Svrcek v. Rosenberg
| Decision Date | 29 March 2012 |
| Docket Number | Sept. Term,2010.,No. 988,988 |
| Citation | 77 UCC Rep.Serv.2d 218,203 Md.App. 705,40 A.3d 494 |
| Parties | Paul SVRCEK v. Diane S. ROSENBERG et al. |
| Court | Court of Special Appeals of Maryland |
OPINION TEXT STARTS HERE
Scott C. Borison, Frederick, MD (Legg Law Firm, LLC, Jonathan D. Suss, PhD, Silver Spring, MD, on the brief), for appellant.
John A. Ansell, III (Rosenberg & Associates, LLC, on the brief), Bethesda, MD, for appellee.
This appeal arises out of a foreclosure sale of property owned by Paul Svrcek, appellant. On October 8, 2009, Diane S. Rosenberg, Mark D. Meyer, and John A. Ansell III, appellees, acting as substitute trustees, commenced an action to foreclose a lien pursuant to a power of sale by filing an order to docket in the Circuit Court for Queen Anne's County. On January 29, 2010, Svrcek's property was sold to “Citibank, N.A. as Trustee for the Certificateholders of Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT–A Trust, Mortgage Pass–Through Certificates Series 2006–4.” The circuit court entered a final ratification of the sale on July 14, 2010 and this timely appeal followed.
Svrcek presents three issues 1 for our consideration, which we have rephrased slightly as follows:
I. Whether appellees had the legal right to initiate a foreclosure;
II. Whether the appointment of appellees as substitute trustees was not effective because it was executed by an attorney in fact without a power of attorney recorded in the land records of Queen Anne's County; and,
III. Whether the deed of trust was invalid because it failed to name an individual as trustee and the Legislature could not make it valid through curative legislation.
For the reasons set forth below, we shall affirm.
On November 4, 2005, Svrcek executed an adjustable rate promissory note in the amount of $486,000 to Taylor, Bean & Whitaker Mortgage Corp. for the purpose of refinancing his property located at 100 Holly Court in Stevensville. The note was secured by a deed of trust, executed on the same date, to Taylor, Bean & Whitaker Mortgage Corp. The deed of trust contained a power of sale provision.
It is uncontroverted that, on or before June 1, 2006, Svrcek's loan was sold or transferred into a pool of securitized trust, “Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT–A Trust, Mortgage Pass–Through Certificates Series 2006–4.” 2 Citibank, N.A. was named as Trustee and EMC Mortgage Corporation was named as servicer. It is also uncontroverted that, for about three years, Svrcek made payments on the note to EMC Mortgage Corporation.
On or about July 31, 2009, Svrcek received a notice of intent to foreclose on his property. The notice identified the mortgage lender as “TAYLOR BEAN & WHITAKER,” the loan servicer as “EMC Mortgage Corporation,” and the secured party as “Citibank, N.A. as Trustee for the Certificateholders of Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT–A Trust, Mortgage Pass–Through Certificates Series 2006–4,” which we shall hereinafter refer to as “Citibank, N.A. as Trustee.”
On October 8, 2009, appellees Diane S. Rosenberg, Mark D. Meyer and John A. Ansell III, acting as substitute trustees, filed in the Circuit Court for Queen Anne's County an order to docket pursuant to Maryland Rules 14–204 3 and 14–207.4 The order to docket was accompanied by a number of documents, including: (1) a copy of the promissory note executed by Svrcek and naming Taylor Bean & Whitaker Mortgage Corp. as the lender; (2) a deed of appointment of substitute trustees dated September 22, 2009, and filed in the circuit court on October 8, 2009, by which appellees were named substitute trustees by “EMC Mortgage Corporation as Attorney in Fact for Citibank, N.A. as Trustee for the Certificateholders of Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT–A Trust, Mortgage Pass–Through Certificates Series 2006–4,” (hereinafter referred to as “EMC Mortgage Corp. as Attorney in Fact for Citibank, N.A. as Trustee”); and, (3) a deed of trust that named Taylor Bean & Whitaker Mortgage Corp. as the lender. 5
On October 15, 2009, the circuit court entered a memorandum order that provided as follows:
No foreclosure sale may occur in this matter until the following deficiencies in the Order to Docket are cured:
1. The affidavit regarding the required Notice of Intent to Foreclose must include, in addition to the date on which notice was sent, a statement that the requirements of § 7–105.1(c)(2)(i)(ii) of the Real Property Article were met, together with the original of the return receipt, purportedly sent on July 31, 2009.
2. The recorded original or a certified copy of the assignment of the mortgage/deed of trust and/or certified copy of assignment of note from Taylor, Bean & Whitaker Mortgage Corp. to EMC Mortgage Corporation as Attorney in Fact for Citibank, N.A., as Trustee for Certificateholders of Structured Asset Mortgage Investments II, Inc., Bear Stearns ALT–A Trust, Mortgage Pass–Through Certificates, Series 2006–4.
As to the second deficiency, the court also noted that “[a]n alternative would be to file the original note.”
Appellees filed a motion to reconsider in which they argued that the affidavit they filed met the requirements of Md.Code (2003 Repl.Vol., 2009 Cum.Supp.), § 7–105.1 of the Real Property Article (R.P.),6 and that neither that section nor Md. Rule 14–207 required the filing of the original return receipt for the certified mailing of the notice of intent to foreclose. On December 3, 2009, Svrcek responded by filing an “Emergency Motion to Enforce Order and Shorten Time to Respond,” in which he opposed appellees' motion to reconsider on the ground that they did not address the second deficiency noted by the court, and requested the court to stay the foreclosure sale and rule on the pending motions before December 4, 2009, the scheduled date for the foreclosure sale. On December 7, 2009, appellees responded to Svrcek's “Emergency Motion” by stating, among other things, that they did not address the second deficiency because they “were awaiting a copy of the recorded assignment from the land records,” and that a “copy of the recorded assignment is being filed simultaneously with this response.”
The document filed by appellees was a photocopy of an assignment of a deed of trust executed on October 22, 2009, and filed in the circuit court on October 30, 2009, by which Taylor, Bean & Whitaker Mortgage Corp. assigned the deed of trust executed by Svrcek on November 4, 2005, to EMC Mortgage Corp. as Attorney in Fact for Citibank, N.A. as Trustee.
On December 8, 2009, the circuit court denied Svrcek's motion as “moot,” noting that Svrcek had “actual notice based upon his filing of a motion” on December 3, 2009, and that appellees had “filed the requisite assignment.”
On January 7, 2010, Svrcek filed a motion to vacate the sale 7 and dismiss the foreclosure proceedings in which he requested, among other things, that the sale of the subject property be stayed and that appellees be required to produce certain documentation. Specifically, Svrcek argued that he was not indebted to Citibank, N.A., as Trustee because it did not own the promissory note and did not have authority to appoint appellees as substitute trustees and, as a result, appellees lacked standing to foreclose on his property. According to Svrcek, appellees failed to establish the identity of the true owner and holder of the promissory note as well as a valid chain of title transferring ownership of the loan from the original lender to EMC Mortgage Corp. as Attorney in Fact for Citibank, N.A. as Trustee.
Svrcek argued that the October 22, 2009 assignment of the deed of trust from Taylor, Bean & Whitaker Mortgage Corp. to Citibank, N.A. as Trustee, which was filed among the land records of Queen Anne's County on October 30, 2009, was not valid and that Citibank, N.A. as Trustee was not the secured party at the time the order to docket was filed on October 8, 2009. Svrcek requested the court to require appellees to produce the original promissory note, a full accounting of money paid and received on Svrcek's account and proof that EMC Mortgage Corp. as Attorney in Fact for Citibank, N.A. as Trustee had “not received third-party payments on [Svrcek's] loan obligation and is unaware that any such third-party payments have been made.”
On January 26, 2010, appellees filed an opposition to Svrcek's motion on the ground that it was untimely because, contrary to the provisions of Maryland Rule 14–211(a)(2),8 his request for a stay was filed more than fifteen days after service of the order to docket. In addition, appellees argued that Citibank, N.A. as Trustee was the owner of the debt notwithstanding the fact that the assignment of the deed of trust was executed after the order to docket was filed. Appellees asserted that the note was actually transferred to Citibank, N.A. as Trustee on April 3, 2006, and that the unassigned deed of trust secured the holder of the note, Citibank, N.A. as Trustee. In response to Svrcek's argument that the note was not validly transferred to Citibank, N.A. as Trustee because there was no endorsement on it, appellees asserted that “most endorsements are on the back page of the original note” and the original note in the instant case was “in the document vault of EMC Mortgage, the servicing agent and Citibank's attorney in fact.” In addition, appellees argued that there is no Maryland law or rule that requires the production of the original note.
On January 29, 2010, the property was sold at public auction to Citibank, N.A. as Trustee and, thereafter, appellees filed a report of sale with the court.
Notwithstanding their claim that the original note was in a document vault belonging to EMC Mortgage Corp., at a motions hearing on February...
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