March 14, 2013
In Cooke v. Mortgage Electronic Registration Systems, Inc., et al., CA No. PC 2011-3487 (R.I. Sup. August 29, 2012), the plaintiff alleged that the assignment of the mortgage interest from MERS to the Federal National Mortgage Association, FNMA, was invalid. As a result, the plaintiff argued that FNMA did not have the statutory power of sale and lacked standing to foreclose. The court addressed the defendant’s motion to dismiss in this opinion.
The court found that both the allegations and the mortgage agreement executed were similar to Payette. As result, the court adopted the reasoning in Payette and ultimately dismissed the claims that were similar. The court found that regardless of the plaintiff’s criticism of the Superior Court’s precedent, the court will follow it until “the Rhode Island Supreme Court determines that this Court’s previous analysis is inconsistent with its view of applicable Rhode Island law.”
The court also found the plaintiff’s reliance on case law from other jurisdictions was neither controlling nor persuasive. The plaintiff argued that a Supreme Court decision, Carpenter v. Longan, 83 U.S. 271 (1872), where the Supreme Court held that the note and mortgage is inseparable under Colorado law, should be applicable. However, the court noted that the Rhode Island General Laws permit the separation of the note and mortgage. In addition, the plaintiff also relied on Eaton v. Fed. Nat’l Mortg. Ass’n, No. 1-1382, 2011 WL 3322892 (Mass. Super. June 17, 2011), which held that the note and mortgage must be held to properly foreclose under Massachusetts law. However, this is not binding on the Rhode Island courts, which have precedent that “the assignment of the mortgage containing the language of the mortgage considered [in this case] does not create a fatal disconnect between the note and the mortgage.” In addition, the court found that there was no case law or statutory law that required the foreclosing party needs to hold both the note and mortgage to properly foreclose.
As a result, the court granted the defendant’s motion to dismiss.
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