Evelyn Coleman v. BAC Servicing, agent for the Secretary of Veterans Affairs, an officer of the United States of America

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REL: 06/22/2012 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2011-2012 2100453 Evelyn Coleman v. BAC S e r v i c i n g , agent f o r the S e c r e t a r y o f Veterans A f f a i r s , an o f f i c e r o f the U n i t e d S t a t e s o f America Appeal from J e f f e r s o n C i r c u i t (CV-09-903114) Court On A p p l i c a t i o n f o r R e h e a r i n g PITTMAN, This and Judge. court's opinion of February 3, 2 0 1 2 , i s w i t h d r a w n the following i ss u b s t i t u t e d therefor. 2100453 E v e l y n C o l e m a n a p p e a l s f r o m a summary j u d g m e n t e n t e r e d i n favor o f BAC Servicing Veterans A f f a i r s , ("the S e c r e t a r y " ) , ("BAC"), an o f f i c e r in the Mortgage amount Company of Coleman We of of America affirm. History and h e r husband o b t a i n e d $93,215 ("Johnson") Secretary States action. and P r o c e d u r a l On N o v e m b e r 3 0 , 1 9 9 4 , f o r the of the United i n an e j e c t m e n t Facts loan agent from to Johnson purchase a & a Associates house. The Colemans e x e c u t e d a p r o m i s s o r y note and a mortgage t o Johnson. On May to 31, 1995, J o h n s o n a s s i g n e d i t s Trans F i n a n c i a l M o r t g a g e Company i n t e r e s t i n the mortgage ("Trans F i n a n c i a l " ) . On D e c e m b e r 2, 2 0 0 0 , F i r s t a r B a n k , a l l e g e d t o b e t h e s u c c e s s o r i n i n t e r e s t to Trans F i n a n c i a l , Electronic Registrations Systems, f o r Lehman B r o t h e r s H o l d i n g s , judgment motion, BAC a s s i g n e d the mortgage t o Mortgage Inc. submitted Inc. ("MERS"), as I n s u p p o r t o f i t s summaryevidence indicating M i d F i r s t B a n k h a d a c q u i r e d p o s s e s s i o n o f t h e n o t e on 17, nominee that September 2005. Coleman's Evelyn Coleman policies husband died on used the couple's April savings i n s u r i n g her husband's l i f e 2 1, 2007, after which and t h e p r o c e e d s o f t o make t h e p a y m e n t s due 2100453 on the mortgage funds had been to make April the indebtedness. depleted mortgage 2009. by February payments due 2009, and Coleman i n February, those failed March, and BAC i n d i c a t i n g t h a t M i d l a n d M o r t g a g e Company, MidFirst's operating subsidiary, default April 2009, on t o Coleman, o f i t s summary-judgment m o t i o n , In support submitted evidence According 8, and had s e n t Coleman a notice of retained by o f a c c e l e r a t i o n on J u l y 24, that M i d F i r s t had sent Coleman a n o t i c e an attorney 2009. On July property 25, 28, 2009, to the Secretary August 1, sale regarding and August the mortgage. mortgage" note to by s p e c i a l w a r r a n t y deed. 8, identified notice of the was p u b l i s h e d MidFirst Inc., assigned evidencing MidFirst. 2 T h e d e e d was r e c o r d e d O f f i c e on N o v e m b e r 9, 2 0 0 9 . 1 2009, the On the i n The indebtedness i n the 3 1, July Alabama the of f o r Lehman and secured 2009, Jefferson T h e a s s i g n m e n t was recorded i n P r o b a t e O f f i c e on S e p t e m b e r 9, 2 0 0 9 . 2 On as t h e a s s i g n e e mortgage September 1 foreclosure On A u g u s t 2 7 , 2 0 0 9 , MERS, a s n o m i n e e Holdings, promissory conveyed i t s i n t e r e s t i n the Coleman's p r o p e r t y Messenger; the notice Brothers MidFirst "[t]he by the MidFirst County Probate Jefferson County 2100453 purchased the property The same day, M i d F i r s t ' s possession On of the September Jefferson Circuit property. application 28, 2009, Court the BAC seeking late Coleman filed a a demand f o r complaint to eject husband complaint f o r the a n d moved Coleman's sent Coleman was also i n the from named BAC default to voluntarily dismiss any November 12, 2009, a time filed judgment On of expired, a husband. entry had the as On N o v e m b e r 1 1 , 2 0 0 9 , o n e d a y a f t e r C o l e m a n ' s answering Coleman attorney sale. property. Coleman's defendant. for f o r $81,132.97 a t t h e f o r e c l o s u r e an against claim Coleman as t o obtained counsel and answered t h e complaint, a s s e r t i n g t h e a f f i r m a t i v e defenses of defective foreclosure. notice, On N o v e m b e r 1 5 , 2 0 0 9 , a d e f a u l t judgment a g a i n s t to Coleman's husband. set aside the default the case t o the a c t i v e Following In support defective the t r i a l Coleman and d i s m i s s e d On N o v e m b e r 2 0 , 2 0 0 9 , judgment trial discovery, of that sale, motion, against and wrongful court entered t h e a c t i o n as the t r i a l Coleman and court restored docket. BAC moved BAC for a submitted note; the mortgage; a notice-of-default 4 summary judgment. the following: letter dated A p r i l the 8, 2100453 2009, from M i d l a n d Mortgage acceleration from letter an a t t o r n e y published retained of the Financial, from certified copies With executed respect i n favor authenticated stamped on indorsement Trans of notice-of- -- from Poage, v i c e president with note to MidFirst; deed that and the andt h e Coleman 30, of the note, two Trans of MidFirst. on November copy three to Johnson MERS of the of to the Secretary; to the promissory o f Johnson copy copies foreclosure from M i d F i r s t 24, 2009, 1994, Poage which indorsements. had had been The first i s stamped "Without r e c o u r s e , pay t o t h e o r d e r o f Co., indorsement certified MidFirst's i t s face a sworn t o MERS, a n d f r o m MidFirst's Financial Mortgage notice; Firstar of Melissa by M i d F i r s t ; mortgage s p e c i a l w a r r a n t y deed affidavit a a d d r e s s e d t o Coleman d a t e d J u l y foreclosure assignments Company t o C o l e m a n ; Mortgage I n c . , by Company. Betty J. Johnson Knight." & Associates The i s stamped: "Pay t o The O r d e r o f Without Recourse This day of , 19 T r a n s F i n a n c i a l M o r t g a g e Company / s / J a m e s K. O l i v e r J a m e s K. O l i v e r , E x e c u t i v e V i c e P r e s i d e n t " 5 second 2100453 Poage stated note "[p]rior subject that judgment had acquired to the i n i t i a t i o n of this Coleman MidFirst a response i n opposition motion, attaching, she foreclosure of the foreclosure made t h e action." filed affidavit; i t s i n t e r e s t i n the argued deed were among that the void other t o BAC's materials, foreclosure to exercise her own and sale f o r the following M i d F i r s t d i d n o t have t h e r i g h t summary- the reasons: t h e power (1) of sale u n d e r t h e m o r t g a g e b e c a u s e , C o l e m a n s a i d , M i d F i r s t was n o t t h e assignee o f t h e mortgage foreclosure with had requirements said, July had failed failed had been not assigned 1, with the published and August 8, 2009, to MidFirst, t h e mortgage MidFirst had failed to mitigation program; and (5) BAC had instrument; (3) notice Coleman i n t h e newspaper reflected that when, comply failed i n fact, until with August on the MERS 27, i t s loss- to support i t s evidence compliant with 6 comply statutory to MidFirst (4) summary-judgment m o t i o n w i t h to A l a . Code 1975, b e c a u s e , notice assigned had i n t h e mortgage t o comply i n § 35-10-13, 25, A u g u s t 2009; (2) M i d F i r s t requirements the foreclosure mortgage i t commenced t h e proceedings; the notice MidFirst o r t h e n o t e when R u l e 56, 2100453 Ala. R. Civ. affidavit was state how or note that P. BAC strike trial in based on a portion of to to the allow knowledge i n favor an of on parties the to that Poage's and did interest not in the Johnson. response affidavit. hearing the argued acquired Coleman's Coleman's continued order had executed reply Coleman personal when M i d F i r s t Coleman had court motion not filed a Specifically, and moved Thereafter, to the summary-judgment brief the following issues: "Whether mere physical possession of the p r o m i s s o r y n o t e i n q u e s t i o n w o r k s an a s s i g n m e n t o f the power t o s e l l the u n d e r l y i n g mortgage to the p a r t y who has acquired p h y s i c a l p o s s e s s i o n of the s a i d promissory note; and, " I f so, then e v i d e n t i a r y p r o o f of the date upon which [ M i d F i r s t ] a c q u i r e d p h y s i c a l p o s s e s s i o n of the s a i d p r o m i s s o r y note, which s h o u l d p r e d a t e the date upon w h i c h [MidFirst] commenced t h e process of statutory foreclosure." BAC attaching in filed a supplement to i t s summary-judgment a second a f f i d a v i t of Poage. pertinent That a f f i d a v i t motion, stated, part: "MidFirst, through i t s operating subsidiary M i d l a n d M o r t g a g e Co., b e c a m e s e r v i c e r o f t h e l o a n i n J u l y 2005, a t w h i c h t i m e the original note was t r a n s f e r r e d t o M i d F i r s t . As p a r t o f t h e servicing transfer, MidFirst received [Coleman's and her husband's] l o a n f i l e and c o n d u c t e d a r e v i e w of e v e r y 7 2100453 document c o n t a i n e d t h e r e i n . According to M i d F i r s t ' s business records, the original Coleman note was n o t a t e d as p r e s e n t i n t h e c u s t o d i a l f i l e maintained a t M i d F i r s t on S e p t e m b e r 1 7 , 2 0 0 5 . The n o t e was e n d o r s e d i n b l a n k and M i d F i r s t has had continuous p h y s i c a l p o s s e s s i o n of the note s i n c e t h a t time. A true and c o r r e c t copy of a screen print from MidFirst's document t r a c k i n g system showing the i n f o r m a t i o n r e g a r d i n g the r e c e i p t of the Coleman l o a n d o c u m e n t s i s a t t a c h e d h e r e t o as ' E x h i b i t B.' The C o l e m a n l o a n i s a s s i g n e d L o a n N u m b e r x x x x 9 8 5 1 a s s h o w n on t h e a t t a c h e d E x h i b i t B. " M i d F i r s t Bank, or i t s s e r v i c i n g agent, has been in possession of the collateral file since i t s r e c e i p t as set forth above. M i d F i r s t Bank has t h e r e f o r e been a h o l d e r of the note, e n t i t l e d t o the money owed u n d e r the note and secured by the mortgage, since taking possession of the note endorsed i n blank." Coleman moved failed filed to decision. September on strike Poage's August judgment on response to comply w i t h Rule On law a in 31, favor of Coleman 27, 2010, BAC, filed 2010. December 27, i t w i t h i n the That 2010, time to BAC's second affidavit, 56(e), the supplemented A l a . R. trial court setting a out timely motion was when t h e p r e s c r i b e d by 8 motion arguing Civ. trial Rule a reasons postjudgment denied by court 59.1, that i t P. entered the and summary for i t s motion on operation of failed to A l a . R. act Civ. 2100453 P. supreme court t r a n s f e r r e d Coleman's a p p e a l t o t h i s c o u r t p u r s u a n t t o § 12-2- 3 C o l e m a n a p p e a l e d o n F e b r u a r y 7, 7(6), A l a . Code parte Ballew, summary review of 771 judgment material fact judgment as So. a 2d 1040 i s t o be exists and Review summary judgment g r a n t e d when the moving Rule f o r a summary j u d g m e n t showing there fact and law." that Rule 1036, 1038 burden then genuine [it] is entitled 56(c)(3); ( A l a . 1992). shifts to see Lee no party A as issue A l a . R. to any as to nonmovant to rebut material 592 the a facie a matter of Gadsden, of C i v . P. So. I f t h e movant meets t h i s b u r d e n , the Ex for a m u s t make a p r i m a issue City motion is entitled t o a judgment v. novo. genuine 56(c)(3), A p a r t y moving i s no i s de ( A l a . 2000). a matter of law. "that The 1975. Standard of Appellate 2011. of 2d "the movant's R u l e 59.1 p r o v i d e s t h a t a p o s t j u d g m e n t m o t i o n t h a t i s n o t r u l e d o n b y t h e c o u r t w i t h i n 90 d a y s i s d e e m e d d e n i e d a t t h e e x p i r a t i o n o f the 90-day p e r i o d . The 90th day following C o l e m a n ' s f i l i n g o f h e r p o s t j u d g m e n t m o t i o n on S e p t e m b e r 27, 2 0 1 0 , was S u n d a y , D e c e m b e r 2 6 , 2 0 1 0 . T h e r e f o r e , Coleman's p o s t j u d g m e n t m o t i o n was d e e m e d d e n i e d on M o n d a y , D e c e m b e r 2 7 , 2010. S e e F i r s t A l a b a m a S t a t e B a n k v . McGowan, 758 S o . 2 d 1 1 1 6 ( A l a . C i v . A p p . 2 0 0 0 ) , a n d R i c h b u r g v . C r o m w e l l , 428 S o . 2 d 621 ( A l a . 1 9 8 3 ) . 3 9 2100453 prima 2d facie at showing 1038 evidence by 'substantial (footnote omitted). of such weight and evidence.'" "[S]ubstantial quality that Lee, 592 evidence Life of the f a c t Assurance 1989); Co. sought of see A l a . Code t o be p r o v e d . " Florida, 1975, § 547 is fair-minded persons i n the e x e r c i s e of i m p a r t i a l judgment can r e a s o n a b l y i n f e r existence So. So. West v. 2d 870 , the Founders 87 1 (Ala. d i d not have the right 12-21-12(d). Discussion I. A. to Coleman argues exercise MidFirst the was power not commenced t h e that of the foreclosure of ( A l a . C i v . App. a mortgage foreclosing initiates the under of the the proceedings. [Ms. 2011), assignment entity sale assignee N a t i o n a l Mortgage Ass'n, 3d MidFirst mortgage mortgage In is when P e r r y v. 2 1 0 0 2 3 5 , M a r c h 9, this because Federal 2012] So. court noted that the not determinative i t timing when the a c q u i r e s p o s s e s s i o n of the note before i t foreclosure proceedings. That i s so because " [ w ] h e r e a power t o s e l l l a n d s i s g i v e n i n any mortgage, t h e power i s p a r t o f t h e s e c u r i t y and may be executed by any person, or the personal r e p r e s e n t a t i v e o f a n y p e r s o n who, b y a s s i g n m e n t o r 10 2100453 otherwise, secured." becomes entitled Ala. Code Ala. 2 6 7 , 2 7 0 , 57 S o . 8 5 1 , 8 5 1 not 1975, § 35-10-12. to the See a l s o (1911) money Harton thus v. L i t t l e , 176 (stating that " [ i ] t i s a t a l l n e c e s s a r y t h a t a m o r t g a g e d e e d be a s s i g n e d i n order t o e n a b l e t h e owner o f t h e d e b t t o f o r e c l o s e under a power o f sale"); see Mortgages obligation unless generally § 5.4(a) Restatement (1997) (Third) (stating that s e c u r e d by a mortgage a l s o of Property: "[a] t r a n s f e r o f an t r a n s f e r s the mortgage the p a r t i e s t o the t r a n s f e r agree otherwise"). a f f i d a v i t indicated that MidFirst obtained physical Poage's possession o f t h e n o t e on S e p t e m b e r 17, 2005, a l m o s t f o u r y e a r s b e f o r e i t initiated foreclosure late 2009. July In this entity presented holder of the proceedings case, evidence note as against i n Perry, indicating before the Campbells that i t initiated in the foreclosing i t became the the foreclosure proceedings. B. C o l e m a n a r g u e s , h o w e v e r , t h a t B A C ' s e v i d e n c e a s t o t h e date MidFirst 56(e), A l a . R. acquired C i v . P. the note That failed t o comply rule states, with i n pertinent Rule part: " S u p p o r t i n g a n d o p p o s i n g a f f i d a v i t s s h a l l b e made o n personal knowledge, s h a l l s e t f o r t h such f a c t s as w o u l d be a d m i s s i b l e i n evidence, and s h a l l show 11 2100453 affirmatively that the affiant i s competent t o t e s t i f y t o the matters s t a t e d therein. Sworn o r certified copies of a l l papers or parts thereof referred t o i n an a f f i d a v i t shall be attached thereto or served therewith." Coleman contends that i t was b a s e d competent to affidavit. of t h a t Poage's second the rule Poage's on p e r s o n a l testify about knowledge the The p e r s o n a l - k n o w l e d g e were satisfied affidavit f a i l e d t o show or that matters Poage asserted and competency by the f o l l o w i n g was i n the requirements statements i n affidavit: " I n my p r e s e n t p o s i t i o n , I h a v e d i r e c t a c c e s s t o the books and r e c o r d s o f t h e M i d F i r s t Bank r e g a r d i n g the account which forms t h e b a s i s o f t h i s a c t i o n . I have p e r s o n a l knowledge o f t h e f a c t s s e t f o r t h i n t h i s A f f i d a v i t , and I have r e v i e w e d s a i d r e l e v a n t business books and r e c o r d s . "The b o o k s a n d r e c o r d s w e r e made i n t h e o r d i n a r y c o u r s e o f t h e b u s i n e s s a n d i t was t h e r e g u l a r c o u r s e o f s a i d b u s i n e s s t o make s u c h b o o k s a n d r e c o r d s . S a i d books and r e c o r d s r e l a t i v e t o [Coleman's loan] and this action w e r e made a t t h e t i m e of the t r a n s a c t i o n , occurrence or event r e f e r r e d t o t h e r e i n o r w e r e made w i t h i n a r e a s o n a b l e t i m e thereafter, a n d s a i d b o o k s a n d r e c o r d s a r e k e p t u n d e r my c a r e , s u p e r v i s i o n , and/or c o n t r o l . " See Isbell 1985) (holding that affiant and v. Alabama Power C o . , 477 S o . 2 d 2 8 1 , 2 8 5 affidavit satisfied Rule s t a t e d t h a t he was t h e p o w e r - c o m p a n y was b a s i n g h i s testimony "'on p e r s o n a l 12 (Ala. 56(e) because credit manager knowledge and a 2100453 thorough search president of of Company MidFirst, records'"). stated MidFirst were k e p t under her that she had had personal affidavit. examined "In [Poage's] evidence." 735, 739 Stephens for the certified" as entitled a see note on screen the document. she in her indicating that by a loan based number a p p e a r s upon [her] Commercial i d . at the personal the affidavit 739 Bank, 17, had document not That a p p e a r s t o be other 3d Poage acquired 2 0 0 5 , was 56(e). "sworn document, a printout that contains C o l e m a n ' s name d o e s document i n d i c a t e s r e v i e w e d on September The same l o a n BAC i n s u p p o r t of i t s summary-judgment m o t i o n , and 13 So. n.2. MidFirst Rule a 45 document upon w h i c h file. on asserted considered However, the n u m b e r e d x x x x 9 8 5 1 was records, evidence that displaying a p p e a r on that September required f o r review of and any a "Loan Document A u d i t , " computer loan also of control, matters First conclusion checklist a v. records and correctly contends that her of of and vice and the not court (Ala. 2010); possession or was trial Coleman a l s o relied of books the supervision, books absence affidavit knowledge, the as the the care, those knowledge that Poage, documents 17, a not that 2005. submitted those of by other 2100453 documents i d e n t i f y t h e l o a n as Coleman's. the document by s t a t i n g screen the print information assigned Exhibit and c o r r e c t copy o f a regarding Loan the receipt hereto Number o f t h e Coleman a s ' E x h i b i t B.' xxxx9851 as showing shown loan The C o l e m a n on the loan attached B." With "[s]worn in "[a] true authenticated from M i d F i r s t ' s document t r a c k i n g system documents i s a t t a c h e d is that Poage respect to ... c o p i e s an affidavit therewith," the requirement i n Rule 56(e) of a l l papers or parts thereof shall be o u r supreme c o u r t attached that referred to thereto or served has s t a t e d : "'... T h i s means t h a t i f w r i t t e n d o c u m e n t s a r e relied upon they actually must be exhibited; a f f i d a v i t s that purport t o d e s c r i b e a document's s u b s t a n c e o r an i n t e r p r e t a t i o n o f i t s c o n t e n t s a r e insufficient. Wright & Miller, Federal P r a c t i c e a n d P r o c e d u r e : C i v i l § 2 72 2." Oliver v. added). 340, 343 Brock, 342 So. 2d 1, 4-5 ( A l a . 1976) (emphasis S e e a l s o W e l c h v . H o u s t o n C n t y . H o s p . B d . , 502 S o . 2 d ( A l a .1987); (Ala. 1985). Osborn v. Johns, 468 So.2d As t h e f o r e g o i n g d e c i s i o n s i m p l y , 103, 108 a document i s deemed t o be " s w o r n " i f i t i s a u t h e n t i c a t e d b y t h e a f f i a n t a n d attached as International an exhibit Harvester to the affidavit. C o . , 582 F. S u p p . 14 In Haupt 5 4 5 , 547 n.4 v. (N.D. 2100453 Ill. 1984), District the the U n i t e d States D i s t r i c t Court of Illinois, federal rules r e v i e w i n g the of c i v i l f o r the analogous Northern requirement in procedure, explained: "[The] argument [ t h a t ] none o f t h e exhibits [ r e f e r r e d t o i n H a u p t ' s a f f i d a v i t ] c a n be a d m i t t e d into evidence because they are unsworn and u n c e r t i f i e d h a s no m e r i t , b e c a u s e H a u p t ' s a f f i d a v i t i t s e l f i s sworn t o . As o u r C o u r t o f A p p e a l s s t a t e d i n F i r s t N a t ' l B a n k Co. o f C l i n t o n v . I n s u r a n c e Co. o f N o r t h A m e r i c a , 606 F . 2 d 7 6 0 , 766 ( 7 t h C i r . 1979) (citations omitted): " ' I n p r o c e e d i n g s u n d e r r u l e 5 6 ( c ) [ , F e d . R. C i v . P . ] , documents and e x h i b i t s i d e n t i f i e d b y a f f i d a v i t may b e s u b m i t t e d t o s u p p o r t a m o t i o n f o r summary j u d g m e n t . ' " 582 F. Corp., Supp. 217 collection attached forth n o t be Cooper at F.3d of to such under n.4. 621, 636 See affidavit facts as F.2d report affidavit Rule California 237, 56(e), be Union 240 ... I n s . Co., Motors (holding that " a u t h e n t i c a t e d by p e r s o n a l knowledge 56, Fed. (1st Civ. 748 15 R. Cir. sworn not R. General to nor competent P.); F. Carey Supp. and could C i v . P . ) ; Ramsay 1977) 8, (holding accompanied t o be v. that by a considered" Canada, 13 a setting admissible i n evidence," not [was] Fed. not made on would S t u a r t v. ( 8 t h C i r . 2000) notes, c o n s i d e r e d under Rule 553 also n.20 handwritten an "consultant's proper 547 Inc. (D.D.C. v. 1990) 2100453 (granting a motion neither attached Rule 56(e), Corp., F. "[b]ecause attached to Federal Rule citing and 10A which was MidFirst initiated when the the Contreras not been that at 59-60 holder made of the B a 418 that of a N.J. note ... , t h e r e was no note possession ... did of had contain information provided 16 hold and of that York 445 i t v. (2010) to e s t a b l i s h because, blank in before New 435, failed [a] the Audit," showing years Bank note that affidavit, facie 13 A . 3 d a of Practice Document four Cf. 341, foreclosing entity acquired the S u p e r . 323, we Poage's foreclosure proceedings. and (1983)). prima the by them," Federal "Loan to that, requirements Kane, by Res. (stating authenticated authorities, Exhibit BAC 1988) consider & M. "was Control cannot considered as v. the Miller i t as r e q u i r e d meets court A. because certified, Ill. have § 2722, whether i t had copy memorandum (N.D. foregoing attached Raftogianis, (holding Civil the was 292 the properly determining a P."); affidavit Wright, on court 289, 56(c), Procedure: trial Civ. documents an C. Based R. Supp. ... strike t o an a f f i d a v i t n o r Fed. 680 to "[w]hile endorsement as t o when t h e n o t e was 2100453 indorsed, the note C. 16, when was b e i n g Citing 2012] contends the note B y r d v. M o r E q u i t y , 3d MidFirst conflict. the t r i a l court acquired Coleman o r where I n c . , [Ms. 2 1 0 0 7 3 4 , ( A l a . C i v . App. erred j u d g m e n t i n f a v o r o f BAC b e c a u s e , when transferred, held"). So. that was p h y s i c a l l y 2012), i n entering March Coleman a summary she s a y s , t h e e v i d e n c e as t o i t s interest maintains that in the note was B A C ' s own e v i d e n c e created a genuine i s s u e o f m a t e r i a l f a c t as t o whether M i d F i r s t entitled to exercise virtue t h e power of i t sobtaining physical b e a r e r i n s t r u m e n t , on S e p t e m b e r received "transfer an interest of MorEquity, presented it this the ejectment plaintiff, evidence motion, MorEquity because written i n favor MorEquity on In support submitted one a 2009. r e g a r d i n g the date mortgage. by MidFirst of the f r o m MERS o n A u g u s t 2 7 , assigned the Byrds' summary-judgment virtue c o u r t r e v e r s e d a summary j u d g m e n t contradictory had been of the note, 17, 2005, o r w h e t h e r by became i n t h e mortgage possession i n the note and assignment" In Byrd, of sale in which of i t s affidavit s t a t i n g t h a t t h e m o r t g a g e h a d been a s s i g n e d t o i t on A p r i l 20, 2009, and a n o t h e r a f f i d a v i t s t a t i n g t h a t t h e mortgage h a d been 17 2100453 assigned t o i t on initiated December foreclosure 30, 2009. proceedings Because MorEquity against the Byrds December 2009, t h e d a t e o f t h e mortgage a s s i g n m e n t had i n mid- was crucial i n e s t a b l i s h i n g M o r E q u i t y ' s a u t h o r i t y t o e x e r c i s e t h e power o f sale i n the mortgage. mandate Byrd a reversal i n this Byrd authority dealt with a to exercise i s distinguishable foreclosing t h e power conveyance of l e g a l t i t l e mortgage must be evidenced Statute of Frauds. So. 379, 2d presented factual been 380 two See entity writings q u e s t i o n as In whose s o u r c e of a u t h o r i t y mortgage i t s status the mortgage. bearer of to 270 the with A l a . 55, ejectment conflicting date comply dates on w h i c h of a the 56, 116 plaintiff raised MorEquity a had mortgage. The p r e s e n t c a s e , h o w e v e r , was Clark, Byrd, to the true assigned the Byrds' the assignment a writing whose source Because a mortgage i s i n Alabama, by whose o f s a l e i n a m o r t g a g e was i t s Dean v. (1959). not case. s t a t u s as t h e a s s i g n e e o f t h e m o r t g a g e . a and does concerns to exercise as t h e owner a foreclosing entity t h e power of sale of the debt in a secured The p r o m i s s o r y n o t e e v i d e n c i n g t h a t d e b t was instrument that could be 18 t r a n s f e r r e d i n two ways: by a by 2100453 delivery of possession C o d e 1 9 7 5 , § 8-5-24 o r by w r i t t e n assignment. ("The t r a n s f e r o f a ... n o t e p u r c h a s e money o f l a n d s , w h e t h e r t h e t r a n s f e r merely on or i nwriting, the transferor, vendor MERS: Have expressed passes Mortgage Authority Illinois (2010) (stating to Assign action obtains primary ways: that delivery t o be w i t h o r w i t h o u t recourse M. Hudspeth, 31 "a p l a i n t i f f N. Clarifying Note in a I l l . U.L. i n a mortgage to enforce through of the Murky R e g i s t r a t i o n Systems, I n c . , the Mortgage Action?, the right (1) be by Electronic Foreclosure given f o r the to the transferee the lien of the lands."); Kevin Does See A l a . proper t h e note Rev. 1, 14 foreclosure i n one o f two assignment through n e g o t i a t i o n under t h e U[niform] Standard ... , C[ommercial] or (2) C[ode]"). "Ownership of a contractual obligation can generally be transferred by a document of a s s i g n m e n t ; s e e R e s t a t e m e n t , S e c o n d , C o n t r a c t s § 316 [(1981)]. However, i ft h e o b l i g a t i o n i s embodied i n a negotiable instrument, a transfer of the right to e n f o r c e m u s t b e made b y d e l i v e r y o f t h e i n s t r u m e n t ; s e e [ f o r m e r ] U.C.C. § 3-202 ( 1 9 9 5 ) Restatement (Third) of Property: Mortgages § 5.4, c m t . b . a t 381. Because, MidFirst had as p r e v i o u s l y d i s c u s s e d , obtained BAC physical possession 19 established that of the note, a 2100453 bearer instrument, on September 17, 2005, the t r i a l court c o r r e c t l y determined that the purported w r i t t e n assignment of the note on differently, note August the fact present was "superfluous." Stated of the that the date o f t h e assignment differed from h a d become a 2009 i n 2009 to MidFirst MidFirst 27, a holder "contradiction" t h e date o f the note or a i n 2005 "conflict" note. that, the insofar the was i n o p e r a t i v e the entity obtained the divergence entitled governs Restatement following to p o s s e s s i o n o f t h e note i s symbolic of the debt, note because over (Third) illus. 7 four i n c l u d e d i n t h e August "Assignment o f Mortgage" when i t "[T]he possession of of i t s ownership." § 5 . 4 ( c ) , cmt. D r a f t N o , . 5, M a r c h We s u r m i s e t h a t t h e p u r p o r t e d a s s i g n m e n t was had already earlier. and t h e p h y s i c a l of Property: Mortgages (Tentative i n 2009, the note years any o t h e r i n d i c i u m indicated t h e note MidFirst enforce d i dnot to enforce i n the dates a s MERS p u r p o r t e d t o a s s i g n assignment become note Instead, which i n the evidence c o n c e r n i n g t h e t i m e a t w h i c h M i d F i r s t was e n t i t l e d the on 18, 1996). o f the note that 27, 2009, w r i t i n g d e s i g n a t e d as an was a c t u a l l y a p r e c a u t i o n a r y m e a s u r e b y MERS, i n t e n d e d t o i n s u l a t e the assignment 20 o f t h e mortgage 2100453 from the operation transfer void, o f t h e mortgage absent Pietranico, rule applied without a contrary intent See, parties. n.4 of the rule e.g., Deutsche 33 M i s c . (Sup. C t . 2010) [is] that contracting transfer Bank 3 d 5 2 8 , 537 n . 4 , a transfer Nat'l a t r a n s f e r of the mortgage a l s o t r a n s f e r s applicable ...."). t o the predomin[ant] agree provision or such t r a n s f e r of the v. 8 1 8 , 825 a York transfer Uniform that the common-law the debt New rule unless i s precluded Commercial by Code Alabama and t h e Restatement f o l l o w t h e "predomin[ant] common-law So. otherwise Co. intent of the o r i g i n a l that the Trust o f the mortgage w i t h o u t rule parties contracting 928 N . Y . S . 2 d York the a of the debt i s I t i s i n t e r e s t i n g t o note i s contrary that t h e " l o n g - s t a n d i n g New "absent a contrary parties. states of the o r i g i n a l (stating that of the debt i s v o i d " a i n some rule." 5 4 0 , 542 See F o l m a r v . B e a l l , (1920) (stating that 204 A l a . 2 9 8 , 3 0 1 , 85 " t h e s e c u r i t y b e i n g t h e mere i n c i d e n t o f t h e i n d e b t e d n e s s , an a s s i g n m e n t o f t h e d e b t p a s s e s the title the parties Property: i n the pledge agree Mortgages to the assignee otherwise"); § 5.4(a) ("A 21 of the debt, Restatement transfer o f an unless (Third) of obligation 2100453 secured by a mortgage a l s o parties to the t r a n s f e r agree otherwise."). the foregoing, conclude Based on "conflicting" evidence material we concerning enforce fact the t r a n s f e r s the that that created when mortgage u n l e s s a MidFirst there the was no issue of entitled to genuine became note. II. Citing 2011), were f o r the specifically obligation foreclose." Reporter's a in New 231, because had decision proposition that and can in that Agard, York; Harton, Mortgages mortgage B.R. be the the that hands one who only Restatement - the the an note applying holder 22 mortgage lien. New York a mortgage law, cannot law a separation. c a n be See Restatement that "[t]he (Third) a of note and mortgage becomes does not also of the obligation cmt. We Alabama (Third) of Property: Introduction, E.D.N.Y. and enforceable position but because Note The separated of (Bankr. nevertheless, supra. takes 246 a n o t e and contemplates that there 35-10-12 Property: 444 M i d F i r s t never whether separated useless Agard, contends separated, stands § re Coleman question be In a hold Mortgages § at 386. the can 5.4, The 2100453 Restatement explains: "'The the survive tail. cannot The survive Fertilizers 675, 676 492, 570 P.2d MidFirst without the without cow.'" 179 (1977)). the note entitled to Id. cow a As at on and other right mortgage the tail (quoting Ariz. Best 178, 179, g r o u n d s , 116 discussed, a l l pertinent the but 387 previously exercise the tail, at I n c . v . B u r n s , 117 (Ct. App.), r e v e r s e d held therefore, can of A r i z o n a , P.2d the cow note i s the times, to 571 Ariz. because i t foreclose was, under mortgage. III. Coleman d e f a u l t and instrument. contends t h a t was vendee of was not the i n the the the to foreclosure-sale purchaser, i n paragraph we 14, of foreclosure is a a subsequent note that that "[a]ny notice to borrower provided for in this s e c u r i t y i n s t r u m e n t s h a l l be g i v e n b y d e l i v e r i n g i t or by mailing i t by first class mail unless a p p l i c a b l e law r e q u i r e s use of a n o t h e r method. The n o t i c e s h a l l be d i r e c t e d t o t h e p r o p e r t y a d d r e s s o r any o t h e r a d d r e s s b o r r o w e r d e s i g n a t e s by n o t i c e t o 23 of mortgage e j e c t m e n t a c t i o n b r o u g h t by f o r e c l o s i n g e n t i t y but mortgage i n s t r u m e n t provided, notice t h a t the a s s e r t i o n p r o c e s s l e a d i n g up a d e f e n s e t o an not given r e q u i r e d by Assuming, without d e c i d i n g , a v a i l a b l e as party she n o t i c e o f a c c e l e r a t i o n as such a l l e g e d defects is that the 2100453 l e n d e r . ... A n y n o t i c e p r o v i d e d f o r i n t h i s s e c u r i t y i n s t r u m e n t s h a l l be deemed t o have been g i v e n t o borrower ... when given as provided in this paragraph." I n s u p p o r t o f i t s s u m m a r y - j u d g m e n t m o t i o n , BAC evidence indicating Coleman l o a n that contained operating acceleration letter 2009, b y an a t t o r n e y identified by Poage file concerning a notice-of-default letter s e n t t o C o l e m a n on A p r i l MidFirst's MidFirst's submitted the purportedly 8, 2 0 0 9 , b y M i d l a n d M o r t g a g e C o m p a n y , subsidiary, purportedly as sent well as t o Coleman r e t a i n e d by M i d F i r s t . and attached a to notice-ofon J u l y Both l e t t e r s her first 24, were affidavit. A l t h o u g h Coleman d e n i e d t h a t she had r e c e i v e d t h e l e t t e r s , did not dispute source o f Poage's Coleman, genuine were 2d that the letters knowledge therefore, issue sent. 6 3 0 , 634 neither acceleration that the letters had been sent. of a fact regarding S e e Redman v . F e d e r a l whether the notices Home M o r t g . Corp., 765 So. ( A l a . 1999). In h e r a p p e l l a t e that had been sent o r q u e s t i o n t h e to establish the existence failed of material she brief, Coleman the notice-of-default letter "explained letter the M i d l a n d Mortgage and M i d F i r s t Bank." 24 r a i s e s a new a r g u m e n t -¬ nor the notice-of- relationship between That argument, however, 2100453 was n o t p r e s e n t e d t o t h e t r i a l the first time on a p p e a l . court a n d c a n n o t be r a i s e d f o r See W h i t e PRS I I , L L C , 998 S o . 2 d 1 0 4 2 , 1 0 5 7 Sands (Ala. Group, L.L.C. v. 2008). IV. Coleman deed, which argues was that the executed Secretary's by M i d F i r s t on special July warranty 28, 2009, i s " v o i d as an i m p o s s i b i l i t y " b e c a u s e M i d F i r s t d i d n o t have until i tpurchased foreclosure doctrine sale. the property That on S e p t e m b e r argument of after-acquired overlooks 1, 2 0 0 9 , the title at the equitable title. "'"In no S t a t e perhaps has t h e r u l e been more r i g i d l y adhered t o than i n t h i s , ' t h a t when one s e l l s l a n d t o w h i c h he h a s no r i g h t , w i t h w a r r a n t y o f t i t l e , a n d he a f t e r w a r d s a c q u i r e s a good t i t l e , it passes i n s t a n t l y t o h i s vendee, a n d he i s e s t o p p e d f r o m d e n y i n g t h a t he h a d no r i g h t a t t h e time of the s a l e . ' . . . " ' " Jett v. Lawyers Title Civ. App. 2007) (quoting (Ala. 1985), quoting 380 Ala. I n s . Corp., 985 S o . 2 d 4 3 4 , 438 ( A l a . T u r n e r v . L a s s i t e r , 484 S o . 2 d 3 7 8 , i n turn Doolittle 4 1 2 , 4 1 3 , 19 S o . 8 5 1 , 8 5 1 ( 1 8 9 5 ) ) . v. R o b e r t s o n , B a s e d on t h e d o c t r i n e of a f t e r - a c q u i r e d t i t l e , MidFirst perfected purchased at the property immediately passed to the the foreclosure Secretary. 25 109 its title sale when i t and title 2100453 A. Coleman required by a specifically 12 next argues provision U.S.C. § that of a the foreclosing National 1715u(a) entity Housing ( e f f e c t i v e May 20, ("the A c t " ) , a n d b y r e g u l a t i o n s p r o m u l g a t e d b y t h e of H o u s i n g and Urban Veterans A f f a i r s to foreclosure maintains that Development is Act, 2009) Department ("HUD") a n d t h e D e p a r t m e n t of ("VA"), t o o f f e r l o s s - m i t i g a t i o n a l t e r n a t i v e s f o r mortgagors MidFirst procedures set forth regulations and that who failed in are i n default. to follow the Act i t s failure and Coleman the l o s s - m i t i g a t i o n in rendered the the pertinent foreclosure wrongful. In support decisions to her argument, Coleman cites a explore loss-mitigation i s an e q u i t a b l e actions defense cases upon w h i c h Coleman r e l i e s as an to a foreclosure do, i n fact, foreclosure actions actions mortgagors by by mortgagees, seeking or in declaratory to action. contain such judicial- pre-foreclosure or injunctive not i n the context of n o n j u d i c i a l - f o r e c l o s u r e 26 of failure alternative statements, but the statements are i n the context of relief, number from o t h e r j u r i s d i c t i o n s i n d i c a t i n g t h a t the foreclosure The of actions 2100453 p u r s u a n t t o a power o f s a l e foreclosure Mortg. Ass'n (judicial 770 ejectment i n a mortgage instrument o r p o s t - actions. v. Moore, See, e.g., Federal 6 0 9 F. Supp. a published opinion) (judicial I n c . v. N e a l , foreclosure action injunctive relief); Overboe, 404 (decision 1985) without W e l l s F a r g o Home 3 9 8 Md. 7 0 5 , 922 A . 2 d 5 3 8 ( 2 0 0 7 ) by mortgagor and Federal N.W.2d 445, that of sale given seeking Land 449 " [ I ] t i s generally power (table) foreclosure); foreclosure). a (N.D. I l l . f o r e c l o s u r e ) ; A B N AMRO M o r t g . G r o u p , I n c . v . T u l l a r , N.W.2d 8 5 1 ( I o w a C t . A p p . 2 0 0 9 ) Mortg., 194 Nat'l declaratory Bank (N.D. (pre- of S t . Paul 1987) and v. (judicial r e c o g n i z e d under Alabama l a w under a mortgage affords the m o r t g a g e e a n a d d i t i o n a l a n d more s p e e d y remedy f o r r e c o v e r y o f the d e b t . " J o h n s o n v . S h i r l e y , 5 3 9 S o . 2 d 1 6 5 , 168 ( A l a . 1 9 8 8 ) (citing (Ala. Paint 1981)). authority that Rock Props. v . Shewmake, I n t h e absence from o u r supreme c o u r t thefailure 3 9 3 S o . 2 d 9 8 2 , 984 of a statute or controlling t o the contrary, we c o n c l u d e o f a f o r e c l o s i n g e n t i t y t o comply w i t h HUD o r V A l o s s - m i t i g a t i o n r e q u i r e m e n t s may n o t b e r a i s e d a s a d e f e n s e to an e j e c t m e n t action following 27 a nonjudicial foreclosure. 2100453 B. Coleman contends that the f o r e c l o s u r e would was working that MidFirst misrepresented to with her Coleman's a f f i d a v i t n o t t a k e p l a c e as l o n g in i t s as her MidFirst loss-mitigation program. stated: " I s p o k e t o t h e m o r t g a g e company numerous t i m e s about a l o a n - m o d i f i c a t i o n or work-out p l a n through t h e i r l o s s - m i t i g a t i o n program. T h e y t o l d me they w o u l d w o r k w i t h me b u t t h e y d i d n o t f o l l o w t h r o u g h because they s o l d the loan to another mortgage company. My m o r t g a g e was t r a n s f e r r e d s e v e r a l t i m e s d u r i n g t h i s t i m e frame and I c o u l d never g e t anyone t o f o l l o w up w i t h t h e m o d i f i c a t i o n . I sent a l l the r e q u e s t e d i n f o r m a t i o n t o them; however I n e v e r h e a r d f r o m them. I was t o l d b y t h e m t h a t t h e f o r e c l o s u r e w o u l d n o t go f o r w a r d a s l o n g a s t h e y w e r e w o r k i n g with me through the loss-mitigation program. Because of these communications with the lender, I was confused about the foreclosure procedure. Further, I r e l i e d upon t h e s e communications and b e l i e v e d t h a t t h e m o r t g a g e c o m p a n y was w o r k i n g w i t h me t o h e l p me k e e p my home. T h e y d i d n o t f o l l o w up and failed t o work w i t h me through the lossm i t i g a t i o n program." (Emphasis added.) BAC moved t o s t r i k e the emphasized of Coleman's a f f i d a v i t on t h e g r o u n d s t h a t that Statute i t violated court d i d not affidavit, rule [BAC] ... statement." So. 2d 45, 57 the was on of [BAC's] entitled Kingvision ( A l a . 2003) . Frauds. motion to i t was "While strike t o an o r d e r s t r i k i n g Pay-Per-View, See 28 portion hearsay the and trial [Coleman's] [Coleman's] L t d . v. A y e r s , 886 a l s o Haygood v. Wesfam R e s t s . , 2100453 Inc., 675 S o . 2 d 1 3 1 2 , 1 3 1 4 on other 2d 1 2 2 0 , 1224 motion grounds, to to R o t h e n b e r g e r v. C a s t (Ala. C i v . App. strike was not ruled the deficiencies to that court's Prods., 1997) because however, brought ( A l a . C i v . App. 1996), upon I n c . , 716 So. (stating by of that the t r i a l the a t t e n t i o n , they overruled "[t]he court; affidavit are properly were subject our review"). Assuming that a MidFirst official had made the r e p r e s e n t a t i o n t h a t Coleman a l l e g e d , t h a t r e p r e s e n t a t i o n have been u n e n f o r c e a b l e 8-9-2(7), Ala. under the Statute of Frauds. oral would Section Code 1 9 7 5 , p r o v i d e s : "In t h e f o l l o w i n g cases, every agreement i s v o i d unless s u c h a g r e e m e n t o r some n o t e o r memorandum thereof expressing the consideration i s i n w r i t i n g and s u b s c r i b e d b y t h e p a r t y t o be c h a r g e d t h e r e w i t h or some o t h e r person by him thereunto lawfully authorized i n writing: "(7) Every agreement o r commitment t o l e n d money, d e l a y or forbear repayment t h e r e o f or to modify the provisions o f such an a g r e e m e n t o r commitment except f o r consumer loans with a p r i n c i p a l amount f i n a n c e d l e s s t h a n $25,000." (Emphasis added.) 2005) forbear (holding See DeVenney v. H i l l , that collecting agreement whereby 918 S o . 2 d 1 0 6 seller $150,000 o f p u r c h a s e p r i c e 29 of land (Ala. would f o r 30 d a y s i n 2100453 return was for additional not in held agreement the 852 So. a Holman 2d 691 claim under Frauds bars the proof claim. The court the defense we conclude that i s predicated unenforceable purpose Based agent for Coleman court's that under of on the the the from the Statute Statute of foregoing, APPLICATION and Thompson, we and t o be GRANTED; without and alleged of Frauds, agreement that to a l l o w Statute of of to the Frauds. defective-foreclosure a l l e g e d agreement t h a t Frauds conclude that, would also is defeat that its BAC, right as the eject the therefore, to trial 3, 2 012, affirmed. OPINION Thomas, J J . , P.J., a an supreme Frauds. WITHDRAWN; O P I N I O N S U B S T I T U T E D ; Bryan the established property j u d g m e n t i s due allow on that explained u p o n an Secretary, the to Childersburg Statute of purpose of Likewise, v. turns c l a i m would defeat tort tort also v o i d because i t ( A l a . 2002), our tort of when In i s unenforceable that support the the Inc., that Statute f r o m b u y e r was writing) . Bancorporation, court $50,000 OF FEBRUARY AFFIRMED. concur. Moore, writings. 30 J., concur in the result,

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