Title: U.S. Bank National Ass'n v. Baber
Citation: 2012 OK 55, 280 P.3d 956
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: June 12, 2012

U.S. Bank National Ass'n v. Baber Annotate this Case Justia Opinion Summary In 2005, Appellants Billy and Jeanette Baber executed a promissory note ("Note") payable to Ameriquest Mortgage Company, Inc. ("Lender"). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a mortgage which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings in 2006. A copy of the non-indorsed Note and Mortgage was included with the petition. In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage. Appellee U.S. Bank as trustee for the Lender, moved for summary judgment; in an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. The trial court granted judgment on the Note and foreclosure on the mortgage in favor of U.S. Bank. Appellants moved to vacate that judgment, arguing they were denied their statutory right to respond to the bank's cross-motion for summary judgment that the motion was not delivered to them in a timely fashion and that they did not receive notice of a hearing that occurred on September 5, 2010. Upon review, the Supreme Court found that the bank by its unindorsed Note and Mortgage, did not prove that it was entitled to enforce either. The Court reversed the trial court's grant of summary judgment and remanded the case for further proceedings. Read more Want to stay in the know about new opinions from the Oklahoma Supreme Court? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Oklahoma Supreme Court. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . U.S. BANK NATIONAL ASSOCIATION v. BABER 2012 OK 55 Case Number: 109942 Decided: 06/12/2012 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. U.S. BANK NATIONAL ASSOCIATION, As TRUSTEE of the SECURITY NATIONAL MORTGAGE LOAN TRUST 2006-1, Plaintiff/Appellee, v. BILLY G. BABER a/k/a BILLY GENE BABER and JEANETTE BABER, a/k/a AGNES J. BABER a/k/a A. JEANETTE BABER, Defendants/Appellants, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GOLD MORTGAGE BANC, INC., AMERIQUEST MORTGAGE COMPANY and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. Defendants. ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY HONORABLE PATRICIA G. PARRISH DISTRICT JUDGE ¶0 Appeal of a summary judgment and motion to vacate granted in U.S. Bank Association's favor against Billy G. Baber and Jeanette Baber, husband and wife (hereinafter "Appellants"), on March 18, 2011. The Babers appeal this summary judgment, and motion to vacate. REVERSED AND REMANDED WITH INSTRUCTIONS MaryGaye LeBoeuf , Oklahoma City, Oklahoma, for Defendants/Appellants Billy G. Baber and Jeanette Baber. Melvin R. Mcvay and Raymond E. Zschiesche, Phillips McFall McCaffrey McVay & Murrah, PC, Oklahoma City Oklahoma for Plaintiff/Appellee U.S. Bank, N.A. Scott Peck, Peck, Erodes & Wenzel, P.A., Oklahoma City for Plaintiff/Appellee U.S. Bank, N.A. COMBS, J. FACTUAL BACKGROUND AND PROCEDURAL HISTORY ¶1 On February 22, 2005, Appellants executed a promissory note (hereinafter "Note") payable to Ameriquest Mortgage Company, Inc. (hereinafter "Lender"). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a certain mortgage (hereinafter "Mortgage"), which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County, Oklahoma. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings on November 6, 2006. A copy of the non-indorsed Note and Mortgage was included with the petition. ¶2 In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage.1 Appellee moved for summary judgment on August 31, 2009. In an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. ¶3 The final Journal Entry of Judgment was filed on March 18, 2011 granting judgment on the note and foreclosing the mortgage lien in favor of U.S. Bank Association, as Trustee. The Babers filed a motion to vacate the judgment on April 4, 2011 arguing they were denied their statutory right to respond to U.S. Bank NA's Cross-Motion for Summary Judgment in violation of statute and rule, that the motion was not delivered to them in a timely fashion and that they did not receive notice of the hearing that occurred on September 5, 2010. STANDARD OF REVIEW ¶4 The standard of review2 for a trial court's ruling either vacating or refusing to vacate a judgment is abuse of discretion. Ferguson Enterprises, Inc. v. Webb Enterprises, Inc., 2000 OK 78, ¶ 5, 13 P.3d 480 , 482; Hassell v. Texaco, Inc., 1962 OK 136, 372 P.2d 233 . A clear abuse-of-discretion standard includes appellate review of both fact and law issues. Christian v. Gray, 2003 OK 10, ¶ 43, 65 P.3d 591 , 608. An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law, or where there is no rational basis in evidence for the ruling. Fent v. Oklahoma Natural Gas Co., 2001 OK 35, ¶12; 27 P.3d 477 , 481 ¶5 Following the teachings of Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___ P.3d ____, ¶11, where we held: To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717 . Being a person entitled to enforce the note is an essential requirement to initiate a foreclosure lawsuit. In the present case, there is a question of fact as to when Appellee became a holder, and thus, a person entitled to enforce the note. Therefore, summary judgment is not appropriate. If Deutsche Bank became a person entitled to enforce the note as either a holder or nonholder in possession who has the rights of a holder after the foreclosure action was filed, then the case may be dismissed without prejudice and the action may be re-filed in the name of the proper party. We reverse the granting of summary judgment by the trial court and remand back for further determinations as to when Appellee acquired its interest in the note. See also, Deutsche Bank v. Matthews, 2012 OK 14, , ___ P.3d ____; Deutsche Bank v. Richardson, 2012 OK 15, ___ P.3d ____;and J.P. Morgan v. Eldridge, 2012 OK 24, ___ P.3d ____. In the present matter U.S. Bank, N.A., as Trustee filed a non-indorsed copy of the note at every step of the proceedings.3 We therefore find there is a question of fact as to when U.S. Bank N.A., as Trustee, acquired the note in the instant matter, and we remand this matter back to the trial court for further determination as to if and when U.S. Bank N.A., as Trustee became a person entitled to enforce the note. CONCLUSION ¶6 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and to have the proper supporting documentation in hand when filing suit, showing the history of the note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, the dismissal cannot cancel their obligation arising from an authenticated note, or insulate them from foreclosure proceedings based on proven delinquency and, therefore, this Court's decision in no way releases or exonerates the debt owed by the defendants on this home. See, U.S. Bank National Association v. Kimball 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010) REVERSED AND REMANDED WITH INSTRUCTIONS ¶7 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, JJ. ¶8 CONCUR IN PART; DISSENT IN PART: WINCHESTER (JOINS GURICH, J.), GURICH (BY SEPARATE WRITING), JJ. ¶9 RECUSED: COLBERT, V.C.J. FOOT