KAYSER v. OCWEN LOAN SERVICING, LLC
2:13-cv-05999
D.N.J.Aug 18, 2017Background
- Michael and Barbara Kayser obtained an adjustable-rate note and mortgage on June 10, 2003, originally made payable to Morgan Stanley Dean Witter (successor MSPBNA). Defendants are Morgan Stanley Capital Holdings (MSCH), Ocwen (servicer), and HSBC Bank USA as Trustee for the 2004-2AR Trust.
- MSCH recorded an assignment of the mortgage from MSPBNA on October 18, 2012; HSBC as Trustee recorded a second assignment from MSCH on September 19, 2013. Ocwen began servicing the loan on April 2, 2012.
- Kayser stopped making regular payments around 2011–2012; defendants produced the original note with a signed-in-blank endorsement/allonge and the collateral file showing the note and mortgage.
- Kayser’s amended complaint alleges (1) wrongful collection, (2) quiet title, and (3) fraud/FDCPA violations, all premised on defendants not being the true owners/holders of the note and mortgage.
- Defendants moved for summary judgment; Kayser filed an opposition but submitted no affidavits or admissible evidence to create genuine factual disputes. The court granted summary judgment for defendants and dismissed the amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/ability to collect (ownership/holder status of note) | Kayser: assignments invalid; defendants are not true owners/holders and thus lack right to collect/foreclose | Defendants: produced recorded assignments, original note with signed-in-blank allonge, and servicing records showing possession/control; under NJ law these establish enforceability | Court: Defendants established entitlement to enforce; Kayser produced no admissible evidence to create a factual dispute — dismissal granted |
| Quiet title (dispute over ownership of note/mortgage) | Kayser: title never transferred to the Trust; seeks quiet title/declaratory relief | Defendants: assignments and possession/endorsement evidence show ownership/control; PSAs do not confer rights on borrowers | Court: Borrower lacks standing to challenge interparty assignments/PSA; no competing claim shown — quiet title claim fails |
| Fraud / FDCPA (misrepresentation and unlawful collection) | Kayser: defendants knew they lacked title but still attempted collection; Ocwen made false promises causing damages | Defendants: collection efforts were by note/mortgage owner/servicer; FDCPA likely inapplicable if defendants are holders or collecting on their own behalf | Court: Fraud/FDCPA claims fail for lack of factual proof (and FDCPA faces additional legal hurdles re: who qualifies as a "debt collector") |
| Article III justiciability / preemptive challenge to anticipated foreclosure | Kayser: seeks to preemptively block foreclosure/declaratory relief over ownership/right to collect | Defendants: no foreclosure has been filed; dispute is not sufficiently concrete or imminent | Court: No injury-in-fact or actual controversy shown; Article III jurisdiction lacking as to preemptive relief (alternative merits analysis also favors defendants) |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard; plaintiff must show genuine issue for trial)
- Celotex Corp. v. Catrett, 477 U.S. 317 (moving party may point to absence of evidence; nonmoving must produce admissible evidence)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must present evidence creating genuine issue)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (Article III injury-in-fact requirement)
- Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592 (App. Div. 2011) (ownership/control of debt required to foreclose; NJ law on mortgage enforcement)
- Gennari v. Weichert Co. Realtors, 148 N.J. 582 (1997) (elements of common-law fraud)