Opinion
3:10-cv-00001-RCJ-VPC
10-13-2011
ROBERT L. FITZGERALD, Plaintiff, v. QUALITY LOAN SERVICE CORP et al., Defendants.
ORDER
This is a residential foreclosure case involving one property. The Complaint is a MERS-conspiracy-type complaint listing six causes of action. Judge Teilborg partially remanded the case from MDL Case No. 2119 (the "MDL Case"). The Court dismissed the remanded unjust enrichment and reformation claims on the merits. The Court found that the foreclosure may have been statutorily invalid because of a questionable transfer of the beneficial interest by MERS. The Court therefore dismissed as against the lender, CTX Mortgage Co., Inc. but dismissed only in part as to Defendant Quality Loan Services Corp. ("QLS"), permitting a claim for injunctive relief to proceed as against QLS because of the potential defect in foreclosure. Defendants QLS and OneWest Bank, BSB ("OneWest"), f.k.a. IndyMac Bank, have now moved for summary judgment against the claim for injunctive relief insofar as it rests on an allegation of statutorily defective foreclosure. For the reasons given herein, the Court grants the motion.
Charles Boyle, a Vice President and records custodian of OneWest attests that Mortgage Electronic Registration Systems ("MERS"), as nominee for CTX, assigned the subject promissory note (the "Note") to IndyMac by endorsing it in blank and transferring it to IndyMac. (Boyle Aff. ¶¶ 1, 4, 7, Mar. 18, 2011, ECF No. 71-1). Defendants adduce a copy of the Note, which is signed by Plaintiff. (See Note, Feb. 9, 2005, ECF No. 71-4). It is a $650,000 promissory note given by Plaintiff to CTX, and it has been endorsed in blank by CTX, without recourse. (See id. 4). A separate assignment of the Note to IndyMac is also adduced. (See Assignment, Dec. 22, 2008, ECF No. 71-3). This was sufficient to transfer the beneficial interest in Nevada if at least one of two things is also true: (1) CTX delivered or caused to be delivered the blank-endorsed Note to IndyMac; or (2) MERS had the authority separately to transfer the Note on behalf of CTX. See Leyva v. Nat'l Default Servicing Corp., 127 Nev. Adv. Op. No. 40 (Nev. 2011) (holding that in Nevada a promissory note may be transferred either via a traditional negotiation or by otherwise giving the transferee "possession of the note for the purpose of enforcing it" (citing Nev. Rev. Stat. §§ 104.3109 et seq.)).
In Leyva, the Nevada Supreme Court reversed a state district court's order concerning a beneficiary's compliance with the state foreclosure mediation program. See id. The Court ruled that the beneficiary had failed to provide all required documents at the mediation by failing to produce proof of either the endorsed promissory note or other assignment of the beneficial interest. See id. Here, Defendants have produced both. The copy of the blank-endorsed Note, coupled with CTX's attestation that the Note was delivered to IndyMac shows a proper traditional negotiation of the Note, see id., so the Court need not in this case examine the propriety of MERS' purported separate assignment of the interest in the Note, see Leyva (citing Nev. Rev. Stat. § 104.3203(2)); see also Smith v. Cmty. Lending, Inc., 773 F. Supp. 2d 941, 942-43 (D. Nev. 2011) (finding that such a transfer can be proper depending on the scope of MERS' agency under the language of the deed of trust).
Boyle next attests that OneWest then acquired the assets of IndyMac, including the Note, and transferred the Note to Deutsche Bank as trustee for a mortgage-backed security. (Id. ¶8). Defendants also adduce a copy of this assignment. (See Assignment, Dec. 22, 2008, ECF No. 715). Because the Note was still blank-endorsed at this time—there is no evidence that IndyMac or any other putative intermediate holder specifically endorsed the Note in the meantime—delivery to Deutsche Bank (as trustee for a mortgage-backed security) would have effected a traditional negotiation under section 104.3201 without any separate assignment under section 104.3203(2). The separate assignment from OneWest to Deutsche Bank was therefore sufficient, but unnecessary.
In summary, Defendants have accounted for the potential defect the Court identified when ruling on the previous motions to dismiss. Plaintiff has not adduced any contrary evidence showing a genuine issue of material fact. The Court will therefore grant summary judgment to QLS and OneWest as to the remainder of the sixth claim insofar as it has been remanded from the MDL Case.
CONCLUSION
IT IS HEREBY ORDERED that the Motion for Summary Judgment (ECF No. 71) is GRANTED.
IT IS FURTHER ORDERED that the hearing set for November 7, 2011 is VACATED.
IT IS SO ORDERED.
ROBERT C. JONES
United States District Judge