Source: https://forum.msfraud.org/post/u-s-bank-v-kimball-vt-sup-ct-july-22-2011-5410764
Timestamp: 2020-08-13 08:31:08
Document Index: 256226037

Matched Legal Cases: ['§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3']

U.S. Bank v. Kimball - VT Sup. Ct. (July 22, 2011) - MSFraud.org Mortgage Servicing Fraud Forum
U.S. Bank v. Kimball - VT Sup. Ct. (July 22, 2011)
Alina Virani 1311610367
This is a great case on standing. The Supreme Court of Vermont affirmed the dismissal with prejudice of U.S. Bank's foreclosure complaint.
http://www.leagle.com/xmlResult.aspx?xmldoc=In%20VTCO%2020110722B97.xml&docbase=CSLWAR3-2007-CURR
¶ 1. Plaintiff US Bank National Association, as trustee for RASC 2005 AHL1, appeals from a trial court order granting summary judgment for defendant homeowner and dismissing with prejudice US Bank's foreclosure complaint for lack of standing. On appeal, US Bank argues that it had standing to prosecute the foreclosure claim and the court's dismissal with prejudice was in error. Homeowner cross-appeals, arguing that the court erred in not addressing her claim for attorney's fees. We affirm the dismissal and remand for consideration of homeowner's motion for attorney's fees.
¶ 6. US Bank opposed the request and responded with its own cross-motion for summary judgment on the merits, claiming that whatever deficiencies were present in its original complaint were now resolved because it had produced and sent to homeowner "a copy of the fully endorsed note specifically payable to [US Bank]." In its statement of undisputed facts, US Bank asserted that it had the original note, and that it was endorsed from Accredited to RFC and then to US Bank. No dates, however, were provided for these endorsements. In support, US Bank attached an affidavit attesting to these facts, but still devoid of any dates for the purported assignments. The affidavit was signed by Jeffrey Stephan, the same man who had signed the assignment attached to original complaint, but this time identifying himself as a "Limited Signing Officer" for GMAC, the mortgage servicer for homeowner's loan. In the affidavit, Stephan claims that he has "familiarity with the loan documentation underlying the mortgage loan entered at issue in the present foreclosure case." The copy of the note attached had an allonge, appearing to be the same allonge previously submitted as endorsed in blank, but this time with "RFC" stamped in the blank spot and containing a second endorsement from RFC to US Bank. Neither endorsement was dated.
¶ 12. We begin with the issue of standing. "[O]ur review of dismissal for lack of standing is the same as that for lack of subject matter jurisdiction. We review the lower court's decision de novo, accepting all factual allegations in the complaint as true." Brod v. Agency of Natural Res., 2007 VT 87, ¶ 2, 182 Vt. 234, 936 A.2d 1286. We have the same standing requirement as the federal courts in that our jurisdiction is limited to "actual cases or controversies." Parker v. Town of Milton, 169 Vt. 74, 76-77, 726 A.2d 477, 480 (1998). Therefore, to bring a case "[a] plaintiff must, at a minimum, show (1) injury in fact, (2) causation, and (3) redressability." Id. at 77, 726 A.2d at 480 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). This means a plaintiff "must have suffered a particular injury that is attributable to the defendant," id. at 77, 726 A.2d at 480, and a party who is not injured has no standing to bring a suit. Bischoff v. Bletz, 2008 VT 16, ¶¶ 15-16, 183 Vt. 235, 939 A.2d 420. And, as the U.S. Supreme Court has explained, "standing is to be determined as of the commencement of suit." Lujan, 504 U.S. at 570 n.5.
¶ 13. To foreclose a mortgage, a plaintiff must demonstrate that it has a right to enforce the note, and without such ownership, the plaintiff lacks standing. Wells Fargo Bank, N.A. v. Ford, 15 A.3d 327, 329 (N.J. Super. Ct. App. Div. 2011). While a plaintiff in a foreclosure should also have assignment of the mortgage, it is the note that is important because "[w]here a promissory note is secured by a mortgage, the mortgage is an incident to the note." Huntington v. McCarty, 174 Vt. 69, 70, 807 A.2d 950, 952 (2002). Because the note is a negotiable instrument, it is subject to the requirements of the UCC. Thus, US Bank had the burden of demonstrating that it was a "`[p]erson entitled to enforce'" the note, 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." 9A V.S.A. § 3-301. On appeal, US Bank asserts that it is entitled to enforce the note under the first category—as a holder of the instrument.
¶ 14. A person becomes the holder of an instrument when it is issued or later negotiated to that person. 9A V.S.A. § 3-201(a). Negotiation always requires a transfer of possession of the instrument. Id. § 3-201 cmt. When the instrument is made payable to bearer, it can be negotiated by transfer alone. Id. §§ 3-201(b), 3-205(a). If it is payable to order—that is, to an identified person—then negotiation is completed by transfer and endorsement of the instrument. Id. § 3-201(b). An instrument payable to order can become a bearer instrument if endorsed in blank. Id. § 3-205(b). Therefore, in this case, because the note was not issued to US Bank, to be a holder, US Bank was required to show that at the time the complaint was filed it possessed the original note either made payable to bearer with a blank endorsement or made payable to order with an endorsement specifically to US Bank. SeeBank of N.Y. v. Raftogianis, 13 A.3d 435, 439-40 (N.J. Super. Ct. Ch. Div. 2010) (reciting requirements for bank to demonstrate that it was holder of note at time complaint was filed).
¶ 23. Thus, this may be but an ephemeral victory for homeowner. Absent adjudication on the underlying indebtedness, the dismissal cannot cancel her obligation arising from an authenticated note, or insulate her from foreclosure proceedings based on proven delinquency. Cf. Indymac Bank, F.S.B. v. Yano-Horoski, 912 N.Y.S.2d 239, 240 (App. Div. 2010) (reversing trial court's order canceling mortgage and debt). Homeowner's arguments supporting a dismissal with prejudice are not convincing.6 Homeowner relies on Nolen v. State, but that unpublished three-justice decision simply affirmed the trial court's decision to dismiss with prejudice plaintiff's constitutional claim for lack of standing without a challenge to or any analysis of the "with prejudice" designation. No. 08-131, 2009 WL 2411832, at *2 (Vt. May 29, 2009) (unpub. mem.), available athttp://www.vermontjudiciary.org/d-upeo/upeo.aspx. Further, the court's order does not support plaintiff's assertion that the court was warranted in dismissing with prejudice on equitable grounds given what homeowner characterizes as inconsistent and "likely fraudulent filings" submitted by US Bank. See New Eng. Educ. Training Serv., Inc. v. Silver St. P'ship, 156 Vt. 604, 613, 595 A.2d 1341, 1345-46 (1991) (affirming dismissal of foreclosure action where recovery on the underlying note would be unconscionable). While the trial court may have had discretion to exert its equitable powers in this manner, no findings were made to support such a conclusion, and we will not speculate on a matter of such importance.
Alina Virani 1311610497
Sorry, the link did not post correctly:
Ginger 1311641421
So here we have a perfect example of how lack of standing is not a final win for the homeowner. Mr. Roper's argument that conditions precedent can be a better defense might apply in this case.
Is it likely that, with so many fingers in the pie, the notices of intent to accelerate were sent by the wrong party? A party who could only offer hearsay about the payoff?
In this case, which party should have sent the notices of intent to accelerate? RFC? GMAC? US Bank?