Staley v. Green Tree Servicing, LLC

Filing 17

ORDER GRANTING 13 Motion for Summary Judgment. The subject Release of Mortgage recorded in the Mobile County Probate Office is rescinded, null, void, and of no effect. as more fully set out in order. Signed by Senior Judge Charles R. Butler, Jr on 1/26/2015. (clr)

IN
 THE
 UNITED
 STATES
 DISTRICT
 COURT
 FOR
 THE

SOUTHERN
 DISTRICT
 OF
 ALABAMA

SOUTHERN
 DIVISION

PATRICIA
 STALEY,

)

Plaintiff,

)

 CIVIL
 ACTION
 NO.

v.

)

 14-­‐00316-­‐CB-­‐N

GREEN
 TREE
 SERVICING,
 LLC,

)

Defendant.

)

ORDER

This
 matter
 is
 before
 the
 Court
 on
 the
 Defendant’s
 motion
 (Doc.
 13)
 seeking

summary
 judgment
 on
 its
 counterclaim
 against
 the
 Plaintiff.1

 For
 reasons
 discussed

below,
 the
 motion
 is
 due
 to
 be
 granted.

Determinations
 of
 Undisputed
 Fact2

On
 December
 23,
 2002,
 Counterclaim
 Defendant
 Patricia
 Staley
 (“Staley”)

executed
 a
 Note
 and
 Mortgage
 and
 Countrywide
 Home
 Loans,
 Inc.
 (“Countrywide”).

The
 Mortgage
 was
 recorded
 in
 the
 Mobile
 County
 Probate
 Office
 (the
 “Probate

Office”)
 at
 Book
 5287,
 Page
 530.

 A
 copy
 of
 the
 Note
 and
 recorded
 Mortgage
 are

attached
 the
 Affidavit
 of
 Jeffrey
 Sis
 as
 Exhibits
 A.1
 and
 A.2,
 respectively.

 Mr.
 Sis’s

affidavit
 is
 attached
 to
 Green
 Tree’s
 motion
 for
 summary
 judgment
 (the
 “Motion”)
 as

Exhibit
 A.

1After
 this
 action
 was
 removed
 from
 state
 court,
 this
 Court
 dismissed

Plaintiff’s
 claims
 without
 prejudice
 for
 deliberately
 disobeying
 a
 court
 order.

 (Doc.

12.)

 Therefore,
 Defendant’s
 counterclaim
 is
 the
 only
 claim
 remaining
 in
 this
 action.

2
 Because
 Plaintiff
 has
 failed
 to
 respond
 to
 the
 Defendant’s
 summary

judgment
 motion
 as
 ordered
 by
 the
 Court,
 the
 facts
 asserted
 by
 the
 Defendant
 are

deemed
 admitted.

 See
 Local
 Rule
 7.2(b).

On
 or
 about
 November
 1,
 2013,
 Green
 Tree
 became
 the
 servicer
 and
 holder

of
 the
 Note
 and
 Mortgage,
 and
 later
 the
 recorded
 assignee
 of
 the
 Mortgage.

 A
 copy

of
 the
 recorded
 assignment
 agreement
 is
 attached
 to
 the
 Sis
 Affidavit
 as
 part
 of

Exhibit
 A.3.

 A
 modification
 agreement
 executed
 by
 Staley
 is
 attached
 to
 the
 Sis

Affidavit
 as
 Exhibit
 A.4.

On
 May
 12,
 2014,
 without
 the
 consent,
 permission
 or
 authority
 of
 Green
 Tree,

Staley
 drafted
 and
 unilaterally
 recorded
 a
 document
 with
 the
 Probate
 Office
 of

Mobile
 County
 entitled
 –
 “Release
 of
 Mortgage”
 (the
 “Release”).

 The
 Release
 makes

several
 false,
 inaccurate
 and
 misleading
 statements,
 including
 that
 Green
 Tree
 had

“received
 satisfaction”
 of
 the
 mortgage
 indebtedness
 and
 that
 “the
 debt
 is
 hereby

cancelled”
 and
 “discharged.”

 (Sis.
 Aff.,
 Ex
 A.5.)

 To
 the
 contrary,
 Staley
 had
 not
 paid

the
 balance
 owed
 on
 the
 Note
 and
 Mortgage,
 nor
 had
 Green
 Tree
 agreed
 to
 release

the
 Mortgage
 or
 the
 Mortgage
 lien.

 (Id.)

  In
 fact,
 Staley
 still
 owed
 well
 over

$170,000
 on
 the
 debt
 and
 was
 over
 nine
 months
 past
 due
 on
 her
 payments.

 (Sis

Aff.)

Staley
 also
 worded
 the
 Release
 (“duly
 executed,”
 “[p]repared
 by:
 [Staley\
 for

Green
 Tree,”
 etc.)
 in
 such
 a
 manner
 that
 a
 third
 party
 seeing
 the
 Release
 would

believe
 that
 Green
 Tree
 had
 consented
 or
 participated
 in
 it
 being
 filed,
 when,
 in

truth,
 Green
 Tree
 had
 not
 consented
 or
 participated
 in
 the
 drafting
 and
 recorded

whatsoever.

 (Id.)

 The
 document
 was
 recorded
 without
 Green
 Tree’s
 knowledge,

permission,
 or
 consent.
 (id.)

On
 June
 26,
 2014,
 Green
 Tree,
 though
 counsel,
 sent
 written
 correspondence

to
 Staley
 demanding
 that
 the
 Release
 be
 withdrawn.

 A
 copy
 of
 the
 correspondence

2

is
 attached
 to
 the
 Sis
 Affidavit
 as
 Exhibit
 A.6.

 To
 date,
 to
 Green
 Tree’s
 knowledge,

Staley
 has
 undertaken
 no
 actions
 to
 withdraw
 the
 Release
 or
 to
 otherwise
 convey
 or

represent
 that
 it
 is
 null,
 void,
 and
 of
 no
 effect.

 (Sis
 Aff.)

Conclusions
 of
 Law

“Summary
 judgment
 is
 appropriate
 ‘if
 the
 pleadings,
 depositions,
 answers
 to

interrogatories,
 and
 admission
 on
 file,
 together
 with
 affidavits,
 if
 any,
 show
 that

there
 is
 no
 genuine
 issue
 as
 to
 any
 material
 fact
 and
 that
 the
 moving
 party
 is
 entitled

to
 a
 judgment
 as
 a
 matter
 of
 law.’
 Fed.
 R.
 Civ.
 P.
 56(c).

 In
 opposing
 the
 summary

judgment
 motion,
 ‘an
 adverse
 party
 may
 not
 rest
 upon
 the
 mere
 allegations
 or

denials
 of
 the
 adverse
 party’s
 pleadings,
 but
 the
 adverse
 party’s
 response,
 by

affidavits
 or
 as
 otherwise
 provided
 in
 this
 rule,
 must
 set
 forth
 specific
 facts
 showing

that
 there
 is
 a
 genuine
 issue
 for
 trial.’

 Fed.
 R.
 Civ.
 P.
 56(e).”

 Merget
 v.
 Moss,
 246
 Fed.

Appx.
 664
 (11th
 Cir.
 2007

Section
 35-­‐4-­‐153
 of
 the
 Alabama
 Code
 provides:

 “[w]hen,
 through
 fraud,
 or
 a

mutual
 mistake
 of
 the
 parties,
 or
 a
 mistake
 of
 one
 party
 which
 the
 other
 at
 the
 time

knew
 or
 suspected,
 a
 deed,
 mortgage
 or
 other
 conveyance
 does
 not
 truly
 express
 the

intention
 of
 the
 parties,
 it
 may
 be
 revised
 by
 a
 court
 on
 the
 application
 of
 the
 party

aggrieved
 so
 as
 to
 express
 that
 intention,
 insofar
 as
 this
 can
 be
 done
 without

prejudice
 to
 rights
 acquired
 by
 third
 persons
 in
 good
 faith
 and
 for
 value.”3

 As
 the
 Sis

3
 If
 the
 mortgage
 release
 does
 not
 qualify
 as
 a
 “mortgage
 under
 Ala.
 Code
 §

35-­‐4-­‐153,
 it
 would
 certainly
 qualify
 as
 an
 “other
 conveyance”
 because,
 when
 valid,
 a

mortgage
 release
 materially
 alters
 title
 to
 the
 subject
 property.

 See
 e.g.
 Ala.
 Code
 §

35-­‐10-­‐26
 (“The
 payment
 or
 satisfaction
 of
 the
 real
 property
 mortgage
 debt
 divests

the
 title
 passing
 by
 the
 mortgage.”)

3

Affidavit
 makes
 clear,
 the
 Release
 at
 issue
 is
 clearly
 a
 fraudulent
 document
 that

Staley
 filed
 in
 an
 (unsuccessful)
 effort
 to
 thwart
 the
 foreclosure
 of
 her
 home.

Indeed,
 the
 Release
 makes
 several
 false,
 inaccurate
 and
 misleading

statements,
 including
 that
 Green
 Tree
 had
 “received
 satisfaction”
 of
 the
 mortgage

indebtedness
 and
 that
 “the
 debt
 is
 hereby
 cancelled”
 and
 “discharged.”

 In
 fact,

Staley
 had
 not
 paid
 the
 balance
 owed
 on
 the
 Note
 and
 Mortgage,
 nor
 had
 Green
 Tree

agreed
 to
 release
 the
 Mortgage
 or
 the
 Mortgage
 lien.

 (Sis
 Aff.).

 Staley
 also
 worded

the
 Release
 (“duly
 executed,”
 “[p]repared
 by:

 [Staley]
 for
 Green
 Tree,”
 etc.)
 in
 such
 a

manner
 that
 a
 third
 party
 seeing
 the
 release
 would
 believe
 that
 Green
 Tree
 had

consented
 or
 participated
 in
 it
 being
 filed,
 when,
 in
 truth,
 Green
 Tree
 had
 not

consented
 or
 participated.
 (Id.)

Based
 on
 the
 clear
 testimony
 from
 Green
 Tree
 that
 it
 did
 not
 consent
 to,
 and

played
 no
 role
 in,
 the
 filing
 of
 the
 Release,
 this
 Court
 will
 grant
 summary
 judgment

in
 favor
 of
 Green
 Tree.

 See
 Ala.
 Code
 §
 35-­‐4-­‐153;
 Ala.
 Code
 §
 6-­‐6-­‐220,
 et
 seq.4,
 28

U.S.C.
 §
 2201,
 et
 seq.;
 Wells
 Fargo
 Bank,
 N.A.
 v.
 Sharma,
 642
 F.
 Supp.,
 2d
 242
 (S.D.N.Y.

2009)
 (district
 court
 had
 authority
 to
 rescind
 or
 terminate
 an
 agreement
 under
 the

Declaratory
 Judgment
 Act).

 The
 Court
 further
 finds
 that,
 at
 the
 very
 least,
 the

Release
 is
 invalid
 because
 Staley
 failed
 to
 follow
 the
 requirements
 under
 Alabama

law
 for
 filing
 a
 release
 of
 mortgage,
 something
 that
 can
 only
 be

 accomplished
 by
 the

4
 Ala.
 Code
 §
 6-­‐6-­‐223
 provides:

 “[a]ny
 person
 interested
 under
 a
 deed,
 will,

written
 contract,
 or
 other
 writings
 constituting
 a
 contract
 or
 whose
 rights,
 status,
 or

other
 legal
 relations
 are
 affected
 by
 a
 statute,
 municipal
 ordinance,
 contract,
 or

franchise
 may
 have
 determined
 any
 question
 of
 construction
 or
 validity
 arising

under
 the
 instrument,
 statute,
 ordinance,
 contract,
 or
 franchise
 and
 obtain
 a

declaration
 of
 rights,
 status
 or
 other
 legal
 relations
 thereunder.”

4

mortgagor
 or
 a
 satisfaction
 agent
 –
 which
 Staley
 clearly
 was
 not.

 See
 e.g.
 Ala.
 Code
 §

35-­‐10-­‐27
 and
 Ala.
 Code
 35-­‐10-­‐90,
 et
 seq.

Based
 on
 the
 clear
 testimony
 from
 Green
 Tree
 that
 it
 did
 not
 consent
 to,
 and

played
 no
 role
 in
 the
 filing
 of
 the
 fraudulent
 Release,
 this
 Court
 will
 grant
 Green

Tree’s
 motion
 for
 summary
 judgment.

 The
 subject
 Release
 of
 Mortgage
 recorded
 in

the
 Mobile
 County
 Probate
 Office
 is
 rescinded,
 null,
 void,
 and
 of
 no
 effect.

DONE
 and
 ORDERED
 this
 the
 26th
 day
 of
 January,
 2015.

s/Charles
 R.
 Butler,
 Jr.

Senior
 United
 States
 District
 Judge

5