Fulton Bank v. Mermelstein, D.

J-S27031-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

FULTON BANK, NA : IN THE SUPERIOR COURT OF

: PENNSYLVANIA

:

v. :

:

:

DAVID MERMELSTEIN :

:

Appellant : No. 2567 EDA 2019

Appeal from the Order Entered July 23, 2019

In the Court of Common Pleas of Montgomery County Civil Division at

No(s): 2011-03186

BEFORE: SHOGAN, J., McCAFFERY, J., and STEVENS, P.J.E.*

MEMORANDUM BY STEVENS, P.J.E.: FILED JUNE 30, 2020

Appellant David Mermelstein (“Mermelstein”) appeals from the order

entered in the Court of Common Pleas of Montgomery County denying his

petition to mark a confessed judgment satisfied and discharged pursuant to

42 Pa.C.S.A § 8104. The trial court also purported to enter a deficiency

judgment of $738,606.43 in favor of Autumn Lane Associates, LLC (“Autumn

Lane”). After a careful review, we affirm the trial court’s denial of

Mermelstein’s petition to mark the judgment satisfied under Section 8104, but

we vacate the trial court’s deficiency judgment.

The relevant facts and procedural history are as follows: On February 3,

2011, Fulton Bank, NA (“Fulton”), as the successor by merger to Premier

____________________________________________

* Former Justice specially assigned to the Superior Court.

J-S27031-20

Bank, NA (“Premier”), filed a complaint in confession of judgment against

Mermelstein. Therein, Fulton alleged that it was the payee and holder of a

promissory note dated September 12, 2006, in the principal amount of

$900,000.00 in connection with a commercial loan extended to Mermelstein.

Fulton indicated that, on September 12, 2006, Mermelstein executed a

commercial loan agreement, which set forth all terms of the loan, including

that Fulton could confess judgment upon default and had the right to declare

all amounts under the loan immediately due and payable upon default.

Further, pursuant to the promissory note, upon default, Fulton was entitled to

confess judgment for the entire unpaid balance, plus accrued interest, late

charges, costs of suit, and attorney’s fees. In addition to securing the loan

with the promissory note, real property located in Egg Harbor Township, New

Jersey was provided by Mermelstein as collateral for the loan through a

mortgage.

Fulton averred that, pursuant to the promissory note, Mermelstein was

to make monthly payments of accrued paid interest at a variable rate

beginning on October 1, 2006, with all subsequent interest payments due on

the same day of each month, with the full amount of the loan due immediately

upon Fulton’s demand. Fulton alleged Mermelstein defaulted on the

promissory note and the loan agreement by failing to pay the monthly

installments of interest due on October 1, 2010, and November 1, 2010, as

well as on December 1, 2010, and January 1, 2011.

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Fulton alleged that, on November 11, 2010, it sent Mermelstein a notice

of event of default, which advised him of the default, as well as Fulton’s

decision to accelerate the loan and demand for immediate payment. A sixty

day grace period for repayment was offered without waiver of any of Fulton’s

rights. Mermelstein failed to repay the loan as demanded. Fulton alleged

that, pursuant to the promissory note and loan agreement, Mermelstein owed

$898,839.93 for the principal, $9,077.08 for interest accrued through January

19, 2011 (with interest accruing at $68.66 per diem from this date), $929.07

in late fees, $90,866.08 in attorney’s fees, and $20.00 for satisfaction fees.

On February 3, 2011, the prothonotary entered a judgment by

confession in favor of Fulton and against Mermelstein in the amount of

$999,657.78, plus interest at $68.66 per diem from January 19, 2011.

Mermelstein did not file a petition to have the confessed judgment opened or

stricken.

Fulton initiated efforts to collect on the confessed judgment, including

garnishments.1 Further, Fulton filed a complaint in foreclosure upon the

mortgage in the Superior Court of New Jersey as to the Egg Harbor Township

property, and on March 4, 2013, a final order in mortgage foreclosure was

entered in New Jersey.

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1 Fulton garnished a Vanguard account of Mermelstein’s in the amount of

$2,565.95.

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On October 18, 2013, Fulton assigned the confessed judgment to

Autumn Lane. On May 29, 2014, the sheriff of Atlantic County, New Jersey,

sold the Egg Harbor Township property to Autumn Lane for costs in accordance

with the final order entered in the mortgage foreclosure.2

On November 1, 2016, Mermelstein filed a petition pursuant to 42

Pa.C.S.A. § 8104 to mark the confessed judgment satisfied and discharged.

Therein, he admitted he entered into the loan agreement discussed supra. He

also admitted he executed a promissory note in favor of Premier, the

promissory note was secured by a mortgage on the Egg Harbor Township

property, and Premier fully merged into Fulton on December 9, 2006.

Mermelstein indicated that, on March 14, 2007, he obtained a

$500,000.00 “line of credit” from Fulton. Mermelstein averred that he was

required to use the “line of credit” to build two sample houses on the Egg

Harbor Township property, and accordingly, he built two sample houses on

the property. Thereafter, the Egg Harbor Township property, including the

houses, was appraised by Fulton at $1,100,000.00. Mermelstein additionally

averred that he gave a $300,000.00 bond to Egg Harbor Township in

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2 We note Autumn Lane also obtained a charging order on a 24% limited

partnership interest Mermelstein had in M & M Realty Partners, L.P.

Subsequently, on October 18, 2019, the trial court entered an order

authorizing a public sale of Mermelstein’s transferable interest in M & M Realty

Partners, L.P. Mermelstein filed a separate appeal, which this Court docketed

at 3532 EDA 2019, with regard to this matter.

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connection with the development of the property, which has inured to the

benefit of the property’s current owner. Also, there were solar panels, valued

at $32,000.00, left on the property for installation on the houses.

Mermelstein admitted he was unable to make payments on the loan, as

secured by the mortgage, and he defaulted in November of 2010. He noted

Fulton confessed judgment, as indicated supra, for $999,657.78, plus

interest; however, he indicated Fulton also entered a confessed judgment

against Mermelstein on the “line of credit” for $558,304.71, plus interest at

$55.52 per diem from January 19, 2011.

Mermelstein averred that, after he defaulted on the loan, he met with

Cathy Ashley, who was the vice president of Fulton, and they agreed that

Fulton would receive the deed to the Egg Harbor Township property in

satisfaction of all of Fulton’s judgments and liens on the property. Mermelstein

contended he left the meeting “believing the entire matter concerning the

[p]roperty was resolved and [he] sent a letter to Ms. Ashley confirming their

agreement.” Mermelstein’s Petition, filed 11/1/16, at 5. However, he averred

that, a few months after Fulton agreed to the deed in lieu of foreclosure,

“Fulton breached the agreement and foreclosed on the [p]roperty [in New

Jersey].” Id. Mermelstein averred he learned of Fulton’s alleged breach when

he received the foreclosure complaint.

Mermelstein acknowledged the confessed judgment was assigned from

Fulton to Autumn Lane; however, he contended Fulton “did not tell Autumn

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Lane about the second [confessed] judgment on the line of credit, and [Fulton]

has vigorously pursued full payment thereon.” Id. He averred that Fulton

received $273,000.00 from Autumn Lane for the assignment of the confessed

judgment; however, the assignment was worth over $1,432,000.00 since it

included the Egg Harbor Township property (along with the two houses), the

benefit of the bond, and the solar panels.

Mermelstein argued that, after the property was sold to Autumn Lane at

the sheriff’s sale in New Jersey on May 29, 2014, any debt Mermelstein had

should have been extinguished. He averred that, after the sheriff’s sale,

neither Autumn Lane nor Fulton attempted to determine whether any alleged

deficiency amount existed. Mermelstein averred the foreclosure of the

property “wiped out his entire debt, including the [confessed] judgment on

the note.” Id. at 8.

Specifically, he contended that any further attempt to collect on the

confessed judgment was barred by the six-month statute of limitations

provided for in 42 Pa.C.S.A. § 8103 of Pennsylvania’s Deficiency Judgment

Act. In this vein, he argued that, since Autumn Lane filed no petition to fix

the fair market value of the Egg Harbor Township property so as to seek a

deficiency judgment within six months after the sheriff’s sale of the property

on May 29, 2014, Mermelstein was entitled to have the confessed judgment

marked satisfied. He also argued any attempt to collect on the deficiency was

barred by the final order entered in the mortgage foreclosure and/or under

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the doctrine of laches. Alternatively, Mermelstein argued he was entitled to

an equitable credit against the confessed judgment for the fair market value

of the collateral property (the Egg Harbor Township property), which was sold

to the judgment creditor, Autumn Lane.

Autumn Lane filed an answer in opposition to Mermelstein’s petition

alleging there was a deficiency with regard to the Egg Harbor Township

property. The matter proceeded to an evidentiary hearing on Mermelstein’s

request to have the confessed judgment marked satisfied and/or decreased

by the fair market value of the Egg Harbor Township property. The trial court

has aptly summarized the relevant argument and testimony presented at the

evidentiary hearings as follows:

At the first hearing on April 3, 2019, the parties first

addressed Mermelstein’s argument that any collection of a

deficiency judgment was barred by the Statute of Limitations.

Mermelstein argued that pursuant to the Pennsylvania Deficiency

Judgment Act,[3] [specifically] 42 Pa.C.S.A. [§] 8103, [a deficiency

proceeding] had to have been brought within six months after

relief. In response, Autumn Lane argued that the Pennsylvania

Deficiency Judgment Act does not apply because the property at

issue is located outside of Pennsylvania. Autumn Lane also argued

that the New Jersey law placing time limits on deficiency actions

likewise does not apply because that law only applies to residential

properties, and the property at issue is not such a property.

Mermelstein then gave testimony to support his argument

that the judgment should be marked satisfied. He stated that he

purchased the property at issue located in Egg Harbor [Township],

New Jersey in 2010 for $900,000.00 from a bankruptcy trustee

for a developer who had “failed on it.” Mermelstein planned to

____________________________________________

3 We note the Pennsylvania Supreme Court has amended the Rules of Civil

Procedure to comport with the amended Deficiency Judgment Act. See

Pa.R.C.P. Nos. 3276–3291.

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build a moderate income home development. He was required by

Egg Harbor Township [to] put $300,000.00 in escrow with the

township to cover municipal and utility improvements.

Mermelstein testified that due to “a huge real estate bust” in

2012-2014, “people were handing the deeds back to the bank.

The bank were selling the houses just to get rid of them.” He held

on as long as he could, but eventually he defaulted and Fulton []

took the judgment. Autumn Lane, the assignee of this judgment,

offered to compromise the note for “$50 cents on the dollar.”

Mermelstein said he could not come up with this money.

Mermelstein testified that an appraisal report obtained by

Autumn Lane dated June 21, 2018[,] which reflected the value of

the property on that date[,] proved that the property had been

allowed to deteriorate, and that was the reason the appraised

value of the property, $38,500.00, was so low. Mermelstein

acknowledged that the property had been put up for auction, and

that no bids had been received. On cross-examination,

Mermelstein acknowledged that he did not appeal the entry of the

confessed judgment against him, or the foreclosure judgment on

the property. He testified that no one forced him into seeking the

loans or buying the property. The hearing was adjourned to allow

Autumn Lane to submit an additional appraisal report reflecting

the value of the property on the date of the Sheriff’s sale [on] May

29, 2014.

The next hearing took place on May 7, 2019. At this

hearing, Autumn Lane presented testimony [from] James Boyle,

a realtor who has worked in [the] Atlantic County, New Jersey

area where the foreclosed upon property is located since 1994. In

2014, Boyle had a contract to list the property for sale. He

testified that there were no agreements of sale to buy the

property.

Boyle was qualified as an expert on real estate in the area,

and expressed his opinions within a reasonable degree of

professional certainty. He described in detail the real estate

market in Atlantic County from 2004 through 2014, including the

effect of the recession in 2008 through 2009. He also described

certain issues with the property which affected its salability and

its value, including visibility of high power lines, issues with

frontage and accessibility, and retention basin. The property was

located close to the shoreline, and to the Atlantic City Casinos.

According to Boyle, its market value was affected by Hurricane

Sandy, and by the closing of five casinos, with the ensuing job

losses taking potential home buyers away. All of these factors,

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along with comparative sales of similar properties, were

considered by James Boyle in offering his opinions.

Autumn Lane then presented the testimony of Marie

Shelton, who was qualified as an expert real estate appraiser

currently[, as well as] on May 29, 2014. Shelton had prepared an

appraisal report as to the value of the property in 2018. After the

first hearing, she was asked to prepare an appraisal of what the

value of the property had been on May 29, 2014. She testified

that the fair market value of the property on May 29, 2014[,] was

$35,800.00. An appraisal was introduced which listed the

appraisal value of the property on May 1, 2014[,] as $35,800.00.

At the final hearing on June 18, 2019, Mermelstein

presented testimony of Robert Salvato concerning the value of the

property in 2014. Salvato is an auctioneer. Salvato testified that

the market value of the property was $642,000.00, which when

coupled with a $300,000.00 bond posted with Egg Harbor

Township brought the amount for which Mermelstein should be

credited to $942,000.00.

Trial Court Opinion, filed 10/18/19, at 3-5 (footnotes omitted) (footnote

added).

At the conclusion of the hearings, by order entered on July 23, 2019,

the trial court denied Mermelstein’s petition to mark the judgment satisfied

and discharged under Section 8104. Further, the trial court held that a

deficiency existed and calculated the amount due from Mermelstein as follows:

Original Judgment: $999,657.78; Minus garnished funds of $2,565.85; Minus

Fair Market Values of Collateral Property as of 5/24/2014 of $35,800.00;

Minus Balance of Escrow with Egg Harbor Township of $297,466.80; Plus

Property Taxes Not Discharged by Sheriff’s sale of Collateral for 2011, plus

back taxes and fines, of $25,604.32, and for 2012-13, $49,176.98; Equals a

Deficiency Judgment of $738,606.43.

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Mermelstein filed a petition for reconsideration, which the trial court

denied. Mermelstein filed an appeal to this Court on August 19, 2019. The

trial court did not direct Mermelstein to file a Pa.R.A.P. 1925(b) statement,

and consequently, no such statement was filed. The trial court filed a

Pa.R.A.P. 1925(a) opinion.

Mermelstein sets forth the following issues in his “Statement of the

Questions Involved” (verbatim):

1. Did the Trial Court err as a matter of law in [sic] when it did

not satisfy the judgment pursuant to Pa.C.S.A. § 8014 [sic]

when the Plaintiff failed to file for a deficiency judgment within

six (6) months of the sheriff’s sale?

2. Did the Trial Court err as a matter of law in [sic] when it did

not satisfy the judgment based on a theory of laches when the

Plaintiff made no effort to ascertain the fair market value of the

property for over four (4) year[s][?]

3. Did the Trial Court err when it did not consider the valuation of

the property proffered by its expert witness[?]

4. Did the [T]rial [C]ourt err by failing to give appropriate credits

to the judgment for monies that have already been collected

from Defendant?

Mermelstein’s Brief at 4 (suggested answers omitted).

“At the outset, we note that when reviewing deficiency judgment

proceedings, this Court is limited to determining whether there is sufficient

evidence to sustain the holding of the trial court or whether it committed

reversible error of law.” Conestoga Bank v. Tioga Investments II, 138

A.3d 652, 655 (Pa.Super. 2016) (citation omitted).

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As it pertains to the interpretation of Pennsylvania’s Deficiency

Judgment Act, this requires us to perform the familiar task of statutory

interpretation.

Statutory interpretation is a question of law over which our

standard of review is de novo, and our scope of review plenary.

Commonwealth v. Kingston, 143 A.3d 917, 921 (Pa. 2016).

“In all matters involving statutory interpretation, we apply the

Statutory Construction Act, 1 Pa.C.S. §§ 1501, et seq., which

directs us to ascertain and effectuate the intent of the General

Assembly. 1 Pa.C.S. § 1921(a).” Kingston, 143 A.3d at 922.

In discerning that intent, the court first resorts to the

language of the statute itself. If the language of the statute

clearly and unambiguously sets forth the legislative intent, it is

the duty of the court to apply that intent to the case at hand and

not look beyond the statutory language to ascertain its meaning.

See 1 Pa.C.S. § 1921(b) (“When the words of a statute are clear

and free from all ambiguity, the letter of it is not to be disregarded

under the pretext of pursuing its spirit.”). “Relatedly, it is well

established that resort to the rules of statutory construction is to

be made only when there is an ambiguity in the provision.” Oliver

v. City of Pittsburgh, 608 Pa. 386, 11 A.3d 960, 965 (2011).

Thomas Jefferson University Hospitals, Inc. v. Pennsylvania

Department of Labor and Industry, 640 Pa. 219, 162 A.3d 384, 389

(2017) (quotation omitted). With these relevant legal precepts in mind, we

proceed to examine the issues raised by Mermelstein on appeal.

In his first issue, Mermelstein contends the trial court erred, as a matter

of law, in failing to mark the confessed judgment satisfied and discharged

under 42 Pa.C.S.A. § 8104.4 Specifically, he avers that after the collateral

____________________________________________

4 42 Pa.C.S.A. § 8104 provides the following:

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property (the Egg Harbor Township property) was sold to Autumn Lane at the

sheriff’s sale for a sum less than the amount of the confessed judgment (which

was assigned to Autumn Lane from Fulton), in order to recoup any unpaid

indebtedness not satisfied by the sale of the property, Autumn Lane was

required to file a petition to determine the fair market value of the property

and seek any deficiency within six months of the sheriff delivering the deed of

the property. Mermelstein argues that, since Autumn Lane undisputedly filed

no deficiency petition, Pennsylvania’s Deficiency Judgment Act provides that

the confessed judgment assigned to Autumn Lane from Fulton must be

marked satisfied and discharged.

____________________________________________

§ 8104. Duty of judgment creditor to enter satisfaction

(a) General rule.--A judgment creditor who has received

satisfaction of any judgment in any tribunal of this Commonwealth

shall, at the written request of the judgment debtor, or of anyone

interested therein, and tender of the fee for entry of satisfaction,

enter satisfaction in the office of the clerk of the court where such

judgment is outstanding, which satisfaction shall forever

discharge the judgment.

(b) Liquidated damages.--A judgment creditor who shall

willfully or unreasonably fail without good cause or refuse for more

than 90 days after written notice in the manner prescribed by

general rules to comply with a request pursuant to subsection (a)

shall pay to the judgment debtor as liquidated damages 1% of the

original amount of the judgment for each month of delinquency

beyond such 90 days, but not less than $250 nor more than

$2,500. Such liquidated damages shall be recoverable pursuant

to general rules, by supplementary proceedings in the matter in

which the judgment was entered.

42 Pa.C.S.A. § 8104 (bold in original).

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Initially, in developing his argument that the confessed judgment should

be marked satisfied because Autumn Lane did not timely file a petition to

establish the fair market value and seek a deficiency, Mermelstein points to

Pennsylvania’s Deficiency Judgment Act, 42 Pa.C.S.A. § 8103, which provides,

in relevant part, the following:

§ 8103. Deficiency Judgments

(a) General rule.—Whenever any real property is sold, directly

or indirectly, to the judgment creditor in execution proceedings

and the price for which such property has been sold is not

sufficient to satisfy the amount of the judgment, interest and costs

and the judgment creditor seeks to collect the balance due on said

judgment, interest and costs, the judgment creditor shall petition

the court to fix the fair market value of the real property sold. The

petition shall be filed as a supplementary proceeding in the matter

in which the judgment was entered. If the judgment was

transferred from the county in which it was entered to the county

where the execution sale was held, the judgment shall be deemed

entered in the county in which the sale took place.

***

(d) Action in absence of petition.—If the judgment creditor

shall fail to present a petition to fix the fair market value of the

real property sold within the time after the sale of such real

property provided by section 5522 (relating to six months

limitation), the debtor, obligor, guarantor or any other person

liable directly or indirectly to the judgment creditor for the

payment of the debt, or any person interested in any real estate

which would, except for the provisions of this section, be bound

by the judgment, may file a petition, as a supplementary

proceeding in the matter in which the judgment was entered, in

the court having jurisdiction, setting forth the fact of the sale, and

that no petition has been filed within the time limited by section

5522 to fix the fair market value of the property sold, whereupon

the court, after notice as prescribed by general rule, and being

satisfied of such facts, shall direct the clerk to mark the judgment

satisfied, released and discharged.

42 Pa.C.S.A. § 8103(a), (d) (bold in original).

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In interpreting Section 8103, this Court has relevantly explained:

The Deficiency Judgment Act applies whenever real property of

the debtor has been sold in execution to the judgment creditor for

a sum less than the amount of the judgment, interest and costs.

Under the Deficiency Judgment Act, the creditor’s judgment

against the debtor is reduced by the fair market value of the

property purchased by the creditor rather than by the actual sale

price of the property. The objective of the Deficiency Judgment

Act is to relieve a debtor from further personal liability to the

judgment creditor when the real property taken by the judgment

creditor on an execution has a fair market value on the date of

sale sufficient so that the judgment creditor can dispose of the

property to others without a further loss.

Devon Service, LLC v. S & T Realty, 171 A.3d 287, 291 (Pa.Super. 2017)

(quotation omitted).

Moreover, we have held:

The Deficiency Judgment Act…require[s] [a] [judgment

creditor] to file its petition to fix the fair market value within six

months of the date upon which the Sheriff delivered the deed, and

it is presumed as a matter of law that a judgment is satisfied if a

judgment creditor fails to proceed under the Act within the time

mandated by statute. The six-month deadline derives from 42

Pa.C.S.A. § 5522 which states a six month statute of limitations

is applicable to judicial sales:

(b) Commencement of action required.—The

following actions and proceedings must be

commenced within six months:

***

(2) A petition for the establishment of a deficiency

judgment following execution and delivery of the

sheriff’s deed for the property sold in connection with

the execution proceedings referenced in the

provisions of section 8103(a) (relating to deficiency

judgments).

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Conestoga Bank, 138 A.3d at 656 (quoting 42 Pa.C.S.A. § 5522(b)(2)) (bold

in original).

Thus, if the judgment creditor fails to file a Section 8103(a) petition to

fix the fair market value of the property within six months of the sheriff

delivering the deed, there is an irrebuttable presumption that the creditor was

paid in full and the debtor is entitled to have the judgment marked satisfied

as a matter of law. Home Sav. and Loan Co. of Youngstown, Ohio v.

Irongate Ventures, LLC, 19 A.3d 1074, 1078 (Pa.Super. 2011).

In the case sub judice, the trial court acknowledged that, after the

sheriff’s deed was delivered, Autumn Lane (the judgment creditor) failed to

file a petition to fix the fair market value of the Egg Harbor Township property

in an effort to collect any deficiency. Further, the trial court acknowledged

Section 8103(a)’s and (d)’s requirement that, in Pennsylvania, a judgment

creditor must file the petition within six months of the sheriff delivering the

deed, or the judgment shall be marked satisfied upon petition by the judgment

debtor.

However, the trial court concluded Pennsylvania’s six-month limitations

period was inapplicable in this case where the real property was located,

foreclosed, and sold at a sheriff’s sale in New Jersey. We find no error.

It is well-settled that the “petition to fix fair market value ‘shall’ be filed

as a supplementary proceeding in the matter in which the real property was

sold to the judgment creditor in execution proceedings (i.e. in the foreclosure

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action).” Home Sav. and Loan Co. of Youngstown, Ohio, 19 A.3d at 1080

(noting the term “shall” is mandatory for purposes of statutory construction

when a statute is unambiguous) (citation omitted)). In the case sub judice,

the foreclosure action, including the filing of the foreclosure complaint and

eventual sheriff’s sale, occurred in New Jersey. Thus, any petition Autumn

Lane filed to set the fair market value of the collateral property so as to

determine a deficiency would be filed properly in New Jersey.5 Therefore,

Autumn Lane is not limited by Pennsylvania’s six-month statute of limitations

set forth in Section 8103(a).

Moreover, we find further support for our holding in Subsection 8103(g),

which sets forth the definition for words and phrases used in Section 8103,

indicating that “real property collateral” means “all of the real property subject

to a lien securing the obligation evidenced by the judgment and located

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5 The trial court held that “the New Jersey deficiency law has no time limits on

deficiency judgments which do not involve residential property.” Trial Court

Opinion, filed 10/18/19, at 7 n.3. We note that our Supreme Court’s Rules of

Civil Procedure do not set forth the Rules to be followed for deficiency

judgments of foreign collateral. However, when a deficiency judgment is

sought with regard to real property sold in Pennsylvania, the proper venue to

file the supplementary petition is in the county where the real property was

sold. See Pa.R.C.P. 3278.

Mermelstein acknowledges that, since the foreclosure took place in

Atlantic County, New Jersey, “the deficiency proceedings would have needed

to be brought there[.]” Mermelstein’s Brief at 15. However, he contends that

since such proceedings did not occur within six months, Pennsylvania should

apply its six-month limitations period. For the reasons discussed infra, we

disagree with his contention.

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within this Commonwealth.” 42 Pa.C.S.A. § 8103(g) (bold added).

Additionally, Subsection 8103(f.2) relevantly provides:

(f.2) Foreign collateral.--

(1) No deficiency court shall have the power to fix the fair market

value of real property located outside this Commonwealth and

may not take into account the value of that property in considering

whether or not a deficiency exists under this section.

(2) This section shall not apply to the sale of any real property

located outside this Commonwealth.

42 Pa.C.S.A. § 8103(f.2) (bold in original).

Utilizing the rules of statutory interpretation, we conclude Section

8103(f.2) plainly provides that the six-month statute of limitations providing

for a judgment creditor in execution proceedings to file a petition to fix the

fair market value, or risk having the judgment satisfied, is not applicable to

“foreign collateral,” such as the New Jersey property in the case sub judice.

See Thomas Jefferson University Hospital, Inc., supra (setting forth the

rules of statutory interpretation). Consequently, the trial court did not err in

declining to presume, as a matter of law, that the judgment was satisfied on

the basis Autumn Lane failed to proceed under Pennsylvania’s Deficiency

Judgment Act within the time mandated by the statute. Thus, it did not err in

denying Mermelstein’s petition to mark the judgment satisfied on this basis.6

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6 We note Mermelstein argues Pennsylvania law is applicable, as opposed to

New Jersey law, since the promissory note indicates the note is governed by

the laws of Pennsylvania without regard to its conflicts of law provisions.

However, in applying Pennsylvania’s Deficiency Judgment Act, the Act, by its

own clear terms, does not apply to foreign collateral.

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In his next issue, Mermelstein contends the trial court erred in failing to

mark the confessed judgment satisfied under the doctrine of laches.

Specifically, he contends Autumn Lane’s delay resulted in Mermelstein

changing his position such that Autumn Lane should be estopped from seeking

any deficiency. In this vein, he relevantly avers:

Mermelstein believed the matter was resolved following his

de[e]d in lieu of foreclosure agreement with [C]athy Ashley.

Additionally, collection actions were not promptly taken by either

Fulton Bank or Autumn Lane, further making Mermelstein believe

that the deed in lieu of foreclosure agreement was being honored.

For that reason, Mermelstein took no further action regarding the

validity of the judgment, including attempting to open the

confessed judgment.

Mermelstein’s Brief at 17.

We have outlined the parameters of the doctrine of laches as follows:

Laches bars relief when the complaining party is guilty of

want of due diligence in failing to promptly institute the action to

the prejudice of another. Thus, in order to prevail on an assertion

of laches, respondents must establish: a) a delay arising from

petitioner’s failure to exercise due diligence; and, b) prejudice to

the respondents resulting from the delay. Moreover, the question

of laches is factual and is determined by examining the

circumstances of each case.

Unlike the application of the statute of limitations, exercise

of the doctrine of laches does not depend on a mechanical passage

of time. Indeed, the doctrine of laches may bar a suit in equity

where a comparable suit at law would not be barred by an

analogous statute of limitations. Moreover,

[t]he party asserting laches as a defense must present

evidence demonstrating prejudice from the lapse of

time. Such evidence may include establishing that a

witness has died or become unavailable, that

substantiating records were lost or destroyed, or that

the defendant has changed his position in anticipation

that the opposing party has waived his claims.

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Fulton v. Fulton, 106 A.3d 127, 131 (Pa.Super. 2014) (citations and

quotations omitted).

Assuming, arguendo, the doctrine of laches may be raised in a petition

to mark a judgment satisfied under Section 8104, we agree with the trial court

that the facts do not warrant the relief requested by Mermelstein. As the trial

court found, “the creditors have continuously sought to enforce their right to

payment on their judgments against Mermelstein.” Trial Court Opinion, filed

10/18/19, at 7. Further, Mermelstein could have filed a petition to open or

strike the confessed judgment; however, he did not do so. While the record

reveals Mermelstein and Ms. Ashley engaged in discussions concerning

whether it would be prudent for Fulton to accept the deed in lieu of foreclosing

upon the mortgage, the trial court did not find any credible evidence that the

parties reached any binding agreement with regard thereto. We find no error

in this regard.

In his final issues, Mermelstein alleges the trial court erred in its

determination of the fair market value of the Egg Harbor Township property,

the credit to be given to Mermelstein against the judgment, and its

determination of a deficiency in favor of Autumn Lane.

As indicated above, as it applies to foreign collateral, Pennsylvania’s

Deficiency Judgment Act relevantly provides “[n]o deficiency court shall have

the power to fix the fair market value of real property located outside this

Commonwealth and may not take into account the value of that property in

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considering whether or not a deficiency exists under this section.” 42

Pa.C.S.A. § 8103(f.2).

Based on the plain and unambiguous language of Section 8103(f.2), the

trial court did not have the statutory authority to determine the fair market

value of the Egg Harbor Township, New Jersey property in this case or whether

a deficiency existed with regard thereto. See Thomas Jefferson University

Hospitals, Inc., supra (setting forth the rules for statutory interpretation).

Accordingly, inasmuch as the trial court purported to determine a fair market

value for the subject foreign collateral property, and then offset it against the

confessed judgment to determine that a deficiency existed in favor of Autumn

Lane, we conclude this was error. See 42 Pa.C.S.A. § 8103(f.2). Rather, the

proper determination of the fair market value of the Egg Harbor Township

property must, under the plain wording of Section 8103(f.2), be made upon

petition by the parties in the New Jersey court. Thereafter, if necessary, the

parties may take the required steps to have the confessed judgment marked

satisfied and discharged in the Court of Common Pleas of Montgomery County

under Section 8104.7

____________________________________________

7 As indicated supra, the confessed judgment with regard to Mermelstein

defaulting under the terms of the commercial loan agreement and promissory

note was entered in the Court of Common Pleas of Montgomery County.

Whether the confessed judgment should be marked satisfied cannot be

determined without the New Jersey court first determining whether Autumn

Lane is entitled to a deficiency judgment regarding the Egg Harbor Township

real property, which necessarily entails the New Jersey court determining the

fair market value of the property.

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For all of the foregoing reasons, we affirm the trial court’s denial of

Mermelstein’s petition to mark the confessed judgment satisfied and

discharged under Section 8104. At this juncture, Mermelstein has not met his

burden of demonstrating his entitlement to such relief in the trial court.

However, we specifically vacate the trial court’s purported determination

regarding the fair market value of the Egg Harbor Township, New Jersey

property, as well as its deficiency judgment.

Affirmed, in part; vacated, in part; jurisdiction relinquished.

Judge McCaffery did not participate in the consideration or decision of

this case.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 6/30/2020

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