Title: Deutsche Bank National Trust Co. v. Byrams

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

DEUTSCHE BANK NATIONAL TRUST COMPANY v. BYRAMS2012 OK 4Case Number: 108545Decided: 01/17/2012THE 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 IN TRUST 
FOR THE BENEFIT OF THE CERTIFICATE HOLDERS FOR ARGENT SECURITIES INC., 
ASSET-BACKED PASS THROUGH CERTIFICATES, SERIES 2006-W2, 
Plaintiff/Appellee,v.JEVESTER BYRAMS, JR. and NATACHA BYRAMS, ET AL 
Defendant/Appellant,
ON APPEAL FROM THE DISTRICT COURT OF CREEK COUNTYHONORABLE 
LAWRENCE W. PARISHDISTRICT JUDGE
¶0 Appeal of a summary judgment granted in Deutsche Bank National Trust 
Company's favor against the Byramses on May 11, 2010. The Byramses filed a 
petition and motion to vacate, as well as, requests to stay any proceedings 
regarding the property. The parties appeared before the trial court on June 15, 
2010, and the petition, motion and other requests were denied. The order was 
filed on July 6, 2010. The Byrams appealed on July 28, 2010, and this Court 
retained the matter on April 21, 2011.
REVERSED AND REMANDED WITH INSTRUCTIONS
Phillip A. Taylor, TAYLOR & ASSOCIATES, Broken Arrow, Oklahoma, for 
Defendant/Appellants.A. Grant Schwabe, KIVELL, RAYMENT AND FRANCIS, P.C., 
Tulsa, Oklahoma, for Plaintiff/Appellee.
COMBS, J.
FACTUAL AND PROCURAL HISTORY
¶1 In a petition filed on December 8, 2009, Deutsche Bank National Trust 
company, as Trustee in Trust for the benefit of the Certificate Holders for 
Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 
2006-W2,claiming to be the present holder of the note (hereinafter Deutsche 
Bank) filed a foreclosure action against the Byramses. Deutsche Bank claimed at 
that time to hold the note and mortgage having received due assignment through 
mesne assignments of record or conveyance via mortgage servicing transfer. A 
review of the note shows no indorsement. Argent Mortgage Company, LLC, was the 
original lender. In its brief in support of motion for summary judgment, filed 
March 9, 2010, Deutsche Bank attached a document entitled "Assignment of 
Mortgage." This assignment of mortgage was acknowledged on January 12, 2010, and 
stamped as being recorded with the County Clerk of Tulsa County on January 26, 
2010. This was over one month after the filing of the foreclosure 
proceeding (December 8, 2009). Additionally, this Assignment of Mortgage, from 
Argent Mortgage Company, LLC, by Citi Residential Lending, Inc., made to 
plaintiff, Deutsche Bank as the trustee of Argent Mortgage Company, LLC, was 
signed by Citi Residential Lending, Inc. Both the assignor and assignee list the 
same address, "c/oAmerican Home Mtg Servicing, Inc. 1525 S. Beltline Rd, 
Coppell, TX 75019." A summary judgment granted in Deutsche Bank's favor against 
the Byrams on May 11, 2010, memorialized a final journal entry of judgment 
order. A petition for new trial to vacate the final journal entry of judgment, 
and motion to dismiss plaintiff's petition for lack of standing was filed on May 
21, 2010, which was denied by order on June 28, 2010, by the trial court. The 
Byrams appeal this summary judgment arguing Deutsche Bank National Trust Company 
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, 631 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. Although Appellee has argued it holds the note, there is no evidence in 
the record supporting it is a holder of the note. The face of the note does not 
indicate it was indorsed and the purported "assignment of mortgage" was filed 
after the filing of the foreclosure proceedings. 
¶4 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).
¶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 717.1 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 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).2 Therefore, both possession of the note and an 
indorsement on the note or attached allonge3 are required in order for one to be a "holder" of the 
note.
¶7 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. The record in this case reflects the note has 
not been indorsed. 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 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. 
¶8 In the present case, Appellee has only presented evidence of an unindorsed 
note and an "Assignment of Mortgage." Without an indorsement on the note the 
Appellee cannot be a holder of the note. Therefore, from the record presented to 
this Court, the Appellee must assert it is a nonholder in possession who has the 
rights of a holder. 
¶9 The assignment of a mortgage is not the same as an assignment of the note. 
If a person is trying to establish it is a nonholder in possession who has the 
rights of a holder it must bear the burden of establishing its 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 "the following described mortgage, securing the payment of a certain 
promissory note(s) for the sum listed below, together with all rights therein 
and thereto, all liens created or secured thereby, all obligations therein 
described, the money due and to become due thereon with interest, and all rights 
accrued or to accrue under such mortgage." This language has been determined by 
other jurisdictions to not effect an assignment of a note but to be useful only 
in identifying the mortgage. Therefore, this language is neither proof of 
transfer of the note nor proof of the purpose of any alleged transfer. See, 
In re Veal, 450 B.R. 897, 905 (B.A.P. 9th Cir. 
2011).
¶10 Appellee must show it became a "person entitled to enforce" prior 
to the filing of the foreclosure proceeding. In the present case, there is a 
question of fact as to when and if this occurred and summary judgment is not 
appropriate. Therefore, we reverse the granting of summary judgment by the trial 
court and remand back for further determinations. If 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
¶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 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. 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, 
C.J.), WATT, WINCHESTER (joins Taylor, C.J.), EDMONDSON, REIF, COMBS, GURICH 
(joins Taylor, C.J.), JJ.
¶13 RECUSED: COLBERT, V.C.J.
FOOTNOTES
1 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)). 
2 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205. 

3 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).