Archie v. U.S. Bank, N.A.

• Decision Date: 05 August 2021
• Docket Number: Nos. 18-CV-945,19-CV-155,s. 18-CV-945
• Parties: Nita B. ARCHIE, Appellant, v. U.S. BANK, N.A., AS TRUSTEE FOR the RMAC TRUST, SERIES 2016-CTT, Appellee.
• Court: D.C. Court of Appeals

255 A.3d 1005

Nita B. ARCHIE, Appellant,

v.U.S. BANK, N.A., AS TRUSTEE FOR the RMAC TRUST, SERIES 2016-CTT, Appellee.

Nos. 18-CV-945

19-CV-155

District of Columbia Court of Appeals.

Argued June 9, 2020

Decided August 5, 2021

Jason M. Knott^* , with whom Steven N. Herman, Washington, was on the brief, for appellant.

Jordan M. Smith for appellee.

Before Thompson, Beckwith, and McLeese, Associate Judges.

Thompson, Associate Judge:

This appeal arises from a "Complaint for Judicial Foreclosure Sale" filed by PennyMac Holdings, LLC ("PennyMac"), the predecessor in interest to appellee U.S. Bank, N.A. ("U.S. Bank") against defendant/appellant Nita B. Archie. By its complaint, PennyMac sought to foreclose on the property located at 1467 Chapin Street, N.W. (the "Property"), based on appellant Archie's default on her mortgage payments. In her answer, Ms. Archie raised a number of affirmative defenses, recoupment defenses, and counterclaims. In an August 17, 2018, bench ruling, the Superior Court granted final summary judgment in favor of PennyMac (and later substituted U.S. Bank as the prevailing party) and rejected Ms. Archie's defenses and counterclaims. Ms. Archie seeks relief on several grounds. We affirm the Superior Court's determination that the foreclosure complaint was not time-barred and its ruling that Ms. Archie was not entitled to judgment on the pleadings. However, we agree with Ms. Archie that summary judgment in favor of PennyMac on its foreclosure complaint and against Ms. Archie on her lack-of-standing and other defenses and counterclaims was not warranted. We therefore reverse the entry of summary judgment in favor of PennyMac and remand for further proceedings.

I. Background

The record indicates that in 1995 or 1996, Ms. Archie's parents deeded her the Property, which thereafter was free and clear of any mortgage indebtedness until 2005. Ms. Archie alleges that beginning in 2005, she fell prey to a series of "fraudulently-induced mortgage transactions" that were "equity-stripping refinance scheme[s][.]" Ms. Archie took out a $231,000 loan on the Property in 2005 and a $318,500 refinance loan in 2006. She claims to have believed that through the refinancing transactions in issue here, she was availing herself of a program that would help make whole homeowners like her who had been scammed by other lenders. The reality, however, is that, in 2007, she signed loan and closing documents by which she took out an adjustable-rate $436,000 refinance loan even though she had no income at the time. As to the 2007 loan, Ms. Archie executed a promissory note payable to Premier Mortgage Capital, Inc. ("Premier"). Premier sold the loan to CitiMortgage, Inc. ("Citi") immediately after the loan transaction was completed. Subsequently, PennyMac bought the (then-distressed) loan from Citi in 2011, and U.S. Bank eventually succeeded PennyMac as the loan purchaser.

There is no dispute that Ms. Archie defaulted on the Premier promissory note (the "Note") and accompanying deed of trust (the "Deed of Trust") in 2008, after she failed to make the monthly payment due on May 1, 2008. She has since made no payments on the loan. The default not having been cured, and Citi not having followed through on a notice of default and intent to accelerate that it issued in August 2008, PennyMac filed its complaint for judicial foreclosure on December 31, 2014. In her second amended answer, Ms. Archie raised a number of affirmative and recoupment defenses and counterclaims.

Ms. Archie moved for judgment on the pleadings on the ground that PennyMac lacked standing to seek foreclosure. The Superior Court denied that motion in a ruling from the bench on August 4, 2017. In a subsequent written order, the Superior Court ruled that PennyMac's foreclosure complaint was barred under the six-year statute of limitations for enforcing a note specified in the District of Columbia's version of the Uniform Commercial Code ("UCC"). See D.C. Code § 28:3-118(a) (2013 Repl.). But, after an August 17, 2018, hearing on PennyMac's motion for reconsideration or to alter or amend the judgment, the court reversed its ruling and determined that a twelve-year limitations period applied and that the complaint therefore was not time-barred. The Superior Court also rejected Ms. Archie's defenses and counterclaims. Accordingly, the court entered final summary judgment in favor of PennyMac. This appeal followed.

II. Asserted Grounds for Dismissal

We begin our analysis with Ms. Archie's arguments as to why dismissal in her favor was warranted.

A. Judgment on the Pleadings

We turn first to Ms. Archie's challenge to the Superior Court's denial of her Super. Ct. Civ. R. 12(c) motion for judgment on the pleadings. Our review is de novo. See Grimes v. District of Columbia , 89 A.3d 107, 111– 12 (D.C. 2014).

Ms. Archie's Rule 12(c) motion sought dismissal of the complaint for lack of standing to foreclose. The premise of the motion was that while PennyMac alleged that it was the holder of the Note and beneficiary of the Deed of Trust executed by Ms. Archie, the paperwork it attached to its complaint (showing an endorsement of the Note in blank by Citi) did not show a prior endorsement by Premier that gave Citi the right to negotiate the Note by transferring it to PennyMac. The Superior Court did not err in denying the motion. As the Superior Court correctly recognized, all that is required to survive a Rule 12(c) motion is that the complaint "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id . at 112 (quoting Potomac Dev. Corp. v. District of Columbia , 28 A.3d 531, 544 (D.C. 2011) ). That requirement was met by PennyMac's allegations that it was the "current holder of the Note and the beneficiary of the Deed of Trust[,]" that Ms. Archie defaulted on the Note and failed to cure the default, and that PennyMac "is entitled to enforce the Deed of Trust through a judicial foreclosure sale of the Property." Cf. Jaffer v. Chase Home Fin., LLC , 155 So. 3d 1199, 1201–02 (Fla. Dist. Ct. App. 2015) (holding, in case in which copy of the note attached to the complaint "did not contain any indorsements or allonges demonstrating the note had been transferred to Chase," that "for exhibits to serve as a basis for dismissing a complaint ... the exhibits must actually negate the cause of action — not simply raise possible defenses to it") (quoting Paladin Props. v. Family Inv. Enters., 952 So. 2d 560, 564 (Fla. Dist. Ct. App. 2007) ).

B. The Statute of Limitations

Ms. Archie contends in the alternative that she was entitled to dismissal of the complaint because PennyMac's December 2014 complaint for foreclosure, filed more than six years after she defaulted on the Note in May 2008 and Citi issued its August 29, 2008, notice of default and intent to accelerate, was time-barred under D.C. Code § 28:3-118(a). Section 28:3-118(a) provides generally that "an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within 6 years after the due date or dates stated in the note, or, if a due date is accelerated, within 6 years after the accelerated due date."

The Superior Court relied instead on D.C. Code § 12-301(6) (2012 Repl. & 2020 Supp.), which provides that "[e]xcept as otherwise specifically provided by law, actions [on any ... instrument under seal] may not be brought after the expiration of [12 years] from the time the right to maintain the action accrues[.]" On both the Note and the Deed of Trust, the word "seal" appears next to Ms. Archie's signature. We have explained that "[w]hen the instrument is made by an individual, the word ‘seal’ next to the signature is ‘standing alone, sufficient to create a sealed instrument entitled to the twelve-year statute of limitations.’ " Murray v. Wells Fargo Home Mortg. , 953 A.2d 308, 318 (D.C. 2008) (quoting Burgess v. Square 3324 Hampshire Gardens Apts. , 691 A.2d 1153, 1156–57 (D.C. 1997) ). Our jurisdiction long ago recognized that "a deed of trust is a sealed instrument and the period of limitation is twelve years." Brice v. Walker , 121 F.2d 864, 865 (D.C. Cir. 1941).

Appellant contends that § 28:3-118(a) should control despite the express applicability of § 12-301(6) to instruments under seal because, she asserts, § 28:3-118(a) is the more specific statute as to notes and is the more recently enacted statute. However, while § 28:3-118(a) is specific as to notes, § 12-301(6) is equally specific regarding instruments under seal. "It can be difficult to determine which of two statutes is more general and which is more specific[,]" including where "each of the provisions at issue is more specific than the other in some respects and more general than the other in some respects." J.P. v. District of Columbia , 189 A.3d 212, 220 (D.C. 2018). As another court has aptly observed, "[i]n such a case, the canon of construction that a specific statute governs a general one does not assist us in interpreting the statutes." In re Cesar G ., 272 Wis.2d 22, 682 N.W.2d 1, 40 (2004). In any event, by its terms, § 28:3-118(a) is its most specific with regard to the limitations period for enforcing "the obligation of a party to pay a note[.]" Here, PennyMac's complaint was not the initiation of an action to require Ms. Archie to pay the Note, but instead was, as the Superior Court correctly recognized, the initiation of an in rem action in equity to enforce the Deed of Trust, by requiring a sale of the Property to generate proceeds to repay the lender for funds advanced on the security of the Property. See Bank of N.Y. Mellon Tr. Co. N.A. v. Henderson , 862 F.3d 29, 32–33 (D.C. Cir. 2017) ("D.C. law allows the holder of a note to enforce the deed of trust by judicial foreclosure") (citing Szego v. Anyanwutaku , 651 A.2d 315, 316 (D.C. 1994) (quoting the general rule that "a creditor whose debt is secured by mortgage may pursue his remedy in personam for the debt ...