Tag Archives: non-moving

Court Decides that Lower Court Was Correct in Granting Summary Judgment in Favor of Bank of America and ReconTrust on FDCPA Claims

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The court in deciding Brown v. Bank of Am., N.A. (In re Brown), 2013 Bankr. (B.A.P. 9th Cir., 2013) affirmed the lower court’s holding.

The plaintiff in this case alleged alleged that BAC and ReconTrust violated the CPA by promulgating, recording, and relying on documents they should have known were false, in particular: the MERS’ assignment, the successor trustee appointment, and the notice of default. Plaintiffs also alleged that ReconTrust’s issuance and use of the notice of default violated the FDCPA and that ReconTrust’s attempts to dispossess the debtor of her property constituted malicious prosecution.

As to the claim for wrongful foreclosure, the plaintiffs alleged that the defendants violated the Washington Deed of Trust Act when they designated MERS as a beneficiary in the trust deed and MERS subsequently executed the MERS Assignment.

The plaintiffs contended that BAC’s authority to execute the successor trustee appointment and ReconTrust’s authority to execute the Notice of Default derived solely from the invalid MERS Assignment, invalidating both documents. They alleged that these transactions constituted a deception and, therefore, invalid transactions under the Trust Deed Act.

ReconTrust, Bank of America, N.A., as successor by merger to BAC, and MERS jointly brought a motion to dismiss the SAC pursuant to Civil Rule 12(b)(6). The defendants argued that the plaintiffs failed to adequately plead the identified claims and, in addition, that the plaintiffs should be collaterally estopped from contending that BofA could not initiate foreclosure proceedings, based on the order entered by the bankruptcy court on the uncontested relief from stay motion.

Court Finds that BAC Home Loans did not Have Standing to File Suit

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The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s decision and found that appellee had not established that it was the current holder of the note and mortgage, thus, appellee did not have standing to file suit.

Appellant Walter J. Blythe appealed the Columbiana County Common Pleas Court’s decision granting summary judgment in favor of BAC Home Loans Servicing, L.P., in a foreclosure action.

Blythe challenged the trial court’s finding that BAC had standing to foreclose in the absence of evidence that BAC was the holder of the note that created the obligation. Blythe relied on the material submitted by BAC in support of this claim.

This court held that the note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by the loan servicing company (LSC) that was not the transferee or successor in interest of the bank. The LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). The LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

The court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. The note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, here the bank was the real party in interest in the foreclosure action, thus the LSC lacked standing to foreclose.

Ohio Court of Appeals Finds that BAC had Failed to Demonstrate that it had Standing to Accelerate the Note and Foreclose the Mortgage

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The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s judgment.

Appellant Walter J. Blythe appealed the lower court’s decision granting summary judgment in favor of Appellee, BAC Home Loans Servicing, L.P., in this foreclosure action.

Blythe challenged the lower court’s finding that BAC Home Loans Servicing had standing to foreclose in the absence of evidence that BAC was the holder of the note creating the obligation. Blythe relied on the material submitted by BAC in support of this claim. Because the copy of the note filed by BAC was specifically indorsed to Countrywide Bank, FSB, not BAC, and there was nothing to indicate otherwise, BAC had failed to demonstrate that it had standing to accelerate the note and foreclose the mortgage. Thus this court reversed the judgment of the lower court and dismissed the suit for lack of standing.

This court held that a note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by a loan servicing company (LSC) that was not the transferee or successor in interest of the bank. This court also held that the LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). Further, the LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

This court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. Lastly, the court held that the note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, as such the bank was the real party in interest in the foreclosure action. Thus the LSC lacked standing to foreclose.