U.S. Bank N.A., as Trustee for the Registered Holders of the Structured Asset Securities Corporation, Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates, Series 2003-BC11 v. Shakoori-Naminy a/k/a Shakoori et al
Filing
104
MEMORANDUM AND ORDER denying 90 Motion to Alter Judgment; denying 102 Motion to Alter Judgment; denying 102 Motion for New Trial. So Ordered by District Judge William E. Smith on 5/3/2023. (Urizandi, Nissheneyra)
Case 1:17-cv-00394-WES-LDA Document 104 Filed 05/03/23 Page 1 of 14 PageID #: 4241
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
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Plaintiff,
)
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v.
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MASOUD SHAKOORI-NAMINY a/k/a
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MASOUD SHAKOORI, BRENDA
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SHAKOORI-NAMINY, and SAND CANYON
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CORPORATION,
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Defendants.
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___________________________________)
U.S. BANK N.A., as Trustee for the
Registered Holders of the
Structured Asset Securities
Corporation, Structured Asset
Investment Loan Trust,
Mortgage Pass-Through
Certificates, Series 2003-BC11,
C.A. No. 17-394 WES
MEMORANDUM AND ORDER
WILLIAM E. SMITH, District Judge.
Before the Court are two motions to alter judgment and for
new
trial,
one
filed
by
(“Shakoori”), ECF No. 90,
Defendant
and
Masoud
the other by
Shakoori-Naminy
Defendant Brenda
Shakoori-Naminy (“Brenda”), ECF No. 102, both challenging the
Court’s
ruling
that Plaintiff U.S. Bank N.A. is entitled
equitable assignment of Defendants’ mortgage.
Fact & Concl. of L., ECF No. 88.
Defendants’ motions are DENIED.
to
See Findings of
For the reasons that follow,
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I.
Standard of Review
Following a nonjury trial, a motion for new trial may be
granted “for any reason for which a rehearing has heretofore been
granted in a suit in equity in federal court.”
P. 59(a)(1)(B).
Fed. R. Civ.
The reason must be substantial; judgment will not
be set aside unless there has been a manifest error of law or
mistake of fact.
Jackson v. United States, No. 08-40024-FDS, 2011
WL 6301425, at *3 (D. Mass. Dec. 15, 2011) (quoting Ball v.
Interoceanica Corp., 71 F.3d 73, 76 (2d Cir. 1995)).
Similarly, a motion to alter or amend judgment under Federal
Rule of Civil Procedure 59(e) may be granted “only where the movant
shows a manifest error of law or newly discovered evidence.”
Prescott v. Higgins, 538 F.3d 32, 45 (1st Cir. 2008) (quoting
Kansky v. Coca-Cola Bottling Co. of New Eng., 492 F.3d 54, 60 (1st
Cir. 2007)).
A court may properly deny a Rule 59(e) motion if the
arguments asserted rely on evidence that could have been discovered
earlier through the exercise of due diligence, are repeat arguments
that were properly rejected, or could and should have been raised
before judgment issued.
See Yeomalakis v. FDIC, 562 F.3d 56, 61
(1st Cir. 2009).
2
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II.
Discussion1
A. Shakoori’s Motion for New Trial
Shakoori seeks to amend the judgment or a new trial on the
grounds that the Court committed three manifest errors of law:
(1) that the indorsement of the promissory note (“note”) was
invalid because there was no evidence that the allonge was affixed
to the note at the time it was executed, (2) that the testimony of
Howard
Handville,
a
senior
loan
analyst
at
Ocwen
Financial
Corporation (“Ocwen”), should not have been admitted under U.S.
Bank Trust v. Jones, and (3) that Plaintiff’s admissions precluded
judgment.
Def.’s Mem. Supp. Mot. New Trial & Alter & Amend J.
(“Shakoori’s Mem.”) 2, 11, 21, ECF No. 90-1.
1. Indorsement
Shakoori
first
argues
that
Plaintiff
failed
to
present
evidence that the allonge was affixed to the note at the time it
was executed and thus the indorsement of the note was invalid.
Shakoori’s Mem. 1-10.
No statute or case supports Shakoori’s
position that an allonge must be attached to a promissory note at
the time the allonge is executed.
First, Shakoori points to Rhode Island’s Uniform Commercial
Code, which, in defining “indorsement,” states that “a paper
For a detailed recitation of the facts of the case, see
Findings of Fact & Concl. of L., ECF No. 88.
1
3
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affixed to the instrument is a part of the instrument.” Shakoori’s
Mem. 2 (quoting R.I. Gen. Laws § 6A-3-204).
No part of this
definition contains any requirement that the allonge be affixed to
the note at the time of signature.
Shakoori next points to three Rhode Island Supreme Court
(“RISC”) cases, each of which defines “allonge.”
4-5.
Shakoori’s Mem.
In Note Capital Group, Inc. v. Perretta, 207 A.3d 998, 1000
n.4 (R.I. 2019), Pimentel v. Deutsche Bank National Trust Co., 174
A.3d 740, 742 n.4 (R.I. 2017), and Moura v. Mortgage Electric
Registration Systems, 90 A.3d 852, 853 n.1 (R.I. 2014), the RISC
referred
to
the
definition
of
“allonge”
from
Black’s
Law
Dictionary, which states that an allonge is “[a] slip of paper
sometimes attached to a negotiable instrument for the purpose of
receiving further indorsements when the original paper is filled
with indorsements.”
Black’s Law Dictionary 92 (10th ed. 2014).
Like the Rhode Island statute, these cases make no mention of when
the allonge must be affixed to the note.
In addition, the
attachment of the allonge to the note was not at issue in these
three cases,2 and the RISC did not engage in any discussion on this
In Note Capital Group, the Rhode Island Supreme Court
concluded that the plaintiff could not foreclose on the defendant’s
property because there was insufficient proof to establish
possession of the lost note. 207 A.3d at 1006. In Pimentel, the
court affirmed summary judgment in favor of the foreclosing bank
despite that the borrower submitted copies of unendorsed notes
4
2
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issue other than to provide the definition.
Rather than support
for Shakoori’s argument that the allonge must be affixed to the
note at the time of signing, these cases bolster the conclusion
that Plaintiff is entitled to equitable assignment of the mortgage
because the evidence demonstrates a valid endorsement by allonge
and present possession of the note.
Shakoori also points to several decisions outside of Rhode
Island to argue that the allonge must be affixed to the note at
the time of signature.
Shakoori’s Mem. 5-10.
First, in In re
Shapoval, 441 B.R. 392 (Bankr. D. Mass. 2010), the Massachusetts
bankruptcy
court
determined
that
an
evidentiary
hearing
was
necessary to determine “whether the allonge was ever affixed to
the note.”
Id. at 394.
A similar question arose in In re Thomas,
447 B.R. 402, 411 (Bankr. D. Mass. 2011) (“Given that [Defendant]
has produced two different copies of the note -- one with and one
without the purported allonge -- the plaintiff argues that there
is a question of fact as to whether the allonge is affixed to the
because the bank “provided a copy of the note with an allonge that
demonstrate[d] that the note was endorsed, along with an affidavit
attesting that it [held] the note.” 174 A.3d at 746. Finally, in
Moura, the court affirmed summary judgment in favor of the
foreclosing bank because “[t]he evidence and supporting documents
. . . established that [the plaintiff] signed the note, that the
note was signed in favor of Accredited Home Lenders, which endorsed
an allonge in blank, and that it was subsequently held by Vericrest
Financial on behalf of Deutsche Bank.” 90 A.3d at 746.
5
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note . . .”) and in Adams v. Madison Realty & Development, Inc.,
853 F.2d 163, 166 (3d Cir. 1988) (“We may assume . . . that the
loose indorsement sheets accompanying [the] notes would have been
valid
allonges
had
they
been
stapled
or
glued
to
the
note
themselves.”). Notably, however, these cases focus only on whether
and how firmly the allonge is affixed to the note and make no
mention
of
the
timing
of
requirement for enforcement.
a
signature
on
the
allonge
as
a
Here, there is no dispute that the
allonge is permanently affixed to the note and that Plaintiff is
in possession of the note and allonge.
Finally, Shakoori argues that the Court erred in relying on
Livonia
Property
Holdings,
LLC
v.
12840-12976
Farmington
Rd.
Holdings, LLC, 717 F. Supp. 2d 724 (E.D. Mich. 2010), and Kohler
v. U.S. Bank Nat’l Ass’n, No. 11-C-0893, 2013 WL 3179557 (E.D.
Wis. June 21, 2013), due to the factual differences between those
cases and the present case.
Both cases stand for the proposition
that so long as the information on an allonge indicates an intent
to serve as indorsement of the note, the allonge is effective.
Here, review of the allonge affixed to the note evidences a clear
and unambiguous intent to negotiate the agreement by an endorsement
in blank.
Thus, Shakoori’s argument fails.
2. Handville’s Testimony
Shakoori next challenges the admission of the testimony of
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Howard Handville, a senior loan analyst at Ocwen, arguing that
Handville did not verify the boarding or verification of business
records as required by U.S. Bank Trust v. Jones, 925 F.3d 534 (1st
Cir. 2019).
Shakoori’s Mem. 11-21.
Federal Rule of Evidence 803(6) excludes from the definition
of hearsay records that are kept in the course of regularly
conducted
business.
Jones
dictates
that
business
records
“containing third-party entries without third-party testimony” may
be admitted if “the entries ‘were intimately integrated’ into the
business records.”
Jones, 925 F.3d at 537 (quoting FTC v. Direct
Mktg. Concepts, Inc., 624 F.3d 1, 16 n.15 (1st Cir. 2010)).
In
reaching this conclusion, the Jones court emphasized certain facts
elicited through the testimony of the loan servicer’s witness: the
servicer “incorporated the previous servicer’s records into its
own database,” and the servicer’s “acquisition department took
steps to review the [prior] servicer’s records in a way that
assured itself of the accuracy of the records.”
Id. at 538
(quoting U.S. Bank Trust v. Jones, 330 F. Supp. 3d 530, 543(D. Me.
2018)).
Here, Handville testified similarly to the witness in Jones,
explaining the multi-step process through which the records were
transferred from the original servicer to PHH Mortgage Corporation
and verified.
Apr. 18 Tr. 9:12-15:4, ECF No. 76.
7
Handville
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further explained how Ocwen received the documents particular to
Shakoori’s loan through the merger with PPH Mortgage Corporation
(“PHH”)
and
how
the
documents
were
imported
and
verified,
discussing the systems and processes used to integrate and review
the loan records.
Id. at 16:9-17:24.
He explained that he
reviewed the business records, including “origination documents,
the HUD-1, the closing settlement statements, [and] collateral
file documents such as the note [and] mortgage” in preparation for
trial.
Id. at 20:10-22.
demonstrated
the
The substance of Handville’s testimony
integration
of
business
records
into
those
maintained by the current servicer as required by Jones.
Shakoori claims specifically that Handville could not explain
how Ocwen’s records were confirmed and verified when it merged
with PPH.
Shakoori’s Mem. 10-11.
However, Handville testified
that when the servicers merged, all the data was transferred from
the
“REAL
servicing
mortgage
platform”
to
the
“Black
Knight
LoanSphere MSP” using the same process described in relation to
the other transfers.
Apr. 18 Tr. 19:2-18; 31:1-38:17.
He further
explained how Ocwen maintained loan documents in an image database
called CIS, and how, after the merger with PHH, the documents were
imported into a new repository called iDesk, including how Ocwen
and PHH verified the accuracy of these records.
20:5.
8
Id. at 19:19-
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Shakoori further argues that Handville’s testimony violated
the best evidence rule because Handville looked only at copies of
the documents and did not know the location of the original
documents.
1001(d)
Shakoori’s Mem. 16-17.
provides
that
a
printout
Federal Rule of Evidence
may
constitute
an
original
document for electronically stored information so long as the
printout is an accurate reflection of that information. See Jones,
925 F.3d at 540.
Here, Handville’s testimony demonstrated that
the loan and trust documents were printed from electronic records
maintained by PHH, explained the systems in place to search for
documents, and detailed the process to review documents on PHH’s
internal Sharepoint website, which satisfies the requirements of
Rule 1001(d).
Shakoori also argues that Handville could not authenticate
the note. However, Handville reviewed both the original collateral
file containing the note and allonge and bailee letters that PHH
and its counsel used to acknowledge transfer of the note from one
entity or person to another, which suffices to authenticate the
note.
Apr. 18 Tr. 86:19-95:14.
testimony
on
this
issue
was
Further, even if Handville’s
deficient,
Shakoori
himself
authenticated the note through his own testimony. Apr. 5 Tr. 38:539:9, ECF No. 75.
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3. Plaintiff’s Admissions
Shakoori argues that the Court committed manifest error of
law by not accepting as admitted the facts in his request for
admissions.
Shakoori’s Mem. 21-28.
This argument fails because
the Court in fact granted Shakoori’s motion and admitted all facts
contained in the request for admissions.
Concl. of L. 17.
See Findings of Fact &
As explained in the Findings of Fact and
Conclusions of Law, the admitted facts had little, if any, effect
on the case because most pertained to assignments of the mortgage,
which are not relevant to a claim of equitable assignment.
17-18.
Id. at
Those admitted facts that pertained to the note were also
inconsequential because Plaintiff was required to prove only that
it holds the note and was entitled to enforce it, which it did by
presenting the original note indorsed in blank and authenticated
by the testimony of both Shakoori and Handville.
Id.
4. Sanctions
Finally, Shakoori argues that the Court committed manifest
error by not imposing sanctions on Plaintiff for failing to respond
to discovery requests and presenting evidence contrary to its
responses.
Shakoori’s Mot. 28.
The evidence that, Shakoori
contends, forms the basis for sanctions was ultimately not admitted
or deemed irrelevant, which undermines Shakoori’s request for
sanctions.
See Findings of Fact & Concl. of L. 19.
10
Shakoori has
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not identified any other conduct that would justify the imposition
of sanctions on Plaintiff.
Accordingly, Shakoori’s Motion for New Trial is DENIED.
B. Shakoori’s Motion to Alter Judgment
As
discussed
above,
Shakoori’s
arguments
simply
rehash
positions that he pressed in pretrial filings, throughout the
trial, and in post-trial briefs.
Thus, no relief under Rule 59(e)
is available because the arguments were already presented to and
properly rejected by the Court.
See Yeomalakis, 562 F.3d at 61.
Accordingly, Shakoori’s Motion to Alter Judgment is DENIED.
C. Brenda Shakoori-Naminy’s Motion for New Trial
Defendant Brenda Shakoori-Naminy, wife of Shakoori, filed her
own motion for new trial, ECF No. 102, asserting several reasons
why a new trial is warranted in this case.
The Court addresses
her arguments in turn.
1. Ability to Present Defense
Brenda first makes a variety of arguments related to the
circumstances at trial and her ability to present a defense,
including that the COVID protocols in place at the time were
prejudicial to Defendants and that her attorney failed to appear.
Def.’s Mot. New Trial (“Brenda’s Mot.”) 1-2, ECF No. 102.
She
does not, however, identify any arguments that she was precluded
from making that could have changed the outcome of the case that
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were not already put forth by Shakoori’s attorney, nor has she
identified any specific prejudice that resulted from her inability
to present these arguments.
2. Bankruptcy Filings
Next, Brenda takes issue with the admission of documents
pertaining to Shakoori’s bankruptcy because they were made by
Attorney Dawn Thurston who was later suspended for misconduct.
As
discussed in the Findings of Fact and Conclusions of Law, this
case ultimately rested upon Plaintiff’s ability to prove that it
was the holder of the note and entitled to enforce it, which it
did successfully. Findings of Fact & Concl. of L. at 8. Shakoori’s
bankruptcy proceedings were irrelevant to this conclusion, other
than to demonstrate that he would not be personally liable for the
outstanding balance on the loan because his debt was discharged.
See id. at 15 n.11.
Because the documents that Brenda challenges
did not influence the outcome of the case, this argument is without
merit.
3. Movement of Case
Next, Brenda argues that the fact that Defendants have not
made payments on the mortgage in ten years should not count against
them.
She asserts that the delay in payments was due to the slow
movement of the case through the judicial process over which
Defendants had no control.
Def.’s Mem. 7-8.
12
Defendants last made
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a payment on the mortgage over ten years before the commencement
of this trial.
Findings of Fact & Concl. of L. at 4.
This lawsuit
was filed in 2017, at least four years after the last payment.
Thus, Brenda’s assertion that the nonpayment was due to the
movement of the case through the judicial system does not apply to
a significant portion of the missed payments, and this argument is
not a basis on which to grant a new trial.
4. Mortgage
Finally,
mortgage.
Brenda
makes
four
challenges
related
to
the
She argues that the high-interest refinance that was
issued to Shakoori in 2000 should be declared void because he
should not have qualified for such a high interest rate, Brenda’s
Mot. at 2-3, that Plaintiff does not meet the requirements set
forth in General Laws § 6A-3-302 for a holder in due course of the
mortgage, Brenda’s Mot. at 5-6, that a settlement reached with the
Lehman Brothers estate concerning improper depositing of mortgages
into real estate mortgage investment conduits has already made
Plaintiff whole vis-a-vis Defendants’ mortgage, id. at 6-7, and
that the assignments of the mortgage were fraudulent, id. at 9.
Because this is a case for equitable assignment and the outcome
depended only upon Plaintiff demonstrating that it is the holder
of the note and entitled to enforce it, evidence concerning the
mortgage itself is irrelevant.
See Findings of Fact & Concl. of
13
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L. at 6-7 n.6.
Thus, even if Brenda’s assertions concerning the
mortgage are correct, these arguments do not warrant a new trial.
III. Conclusion
For the foregoing reasons, Defendant Masoud Shakoori-Naminy’s
Motion to Alter Judgment and for New Trial, ECF No. 90, and
Defendant Brenda Shakoori-Naminy’s Motion for New Trial, ECF No.
102, are DENIED.
IT IS SO ORDERED.
William E. Smith
District Judge
Date: May 3, 2023
14
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