Case Title: Deutsche Bank National Trust Co. v. Matthews

Citation: 

Docket Number: 108427

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2012-02-28T00:00:00Z

Document:
DEUTSCHE BANK NATIONAL TRUST COMPANY v. MATTHEWS2012 OK 14Case Number: 108427Decided: 02/28/2012THE SUPREME COURT OF THE STATE OF OKLAHOMA
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN 
THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR 
WITHDRAWAL. 

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, 
Plaintiff/Appellee,v.THERON MATTHEWS, 
Defendant/Appellant,andCHRISTINA A. MATTHEWS; JOHN DOE; JANE DOE; AVB 
f/k/a ARKANSAS VALLEY STATE BANK; and CHASE BANK USA, N.A., Additional 
Defendants.
ON APPEAL FROM THE DISTRICT COURT OF CREEK COUNTYHONORABLE 
LAWRENCE W. PARISHDISTRICT JUDGE
¶0 Appeal of a partial summary judgment granted in Deutsche Bank National 
Trust Company's favor against the Matthewses on August 20, 2009, memorialized by 
minute order. A Partial Journal Entry of Judgment was filed on May 26, 2010. The 
Matthews appeal this summary judgment arguing Deutsche Bank National Trust 
Company as Trustee for J.P. Morgan Mortgage Acquisition Trust 2007-CH3 failed to 
demonstrate standing.
REVERSED AND REMANDED WITH INSTRUCTIONS
Theron T. Matthews, Pro Se, Mounds, Oklahoma, for 
Defendant/Appellant.Sally E. Garrison, BAER, TIMBERLAKE, COULSON & 
CATES, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee.
COMBS, J.
FACTUAL AND PROCURAL HISTORY
¶1 In a petition filed on January 14, 2009, Deutsche Bank National Trust 
company, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2007-CH3 
(hereinafter Deutsche Bank) filed a foreclosure action against Theron Matthews 
(Matthews). Deutsche Bank claimed at that time to hold the note and mortgage. 
Deutsche Bank claims the note and mortgage were indorsed in blank. However from 
the face of the note attached to the Petition, no such indorsement is found. 
Chase Bank USA, N.A., was the original lender. Deutsche Bank, filed on June 18, 
2009, a document entitled "Assignment of Real Estate Mortgage," dated June 9, 
2009, with the County Clerk of Creek County. This was some six months 
after the filing of the foreclosure proceeding. A partial summary 
judgment granted in Deutsche Bank's favor against the Matthews on August 20, 
2009, was memorialized by minute order. A Partial Journal Entry of Judgment was 
filed on May 26, 2010. The Matthewses appeal this summary judgment arguing 
Deutsche Bank failed to demonstrate standing.
STANDARD OF REVIEW
¶2 An appeal on summary judgment comes to this court as a de novo 
review. Carmichael v. Beller, 1996 OK 48, ¶2, 914 P.2d 1051, 1053. All inferences and conclusions 
are to be drawn from the underlying facts contained in the record and are to be 
considered in the light most favorable to the party opposing the summary 
judgment. Rose v. Sapulpa Rural Water Co., 1981 OK 85, 621 P.2d 752. Summary judgment is 
improper if, under the evidentiary materials, reasonable individuals could reach 
different factual conclusions. Gaines v. Comanche County Medical 
Hospital, 2006 OK 
39, ¶4, 143 P.3d 203, 205.
ANALYSIS
¶3 Appellant argues Appellee does not have standing to bring this foreclosure 
action. The note attached to Deutsche Bank's motion for summary judgment, filed 
June 25, 2009, contained two allonges. These were not included with the note 
that was attached to its petition filed on January 14, 2009. Both allonges are 
dated January 9, 2007. The first allonge is a special indorsement made by the 
lender, Chase Bank USA, N.A., and is payable to Chase Home Finance, LLC. It is 
signed by A. Young, assistant secretary. The second allonge is a blank 
indorsement, made by Chase Home Finance, LLC, and is also signed by A. Young, 
assistant secretary. Deutsche Bank states in its motion for summary judgment 
that it brings this action in its capacity as the holder and owner of the note 
and mortgage at issue. However, in the same paragraph Deutsche Bank states it 
acquired Chase Bank USA, N.A.'s interest in the note and mortgage 
subsequent to the filing of this action. Deutsche Bank also attached an 
affidavit by an officer of Chase Home Finance, LLC, executed May 6, 2009. The 
officer merely states Deutsche Bank is the current holder of the note and 
mortgage.
¶4 The crux of the entire issue presented to this Court is the issue of 
standing. This Court has previously held:
Standing, as a jurisdictional question, may be correctly raised at any level 
of the judicial process or by the Court on its own motion. This Court has 
consistently held that standing to raise issues in a proceeding must be 
predicated on interest that is "direct, immediate and substantial." Standing 
determines whether the person is the proper party to request adjudication of a 
certain issue and does not decide the issue itself. The key element is whether 
the party whose standing is challenged has sufficient interest or stake in the 
outcome.
Matter of the Estate of Doan, 1986 OK 15, ¶7, 727 P.2d 574, 576. In Hendrick v. Walters, 
1993 OK 
162, ¶ 4, 865 P.2d 1232, 1234, this Court also held:
Respondent challenges Petitioner's standing to bring the tendered 
issue. Standing refers to a person's legal right to seek relief in a judicial 
forum. It may be raised as an issue at any stage of the judicial process by 
any party or by the court sua sponte. (emphasis original)
Furthermore, in Fent v. Contingency Review Board, 2007 OK 27, footnote 19, 163 P.3d 512, 519, this Court stated "[s]tanding 
may be raised at any stage of the judicial process or by the court on its own 
motion." Additionally in Fent, this Court stated:
Standing refers to a person's legal right to seek relief in a judicial forum. 
The three threshold criteria of standing are (1) a legally protected interest 
which must have been injured in fact- i.e., suffered an injury which is 
actual, concrete and not conjectural in nature, (2) a causal nexus between the 
injury and the complained-of conduct, and (3) a likelihood, as opposed to mere 
speculation, that the injury is capable of being redressed by a favorable court 
decision. The doctrine of standing ensures a party has a personal stake in the 
outcome of a case and the parties are truly adverse.
Fent v. Contingency Review Board, 2007 OK 27, ¶7, 163 P.3d 512, 519-520. In essence, a plaintiff who 
has not suffered an injury attributable to the defendant lacks standing to bring 
a suit. And, thus, "standing [must] be determined as of the commencement of 
suit." Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n.5, 112 S. Ct. 2130, 2142, 119 L. Ed. 351 (1992).1 
¶5 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate 
it has a right to enforce the note and, absent a showing of ownership, the 
plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma 
City, 1945 OK 
181, 159 P.2d 717.2 An Assignment of the mortgage, however, is of no 
consequence because under Oklahoma law, "[p]roof of ownership of the note 
carried with it ownership of the mortgage security." Engle v. Federal Nat. 
Mortg. Ass'n, 1956 OK 
176, ¶7, 300 P.2d 997, 999. Therefore, in Oklahoma it is not possible to bifurcate the 
security interest from the note. BAC Home Loans Servicing, L.P. v. White, 
2011 OK CIV APP 
35, ¶ 10, 256 P.3d 1014, 1017. Because the note is a 
negotiable instrument, it is subject to the requirements of the UCC. Thus, a 
foreclosing entity has the burden of proving it is a "person entitled to enforce 
an instrument" by showing it was "(i) the holder of the instrument, (ii) a 
nonholder in possession of the instrument who has the rights of a holder, or 
(iii) a person not in possession of the instrument who is entitled to enforce 
the instrument pursuant to Section 12A-3-309 or subsection (d) of Section 
12A-3-418 of this title." 12A O.S. 2001, § 3-301.
¶6 The note, in which the Matthews promised to pay a sum certain to the order 
of Lender, is a negotiable instrument pursuant to 12A O.S. 2001 §3-104(a). It may be indorsed 
specially to be payable to an identified person or it may be indorsed in blank 
to be payable to bearer. 12A O.S. 2001, § 3-205(a) and (b)3. 
¶7 To show you are the "holder" of the note you must prove you are in 
possession of the note and the note is either "payable to bearer" (blank 
indorsement) or to an identified person that is the person in possession 
(special indorsement).4 Therefore, both possession of the note and an 
indorsement on the note or attached allonge are required in order for one to be 
a "holder" of the note.
¶8 To be a "nonholder in possession who has the rights of a holder" you must 
be in possession of a note that has not been indorsed either by special 
indorsement or blank indorsement. Basically, no negotiation has occurred because 
the person now in possession did not become a holder by lack of the note being 
indorsed as mentioned. Negotiation is the voluntary or involuntary transfer of 
an instrument by a person other than the issuer to a person who thereby becomes 
its holder. 12A O.S. 2001, § 
3-201. Transfer occurs when the instrument is delivered by a person other than 
its issuer for the purpose of giving to the person receiving delivery the right 
to enforce the instrument. 12A O.S. 2001, § 3-203. Delivery of the note 
would still have to occur even though there is no negotiation. Delivery is 
defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b)(15). The transferee 
would then be vested with any right of the transferor to enforce the note. 
12A O.S. 2001, § 
3-203(b). Some jurisdictions have held without holder status and therefore the 
presumption of a right to enforce, the possessor of the note must demonstrate 
both the fact of the delivery and the purpose of the delivery of the note to the 
transferee in order to qualify as the person entitled to enforce. In re Veal, 
450 B.R. 897, 912 (B.A.P. 9th Cir. 2011). This 
would include showing the note was transferred for the purpose of giving to the 
person receiving delivery the right to enforce the instrument. 12A O.S. 2001, § 3-203. 
¶9 Here, Deutsche Bank is trying to show it is a "holder" of the note and not 
that it is a "nonholder in possession who has the rights of a holder." If 
Deutsche was trying to establish it was a "nonholder in possession who has the 
rights of a holder" an Assignment of Real Estate Mortgage, like the one attached 
to its motion for summary judgment and which also expressly purports to transfer 
the note, might be evidence of the purpose of a transfer if possession of the 
note was established. However, the Assignment of Real Estate Mortgage attached 
to its motion for summary judgment is executed on June 9, 2009, by a Vice 
President of Chase Bank USA, N.A. The note attached to its motion for summary 
judgment, however, shows an allonge from Chase Bank USA, N.A., to Chase Home 
Finance, LLC. Further, this purported transfer of the note occurred six months 
after the action was commenced. Deutsche Bank also by its own admission states 
it acquired its interest in the note and mortgage subsequent to the filing of 
this action.
¶10 A plaintiff must show it became a "person entitled to enforce" the note 
prior to the filing of the foreclosure proceeding. There is no evidence 
showing Deutsche Bank was a person entitled to enforce the note prior to 
the filing of the foreclosure proceeding. In fact, by its own admission it 
acquired its interest subsequent to the filing of the action. Therefore, we 
reverse the granting of summary judgment by the trial court with instructions to 
dismiss the case without prejudice. 
CONCLUSION
¶11 It is a fundamental precept of the law to expect a foreclosing party to 
actually be in possession of its claimed interest in the note, and have the 
proper supporting documentation in hand when filing suit, showing the history of 
the note, so the defendant is duly apprised of the rights of the plaintiff. This 
may be accomplished by demonstrating the party is a holder of the instrument or 
a nonholder in possession of the instrument who has the rights of a holder, or a 
person not in possession of the instrument who is entitled to enforce the 
instrument pursuant to 12A O.S. 2001, § 3-309, or 12A O.S. 2001, § 3-418. Likewise, for the 
homeowners, absent adjudication on the underlying indebtedness, the dismissal 
cannot cancel their obligation arising from an authenticated note, or insulate 
them from foreclosure proceedings based on proven delinquency. See, U.S. Bank 
National Association v. Kimball, 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 
81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).
REVERSED AND REMANDED WITH INSTRUCTIONS
¶12 CONCUR: TAYLOR (This Court's decision in no way releases or exonerates 
the debt owed by the defendants on this home.), C.J., KAUGER (joins 
Taylor, J.), WATT, EDMONDSON, REIF, COMBS, JJ.
¶13 DISSENT: WINCHESTER (joins Gurich, J.), GURICH (by separate writing), 
JJ.
¶14 RECUSED: COLBERT, V.C.J. 
FOOTNOTES
1 The dissenting opinion in 
this matter relies upon Justice Opala's concurring opinion in Toxic Waste 
Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906, for the proposition that standing is not 
a jurisdictional question. Justice Opala's concurring opinion was not the 
majority opinion of this Court and as such "a minority opinion has no binding, 
precedential value." 20 Am.Jur. 2d Courts §138.
2 This opinion occurred prior to the enactment of the 
UCC. It is, however, possible for the owner of the note not to be the person 
entitled to enforce the note if the owner is not in possession of the note. (See 
the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, 
APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO 
MORTGAGE NOTES (NOVEMBER 14, 2011)). 
3 12A O.S.2001 §3-205(a) and (b) provide:
(a) If an indorsement is made by the holder of an instrument, whether payable 
to an identified person or payable to bearer, and the indorsement identifies a 
person to whom it makes the instrument payable, it is a "special indorsement". 
When specially indorsed, an instrument becomes payable to the identified person 
and may be negotiated only by the indorsement of that person. The principles 
stated in Section 12A-3-110 of this title apply to special indorsements. 
(b) If an indorsement is made by the holder of an instrument and it is not a 
special indorsement, it is a "blank indorsement". When indorsed in blank, an 
instrument becomes payable to bearer and may be negotiated by transfer of 
possession alone until specially indorsed. 
4 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 
3-205.

GURICH, J., with whom WINCHESTER, J. joins, dissenting: 
¶1 I respectfully dissent. The majority states that "[t]o commence a 
foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to 
enforce the note, and absent a showing of ownership, the plaintiff lacks 
standing," citing Gill v. First Nat. Bank & Trust Co., 
1945 OK 181, 159 P.2d 717.1 See Majority Op. ¶ 5. I agree that in any 
foreclosure action a party must demonstrate it is the proper party to request 
adjudication of the issues. However, the issue of whether a party is the proper 
party to request adjudication of the issues is a real-party-in-interest issue, 
not an issue of "standing," as the majority frames it. See Toxic Waste 
Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906 (Opala, J., concurring). Justice Opala 
framed the issue correctly in Toxic Waste Impact Group: 
Standing in the federal legal system is imbued with a 
constitutional/jurisdictional dimension, while in the body of state law it 
fits under the rubric of ordinary procedure. The U.S. Constitution, 
Article III, has long been held to require that a "case" or "controversy" is 
essential to invoke federal judicial jurisdiction and that a person's competence 
to bring an action is a core component of standing in a case-or-controversy 
inquiry. It is for this reason that standing is an integral part of the 
mechanism for invoking the federal judiciary's power. 
Oklahoma's fundamental law places no restraint on the judiciary's power 
analogous to the federal case-or-controversy requirement. Under the earlier Code 
of Civil Procedure the suit had to be brought by the real party in interest. 
That requirement has always been non-jurisdictional. If a state court proceeded 
to adjudicate a claim pressed by one not in that status, its decision was not 
fraught with jurisdictional infirmity but rather regarded as erroneous for want 
of proof to establish an important element of the claim. An error in this 
category is waivable at the option of the defendant; and, if not asserted on 
appeal, the reviewing court may reach the merits of the case despite a 
plaintiff's apparent lack of standing at nisi prius.
Toxic Waste Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906 (Opala, J., concurring, ¶¶ 2-3) (emphasis 
added).
¶2 The majority in this case cites Hendrick v. Walters, 
1993 OK 162, ¶ 4, 865 P.2d 1232, 1234 and Fent v. Contingency Review 
Board, 2007 OK 
27, n.19, 163 P.3d 512, 519 for the proposition that "standing may be raised at any stage of 
the judicial process or by the court on its own motion." See Majority Op. 
¶ 4. Those cases cite Matter of the Estate of Doan, 1986 OK 15, ¶ 7, 7272 P.2d 574, as authority for this 
proposition. Arguably, however, Doan misstates the law: 
Ever since the Code of Civil Procedure was replaced in 1984 by the Pleading 
Code, our nomenclature for identifying the party entitled to sue, which began to 
follow that of federal jurisprudence, has used "standing" as if it were a 
functional equivalent of the earlier procedural terms of art--real party in 
interest, one with appealable interest, one occupying the aggrieved-party or 
pecuniary-interest status. It was during this transition that one of our 
opinions inadvertently referred to "standing" in terms of a jurisdictional 
requirement, thus creating the misimpression that the term has a jurisdictional 
dimension. Oklahoma's constitution has no case-or-controversy clause. Standing 
is hence to be viewed as an adjective-law concept. The inadvertent reference to 
the contrary should be treated as ineffective to alter standing's true character 
in the body of our procedural law.
. . . .
I concur in today's opinion and in the disposition of the cause. If I were 
writing for the court, I would additionally declare that Doan's 
inadvertent reference to federal law is to be viewed as withdrawn. 
Lujan's tripartite standing test, which we adopt today, must be treated 
as having been received sans its federal jurisdictional baggage. 

See Toxic Waste Impact Group, 1994 OK 148 (Opala, J., concurring ¶ 4). 
¶3 Additionally, both Hendrick and Fent were original actions 
in this Court. As such, "standing" could have been raised at any point by this 
Court sua sponte. However, in a proceeding in District Court, because it is a 
non-jurisdictional issue, failure to assert that the Plaintiff is not the real 
party in interest may be waived. See Liddell v. Heavner, 
2008 OK 6, n.5, 180 P.3d 1191 (Opala, J., majority Op.); see also 
12 O.S. 2012 § 2008(D). 
¶4 In this case, the facts demonstrate that the Defendant argued below that 
Plaintiff did not have a stake in the foreclosure and was not the real party in 
interest. As such, the issue was properly appealed. However, the facts also 
demonstrate that the Plaintiff was in fact the real party in interest and was 
the proper party to pursue the foreclosure. 12 O.S. 2012 § 2017. As such, I would affirm 
the trial court.
¶5 The majority also holds that a foreclosing party must have the "proper 
supporting documentation in hand when filing suit." See Majority 
Op. ¶ 10 (emphasis added). Oklahoma pleading procedure does not require a 
plaintiff to have all evidence necessary to prevail on its claim at the time of 
the filing. Rather, what is required is a "short and plain statement of the 
claim showing that the pleader is entitled to relief." 12 O.S. 2012 § 2008(A) (1). Additionally, 
12 O.S.2012 § 2011(B) (3) provides that an 
attorney filing anything with the court certifies that to "the best of the 
person's knowledge, information and belief, formed after an inquiry reasonable 
under the circumstances . . . the allegations and other factual contentions have 
evidentiary support or, if specifically so identified, are likely to have 
evidentiary support after a reasonable opportunity for further investigation or 
discovery." 12 O.S. 2012 § 
2011(B)(3) (emphasis added).2 
¶6 Mortgage foreclosures, like other civil actions, allow the parties to 
continue to investigate and discover evidence up until the time of judgment. In 
this case, the Plaintiff continued to investigate its claim up until the time of 
summary judgment. At the time of summary judgment it offered sufficient proof to 
the trial court that it had the right to foreclose on the mortgage.3 
¶7 Plaintiff satisfied its burden of proof, the Defendant failed to file any 
response, and the trial court was correct in sustaining the motion and granting 
judgment to the Plaintiff. On appeal where no evidence indicates otherwise, 
there is a presumption that the judgment of the trial court conforms to the 
proof present at the trial. Gilkes v. Gilkes, 1964 OK 28, 389 P.2d 503. I cannot agree with the majority's 
holding that the plaintiff must have the "proper supporting documentation in 
hand when filing suit" because no authority states such and the Oklahoma 
pleading code requires otherwise. The procedure imposed by the majority in this 
case, will result in delay, will not affect the inevitable outcome of 
foreclosure, and will increase the homeowner's debt. 4 
FOOTNOTES
1 In Gill, the 
plaintiff brought an action to foreclose a mortgage on real property. There was 
no discussion in the case of whether the plaintiff had standing to bring the 
action or whether the plaintiff was the real party in interest. In fact, the 
case was tried to the Court, and the appeal turned on the sufficiency of 
evidence presented at trial. The Gill decision stands for the proposition 
that the assignment of the note carries with it an assignment of the mortgage. 
It is not relevant to the standing analysis, nor does it stand for the 
proposition that the plaintiff must prove at the time of filing that it 
has a right to enforce the note. 
2 Likewise, while I agree that the UCC applies in this 
case because the note is a negotiable instrument, the UCC does not require that 
a foreclosing entity prove at the time of filing that it is the person 
entitled to enforce the instrument. 
3 Rule 13 of the Rules for District Courts permits a 
party to file evidentiary material with a motion for summary judgment. The Rule 
sets out a procedure for challenging affidavits that are attached to the motion. 
In this case, the Plaintiff included an affidavit of an officer, verifying that 
Plaintiff was the holder of the mortgage and the Note in question, and no 
challenge was made to that affidavit. Further, the Plaintiff presented a copy of 
the endorsed Note as an exhibit to its Motion for Summary Judgment. 
Defendant/Appellant failed to challenge the authenticity of the original 
document and pursuant to 12 O.S. § 3003 and 12A O.S. §3-308(a), a copy is admissible. 
4 Rather than dismiss the petition, on remand, the trial 
court may allow the Plaintiff to amend its petition. HSBC Bank USA v. 
Lyon, 2012 OK 
10, ¶ 1, __ P.3d __.