OPINION BY BOWES, J.:
James M. Brolley appeals from the March 9, 2017 in rem judgment in mortgage foreclosure entered in favor of Wilmington Trust, National Association, as Trustee for VM Trust Series 3, a Delaware Statutory Trust ("Mortgagee"). We vacate the judgment and dismiss the action with prejudice.
The following facts are relevant to our review. On February 7, 2003, Helen Brolley executed a mortgage and note in the principal amount of $65,000, in favor of Wells Fargo Home Mortgage, Inc., on her property at 150 Laurel Drive, Mountain Top, Pennsylvania 18707 ("the Property"). The mortgage was duly recorded with the Recorder of Deeds of Luzerne County. The note provided for interest at an annual rate of 8.250%. On November 13, 2003, she transferred her interest to her son via deed, which was duly recorded. Helen Brolley died on March 15, 2006.
It is undisputed that no monthly payments of principal and interest were made on or after April 1, 2006. On August 8, 2007, Wells Fargo filed a complaint in mortgage foreclosure against James Brolley, seeking the amount owing from April 1, 2006, and each month thereafter. That action was docketed at No. 8805 of 2007. By order dated September 9, 2009, an in rem summary judgment was entered in favor of Wells Fargo and against Mr. Brolley.
On October 28, 2011, Residential Credit Solutions, Inc., the servicer of the mortgage, sent notice of intent to foreclose on the mortgage addressed to the Estate of Helen Brolley at the Property. That notice recited that the mortgage was in serious default, no monthly payment having been made since April 1, 2006. On March 12, 2012, EMC Mortgage LLC commenced the instant action at No. 2985 of 2012, by filing a complaint in mortgage foreclosure. Mr. Brolley filed a pro se answer to the complaint in which he pled that, "a legal judgment has already been rendered in this matter by Judge Peter Paul Olszewski." Answer in Mortgage Foreclosure, 5/17/12, at 1.
On April 22, 2013, EMC Mortgage Corporation filed a praecipe to vacate and discontinue the prior judgment at No. 8805 of 2007 "without prejudice," and thereafter the Mortgagee herein filed two motions for summary judgment, which the court denied. After a bench trial, the court entered judgment in favor of EMC Mortgage LLC.
Mr. Brolley filed post-trial motions, which were denied, and a timely appeal to this Court. In his Rule 1925(b) statement, he asserted that the trial court erred in failing to consider the affirmative defenses of collateral estoppel and res judicata, that he raised in his pro se answer. The trial court, in its Rule 1925(a) opinion, found the defenses waived as Mr. Brolley failed to plead them as new matter pursuant to Pa.R.C.P. 1030(a). This Court disagreed, vacated the judgment, and remanded the matter to the trial court "for consideration on the merits of [Mr. Brolley's] affirmative defenses."
Following remand, the trial court held a status conference. It issued an order directing the parties to brief the legal issues and ordering that "the transcript, evidence, and stipulations of March 31, 2015" be made part of the new record. Order, 7/13/16, at 1. The order further stated that if the parties subsequently determined that they needed to present additional evidence, they could either stipulate to that evidence or request a phone conference with the court.
Following submission of briefs and argument, the trial court ruled that the defense of res judicata, applied to the prior judgment in mortgage foreclosure at No. 8805 of 2007, but not to subsequent defaults under the mortgage. Order, 12/8/16. That same day, the court issued a trial management order scheduling a non-jury trial for February 3, 2017, and ordering the parties to submit witness lists, expert reports, exhibit lists, proposed findings of fact and conclusions of law, and designating portions of depositions that they intended to offer.
Mr. Brolley filed a motion for reconsideration, alleging that the trial court erred in not finding the action barred based on res judicata and collateral estoppel, as well as the lack of Act 91 notice. The court ruled that the motion was premature as it had not ruled on the specific dates of
Trial proceeded on February 3, 2017, although Mr. Brolley was not present. N.T., Bench Trial, 2/3/17, at 7. Mortgagee called Kimberly Harmstad from Shellpoint Mortgage Servicing, the servicer of the loan at issue.
Shortly after the conclusion of the trial, the court issued an order directing Mr. Brolley to brief his argument that Mortgagee had failed to comply with the notice requirements of Act 91 in its October 28, 2011 notice. Order, 2/8/17, at 1. Mr. Brolley complied, representing therein that although he received Act 91 notice on or about October 28, 2011, the Mortgagee failed to adduce any evidence that a proper Act 91 notice was sent with the correct deficiencies and amounts remaining on the mortgage after the court ruled that res judicata applied. Mortgagee countered that Defendant had admitted that Act 91 notice complied with the statute, and thus, any objection to notice was waived.
On March 9, 2017, the court found in favor of Mortgagee and entered an in rem judgment in the amount of $128,313.64 as of January 31, 2017 with the per diem rate of $14.31 and a monthly late charge of $24.41. The court found that Mortgagee proved its mortgage foreclosure claim as to Mr. Brolley's defaults from October 1, 2010 to date. The court also rejected Mr. Brolley's claim that the October 28, 2011 Act 91 Notice was defective, finding that the notice requirements were temporarily suspended at that time, and only went back into effect on October 2, 2012, and thus, no notice was required.
Mr. Brolley did not file a post-trial motion following the trial court's determination.
Appellant's brief at 4.
Preliminarily, Mortgagee contends that the foregoing issues are waived as Mr. Brolley failed to file a post-trial motion pursuant to Pa.R.C.P. 227.1(c)(2), following the March 9, 2017 non-jury verdict. Rule 227.1(c)(2) provides: "Post-trial motions shall be filed within ten days after notice of nonsuit or the filing of the decision in the case of a trial without [a] jury." Post-trial motions preserve issues for appeal because issues not raised in the lower court are waived.
Mr. Brolley maintains that he was not required to file a post-trial motion because Pa.R.C.P. 227.1(i), dealing specifically with cases on remand for further proceedings, governed. That subdivision provides that:
Pa.R.C.P. 227.1(i). The 2015 Explanatory Comment to the Rule explains that subdivision (i) was added that year to address the gap in the rule where a matter is remanded for further consideration by the trial court, and "to give the practitioner certainty as to when a motion for post-trial relief is required in the remand context." 2015 Explanatory Comment. Mr. Brolley points out that this Court did not specifically remand for a new trial or partial new trial. Nor did the trial court indicate that a motion for post-trial relief was required. Thus, he contends that, under the express language of subdivision (i), he was not required to file post-trial motions on the facts herein.
The record confirms that this Court did not order a new trial or partial new trial upon remand. The trial court, after addressing the subject of the remand, ordered a new trial. The parties were directed to comply with all pretrial formalities. Additional testimony was taken; new exhibits were offered. In our view, the proceedings on remand constituted a trial. However, after the amendment to Rule 227.1 to include subdivision (i), the issue is not whether the proceeding on remand constituted a trial. Rather, the proper inquiry is whether our remand called for "a complete or partial new trial," or whether the trial court required Mr. Brolley to file a new post-trial motion. Since neither occurred, the filing of post-trial motions following remand was not required in order to preserve issues for appellate review. Hence, we find no waiver.
Mr. Brolley contends that the instant mortgage foreclosure action is barred by the doctrines of res judicata and collateral estoppel. He maintains that the prior in rem judgment in mortgage foreclosure on the note securing the Property is a bar to the instant action. He argues that the trial court erred in finding that res judicata only barred recovery for matters covered by the first judgment and that another
As our sister court noted in
Res judicata is a doctrine that operates to foreclose repetitious litigation by barring parties from re-litigating a matter that was previously litigated or could have been litigated. The doctrine only applies where four common elements exist: "(1) identity of issues; (2) identity of causes of action; (3) identity of persons and parties to the action; and (4) identity of the quality or capacity of the parties suing or sued."
The related doctrine of collateral estoppel or issue preclusion applies if: "(1) the issue decided in the prior case is identical to the one presented in the later case; (2) there was a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party in the prior case; (4) the party or person privy to the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding; and (5) the determination in the prior-proceeding was essential to the judgment."
Upon remand from this Court, the trial court was directed to consider whether res judicata or collateral estoppel were defenses to the current action in mortgage foreclosure. The trial court determined that res judicata barred recovery for default occurring as of the date of the earlier mortgage foreclosure judgment. However, it reasoned that since the mortgage is an installment contract, successive actions could be maintained for breach of an installment. In reaching its conclusion, the trial court cited
In relying upon the aforementioned cases, the trial court failed to appreciate a critical factual distinction: the first mortgage foreclosure action in those cases did not culminate in a foreclosure, and hence, the mortgage remained in effect after that proceeding. Accordingly, the mortgagor's responsibility for the monthly payments continued, and the potential for default remained. Those courts reasoned that, in the event of a subsequent default, mortgagee could file a new foreclosure proceeding limited to amounts owing after that default.
That reasoning is misplaced on the facts herein. In this case, Mortgagee prevailed in the first mortgage foreclosure action, and a judgment in mortgage foreclosure was entered at No. 8805 of 2007. Under Pennsylvania law, "[t]he doctrine of merger of judgments ... provides that the terms of a mortgage are merged into a foreclosure judgment and thereafter no longer provide the basis for determining the obligations of the parties."
The situation herein is remarkably similar to the facts in
Our recent decision in
We find that the prior judgment in mortgage foreclosure bars this subsequent action in mortgage foreclosure.
For these reasons, we need not reach the issue of whether Act 91 notice was proper. We vacate the judgment and dismiss the action with prejudice.
Judgment vacated. Action dismissed with prejudice.
