Bank of New York Mellon v. Tang

• Court: Superior Court of Delaware
• Decided: March 8, 2019
• Docket: N18L-01-064 CLS
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

The Bank of New York Mellon ) FKA The Bank of New York, as ) Trustee for the Certificateholders ) of CWALT, Inc., Alternative Loan ) Trust 2005-80CB, Mortgage Pass ) Through Certificates, Series 2005- ) 80CB, ) ) Plaintiff ) ) v. ) C.A. No. N18L-01-064 CLS ) Pat Tang, ) ) Defendant. )

Date Submitted: January 15, 2019 Date Decided: March 8, 2019

On Plaintiff’s The Bank of New York Mellon Motion for Summary Judgment. GRANTED. ORDER

Melanie J. Thompson, Esquire, Orlans PC, 4250 Lancaster Pike, Wilmington, Delaware 19805. Attorney for Plaintiff.

Pat Tang, 6 Bayard Lane, Newark, Delaware 19702. Defendant.

Scott, J. Background

This is a foreclosure action brought by The Bank of New York Mellon, (The

Bank) assignee to the mortgage and the note, executed by Defendant on November

23, 2005, for the real property located at 6 Bayard Lane, Newark, Delaware. The

Bank filed a scire facias sur mortgage complaint against the Defendant on January

17, 2018. Defendant’s answer was filed on February 13, 2018.

The Bank filed this Motion for Summary Judgment on November 20, 2018.

The Bank states they are the holder of the original Note and assignee to the mortgage

and therefore entitled to bring this foreclosure action. The Bank argues Defendant

has not pleaded any allowable defenses and there are no material issues of fact,

therefore Summary Judgment is appropriate.

In the Answer and Opposition to this Motion, Defendant takes the position

that The Bank lacks standing. Defendant argues The Bank is not in possession of the

original Note, or is not a proper holder of the Note, and therefore not entitled to

enforce the Note. Defendant raises two issues why Summary Judgment is

inappropriate; (1) The Bank’s use of the word “assignment” when the Note uses the

word “transfer” invalidates the Banks ability to enforce the Note, and (2) Any

transfer of the Mortgage and the Note is invalid because evidence presented in courts

of other jurisdictions has shown Mortgage Electronic Registration System, Inc.

(MERS) does not transfer promissory notes.

2 Standard of Review

The Court may grant Summary Judgment if “the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any material fact and that the moving

party is entitled to Summary Judgment as a matter of law.”1 The moving party bears

the initial burden of showing that no material issues of fact are present. 2 Once such

a showing is made, the burden shifts to the non-moving party to demonstrate that

there are material issues of fact in dispute.3 In considering a Motion for Summary

Judgment, the Court must view the record in a light most favorable to the non-

moving party.4 The Court will not grant Summary Judgment if it seems desirable to

inquire more thoroughly into the facts in order to clarify the application of the law.5

Discussion

In order to foreclose on a mortgage, a mortgage holder must be a party entitled

to enforce the underlying debt, the Note, which the mortgage secures.6 Delaware

case law continues to recognize that the only defenses available in a mortgage

foreclosure action are payment of the “mortgage money”, satisfaction or a plea in

1 Super. Ct. Civ. R. 56(c); Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991). 2 Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979). 3 Id. at 681. 4 Burkhart, 602 A.2d at 59. 5 Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); Phillip-Postle v. BJ Prods., Inc., 2006 WL 1720073, at *1 (Del. Super. Ct. Apr. 26, 2006). 6 Shrewsbury v. The Bank of New York Mellon, 160 A.3d 471, 477 (Del. 2017). 3 avoidance of the mortgage.7 Examples of pleas of avoidance are “act of God,

assignment of cause of action, conditional liability, discharge, duress, exception or

proviso of statute, forfeiture, fraud, illegality of transaction, nonperformance of

condition precedent, ratification, unjust enrichment and waiver.”8

Defendant’s first objection is not one of these recognized defenses, and is

without merit. Terms that are not defined in a statute or in a contract must be given

their ordinary, common meaning.9 Assignment is the transfer of rights or property.10

When an instrument, such as a note, is indorsed in blank, the instrument becomes

payable to the bearer and may be negotiated by transfer of possession alone. 11 The

holder of a note can freely transfer the note through negotiation to another party, and

the receiving party then has the right to enforce the note. Similarly, under Delaware

law the assignment of a mortgage […] attested by 1 creditable witness shall be valid

and effectual to convey all the right and interests of the assignor.12 Furthermore, the

principals of contract law dictate when the debtor is not a party to a transfer, nor a

third party beneficiary, nor show it sustained some type of legal harm as a result of

the transfer, they do not have standing to challenge the transfer or enforcement of

7 Id. 8 Id. 9 See Dewey Beach Enterprises, Inc. v. Bd. of Adjustment of Town of Dewey Beach, 1 A.3d 305, 307 (Del. 2010). 10 ASSIGNMENT, Black's Law Dictionary (10th ed. 2014). 11 6 Del. C. § 3-205. 12 25 Del. C. § 2109 4 the note.13 Contrary to Defendant’s claim, the assignment of the Note, as opposed to

a “transfer” does not affect Plaintiff’s legal ability to foreclose on the Mortgage.14

Moving to Defendant’s second argument regarding the assignment by MERS,

Delaware Courts show little appetite for invalidating mortgage assignments merely

because they were assigned by MERS.15 The mortgage agreement states “Borrower

does hereby mortgage, grant and convey to MERS (solely as nominee for Lender

and Lender’s successors and assigns) and to the successors and assigns of MERS,

the […] property […] with the address 6 Bayard Lane, Newark, Delaware.”16 The

Mortgage further indicates “[t]he Note or a partial interest in the Note (together with

the mortgage) can be sold one or more times without prior notice to Borrower.”17

Defendant’s position that “numerous landmark cases across the nation” have

determined that notes are not transferred by MERS does not raise a genuine issue of

fact in this case.

Conclusion

Defendant does not raise a plea in avoidance which would invalidate The

Bank’s right to enforce the Note, and to bring this action. The Note is indorsed in

13 Toelle v. Greenpoint Mortgage Funding, Inc., 2015 WL 5158276, at *3 (Del. Super. Ct. 2015). 14 Shrewsbury, at 478 (Del. 2017). 15 Toelle, at *5 (Del. Super. Ct. 2015) (citing Branch Banking and Trust Co. v. Eid, 2013 WL 3353846, *3 (Del.Super. Ct. 2013). 16 Pl. Ex A at 3, 4. 17 Pl. Ex. A at 15. 5 blank, therefore as bearer, The Bank is entitled to enforce it. The Bank is the holder

of the Mortgage, and the Note which the Mortgage secures. Defendant has failed to

show cause why the mortgaged premises ought not to be seized and taken in

execution for payment of the Note. Therefore, Plaintiff’s Motion for Summary

Judgment is Granted.

IT IS SO ORDERED.

/s/ Calvin L. Scott Judge Calvin L. Scott, Jr.