Allana Baroni v. Nationstar Mortgage, LLC (In re Allana Baroni)

Summarized by Joel Newell , Ballard Spahr, LLP
10 years 3 months ago

Citation:

Ninth Circuit Bankruptcy Appellate Panel Case No. CC-14-1578-KuDTa (November 10, 2015)

Tag(s):

Ruling:

There are three components necessary for constitutional standing, which include (1) injury in fact (2) causation and (3) redressability. The Ninth Circuit Bankruptcy Appellate Panel ("BAP") disagreed with the bankruptcy court's ruling that the Allana Baroni ("Debtor") lacked standing to challenge Nationstar Mortgage, LLC's ("Nationstar") asserted secured proof of claim. The claimant who is entitled to enforce a promissory note satisfies both the standing and real party in interest requirements. Based on the differing indorsements on the promissory note, a genuine issue of material fact was present regarding whether Nationstar qualified as a hold of the promissory note. The bankruptcy court erred in granting summary judgment in favor of Nationstar because Nationstar did not meet its burden to establish it qualified as the person entitled to enforce the promissory note. The BAP affirmed the bankruptcy court's determination that the loan refinanced by James was not a debt covered by the FDCPA. Therefore, the BAP affirmed in part, reversed in party, and remanded the matter to the bankruptcy court for further proceedings.

Procedural context:

The Debtor commenced an adversary proceeding challenging Nationstar's alleged secured proof of claim. The bankruptcy court granted summary judgment in favor of Nationstar. The bankruptcy court determined that Nationstar possessed the original promissory note endorsed in blank; therefore, Nationstar was qualified as party entitled to enforce the promissory note. The bankruptcy court found that the Debtor lacked standing to challenege Nationstar's Proof of Claim because the Debtor did not execute the promissory note or Deed of Trust. The Debtor appealed the bankruptcy court's summary judgment ruling in favor of Nationstar.

Facts:

In 2004, the Debtor's husband ("James") refinanced residential real property. This real property was utilized as a rental property. When James refinanced the real property he owned the real property as his sole and separate property; however, shortly after refinancing James executed a grant deed conveying the real property to himself and the Debtor as husband and wife as joint tenants. The Debtor asserted that the promissory note and Deed of Trust had been irrevocably split; therefore, the Deed of Trust was unenforceable. Nationstar's Proof of Claim attachments include copies of a promissory note and Deed of Trust that appear to be executed by James. The Promissory Note also contains three additional indorsements. In Nationstar's summary judgment motion it identified itself as the servicer for the owner of the promissory note, Wells Fargo Bank. The Debtor's opposition to the summary judgment motion was based on the asserted factual dispute whether there were two different original promissory notes memorializing the same obligation and numerous evidentiary objections to the declaration filed in support of Nationstar's summary judgment motion.

Judge(s):

KURTZ, DUNN and TAYLOR, Bankruptcy Judges

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