Fed. Nat'l Mortg. Ass'n v. Malinou

• Decision Date: 20 October 2014
• Docket Number: No. 2013–179–Appeal.,2013–179–Appeal.
• Citation: 101 A.3d 860
• Parties: FEDERAL NATIONAL MORTGAGE ASSOCIATION v. Etta E. MALINOU et al.
• Court: Rhode Island Supreme Court

101 A.3d 860

FEDERAL NATIONAL MORTGAGE ASSOCIATION

v.Etta E. MALINOU et al.

No. 2013–179–Appeal.

Supreme Court of Rhode Island.

Oct. 20, 2014.

Michael J. Polak, Esq., for Plaintiff.

Martin S. Malinou, Providence, Pro Se.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice FLAHERTY, for the Court.

The defendant, Martin Malinou, appeals from a Superior Court judgment after a trial before a justice of the Superior Court, sitting without the benefit of a jury, that awarded the plaintiff, Federal National Mortgage Association (Fannie Mae), possession of premises located at 334 Smith Street, Providence (the property). It is noteworthy that the defendant was previously before this Court on a closely related case, Malinou v. Seattle Savings Bank, 970 A.2d 6, 12 (R.I.2009), wherein this Court affirmed a Superior Court judgment that Seattle Savings Bank had the right to foreclose on the property. In this appeal, the defendant challenges Fannie Mae's right to possession of the property. On September 24, 2014, this case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues in this appeal should not be summarily decided. After hearing the arguments of the parties and examining the memoranda that they submitted, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time without further briefing or argument. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

IFacts and Travel

The defendant's mother, Etta E. Malinou (decedent), was the sole owner of the property from 1945 until her death in 2003, at which point defendant acquired title. Malinou, 970 A.2d at 8. On November 15, 1991, the decedent executed and delivered a home equity conversion adjustable rate note and an adjustable rate allonge (collectively the note) to Rhode Island Housing and Mortgage Finance Corporation (RIHMFC). The note was secured by a mortgage on the property. Collectively, those documents created a “reverse mortgage” that required that “all outstanding principal and accrued interest [be paid] to Lender upon receipt of a notice by Lender requiring immediate payment in full * * *.” See Malinou, 970 A.2d at 8. The note specified that, upon decedent's death, lender had the right to demand immediate payment of the note in full.

On October 31, 2002, before Mrs. Malinou died, RIHMFC assigned the note and mortgage to Seattle Savings Bank. The assignment was not recorded in the Office of the Recorder of Deeds in Providence until June 3, 2003.

In January 2003, the decedent died testate as the sole owner of the property. It is undisputed that no principal or interest payments had been paid during decedent's lifetime. Pursuant to the terms of decedent's will, defendant inherited the property. It is noteworthy that defendant has resided at the property since 1946 and has maintained his law practice on the first floor since 1960.

On June 30, 2003, Seattle Savings Bank notified defendant that it held the mortgage and it demanded payment of the note in full. Malinou, 970 A.2d at 8. There is no dispute that no payments have been made since Seattle Savings Bank demanded payment in full. Id.

In August 2003, Seattle Savings Bank notified defendant that a foreclosure sale was scheduled for October 15, 2003. Malinou, 970 A.2d at 8. However, less than a week before the foreclosure date, defendant filed the first of several Chapter 13 bankruptcy proceedings. Id. In addition, defendant filed suit in Superior Court, challenging Seattle Savings Bank's authority to foreclose. Id. at 8–9. We characterized defendant's lawsuit as a tactic that allowed him “to delay, for many years, a foreclosure action instituted by * * * Seattle Savings Bank * * *.” Id. at 8. Based upon the clear record title, we held that Seattle Savings Bank had the right to foreclose. Id. at 12.

Once again, in the spring of 2007, Seattle Savings Bank noticed and advertised the foreclosure of the property. This time, on June 13, 2007, the foreclosure took place and Seattle Savings Bank was the highest bidder. Thereafter, Seattle Savings Bank recorded a foreclosure deed in the Office of the Recorder of Deeds in Providence. On July 30, 2007, Seattle Savings Bank executed a quitclaim deed conveying the property to Fannie Mae. Fannie Mae recorded the quitclaim deed on August 3, 2007.

On or about August 3, 2007, Fannie Mae sent a notice of termination of tenancy by sufferance to defendant pursuant to G.L.1956 § 34–18.1–2.¹ The notice instructed defendant to vacate the property by August 14, 2007. The defendant failed to comply. As a result, on September 7, 2007, Fannie Mae filed a trespass and ejectment complaint in Sixth Division District Court. In the District Court, the parties entered into a stipulation to transfer the case to Superior Court because “[d]efendant's defense relies upon issues of [t]itle which are properly heard in the Superior Court.” An order was entered to that effect.

Prior to trial in Superior Court, the parties entered into a joint statement of undisputed facts. In addition to many of the facts outlined above, the parties further agreed that, on July 10, 2007, an assignment naming Seattle Mortgage Company as assignor was recorded in the Office of the Recorder of Deeds in Providence in book 8763 at page 94. That document, which was prepared by DocX, a subsidiary of Lender Processing Services, Inc. (LPS), failed to name an assignee. Further, the parties agreed that, at the time of trial, there remained on record a tax sale deed to Rookies Real Estate, NLR Partners, recorded on August 3, 2012. However, Fannie Mae was within the time to redeem the property and no petition to foreclose the right of redemption had been filed.²

The nonjury trial commenced on March 20, 2013. At trial, defendant, in an effort to defeat Fannie Mae's trespass and ejectment action, relied heavily upon the Seattle Mortgage Company assignment and the August 2012 tax-sale deed. In addition, defendant urged the trial justice to enforce subpoenas duces tecum that he had caused to be served upon LPS and Bank of America (BOA), respectively, one day and two days before the commencement of trial. The trial justice refused to enforce the subpoenas because they were overbroad and violated the pretrial order closing discovery on February 19, 2013. Further, the trial justice found that enforcing the subpoenas would inevitably require the trial to be suspended for an unspecified length of time.

On March 22, 2013, the trial justice issued a bench decision. In her decision, she determined that a presumption in favor of the record title holder, Fannie Mae, existed and that clear and convincing evidence was necessary to overcome that presumption. The trial justice found that the Seattle Mortgage Company assignment failed to rebut the presumption because it was an extraneous document that lay outside Fannie Mae's chain of title. Further, the trial justice gave no weight to the August 2012 tax-sale deed because Fannie Mae's right to redeem was still in effect.³ Accordingly, the trial justice awarded Fannie Mae possession of the property. Judgment in favor of Fannie Mae entered on the same day.

On March 29, 2013, defendant filed a motion to stay the execution of judgment. The trial justice granted defendant's motion, staying the execution for possession until April 20, 2013 in order to give defendant an opportunity to request a stay from this Court. On April 5, 2013, defendant timely filed his notice of appeal. Also, defendant filed a motion to stay execution of the judgment with this Court. We did not oblige.

On appeal, defendant raises five points of contention. First, defendant argues that “[f]or lack of personal jurisdiction over the Estate of Etta E. Malinou the Superior Court did not have subject matter jurisdiction to determine title to the real estate devised in her [w]ill.” The defendant contends that personal jurisdiction over decedent's estate was lacking because Fannie Mae failed to serve the estate. Second, defendant argues that this Court should not give deference to the trial justice's findings of fact because they were based entirely on documentary evidence. Third, defendant avers that the trial justice erred when she required clear and convincing evidence to rebut the presumption in favor of Fannie Mae. Fourth, defendant contends that the trial justice erred when she failed to enforce the subpoenas duces tecum issued upon LPS and BOA. Finally, defendant argues that the August 2012 tax-sale deed in favor of Rookies Real Estate divested Fannie Mae of the right to possess the property.

IIStandard of Review

It is well established that this Court's review of a trial justice's decision following a nonjury trial is deferential. Banville v. Brennan, 84 A.3d 424, 429 (R.I.2014) (citing Cigarrilha v. City of Providence, 64 A.3d 1208, 1212 (R.I.2013) ). “When we review the factual findings of a trial justice sitting without a jury, we accord those findings great deference.” Lamarque v. Centreville Savings Bank, 22 A.3d 1136, 1140 (R.I.2011) (citing Ondis v. City of Woonsocket ex rel. Treasurer Touzin, 934 A.2d 799, 802 (R.I.2007) ). “Pure questions of law, however, we review on a de novo basis.” Id. Thus, “[a] judgment in a nonjury case will be reversed on appeal when it can be shown that the trial justice misapplied the law, misconceived or overlooked material evidence or made factual findings that were clearly wrong.” Id. at 1139–40 (quoting Cathay Cathay, Inc. v. Vindalu, LLC, 962 A.2d 740, 745 (R.I.2009) ).

IIIDiscussion

ASubject Matter Jurisdiction

The defendant's first argument before this Court is that the Superior Court did not have subject matter jurisdiction over the controversy because there was no personal jurisdiction over the estate. The defendant contends that personal jurisdiction over decedent's estate was lacking because Fannie Mae failed to serve the estate. The record...