Wilson v. Countrywide Home Loans, Inc. Ex Rel. Certificate-Holders of Morgan Stanley ABS Capital I Inc. Trust 2004-NC3 (In Re Wilson)
442 B.R. 10
| Bankr. D. Mass. | 2010Background
- Wilson filed Chapter 13 bankruptcy; Deutsche Bank filed a proof of claim for $244,825.18 secured by Wilson's Mattapan mortgage and alleged prepetition arrearage of $26,467.20.
- Note was originally made by New Century Mortgage; the note was indorsed in blank, making it a bearer instrument; Deutsche Bank alleges it acquired the note on December 31, 2003 and has possessed it since, with temporary possession by Countrywide as servicer.
- Deutsche Bank filed an Assignment of Mortgage from New Century to Deutsche Bank, recorded April 21, 2005; Wilson argues PSA constraints require depositor-channel transfers and that direct assignment bypasses the depositor, potentially invalidating the transfer.
- Wilson sought four counts: (1) DB not holder of note or mortgage, (2) disallowance of DB's claim due to improper filing by Countrywide rather than servicer, (3) accounting for amounts due and disallowance of improper charges, (4) damages for alleged stay violations; the court granted summary judgment for Deutsche Bank on all counts.
- The court held no genuine issues of material fact; Deutsche Bank is holder of the note and owner of the mortgage; the prepetition arrearage is fixed by prior agreement; accounting and stay issues found lacking sufficient basis; the adversary proceeding to be dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Deutsche Bank is holder of the promissory note | Wilson contends signature authenticity and timing create issues; argues note may not have been properly indorsed. | Deutsche Bank asserts blank indorsement made note a bearer instrument and possession makes it holder; timing disputes are immaterial to holder status. | Deutsche Bank is holder of the note. |
| Whether Deutsche Bank has title to the mortgage | Direct assignment bypassing depositor under PSA invalid; transfer invalid. | PSA implications do not render the assignment invalid; even if PSA breached, transfer remains valid and DB holds mortgage. | Deutsche Bank has title to the mortgage. |
| Disallowance of Deutsche Bank's claim (Count II) | Countrywide filed the claim improperly; servicer authority questioned. | Claim filed by Deutsche Bank; no credible evidence that Countrywide filed it instead; proper party identified. | Count II fails; claim properly filed by Deutsche Bank. |
| Accounting for postpetition charges and potential diversion (Count III) | Requests an accounting for postpetition debits/credits and disallowance of improper charges. | No fiduciary duty shown; prepetition arrearage fixed; postpetition accounting not warranted; request appears speculative. | No accounting; counting prepetition arrearage fixed; accounting request denied. |
| Damages for automatic stay violations (Count IV) | Countrywide/Deutsche Bank diverted payments in violation of stay. | Complaint lacks specific diversion allegations; stay violation not pled as actual conduct. | Count IV dismissed for lack of factual pleading. |
Key Cases Cited
- First National Bank of Cape Cod v. North Adams Hoosac Savings Bank, 7 Mass.App.Ct. 790 (Mass. App. Ct. 1979) (holder entitled to payments on note; prima facie show of proof by holder)
- Porter v. Reid, 79 F. Supp. 898 (D. Mass. 1948) (discretion in accounting available for fiduciaries; narrow circumstances)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. Supreme Court 1986) (summary judgment burden-shifting standard)