IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

Assignment Instrument
20161003-0050047

BANK OF AMERICA, N.A., )
)
Plaintiff, ) C.A. No. N17L-07-018 MMJ
)
V. ) Tax Parcel No. 10-029.20-278 C0087
)
ALICE YARBOROUGH, and ) Sci. Fa. Sur Mortgage Action INREM
PRESTON WHITE, )
) Mortgage Instrument
Defendants. ) 20071019-0091702
)
)

Submitted: March 30, 2020
Decided: May 15, 2020

Upon Plaintiff's Motion for Summary Judgment and
Plaintiff's Motion for Default Judgment
GRANTED
OPINION

Michael K. Pak, Esq., (Argued), Janet Z. Charlton, Esq., McCabe, Weisberg &
Conway, LLC, Wilmington, Delaware, Attorneys for Plaintiff

Edward J. Fornias, II, Esq., (Argued) E.J. Fornias, P.A., Wilmington, Delaware,
Attorneys for Defendant Preston White

JOHNSTON, J.
FACTUAL AND PROCEDURAL CONTEXT
Plaintiff Bank of America, N.A., brings this mortgage foreclosure action

against Defendants Alice Yarborough and Preston White.

1
On October 17, 2007, Defendant Yarborough purchased the Property located
at 208A Highland Boulevard, New Castle, Delaware 19720, Tax Parcel No. 10-
029.20-278 C0087 (the “Property’”). In order to finance the purchase, Yarborough
obtained a loan from First Horizon Home Loans in the amount of $80,000.00 (the
“Loan”).! Yarborough executed and delivered her Mortgage (the “Mortgage”) on
the Property to Mortgage Electronic Registration Systems Inc. (“MERS”), as
Nominee for First Horizon Home Loans.” The Mortgage was recorded on October
19, 2007 in the Office of the Recorder of Deeds, in and for New Castle County,
Delaware as Instrument No. 20071019-0091702.? The Mortgage was subsequently

assigned to Plaintiff on September 21, 2016.*

The Property is subject to assessment fees from the Burnbrae
Condominiums at Wilton’s Homeowners Association known as the Burnbrae
Maintenance Association (“Burnbrae”). The Burnbrae Declaration of

Condominium recorded on October 17, 1987 (the “Declaration’”) provides:

Each such assessment shall be a continuing lien upon the unit against
which it was made and shall also be the personal obligation of the owner
of such unit at the time when the common expense assessment fell
due....All such liens shall be subordinate to any lien for past due and
unpaid taxes, the lien of a first mortgage recorded prior to the date of

 

' P].’s Supp. Br. at 2; Def.’s Ans. Br., Ex. 2 (Note).
* Compl. 4 5, Ex. E (Mortgage).

> P].’s Supp. Br., Ex. A (Recorded Deed).

* Compl., Ex. F (Assignment of Mortgage).
the delinquent assessment, and to any other lien recorded prior to the
time of recording of the claim to lien.°

At the time the Loan was settled, payment was made to Burnbrae for
monthly assessments related to the Property due for October 2007 (amounts due
from October 17, 2007 through November 1, 2007), and a deposit for working
capital.© Thus, at the time of the Mortgage’s recording on October 19, 2007,

Yarborough was not delinquent on assessments owed to Burnbrae.

On June 6, 2011, Burnbrae filed a Notice of Lien pursuant to Delaware Code
Title 25, Section 81-316.’ In 2015, Burnbrae obtained a judgment in the Justice of
the Peace Court against Yarborough for unpaid assessments in the amount of
$16,200.00. The case was subsequently transferred to this Court as Case No.
N15J-04295. To satisfy the Burnbrae judgment lien, the Property was sold at
sheriff sale to the current owner, Defendant White, by Sheriff's Deed dated
October 19, 2016, and recorded as Instrument No. 20161019-0053724.° Since
White purchased the Property, both Defendants have failed to make payments on

the Mortgage to Plaintiff when due.’

 

> P].’s Supp. Br. at 1, Ex. 1 at 9-10 (Burnbrae Declaration) (emphasis added).

6 Td. at 2-3, Ex. C (HUD-1 Settlement Statement).

7 Td. at 3-4.

§ Compl. § 6; PI.’s Op. Br., Ex. B (Recorded Sheriff Deed).

* Id. 47; See also P|.’s Supp. Br. at 3 n. 5 (noting that White purchased the Property for $15,000,
which was insufficient to satisfy the Burnbrae judgment of $16,200.00, thus no funds from the
sale remained to satisfy any part of the Mortgage).

3
On July 10, 2017, Plaintiff brought this action against Yarborough and
White for the principal sum of the Mortgage, together with interest, fees, and other
expenses. On December 19, 2019, Plaintiff filed a Motion for Default Judgment
against Yarborough, who has not answered the Complaint despite personal service.
Plaintiff also filed a Motion for Summary Judgment against White. White filed an

Answering Brief on January 18, 2020.

The Court heard oral argument on January 29, 2020. Following the hearing,
White filed a Supplemental Brief in Support of Discharge of the Mortgage Lien

and Plaintiff filed a Reply.

STANDARD OF REVIEW
Summary judgment is granted only if the moving party establishes that there
are no genuine issues of material fact in dispute and judgment may be granted as a
matter of law.'° All facts are viewed in a light most favorable to the non-moving
party.'' Summary judgment may not be granted if the record indicates that a
material fact is in dispute, or if there is a need to clarify the application of law to
the specific circumstances.!* When the facts permit a reasonable person to draw

only one inference, the question becomes one for decision as a matter of law.!? If

 

10 Super. Ct. Civ. R. 56(c).

"| Burkhart v. Davies, 602 A.2d 56, 58-59 (Del. 1991).
2 Super. Ct. Civ. R. 56(c).

'3 Wooten v. Kiger, 226 A.2d 238, 239 (Del. 1967).

4
the non-moving party bears the burden of proof at trial, yet “fails to make a
showing sufficient to establish the existence of an element essential to that party’s
case,” then summary judgment may be granted against that party.!4
ANALYSIS
Plaintiff argues it is entitled to judgment as a matter of law because: (1)
White failed to comply with Delaware Code Title 10 Section 3901; and (2) the
facts are not in dispute that Defendants failed to make timely payments to Plaintiff

on the Mortgage.
Delaware Code Title 10 Section 3901

Title 10 Section 3901 of the Delaware Code provides that in all actions upon

scire facias on mortgages:

[Plaintiff may specifically require the defendant or defendants to
answer any or all allegations of the complaint by an affidavit setting
forth the specific nature and character of any defense and the factual
basis therefor, by the specific notation upon the face of the complaint
that those allegations must be answered by affidavits.

Plaintiff filed a scire facias Mortgage Action with conspicuous language
demanding an Affidavit of Defense,'® and attached a certified copy of the

Mortgage!’ pursuant to Section 3901.

 

'4 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

15.10 Del. C. §3901(a).

16 See Compl. (demanding affidavit of defenses in the Caption).
'7 Td. Ex. E (Mortgage).

5
White argues that Plaintiff is not entitled to an Affidavit of Defense because
it failed to comply with Section 3901. White relies on Shrewsbury v. The Bank of
New York Mellon.'® White suggests that Shrewsbury should be read to include the
requirement that a certified copy of the Note must be attached to the Complaint to

trigger the Plaintiffs entitlement to receive an Affidavit of Defense.

Plaintiff has provided a copy of the assigned Note.'? Plaintiff asserted that it
held the Note and was entitled to enforce it. Defendants have not asserted that

Plaintiff was not the holder of the Note or entitled to enforce it.

The Shrewsbury Court “held that summary judgment was inappropriate
where a mortgage holder sought foreclosure on a property but did not produce the
promissory note, claim to be the holder of the note, or claim to be entitled to
enforce the note.””° The Court finds that Plaintiff has satisfied the requirements of
Delaware Code Title 10 Section 3901, as further defined in Shrewsbury.
Therefore, Defendants must answer the Complaint by Affidavit of Defense

compliant with Section 3901. Neither Defendant has complied with Section 3901.

 

'8 160 A.3d 471 (Del. 2017).

'9 Pl.*s Op. Br., Ex. A (The Note).

20 JPMorgan Chase Bank, National Association v. Rivera, 2018 WL 565300, at *2 (Del. Super.)
(citing Shrewsbury, 160 A.3d at 478).

6
Sheriff's Sale and Discharge of the Mortgage

Title 10 Section 4985 of the Delaware Code provides that a sheriffs sale
discharges all liens against the subject property except mortgages which are “prior
to any general liens.” White argues that the Burnbrae sheriff sale discharged the

Mortgage because Burnbrae held the superior lien against the Property.

The 1987 Burnbrae Declaration created Burnbrae’s right to a lien in the
event Yarborough became delinquent in her payments to Burnbrae. The parties do
not dispute that the Burnbrae lien only came into existence when Yarborough
became delinquent in her payments to Burnbrae. Plaintiff supplied evidence that
Yarborough was current in her Burnbrae payments at the time the Mortgage was
created and perfected in October 2007.7! White has not disputed this fact.*? Thus,
the Burnbrae lien was created sometime after the perfected Mortgage, and not

recorded until June 6, 2011.

Plaintiff argues that because the Mortgage was earlier in both time and
notice than the Burnbrae lien, the Mortgage was the superior lien at the time of the
sheriff's sale. White does not argue that the Burnbrae lien predated the Mortgage

in time or notice by virtue of the 1987 Declaration, but rather, that the Burnbrae

 

21 Td at 2-3, Ex. C (HUD-1 Settlement Statement).

22 Although White suggests that Yarborough was not current as early as October 1, 2008, he does
not assert that she was delinquent in her payments as of the creation and recording of the
Mortgage. See Def.’s Supp. Br. at § 2.

7
lien became the superior lien by operation of law when Burnbrae recorded its lien

on June 6, 2011.

White relies on the Delaware Uniform Common Interest Ownership Act
(“DUCIOA”).2 DUCIOA Section 81-316(a) gives Common Interest Communities
(“CIC”), such as Burnbrae, a statutorily-created lien for unpaid assessments or
condominium fees.74 Section 81-316(b)(ii) provides that such statutorily-created
liens are subordinate to: “a first or second security interest on the unit recorded
before the date on which the assessment sought to be enforced became

delinquent....””>

Nevertheless, White argues that Section 81-316(b) confers “super-priority”
status on Burnbrae’s lien. White bases his argument on an exception in Section
81-316(b), which provides that a CIC delinquency assessment lien “shall have
priority over the security interests described in paragraph (ii)” if the CIC records “a

document” and a statement of lien.*° Thus, White contends that Section 81-316(b)

 

23.25 Del. C. § 81-101 et. seq.
4 Td. § 81-316(a):

The association has a statutory lien on a unit for any assessment levied against that
unit or fines imposed against its unit owner....If an assessment is payable in
installments, the lien is for the full amount of the assessment from the time the first
installment thereof becomes due. /d.

25 Id. § 81-316(b)(ii).
26 Id.
automatically conferred priority status to Burnbrae’s lien when Burnbrae recorded

its Notice of Lien in 2011.

Section 8-316(b) also provides that “/e/xcept as otherwise provided in the
declaration, a lien under this section is prior to all other liens and encumbrances on
aunit....”2? The Burnbrae Declaration clearly provides that the Burnbrae lien is
subordinate to a mortgage created and recorded prior to delinquency.”* Likewise,
the Burnbrae Notice of Lien clarifies that the Burnbrae lien is not a priority lien

unless a superior lienholder forecloses on the Property:

PRIORTY LIEN*: $1,350.00 (*pursuant to 25 Del. C. § 81-316(b)(ii),
if/when a first or second security interest lienholder forecloses upon
this condominium unity, Burnbrae Mainatenance Association has
super-lien priority for up to six months of common expense
assessments).

Here, it was the CIC Burnbrae that brought the foreclosure sale, not the
superior lienholder. Thus, pursuant to the Notice of Lien, Section 81-316(b)(ii)

would not apply.

Burnbrae’s actions also evidence that Burnbrae did not intend to foreclose

on the Property pursuant to Section 81-316: (1) Burnbrae did not assert in its

 

27 (emphasis added).

28 P].’s Supp. Br. at 1, Ex. 1 at 9-10 (Burnbrae Declaration) (providing that the Burnbrae lien
“shall be subordinate to any lien...of a first mortgage recorded prior to the date of the delinquent
assessment....”).

29 Id. at 4, Ex. D (Burnbrae Recorded Notice of Lien) (emphasis added).
9
pleadings that it was foreclosing pursuant to its DUCIOA priority lien; (2) the
Notice of Lien shows that Burnbrae interpreted Section 81-316 to confer priority
on Burnbrae’s lien only in the event a superior lienholder foreclosed on the
Property;°° and (3) Burnbrae did not bring an equitable foreclosure in the Court of

Chancery, as required under Section 81-316(j)(1).>!

The Mortgage preceded the Burnbrae lien in both time and notice.
Burnbrae’s Notice of Lien Section 8-316 conferred priority only in the event a
superior lienholder foreclosed on the Property. The Burnbrae Declaration
explicitly provided that its lien was subordinate to a first-in-time mortgage.
Burnbrae did not follow the Section 81-316(G) procedures. Thus, even if Section 8-
316 would have conferrred “super-priority” lienholder status on Burnbrae,
Burnbrae did not foreclose on the Property pursuant to Section 8-316. Therefore,

the Court finds that Section 8-316 is inapplicable, and the sheriff's sale of the

 

3° Plaintiff argues that the purpose of DUCIOA’s super priority lien status conferred on CICs
under certain circumstances is intended to limit any losses a CIC would incur as a result of a
senior mortgage holder’s foreclosure. In addition to evidence that Burnbrae interpreted Section
18-316 as a “shield rather than a sword for Burnbrae,” Plaintiff notes that mortgage lenders are
subject to heightened standards of notice, CFPB standards and regulations, the mandatory
foreclosure mediation program, and other significant procedural differences. P1.’s Supp. Br. at
5—6 (citing 10 Del. C. §§ 5062A—5062C).

31 Burnbrae is a “condominium or planned community” under 25 Del. C. Section 81-316(j)(1).
Pursuant to Section 81-316()(1), a condominium or planned community seeking to foreclose on
a Section 81-316 lien, “must” foreclose “by equitable foreclosure.” Id. White notes that Section
81-316(j) allows execution of foreclosure “upon other lawful procedures provided for in the
declaration....” Jd. Defendant does not refer to any “other lawful procedures” provided in the
Declaration, and Plaintiff asserts that the Declaration provides no such “other lawful
procedures.” Pl.’s Supp. Br. at 6.

10
Property did not discharge the Mortgage because it was superior to the Burnbrae
lien.
CONCLUSION

The Court finds that Plaintiff has satisfied Title 10 Section 3901 of the
Delaware Code, and Defendant White has failed to file an Affidavit of Defense
stating any cognizable defenses. Additionally, the sheriffs sale did not discharge
the Mortgage. THEREFORE, Plaintiff's Motion for Summary Judgment is
hereby GRANTED, and judgment in rem shall be entered against Defendant

White.

The Court finds that Plaintiff has satisfied Title 10 Section 3901 of the
Delaware Code, and Defendant Yarborough has not entered an appearance in this
case, despite personal service. THEREFORE, Plaintiff's Motion for Default
Judgment is hereby GRANTED, and judgment on the Mortgage shall be entered

against Defendant Yarborough.

   

IT IS SO ORDERED.

  

gpl ff#

The Hénorabfé Mary M. Johnston

 

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