Justia Rhode Island Supreme Court Opinion Summaries

The Supreme Court affirmed the order of the superior court granting the motions to dismiss filed by Defendants, Bank of America, N.A. (BOA) and EverBank Mortgage (EverBank), on Plaintiff’s complaint seeking monetary damages for breach of contract and breach of the implied covenant of good faith and fair dealing, as well as a preliminary injunction to stop a foreclosure.Plaintiff executed a mortgage on his property in favor of Mortgage Electronic Registration Systems, Inc. (MERS). The mortgage was later assigned to BOA. After the BOA informed Plaintiff that his mortgage was in foreclosure he filed a complaint alleging, inter alia, that the assignment of the mortgage was void and that Defendants had no standing to foreclose on his property. A federal court granted Defendants’ motion to dismiss. Thereafter, Plaintiff brought this complaint. Defendants filed motions to dismiss. The superior court found that res judicata warranted the granting of Defendants’ motions to dismiss. The Supreme Court affirmed, holding that res judicata applied. View "Goodrow v. Bank of America, N.A." on Justia Law

The Supreme Court affirmed the judgment of the superior court in favor of Santander Bank, N.A. in this complaint challenging Santander’s foreclosure of Plaintiff’s property.In her complaint, Plaintiff alleged that Santander had failed to comply with the statutory notice requirements before it conducted the foreclosure sale. A justice of the superior court granted Santander’s motion for summary judgment. The Supreme Court affirmed, holding that summary judgment was appropriate because there was no genuine issue of material fact with respect to whether Santander complied with the notice requirements of R.I. Gen. Laws 34-27-4(a) and 34-27-4)b. View "Adams v. Santander Bank, N.A." on Justia Law

After Wells Fargo foreclosed upon Plaintiff’s home, Plaintiff filed an amended complaint against Wells Fargo, asserting six causes of action. The superior court granted Wells Fargo’s motion for judgment as a matter of law on all six counts. The Supreme Court affirmed, holding (1) Plaintiff’s claim that Wells Fargo breached federal guidelines regarding loan modification review and improperly foreclosed on her home while her loan modification request was pending was not properly preserved for appeal; (2) Wells Fargo did not breach the covenant of good faith and fair dealing; and (3) the superior court justice did not err in finding that Plaintiff failed to meet the burden of proof on her claim that her reliance on the federal regulations should not have estopped Wells Fargo from foreclosing on the property. View "Miller v. Wells Fargo Bank, N.A." on Justia Law

Plaintiff purchased certain property at a tax sale and then filed a petition to foreclose tax lien seeking to foreclose Bank’s right of redemption with respect to the property. Bank did not timely file an answer after its receipt of the petition. Plaintiff subsequently filed a motion for entry of default and final decree and a motion for decree pro confesso. Thereafter, Bank filed a motion to file a late answer and its response to the petition, which contained an offer to redeem. The trial justice granted Bank’s motion to file a late answer and Bank’s request for redemption. The court then entered judgment allowing Bank and redeem the property and setting forth the amount of redemption. The Supreme Court vacated the judgment of the superior court, holding (1) Bank’s motion to file a late answer should have been denied because there was no good cause shown for Bank’s failure to comply with the deadline set out in the petition; and (2) accordingly, Bank was in default and should not have been permitted to redeem the property. View "Conley v. Fontaine" on Justia Law

The dispute in this receivership action centered on the receiver’s sale of commercial property owned by P.T.A. Realty, LLC to NMLM Realty, LLC. NMLM’s agent, Liberty Title & Escrow Company, failed to list all the municipal taxes owed on the property, resulting in an overpayment of funds to Bank of America, N.A. NMLM filed a petition for restitution against the Bank, which Liberty incorporated in its own petition for restitution against the Bank. The Bank argued that it was insulated from a restitution claim as a third-party creditor that received the payment in good faith and without notice of Liberty’s error. A hearing justice ruled in favor of the Bank. NMLM and Liberty filed a joint notice of appeal. The Supreme Court affirmed, holding (1) there was no evidence that, at the time the proceeds from the sale were disbursed, the Bank knew that it was receiving an overpayment of funds; and (2) therefore, the Bank received the excess funds in good faith, and NMLM and Liberty could not seek the return of their erroneous payment predicated on the theory of unjust enrichment. View "Bank of America, N.A. v. P.T.A. Realty, LLC, et al." on Justia Law

In 2011, Plaintiff purchased a condominium unit at a condominium association lien foreclosure sale. In 2013, Plaintiff filed suit seeking to quiet title to the unit in his name. Plaintiff also sought declaratory and injunctive relief to prevent a foreclosure by Defendant, the prior owner’s first mortgage holder. The superior court dismissed Plaintiff’s complaint for failure to state a claim, concluding that Plaintiff took title to the property subject to Defendant’s mortgage. The Supreme Court reversed, holding that a condominium foreclosure sale conducted pursuant to the Rhode Island Condominium Act extinguishes a prior-recorded first mortgage on the unit following the mortgagee’s failure to exercise the right of redemption provided for in R.I. Gen. Laws 34-36.1-3.21(c). Remanded. View "Twenty Eleven, LLC v. Botelho" on Justia Law

Plaintiff obtained a mortgage loan from Equity One, Inc. As security for the note, Plaintiff executed a mortgage on the property in favor of Mortgage Electronic Registration Systems (MERS). The note was twice transferred, eventually landing in the possession of Deutsche Bank, National Trust Company. Litton Loan Servicing, L.P. was retained to service the loan. Meanwhile, MERS, as nominee for Equity One, assigned its interest in the mortgage to Deutsche Bank. After Litton and Deutsche Bank initiated foreclosure proceedings, Plaintiff filed an action alleging that the assignment from MERS to Deutsche Bank was invalid for lack of authority. When Plaintiff sought to depose a MERS designee, MERS filed a motion for a protective order, arguing that Plaintiff lacked standing to challenge the assignment. The superior court denied the motion. MERS filed a petition for a writ of certiorari. Litton and Deutsche Bank then moved for summary judgment, which the hearing justice granted. The Supreme Court (1) quashed the order denying MERS’ motion for a protective order, holding that Plaintiff lacked standing to challenge the assignment in question; and (2) affirmed the grant of summary judgment for Litton and Deutsche Bank, holding that MERS had the authority to assign the mortgage. View "Genao v. Litton Loan Servicing, L.P." on Justia Law

Imperial Capital Bank granted a loan to Main and West, LLC in the sum of $607,500. Main and West signed a promissory note as security for the loan, and two individuals personally guaranteed the loan. City National Bank (Plaintiff) acquired the loan after Imperial dissolved. When Main and West defaulted on the note, Plaintiff filed suit seeking full payment of the obligations of Defendants - Main and West and the guarantors. The trial justice granted summary judgment for Plaintiff. Defendants appealed, arguing that the trial justice erred in granting summary judgment because he considered an exhibit that was viewed in camera without having afforded defense counsel an opportunity to review it. The Supreme Court vacated the summary judgment and remanded, holding that the trial justice inappropriately reviewed and relied on a document not shown to defense counsel in granting summary judgment. View "City Nat’l Bank v. Main & West, LLC" on Justia Law

Plaintiff executed a promissory note that was secured by a mortgage on her real estate. The mortgage deed named Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee. The note was transferred to USA Residential Properties, LLC, and Rushmore Loan Management Services, LLC became the servicer for the loan. MERS then assigned its interest in the mortgage to ACT Properties, LLC, which assigned its interest in the mortgage to USA Residential. When Rushmore initiated foreclosure proceedings, Plaintiff filed a complaint alleging that the assignment from MERS to ACT Properties was invalid because the signer was unauthorized. When Plaintiff filed a notice to depose a MERS designee as to the authority of the official who executed the assignment from MERS to ACT Properties, MERS moved for a protective order seeking to restrict discovery, arguing that Plaintiff had no standing to challenge the validity of the assignment. The hearing justice denied the motion. The Supreme Court quashed the hearing justice’s decision, holding that because Plaintiff merely alleged that the assignment was voidable, as opposed to void, and because she was not a party to the assignment, she lacked standing to challenge it and was not entitled to engage in discovery pertaining to the authority issue. View "Cruz v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In order to finance her purchase of a home, Plaintiff executed a note payable to New Century Mortgage Corporation. The note was secured by a mortgage on the property naming Mortgage Electronic Registration Systems, Inc. (MERS) as mortgagee. New Century, the lender, subsequently filed for bankruptcy and filed a notice of rejection of executory contract regarding its membership agreement with MERS and its status as a MERS member. MERS then assigned the mortgage to UBS Real Estate Securities, and UBS assigned the mortgage to USA Residential Properties. Thereafter, USA Residential and its loan servicer, Rushmore Loan Management Services, LLC, commenced foreclosure proceedings against Plaintiff. Plaintiff filed this complaint against MERS, UBS, USA Residential, and Rushmore, declaring that the mortgage assignments were void and the foreclosure sale was invalid. The superior court dismissed the action for failure to state a claim, concluding that Plaintiff lacked standing to challenge the assignments of the mortgage and, alternatively, that the assignments were valid and the foreclosure proper. The Supreme Court vacated the judgment of the superior court, holding that Plaintiff had standing to challenge the assignment of the mortgage on her home and adequately stated a claim upon which relief may be granted. View "DiLibero v. Mortgage Elec. Registration Sys., Inc." on Justia Law