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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-14-1578-KuDTa

)

ALLANA BARONI, ) Bk. No. 12-10986

)

Debtor. ) Adv. No. 13-01069

______________________________)

)

ALLANA BARONI, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

NATIONSTAR MORTGAGE, LLC, )

)

Appellee. )

______________________________)

Argued and Submitted on September 24, 2015

at Malibu, California

Filed – November 10, 2015

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Alan M. Ahart, Bankruptcy Judge, Presiding

 

Appearances: Louis J. Esbin argued for appellant Allana Baroni;

Bernard Kornberg of Severson & Werson argued for

appellee Nationstar Mortgage, LLC.

 

Before: KURTZ, DUNN and TAYLOR, Bankruptcy Judges.

FILED

NOV 10 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

*This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.
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INTRODUCTION

The debtor Allana Baroni1 commenced an adversary proceeding

against Nationstar Mortgage LLC challenging Nationstar’s proof of

secured claim, and the bankruptcy court granted summary judgment

in favor of Nationstar. The bankruptcy court determined that

there was no genuine factual dispute that Nationstar possessed

the original promissory note indorsed in blank, so Nationstar

qualified as a person entitled to enforce the note and hence had

standing to file the proof of claim. Allana asserts that

Nationstar demonstrated neither that it had a right to enforce

the note and the deed of trust nor that it had an agency

relationship with someone else who did.

Our resolution of this appeal largely hinges on our answer

to a single question: when a creditor, in the process of

supporting a proof of claim based on a promissory note, presents

the bankruptcy court with two materially different copies of the

indorsements supposedly accompanying the note, can the court on

summary judgment correctly determine that there is no genuine

dispute that the note has been duly indorsed in blank? We answer

this question in the negative. While the bankruptcy court’s

summary judgment against Allana on one of Allana’s four claims

for relief can be affirmed on alternate grounds, summary judgment

on the other three claims for relief must be reversed.

Accordingly, we AFFIRM IN PART, REVERSE IN PART AND REMAND

FOR FURTHER PROCEEDINGS.

1For the sake of clarity, we refer to Allana and her husband

James Baroni by their first names. No disrespect is intended.

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FACTS

In February 2004, Allana’s husband James refinanced a parcel

of residential real property located in Carmel, California. 

According to several of Allana’s filings in her bankruptcy case,

the Baronis did not actually reside in the Carmel property but

instead used it as a rental property. In furtherance of the

refinancing, James executed a note in the amount of $1,430,000.00

and a deed of trust securing repayment of the note.

At the time of the refinancing, James owned the Carmel

property as his sole and separate property. But shortly after

the refinancing, James executed a grant deed conveying the Carmel

property to himself and Allana as husband and wife as joint

tenants. Allana does not dispute that she took her interest in

the Carmel property subject to the deed of trust and in that

sense has admitted that she might be obliged to repay the Carmel

note in order to prevent foreclosure of her real property

interest. On the other hand, Allana claims that she is not

certain who she is obliged to pay. She also claims that the

Carmel note and the Carmel deed of trust have been irrevocably

split, which has rendered the deed of trust unenforceable.

In February 2012, Allana commenced her bankruptcy case by

filing a voluntary chapter 132 petition. Later that same month,

she voluntarily converted her case from chapter 13 to chapter 11. 

2Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure. All “Civil Rule” references are to the Federal Rules

of Civil Procedure, and all “Evidence Rule” references are to the

Federal Rules of Evidence.

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In September 2012, Nationstar filed a proof of claim asserting a

claim in Allana’s bankruptcy case in the approximate amount of

$1,480,000.00. Nationstar attached to the proof of claim copies

of a promissory note and a deed of trust both apparently executed

by James in February 2004 (respectively, the “POC Note Copy” and

the “POC Trust Deed Copy”). The POC Note Copy identifies James

as the borrower and Platinum Capital Group as the lender. The

principal amount stated in the POC Note Copy is $1,430,000.00.

The POC Note Copy also contains on the signature page what

appears to be James’ signature. The page immediately following

the signature page is blank, with the exception of what appear to

be three indorsements.3 Reading from left to right, the first

indorsement appears to be signed by an “assistant secretary” of

Platinum Capital Group and appears to make the note payable to

“Lehman Brothers Bank FSB.” Immediately to the right of the

first indorsement is another indorsement apparently signed by an

“authorized signatory” of Lehman Brothers Holdings, Inc. The

“pay to the order” line of that indorsement is blank. 

Immediately beneath the Lehman Brothers Holdings, Inc.

indorsement is a third indorsement apparently signed by a “Vice

President” of Lehman Brothers Bank, FSB and apparently making the

note payable to Lehman Brothers Holdings, Inc.4

3A copy of this indorsements page is attached as Appendix A

to this decision.

4Of course, reading these undated indorsements in this order

makes no sense except for the purpose of describing their

relative positions on the indorsements page. The three

indorsements only can be understood sensibly in the following

(continued...)

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The POC Trust Deed Copy identifies James as the borrower,

Platinum Capital Group as the lender, and MERS as the

beneficiary, but solely as the nominee of the lender and the

lender’s successors and assigns. The recording information on

the first page of the POC Trust Deed Copy indicates that the

trust deed was recorded in the Monterey County Recorder’s Office

in March 2004. The POC Trust Deed Copy further reflects the

transfer of an interest in the Carmel property to secure the

repayment of the Carmel note.

In April 2013, over Nationstar’s objection, Allana obtained

an order confirming her second amended reorganization plan. In

relevant part, Allana set forth in her disclosure statement and

plan that she disputed and objected to Nationstar’s proof of

claim but that, to the extent the bankruptcy court ultimately

allowed any claim secured by the Carmel property, she would pay

the holder of that allowed claim in accordance with the terms of

her plan.

That same month, Allana filed her complaint against

Nationstar. In the complaint, Allana pointed out that neither

the Carmel note nor the Carmel deed of trust identify Nationstar

in any way. Therefore, Allana posited, nothing in Nationstar’s

proof of claim established that Nationstar was entitled to

enforce either the Carmel note or the Carmel deed of trust. 

4(...continued)

order: (1) the indorsement by Platinum Capital Group (the

original payee identified in the note) making the note payable to

Lehman Brothers Bank; (2) the indorsement by Lehman Brothers Bank

making the note payable to Lehman Brothers Holdings, Inc.; and

(3) the indorsement in blank by Lehman Brothers Holdings, Inc.

making the note payable to the bearer.

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Allana also included in her complaint copies of a number of

communications she received from third parties. These

communications opine (without actually proving) that the Carmel

note was sold to a mortgage securitization trust and that the

trust owns the note. The complaint then proceeds to conflate the

concept of note ownership with the concept of being a “holder” of

the note. The complaint asserts that Nationstar only could prove

its standing to file the proof of claim if it demonstrated its

title to the Carmel note within the “chain of ownership.” 

According to the complaint, Allana would be unjustifiably exposed

to the risk of having to pay the amount due on the Carmel note

multiple times unless the bankruptcy court determined who was the

“holder” of the Carmel note and hence had standing to file a

proof of claim based on the Carmel note.

In addition, Allana’s complaint pointed out that there was

no documentation indicating that Nationstar is the beneficiary

under the deed of trust or an assignee of the beneficiary.

Based on the allegations set forth above, Allana’s complaint

included a claim for declaratory relief seeking a judicial

determination as to whether Nationstar’s proof of claim should be

allowed or disallowed and whether that claim was secured or

unsecured. The complaint also included a claim for relief

alleging that Nationstar would be unjustly enriched if its claim

were allowed in the absence of proof that Nationstar was 

entitled to enforce the Carmel note and deed of trust. The

complaint’s third claim for relief under the Fair Debt Collection

Practices Act, 15 U.S.C. § 1692, et seq., alleged that Nationstar

falsely represented that it was entitled to enforce the Carmel

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note and deed of trust by filing the proof of claim.5 Allana’s

fourth and final claim for relief, based on all of the same

allegations, set forth a claim under California’s unfair

competition law, Cal. Bus. & Profs. Code § 17200, et seq.

Nationstar sought dismissal of Allana’s complaint under

Civil Rule 12(b)(6), but the bankruptcy court denied Nationstar’s

dismissal motion. Nationstar then filed an answer to Allana’s

complaint in November 2013, and close to a year later, in

September 2014, Nationstar filed its summary judgment motion. 

Even though Nationstar did not so indicate in its proof of claim,

Nationstar identified itself in the summary judgment motion as

the servicing agent for the owner of the note, Wells Fargo Bank,

as trustee of the securitization trust referenced in Allana’s

complaint.

In order to prove up Wells Fargo’s interest in the Carmel

note, Nationstar submitted the declaration of Edward Hyne. Hyne

identified himself as a “Litigation Resolution Analyst” employed

by Nationstar. By virtue of his employment, Hyne claimed

familiarity with the manner in which Nationstar’s business

records are prepared and maintained. Hyne further claimed that

Nationstar’s records are “prepared” by Nationstar employees and

agents with personal knowledge of the facts set forth therein or

with information supplied by others with personal knowledge. 

5The FDCPA claim also alleged that Nationstar has

misrepresented the amount due on the note and has falsely failed

to credit Allana for all of the payments she has made. Allana

has abandoned these issues for appeal purposes by not addressing

them in her opening appeal brief. Christian Legal Soc'y v. Wu,

626 F.3d 483, 487–88 (9th Cir. 2010); Brownfield v. City of

Yakima, 612 F.3d 1140, 1149 n.4 (9th Cir. 2010).

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In a bit of a disconnect, Hyne stated that the facts set

forth in his declaration were based on “the files and records for

[Allana’s] loan,” but he does not identify those loan files and

records as Nationstar’s business records. Nor would it seem

accurate to characterize them as Nationstar’s business records. 

There is no reason to suspect let alone conclude that anyone at

Nationstar “prepared” any of the documents pertaining to the

origination or sale of the Carmel loan. In fact, nothing in the

summary judgment record suggests that Nationstar played any role

in the origination or sale of that loan, so it makes no sense

that Nationstar would have prepared any documents pertaining to

the origination or sale of the loan.

Based on the above description of the source of his

knowledge, Hyne asserted that the note attached as Exhibit A to

his declaration was a true copy of the Carmel note and that

Exhibit C to his declaration – a mortgage loan sale & assignment

agreement between Lehman Brothers Holdings, Inc. as seller and

Structured Asset Securities Corp. as buyer – evidences the

transfer of the Carmel note to Wells Fargo as Trustee for the

Structured Adjustable Rate Mortgage Loan Trust Mortgage PassThrough Certificates, Series 2004-5.

Unfortunately, Hyne did not specify what was purportedly

transferred to Wells Fargo: possession of the note, beneficial

ownership of the note, mere legal title to the note, or the right

to payment under the note. Moreover, the sale and assignment

agreement attached as Exhibit C does not evidence or even

reference any such transfers to Wells Fargo. 

Meanwhile, attached to Exhibit C is a single page on which

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everything is redacted, except for the following single line of

information: “17362807 3 Carmel CA 93923 1430000 1430000.”6

Hyne and Nationstar presumably claim that this redacted page

attached to Exhibit C evidences the inclusion of the Carmel note

in the mortgage pool covered by the sale and assignment

agreement. Immediately preceding the redacted page are two

schedules that are supposed to identify the loans covered by the

sale and assignment agreement, but both of those schedules are

blank, except for a type-written notation on the face of each

schedule indicating that the actual listing of covered loans is

“on file” in the Philadelphia offices of Morgan, Lewis & Bockius

LLP. There is no explanation in the sale and assignment

agreement of the relationship between the blank schedules and the

redacted page immediately following the blank schedules. Nor did

Hyne attempt to explain the relationship. More importantly, no

one who arguably might have had personal knowledge of what

actually is in the completed schedules supposedly held by Morgan,

Lewis & Bockius attempted to explain the significance of the

redacted page.

Finally, Hyne stated that Nationstar is Wells Fargo’s

servicing agent for purposes of the Carmel note. In support of

this statement, Hyne referenced the limited power of attorney

attached to his declaration as Exhibit D. The power of attorney,

6The significance of the number “17362807" is equivocal. It

is not the loan number assigned to the Carmel refinancing loan at

the time the loan was made. That loan number apparently is

11101490. The summary judgment record reflects that “17362807"

was handwritten onto some copies of the Carmel note but not onto

others. Who wrote that number on some copies and what that

number purportedly signifies never was addressed by either party.

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apparently executed by Wells Fargo as the trustee of certain

designated securitization trusts, identified Nationstar as the

assignee of Aurora Loan Services LLC’s loan servicing rights and

duties and granted Nationstar the authority to, among other

things, execute on Wells Fargo’s behalf “all documents and

instruments necessary in appearance and prosecution of bankruptcy

proceedings . . . .” The limited power of attorney listed the

Structured Adjustable Rate Mortgage Loan Trust Mortgage PassThrough Certificates, Series 2004-5, as one of the securitization

trusts covered. But nothing in the limited power of attorney

established that ownership of the Carmel note had been

transferred to that particular securitization trust, any more

than the sale and assignment agreement had.

Nationstar further supported its summary judgment motion by

filing the declaration of one of its attorneys, Adam Barasch. In

relevant part, Barasch stated that, on behalf of his client

Nationstar, he was in possession of the original note and

original deed of trust executed by James. Barasch further stated

that the copy of the Carmel note attached as Exhibit A to the

Hyne declaration is a true copy of the original note in his

possession.

In October 2014, Allana filed her opposition to Nationstar’s

summary judgment motion. Allana principally argued that a

genuine issue of material fact existed as to whether there were

two different original Carmel notes memorializing the same

obligation. Allana pointed out that the copy of the Carmel note

attached to the Hyne declaration differs in several respects from

the POC Note Copy. Most importantly, the indorsements page in

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each copy is significantly different. As described above, in the

POC Note Copy, the Platinum Capital Group indorsement and the

Lehman Brothers Holdings indorsement are side by side and the

Lehman Brothers Bank indorsement is beneath the Lehman Brothers

Holdings indorsement. In the Hyne declaration copy of the Carmel

note, the Lehman Brothers Bank indorsement and the Lehman

Brothers Holdings indorsement are side by side and the Platinum

Capital Group indorsement is above the Lehman Brothers Bank

indorsement.7 

In support of her opposition, Allana submitted a declaration

of a questioned-documents expert by the name of Meredith DeKalb

Miller. Miller explained in her declaration that she examined in

2011 several different copies of the Carmel note and deed of

trust that Allana had provided to her as well as an original note

and an original deed of trust, which she examined in person in

June 2011 in the Chicago offices of McGinnis Tessitore Wutcher

LLP. Miller observed that some of the note copies she examined

had marks indicative of hole punches and fasteners while others

did not. Miller further observed that some of the note copies

she examined had the hand-printed notation “kahrl” and “17362807"

in the upper right hand corner while others did not. Meanwhile,

one of the four note copies included a stamped notation stating

that the copy was certified to be a true and correct copy.

Notwithstanding these and other differences, Miller also

stated that all of the copies provided to her were

7A copy of the indorsements page accompanying the Hyne

declaration is attached as Appendix B to this decision.

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“representative copies of the same adjustable rate note” and that

the signatures of James’ she observed on the original note and on

all of the note copies “are consistent.” Miller Decl. at ¶¶ 20,

26.

In her summary judgment opposition, Allana claimed that a

2011 report attached to Miller’s declaration as Exhibit 2 (on

which Miller’s 2014 declaration was based) demonstrated that the

POC Note Copy and the Hyne declaration note copy are not copies

of the same original note.8 However, neither the 2011 Miller

report nor the 2014 Miller declaration demonstrate what Allana

claims they do. At most, Miller’s declaration and report observe

certain minor differences between various copies of the note

provided to her long before either Nationstar’s 2012 proof of

claim or Hyne’s 2014 declaration even existed.9

In addition to her claim that there appeared to exist two

different original Carmel notes, Allana asserted that the Hyne

declaration and the Barasch declaration did not contain competent

evidence regarding who owned the Carmel note and who was the

holder of the Carmel note. In conjunction with this assertion,

Allana formally made several different evidentiary objections to

both declarations, which the bankruptcy court never addressed.

8The summary judgment opposition stated at page 9: “As

described in the Forensic Examiner’s report attached as

“Exhibit 2,” the Note Mr. Barasch apparently has in his

possession, and attached as Exhibit A to Mr. Hyne’s declaration

is not the same Note attached to Claim 9-1 . . . .”

9The indorsement pages included with the note copies

provided to Miller are a different matter. Miller duly noted

that the indorsement signatures on some copies were “configured

differently” than other copies.

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Allana further contended that she was not given adequate

opportunity to conduct discovery. In support of this contention,

Allana referenced certain examinations and document requests she

had sought under Rule 2004 from Nationstar, Wells Fargo and

others before she filed her adversary proceeding against

Nationstar. According to Allana, none of the responding parties

fully complied with her Rule 2004 examination and document

requests. Allana did not identify what efforts, if any, she had

made to conduct or compel discovery during the roughly 18 months

that elapsed between the filing of her complaint and the filing

of her summary judgment opposition.

After holding a hearing at which both parties submitted

without argument, the bankruptcy court entered an order granting

summary judgment to Nationstar. The order set forth the court’s

reasoning. According to the court, Allana lacked standing to

challenge Nationstar’s proof of claim because only James executed

the Carmel note and deed of trust.

Alternately, the bankruptcy court explained, Nationstar had

established that it had possession of the original Carmel note,

indorsed in blank, so Nationstar was a “person entitled to

enforce” the Carmel note under Uniform Commercial Code § 3-301

and hence had standing to file a proof of claim based on the

Carmel note. Even if Nationstar had not qualified as the holder

of the note, the court reasoned, Nationstar had established that

it possessed the note on behalf of Wells Fargo as trustee of a

securitization trust and that Wells Fargo owned the Carmel note

as trustee of that trust. Thus the court held that, as Wells

Fargo’s servicing agent, Nationstar had alternately established

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that it was “a nonholder in possession of the instrument who has

the rights of a holder” under Uniform Commercial Code § 3-301.

Based on its analysis of Nationstar’s and Wells Fargo’s

rights in relation to the Carmel note, the bankruptcy court

concluded that, as a matter of law, Allana could not prevail on

any of her claims for relief. As an additional ground for

denying relief on Allana’s unjust enrichment claim, the

bankruptcy court held that Allana’s action was an action based on

contract and that unjust enrichment was not available in an

action based on contract. As additional grounds for denying

relief on Allana’s Fair Debt Collection Practices Act claim, the

bankruptcy court held that Nationstar was not a debt collector

within the meaning of the Act, that the Act only applied to

consumer debts and that the debt secured by the Carmel property

was not consumer debt.

On December 15, 2014, Allana timely filed her notice of

appeal from the bankruptcy court’s summary judgment.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(B) and (C). We have jurisdiction under

28 U.S.C. § 158.

ISSUES

Did the bankruptcy court correctly grant summary judgment in

favor of Nationstar?

STANDARD OF REVIEW

We review de novo the bankruptcy court’s summary judgment

ruling. Wank v. Gordon (In re Wank), 505 B.R. 878, 886 (9th Cir.

BAP 2014). 

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SUMMARY JUDGMENT STANDARDS

Because we review summary judgment rulings de novo, we

utilize the same summary judgment standards as other federal

courts use. Kelly v. Okoye (In re Kelly), 182 B.R. 255, 258 (9th

Cir. BAP 1995), aff'd, 100 F.3d 110 (9th Cir. 1996). Pursuant to

Civil Rule 56(a), which is made applicable in adversary

proceedings by Rule 7056, summary judgment may be appropriate "if

the movant shows that there is no genuine issue as to any

material fact and the movant is entitled to judgment as a matter

of law." In re Wank, 505 B.R. at 886. In considering summary

judgment, the court is not permitted to weigh the evidence;

instead, it only may determine whether a genuine and material

factual issue remains for trial. Id. An issue is genuine if

there is enough evidence for a reasonable trier of fact to make a

finding in favor of the non-moving party, and an issue is

material if it might affect the outcome of the case. Far Out

Prods., Inc. v. Oskar, 247 F.3d 986, 992 (9th Cir. 2001) (citing

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986)).

The initial summary judgment burden rests on the moving

party. In re Wank, 505 B.R. at 886. Once the moving party has

presented facts as undisputed and has presented admissible

evidence in support of those facts, the non-moving party may be

deemed to have admitted those facts for summary judgment purposes

unless he or she specifically challenges those facts and presents

controverting evidence in support of his or her position. See

Beard v. Banks, 548 U.S. 521, 527 (2006); see also 10A Charles A.

Wright, Arthur R. Miller, et al., FED. PRAC. & PROC. CIV. § 2727

(3d ed. 2015) (“If the movant presents credible evidence that, if

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not controverted at trial, would entitle him to a Rule 50

judgment as a matter of law that evidence must be accepted as

true on a summary-judgment motion.”).

DISCUSSION

A. Allana’s Standing

We first address the bankruptcy court’s ruling that Allana

lacked standing to pursue her adversary proceeding against

Nationstar. Standing typically is jurisdictional. 

Employers-Teamsters Local Nos. 175 & 505 Pension Trust Fund v.

Anchor Capital Advisors, 498 F.3d 920, 923 (9th Cir. 2007)

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561

(1992)). It is a threshold requirement that must be satisfied in

every federal case. Warth v. Seldin, 422 U.S. 490, 498 (1975).

The three core components necessary for constitutional

standing are: (1) injury in fact, (2) causation, and

(3) redressability. See Sprint Commc'ns Co. v. APCC Servs.,

Inc., 554 U.S. 269, 273–74 (2008). Even if the the core

constitutional components are present, the plaintiff also may

need to address certain prudential standing concerns. Veal v.

Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897,

906-07 (9th Cir. BAP 2011). These prudential standing concerns

are “‘judicially self-imposed limits on the exercise of

jurisdiction.’” Id. (quoting Sprint Commc'ns Co., 554 U.S. at

289). One of the more common prudential standing concerns is

known as third party standing. Sprint Commc'ns Co., 554 U.S. at

289-90. This means that “a plaintiff must assert its own legal

rights and may not assert the legal rights of others.” In re

Veal, 450 B.R. at 907. In the context of both constitutional and

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prudential standing issues, the plaintiff bears the burden of

proof to establish its standing as to each claim for relief

asserted. Id. at 907 n.11.

We disagree with the bankruptcy court’s ruling that Allana

lacked standing. Allana’s adversary proceeding was filed in

response to the proof of claim Nationstar filed in her bankruptcy

case, pursuant to which Nationstar sought to perfect its right

(or Wells Fargo’s right) to share in any distributions made by

Allana to her creditors in accordance with her proposed

reorganization plan. The potential impact of Nationstar’s proof

of claim on her plan distributions amply satisfies the core

constitutional standing components of injury in fact, causation

and redressability. Cf. In re Veal, 450 B.R. at 906 (holding

that creditor had satisfied constitutional standing requirements

in light of the effect of bankruptcy claim allowance procedures

on the creditor’s ability to obtain a distribution on its claim).

Nor do we perceive the third party standing doctrine as an

impediment to Allana’s entitlement to sue Nationstar. While the

bankruptcy court indicated that Nationstar’s proof of claim was

based on a debt for which only James was personally liable, the

debt was secured by property of Allana’s bankruptcy estate, and

in light of the clear impact of Nationstar’s proof of claim on

both Allana’s property and on her chapter 11 plan, we hold that

she was asserting and protecting her own rights and interests and

not those belonging to James.

Allana’s position is no different than that of any debtor

whose property is encumbered by a non-recourse debt. While she

might not be personally liable for repayment of the Carmel note,

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her interest in the Carmel property is directly and adversely

affected pecuniarily by Nationstar’s claim. Nationstar has not

cited any authority to us indicating that a person whose interest

in real property is encumbered by a non-recourse debt lacks

standing to challenge both the validity of the lien and the

validity of the underlying debt. Nor are we aware of any such

authority. To the contrary, as indicated by one of our prior

decisions, a debtor whose property is subject to a lien securing

non-recourse debt may object to a claim filed in his or her

bankruptcy case based on that debt. See Simpson v. Deutsche Bank

Nat. Trust Co. (In re Simpson), 2013 WL 2350967 (9th Cir. BAP

May 29, 2013) (Mem. Dec.).

Furthermore, the fact that Allana’s standing arose after

James incurred the debt – when James conveyed an interest in the

Carmel property to Allana subject to the Carmel deed of trust – 

does not alter or impair her standing to challenge the lien and

the underlying debt. As noted in Sprint Commc'ns Co., 554 U.S.

at 290, a party with standing may confer standing on a third

party by transferring a property interest to that third party.

Accordingly, the bankruptcy court’s standing ruling does not

support the court’s summary judgment in favor of Nationstar.

B. Nationstar’s Standing

Having concluded that Allana had standing to challenge

Nationstar’s proof of claim and to assert the claims for relief

set forth in her complaint, we next turn our attention to

Nationstar’s standing to file its proof of claim, an issue on

which resolution of this appeal largely turns.

Allana sometimes refers to this as a problem of standing and

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sometimes as a problem of who qualifies as the real party in

interest under Civil Rule 17(a). In In re Veal, this Panel

explained that who has standing and who is the real party in

interest are legally distinct issues. See In re Veal, 450 B.R.

at 907-08. At the same time, in the context of a proof of claim

based on a promissory note, we effectively held in In re Veal

that the distinction between the two issues is irrelevant because

a claimant who is a person entitled to enforce the note satisfies

both the standing and real party in interest requirements, and a

claimant who is not a person entitled to enforce the note

satisfies neither requirement. Id. at 920.

1. Applicable Law

Similar standing and real party in interest issues have been

addressed in a number of published and unpublished Panel

decisions over the last several years. See, e.g., Allen v. U.S.

Bank, N.A. (In re Allen), 472 B.R. 559, 565 (9th Cir. BAP 2012); 

In re Veal, 450 B.R. at 897; see also Rivera v. Deutsche Bank

Nat'l Trust Co. (In re Rivera), 2014 WL 6675693, at *6-7 (9th

Cir. BAP Nov. 24, 2014) (Mem. Dec.); Green v. Waterfall Victoria

Master Fund 2008–1 Grantor Trust Series A (In re Green), 2012 WL

4857552, at *6-7 (9th Cir. BAP Oct. 15, 2012) (Mem. Dec.); cf.

Edwards v. Wells Fargo Bank, N.A. (In re Edwards), 454 B.R. 100,

105 (9th Cir. BAP 2011) (focusing on creditor standing issue in

the context of a relief from stay motion). In In re Allen and in

In re Veal, we generally held that a party is entitled to file a

proof of claim based on a secured promissory note if that party

is a “person entitled to enforce” the note under § 3–301 of the

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Uniform Commercial Code (“UCC”).10 In re Allen, 472 B.R. at 565;

In re Veal, 450 B.R. at 902. There are several ways a party may

become a person entitled to enforce the note under UCC § 3–301,

but one common way is for the person to become a "holder" of the

note, as defined in UCC § 1–201(b)(21)(A). In re Allen, 472 B.R.

at 565; In re Veal, 450 B.R. at 910–11. As set forth in UCC

§ 1–201(b)(21)(A), a “holder” includes a “person in possession of

a negotiable instrument that is payable . . . to bearer . . . .” 

And a negotiable instrument is payable to the bearer when it is

indorsed in blank. See UCC § 3–205(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.”); see also In re Allen, 472 B.R. at 567.11

10Because the Carmel note and deed of trust apparently were

signed in California, the real property securing the note is

located in California and Allana at all relevant times has

resided in California, California’s version of the UCC applies

for purposes of determining the parties’ rights and duties with

respect to the note. See UCC § 1-301(b); Barclays Discount Bank

Ltd. v. Levy, 743 F.2d 722, 725 (9th Cir. 1984); see also

In re Veal, 450 B.R. at 921 n.41 (applying Arizona's counterpart

to UCC § 1-301(b) under similar circumstances). For purposes of

resolving this appeal, there is no material difference between

the uniform version of the UCC and California’s version of the

UCC. Meanwhile, the deed of trust identifies federal law and the

law of the jurisdiction in which the Carmel property is located

as the governing law. Thus, California law also governs

interpretation and enforcement of the deed of trust. Id. 

Moreover, the parties’ papers assume that California law applies.

11The reasoning of the bankruptcy court and the arguments of

both parties have at all times assumed that the Carmel note

(continued...)

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2. Nationstar’s Alleged Possession of the Original Note

Indorsed in blank

Nationstar claims to have possession of the Carmel note

indorsed in blank and thereby claims to be a holder of the note

and hence a person entitled to enforce the note. Allana claims

that Nationstar’s possession of the Carmel note indorsed in blank

would be insufficient by itself to support the assertion that

Nationstar is entitled to enforce the note. According to Allana,

Nationstar also must establish who owns the note and whether

Nationstar is the owner’s agent. Allana is incorrect. As the

plain language of UCC § 3-301 provides, “[a] person may be a

person entitled to enforce the instrument even though the person

is not the owner of the instrument or is in wrongful possession

of the instrument.”

As we explained at length in In re Veal, so long as Allana

knows that, if she pays Nationstar she has satisfied the debt,

Allana should be indifferent as to who ultimately is determined

to be the owner of the note and whether Nationstar is the owner’s

agent. In re Veal, 450 B.R. at 910, 912 & n.27; see also id. at

913, 919 (holding that alleged servicer can establish entitlement

to payment and to file proof of claim by showing that it is a

person entitled to enforce the note or that it is the agent of a

person entitled to enforce the note). Put another way, if

11(...continued)

qualifies as a negotiable instrument within the meaning of UCC

§ 3-104(a). Consequently, any issue regarding whether UCC

Article 3 applies to the Carmel note has been forfeited. See

Golden v. Chicago Title Ins. Co. (In re Choo), 273 B.R. 608, 613

(9th Cir. BAP 2002).

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Nationstar has established it is a person entitled to enforce the

note, then Nationstar has provided Allana with the requisite

assurance that her plan payments on account of Nationstar’s claim

will satisfy the debt, in accordance with UCC § 3-602. See

In re Veal, 450 B.R. at 910. 

Allana argues that there is a triable issue of fact

regarding whether there exist two originals of the Carmel note. 

We disagree. We have reviewed all of the note copies in the

summary judgment record as well as the declaration and expert

report of Meredith DeKalb Miller and none of these items support

the notion that two original notes exist. Rather, the summary

judgment record indicates that there is only one original Carmel

note and that Nationstar’s attorney Adam Barasch is in possession

of it. Having studied all of the note copies, we agree with

Miller’s statement that all of the note copies are representative

copies of the same note and that James’ signature on each of the

note copies is consistent.

Allana attacked Adam Barasch’s declaration on a number of

evidentiary grounds including hearsay, lack of foundation and

lack of personal knowledge, but these grounds are meritless to

the extent Allana seeks to challenge Barasch’s assertion that he

is in possession of the original of the Carmel note. Barasch is

competent to employ his powers of personal observation to assess

whether he is in possession of an original document. See

Evidence Rule 602 and accompanying Advisory Committee Notes. 

Barasch also is competent to compare the original in his

possession to the copy attached to the Hyne declaration and to

declare whether the Hyne declaration note copy is identical to

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the original. Id. Barasch cannot attest to the authenticity of

James’s signature on the Carmel note, but he does not need to. 

Signatures on negotiable instruments are presumed to be authentic

and authorized, and Allana has not presented any evidence to

overcome that presumption. See In re Stanley, 514 B.R. 27, 39

(Bankr. D. Nev. 2012)(citing UCC §§ 1–206 & 3–308).

On the other hand, the authenticity of the indorsements is a

different matter. Like James’ signature on the note, indorsement

signatures on a negotiable instrument typically are selfauthenticating. Id. And yet, here, there are genuine and

material issues regarding whether the original of the Carmel note

was duly indorsed in blank.

Barasch indicated in his declaration that the indorsement

page attached to the Hyne declaration note copy is identical to

the original. However, Barasch did not specify whether the

indorsements appear on the back of the note’s signature page or

whether they appear on a separate piece of paper attached to the

note, which would make the page containing the indorsements an

allonge. See In re Veal, 450 B.R. at 911 & n.24. Either way,

when as here the debtor legitimately contests the validity of the

indorsements, the bankruptcy court is obliged to physically

inspect them. Id.

Here, Nationstar itself created a genuine issue of material

fact by presenting with its proof of claim a copy of the note

containing a materially different indorsements page than that

contained in the Hyne declaration note copy. As we explained

above, the indorsements are configured differently in the POC

note copy and in the Hyne declaration note copy. In spite of the

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statement in the Barasch declaration that the Hyne declaration

note copy is identical to the original, the contents of the

indorsements page in the POC note copy is controverting evidence

that could permit a reasonable trier of fact to discredit

Barasch’s statement regarding what the original Carmel note looks

like (at least regarding what the indorsements page accompanying

the original note looks like). More importantly, a reasonable

trier of fact also might infer from the divergent indorsements

pages that the original Carmel note never was properly indorsed;

rather, an indorsements page might have been placed with the

original note by some unknown third party without authority to

indorse the Carmel note.

As a result, there is a genuine issue of material fact

regarding whether the Carmel note was duly endorsed in blank and

made payable to the bearer and hence there also is a genuine

issue of material fact as to whether Nationstar qualifies as a

holder of the note and a person entitled to enforce the note.

3. Wells Fargo as Non-holder in Possession of Note with

the Rights of a Holder; Evidentiary Problems

Alternately, Nationstar claims that it possesses the Carmel

note on Wells Fargo’s behalf and that Wells Fargo therefore

qualifies as nonholder in possession of the note with the rights

of holder, which is another means of qualifying as a person

entitled to enforce the note under UCC § 3-301. See In re Veal,

450 B.R. at 911. This alternate claim depends upon Nationstar’s

dual contentions that Wells Fargo, as trustee of a securitization

trust, owns the Carmel note and that Nationstar is Wells Fargo’s

agent. As indicated in In re Veal, proving a non-holder claim of

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this type is harder than proving holder status because the

claimant must demonstrate not only possession of the original

note but also the transfer of some form of interest in the note –

either to the party in possession of the note or to a party on

whose behalf the possessor has taken possession of the note. Id.

at 911-12.

To support these contentions, Nationstar largely relies on

the Hyne declaration. But Hyne’s critical declaration testimony

lacks adequate foundation as to his personal knowledge of key

factual matters, and many of his statements appear to be based on

inadmissible hearsay contained in documents attached as exhibits.

Generally speaking, in order to establish the admissibility

of his declaration testimony, Hyne needed to satisfy the

foundational requirement of demonstrating his personal knowledge

of the facts set forth in his declaration. Evidence Rule 602;

see also United States v. Lopez, 762 F.3d 852, 863 (9th Cir.

2014) (“Personal knowledge means knowledge produced by the direct

involvement of the senses.”). To the extent Hyne did not

properly lay a foundation regarding his personal knowledge or

based his testimony on inadmissible hearsay statements contained

in documents attached to his declaration as exhibits, his

testimony is inadmissible. See Medina v. Multaler, Inc.,

547 F.Supp.2d 1099, 1105 n.8 (C.D. Cal. 2007); see also United

States v. Snodgrass, 635 F.3d 324, 329 (7th Cir. 2011) (affirming

exclusion of witness testimony that was based on inadmissible

hearsay).

From an evidentiary standpoint, of most concern to us is

Hyne’s statement indicating that ownership of the Carmel note was

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transferred to Wells Fargo as trustee of a securitization trust

in April 2004. There is no specific explanation as to how Hyne

came by this information. His generic statement that he relied

on Nationstar’s books and records in preparing his declaration

does virtually nothing to assure us of his personal knowledge

regarding ownership of the Carmel note. Nor is there any

reliable indication that anyone else at Nationstar had personal

knowledge regarding the sale of the Carmel note to Wells Fargo or

that anyone at Nationstar prepared business records regarding the

sale based on information received from persons known to have

personal knowledge.

To corroborate his statement regarding Wells Fargo’s

ownership of the Carmel note, Hyne apparently relied on the

document attached to his declaration as Exhibit C: the mortgage

loan sale & assignment agreement between Lehman Brothers

Holdings, Inc. as seller and Structured Asset Securities Corp. as

buyer. But the statements in Exhibit C that Hyne seems to be

relying upon to corroborate his declaration testimony qualify as

inadmissable hearsay. For instance, in a passing reference, the

sale and assignment agreement refers to Wells Fargo as trustee of

certain mortgage note securitization trusts. While Hyne

attempted to establish that the contents of the sale and

assignment agreement were excepted from the rule against hearsay

by the business records exception set forth in Evidence

Rule 803(6), Hyne failed to demonstrate that he qualified as the

custodian of the sale and assignment agreement or as “another

qualified witness” competent to testify regarding the

prerequisites for application of the business records exception. 

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See Evidence Rule 803(6)(D).

If Allana had not objected to this particular portion of

Hyne’s declaration testimony on foundation, lack of personal

knowledge, hearsay and similar grounds, we might have concluded

that Allana had forfeited these evidentiary objections. But

Allana did make the requisite evidentiary objections, and the

bankruptcy court ignored these objections. Under the

circumstances presented here, the bankruptcy court committed

reversible error in doing so.

 Even if Nationstar somehow could overcome Allana’s evidentiary

objections, the sale and assignment agreement’s passing reference

to Wells Fargo’s role as trustee of certain securitization trusts

does not contain admissible evidence that would permit the

bankruptcy court to conclude for summary judgment purposes that

the Carmel note was included in any of the securitization trusts

for which Wells Fargo allegedly serves as trustee.

 As for Nationstar’s contention that it is Wells Fargo’s

servicing agent, Hyne’s statement to that effect appears at first

blush to be corroborated by the limited power of attorney

attached as Exhibit D to Hyne’s declaration. Nonetheless, even

if we were to assume that Allana’s evidentiary objections to this

statement are not well taken, the limited power of attorney does

not demonstrate that it covers the Carmel note. Nowhere in the

limited power of attorney is the Carmel note listed. The limited

power of attorney does list the securitization trust that

Nationstar asserts included the Carmel note: the Structured

Adjustable Rate Mortgage Loan Trust Mortgage Pass-Through

Certificates, Series 2004-5.

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But there is a critical gap in Nationstar’s evidence. 

Nowhere in the Hyne declaration or in the exhibits attached

thereto is there any competent evidence demonstrating that

ownership of the Carmel note was transferred to the abovereferenced securitization trust. In the absence of such

evidence, Nationstar did not establish, for summary judgment

purposes or otherwise, that Wells Fargo owned the Carmel note and

that Nationstar was Wells Fargo’s agent for purposes of servicing

the Carmel note.

In short, Nationstar did not meet its summary judgment

burden to establish that it qualified as a person entitled to

enforce the Carmel note under either of its alternate theories

pursuant to UCC § 3-301. This means that the bankruptcy court

erred when it granted Nationstar summary judgment with respect to

Allana’s declaratory relief claim and her California unfair

competition law claim, which rulings wholly relied on

Nationstar’s status as a person entitled to enforce the note. 

C. Alternate Theories in Support of Summary Judgment

The bankruptcy court offered an alternate theory for its

summary judgment ruling with respect to Allana’s unjust

enrichment claim. According to the court, Allana’s complaint

against Nationstar sounded in contract, and unjust enrichment

does not apply to actions based in contract. See Klein v.

Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1388 (2012).

We are perplexed by the bankruptcy court’s unjust enrichment 

ruling. We are not aware of any contract between Nationstar and

Allana. At most, the summary judgment record reflects that

Allana obtained an interest in the Carmel property subject to the

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lien securing repayment of the Carmel note. We simply don’t

perceive any contractual relationship between Allana and

Nationstar, nor do we perceive any contract-based claim in

Allana’s complaint against Nationstar. 

Some California courts have held that unjust enrichment is a

remedy and is not an independent cause of action. See, e.g.,

Jogani v. Superior Court, 165 Cal.App.4th 901, 911 (2008);

Melchior v. New Line Prods., Inc., 106 Cal.App.4th 779, 794

(2003). Even so, the Ninth Circuit Court of Appeals recently

interpreted California law on this point and held that, when

faced with a claim for relief alleging unjust enrichment, 

district courts ordinarily should treat the claim for relief “as

a quasi-contract claim seeking restitution.” Astiana v. Hain

Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). Astiana

further held that courts should not dismiss such claims as

duplicative or superfluous of other claims. Id. 

As for Allana’s fourth and final claim – her Fair Debt

Collection Practices Act (“FDCPA”) claim – the bankruptcy court

also offered an alternate theory for its summary judgment ruling

on that claim. The bankruptcy court held that, as matter of law,

the FDCPA did not apply because Nationstar was not a “debt

collector” within the meaning of the FDCPA. The Act provides a

specialized and narrow definition of the term “debt collector,”

which states in relevant part as follows:

(6) The term “debt collector” means any person who uses

any instrumentality of interstate commerce or the mails

in any business the principal purpose of which is the

collection of any debts, or who regularly collects or

attempts to collect, directly or indirectly, debts owed

or due or asserted to be owed or due another. . . . 

The term does not include–

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* * *

(F) any person collecting or attempting to collect

any debt owed or due or asserted to be owed or due

another to the extent such activity (i) is

incidental to a bona fide fiduciary obligation or

a bona fide escrow arrangement; (ii) concerns a

debt which was originated by such person;

(iii) concerns a debt which was not in default at

the time it was obtained by such person; or

(iv) concerns a debt obtained by such person as a

secured party in a commercial credit transaction

involving the creditor.

15 U.S.C.A. § 1692a (West).

The bankruptcy court did not explain its reasoning for this

holding, but it seems to be based on the notion that mortgage

servicers generally are not considered debt collectors under the

FDCPA, so long as their role as mortgage servicer arose before

the borrower defaulted. Perry v. Stewart Title Co., 756 F.2d

1197, 1208 (5th Cir. 1985); see also Lal v. Am. Home Servicing,

Inc., 680 F.Supp.2d 1218, 1224 (E.D. Cal. 2010) (quoting Perry

and stating: “[t]he law is well settled that FDCPA's definition

of debt collector ‘does not include the consumer's creditors, a

mortgage servicing company, or any assignee of the debt.’”);

Mansour v. Cal-Western Reconveyance Corp., 618 F.Supp.2d 1178,

1182 (D. Ariz. 2009) (same).

Assuming without deciding that Perry, Lal and Mansour have

correctly interpreted the FDCPA, we still cannot affirm the

bankruptcy court’s ruling on the FDCPA claim on this basis. 

There are a number of disputed material factual issues that

prevent us from doing so, including but not limited to the

following: (1) whether the Carmel loan is in default; (2) if so,

when that default occurred; (3) whether Nationstar is the

mortgage servicer for the Carmel note; and (4) if so, when it

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became the servicer for that note. The parties contested all of

these issues in the adversary proceeding, and the bankruptcy

court incorrectly attempted to decide them on summary judgment. 

As a second alternate theory for granting summary judgment

against Allana on her FDCPA claim, the bankruptcy court held that

the Carmel refinancing loan was not a “debt” covered by the

FDCPA. We agree. Under the FDCPA, a “debt” is defined as:

any obligation or alleged obligation of a consumer to

pay money arising out of a transaction in which the

money, property, insurance, or services which are the

subject of the transaction are primarily for personal,

family, or household purposes. . . .

15 U.S.C. § 1692a(5) (emphasis added); see also Miller v.

McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C.,

214 F.3d 872, 874-75 (7th Cir. 2000); Bloom v. I.C. Sys., Inc.,

972 F.2d 1067, 1068 (9th Cir. 1992). 

Here, the summary judgment record establishes that the

Carmel loan was used to refinance the Carmel property, and in her

bankruptcy filings, Allana repeatedly admitted that the Carmel

property was not used as the Baronis’ residence, but 

rather was used as a rental property to generate income.12 Under

these circumstances, we hold that the bankruptcy court correctly

determined that the Carmel refinancing loan was not a debt

covered by the FDCPA. Cf. Miller, 214 F.3d at 874-75 (indicating

that a loan used to refinance property that at the time of the

12The loan documentation for the Carmel refinancing loan

further supports the notion that the Carmel property was not used

as the Baronis’ residence at the time James entered into the

transaction. The Carmel deed of trust included an assignment of

rents rider that, among other things, relieved James from the

obligation of occupying the Carmel property as his residence.

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transaction is used as a rental property to generate income is

not covered by the FDCPA). Thus, on this basis, the bankruptcy

court correctly granted Nationstar summary judgment on Allana’s

FDCPA claim.13

D. Other Arguments and Issues

We also must address Allana’s argument that the Carmel note

and the Carmel deed of trust have been irrevocably split and,

therefore, that the Carmel deed of trust is invalid, so the claim

based on the Carmel note should be treated as unsecured. This

argument fails because, under California law, the right to

enforce the deed of trust automatically follows the note. See

Cal. Civ. Code § 2936 (“The assignment of a debt secured by

mortgage carries with it the security.”); Cockerell v. Title Ins.

& Trust Co., 42 Cal.2d 284, 291 (1954) (“Assuming for the moment

that the assignment of the note, secured by the third trust deed,

was a valid assignment, no further assignment of the deed of

trust was necessary.”); see also Carpenter v. Longan, 83 U.S.

271, 275 (1872) (“The transfer of the note carries with it the

security, without any formal assignment or delivery, or even

mention of the latter.”).

Allana additionally argued that the bankruptcy court erred

by not giving her more time to conduct discovery before ruling on

Nationstar’s summary judgment motion. In support of this

13Allana did not attempt to address this issue regarding the

application of the FDCPA until she filed her reply brief on

appeal. Her failure to address this issue in her opening appeal

brief provides a separate and independent basis for rejecting her

belated contention that the Carmel refinance loan is covered by

the FDCPA. Christian Legal Soc'y, 626 F.3d at 487–88;

Brownfield, 612 F.3d at 1149 n.4.

32
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argument, Allana contends that Nationstar, Wells Fargo and others

never fully complied with the discovery requests she made

pursuant to Rule 2004 before she filed her adversary proceeding. 

Allana further contends that Nationstar violated Civil Rule 26 by

not disclosing its alleged servicer role and Wells Fargo’s

alleged ownership of the Carmel note.

In light of our disposition of this appeal, we decline to

resolve Allana’s discovery-related issues. However, we do note

that there is no evidence in the summary judgment record that

Allana took any affirmative action to conduct or compel discovery

during the entire time her adversary proceeding was pending. Nor

did she comply with the applicable procedures for requesting

additional time to conduct discovery. See Civil Rule 56(d); see

also Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d 1439, 1443

(9th Cir. 1986).

CONCLUSION

For the reasons set forth above, we AFFIRM IN PART, REVERSE

IN PART AND REMAND FOR FURTHER PROCEEDINGS.

33
Case 1:12-bk-10986-AA Claim 9-1 Part 2 Filed 09/17/12 Desc Exhibit Page 7 of

 36

Case: 14-1578, Document: 29-4, Filed: 05/12/2015 Page 12 of 41

Appendix A
Exhibit A

Case 1:13-ap-01069-AA Doc 50-2 Filed 09/24/14 Entered 09/24/14 11:42:47 Desc

 Exhibit A-Note Page 7 of 9

Case: 14-1578, Document: 29-14, Filed: 05/12/2015 Page 12 of 41

Appendix B