ARGUED: September 13, 2017
from the Judgment of Superior Court entered on July 27, 2016
at No. 2364 EDA 2015, affirming the Order entered on July 9,
2015 in the Court of Common Pleas, Philadelphia County, Civil
Division at No. 1170 May Term, 2013
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY,
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."
Bennett v. Seave, 554 A.2d 866, 891 (Pa. 1989)
(plurality); see also Benner v. Bank of America,
N.A., 917 F.Supp.2d 338, 357 (E.D.Pa. 2013). 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, and in
section 503(a) it provides for an award of attorneys'
fees for any residential mortgage debtor who "prevails
in an action arising under this act." 41 P.S.
§§ 403(a), 503(a). In this appeal, Appellant Rodger
Lindsay ("Lindsay"), a debtor who, in response to a
mortgage foreclosure complaint filed by Appellee Bayview Loan
Servicing, LLC ("Bayview"), asserted as an
affirmative defense in new matter Bayview's failure to
provide him with the required thirty days' notice. We are
presented with the question of whether, following
Bayview's discontinuance of the case, Lindsay is entitled
to recover attorneys' fees arising from the assertion of
his affirmative defense. We conclude that to be entitled to
an award of attorneys' fees under section 503(a), the
debtor must commence an "action" asserting a
violation of section 403(a) and prevail. Because an
affirmative defense is not an "action" for purposes
of Act 6, under the facts and procedural history presented
here, Lindsay is not entitled to an award of attorneys'
in 1974, Act 6 regulates legal rates of interest, 41 P.S.
§§ 201, 301, provides various consumer protection
provisions, 41 P.S. §§ 401-408; and sets forth
various remedies for the violation of its terms. 41 P.S.
§§ 501-507. The remedial consumer protective
provision at issue in this appeal is set forth in section
403(a), which requires that
[b]efore any residential mortgage lender may accelerate the
maturity of any residential mortgage obligation, commence any
legal action including mortgage foreclosure to recover under
such obligation, or take possession of any security of the
residential mortgage debtor for such residential mortgage
obligation, such person shall give the residential mortgage
debtor notice of such intention at least thirty days in
advance as provided in this section.
41 P.S. § 403(a). The remedy provision at issue here is
section 503(a), which permits the recovery of reasonable
attorneys' fees and other costs and expenses, as follows:
If a borrower or debtor, including but not limited to a
residential mortgage debtor, prevails in an action arising
under this act, he shall recover the aggregate amount of
costs and expenses determined by the court to have been
reasonably incurred on his behalf in connection with the
prosecution of such action, together with a reasonable amount
for attorney's fee.
41 P.S. § 503(a).
set forth the relevant statutory provisions, we turn to the
facts of this case. In February 2006, Lindsay and his wife
purchased 2115 East Chelten Avenue in Philadelphia (the
"Property"). The Property had a storefront
commercial unit on the first floor and a residential unit
above. To finance this purchase, the Lindsays obtained a $75,
000 mortgage loan from Equity One, Inc. ("Equity
One"). The mortgage note indicated that the property was
an investment, that the Lindsays would not use it as a
primary or secondary residence, and that the Lindsays would
notify Equity One in writing of any proposed change of
occupancy. On April 29, 2011, Equity One assigned the
mortgage to Bayview. At some point after purchasing the
Property, Lindsay began using the Property as his primary
payments continued until December 2012, but none were made
after that date. On May 14, 2013, Bayview filed a complaint
in mortgage foreclosure. In response, Lindsay filed an answer
and new matter, in which he asserted, along with three other
defenses,  that Bayview failed to provide him with
pre-foreclosure notice as required by section 403(a) of Act
6. Lindsay's Answer and New Matter, 5/12/2014, at 12-14.
On February 2, 2015, Bayview filed a motion for summary
judgment. Following oral argument, the trial court denied
Bayview's motion for summary relief based upon its
finding that there were unresolved issues with regard to
whether Bayview was required to provide section 403(a)
notice, whether Lindsay was eligible for government programs
related to mortgage repayment, and "other facts on [sic]
record." Trial Court Order, 4/22/2015.
week later, Bayview discontinued the mortgage foreclosure
action without prejudice. Lindsay then filed a motion for
attorneys' fees under section 503(a), asserting that he
was the prevailing party in Bayview's foreclosure action.
Supplemental Brief in Support of Motion for Award of
Statutory Attorney's Fees and Costs, 6/29/2015, at 1. In
support of his motion, Lindsay cited to Gardner v.
Clark, 503 A.2d 8 (Pa. Super. 1986), a case in which the
Superior Court held that a debtor asserting defenses under
Act 6 was entitled to attorneys' fees after the creditor
discontinued the action. Id. at 10. According to the
Superior Court in Gardner, the debtor was a
"prevailing party" because he had
"successfully resisted appellant's attempt to
enforce the judgment against their residence."
Id. The intermediate appellate court further held
that it did not matter, for purposes of entitlement to
attorneys' fees under Act 6, that the case had not ended
in an adverse judgment against the appellant or that the debt
remained valid and collectable in a future action.
Id. Instead, all that mattered was that the debtor
had succeeded "in obtaining substantially the relief
trial court disagreed with Lindsay, concluding that
Gardner had no applicability in the present
circumstances because it involved an award of attorneys'
fees in a case involving an attempt to enforce a confessed
judgment. Trial Court Opinion, 12/9/2015, at 3. Pursuant to
section 407 of Act 6, before levying, executing or garnishing
on a confessed judgment with respect to residential real
estate, the creditor must first file an action against the
debtor and proceed to judgment, at which time the judgment by
confession and judgment in the subsequent action are merged
and conformed as to amount. 41 P.S. § 407(a). In
Gardner, the debtor asserted that the creditor had
not filed a separate action as required by section 407(a).
Gardner, 503 A.2d at 9. In the present case, the
trial court found that the situation in Gardner
(involving a confessed judgment) was not sufficiently
"comparable to circumstances of the instant
proceeding." Trial ...