Deutsche Bank Nat'l Trust Co. v. Monegro

• Decision Date: 24 January 2013
• Docket Number: C.A. No. KD 2011-1345
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY v. JOSEFINA MONEGRO, JOHN DOE, JANE DOE AND ALL OTHER OCCUPANTS
• Court: Rhode Island Superior Court

DEUTSCHE BANK NATIONAL TRUST COMPANY

v.JOSEFINA MONEGRO, JOHN DOE, JANE DOE AND ALL OTHER OCCUPANTS

C.A. No. KD 2011-1345

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS KENT, SC. SUPERIOR COURT

Filed: January 24, 2013

DECISION

RUBINE, J. Before the Court is a trespass and ejectment action by Plaintiff Deutsche Bank National Trust Company ("Deutsche Bank") to obtain possession of certain real property located at 84 Rosemere Street, Warwick, Rhode Island (the "Property") from Defendant Carlos Martinez ("Martinez"), a tenant of the former Property owner, Josefina Monegro ("Monegro"). This case is on appeal from a judgment for possession entered against Martinez after trial in the District Court, and now it is presently before the Court for trial de novo.¹ See G.L. 1956 § 9-12-10.1; see also Bernier v. Lombardi, 793 A.2d 201, 202 (R.I. 2002). Deutsche Bank claims that Martinez is a tenant at sufferance as well as a holdover tenant, given his residence at the Property following the foreclosure sale at which Deutsche Bank was the successful bidder and obtained title to the Property. Martinez, on the other hand, alleges that the foreclosure sale was invalid, that Deutsche Bank should not be considered the valid title holder of the Property, and therefore that Deutsche Bank could not properly evict him.

IFACTS & TRAVEL

The record reflects the following undisputed facts as presented at trial, as well as through the exhibits, the authenticity of which are not disputed and each of which is found to be a full and accurate representation of that which it purports to be:

1. On September 25, 2006, Monegro executed a note ("Note") in the amount of $256,500 in favor of the lender, First NLC Financial Services, LLC ("First NLC"). (Ex. 2 at 1.)

2. To secure the Note, Monegro contemporaneously executed a mortgage ("Mortgage") on the Property. (Ex. 2.)

3. The Mortgage designates First NLC as "Lender" and further designates Mortgage Electronic Registration Systems, Inc. ("MERS") as "mortgagee" as well as "nominee for [First NLC] and [First NLC's] successors and assigns." (Ex. 2 at 1.)

4. The Mortgage provides that "Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for [First NLC] and [First NLC's] successors and assigns) and to the successors and assigns of MERS, with Mortgage Covenants upon the Statutory Condition and with the Statutory Power of Sale." (Ex. 2 at 3.) In addition, the Mortgage provides that "Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for [First NLC] and [First NLC's] successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right toforeclose and sell the Property; and to take any action required of [First NLC]." Id.

5. On September 29, 2008, MERS, as mortgagee and as nominee for First NLC, assigned the Mortgage interest to "Deutsche Bank National Trust Company, as Trustee for IXIS 2006-HE2 of c/o Saxon Mortgage Services, Inc." ("DB 2006-HE2"). (Ex. 3.)

6. On May 8, 2009, DB 2006-HE2, as mortgagee by way of assignment from MERS, assigned the Mortgage instrument to Deutsche Bank National Trust Company, as Trustee for Morgan Stanley IXIS Real Estate Capital Trust 2006-2, c/o Saxon Mortgage Services, Inc. ("DB 2006-2"). (Ex. 4.) Thus, after the assignment, DB 2006-2 possessed the right to exercise the statutory power of sale granted by the Mortgage. (Ex. 2 at 3.)

7. As recited in the affidavit of sale which accompanied the foreclosure deed, Monegro defaulted resulting in Saxon Mortgage Servicer, Inc. ("Saxon"), as servicer for DB 2006-2 and acting on its behalf, to commence foreclosure proceedings. (Ex. 5.) On July 2, 2009, Saxon foreclosed on the Property on behalf of DB 2006-2. Id. DB 2006-2 prevailed as the successful bidder at the foreclosure sale, purchasing the Property for $106,250. Id. Thereafter, DB 2006-2 executed and recorded a foreclosure deed. Id.

8. On October 12, 2010, Deutsche Bank filed a complaint for eviction of tenancy at sufferance against Monegro and all other occupants in the Third Division District Court ("District Court"). Thereafter, Deutsche Bank obtained a default judgmentagainst Monegro on January 11, 2011, in the District Court eviction action. (Stipulation ¶ 1, dated Dec. 8, 2011 ("Stip.").)

9. Monegro appealed the District Court judgment, which appeal was subsequently dismissed by the Superior Court and remanded to District Court on July 12, 2011.² (Stip. ¶ 2.)

10. On October 8, 2011, the District Court granted Martinez's Motion for Temporary Restraining Order and added Martinez as a party to the eviction action. (Stip. ¶ 3.) A trial in the District Court was held on October 25, 2011, with respect to Martinez only. At the trial, judgment for possession was entered in favor of Deutsche Bank. (Stip. ¶ 4.) Martinez then appealed that judgment to the Superior Court, C.A. No. KD 2011-1345, leading to the instant denovo proceeding. (Stip. ¶ 5.)

The Superior Court held a trial de novo on December 8, 2011, with respect to Martinez's appeal of the District Court judgment for possession. (Stip. ¶ 6.) At the trial de novo, Monegro and Martinez testified and all exhibits were accepted by the Court as full exhibits without objection. Both parties then agreed to submit memoranda to the Court, and to submit a stipulation as to the undisputed facts.³ The Court has taken the matter under advisement for post-trial decision.

IISTANDARD OF REVIEW

In a case tried to the Court upon stipulated facts, "the trial court does not play a fact-finding role, but is limited to 'applying the law to the agreed-upon facts.'" Delbonis Sand & Gravel Co. v. Town of Richmond, 909 A.2d 922, 925 (R.I. 2006) (quoting Hagenberg v. Avedisian, 879 A.2d 436, 441 (R.I. 2005)). When a case is submitted to the Court for decision, the Court will consider any stipulated facts and the inferences to be drawn therefrom. 73 Am. Jur. 2d Stipulations § 17 (West 2012). "Valid stipulations are controlling and conclusive, and courts are bound to enforce such stipulations." Burstein v. United States, 232 F.2d 19, 22 (8th Cir. 1956) (citing H. Hackfeld & Co. v. United States, 197 U.S. 442, 447 (1905)). Nevertheless, "[w]here . . . [there are] evidentiary facts stipulated, the court may, if more than one inference can be drawn from the facts, permissibly find the ultimate determinative facts from the evidence stipulated." 73 Am. Jur. 2d Stipulations § 17 (West 2012).

IIIANALYSIS

AStanding

In his post-trial memorandum, Martinez avers that Deutsche Bank lacked standing to file the eviction action in the District Court as Deutsche Bank is not the record title owner named in the foreclosure deed. Specifically, Martinez is referring to the fact that Deutsche Bank filed suit as "Deutsche Bank National Trust Company," rather than "Deutsche Bank National Trust Company, as Trustee for Morgan Stanley IXIS RealEstate Capital Trust 2006-2." Therefore, Martinez avers that Deutsche Bank is not the real party in interest and has no standing to file suit.

To the contrary, Deutsche Bank avers that Martinez has waived this affirmative defense as he failed to raise such a defense at trial or in any responsive pleading filed preceding trial. In the alternative, Deutsche Bank avers that Martinez was put on notice of the real party in interest because the foreclosure deed identified "Deutsche Bank National Trust Company, as Trustee for Morgan Stanley IXIS Real Estate Capital Trust 2006-2" as record title holder, which deed was attached to the complaint filed in District Court.

Rule 17(a) of the Rhode Island Superior Court Rules of Civil Procedure provides that "[e]very action shall be prosecuted in the name of the real party in interest." Super. R. Civ. P. 17(a). The purpose of requiring prosecution in the name of the real party in interest is to protect a defendant from multiple suits regarding the same claim. See Esquire Swimming Pool Prod., Inc. v. Pittman, 114 R.I. 238, 239-40, 332 A.2d 128, 130 (1975). In accordance with pleading standards, a defendant may raise failure to prosecute a claim in the name of the real party in interest in a manner similar to raising an affirmative defense. See Super. R. Civ. P. 17(a); see also Esquire Swimming Pool Prod., Inc., 114 R.I. at 239, 332 A.2d at 129-30; Robert B. Kent et al., Rhode Island Civil Procedure § 17:1 (West 2011). Any objection concerning whether the plaintiff is a real party in interest must be raised as promptly as possible and failure to do so may result in waiver, and promptness with respect to raising this objection is within the discretion of the trial justice. See Kent, Rhode Island Civil Procedure § 17:1; see also Calenda v. Allstate Ins. Co., 518 A.2d 624, 627 (R.I. 1986). "[C]ourts should be allowed as muchdiscretion as possible in handling real-party-in-interest objections." Calenda, 518 A.2d at 627. Our Supreme Court has stated that it will not allow a defendant to withhold a real party in interest objection "until the eleventh hour in order to entrap the plaintiff." Esquire Swimming Pool Prod., Inc., 114 R.I. at 241, 332 A.2d at 130.

Here, Martinez failed to promptly raise the real party in interest defense within a reasonable period of time after commencement of suit in this matter. See Kent, Rhode Island Civil Procedure § 17:1; see also Calenda v. Allstate Ins. Co., 518 A.2d 624, 627 (R.I. 1986). In fact, Martinez raised this defense for the first time, not in a pleading, but solely by way of argument in his post-trial memorandum. Accordingly, having failed to exercise reasonable promptness in making the real party in interest objection, Martinez has waived such a defense. See Esquire Swimming Pool Prod., Inc., 114 R.I. at 240, 332 A.2d at 130.

Martinez further avers that there is no evidence proving that Deutsche Bank is owner of the Property. This argument is without merit as...