Marcuzzo v. Bank of the West ( 2015 )

Nebraska Advance Sheets
MARCUZZO v. BANK OF THE WEST 809
Cite as 290 Neb. 809
motion for recusal. Kalkowski’s assignment of error is with-
out merit.
CONCLUSION
Accordingly, we find that the district court did not err in
determining Kalkowski was not entitled to the CIAs and in
denying Kalkowski’s motion for recusal.
Affirmed.
Brian Marcuzzo and Donna Marcuzzo, appellants,
v. Bank of the West et al., appellees.
___ N.W.2d ___
Filed May 1, 2015. No. S-14-367.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower
court’s grant of summary judgment if the pleadings and admissible evidence
offered at the hearing show that there is no genuine issue as to any material facts
or as to the ultimate inferences that may be drawn from those facts and that the
moving party is entitled to judgment as a matter of law.
2. Courts: Dismissal and Nonsuit: Appeal and Error. The exercise of the power
to dismiss a matter for lack of prosecution rests in the sound discretion of the trial
court, whose ruling will not be disturbed on appeal in the absence of a showing
of an abuse of discretion.
3. Appeal and Error. Appellants are required to point out the factual and legal
bases that support their assignments of error.
4. ____. An argument that does little more than restate an assignment of error does
not support the assignment, and an appellate court will not address it.
5. ____. An appellate court will not address arguments that are too generalized or
vague to be understood.
6. Actions: Parties: Standing: Jurisdiction. Before a party is entitled to invoke a
court’s jurisdiction, that party must have standing to sue, which involves having
some real interest in the cause of action.
7. Actions: Parties: Standing. To have standing to sue, a plaintiff must have some
legal or equitable right, title, or interest in the subject matter of the controversy.
8. ____: ____: ____. The purpose of an inquiry as to standing is to determine
whether one has a legally protectable interest or right in the controversy that
would benefit by the relief to be granted.
9. Declaratory Judgments. Where declaratory relief is sought, an actual contro-
versy must be present.
10. Standing: Claims: Parties. Standing requires that a plaintiff show his or her
claim is premised on his or her own legal rights as opposed to rights of a
third party.
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11. Contracts: Parties. Only a party (actual or alleged) to a contract can challenge
its validity.
12. Contracts: Parties: Standing. The fact that a third party would be better off if
a contract were unenforceable does not give him or her standing to sue to void
the contract.
13. Contracts: Parties. Parties can recover as third-party beneficiaries of a contract
only if it appears that the rights and interest of the third parties were contem-
plated and that provision was being made for them.
14. Mortgages: Assignments: Parties: Standing. A borrower who is not a party to
a mortgage assignment, or a party intended to benefit from the assignment, lacks
standing to challenge the assignment.
15. Actions: Parties. The plaintiff bears the responsibility to prosecute a case with
reasonable diligence.
16. Actions: Dismissal and Nonsuit: Rules of the Supreme Court. In the absence
of a showing of good cause, a litigant’s failure to prosecute a civil action, result-
ing in noncompliance with the Nebraska Supreme Court’s progression standards
for civil actions in district courts, is a basis to dismiss an action on account of a
lack of diligent prosecution.
17. Courts: Dismissal and Nonsuit. The district court has the inherent power to
dismiss a case for failure to prosecute with due diligence.
Appeal from the District Court for Sarpy County: Max
K elch, Judge. Affirmed.
Douglas W. Ruge for appellants.
Ryan K. Forrest, of Kozeny & McCubbin, L.C., for appellee
Erika Knapstein.
Jennifer L. Andrews and Alison M. Gutierrez, of Kutak
Rock, L.L.P., for appellees Wells Fargo Bank, N.A., and
Federal National Mortgage Association.
Heavican, C.J., Wright, Connolly, McCormack, and
Cassel, JJ.
McCormack, J.
NATURE OF CASE
Brian Marcuzzo and Donna Marcuzzo asserted causes of
action against Wells Fargo Bank, N.A. (Wells Fargo), the
Federal National Mortgage Association (Fannie Mae), Erika
Knapstein, Bank of the West, and Jeff T. Courtney (collectively
the defendants), relating to the foreclosure and subsequent
sale of their residence. All causes of action are premised on
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the assertion that the assignment of the Marcuzzos’ mortgage
was improper. The district court granted summary judgment to
Wells Fargo, Fannie Mae, and Knapstein, and dismissed Bank
of the West and Courtney. The Marcuzzos appeal.
BACKGROUND
The Marcuzzos asserted six causes of action against the
defendants. All causes of action arose out of the sale of the
Marcuzzos’ residence, pledged as collateral for a mortgage
loan on which the Marcuzzos defaulted. Actions for quiet
title, declaratory judgment, and injunctive relief were asserted
against all of the defendants. The Marcuzzos sought actions
for accounting, conversion, and slander of title against Wells
Fargo. The Marcuzzos sought an action for wrongful fore-
closure against Wells Fargo, Fannie Mae, and Knapstein, the
successor trustee of the deed of trust. In the district court, the
actions against Wells Fargo, Fannie Mae, and Knapstein were
dismissed in summary judgment and the remaining causes
against Bank of the West and Courtney were dismissed for
failure to prosecute. The Marcuzzos appeal.
Mortgage Documents
On February 6, 2004, the Marcuzzos executed and deliv-
ered a promissory note in the principal amount of $214,949
to Advantage Mortgage Service, Inc. (Advantage Mortgage).
To secure payment of the note, the Marcuzzos executed and
delivered a deed of trust to Mortgage Electronic Registration
Systems, Inc. (MERS). The deed of trust granted Advantage
Mortgage a secured interest in the Marcuzzos’ residential prop-
erty located in Sarpy County, Nebraska. The deed of trust
was duly recorded in the office of the Sarpy County register
of deeds.
The note executed in the Marcuzzos’ names was negoti-
ated from Advantage Mortgage to Commercial Federal Bank
(Commercial Federal). Wells Fargo purchased Commercial
Federal’s loan portfolio, including the note and deed of trust.
Commercial Federal endorsed the note in blank and transferred
possession of it to Wells Fargo in July 2005. Commercial
Federal was acquired by Bank of the West.
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On July 27, 2011, MERS, as nominee for Advantage
Mortgage, assigned all of its rights, title, and interest in the
deed of trust to Wells Fargo by a corporate assignment of
deed of trust. The corporate assignment of deed of trust was
recorded in the office of the Sarpy County register of deeds.
Wells Fargo has had possession of the note and deed of
trust since it was delivered to it in July 2005. No other
entity has claimed ownership of the note and deed of trust or
has demanded payment. When the Marcuzzos made payment
on their note, the payments were made to and received by
Wells Fargo.
Foreclosure and Bankruptcy
In May 2011, the Marcuzzos instituted bankruptcy pro-
ceedings under chapter 7 of the U.S. Bankruptcy Code. The
Marcuzzos identified Wells Fargo on their bankruptcy sched-
ules as a creditor holding a secured claim on their residence.
The Marcuzzos also began to default on their mortgage
loan payments in May 2011. Wells Fargo sent the Marcuzzos
multiple notices of default and then accelerated the Marcuzzos’
loan balance that was due. The notices provided the Marcuzzos
with the opportunity to cure the default.
The Marcuzzos stated that they voluntarily decided to stop
making payments until they received adequate answers from
Wells Fargo in regard to claimed issues in the paperwork of
their mortgage assignment. The Marcuzzos claimed that they
are ready and able to pay the past due principal and interest
amounts to the proper beneficiary of the loan.
After obtaining a stay of relief in the bankruptcy court,
Wells Fargo instituted foreclosure proceedings against the
Marcuzzos’ residential property. In November 2011, Wells
Fargo appointed a successor trustee, Knapstein, in place of the
original trustee, Courtney, by recording a substitution of trustee
in the office of the Sarpy County register of deeds. Knapstein
filed a notice of default in that office on November 9, 2011.
Knapstein further sent a notice of default and letter of default
to the Marcuzzos.
Notice of sale of the property was published in a local
newspaper once a week for 5 weeks beginning on December
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14, 2011, and ending on January 11, 2012. This notice pro-
vided that the sale was scheduled to take place on January
23. An agreement was reached between Wells Fargo and the
Marcuzzos to postpone the sale of the property until February
7. At the sale on February 7, Fannie Mae was the highest bid-
der, and the property was sold to Fannie Mae for $196,350.47.
Knapstein executed a trustee’s deed, conveying the property to
Fannie Mae, which was filed in the office of the Sarpy County
register of deeds.
P rocedural History
The Marcuzzos filed an amended complaint alleging six
causes of action regarding their foreclosed residence.
The first cause of action asked for the court to quiet title in
the name of the Marcuzzos. The second cause of action asked
for declaratory judgment setting forth the “rights and status
of the respective parties in the real property, for a temporary
and permanent injunction.” The third cause of action alleged
conversion and asked for an accounting against Wells Fargo
based on the mortgage payments Wells Fargo received “when
it had not obtained a proper Assignment of the Deed of Trust
and Promissory Note.” The fourth cause of action alleged
slander of title against Wells Fargo. The fifth cause of action
asked for “a Temporary Restraining Order and Temporary and
Permanent Injunction preventing the sale of the property.”
Finally, the sixth cause of action alleged a wrongful foreclo-
sure suit against Wells Fargo, Fannie Mae, and Knapstein. As a
premise for all causes of action, the Marcuzzos allege that the
assignment of their mortgage was defective.
The Marcuzzos averred that Wells Fargo supplied the
Marcuzzos copies of the assignment, deed of trust, and promis-
sory note that had been altered from the original documents.
At the hearing on the motion for summary judgment, counsel
for the Marcuzzos submitted Brian Marcuzzo’s affidavit and
attached to it several of these mortgage documents, including
several deeds of trust, corporate assignments of deeds of trust,
and the promissory note.
The Marcuzzos also alleged the assignment was defective
because a Wells Fargo employee signed the assignment rather
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814 290 NEBRASKA REPORTS
than a Bank of the West employee. Further, the Marcuzzos
averred that the assignment by MERS showed a loan servic-
ing number which was different from the original loan servic-
ing number.
Wells Fargo, Fannie Mae, and Knapstein all filed answers to
the amended complaint. Bank of the West filed a “Disclaimer
of Interest.” Bank of the West disclaimed any interest in the
property described in the Marcuzzos’ amended complaint and
acknowledged that it would have no further standing to appear
in regard to this case. Courtney did not file such a disclaimer
of interest.
Wells Fargo and Fannie Mae filed a motion for summary
judgment asking the court to dismiss all causes of action
against them. Knapstein also filed a motion for summary judg-
ment to dismiss all causes of action against her.
The district court granted the summary judgment motion
in favor of Wells Fargo as to the conversion, accounting, and
slander of title claims, and granted summary judgment in favor
of Wells Fargo, Fannie Mae, and Knapstein as to the injunc-
tive relief claim. The court granted summary judgment on
the alleged action for conversion and accounting, because the
prayer for relief had not specifically requested relief relating
to conversion and because the court found Wells Fargo to be
the holder of the note since 2005, rightfully entitling it to pay-
ments on the note, and not meriting an accounting action. The
court granted summary judgment on the slander of title claim,
because the evidence did not reflect that Wells Fargo or an
agent had filed any document with knowledge that the state-
ment was false or with reckless disregard for its falsity. The
court also granted summary judgment on the claim for injunc-
tive relief, because the real property had been sold and, thus,
the request was moot.
The district court denied the motions for summary judg-
ment as to the actions for quiet title, declaratory judgment, and
wrongful foreclosure. The court reasoned that Wells Fargo,
Fannie Mae, and Knapstein had not shown that the Marcuzzos
were served proper notice of foreclosure proceedings as
required by Nebraska statutes. Therefore, the district court
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found they had not met their burdens of establishing no mate-
rial issue of fact that they complied with such statutes.
Wells Fargo, Fannie Mae, and Knapstein then filed renewed
motions for summary judgment. The renewed motions included
evidence that Wells Fargo and Knapstein sent notices to the
Marcuzzos prior to acceleration of their debt, notifying them
of the default, actions required to cure the default, and a
date by which the default must be cured to prevent sale of
the property.
The district court granted the renewed motions for sum-
mary judgment with regard to the claims of quiet title,
declaratory judgment, and wrongful foreclosure. The district
court found that there was no material issue of fact that
Wells Fargo was the rightful holder and owner of the mort-
gage on the Marcuzzos’ residence, since (1) Wells Fargo
had possession of the note and deed of trust, (2) no other
entity had claimed ownership of the note and deed of trust or
demanded payment, (3) the Marcuzzos’ prior payments were
received by Wells Fargo, and (4) Wells Fargo was included
in bankruptcy proceedings as the creditor of the Marcuzzos’
residence. Therefore, the court granted summary judgment on
the actions for quiet title, declaratory judgment, and wrong-
ful foreclosure.
Because no final order had yet been issued as to Courtney
or Bank of the West, Wells Fargo and Fannie Mae filed a
motion to dismiss “any and all claims [the Marcuzzos] may
have against any and all of the Defendants in this action
due to [the Marcuzzos’] failure to diligently prosecute such
claims.” The Marcuzzos filed a “Resistance to Motion to
Dismiss and Motion for Final Order.” The Marcuzzos agreed
that the court should dismiss all actions as to Courtney and
Bank of the West. However, the Marcuzzos asserted that the
action as to Bank of the West should have been dismissed
because Bank of the West had filed a disclaimer of interest,
and not because of a failure to prosecute. The Marcuzzos
argued that the action against Courtney should have been dis-
missed through the district court’s ruling that there had been
a proper substitution of trustee and conveyance of title, and
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not dismissed because of a failure to prosecute. Following
these motions, the district court issued an order dismissing
the actions against Courtney and Bank of the West for lack
of prosecution.
The Marcuzzos now appeal the district court’s grant of sum-
mary judgment to Wells Fargo, Fannie Mae, and Knapstein
and the dismissal of the case against Courtney and Bank
of the West for lack of prosecution. The Marcuzzos argue
that because there are issues in the evidence regarding the
assignment of their mortgage, summary judgment should not
have been granted. The Marcuzzos also argue that the actions
against Courtney and Bank of the West should not have been
dismissed for lack of prosecution, because the Marcuzzos did
not fail to prosecute Courtney and Bank of the West, but,
rather, Courtney and Bank of the West were, effectively, no
longer parties to the suit.
ASSIGNMENTS OF ERROR
The Marcuzzos assign as error the district court’s (1) award
of “summary judgment since there were material facts when the
evidence, viewed in a light most favorable to the [Marcuzzos],
including reasonable inferences therefrom,” and (2) dismissal
of Courtney and Bank of the West for lack of prosecution.
STANDARD OF REVIEW
[1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admissible evidence
offered at the hearing show that there is no genuine issue as to
any material facts or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to
judgment as a matter of law.1
[2] The exercise of the power to dismiss a matter for lack
of prosecution rests in the sound discretion of the trial court,
whose ruling will not be disturbed on appeal in the absence of
a showing of an abuse of discretion.2
1
Countryside Co-op v. Harry A. Koch Co., 280 Neb. 795, 790 N.W.2d 873
(2010).
2
See Schaeffer v. Hunter, 200 Neb. 221, 263 N.W.2d 102 (1978).
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ANALYSIS
[3-5] As an opening matter, we begin our analysis by reit-
erating that appellants are required to point out the factual and
legal bases that support their assignments of error.3 Further,
an argument that does little more than restate an assignment
of error does not support the assignment, and an appellate
court will not address it.4 Finally, this court will not address
arguments that are too generalized or vague to be understood.5
As we read the Marcuzzos’ brief, they set forth two argu-
ments. First, they assert that summary judgment was improp-
erly granted because there were material issues of fact as to
whether their mortgage was properly assigned and, second,
that the district court should not have dismissed Courtney and
Bank of the West for failure to prosecute. To the extent the
Marcuzzos wished to assert any more specific errors or argu-
ments, their assignments and arguments were too generalized
and vague to be addressed.6
Causes Action Challenging
of
Assignment
The Marcuzzos’ first assignment of error broadly states that
the district court erred in granting summary judgment, because
there were genuine issues of material fact. But there were six
separate claims relating to three of the defendants, which were
all dismissed in summary judgment, on differing grounds, and
as a part of separate summary judgment orders.
We will generously assume this assignment of error refers
to each order, and each claim upon which the court awarded
summary judgment. However, the Marcuzzos do not argue
in their brief that the district court’s award of summary judg-
ment as to injunctive relief was improper. Because this court
3
See Stiver v. Allsup, Inc., 255 Neb. 687, 587 N.W.2d 77 (1998).
4
In re Interest of S.C., 283 Neb. 294, 810 N.W.2d 699 (2012).
5
See, Trieweiler v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004); McLain v.
Ortmeier, 259 Neb. 750, 612 N.W.2d 217 (2000); Miller v. City of Omaha,
253 Neb. 798, 573 N.W.2d 121 (1998).
6
See, State v. Abdullah, 289 Neb. 123, 853 N.W.2d 858 (2014); Coyle v.
Janssen, 212 Neb. 785, 326 N.W.2d 44 (1982).
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addresses only assignments of error both assigned and argued,
we will not address the award of summary judgment as to the
Marcuzzos’ prayer for injunctive relief.7
The Marcuzzos’ remaining five causes of action—for quiet
title, declaratory judgment, accounting, slander of title, and
wrongful foreclosure—were all premised on the allegation
that Wells Fargo is not the proper holder of the mortgage and
note, because the assignment of the mortgage was defectively
executed. The Marcuzzos thus argue in this appeal that the dis-
trict court erred in granting summary judgment as to all these
claims because, viewing the evidence in a light most favorable
to the Marcuzzos, the assignment of the mortgage to Wells
Fargo was defective or improper.
Repeatedly, the Marcuzzos argue that there were discrepan-
cies and irregularities in the paperwork of the assignment that
create material issues of fact as to whether the assignment
was properly executed. The Marcuzzos argue that because
the assignment was not proper, Wells Fargo is not the proper
holder of its note and mortgage.
However, Wells Fargo, Fannie Mae, and Knapstein argue
that the Marcuzzos do not have standing to challenge the valid-
ity of the assignment of their mortgage, because they were not
a party to the mortgage and cannot articulate an injury caused
by the assignment of their mortgage. We agree. We hold that
the Marcuzzos lack standing to attack the assignment of their
mortgage, because the validity of the mortgage, even under the
facts viewed in a light most favorable to the Marcuzzos, would
have no effect on the Marcuzzos’ obligation to pay. Stated
another way, whether or not the assignment of the mortgage
was properly executed is not a material issue in the five causes
of action addressed in this appeal, because the Marcuzzos can-
not show an injury arising from the assignment, regardless of
whether the assignment was proper or improper. Therefore, we
affirm the district court’s grant of summary judgment and dis-
missal of such causes of action.
7
See, Pantano v. McGowan, 247 Neb. 894, 530 N.W.2d 912 (1995); Label
Concepts v. Westendorf Plastics, 247 Neb. 560, 528 N.W.2d 335 (1995).
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[6-9] Before a party is entitled to invoke a court’s jurisdic-
tion, that party must have standing to sue, which involves hav-
ing some real interest in the cause of action.8 In other words,
to have standing to sue, a plaintiff must have some legal or
equitable right, title, or interest in the subject matter of the con-
troversy.9 The purpose of an inquiry as to standing is to deter-
mine whether one has a legally protectable interest or right in
the controversy that would benefit by the relief to be granted.10
Even where declaratory relief is sought, an actual controversy
must be present.11
[10-13] And of particular importance here, standing requires
that a plaintiff show his or her claim is premised on his or
her own legal rights as opposed to rights of a third party.12
Accordingly, Nebraska law states that “only a party (actual
or alleged) to a contract can challenge its validity.”13 “‘[T]he
fact that a third party would be better off if a contract were
unenforceable does not give him standing to sue to void the
contract.’”14 Parties can recover as third-party beneficiaries of
a contract only if it appears that the rights and interest of the
third parties “‘were contemplated and that provision was being
made for them.’”15
8
Fitzke v. City of Hastings, 255 Neb. 46, 582 N.W.2d 301 (1998).
9
Id. See, Ponderosa Ridge LLC v. Banner County, 250 Neb. 944, 554
N.W.2d 151 (1996); Metropolitan Utilities Dist. v. Twin Platte NRD, 250
Neb. 442, 550 N.W.2d 907 (1996); In re Interest of Archie C., 250 Neb.
123, 547 N.W.2d 913 (1996).
10
Cornhusker Pub. Power Dist. v. City of Schuyler, 269 Neb. 972, 699
N.W.2d 352 (2005); County of Sarpy v. City of Gretna, 267 Neb. 943, 678
N.W.2d 740 (2004); Adam v. City of Hastings, 267 Neb. 641, 676 N.W.2d
710 (2004); Crosby v. Luehrs, 266 Neb. 827, 669 N.W.2d 635 (2003);
Hradecky v. State, 264 Neb. 771, 652 N.W.2d 277 (2002).
11
Ryder Truck Rental v. Rollins, 246 Neb. 250, 518 N.W.2d 124 (1994).
12
See Schauer v. Grooms, 280 Neb. 426, 786 N.W.2d 909 (2010).
13
Spanish Oaks v. Hy-Vee, 265 Neb. 133, 138, 655 N.W.2d 390, 397 (2003).
14
Id.
15
Palmer v. Lakeside Wellness Ctr., 281 Neb. 780, 785, 798 N.W.2d 845, 850
(2011).
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[14] Though we have never addressed the more specific
question of whether a borrower has standing to challenge the
assignment of their mortgage, it follows from these rules that
a borrower who is not a party to a mortgage assignment, or a
party intended to benefit from the assignment, lacks standing to
challenge the assignment.
While not many courts have addressed this specific question,
the majority of courts have found under these principles that
borrowers do not have standing to challenge an assignment of
their mortgage, because they are not a party to the assignment
contract.16 This is true even if there is proof that the assignment
is somehow flawed.17 Where the mortgage assignment does
not alter the borrower’s obligations under the note or mort-
gage, and no injury is traceable to the mortgage assignment,
the borrowers simply have shown no injury.18 In reaching this
conclusion, courts rely on the general common-law principle
that the maker of a promissory note cannot challenge his or her
obligations under the note by asserting that an invalid assign-
ment had occurred.19
For example, in Yuille v. American Home Mortg. Services,
Inc.,20 the court held that borrowers in default lacked standing
to challenge the validity of the mortgage’s assignment where
16
See, e.g., Richard A. Vance and Katherine A. Bell, MERS Litigation in
2012 and 2013: A Survey of Claims by Borrowers and Others, 69 Bus.
Law. 657 (2014). See, also, Ward v. Security Atlantic Mortg. Elec. Reg.,
858 F. Supp. 2d 561 (E.D.N.C. 2012); Velasco v. Security Nat. Mortg.
Co., 823 F. Supp. 2d 1061 (D. Haw. 2011), affirmed 508 Fed. Appx. 679
(9th Cir. 2013); Montgomery v. Bank of America, 321 Ga. App. 343, 740
S.E.2d 434 (2013); Yuille v. American Home Mortg. Services, Inc., 483
Fed. Appx. 132 (6th Cir. 2012); Dehdashti v. Bank of NY Mellon, No.
1:12-CV-595-TCB, 2012 U.S. Dist. LEXIS 187433 (N.D. Ga. June 7,
2012) (unpublished opinion).
17
Montgomery v. Bank of America, supra note 16.
18
See Bank of New York Mellon Trust Co. v. Unger, No. 97315, 2012
Ohio App. LEXIS 1723 (Ohio App. 8th Dist. May 3, 2012) (unpublished
opinion).
19
See Bowles v. Oakman, 246 Mich. 674, 225 N.W. 613 (1929).
20
Yuille v. American Home Mortg. Services, Inc., supra note 16, 483 Fed.
Appx. at 135.
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the borrower was a “stranger to the assignment.” The court in
Livonia Properties Holdings, LLC v. 12840-12976 Farmington
Road Holdings, LLC21 agreed, stating that “if the assignment
were in fact irregular, that would be an issue between the
assignor and assignee.”
Some courts while accepting this general rule have recog-
nized an exception if the borrower can show actual prejudice
by the improper assignment of the loan.22 For example, if the
borrower was at risk of paying the same debt twice, then the
borrower could establish a concrete injury arising from the
improper assignment of the mortgage.23 If the borrower can
show any injury that is directly traceable to the assignment of
the mortgage, then, under this exception, the borrower would
have standing to challenge that assignment.
Only one circuit court has held that the borrower does
not need to demonstrate injury in order to have standing to
challenge the validity of an assignment that the borrower
was not a party to.24 But, the court strictly circumscribed the
type of challenge for which a borrower may have standing.25
In Culhane v. Aurora Loan Services of Nebraska,26 the First
Circuit Court of Appeals held that a borrower can have stand-
ing to challenge the assignment of his or her mortgage where
the borrower is arguing the mortgage is invalid, ineffective, or
void. Examples of void assignments include where the right
attempted to be assigned is not assignable, or a prior revocation
of the assignment.27
However, the Culhane court held that a borrower does not
have standing to challenge shortcomings in an assignment that
21
Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road
Holdings, LLC, 399 Fed. Appx. 97, 103 (6th Cir. 2010).
22
See In re Sandri, 501 B.R. 369 (N.D. Cal. 2013).
23
Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road
Holdings, LLC, supra note 21.
24
Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.
2013).
25
Id.
26
Id.
27
6A C.J.S. Assignments § 132 (2004).
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render it merely voidable at the election of one party, but oth-
erwise effective to pass legal title.28
The plaintiff in Culhane argued that the assignor of the
mortgage never had valid title to the mortgage, and therefore
never had the right to assign the mortgage.29 If true, the mort-
gage assignment would be void ab initio. The First Circuit
Court of Appeals found that the harm to the plaintiff in such
circumstances would be the foreclosure, which could be traced
directly to the creditor’s “exercise of the authority purportedly
delegated by the assignment.”30 The court also found two key
facts in favor of standing in light of the allegations presented:
(1) that, in Massachusetts, debtors have a statutory right under
state law to ensure that any attempted foreclosure on his or
her home is conducted lawfully and (2) that the mortgage con-
tained a power of sale without prior judicial authorization.31
The court was careful to caution that its holding was narrow,
specific to Massachusetts law, and applied only when the bor-
rower challenged the mortgage assignment as invalid, ineffec-
tive, or void.32
We find Culhane to be distinguishable from the case at bar.
The Marcuzzos did not allege a void assignment. They did not
allege that MERS, or Bank of the West, had no legally cogni-
zable right to assign under the mortgage documents. Instead,
the Marcuzzos’ argument is that the assignment paperwork
between the assignor and Bank of the West did not follow
the proper procedural framework. Even if this were true, the
assignment would not be defective.33
Moreover, the Marcuzzos do not argue that they should not
be liable for the remainder of their debt under the mortgage.
28
Culhane v. Aurora Loan Services of Nebraska, supra note 24. See, also,
Service Mortgage Corp. v. Welson, 293 Mass. 410, 200 N.E. 278 (1936);
Murphy v. Barnard, 162 Mass. 72, 38 N.E. 29 (1894).
29
Culhane v. Aurora Loan Services of Nebraska, supra note 24.
30
Id. at 290.
31
Id.
32
Id.
33
See 21 C.J.S. Creditor and Debtor § 27 (2006).
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Indeed, when their mortgage was purchased by Wells Fargo
in 2005, the Marcuzzos paid Wells Fargo their mortgage pay-
ments for nearly 6 years before they defaulted on their loan
and demanded explanation as to the irregularities in the assign-
ment paperwork.
In sum, all parties involved, including the assignor of the
mortgage, Bank of the West, accepted Wells Fargo as the
proper assignee of the mortgage. The Marcuzzos also accepted
Wells Fargo as the creditor of their mortgage for nearly 6
years. From our understanding, nothing else changed at the
point that the Marcuzzos began to refuse payment, other
than their entrance into bankruptcy. No other bank claimed
mortgage payments. Neither the amount due on the mortgage
nor the terms of the mortgage changed. Thus, even if the
Marcuzzos’ allegations were proved true, those allegations
would fail to establish a real injury in fact caused by a defec-
tive assignment.
We need not decide in this case whether a borrower who is
at risk of paying the same debt twice, or otherwise at risk of
prejudice from an improper assignment, would have standing to
challenge that assignment of its mortgage. Had the Marcuzzos
established an injury that directly related back to the assign-
ment of their mortgage, our holding may have been different.
But no such injury caused by the assignment is alleged or
found. Strictly applying Nebraska law, the Marcuzzos were not
a party to the assignment. Nor was the assignment made for
their benefit. Thus, the Marcuzzos cannot challenge the assign-
ment contract’s validity.
The alleged five causes of action, as stated and argued by
the Marcuzzos, all depended upon the Marcuzzos’ allegation
that the assignment was defective or improperly executed.
The Marcuzzos failed to demonstrate at the summary judg-
ment hearings that there was any material issue of fact that, if
ultimately determined in their favor, would establish standing
to challenge the assignment. As such, the Marcuzzos failed to
establish standing to challenge the assignment. Because they
lacked standing to challenge the assignment, they also lacked
standing to assert any cause of action that depended upon the
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824 290 NEBRASKA REPORTS
validity of the assignment. Therefore, albeit for a different
reason than stated by the court below, we affirm the district
court’s grant of summary judgment dismissing the Marcuzzos’
actions to quiet title, declaratory judgment, accounting, slander
of title, and wrongful foreclosure.
Failure to P rosecute
As far as we can discern, the Marcuzzos’ second assignment
of error asserts that the district court erred in finding that the
Marcuzzos failed to prosecute Courtney and Bank of the West.
The Marcuzzos’ argument on appeal pertaining to their second
assignment of error is as follows:
The District Court should not have dismissed . . .
Courtney and Bank of the West for lack of prosecution
. . . . The [Marcuzzos’] Resistance to this motion shows
that the District Court effectively ruled on any issues
affecting these Defendants. Namely it ruled that Wells
Fargo [i]s the proper owner of the loan documents and
that the substation of trustee and trustee’s sale was proper.
These rulings dispose of any interest by these defendants
and it was improper to dismiss them. Rather they should
have been dismissed as having no interest in the subject
property and loan by virtue of the District Court’s prior
rulings. Dismissal for lack of prosecution should also
not be allowed as the [Marcuzzos] were prevented from
doing discovery.34
We agree with the district court that Courtney and Bank of the
West were properly dismissed from the action, and we affirm
the district court’s dismissal, although again for a slightly dif-
ferent reason than that articulated by the district court.
[15-17] The plaintiff bears the responsibility to prosecute a
case with reasonable diligence.35 In the absence of a showing
of good cause, a litigant’s failure to prosecute a civil action,
resulting in noncompliance with the Nebraska Supreme Court’s
34
Brief for appellants at 23.
35
Roemer v. Maly, 248 Neb. 741, 539 N.W.2d 40 (1995); Schaeffer v.
Hunter, 200 Neb. 221, 263 N.W.2d 102 (1978).
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MARCUZZO v. BANK OF THE WEST 825
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progression standards for civil actions in district courts, is a
basis to dismiss an action on account of a lack of diligent pros-
ecution.36 The district court has the inherent power to dismiss a
case for failure to prosecute with due diligence.37
On the record provided, Bank of the West filed a disclaimer
of interest in the case, stating that it acknowledged it had no
interest in the subject matter of the action, and acknowledg-
ing that it therefore lacked standing to proceed in the action.
However, the record does not show that Courtney filed a dis-
claimer of interest.
Wells Fargo and Fannie Mae moved for the district court
to dismiss “any and all of the Defendants in this action
due to [the Marcuzzos’] failure to diligently prosecute such
claims.” The Marcuzzos filed a resistance to this motion to
dismiss, stating that Courtney should be dismissed, since the
court already ruled there was no defect in the substitution of
Knapstein as the substitute trustee. They also argued that Bank
of the West did not need to be dismissed, because it filed a
disclaimer of interest on which it should have been dismissed
from the case.
The district court granted the motion to dismiss for failure to
prosecute “due to no good cause shown why this case should
not be dismissed for lack of prosecution.” We can find no abuse
of discretion in the district court’s dismissal of Courtney for
lack of prosecution. The record does not reflect that Courtney
was included in any of the arguments by the Marcuzzos, and
Courtney never entered an appearance in the matter.
However, it was an abuse of discretion for the district court
to dismiss Bank of the West for failure to prosecute. Because
Bank of the West filed a disclaimer of interest and acknowl-
edged that it had no interest in the subject matter of the
action, it should have been dismissed from the action for lack
of standing.
36
Billups v. Jade, Inc., 240 Neb. 494, 482 N.W.2d 269 (1992).
37
Gutchewsky v. Ready Mixed Concrete Co., 219 Neb. 803, 366 N.W.2d 751
(1985).
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Although our reasoning differs from that of the district
court, the court did not err in dismissing Bank of the West. We
affirm the district court’s dismissal of Courtney and Bank of
the West.
CONCLUSION
For the foregoing reasons, we affirm the grant of summary
judgment to Wells Fargo, Fannie Mae, and Knapstein, and we
affirm the dismissal of Courtney and Bank of the West.
Affirmed.
Stephan and Miller-Lerman, JJ., not participating.