Bessie T. Sturdivant v. BAC Home Loan Servicing, LP
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REL: 12/13/2013
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ALABAMA COURT OF CIVIL APPEALS
OCTOBER TERM, 2013-2014
_________________________
2100245
_________________________
Bessie T. Sturdivant
v.
BAC Home Loan Servicing, LP
Appeal from Jefferson Circuit Court
(CV-09-904181)
After Remand from the Supreme Court
THOMPSON, Presiding Judge.
The facts of this case, as set forth in an earlier
opinion of this court, are as follows:
LP
"On December 31, 2009, BAC Home Loans Servicing,
(hereinafter 'BAC'), filed a complaint in
2100245
ejectment
against
Bessie
T.
Sturdivant.
Specifically, BAC alleged that it had sold at
foreclosure certain property pursuant to the terms
of a mortgage executed by Sturdivant, that it had
purchased the property at the foreclosure sale, and
that Sturdivant had failed to surrender possession
of the property. Sturdivant answered and denied the
material allegations of the complaint.
"BAC moved for a summary judgment, and
Sturdivant opposed that motion. After conducting a
hearing, the trial court, on October 29, 2010,
entered a summary judgment in favor of BAC.
The
trial court also ordered that a writ of possession
in favor of BAC be issued.
Sturdivant filed a
postjudgment motion, which the trial court denied.
Sturdivant timely appealed to the Alabama Supreme
Court, which transferred the appeal to this court
pursuant to § 12–2–7(6), Ala. Code 1975.
"The record indicates the following relevant
facts. In December 2007, Sturdivant obtained a loan
from Security Atlantic Mortgage Co., Inc. ('Security
Atlantic'), to purchase a home. To secure the loan,
Sturdivant executed a mortgage with Mortgage
Electronic Registration Systems, Inc. ('MERS'),
'solely as nominee' for Security Atlantic. The
record indicates that the loan was insured by the
Federal Housing Administration ('FHA'). A portion
of the security agreement for the mortgage reads:
"'This security instrument is given to
Mortgage Electronic Registration Systems,
Inc. ("MERS"), solely as nominee for
lender,
as
hereinafter
defined,
and
lender's
successors
and
assigns,
as
beneficiary.... For this purpose, borrower
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 power
2
2100245
of sale, the following described property
located in Jefferson County, Alabama ....
"'... Borrower understands and agrees
that MERS holds only legal title to the
interest granted by borrower and the
security instrument; but, if necessary to
comply with law or custom, MERS (as nominee
for lender and lender's successors and
assigns) has the right to exercise any and
all of those interests, including, but not
limited to, the right to foreclose and sell
the property; and to take any action
required of lender....'
"Sturdivant stated in an affidavit that in March
2009 several of her family members died, that she
herself became ill, and that she suffered a decrease
in her income. Sturdivant testified that in March
2009 she began contacting BAC about the possibility
of modifying her loan payments.
"The record indicates that when Sturdivant did
not make the loan payments due in April 2009 or May
2009, BAC sent a letter on June 8, 2009, in which it
identified itself as the 'servicer' of her loan. In
that letter, BAC notified Sturdivant that if her
default on the terms of the mortgage was not cured,
the loan payments would be accelerated and the
balance of the loan would be due.
"BAC presented evidence indicating that in
September 2009 it referred the matter to an attorney
to begin the foreclosure process.
The record
contains two letters, each dated September 20, 2009,
sent by BAC's attorney to Sturdivant. One of the
September 20, 2009, letters identified BAC as the
'holder of [Sturdivant's] mortgage,' informed
Sturdivant of the total amount due under the terms
of the mortgage-loan contract, and notified her of
the procedures for disputing the debt. The other
September 20, 2009, letter from BAC's attorney to
3
2100245
Sturdivant notified Sturdivant that BAC, identified
as the holder of the mortgage, had instructed the
attorney to proceed with the foreclosure of the
mortgage and that a foreclosure sale was scheduled
for October 28, 2009.
"BAC
also
submitted
into
evidence
two
communication logs generated by Neighborhood Housing
Services
of
Birmingham,
Inc.
('NHSB'),
an
organization that Sturdivant authorized to negotiate
on her behalf with 'the lender' in connection with
the mortgage loan.
The NHSB communication logs
indicate that in late April or early May 2009
Sturdivant began the process of applying for a 'work
out' of her mortgage, i.e., applying for assistance
regarding, a modification of, or a restructuring of
the mortgage loan. The communication logs indicate
that in mid September 2009 Sturdivant was informed
that BAC was seeking to foreclose on the property
and that Sturdivant was continuing her efforts to
obtain a modification of the mortgage loan.
"The foreclosure sale scheduled for October 28,
2009, was postponed until December 1, 2009, while
BAC continued to review Sturdivant's request for a
modification of her loan.
A November 13, 2009,
entry on one of the NHSB communication logs
indicates that NHSB was informed on that date that
Sturdivant's request was still under review but that
the foreclosure sale remained scheduled for December
1, 2009.
On December 1, 2009, NHSB entered a
notation that it had been informed that Sturdivant
'did not qualify for a loan mod on 11–7–2009.' An
assistant vice president for BAC, Ken Satsky, stated
in an affidavit that, 'based upon a review of the
financial information provided by Ms. Sturdivant,
she did not meet the applicable guidelines' for a
modification of the mortgage loan.
"In his affidavit, which was submitted in
support of BAC's summary-judgment motion, Satsky
said that, '[i]n my employment capacity, I am
4
2100245
personally familiar' with Sturdivant's mortgage
account.
Satsky's
affidavit
stated
that
Sturdivant's mortgage had originated with MERS, on
behalf of Security Atlantic or its successors and
assigns, and that foreclosure proceedings had been
initiated. Satsky's affidavit does not reference an
assignment of the mortgage to BAC, and it does not
indicate the identity of the entity that initiated
the foreclosure proceedings. Satsky testified that
Sturdivant defaulted on the note secured by the
mortgage and that BAC 'provided her with Notice of
Default and acceleration of the debt due under said
note by letter dated January 6, 2009.' The record
on appeal does not contain a letter dated January 6,
2009, and Satsky's affidavit does not refer to the
September 20, 2009, letters BAC submitted to the
trial court in support of its summary-judgment
motion.
"Also in support of its summary-judgment motion,
BAC submitted into evidence a statement that a
notice of foreclosure had been published on November
7, 2009, in the Alabama Messenger, a 'weekly
newspaper of general circulation.' See § 35–10–8,
Ala. Code 1975 (governing the notice required for a
foreclosure sale). In that notice, BAC stated that
it was the 'holder of [Sturdivant's] mortgage,'
which contained a power of sale, and that BAC would
sell the property on December 1, 2009, at public
auction.
BAC also represented in its published
notice of the proposed December 1, 2009, foreclosure
sale that Sturdivant had mortgaged the property to
MERS, as nominee for Security Atlantic or its
successors and assigns, and that 'said mortgage was
subsequently assigned to BAC Home Loans Servicing,
LP, by instrument recorded in [the probate court].'
"On December 1, 2009, the property was sold at
the foreclosure sale that BAC had scheduled. BAC
was the purchaser of the property at that sale.
Also on December 1, 2009, MERS assigned Sturdivant's
mortgage to BAC.
5
2100245
"In support of its motion for a summary
judgment, BAC submitted to the trial court a copy of
its auctioneer's foreclosure deed, also dated
December 1, 2009, which states, among other things,
that MERS had assigned the mortgage to BAC, that BAC
had recorded that assignment of the mortgage, and
that BAC had completed other steps necessary to
obtain a deed by virtue of its purchase of the
property at the foreclosure sale. With regard to
the assignment of the mortgage, the December 1,
2009, auctioneer's foreclosure deed specifically
states:
"WHEREAS,
BESSIE
T.
STURDIVANT,
unmarried, executed a mortgage to Mortgage
Electronic
Registration
Systems,
Inc.
[MERS], acting solely as nominee for Lender
and Lender's Successors and Assigns on the
18th day of December 2007, on that certain
real property hereinafter described, which
mortgage is recorded in Book LR200801, Page
21971, of the records in the Office of the
Judge
of
Probate,
Jefferson
County,
Alabama;
which
said
mortgage
was
subsequently assigned to BAC Home Loans
Servicing LP by instrument recorded in Book
200912 Page 14464 of said Probate Court
records ....'
"(Emphasis added.) The 'book' and 'page' numbers
identified in the above-quoted portion of the
December 1, 2009, auctioneer's foreclosure deed are
not printed in typeface, as is the remainder of the
deed.
Rather, those numbers are handwritten
insertions into the auctioneer's foreclosure deed.
The evidence submitted by BAC in support of its
summary-judgment motion indicates that the December
1, 2009, assignment of Sturdivant's mortgage from
MERS to BAC and the December 1, 2009, auctioneer's
foreclosure deed were each first recorded in the
office of the Jefferson Probate Court ('the probate
court') on December 23, 2009, and the time stamps on
6
2100245
those documents indicate that the auctioneer's
foreclosure deed was recorded one second after the
assignment.
"On December 4, 2009, BAC sent a letter to
Sturdivant notifying her of its purchase of the
property at the December 1, 2009, foreclosure sale
and demanding possession of the property pursuant to
§ 6–5–251, Ala. Code 1975."
Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec.
16, 2011]
So. 3d
,
(Ala. Civ. App. 2011) (footnotes
omitted), rev'd, Ex parte BAC Home Loans Servicing, LP, [Ms.
1110373, Sept. 13, 2013]
So. 3d
,
(Ala. 2013).
In Sturdivant, supra, this court, relying on precedent
from
our
mortgage
supreme
had
not
court,
been
held
assigned
that
to
because
BAC
at
Sturdivant's
the
time
BAC
initiated the foreclosure proceedings, BAC did not have the
right to conduct the foreclosure sale and, therefore, lacked
standing to prosecute its ejectment action. Id. Accordingly,
this court pretermitted the discussion of the other issues
raised in Sturdivant's brief on appeal.
BAC filed a petition for a writ of certiorari to our
supreme court, which consolidated the action with another
action with similar facts.
Our supreme court held that this
court erred in determining that BAC did not have standing to
7
2100245
prosecute its ejectment action, concluding that the issue
whether the foreclosing entity had valid title to or the right
to possess the property was not one that impacted the subjectmatter jurisdiction of the trial court.
Loans Servicing, LP,
So. 3d at
.
Ex parte BAC Home
Rather, our supreme
court held, those issues impacted the determination whether a
foreclosing person or entity could meet each element of its
cause
of
action
in
ejectment.
Id.
The
supreme
court
explained:
"[BAC Home Loans Servicing, LP ('BAC'),]
attended a foreclosure auction, was the successful
bidder at that auction, paid money for the auctioned
property, and received a foreclosure deed to the
property. With deed in hand, [BAC] now brings an
action under Alabama law, specifically § 6–6–280(b),
Ala. Code 1975, claiming good title to the property
at issue and the right to eject the original debtor.
We are clear to the conclusion that the trial courts
had subject-matter jurisdiction over [this] cause[],
including any issue as to the validity in fact of
[BAC's] title to the property, this being one of the
elements of proof required in an ejectment action.
"If in the end the facts do not support [BAC],
or the law does not do so, so be it-—but this does
not mean [BAC] cannot come into court and allege,
and attempt to prove, otherwise. If [BAC] fail[s]
in this endeavor, it is not that [it has]
a
'standing' problem, it is, as Judge Pittman
recognized in Sturdivant, that [it has] a 'cause of
action' problem, or more precisely in [this] case[],
a 'failure to prove one's cause of action' problem.
The trial court has subject-matter jurisdiction to
8
2100245
'hear' such 'problems'--and the cases in which they
arise. To the extent Cadle [v. Shabani, 950 So. 2d
277 (Ala. 2006),] holds otherwise, i.e., that a
plaintiff in an ejectment action lacks 'standing' if
it cannot prove one of the elements of its claim
(namely, legal title or the right to possession of
the property) and that the trial court in turn lacks
subject-matter jurisdiction over that claim-—it and
other cases so holding are hereby overruled."
Ex parte BAC Home Loans Servicing, LP,
So. 3d at
.
On remand from our supreme court, we now reach the other
issues raised by Bessie T. Sturdivant in her brief submitted
to this court pertaining to whether BAC Home Loans Servicing,
LP ("BAC"), was entitled to a summary judgment on its cause of
action for ejectment.
The standard by which this court
reviews a summary judgment is well settled:
"'"To grant [a summary-judgment] motion,
the trial court must determine that the
evidence does not create a genuine issue of
material fact and that the movant is
entitled to a judgment as a matter of law.
Rule 56(c)(3), Ala. R. Civ. P. When the
movant makes a prima facie showing that
those two conditions are satisfied, the
burden shifts to the nonmovant to present
'substantial evidence' creating a genuine
issue of material fact. Bass v. SouthTrust
Bank of Baldwin County, 538 So. 2d 794,
797–98 (Ala. 1989); § 12–21–12(d)[,] Ala.
Code 1975. Evidence is 'substantial' if it
is of 'such weight and quality that
fair-minded persons in the exercise of
impartial judgment can reasonably infer the
existence of the fact sought to be proved.'
9
2100245
West v. Founders Life Assur. Co. of
Florida, 547 So. 2d 870, 871 (Ala. 1989).
"'"In
our
review
of
a
summary
judgment, we apply the same standard as the
trial court. Ex parte Lumpkin, 702 So. 2d
462, 465 (Ala. 1997).
Our review is
subject to the caveat that we must review
the record in a light most favorable to the
nonmovant and must resolve all reasonable
doubts against the movant.
Hanners v.
Balfour Guthrie, Inc., 564 So. 2d 412 (Ala.
1990)."'
"Payton v. Monsanto Co., 801 So. 2d 829, 832–33
(Ala. 2001) (quoting Ex parte Alfa Mut. Gen. Ins.
Co., 742 So. 2d 182, 184 (Ala. 1999))."
Maciasz v. Fireman's Fund Ins. Co., 988 So. 2d 991, 994–95
(Ala. 2008).
Sturdivant argues that the trial court erred in entering
a summary judgment in favor of BAC because, she contends, BAC
did not present prima facie evidence in support of each
element of its claim for ejectment.
This court explained
BAC's claim seeking to eject Sturdivant from the property as
follows:
"BAC's claim for ejectment is one arising under
§ 6–6–280(b), Ala. Code 1975. See EB Invs., L.L.C.
v. Atlantis Dev., Inc., 930 So. 2d 502 (Ala. 2005)
(the claim was one in ejectment under § 6–6–280(b),
Ala. Code 1975, when the complainant alleged that it
was entitled to possession of land because of its
purchase of the land at a foreclosure sale and that
the defendant was unlawfully detaining same); Muller
10
2100245
v. Seeds, 919 So. 2d 1174 (Ala. 2005), overruled on
other grounds, Steele v. Federal Nat'l Mortg. Ass'n,
69 So. 3d 89 (Ala. 2010) (same); and Earnest v.
First Fed. Sav. & Loan Ass'n of Alabama, 494 So. 2d
80 (Ala. Civ. App. 1986) (same).
"Section 6–6–280(b) provides as follows:
"'(b) An action for the recovery of
land or the possession thereof in the
nature of an action in ejectment may be
maintained without a statement of any lease
or demise to the plaintiff or ouster by a
casual
or
nominal
ejector,
and
the
complaint is sufficient if it alleges that
the plaintiff was possessed of the premises
or has the legal title thereto, properly
designating or describing them, and that
the
defendant
entered
thereupon
and
unlawfully withholds and detains the same.
This action must be commenced in the name
of the real owner of the land or in the
name of the person entitled to the
possession thereof, though the plaintiff
may have obtained his title thereto by a
conveyance made by a grantor who was not in
possession of the land at the time of the
execution of the conveyance thereof. The
plaintiff may recover in this action mesne
profits and damages for waste or any other
injury to the lands, as the plaintiff's
interests in the lands entitled him to
recover, to be computed up to the time of
the verdict.'"
Sturdivant,
So. 3d at
(Some emphasis in original; some
emphasis added).
"In
order
to
maintain
an
action
for
ejectment,
a
plaintiff must allege either possession or legal title ...."
11
2100245
Cadle Co. v. Shabani, 950 So. 2d 277, 279 (Ala. 2006).
In Ex
parte BAC Home Loans Servicing, LP, supra, our supreme court
clarified that either possession or legal title is an element
of proof to be demonstrated in support of a cause of action
for ejectment.
See also § 6-6-280(b), Ala. Code 1975 (A
complaint in ejectment "is sufficient if it alleges that the
plaintiff was possessed of the premises or has the legal title
thereto."); Ex parte McKinney, 87 So. 3d 502, 507 n. 6 (Ala.
2011)
("'Ejectment
may
be
maintained
on
proof
of
title
carrying, as an element of ownership, a right to possession
and enjoyment. ...' Lane v. Henderson, 232 Ala. 122, 124, 167
So. 270, 271 (1936).").
In this case, BAC alleged in its ejectment complaint that
it had legal title to the property.
In response, Sturdivant
argued that BAC's deed, pursuant to which BAC claimed title to
the property, was void because BAC could not have validly
foreclosed
on
the
mortgage.
A
deed
resulting
from
a
foreclosure sale may be deemed void when, among other things,
"the foreclosing entity does not have the legal right to
exercise the power of sale, as for example, when that entity
is neither the assignee of the mortgage ... nor the holder of
12
2100245
the
promissory
note
...
foreclosure proceedings."
at
the
it
commences
the
Campbell v. Bank of America, N.A.,
[Ms. 2100246, June 22, 2012]
App. 2012).
time
So. 3d
,
(Ala. Civ.
"In an ejectment action, the burden is on the
plaintiff, not the defendant, to prove superior title to the
property in question." Maiden v. Federal Nat'l. Mortg. Ass'n,
86 So. 3d 368, 376 n.1 (Ala. Civ. App. 2011).
Section 35-10-12, Ala. Code 1975, provides in part that
"[w]here a power to sell lands is given in any mortgage, the
power is part of the security and may be executed by any
person, or the personal representative of any person who, by
assignment or otherwise, becomes entitled to the money thus
secured."
(Emphasis added.)
Sturdivant argues that the
foreclosure sale was invalid because, she contends, BAC was
not an assignee of the mortgage and, therefore, did not have
the
legal
right
to
initiate
foreclosure
proceedings
in
September 2009.
However, on the same date that it released its opinion in
Ex parte BAC Home Loans Servicing, LP, supra, our supreme
court also released Ex parte GMAC Mortgage, LLC, [Ms. 1110547,
Sept. 13, 2013]
So. 3d
(Ala. 2013).
13
In Ex parte GMAC,
2100245
supra, GMAC accelerated the terms of a mortgage, gave notice
of
foreclosure,
and
scheduled
a
foreclosure
sale.
The
mortgage was assigned to GMAC one day before the foreclosure
sale. The mortgagors, who were defendants in GMAC's ejectment
action, challenged the validity of the foreclosure sale on the
basis that GMAC had not been assigned the mortgage at the time
it had initiated the foreclosure proceedings.
Our supreme
court held that "the validity of a foreclosure turns not on
whether the foreclosing party held the mortgage and the power
of sale at the time of the initiation of the foreclosure
process, but on whether it held the mortgage and the power of
sale 'at the time the power of sale is executed.'"
at
.
So. 3d
Thus, the court concluded, "[a]t the time GMAC
Mortgage signed and delivered the foreclosure deed, it was in
fact the holder of the mortgage. It had at that point the full
power to exercise the power of sale so as to 'foreclose' the
mortgagor's rights in the land and convey those rights to
itself or to another."
Ex parte GMAC,
So. 3d at
.
Accordingly, we consider Sturdivant's argument that BAC
lacked the authority to foreclose because of the timing of its
assignment in light of the recent holding of Ex parte GMAC,
14
2100245
supra, and we must determine whether BAC presented a prima
facie case that, at the time it foreclosed on Sturdivant's
mortgage, BAC had received an assignment of the mortgage. The
record
indicates
that
Mortgage
Electronic
Registration
Systems, Inc. ("MERS"), assigned the mortgage to BAC on
December 1, 2009. Also on December 1, 2009, BAC conducted the
foreclosure
sale
and
Sturdivant's property.
obtained
a
foreclosure
deed
to
The record contains no indication as
to what time the December 1, 2009, assignment occurred or when
BAC conducted the foreclosure sale on December 1, 2009.1
Although BAC might have had the assignment at the time it
foreclosed, it failed to present evidence in support of that
fact in its summary-judgment motion.
Thus, BAC failed to
present a prima facie case in support of its summary-judgment
motion that it had received the December 1, 2009, assignment
of Sturdivant's mortgage before it foreclosed on the property
on December 1, 2009.
Accordingly, we conclude that BAC was
not entitled to a summary judgment on the basis of having
1
According to the statement in the foreclosure deed, the
sale was conducted "during the legal hours of sale" on
December 1, 2009.
15
2100245
demonstrated that it had been assigned Sturdivant's mortgage
at the time it foreclosed.
However, under § 35-10-2, Ala. Code 1975, BAC might
"otherwise" become entitled to foreclose. This court has held
that
under
§
35-10-12
any
person
or entity
who,
before
initiating foreclosure proceedings, becomes a holder of a
promissory note secured by a mortgage and thereby is entitled
to the payment of the mortgage debt may validly foreclose upon
a borrower's default.
Perry v. Federal Nat'l Mortg. Ass'n,
100 So. 3d 1090, 1094 (Ala. Civ. App. 2012).
The parties have
not addressed in their briefs submitted to this court whether
BAC
was
a
Sturdivant's
holder
of
mortgage
foreclosure proceedings.
the
at
promissory
the
time
note
BAC
secured
initiated
by
the
However, an appellate court may
affirm a judgment that is correct for any reason.
Ex parte
Shelby Cnty. Health Care Auth., 850 So. 2d 332, 339 (Ala.
2002) ("[T]his Court will affirm a properly entered summary
judgment, even if the trial court's reasons for entering the
judgment were incorrect.").
For that reason, this court
addresses the issue whether the evidence would support a
conclusion that BAC presented a prima facie case that it was
16
2100245
entitled to a summary judgment on the basis that it was a
holder of the note at the time it foreclosed on the property.
In Alabama, a note secured by a mortgage is a negotiable
instrument. Thomas v. Wells Fargo Bank, N.A., 116 So. 3d 226,
233 (Ala. Civ. App. 2012).
A holder of a note secured by a
mortgage is entitled to enforce the terms of the note.
Perry
v. Federal Nat'l Mortg. Ass'n, 100 So. 3d at 1094.2
This
court has explained:
"In Harton v. Little, 176 Ala. 267, 270, 57 So. 851,
851 (1911), our supreme court held that '[i]t is not
at all necessary that a mortgage deed be assigned in
order to enable the owner of the debt to foreclose
under a power of sale.'
"'The power of sale is a part of the
security, and may be exercised by an
assignee, or any person who is entitled to
the mortgage debt. And a transfer of the
debt, by writing or by parol, is in equity
an assignment of the mortgage.'
"176 Ala. at 270, 57 So. At 851-52 (citations
omitted). See also Ala. Code 1975, § 8-5-24 ('the
transfer of a ... note given for the purchase money
of lands, whether the transfer be by delivery merely
or in writing, expressed to be with or without
recourse on the transferor, passes to the transferee
2
We also note that Sturdivant contends that the mortgage
and the note were separated. This court has held that such a
separation does not render the note unenforceable. Nelson v.
Federal Nat'l Mortg. Ass'n, 97 So. 3d 770, 775 (Ala. Civ. App.
2012).
17
2100245
the lien of the vendor of the liens.') See generally
Restatement (Third) of Property: Mortgages § 5.4(a)
(1997) (stating that '[a] transfer of an obligation
secured by a mortgage also transfers the mortgage
unless
the
parties
to
the
transfer
agree
otherwise')."
Perry v. Federal Nat'l Mortg. Ass'n, 100 So. 3d at 1095.
In Coleman v. BAC Servicing, 104 So. 3d 195, 203 (Ala.
Civ. App. 2012), this court reiterated that "[t]he promissory
note evidencing that debt was a bearer instrument that could
be transferred in two ways: by delivery of possession or by
written assignment." (Citing § 8-5-24, Ala. Code 1975.)
In
that case, although it had not received an assignment of the
mortgage at issue, the foreclosing entity had possession of
the note secured by the mortgage; therefore, this court held
that the foreclosing entity was entitled to enforce the note
and foreclose on the mortgage.
In so holding, this court
explained that "'[t]he note is symbolic of the debt, and the
physical
possession
of
the
note
indicium of its ownership.'"
governs
over
any
other
Coleman, 104 So. 3d at 204
(quoting Restatement (Third) of Property: Mortgages § 5.4(c),
cmt. following illus. 7 (Tentative Draft No. 5, March 18,
1996)).
18
2100245
In Nelson v. Federal National Mortgage Association, 97
So. 3d 770 (Ala. Civ. App. 2012), the record indicated that
Flagstar Bank, FSB, was the entity that had the rights to
service a mortgage loan on behalf of the mortgagee or note
holder.
MERS, as nominee for Flagstar, foreclosed on the
property and obtained a foreclosure deed, which it then
transferred
to
("Fannie Mae").
the
Federal
National
Mortgage
Association
Fannie Mae, relying on the foreclosure deed
it received from Flagstar, sought to eject the mortgagors, the
Nelsons.
In opposing Fannie Mae's ejectment action, the
Nelsons argued that the foreclosure deed was invalid.
It was
undisputed that the mortgage at issue had not been assigned to
MERS or Flagstar at the time that MERS, on behalf of Flagstar,
initiated the foreclosure proceedings, and, therefore, based
on decisions pre-dating Ex parte GMAC, supra, the foreclosure
sale
could
assignment.
not
be
said
to
be
valid
based
on
a
timely
Nelson, supra.
However, in that case, this court concluded that, in its
summary-judgment motion in support of its ejectment claim,
Fannie Mae had failed to present any evidence indicating that
Flagstar was the holder of the note at the time that MERS, on
19
2100245
behalf of Flagstar, initiated the foreclosure proceedings.
Nelson, 97 So. 2d at 779 (explaining that, under § 35-10-2,
"the owner of the debt may foreclose on property that is the
subject of a mortgage securing that debt if the owner is the
holder of the promissory note at the time the owner initiates
foreclosure proceedings").
This court concluded:
"The complete absence of any evidence indicating
that Flagstar was the owner of the debt, i.e., the
holder of the note, before June 5, 2009, when MERS,
as nominee for Flagstar, invoked the power of sale
in the mortgage means that MERS did not convey legal
title to itself by virtue of the foreclosure deed
because MERS had no authority to initiate the
foreclosure proceedings. Consequently, the special
warranty deed that Fannie Mae received from MERS two
days after the foreclosure sale, which depended on
its efficacy upon the validity of the MERS
foreclosure deed, see 11 Thompson on Real Property
§ 94.07(b)(2)(I) at 390 (David A. Thomas 2d ed.
2002), was also void."
Nelson, 97 So. 3d at 780 (emphasis added).
In Nelson, supra, this court, relying on Sturdivant,
supra, held that, as a result of the void ejectment deed,
Fannie Mae lacked standing to initiate its foreclosure action
against
the
Sturdivant
Nelsons.
and
held
Our
that
supreme
a
court
foreclosing
has
entity
reversed
with
a
purportedly valid deed does have standing to initiate an
ejectment action, but that having a valid deed at the time it
20
2100245
initiates the ejectment action is an essential element of that
cause of action.
So. 3d at
Ex parte BAC Home Loans Servicing, LP,
("[T]he validity in fact of the plaintiffs'
title to the property [is] one of the elements of proof
required in an ejectment action.").
In addition, our supreme
court in Ex parte GMAC held that there is no requirement that
the foreclosing entity have title (or be a holder of the note)
until the time of foreclosure, thus negating that part of
Nelson in which this court held that the foreclosing entity
was required to have legal title or be in possession of the
note at the time the foreclosure "process" was initiated.
Accordingly,
given
Sturdivant's
argument
concerning
whether BAC met its prima facie burden and given the foregoing
precedent, we must determine whether BAC presented a prima
facie case indicating that it was a holder of the note at the
time it foreclosed. The record indicates that BAC sent a June
8, 2009, letter to Sturdivant in which BAC stated that it
"services the home loan described above on behalf of the
holder of the promissory note (the 'Noteholder')."3
3
BAC did
Even assuming that the statement of its attorney could
be said to be evidence indicating that BAC was the servicer of
the mortgage debt, a transfer of the rights to service a loan
21
2100245
not identify the person or entity who was the "Noteholder"
referenced in that letter.
In a September 20, 2009, letter
from counsel for BAC, the attorney who authored the letter
referred to BAC as the "holder of the above mortgage."
In
another September 20, 2009, letter to Sturdivant, as well as
an October 28, 2009, letter, BAC's attorney referred to
Sturdivant's
mortgage
as
being
"held
by
BAC."4
Those
statements in correspondence by an attorney, however, are
unsworn
representations
and
do
not
constitute
evidence
regarding whether BAC was a holder of the note secured by
Sturdivant's mortgage at the time of the foreclosure.
The record contains no evidence indicating if or when
BAC became the holder of the note secured by the mortgage.
In
support of its summary-judgment motion, BAC submitted only
documentary evidence, the affidavit of its attorney detailing
the
measures
proceedings,
he
and
took
in
Satsky's
initiating
affidavit.
the
None
foreclosure
of
those
to an entity such as BAC might, but does not necessarily,
transfer to the servicer the note secured by the mortgage.
Nelson, 97 So. 3d at 777.
4
None of the letters referenced in this paragraph was
authored by BAC's appellate counsel.
22
2100245
submissions sets forth evidence indicating whether BAC was
merely the debt servicer for a holder of the note or whether
BAC was the holder of the note by virtue of having the note in
its possession.
Thus, BAC presented no evidence indicating that it was
either the assignee of the mortgage or the holder of the note
entitled to payment of the mortgage indebtedness at the time
it foreclosed on Sturdivant's mortgage. We must conclude that
BAC failed to present a prima facie case in support of its
summary-judgment motion that it had the authority to foreclose
and, thus, had valid title to or the right to possess the
property. Given BAC's failure to present prima facie evidence
of one of the elements of its claim in ejectment, we must
reverse the summary judgment and remand the cause for further
proceedings.
See, e.g., Ross v. Wells Fargo Bank, N.A., 122
So. 3d 219, 223 (Ala. Civ. App. 2013) (The foreclosing entity
conceded that, because of errors in the assignment of a
mortgage, there existed a genuine issue of material fact
regarding whether it had the authority to foreclose, and,
therefore,
ejectment.).
whether
Our
it
could
resolution
23
maintain
its
of
issues
these
action
makes
in
it
2100245
unnecessary to address Sturdivant's other arguments pertaining
to the summary judgment.
REVERSED AND REMANDED.
Pittman, Thomas, Moore, and Donaldson, JJ., concur.
24
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