Supreme Court
No. 2013

- 107

- Appeal. (KC 11

- 341)

Michael Moura et al. :

v. : Mortgage Electronic Registration Systems, Inc

. , et al. :

NOTICE : This opinion is subject to formal revision before publication in the Rhode Island Reporter. Readers are requested to notify the Opinion Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence, Rhode Island 02903, at Tel. 222

- 3258 of any typographical or other formal errors in order that co rrections may be made before the opinion is published.- 1

- Supreme Court
No. 2013

- 107

- Appeal. (KC 11

- 341 )

Michael Moura et al. :

v. : Mortgage Electronic Registration Systems, Inc. , et al. :

Pres ent: Sut tell, C.J., Goldberg, Flaherty, Rob i nson, and Indeglia, JJ.
O P I N I O N Justice Flaherty, for the Court
. The plaintiffs, Michael Moura and Margaret Moura, appeal from summ ary judgment entered against them and in favor of the defendants, Mortgage
Electro nic Registration Systems , Inc. (MERS), Accredited Home Lenders, Inc., Foreclosure Management Co., Vericrest Financial, Inc., Accredited REO Properties, LLC, and Deutsche Bank National Trust Company, as Trustee on behalf of the LSF MRA Pass

- Through Trust

. This case came before the Supreme Court for oral argument on April 8, 2014 , pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. After hearing the argume nts and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown, and we proceed to decide the appeal
at this time without further briefing or argument. For the reasons set forth in this opinion , we affirm the judg ment of the Superior Court.- 2

- I
Facts and Travel On June 8, 2007, the Mouras purchased a home at 114 Betsy Williams Drive in Warwick.
To finance the transaction , Michael Moura executed a note , payable to Accredited Home Lenders, in the amount of $206,250. On the same day the Mouras signed the note, Accredited
Home Lenders endorsed in blank an “allonge” 1 on the property. 2 T he note was secure d by a mortgage on the property that named plaintiffs as the mortgagors and MERS as the mortgagee, acting as a “ nominee for Lender and Lender’s successors and assigns. ” 3 Both the note and the mortgage d esignate d Accredited Home Lenders as the Lender. Significantl y, the mortgage further provided that “[b]orrower does hereby mortgage, grant and convey to MERS, (sole ly as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS, * * * with the Statutory Power of Sale.” The mortgage was recorded in the land evidence records of the City of Warwick on June 13, 2007.

1 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.” NV One, LLC v. Potomac Realty Capital, LLC , 84 A.3d 800, 803 n.4 (R.I. 2014) (quoting Blac k’ s Law Dictionary 88 (9th ed. 2009)). 2 This action by Accredited Home Lenders “does not identify a person to whom it makes the instrument payable.” See Mruk v. Mortgage Electronic Registration Systems, Inc. , 82 A.3d 527, 530 n.3 (R.I. 2013) (quoting G.L. 1956 § 6A

- 3

- 205 cmt. 2). “When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed. ” Id. (quoting § 6A

- 3

- 205(b)). 3 On the mortgage, the notary states “ [o] n this 8th day of June 2006”; however, we are confident that this is simply an error by the notary . Under “Definitions” on the first page of the mortgage, the following is written : “‘Security Instrument’ means this document, which is dated June 8, 2007 together with all Riders to this document.” The trial justice made a similar conclusion and also aptly noted that under G.L. 1956 § 34

- 11

- 1, a conveyance of lands by way of mortgage that is delivered is nonetheless valid and binding even if not acknowledged or reco rded. The plaintiffs have not challenged that the mortgage was not delivered

.- 3

- On November 30, 2009, MERS assigned the mortgage to Deutsche Bank National Trust Company (Deutsche Bank) “ as Trustee on behalf of the LSF MRA Pass

- Through Trust” (the Trust)

. The assignment was signed by “Hal Bartow, AVP” and notarized in Oklahoma. 4 This assignment was also recorded in the land evidence records in Warwick. In an affidavit filed in support of defendants’ motion for summary judgment, Eduardo Asher, Assistant Vice President of Vericrest Financial, attested tha t Vericrest became the attorney

- in

- fact fo r Deutsche Bank on or about June 26, 2009. 5 There seems to be little dispute that in July 2009, the Mouras stopped making their payments as set forth in the note. On March 1, 2010, Deutsche Bank foreclosed on the property, and, at a subsequent foreclosure sale, Accredited REO Properties, LLC, purchased the property for $125,000. In July 2010 , Vericrest executed a foreclosure deed on behalf of Deutsche Bank , which Accredited REO subsequently recorded with the City of Warwick.
On Mar ch 14, 2011, plaintiffs filed a two

- count complaint seeking declaratory judgment and injunctive relief. In their prayer s for relief, plaintiffs asked the court to quiet title to the property, and they sought a nine

- point declaration , including orders decl aring that plaintiffs were the owners of the property as a matter of law , that the foreclosure sale, conveyance, and assignment were void , and that defendants pay plaintiffs’ attorney’s fees. On November 8, 2012,

4 Attached to defendants’ motion for summary judgment is a document entitled “Corporate Resolu tion.” This document illustrates that , on April 2, 2008, several individuals , who we re listed on separate sheet s of paper, we re employees of Vericrest Financial a nd we re appointed as vice p residents of MERS with the authority to “execute such documents as may be necessary to fulfill the Member’s servicing obligations to the beneficial owners of su ch mortgage loan.” Hal Bartow wa s one of those Veri crest employees appointed as a vice p resident of MERS. 5 In a document entitled “Limited Power of Attorney” submitted to the Superior Court in support of the motion, Deutsche Bank appears to have appointed Vericrest Fi nancial on June 24, 2010 as the Trust’s attorney

- in

- fact and servicer for “any of the mortgage s or deeds of trust

. ” This document references a n April 1, 2009 “Servicing Agreement” between Deutsche B ank and Vericrest , and indicates that in the servicing agreement Vericrest is the “Servicer.”- 4

- after both sides had conducted discovery, defendants filed a motion for summary judgment, alleging that there were no genuine issues of material fact and that they were entitled to judgment
as a matter of law. In addition to other documentation, defendants filed two a ffidavits to support
the moti on: one from Asher and another f rom Dean Ponte, a licensed auctioneer who conducted
the foreclosure sale on behalf of Vericrest. To support their objection to the motion, plaintiffs
filed a counter

- affidavit from Michael Moura. The parties subsequently agreed to waive oral argument , and a justice of the Superior Court rendered a decision on February 27, 2013

. The trial justice considered each of the six arguments plaintiffs presented in opposition to summary judgment and found that none presented a gen uine issue of material fact. During his consideration of the arguments, the trial justice addressed defendants’ argument that plaintiffs lacked standing to challenge the assignment of the mortgage becaus e the Mouras contended that Bartow lacked authority to assign the mortgage on behalf of MERS

. The trial justice stated that he did not believe plaintiffs had standing to make such a challenge, but that even if he were to
find that they did, he nonetheless con cluded that plaintiffs’ argument was without merit because the assignme nt was signed by Bartow and because the certification that he was a vice president
of MERS was acknowledged by a notary

. That notarized assignment was recorded in the land
evidence records , which , in the trial justice’s opinion, amounted to “presumptive evidence” that
B artow had the authority to sign, an assertion that plaintiffs had not challenged with competent
evidence. After considering the submissions of the parties, the trial justice g ranted the motion for summary judgment. The plaintiffs filed a timely appeal to this Court. 6

6 In April 2013, this Court decided Bucci v. Lehman Brot hers Bank, FSB , 68 A.3d 1069 (R.I. 2013), which addressed several of the arguments the Mouras have presented on appeal. Consequently, on December 17, 2013, when the Mouras came before a single justice of this Court pursuant to Article I, Rule 12A(3) of th e Supreme Court Rules of A ppellate Procedure,- 5

- II
Standard of Review
We review a trial justice’s granting of summary judgment de novo
. Mruk v. Mortgage Electronic Registration Systems, Inc. , 82 A.3d 527, 532 (R.I. 2013). “Examining the case from the vantage point of the trial justice who passed on the motion for summary judgment, ‘[w]e view the evidence in the light most favorable to the nonmoving party, and if we conclude that there are no genuine issues of material fact and that the moving party is entitled to judgment as a
matter of law [, ] we will affirm the judgment.’ ” Sullo v. Greenberg , 68 A.3d 404, 406

- 07 (R.I. 2013) (quoting Sacco v. Cranston School Department , 53 A.3d 147, 1 50 (R.I. 2012)). “Although summary judgment is recognized as an extreme remedy, * * * to avoid summary judgment the burden is on the nonmoving party to produce competent evidence that ‘prove[s] the existence of a dispu ted issue of material fact [.]’ ” Id. at 407 (quoting Mu tual Development Corp. v. Ward
Fisher & Co. , 47 A.3d 319, 323 (R.I. 2012)). “[T]he nonmoving party * * * cannot rest upon mere allegations or denials in the pleadings, mere conclusions or mere legal opinions.” Mruk , 82 A.3d at 532 (quoting Daniels v. Flu ette , 64 A.3d 302, 304 (R.I. 2013)). Demonstrating mere factual disputes will not defeat summary judgment; “the requirement is that there be no genuine
issue of material fact.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986).

plaintiffs were directed to file a supplemental memorandum within twenty days discussing the effect of Bucci on the is sues raised i n this appeal. The p laintiffs’ counsel failed to comply with the order of this Court and never filed the required supplemental memorandum . At oral argument, plaintiffs’ counsel was unable to articulate any reasonab le explanation as to why he did not adhere to the order. The general, plenary supervisory power of this Court authorizes us to dismiss an appeal if a party fails to follow a duly issued order. See Santos v. Smith , 99 R.I. 430, 431

- 32, 208 A.2d 524, 525 (1965) (declining to dismiss certiorari petiti on for not complying with a statutory provision, but retaining authority to decide differently in the future). Although we choose not to dismiss this appeal for noncompliance with the Court’s order , we are nevertheless dismayed by counsel’s unexplained di sregard for our directive.- 6

- III
Discussion
The p laintiffs discharge a volley of arguments on appeal that they contend demonstrate the trial justice’s error in granting summary judgment

. First , plaintiffs contend that the trial justice erred when he allowed Asher’s affidavit into evidence. Second, pl aintiffs maintain that there is a material issue of fact surrounding the validity of the travel of the note and the mortgage. Third , plaintiffs argue that the trial justice erred when he found that MERS had properly assigned the mortgage to Deutsche Bank. Finally, plaintiffs claim that the trial justice
erred when he found that the foreclosure sale had been lawfully noticed and conducted. In our opinion, these arguments are unpersuasive and without merit. The Mouras begin by parsing the trial justice’s b ench decision into eighteen alleged errors that the trial justice committed in granting summary judgment. Of note, for our purposes, plaintiffs take issue with the trial justice’s statement that he did not believe plaintiffs had standing to challenge the assignment even though he went on to an alyze the argument assuming they did have standing. Indeed, al though standing was contested below , before this Court,
defendants make it clear that they do not dispute plaintiffs’ standing to challenge the assignment

. We pause to note, however, that we agree with the trial justice that standing was problematic in this case. This Court first addressed the issue of a plaintiff’s standing to challenge an assignment of a mortgage in Mruk , 82 A.3d at 532. In Mruk , we created an exception to the general rule that third parties do not have standing to challenge a contract and held that “homeowners in Rhode Island have standing to challenge the assignment of mortgages on their homes to the extent necessary to contest the foreclosing entity’s authority to foreclose.”
Id. at 536. However, we cautioned that this holding on standing was to be narrow ly construed- 7

- and limited only to those situations in which a mortgagor challenges an “‘invalid, ineffective, or void’ assignment of the mortgage.” Id. (quoting Culhane v. Aurora Loan Services of Nebraska , 708 F.3d 282, 291 (1st Cir. 2013)). More specifically, we agreed with the First Circuit that mortgagors do not have standing to challenge “shortcomings in an assignment that render it merely voidable at the election of one party but otherwise effective to pass legal title.” Id. (quoting Culhane , 708 F.3d at 291). Earlier this year, in a case based on Massachu setts law, the First Circuit expounded upon the difference between standing to challenge a void assignment and an assignment that is merely
voidable. Wilson v. HSBC Mortgage Services, Inc. , 744 F.3d 1, 9 (1st Cir. 2014). The court said that a mortgagor w ould lack standing to challenge an assignment that is voidable because “even successfully proving that the assignment was voidable would not affect the rights as between those two parties or provide the homeowner with a defense to the foreclosure action.”
Id. A “void” contract, the court explained, was a “nullity,” “incapable of confirmation or
ratification.” Id. (quoting Allis v. Billings , 47 Mass. 415, 417 (1843)). On the other hand, a “voidable” contract affects the rights of one party and may be eit her ratified or rescinded at that party’s election. Id. Moreover, the court did not take as “gospel” the mortgagor’s bald assertion that the assignment was void, but analyzed the materials before the court to determine whether the assignment was properly categorized as void or voidable. Id. at 10. The mortgagors in
Wilson , 744 F.3d at 11, claimed the assignment was void and supported that assertion with allegations that bear a striking resemblance to the position taken here by the Mouras. Ultimately,

t he court in Wilson determined that the mortgagors did not have standing to challenge the assignment because they had not proven that the assignment was void. Id. at 14. Although the issue of standing is a threshold inquiry that the Court may decide befor e reaching the merits of a- 8

- claim, Narragansett Indian Tribe v. State , 81 A.3d 1106, 1110 (R.I. 2014), because standing was
neither briefed n or argued by the parties and was assumed to be present by the trial justice, we too will credit plaintiffs with stan ding and will proceed to decide the case on its merits. However, in principle, we find the reasoning in Wilson to be persuasive. The first argument before us is plaintiffs ’ claim that the trial justice erred in admitting th e affidavit of Eduardo Asher. T he p lai ntiffs claim that Asher, as an assistant vice p resident of Vericrest, did not offer any evidence of a contractual relationship between Vericrest and any other party. Furthermore, plaintiffs claim that Asher’s statement in paragraph one of the
affid avit is insufficient to satisfy Rule 803(6) of the Rhode Island Rules of Evidence. 7 It should
be noted that Rule 56(e) of the Superior Court Rules of Civil Procedure require s supporting and opposing affidavits to be made on personal knowledge, setting for th facts admissible into
evidence , and affirmatively showing that the affiant is competent to testify. The plaintiffs challenge the admissibility of the facts set forth in the Asher affidavit because the affiant claims
that Vericrest is a mortgage servicer, but never claims to be the servicer of plaintiffs’ loan. According to plaintiffs, if Vericrest is not the servicer of the ir loan , then Asher is testifying to

7 Rule 803(6) of the Rhode Island Rules of Evidence states:

“ Records of Regularly Conducted Activity

. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions or diagnoses, made at or near the time by, or from information transmitted by, another person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or d ata compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lac k of trustworthiness. The term ‘business’ as used in this paragraph inclu des business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit. ”- 9

- records not prepared or kept by Vericrest , which means Asher’s statements are not based on his personal knowledge . Although it is true that Asher does not say that Vericr est is the servicer of the note, that does not cause us to conclude that plaintiff’s position is sound . Asher swears that
the claims in his affidavit are based o n personal knowledge, that Vericrest is a mortgage servicer , and that the note is held by Vericrest . These three statements, along with others, convince us that
the affidavit was proper because Asher ’s averments satisfy the strictures of Rule 56(e)

. See Textron, Inc. v. Aetna Casualty and Surety Co. , 723 A.2d 1138, 1144 (R.I. 1999) (discussing sufficiency of personal knowledge presented in affidavits in support of motion for summary judgment). Next, the Mouras assert that defendants cannot prove a legal f oreclosure occurred
because the evidence submitted did not demonstrate the presence of a valid travel of the note and mortgage. To support this argument, plaintiffs present a disorganized mélange of conclusory statements that purportedly undergird a claim that there is a genuine issue of material fact. We, however, are convinced that the record presents a clear chain of title beginning with Accredited
Home Lenders and concluding with REO Properties. The evidence and supporting documents, including the As her Affidavit , establish that Michael Moura signed the note , that the note was signed in favor of Accredited Home Lenders , which endorse d an allonge in blank , and that it was subsequently held by Vericrest Financial on behalf of Deutsche Bank. Further, MERS properly assigned the mortgage through its duly authorized representative to Deutsche Bank, and the assignment was recorded with the City of Warwick.
T o avoid summary judgment, the Mo uras, as the nonmoving party, had the burden of producing competent evidence to elucidate a genuine and material factual dispute. See Sullo , 68
A.3d at 407. In the counter

- affidavit submitted by plaintiffs, Michael Moura attests th at he was- 10

- told by MERS that Bartow, who signed the assignment from MERS to Deutsche Bank , was never an employee of MERS. Moura further swears that Bartow is a known “robosigner , ” and
he attached a list that includes Bartow among other known “robosigners” from the South Essex
Di strict Registry of Deeds in Massachusetts. However, in the papers submitted to the trial justice and to this Court, the Mouras do not develop these diffuse claims into a cogent argument, explain their significance, or e ven make further mention of Bartow. Mere allegations and conclusions will not create a factual dispute sufficient to defeat summary judgment. Mruk , 82 A.3d at 532. The p laintiffs ’ remaining arguments challenge the assignment of the mortgage to Deutsche Bank. First, the Mouras maintain t hat MERS did not have the authorit y to assign the mortgage. S econd, the plaintiffs contend that the foreclosure was invalid because there we re no valid assig nments that would have granted the proper interest to foreclose. This Court already
has addressed the issue of the authority of MERS to assign a mortgage in Bucci v. Lehman
Brothers Bank FSB , 68 A.3d 1069 (R.I. 2013) . Because the plaintiffs did not distinguish their arguments from our decision in Bucci , as they were ordered to do , we need not, and do not, address those arguments further

. IV
Conclusion For the foregoing reasons, we affirm the grant of summary judgment in favor of the
defendant s
. The record shall be remanded to the Superior Court.

### R HODE 

### I SLAND 

### S UPREME 

### C OURT 

### C LERK 

### ’ S 

### O FFICE


### Clerk’s Office Order/O pinion Cover Sheet

TITLE OF CASE: Michael Moura et al. v. Mortga ge Electronic Registration Systems, Inc., et al.
CASE NO : No. 20 1 3

- 1 07

- Appeal

. (KC 11

- 341)
COURT: Supreme Court
DATE OPINION FILED: May 16, 2014
JUSTICES: S uttell, C.J. , Goldberg, Flaherty , R obinson , and Indeglia, JJ

. WRITTEN BY: Associate Justice Francis X. Flaherty
SOURCE OF APPEAL: Providence County Superior Court
JUDGE FROM LOWER COURT : Associate Justice Bennett R. Gallo
ATTORNEYS ON APPEAL :
For Plaintiffs : George E. Babcock , Esq.
For Defen dants : Dean J. Wagner , Esq.