| ICSC Legal Database - Cases | Monday, February 22, 1999 05:01 PM |
| Citation: |
| Atlantic Financial v. Orianna, 406 Pa.Super. 316, 594 A.2d 356 (1991). |
| Issue: |
| Whether summary judgment is properly granted in favor of a mortgagee if the parties to the mortgage dispute |
| the existence of an oral agreement to forebear from foreclosure. |
| Facts: |
| Plaintiff, Atlantic Financial financed a total of 42 mortgages for defendant, Orianna, involving two commercial |
| condominium projects. In August 1990, Atlantic filed a complaint in mortgage foreclosure against Orianna, |
| asserting default on twelve of the mortgages. In its answer, Orianna denied being in default and argued that |
| Atlantic had orally agreed to forebear from foreclosure action. At the time Atlantic made its motion for summary |
| judgment, the only evidence of an agreement to forebear was contained in a letter written by Orianna to Atlantic |
| proceedings began. The letter referred to an "understanding" between the panics which would cause the suit to |
| be dismissed. Additionally, an Orianna agent testified in his deposition that the parries made an oral agreement |
| to forebear. The trial court granted Atlantic's motion for summary judgment on the grounds that an agreement to |
| forebear from mortgage foreclosure was subject to the Statute of Frauds. Accordingly, an oral agreement was |
| unenforceable. Orianna appealed the judgment on the grounds that the existence of the agreement was a |
| disputed issue of material fact and the Statute of Frauds was inapplicable to the agreement in question. |
| Holding: |
| Affirmed. The court found the Statute of Frauds applicable in the absence of an assertion by Orianna that |
| application of the Statute would increase the chances of fraud or perjury. Furthermore, because Orianna's |
| actions led to foreclosure, an argument that the Statute did not apply would be unconvincing. The court |
| determined that the only evidence of an agreement to forebear was a unilateral, vague ,. expression of an |
| understanding made after Atlantic instituted suit. Orianna's agent's deposition acknowledged that the agreement |
| was oral. The Statute of Frauds precluded enforcement of an oral agreement to forebear. Summary judgment |
| therefore was properly granted. |
| Classification 1: |
| Mortgages |
| 00139 - Legal Update - Winter 1991 |
|
