Hofman v. HSBC Bank USA, NA (In re Hofman)
| Decision Date | 25 February 2013 |
| Docket Number | Bankruptcy No. 12–60619–13.,Adversary No. 12–00039. |
| Citation | 488 B.R. 157 |
| Parties | In re Jurian W. HOFMAN and Dawn L. Hofman, Debtors. Jurian W. Hofman and Dawn L. Hofman, Plaintiffs v. HSBC Bank USA, NA, as Trustee for the registered holder of Nomura Home Equity Loan Inc Asset-backed Certificates, Series 2007–3, Defendant. |
| Court | U.S. Bankruptcy Court — District of Montana |
OPINION TEXT STARTS HERE
Jurian W. Hofman, Missoula, MT, pro se.
Dawn L. Hofman, Missoula, MT, pro se.
John Joe Solseng, Seattle, WA, for Defendant.
Pending in this adversary proceeding is the Motion for Summary Judgment (Docket No. 9) filed by Defendant HSBC Bank USA, NA (“HSBC”), as Trustee for the registered holder of Nomura Home Equity Loan Inc (“Nomura”) Asset-backed Certificates, Series 2007–3, in which HSBC seeks dismissal with prejudice of the Plaintiffs/Debtors' complaint objecting to HSBC's Proof of Claim. HSBC filed with its Motion a Statement of Uncontroverted Facts, memorandum in support, and affidavits with supporting exhibits. Plaintiffs/Debtors Jurian W. Hofman (“Jurian”) and Dawn L. Hofman (“Dawn”), pro se, who filed their objection to HSBC's Proof of Claim seeking to disallow HSBC's secured claim in its entirety, filed their response (Dkt. 18) in opposition to HSBC's Motion, accompanied by 26 exhibits. The Court has reviewed HSBC's Motion and Debtors' response, together with the accompanying exhibits, record and applicable law. This matter is ready for decision. For the reasons set forth below, and in particular the holding by the United States Court of Appeals for the Ninth Circuit as explained in Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 9121(9th Cir. BAP 2011), this Court concludes that HSBC has satisfied its burden to show there is no genuine issue of fact, and that HSBC is entitled to judgment as a matter of law that it has standing to file its proof of claim as the party entitled to enforce the Deed of Trust signed by the Plaintiffs under Montana law.
This Court has jurisdiction of the above-captioned adversary proceeding and Chapter 13 case under 28 U.S.C. § 1334(a) & (b). This adversary proceeding is a core proceeding to determine the validity of HSBC's lien and allowance/disallowance of claims under 28 U.S.C. § 157(b)(2)(B) and (K). Plaintiffs' complaint objects to HSBC's secured claim asserting two claims for relief: (1) Wrongful and Erroneous Foreclosure Representation as to Standing to Make Claim because Nomura is dormant or dissolved, because HSBC is overseeing the sale or trading of unregistered securities in violation of federal law, and HSBC is not the owner of the promissory note and therefore lacks standing; and, as a result, (2) Debtors seek expungement of HSBC's Proof of Claim which purports that it is secured by Debtors' residence at 2175 Oriole Drive, Missoula, Montana. This Memorandum of Decision includes the Court's findings of fact and conclusions of law under F.R.B.P. Rule 7052.
The Court may give evidentiary weight to sworn statements in the debtor's schedules, though the schedules are not necessarily and finally determinative of all facts contained therein. Veal, 450 B.R. at 921,citing Campbell v. Verizon Wireless (In re Campbell), 336 B.R. 430, 436 (9th Cir. BAP 2005). The Debtors, pro se, filed a voluntary Chapter 13 petition on April 23, 2012, and filed their Schedules and Statement of Financial Affairs on May 7, 2012. On Schedule A Debtors list their joint interests in their residence at Lot 3, Block 3 of El Mar Estates, Phase II, a/k/a 2175 Oriole Dr. in Missoula, Montana, which they value at $175,384.14, and listed claims secured by the residence in the amounts stated of $162,521.09 and $14,452.00, respectively. Schedule C claims an exemption in the residence under Montana's homestead statutes in the amount of $162,521.09.
Schedule D lists HSBC as having a contingent, disputed claim incurred on 11/20/2006, in an amount stated of $175,384.14. The SOFA at item 6 (“Assignments and receiverships”) lists “HSBC–Nomura” as assignee of property by assignment or settlement dated 1/26/2012.2
Debtors filed a Chapter 13 Plan and an amended Plan. HSBC and the Trustee filed objections, and confirmation was denied after hearing held on July 12, 2012. At that hearing the Court informed the Debtors that they must resolve the amount of HSBC's arrearage and claim prior to confirmation.
On August 6, 2012, Debtors filed their Objection to HSBC's Claim, even though HSBC had not filed a proof of claim as of that date. The Court entered an Order on August 7, 2012, in the Chapter 13 case treating Debtors' Objection as a complaint which needed to be served on HSBC, which commenced this adversary proceeding to determine HSBC's interest in property. HSBC filed its answer and affirmative defenses on August 22, 2012.
HSBC 3 filed its Proof of Claim No. 14 on October 5, 2012. As amended, Claim 14 asserts a secured claim in the amount of $170,539.62, secured by property with a stated value of $172,000.00. Claim 14 has several attachments, including a Fixed/Adjustable Rate/Balloon Note, Loan Modification Agreement, Deed of Trust (“DOT”) covering Debtors' residence which is signed by Debtors, an Assignment of DOT from Mortgage Electronic Registration Systems, Inc. (“MERS”) to HSBC, addenda, and an Allonge dated June 26, 2012, transferring the original note from Meritage Mortgage Corporation (“Meritage”) to HSBC 4.
Debtors filed a further amended Plan to which objections again were filed by the Trustee and HSBC, and confirmation has been continued 5 so that this adversary proceeding can be decided. On November 15, 2012, HSBC filed its Motion for Summary Judgment and supporting memorandum, requesting that the Court grant its Motion and dismiss Plaintiffs' complaint with prejudice. Defendant also filed a Statement of Uncontroverted Facts, supporting affidavits of Samantha J. DeLage (“DeLage”) and HSBC's attorney Joe Solseng (“Solseng”), and attached exhibits.
HSBC's Statement of Uncontroverted Facts sets forth the following:
1. On or about November 20, 2006, Dawn Hofman and Jurian Hofman made and delivered a Promissory Note to the original lender, Meritage Mortgage Corporation, in the principal amount of $146,720.00 (the “Note”). See Note attached as Exhibit “A” to the Affidavit of Samantha J. DeLage.
2. The Note was secured by a Priority Deed of Trust on the Property commonly known as 2175 Oriole Drive, Missoula, MT 59808 (the “Property”), legally described as:
LOT 3 IN BLOCK 3 OF EL MAR ESTATES PHASE II, A PLATTED SUBDIVISION IN MISSOULA COUNTY, MONTANA, ACCORDING TO THE OFFICIAL RECORDED PLAT THEREOF.
(hereinafter the “Subject Property”). See Deed of Trust attached as Exhibit “B” to the Affidavit of Samantha J. DeLage.
3. Attached to the original Note are both an endorsement in Blank from the original lender, Meritage Mortgage Corporation, and an Allonge from Meritage Mortgage Corporation to HSBC. See Note attached as Exhibit “A” to the Affidavit of Samantha J. DeLage.
4. Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”), solely as nominee for Meritage Mortgage Corporation, was the original beneficiary under the Deed of Trust. The Deed of Trust was recorded on November 21, 2006, under Recorder's No. 200630237, records of Missoula County, Montana. See Deed of Trust attached as Exhibit “B” to the Affidavit of Samantha J. DeLage.
5. On or about December 2, 2008, MERS executed an Assignment of Deed of Trust, transferring the beneficial interest in the Note and Deed of Trust to HSBC. The Assignment was recorded on December 22, 2008 under Recorder's No. 200827638, records of Missoula County, Montana. See Assignment of Deed of Trust attached as Exhibit “C” to the Affidavit of Samantha J. DeLage.
6. On or about April 23, 2012, Jurian W. Hofman and Dawn L. Hofman (hereinafter the “Debtors”) filed the instant Chapter 13 bankruptcy as Petition No. 12–60619–RBK.
7. On August 6, 2012, the Debtors filed an Objection to Claim against HSBC. The Court subsequently ordered that the Objection would be treated as a Complaint and it would proceed as an adversary action. See Docket No. 33 in Debtor's Bankruptcy Case No. 12–60619–RBK.
8. HSBC filed its Proof of Claim in the Debtor's bankruptcy as Claim No. 14–1 on October 5, 2012. The Claim was amended that same day under Claim No. 14–2 to correct the attached documentation. See Proofs of Claim filed on Claims Register in Debtor's Bankruptcy Case No. 12–60619–RBK.
9. HSBC Bank USA, NA, as Trustee for the Registered Holder of Nomura Home Equity Loan Inc. Asset–Backed Certificates, Series 2007–3 is the holder of and has possession of the original endorsed Note. See ¶ 8 of Affidavit of Samantha J. DeLage.
The affidavit of DeLage (Dkt. 11), wherein she states that she is employed by the current servicer of the loan and has personal knowledge of the loan documents, is accompanied by the above-described exhibits including a promissory note with an endorsement in blank and an allonge from Meritage to HSBC, a DOT subtitled “Trust Indenture Under the Small Tract Financing Act of Montana” (“STFA”), and the above-described assignment from MERS to HSBC as trustee for Nomura, of the DOT and “all notes and obligations therein described or referred to.” Solseng's affidavit (Dkt. 12) describes his office's on-line search of the Delaware Corporations database and a printout dated October 17, 2012, which states that Nomura is a registered corporation.
Debtors filed a response to HSBC's Motion for Summary Judgment, and filed a list of 26 exhibits. They did not file any affidavits explaining or providing foundation for their exhibits 6, which include not only loan documents but also several printouts from what appear to be business publications, articles search engines, a blog, printouts from the United States Securities and Exchange Commission (“SEC”), cases or case summaries, and copies...
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