Title: Deutsche Bank National Trust Co. v. Richardson

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

DEUTSCHE BANK NATIONAL TRUST COMPANY v. RICHARDSON2012 OK 15Case Number: 109999Decided: 02/28/2012IN THE 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.CORY L. RICHARDSON, 
Defendant/Appellant,andERNESTINE RICHARDSON A/K/A ERNESTINE V. 
RICHARDSON, JOHN DOE, JANE DOE, ARGENT MORTGAGE COMPANY, LLC, CITIFINANCIAL 
SERVICES, INC., Defendants.
ON APPEAL FROM THE DISTRICT COURTOF OKLAHOMA 
COUNTYHONORABLE DANIEL OWENS, DISTRICT JUDGE
¶0 Appeal of a summary judgment granted to Deutsche Bank National Trust 
Company, as trustee, against Cory L. Richardson on June 13, 2011. This Court 
retained the matter on September 19, 2011. Richardson appeals the granting of 
Summary Judgment asserting Deutsche Bank National Trust Company, as trustee, did 
not have standing to bring the action.
REVERSED AND REMANDED WITH INSTRUCTIONS
Steve A. Heath, Matthew Hudspeth, BAER, TIMBERLAKE, COULSON & CATES, 
P.C., Tulsa, Oklahoma, for Plaintiff/AppelleeJon H. Patterson, BRADLEY ARANT 
BOULT CUMMINGS LLP, Birmingham Alabama, for Plaintiff/Appellee.Steven W. 
Crow, Daniel Delluomo, DELLUOMO & CROW, Oklahoma City, Oklahoma, for 
Defendant/Appellants.
COMBS, J.
FACTUAL AND PROCURAL HISTORY
¶1 In a petition filed on October 15, 2010, Deutsche Bank National Trust 
Company, as trustee, (hereinafter Deutsche Bank), alleging to be the "present 
holder" of the note and mortgage, initiated a foreclosure action against Cory L. 
Richardson (hereinafter Richardson). A review of the note, filed as an exhibit 
to the Motion for Summary Judgment, filed May 26, 2011, reveals an undated blank 
indorsement. This blank indorsement was filed with the lower court for the first 
time in the Motion for Summary Judgment. Nowhere in the original petition did 
Deutsche Bank reference the undated blank indorsement. 
¶2 WMC Mortgage Corporation (hereinafter WMC) was the original lender. 
Deutsche Bank filed with the County Clerk of Oklahoma County, a document 
entitled "Assignment of Real Estate Mortgage" on February 22, 2011. This 
document, which was dated February 15, 2011, claimed the assignment to be 
effective as of December 28, 2010. This was four months after the filing of the 
petition to foreclose.1 Additionally, this Assignment of Mortgage executed by 
Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for WMC and 
its successors and assigns, purportedly transferred the grantor's interest to 
Deutsche Bank as the trustee of WMC and was signed by a Vice President of MERS, 
Inc. There was only a minimal reference to the "note, debts and claims thereby 
secured. . ." in this assignment of mortgage. A summary judgment was granted in 
Deustche Bank's favor against Richardson, dated July 1, 2011, signed by the 
trial judge on September 19, 2011, and filed on September 21, 2011. All were 
memorialized by a final journal entry of judgment order. Richardson appealed 
this summary judgment asserting Deutsche Bank failed to demonstrate 
standing.
STANDARD OF REVIEW
¶3 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
¶4 Appellant argues Appellee does not have standing to bring this foreclosure 
action. Although Appellee has argued it holds the note, the record demonstrates 
conflicting evidence as to when Appellee became entitled to enforce the note. 
Appellee has presented evidence of an indorsement in blank, not at the time of 
filing the original petition (October 15, 2010), but attached as an exhibit to 
the motion for summary judgment filed May 26, 2011. The purported "assignment of 
mortgage" was filed on February 15, 2011, claiming to be effective December 28, 
2010, four months after the filing of the original petition to foreclose. 
¶5 The issue presented to this Court is 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).2
¶6 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 717.3 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. 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.
¶7 To demonstrate you are the "holder" of the note you must establish 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 allonge5 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 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 that 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). See also, 
12A O.S. 2001, § 
3-203. 
¶9 In the present case, Appellee has presented evidence in support of the 
motion for summary judgment of an indorsed-in-blank note, and an "Assignment of 
Mortgage" both arguably obtained after the filing of the petition. 
Appellee must prove it is the holder of the note or the nonholder in possession 
who has the rights of a holder prior to the filing of the foreclosure 
proceeding. In the present matter the timeliness of the transfer is a disputed 
fact issue. Since Deutsche Bank did not file the blank indorsement until it 
filed its motion for summary judgment it is impossible to determine from the 
record when Deutsche Bank acquired its interest in the underlying note.
¶10 The assignment of a mortgage is not the same as an assignment of the 
note. If a person is trying to establish they are a nonholder in possession who 
has the rights of a holder, they must bear the burden of establishing their 
status as a nonholder in possession with the rights of a holder. Appellee must 
establish delivery of the note as well as the purpose of that delivery. In the 
present case, it appears Appellee is trying to use the assignment of mortgage in 
order to establish the purpose of delivery. The assignment of mortgage purports 
to transfer "For value received, the undersigned, Mortgage Electronic 
Registration Systems, Inc., as nominee for WMC and its successors and assigns 
does hereby assign, transfer and set over unto Deutsche Bank National Trust 
Company, as Trustee of MASTR 2007-02, that certain real estate mortgage dated 
August 3, 2006, granted by Cory L. Richardson and Ernestine Richardson, a/k/a 
Ernestine V. Richardson, husband and wife "together with the note, debts and 
claims thereby secured, covering the following described real estate. . ." We do 
not address the issue of whether MERS, as nominee of WMC had the authority to 
assign the note in question as the date of the assignment is well after the 
filing of the petition.
¶11 Appellee must show it became a "person entitled to enforce" prior 
to the filing of the foreclosure proceeding. There is a question of fact as to 
when and if this occurred, and thus summary judgment is not appropriate. 
Therefore, we reverse the granting of summary judgment by the trial court and 
remand back for further determinations. If it is determined Deutsche Bank became 
a person entitled to enforce the note as either a holder or nonholder in 
possession who has the rights of a holder after the foreclosure action was 
filed, then the case may be dismissed without prejudice and the action 
may be re-filed in the name of the proper party.
CONCLUSION
¶12 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 to have the 
proper supporting documentation in hand when filing suit, showing the history of 
the note, so that the defendant is duly apprised of the rights of the plaintiff. 
This is accomplished by showing 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 and therefore, 
this Court's decision in no way releases or exonerates the debt owed by the 
defendants on this home. 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
¶13 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, 
JJ.
¶14 CONCUR IN PART; DISSENT IN PART: GURICH (by separate writing), 
WINCHESTER (joins Gurich, J.), JJ.
¶15 RECUSED: COLBERT, V.C.J.
FOOTNOTES
1 Appellee filed an amended 
petition on January 28, 2011, which added additional defendants but made no 
change in the allegations as between the Appellant and Appellee. 
2 The concurring in part; dissenting in part 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. 
3 This opinion was rendered 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)). 
4 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205. 

5 According to Black's Law Dictionary (9th ed. 2009) an allonge is "[a] slip of paper sometimes 
attached to a negotiable instrument for the purpose of receiving further 
indorsements when the original paper is filled with indorsements." See, 
12A O.S. 2001, § 
3-204(a). 

GURICH, J., with whom WINCHESTER, J. joins, concurring in part and dissenting 
in part: 
¶1 I concur that there are fact issues present and summary judgment, under 
the evidentiary materials, is improper in this case.1
¶2 However, I respectfully dissent to the majority's statement 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." See Majority Op. ¶ 5. Gill v. First Nat. Bank & 
Trust Co., 1945 OK 
181, 159 P.2d 717.2 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).
¶3 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, 727 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). 
¶4 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). 
¶5 In this case, the facts demonstrate that Defendant raised this issue in 
the Answer as well as in the Response to Motion for Summary Judgment. As such, 
the issue was properly appealed. 
¶6 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).3 Mortgage foreclosures, like other civil actions, allow 
the parties to continue to investigate and discover evidence up until the time 
of judgment. 
¶7 While I agree that questions of fact exist so that summary judgment was 
improper in this case, 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. 
FOOTNOTES
1 The record indicates that 
the note presented at summary judgment was not indorsed. As such, a question of 
fact remains as to whether Plaintiff was the holder of the note, summary 
judgment was improper in this case. However, on remand, the trial court, rather 
than dismiss the petition, may allow the Plaintiff to amend its petition. 
HSBC Bank USA v. Lyon, 2012 OK 10, ¶ 1, __P.3d__. 
2 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. 
3 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.