The Bank of New York Mellon formerly known as the Bank of New York, as Trustee v. Anthony J. Tatro, Matthew Jaakola ( 2014 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-0142
The Bank of New York Mellon
formerly known as the Bank of New York, as Trustee,
Respondent,
vs.
Anthony J. Tatro, et al.,
Defendants,
Matthew Jaakola, et al.,
Appellants.
Filed October 6, 2014
Affirmed
Reyes, Judge
Anoka County District Court
File No. 02CV135303
John M. Miller, Peterson, Fram & Bergman, P.A., St. Paul, Minnesota (for respondent)
William Bernard Butler, Butler Liberty Law, L.L.C., Minneapolis, Minnesota (for
appellants)
Considered and decided by Peterson, Presiding Judge; Reilly, Judge; and
Reyes, Judge.
UNPUBLISHED OPINION
REYES, Judge
In this eviction dispute, appellants argue that (1) respondent lacked standing to
bring the eviction action; (2) the district court should have taken judicial notice of New
York trust law and the fact that it was not satisfied by respondent, meaning that
respondent did not have legal capacity to bring suit; (3) the district court should have
stayed this proceeding pending resolution of a federal quiet-title action; and (4) the
district court erred in granting summary judgment to respondent.1 We affirm.
FACTS
In November 2005, Anthony and Milissa Tatro executed a mortgage on property
located in Ham Lake. The mortgage was assigned to respondent The Bank of New York
Mellon (BNYM) in July 2010. BNYM then began foreclosure proceedings, resulting in
foreclosure by advertisement. On July 18, 2011, BNYM purchased the property at the
foreclosure sale, subject to a six-month redemption period, which expired on
1
This case is being considered on its own merits. Nevertheless, we note that appellants’
attorney, William Bernard Butler, has had a number of cases before this court in which he
essentially makes the same unavailing arguments that he makes here. See, e.g., Bank of
America, N.A. v. Smith, A13-2299, (Minn. App. Aug. 4, 2014); Fed. Home Loan Mortg.
Corp. v. Briggs, A13-2089, (Minn. App. July 14, 2014); Wilmington Trust Co. v.
Northwick, A13-2266, (Minn. App. June 2, 2014).
In federal court, Mr. Butler engaged in the dubious practice of taking “a group of a
dozen or so individuals who are facing foreclosure but otherwise have no connection to
one another” to pursue frivolous “show-me-the-note” claims, sometimes judge-shopping
by voluntarily dismissing an action and “reorder[ing] the names of the plaintiffs or
substitute[ing] a new plaintiff for one of the old plaintiffs, so that the refiled case would
have a different caption.” Welk v. GMAC Mortg., LLC, 850 F. Supp. 2d 976, 981
(D. Minn. 2012). “[W]hile all of this drag[ged] on month after month, Butler [continued
to collect] fees from his clients.” Id. at 982. For his “extraordinarily egregious and
brazen” conduct, id. at 1004, Butler was suspended from practicing law before the Eighth
Circuit Court of Appeals and the United States District Court for the District of
Minnesota. In re Butler, No. 13-9013 (8th Cir. Dec. 26, 2013) (order of suspension).
2
January 18, 2012, without being redeemed, and the foreclosure record was filed with the
Anoka County recorder’s office.2
The property, however, continues to be occupied by appellants Matthew and
Kristen Jaakola, who purportedly acquired their alleged interest in the property via a pair
of quitclaim deeds, one dated December 17, 2011, and the other dated September 10,
2013. In September 2013, BNYM commenced the eviction action at issue in this case,
seeking possession of the property. The Jaakolas moved the district court to stay the
action pending the outcome of their then-pending federal suit.3 They also requested that
the district court take judicial notice of certain facts. BNYM moved for summary
judgment. The district court denied the Jaakolas’ motion and request and granted
summary judgment to BNYM for eviction, concluding the requirements of the applicable
eviction statute, Minn. Stat. § 504B.285, subd. 1(1)(ii) (2012), had been satisfied and that
BNYM was entitled to possession of the property. This appeal follows.
2
Also in 2011, BNYM was named as a defendant in an action removed to U.S. District
Court for the District of Minnesota in which the plaintiffs in that action, including Milissa
Tatro, challenged the foreclosure and BNYM’s title to the property. Wang Xang Xiong v.
Bank of Am., N.A., CIV. 11-3377 JRT/JSM, 2012 WL 4470274 (D. Minn. Sept. 27, 2012)
aff’d sub nom. Welk v. Bank of Am., N.A., 515 F. App’x 640 (8th Cir. 2013). The case
was dismissed with prejudice, and the United States Court of Appeals for the Eighth
Circuit affirmed.
3
On September 27, 2013, the Jaakolas filed an action in state court, which was removed
to U.S. District Court for the District of Minnesota on October 23, 2013, challenging the
foreclosure and BNYM’s title to the property. Jaakola v. The Bank of New York Mellon,
CIV 13-2919 DSD-JSM 2014 WL 4055538 (D. Minn. Aug 15, 2014). The case was
dismissed with prejudice. Id.3
DECISION
I. Standing
The Jaakolas argue that BNYM does not have standing to bring an eviction action.
Standing is a legal question which this court reviews de novo. Builders Ass’n of Minn. v.
City of St. Paul, 819 N.W.2d 172, 176 (Minn. App. 2012). Standing “requires a party to
demonstrate a ‘sufficient stake in a justiciable controversy to seek relief from a court.’”
Id. (quoting Enright v. Lehmann, 735 N.W.2d 326, 329 (Minn. 2007)). For standing to
exist, “a party must have suffered some actual or threatened injury as a result of the
putatively illegal conduct of the defendant,” and “[t]he injury must be traceable to the
challenged action” and “capable of being redressed in court.” Id. (quotation omitted).
Although the Jaakolas frame their argument as a standing issue, their assertion that
BNYM lacks standing is grounded in their belief that the foreclosure was invalid. But the
foreclosure action is not part of this appeal; this is an appeal from the eviction
proceeding. And as to the eviction proceeding, BNYM holds the sheriff’s certificate of
sale, having purchased it following the expiration of the redemption period. See Minn.
Stat. § 580.19 (2012) (providing that a “sheriff’s certificate of sale . . . shall be prima
facie evidence that all the requirements of law in that behalf have been complied with,
and prima facie evidence of title in fee thereunder in the purchaser at such sale . . . after
the time for redemption therefrom has expired”). An eviction action is limited to the
question of who has a greater right to present possession of a property. Deutsche Bank
Nat’l Trust Co. v. Hanson, 841 N.W.2d 161, 164 (Minn. App. 2014). By virtue of
holding the sheriff’s certificate, BNYM has a definite interest in resolving the conflict of
4
who is entitled to present possession of the property. There is no question that BNYM
has standing to pursue the eviction action.
II. Legal capacity and judicial notice
The Jaakolas argue that BNYM does not have the “legal capacity”4 to bring this
action and that the district court abused its discretion when it did not take judicial notice
of New York trust law, which would serve to bar BNYM’s ability to bring the eviction
proceeding. This argument is premised on the theory that BNYM’s interest in the
mortgage is defective. But an eviction proceeding “merely determines the right to
present possession and does not adjudicate the ultimate legal or equitable rights of
ownership possessed by the parties.” Dahlberg v. Young, 231 Minn. 60, 68, 42 N.W.2d
570, 576 (1950). As a result, the Jaakolas’ argument is without merit.
Moreover, the crux of the Jaakolas’ request for judicial notice asks that the district
court draw a legal conclusion about the effect of New York law regarding trusts on
contracts involved in this dispute. But legal questions are not properly the subject of
judicial notice under Minn. R. Evid. 201, which governs only the judicial notice of
adjudicative facts. See In re Miner, 424 N.W.2d 810, 813 (Minn. App. 1988) (“A
judicially noticed fact must be one not subject to reasonable dispute in that it is either (1)
4
The Jaakolas appear to use “legal capacity” and “standing” interchangeably. But these
concepts are distinct. See Cochrane v. Tudor Oaks Condo. Project, 529 N.W.2d 429, 433
(Minn. App. 1995) (“In contrast to subject matter jurisdiction, which concerns the court’s
ability to consider a question, and standing, which concerns a party’s right to bring a
particular action, capacity to sue concerns a party’s right to maintain any action. By
arguing that [respondent] did not have the right to maintain an action, appellants are in
fact arguing [respondent’s] lack of capacity to sue.”), review denied (Minn. May 31,
1995).
5
generally known within the territorial jurisdiction of the trial court or (2) capable of
accurate and ready determination by resort to sources whose accuracy cannot reasonably
be questioned.”) (quoting Minn. R. Evid. 201(b) (quotation marks omitted)), review
denied (Minn. July 28, 1988). Even if the Jaakolas’ claims were properly raised in this
proceeding, the district court did not abuse its discretion in denying the Jaakolas’ request
for judicial notice. In re Conservatorship of Torres, 357 N.W.2d 332, 341 (Minn. 1984)
(“[R]ulings on the admissibility of evidence are left to the sound discretion of the trial
court.”).
III. Stay of action
We review the district court’s decision on whether to stay an eviction proceeding
for an abuse of discretion. Bjorklund v. Bjorklund Trucking, Inc., 753 N.W.2d 312, 317
(Minn. App. 2008), review denied (Minn. Sept. 23, 2008).
When deciding whether to stay an eviction proceeding because of other pending
litigation, a court considers “judicial economy, comity between courts, and the cost to
and the convenience of the litigants.” Fed. Home Loan Mortg. Corp. v. Nedashkovskiy,
801 N.W.2d 190, 192 (Minn. App. 2011) (quotation omitted). Even when a party
provides a basis for a stay, “a stay is not required” in light of the “considerable
discretion” a district court has in determining whether to grant a stay. Id.The Jaakolas rely on Bjorklund, in which this court reversed the district court’s
decision to deny a stay of an eviction action as an abuse of discretion. 753 N.W.2d at
314. This court held that “when the counterclaims and defenses are necessary to a fair
determination of the eviction action, it is an abuse of discretion not to grant a stay of the
6
eviction proceedings when an alternate civil action that involves those counterclaims and
defenses is pending.” Id. at 318-19. But in Bjorklund, it was not clear whether appellant
purchased the property or had a lease agreement, or who was entitled to possession of the
property. Id. at 316, 319. Here, however, the Jaakolas’ civil action was filed after the
foreclosure, the sheriff’s sale, and the expiration of the redemption period. This record
does not present the same confusion relating to possessory interest that existed in
Bjorklund. As a result, the district court did not abuse its discretion by denying the
Jaakolas a stay of the eviction action.
IV. Summary judgment
The Jaakolas argue that, because the foreclosure was invalid, there is a genuine
issue of material fact as to whether BNYM is entitled to present possession of the
property and that the district court erred by granting summary judgment to BNYM.
This court reviews the district court’s grant of summary judgment to determine
whether there are genuine issues of material fact and whether the district court erred in
interpreting or applying the law. Dahlin v. Kroening, 796 N.W.2d 503, 504 (Minn.
2011). Summary judgment is proper “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits . . . show that there is
no genuine issue as to any material fact and that either party is entitled to a judgment as a
matter of law.” Minn. R. Civ. P. 56.03. On appeal from summary judgment, this court
reviews the evidence de novo, in a light most favorable to the nonmoving party. Valspar
Refinish, Inc. v. Gaylord’s Inc., 764 N.W.2d 359, 364 (Minn. 2009).
7
Eviction actions are governed by Minn. Stat. §§ 504B.281-.371 (2012). An
eviction action is described as a “summary court proceeding to remove a tenant or
occupant from or otherwise recover possession of real property by process of law.”
Minn. Stat. § 504B.001, subd. 4 (2012). The scope of an eviction action is limited to the
question of “present possessory rights to the property.” Hanson, 841 N.W.2d at 164.
Generally, other related claims are not litigated in an eviction proceeding, unless they “fit
within the limited scope of an eviction proceeding.” Id. An eviction proceeding is the
appropriate action to recover possession of property when “any person holds over real
property . . . after the expiration of the time for redemption on foreclosure of a
mortgage.” Minn. Stat. § 504B.285, subd. 1(1).5 The plaintiff seeking possession must
demonstrate that (1) a person remains in possession of real property; (2) the mortgage
was foreclosed; (3) the redemption period has expired; and (4) the plaintiff is entitled to
possession of the property. Id.
The Jaakolas argue that BNYM failed to prove that the mortgage was legally
foreclosed and it is therefore not entitled to possession of the property. But an eviction
proceeding “adjudicate[s] only the right to present possession of property, not disputes
over ownership.” Hanson, 841 N.W.2d at 165. Challenges to the validity of the
mortgage or foreclosure process are generally brought in a separate proceeding, in which
the party raising the challenges can also seek an injunction to stay the eviction action.
AMRESCO Resid’l Mortg. Corp. v. Stange, 631 N.W.2d 444, 445-46 (Minn. App. 2001).
5
Although the 2014 Session Laws indicate that this section will be recodified as Minn.
Stat. § 504B.285, subd. 1(a)(1) (2014), the quoted language remains the same.
8
The Jaakolas followed this procedure, bringing a quiet-title action in district court
to attack the validity of the securitization procedure and the foreclosure. This action was
removed to federal district court and faces dismissal. BNYM, meanwhile, has a sheriff’s
certificate of sale, which is “prima facie evidence that all the requirements of law [for
foreclosure] have been complied with.” Minn. Stat. § 580.19. BNYM has provided
proof of foreclosure, the redemption period has ended, and the Jaakolas’ continued
occupation of the property. BNYM has also demonstrated that it has a present possessory
right to the property. The Jaakolas, in contrast, present no facts that dispute or rebut
BNYM’s possessory interest. Accordingly, the district court did not err by granting
summary judgment to BNYM.
Affirmed.
9