Rinderknecht et al v. Quicken Loans, Inc. et al

Filing 41

OPINION AND ORDER denying 34 Defendants' Motion for Sanctions; and granting 35 Defendants' Motion for Summary Judgment. See Opinion and Order for details. The Clerk shall enter judgment accordingly, terminate all pending motions and deadlines as moot, and close the file. Signed by Judge John E. Steele on 1/7/2016. (MAW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
GENE A RINDERKNECHT, As CoTrustees of the Rinderknecht
Living Trust and SANDRA KAY
RINDERKNECHT,
As
CoTrustees of the Rinderknecht
Living Trust,
Plaintiffs,
v.

Case No: 2:15-cv-19-FtM-29MRM

QUICKEN
LOANS,
INC.,
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION, and MORTGAGE
ELECTRONIC
REGISTRATION
SYSTEMS, INC.,
Defendants.

OPINION AND ORDER
This matter comes before the Court on Defendants’ Motion for
Summary Judgment (Doc. #35) filed on December 1, 2015.
filed

a

Response

(Doc.

#37)

on

December

16,

2015,

Plaintiffs
to

which

Defendants filed a Reply (Doc. #40) on January 5, 2016.

Also

before the Court is Defendants’ Motion for Sanctions (Doc. #34)
filed on November 24, 2015 and Plaintiffs’ Response (Doc. #32)
filed on November 12, 2015.

For the reasons set forth below, the

Motion for Summary Judgment is granted and the Motion for Sanctions
is denied.

I.
Plaintiffs, who are proceeding pro se, have filed an Amended
Complaint

(Doc.

#14)

against

Defendants

Quicken

Loans,

Inc.

(Quicken), the Government National Mortgage Association (Ginnie
Mae), and Mortgage Electronic Registration Systems, Inc. (MERS)
seeking to quiet title to their home and seeking a declaratory
judgment that their mortgage is unenforceable.

The relevant

undisputed facts are as follows:
On or about October 19, 2012, Plaintiffs executed a note in
favor of Quicken in the amount of $263,907 (the Note).
p. 3; Doc. #37, pp. 1-2.)

(Doc. #35,

The Note was secured by a mortgage (the

Mortgage), which lists Plaintiffs as mortgagors and the subject
property as 15356 Yellow Wood Dr. Alva, FL 33920 (the Property).
(Id.)

Plaintiffs are the current owners of the Property.

#14, ¶ 8; Doc. #35, p. 3.)

(Doc.

After execution of the Note and

Mortgage, the Note was bundled into a mortgage backed security
known as the REMIC 2012-121 Trust (the Trust), for which Ginnie
Mae serves as trustee.

(Doc. #14, ¶¶ 14-17; Doc. #35, p. 4.)

To

effectuate that transaction, Quicken transferred the Note to the
Trust.

(Id.)

Plaintiffs contend that Quicken failed to properly record an
assignment of the Note to the Trust at the time of securitization.
Plaintiffs further contend that Quicken did not transfer the

2

Mortgage to the Trust along with the Note.1

(Doc. #14, ¶¶ 14-20.)

According to Plaintiffs, the separation of the Note and Mortgage,
along with Quicken’s failure to properly assign the Note to the
Trust, render the mortgage unenforceable against them.

Based on

these allegations, Plaintiffs seek a declaratory judgment that
Defendants have no legal interest in the Property and quieting
title to the Property in favor of Plaintiffs.

Defendants now move

for summary judgment, arguing that even if the Note and Mortgage
were separated as Plaintiffs contend, the separation does not
render the mortgage unenforceable.
II.
Summary

judgment

is

appropriate

only

when

the

Court

is

satisfied 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.”

Fed. R. Civ. P. 56(a).

“An issue of fact is ‘genuine’ if

the record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”

Baby Buddies, Inc. v. Toys “R” Us,

1

Defendants dispute that there were defects in the transfer of
the Note and Mortgage to the Trust. However, as set forth below,
Plaintiffs cannot prevail even if they successfully demonstrate
that the transfer of the Note to the Trust took place without a
proper assignment and/or without a contemporaneous transfer of the
Mortgage. Thus, for the purposes of this motion, the Court will
assume that Plaintiffs accurately characterize the circumstances
surrounding the transfer and assignment.
Scott v. Harris, 550
U.S. 372, 380 (2007) (In ruling on a motion for summary judgment,
the Court views all evidence and draws all reasonable inferences
in favor of the non-moving party.).
3

Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).

A fact is “material”

if it may affect the outcome of the suit under governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“A

court must decide ‘whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004) (citing Anderson, 477 U.S. at 251).
In ruling on a motion for summary judgment, the Court views
all evidence and draws all reasonable inferences in favor of the
non-moving party.

Scott, 550 U.S. at 380; Tana v. Dantanna’s, 611

F.3d 767, 772 (11th Cir. 2010).

However, “if reasonable minds

might differ on the inferences arising from undisputed facts, then
the court should deny summary judgment.”

St. Charles Foods, Inc.

v. America’s Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir.
1999) (quoting Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695
F.2d 1294, 1296-97 (11th Cir. 1983) (finding summary judgment “may
be inappropriate even where the parties agree on the basic facts,
but disagree about the factual inferences that should be drawn
from these facts”)).

“If a reasonable fact finder evaluating the

evidence could draw more than one inference from the facts, and if
that inference introduces a genuine issue of material fact, then
the court should not grant summary judgment.”
Pub. Educ., 495 F.3d 1306, 1315 (11th Cir. 2007).

4

Allen v. Bd. of

III.
Plaintiffs bring two interrelated claims premised on their
assertion that the Mortgage is unenforceable.

First, Plaintiffs

seek a declaratory judgment that the Mortgage is unenforceable.
Second, based on the alleged unenforceability of the Mortgage,
Plaintiffs seek to quiet title to the Property by removing the
Note and Mortgage as clouds on their title.

“A claim for quiet

title in Florida ‘must not only show title in the plaintiff to the
lands in controversy, but also that a cloud exists, before relief
can be given against it.’”

Lane v. Guar. Bank, 552 F. App'x 934,

936 (11th Cir. 2014) (quoting Stark v. Frayer, 67 So. 2d 237, 239
(Fla. 1953)). Defendants do not contest that Plaintiffs have title
to the Property.

Thus, to prevail, Plaintiffs must demonstrate

that the mortgage in unenforceable and, consequently, a cloud on
Plaintiffs’ title to the Property.
Plaintiffs assert two bases for their contention that the
Mortgage is unenforceable.

First, Plaintiffs allege that Quicken

failed to properly record an assignment of the Note to the Trust
when the Note was securitized.

Second, Plaintiffs allege that

Quicken did not transfer the Mortgage to the Trust along with the
Note.

Defendants argue that they are entitled to summary judgment

because, as a matter of law, the Mortgage remains enforceable even
if the transfer of the Note to the Trust took place without a

5

proper assignment and/or without a contemporaneous transfer of the
Mortgage.

The Court agrees with Defendants.

Plaintiffs contend that when Quicken assigned (or attempted
to assign) the Note to the Trust it did not contemporaneously
assign the Mortgage, thereby “splitting” the Note from the Mortgage
and rendering the Mortgage void.

However, Plaintiffs provide no

legal support for their theory that assigning a note without
contemporaneously assigning the mortgage irrevocably “splits” the
instruments and voids the mortgage.

To the contrary, Florida law

is clear that an assignment of a note automatically transfers the
underlying mortgage unless the parties specify otherwise.

Taylor

v. Bayview Loan Servicing, LLC, 74 So. 3d 1115, 1118 (Fla. 2d DCA
2011) (“[Assignee] also became the equitable owner of the mortgage
when

[Assignor]

endorsed

the

note

to

[Assignee]

ownership of the mortgage followed the note.”)

because

the

Thus, Plaintiffs

cannot prevail on their “split the note” theory because, under
Florida law, the Mortgage was automatically transferred to the
Trust at the same time as the Note.
as

true

Plaintiffs’

In other words, even taking

characterization

of

the

securitization

process, Florida law is clear that the Note and Mortgage did not
split.

Moreover, even if the Note and Mortgage somehow did split

when the Mortgage was securitized, “the separation of the Note and
Mortgage does not make the Mortgage (or the Note) voidable.”
Howell v. PHH Mortgage Corp., No. 15-CV-883, 2015 WL 5829673, at

6

*4 (M.D. Fla. Oct. 1, 2015) (collecting cases and dismissing quiet
title action); see also Altier v. Fed. Nat. Mortgage Ass'n, No.
13-CV-164, 2013 WL 6388521, at *5 (N.D. Fla. Dec. 6, 2013) (same).
Plaintiffs also allege that Quicken did not properly assign
the Note to the Trust and/or failed to record the assignment.
However, Florida law is clear that “an improper and/or unrecorded
assignment

does

not

disturb

the

validity

of

the

underlying

mortgage.”

Mahan v. Suntrust Mortgage, Inc., No. 14-CV-109, 2015

WL 3605105, at *5 (M.D. Fla. June 8, 2015); see also In re Halabi,
184 F.3d 1335, 1338 (11th Cir. 1999) (“a failure to record any
subsequent assignment [does not] afford the mortgagor . . . an
opportunity to avoid the mortgage”); Altier, 2013 WL 6388521, at
*4 (“Because the Mortgage would not be voided by an assignment of
the Mortgage only, the Mortgage does not create a cloud on title
. . . .”); Roder v. RH Funding Co., No. 12-CV-1076, 2012 WL 6799690,
at *4 (M.D. Fla. Dec. 10, 2012) (“any defect in the chain of title
on

the

mortgage

(whether

occurring

before

or

during

the

securitization process) does not undermine the mortgage itself”)
report and recommendation approved, 2013 WL 75278 (M.D. Fla. Jan.
7, 2013).

Thus, even if Quicken improperly assigned the Note or

failed

record

to

the

assignment,

the

Mortgage

would

remain

enforceable.
In sum, Florida law is clear that neither “splitting” the
Note from the Mortgage nor an improper and/or unrecorded assignment

7

of the Note renders Plaintiffs’ Mortgage unenforceable.

Absent a

finding that the Mortgage is unenforceable, the Mortgage is not a
cloud on Plaintiffs’ title and Plaintiffs are not entitled to a
declaratory judgment.

Therefore, Defendants’ motion for summary

judgment must be granted.
Concerning Defendants’ motion for sanctions, Rule 11 of the
Federal Rules of Civil Procedure provides that any party (including
those proceeding

pro se) submitting a pleading to the court

“certifies that to the best of the person's knowledge, information,
and

belief,

formed

circumstances

.

.

after
.

the

an

inquiry

claims,

reasonable

defenses,

and

under
other

the
legal

contentions are warranted by existing law or by a nonfrivolous
argument for extending, modifying, or reversing existing law or
for establishing new law.”

Fed. R. Civ. P. 11(b)(2).

If a party

violates Rule 11, “the court may impose an appropriate sanction.”
Id. at 11(c)(1).
Defendants contend that Plaintiffs are subject to Rule 11
sanctions
unsupported

because
by

their

existing

legal
law.

arguments
While

the

are

frivolous

Court

agrees

and
with

Defendants that Plaintiffs’ theories of recovery are foreclosed as
a matter of law, the Court does not agree that Plaintiffs have
violated Rule 11.

In their response to Defendants’ motion,

Plaintiffs state that they advanced their claims with a good faith
belief that Florida law entitled them to the relief they sought

8

(Doc. #32, ¶ 17), and Defendants have provided no evidence to the
contrary.

Moreover, as Defendants note, Plaintiffs have continued

to make timely mortgage payments during the course of this action.
(Doc. #40, p. 3.)

This suggests that Plaintiffs did not bring

this action as a delay tactic or for some other impermissible
purpose.

Defendants’ motion for sanctions will be denied.

Accordingly, it is now
ORDERED:
1.

Defendants’ Motion for Sanctions (Doc. #34) is DENIED.

2.

Defendants’ Motion for Summary Judgment (Doc. #35) is

GRANTED, judgment is entered in favor of Defendants, and Plaintiff
shall take nothing.
3.

The Clerk shall enter judgment accordingly, terminate

all pending motions and deadlines as moot, and close the file.
DONE AND ORDERED at Fort Myers, Florida, this
January, 2016.

Copies: Counsel of record

9

7th

day of