Hardesty v. Mortgage Electronic Registration Systems, Inc. (In re Boothe)

510 B.R. 154
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedMarch 27, 2013
DocketBankruptcy No. 11-55574; Adversary No. 11-2347
StatusPublished

This text of 510 B.R. 154 (Hardesty v. Mortgage Electronic Registration Systems, Inc. (In re Boothe)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hardesty v. Mortgage Electronic Registration Systems, Inc. (In re Boothe), 510 B.R. 154 (Ohio 2013).

Opinion

MEMORANDUM OPINION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT

C. KATHRYN PRESTON, Bankruptcy Judge.

This matter is before the Court upon the Motion for Summary Judgment (Doc. 29) [156]*156(“Motion”) filed by Clyde Hardesty, Trustee (hereinafter “Plaintiff’), the response (Doc. 34) to Plaintiffs Motion filed by Litton Loan Servicing LP and Mortgage Electronic Registration Systems, Inc. (hereinafter collectively referred to as “Defendant”), the Motion for Summary Judgment (Doc. 30) (“Defendant’s Motion”) filed by Defendant and the response (Doc. 33) to Defendant’s Motion filed by Plaintiff. Plaintiff filed this adversary proceeding on August 5, 2011, naming Defendant and CIT Group Consumer Finance Inc.1 (“CIT Group”) as defendants.

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and General Order No. 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This matter is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A), (F), (K) and (O). Venue is properly before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

This adversary proceeding stems from the Chapter 7 bankruptcy ease of David Allen Boothe and Rebecca Sue Boothe (hereinafter “Debtors”). Plaintiff asserted five causes of action in his complaint (Doc. 1) (hereinafter “Complaint”) including: 1) Declaratory judgment to determine the extent and validity of Defendant’s lien; 2) Avoidance of Defendant’s mortgage pursuant to 11 U.S.C. § 544 and Ohio Rev.Code §§ 5301.01, et seq.; 3) Avoidance of Defendant’s mortgage as a preference under 11 U.S.C. § 547; 4) Preservation of Defendant’s mortgage for the benefit of the bankruptcy estate pursuant to 11 U.S.C. § 551; and 5) Recovery of property pursuant to 11 U.S.C. § 550. Although the Motion does not specifically so state, it appears to be requesting judgment only as to Count Two of the Complaint.

Plaintiff seeks to avoid Defendant’s mortgage on the grounds that the mortgage contains a defective certificate of ac-knowledgement which is not in substantial compliance with the requirements of Ohio law and that Defendant’s mortgage is, therefore, not properly recorded. Primarily, Plaintiff argues that the certificate of acknowledgment clause (hereinafter “Certificate of Acknowledgment”) in the mortgage failed to properly acknowledge who executed the instrument and that recordation of a defective mortgage is ineffective [157]*157against a subsequent bona fide purchaser of real estate. Thus, Plaintiff, clothed with the status of a bona fide purchaser without notice of the lien, has the authority to avoid the mortgage.

Defendant counters that the mortgage is in substantial compliance with Ohio law. Defendant argues that the Certificate of Acknowledgment, taken together with the rest of the mortgage and the deposition testimony of Debtors, provides sufficient clarification to cure any ambiguities in the Certificate of Acknowledgment. Thus, according to Defendant, Plaintiff has constructive notice of the mortgage.

For the reasons stated below, the Court concludes that Plaintiff is entitled to summary judgment in the instant adversary proceeding.

I. Standard of Review for Motions for Summary Judgment

Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Bankruptcy Rule 7056, provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). The party seeking summary judgment bears the initial burden of “informing the ... court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

If the movant satisfies this burden, the nonmoving party must then assert that a fact is genuinely disputed and must support the assertion by citing to particular parts of the record. Fed.R.Civ.P. 56(c)(1). The mere allegation of a factual dispute is not sufficient to defeat a motion for summary judgment; to prevail, the non-moving party must show that there exists some genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When deciding a motion for summary judgment, all justifiable inferences must be viewed in a light most favorable to the non-moving party. Matsushita Elec Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

The Sixth Circuit Court of Appeals has articulated the following standard to apply when evaluating a motion for summary judgment:

[T]he moving [party] may discharge its burden by “pointing out to the ... court ... that there is an absence of evidence to support the nonmoving party’s case.” The nonmoving party cannot rest on its pleadings, but must identify specific facts supported by affidavits, or by depositions, answers to interrogatories, and admissions on file that show there is a genuine issue for trial. Although we must draw all inferences in favor of the nonmoving party, it must present significant and probative evidence in support of its complaint. “The mere existence of a scintilla of evidence in support of the [nonmoving party’s] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].”

Hall v. Tollett, 128 F.3d 418, 422 (6th Cir.1997) (internal citations omitted).

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Hall v. Tollett
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Bluebook (online)
510 B.R. 154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hardesty-v-mortgage-electronic-registration-systems-inc-in-re-boothe-ohsb-2013.