This article originally appeared in the December 2024 edition of MortgagePoint magazine, online now.
A question that has become prevalent in Pennsylvania foreclosure of late has been, does a borrower have a right to a jury trial for in rem actions in foreclosure? This has particularly come to light as an opinion from the Philadelphia Court of Common Pleas stated a borrower does have such a right in U.S. Bank National Association, not in its Individual Capacity but Solely as Trustee for the NRZ Pass-Through Trust XIV v Wright, August Term 2020, No. 2826 (Phila. C.C.P. February 16, 2024) (hereinafter “Wright”).
Determining Whether a Litigant Has a Right to a Jury Trial
Aright to a jury trial in Pennsylvania generally rests on whether the right existed prior to the adoption of the Pennsylvania Constitution. Absent such an existence, the right does not exist unless specifically created by the legislature. The Pennsylvania Constitution states in Article I, § 6, “Trial by jury shall be as heretofore, and the right thereof remain inviolate.”
To date, the legislature has created no right to a jury trial in mortgage foreclosure actions. In fact, Pennsylvania Rules of Civil Procedure (“Rule”) Nos. 1141 through 1150, which control the procedural aspects of actions in foreclosure, make no reference whatsoever to a trial by jury. Interestingly, Rule 1150 explicitly references trials without a jury, with no mention of a trial by jury procedure. Further, there is no mention of jury instructions, standard for jurors, etc. contained within the Rules governing mortgage foreclosure actions in Pennsylvania.
Without legislation creating a right to jury trial in foreclosure matters, the test for determining if a right to jury trial exists rests in a three-part test. Specifically, courts are to analyze (1) whether the right has been conferred by statute; (2) whether jury trials were required in such actions before 1790; and (3) whether there was a common law basis for the proceeding. Wertz v. Chapman Twp., 741 A.2d 1272, 1276 (Pa. 1999), citing, Commw. v. One (1) 1984 Z-28 Camaro Coupe, 610 A.2d 36, 39 (Pa. 1992). For determining whether the right has been conferred by statute, courts must analyze the following criteria: (1) whether the statute speaks to the right; (2) whether the statute describes the court as the entity providing relief; and (3) whether the legislative history supports the conclusion that the Legislature intended to include the right to a jury trial. Mishoe v. Erie Ins. Co., 824 A.2d 1153, 1156 (Pa. 2003); Wertz v. Chapman Twp., 741 A.2d 1272, 1275 (Pa. 1999).
The Wright Opinion
With the aforementioned framework in mind, the opinion from the Wright case reached the conclusion that a right to a jury trial did exist in mortgage foreclosure actions. In support of this conclusion, the court relied on the law that controlled mortgage foreclosure prior to adoption of the Rules. Specifically, the legal theory of scire facias sur mortgage under the Act of 1705, 1 Sm. L. 57, 57-69 (the “1705 Act”).
In short, the Wright court used notes contained within the 1705 Act which required jury trials in certain circumstances.
The notes stated as follows:
the sheriff is to impanel a jury, who are to make inquiry of all the goods and chattels of the debtor, and to appraise the same, and also to inquire as to his lands and tenements; and upon such inquisition, the sheriff is to deliver all the goods and chattels (except the beasts of the plough) and a moiety of the lands to the party, and must return his writ, in order to record such inquisition in that court, out of which the [writ] issued. And when the jury have found the seizin and value of the land, the sheriff, and not the jury, is to set out and deliver a moiety thereof to the plaintiff by metes and bounds […] And in Pennsylvania, it is the uniform practice to calculate the interest on all judgments for the seven years, to enable the jury, on the first inquisition, to decide whether or not the estate will satisfy them, by the yearly rents and profits, beyond all reprizes, within the term of seven years.
In the court’s opinion, these notes demonstrated an intent of the legislature at the time to create a right to a jury trial in foreclosure actions. Thus, despite the later adopted Rules being silent on jury trials while including language of trials without juries, the court reasoned that the 1705 Act a right to jury trials in foreclosure actions has always existed in Pennsylvania, meeting the previously mentioned three-part test.
Key Questions Regarding the Wright Opinion
The Wright opinion opens the door to jury trials in an area of law which is very nuanced and law specific. However, questions still remain in the reasoning of the opinion, and whether such a right does exist.
The Wright opinion relies upon notes in the 1705 Act which pertain to collection of personal debts, not mortgage foreclosure. This is an important distinction as the opinion states the following in support of a right for jury trials “A process of inquisition and condemnation in connection with the writ of fieri facias (see § 1:3, infra) also gave debtors a means of avoiding ‘foreclosure’ when the suit was on the note. This procedure, provided for in 1705 (see 1 Sm. L. §§ 1 and 2), allowed debtors to avoid the sheriff’s sale where the income from the property would pay off the debt within seven years. Unfortunately, this protection could also be waived by the debtor in the ‘note’ or bond and warrant and usually was.” With this language used by the Wright court, the provision deals with actions in personal liability under a note and not in rem actions to enforce a mortgage lien in a modern foreclosure action. Such a distinction calls into question whether the notes cited by the Wright opinion in fact indicate the existence of a right to jury trial in in rem foreclosure actions.
As one can imagine when relying on a piece of law from 1705, the purpose of the 1705 Act and what it exactly sought to provide in terms of a jury trial lacks clarity and is open to multiple interpretations on both sides. Which presents a potential issue for appellate review to determine this longstanding issue.
Ramifications Going Forward
It is important to note that the Wright opinion is a trial court opinion which is not binding upon other courts in the Commonwealth. Which begs the questions, what does the future hold for foreclosure jury trials in Pennsylvania?
First, should courts permit jury trials in foreclosure actions, this would undoubtedly bog down the judicial economy of courts throughout the Commonwealth. With the volume of foreclosure actions filed across such a large state, the conducting of potentially large numbers of jury trials would strain the court system and affect all matters on a court’s docket, creating extensive delays. This is seemingly an untenable route to move forward with and would likely require the legislature to provide clarity on the matter to prevent such a back log.
Second, jury trials would have a substantial impact on witnesses testifying in foreclosure cases. Foreclosure matters are littered with statutory prerequisites and requirements to prove a lender’s entitlement to in rem judgment. In short, foreclosure cases are driven by statutory interpretation and application, which could present challenges for a jury at trial. This creates an interesting challenge for the attorneys and witnesses involved as they would now need to present a coherent case to a group of citizens with no prior knowledge in this unique area of law.
Finally, such a result could lead to vastly different results depending on which area of the Commonwealth you are in. It is easy to imagine a jury in Philadelphia reaching a different conclusion on a matter than that of a jury in one of the more rural counties in Pennsylvania.
With venue being restricted to the county in which the mortgaged property is located, it is foreseeable the imposition of jury trials would create different risks for lenders depending on which county a property is located in.
Conclusion
In short, the potential right to jury trials in Pennsylvania foreclosure actions is certainly something to monitor. It is clear, however, that any uptick in jury trial demands in foreclosures would have a significant impact on both lenders as well as the court system.
Ultimately, it seems in everyone’s best interest for the legislature to take notice of this lack of clarity in the law and issue some guidance for the industry moving forward.
