Mruk v. Mortg. Elec. Registration Sys., Inc.

• Decision Date: 19 December 2013
• Docket Number: No. 2012–282–Appeal.,2012–282–Appeal.
• Citation: 82 A.3d 527
• Parties: Walter J. MRUK, Jr. v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al.
• Court: Rhode Island Supreme Court

82 A.3d 527

Walter J. MRUK, Jr.

v.MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al.

No. 2012–282–Appeal.

Supreme Court of Rhode Island.

Dec. 19, 2013.

Corey J. Allard, Esq., for plaintiff.

Charles C. Martorana, Esq., for defendants.

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

OPINION

Justice INDEGLIA, for the Court.

The plaintiff, Walter J. Mruk, Jr., appeals from the entry of summary judgment in the Superior Court in favor of the defendants Mortgage Electronic Registration Systems, Inc., IndyMac Mortgage Services, OneWest Bank, FSB, and Federal National Mortgage Association.¹ This case came before the Supreme Court for oral argument on October 30, 2013, 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 carefully considering the written and oral submissions of the parties, we are satisfied that this appeal may be resolved without further briefing or argument. For the reasons set forth in this opinion, the judgment of the Superior Court is vacated in part, and affirmed in part.

IFacts and Travel

On April 18, 2006, plaintiff Walter J. Mruk, Jr. (Mruk or plaintiff) executed a promissory note to Dollar Mortgage Corporation (DMC) for the sum of $236,000. The promissory note was secured by a mortgage on Mruk's real property, located at 44 Pine Tree Road in Coventry, Rhode Island. The mortgage, also dated April 18, 2006, was held by MERS as the mortgagee and the nominee for DMC. The mortgage was expressly granted to MERS “solely as nominee for [DMC] and [DMC's] successors ans [ sic ] assigns” and recognized that it would also be held by any successors to MERS. The mortgage also allowed for the sale of the note and the mortgage, as well as a change in the loan servicer ² for the note and mortgage. The mortgage was recorded in the Land Evidence Records of the Town of Coventry at Book 1720, Page 801.

On April 24, 2006, DMC endorsed the promissory note to IndyMac Mortgage Services (IndyMac). In a letter dated that same day, DMC informed Mruk that IndyMac would be servicing his mortgage as of June 1, 2006.

IndyMac subsequently endorsed the note in blank.³ On July 11, 2008, IndyMac was closed by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver of IndyMac. On March 19, 2009, OneWest Bank, FSB (OneWest) acquired substantially all of the assets and mortgage servicing rights of IndyMac and, as a result, became the servicer of Mruk's promissory note. Deutsche Bank National Trust Company (Deutsche Bank) later became the holder of Mruk's note as custodian for OneWest.

On March 3, 2010, MERS assigned Mruk's mortgage to the Federal National Mortgage Association (FNMA).

Mruk defaulted on his mortgage in 2010. Accordingly, FNMA instituted foreclosure proceedings on the Pine Tree Road property. Notice of the foreclosure sale was advertised in the Kent County Daily Times on April 6, 2010, April 13, 2010, and April 20, 2010. At the foreclosure sale, which took place on April 27, 2010, FNMA purchased the property for the sum of $237,652.63. A foreclosure deed to FNMA was executed on May 11, 2010.

On November 4, 2010, Mruk filed the instant action in the Kent County Superior Court, seeking declaratory relief as to the validity of the foreclosure sale and the ownership of the subject property; an order quieting title to the property; and damages for negligent misrepresentation.⁴ The defendants filed a motion for summary judgment on August 9, 2011. In support of their motion, defendants submitted an affidavit from Charles Boyle, the Vice President of IndyMac, a division of OneWest. The plaintiff objected to the motion. In his objection, plaintiff challenged, among other issues, the validity of the MERS assignment of the mortgage to FNMA. The plaintiff filed three affidavits, including one from a title insurer and one from an attorney who was familiar with MERS and real estate titles. Both affidavits questioned the authenticity of the signature on the mortgage assignment which was purportedly that of Andrew Harmon, the Assistant Secretary and Vice President of MERS.

In a written decision on defendants' motion filed July 10, 2012, the trial justice found that the material facts in the instant case were undisputed and largely identical to the material facts previously considered by him in the case of Payette v. Mortgage Electronic Registration Systems, No. PC 2009–5875, 2011 WL 3794701 (R.I.Super. August 22, 2011).⁵ Accordingly, the trial justice incorporated his reasoning from Payette into his decision in the instant matter. The trial justice noted that the clear and unambiguous language of the mortgage explicitly granted MERS and its successors and assigns the statutory power of sale. The trial justice addressed plaintiff's contention that the signature on the assignment to FNMA was invalid and found that plaintiff had not submitted competent evidence to raise a genuine issue of material fact as to its authenticity. The trial justice also noted that plaintiff did not have standing to challenge the validity of the assignment because he was a stranger to the assignment. The trial justice further accepted that the statements made in the Boyle affidavit submitted by defendants were admissible and constituted competent evidence. The trial justice found that plaintiff had failed to demonstrate that a genuine issue of material fact existed which would result in the nullification of the foreclosure sale conducted by FNMA. Accordingly, the trial justice granted summary judgment in favor of defendants.

The plaintiff filed the instant appeal on August 20, 2012. The order granting defendants' motion for summary judgment and dismissing plaintiff's complaint on all counts was entered on August 27, 2012.⁶

IIStandard of Review

This Court reviews a trial court's grant of summary judgment de novo. See Swain v. Estate of Tyre, 57 A.3d 283, 288 (R.I.2012). We apply the same standards and rules used by the trial justice. See Daniels v. Fluette, 64 A.3d 302, 304 (R.I.2013). In deciding a motion for summary judgment, the Court views the evidence in the light most favorable to the nonmoving party. See Beauregard v. Gouin, 66 A.3d 489, 493 (R.I.2013). “Summary judgment is appropriate when no genuine issue of material fact is evident from ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any,’ and the motion justice finds that the moving party is entitled to prevail as a matter of law.” Swain, 57 A.3d at 288 (quoting Beacon Mutual Insurance Co. v. Spino Brothers, Inc., 11 A.3d 645, 648 (R.I.2011)). “[T]he nonmoving party bears the burden of proving by competent evidence the existence of a disputed issue of material fact and cannot rest upon mere allegations or denials in the pleadings, mere conclusions or mere legal opinions.” Daniels, 64 A.3d at 304 (quoting Great American E & S Insurance Co. v. End Zone Pub & Grill of Narragansett, Inc., 45 A.3d 571, 574 (R.I.2012)).

IIIDiscussion

AThe Existence of Genuine Issues of Material Fact

On appeal, Mruk contends that the trial justice erred in holding that no genuine issues of material fact existed and that defendants were entitled to a judgment as a matter of law.⁷ Mruk insists that genuine issues of material facts exist as to (1) MERS's authority to foreclose on the property when it only held the mortgage and not the note; (2) the validity of DMC's endorsement of the note to IndyMac; (3) the validity of the assignment of the mortgage from MERS to FNMA; (4) the admissibility of the Boyle affidavit as competent evidence in court; (5) the validity of the foreclosure sale; and (6) the trial justice's “interposition” of facts from other cases and incorrect reliance upon previous Superior Court decisions. We find plaintiff's arguments to be without merit.

Initially, we note that the authority of either MERS or FNMA to foreclose on a property or the authority of MERS to assign the mortgage are questions of law and not questions of fact to be determined by a fact-finder. Further, his remaining assertions do not rise to the level of competent evidence so as to defeat a motion for summary judgment. The plaintiff's contentions are largely “barren of particularized factual support and fail to set forth any specific facts that would be admissible in evidence.” Harold W. Merrill Post No. 16 American Legion v. Heirs–at–Law, Next–of–Kin and Devisees of Smith, 116 R.I. 646, 648, 360 A.2d 110, 112 (1976). “Although an opposing party is not required to disclose * * * all its evidence, he must demonstrate that he has evidence of a substantial nature, as distinguished from legal conclusions, to dispute the moving party on material issues of fact.” Bourg v. Bristol Boat Co., 705 A.2d 969, 971 (R.I.1998) (quoting Gallo v. National Nursing Homes, Inc., 106 R.I. 485, 489, 261 A.2d 19, 21–22 (1970)).

The plaintiff challenges the validity of DMC's endorsement of the note to IndyMac on the grounds that the endorsement was signed in blank; was not sealed; and was undated. The plaintiff's challenge to the validity of the endorsement is without merit. As the trial justice noted, plaintiff “failed to submit any evidence to this [c]ourt to illustrate the possibility of fraud with respect to the endorsement of the Note in blank.” This Court has made it clear beyond peradventure that, in opposing a motion for summary judgment, “[t]he nonmoving party bears the burden of showing the existence of disputed issues of material fact by competent evidence * * * [and] cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions.” Takian v. Rafaelian, 53 A.3d 964, 971 (R.I.2012) (quoting Zanni v. Voccola, 13 A.3d 1068, 1071 (R.I.2011)). The plaintiffs unsupported challenges to the validity of the endorsement in blank are not sufficient to create a disputed issue of...