Bradsen v. Shellpoint Mortgage Services ( 2022 )

2022 UT App 10THE UTAH COURT OF APPEALS
ALLIXANDRA KARENN BRADSEN,
Appellant,
v.
SHELLPOINT MORTGAGE SERVICES AND
SAXON MORTGAGE SERVICES INC.,
Appellees.
Opinion
No. 20200244-CA
Filed January 21, 2022
Fourth District Court, Provo Department
The Honorable Derek P. Pullan
No. 180401536
David D. Jeffs, Attorney for Appellant
Alex B. Leeman, Attorney for Appellee Shellpoint
Mortgage Services
Stephen G. Stoker, Attorney for Appellee Saxon
Mortgage Services Inc.
JUDGE JILL M. POHLMAN authored this Opinion, in which
JUDGES GREGORY K. ORME and RYAN M. HARRIS concurred.
POHLMAN, Judge:
¶1 In 2007, Allixandra Karenn Bradsen refinanced the
mortgage on her house by obtaining a loan secured by a trust
deed on the property. Two years later, Bradsen stopped making
payments on the loan and, for more than a decade, she has
worked to forestall its collection and to prevent foreclosure on
the property. As part of her efforts, Bradsen filed the present
Bradsen v. Shellpoint
lawsuit, alleging that Shellpoint Mortgage Services, 1 the entity
claiming to currently hold the note and trust deed, does not have
standing to foreclose on the property because it does not hold
good title. She also alleges that collection on the note and
foreclosure on the property are time-barred.
¶2 The district court disagreed with Bradsen. In granting
summary judgment in favor of Shellpoint, it concluded that
Shellpoint had demonstrated an unbroken chain of title that
proved it is the rightful owner of the note and beneficiary of the
trust deed. The court also determined that the six-year statute of
limitations had not expired because Bradsen restarted the
limitations period by acknowledging her debt when she applied
for mortgage relief in 2014.
¶3 On appeal, we agree with the district court that Bradsen
revived the statute of limitations by acknowledging her debt, but
we disagree with the court’s analysis relevant to the chain of
title. Accordingly, we vacate the district court’s award of
summary judgment in favor of Shellpoint and remand for
further proceedings.
1. Shellpoint, a dba for New Residential Mortgage LLC, is a
successor in interest to Ditech Financial LLC. Bradsen filed suit
against Ditech, but Shellpoint later acquired Ditech’s rights and
assumed its role in this litigation. As necessary for historical
accuracy, we will refer to Ditech and Shellpoint by their actual
names. But in describing the roles and positions of the parties in
the litigation, we will refer to Ditech as Shellpoint because
Shellpoint is Ditech’s successor.
20200244-CA 2 2022 UT App 10Bradsen v. Shellpoint
BACKGROUND 2
The Note and Deed of Trust
¶4 In June 2007, Bradsen received a loan from Sand Canyon
Corporation 3 by executing an adjustable rate note. As collateral
for the loan, Sand Canyon took a security interest in Bradsen’s
property as evidenced by a trust deed that identified Sand
Canyon as the beneficiary. The next month, Sand Canyon
assigned the trust deed to Saxon Mortgage Services Inc. (the 2007
Assignment).
Bradsen’s Default
¶5 Because Bradsen stopped making payments on the loan in
March 2009, Saxon executed a Notice of Default and Election to
Sell and recorded that document at the county recorder’s office
(the First Notice). In the First Notice, Saxon accelerated all
payments due under the note and invoked its option to foreclose
on the property under the trust deed. In response, Bradsen filed
a lawsuit in federal court attempting to void the note and trust
2. “In reviewing a district court’s grant of summary judgment,
we view the facts and all reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party and recite the
facts accordingly.” Ockey v. Club Jam, 2014 UT App 126, ¶ 2 n.2,
328 P.3d 880 (cleaned up).
3. In 2007, at the time the note and trust deed were executed,
Sand Canyon was known as Option One Mortgage Corporation.
To avoid confusion, we will refer to Option One as Sand Canyon
throughout this opinion.
20200244-CA 3 2022 UT App 10Bradsen v. Shellpoint
deed, alleging that the loan had violated the federal Truth in
Lending Act (TILA). 4 See generally 15 U.S.C. §§ 1601 to 1667f.
The Purported Assignment to RCS
¶6 Ultimately, Saxon did not seek to collect on the note or
foreclose under the trust deed. Instead, it sent Bradsen a letter in
May 2012, informing her that “the servicing of [her] mortgage
loan will be transferred from Saxon . . . to Residential Credit
Solutions, Inc.” (RCS) and that her “new servicer will be [RCS].”
¶7 In July 2013, the trust deed was purportedly assigned to
RCS, but the assignment (the 2013 Assignment) listed “Sand
Canyon Corporation f/k/a Option One Mortgage Corporation”
as the assignor, not Saxon. Sand Canyon was identified on the
signature line of the 2013 Assignment and it was signed by its
assistant secretary.
Bradsen’s Request for Loan Modification
¶8 The next year, on January 22, 2014, Bradsen wrote to RCS
asking for a loan modification. She explained, “I write this letter
regarding my reason for my late payments on my mortgage loan
and to request a workout in order to prevent my home from
going into default and foreclosure.” She identified her “original
loan amount” as $258,400 and stated that when she refinanced
with Sand Canyon, her loan ballooned “to over $400 thousand.”
She also identified what she referred to as “[m]y payment” as
$2,409.02 per month.
4. Bradsen’s federal claim was eventually dismissed five years
later. See Moliere v. Option One Mortgage, No. 2:10-cv-00802-CW,
2015 WL 429968 (D. Utah Feb. 2, 2015). (Bradsen was formerly
known as Murielle Moliere.)
20200244-CA 4 2022 UT App 10Bradsen v. Shellpoint
¶9 Bradsen further explained that she had filed her federal
lawsuit “to see if the loan could be cancelled” due to TILA
violations, but that her lawyer had withdrawn from the case and
that she was now “appealing to [RCS] for what [she] wanted in
the first place, to modify [her] loan to make [her] mortgage
payment more affordable.” She then stated, “I am willing to
dismiss any litigation actions that have been taken in my behalf,
but have been afraid to before someone can look at my matter.”
¶10 In addition to her letter, Bradsen submitted to RCS a
signed Uniform Borrower Assistance Form seeking mortgage
relief under the federal government’s Making Home Affordable
program. In the form, she repeatedly refers to herself as
“Borrower” and acknowledged that the purpose of her
application was to obtain “mortgage relief” or “mortgage
assistance” under her “existing mortgage.” She also referred to
her outstanding debt as “my loan.”
The Rescission of the 2007 Assignment
¶11 In September 2017, Sand Canyon executed and recorded a
Rescission of Assignment of Deed of Trust (the Rescission). In
the Rescission, Sand Canyon stated that it, when known as
Option One, “erroneously filed” the 2007 Assignment assigning
the trust deed to Saxon. 5 The Rescission further declared that the
2007 Assignment was thereby “withdrawn, canceled and
declared of no force or effect, and that the lien on the [Bradsen]
property . . . shall in no way be affected by such erroneous
instrument.”
5. In its ruling, the district court identified the rescinded
assignment as the 2013 Assignment—the one between Sand
Canyon and RCS. This appears to be a misstatement as the face
of the Rescission makes clear that it purports to rescind the 2007
Assignment—the one between Sand Canyon and Saxon.
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The Assignment to Ditech and the Ditech Affidavit
¶12 In October 2017, RCS purported to assign the trust deed
to Ditech Financial LLC. 6 The next month, Ditech executed an
Affidavit of Lost Assignment (the Affidavit). In the Affidavit, a
representative of Ditech averred that “[t]he original assignment
of the Mortgage between Saxon . . . and Ditech . . . has been lost
and/or was not recorded.” 7 Ditech further asserted that Saxon “is
no longer in business and a replacement assignment is therefore
unavailable.”
¶13 In December 2017, Ditech executed and recorded a
Cancellation of Notice of Default. In the cancellation, Ditech
cancelled the First Notice that Saxon had recorded in 2009. On
the same day, Ditech executed and recorded its own Notice of
Default and Election to Sell (the Second Notice). In the Second
Notice, Ditech alleged that Bradsen had defaulted on her
“monthly payment obligation set forth in the promissory note”;
it also accelerated the amount still due under the note and
elected to foreclose on Bradsen’s property under the trust deed’s
terms.
6. Prior to the October 2017 assignment, RCS purported to assign
the trust deed securing Bradsen’s note to Federal National
Mortgage Association (Fannie Mae). That assignment was
executed and recorded in November 2014. Then, in August 2015,
Fannie Mae assigned the trust deed back to RCS, and the
assignment was recorded the same month.
7. Aside from the Affidavit, there is no evidence in the summary
judgment record of an assignment between Saxon and Ditech.
20200244-CA 6 2022 UT App 10Bradsen v. Shellpoint
The Correction
¶14 In January 2019, Saxon recorded a Corrected and Restated
Assignment of Trust Deed (the Correction). In the Correction,
Saxon purported to “correct the assignor identified” in the 2013
Assignment, in which Sand Canyon (years after assigning the
trust deed to Saxon) purported to assign the trust deed to RCS.
Saxon restated the 2013 Assignment as having been between
Saxon and RCS.
The Shellpoint Assignment
¶15 Ditech filed a Chapter 11 bankruptcy action before
formally foreclosing on the property. The trust deed was later
assigned to Shellpoint during bankruptcy proceedings.
Procedural History
¶16 Before any formal foreclosure proceedings began, Bradsen
filed the underlying lawsuit against Shellpoint and Saxon,
seeking to enjoin the foreclosure of her property and seeking
quiet title of the property in her favor. In November 2018,
Shellpoint asserted a counterclaim, alleging that Bradsen was in
default of her loan and petitioning the district court for judicial
foreclosure and enforcement of the note. Prior to that time, no
entity had filed any action to enforce payment on the note or to
foreclose on the property.
¶17 Both Bradsen and Shellpoint subsequently moved for
summary judgment. In her motion, Bradsen argued that
foreclosure on her property was time-barred. Citing Utah Code
section 70A-3-118(1), Bradsen asserted that the holder of a note
has six years to enforce the note or foreclose under a deed of
trust once the holder has accelerated payments due under the
note. Because Saxon first accelerated payments under the note
on August 20, 2009, Bradsen argued that Shellpoint’s attempt to
foreclose on her property after August 20, 2015, was unlawful.
20200244-CA 7 2022 UT App 10Bradsen v. Shellpoint
Further, Bradsen argued that the trust deed should be
extinguished because the note could no longer be enforced and
that, as a result, “the court should quiet title in and to [the
subject property] as against [Shellpoint and Saxon] or any other
person” claiming an interest in the subject property under the
trust deed.
¶18 In its cross-motion, Shellpoint sought dismissal of
Bradsen’s quiet title claim and summary judgment in its favor on
its counterclaim for judicial foreclosure. Shellpoint asserted that
the chain of recorded documents proved that it was the current
assignee and beneficiary of the note and trust deed, “with all
rights thereunder.” In so asserting, Shellpoint acknowledged
that Bradsen had questioned Shellpoint’s standing, pointing to a
break in the chain of title due to the 2013 Assignment, where
Sand Canyon (rather than Saxon) purported to assign the deed
to RCS. But Shellpoint argued that any such break was
retroactively corrected when Saxon executed the Correction in
2019. Further, in response to Bradsen’s statute of limitations
argument, Shellpoint claimed that Bradsen’s application to
modify her loan restarted the statute of limitations in 2014. It
also argued, alternatively, that even if the statute of limitations
had run on enforcement of the note, the trust deed was still
valid, allowing for foreclosure of the property.
¶19 Bradsen responded to Shellpoint’s standing argument by
asserting that Shellpoint was not entitled to summary judgment
because it had not shown, as a matter of law, that “it is the
owner of the note and trust deed.” Bradsen argued that Saxon
could not unilaterally repair the break in the chain of title by
filing the Correction, and that because Saxon never assigned its
interest to RCS, Saxon continues to own the note and hold the
trust deed. Bradsen further argued that the “inherent
inconsistencies” among the Correction, the Rescission, and the
Affidavit raised genuine issues of material fact as to the
ownership of the note and trust deed that precluded summary
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judgment in Shellpoint’s favor. In reply, Shellpoint asserted that
neither the Rescission nor the Affidavit “has any legal effect,”
but that even if the documents were effective, the chain of title
would still lead unbroken to Shellpoint.
¶20 After hearing argument, the district court granted
summary judgment in favor of Shellpoint. Regarding
Shellpoint’s ability to enforce the note and foreclose the trust
deed, the court held that Shellpoint “is the rightful owner of the
Note and beneficiary of the Trust Deed.” The court reasoned that
the naming of Sand Canyon as the assignor in the 2013
Assignment (rather than Saxon) was a “clerical error” that Saxon
had the authority to correct via the Correction in 2019. And with
the “clerical error” fixed, the court concluded that “there is an
unbroken chain of assignments that leads to [Shellpoint].” The
court also determined that the Rescission did not create an issue
of material fact because “even if [it] were effective, the chain of
assignment would be unbroken between the original holder of
the Note and Trust Deed and [Shellpoint].” 8
¶21 Regarding the statute of limitations, the district court held
that it “was restarted on January 22, 2014, when Bradsen
acknowledged her loan and mortgage debt in her signed
Uniform Borrower Assistance Form and related letter.” “Having
resolved this question,” the court did not decide whether “the
running of the statute of limitations voids the Trust Deed or
extinguishe[d] [Shellpoint’s] right to foreclose on [the] Trust
Deed.”
¶22 In an Amended Judgment, the district court entered
judgment in favor of Shellpoint, which included attorney fees,
8. The district court did not address what effect, if any, the
Affidavit, executed by Ditech before the Correction was
executed, had on the chain of title.
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and ordered the sale of Bradsen’s property to satisfy the
judgment.
¶23 Bradsen appeals.
ISSUES AND STANDARD OF REVIEW
¶24 Bradsen contends that the district court made two errors
in granting summary judgment in favor of Shellpoint. First,
Bradsen argues that the statute of limitations applicable to the
enforcement of the note and the foreclosure on her property
expired on August 20, 2015. Thus, Bradsen argues, the court
erred in concluding that because she restarted the six-year
statute of limitations when she applied for mortgage relief in
2014, Shellpoint’s action was timely filed. Second, Bradsen
argues that the court erred in concluding, as a matter of law, that
Shellpoint is the holder of the note and the beneficiary of the
trust deed and thus has the right to enforce the note and
foreclose on her property.
¶25 Summary judgment is appropriate “if the moving party
shows that there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law.”
Utah R. Civ. P. 56(a). We review the district court’s legal
conclusions and its grant of summary judgment on these issues
for correctness. Cochegrus v. Herriman City, 2020 UT 14, ¶ 14, 462
P.3d 357.
ANALYSIS
I. The Statute of Limitations
¶26 Bradsen first contends that the district court committed
reversible error in concluding that Shellpoint’s action to collect
on the note and to foreclose the trust deed was timely filed.
20200244-CA 10 2022 UT App 10Bradsen v. Shellpoint
Specifically, Bradsen argues that the applicable six-year statute
of limitations had expired before Shellpoint filed a foreclosure
action or completed a trustee’s sale and that the court erred in
concluding that she restarted the statute of limitations to
foreclose on her property when she applied for mortgage relief.
According to Bradsen, her letter “submitted to RCS in January
2014 did not restart the statute of limitations because it was not a
sufficiently distinct, direct, unqualified, and intentional
admission of a present, subsisting debt of [hers] for which she
acknowledged she was liable.”
¶27 The applicable statute of limitations requires that “an
action to enforce the obligation of a party to pay a note
payable at a definite time must be commenced within six
years after the due date or dates stated in the note or, if a due
date is accelerated, within six years after the accelerated due
date.” Utah Code Ann. § 70A-3-118(1) (LexisNexis 2020). In
August 2009, Saxon issued the First Notice and accelerated all
sums due under the note. Given this acceleration, the beneficiary
had six years from August 2009 to enforce Bradsen’s obligation.
See id.
¶28 The Utah Code further provides, however, that the statute
of limitations may restart if certain events occur. As relevant
here, “[a]n action for recovery of a debt may be brought within
the applicable statute of limitations from the date: . . . a written
acknowledgment of the debt or a promise to pay is made by the
debtor.” Id. § 78B-2-113(1)(b) (2018). The district court
determined that this provision applied to this case, concluding
that “the statute of limitations was restarted on January 22, 2014,
when Bradsen acknowledged her loan and mortgage debt in her
signed Uniform Borrower Assistance Form and related letter.”
Accordingly, the court concluded that Shellpoint’s “action to
collect on the Note and to foreclose on the Trust Deed, therefore,
is timely filed.”
20200244-CA 11 2022 UT App 10Bradsen v. Shellpoint
¶29 “To restart a statute of limitations, an acknowledgment of
a debt must be ‘clear, distinct, direct, unqualified, and
intentional.’” Daniels v. Deutsche Bank Nat’l Trust, 2021 UT App
105, ¶ 32, 500 P.3d 891 (quoting Wells Fargo Bank, NA v. Temple
View Invs., 2003 UT App 441, ¶ 9, 82 P.3d 655). Further, “an
acknowledgment ‘must be more than a hint, a reference, or a
discussion of an old debt; it must amount to a clear recognition
of the claim and liability as presently existing.’” Id. (quoting Beck
v. Dutchman Coal. Mines Co., 269 P.2d 867, 870 (Utah 1954)); see
also Beck, 269 P.2d at 869 (“No set phrase or particular form of
language is required; anything that will indicate that the party
making the acknowledgment admits that he is still liable on the
claim, that he is still bound for its satisfaction, that he is still held
for its liquidation and payment, is sufficient to revive the debt or
claim . . . .” (cleaned up)). Indeed, our supreme court has
instructed that “nothing short of a distinct, direct, unqualified,
and intentional admission of a present, subsisting debt on which
a party is liable will be sufficient to take the obligation out of the
statute and start it running anew.” Salt Lake Transfer Co. v.
Shurtliff, 30 P.2d 733, 736 (Utah 1934) (cleaned up).
¶30 For example, in Beck, the Utah Supreme Court determined
that a letter contained “a clear and definite acknowledgment that
the respondent presently owe[d] the appellant for his services.”
269 P.2d at 870. There, the respondent’s letter referred to the
appellant’s “bill for services” and “expressed that he thought
$1,000 was all that was due and owing.” Id. The supreme court
concluded that this letter “contain[ed] an acknowledgment of an
existing liability independently of the [respondent’s] offer . . . to
settle the claim for $1,000.” Id. In contrast, this court reached the
opposite conclusion in Wells Fargo Bank. In that case, a party had
written to the bank and stated that “this may be a good time to
resolve the long outstanding matter of liability of [a] . . .
promissory note,” which had “accruals . . . exceed[ing]
$390,000.” Wells Fargo Bank, 2003 UT App 441, ¶ 8. This court
20200244-CA 12 2022 UT App 10Bradsen v. Shellpoint
determined that although this letter “indicates a dispute,” it did
not “clearly acknowledge[] any existing liability.” Id. ¶ 10.
¶31 Bradsen acknowledges that her letter “reference[d] or
discusse[d] the existing mortgage loan” and “recite[d] the
dispute that [she] had relative to the loan,” but she argues that
her letter was “insufficient to constitute an acknowledgment”
because she did not acknowledge “her present liability for the
loan, Note, or Trust Deed.” 9 It is true that language referring to
“‘the long outstanding matter of liability,’ . . . indicates a dispute
regarding whether [a party] was liable to pay the note” but does
not constitute an acknowledgment. Id. Yet we agree with the
district court that Bradsen’s letter did more than refer to a
dispute and her willingness to “dismiss any litigation actions”; it
contained her “acknowledgement of her presently existing
9. Bradsen also argues that because Saxon remained the owner of
the note and trust deed, her 2014 letter to RCS was not sent to
the actual creditor and could not restart the statute of limitations.
Even assuming RCS did not hold the note and trust deed in 2014,
Bradsen’s argument is unavailing. Relying on Nilson-Newey
& Co. v. Utah Resources International, 905 P.2d 312 (Utah Ct. App.
1995), Bradsen asserts that “for an acknowledgment to interrupt
the time bar, it must be communicated to the creditor.” Yet
Nilson-Newey and the case it relies on, Weir v. Bauer, 286 P. 936(Utah 1930), are not so restrictive. Rather, those cases state that
the acknowledgment “must be communicated to the plaintiff,”
Nilson-Newey, 905 P.2d at 316, or to “a creditor, or to his agent, or
to one authorized to act on the acknowledgment,” Weir, 286 P. at
945. On the other hand, “acknowledgment to a stranger is
insufficient.” Id. Here, even if the district court ultimately finds
that RCS was not the actual holder of the note and beneficiary of
the trust deed in 2014, RCS was no stranger. RCS was, at the
very least, the undisputed servicer of the loan. Therefore, the
principles of Nilson-Newey and Weir do not assist Bradsen.
20200244-CA 13 2022 UT App 10Bradsen v. Shellpoint
mortgage debt.” In her letter, Bradsen recognized her late
payments on “[her] mortgage loan” and asked for “a loan
modification” to lower her payments. She also identified her
“original loan amount” as $258,400 and stated that when she
refinanced with Sand Canyon, her loan ballooned “to over $400
thousand.” Additionally, Bradsen submitted a Uniform
Borrower Assistance Form to RCS in which she again referred to
“[her] loan,” repeatedly referred to herself as “Borrower,” and
explained that the purpose of her application was to obtain
“mortgage relief” or “mortgage assistance” under her “existing
mortgage.” We further agree with the district court that
Bradsen’s letter and form are similar to the letter in Beck and that
they amounted to a “clear, distinct, direct, unqualified, and
intentional” acknowledgement of her outstanding debt. See
Daniels, 2021 UT App 105, ¶ 32 (cleaned up); see also Beck, 269
P.2d at 869–70.
¶32 We therefore affirm the district court’s determination that
Bradsen’s 2014 letter restarted the six-year statute of limitations
and that Shellpoint’s foreclosure action was timely filed.
II. Shellpoint’s Rights in the Note and the Deed
¶33 In concluding that Shellpoint had demonstrated a clear
chain of title such that it could enforce Bradsen’s note and
foreclose on her property, the district court acknowledged a
potential break in the chain attributable to the 2013 Assignment
in which Sand Canyon—rather than Saxon—purported to assign
the trust deed to RCS. But the court concluded that because the
2013 Assignment contained a mere “clerical error,” the
Correction recorded by Saxon in 2019 retroactively remedied the
break. The court also rejected Bradsen’s argument that the
Rescission, by which Sand Canyon purported to rescind its
assignment to Saxon, precluded summary judgment in
Shellpoint’s favor.
20200244-CA 14 2022 UT App 10Bradsen v. Shellpoint
¶34 We begin by briefly describing the relevant documents
and the district court’s conclusions based on those documents.
We then address the court’s conclusion that with the Correction,
“there is an unbroken chain of assignments that leads to
[Shellpoint].” Last, we address the parties’ arguments regarding
the Rescission and whether the Rescission is an alternate path to
remedy the break in the chain of title.
A. The Chain of Title
¶35 Sand Canyon was the original holder of Bradsen’s note
and related trust deed, but Sand Canyon did not hold the note
and deed for long. Within one month of their execution, Sand
Canyon transferred the note and assigned its interest in the deed
to Saxon.
¶36 Shellpoint contends that Saxon subsequently intended to
assign its interest in the note and deed to RCS, but the 2013
Assignment to RCS was executed by and in the name of Sand
Canyon.
¶37 More than four years later, in the fall of 2017, several
documents were executed relating to the note and trust deed.
First, in September 2017, Sand Canyon recorded the Rescission
in which it purported to rescind the 2007 Assignment to Saxon.
The Rescission declared the 2007 Assignment “of no force or
effect.” Next, in October 2017, RCS transferred its interest in the
note and trust deed to Ditech (now Shellpoint). And finally, in
November 2017, Ditech executed the Affidavit, in which it
asserted that an assignment of the note from Saxon to Ditech had
been lost. At least for purposes of summary judgment,
Shellpoint has argued that neither the Rescission nor the
Affidavit “has any legal effect.”
¶38 Finally, in January 2019, Saxon recorded the Correction in
which it purported to adopt Sand Canyon’s 2013 Assignment as
20200244-CA 15 2022 UT App 10Bradsen v. Shellpoint
its own and to “correct” it. In the Correction, Saxon restated the
2013 Assignment as having been between Saxon and RCS.
¶39 The district court concluded that “there is an unbroken
chain of assignments that leads to [Shellpoint].” Specifically, the
court concluded that Saxon had “authority to correct the clerical
error” in the 2013 Assignment, and with the Correction in place,
Shellpoint is the rightful owner of the note and beneficiary of the
trust deed. Alternatively, the court concluded that “even if the
[R]escission were effective, the chain of assignment would be
unbroken.” In other words, if the Rescission effectively annulled
the 2007 Assignment from Sand Canyon to Saxon, Sand
Canyon’s 2013 Assignment to RCS was effective, leaving no
break in the chain. Bradsen contends that the court was wrong
on both counts.
B. The Effect of the Correction
¶40 In contending that the 2013 Assignment contained “a
scrivener’s error” that was remedied by the Correction,
Shellpoint invokes both Utah statutory and common law. Citing
Utah Code section 57-3-106(9), Shellpoint argues that a party
may retroactively correct a minor typographical or clerical error
in a recorded document by recording a correction. Shellpoint
further argues that the relation back doctrine as described by the
Utah Supreme Court in Arnold Industries, Inc. v. Love, 2002 UT
133, 63 P.3d 721, allows the same. We address each theory in
turn.
¶41 First, Utah Code section 57-3-106(9) provides that
“[m]inor typographical or clerical errors in a document of record
may be corrected by the recording of an affidavit or other
appropriate instrument.” Utah Code Ann. § 57-3-106(9)
(LexisNexis 2020). Although neither the statute nor Utah
precedent expressly defines what constitutes a minor
typographical or clerical error, our supreme court has rejected
20200244-CA 16 2022 UT App 10Bradsen v. Shellpoint
the contention that the omission of a parcel of property from a
conveyance was a “minor typographical or clerical error” that
could be corrected by the filing of an affidavit or other
instrument pursuant to section 57-3-106(9). See Pioneer Builders
Co. of Nevada, Inc. v. K D A Corp., 2012 UT 74, ¶ 56, 292 P.3d 672.
The court observed that its conclusion was in line with those of
courts in other jurisdictions that “have concluded that significant
changes in deeds—such as the improper characterization of a
grantee, the omission of a grantee, and the conveyance of an
incorrect parcel of land—were not minor typographical or
clerical errors that could be remedied” by corrective deeds or
affidavits. 10 Id. ¶ 58. Similarly, this court has concluded that
“listing a different but existing company as the beneficiary of a
trust deed (as opposed to, say, misspelling the beneficiary’s
name, or using a shorthand term to refer to it) is no mere
scrivener’s error that can be corrected” by recording a corrective
deed or affidavit “not signed by the misidentified party.” See
Ocean 18 LLC v. Overage Refund Specialists LLC (In re Excess
Proceeds from Foreclosure of 1107 Snowberry St.), 2020 UT App 54,
¶ 35 n.4, 474 P.3d 481 (cleaned up).
10. In Spain v. EMC Mortgage Co., No. CIV 07-0308-PHX-RCB,
2009 WL 2590100 (D. Ariz. Aug. 20, 2009), one of the cases cited
by the supreme court in Pioneer Builders, the federal court
rejected the availability of a corrective deed to restate a
conveyance made to the plaintiff in his capacity as a trust
beneficiary as opposed to in his individual capacity. Id. at *5. The
Spain court explained, “Transposing an entire word, especially
when those words are spelled quite differently, is not a mere
typographical error, despite how plaintiff tries to portray it. A
typographical error would be, for example, the difference
between the word ‘data’ and the word ‘date.’ It is easy to see
how in transcription those two words inadvertently could be
interposed one for the other. The same is not true, however, of
the words ‘beneficiary’ and ‘individually.’” Id.
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¶42 In light of this precedent, we have no trouble concluding
that the error in the 2013 Assignment is not a minor
typographical or clerical error that can be corrected by the filing
of an affidavit or corrected deed under section 57-3-106(9). The
error is far too significant. Shellpoint contends that Saxon was
the true assignor, but the 2013 Assignment does not mention
Saxon, nor is Saxon a party to the document. Instead, the 2013
Assignment identifies Sand Canyon—a then-existing entity—as
the assignor, and the document is executed in the name of Sand
Canyon by its corporate representative.11 This is not a situation
where Saxon merely mistyped its own name. It was not even a
party to the document. Thus, given the significance of the
mistake, the district court erred to the extent it concluded that
the naming of Sand Canyon as the assignor rather than Saxon
was a minor clerical error that Saxon could unilaterally correct
under section 57-3-106(9).
¶43 Second, Shellpoint relies on the doctrine of relation back
as an alternative means to retroactively correct the 2013
Assignment. Our supreme court has recognized the doctrine as
allowing “a party to a conveyance of real property to correct an
erroneous legal description in the original deed by filing a
subsequent or ‘correction’ deed.” Arnold, 2002 UT 133, ¶ 21
(cleaned up). The doctrine, if properly invoked, allows a
corrective deed to “relate[] back to the time of the original
conveyance,” making it “effective as of the date of the original
deed.” Id. (cleaned up).
11. The 2013 Assignment also contains a notary’s affirmation that
the assistant secretary of Sand Canyon appeared before her and
acknowledged its execution. In other words, the face of the
document confirms in multiple ways that Sand Canyon, not
Saxon, made the assignment.
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¶44 Shellpoint appears to suggest that the doctrine permits
the retroactive correction of any error in the original assignment.
Although the doctrine has been invoked to correct more than
just an erroneous legal description, see, e.g., Chicago Title Ins. Co.
v. Accurate Title Searches, Inc., 164 A.3d 682, 699 (Conn. 2017)
(stating that “a corrective deed . . . may be issued to correct,
among other things, the spelling or omission of an intended
grantee’s name”), Shellpoint has identified no authority to
support its contention that Saxon could invoke the doctrine to
unilaterally substitute itself as the assignor in place of Sand
Canyon. Not only are we unaware of a case where the doctrine
has been invoked to substitute the named assignor, but in
Arnold, our supreme court stated that for a corrective deed to be
effective, it “must be executed by the same grantor that executed
the original . . . deed.” Arnold, 2002 UT 133, ¶ 23 (concluding that
a corrective deed was effective only because it was executed by
the same partnership that signed the original deed, even though
the property was not owned by the partnership but was owned
by the individual partners).
¶45 Here, Saxon—not Sand Canyon—executed the Correction.
Thus, the Correction is ineffective because it was not executed by
the entity that executed the 2013 Assignment. See id. Shellpoint
attempts to avoid this result by arguing that Saxon was the
“actual assignor” because only Saxon held rights in the note and
the trust deed at the time the 2013 Assignment was executed. But
this fact is the problem, not the solution. It may be true that Saxon
held all rights in the note and the trust deed at the time of the
2013 Assignment, but that fact does not transform Saxon into the
executor of the 2013 Assignment. As explained above, Sand
Canyon executed the 2013 Assignment by identifying itself as
the signatory and by having its agent execute the document on
its behalf. Thus, Saxon had no right to correct the 2013
Assignment under the relation back doctrine, and to the extent
the district court concluded otherwise, it erred.
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C. The Effect of the Rescission
¶46 In granting summary judgment to Shellpoint, the district
court relied primarily on the effectiveness of the Correction. But
having determined that the Correction was ineffective, we must
consider the court’s conclusion that the Rescission provides an
alternative path to remedy the break in the chain of title.
Specifically, the court concluded that “if the [R]escission were
effective, the chain of assignment would be unbroken between
the original holder of the Note and Trust Deed and [Shellpoint].”
¶47 We share the district court’s view that if the Rescission
operates retroactively to void the 2007 Assignment, the chain of
title would be unbroken between Sand Canyon and Shellpoint.
After all, if the Rescission had such retroactive effect, it would
eliminate the 2007 Assignment from Sand Canyon to Saxon.
Thus, Sand Canyon would have held rights to the note and the
trust deed at the time the 2013 Assignment was executed,
meaning that the assignment from Sand Canyon to RCS was
effective and any break in the chain of title would be eliminated.
¶48 But we cannot affirm summary judgment to Shellpoint on
this basis because Shellpoint has yet to prove that the Rescission
operated to retroactively void the 2007 Assignment. The
arguments Shellpoint made to the district court relative to the
Rescission were all conditional. In moving for summary
judgment, Shellpoint relied entirely on its argument that the
Correction remedied the alleged error in the 2013 Assignment.
Shellpoint acknowledged the Rescission only in response to
Bradsen’s argument that the Rescission impaired the
effectiveness of the Correction. And in doing so, Shellpoint first
“[d]isputed that the [Rescission] has any legal effect,” but then
asserted that “[e]ven if this document was effective, the chain of
title would show an unbroken chain of assignments to
[Shellpoint].” Likewise, on appeal, Shellpoint argues that “if” the
Rescission were effective, “the chain of assignments leads to . . .
20200244-CA 20 2022 UT App 10Bradsen v. Shellpoint
Shellpoint,” but in making that assertion it again appears to
dispute the legal effectiveness of the Rescission, referring to it as
an “erroneous attempted rescission.” (Emphasis added.)
¶49 In line with Shellpoint’s arguments, the district court did
not conclude that the Rescission was effective. Instead, it
concluded that only if the Rescission were effective would the
chain of title be intact. And because Shellpoint has disputed, at
least for purposes of summary judgment, the legal effectiveness
of the Rescission, we are not in a position to affirm the court’s
summary judgment on that basis.
¶50 In sum, on the question of Shellpoint’s claim that it is the
rightful owner of the note and beneficiary of the trust deed, we
reverse the district court and vacate its summary judgment to
Shellpoint based on our conclusion that the court erred in
determining that Saxon unilaterally remedied the break in the
chain of title by recording the Correction. Because the court’s
dismissal of Bradsen’s quiet title claim was “grounded on this
issue,” we also vacate the dismissal of that claim without
expressing any view on its merits.
¶51 In vacating the court’s summary judgment order on the
chain of title question, we express no opinion on whether the
Rescission is legally effective. Further, we express no opinion on
whether Shellpoint can establish its alleged rights under the note
and trust deed in some other way. We conclude only that, as a
matter of law, the Correction cannot assist Shellpoint in proving
its claim that the chain of title is intact and that it is the rightful
owner of the note and beneficiary of the trust deed.
III. The Parties’ Attorney Fees Requests
¶52 Both parties request attorney fees on appeal based on
provisions in the note and trust deed. Paragraph 7(D) of the note
states: “[T]he Note Holder will have the right to be paid back by
20200244-CA 21 2022 UT App 10Bradsen v. Shellpoint
[the borrower] for all of its costs and expenses in enforcing this
Note to the extent not prohibited by applicable law . . . . Those
expenses include, for example, reasonable attorneys’ fees.”
Paragraph 21 of the trust deed states that in the event of
foreclosure, the “Trustee shall apply the proceeds of the sale in
the following order: (a) to all expenses of the sale, including, but
not limited to, reasonable Trustee’s and attorneys’ fees.”
¶53 Even assuming both of these provisions have application
here, we deny both parties’ requests for fees at this time. We
deny Shellpoint’s request because it has not yet established that
it has rights under the note or the trust deed. Thus, it has not
shown that it is entitled to recover fees under the cited
provisions. But if, on remand, Shellpoint does establish its rights
under the note and trust deed and if the district court again
determines that Shellpoint is entitled to attorney fees, then the
court may also consider whether it would be appropriate for
Shellpoint to recover the fees it incurred in this appeal, given its
success on the statute of limitations issue. See Greyhound Lines,
Inc. v. Utah Transit Auth., 2020 UT App 144, ¶ 56, 477 P.3d 472(remanding the case to the district court “for a reassessment of
both parties’ competing claims . . . to attorney fees,” including
“fees incurred in this appeal,” when the appellate court had
reversed summary judgment); cf. Fuja v. Adams, 2021 UT App 55,
¶ 22 n.9, 492 P.3d 793 (allowing, under the facts of that case, for
the possibility that if the appellants prevail on an attorney fees
request on remand, they might “as part of that request recover
the attorney fees they incurred in this successful appeal”).
Likewise, if on remand Bradsen prevails on her now-reinstated
claim for quiet title, then the court may consider whether it
would be appropriate for Bradsen to recover the fees she
incurred in this appeal, given her success in winning a vacatur
of the order dismissing her claim. See Greyhound, 2020 UT App
144, ¶ 56.
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CONCLUSION
¶54 We affirm the district court’s determination that
Shellpoint’s foreclosure action was not time-barred. But we
reverse its determination that Shellpoint’s chain of title was
intact based on the Correction, and on that basis we vacate the
court’s order dismissing Bradsen’s quiet title claim and granting
judgment in favor of Shellpoint on its counterclaim.
Accordingly, we affirm in part, reverse in part, vacate in part,
and remand for further proceedings.
20200244-CA 23 2022 UT App 10