TD Bank

PHILADELPHIA – On Tuesday, the U.S. Court of Appeals for the Third Circuit affirmed a trial court ruling which retained a six-figure judgment against a Wisconsin-based real estate investment group.

Judges Kent A. Jordan, Thomas M. Hardiman and Joseph A. Greenaway Jr. upheld a District Court decision which refused to set aside a default judgment levied against BNB Properties of Stevens Point, Wis. in the amount of $790,286.03, and dismissed the remainder of the appeal with prejudice.

On June 25, 2002, BNB obtained a mortgage loan from Commerce Bank of Pennsylvania for $800,000 (Appellee TD Bank, N.A. is the successor-by-merger to Commerce Bank’s interest in that loan to BNB).

On Sept. 10, 2009, TD Bank exercised its option under the mortgage agreement to declare the outstanding balance and interest due. BNB failed to pay its balance and, after many attempts to receive payment, TD Bank initiated foreclosure proceedings in the Montgomery County Court of Common Pleas.

On Jan. 10, 2014, BNB removed the case to the United States District Court for the Eastern District of Pennsylvania and it proceeded until BNB’s counsel and corporate principal, John Koresko, was suspended from the practice of law by the District Court.

After a series of miscommunications with Koresko, the Court entered and awarded TD Bank a default judgment of $790,286.03 on Oct. 3, 2014. When BNB’s motion to set aside the judgment under Rule 60 of Federal Rules of Civil Procedure was denied by the District Court on Nov. 21, 2014, it appealed to the Third Circuit four weeks later.

BNB seeks: “(1) reversal of all District Court orders relating to the initial entry of default judgment; (2) remand for a new damages calculation because TD Bank’s witness was not competent to testify to damages; (3) vacatur upon a finding that TD Bank lacked standing to initiate this foreclosure action; and (4) reversal of the District Court’s adverse Rule 60(b) ruling.”

TD Bank countered BNB’s appeal was only timely as to the desired reversal of the Rule 60 ruling, and the Court agreed.

“In this case, BNB filed its Rule 60 motion 29 days after judgment was entered,” Hardiman said. “Accordingly, that motion failed to toll the time to appeal the District Court’s underlying orders and the time to appeal such orders had expired by the time this appeal was filed. TD Bank claims this untimeliness precludes us from reviewing all the District Court orders except for its order denying the Rule 60 motion itself.”

The Court also rejected BNB’s “specious” arguments as to the timetable of its appeal, before turning to its claim that TD Bank had no basis to initiate the foreclosure action. The Court found BNB’s claim on the foreclosure action did not reference relevant jurisprudence and failed to illustrate TD Bank had a “lack of standing” to begin those proceedings.

“TD Bank provided the District Court with a copy of the mortgage agreement and alleged that it came into possession of the mortgage via a merger with Commerce Bank,” Hardiman said.

“It alleged that BNB failed to make required payments on that mortgage, and that it sought to foreclose. And TD Bank has been directly injured by BNB’s failure to meet its payment obligations and such harm may be remedied by foreclosure,” Hardiman added.

Finally, BNB advocated the default judgment should be set aside due to “mistake, inadvertence, surprise, or excusable neglect” – but the Third Circuit found this argument made in error under the wrong subset of Rule 60, and it was accordingly forfeited.

“For the reasons stated, we will affirm the District Court’s Nov. 21, 2014 order and will dismiss the remainder of the appeal with prejudice,” Hardiman said.

The plaintiff was represented by Mark D. Pfeiffer and Nola R. Bencze of Buchanan Ingersoll & Rooney in both Philadelphia and Princeton, N.J., plus Blair H. Granger, David J. Scaggs and James D. Doyle of The Granger Firm in Paoli.

The defendants are represented by Douglas A. Cipriano of the Law Office of Douglas A. Cipriano in Flossmoor, Ill. and Michael J. McCaney Jr. of McCaney Law in Philadelphia.

U.S. Court of Appeals for the Third Circuit case 14-4806

U.S. District Court for the Eastern District of Pennsylvania case 2:14-cv-00136

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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