HARRISBURG – Three Superior Court judges have ruled to affirm a trial court perspective with respect to the assignment of seven-figure damages in a mortgage foreclosure action.
On Dec. 9, Judges Paula Francisco Ott, Alice Beck Dubow and William H. Platt ruled judgment was again entered in favor of plaintiff VFC Partners 8 and against defendants Hassan Hadj Mohammadi, Tannaz Hadj Mohammadi and Sanaz Hadj Mohammadi, in the sum of $1,269,400, plus attorney’s fees, costs, and additional interest from the date of trial to the date of judgment
Platt authored the Court’s opinion in this matter, initially filed in the Huntingdon County Court of Common Pleas of June 22, 2011.
VFC Partners is the assignee of a mortgage dated Nov. 1, 2006 executed by Hassan favor of Branch Banking and Trust Company of Virginia (BB&T) in the amount of $1,000,000.00, which encompasses real estate property in Huntingdon and Fulton Counties. This mortgage was recorded Nov. 3, 2006 in each county’s respective record books.
VFC Partners was assigned the mortgage in Huntingdon County on March 7, 2011. On Sept. 3, 2010, Hassan conveyed the real estate of the mortgage in question to his daughters Tannaz and Sanaz without consideration.
VFC Partners’ predecessor and assignor BB&T loaned Watchwood, LLC (hereafter Watchwood) the sum of $5,650,000.00 on Nov. 1, 2006. Simultaneously, Hassan executed a promissory note pledging $1,000,000.00 toward repayment of the loan. Moreover, Hassan executed a Guaranty Agreement limited to $1,000,000.00 plus accrued interest, late fees, and costs of collection (including attorney’s fees). In that agreement, Hassan granted a security interest and lien on the real estate located in Huntingdon and Fulton counties – further, Watchwood was owned by his brother.
Watchwood defaulted on the loan and subsequently sought relief in the United States Bankruptcy Court for the District of Maryland on Aug. 10, 2009. In the bankruptcy proceeding, Watchwood indicated that $5,452,977.35 was owed to BB&T due to the 2006 loan.
VFC moved for partial summary judgment on the issue of liability and secured it on Sept. 22, 2015, because the trial court found Hassan was liable under the guarantee agreement and mortgage plus Tannaz and Sanaz’s interests were subject to the lien of the mortgage.
The trial court entered a verdict of $1,269,400.00 plus attorney’s fees, costs, and additional interest from the date of trial to the date of judgment on Feb. 29. The court later rejected a motion to alter verdict and find in favor of plaintiffs for lack of jurisdiction on April 21, and entered judgment on the verdict on April 25.
This led the plaintiffs to appeal, claiming the trial court overstepped its judicial geographic boundaries “erred when it exercised jurisdiction over debt instruments which by their terms vest jurisdiction in the state of Virginia.”
“This case involves a mortgage foreclosure action, which is an in rem proceeding. The property encumbered by the lien of the mortgage is in Huntingdon County, Pennsylvania. Therefore, the trial court, which is located in Huntingdon County, Pennsylvania, has jurisdiction over this case. Regardless of the language contained in the note and mortgage, the parties could not confer jurisdiction on Virginia where it does not properly exist,” Platt said. “Plaintiffs’ claim lacks merit.”
Superior Court of Pennsylvania case 738 MDA 2016
Huntingdon County Court of Common Pleas case 2011-1151
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com