                                                                Supreme Court

                                                                No. 2013-107-Appeal.
                                                                (KC 11-341)


          Michael Moura et al.              :

                   v.                       :

Mortgage Electronic Registration Systems,   :
               Inc., et al.




             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 Tel. 222-3258 of any typographical or other
             formal errors in order that corrections may be made before the opinion is
             published.
                                                               Supreme Court

                                                               No. 2013-107-Appeal.
                                                               (KC 11-341)


           Michael Moura et al.              :

                    v.                       :

Mortgage Electronic Registration Systems,    :
               Inc., et al.


             Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

                                         OPINION

       Justice Flaherty, for the Court. The plaintiffs, Michael Moura and Margaret Moura,

appeal from summary judgment entered against them and in favor of the defendants, Mortgage

Electronic Registration Systems, Inc. (MERS), Accredited Home Lenders, Inc., Foreclosure

Management Co., Vericrest Financial, Inc., Accredited REO Properties, LLC, and Deutsche

Bank National Trust Company, as Trustee on behalf of the LSF MRA Pass-Through Trust. This

case came before the Supreme Court for oral argument on April 8, 2014, pursuant to an order

directing the parties to appear and show cause why the issues raised in this appeal should not

summarily be decided. After hearing the arguments and examining the memoranda filed by the

parties, we are of the opinion that cause has not been shown, and we proceed to decide the appeal

at this time without further briefing or argument. For the reasons set forth in this opinion, we

affirm the judgment of the Superior Court.




                                              -1-
                                                I

                                       Facts and Travel

       On June 8, 2007, the Mouras purchased a home at 114 Betsy Williams Drive in Warwick.

To finance the transaction, Michael Moura executed a note, payable to Accredited Home

Lenders, in the amount of $206,250. On the same day the Mouras signed the note, Accredited

Home Lenders endorsed in blank an “allonge” 1 on the property. 2 The note was secured by a

mortgage on the property that named plaintiffs as the mortgagors and MERS as the mortgagee,

acting as a “nominee for Lender and Lender’s successors and assigns.” 3 Both the note and the

mortgage designated Accredited Home Lenders as the Lender. Significantly, the mortgage

further provided that “[b]orrower 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, * * * with the Statutory Power of Sale.” The mortgage was recorded in the land

evidence records of the City of Warwick on June 13, 2007.




1
  An “allonge” is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose
of receiving further indorsements when the original paper is filled with indorsements.” NV One,
LLC v. Potomac Realty Capital, LLC, 84 A.3d 800, 803 n.4 (R.I. 2014) (quoting Black’s Law
Dictionary 88 (9th ed. 2009)).
2
  This action by Accredited Home Lenders “does not identify a person to whom it makes the
instrument payable.” See Mruk v. Mortgage Electronic Registration Systems, Inc., 82 A.3d 527,
530 n.3 (R.I. 2013) (quoting G.L. 1956 § 6A-3-205 cmt. 2). “When indorsed in blank, an
instrument becomes payable to bearer and may be negotiated by transfer of possession alone
until specially indorsed.” Id. (quoting § 6A-3-205(b)).
3
  On the mortgage, the notary states “[o]n this 8th day of June 2006”; however, we are confident
that this is simply an error by the notary. Under “Definitions” on the first page of the mortgage,
the following is written: “‘Security Instrument’ means this document, which is dated June 8,
2007 together with all Riders to this document.” The trial justice made a similar conclusion and
also aptly noted that under G.L. 1956 § 34-11-1, a conveyance of lands by way of mortgage that
is delivered is nonetheless valid and binding even if not acknowledged or recorded. The
plaintiffs have not challenged that the mortgage was not delivered.



                                              -2-
       On November 30, 2009, MERS assigned the mortgage to Deutsche Bank National Trust

Company (Deutsche Bank) “as Trustee on behalf of the LSF MRA Pass-Through Trust” (the

Trust). The assignment was signed by “Hal Bartow, AVP” and notarized in Oklahoma. 4 This

assignment was also recorded in the land evidence records in Warwick. In an affidavit filed in

support of defendants’ motion for summary judgment, Eduardo Asher, Assistant Vice President

of Vericrest Financial, attested that Vericrest became the attorney-in-fact for Deutsche Bank on

or about June 26, 2009. 5

       There seems to be little dispute that in July 2009, the Mouras stopped making their

payments as set forth in the note. On March 1, 2010, Deutsche Bank foreclosed on the property,

and, at a subsequent foreclosure sale, Accredited REO Properties, LLC, purchased the property

for $125,000. In July 2010, Vericrest executed a foreclosure deed on behalf of Deutsche Bank,

which Accredited REO subsequently recorded with the City of Warwick.

       On March 14, 2011, plaintiffs filed a two-count complaint seeking declaratory judgment

and injunctive relief. In their prayers for relief, plaintiffs asked the court to quiet title to the

property, and they sought a nine-point declaration, including orders declaring that plaintiffs were

the owners of the property as a matter of law, that the foreclosure sale, conveyance, and

assignment were void, and that defendants pay plaintiffs’ attorney’s fees. On November 8, 2012,

4
   Attached to defendants’ motion for summary judgment is a document entitled “Corporate
Resolution.” This document illustrates that, on April 2, 2008, several individuals, who were
listed on separate sheets of paper, were employees of Vericrest Financial and were appointed as
vice presidents of MERS with the authority to “execute such documents as may be necessary to
fulfill the Member’s servicing obligations to the beneficial owners of such mortgage loan.” Hal
Bartow was one of those Vericrest employees appointed as a vice president of MERS.
5
  In a document entitled “Limited Power of Attorney” submitted to the Superior Court in support
of the motion, Deutsche Bank appears to have appointed Vericrest Financial on June 24, 2010 as
the Trust’s attorney-in-fact and servicer for “any of the mortgages or deeds of trust.” This
document references an April 1, 2009 “Servicing Agreement” between Deutsche Bank and
Vericrest, and indicates that in the servicing agreement Vericrest is the “Servicer.”



                                               -3-
after both sides had conducted discovery, defendants filed a motion for summary judgment,

alleging that there were no genuine issues of material fact and that they were entitled to judgment

as a matter of law. In addition to other documentation, defendants filed two affidavits to support

the motion: one from Asher and another from Dean Ponte, a licensed auctioneer who conducted

the foreclosure sale on behalf of Vericrest. To support their objection to the motion, plaintiffs

filed a counter-affidavit from Michael Moura. The parties subsequently agreed to waive oral

argument, and a justice of the Superior Court rendered a decision on February 27, 2013.

       The trial justice considered each of the six arguments plaintiffs presented in opposition to

summary judgment and found that none presented a genuine issue of material fact. During his

consideration of the arguments, the trial justice addressed defendants’ argument that plaintiffs

lacked standing to challenge the assignment of the mortgage because the Mouras contended that

Bartow lacked authority to assign the mortgage on behalf of MERS. The trial justice stated that

he did not believe plaintiffs had standing to make such a challenge, but that even if he were to

find that they did, he nonetheless concluded that plaintiffs’ argument was without merit because

the assignment was signed by Bartow and because the certification that he was a vice president

of MERS was acknowledged by a notary. That notarized assignment was recorded in the land

evidence records, which, in the trial justice’s opinion, amounted to “presumptive evidence” that

Bartow had the authority to sign, an assertion that plaintiffs had not challenged with competent

evidence. After considering the submissions of the parties, the trial justice granted the motion

for summary judgment. The plaintiffs filed a timely appeal to this Court. 6



6
 In April 2013, this Court decided Bucci v. Lehman Brothers Bank, FSB, 68 A.3d 1069 (R.I.
2013), which addressed several of the arguments the Mouras have presented on appeal.
Consequently, on December 17, 2013, when the Mouras came before a single justice of this
Court pursuant to Article I, Rule 12A(3) of the Supreme Court Rules of Appellate Procedure,



                                               -4-
                                                II

                                      Standard of Review

       We review a trial justice’s granting of summary judgment de novo. Mruk v. Mortgage

Electronic Registration Systems, Inc., 82 A.3d 527, 532 (R.I. 2013). “Examining the case from

the vantage point of the trial justice who passed on the motion for summary judgment, ‘[w]e

view the evidence in the light most favorable to the nonmoving party, and if we conclude that

there are no genuine issues of material fact and that the moving party is entitled to judgment as a

matter of law[,] we will affirm the judgment.’” Sullo v. Greenberg, 68 A.3d 404, 406-07 (R.I.

2013) (quoting Sacco v. Cranston School Department, 53 A.3d 147, 150 (R.I. 2012)). “Although

summary judgment is recognized as an extreme remedy, * * * to avoid summary judgment the

burden is on the nonmoving party to produce competent evidence that ‘prove[s] the existence of

a disputed issue of material fact[.]’” Id. at 407 (quoting Mutual Development Corp. v. Ward

Fisher & Co., 47 A.3d 319, 323 (R.I. 2012)). “[T]he nonmoving party * * * cannot rest upon

mere allegations or denials in the pleadings, mere conclusions or mere legal opinions.” Mruk, 82

A.3d at 532 (quoting Daniels v. Fluette, 64 A.3d 302, 304 (R.I. 2013)). Demonstrating mere

factual disputes will not defeat summary judgment; “the requirement is that there be no genuine

issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).



plaintiffs were directed to file a supplemental memorandum within twenty days discussing the
effect of Bucci on the issues raised in this appeal. The plaintiffs’ counsel failed to comply with
the order of this Court and never filed the required supplemental memorandum. At oral
argument, plaintiffs’ counsel was unable to articulate any reasonable explanation as to why he
did not adhere to the order. The general, plenary supervisory power of this Court authorizes us
to dismiss an appeal if a party fails to follow a duly issued order. See Santos v. Smith, 99 R.I.
430, 431-32, 208 A.2d 524, 525 (1965) (declining to dismiss certiorari petition for not complying
with a statutory provision, but retaining authority to decide differently in the future). Although
we choose not to dismiss this appeal for noncompliance with the Court’s order, we are
nevertheless dismayed by counsel’s unexplained disregard for our directive.



                                               -5-
                                                III

                                            Discussion

       The plaintiffs discharge a volley of arguments on appeal that they contend demonstrate

the trial justice’s error in granting summary judgment. First, plaintiffs contend that the trial

justice erred when he allowed Asher’s affidavit into evidence. Second, plaintiffs maintain that

there is a material issue of fact surrounding the validity of the travel of the note and the

mortgage. Third, plaintiffs argue that the trial justice erred when he found that MERS had

properly assigned the mortgage to Deutsche Bank. Finally, plaintiffs claim that the trial justice

erred when he found that the foreclosure sale had been lawfully noticed and conducted. In our

opinion, these arguments are unpersuasive and without merit.

       The Mouras begin by parsing the trial justice’s bench decision into eighteen alleged

errors that the trial justice committed in granting summary judgment. Of note, for our purposes,

plaintiffs take issue with the trial justice’s statement that he did not believe plaintiffs had

standing to challenge the assignment even though he went on to analyze the argument assuming

they did have standing. Indeed, although standing was contested below, before this Court,

defendants make it clear that they do not dispute plaintiffs’ standing to challenge the assignment.

       We pause to note, however, that we agree with the trial justice that standing was

problematic in this case.    This Court first addressed the issue of a plaintiff’s standing to

challenge an assignment of a mortgage in Mruk, 82 A.3d at 532. In Mruk, we created an

exception to the general rule that third parties do not have standing to challenge a contract and

held that “homeowners in Rhode Island have standing to challenge the assignment of mortgages

on their homes to the extent necessary to contest the foreclosing entity’s authority to foreclose.”

Id. at 536. However, we cautioned that this holding on standing was to be narrowly construed




                                               -6-
and limited only to those situations in which a mortgagor challenges an “‘invalid, ineffective, or

void’ assignment of the mortgage.” Id. (quoting Culhane v. Aurora Loan Services of Nebraska,

708 F.3d 282, 291 (1st Cir. 2013)). More specifically, we agreed with the First Circuit that

mortgagors do not have standing to challenge “shortcomings in an assignment that render it

merely voidable at the election of one party but otherwise effective to pass legal title.” Id.

(quoting Culhane, 708 F.3d at 291).

       Earlier this year, in a case based on Massachusetts law, the First Circuit expounded upon

the difference between standing to challenge a void assignment and an assignment that is merely

voidable. Wilson v. HSBC Mortgage Services, Inc., 744 F.3d 1, 9 (1st Cir. 2014). The court

said that a mortgagor would lack standing to challenge an assignment that is voidable because

“even successfully proving that the assignment was voidable would not affect the rights as

between those two parties or provide the homeowner with a defense to the foreclosure action.”

Id. A “void” contract, the court explained, was a “nullity,” “incapable of confirmation or

ratification.” Id. (quoting Allis v. Billings, 47 Mass. 415, 417 (1843)). On the other hand, a

“voidable” contract affects the rights of one party and may be either ratified or rescinded at that

party’s election. Id. Moreover, the court did not take as “gospel” the mortgagor’s bald assertion

that the assignment was void, but analyzed the materials before the court to determine whether

the assignment was properly categorized as void or voidable. Id. at 10. The mortgagors in

Wilson, 744 F.3d at 11, claimed the assignment was void and supported that assertion with

allegations that bear a striking resemblance to the position taken here by the Mouras. Ultimately,

the court in Wilson determined that the mortgagors did not have standing to challenge the

assignment because they had not proven that the assignment was void. Id. at 14. Although the

issue of standing is a threshold inquiry that the Court may decide before reaching the merits of a




                                               -7-
claim, Narragansett Indian Tribe v. State, 81 A.3d 1106, 1110 (R.I. 2014), because standing was

neither briefed nor argued by the parties and was assumed to be present by the trial justice, we

too will credit plaintiffs with standing and will proceed to decide the case on its merits.

However, in principle, we find the reasoning in Wilson to be persuasive.

          The first argument before us is plaintiffs’ claim that the trial justice erred in admitting the

affidavit of Eduardo Asher. The plaintiffs claim that Asher, as an assistant vice president of

Vericrest, did not offer any evidence of a contractual relationship between Vericrest and any

other party.     Furthermore, plaintiffs claim that Asher’s statement in paragraph one of the

affidavit is insufficient to satisfy Rule 803(6) of the Rhode Island Rules of Evidence. 7 It should

be noted that Rule 56(e) of the Superior Court Rules of Civil Procedure requires supporting and

opposing affidavits to be made on personal knowledge, setting forth facts admissible into

evidence, and affirmatively showing that the affiant is competent to testify. The plaintiffs

challenge the admissibility of the facts set forth in the Asher affidavit because the affiant claims

that Vericrest is a mortgage servicer, but never claims to be the servicer of plaintiffs’ loan.

According to plaintiffs, if Vericrest is not the servicer of their loan, then Asher is testifying to

7
    Rule 803(6) of the Rhode Island Rules of Evidence states:
                          “Records of Regularly Conducted Activity. A
                 memorandum, report, record, or data compilation, in any form, of
                 acts, events, conditions, opinions or diagnoses, made at or near the
                 time by, or from information transmitted by, another person with
                 knowledge, if kept in the course of a regularly conducted business
                 activity, and if it was the regular practice of that business activity
                 to make the memorandum, report, record, or data compilation, all
                 as shown by the testimony of the custodian or other qualified
                 witness, unless the source of information or the method or
                 circumstances of preparation indicate lack of trustworthiness. The
                 term ‘business’ as used in this paragraph includes business,
                 institution, association, profession, occupation, and calling of
                 every kind, whether or not conducted for profit.”




                                                   -8-
records not prepared or kept by Vericrest, which means Asher’s statements are not based on his

personal knowledge. Although it is true that Asher does not say that Vericrest is the servicer of

the note, that does not cause us to conclude that plaintiff’s position is sound. Asher swears that

the claims in his affidavit are based on personal knowledge, that Vericrest is a mortgage servicer,

and that the note is held by Vericrest. These three statements, along with others, convince us that

the affidavit was proper because Asher’s averments satisfy the strictures of Rule 56(e). See

Textron, Inc. v. Aetna Casualty and Surety Co., 723 A.2d 1138, 1144 (R.I. 1999) (discussing

sufficiency of personal knowledge presented in affidavits in support of motion for summary

judgment).

       Next, the Mouras assert that defendants cannot prove a legal foreclosure occurred

because the evidence submitted did not demonstrate the presence of a valid travel of the note and

mortgage. To support this argument, plaintiffs present a disorganized mélange of conclusory

statements that purportedly undergird a claim that there is a genuine issue of material fact. We,

however, are convinced that the record presents a clear chain of title beginning with Accredited

Home Lenders and concluding with REO Properties. The evidence and supporting documents,

including the Asher Affidavit, establish that Michael Moura signed the note, that the note was

signed in favor of Accredited Home Lenders, which endorsed an allonge in blank, and that it was

subsequently held by Vericrest Financial on behalf of Deutsche Bank. Further, MERS properly

assigned the mortgage through its duly authorized representative to Deutsche Bank, and the

assignment was recorded with the City of Warwick.

       To avoid summary judgment, the Mouras, as the nonmoving party, had the burden of

producing competent evidence to elucidate a genuine and material factual dispute. See Sullo, 68

A.3d at 407. In the counter-affidavit submitted by plaintiffs, Michael Moura attests that he was




                                               -9-
told by MERS that Bartow, who signed the assignment from MERS to Deutsche Bank, was

never an employee of MERS. Moura further swears that Bartow is a known “robosigner,” and

he attached a list that includes Bartow among other known “robosigners” from the South Essex

District Registry of Deeds in Massachusetts. However, in the papers submitted to the trial justice

and to this Court, the Mouras do not develop these diffuse claims into a cogent argument, explain

their significance, or even make further mention of Bartow. Mere allegations and conclusions

will not create a factual dispute sufficient to defeat summary judgment. Mruk, 82 A.3d at 532.

       The plaintiffs’ remaining arguments challenge the assignment of the mortgage to

Deutsche Bank. First, the Mouras maintain that MERS did not have the authority to assign the

mortgage. Second, the plaintiffs contend that the foreclosure was invalid because there were no

valid assignments that would have granted the proper interest to foreclose. This Court already

has addressed the issue of the authority of MERS to assign a mortgage in Bucci v. Lehman

Brothers Bank FSB, 68 A.3d 1069 (R.I. 2013). Because the plaintiffs did not distinguish their

arguments from our decision in Bucci, as they were ordered to do, we need not, and do not,

address those arguments further.

                                               IV

                                          Conclusion

       For the foregoing reasons, we affirm the grant of summary judgment in favor of the

defendants. The record shall be remanded to the Superior Court.




                                              - 10 -
                           RHODE ISLAND SUPREME COURT CLERK’S OFFICE

                                Clerk’s Office Order/Opinion Cover Sheet




TITLE OF CASE:       Michael Moura et al. v. Mortgage Electronic Registration Systems,
                     Inc., et al.

CASE NO:             No. 2013-107-Appeal.
                     (KC 11-341)

COURT:               Supreme Court

DATE OPINION FILED: May 16, 2014

JUSTICES:            Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

WRITTEN BY:          Associate Justice Francis X. Flaherty

SOURCE OF APPEAL:    Providence County Superior Court

JUDGE FROM LOWER COURT:

                     Associate Justice Bennett R. Gallo

ATTORNEYS ON APPEAL:

                     For Plaintiffs: George E. Babcock, Esq.

                     For Defendants: Dean J. Wagner, Esq.
