O'Banion et al v. Select Portfolio Services Inc et al

Filing 211

ORDER ADOPTING REPORT AND RECOMMENDATIONS; denying as moot 127 Motion for Preliminary Injunction; granting 159 Motion for Summary Judgment; denying 164 Motion in Limine; denying 168 Motion for Summary Judgment; denying 176 Motion for Summary Judgment; incorporating and adopting 202 Report and Recommendations. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

MICHAEL P. O’BANION and
PATRICIA R. BRADLEY,
Plaintiffs,

Case No. 1:09-CV-00249-EJL
ORDER ADOPTING REPORT
AND RECOMMENDATION

v.
SELECT PORTFOLIO SERVICES,
INC., LITTON LOAN SERVICING LP;
JUST LAW, INC.; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC.; DISCOVER
LENDING GROUP; OWNIT
MORTGAGE SOLUTIONS, INC.,
Defendants.

On August 22, 2012, Chief United States Magistrate Judge Candy W. Dale issued
a Report and Recommendation (“the Report”), recommending that Plaintiffs’ Motion for
Summary Judgment, Amended Motion for Summary Judgment, and Motion in Limine be
denied. (Dkt. 202.) The Report also recommended that Defendants’ Motion for Summary
Judgment be granted and their Motion for Preliminary Injunction be denied as moot. Any
party may challenge a Magistrate Judge’s proposed recommendation regarding by filing
written objections within ten days after being served with a copy of the magistrate’s
Report and Recommendation. 28 U.S.C. § 636(b)(1). The district court must then “make a
ORDER ADOPTING REPORT AND RECOMMENDATION - 1

de novo determination of those portions of the report or specified proposed findings or
recommendations to which objection is made.” Id. The district court may accept, reject, or
modify in whole or in part, the findings and recommendations made by the magistrate.
Id.; see also Fed. R. Civ. P. 72(b). Plaintiffs filed objections to the Report and
Recommendation to which the Defendants have responded. (Dkt. 207, 210.) The Court
has considered the Plaintiffs’ contentions and conducted a de novo review of the record
and finds as follows.
Discussion
Plaintiffs object to the Report arguing 1) it failed to properly consider the material
facts and legal arguments brought out in the record and/or erred in finding no genuine
issue of material facts in the record, 2) the facts in the record confirm there was an
additional party/entity that had beneficial interests in Plaintiffs’ mortgage loan, 3) two of
the loan documents fail to accurately reflect the appropriate beneficial parties in interest,
and 4) the loan note is without the endorsement of the beneficial interest and, therefore, is
null and void as a negotiable instrument. (Dkt. 207.) Defendants respond arguing the
Report properly resolved the Motions and should be adopted. (Dkt. 210.) In particular,
Defendants assert the facts and record in this matter were properly consider and there is
no legal authority to support the Plaintiffs’ position.

The Court has reviewed the objections and conducted a de novo review of the
Report in this matter as well as the record. Having done so, this Court is in agreement
ORDER ADOPTING REPORT AND RECOMMENDATION - 2

with the Magistrate Judge’s analysis of the issues presented and will adopt the same. The
bulk of Plaintiffs’ objections point to portions of their filings to support their argument
that a genuine issue of material fact exists in this case; in particular as to the question of
whether or not there is an intermediate beneficial party in interest who was not properly
listed and/or recorded on the loan documents.
In their objections, Plaintiffs take issue with the Report’s comment in footnote 2
regarding their Statement of Disputed Facts and Statement of Facts. (Dkt. 202 at 2, n. 2.)
In that footnote, the Magistrate Judge concluded that the statements contained in those
two filings do not set forth admissible facts other than what is set forth within the Report.
(Dkt. 202 at 2, n. 2.) Plaintiffs object, arguing the facts they presented should not be
summarily disposed of in the footnote as doing so is bias, prejudicial, and an abuse of
discretion. (Dkt. 207 at 4.) This Court has reviewed de novo the Plaintiffs’ Statement of
Disputed Facts and Statement of Facts (Dkt. 175-1 and 168-10) and agrees with the
Magistrate Judge that those documents do not set forth facts admissible in this case other
than what is already included in the Report. (Dkt. 202 at 2-7.) As noted in the Report,
‘[o]nly admissible evidence may be considered in ruling on a motion for summary
judgment. Statements in a brief, unsupported by the record, cannot be used to create an
issue of fact.” (Dkt. 202 at 11.) The Plaintiffs’ two filings are more akin to argument than
to stating facts or presenting evidence. This Court finds the Report properly considered
and addressed these materials and finds no error in the Report’s handling of the facts in
this case and will adopt the same.
ORDER ADOPTING REPORT AND RECOMMENDATION - 3

As to Plaintiffs’ arguments and objections regarding the improperly omitted
beneficiary interest and the resulting unlawful transfer of the loan note, the Court has
reviewed de novo the record in light of the parties arguments and again concludes the
Magistrate Judge properly addressed these matters. (Dkt. 202 at 18-31.) The nonrecording of intermediate beneficial interests in a deed of trust is legally immaterial and
irrelevant in Idaho to the validity and enforceability of the instrument. Plaintiffs’
objections are a recitation of the arguments previously made, considered, and
appropriately decided in the Report. For the reasons stated in the Report, this Court finds
that, as a matter of law, Plaintiffs’ claim for unlawful default and unlawful foreclosure
and fraudulent misrepresentation, is without factual and legal support and must be
dismissed as a matter of law. There is no genuine issue of material fact that exists as to
relevant facts on Plaintiffs’ claim nor is there any basis in law to support the same. (Dkt.
202 at 18-31.) Accordingly, the Defendants’ Motion for Summary Judgment will be
granted and judgment will be entered in favor of Defendants on all claims.1

ORDER
Having conducted a de novo review of the Report and Recommendation, this
Court finds that Chief Magistrate Judge Dale’s Report and Recommendation is well

1

As stated in the Report, the claim in Count IV against Select and MERS is the sole remaining claim
for relief. All other parties and claims have either been dismissed or are no longer being pursued by Plaintiffs.
As a result and in light of the Court’s ruling herein, judgment will be entered in favor of Defendants on all
claims in this matter.
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founded in law and consistent with this Court’s own view of the evidence in the record.
Acting on the recommendation of Magistrate Judge Dale, and this Court being fully
advised in the premises, IT IS HEREBY ORDERED that the Report and
Recommendation entered on August 22, 2012, (Dkt. 202), should be, and is hereby,
INCORPORATED by reference and ADOPTED in its entirety.
THEREFORE, IT IS HEREBY ORDERED as follows:
1)

Defendant’s Motion for Preliminary Injunction (Dkt. 127) is DENIED AS
MOOT.

2)

Defendants’ Motion to for Summary Judgment (Dkt. 159) is GRANTED.

3)

Defendants’ Motion in Limine (Dkt. 164) is DENIED.

4)

Plaintiffs’ Motion for Summary Judgment and Amended Motion for
Summary Judgment (Dkt. 168, 176) are DENIED.

DATED: October 9, 2012

Honorable Edward J. Lodge
U. S. District Judge

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