Sarbanis v. Federal National Mortgage Assoc.

2017 DNH 170

• Court: District Court, D. New Hampshire
• Decided: August 30, 2017
• Docket: 17-cv-037-JD
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Mary Ann Sarbanis

v. Civil No. 17-cv-037-JD Opinion No. 2017 DNH 170 Federal National Mortgage Association

O R D E R

Mary Ann Sarbanis brought suit in state court to enjoin the

foreclosure sale of her home, which was scheduled for January

18, 2017. The state court granted an ex parte temporary

restraining order on January 17, with a hearing set for January

27. Following the hearing, Federal National Mortgage

Association (“Fannie Mae”) removed the case to this court and

filed a motion for summary judgment. Sarbanis objects to

summary judgment.

Standard of Review

Summary judgment is appropriate when the moving party

“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). “A genuine dispute is one that a

reasonable fact-finder could resolve in favor of either party

and a material fact is one that could affect the outcome of the case.” Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir.

2015). The facts and reasonable inferences are taken in the

light most favorable to the nonmoving party. McGunigle v. City

of Quincy, 835 F.3d 192, 202 (1st Cir. 2016). “On issues where

the movant does not have the burden of proof at trial, the

movant can succeed on summary judgment by showing ‘that there is

an absence of evidence to support the nonmoving party’s case.’”

OneBeacon Am. Ins. Co. v. Commercial Union Assurance Co. of

Canada, 684 F.3d 237, 241 (1st Cir. 2012) (quoting Celotex Corp.

v. Catrett, 477 U.S. 317, 325 (1986)).

In this district, a party moving for summary judgment must

include in the memorandum “a short and concise statement of

material facts, supported by appropriate record citations, as to

which the moving party contends there is no genuine issue to be

tried.” LR 56.1(a). The party opposing summary judgment must

include in her memorandum “a short and concise statement of

material facts, supported by appropriate record citations, as to

which the adverse party contends a genuine dispute exists so as

to require a trial.” LR 56.1(b). Importantly, “[a]ll properly

supported material facts set forth in the moving party’s factual

statement may be deemed admitted unless properly opposed by the

adverse party.” Id.

2 Sarbanis, who is represented by counsel, did not include a

properly supported factual statement in her memorandum in

opposition to Fannie Mae’s motion for summary judgment.

Instead, Sarbanis simply responded to Fannie Mae’s factual

statement by saying that she admitted or denied the statements

made in each numbered paragraph. She provided some explanations

for her disagreement with facts in Fannie Mae’s memorandum that

may have been intended to be supported by her affidavit which

purports to incorporate all statements in the memorandum.

“An affidavit or declaration used to support or oppose a

motion must be made on personal knowledge, set out facts that

would be admissible in evidence, and show that the affiant or

declarant is competent to testify on the matters stated.” Fed.

R. Civ. P. 56(c)(4). An affidavit must state facts, not legal

conclusions, assumptions, or guesses. Gordon v. EarthLink,

Inc., 2017 WL 3203385, at *6 (D. Mass. July 27, 2017). Further,

an affidavit that states that a memorandum is true “to the best

of my knowledge, information and belief” is not competent to

support or oppose summary judgment. F.D.I.C. v. Roldan Fonseca,

795 F.2d 1102, 1106 (1st Cir. 1986); Inman v. Riebe, 2016 WL

3102198, at *1-*2 (D. Me. May 5, 2016); Drew v. N.H. Drug Task

Force, 2015 WL 4526968, at *3, n.2 (D.N.H. July 27, 2015).

3 Sarbanis submitted her affidavit in support of her

objection to summary judgment. In her affidavit, Sarbanis

states that she reviewed the objection and memorandum prepared

by her counsel, and she “swear[s] that all of the statements and

allegations made therein are true to the best of [her]

knowledge, information and belief.” As such, Sarbanis’s

affidavit is not competent to oppose summary judgment. Because

Fannie Mae did not object to the affidavit, however, the court

will consider the factual statements in the objection and

memorandum as if they were supported by an affidavit.

Background

Sarbanis obtained a loan and signed a mortgage to IndyMac,

FSB in November of 2002. That loan was modified in December of

2008. In March of 2010, the mortgage was assigned to OneWest

Bank, FSB, and was assigned again in June of 2011 to Fannie Mae.

Fannie Mae sent Sarbanis a foreclosure notice, and in

response, Sarbanis applied for a loan modification in July of

2011. Fannie Mae scheduled a foreclosure sale of the property

for April of 2013. Sarbanis filed a petition in state court to

enjoin the foreclosure sale, and the state court granted a

temporary restraining order on April 23, 2013. Fannie Mae

removed that case to federal court on May 23, 2013. See

4 Sarbanis v. Fed. Nat’l Mortg. Ass’n, 13-cv-244-LM (D.N.H. 2013)

(Sarbanis I).

In Sarbanis I, Sarbanis made allegations in support of

injunctive relief from the foreclosure sale without identifying

any specific claims. Fannie Mae moved for summary judgment,

challenging Sarbanis’s allegations that the assignments to

Fannie Mae were invalid, arguing that a dual tracking theory was

not viable, and asserting that it properly held the note and

mortgage and was entitled to foreclose. While Fannie Mae’s

motion for summary judgment was pending, the parties were

negotiating a settlement agreement.

Sarbanis’s motion to dismiss her claims against Fannie Mae

in Sarbanis I, without prejudice, was granted on November 17,

2015. Judgment was entered the same day.

On January 17, 2017, Sarbanis filed a second petition in

state court to enjoin the scheduled foreclosure sale of the

property.1 Sarbanis alleged that she had not made mortgage

payments to Fannie Mae because she had been trying “to come to

an agreement with FNMA for them to discharge [her] mortgage for

a lump sum.” She asked to have the foreclosure sale stopped to

1 Although Sarbanis was represented by counsel during Sarbanis I, she appears to have filed the current petition in state court while proceeding pro se. She is now represented by new counsel.

5 allow her to attempt to settle the matter with Fannie Mae. In

support, Sarbanis made the same allegations that were in her

Sarbanis I petition about a defective assignment to OneWest.

She added new allegations that she had reached a settlement

agreement in Sarbanis I to modify her loan to allow her to

satisfy the debt with a lump sum payment.

As is noted above, Fannie Mae removed the case to this

court and moves for summary judgment.

Discussion

In support of summary judgment, Fannie Mae contends that no

settlement agreement was ever reached in Sarbanis I to modify

Sarbanis’s loan and that the record shows that Sarbanis is in

default. As a result, Fannie Mae contends, it is entitled to

foreclose and is entitled to summary judgment on Sarbanis’s

request for an injunction.

In her objection, Sarbanis argues that she reached a

settlement agreement with Ocwen,2 which was acting as Fannie

Mae’s mortgage servicer, and that the agreement bars

foreclosure. Sarbanis also asserts that Fannie Mae lacks

authority to foreclose because of faulty assignments of her

2 Sarbanis does not provide a full name, but she is referring to Ocwen Loan Servicing, Inc.

6 mortgage. Fannie Mae filed a reply to address Sarbanis’s

arguments raised in her objection.

A. Breach of Settlement Agreement

A claim seeking to enforce a settlement agreement in a

diversity case is governed by the law of the forum state, in

this case New Hampshire. See Tremblay v. Ameriprise Fin.

Servs., Inc., 2017 WL 3278951, at *2 (D.R.I. Apr. 5, 2017).

Under New Hampshire law, “[a] valid and enforceable settlement,

like any contract, requires offer, acceptance, consideration and

mutual assent.” Hogan Family Enters., Ltd v. Town of Rye, 157

N.H. 453, 456 (2008). “Mutual assent requires that the parties

have the same understanding of the agreement’s essential terms,

and manifest an intent to be bound by them.” Id.

Fannie Mae moves for summary judgment on the ground that

the parties never reached a settlement agreement. In support,

Fannie Mae cites Sarbanis’s admissions in her petition that

although the parties were negotiating a settlement agreement,

“[a]n agreement between the parties was never finalized.”

Sarbanis further explained that “[t]here was one term of the

settlement agreement that was still needing to be negotiated. I

needed certain documentation from the lender and the lender

never provided it.” Fannie Mae also cites Sarbanis’s admission

that she signed the purported agreement after the deadline.

7 The proposed settlement agreement offered in Sarbanis I

includes a deadline for Sarbanis’s performance of August 10,

2015, at 5:00 p.m. The proposed agreement also states that

“[t]here will be no extensions of time in which to make said

payment.” Sarbanis admits that she did not comply with that

term and did not sign the agreement until March of 2016.

Sarbanis argues, however, that after the parties failed to

reach an agreement in Sarbanis I and the case was dismissed

without prejudice, they continued to negotiate. Sarbanis

further states in her objection that although she did not meet

the payment deadline in the proposed agreement, she thought that

Fannie Mae “would honor it.” She sought confirmation from Ocwen

that Fannie Mae would discharge the mortgage in exchange for a

lump sum payment of $303,000.00, but Ocwen “did not know of the

details of the history and settlement negotiations in [Sarbanis

I].” Sarbanis asserts that although lenders have no obligation

to modify a loan, Fannie Mae had an obligation to respond within

a reasonable amount of time to the signed settlement proposal

that she sent in March of 2016.

Based on the summary judgment record, Sarbanis did not

comply with the terms of the proposed settlement agreement. For

that reason, Sarbanis has not shown that an enforceable

8 settlement agreement exists. She cites no authority to support

her theory that Fannie Mae had an obligation to respond when she

returned the signed settlement proposal more than six months

after the deadline.3 Therefore, Sarbanis has not shown a triable

issue as to whether Fannie Mae would violate a settlement

agreement by foreclosing on her property.

B. Authority to Foreclose

As in Sarbanis I, Sarbanis contends here that the

assignment of her mortgage from the FDIC to OneWest in 2010 was

defective because it was “robo signed” by Bryan Bly who did not

work for the FDIC.4 Sarbanis provides a copy of a deposition of

Bly taken in another case where Bly testified that he signed

assignments of mortgages for lending companies based on

corporate resolutions from those companies that authorized him

as a signer when he was not otherwise an employee of those

companies, his signature was applied electronically, and his

signature was notarized electronically. Sarbanis deems that

work to be “robo signing” which she contends renders the

To the extent Sarbanis relies on Grenier v. Barclay Square 3

Commercial Condo. Owners’ Ass’n, 150 N.H. 111, 120 (2003), her reliance is misplaced. The cited part of Grenier pertains to a plaintiff’s obligation to mitigate damages. Fannie Mae is not the plaintiff and is not seeking damages in this case.

Sarbanis did not file a copy of the assignment allegedly 4

signed by Bly.

9 assignment of her mortgage from the FDIC to OneWest defective.

She further argues that as a result the subsequent assignment

from OneWest to Fannie Mae was also defective, so that Fannie

Mae lacks authority to foreclose. In its reply, Fannie Mae

responds to Sarbanis’s defective assignment theory and objects

to the exhibit filed by Sarbanis of the deposition of Bly.

1. Robo Signing

Under New Hampshire law, a debtor can raise defenses

against the assignee of his debt that he could have raised

against the assignor before the assignment was made, any matter

that renders the assignment void, and a defense that the

assignee lacks title. Woodstock Soapstone Co., Inc. v.

Carleton, 133 N.H. 809, 817 (1991). If the assignment passed

title to the assignee, however, the debtor cannot raise issues

“which merely render the assignment voidable at the election of

the assignor or those standing in his shoes.” Id. (internal

quotation marks omitted); see also Pike v. Deutsche Bank Nat’l

Tr. Co., 168 N.H. 40, 43 (2015). A charge of “robo signing”

alone does not prove that a mortgage assignment is void. Butler

v. Deutsche Bank Tr. Americas, 748 F.3d 28, 33-34 (1st Cir.

2014); Wilson v. HSBC Mortg. Servs., Inc., 744 F.3d 1, 13-14

(1st Cir. 2014). Unless state law restricts who may act on

behalf of an assignor to sign an assignment, an assignment

10 signed by someone appointed for that purpose is not invalid

despite the signor’s lack of regular employment by the assignor.

Id. at 12 (addressing issue under Massachusetts law).

Sarbanis has not shown that a triable issue exists as to

whether the assignment of her mortgage from the FDIC to OneWest

was void because the assignment was signed by Bryan Bly. To the

extent the assignment would be voidable, she lacks standing to

raise that issue. Burke v. Wells Fargo Bank, N.A., 2015 WL

2125906, at *3 (D.N.H. May 5, 2015).

Sarbanis asserts in her objection that Fannie Mae must show

that it holds the note and a valid mortgage in order to

foreclose and that she is entitled to an injunction if Fannie

Mae cannot make that showing.5 Sarbanis did not raise any issue

or claim related to the validity of the note in her petition for

an injunction. She alleges no facts to show that Fannie Mae

does not hold the note. Therefore, Sarbanis failed to raise an

issue in this case as to whether Fannie Mae holds the note that

is secured by the mortgage on Sarbanis’s property.

5 Ordinarily, a party seeking injunctive relief bears the burden of showing that such relief is appropriate. See Diaz- Carrasquillo v. Garcia-Padilla, 750 F.3d 7, 10 (1st Cir. 2014); Esso Standard Oil Co. v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006). The court need not address the burden of proof issue here, however, because the record supplies sufficient evidence to overcome Sarbanis’s theory.

11 With respect to the mortgage, Sarbanis provided a copy of

her mortgage and the assignment of the mortgage to Fannie Mae in

support of her petition for an injunction against the

foreclosure. The assignment states that OneWest Bank assigned

Sarbanis’s mortgage and the note secured by the mortgage to

Fannie Mae. As such, Sarbanis provided evidence that Fannie Mae

holds a valid mortgage and the note for her property. She has

not provided evidence to show that the assignment from the FDIC

to OneWest is void and therefore has not raised a triable issue

as to whether Fannie Mae has authority to foreclose on her

property.

Based on the evidence presented for purposes of summary

judgment, Sarbanis has not shown a triable issue about Fannie

Mae’s authority to foreclose.

2. Deposition

Fannie Mae objects to having Bryan Bly’s deposition

considered in this case. In support, Fannie Mae cites the

protective order that was filed with the deposition and contends

that the deposition is inadmissible evidence under Federal Rule

of Civil Procedure 32(a)(8) and Federal Rules of Evidence 401

and 804(b)(1). In response, Sarbanis argues that the protective

order does not prohibit using the deposition in this case. She

12 argues that Bly’s deposition is admissible under Federal Rule of

Civil Procedure 32(a)(4) which pertains to unavailable

witnesses.6

Fannie Mae is correct that the Bly deposition concerned a

different mortgage assignment that Bly signed on behalf of a

different company. Because Bly did not testify about the

assignment of Sarbanis’s mortgage or even assignments he may

have signed on behalf of the FDIC, the deposition cannot be

considered to show the circumstances of the assignment of

Sarbanis’s mortgage from the FDIC to OneWest. In any case, for

the reasons explained above, Sarbanis did not show that Bly’s

status when he signed the assignment from the FDIC to OneWest

rendered it void. Therefore, the deposition is not material to

the outcome in this case.

Conclusion

For the foregoing reasons, the defendant’s motion for

summary judgment (document no. 12) is granted.

6 In support, Sarbanis represents without evidence that Bly lives in Florida and contends it would not be reasonable for her to depose Bly or to procure his attendance at trial. As such, Sarbanis has not provided grounds for allowing the deposition under Rule 32(a)(4).

13 The clerk of court shall enter judgment accordingly and

close the case.

SO ORDERED.

__________________________ Joseph DiClerico, Jr. United States District Judge

August 30, 2017

cc: Sandra A. Kuhn, Esq. Walter H. Porr, Jr.