Deutsche Bank National Trust Co. v. Decision One Mortgage Co. LLC

• Court: Superior Court of Maine
• Decided: July 25, 2016
• Docket: CUMre-15-301
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, SS CIVIL ACTION DOCKET NO. RE-15-301

DEUTSCHE BANK NATIONAL TRUST CO., as Trustee,

Plaintiff

v. ORDER

DECISION ONE MORTGAGE CO. LLC, et al.,

Defendants

Before the court is a motion by plaintiff Deutsche Bank "for quiet title, partial declaratory

default judgment, and judgment on the pleadings." Essentially Deutsche Bank is seeking a

judgment declaring that, as the current holder of the mortgage note, Deutsche Bank has title to a

mo1tgage which was originally granted to defendant Decision One Mortgage Co. LLC with

Mortgage Electronic Registration Systems (MERS) as nominee.

Decision One was served but has not answered the complaint and may have gone out of

business. One of the obligors on the note is deceased. The other obligor on the note, William H.

Chase, was named as a party in interest. He was served and filed an answer stating that he is not

living in the property and that he is not asserting any interest in the property. Deutsche Bank also

named MERS as a defendant. MERS was served but has not answered.

Deutsche Bank has submitted documents demonstrating that the mortgage in question

was purportedly assigned by MERS to the Bank of America in March 2012 and was then

assigned by the Bank of America to Deutsche Bank in April 2013. The underlying note was

endorsed in blank by Decision One and is now alleged to be in Deutsche Bank's possession. STATE OF MAINE Cumberland, ss, Clerk's Office

JUL 25 2016 RECEIVED Discussion

This case involves an effort by a mortgage note holder to overcome the problem created

by the Law Court's decision in Bank of America v. Greenleaf, 2014 ME 89, 96 A.3d 700.

Because the mortgage was assigned by MERS to Bank of America as nominee for Decision One,

there has been no valid assignment out of Decision One, and the note holder does not have

standing to foreclose at this time.

Plaintiff argues that based on the default by Decision One it is entitled to an order

confirming the validity of the mortgage assignment by MERS as nominee for Decision One to

the Bank of America. Because the Bank of America subsequently assigned the mortgage to

Deutsche Bank via an assignment that was recorded in the registry of deeds, Deutsche Bank will

be the owner and holder of the mortgage if the MERS assignment is found to be valid.

Plaintiff's argument is based on the principle that the holder of the mortgage note has an

equitable interest in the mortgage. See Jordan v. Cheney, 74 Me. 359, 361 (Me. 1883). 1 Whether

this is sufficient, at least in a case where the original grantee of the mortgage (for whom MERS

was acting as nominee) is no longer in business - and whether this can be reconciled with

Greenleaf is an issue that may have to be resolved by the Law Court. There are also practical

considerations to consider in cases where the mortgaged property is not occupied (as is likely the

case here).

The court agrees that defaults may be entered against Decision One and against MERS

and that, given Mr. Chase's decision not to contest the action, the case may be in order for entry

of judgment declaring that Deutsche Bank is the owner and the holder of the mortgage.

1 Other states have apparently adopted this principle. See, e.g., Eaton v. Fannie Mae, 969 N.E.2d 1118, 1125 (Mass. 2012); Jackson v. MERS, 770 N.W.2d 487, 497 (Minn. 2009).

2 However, this can only happen once Deutsche Bank demonstrates that it the holder of the

original note.

Specifically, because the note is endorsed in blank, Deutsche Bank needs to prove that it

is the holder of the original note in order to have standing to proceed in this case and to be

entitled to the relief it seeks. The clerk shall therefore enter the defaults of defendants Decision

One and MERS and shall schedule a hearing on whether default judgment shall be entered

declaring Deutsche Bank to be the owner and holder of the mortgage. At that hearing Deutsche

Bank can demonstrate that it is the holder of the original note by bringing that note to the

hearing.

The entry shall be :

Defaults shall be entered against defendants Decision One and MERS. Hearing to be scheduled on whether plaintiff shall be entitled to a default judgment declaring Deutsche Bank to be the owner and holder of the mortgage. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a).

,...... 2_~_, 2016 Dated: July __

J~ Thomas D. Warren Justice, Superior Court