Monday, August 18, 2008

mortgage foreclosure - pleading - lack of knowledge

LaSalle Bank v. Youngberg - CP Centre County - August 12, 2008

The court denied plaintiff/mortgagee's motion for summary judgment on its complaint and defendant's answer, which claimed "lack of knowledge" about a) the assignment of the mortgage note, b) the amount due on the mortgage, and c) plaintiff's request for attorney fees.

The court adopted the reasong in Cercone v. Cercone, 386 A.2d 1 (1978), which held that the court must examine the entire pleading in determining whether the responding party must have had knowledge of certain information that was generally denied. While it is well settled that an inadequate denial is unacceptable and may if fact be an admission, that is only the case where it is clear that the defendants have adequate knowledge or that the means of obtaining information are within the defendants’ control.

assignment - The court held that it would not "require the debtor to consult public records records to verify the transfer of a mortgage note from one party to another, particularly when such information is much more readily available to the creditor and the creditor has not provided the verification until much later in the course of the litigation."

amount due - The actual amount due on a mortgage varies over time due to fees assessed and the interest rate. "The Court will not require Defendants, who have incomplete information, to conduct pre-answer discovery to avoid having their otherwise legitimate denials deemed answers by the Court. This shifting of the burden from Plaintiff to Defendant is unacceptable and without basis in the Pennsylvania Rules of Civil Procedure or in case law. Furthermore, Defendants cannot be required to accept the assertion of what costs have been incurred by the Plaintiff without conducting discovery relating to costs. Defendants’ denial of this information, to the extent it was denied in their Answer, was not an admission."

attorney fees - The "assessment of attorney’s fees, is similar to Defendants’ denial...that Defendant cannot be required to accept the assertion that Plaintiff has incurred attorney’s fees amounting to the amount listed in the Complaint. Defendants may challenge the reasonableness of attorney’s fees, including the legal enforceability of attorney’s fees clauses in Mortgage agreements. The Court will analyze attorney’s fees claims under the analysis set forth in Federal Land Bank of Baltimore v. Fetner, 410 A.2d 344 (Pa.Super. 1979), applying a reasonableness test in examining the complexity of the litigation and the relation between the amount requested in attorney’s fees and the amount of the principal due."

In sum, applying the Cercone analysis to the present case, the Court finds that Defendants admitted the allegations to which they had knowledge and denied those in which they did not have knowledge.The Court determines the record does not clearly show that no genuine issues of material fact exist and that Plaintiff is entitled to judgment as a matter of law."

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