Deutsche Bank National Trust Co. v. Brock
430 Md. 714
| Md. | 2013Background
- Brock challenged the power of Deutsche Bank, BAC, and Substitute Trustees to foreclose on her home.
- BAC held the Note with a blank indorsement and asserted authority to foreclose under the Pooling and Servicing Agreement.
- The Trust argues ownership of the Note lies with the Trust, IMPAC as Master Servicer, and BAC as sub-servicer; BAC possesses the Note.
- The Substitute Trustees commenced foreclosure; Brock sought injunctive and declaratory relief.
- Circuit Court granted summary judgment in favor of Petitioners; Court of Special Appeals reversed; this Court granted certiorari to resolve enforcement rights.
- This opinion holds BAC is entitled to enforce the Note, and that Trust existence, though disputed, is not material to the outcome.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is BAC a holder entitled to enforce the Note despite the Trust’s existence? | Brock argues the Trust ownership/disputes render BAC unenforceable. | BAC/IMPAC contend the indorsements and possession make BAC the holder entitled to enforce. | Yes; BAC is a holder entitled to enforce the Note. |
| Does the Trust’s existence affect authority to appoint Substitute Trustees or foreclose? | If the Trust is nonexistent, the Deed of Appointment may be invalid. | Authority to appoint stems from Deed of Appointment signed as agent/attorney; Trust status is irrelevant. | No; Trust existence is not material to enforcement authority. |
| Does evidence of ownership status (Trust vs. holder) defeat summary judgment on enforcement rights? | Ownership dispute should preclude summary judgment. | Enforcement rights attach to the holder; ownership disputes do not bar enforcement. | No; holder rights control; summary judgment proper. |
| Were there material disputes about pre-foreclosure steps, duties, or notice that could defeat foreclosure? | Brock raised concerns about notice and fiduciary duties of Trustees. | These issues were not properly raised or could be decided regardless of the Trust’s existence. | Not material to the decision; the primary issue is enforceability by BAC. |
Key Cases Cited
- Anderson v. Burson, 424 Md. 232 (Md. 2011) (enforcement rights of a holder vs. nonholder in possession; indorsements matter)
- The Great Atlantic & Pacific Tea Co. v. Imbraguglio, 346 Md. 573 (Md. 1997) (owner vs. holder distinction; transfer history rules)
- Svrcek v. Rosenberg, 203 Md.App. 705 (Md. 2012) (note ownership/enforcement rights; transfer and possession)
- In re Veal, 450 B.R. 897 (Bankr. D. Md. 2011) (holder vs. owner; enforcement rights under Article 3)
- SMS Financial, LLC v. ABCO Homes, Inc., 167 F.3d 235 (5th Cir. 1999) (holder vs. owner distinction in enforcement)
- In re Walker, 466 B.R. 271 (Bankr. E.D. Pa. 2012) (enforcement rights of holder vs. owner in bankruptcy)