
before commencing a mortgage foreclosure action in 2015 and
also after the commencement of the mortgage foreclosure action
subject to the pending appeal?
Ciarmatoris Br. at 4.
We review an order granting summary judgment for an abuse of
discretion or error of law. Wells Fargo Bank N.A. v. Spivak, 104 A.3d 7, 10
(Pa.Super. 2014). “[W]e review the evidence in the light most favorable to
the non-moving party . . . and resolve all doubts as to the existence of a
genuine issue of material fact against the moving party[.]” Id. at 11.
“Summary judgment is appropriate where the record clearly demonstrates
there is no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law.” Am. S. Ins. Co. v. Halbert, 203 A.3d 223,
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226 (Pa.Super. 2019) (quoting Estate of Agnew v. Ross, 152 A.3d 247, 259
(Pa. 2017)).
I. Notice Under Act 6
The Ciarmatoris first argue that an Act 6 foreclosure notice must precede
the associated mortgage foreclosure action, and the court therefore erred in
allowing Wells Fargo to send Act 6 notice after commencing the second
foreclosure action. Ciarmatoris’ Br. at 13-15 (citing JP Morgan Chase Bank
N.A. v. Taggart, 203 A.3d 187 (Pa. 2019) and 41 P.S. § 403(a)). The
Ciarmatoris assert Wells Fargo’s untimely Act 6 notice “is a nullity as it is in
violation of the statutory requirements.” Id. at 14.
“The Loan Interest and Protection Law, commonly referred to as ‘Act 6,’
is a consumer protection statute for residential mortgage debtors that
provides an extensive program designed to avoid mortgage foreclosures.”
Bayview Loan Servicing, LLC v. Lindsay, 185 A.3d 307, 308 (Pa. 2018)
(quotation marks and citations omitted). “In its section 403(a), Act 6 requires
a residential mortgage lender to provide at least thirty days’ notice of its intent
to foreclose on a residential mortgage to the homeowner[.]” Id. Notice under
Act 6 must alert the mortgagor of his or her right to cure the mortgage default,
by what sum of money, and the time within which to do so. Taggart, 203
A.3d at 195 (citing 41 P.S. § 403(c)). “A lender may not recycle a stale [Act
6] pre-foreclosure notice that it issued in connection with a prior complaint in
mortgage foreclosure.” Id. at 188.
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In its Rule 1925(a) opinion, the trial court explained that under Johnson
v. Phelan Hallinan & Schmieg, LLP, 202 A.3d 730 (Pa.Super. 2019), the
version of Act 6 that was in effect at the time of the mortgage was executed
controls whether Act 6 notice is required. Tr. Ct. Op. at 9. The version of Act
6 that was in effect in 2006, when the Ciarmatoris’ executed the mortgage,
defined a “residential mortgage” requiring Act 6 notice as an obligation of
$50,000 or less. Id. The court found that as the Ciarmatoris’ 2006 mortgage
exceeded this amount, it did not qualify as a residential mortgage under the
version of Act 6 in place at that time, and Wells Fargo was therefore not
required to send notice under Act 6 prior to instituting a foreclosure action.
Id. at 9-10.
We agree that under Johnson, Act 6 does not apply to the Ciarmatoris’
mortgage, and thus Wells Fargo was not required to send Act 6 notice.
Although the trial court ordered Wells Fargo to send Act 6 notice during the
second action, this was, at most, harmless error.
II. Estoppel
The Ciarmatoris argue that Wells Fargo subjected itself to compliance
with Act 6 both by sending Act 6 notice in 2015, prior to the first foreclosure
action, and by sending a new Act 6 notice during the second foreclosure action.
Ciarmatoris’ Br. at 15, 17. According to the Ciarmatoris, the principles of
estoppel should preclude Wells Fargo from now arguing that Act 6 does not
apply. Id. at 18. The Ciarmatoris rely on Greater Delaware Valley Savings
and Loan Association v. Diehl, 26 Pa. D. & C.3d 571 (C.P. Del. 1982).
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There, the trial court held that because the mortgage lender had sent Act 6
notice to defendants, leading them to believe that Act 6 applied, the lender
was estopped from arguing in court that Act 6 did not apply. Diehl, 26 Pa. D.
& C.3d at 574. The Ciarmatoris argue that after receiving Act 6 and Act 91
notice in 2015, they applied for emergency mortgage assistance, and that
although their application had been denied, the appeal of the denial was still
pending when Wells Fargo filed the Complaint in the second foreclosure action.
Ciarmatoris’ Br. at 8-9, 18. The Ciarmatoris claim this “prevented [them] from
obtaining the emergency mortgage loan assistance available under Act 91.”
Id. at 18.
The Court of Common Pleas’ decision in Diehl does not control us, and
even if it did, it is distinguishable. There, the lender initially complied with Act
6 but later attempted to escape Act 6’s requirements by disputing a factual
question – whether the property at issue had more than two units. 26 Pa. D.
& C.3d at 573. The lender only attempted to do so after the sheriff’s sale and
when the homeowners were attempting to use the sale proceeds to redeem
the foreclosure, pursuant to the provisions of Act 6. The Diehl court refused
to allow the lender to do so. It explained that the lender had led the
homeowners to believe Act 6 applied by sending notice, and only later wanted
to repudiate Act 6 “in order to re-invest at a higher interest rate which is
against the theory and purpose of the act.” Id. at 574.
Here, it is undisputed that the mortgage was in an amount more than
$50,000, such that the version of Act 6 in effect at the time the Ciarmatoris
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entered into their mortgage does not apply. Moreover, the Ciarmatoris have
not established that they relied on Wells Fargo’s sending and resending of the
Act 6 notice to their detriment. Their only claim of prejudice is that Wells
Fargo’s initiation of the second foreclosure action somehow prevented them
from obtaining emergency loan assistance under Act 91, because their appeal
of the denial of their prior Act 91 application was still pending.
This is not a claim that they relied on Wells Fargo’s implicit assertion
that Act 6 applied. Rather, it is a claim that the timing and sequence of events
somehow interfered with the Act 91 process. We therefore cannot conclude
that Wells Fargo was estopped from arguing that Act 6 did not apply.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 02/05/2020
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