Anderson v. CitiMortgage, Inc.

• Decision Date: 03 December 2014
• Docket Number: No. CV–14–348.,CV–14–348.
• Citation: 450 S.W.3d 251,2014 Ark. App. 683
• Parties: Eric ANDERSON and Tama Anderson, Appellants, v. CITIMORTGAGE, INC., Appellee.
• Court: Arkansas Court of Appeals

2014 Ark. App. 683

450 S.W.3d 251

Eric ANDERSON and Tama Anderson, Appellants

v.CITIMORTGAGE, INC., Appellee.

No. CV–14–348.

Court of Appeals of Arkansas.

Dec. 3, 2014.

Rehearing Denied Jan. 14, 2015.

Owings Law Firm, Little Rock, AR, by: Steven A. Owings and Alexander P. Owings, for appellants.

Wilson & Associates, PLLC, Little Rock, AR, by: Samuel S. High, for appellee.

Opinion

RITA W. GRUBER, Judge.

For the second time, Eric and Tama Anderson appeal from an order of the Pulaski County Circuit Court granting summary judgment and dismissing their claims against appellee CitiMortgage, Inc. We dismissed their first appeal for lack of a final, appealable order. Anderson v. Citimortgage, Inc., 2013 Ark. App. 545, 2013 WL 5496781 (Anderson I ). Following remand, the circuit court entered a final order. We now consider the merits of the appeal and affirm the grant of summary judgment.

In Anderson I, we set forth the following background:

In 2001, the Andersons purchased a home on which Citimortgage's predecessor in interest, First Nationwide Mortgage Corporation, held a mortgage. The face amount of the mortgage and the note it secured was $186,200. In March 2003, First Nationwide merged with Citimortgage, and Citimortgage began accepting payments on the Andersons' mortgage.

The Andersons filed a Chapter 13 bankruptcy in February 2004 in order to retain possession of their home. Citimortgage was listed as a secured creditor. In 2008, Citimortgage notified the Andersons that it had not received payment from the bankruptcy trustee.

In May 2009, the bankruptcy trustee filed a motion to dismiss the Andersons' bankruptcy case, asserting that based on the claim filed and allowed, payments made into the plan to date, and currently scheduled plan payments, the plan would not be completed within sixty months from the effective date of the plan; and that the Andersons were in material default with respect to the terms of the plan. An order dismissing the bankruptcy case was entered on August 7, 2009.

In October 2009, Citimortgage, after reviewing information provided for that purpose, determined that the Andersons did not qualify for a loan modification. Further discussions resulted in the approval of a December 2009 trial payment plan with monthly trial payments of $1,400 from January 1 through March 1, 2010. At the conclusion of the December 2009 plan, the loan was reviewed for a potential modification, but denied as not meeting the requisite criteria.

In October 2010, a statutory foreclosure was commenced, and the Andersons received a Notice of Default and Intent to Sell from Wilson & Associates. The notice stated that Wilson & Associates would conduct the sale on November 30, 2010.

On November 24, 2010, the Andersons filed the present action against Citimortgage, Wilson & Associates, PLLC, and Bank of America. The complaint asserted that Citimortgage persuaded Tama Anderson to dismiss her bankruptcy, promising to modify her loan and accept $13,000 to reinstate the mortgage; that Anderson dismissed her bankruptcy and tendered the above sum; and that Citimortgage then informed Anderson of additional fees and costs and did not modify the loan. The Andersons sought a temporary restraining order to enjoin any sale of the house; an accounting for all charges and payments; and damages for breach of contract, breach of fiduciary duty, fraud, and violation of the Arkansas Deceptive Trade Practices Act. They sought further relief in the form of having the security interest, mortgage, debt, and/or note voided, reinstatement of their mortgage, and punitive damages.

On November 29, 2010, an ex parte temporary restraining order was granted that prohibited the defendants from conducting, instituting, or maintaining any foreclosure action against the Andersons. The parties later agreed to the entry of an order extending the temporary restraining order. The Andersons were to remit their monthly mortgage payment into the registry of the court.

Citimortgage filed an answer stating that it was seeking to proceed under the statutory foreclosure act. After setting forth its version of events, Citimortgage also asserted that the Andersons were not entitled to have the security interest, mortgage, debt, and/or note voided. The answer also asserted certain affirmative defenses and requested the complaint be dismissed.

Citimortgage later filed its motion for summary judgment and accompanying brief, to which the Andersons responded. Included with the response was a ten-page affidavit from Tama Anderson outlining her version of the events and her conversations with various Citimortgage employees.

Following a hearing, the circuit court ruled from the bench and granted the motion for summary judgment. The order memorializing that ruling was entered on August 14, 2012, and dismissed the Andersons' complaint in its entirety, with prejudice.

On August 23, 2012, the Andersons filed a motion for amendment of findings. The motion sought to have the circuit court set forth its reasoning for concluding that there were no issues of material fact as to any of the Andersons' causes of action.... The circuit court took no action on the Andersons' motion for amended findings, and it was deemed denied[.]

Anderson I, 2013 Ark. App. 545, at 2–4, 2013 WL 5496781.

On appeal, the Andersons raise two points: that the circuit court erred in determining that no genuine issue of material fact existed and in failing to set out its conclusions of law with specificity.

The Andersons first argue in several subpoints that there are genuine issues of material fact that preclude summary judgment. We disagree. Our supreme court has set forth the following standard of review with regard to motions for summary judgment:

Our standard of review for summary judgment cases is well established. Summary judgment should only be granted when it is clear that there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. The purpose of summary judgment is not to try the issues, but to determine whether there are any issues to be tried. We no longer refer to summary judgment as a drastic remedy and now simply regard it as one of the tools in a trial court's efficiency arsenal. Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Moreover, if a moving party fails to offer proof on a controverted issue, summary judgment is not appropriate, regardless of whether the nonmoving party presents the court with any countervailing evidence.

Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc., 365 Ark. 573, 575–76, 231 S.W.3d 720, 723 (2006) (citations omitted). The standard is whether the evidence is sufficient to raise a fact issue, not whether the evidence is sufficient to compel a conclusion. Wagner v. Gen. Motors Corp., 370 Ark. 268, 258 S.W.3d 749 (2007). A fact issue exists, even if the facts are not in dispute, if the facts may result in differing conclusions as to whether the moving party is entitled to judgment as a matter of law. Id. In such an instance, summary judgment is inappropriate. Id.

The Andersons' first subpoint is a “show-me-the-note” argument, that CitiMortgage cannot foreclose on their home because it did not produce the original note. They also argue that the public records do not show that CitiMortgage has an interest in either the note or the mortgage. These arguments are based on case law relating to judicial-foreclosure actions that require production of the note. See McKay v. Capital Res. Co., 327 Ark. 737, 940 S.W.2d 869 (1997) ; Corn Ins. Agency, Inc. v. First Fed. Bank, 88 Ark.App. 8, 194 S.W.3d 230 (2004). They have no application to the present case.

The right to foreclose a mortgage at a private sale is derived from the power conferred by the mortgage and does not exist independent of it. Stallings v. Thomas, 55 Ark. 326, 327, 18 S.W. 184, 184 (1892). The instrument creating such a power determines its extent, as well as the manner and conditions of its exercise, and those relying upon such a sale must show that it was made in obedience to the power. Id. The Arkansas statutes governing foreclosure of property through a private sale do not specifically require that the foreclosing party produce a physical copy of the original promissory note.¹ Most courts that have recently considered the matter have held that production of the original note is not required before commencing a statutory-foreclosure proceeding. E.g., Hogan v. Wash. Mut. Bank, N.A., 230 Ariz. 584, 277 P.3d 781 (2012) ; Debrunner v. Deutsche Bank Nat'l Trust Co., 204 Cal.App.4th 433, 138 Cal.Rptr.3d 830 (2012) ; Jackson v. Mortg. Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn.2009) ; In re Adams, 204 N.C.App. 318, 693 S.E.2d 705 (2010).²

Apart from there being no requirement that it produce the original note, CitiMortgage submitted the affidavit of John Linnenbrink, its business-operations analyst and custodian of records, stating that the original note was in CitiMortgage's possession. In response, the Andersons submitted the affidavit of one of their attorneys stating that he had researched the records concerning the Andersons' property and had attached copies of all records filed as of January 13, 2011.

To the extent that the Andersons argue that CitiMortgage had a duty to record any assignment of the note or mortgage, there is no such duty. As...