Deutsche Bank Nat'l Trust Co. v. Roesler

• Decision Date: 20 March 2015
• Docket Number: 112,922., Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.
• Citation: Deutsche Bank Nat'l Trust Co. v. Roesler, 2015 OK CIV APP 36, 348 P.3d 707 (Okla. Civ. App. 2015)
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2006–HE3, Plaintiff/Appellee, v. Frank Victor ROESLER, Jr., Defendant/Appellant, and Spouse, if any, of Frank Victor Roesler, Jr.; John Doe, Occupant; Beneficial Oklahoma, Inc.; and Arrow Financial Services, LLC, Defendants.
• Court: United States State Court of Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

348 P.3d 707

2015 OK CIV APP 36

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2006–HE3, Plaintiff/Appellee

v. Frank Victor ROESLER, Jr., Defendant/AppellantandSpouse, if any, of Frank Victor Roesler, Jr.; John Doe, Occupant; Beneficial Oklahoma, Inc.; and Arrow Financial Services, LLC, Defendants.

112,922.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.

Court of Civil Appeals of Oklahoma, Division No. 4.

March 20, 2015.

Kirk Cejda, Michael K. Templeton, Shapiro & Cejda, L.L.P., Oklahoma City, Oklahoma, for Plaintiff/Appellee.

Roland V. Combs, III, The Law Firm of Roland V. Combs, III & ASSOCIATES, PLC, Oklahoma City, Oklahoma and Sherry Doyle, Sherry Doyle, PLLC, Edmond, Oklahoma, for Defendant/Appellant.

Opinion

P. THOMAS THORNBRUGH, Judge.

¶ 1 Frank Victor Roesler, Jr., appeals the summary judgment of the district court in a mortgage foreclosure case. Upon review, we affirm the decision of the district court.

BACKGROUND

¶ 2 This record begins with a foreclosure action filed in April 2011. The petition alleged that, in January 2006, defendant Roesler executed a note and mortgage for $105,300 payable to WMC Mortgage Company (WMC). The petition alleged that Roesler had defaulted on the note in March 2010.¹

¶ 3 Attached to the petition was the note between Roesler and WMC. The note was not endorsed. The petition also stated that the note had been assigned to plaintiff, Deutsche Bank National Trust Company, as Trustee (Deutsche Bank), and that the assignment had been recorded. No copy of the assignment was attached to the petition. Roesler answered, admitting making the mortgage to WMC but denying that Deutsche Bank had any right in the note, or authority to enforce it.

¶ 4 In November 2011, Deutsche Bank filed a motion for summary judgment, attaching an affidavit attributed to a “Crystal Reyes.” The affidavit alleged that Reyes was an employee of “Wells Fargo Bank, N.A.,” which was acting as “servicing agent” for Deutsche Bank, which was, in turn, acting as a trustee for Morgan Stanley ABS Capital I Inc. Trust 2006–HE3 (Morgan Stanley Trust). The affidavit further stated that the note went into default in March 2011, and that the current balance owed was $ 114,102.84. The summary judgment motion also contained a copy of the note that differed from the copy submitted with the petition, in that it bore an undated endorsement in blank by “Jessica Fuentes” on behalf of WMC. The same space on the note submitted with the petition was blank.

¶ 5 Roesler replied, alleging, among other arguments, that Deutsche Bank had still not demonstrated standing to enforce the note at the time the petition was filed. Roesler also noted that this was the second time Deutsche Bank had attempted to foreclose on the note, its first foreclosure having been dismissed in July 2010.

¶ 6 No further action occurred for almost a year. On October 10, 2012, Deutsche Bank apparently moved to amend its petition and, on the same day, the court dismissed the existing petition and granted leave to amend.² On October 11, 2012, Deutsche Bank filed what was, in fact, its third petition seeking to foreclose on the note. A copy of the note endorsed in blank by a purported agent of WMC was attached to this amended petition.

¶ 7 On October 31, 2012, Roesler filed a motion to dismiss. Roesler argued that Deutsche Bank still had not demonstrated the required standing. One year later, in October 2013, the court denied the motion to dismiss. In February 2014, Deutsche Bank again moved for summary judgment. Roesler responded with the following arguments: 1) the only affidavit provided as to default was by an employee of Wells Fargo, and Wells Fargo was a stranger to the note; 2) Deutsche Bank had not demonstrated the required standing at the time the case was filed, and could not do so by filing an amended petition containing a copy of the note with an undated endorsement; 3) the alleged default occurred because either Deutsche Bank or WMC improperly moved for foreclosure in their first two petitions, and Deutsche Bank could not sue based on a default it caused; 4) there was no evidence that the alleged owner of the note, the Morgan Stanley Trust, ever had possession of the note or a right to enforce it; 5) pursuant to applicable New York and federal tax law governing the Morgan Stanley Trust as a “Real Estate Mortgage Investment Conduit” (REMIC), the Morgan Stanley Trust could not acquire any asset after July 24, 2006, and the record showed that, in July 2006, the note was still held by WMC; and 6) Deutsche Bank failed to give the required notice of default before initiating foreclosure.

¶ 8 In May 2014, the district court granted summary judgment to Deutsche Bank without commenting on these theories. Roesler now appeals.

STANDARD OF REVIEW

¶ 9 “Summary judgment will be affirmed only if the appellate court determines that there is no dispute as to any material fact and that the moving party is entitled to judgment as a matter of law.” City of Jenks v. Stone, 2014 OK 11, ¶ 6, 321 P.3d 179. “Summary judgment will be reversed if the appellate court determines that reasonable men might reach different conclusions from the undisputed material facts.” Id.

ANALYSIS

¶ 10 Roesler brings nine allegations of error, paraphrased below as follows:

1. The trial court erred in granting summary judgment to Deutsche Bank when it provided no evidence that it was the holder of the note when the foreclosure was filed.

2. The trial court erred when it accepted the “proffered document as the instrument” when Deutsche Bank did not lay the foundation of the authenticity of the note with a credible witness and testimony.

3. The trial court erred when it placed the burden on Roesler to disprove the authenticity of the proffered document as the alleged original note rather than requiring Plaintiff to prove its allegation.

4. The trial court erred in granting summary judgment to Deutsche Bank because Deutsche Bank did not support its self-serving statements in its Affidavit with admissible evidence.

5. The trial court erred in granting summary judgment to Deutsche Bank when Deutsche Bank provided no evidence to show that the affiant, an employee of Wells Fargo, was competent to testify on behalf of Deutsche Bank.

6. The trial court erred in granting summary judgment to Deutsche Bank when Deutsche Bank did not provide evidence of and prove delivery of the note.

7. The trial court erred in granting summary judgment to Deutsche Bank when the only dated document presented by Deutsche Bank conflicts with the terms of the Pooling and Servicing Agreement governing acceptance of the note by the Trust, showing that Deutsche Bank was barred from accepting the note into the Trust; and therefore, Deutsche Bank does not have standing.

8 The trial court erred in granting summary judgment to Deutsche Bank because Deutsche Bank's pleadings conflicted with prior pleadings. Specifically, Deutsche Bank alleged a “true and correct copy” of the note had been attached to the previous petition; however, that conflicted with the “true and correct copy” of the note attached to the petition in the case at hand.

9. The trial court erred in granting summary judgment to Deutsche Bank when Deutsche Bank alleged a default date during a time in which it had already filed a previous foreclosure action, but after the date alleged in the prior foreclosure petition.

We will address these allegations in turn.

I. The Trial Court Erred In Granting Summary Judgment to Plaintiff When It Provided No Evidence That It Was the Holder of the Note When the Foreclosure Was Filed

A. Standing in Foreclosure Cases

¶ 11 In 2012–2013, the Oklahoma Supreme Court issued several substantive opinions addressing the standing of a party to enforce a note and foreclose the associated mortgage. Those opinions held that, in order to have standing to sue for foreclosure, a plaintiff must have, and demonstrate, the right to enforce the subject note at the time of filing. Wells Fargo Bank, N.A. v. Heath, 2012 OK 54 ¶ 9, 280 P.3d 328, notes that:

To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing ... Appellee has the burden of showing it is entitled to enforce the instrument ... Unless the Appellee was able to enforce the note at the time the suit was commenced, it cannot maintain its foreclosure action against the Appellants.

Id. (citation omitted).

¶ 12 The Supreme Court set a simple procedure to enforce these requirements by requiring a prima facie showing of the right to enforce. A foreclosing party may, at the time of filing, attach a copy of a suitably endorsed note demonstrating possession and a right to enforce, or some other paper demonstrating the rights of a holder. If it does not do so, the petition is subject to dismissal. The defect may be cured by later submission of some document showing a prima facie right to enforce at the time the petition was filed. However, evidence produced after the petition, and showing only a right to foreclose at an unspecified time, does not meet this burden.

¶ 13 Examining the record in this case, it is clear that Deutsche Bank's petition did not make the required showing of its right to enforce the note at the time of its initial filing. The petition contained a note between Roesler and WMC with no endorsement. Although Deutsche Bank later supplied a copy of the note endorsed in blank, the endorsement was not dated. As such, it could not establish that Deutsche Bank had a right to enforce in April 2011.³

¶ 14 We emphasize that the jurisdictional showing required by the Supreme Court in these foreclosure cases is only that of a prima facie right to enforce. Possession of a suitably endorsed note is prima facie evidence of ownership by the holder. Cahill v. Kilgore, 1960 OK 88, ¶ 15, 350 P.2d 928. This showing does not...