Tag Archives: mortgage

Ohio Appeals Court Reverses Summary Judgment in Favor of Bank as Genuine Issue of Fact Existed as to Whether the Bank held the Note

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The court in deciding U.S. Bank N.A. v. Kamal, 2013-Ohio-5380 (Ohio Ct. App., Mahoning County, 2013) reversed and remanded the lower court’s ruling. The court decided that there were genuine issues of material fact as to whether U.S. Bank was the holder of the note or mortgage when the complaint was filed and as to whether U.S. Bank complied with the default provisions in the note and mortgage. Therefore, the grant of summary judgment in U.S. Bank’s favor was reversed and the matter was remanded for further summary judgment proceedings.

Defendants-appellants appealed the decision of the lower court, which granted summary judgment and issued a decree of foreclosure for U.S. Bank National Association. Three issues were raised; the first was whether there was a genuine issue of material fact as to whether U.S. Bank complied with the notice of default provisions in the note and mortgage. The second issue was whether U.S. Bank was a real party in interest when the foreclosure complaint was filed. The third issue was whether the trial court should have struck certain evidence that U.S. Bank used to support its request for summary judgment.

This court ultimately held that a genuine issue of fact existed as to whether the bank was the holder of the note when the complaint was filed, as the record was devoid of any evidence proving the date on which the bank became the holder. There was also a genuine issue of fact as to when the mortgage was assigned, as the assignment contained information not known on the date the mortgage was executed and the only other logical date was the date the assignment was recorded, which occurred after the complaint was filed. Additionally a genuine issue of fact existed as to whether the bank complied with the notice of default and acceleration provision, as there was no evidence as to how the bank notified the debtor as the acceleration.

Ultimately, the lower court’s grant of summary judgment was reversed and the matter was remanded for further summary judgment proceedings.

Ohio Court Finds that Dismissal of Plaintiff’s Foreclosure Complaint did not Deprive it of Jurisdiction Over Defendants and Their TILA Claims

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The court in deciding Wells Fargo Bank, N.A. v. Wick, 2013-Ohio-5422 (Ohio Ct. App., Cuyahoga County, 2013) found that the trial court’s dismissal of plaintiff’s foreclosure complaint did not deprive it of jurisdiction over defendants and their TILA claims, as these claims were separate and independent of the foreclosure complaint.

The Wicks claimed that the trial court erred in dismissing all of their counterclaims, cross-claims, and third-party claims when it dismissed Wells Fargo’s foreclosure complaint for failure to invoke the court’s jurisdiction. In ruling on the Wicks’ motion for reconsideration, however, this court determined that, with the exception of the TILA claims, the trial court’s dismissal of the Wicks’ claims was without prejudice and, therefore, as it related to those non-TILA claims, the trial court’s dismissal was not a final, appealable order.

On appeal, this court determined in considering the merits of the case, that a proper and validly asserted counterclaim is not extinguished by a plaintiff’s voluntary dismissal of its claims when the court has jurisdiction to proceed on the counterclaim. This court found, therefore, that where the court has jurisdiction over the parties and over the controversy, the borrowers’ counterclaim that does not arise from the note or mortgage can remain pending for independent adjudication.

Similarly, this court found that the trial court’s conclusion in this case that it lacked jurisdiction over the foreclosure claim because the bank lacked standing did not extinguished the Wicks’ proper and validly asserted claims.

NY Court Rejects Lack-of-Standing Claim

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The court in deciding HSBC Bank USA v Sage, 112 A.D.3d 1126 (N.Y. App. Div. 3d Dep’t 2013) affirmed the lower court’s decision dismissing the defendant’s lack of standing claim.

HSBC Bank USA commenced this foreclosure action alleging that defendant Gregory Sage defaulted on a note secured by a mortgage on his real property. After joinder of issue and an extended period of time during which settlement conferences took place, plaintiff moved for summary judgment striking the answer and appointment of a referee. Defendant cross-moved for, among other things, leave to amend his answer to allege that plaintiff lacked standing to bring the action. Supreme Court granted plaintiff’s motion and denied the cross motion. After considering the arguments, this court affirmed the lower court’s decision.

This court found that the plaintiff had established that the custodian of the trust had physical possession of the note and mortgage prior to the commencement of the action and that, as trustee, the plaintiff was responsible for carrying out the terms of the trust. Contrary to the defendant’s claim, the affidavit from an assistant vice-president of the mortgage servicing company was adequately based on a review of the books and records of the company maintained in the ordinary course of business, and the lack of personal knowledge as to the creation of the documents was not fatal.

Accordingly, the court found that the plaintiff met its initial burden on the motion for summary judgment and the burden then shifted to defendant to come forward with competent and admissible evidence demonstrating the existence of a defense that properly could raise an issue of fact as to his default. Defendant, as this court noted, did not do this, thus the case was properly dismissed.

Georgia Court Dismisses Plaintiff’s RESPA, TILA and HOEPA Claims

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The court in deciding Mitchell v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. (N.D. Ga., 2013) found no plain error in the lower court’s conclusion to dismiss the plaintiffs’ claims.

Plaintiffs Reginald and Jamela Mitchell filed a complaint against Deutsche Bank and MERS, the complaint alleged federal violations of the Truth-in-Lending Act (“TILA”), the Real Estate Settlement and Procedures Act (“RESPA”), and the Homeownership Equity Protection Act (“HOEPA”).

The Complaint also asserted the following state law claims: (1) fraud; (2) wrongful foreclosure; (3) quiet title; (4) slander of title; (5) infliction of emotional distress and (6) unfair business practices.

The crux of the plaintiffs’ claims under the federal statutes was that the defendants failed to provide them with the required disclosures, thereby allowing plaintiffs to rescind their mortgage transaction and seek damages. The lower court concluded that the Plaintiffs’ claims arising under TILA, HOEPA and RESPA were barred by the statute of limitations. The lower court recommended that the plaintiffs’ complaint be dismissed as the plaintiffs failed to state any federal or state law claim upon which relief could be granted. The plaintiff then appealed.

Upon review of the lower court’s decision, this court found no plain error in the lower court’s findings and recommendation that the defendants’ motion to dismiss plaintiffs’ claims be granted.

Georgia Court Dismisses TILA and RESPA Claims Brought by Plaintiff

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The court in deciding Mitchell v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. (N.D. Ga. Sept. 25, 2013) granted the motion to dismiss proffered by the defendant.

The first enumerated cause of action in Plaintiffs’ complaint was a claim for fraud. Plaintiffs argued that their original mortgage lender, Accredited, engaged in a practice of filing false prospectus supplements with the Securities and Exchange Commission. Plaintiffs’ complaint also included a claim for wrongful foreclosure.

Next, the plaintiffs asserted that Deutsche Bank and MERS had “unclean hands” as they failed to make certain disclosures required by TILA. Plaintiffs also asserted that the defendants or their predecessors in interest violated RESPA in a number of ways. Plaintiffs’ complaint also included a claim for fraud in the inducement. Moreover, the plaintiffs’ complaint raised a claim for quiet title under O.C.G.A. § 23-3-40 and O.C.G.A. § 23-3-60 et seq. Lastly, the plaintiffs’ complaint raised a claim for fraudulent assignment.

Ultimately the court concluded that the plaintiffs’ complaint failed to state a viable claim for relief. Accordingly, this court granted the defendants’ motion to dismiss the plaintiffs’ complaint.

Ohio Appeals Court Denies Assignment Error Claim Brought by Appellee

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The court in deciding United States Bank Nat’l Ass’n v. McHugh, 2013-Ohio-5473 (Ohio Ct. App., Lucas County, 2013) concluded that the trial court properly denied mortgagors’ motion under Civ.R. 60(B)(2).

Appellants argued that appellee lacked standing and was not the real party in interest. They also alleged that they were entitled to relief pursuant to their discovery of new evidence in the form of a pooling service agreement that confirmed appellee’s lack of standing.

Appellee opposed appellants’ motion on the basis that it was barred by res judicata, untimely, and failed to establish grounds for relief pursuant to Civ.R. 60(B)(2).

After considering the parties’ arguments, the court denied appellants’ motion. In its judgment entry, the court determined that the evidence relied upon by appellants in supporting their Civ.R. 60(B) motion was available to them prior to summary judgment and, therefore, was not newly discovered evidence. Further, the court found that appellants failed to demonstrate the existence of a meritorious defense as required under the Ohio Supreme Court. Finally, the court concluded that appellants’ motion was not filed within a reasonable time pursuant to Civ.R. 60(B).

Connecticut Court Rejects Invalid Assignment and Standing Claims

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The court in deciding Bank of Am., N.A. v. Samaha, 2013 Conn. Super.  (Conn. Super. Ct., 2013) granted summary judgment in favor of the plaintiff.

Plaintiff sought to foreclose a mortgage executed by Joseph Samaha and Denise Samaha in favor of the Webster Bank in the principal amount of $162,000.00.

The defendant raised several special defenses to this foreclosure action. First, the defendant asserted that the plaintiff did not have standing to bring this litigation. Second, the defendant claimed that as a result of the death of one of the makers of the note, Joseph Samaha, that his estate had an indivisible interest in the subject property and was subject to probate court jurisdiction. Third, the defendant challenged the authority of MERS to assign this mortgage to the plaintiff. Four, that the defendant had tendered payment with regard to the note and she alleged accord and satisfaction. Fifth, the defendant challenged whether or not the note in question was a negotiable instrument.

Regarding the first special defense, the court decided that the plaintiff had standing.
The court found there was simply no authority for the defendant’s second assertion. Further, the court found there were no facts alleged in the special defense and there is no affidavit from the defendant providing any factual foundation for the third assertion. Regarding the fourth special defense the court found that the mere assertion of this defense, without any evidence to support it, and thereby contest or create a material issue of fact for a motion of summary judgment is insufficient. Lastly, the fifth special defense was deemed to be an assertion of a legal conclusion.

The court in deciding this case granted the plaintiff’s motion for summary judgment.