Quiet Title • Mortgage • Real Estate Partnership

Wolf v. Wolf, PICS Case No. 14-0440 (CP Philadelphia Feb. 20, 2014) Massiah-Jackson, J. (12 pages).

In an action to quiet title to property on Wendover Street in Philadelphia, Michael Wolf contended that a lien filed by his stepmother in an effort to foreclose a mortgage on the property should be removed and he should receive the payments he had made into an escrow account. Quiet title granted and counterclaim for mortgage foreclosure denied.

The property was purchased in 2002 by a real estate partnership consisting of Wolf and his father. Some of the funds used for the partnership were contributed by the father and his wife. After the death of the father, his wife initiated litigation in 2008 to wind up the partnership and determine the partnership assets. That litigation ended in with Wolf paying all judgments and obligations due to the estate and his stepmother.

Wolf filed an action to quiet title and asking the court to declare that the mortgage debt was discharged. In the 2008 litigation that wound up the partnership, the judge had concluded that Wolf was the sole owner of the Wendover Street property. The stepmother denied that the Wendover Street property was included in that earlier litigation and argued that Wolf’s failure to pay monthly payments entitled her to foreclose the mortgage. The similarity of the demands for recovery, the identity of the witnesses, documents and factual allegations compelled the court to rule that res judicata and collateral estoppel barred the stepmother’s defenses to the quiet title action.

When the stepmother sought compensation for the value of the capital account and the post-November 2001 Note capital contributions, she put the Wendover Street debt at issue. The judge in the 2008 litigation determined that the capital account included loans made by the father and the stepmother for the purchase of partnership properties. The stepmother had the opportunity to assert that the balance due on the Wendover Street loan was not to be considered as a post-November 2001 Note contribution, but she chose not to do so. Res judicata bars matters which could have been raised as part of the original action but were not.

Since stepmother was seeking the same compensation as she requested in the earlier litigation and she did not appeal the findings and order in the 2008 case, she was barred from disputing those rulings in a separate action. Plaintiff was entitled to clear title to the property on Wendover Street, was due all monies he paid into the escrow account and was due the monthly payments he made to stepmother from Jan. 24, 2011 through October 2012.