Paik-Apau v. Deutsche Bank National Trust Co. et al
Filing
132
ORDER GRANTING DEFENDANT DEUTSCHE BANK NATIONAL TRUST COMPANY'S MOTION FOR SUMMARY JUDGMENT ON COUNTS 7 AND 8 OF THE FIRST AMENDED COMPLAINT 123 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 10/19/12. " Deutsche Bank is gran ted summary judgment on the remaining claims in this action--the 7th and 8th causes of action asserted in the First Amended Complaint. The Clerk of Court is directed to enter judgment in favor of Defendants and to close this case." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Bernadette M. Paik-Apau shall be served by first class mail at the address of record on October 22, 2012.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
BERNADETTE M. PAIK-APAU
)
)
Plaintiff,
)
)
vs.
)
)
DEUTSCHE BANK NATIONAL TRUST )
CO., AS TRUSTEE IN TRUST OF
)
THE BENEFIT OF THE
)
CERTIFICATE HOLDERS FOR
)
AMERIQUEST MORTGAGE
)
SECURITIES TRUST 2005-R11;
)
AMERIQUEST MORTGAGE COMPANY; )
AMERIQUEST MORTGAGE
)
SECURITIES; AMERICAN HOME
)
MORTGAGE SERVICING, INC.;
)
ROUTH CRABTREE AND OLSEN,
)
)
Defendants.
)
)
_____________________________ )
CIVIL. NO. 10-00699 SOM/RLP
ORDER GRANTING DEFENDANT
DEUTSCHE BANK NATIONAL TRUST
COMPANY’S MOTION FOR SUMMARY
JUDGMENT ON COUNTS 7 AND 8 OF
THE FIRST AMENDED COMPLAINT
ORDER GRANTING DEFENDANT DEUTSCHE BANK NATIONAL TRUST COMPANY’S
MOTION FOR SUMMARY JUDGMENT
ON COUNTS 7 AND 8 OF THE FIRST AMENDED COMPLAINT
I.
INTRODUCTION.
Plaintiff Bernadette Maria Paik-Apau, proceeding pro
se, filed a First Amended Complaint on May 17, 2011.
Her claims
arise out of attempts to enforce rights under a note and mortgage
she executed.
After Paik-Apau allegedly defaulted on her loan
obligations, the lenders began a nonjudicial foreclosure
proceeding that has since been rescinded.
In an order of January 31, 2012, this court granted
summary judgment in favor of Defendants, with the exception of
the 7th and 8th causes of action to the extent they were asserted
against Defendant Deutsche Bank National Trust Co.
96.
See ECF No.
The 7th cause of action seeks to hold Deutsche Bank liable
for a violation of 15 U.S.C. § 1692e, a section of the Fair Debt
Collection Practices Act (“FDCPA”) that prohibits “debt
collectors” from using “any false, deceptive, or misleading
representation or means in connection with the collection of any
debt.”
Paik-Apau asserts that Deutsche Bank’s receipt of a
fraudulent assignment of her note and mortgage violated this
The 8th cause of action seeks to require Deutsche Bank
section.
to prove that it is the proper holder of the original note and
mortgage before it proceeds with any foreclosure proceeding.
It
also reasserts the FDCPA claim asserted in the 7th cause of
action.
Because Deutsche Bank has established that it validly
holds Paik-Apau’s note and mortgage, summary judgment is granted
in its favor on the 7th and 8th causes of action.
II.
BACKGROUND FACTS.
A.
The Note.
In connection with the present motion for summary
judgment, Deutsche Bank filed a copy of the $415,000 adjustable
rate note.
The back of the note was endorsed in blank by
Ameriquest Mortgage Company.
See ECF No. 124-4.
Cindi Ellis,
the Assistant Vice President of Homeward Residential, Inc.,
formerly known as American Home Mortage Servicing, Inc.,
2
submitted a declaration earlier in this case that indicated that
Homeward services Paik-Apau’s loan and that it has possession of
the original $415,000 note which it is holding on Deutsche Bank’s
behalf.
See Declaration of Cindi Ellis ¶¶ 1, 4, and 5, ECF No.
124-1.
However, counsel for Deutsche Bank brought the original
note to the hearing on this motion, indicating that he recently
received it and is holding it on Deutsche Bank’s behalf.
Paik-Apau disputes the authenticity of the adjustable
rate note because, although the signature appears to be hers, she
says she cannot tell without seeing the original.
See
Plaintiff’s Response to Defendant’s Statement of Facts ¶ 1, ECF
No. 127.
Paik-Apau also accuses Cindi Ellis of committing
perjury because Ellis has signed court documents in various
capacities for different companies, making her, in Paik-Apau’s
opinion, a “robosigner.”
128.
See Evidentiary Objections, ECF No.
Paik-Apau’s objections are ill-founded.
On a motion for
summary judgment, Paik-Apau’s burden is to demonstrate a genuine
issue of material fact.
She does not do so by simply stating
that a signature may or may not be hers and that she cannot tell
without seeing the original signature.
Moreover, counsel for
Deutsche Bank brought the original note to the hearing and PaikApau did not claim at the hearing that the signature on that note
was not hers.
In any event, Paik-Apau does not dispute having
executed a $415,000 note in favor of Ameriquest Mortgage Company.
3
See First Amended Complaint ¶ 9, ECF No. 46.
Nor does she
explain how the note submitted to the court differs from the one
she remembers signing.
Paik-Apau’s reference to Ellis’s positions in multiple
companies does not raise a genuine issue of fact as to whether
Deutsche Bank has possession of the original note.
As this court
noted in Tom v. GMAC Mortgage, LLC, 2011 WL 2133705, *7 (D. Haw.
May 25, 2011), “People often hold positions in multiple
companies.”
Paik-Apau’s uncorroborated and speculative
conclusion that Ellis may be a “robosigner” does not raise a
genuine issue of fact as to whether Ellis had the authority she
claims to have had when she signed her declaration.
See Abubo v.
Bank of New York Mellon, 2011 WL 6011787, *7 (D. Haw. Nov. 30,
2011) (rejecting a similar robosigner argument).
In any event,
counsel for Deutsche Bank brought the original note to the
hearing.
Nor is the court convinced that a genuine issue of fact
must exist just because the endorsement of the note was submitted
in connection with this motion, but not in connection with the
previous one.
Compare ECF No. 124-4 with ECF No. 58-5.
The
evidence submitted to this court, as well as Deutsche Bank’s
production of the original note at the hearing, establishes that
Deutsche Bank is certainly in possession of the note assigned in
blank, making it the holder of the note.
4
Other than Paik-Apau’s
speculative and conclusory allegations that no one with authority
endorsed the note, there is nothing in the record indicating that
the note was improperly endorsed.
Contrary to Paik-Apau’s assertion, just because the
endorsement on the note is undated does not mean that Deutsche
Bank fails to establish its standing to enforce the loan
documents.
B.
The Mortgage.
Paik-Apau executed a mortgage securing the note.
This
mortgage was filed in the State of Hawaii Bureau of Conveyances
as Document No. 2005-248459.
See ECF No. 124-5.
Paik-Apau
questions whether this is truly the mortgage she executed because
it refers to her as “married.”
See Plaintiff’s Response to
Defendant’s Statement of Facts ¶ 2, ECF No. 127.
Paik-Apau does
not raise a genuine issue of material fact as to whether the
mortgage recorded in the bureau of conveyances was the one signed
by her simply by questioning the document’s reference to her as
married.
She herself alleged in the First Amended Complaint that
she signed the mortgage that was so recorded.
See FAC ¶¶ 9-10.
In any event, Paik-Apau does not say how the mortgage she
remembers signing materially differed.
For example, Ellis
indicates that Paik-Apau is in default under the terms of her
loan because she has not made a mortgage payment since 2009.
Ellis Decl. ¶ 7.
Paik-Apau does not say that the mortgage she
See
5
signed does not allow for a foreclosure or nonjudicial
foreclosure proceeding in the event of such a default.
Nor does Paik-Apau raise a genuine issue of fact about
the mortgage based on the notary who notarized it.
The record
indicates that the mortgage was notarized by “N. Olson.”
No. 124-5 at PageID #2237.
See ECF
In her deposition, Paik-Apau
indicates that she discovered that “N. Olson” is Nephi Olson.
Paik-Apau says that Nehphi is a man because he is married to
Penny.
Paik-Apau says that the notarization must be fraudulent
because the mortgage she signed was notarized by a woman.
See
Deposition of Bernadette Maria Paik-Apau at 42, Sept. 12, 2011,
ECF No. 124-3.
Paik-Apau fails to demonstrate how she has
personal knowledge that “N. Olson” is Nephi Olson, a man who is
married to Penny.
She does not even address the possibility that
Penny is a man, or that two women might be or might consider
themselves married.
It simply does not necessarily follow that
“N. Olson” must be a man, making the notarization of the document
fraudulent because a female notary actually notarized it.
C.
Assignments of the loan.
On or about January 27, 2009, Citi Residential Lending
Inc., attorney-in-fact for Ameriquest Mortgage Company, assigned
Paik-Apau’s note and mortgage to Deutsche Bank National Trust
Company, as Trustee for Ameriquest Mortgage Securities Inc.
Asset-Backed Pass-Through Certificates, Series 2005-R11, Under
6
the Pooling and Servicing Agreement Dated December 1, 2005.
This
assignment of mortgage was recorded in the bureau of conveyances
on February 27, 2009, as Document No. 2009-029491.
124-9.
See ECF No.
A copy of the pooling and servicing agreement of December
1, 2005, is filed as ECF No. 124-6.
Paik-Apau baldly contends that the note was never
transferred to Deutsche Bank National Trust Company, as Trustee
for Ameriquest Mortgage Securities Inc. Asset-Backed Pass-Through
Certificates, Series 2005-R11, but submits no evidence supporting
that contention.
Nor does she clearly articulate why she thinks
the note was never part of the trust.
At most, she says that the
terms of the pooling and servicing agreement were not complied
with.
But she does not clearly identify what provision was not
complied with.
See Opposition at 6-7, ECF No. 126.
She says,
for example, that according to the Mortgage Loan Purchase
Agreement, ECF No. 127-5, Ameriquest Mortgage Company sold its
interest in her note to Ameriquest Mortgage Securities, Inc.,
before it was transferred to the trust.
That document indicates
that the transfers of various loans had to be completed by
December 1, 2005.
See id.
But there is nothing in that document
indicating that Paik-Apau’s loan was included in that sale.
On or about December 15, 2009, Deutsche Bank National
Trust Company, Trustee for Ameriquest Mortgage Securities Inc.
Asset-Backed Pass-Through Certificates, Series 2005-R11, Under
7
the Pooling and Servicing Agreement Dated December 1, 2005,
assigned Paik-Apau’s mortgage to Deutsche Bank National Trust
Company, Trustee for the benefit of the Certificateholders for
Ameriquest Mortgage Securities Trust 2005-R11, Asset-Backed PassThrough Certificates, Series 2005-R11.
This assignment was
recorded in the bureau of conveyances on January 7, 2010, as
Document No. 2010-002571.
D.
See ECF No. 124-10.
Nonjudicial Foreclosure Proceedings.
The same day that Deutsche Bank National Trust Company,
Trustee for the benefit of the Certificateholders for Ameriquest
Mortgage Securities Trust 2005-R11, Asset-Backed Pass-Through
Certificates, Series 2005-R11, was assigned Paik-Apau’s mortgage,
it issued a Notice of Mortgagee’s Intention to Foreclose Under
Power of Sale.
This document was recorded in the bureau of
conveyances on January 7, 2010, as Document No. 2010-002572.
See
ECF No. 124-11.
Deutsche Bank National Trust Company, Trustee for the
benefit of the Certificateholders for Ameriquest Mortgage
Securities Trust 2005-R11, Asset-Backed Pass-Through
Certificates, Series 2005-R11, recorded a Notice of Rescission of
Mortgagee’s Intention to Foreclose Under Power of Sale in the
bureau of conveyances on June 29, 2011, as Document No. 2011102096.
See ECF No. 124-11.
8
III.
STANDARD OF REVIEW.
The standard for a summary judgment motion was set
forth in this court’s earlier order.
See ECF No. 96.
That
standard is incorporated herein by reference.
IV.
ANALYSIS.
Paik-Apau’s two remaining claims are premised on her
contention that Deutsche Bank National Trust Company, Trustee for
the benefit of the Certificateholders for Ameriquest Mortgage
Securities Trust 2005-R11, Asset-Backed Pass-Through
Certificates, Series 2005-R11, is not the proper holder of her
note and mortgage.
The 8th cause of action seeks to require
Deutsche Bank to prove that it is the proper holder of the
original note and mortgage before it may proceed with any
foreclosure proceeding.
Both the 7th and 8th causes of action
assert that, because Deutsche Bank was not properly assigned her
note and mortgage, it is violating the FDCPA because it is not
attempting to collect its own debt and therefore qualifies as a
“debt collector” that is falsely claiming to assert rights under
the loan documents.
Deutsche Bank moves for summary judgment on
these remaining claims.1
1
To the extent Paik-Apau may be arguing that Deutsche Bank
needs to establish standing to seek summary judgment on claims
asserted against it, this court has already rejected that
argument. See Williams v. Rickard, 2011 WL 2116995, *5 (D. Haw.
May 25, 2011) (“The banks need not establish that they are the
legal owners of Williams’s loans before they defend against
Williams’s claims. ‘Standing’ is a plaintiff’s requirement, and
9
Based on grand assertions of fraud, falsified
foreclosure documents, tampered land records, forgery, and
financial institutions that are “too big to fail,” Paik-Apau
challenges the assignments of her note and mortgages.
This court
has held on numerous occasions, however, that borrowers generally
lack standing to challenge the assignments of their loans.
See
Benoist v. U.S. Bank Nat’s Ass’n, 2012 WL 3202180, *5 (D. Haw.
Aug. 3, 2012) (discussing numerous cases in which courts
concluded that borrowers lack standing to challenge assignments
of their loan documents, and concluding that the plaintiffs could
not therefore set aside the assignment of a mortgage even when
the terms of a pooling and service agreement were not followed);
Au v. Republic State Mortg. Co., 2012 WL 3113147, *4 n.6 (D. Haw.
July 31, 2012) (noting that borrowers who are not parties to or
beneficiaries of a pooling and service agreement lack standing to
challenge alleged violations of such agreements); Bank of New
York Mellon v. Sakala, 2012 WL 1424655, *5 (D. Haw. Apr. 24,
2012) (same); Abubo v. Bank of New York Mellon, 2011 WL 6011787,
*8 (D. Haw. Nov. 30, 2011) (same); Velasco v. Security Nat'l
Mortg. Co., 823 F. Supp. 2d 1061, 1067 (D. Haw. 2011) (ruling
that a borrower could not dispute validity of an assignment of
loan documents through a “slander of title” claim because the
Williams misconstrues the concept in arguing that Defendants must
establish ‘standing’ to defend themselves.”).
10
borrower was not a party to or intended beneficiary of the
assignment).
The reason that debtors generally lack standing to
challenge the assignments of their loan documents is because they
have no interest in those assignments, and the arguments they
usually make do not go to whether the assignments are void ab
initio, but instead to whether the various assignments are
voidable.
Debtors lack standing to challenge voidable
assignments; only the parties to the assignments may raise such
challenges.
See 29 Williston on Contracts § 74:50 (4th ed.),
available at Westlaw Willstn-CN § 74:50 (updated May 2012)
(noting that a debtor may not assert that an assignment is
voidable because it cannot be assumed that the assignor desires
the voiding of the assignment).
“A contract that is void never attains legal effect as
a contract and cannot be enforced, whereas a contract that is
voidable is one where one or more of the parties have the power,
by the manifestation of an election to do so, to avoid the legal
relations created by the contract.”
17A Corpus Juris Secundum
§ 169, available at Westlaw CJS Contracts § 169 (updated Sept.
2012).
A contract is void when one of its essential elements is
missing or when it is made in violation of law.
consent to an agreement that violates the law.
A party cannot
See id.
Accordingly, Hawaii courts have held that a foreclosure sale
11
agreement that arose out of a foreclosure sale that was contrary
to statute is void and unenforceable.
See Lee v. HSBC Bank USA,
121 Haw. 287, 292, 218 P.3d 775, 780 (2009).
Hawaii courts have
similarly held that a contract that involves an “unfair or
deceptive practice” in violation of chapter 480 of Hawaii Revised
Statutes is void and unenforceable.
See 808 Dev. LLC v.
Murakami, 111 Haw. 349, 357, 141 P.3d 996, 1004 (2006).
A judge
of this court has held that a company in bankruptcy liquidation
could not validly assign its interest in a note and mortgage to
another company that would thereafter seek to foreclose on
property as a result of the assignment.
See Deutsche Bank Nat’l
Trust Company, as Trustee Morgan Stanley ABS Capital I Inc. Trust
2007-NC-1 Mortgage Pass-Through Certs., Series 2007-NC1 v.
Williams, 2012 WL 1081174, *3 (D. Haw. Mar. 29, 2012) (Seabright,
J.).
On the other hand, only the parties can seek avoidance
of a voidable contract.
“Only the parties to a contract may
assert its nullity by virtue of a defect in consent.”
17A Corpus
Juris Secundum § 169, available at Westlaw CJS Contracts § 169.
Accordingly, a contract entered into by a minor or an insane
person is generally voidable under Hawaii law and the minor, upon
reaching the age of majority, or the insane person, upon becoming
sane, may choose to ratify or avoid the contractual obligations.
See Zen v. Koon Chan, 27 Haw. 369, 371 (1923).
12
Similarly,
contracts induced by fraud or material misrepresentations are
voidable.
See Exotics Haw.-Kona, Inc. v. E.I. Du Pont De Nemours
& Co., 116 Haw. 277, 288, 172 P.3d 1021, 1032 (2007).
Other
courts have determined that a lack of authority to enter into a
contract makes the contract voidable, not void.
See Emerson
Elec. Co. v. Le Carbone Lorraine, S.A., 2009 WL 313754, *1 n1
(D.N.J. Feb. 4, 2009); Perri v. United States, 53 Fed. Cl. 381,
401 (2002).
Paik-Apau’s challenges to the assignments of her loan
go to whether those assignments are voidable, as she argues that
persons or entities lacked authority to assign the loan
documents.
She lacks standing to make those challenges.
Even if Paik-Apau could properly challenge the various
assignments of her loan, she raises no material issue of fact
concerning Deutsche Bank’s ability to enforce the note and
mortgage.
hearing.
Deutsche Bank brought Paik-Apau’s original note to the
Deutsche Bank is therefore the “holder” of Paik-Apau’s
note, because Hawaii law defines “holder” as the “person in
possession of a negotiable instrument that is payable either to
bearer or to an identified person that is the person in
possession.”
See Haw. Rev. Stat. § 490:1-201(b).
As the
“holder” of a note endorsed in blank, Deutsche Bank is entitled
to enforce it.
See Haw. Rev. Stat. § 490: 3-301.
13
Paik-Apau is not claiming that she does not owe the
obligation evidenced by the note, only that she does not believe
that Deutsche Bank is the proper holder of the note such that it
can seek to enforce the mortgage securing the note.
Paik-Apau’s
mere belief raises no genuine issue of fact; she presents only
uncorroborated and speculative conclusions concerning the
assignments of the loan documents.
Nor does she raise a genuine issue of fact as to
whether Deutsche Bank is authorized by its trust documents to
bring this action.
See Opposition at 12.
In fact, she presents
no evidence at all supporting that contention.
The court is also unconvinced by Paik-Apau’s argument
that, if Deutsche Bank was paid by its loan servicer, it lacks
standing to maintain this action.
First, Paik-Apau submits no
admissible evidence that Deutsche Bank has actually received all
money owed it under the terms of the loan documents.
Second,
Paik-Apau is not contesting that she has failed to make the
payments required by her note and mortgage, allowing the holder
of those documents to use the collection procedures set forth in
them.
Because there is no genuine issue of fact as to whether
Deutsche Bank is a holder of Paik-Apau’s note, it is entitled to
summary judgment on the part of the 8th cause of action that
14
seeks a determination that Deutsche Bank lacks standing to
foreclose on her loan notwithstanding her alleged default.
Given that Deutsche Bank is the holder of the note and
mortgage, it is attempting to collect its own debt such that it
is not a “debt collector” for purposes of the FDCPA, which
defines “debt collector” as:
any person who uses any instrumentality of
interstate commerce or the mails in any
business the principal purpose of which is
the collection of debts, or who regularly
collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to
be owed or due another.
See 15 U.S.C.A. § 1692a(6).
A “debt collector” does not include “any person
collecting or attempting to collect any debt owed or due or
asserted to be owed or due another to the extent such activity .
. . (ii) concerns a debt which was originated with such person.”
15 U.S.C. § 1692a(6)(F)(ii); see also De Dios v. Int’l Realty &
Invs., 641 F.3d 1071, 1074 (9th Cir. 2011) (noting that the FDCPA
excludes from the definition of “debt collector” any “person who
originated the debt, such as a creditor to whom the debt was
originally owed”); Rowe v. Educ. Credit Mgm’t Corp., 559 F.3d
1028, 1031 (9th Cir. 2009) (stating that “a ‘creditor’ is not a
‘debt collector’ under the FDCPA”); Jonak v. John Hancock Mut.
Life Ins. Co., 629 F. Supp. 90, 94 (D. Neb. 1985) (noting that
the definition of “debt collector” “excludes both creditors
15
seeking to collect their own debts and the officers and employees
of creditors collecting debts for the creditors”).
Because
Deutsche Bank is not a “debt collector,” it is entitled to
summary judgment on the FDCPA claims asserted in the 7th and 8th
causes of action.
V.
CONCLUSION.
Deutsche Bank is granted summary judgment on the
remaining claims in this action--the 7th and 8th causes of action
asserted in the First Amended Complaint.
The Clerk of Court is
directed to enter judgment in favor of Defendants and to close
this case.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, October 19, 2012.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Paik-Apau v. Deutsche Bank National Trust Co., et al.; Civ. No. 10-699 SOM/RLP; ORDER
GRANTING DEFENDANT DEUTSCHE BANK NATIONAL TRUST COMPANY'S MOTION FOR SUMMARY JUDGMENT
ON COUNTS 7 AND 8 OF THE FIRST AMENDED COMPLAINT
16
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