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 The subject Release of Mortgage recorded in the Mobile County Probate Office is rescinded, null, void, and of no effect.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)

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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    

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