94 A.3d 523
R.I.2014Background
- In 2006 Kenneth and Olivia Ingram borrowed $212,500 from Loancity, granting a mortgage naming MERS as nominee with an express contractual right to foreclose.
- Loancity endorsed the note to IndyMac, which (according to defendants) later transferred an endorsement in blank to Deutsche Bank; servicing moved to OneWest after IndyMac’s collapse.
- In November 2009 MERS assigned the mortgage to Deutsche Bank, which by then held the note and mortgage; plaintiffs defaulted and Deutsche Bank foreclosed in March 2010, purchasing the property.
- Plaintiffs filed suit in April 2010 seeking declaratory relief and to quiet title; defendants moved under Rule 12(c), and the motion was converted to summary judgment after parties submitted materials outside the pleadings.
- The Superior Court granted summary judgment for defendants; plaintiffs appealed, arguing improper conversion to summary judgment, challenges to MERS’s/Deutsche Bank’s authority, invalid endorsement, and defective foreclosure notice/conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rule 12(c) motion was properly converted to Rule 56 | Ingram: conversion occurred without proper notice/opportunity to present evidence | Defendants: parties had submitted and relied on materials outside pleadings; conversion appropriate | Court: conversion proper; plaintiffs had notice and had introduced outside materials |
| Whether MERS had power to foreclose as nominee | Ingram: status/power of MERS is a factual issue | Defendants: mortgage grants MERS contractual power of sale as a matter of law | Court: MERS had statutory/contractual power of sale as a matter of law (Bucci controlling) |
| Whether assignment to Deutsche Bank was valid and conferred power to foreclose | Ingram: assignment void, so Deutsche Bank lacked authority | Defendants: assignee acquires MERS’s rights; valid assignment gave Deutsche Bank power of sale | Court: assignment effective; assignee acquired MERS’s rights (Mruk controlling) |
| Whether endorsement/possession of the note and the foreclosure notice were valid | Ingram: endorsement in blank may be invalid; foreclosure notice/conduct defective | Defendants: endorsements in blank valid; Deutsche Bank held both note and mortgage; OneWest properly provided notice | Court: unsupported attack on endorsement insufficient; Deutsche Bank held note and mortgage; foreclosure was properly noticed and conducted |
Key Cases Cited
- Bucci v. Lehman Brothers Bank, FSB, 68 A.3d 1069 (R.I. 2013) (mortgage grant to MERS as nominee includes contractual right to foreclose)
- Mruk v. Mortgage Electronic Registration Systems, Inc., 82 A.3d 527 (R.I. 2013) (assignee of MERS acquires its power of sale; challenges to endorsements in blank require evidence)
- Beauregard v. Gouin, 66 A.3d 489 (R.I. 2013) (standard of review for summary judgment and viewing evidence for nonmoving party)
- Lavoie v. North East Knitting, Inc., 918 A.2d 225 (R.I. 2007) (summary judgment affirmance where nonmoving party fails to show essential element)
- Haley v. Town of Lincoln, 611 A.2d 845 (R.I. 1992) (purpose and scope of Rule 12(c) motion)
- Wilson v. HSBC Mortgage Services, Inc., 744 F.3d 1 (1st Cir. 2014) (discussing standing to challenge mortgage assignment; persuasive on void vs. voidable assignment)