GMAC Mortgage LLC v. Saunders, No. 22-1-10 Bncv (Wesley, J., Jan. 26, 2011) 

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STATE OF VERMONT

SUPERIOR COURT

GMAC MORTGAGE LLC │ 

 Plaintiff │ 

│ BENNINGTON UNIT, CIVIL DIVISION

 v. │ Docket No. 22-1-10 Bncv 

Mary L Saunders, et al │ 

 Defendant 

 v. 

Lizanne Degan 

Proposed Intervenor 

│ 

│ 

ORDER DENYING MOTION TO INTERVENE

 Plaintiff brought this foreclosure action on 1/21/2010. Service was complete on 

Defendants Mary L. Saunders and Keith Casey on 1/25/2010 and on Defendant 

Citifinancial, Inc. on 2/3/2010. Default judgment issued against Citifinancial on 

5/12/2010. Following a hearing on Plaintiff’s motion for summary judgment against 

Defendants Saunders and Casey, the Court granted Defendants one week to seek 

mediation pursuant to recently enacted 12 V.S.A. § 4633, indicating in its entry issued 

7/29/2010 that the proceedings would be stayed pending mediation. The Court approved 

Defendants’ request for mediation by entry issued 9/2/2010, and the parties have 

specified Rodney McPhee, Esq. as the mediator by designation filed 9/28/2010. There is 

no report, as yet, regarding the results of mediation. 

 On 11/3/2010, purporting to represent an interested party, Lizanne Degan, 

Attorney A. Jeffrey Taylor entered his appearance and filed a Motion to Dismiss, 

claiming that Plaintiff was without standing to prosecute the foreclosure action. In 

response, the Court held on 11/17/2010 that Ms. Degan’s motion could not be accepted 

for filing as she had not sought leave to intervene pursuant to V.R.C.P. 24. 

 Proposed Intervenor Degan has now filed a motion pursuant to Rule 24 by which 

she claims an interest in the subject property arising from a judicial lien, and seeks to 

prosecute common questions of law and fact which she claims are inherent in the 

foreclosure action; namely, her contention that Plaintiff is without standing and that her 

judicial lien must be accorded priority over the note and mortgage which are the subject 

of Plaintiff’s foreclosure complaint. 

 Plaintiff opposes the motion to intervene. It is undisputed that Ms. Degan’s 

judicial lien, based on a restitution judgment against Defendant Saunders, was not 

recorded in the Manchester Land Records until 7/29/2010, more than six months 

following Plaintiff’s recording of its foreclosure complaint on 1/21/2010. Thus, at the 
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time she recorded her judgment, Ms. Degan was on record notice of the pending 

foreclosure action and became subject to any judgment “without further notice or 

service”. 12 V.S.A.§ 4523. Having attempted to establish an interest in the subject real 

estate after record notice of the foreclosure action had been perfected, Ms. Degan is 

entitled to neither party status, nor redemption rights. Her suggestion that her motion to 

intervene should be granted because there is no final judgment is unsupported by any 

authority, and inconsistent with the statutory scheme represented by §4523 and § 4524, 

both of which establish summary proceedings without further notice or hearing for 

extinguishing the interests of claimants which were filed after the filing of the foreclosure 

complaint in the town clerk’s office. 

 Even assuming that the above-cited statutes did not effect a complete bar to Ms. 

Degan’s attempt to seek party status to challenge the priority of Plaintiff’s mortgage, she 

has failed to show that she has any legal claims that merit granting her motion to 

intervene. By her claim that Plaintiff’s mortgage is a nullity and without legal existence, 

due to the presence in the chain of title of Mortgage Electronic Registration Systems 

(MERS), Ms. Degan extrapolates from two trial court decisions, Deutsche Bank v 

Parisella, et al, Doc. No. S0758 -09 Cnc (Toor,J.), which in turn relied on Judge Cohen’s 

ruling in MERS v Johnston, Doc. No. 420-6-09 Rdcv. However, neither of those 

holdings stand for the proposition that a mortgage which was granted initially, or later 

assigned, to MERS voids the underlying obligation or makes the note and mortgage 

unenforceable. Rather, as Judge Cohen allowed inU.S. Bank National Association v 

Wyman, et al, Doc. No. 466-6-09 Rdcv (Entry Order Re Motion for Default Judgment, 

10/20/2009), this Court has addressed the apparent lack of standing on the face of 

complaints involving MERS by granting the plaintiff an opportunity within a reasonable 

time to demonstrate “that it is entitled to enforce the Promissory Note pursuant to 9A 

V.S.A. § 3-301”. In a majority of cases, plaintiffs in such situations have succeeded in 

remedying the initial defects in pleading. 

 In the current action, the Court perceived no insufficiency on the face of 

Plaintiff’s complaint with regard to standing. The complaint recites that mortgagors 

granted a note to GMAC Mortgage Corporation d/b/a ditech.com. Although MERS was 

the original mortgagee, the complaint further alleges that as nominee for GMAC 

Mortgage Corporation d/b/a ditech.com, MERS assigned the mortgage to Plaintiff, 

GMAC Mortgage, LLC. Most importantly, the complaint alleges at ¶ 6 that the 

promissory note executed in favor of GMAC Mortgage Corporation d/b/a ditech.com 

“was endorsed in blank and Plaintiff is in possession of the note”. This allegation 

directly addresses the defect in standing identified by Judge Cohen, when he expressed 

concern that “the Court cannot allow the assignee of only a security interest to enforce 

the mortgage deed, as this could expose the obligor to a double liability; a ‘person to 

enforce’, 9A V.S.A. § 3-301, could later rightly seek to enforce the unsecured 

obligation.” Wyman at p. 4. Contrary to Wyman, where the complaint was silent as to the 

status of the original note, Plaintiff here alleges that it is a holder, legally entitled to 

enforce the promissory note and its underlying mortgage, since it is currently in physical 

possession of the note, endorsed in blank. See, 9A V.S.A.§ 3-205(b)(blank indorsement 

becomes payable to bearer). In short, the spectre of some other holder entitled to enforce 
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the note - which was the principal concern of Judge Cohen and others who have 

questioned standing sua sponte in transactions in which MERS role as nominee is 

inadequately explained - is absent when Plaintiff supports its claim of assignment with 

possession of the original note, properly indorsed. 

As explained above, Ms. Degan has not demonstrated that she has any right to 

intervene as a junior lienholder attempting to establish an interest after Plaintiff provided 

record notice of this foreclosure action. Even if her claim was not absolutely barred by 

the notice statute, she has established no colorable basis for the claim that her judgment 

lien is entitled to priority over the note and mortgage now held by Plaintiff. 

 Dated at Bennington this day of , 2011. 

 _____________________________ 

 John P. Wesley 

 Superior Court Judge