MILDRED L. SASS
AMTRUST BANK, TICOR TITLE INSURANCE COMPANY, FIDELITY CLOSING SERVICES, LLC, AND ELLERY CRISSMAN APPEAL OF: NATIONSTAR MORTGAGE, LLC. NATIONSTAR MORTGAGE, LLC (AS SUCCESSOR IN INTEREST TO AMTRUST BANK), Appellant
MILDRED L. SASS
Appeal from the Order Entered June 11, 2012 In the Court of Common Pleas of Clearfield County Civil Division at No. 2009-1519 CD
Appeal from the Order Entered December 8, 2011 In the Court of Common Pleas of Clearfield County Civil Division at No. 2009-795-CD
BEFORE: BENDER, J, GANTMAN, J. AND OLSON, J.
These consolidated appeals call upon the Court to address the scope and application of the federal Financial Institutions Reformation, Recovery, and Enforcement Act (FIRREA) to declaratory judgment and in rem mortgage foreclosure actions in state court. Nationstar Mortgage, LLC, as successor in interest to AmTrust Bank, appeals an award of summary judgment in favor of Mildred Sass, which invalidated the mortgage and promissory note on Sass's residence, dismissed Nationstar's mortgage foreclosure action, and released Sass from further liability. Nationstar contends that the trial court acted without lawful authority as FIRREA deprives all courts of subject matter jurisdiction to impose liability on a successor financial institution for pre-assignment conduct by the predecessor institution without exhaustion of administrative remedies before the Federal Deposit Insurance Corporation (FDIC). Upon review, we agree with Nationstar's assertion that FIRREA precludes Sass's action at 1066 WDA 2012 (Trial Court Docket No. 2009-1519-CD), inasmuch as it makes an affirmative claim for declaratory judgment beyond the trial court's subject matter jurisdiction. We conclude as well, however, that the trial court acted fully in accord with FIRREA at 1067 WDA 2012 (Trial Court Docket No. 2009-795-CD), as the remedies it granted derived not from a claim against the assets of Nationstar or AmTrust, but from affirmative defenses Sass raised in New Matter. Accordingly, we vacate the trial court's order at 1066 WDA 2012, and dismiss the appeal from the companion order at 1067 WDA 2012.
AmTrust, then still in operation, commenced the first of the related actions in the Court of Common Pleas in Clearfield County seeking an in rem judgment of mortgage foreclosure against the home of Mildred Sass. Approximately one year before, Sass had attempted to refinance the home with AmTrust and anticipated using the proceeds of $115, 000 to repay her existing mortgage note and consolidate other obligations. Nevertheless, Sass determined that an employee of closing agent Fidelity Closing Services, LLC, had misappropriated $77, 807.28 of the loan proceeds and absconded, leaving her with limited recourse.
Thereafter, Sass declined to repay the mortgage loan to AmTrust, prompting its commencement of the foreclosure action at 2009-795-CD (Sass I). In her answer to AmTrust's Complaint, Sass denied physically or electronically signing a promissory note in favor of AmTrust or authorizing anyone to do so on her behalf. Further, in her New Matter, she alleged the closing agent's misappropriation of the loan proceeds and that AmTrust had violated the Truth in Lending Act (TILA) by failing to include certain disclosures in her documents at closing, and had similarly violated the federal Real Estate Settlement Procedures Act (RESPA). Accordingly, she sought rescission of the mortgage as well as a set-off or credit to her loan balance for sums attributable to the closing agent's malfeasance.
Following AmTrust's commencement of the mortgage foreclosure action, Sass brought the companion action at docket no. 2009-1519-CD (Sass II) seeking a declaratory judgment that the mortgage was void ab initio as a result of the closing agent's misappropriation of loan proceeds. Subsequently, the FDIC placed AmTrust into receivership and transferred the servicing rights to Sass's mortgage loan to Nationstar, whereupon Nationstar substituted itself as plaintiff in Sass I.
Following the closing of the pleadings in Sass I and Sass II, Sass served first, counsel for AmTrust and later, counsel for Nationstar, with interrogatories and requests for production of documents on October 26, 2009. When, after more than one and one-half years, opposing counsel had not responded to her requests, Sass filed a motion to compel followed by a motion for sanctions, on May 12, 2011. After a hearing, the trial court ordered AmTrust "to fully and completely answer each and every of Sass's Interrogatories and to provide Sass's attorney with all documents and written material identified in Sass's Request for Production and/or otherwise identified by AmTrust in its answers to Sass's Interrogatories within thirty (30) days of the date of the Court's Order directing it to do so." R.R. at 175a-178a. Sass's Interrogatories requested, inter alia, that AmTrust
please list and identify all mortgage loan disclosures provided to Mildred L. Sass with reference to the mortgage transaction which is the basis of this mortgage foreclosure action. This is specifically to include all disclosures, good faith estimates, etc. required by the Truth in Lending Act (15 U.S.C. § 1635) and by the Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq) and Regulation X, 24 C.F.R. Part 3500).
R.R. at 156a.
In addition, the order warned that if AmTrust failed to respond to 13 of Sass's requests for admissions they would be deemed admitted. Included among those deemed admissions were the following:
(xii) At no time on or prior to November 26, 2008 did AmTrust Bank and Fidelity Closing Services, LLC provide Mildred L. Sass with a "notice of Right to Cancel" as mandated by 15 U.S.C. § 1635; and
(xiii) At no time on or prior to November 26, 2008 did AmTrust Bank of Fidelity Closing Services, LLC provide Mildred L. Sass with all Truth in Lending Disclosures mandated by 15 U.S.C. § 1605, et seq.
Id. at 177a. Nevertheless, when counsel, now acting on behalf of Nationstar, provided the responses on July 8, 2011, he responded only generally, prompting Sass to file the motions for summary judgment at issue.
On October 7, 2011, Sass moved for summary judgment on the claims and defenses of her New Matter in Sass I and her declaratory judgment action in Sass II. Significantly, Nationstar failed to respond to either motion despite the trial court's order that it do so, and failed as well to appear for oral argument convened on December 8, 2011. Therefore, and in view of the deemed admissions caused by AmTrust/Nationstar's failure to comply with discovery, the trial court granted summary judgment in both Sass I and Sass II, and the trial court's prothonotary served Nationstar with a certified copy of the order. Not until some 19 days later, however, on December 27, 2011, did Nationstar file any manner of response, in the form of a motion for reconsideration in Sass I that averred it had not received the original motion for summary judgment. Nevertheless, the trial court did not grant reconsideration and Nationstar's thirty-day appeal window closed on January 9, 2012, without the filing of a notice of appeal. The trial court denied the motion by order of February 17, 2012, and noted further that inasmuch as the court had not granted reconsideration prior to the expiration of the appeal period and Nationstar had not appealed, the motion for reconsideration had been rendered moot. Subsequently, however, on March 13, 2012, Nationstar filed a second motion in Sass I, this one styled "Plaintiff's Motion to Strike, Open, Vacate and/or Reconsider the February 17, 2012 Order Denying Motion for Reconsideration as Moot, and to Grant Reconsideration of the Order Entering Summary Judgment in Favor of Defendant." In this second reconsideration motion, Nationstar renewed its assertion that it had not been served with the summary judgment motion, and opined that the matter constituted a breakdown in the operation of the court. Notwithstanding the scope of that averment, however, Nationstar provided no documentation in support of its claim and the trial court denied the motion.
Thereafter, Nationstar obtained new counsel on June 25, 2012, and within one week, counsel again petitioned the trial court for relief, this time through a Motion to Dismiss or Vacate Orders in both Sass I and Sass II. In that third reconsideration motion, Nationstar raised for the first time that the court was deprived of jurisdiction by the prohibition of FIRREA upon actions against a successor institution for the pre-assignment conduct of its predecessor. Again, however, the trial court denied the motion, prompting Nationstar to file these consolidated appeals on July 9, 2012, some 213 days after the trial court's entry of summary judgment.
Inasmuch as these appeals are consolidated, Nationstar filed a single Brief for Appellant stating the ...