CPT Asset Backed Certificates, Series 2004-EC1 v. Cin Kham
2012 OK 22
| Okla. | 2012Background
- Appellants Cin Kham and Ngul Liam Cing signed an adjustable-rate note and a mortgage naming MERS as nominee for the lender; Encore Credit Corp. is the lender identified in the mortgage.
- Appellee CPT Asset Backed Certificates, Series 2004-EC1, filed a foreclosure petition after Appellants defaulted on November 1, 2008.
- A default judgment was entered July 31, 2009; a sale confirmation hearing was scheduled for March 9, 2010.
- Appellants moved to vacate, challenging Appellee’s standing to foreclose; the trial court denied the petition to vacate but granted leave to file a writ of prohibition.
- Appellants petitioned this Court for original jurisdiction; the matter was recast as an appeal and later amended; the dispositive issue became whether Appellee had standing to foreclose.
- The Supreme Court reversed and remanded to determine whether Appellee was a person entitled to enforce the note consistent with this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose in Oklahoma | Appellee is holder or entitled to enforce the note | Appellants lack standing due to no indorsements and no ownership proof | Appellee failed to prove standing; case remanded for further proceedings to determine entitlement to enforce the note. |
| Effect of MERS designation on enforceability | MERS can act as mortgagee/participate in assignment | MERS cannot enforce the note because it did not hold the indorsed note | Not decided as dispositive; remand to evaluate enforceability with proper documentation. |
| Record requirement for note presentation/indorsements | Record shows ownership rights and delivery of note; indorsements not required for enforceability in this record | No indorsement or proper delivery shown to establish enforceability | Court required to assess whether plaintiff is entitled to enforce the note; default judgment reversed for further proceedings. |
| Real-party-in-interest versus standing | Plaintiff is proper party to seek adjudication; not a jurisdictional standing issue | Issue raised too late and should have been raised earlier as a real-party-in-interest concern | Waived due to failure to raise before judgment; majority’s focus on standing was improper. |
Key Cases Cited
- Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 159 P.2d 717 (Okla. 1945) (ownership of the note controls; assignment of mortgage follows note; no bifurcation of note and mortgage)
- Engle v. Federal Nat. Mortg. Ass’n, 300 P.2d 997 (Okla. 1956) (ownership of the note controls; mortgage as security)
- Prudential Ins. Co. of America v. Ward, 274 P.2d 648 (Okla. 1929) (mortgage securing a negotiable note is an incident to the note; endorsement and delivery carry the mortgage)
- BAC Home Loans Servicing, L.P. v. White, 256 P.3d 1014 (Okla. Civ. App. 2011) (ownership of the note carries with it ownership of the mortgage; cannot bifurcate)
- Landmark Nat. Bank v. Kesler, 216 P.3d 158 (Kan. 2009) (MERS-related assignments lack enforceable rights without note ownership)