Bowers v. Mortg. Elec. Registration Sys., Inc.
| Decision Date | 26 March 2013 |
| Docket Number | Case No. 10-4141-JTM |
| Parties | SHEILA BOWERS, et al., Plaintiffs, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
The facts of this case have been extensively reviewed in the court's Order of October 4, 2012, which granted summary judgment in favor of intervenor Wells Fargo, reinstated the mortgage to reflect the terms of the loan taken out by Roy Bowers on October 9, 2008, and recognized the existence of the mortgage as a lien interest in the residential property that Plaintiffs owned in Shawnee County, Kansas.1 This Order resolved most of the outstanding issues between the parties. The matter is now before the court on the motions by Wells Fargo for determination of liability on the claim for mortgage foreclosure, and for attorney fees.
Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is nogenuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital, 854 F.2d 365, 367 (10th Cir. 1988). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir. 1985). The moving party need not disprove plaintiff's claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Once the moving party has carried its burden under Rule 56(c), the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule, the nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis in Matsushita). One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). The court omits from its findings of facts any findings requested by a party which lack evidentiary support, which are not cited in the argument portion of the party's brief, or which seek to reargue the court's prior findings.
Count III and Foreclosure
The factual and legal conclusions reached in the Court's October 4, 2012 Memorandum and Order are largely dispositive of the foreclosure. Additional facts submitted to the Court establish that the mortgage at issue encumbers residential property located at 6235 NE Kendall Wood Drive, Topeka, Kansas 66617. This property bears a legal description of Lot 3, Block D, Indian Valley Subdivision II, Shawnee County, Kansas. Roy and Sheila Bowers bought the property on March 28, 2007, "as joint tenants with the right of survivorship and not as tenants in common."
The Bowers executed a mortgage to secure repayment of a loan taken out by Roy Bowers on the same date as the mortgage, a loan evidenced by a fixed rate promissory note in the principal sum of $184,222.00, payable to SecurityNational Mortgage Company and its successors and assigns. This note bore interest at a fixed interest rate of 7.00% per annum.
A first-priority lien, the instrument mortgages, conveys, and warrants all the Bowers' interests in the Property to Wells Fargo for the purpose of securing repayment of the note, and provides for judicial foreclosure in the event the note is breached.
When Roy Bowers took out the loan on October 9, 2008, the mortgage carried insurance issued by the Federal Housing Administration/Housing and Urban Development, but that insurance was terminated in July 2009 when the original Mortgagewas released in connection with a proposed refinance of the original loan that was not completed. As a result of the release of the mortgage and the insurance it originally carried, the mortgage equitably reinstituted in the Court's prior Order is free from any FHA/HUD insurance.
From the first payment due on the original loan through May 2009, the Bowers made average monthy mortgage payments of $1,786.16. As of November 2009, the monthly amount due on the loan was $1,835.94. For approximately sixteen months, from July 27, 2009 to October 2010, the Bowers made monthly payments to Wells Fargo of $1,587.30. These payments reflected the terms of the putative loan refinance that did not close.
To date, the debt evidenced by the note and mortgage on the original loan has not been paid or satisfied by the Bowers. The debt has been accelerated and was turned over to a foreclosure firm with which the Bowers communicated in October 2010.
From the time they received notification from Wells Fargo that the putative loan refinance had been retracted, the Bowers continued to remit monthly payments to Wells Fargo in the amount of $1,587.30, as if the refinance had occurred. These payments were insufficient to pay the terms of the 2008 loan, which required from November 2009 to 2010 a monthly payment of $1,835.94.
Section 18 of the mortgage and Section 6(c) of the note provide for the recovery of Wells Fargo's attorneys' fees and expenses. Under Section 18 of the Mortgage, "Lender shall be entitled to collect all reasonable expenses incurred in pursuing the remedies provided in this paragraph 18, including, but not limited to, reasonable attorney fees, to the extent allowed by applicable law." Section 6(c) of the note provides that
Kansas recognized as "elementary" the principle that a mortgage foreclosure judgment may be obtained by summary judgment. Gibson v. Rea, 92 Kan. 262, 262-63, 140 P. 893, 893 (1914). See generally City of Topeka v. Watertower Place Dev. Group, 265 Kan. 148, 959 P.2d 894 (1998); LaSalle Nat'l Bank v. Friesen, No. 98698, 2010 WL 2977930 (Kan. App. July 23, 2010). State law requires that the plaintiff in a mortgage foreclosure action establish (1) a promissory note reflecting debt; (2) a mortgage securing the repayment of the debt; and (3) the existence of a default on the loan. Cornerstone Homes v. Skinner, 44 Kan. App.2d 88, 97-98, 235 P.3d 494, 500-01 (2010).
The court finds that the uncontroverted facts establish that Wells Fargo is entitled to an in rem judgment against Sheila Bowers foreclosing the mortgage. As noted earlier, the court has found that a promissory note exists, and is properly held by Wells Fargo. (Dkt. 301 at 7-8 n. 2). Further, the court determined under the facts of the case that Wells Fargo possesses an equitable mortgage interest in the property. (Id. at 35-36), and that Wells Fargo was entitled to enforce both the note and its mortgage interest. (Id. at 8). . Finally, the uncontroverted facts establish that the Bowers defaulted on the terms of the note by failing to pay the monthly amount due under the 2008 loan. (Id. at 28). The plaintiff has presented no argument in opposition to foreclosure which was not previously presented to and rejected by the court.
This in rem judgment shall extinguish any interest of the Bowers in the property subject, but will not permit a deficiency judgment against Sheila Bowers, herself or as representative of Roy Bowers. As joint tenants with the right of survivorship and not as tenants in common, Sheila Bowers automatically received Roy Bowers' interest in the property on his death. See In re Estate of Laue, 225 Kan. 177, 185, 589 P.2d 558, 565 (1979). Wells Fargo acknowledges that Kansas law does not require a lender to first obtain a personal judgment against a deceased borrower prior to seeking foreclosure. See State Bank of Downs v. Criswell, 124 P.2d 500, 155 Kan. 314 (1942). However, "in an abundance ofcaution," Wells Fargo does request a judgment on the note against Sheila Bowers as the representative of Roy Bowers, affirmatively representing to the court that it "execute on through in rem relief against Sheila Bowers as the sole owner of the Property." (Dkt. 319, at 9). In light of this representation, the uncontroverted facts, and the approval of the substitution (Dkt. 351), the court grants Wells Fargo's motion and will authorize judgment against Sheila Bowers.
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