May 6, 2014
by Jill P. Jenkins
KML Law Group, P.C. – USFN Member (Pennsylvania)
Since 2008, the city of Philadelphia and the First Judicial District have seen significant changes in the way mortgage foreclosure matters are handled. Today, handling a foreclosure case in Philadelphia (for the lender and the borrower) can be a complex task, including tricky service issues, conciliation conferences, case management conferences and, more commonly in recent years, taking a case to a bench trial.
In years past, things in the mortgage foreclosure world were much different. With little court intervention, cases were often started and finished very quickly, with little delay or litigation involved at all. Very few cases actually became contested and, if they did, the parties controlled when a matter would be listed for trial if a resolution could not be reached. This gave all parties ample time to discuss resolution, serve discovery, prepare motions, and get ready for trial at their own pace, rather than in accordance with looming deadlines set by the court.
As we entered the 2000s, however, things began to shift towards more court-mandated appearances and court involvement in mortgage foreclosure cases. In 2004, the Mortgage Foreclosure Steering Committee formed in Philadelphia. The first of its kind in the city and still active today, it is a group of attorneys representing the lenders’ and the borrowers’ sides, led by The Honorable Annette Rizzo, a Common Pleas Court Judge. The committee meets regularly to discuss current issues in mortgage foreclosure and ways to improve the process in Philadelphia for both the lender and the borrower.
Formation of the group was only the beginning, however. In June 2008, the Philadelphia Mortgage Foreclosure Diversion Program began — now nearing its 6th anniversary. A court-ordered conciliation conference is scheduled for every owner-occupied mortgage foreclosure case. While the borrower is participating in the conciliation program, all proceedings are stayed. The program brings the borrower (or her representative) and a representative of the lender together to discuss how the mortgage foreclosure matter can be resolved amicably for both parties, through a number of possible options. Depending on the type of resolution that the borrower is seeking, this can involve a number of conferences over several months, where both sides meet to discuss how best to proceed towards achieving the chosen resolution.
Up until approximately one year ago, the court had continued the practice of not keeping mortgage foreclosure cases on a specific “track” for the purposes of discovery deadlines, dispositive motion deadlines, and an estimated trial date. This responsibility was left to the parties to determine when a case would be brought to trial, if a resolution could not be reached after the case was removed from conciliation.
Then, the world for mortgage foreclosure attorneys took a significant turn when the court started scheduling case management conferences. These conferences entailed a brief meeting of both parties and a “case management master” to discuss the case and set deadlines for discovery, dispositive motions, and to place the case into a trial pool, which would advise the parties as to the month the case would be called to trial. This conference also required both parties to prepare and present a “case management memorandum.” Moreover, many case management conferences would be scheduled at the same time, but would be called one at a time. This often caused a long period of waiting as more complex cases, such as personal injury or medical malpractice, completed their conferences so that a mortgage foreclosure case could be called, only to meet for a minute or two to be given a discovery deadline and trial date. It was difficult to see the benefit of attending these mandated conferences, sometimes spending hours at City Hall, when not a great deal of discussion regarding the discovery that was required and how long each party needed before a trial could be scheduled was needed for a mortgage foreclosure case.
More recently, it was noticed by the court that this method of case management may not be the right fit for mortgage foreclosure cases. Since December 2013, Philadelphia’s Court of Common Pleas began a new way of tracking its mortgage foreclosure cases. The court now is tracking the status of service of the complaint upon all defendants, and the status of the case after it is removed from the conciliation program, if a default judgment has not yet been entered against the defendants. Generally speaking, if proof of service is not on the docket within 90 days from the commencement of the action, a status conference will be scheduled in front of a judge who has taken ownership of mortgage foreclosure cases in recent months. At the status conference, the attorney is required to represent to the court why service has not yet been completed and when the attorney expects service will be completed.
Now fast forward four or five months, after service has been effectuated and the matter has run its course in conciliation or, in the alternative, the matter involves non-owner occupied property and never ventured into conciliation. The court will issue an order scheduling a case management conference. This may sound similar to what was done previously, but the court has now recognized that mortgage foreclosure matters in Philadelphia are unique, requiring different attention than a catastrophic injury case, business contract dispute, or asbestos lawsuit.
The Philadelphia Court is now holding a brief meeting of the parties with a court administrator, in a courtroom separate from the other case management conferences, so that appropriate deadlines can be quickly decided, and pro se litigants can address any questions they have with the court administrator and the lender’s attorney. Discovery and trial deadlines are still set and expected to be adhered to, but the case management conference itself is completed much more promptly. It appears, at least for now, that this style of case organization is here to stay in Philadelphia.
Not surprisingly, this latest method of tracking cases by the courts has forced firms to reorganize their tracking of cases as well. Firms now are required to calendar and attend court-ordered hearings and status conferences, keep strict calendars for discovery and trial dates (often in cases that are not contested), and confirm attorney coverage for all court appearances, among other new responsibilities. This has added another layer of complexity to the cases that has necessarily increased the costs of prosecuting the case.
It has yet to be seen whether this type of case management will be beneficial to either party or, ideally, to both parties. Given the fact that most mortgage foreclosure matters require similar deadlines for discovery and trial, could it be more efficient to simply issue a case management order with the same proposed deadlines for all mortgage foreclosure cases and allow parties with special, more complex cases to move for an exception? Is there a way to avoid having the court require a pro se litigant to take time off from his or her employment to come to City Hall for a conference to discuss the discovery deadline in a case where no discovery is required? Can another (possibly superfluous) court appearance in the already demanding schedule of the lender’s attorney be avoided? On the other hand, are these conferences providing another opportunity for both parties to be in the same room and discuss a resolution? These are all questions that will likely be addressed over the coming months.
The evolution of case management in Philadelphia has been interesting to observe. It is clear that the courts are open and willing to consider implementing a process that works best for everyone, including the lender, borrower, and court staff. There is still work to be done, but it appears that there is movement in that direction.
© Copyright 2014 USFN. All rights reserved.