Pilgeram v. Greenpoint Mortg. Funding, Inc.

Decision Date25 November 2013
Docket NumberNo. DA 12–0629.,DA 12–0629.
Citation373 Mont. 1,313 P.3d 839
PartiesTroy A. PILGERAM and Teresa A. Pilgeram, husband and wife, Plaintiffs and Appellants, v. GREENPOINT Mortgage Funding, Inc., a California corporation; Countrywide Home Loans, Inc., a Texas corporation; Mann Mortgage, LLC, a Montana limited liability company; and Mortgage Electronic Registration Systems, Inc., an Iowa Corporation, Defendants and Appellees.
CourtMontana Supreme Court

OPINION TEXT STARTS HERE

For Appellant: Eric Hummel, Attorney at Law, PLLC; Kalispell, Montana, W. Jeff Barnes (argued), W.J. Barnes, P.A.; Boca Raton, Florida.

For Appellee: Charles K. Smith, Poore, Roth & Robinson, P.C.; Butte, Montana, Robert J. Pratte (argued), Brent R. Lindahl, Fulbright & Jaworski, L.L.P.; Minneapolis, Minnesota.

Justice MICHAEL E. WHEAT delivered the Opinion of the Court.

[373 Mont. 2]¶ 1 Troy A. Pilgeram and Teresa A. Pilgeram (the Pilgerams) appeal from the orders of the Eleventh Judicial District Court, Flathead County, granting GreenPoint Mortgage Funding, Inc., Countrywide Home Loans, Inc., and Mortgage Electronic Registration Systems, Inc.'s (the Lenders') motion for summary judgment and denying the Pilgerams' motion to amend judgment. We reverse.

¶ 2 The dispositive issue on appeal is:

Did the District Court err in granting the Lenders' motion for summary judgment?

BACKGROUND

¶ 3 On September 7, 2006, the Pilgerams obtained a fixed rate home loan from Mann Mortgage (Mann) for $512,000 and executed a deed of trust (DOT) naming Citizen's Title & Escrow trustee and Mann lender. Also on September 7, 2006, the Pilgerams signed a promissory note, which Mann endorsed to GreenPoint Mortgage Funding, Inc., (GreenPoint) on the same day.

¶ 4 The DOT provided that the promissory note could be sold without advance notice to the borrower. The DOT also provided that the loan services entity could be changed with written notice to the borrower. Pursuant to the promissory note, the Pilgerams waived their rights of presentment and notice of dishonor. Mortgage Electronic Registration Systems, Inc., (MERS) was not named in the promissory note but was identified in the DOT as [t]he beneficiary of this Security Instrument ... solely as a nominee for Lender and Lender's successors and assigns.”

¶ 5 After several transfers of the interest in the DOT and promissory note, the Pilgerams defaulted on the note in April 2008. On July 29, 2008, MERS assigned its interest in the DOT to GreenPoint, which subsequently held the interests in both the promissory note and the DOT. Also on July 29, 2008, GreenPoint appointed and substituted Charles J. Peterson (Peterson) as the successor trustee. In November 2008, the Pilgerams received notice that GreenPoint was assigning the servicing rights to Countrywide effective December 1, 2008. In early December, the Pilgerams received notice from Countrywide that it was now the loan servicing entity and that future payments were to be made in the manner indicated in the notice. They also received notice that the loan was in default and had been accelerated and/or was in foreclosure. They were informedof the manner in which they could bring the note current.

¶ 6 Following a series of cancelled foreclosure sales, the Pilgerams filed a complaint in the District Court, alleging the Lenders lacked the authority to foreclose. The Lenders moved for summary judgment,1 and the District Court granted the motion on December 13, 2011, reasoning that MERS qualified as a “beneficiary” under Montana's Small Tract Financing Act (STFA). On January 25, 2012, the Pilgerams filed a motion to amend judgment. The District Court denied this motion on April 20, 2012, because “the time for ruling expired 60 days after the motion was filed.” The Pilgerams subsequently filed an appeal in this Court in October 2012.

¶ 7 On appeal, the Pilgerams argue that the Lenders failed to meet their burden for summary judgment, and that the complicated assignments between and among MERS, GreenPoint, and Countrywide create genuine issues of material fact. The Lenders counter that the Pilgerams “fail to explain what facts are supposedly in dispute, and why they are material” (emphasis in original). The Lenders argue that the District Court correctly concluded there was “no impediment prohibiting Countrywide from foreclosing the loan and from instructing” Peterson, the successor trustee, “to sell the property to satisfy the default.”

¶ 8 The Pilgerams further argue MERS “is not, was not, and could never be the ‘beneficiary’ of the DOT.” Thus, it “had no authority to endorse a note which it never owned” or “to assign the Pilgerams' deed of trust.” According to the Lenders, the DOT specifically provided that MERS was a beneficiary, allowing MERS to act as the agent of the lender and of the lender's successors and assigns.

STANDARD OF REVIEW

¶ 9 We review de novo a district court's grant or denial of summary judgment, applying the same criteria of M.R. Civ. P. 56 as a district court. Fisher v. State Farm Mut. Auto. Ins. Co., 2013 MT 208, ¶ 11, 371 Mont. 147, 305 P.3d 861. We review a district court's conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Brookins v. Mote, 2012 MT 283, ¶ 22, 367 Mont. 193, 292 P.3d 347 (internal citation omitted).

DISCUSSION

¶ 10 Did the District Court err in granting the Lenders' motion for summary judgment?

¶ 11 The District Court granted summary judgment in favor of MERS solely on the grounds that MERS qualified as a beneficiary under the STFA. Although never addressed by the District Court, MERS asserts on appeal that they are special agent of the lender. We find that neither theory warrants summary judgment in favor of MERS.

¶ 12 Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law.” Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 16, 369 Mont. 444, 299 P.3d 338 (citing M.R. Civ. P. 56(c)(3)). We construe all facts in favor of the non-movant in determining whether an issue of material fact exists. LaTray v. City of Havre, 2000 MT 119, ¶ 15, 299 Mont. 449, 999 P.2d 1010. If the movant demonstrates the absence of any material issue of fact and entitlement to judgment, the non-movant must establish with substantial evidence that a genuine issue of material fact does exist or that the movant is not entitled to prevail under the law. Semenza v. Kniss, 2008 MT 238, ¶ 18, 344 Mont. 427, 189 P.3d 1188;Prindel v. Ravalli County, 2006 MT 62, ¶ 19, 331 Mont. 338, 133 P.3d 165. Where the undisputed evidence concerning the relationship of parties is reasonably susceptible to but a single inference, the question of their legal relationship is one purely of law. Elkins v. Husky Oil Co., 153 Mont. 159, 166, 455 P.2d 329, 332 (1969); Estates of Milliron v. Francke, 243 Mont. 200, 204, 793 P.2d 824, 827 (1990); Semenza, ¶ 19.MERS is not a beneficiary under Montana's STFA.

¶ 13 The Pilgerams argue that MERS had no authority to assign the Pilgerams' DOT and request that we follow other jurisdictions that have determined MERS did not qualify as a beneficiary under their trust deed acts. The Lenders argue the Pilgerams ignore the express language of the trust deed and the plain language of the definition of beneficiary under § 71–1–303(1), MCA. They further argue the Pilgerams disregard Montana authority holding MERS may serve as a beneficiary and have instead “cherry-picked” out-of-state authority.

¶ 14 This case raises an issue we have not yet addressed, namely whether Montana's STFA permits MERS to be the designated beneficiary in a trust indenture.2 We are mindful this is an area of law that is still developing, with state and federal courts in different jurisdictions reaching different results. Federal court decisions in the District of Montana on these issues are instructive, as are the decisions of state district courts and state courts in other jurisdictions. We note that the District Court in this case was not the only Montana state district court to consider similar trust language and conclude that MERS qualified as a beneficiary. See Waide v. U.S. Bank Natl. Assn., DV–10–1763, slip op. at 10 (Watters, J., Yellowstone County Dist. Ct., June 28, 2011) ( Court Doc. 8–5 at 1–17 ).

¶ 15 The STFA defines “beneficiary” as “the person named or otherwise designated in a trust indenture as the person for whose benefit a trust indenture is given or the person's successor in interest, who may not be the trustee.” Section 71–1–303(1), MCA. “When interpreting a statute, we seek to implement the intention of the Legislature.” Williamson v. Mont. Pub. Serv. Commn., 2012 MT 32, ¶ 36, 364 Mont. 128, 272 P.3d 71 (citing § 1–2–102, MCA). We first look to the plain meaning of the statute's words. Williamson, ¶ 36. If the language is clear and unambiguous, we will not resort to other means of interpretation. Williamson, ¶ 36 (citing Rocky Mt. Bank v. Stuart, 280 Mont. 74, 80, 928 P.2d 243, 246–47 (1996)). If the language is unclear or ambiguous, however, we resort to rules of statutory construction to discern and give effect to the intention of the legislature. Mont. Contractors' Assn. v. Dept. of Hwys., 220 Mont. 392, 394, 715 P.2d 1056, 1058 (1986) (internal citations omitted).

¶ 16 We find that the definition of “beneficiary” is clear and unambiguous. The section lends itself to only one interpretation, namely that the beneficiary is “the person named ... in a trust indenture as the person for whose benefit a trust indenture is given or the person's successor in interest” (emphasis added). Section 71–1–303, MCA. The Lenders argue that MERS received a “benefit” from the DOT even though MERS did not lend the money and has no right to repayment. The alleged benefit is title to the...

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