Bank of New York Mellon v. Tang ( 2019 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
The Bank of New York Mellon )
FKA The Bank of New York, as )
Trustee for the Certificateholders )
of CWALT, Inc., Alternative Loan )
Trust 2005-80CB, Mortgage Pass )
Through Certificates, Series 2005- )
80CB, )
)
Plaintiff )
)
v. ) C.A. No. N18L-01-064 CLS
)
Pat Tang, )
)
Defendant. )
Date Submitted: January 15, 2019
Date Decided: March 8, 2019
On Plaintiff’s The Bank of New York Mellon Motion for Summary Judgment.
GRANTED.
ORDER
Melanie J. Thompson, Esquire, Orlans PC, 4250 Lancaster Pike, Wilmington,
Delaware 19805. Attorney for Plaintiff.
Pat Tang, 6 Bayard Lane, Newark, Delaware 19702. Defendant.
Scott, J.
Background
This is a foreclosure action brought by The Bank of New York Mellon, (The
Bank) assignee to the mortgage and the note, executed by Defendant on November
23, 2005, for the real property located at 6 Bayard Lane, Newark, Delaware. The
Bank filed a scire facias sur mortgage complaint against the Defendant on January
17, 2018. Defendant’s answer was filed on February 13, 2018.
The Bank filed this Motion for Summary Judgment on November 20, 2018.
The Bank states they are the holder of the original Note and assignee to the mortgage
and therefore entitled to bring this foreclosure action. The Bank argues Defendant
has not pleaded any allowable defenses and there are no material issues of fact,
therefore Summary Judgment is appropriate.
In the Answer and Opposition to this Motion, Defendant takes the position
that The Bank lacks standing. Defendant argues The Bank is not in possession of the
original Note, or is not a proper holder of the Note, and therefore not entitled to
enforce the Note. Defendant raises two issues why Summary Judgment is
inappropriate; (1) The Bank’s use of the word “assignment” when the Note uses the
word “transfer” invalidates the Banks ability to enforce the Note, and (2) Any
transfer of the Mortgage and the Note is invalid because evidence presented in courts
of other jurisdictions has shown Mortgage Electronic Registration System, Inc.
(MERS) does not transfer promissory notes.
2
Standard of Review
The Court may grant Summary Judgment if “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to Summary Judgment as a matter of law.”1 The moving party bears
the initial burden of showing that no material issues of fact are present. 2 Once such
a showing is made, the burden shifts to the non-moving party to demonstrate that
there are material issues of fact in dispute.3 In considering a Motion for Summary
Judgment, the Court must view the record in a light most favorable to the non-
moving party.4 The Court will not grant Summary Judgment if it seems desirable to
inquire more thoroughly into the facts in order to clarify the application of the law.5
Discussion
In order to foreclose on a mortgage, a mortgage holder must be a party entitled
to enforce the underlying debt, the Note, which the mortgage secures.6 Delaware
case law continues to recognize that the only defenses available in a mortgage
foreclosure action are payment of the “mortgage money”, satisfaction or a plea in
1
Super. Ct. Civ. R. 56(c); Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991).
2
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
3
Id. at 681.
4
Burkhart, 602 A.2d at 59.
5
Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); Phillip-Postle v. BJ Prods.,
Inc., 2006 WL 1720073, at *1 (Del. Super. Ct. Apr. 26, 2006).
6
Shrewsbury v. The Bank of New York Mellon, 160 A.3d 471, 477 (Del. 2017).
3
avoidance of the mortgage.7 Examples of pleas of avoidance are “act of God,
assignment of cause of action, conditional liability, discharge, duress, exception or
proviso of statute, forfeiture, fraud, illegality of transaction, nonperformance of
condition precedent, ratification, unjust enrichment and waiver.”8
Defendant’s first objection is not one of these recognized defenses, and is
without merit. Terms that are not defined in a statute or in a contract must be given
their ordinary, common meaning.9 Assignment is the transfer of rights or property.10
When an instrument, such as a note, is indorsed in blank, the instrument becomes
payable to the bearer and may be negotiated by transfer of possession alone. 11 The
holder of a note can freely transfer the note through negotiation to another party, and
the receiving party then has the right to enforce the note. Similarly, under Delaware
law the assignment of a mortgage […] attested by 1 creditable witness shall be valid
and effectual to convey all the right and interests of the assignor.12 Furthermore, the
principals of contract law dictate when the debtor is not a party to a transfer, nor a
third party beneficiary, nor show it sustained some type of legal harm as a result of
the transfer, they do not have standing to challenge the transfer or enforcement of
7
Id.8
Id.9
See Dewey Beach Enterprises, Inc. v. Bd. of Adjustment of Town of Dewey Beach,
1 A.3d 305, 307 (Del. 2010).
10
ASSIGNMENT, Black's Law Dictionary (10th ed. 2014).
11
6 Del. C. § 3-205.
12
25 Del. C. § 2109
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the note.13 Contrary to Defendant’s claim, the assignment of the Note, as opposed to
a “transfer” does not affect Plaintiff’s legal ability to foreclose on the Mortgage.14
Moving to Defendant’s second argument regarding the assignment by MERS,
Delaware Courts show little appetite for invalidating mortgage assignments merely
because they were assigned by MERS.15 The mortgage agreement states “Borrower
does hereby mortgage, grant and convey to MERS (solely as nominee for Lender
and Lender’s successors and assigns) and to the successors and assigns of MERS,
the […] property […] with the address 6 Bayard Lane, Newark, Delaware.”16 The
Mortgage further indicates “[t]he Note or a partial interest in the Note (together with
the mortgage) can be sold one or more times without prior notice to Borrower.”17
Defendant’s position that “numerous landmark cases across the nation” have
determined that notes are not transferred by MERS does not raise a genuine issue of
fact in this case.
Conclusion
Defendant does not raise a plea in avoidance which would invalidate The
Bank’s right to enforce the Note, and to bring this action. The Note is indorsed in
13
Toelle v. Greenpoint Mortgage Funding, Inc., 2015 WL 5158276, at *3 (Del.
Super. Ct. 2015).
14
Shrewsbury, at 478 (Del. 2017).
15
Toelle, at *5 (Del. Super. Ct. 2015) (citing Branch Banking and Trust Co. v. Eid,
2013 WL 3353846, *3 (Del.Super. Ct. 2013).
16
Pl. Ex A at 3, 4.
17
Pl. Ex. A at 15.
5
blank, therefore as bearer, The Bank is entitled to enforce it. The Bank is the holder
of the Mortgage, and the Note which the Mortgage secures. Defendant has failed to
show cause why the mortgaged premises ought not to be seized and taken in
execution for payment of the Note. Therefore, Plaintiff’s Motion for Summary
Judgment is Granted.
IT IS SO ORDERED.
/s/ Calvin L. Scott
Judge Calvin L. Scott, Jr.
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