Wells Fargo Bank, N.A. v. Lofts at the Mill, L.P.

Filing 23

MEMORANDUM and ORDER granting in part and denying in part 15 pltf's Motion for Summary Judgment - GRANTED re pltf's foreclosure action and DENIED re damages owed by dft to pltf.Signed by Honorable James M. Munley on 4/6/10 (sm, )

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA WELLS FARGO BANK, N.A. Plaintiff : No. 3:09cv1006 : : (Judge Munley) : v. : : LOFTS AT THE MILL, L.P., : Defendant : :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
M E M O R AN D U M B e fo re the court is plaintiff's motion for summary judgment (Doc. 15). Having b e e n briefed, the matter is ripe disposition. B a c k g ro u n d T h is case involves a loan made to the defendant and secured by a mortgage a n d an additional security interest on furniture, fixtures and other things at the m o rtg a g e d premises, 700, 800 and 900 James Avenue, Scranton, Pennsylvania, e xe c u te d by the defendant in this action. Plaintiff alleges that defendant is in default o n this loan because it has not made payments due on the account. Defendant th e re fo re seeks foreclosure and sale of the James Avenue property and a judgement in its favor for the amount due under the loan agreement. P la in tiff filed the instant mortgage foreclosure action on May 28, 2009. (See D o c . 1). Defendant answered the complaint, and the parties engaged in discovery. At the close of discovery, plaintiff filed the instant motion. The parties briefed the is s u e , bringing the case to its present posture.

Jurisdiction T h e plaintiff is a national banking association organized under United States la w and has its principal place of business in California. Defendant is a P e n n s ylva n ia limited partnership with its principal place of business in Pennsylvania. The amount in controversy exceeds $75,000. The court therefore has jurisdiction p u rs u a n t to 28 U.S.C. § 1332. Because the court is sitting in diversity, the law of P e n n s ylva n ia shall apply. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2 0 0 0 ) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). Legal Standard G ra n tin g summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show th a t there is no genuine issue as to any material fact and that the moving party is e n title d to judgment as a matter of law. See Knabe v. Boury, 114 F.3d 407, 410 n.4 (3 d Cir. 1997) (citing FED. R. CIV. P. 56(c)). "[T]his standard provides that the mere e xis te n c e of some alleged factual dispute between the parties will not defeat an o th e rw is e properly supported motion for summary judgment; the requirement is that th e re be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U .S . 242, 247-48 (1986) (emphasis in original). In considering a motion for summary judgment, the court must examine the fa c ts in the light most favorable to the party opposing the motion. International Raw M a te ria ls , Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The 2

burden is on the moving party to demonstrate that the evidence is such that a re a s o n a b le jury could not return a verdict for the non-moving party. Anderson, 477 U .S . at 248 (1986). A fact is material when it might affect the outcome of the suit u n d e r the governing law. Id. W h e re the non-moving party will bear the burden of p ro o f at trial, the party moving for summary judgment may meet its burden by s h o w in g that the evidentiary materials of record, if reduced to admissible evidence, w o u ld be insufficient to carry the non-movant's burden of proof at trial. Celotex v. C a tre tt, 477 U.S. 317, 322 (1986). Discussion T h is action is one in mortgage foreclosure. In Pennsylvania, "[i]n an action for m o rtg a g e foreclosure, the entry of summary judgment is proper if the mortgagors a d m it that the mortgage is in default, that they have failed to pay interest on the o b lig a tio n , and that the recorded mortgage is in the specified amount." Cunningham v. McW illia m s , 714 A.2d 1054, 1057 (Pa. Super. Ct. 1997). If these conditions are m e t, summary judgment is appropriate "even if the mortgagors have not admitted the to ta l amount of the indebtedness in their pleadings." Id. H e re , the defendant agrees that it has defaulted on the mortgage and s u m m a ry judgment on plaintiff's foreclosure action is appropriate. (See Defendant's B rie f in Opposition (Doc. 19) at 3). Defendant disputes, however, the exact amount o w e d in the action and argues that summary judgment is inappropriate as to the p la in tiff's damages. Plaintiff submits an affidavit from Scott Bukhair, a servicing o ffic e r for Centerline Servicing, Inc., special servicer of the loan at issue in this 3

matter.1 (See Affidavit of Scott Bukhair, Exh. 1 to Plaintiff's Motion for Summary J u d g m e n t (Doc. )). Bukhair alleges that, as of January 1, 2010, defendant owes $ 1 6 ,1 0 3 .4 7 9 .5 2 on the debt, late charges, interest and various fees, as well as a d d itio n a l ongoing interest. (Id. at ¶ 7). Defendant submits the affidavit of Gerard P. J o yc e , sole general partner of Defendant Lofts at the Mill to challenge these a lle g a tio n s . (See Doc. ). Joyce attests that the amount owed on the loan is $ 1 5 ,8 2 7 ,5 3 3 , and that ongoing interest charges are lower than Bukhair alleges.2 (Id. a t ¶ 3). T h e court finds that there is a dispute of fact over the plaintiff's damages in th is case and that a hearing on that matter is necessary. As such, the court will g ra n t the motion for summary judgment as it pertains to plaintiff's foreclosure action a n d deny it as it pertains to the damages owed by the defendant. Conclusion F o r the reasons stated above, the court will grant the plaintiff's motion for s u m m a ry judgment as it pertains to the foreclosure action and deny it as it pertains

Bukhair describes the debt as follows: Principal: $12,800,000.00; Interest: $976,558.22; Late Charges: $62,799.90; Default Interest: $968,533.34; Prepayment Premium: $2,407,249.67; Servicer Fees: $300.00; Property Protection Advances: $34,547.28; Credit for Suspense and Reserve Funds on Deposit: ($1,146,508.89); Total: $16,103, 508.89; per diem regular interest from and after 1/02/10: $2,136.89; per diem default interest from and after 1/02/10: $1,422.22 Joyce describes the debt as follows: Loan Amount: $12,800, Less: Reserve: $800,000, Principal: $12,000,000; Interest: $915,523; Late Charges: $58,875; Default Interest: $908,000; Prepayment premium: $2,256,797; Service Fees: $300; Property Protection Advances: $34,547; Credit for Escrow: $(346,509); Funds on Deposit Total: $15,827,533; Per Diem Regular Interest from and After 1/02/10: $2,003.33; Per Diem Default Interest from and After 1/02/10: $1,333.33. 4
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to the specific amount plaintiff seeks in damages. The court will schedule a hearing to determine the damages. An appropriate order follows.

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA WELLS FARGO BANK, N.A. Plaintiff : No. 3:09cv1006 : : (Judge Munley) : v. : : LOFTS AT THE MILL, L.P., : Defendant : :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER AN D NOW, to wit, this 6th day of April 2010, the plaintiff's motion for summary ju d g m e n t (Doc. 15) is hereby GRANTED in part and DENIED in part, as follows: 1 . The motion is granted as it pertains to plaintiff's foreclosure action; and 2 . The motion is denied as it pertains to the damages owed by defendant to p la in tiff.

B Y THE COURT:

s / James M. Munley JUDGE JAMES M. MUNLEY United States District Court

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