Deutsche Bank National Trust Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1 v. Alebia, Inc.

CourtSupreme Court of Rhode Island
DecidedApril 17, 2025
Docket2023-0044-Appeal.
StatusPublished

This text of Deutsche Bank National Trust Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1 v. Alebia, Inc. (Deutsche Bank National Trust Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1 v. Alebia, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Deutsche Bank National Trust Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1 v. Alebia, Inc., (R.I. 2025).

Opinion

Supreme Court

No. 2023-44-Appeal. (PB 11-5398)

Deutsche Bank National Trust : Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1

v. :

Alebia, Inc. :

NOTICE: This opinion is subject to formal revision before publication in the Rhode Island Reporter. Readers are requested to notify the Opinion Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence, Rhode Island 02903, at Telephone (401) 222-3258 or Email opinionanalyst@courts.ri.gov, of any typographical or other formal errors in order that corrections may be made before the opinion is published. Supreme Court

Deutsche Bank National Trust : Company, as Trustee for the Registered Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1

Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.

OPINION

Chief Justice Suttell, for the Court. The defendant, Alebia, Inc. (Alebia or

defendant), appeals from the Superior Court’s entry of a partial judgment in favor of

the plaintiff, Deutsche Bank National Trust Company, as Trustee for the Registered

Holders of CBA Commercial Assets, Small Balance Commercial Mortgage Pass-

Through Certificates, Series 2006-1 (Deutsche Bank or plaintiff), in accordance with

Rule 54(b) of the Superior Court Rules of Civil Procedure. The judgment reforms a

mortgage that is at the center of this dispute. This case came before the Supreme

Court pursuant to an order directing the parties to appear and show cause why the

issues raised in this appeal should not be summarily decided. After considering the

parties’ written and oral submissions and reviewing the record, we conclude that

-1- cause has not been shown and that this case may be decided without further briefing

or argument. For the reasons set forth herein, we affirm the judgment of the Superior

Court.

I

Facts and Travel

Alebia is a Rhode Island corporation with its principal place of business

located at 284-286 Atwells Avenue, Providence (the property). Alebia was the

record owner of the property at the time of the execution of the mortgage in dispute.

Carmela Natale and Walter Potenza are purportedly the only owners and

shareholders of Alebia. Deutsche Bank is a national trust company.

In September 2005, Natale and Potenza executed a promissory note (the note)

and mortgage in favor of Equity One Mortgage Company (Equity One). The

mortgage lacked a legal description of the property to be used as collateral for the

note; the loan proceeds, however, were used to pay off and discharge prior mortgages

encumbering the property, as well as the City of Providence taxes due on the

property. The remaining proceeds of the loan were paid to Natale and Potenza. The

plaintiff is the current holder of the note. According to plaintiff, all parties to the

transaction intended both for the note to be secured by the property and for the

mortgage to be executed by Natale and Potenza as authorized officers of Alebia.

-2- Instead, however, Natale and Potenza signed the mortgage in their individual

capacities.

Despite this, in 2007, Natale and Potenza executed a loan modification

agreement with plaintiff, acknowledging that the note was secured by the property.

Additionally, several other documents–including the homeowner insurance

verification and authorization, truth-in-lending disclosure, numerous documents

related to the refinancing request, and affidavit of title–all referred to Natale and

Potenza as the borrowers and the property as the collateral to which the security

interest was attached.

On September 19, 2011, plaintiff filed a complaint in Providence County

Superior Court against Natale and Potenza asserting breach-of-contract claims and

seeking damages in the amount equal to the payment remaining under the note,

property taxes, attorneys’ fees, expenses, and interest. On the same day, plaintiff

also filed a complaint against Alebia seeking reformation of the mortgage, the

imposition of an equitable mortgage, a declaratory judgment declaring the mortgage

reformed, and damages. Eventually, on April 10, 2017, plaintiff obtained a

judgment against Natale and Potenza for their remaining obligations under the loan.

But because Natale and Potenza had executed the note in their individual capacities

and not on behalf of Alebia, plaintiff was unable to proceed against the property as

collateral for the debt. Accordingly, on June 18, 2021, plaintiff filed a motion to

-3- equitably reform the mortgage in its case against Alebia and requested an evidentiary

hearing. The defendant objected.

A justice of the Superior Court presided over three remote evidentiary

hearings between September 2021 and February 2022. At the first hearing, on

September 17, 2021, defendant objected to holding the hearings remotely. The

defendant argued that because the hearing justice was making an ultimate decision

on the merits of the litigation, the hearings constituted a bench trial and that, under

an executive order issued by the Supreme Court during the pandemic, all bench trials

were to be held in court unless all parties agreed to hold them remotely. The hearing

justice denied defendant’s objection, however, and the hearings proceeded remotely.

Over the course of the hearings, four witnesses testified, viz.: Howard

Handville, a senior loan analyst for Ocwen Financial Corporation (Ocwen); Karen

Medeiros, Esq., a former closing attorney for Residential Title and Escrow Services,

Inc.; Leonard Accardo, Jr., Esq., who testified as an expert witness in commercial

real estate transactions; and Danielle Smith, the managing paralegal and firm

administrator for Savage Law Partners (SLP), the law firm representing the plaintiff

in this action. We recite only the testimony necessary to decide the issues before us.

Mr. Handville was, at the time, a senior loan analyst at Ocwen. He testified

that since the loan originated in 2005, the loan has been serviced by several different

loan servicing companies, the most recent of which was PHH Mortgage (PHH) in

-4- 2019. Following a merger between PHH and Ocwen in 2019, PHH became a

subsidiary of Ocwen. Handville further testified that he had reviewed the files of

PHH related to the mortgage more than half a dozen times and that those files were

maintained by Ocwen in the normal course of business. Handville testified that

“[t]here was no question the loan was secured by an asset, [the] real estate asset.”

Ms. Smith was the managing paralegal at Shechtman, Halperin & Savage

(SHS) and then at SLP, attorneys for plaintiff and the entities that kept physical

possession of the original note. Smith testified that the note was received by SHS

and then transferred to SLP. She further testified that the note was kept and

maintained in the ordinary course of business since its initial arrival and that she had

been responsible for overseeing the safekeeping and transportation of the note and

the attached documents between the two firms. Smith was asked to compare the

photocopy of the note offered as an exhibit with the original note she had on file in

her office. In her comparison, the only differences she noted were initials on the

lower corner of the original note.

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