Walter J. Mruk, Jr. v. Mortgage Electronic Registration Systems, Inc.
2013 R.I. LEXIS 163
| R.I. | 2013Background
- In April 2006 Mruk executed a note to Dollar Mortgage Corp. (DMC) secured by a mortgage naming MERS as mortgagee/nominee for DMC; the note was endorsed to IndyMac and later endorsed in blank.
- IndyMac failed in 2008; OneWest acquired IndyMac’s assets and servicing rights; Deutsche Bank later acted as holder/custodian for the note.
- MERS assigned the mortgage to FNMA in March 2010; Mruk defaulted and FNMA foreclosed and purchased the property at a 2010 foreclosure sale.
- Mruk sued in Superior Court (declaratory relief, quiet title, negligent misrepresentation), challenging the mortgage assignment, the endorsement, and the foreclosure’s validity; defendants moved for summary judgment and submitted an affidavit from IndyMac/OneWest VP Charles Boyle.
- The trial justice granted summary judgment for defendants, finding no genuine factual disputes and that FNMA lawfully foreclosed; Mruk appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge mortgage assignment | Mruk argued he could challenge the MERS→FNMA assignment though not a party to it | Defendants argued strangers to a contract lack standing to challenge assignments | Court held mortgagors have limited standing to challenge assignments to the extent needed to contest the foreclosing entity’s authority to foreclose |
| Validity of MERS’s authority to assign/foreclose where MERS did not hold the note | Mruk: MERS could not transfer legal title or foreclose because it was not note holder | Defendants: Mortgage granted MERS and successors the power of sale; assignor can transfer those rights | Court held MERS could hold legal title and exercise/assign the power of sale; assignment to FNMA effective |
| Authenticity/validity of assignment signature (Andrew Harmon) | Mruk: signature appears inauthentic; Harmon lacked authority | Defendants: assignment notarized; plaintiff submitted only nonexpert, inconclusive affidavits | Court held plaintiff failed to produce competent expert evidence to create a genuine issue of fact; assignment treated as valid |
| Admissibility/sufficiency of Boyle affidavit | Mruk: Boyle’s affidavit lacked foundation and personal knowledge | Defendants: Boyle was a OneWest vice president familiar with records and attested to documents | Court held Boyle laid adequate foundation; his affidavit competent and unopposed by contrary evidence |
Key Cases Cited
- Bucci v. Lehman Bros. Bank, FSB, 68 A.3d 1069 (R.I. 2013) (upholding that MERS may hold legal title and exercise the power of sale; note and mortgage need not be held by same entity)
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (mortgagors may have standing to challenge mortgage assignments when necessary to contest the foreclosing party’s authority)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (foundational standing requirements: injury in fact, causation, redressability)
- DePetrillo v. Belo Holdings, Inc., 45 A.3d 485 (R.I. 2012) (general rule that strangers to contracts lack standing to challenge them)
- Shappy v. Downcity Capital Partners, Ltd., 973 A.2d 40 (R.I. 2009) (where facts permit only one reasonable inference, issue may be decided as matter of law)