McGovern v. Bank of Am., N.A.

• Decision Date: 09 June 2014
• Docket Number: No. 2013–184–Appeal.,2013–184–Appeal.
• Citation: 91 A.3d 853
• Parties: Thomas H. McGOVERN, III v. BANK OF AMERICA, N.A., et al.
• Court: Rhode Island Supreme Court

91 A.3d 853

Thomas H. McGOVERN, III

v.BANK OF AMERICA, N.A., et al.

No. 2013–184–Appeal.

Supreme Court of Rhode Island.

June 9, 2014.

Kent County Superior Court, Associate Justice Allen P. Rubine.

George E. Babcock, Esq., Pawtucket.

Eva M. Massimino, Esq.

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

OPINION

Justice INDEGLIA, for the Court.

The plaintiff Thomas H. McGovern, III (McGovern or plaintiff) appeals from the Superior Court's grant of summary judgment in favor of the defendants Bank of America, N.A. (Bank of America), BAC Home Loans (BAC),¹ Federal Home Loan Mortgage Corporation (FHLMC),² and Celtic Roman Group, LLC (collectively, defendants). This case came before the Court on May 13, 2014 pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After hearing the parties' arguments and reviewing their written submissions, we are satisfied that cause has not been shown. For the reasons set forth below, we affirm the judgment of the Superior Court.

IFacts and Travel

On August 7, 2001, plaintiff and his wife ³ signed an adjustable-rate note (note) evidencing a loan from Bank of America for a principal amount of $180,000. On the same date, McGovern and his wife executed a mortgage on the property ⁴ that securedthe loan. Both the note and the mortgage designate Bank of America as the “Lender,” and the mortgage additionally designates Bank of America as the “mortgagee.” The mortgage explicitly grants the “Lender” the statutory power of sale.

By letter dated February 19, 2010, Bank of America notified plaintiff of its intent to exercise its right to foreclose upon the property at a sale scheduled for April 21, 2010. The letter indicated that plaintiff had defaulted on his loan and failed to cure the default.⁵ Notice of the scheduled foreclosure sale appeared in the Kent County Daily Times during four successive weeks, starting on Monday, March 29, 2010 and running through Monday, April 19, 2010.

The foreclosure sale did not take place as scheduled on April 21, 2010. Instead, the sale was adjourned to afford plaintiff an opportunity to determine whether he was eligible for assistance from the Home Affordable Modification Program (HAMP).⁶ While plaintiff was making inquiries about HAMP, the sale was rescheduled several times. Notice of the rescheduled foreclosure sales continued to appear in the Kent County Daily Times on a weekly basis from April 26, 2010 through July 26, 2010.⁷ The plaintiff ultimately was unable to obtain assistance from HAMP.

When the foreclosure auction was held on July 27, 2010, Celtic Roman Group, LLC (Celtic) placed a successful bid of $192,600. Before Celtic could close on the property, however, plaintiff filed a notice of lis pendens in the land evidence records for the City of Warwick. The plaintiff then filed a verified complaint on November 18, 2010 in Kent County Superior Court. In his complaint, plaintiff alleged: (1) Bank of America was not the holder of the note at the time of foreclosure; (2) he was not in arrears on his loan payments; and (3) Bank of America “never mailed [him] a new mortgage foreclosure notice * * *.” The plaintiff requested that the court declare the foreclosure sale invalid and vest title to the property in his name. After Celtic was permitted to intervene in the litigation, defendants filed a joint motion for summary judgment on June 27, 2011.

In support of their motion for summary judgment, defendants submitted an affidavit from Sharon Mason, a vice president of BAC, in which Ms. Mason swore that Bank of America held the note and the mortgage at all times from the date of execution through the date of the foreclosure sale. A copy of the note endorsed in blank was attached to Ms. Mason's affidavit. The defendants additionally submitted an affidavit from Felisha Jackson, an employee of Bank of America, who also swore that Bank of America held both the mortgage and the note from the date of execution through the foreclosure sale. Ms. Jackson stated that, as of February 19, 2010, plaintiffwas in arrears on his loan payments and had failed to cure the default at any time prior to July 27, 2010. A history of all activity on plaintiff's account from February 2010 to July 2010, attached to Ms. Jackson's affidavit, indicated that plaintiff had not made any payments during that time period.

In opposition to defendants' motion, plaintiff submitted two personal affidavits, in which he swore that Bank of America did not own the note at the time of the foreclosure sale. The plaintiff attached a letter dated July 6, 2010 from an attorney purporting to represent BAC, in which the attorney stated that “[t]he current owner of the note is FHLMC.” ⁸ In his second affidavit, plaintiff again swore that “Bank of America did not own my promissory note on the date that it foreclosed on my property.” The plaintiff did not come forward with any evidence to counter defendants' evidence that he had defaulted on his loan. In fact, a copy of plaintiff's loan payment history submitted with one of his affidavits indicates that no payments were made after May 15, 2009.

In a written decision filed on March 26, 2013, a Superior Court trial justice granted defendants' motion for summary judgment. The trial justice found that, based upon the undisputed facts, Bank of America had complied with all statutory notice requirements. He additionally found that there might be a genuine issue of fact as to who had possession of the note at the time of foreclosure but reasoned that this issue was immaterial. Finally, the trial justice pointed out that defendants had submitted affidavits and copies of the payment history for the loan as proof that plaintiff had defaulted on the loan. The plaintiff had failed to offer any evidence in response except a statement in his verified complaint that “[t]he Mortgage is not in arrears.” The trial justice reasoned that this conclusory statement was insufficient to withstand a motion for summary judgment.

An order granting defendants' motion for summary judgment entered on April 26, 2013. A final judgment declaring the foreclosure sale valid and discharging the notice of lis pendens entered the same day. The plaintiff timely appealed to this Court.

IIStandard of Review

This Court reviews de novo a hearing justice's grant of summary judgment pursuant to Rule 56 of the Superior Court Rules of Civil Procedure. Sisto v. America Condominium Association, Inc., 68 A.3d 603, 611 (R.I.2013). We “employ[ ] the same standards and rules used by the hearing justice.” Empire Fire and Marine Insurance Cos. v. Citizens Insurance Co. of America/Hanover Insurance, 43 A.3d 56, 59 (R.I.2012) (quoting Generation Realty, LLC v. Catanzaro, 21 A.3d 253, 258 (R.I.2011)). “If we conclude, after viewing the evidence in the light most favorable to the nonmoving party, that there is no genuine issue of material fact to be decided and that the moving party is entitled to judgment as a matter of law, we will affirm the grant of summary judgment.” Pereira v. Fitzgerald, 21 A.3d 369, 372 (R.I.2011) (quoting Lacey v. Reitsma, 899 A.2d 455, 457 (R.I.2006)).

IIIDiscussion

On appeal, plaintiff generally alleges that there were three sources of error in the trial justice's grant of summary judgment. He targets the trial justice's conclusions on the issues of (1) proof of default; (2) notice of the adjourned foreclosure sale; and (3) the identity of the noteholder. In response, defendants contend that summary judgment was appropriate given the absence of any material factual issues.

AProof of Default

McGovern challenges the trial justice's determination that there was no genuine issue of fact as to whether he had defaulted on his loan. He contends that the trial justice incorrectly placed the burden on him to come forth with evidence that he was not in default.

We may expeditiously dispatch with this allegation of error. Contrary to plaintiff's assertion, the trial justice's decision contains a textbook recitation of the standard for granting summary judgment, followed by a faultless application of that standard. As we have often explained, “[o]nce ‘the moving party establishes grounds for [summary] judgment, the opposing party, who counters that there is a material factual dispute, * * * must set forth specific facts that would constitute a genuine issue for resolution at trial.’ ” Riel v. Harleysville Worcester Insurance Co., 45 A.3d 561, 570 (R.I.2012) (quoting Salisbury v. Stone, 518 A.2d 1355, 1358 (R.I.1986)). The plaintiff is therefore correct that “[t]he moving party bears the initial burden of establishing the absence of a genuine issue of fact.” Robert B. Kent et al., Rhode Island Civil Procedure § 56:5, VII–28 (West 2006). What plaintiff overlooks, however, is that “[t]he burden then shifts * * * and the nonmoving party has an affirmative duty to demonstrate * * * a genuine issue of fact.” Id.

Here, Bank of America submitted competent evidence, in the form of Ms. Jackson's affidavit and an authenticated copy of the payment history for the loan, to prove that plaintiff was in arrears on his loan as of February 2010 and failed to cure the default prior to the foreclosure sale. Faced with such evidence, plaintiff was required to come forward with competent evidence of his own to establish a genuine issue of fact. See Plainfield Pike Gas & Convenience, LLC v. 1889 Plainfield Pike Realty Corp., 994 A.2d 54, 57 (R.I.2010) (The “party ‘opposing a motion for summary judgment has the burden of proving by competent evidence the existence of a disputed issue of material fact * * *.’ ”) (quoting D'Allesandro v. Tarro, 842 A.2d 1063, 1065 (R.I.2004)).

Neither of plaintiff's two affidavits indicates that he was current on his loan payments. The only such assertion contained in the record appears in plaintiff's complaint where he makes a one-sentence allegation that his mortgage was...