781 Fed.Appx. 735 (10th Cir. 2019), 18-5089, Monroe v. Bank of America Corp.

Docket Nº:18-5089
Citation:781 Fed.Appx. 735
Opinion Judge:Mary Beck Briscoe, Circuit Judge
Party Name:Amy MONROE, a/k/a Amy L. McCafferty; C. Marcus McCafferty, Plaintiffs-Appellants, v. BANK OF AMERICA CORPORATION, f/k/a Bank of America, N.A.; Wilmington Savings Fund Society, FSB, doing business as Christiana Trust, not in its individual capacity, but soley as trustee for BCAT 2015-14BTT, Defendants-Appellees.
Attorney:James David Jorgenson, Waller Jorgenson Warzynski, Tulsa, OK, for Plaintiffs-Appellants. Lysbeth Lou George, Liz George Law Office, Blanchard, OK, Joel W. Harmon, Melanie Wilson Rughani, Crowe & Dunlevy, Oklahoma City, OK, for Defendant-Appellee. Blake C. Parrott, Baer & Timberlake, Oklahoma City...
Judge Panel:Before BRISCOE, McKAY, and LUCERO, Circuit Judges.
Case Date:July 16, 2019
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 735

781 Fed.Appx. 735 (10th Cir. 2019)

Amy MONROE, a/k/a Amy L. McCafferty; C. Marcus McCafferty, Plaintiffs-Appellants,

v.

BANK OF AMERICA CORPORATION, f/k/a Bank of America, N.A.; Wilmington Savings Fund Society, FSB, doing business as Christiana Trust, not in its individual capacity, but soley as trustee for BCAT 2015-14BTT, Defendants-Appellees.

No. 18-5089

United States Court of Appeals, Tenth Circuit

July 16, 2019

Editorial Note:

UNPUBLISHED OPINION (See Fed. Rule of Appellate Procedure 32.1. See also U.S.Ct. of App. 10th Cir. Rule 32.1.)

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(D.C. No. 4:17-CV-00248-JED-JFJ) (N.D. Oklahoma)

James David Jorgenson, Waller Jorgenson Warzynski, Tulsa, OK, for Plaintiffs-Appellants.

Lysbeth Lou George, Liz George Law Office, Blanchard, OK, Joel W. Harmon, Melanie Wilson Rughani, Crowe & Dunlevy, Oklahoma City, OK, for Defendant-Appellee.

Blake C. Parrott, Baer & Timberlake, Oklahoma City, OK, for Defendant-Appellee.

Before BRISCOE, McKAY, and LUCERO, Circuit Judges.

ORDER AND JUDGMENT[*]

Mary Beck Briscoe, Circuit Judge

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Amy Monroe (also known as Amy L. McCafferty) and C. Marcus McCafferty (collectively, "the McCaffertys") allegedly defaulted on a promissory note secured by a mortgage on their home. The original holder of those instruments was Bank of America Corporation (formerly known as Bank of America, N.A. or "BANA"). BANA ultimately assigned its rights to Wilmington Savings Fund Society, FSB ("Wilmington"). After BANA and Wilmington initiated separate foreclosure actions that were dismissed without prejudice, the McCaffertys filed this declaratory judgment action to challenge the enforceability of the note and mortgage. The district court dismissed most of their claims under Federal Rule of Civil Procedure 12(b)(6) and granted summary judgment to Wilmington on the remaining claim under Federal Rule of Civil Procedure 56(f). Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

BACKGROUND

In 2006, the McCaffertys borrowed $175,000 from BANA. Ms. McCafferty executed a promissory note, which was secured by a duly recorded mortgage that the McCaffertys jointly executed on their real property located at 1616 South Owasso Avenue in Tulsa, Oklahoma. The promissory note and the mortgage cross reference each other. The McCaffertys apparently stopped making payments in 2010, causing the loan to go into default and precipitating a series of foreclosure actions against them in state court.

BANA filed the initial foreclosure action in March 2011 (the "2011 action"). It invoked its option to accelerate the total payment due upon default and demanded $174,996.31, together with accrued interest and applicable fees. For reasons that are not evident from the record, the 2011 action was dismissed without prejudice in late 2012.

In September 2015, BANA assigned all of its interest in the note and mortgage to Wilmington. The record is silent as to whether the McCaffertys were aware of the assignment, which was recorded with the county clerk in October 2015. In June 2016, the McCaffertys’ counsel sent a letter to BANA’s agent, demanding that BANA release the mortgage. The next week, Wilmington filed its own foreclosure action against the McCaffertys ("the 2016 action"). The 2016 action was dismissed without prejudice in January 2017, this time for failure to serve process.

The McCaffertys filed this lawsuit in state court in April 2017, asserting three claims: (1) a declaratory judgment that the mortgage is unenforceable because of an error in the property description; (2) a declaratory judgment that the promissory note and mortgage are unenforceable because the statute of limitations has passed; and (3) slander of title based on the filing of the 2016 action and the defendants’ refusal to release the mortgage. After BANA removed the case to federal court, the defendants moved to dismiss all claims under Rule 12(b)(6). In the meantime, Wilmington filed its second foreclosure action against the McCaffertys in state court in December 2017 ("the 2017 action").[1]

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In March 2018, the federal district court dismissed the first and second claims against BANA, finding that BANA had no continuing interest in the enforceability of the note or mortgage after it assigned the instruments to Wilmington. It also dismissed the first claim against Wilmington on the ground that an erroneous property description does not necessarily invalidate a mortgage under Oklahoma law. The rest of the claims survived, at least for the time being. The district court denied the motion to dismiss the second claim against Wilmington, rejecting the notion that the statute of limitations began to run after the last missed installment payment and finding instead that the limitations period began to run in 2011, when BANA accelerated the due date for the entire balance. The district court reserved its ruling on the third claim against both defendants pending supplemental briefing on the applicable statute of limitations: the six-year statute of limitations for promissory notes codified at Okla. Stat. tit. 12A, § 3-118(a); or the five-year statute of limitations for actions upon a contract codified at Okla. Stat. tit. 12, § 95(A)(1). In a follow-up order issued in April 2018, the district court dismissed the slander of title claim, holding that the McCaffertys could not satisfy the elements as a matter of law. Within this context, the district court resolved the statute of limitations question, concluding that the six-year statute of limitations in § 3-118(a) applies to both the note and mortgage in this case.

Only one claim remained: the second declaratory judgment claim against Wilmington based upon the expiration of the statute of limitations. In May 2018, the district court ordered Wilmington to show cause why summary judgment should not be entered in the McCaffertys’ favor given its ruling that a six-year statute of limitations began to run in March 2011. Wilmington responded that it had one year from the dismissal of the 2016 action (not the dismissal of the 2011 action) to re-file a foreclosure action against the McCaffertys under Okla. Stat. tit. 12, § 100, Oklahoma’s savings statute, and it had done just that. It provided evidence that it filed the 2017 action on December 18, 2017. The district court agreed with Wilmington’s position. In an order issued in July 2018, it held that the 2017 action is not barred by the six-year statute of limitations because it falls within the savings statute; therefore, Wilmington prevailed on the remaining claim as a matter of law under Rule 56(f).

The McCaffertys filed this timely appeal. They argue that the district court erred in granting summary judgment in Wilmington’s favor on the declaratory judgment claims because (1) the six-year statute of limitations in Okla. Stat. tit. 12A, § 3-118(a) does not apply to mortgage foreclosure actions in Oklahoma; and (2) the mortgage was fatally defective. They do not challenge the dismissal of the claims against BANA2 or the dismissal of their slander of title claim.

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ANALYSIS

I. Standard of Review

We review the grant of summary judgment de novo, applying the same standard the district court applied. Cillo v. City of Greenwood Vill., 739 F.3d 451, 461 (10th Cir. 2013). Summary judgment must be granted if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). When applying this standard, "[w]e must view facts in the light most favorable to the non-moving part[y]" and "resolv[e] all factual disputes and reasonable inferences in [the non-moving party’s] favor." Cillo, 739 F.3d at 461 (internal quotation marks omitted).

II. Statute of Limitations

To assess the district courts summary judgment ruling on the enforceability of the note and mortgage, we must determine whether a five- or six-year statute of limitations...

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