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Bank of New York Mellon v. Delaney

Court of Appeals of Oregon

August 14, 2019

BANK OF NEW YORK MELLON, fka Bank of New York as Trustee for the Certifcate Holders of CWALT, Inc. Alternative Loan Trust 2007-3T1, Mortgage Pass-Through Certifcates 2007-3T1 and Recontrust Company, N. A., its successors in interest and or assigns, Plaintiff-Respondent,
v.
Tammie M. DELANEY and Michael E. Delaney, as tenants by the entirety, Defendants-Appellants, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation, et al., Defendants.

          Argued and submitted December 11, 2017.

          Crook County Circuit Court 12CV0099; Gary Lee Williams, Judge.

          W. J. Barnes, Florida, argued the cause for appellants. Also on the briefs was Philip Anderson.

          Erick J. Haynie argued the cause for respondent. On the brief were Tony Kullen and RCO Legal, P.S.

          Before Armstrong, Presiding Judge, and Tookey, Judge, and Shorr, Judge.

         Case Summary: Defendants appeal a general judgment of judicial foreclosure of a residential deed of trust, arguing that the trial court erred in concluding that plaintiff was entitled to enforce the promissory note that was secured by the [299 Or.App. 2] deed of trust. Defendants make multiple arguments on appeal, primarily based on their contention that the promissory note was not properly indorsed by the named lender. Held: Evidence in the record supported the trial court's factual fending that plaintiff was the holder of the promissory note indorsed in blank. Defendants did not raise any arguments on appeal that could provide a basis for the conclusion that plaintiff was not entitled to enforce the note as the holder of it.

         [299 Or.App. 3] ARMSTRONG, P. J.

         Defendants appeal a general judgment of judicial foreclosure of a residential deed of trust, arguing that the trial court erred in concluding that plaintiff was entitled to enforce the note. We conclude that defendants have not raised any issues on appeal that provide a basis on which we could conclude that plaintiff was not entitled to enforce the note. Accordingly, we affirm.

         Judicial foreclosure is an equitable proceeding that we may exercise our discretion to review de novo. Blunier v. Staggs, 250 Or.App. 215, 217, 279 P.3d 826 (2012); ORS 19.415(3). However, we decline to do that because neither party presents an argument in favor of our taking de novo review, and this is not an exceptional case justifying such review. ORAP 5.40(8)(c). Thus, we review the trial court's findings to determine whether there is any evidence in the record to support them, and its legal conclusions for legal error. See, e.g., Frontgate Properties, LLC v. Bennett, 261 Or.App. 810, 812, 324 P.3d 483, rev den, 356 Or. 400 (2014). In so doing, "we view the evidence, as supplemented and buttressed by permissible derivative inferences, in the light most favorable to the trial court's disposition and assess whether, when so viewed, the record was legally sufficient to permit that outcome." Dept. of Human Services v. N. P., 257 Or.App. 633, 639, 307 P.3d 444 (2013).

         Defendants executed a promissory note dated January 16, 2007, payable to "America's Wholesale Lender," in the principal amount of $577, 054. The note identified America's Wholesale Lender as "lender" and provided that "I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the 'Note Holder.'" The original note, which was admitted into evidence at trial, was indorsed in blank by "Countrywide Home Loans, Inc., a New York Corporation doing business as America's Wholesale Lender." Defendants also executed a deed of trust securing that note, which identified the "lender" as "America's Wholesale Lender" and as a corporation organized under the laws of New York.

         [299 Or.App. 4] In 2012, plaintiff brought this action for judicial foreclosure of the deed of trust as security for the note. Plaintiff moved for summary judgment. Defendants opposed that motion and also filed a cross-motion for summary judgment on their counterclaim for declaratory relief. Defendants sought a declaration that the note and deed of trust are invalid and void because America's Wholesale Lender was not incorporated and did not have a lender license in Oregon, plaintiff had not obtained a proper assignment of the deed of trust, and the indorsement of the note included with plaintiffs summary judgment motion was of "dubious authenticity." Plaintiff responded that, among other things, defendants could not seek a declaration that the note and deed of trust were void because they did not set out such a defense or claim in their pleadings.

         The trial court granted plaintiffs motion in part and denied defendants' motion. On plaintiffs motion for summary judgment, the trial court concluded that it was undisputed that the deed of trust authorized judicial foreclosure, that defendants were in default under the terms of the note, and that, despite notice and an opportunity to cure the default, defendants had not done so. However, the trial court concluded that genuine issues of material fact existed as to whether plaintiff was entitled to enforce the note, and the trial court conducted a bench trial on that issue.

         At trial, plaintiff presented testimony from Gerardo Trueba, the custodian of records for Bayview Loan Servicing, LLC, the servicer of the loan to defendants. Trueba testified that business records showed that the prior loan servicer, Bank of America, had received the indorsed note in 2007, and that Bayview became the servicer for the loan in October 2012, with plaintiff as the owner of the loan. Trueba also testified that Bank of America had acquired Countrywide Home Loans, Inc.

         Defendants presented an expert witness, Richard Kahn. Kahn testified that a New York corporation called "America's Wholesale Lender" does not exist and that America's Wholesale Lender did not have an Oregon lending license. He did testify, however, that Countrywide Home [299 Or.App. 5] Loans, Inc. dba America's Wholesale Lender did have a license in Oregon and that the license was cancelled in 2001. Kahn also questioned the legitimacy of the indorsement on the note because it was not dated, it was in the name of Countrywide Home Loans, Inc. dba America's Wholesale Lender and not America's Wholesale Lender, Inc., and the signature in the stamp was small in ...


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