Tag Archive | "Reversal"

[VIDEO] NH Supreme Court Oral Argument of DEUTSCHE BANK v. KEVLIK

[VIDEO] NH Supreme Court Oral Argument of DEUTSCHE BANK v. KEVLIK

Via: Mike Dillon


Judge: I went through the material that you attached and I was very confused about IndyMac’s role and how we ended up with a foreclosure deed that didn’t reflect IndyMac’s role…can you explain?

Attorney Sheridan for the Kevlik’s  replies… There’s nothing in the record that explains MERS’ role! […] No power to assign… What happened to OneWest bank???

Go on to the link to video below…

  • 2010-0249

[View Video/Audio]

Deutsche Bank National Trust Co.
(John T. Precobb)
(15 min.)
v. James Kevlik & a.
William C. Sheridan
(15 min.)

After you watch the video come back and read…

New Hampshire Supreme Court Reversal “Plaintiff has not carried its burden to show ownership of the property” DEUTSCHE BANK v. KEVLIK

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New Hampshire Supreme Court Reversal “Plaintiff has not carried its burden to show ownership of the property” DEUTSCHE BANK v. KEVLIK

New Hampshire Supreme Court Reversal “Plaintiff has not carried its burden to show ownership of the property” DEUTSCHE BANK v. KEVLIK




No. 2010-249.

Supreme Court of New Hampshire.

Argued: February 17, 2011.

Opinion Issued: April 28, 2011.

Orlans Moran, PLLC, of Boston, Massachusetts (John T. Precobb on the brief and orally), for the plaintiff.

William C. Sheridan, of Londonderry, on the brief and orally, for the defendants.


The defendants, James Kevlik, Catherine Kevlik, and Patricia Durgin, appeal an order of the Derry District Court (Coughlin, J.) denying their motion to dismiss and granting judgment to the plaintiff, Deutsche Bank National Trust Company, in its action for possession of real estate located in Chester. See RSA 540:12 (2007). We reverse.

The following facts are supported by the record or are undisputed. Through its attorney, the plaintiff filed a landlord and tenant writ, alleging that: (1) the plaintiff was entitled to possession of the property; (2) the defendants had been provided with an eviction notice; and (3) the defendants had refused to deliver the property. In the eviction notice, attached to its writ, the plaintiff alleged that it was the current owner of the property “as a result of the foreclosure of a [m]ortgage, which foreclosure sale was held at the [p]roperty on June 12, 2009.” On the day of the merits hearing, the defendants filed a motion to dismiss asserting that a foreclosure sale had never taken place.

At the merits hearing, the Kevliks appeared without counsel. Defendant Durgin did not appear. The plaintiff’s attorney appeared without his client and proffered copies of the landlord and tenant writ with an “affidavit of ownership,” a foreclosure deed with an attached statutory affidavit, and a mortgage assignment, all of which the trial court allowed into evidence over the defendants’ objection. The assignment, dated on January 25, 2009, indicates a transfer of a mortgage executed by defendant Patricia Durgin from Mortgage Electronic Registration Systems, Inc. (as nominee of SouthStar Funding, LLC) to IndyMac Bank F.S.B. The July 20, 2009 foreclosure deed purports to describe a sale of the property from One West Bank, F.S.B., to the plaintiff at a June 12, 2009 foreclosure auction.

At the hearing, the plaintiff’s attorney admitted that the foreclosure and assignment documents were not certified and that he could not attest to their authenticity. Plaintiff’s attorney acknowledged that his firm had not handled the foreclosure sale and that he did not know what the mortgage payments had been. Until the hearing, he was not aware that the Kevliks were related to Patricia Durgin, the mortgagor, and did not know what, if any, rental agreement they had. When asked by the trial court to name a reasonable rent for the property, plaintiff’s attorney suggested five hundred dollars per month. When questioned further on that point by the trial court, he admitted he was “not from this area.”

The Kevliks argued that they had videotape evidence that no foreclosure sale had occurred. The trial court, however, refused to consider this evidence, characterizing the defendants’ argument as contesting title to the property. The trial court told the Kevliks that they would have to pay “recognizance” to the plaintiff of $348.84 per week pending their entry of an action in superior court.

The Kevliks told the trial court they did not wish to pursue the matter in superior court, but requested a continuance in order to consult with counsel. Plaintiff’s attorney did not oppose this request, stating that, “in the interest of fairness, they should have an attorney here.” However, the trial court denied the motion to continue as well as the motion to dismiss, and took the matter under advisement. Subsequently, the trial court ordered judgment in favor of the plaintiff. In its order, the trial court also stated that, “One week after the [h]earing on the [m]erits . . .[,] the tenants paid $348.84 into the Court and the Court accepted the payment. However, the Court accepted said payment with regards to an appeal to the New Hampshire Supreme Court regarding the Landlord/Tenant action and not a plea of title transfer to the Superior Court.”

The defendants moved for reconsideration, again asserting that a foreclosure sale had not, in fact, taken place. They explained that the auctioneer arrived thirty minutes late for the scheduled sale, sat in his car for five minutes, and then drove away. No buyer or anyone else appeared. The defendants argued that the plaintiff could not have purchased the mortgage at the foreclosure sale and therefore did not have standing to evict the defendants. The court denied this motion.

On appeal, the defendants argue that the plaintiff failed to carry its burden of demonstrating that it was the owner of the property, and, thus, the plaintiff is not entitled to judgment. Specifically, the defendants maintain that the documents submitted by the plaintiff’s attorney were insufficient to establish ownership because the evidence was based on “incompetent and unauthenticated hearsay.” Further, the defendants assert, the trial court should have permitted them to challenge the plaintiff’s “offer[s] of proof.”

The issue before us presents a question of statutory interpretation. We are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole. Kenison v. Dubois, 152 N.H. 448, 451 (2005). We first examine the language of the statute, and, where possible, we ascribe the plain and ordinary meanings to the words used. Id. We review the trial court’s interpretation of a statute de novo. Id.

RSA 540:17 (2007) provides:

If the defendant shall plead a plea which may bring in question the title to the demanded premises he shall forthwith recognize to the plaintiff, with sufficient sureties, in such sum as the court shall order, to enter his action in the superior court for the county at the next return day, and to prosecute his action in said court, and to pay all rent then due or which shall become due pending the action, and the damages and costs which may be awarded against him.

Although the statute requires title issues to be resolved in superior court, it does not relieve a possessory plaintiff of the obligation to establish ownership of the subject property. Possessory actions are authorized by RSA 540:12, which provides that, “[t]he owner, lessor, or purchaser at a mortgage foreclosure sale of any [property] may recover possession thereof from a lessee, occupant, mortgagor, or other person in possession . . . after notice in writing to quit the same . . . .” In Liam Hooksett, LLC v. Boynton, 157 N.H. 625 (2008), we addressed the required ownership element of a possessory action brought pursuant to RSA 540:12. In that case, the defendants asserted that an individual other than the plaintiff actually owned the property. Liam Hooksett, 157 N.H. at 627. At the hearing, the plaintiff’s manager appeared on its behalf, but she did not testify that the plaintiff was the owner of the property. Id. at 628. Rather, she presented to the court an “Affidavit of Ownership/Tenancy” that purported to “certify” that the plaintiff was the owner, but the document was not notarized, signed under oath, or admitted into evidence. Id. On that record, we agreed that the plaintiff had not carried its burden to demonstrate that it was the actual owner of the property. Id. “The plaintiff filed a writ seeking possession of the property. Thus, to prevail in this action, the plaintiff was required to prove that it was the `owner, lessor, or purchaser at a mortgage foreclosure sale’ of the property.” Id. The same is true here.

Here, the plaintiff’s attorney presented, as proof of ownership, uncertified copies of a foreclosure deed and affidavit and a mortgage assignment. He did not, however, have first-hand knowledge as to the authenticity of the documents and presented no other proof of their authenticity. The rules of evidence provide that a copy of a public record is admissible only when it is either: (1) certified as correct by a custodian or other authorized person; or (2) accompanied by the testimony of a witness who has compared it to the original and found it to be correct. See N.H. R. Ev. 902(4), 1005. Because the plaintiff satisfied neither requirement, the trial court erred in admitting and relying upon these documents.

Plaintiff’s attorney also submitted a copy of the landlord and tenant writ and attachments, including an “affidavit of ownership.” This “affidavit” stated that plaintiff’s attorney was “certifying” that the plaintiff was the owner of the subject property, but the purported affidavit was not notarized or signed under oath. Further, the initials next to the name on the signature line indicate that it was actually signed by another individual, “C.M.S.” Thus, it was error for the trial court to admit and rely on that document. See Liam Hooksett, 157 N.H. at 628.

On this record, we conclude that the plaintiff has not carried its burden to show ownership of the property. Accordingly, we reverse the trial court’s decision to grant judgment to the plaintiff.

We note the limited nature of our holdings herein. Had the plaintiff proffered authenticated documents, with supporting testimony if necessary, regarding the foreclosure sale, or other proof of its ownership of the property, the trial court could have properly ruled on the issue of the plaintiff’s entitlement to possession because the defendants stated they did not wish to file a title action in superior court. The defendants would not have been able to pursue their challenge to the plaintiff’s title in the district court. See Bank of N.Y. Mellon v. Cataldo, 161 N.H. 135 (2010).


DALIANIS, C.J., and DUGGAN, HICKS and LYNN, JJ., concurred.

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OHIO Appeals Court Reverses Judgment ‘Clerical Errors, Misstatement, Trial Court Entry Nullity’ LaSALLE BANK v. SCOLARO

OHIO Appeals Court Reverses Judgment ‘Clerical Errors, Misstatement, Trial Court Entry Nullity’ LaSALLE BANK v. SCOLARO



JOSEPH M. SCOLARO, et al., Appellants.

C.A. No. 25084.

Court of Appeals of Ohio, Ninth District, Summit County.

March 16, 2011.

CARR, Judge.

{¶ 1} Appellant, Joseph Scolaro, appeals the judgment of the Summit County Court of Common Pleas. This Court reverses.


{¶ 2} On July 18, 2008, LaSalle Bank National Association (hereinafter referred to as “LaSalle”), the original plaintiff, brought this action against Scolaro seeking money judgment against Scolaro based on a January 10, 2007 promissory note in the amount of $225,250.00 plus interest at a rate of 9.60 percent per year from February 1, 2008, plus court costs, advances, and other charges allowed by law. LaSalle also sought to foreclose upon Scolaro’s property based on the mortgage dated January 10, 2007. LaSalle also sued Judy E. Scolaro and the unknown spouse of Joseph Scolaro.

{¶ 3} The parties subsequently participated in resolution and settlement conferences. On April 16, 2009, Joseph Scolaro filed an answer in which he asserted multiple affirmative defenses. The affirmative defenses alleged LaSalle was not the proper party plaintiff, that LaSalle lacked standing, and that LaSalle failed to give proper and requisite notice to Scolaro prior to initiating foreclosure. On April 29, 2009, LaSalle filed a motion to substitute Bank of America, National Association (hereinafter referred to as “Bank of America”) as the plaintiff. This motion was granted by the trial court on April 30, 2009. On June 22, 2009, Bank of America filed a motion for summary judgment, along with an affidavit in support. On August 20, 2009, after being granted an extension of time, Joseph Scolaro filed a brief in opposition with supporting affidavit, as well as his own motion for summary judgment. On September 30, 2009, Bank of America filed a reply in support of its motion for summary judgment and a response to Joseph Scolaro’s motion for summary judgment. On that same day, Bank of America filed a motion for default judgment against Judy E. Scolaro and the unknown spouse of Joseph Scolaro.

{¶ 4} On October 9, 2009, the trial court entered a default judgment against Judy E. Scolaro and the unknown spouse. Also on October 9, 2009, the trial court granted summary judgment against Joseph Scolaro, finding that the substituted plaintiff, Bank of America, had filed a motion for summary judgment and Joseph Scolaro had filed no opposition to the motion. On November 6, 2009, Scolaro filed a notice of appeal.

{¶ 5} On January 28, 2010, Bank of America moved to stay the appeal and remand the matter to the trial court to correct what it described as a “clerical error” in the judgment entry from which the appeal was taken. Bank of America also requested leave to file a motion with the trial court to correct the omission of the motion for summary judgment from the record. On February 8, 2010, Scolaro responded in opposition, asking this Court to deny the portion of Bank of America’s motion requesting a remand to correct a clerical error in the judgment entry. Scolaro argued that the trial court’s finding that he had not filed a response to the motion for summary judgment was not a clerical error and, thus, could not be cured upon the filing of a Civ.R. 60(A) motion. On February 19, 2010, this Court granted the motion to stay the appellate proceedings and ordered the matter “remanded to the trial court for 30 days to rule on Bank of America’s anticipated Civ.R. 60(A) motion.” This Court’s journal entry specifically noted that the “stay and remand [would] automatically expire 30 days from the journalization of [the] order” and required that Bank of America move this Court to continue the stay if the trial court needed additional time to rule on the motion.

{¶ 6} On February 26, 2010, Bank of America filed with the trial court a “motion for an amended and restated judgment nunc pro tunc and revised transcript to correct clerical errors.” In its motion, Bank of America invoked Civ.R. 60(A) and requested that the trial court correct its statement in the October 9, 2009 journal entry that Scolaro had not filed an opposition in response to Bank of America’s motion for summary judgment. Bank of America also requested that the trial court correct the record which failed to reflect that Bank of America had filed a motion for summary judgment on June 22, 2009. Also filed on February 26, 2010, was the affidavit of Attorney April Brown, co-counsel for Bank of America. In the affidavit, Attorney Brown acknowledged that she had prepared a draft of the order granting summary judgment for the convenience of the trial court. Attorney Brown averred that in preparing this entry, she worked from a Summit County form she had previously used. Attorney Brown averred that she accidentally failed to delete the erroneous sentence from the foundational form which stated, “There has been no opposition filed in response to the *** Motion for Summary Judgment.” Attorney Brown averred that “[t]he inclusion of this sentence was accidental, and it did not reflect the procedural history of the case now before this Court.” On March 15, 2010, Joseph Scolaro filed a brief in opposition to Bank of America’s motion. In his brief, Scolaro argued that the aforementioned error in the judgment entry was not mistake or omission which was mechanical in nature and could not be corrected pursuant to Civ.R. 60(A). Scolaro also requested in his motion that the trial court vacate the order for sale of his property which has been issued on October 23, 2009.

{¶ 7} On March 19, 2010, Bank of America filed a motion to continue the stay with this Court. On March 22, 2010, the trial court issued an entry captioned “nunc pro tunc amended and restated judgment and decree in foreclosure and reformation of mortgage and deed.” In the nunc pro tunc entry, the trial court noted that Scolaro had filed an answer to the complaint as well as a memorandum and affidavit in opposition to Bank of America’s motion for summary judgment. The entry stated that “[a]fter due consideration of the submissions of the parties, the Court further finds that there is no genuine issue of material fact and that Bank of America is entitled to summary judgment as a matter of law.”

{¶ 8} On March 29, 2010, Bank of America filed with this Court a notice of correction of record and motion to lift stay. On April 6, 2010, this Court issued a journal entry granting Bank of America’s motion and allowing twenty days for Scolaro to either file a new merit brief or a notice of reliance upon his prior brief. On April 26, 2010, Scolaro filed a notice that he intended to rely on his prior brief.

{¶ 9} On appeal, Scolaro raises two assignments of error.




{¶ 10} In his first assignment of error, Scolaro argues the trial court erred in granting summary judgment in favor of Bank of America because it failed to consider Scolaro’s response to the motion and found that no response had been filed. This Court agrees.

{¶ 11} This Court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105. This Court applies the same standard as the trial court, viewing the facts in the case in the light most favorable to the non-moving party and resolving any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 12.

{¶ 12} Pursuant to Civ.R. 56(C), summary judgment is proper if:
“(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.” Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327.

{¶ 13} To prevail on a motion for summary judgment, the party moving for summary judgment must be able to point to evidentiary materials that show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt (1996), 75 Ohio St.3d 280, 293. Once a moving party satisfies its burden of supporting its motion for summary judgment with sufficient and acceptable evidence pursuant to Civ.R. 56(C), Civ.R. 56(E) provides that the non-moving party may not rest upon the mere allegations or denials of the moving party’s pleadings. Rather, the non-moving party has a reciprocal burden of responding by setting forth specific facts, demonstrating that a “genuine triable issue” exists to be litigated for trial. State ex rel. Zimmerman v. Tompkins (1996), 75 Ohio St.3d 447, 449.

{¶ 14} It is axiomatic that the non-moving party’s reciprocal burden does not arise until after the moving party has met its initial evidentiary burden. To do so, the moving party must set forth evidence of the limited types enumerated in Civ.R. 56(C), specifically, “the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact[.]” Civ.R. 56(C) further provides that “[n]o evidence or stipulation may be considered except as stated in this rule.”

{¶ 15} On February 26, 2011, Bank of America filed a motion for an amended judgment pursuant to Civ.R. 60(A). In its motion, Bank of America noted the trial court’s original judgment entry incorrectly stated that Scolaro had not filed a brief in opposition to Bank of America’s motion for summary judgment. Bank of America characterized this error as a “misstatement” and argued that the “[t]he Judgment and Decree was not entered until several weeks after Bank of America filed its Reply to Scolaro’s Memorandum in Opposition to Bank of America’s Motion for Summary Judgment, thus affording this Court ample time to review and evaluate the parties’ arguments.” In an affidavit which was filed simultaneously to the Civ.R. 60(A) motion, counsel for Bank of America, April Brown, averred that she had prepared a draft of the judgment entry, but failed to delete the erroneous sentence.

{¶ 16} Civ.R. 60(A) states:
“Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time on its own initiative or on the motion of any party and after such notice, if any, as the court orders. During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court.”

Within the context of Civ.R. 60(A), a “clerical mistake” is “a type of mistake or omission mechanical in nature which is apparent on the record and which does not involve a legal decision or judgment by an attorney.” Paris v. Georgetown Homes, Inc. (1996), 113 Ohio App.3d 501, 503, quoting Dentsply Internatl., Inc. v. Kostas (1985), 26 Ohio App.3d 116, 118. The Tenth District has stated, “The decision whether a submitted entry accurately reflects a decision rendered by the court involves the exercise of discretion by the court, and therefore is not subject to correction under Civ.R. 60(A).” Dokari Invests., LLC v. DFG2, LLC, 10th Dist. No. 08AP-664, 2009-Ohio-1048, at ¶ 16.

{¶ 17} In this case, the trial court’s actions on remand went beyond the scope of merely correcting a clerical mistake in its original judgment entry. As noted above, once a moving party satisfies its burden of supporting its motion for summary judgment with sufficient and acceptable evidence, the non-moving party has a reciprocal burden of responding by setting forth specific facts to demonstrate that a “genuine triable issue” exists to be litigated for trial. Tompkins, 75 Ohio St.3d at 449. Under this standard, the trial court’s erroneous finding in its October 9, 2009 judgment entry that Scolaro had not filed a response to Bank of America’s motion for summary judgment was not merely a mechanical error. Rather, it was a significant finding that was relevant in resolving the legal issue before the court. “A trial court may or may not sign prepared entries at its discretion.” State v. Sapp, 5th Dist. No. 07CA11, 2008-Ohio-5083, at ¶ 27. In exercising its discretion to sign the October 9, 2009 judgment entry, the trial court confirmed that the content of the entry accurately reflected the basis for its ruling. It follows that the erroneous finding that Scolaro had not filed a response to the motion for summary judgment was not subject to correction under Civ.R. 60(A). See Dokari at ¶ 16. By requesting that the trial court issue “an amended and restated judgment nunc pro tunc,” Bank of America was, in effect, asking the trial court to reconsider a final order. It is well-settled that “motions for reconsideration of a final judgment in the trial court are a nullity.” Price v. Carter Lumber Co., 9th Dist. No. 24991, 2010-Ohio-4328, at ¶ 11, quoting Pitts v. Ohio Dept. of Transp. (1981), 67 Ohio St.2d 378, paragraph one of the syllabus. This Court has stated that “any order granting such a motion is likewise a nullity.” State v. Keith, 9th Dist. No. 08CA009362, 2009-Ohio-76, at ¶ 8. Therefore, as the trial court’s judgment entry issued on March 22, 2010 was a nullity, this Court must look to the trial court’s October 9, 2009 judgment entry in reviewing Scolaro’s first assignment of error.

{¶ 18} Turning to the merits of Scolaro’s assignment of error, this Court concludes that the trial court’s judgment must be reversed. As discussed above, the trial court found that Bank of America’s motion for summary judgment was unopposed. The record indicates that Scolaro filed a brief in opposition to the motion for summary judgment, along with an affidavit in support, as well as a cross-motion for summary judgment, on August 20, 2009. Subsequently, on September 30, 2009, Bank of America filed a reply in support of its motion for summary judgment and a response to Joseph Scolaro’s motion for summary judgment. On remand, the trial court must make substantive determinations on the competing motions for summary judgment giving consideration to all relevant submissions by the parties.

{¶ 19} Scolaro’s first assignment of error is sustained.



{¶ 20} In his second assignment of error, Scolaro argues the trial court erred in granting summary judgment to Bank of America because there were genuine issues of material fact. Because our resolution of the first assignment of error is dispositive of this appeal, this Court declines to address the Scolaro’s second assignment of error as it is rendered moot. See App.R. 12(A)(1)(c).


{¶ 21} Scolaro’s first assignment of error is sustained. Scolaro’s second assignment of error is rendered moot. The judgment of the Summit County Court of Common Pleas is reversed, and the cause remanded for further proceedings consistent with this decision.

Judgment reversed, and cause remanded.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellee.


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Interesting Appeals Court Reversal From 1950’s “Fourteenth Amendment, Due Process” Mullane v. Central Hanover Bank & Trust Co.

Interesting Appeals Court Reversal From 1950’s “Fourteenth Amendment, Due Process” Mullane v. Central Hanover Bank & Trust Co.

339 U.S. 306 (1950)


No. 378.Supreme Court of United States.

Argued February 8, 1950. Decided April 24, 1950.


307*307 Kenneth J. Mullane argued the cause and filed a brief for appellant.

Albert B. Maginnes argued the cause for the Central Hanover Bank & Trust Co., appellee. With him on the brief was J. Quincy Hunsicker, 3rd.

James N. Vaughan submitted on brief for Vaughan, appellee.

Peter Keber and C. Alexander Capron filed a brief for the New York State Bankers Association, as amicus curiae, urging affirmance.

MR. JUSTICE JACKSON delivered the opinion of the Court.

This controversy questions the constitutional sufficiency of notice to notice to beneficiaries on judicial settlement of accounts by the trustee of a common trust fund established under the New York Banking Law. The New York Court of Appeals considered and overruled objections that the statutory notice contravenes requirements of the Fourteenth Amendment and that by allowance of the account beneficiaries were deprived of property without due process of law. 299 N. Y. 697, 87 N. E. 2d 73. The case is here on appeal under 28 U. S. C. § 1257.

Common trust fund legislation is addressed to a problem appropriate for state action. Mounting overheads have made administration of small trusts undesirable to corporate trustees. In order that donors and testators of moderately sized trusts may not be denied the service of corporate fiduciaries, the District of Columbia and some 308*308 thirty states other than New York have permitted pooling small trust estates into one fund for investment administration.[*] The income, capital gains, losses and expenses of the collective trust are shared by the constituent trusts in proportion to their contribution. By this plan, diversification of risk and economy of management can be extended to those whose capital standing alone would not obtain such advantage.

Statutory authorization for the establishment of such common trust funds is provided in the New York Banking Law, § 100-c (c. 687, L. 1937, as amended by c. 602, L. 1943 and c. 158, L. 1944). Under this Act a trust company may, with approval of the State Banking Board, establish a common fund and, within prescribed limits, 309*309 invest therein the assets of an unlimited number of estates, trusts or other funds of which it is trustee. Each participating trust shares ratably in the common fund, but exclusive management and control is in the trust company as trustee, and neither a fiduciary nor any beneficiary of a participating trust is deemed to have ownership in any particular asset or investment of this common fund. The trust company must keep fund assets separate from its own, and in its fiduciary capacity may not deal with itself or any affiliate. Provisions are made for accounting twelve to fifteen months after the establishment of a fund and triennially thereafter. The decree in each such judicial settlement of accounts is made binding and conclusive as to any matter set forth in the account upon everyone having any interest in the common fund or in any participating estate, trust or fund.

In January, 1946, Central Hanover Bank and Trust Company established a common trust fund in accordance with these provisions, and in March, 1947, it petitioned the Surrogate’s Court for settlement of its first account as common trustee. During the accounting period a total of 113 trusts, approximately half inter vivos and half testamentary, participated in the common trust fund, the gross capital of which was nearly three million dollars. The record does not show the number or residence of the beneficiaries, but they were many and it is clear that some of them were not residents of the State of New York.

The only notice given beneficiaries of this specific application was by publication in a local newspaper in strict compliance with the minimum requirements of N. Y. Banking Law § 100-c (12): “After filing such petition [for judicial settlement of its account] the petitioner shall cause to be issued by the court in which the petition is filed and shall publish not less than once in each week 310*310 for four successive weeks in a newspaper to be designated by the court a notice or citation addressed generally without naming them to all parties interested in such common trust fund and in such estates, trusts or funds mentioned in the petition, all of which may be described in the notice or citation only in the manner set forth in said petition and without setting forth the residence of any such decedent or donor of any such estate, trust or fund.” Thus the only notice required, and the only one given, was by newspaper publication setting forth merely the name and address of the trust company, the name and the date of establishment of the common trust fund, and a list of all participating estates, trusts or funds.

At the time the first investment in the common fund was made on behalf of each participating estate, however, the trust company, pursuant to the requirements of § 100-c (9), had notified by mail each person of full age and sound mind whose name and address were then known to it and who was “entitled to share in the income therefrom. . . [or] . . . who would be entitled to share in the principal if the event upon which such estate, trust or fund will become distributable should have occurred at the time of sending such notice.” Included in the notice was a copy of those provisions of the Act relating to the sending of the notice itself and to the judicial settlement of common trust fund accounts.

Upon the filing of the petition for the settlement of accounts, appellant was, by order of the court pursuant to § 100-c (12), appointed special guardian and attorney for all persons known or unknown not otherwise appearing who had or might thereafter have any interest in the income of the common trust fund; and appellee Vaughan was appointed to represent those similarly interested in the principal. There were no other appearances on behalf of any one interested in either interest or principal.

311*311 Appellant appeared specially, objecting that notice and the statutory provisions for notice to beneficiaries were inadequate to afford due process under the Fourteenth Amendment, and therefore that the court was without jurisdiction to render a final and binding decree. Appellant’s objections were entertained and overruled, the Surrogate holding that the notice required and given was sufficient. 75 N. Y. S. 2d 397. A final decree accepting the accounts has been entered, affirmed by the Appellate Division of the Supreme Court, 275 App. Div. 769, 88 N. Y. S. 2d 907, and by the Court of Appeals of the State of New York. 299 N. Y. 697, 87 N. E. 2d 73.

The effect of this decree, as held below, is to settle “all questions respecting the management of the common fund.” We understand that every right which beneficiaries would otherwise have against the trust company, either as trustee of the common fund or as trustee of any individual trust, for improper management of the common trust fund during the period covered by the accounting is sealed and wholly terminated by the decree. See Matter of Hoaglund, 194 Misc. 803, 811-812, 74 N. Y. S. 2d 156, 164, aff’d 272 App. Div. 1040, 74 N. Y. S. 2d 911, aff’d 297 N. Y. 920, 79 N. E. 2d 746; Matter of Bank of New York, 189 Misc. 459, 470, 67 N. Y. S. 2d 444, 453; Matter of Security Trust Co. of Rochester, id.Matter of Continental Bank & Trust Co., id. 795, 797, 67 N. Y. S. 2d 806, 807-808. 748, 760, 70 N. Y. S. 2d 260, 271;

We are met at the outset with a challenge to the power of the State—the right of its courts to adjudicate at all as against those beneficiaries who reside without the State of New York. It is contended that the proceeding is one in personam in that the decree affects neither title to nor possession of any res, but adjudges only personal rights of the beneficiaries to surcharge their trustee for negligence or breach of trust. Accordingly, it is said, under the strict doctrine of Pennoyer v. Neff, 95 U. S. 714, the Surrogate 312*312 is without jurisdiction as to nonresidents upon whom personal service of process was not made.

Distinctions between actions in rem and those in personam are ancient and originally expressed in procedural terms what seems really to have been a distinction in the substantive law of property under a system quite unlike our own. Buckland and McNair, Roman Law and Common Law, 66; Burdick, Principles of Roman Law and Their Relation to Modern Law, 298. The legal recognition and rise in economic importance of incorporeal or intangible forms of property have upset the ancient simplicity of property law and the clarity of its distinctions, while new forms of proceedings have confused the old procedural classification. American courts have sometimes classed certain actions as in rem because personal service of process was not required, and at other times have held personal service of process not required because the action was in rem. See cases collected in Freeman on Judgments, §§ 1517 et seq. (5th ed.).

Judicial proceedings to settle fiduciary accounts have been sometimes termed in rem, or more indefinitely quasi in rem, or more vaguely still, “in the nature of a proceeding in rem.” It is not readily apparent how the courts of New York did or would classify the present proceeding, which has some characteristics and is wanting in some features of proceedings both in rem and in personam. But in any event we think that the requirements of the Fourteenth Amendment to the Federal Constitution do not depend upon a classification for which the standards are so elusive and confused generally and which, being primarily for state courts to define, may and do vary from state to state. Without disparaging the usefulness of distinctions between actions in rem and those in personam in many branches of law, or on other issues, or the reasoning which underlies them, we do not rest the power of the State to resort to constructive service in this proceeding 313*313 upon how its courts or this Court may regard this historic antithesis. It is sufficient to observe that, whatever the technical definition of its chosen procedure, the interest of each state in providing means to close trusts that exist by the grace of its laws and are administered under the supervision of its courts is so insistent and rooted in custom as to establish beyond doubt the right of its courts to determine the interests of all claimants, resident or nonresident, provided its procedure accords full opportunity to appear and be heard.

Quite different from the question of a state’s power to discharge trustees is that of the opportunity it must give beneficiaries to contest. Many controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.

In two ways this proceeding does or may deprive beneficiaries of property. It may cut off their rights to have the trustee answer for negligent or illegal impairments of their interests. Also, their interests are presumably subject to diminution in the proceeding by allowance of fees and expenses to one who, in their names but without their knowledge, may conduct a fruitless or uncompensatory contest. Certainly the proceeding is one in which they may be deprived of property rights and hence notice and hearing must measure up to the standards of due process.

Personal service of written notice within the jurisdiction is the classic form of notice always adequate in any type of proceeding. But the vital interest of the State in bringing any issues as to its fiduciaries to a final settlement can be served only if interests or claims of individuals who are outside of the State can somehow be determined. A construction of the Due Process Clause which 314*314 would place impossible or impractical obstacles in the way could not be justified.

Against this interest of the State we must balance the individual interest sought to be protected by the Fourteenth Amendment. This is defined by our holding that “The fundamental requisite of due process of law is the opportunity to be heard.” Grannis v. Ordean, 234 U. S. 385, 394. This right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.

The Court has not committed itself to any formula achieving a balance between these interests in a particular proceeding or determining when constructive notice may be utilized or what test it must meet. Personal service has not in all circumstances been regarded as indispensable to the process due to residents, and it has more often been held unnecessary as to nonresidents. We disturb none of the established rules on these subjects. No decision constitutes a controlling or even a very illuminating precedent for the case before us. But a few general principles stand out in the books.

An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Milliken v. Meyer, 311 U. S. 457; Grannis v. Ordean, 234 U. S. 385; Priest v. Las Vegas, 232 U. S. 604; Roller v. Holly, 176 U. S. 398. The notice must be of such nature as reasonably to convey the required information, Grannis v. Ordean, supra, and it must afford a reasonable time for those interested to make their appearance, Roller v. Holly, supra, and cf. Goodrich v. Ferris, 214 U. S. 71. But if with due regard for the practicalities and peculiarities of the case these conditions 315*315 are reasonably met, the constitutional requirements are satisfied. “The criterion is not the possibility of conceivable injury but the just and reasonable character of the requirements, having reference to the subject with which the statute deals.” American Land Co. v. Zeiss, 219 U. S. 47, 67; and see Blinn v. Nelson, 222 U. S. 1, 7.

But when notice is a person’s due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected, compare Hess v. Pawloski, 274 U. S. 352, with Wuchter v. Pizzutti, 276 U. S. 13, or, where conditions do not reasonably permit such notice, that the form chosen is not substantially less likely to bring home notice than other of the feasible and customary substitutes.

It would be idle to pretend that publication alone, as prescribed here, is a reliable means of acquainting interested parties of the fact that their rights are before the courts. It is not an accident that the greater number of cases reaching this Court on the question of adequacy of notice have been concerned with actions founded on process constructively served through local newspapers. Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper, and if he makes his home outside the area of the newspaper’s normal circulation the odds that the information will never reach him are large indeed. The chance of actual notice is further reduced when, as here, the notice required does not even name those whose attention it is supposed to attract, and does not inform acquaintances who might call it to attention. In weighing its sufficiency on the basis of equivalence with actual notice, we are unable to regard this as more than a feint.

316*316 Nor is publication here reinforced by steps likely to attract the parties’ attention to the proceeding. It is true that publication traditionally has been acceptable as notification supplemental to other action which in itself may reasonably be expected to convey a warning. The ways of an owner with tangible property are such that he usually arranges means to learn of any direct attack upon his possessory or proprietary rights. Hence, libel of a ship, attachment of a chattel or entry upon real estate in the name of law may reasonably be expected to come promptly to the owner’s attention. When the state within which the owner has located such property seizes it for some reason, publication or posting affords an additional measure of notification. A state may indulge the assumption that one who has left tangible property in the state either has abandoned it, in which case proceedings against it deprive him of nothing, cf. Anderson National Bank v. Luckett, 321 U. S. 233; Security Savings Bank v. California, 263 U. S. 282, or that he has left some caretaker under a duty to let him know that it is being jeopardized. Ballard v. Hunter, 204 U. S. 241; Huling v. Kaw Valley R. Co., 130 U. S. 559. As phrased long ago by Chief Justice Marshall in The Mary, 9 Cranch 126, 144, “It is the part of common prudence for all those who have any interest in [a thing], to guard that interest by persons who are in a situation to protect it.”

In the case before us there is, of course, no abandonment. On the other hand these beneficiaries do have a resident fiduciary as caretaker of their interest in this property. But it is their caretaker who in the accounting becomes their adversary. Their trustee is released from giving notice of jeopardy, and no one else is expected to do so. Not even the special guardian is required or apparently expected to communicate with his ward and client, and, of course, if such a duty were merely transferred 317*317 from the trustee to the guardian, economy would not be served and more likely the cost would be increased.

This Court has not hesitated to approve of resort to publication as a customary substitute in another class of cases where it is not reasonably possible or practicable to give more adequate warning. Thus it has been recognized that, in the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights. Cunnius v. Reading School District, 198 U. S. 458; Blinn v. Nelson, 222 U. S. 1; and see Jacob v. Roberts, 223 U. S. 261.

Those beneficiaries represented by appellant whose interests or whereabouts could not with due diligence be ascertained come clearly within this category. As to them the statutory notice is sufficient. However great the odds that publication will never reach the eyes of such unknown parties, it is not in the typical case much more likely to fail than any of the choices open to legislators endeavoring to prescribe the best notice practicable.

Nor do we consider it unreasonable for the State to dispense with more certain notice to those beneficiaries whose interests are either conjectural or future or, although they could be discovered upon investigation, do not in due course of business come to knowledge of the common trustee. Whatever searches might be required in another situation under ordinary standards of diligence, in view of the character of the proceedings and the nature of the interests here involved we think them unnecessary. We recognize the practical difficulties and costs that would be attendant on frequent investigations into the status of great numbers of beneficiaries, many of whose interests in the common fund are so remote as to be ephemeral; and we have no doubt that such impracticable and extended searches are not required in the 318*318 name of due process. The expense of keeping informed from day to day of substitutions among even current income beneficiaries and presumptive remaindermen, to say nothing of the far greater number of contingent beneficiaries, would impose a severe burden on the plan, and would likely dissipate its advantages. These are practical matters in which we should be reluctant to disturb the judgment of the state authorities.

Accordingly we overrule appellant’s constitutional objections to published notice insofar as they are urged on behalf of any beneficiaries whose interests or addresses are unknown to the trustee.

As to known present beneficiaries of known place of residence, however, notice by publication stands on a different footing. Exceptions in the name of necessity do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. Where the names and postoffice addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.

The trustee has on its books the names and addresses of the income beneficiaries represented by appellant, and we find no tenable ground for dispensing with a serious effort to inform them personally of the accounting, at least by ordinary mail to the record addresses. Cf. Wuchter v. Pizzutti, supra. Certainly sending them a copy of the statute months and perhaps years in advance does not answer this purpose. The trustee periodically remits their income to them, and we think that they might reasonably expect that with or apart from their remittances word might come to them personally that steps were being taken affecting their interests.

We need not weigh contentions that a requirement of personal service of citation on even the large number of known resident or nonresident beneficiaries would, by 319*319 reasons of delay if not of expense, seriously interfere with the proper administration of the fund. Of course personal service even without the jurisdiction of the issuing authority serves the end of actual and personal notice, whatever power of compulsion it might lack. However, no such service is required under the circumstances. This type of trust presupposes a large number of small interests. The individual interest does not stand alone but is identical with that of a class. The rights of each in the integrity of the fund and the fidelity of the trustee are shared by many other beneficiaries. Therefore notice reasonably certain to reach most of those interested in objecting is likely to safeguard the interests of all, since any objection sustained would inure to the benefit of all. We think that under such circumstances reasonable risks that notice might not actually reach every beneficiary are justifiable. “Now and then an extraordinary case may turn up, but constitutional law like other mortal contrivances has to take some chances, and in the great majority of instances no doubt justice will be done.” Blinn v. Nelson, supra, 7.

The statutory notice to known beneficiaries is inadequate, not because in fact it fails to reach everyone, but because under the circumstances it is not reasonably calculated to reach those who could easily be informed by other means at hand. However it may have been in former times, the mails today are recognized as an efficient and inexpensive means of communication. Moreover, the fact that the trust company has been able to give mailed notice to known beneficiaries at the time the common trust fund was established is persuasive that postal notification at the time of accounting would not seriously burden the plan.

In some situations the law requires greater precautions in its proceedings than the business world accepts for its own purposes. In few, if any, will it be satisfied with 320*320 less. Certainly it is instructive, in determining the reasonableness of the impersonal broadcast notification here used, to ask whether it would satisfy a prudent man of business, counting his pennies but finding it in his interest to convey information to many persons whose names and addresses are in his files. We are not satisfied that it would. Publication may theoretically be available for all the world to see, but it is too much in our day to suppose that each or any individual beneficiary does or could examine all that is published to see if something may be tucked away in it that affects his property interests. We have before indicated in reference to notice by publication that, “Great caution should be used not to let fiction deny the fair play that can be secured only by a pretty close adhesion to fact.” McDonald v. Mabee, 243 U. S. 90, 91.

We hold that the notice of judicial settlement of accounts required by the New York Banking Law § 100-c (12) is incompatible with the requirements of the Fourteenth Amendment as a basis for adjudication depriving known persons whose whereabouts are also known of substantial property rights. Accordingly the judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.


MR. JUSTICE DOUGLAS took no part in the consideration or decision of this case.

MR. JUSTICE BURTON, dissenting.

These common trusts are available only when the instruments creating the participating trusts permit participation in the common fund. Whether or not further notice to beneficiaries should supplement the notice and representation here provided is properly within the discretion of the State. The Federal Constitution does not require it here.

[*] Ala. Code Ann., 1940, Cum. Supp. 1947, tit. 58, §§ 88 to 103, as amended, Laws 1949, Act 262; Ariz. Code Ann., 1939, Cum. Supp. 1949, §§ 51-1101 to 51-1104; Ark. Stat. Ann. 1947, §§ 58-110 to 58-112; Cal. Bank. Code Ann., Deering, 1949, § 1564; Colo. Stat. Ann., 1935, Cum. Supp. 1947, c. 18, §§ 173 to 178; Conn. Gen. Stat. 1949 Rev., § 5805; Del. Rev. Code, 1935, § 4401, as amended, Laws, 1943, c. 171, Laws 1947, c. 268; (D. C.) 63 Stat. 938; Fla. Stat., 1941, §§ 655.29 to 655.34; Ga. Code Ann., 1937, Cum. Supp. 1947, §§ 109-601 to 109-622; Idaho Code Ann., 1949, Cum. Supp. 1949, §§ 68-701 to 68-703; Ill. Rev. Stat., 1949, c. 16 1/2, §§ 57 to 63; Ind. Stat. Ann., Burns, 1950, §§ 18-2009 to 18-2014; Ky. Rev. Stat., 1948, § 287.230; La. Gen. Stat. Ann., 1939, § 9850.64; Md. Ann. Code Gen. Laws, 1939, Cum. Supp. 1947, art. 11, § 62A; Mass. Ann. Laws, 1933, Cum. Supp. 1949, c. 203A; Mich. Stat. Ann., 1943, §§ 23.1141 to 23.1153; Minn. Stat., 1945, § 48.84, as amended, Laws 1947, c. 234; N. J. Stat. Ann., 1939, Cum. Supp. 1949, §§ 17:9A-36 to 17:9A-46; N. C. Gen. Stat., 1943, §§ 36-47 to 36-52; Ohio Gen. Code Ann. (Page, 1946) §§ 715 to 720, 722; Okla. Stat., 1941, Cum. Supp. 1949, tit. 60, § 162; Pa. Stat. Ann., 1939, Cum. Supp. 1949, tit. 7, §§ 819-1109 to 819-1109d; So. Dak. Laws 1941, c. 20; Tex. Rev. Civ. Stat. Ann., 1939, Cum. Supp. 1949, art. 7425b-48; Vt. Stat., 1947 Rev., § 8873; Va. Code Ann., 1950, §§ 6-569 to 6-576; Wash. Rev. Stat. Ann., Supp. 1943, §§ 3388 to 3388-6; W. Va. Code Ann., 1949, § 4219(1) et seq.; Wis. Stat., 1947, § 223.055.

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Commonwealth of Kentucky
Court of Appeals

NO. 2009-CA-000058-MR





** ** ** ** **


In light of our analysis, we vacate the entry of summary judgment because Deutsche Bank did not have standing to commence this action when it did.

This matter is therefore remanded to the circuit court for the purpose of entering an order consistent with this opinion removing this case from its docket.

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FL APPEALS 2nd DCA “Unsupportable Claim, Lost Note Affidavit” COUNTRY PLACE COMM v. JPMORGAN

FL APPEALS 2nd DCA “Unsupportable Claim, Lost Note Affidavit” COUNTRY PLACE COMM v. JPMORGAN




Opinion filed December 29, 2010.

Appeal from the Circuit Court for
Hillsborough County; William P. Levens,

Leslie M. Conklin, Clearwater, for

No appearance for Appellee.



The lender named in the copy of the note and mortgage attached to the
complaint was First Franklin Financial Corporation. The mortgage designated Mortgage
Electronic Registration Systems, Inc., as the mortgagee. J.P. Morgan did not attach to
its complaint any evidence of an assignment of either the note or the mortgage in its
favor. When J.P. Morgan filed the action, no assignment of the mortgage in its favor
had been recorded in the public records of Hillsborough County.


2The note had apparently been endorsed in blank. Oddly, J.P. Morgan
had filed an “Affidavit of Lost Original Instruments” after the entry of the adverse
summary judgment and about seven weeks before the hearing on Country Place’s
motion for attorney’s fees. In the affidavit, J.P. Morgan’s representative swore that the
original note and mortgage “have been lost or misplaced and cannot be located by
Plaintiff. Plaintiff has caused an extensive search of Plaintiff’s records and said Note
and Mortgage cannot be found.”

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FL APPEALS 5th DCA REVERSAL “Race-Notice, Unrecorded Instrument” ARGENT v. WACHOVIA

FL APPEALS 5th DCA REVERSAL “Race-Notice, Unrecorded Instrument” ARGENT v. WACHOVIA


Case No. 5D09-4014.

District Court of Appeal of Florida, Fifth District.

Opinion filed December 30, 2010.

Jeffrey R. Dollinger, of Scruggs & Carmichael, P.A., Gainesville, for Appellant.
W. David Vaughn, of W. David Vaughn, P.A., Jacksonville, for Appellee.

Argent Mortgage Company, LLC [“Argent”] appeals the trial court’s entry of judgment in favor of Wachovia Bank National Association, as Trustee Under Pooling and Servicing Agreement Dated as of November 1, 2004, Asset Backed Pass-Through Certificates Series 2004-WWF1 [“Wachovia”]. Argent argues that the trial court erred by finding that the mortgage now owned by Wachovia has priority over Argent’s mortgage. We reverse.
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Bank of America, Plaintiff-Appellee,

Rodney K. Litteral, et al., Defendant-Appellant.

Appellate No. 23900.

Court of Appeals of Ohio, Second District, Montgomery County.

Rendered on December 3, 2010.


{¶ 1} Defendant-appellant Rodney Litteral appeals from a summary judgment rendered against him and in favor of plaintiff-appellee Bank of America. Litteral contends that the trial court abused its discretion and denied Litteral due process by failing to grant a motion for additional time to obtain counsel and respond, prior to granting the motion for summary judgment. Litteral also argues that the trial court erred by granting summary judgment before the deadline fixed by the trial court for Litteral’s response to the motion had passed.

{¶ 2} We conclude that the trial court erred in prematurely rendering summary judgment in favor of Bank of America. By prematurely entering the judgment the trial court erroneously removed Litteral’s timely filed motion for a continuance from its consideration. By depriving Litteral of the consideration of his motion within its sound discretion, the trial court erred to Litteral’s prejudice. Accordingly, the judgment of the trial court is Reversed, and this cause is Remanded for further proceedings consistent with this opinion.

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PATRICK L. COGSWELL and PATRICK M. O’FLAHERTY, doing business as THE PATRICK GROUP, Plaintiffs-Appellants,
CITIFINANCIAL MORTGAGE COMPANY, INCORPORATED, successor by merger to Associates Finance, Incorporated, Defendant-Appellee.

No. 08-2153.

United States Court of Appeals, Seventh Circuit.

Argued April 15, 2009. Decided October 5, 2010.

Before FLAUM, RIPPLE, and SYKES, Circuit Judges.

SYKES, Circuit Judge.

CitiFinancial Mortgage assigned its interest in a mortgage to two investors—doing business as “The Patrick Group”—but never delivered the original or a copy of the underlying note. When The Patrick Group tried to foreclose on the mortgage in Illinois state court, its action was dismissed because it could not produce the note. After an unsuccessful appeal, The Patrick Group filed this breach-of-contract lawsuit against CitiFinancial. The suit was removed to federal court, and the district court granted summary judgment in favor of CitiFinancial.

We reverse. The district court based its summary-judgment decision primarily on a determination that CitiFinancial never agreed to deliver the note as part of the parties’ agreement to transfer the mortgage. But whether they agreed on this term is a question of fact, and The Patrick Group presented enough evidence from which a reasonable fact finder could conclude that it was a part of the parties’ agreement. The district court’s alternative basis for summary judgment—that CitiFinancial’s alleged breach did not cause The Patrick Group’s damages—was also erroneous. Under the circumstances of this case, the causation question should have been resolved in The Patrick Group’s favor as a matter of law; the state trial and appellate courts rejected The Patrick Group’s foreclosure action because without a copy of the note, it could not prove it was the holder of the debt the mortgage secured.


In short, as a matter of law, The Patrick Group’s damages were caused by CitiFinancial’s failure to deliver an original or a copy of the note secured by the mortgage.[5] The open factual question is whether the parties’ agreement required CitiFinancial to do so, and on this the evidence is disputed. We therefore REVERSE the judgment of the district court and REMAND for further proceedings consistent with this opinion.

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FL 3rd DCA Appeals Court: “Process Service” OPELLA vs. Bayview Loan Servicing, LLC

FL 3rd DCA Appeals Court: “Process Service” OPELLA vs. Bayview Loan Servicing, LLC

No. 3D09-2921
Lower Tribunal No. 09-12657
Steven Ray Opella,

Bayview Loan Servicing, LLC.,

An Appeal from the Circuit Court for Miami-Dade County, Thomas S. Wilson, Jr., Judge.

Steven Ray Opella, in proper person.
Popkin & Rosaler, Brian L. Rosaler, Richard P. Cohn and Deborah Posner,
(Deerfield Beach), for appellee.


Steven Ray Opella appeals from a final summary judgment of foreclosure
entered in favor of Bayview Loan Servicing, LLC., claiming that he was never
served with process. Because the record unequivocally confirms that Opella was
neither served with process nor waived service, we reverse.

We also direct the clerk to forward a copy of this opinion to the Florida Bar for
consideration of conduct in violation of the Rules Regulating the Florida Bar.


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In re: BAP No. CC-09-1396-HPDu

Bk. No. 09-15088-TD




Submitted on March 18, 2010
at Pasadena, California
Filed – March 29, 2010



For the foregoing reasons, we REVERSE the bankruptcy court’s order granting stay relief to BAC. BAC is free to file a new motion for relief from stay if it can properly demonstrate its standing. 13

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TILA ‘VIOLATION’ TIMELY FILED REVERSAL & REMAND: Luce Frazile v. EMC Mortgage Corporation, 09-15560

TILA ‘VIOLATION’ TIMELY FILED REVERSAL & REMAND: Luce Frazile v. EMC Mortgage Corporation, 09-15560


LUCE FRAZILE, Plaintiff-Appellant,

EMC MORTGAGE CORPORATION, a Foreign corporation, FREMONT REORGANIZING CORPORATION, a foreign corporation, Defendants-Appellees.

No. 09-15560. Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

June 11, 2010.

Before BIRCH, MARTIN and ANDERSON, Circuit Judges.



Luce Frazile brought this action against EMC Mortgage Corporation (“EMC”) and Fremont Reorganizing Corporation (“Fremont”). She alleges that in executing and servicing her mortgage loan the defendants misrepresented the true nature of her obligations and violated various federal loan processing requirements. The district court granted the defendants’ motions to dismiss. This appeal followed. For reasons we will discuss, we affirm in part, reverse in part, and remand to the district court.


Accepting the factual allegations of the complaint as true and construing them in the light most favorable to Frazile, the relevant facts are as follows. In 2006, a Fremont agent approached Frazile and encouraged her to refinance the home mortgage on her primary residence, which she alone owned. After she refinanced, it quickly became apparent that Frazile could not afford the payments on her newly refinanced mortgage and she turned to Fremont to rework the agreement’s terms. On November 16, 2006, Frazile again refinanced her mortgage loan. However, Frazile claims that at closing Fremont never provided her with certain documents, namely a consumer handbook on adjustable rate mortgages, two copies of a notice of right to cancel the mortgage, or a closing package. She further alleges that at some point after closing, EMC was assigned either the mortgage and note, loan servicing responsibility, or some combination of these.

Approximately two years after closing, in November 2008, Frazile attempted to rescind her mortgage loan transaction, a right to which she claimed entitlement under the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-1667f. In December 2008, Frazile finally received a “less-than-complete copy of the closing package” from EMC. In these documents, her monthly income was misstated as $4,000, well above her actual $1,200 monthly earnings. Under the terms of the mortgage, the required monthly payments actually exceeded her monthly income. According to her complaint, “[t]he cumulative effect of increased monthly mortgage payments, property taxes and insurance premiums was to create an onerous financial burden on Frazile that would seriously jeopardize her ownership of the homestead of sixteen (16) years.”

On June 15, 2009, Frazile filed this lawsuit. In addition to three state law claims, she sought relief under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617, TILA, and relevant federal regulations. The defendants filed Rule 12(b)(6) motions to dismiss for failure to state a claim. The district court granted the defendants’ motions, dismissing with prejudice Frazile’s federal claims, declining to exercise supplemental jurisdiction as to her remaining state law claims, and closing the case. Frazile now appeals, challenging only the district court’s ruling as to her two federal claims.


“We review de novo the district court’s grant of a motion to dismiss under Rule 12(b)(6).” Redland Co. v. Bank of Am. Corp., 568 F.3d 1232, 1234 (11th Cir. 2009). While we accept all allegations of the complaint as true, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007). In other words, the plaintiff must “allege[] enough facts to suggest, raise a reasonable expectation of, and render plausible” the claims. Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1296 (11th Cir. 2007). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. ___, 129 S. Ct. 1937, 1949 (2009). Furthermore, although the pleading party is not required to “allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001) (citation and internal quotation marks omitted).


Count I of the complaint alleged violation of RESPA. In her complaint, Frazile specifically identified only one provision of that statute as the basis for her claims. She asserted that the defendants’ statutorily required “good faith estimate” failed to “timely provide [her] with full disclosure regarding the nature and the cost of the loan” including the “amount or range of settlement charges.” For this reason, she alleged that the defendants violated 12 U.S.C. § 2604(c).

We have held in the past that “there is no private civil action for a violation of 12 U.S.C. § 2604(c), or any regulations relating to it.” Collins v. FMHA-USDA, 105 F.3d 1366, 1368 (11th Cir. 1997). For this reason, we affirm the district court’s conclusion that all claims brought under this provision must fail.

However, the district court went on to liberally construe Frazile’s complaint. The court examined Frazile’s argument, made in response to the defendants’ motions to dismiss, that she had pleaded sufficient facts to give rise to a claim under 12 U.S.C. § 2605. Section 2605 does afford a private cause of action, and requires that “[e]ach transferee servicer to whom the servicing of any federally related mortgage loan is assigned, sold, or transferred shall notify the borrower of any such assignment, sale, or transfer.” 12 U.S.C. § 2605(c)(1). The district court dismissed any claim arguably brought under § 2605 on the grounds that Frazile failed to allege either (1) actual damage from the nondisclosure of the assignment of the servicing of the loan—as compared to nondisclosure of the terms of the mortgage—or (2) a pattern or practice of nondisclosure by the defendants that would warrant statutory damages. Such an allegation is a necessary element of any claim under § 2605. Id. § 2605(f). After careful review of the complaint, we agree with the conclusion of the district court that Frazile failed to allege facts relevant to the necessary element of damages caused by assignment. She did not, therefore, state a claim under § 2605.

On appeal, Frazile first acknowledges that her “complaint, as drafted, alleges that the [RESPA] violations were of § 2604(c), only.” Despite this fact, and without citation to any statutory provision, relevant regulation, or binding authority, Frazile sets out a series of other RESPA claims that she argues can be inferred from the facts alleged in her complaint. Her attempts to salvage a RESPA claim, however, are without merit. Frazile seems to suggest that she can assert a cause of action under 12 U.S.C. § 2607 (prohibiting kickbacks, markups, and fee splitting for services not performed) or 12 U.S.C. § 2605(e) (setting out the proper form and timing of responses to qualified written requests).

Frazile never raised arguments regarding § 2607 at the district court, even though she had the opportunity to do so. When, for instance, the defendants pointed out in their respective motions to dismiss that § 2604(c) could not support a private cause of action, Frazile did not argue that her complaint alleged facts sufficient to give rise to claims of unlawful markups, kickbacks, or fee splitting. Instead, as it related to RESPA, Frazile’s responsive filing focused entirely on § 2605. She argued that although she had cited only § 2604(c), “[t]he motion to dismiss should be denied because Ms. Frazile is afforded a private or individual cause of action under § 2605.” “[W]e have repeatedly held that `an issue not raised in the district court and raised for the first time in an appeal will not be considered by this court.’” Walker v. Jones, 10 F.3d 1569, 1572 (11th Cir. 1994) (quoting Depree v. Thomas, 946 F.2d 784, 793 (11th Cir. 1991)). If we were to try and address these new arguments on appeal, “we [would] have nothing to go on other than scattered (and unsupported) factual references in the appellant[`s] brief before this Court.” Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1332 (11th Cir. 2004). Under this standard, Frazile failed to preserve a § 2607 claim.

In addition, after careful review of Frazile’s complaint, we cannot conclude that Frazile “alleged enough facts to suggest, raise a reasonable expectation of, and render plausible” claims brought under either § 2607 or § 2605(e). See Watts, 495 F.3d at 1296. Relying solely on the allegations of the complaint, we conclude that Frazile’s pleading did not afford the defendants fair notice either that she brought a claim for payment of unlawful kickbacks, markups, or fee splitting, or that she brought a claim based on the inadequacy of their response to her qualified written request. In other words, her complaint did not include factual allegations sufficient “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S. Ct. at 1965.

For the foregoing reasons, the district court did not err when it held that Frazile’s complaint failed to state a RESPA claim.


Frazile also sought relief under TILA, alleging that the defendants violated 15 U.S.C. §§ 1635, 1640, and 1641 as well as Regulation Z, 12 C.F.R. § 226. She asked that the district court remedy her losses by rescinding her mortgage transaction and awarding damages, costs, and attorney’s fees. The district court rejected Frazile’s TILA claims on the grounds that rescission was not available for residential mortgage transactions of the type at issue in Frazile’s suit and that any claim for damages was time-barred.

The district court turned to 15 U.S.C. § 1635(e)(1) to dispense with Frazile’s rescission claim. However, its reliance on this provision was misplaced. TILA exempts from the right of rescission residential mortgage transactions “to finance the acquisition or initial construction of such dwelling.” See 15 U.S.C. §§ 1635(e)(1), 1602(w); 12 C.F.R. §§ 226.23(f)(1), 226.2(a)(24). However, the facts alleged in Frazile’s complaint clearly demonstrate that the mortgage at issue was obtained as part of a refinancing transaction. Thus, § 1635(e)(1)’s exemption is not applicable.[ 1 ]

Frazile also sought damages, attorney’s fees, and costs under § 1640(a) both for the defendants’ failure to comply with the statute’s disclosure requirements and for their failure to properly respond to her November 2008 rescission request. The district court addressed only the former issue, deeming any claim for damages time-barred under § 1640(e), which requires that plaintiffs bring suit “within one year from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e).

This Court has observed that a TILA nondisclosure “violation `occurs’ when the transaction is consummated,” in other words, at the time of closing of a residential mortgage transaction. Smith v. Am. Fin. Sys., Inc. (In re Smith), 737 F.2d 1549, 1552 (11th Cir. 1984). Insofar as nondisclosure is concerned, we have held that the violation “is not a continuing violation for purposes of the statute of limitations.” Id. We have also recognized that the doctrine of equitable tolling might salvage a stale TILA claim where the debtor “ha[s] been prevented from [bringing suit] due to inequitable circumstances.” Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703, 706-08 (11th Cir. 1998).

The alleged nondisclosure occurred at closing on November 16, 2006, more than a year prior to the commencement of this suit. As the district court correctly observed, the complaint’s relevant assertions of misconduct all relate to conduct that took place on or before closing. Because Frazile filed this suit on June 15, 2009, more than one year later, her damages action for noncompliance with TILA’s disclosure requirements is time-barred.[ 2 ]

However, the district court did not evaluate whether the defendants’ failure to timely rescind the mortgage transaction amounted to a separate violation of § 1635(b), which is actionable under § 1640(a). See In re Smith, 737 F.2d at 1552. When a borrower exercises a valid right to rescission, the creditor must take action within twenty days after receipt of the notice of rescission, returning the borrower’s money and terminating its security interest. See 15 U.S.C. § 1635(b). Failure to do so constitutes a separate violation of TILA, actionable under § 1640. Therefore, the one-year limitations period for violation of § 1635(b) claims runs from twenty days after a plaintiff gives notice of rescission. See Belini v. Wash. Mut. Bank, FA, 412 F.3d 17, 26 (1st Cir. 2005) (holding that though the plaintiffs had conceded that their disclosure-based TILA claims were time-barred, the statute of limitations had not yet run on claims arising out of noncompliance with § 1635(b)’s twenty-day requirement). Frazile alleged that in November 2008 she exercised her statutory right to rescind and that the defendants failed to timely respond. Frazile then filed this action on June 15, 2009. Thus, Frazile’s cause of action for inadequate response to her notice of rescission is not time-barred.[ 3 ]

We recognize that the defendants set out a series of alternative grounds on which we might affirm the district court’s dismissal of Frazile’s TILA claims. Despite our authority to affirm on other grounds, we think the better course is to leave these issues for appropriate factual and legal development by the district court. See Jones v. Dillard’s, Inc., 331 F.3d 1259, 1268 n.4 (11th Cir. 2003). On remand, the district court should therefore evaluate the defendants’ other grounds for dismissal and determine whether Frazile has, in fact, stated a TILA claim. If she has, the district court must then determine whether the alleged nondisclosures preserved Frazile’s right to rescind for three years, see 15 U.S.C. § 1635(f), and whether Frazile has alleged that the defendants violated TILA’s rescission procedures by failing to adequately respond to her rescission notice, see id. § 1635(b).


For the foregoing reasons, the district court’s dismissal of Frazile’s RESPA claims is AFFIRMED. However, we REVERSE as to Frazile’s TILA claims and REMAND for proceedings consistent with this opinion.

1. We are aware that under 15 U.S.C. § 1635(e)(2) the right to rescind does not apply to certain refinancing and consolidation loans. However, neither the district court nor either defendant—in their motions to dismiss or on appeal—cites to or relies upon this provision when arguing that Frazile failed to state a TILA claim. Furthermore, even if § 1635(e)(2) were applicable, Frazile might still have a right to rescind “to the extent the new amount financed exceed[ed] the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation.” 12 C.F.R. § 226.23(f)(2).
2. In her briefs on appeal, Frazile asserts that the district court should have deemed the statute of limitations equitably tolled because the defendants did not supply her with the relevant TILA-required disclosures until December 2008 or January 2009, and that the documents eventually provided were incomplete. She also claims that the statute of limitations defense is inapplicable because the exact date of the closing is in question.Frazile’s equitable tolling arguments fail. The alleged nondisclosure of TILA-related documents is the same conduct that makes up the TILA violation itself, a violation that we have deemed noncontinuing for statute of limitation purposes. See In re Smith, 737 F.2d at 1552. To hold otherwise would mean that any failure to disclose at the time of closing would not only give rise to a TILA claim, but would also toll the statute of limitations, thereby eviscerating the time limit expressly set out in § 1640(e). Frazile knew in 2006, at the time of closing, that she had not been supplied with the documents. Her ability to bring suit within one year of this alleged TILA violation was not affected by the defendants’ failure to provide the required documents at closing or by EMC’s purportedly incomplete disclosures two years later.Insofar as she questions the exact date of the closing, Frazile’s argument is directly contradicted by the allegations of her own complaint, in which she clearly and repeatedly asserts that the refinancing transaction closed on November 16, 2006.

Thus, Frazile has failed to state facts sufficient to demonstrate that she was prevented from filing this lawsuit by extraordinary circumstances that were both beyond her control and unavoidable and that she had diligently sought to preserve her statutory rights within a year of the alleged nondisclosure violation. See Arce v. Garcia, 434 F.3d 1254, 1261 (11th Cir. 2006).

3. Fremont argues that Frazile waived the right to object to both § 1635(e)(1)’s applicability and the timeliness of her damages action because her initial brief did not directly address the grounds on which the district court based its ruling. Instead, argues Fremont, Frazile conflates the two issues and dedicates the bulk of her initial brief to the timeliness of her rescission claim. We do not consider these issues abandoned. In her brief, Frazile argues that she continues to enjoy TILA’s protections, citing cases to support the position that she is allowed three years to request rescission of the mortgage transaction, pursuant to § 1635(f). Her argument therefore necessarily takes issue with the district court’s conclusion that her mortgage transaction is exempted under § 1635(e). Additionally, she challenges the district court’s finding that she is not entitled to equitable tolling of the statute of limitations, claiming in her initial brief that in 2008 and in 2009 EMC obstructed her ability to acquire information relevant to her suit. Thus, the defendants were on notice that the district court’s TILA rulings were within the scope of Frazile’s appeal.
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