Wells Fargo Bank, N.A. v. Goodman
| Decision Date | 30 October 2015 |
| Docket Number | 111,575. |
| Citation | 358 P.3d 878 (Table) |
| Parties | WELLS FARGO BANK, N.A., Appellee, v. Robert GOODMAN, et al., Appellants. |
| Court | Kansas Court of Appeals |
Donna L. Huffman, of the Law Office of Donna L. Huffman, of Oskaloosa, for appellants.
Michelle M. Masoner and Jennifer Donnelli, of Bryan Cave LLP, of Kansas City, Missouri, for appellee.
Before LEBEN, P.J., GREEN, J., and JEFFREY E. GOERING, District Judge, assigned.
In this mortgage foreclosure action, Velda Goodman appeals the trial court's granting of summary judgment in favor of Wells Fargo Bank, N.A. The trial court ruled that Wells Fargo was the holder of the note and the mortgage and that the Goodmans had defaulted on the loan.
On appeal, Velda argues that Wells Fargo was not entitled to summary judgment because there were genuine issues of material fact. Velda contends that the mortgage was void as a matter of law, and therefore, Wells Fargo was not entitled to foreclose on the property. Velda also maintains that Wells Fargo's counsel repeatedly made false representations to the court which should result in sanctions.
Finding no error, we affirm.
On April 29, 2005, Robert Goodman executed and delivered a note to First Magnus Financial Corporation, promising to pay First Magnus the principal sum of $134,826 plus interest in monthly installments. As security for the note, Robert and his wife, Velda, signed the mortgage on their Ozawkie home, which was filed with the Jefferson County Register of Deeds on May 2, 2005. On May 30, 2012, an assignment of the mortgage to Wells Fargo was filed with the Jefferson County Register of Deeds.
The note was endorsed by First Magnus to Wells Fargo. Wells Fargo then endorsed the note “in blank.”
After Robert Goodman passed away, the Goodmans' payments on the loan stopped. On August 28, 2012, Wells Fargo filed this foreclosure action.
In response, Velda filed an answer and numerous counterclaims against Wells Fargo. Velda alleged that Wells Fargo violated the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), and the Kansas Consumer Protection Act (KCPA).
Wells Fargo moved to dismiss Velda's counterclaims. The trial court held two hearings on the motion to dismiss. Ultimately, the trial court granted Wells Fargo's motion to dismiss. The trial court held that Velda had not raised a viable defense or counterclaim to the foreclosure. The court further found that Velda had abandoned the property, that Wells Fargo had possession of the note and the mortgage, and that the Goodmans were in default.
On July 24, 2013, Velda moved to set aside the journal entry dismissing her counterclaims. Specifically, at the hearing on Wells Fargo's motion to dismiss, Velda argued that Wells Fargo's counsel told the court that it had an original copy of the mortgage in Wells Fargo's loan records. Yet, the journal entry did not state that Wells Fargo had possession of the original mortgage.
On August 6, 2013, the trial court held a hearing on Velda's motion to set aside the journal entry. At the hearing, Wells Fargo's counsel corrected her previous statement and told the court that Wells Fargo did not have the original mortgage. Wells Fargo's counsel then told the court that the mortgage and its assignment to Wells Fargo were recorded with the Jefferson County Register of Deeds. The trial court ultimately denied Velda's motion to set aside the journal entry finding that the journal entry correctly reflected the court's rulings.
On September 9, 2013, Wells Fargo moved for summary judgment. Velda moved in opposition to summary judgment and also filed a cross-motion for summary judgment arguing that there was a split with the note and the mortgage, that the mortgage was void due to statutory violations, and that the mortgage was void by rescission.
On November 6, 2013, the court held a hearing on the motions for summary judgment. The court granted Wells Fargo's motion for summary judgment finding that it was the holder of the note, and that the mortgage was properly recorded in Jefferson County, Kansas, and that the Goodmans were in default. The court then denied all of Velda's claims finding that they were without merit.
Velda argued her motion for sanctions against Wells Fargo's attorney for her numerous misrepresentations to the court regarding the location of the mortgage. The trial court denied the motion for sanctions finding that the comments were inadvertent and that counsel properly remedied the misstatements after discovering the error. The court held: “There was no demonstrable evidence to indicate that [counsel] intended to mislead or deceive the Court or invite error.”
The foreclosure sale occurred on April 22, 2014. Velda's redemption rights were extinguished by the court on June 19, 2014.
Velda first argues that there were genuine issues of material fact and that the trial court erred in granting Wells Fargo's motion for summary judgment. Velda contends that Wells Fargo lacked standing to bring the foreclosure suit and also maintains that there was a split between the note and the mortgage.
When the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. K.S.A.2014 Supp. 60–256(c)(2). The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to dispute must be material to the conclusive issues in the case. On appeal, the same rules apply; summary judgment must be denied if reasonable minds could differ as to the conclusions drawn from the evidence. Waste Connections of Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 962, 298 P.3d 250 (2013).
When challenging the moving party's factual contentions, the nonmoving party must “concisely summarize the conflicting testimony or evidence and any additional genuine issues of material fact” with precise references to the relevant portion of the record. Supreme Court Rule 141(b)(1)(C)(i)-(ii) (2014 Kan. Ct. R. Annot. 257). Accordingly, allegations, uncertainty, and “[m]ere speculation [are] insufficient to avoid summary judgment.” Seitz v. Lawrence Bank, 36 Kan.App.2d 283, 290, 138 P.3d 388, rev. denied 282 Kan. 791 (2006). Furthermore, an issue of fact is not genuine unless it has legal controlling force as to the controlling issue. A disputed question of fact which is immaterial to the issue does not preclude summary judgment. In other words, if the disputed fact, however resolved, could not affect the judgment, it does not present a genuine issue for purposes of summary judgment. Northern Natural Gas Co. v. ONEOK Field Services Co., 296 Kan. 906, 934, 296 P.3d 1106, cert. denied 134 S.Ct. 162 (2013) ; Carr v. Vannoster, 48 Kan.App.2d 19, 21, 281 P.3d 1136 (2012). Additionally, to the extent this case involves a jurisdiction question—whether Wells Fargo has standing to bring this foreclosure action—our review is unlimited. Board of Sumner County Comm'rs v. Bremby, 286 Kan. 745, Syl. ¶ 1, 189 P.3d 494 (2008).
See also MetLife Home Loans v. Hansen, 48 Kan.App.2d 213, Syl. ¶ 1, 286 P.3d 1150 (2012).
Therefore, in this case, if there are no genuine issues of material fact (1) regarding Wells Fargo's beneficial interest in the note signed by Robert; (2) regarding Wells Fargo's beneficial interest in the mortgage signed by Robert and his wife, Velda, to secure the Note; and (3) regarding a default on the note, then Wells Fargo is entitled to judgment as a matter of law.
It is undisputed that the Goodmans are in default on the note. Thus, the third condition, or requirement, for foreclosure is met on the undisputed facts. Velda does not challenge that the loan is in default and admits that she does not have a default defense to the foreclosure action. This admission by Velda is sufficient to show that the Goodmans were in default on the note.
It is also undisputed that Wells Fargo is in possession of the original note signed by Robert. Wells Fargo presented the original note in court, and Velda does not take issue with that fact. Instead, Velda maintains that Wells Fargo was not the holder of the mortgage. Velda essentially argues that there was a split between the note and the mortgage because Wells Fargo did not possess the original mortgage.
It is true that if “a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable.” Landmark Nat'l Bank v. Kesler, 289 Kan. 528, 540, 216 P.2d 158 (2009) ; see Mortgage Electronic Registration Systems v. Graham, 44 Kan.App.2d 547, 554, 247 P.3d 223 (2010). Nevertheless, it is also true that “a promissory note and the mortgage securing it are, as a general rule, inseparable.” U.S. Bank NA v. McConnell, 48 Kan.App.2d 892, 906, 305 P.3d 1, rev. denied 298 Kan. 1208 (2013). Additionally, the holder of a note, meaning the person in possession of the note or the person who the note is endorsed to, is entitled to enforce the note even if he or she is not its owner or is in wrongful possession. K.S.A. 84–3–301 ; K.S.A.2014 Supp....
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