Justia Rhode Island Supreme Court Opinion Summaries

AIDG Properties, LLC, a real-estate holding company managed by Anjan Dutta-Gupta, purchased property. AIDG obtained loans from BankNewport (Defendant) to finance the purchase and to perform improvements. Dutta-Gupta personally guaranteed the loans. Emond Plumbing & Heating, Inc. and Tecta America New England, LLC (collectively, Plaintiffs) served as subcontractors on the project. Plaintiffs substantially completed the renovations, and BankNewport deposited the loan proceeds into AIDG’s account. After Dutta-Gupta was arrested, Defendant declared Dutta-Gupta to be in default and accelerated the loans. Defendant then set off the deposit it made previously by reversing it. As a result, AIDG was unable to pay Plaintiffs for the work they had performed. Defendant, who was granted possession of the property, later foreclosed. Plaintiffs filed a complaint seeking to recover compensation for their work under the theory of unjust enrichment. The superior court granted summary judgment for Defendant. The Supreme Court affirmed, holding that due to the absence of a relationship between Plaintiffs and Defendant and the lack of any allegation that Defendant engaged in any type of misconduct or fraud, Defendant’s retention of the property, including the improvements, was not inequitable under the Court’s jurisprudence on unjust enrichment. View "Emond Plumbing & Heating, Inc. v. BankNewport" on Justia Law

Plaintiffs executed a promissory note in order to purchase certain real property. To secure payment obligations under the note, Plaintiffs executed a mortgage on the property. Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the original lender, assigned its interest in the mortgage to OneWest Bank, FSB (OneWest), which was then authorized to service the note for Federal National Mortgage Association (Fannie Mae). When Plaintiffs failed to make timely payments, OneWest initiated foreclosure proceedings. Plaintiffs filed an action against MERS and OneWest seeking a declaration that the assignment from MERS to OneWest was invalid and to quiet title to the property. OneWest eventually held a sale, and the property was sold to Fannie Mae. The hearing justice granted summary judgment for Defendants, concluding (1) MERS validly assigned its interest in the mortgage to OneWest, and therefore, OneWest had the statutory power of sale; (2) Plaintiffs defaulted under the terms of the note; and (3) Fannie Mae, as the buyer at the foreclosure sale, held the record title to the property. The Supreme Court affirmed, holding that the hearing justice did not err in determining that no genuine issue of material fact existed such that granting summary judgment in favor of Defendants was appropriate. View "Breggia v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In 2003, the Supreme Court held that Seattle Savings Bank had the right to foreclose on certain property that Defendant inherited from his mother. In 2007, the Bank executed a quitclaim deed conveying the property to the Federal National Mortgage Association (Fannie Mae). Because Defendant refused to vacate the property, Fannie Mae filed a trespass and ejectment complaint. Defendant, in turn, argued that Fannie Mae was not entitled to possession of the property. The trial court awarded Fannie Mae possession of the property. The Supreme Court affirmed, holding that the superior court correctly found that Fannie Mae had the right to possess the property. View "Fed. Nat’l Mortgage Ass’n v. Malinou" on Justia Law

A mortgage deed designated Desmond Leone as the mortgagor of his home and Mortgage Electronic Registration Systems (MERS) as the mortgagee, acting as nominee for the lender, Equity One, Inc. MERS later assigned its interest in the mortgage to Assets Recovery Center Investments, LLC (ARC). When Leone failed to make timely payments to the lender, ARC, which Equity One had authorized to act on its behalf, initiated foreclosure proceedings. Leone subsequently filed a complaint seeking a declaration that the assignment from MERS to ARC was invalid and also sought to quiet title to the property. A hearing justice granted summary judgment in favor of Defendants - MERS, Equity One, and ARC. The Supreme Court affirmed, holding that the hearing justice properly found that no genuine issues of material fact existed and that the matter was ripe for summary judgment in favor of Defendants. View "Leone v. Mortgage Elec. Registration Sys." on Justia Law

Plaintiffs entered into a loan agreement with Potomac Realty Capital LLC (PRC) to rehabilitate and renovate certain property. As security for the loan, NV One granted a mortgage on the property. Plaintiffs later filed a complaint against PRC, asserting violations of the Rhode Island usury law, among other claims. The trial justice granted summary judgment to Plaintiffs with respect to the usury claim, entered an order declaring the loan usurious and void, and voided the mortgage. At issue on appeal was whether a usury savings clause in the loan document validated the otherwise usurious contract. The Supreme Court affirmed, holding that Plaintiffs were entitled to judgment as a matter of law on their usury claim because (1) the loan was a usury; and (2) the usury savings clause was unenforceable on public policy grounds.View "NV One, LLC v. Potomac Realty Capital, LLC" on Justia Law

Plaintiffs executed a mortgage identifying Domestic Bank as the lender and Mortgage Electronic Registration Systems, Inc. as a corporation “acting solely as nominee” for the lender and the lender’s assigns. Later, MERS purported to assign the mortgage to Aurora Loan Services, LLC (Aurora). Aurora “or the successful bidder” allegedly took a foreclosure deed at a subsequent foreclosure sale. Plaintiffs filed a complaint against MERS seeking a declaration that the assignment and foreclosure sale were void and that Plaintiffs owned a fee simple interest in the property. The superior court dismissed the complaint, concluding (1) Plaintiffs did not have standing to seek relief based on the assignment because they were neither an assignor nor an assignee of the assignment; and (2) even if Plaintiffs had standing, their allegations were insufficient to survive a motion to dismiss. The Supreme Court vacated the judgment of the superior court, holding (1) Plaintiffs had standing to prosecute their claim; and (2) Defendants’ Rule 12(b)(6) motion was improperly granted because Plaintiffs’ complaint stated a plausible claim upon which relief could be granted.View "Chhun v. Mortgage Elec. Registration Sys., Inc." on Justia Law

Plaintiff executed a promissory note secured by a mortgage on his property. After Plaintiff defaulted on the loan, foreclosure proceedings commenced. Plaintiff subsequently filed a Chapter 7 bankruptcy petition. Then then-holder of the mortgage sought relief from the automatic stay imposed by bankruptcy law. Relief from the stay was given in two bankruptcy cases filed by Plaintiff, the second of which was initiated after a foreclosure sale had been completed. Plaintiff then filed an action seeking a declaration that the foreclosure deed was void and that he owned the property in fee simple absolute. The superior court granted summary judgment against Plaintiff based on the doctrine of res judicata. The Supreme Court affirmed, holding that Plaintiff was precluded from raising issues regarding the foreclosure again in the superior court after the propriety of the foreclosure was examined by the bankruptcy court and the foreclosure sale was declared valid.View "Reynolds v. First NLC Fin. Servs., LLC" on Justia Law

In 2006, Ingram executed a promissory note in favor of Loancity in the amount of $212,500 to finance the purchase of property in Providence and executed a mortgage on the property. The documents identified Mortgage Electronic Registration Systems (MERS) as “a separate corporation that is acting solely as nominee for Lender and Lender’s successors and assigns.” After a series of assignments in 2009, Deutsche Bank held both the note and the mortgage to the property. Ingram failed to make the required payments. OneWest, under power of attorney for Deutsche Bank, mailed notice that a foreclosure sale on the property was scheduled for March 25, 2010. The foreclosure sale was advertised in the Providence Journal. At the scheduled sale, Deutsche Bank purchased the property for $95,066.40. Ingram sought declaratory relief and to quiet title to the property. The superior court dismissed. The Rhode Island Supreme Court affirmed, rejecting various allegations of improper procedure. View "Ingram v. Mortg. Elec. Registration Sys., Inc" on Justia Law

Plaintiff executed a promissory note to Dollar Mortgage Corporation (DMC) secured by a mortgage on Plaintiff's real property. The mortgage was held by Mortgage Electronic Registration Systems (MERS) as the mortgagee and nominee for DMC. Eventually, Deutsche Bank National Trust Company became the holder of Plaintiff's note as custodian for OneWest Bank. Later, MERS assigned Plaintiff's mortgage to the Federal National Mortgage Association (FNMA). AFter Plaintiff defaulted on his mortgage, FNMA purchased the property at a foreclosure sale. Plaintiff subsequently file this action seeking declaratory relief as to the validity of the foreclosure sale and the ownership of the property, an order quieting title to the property, and damages for negligent misrepresentation. The trial court granted summary judgment for Defendants, finding, among other things, that Plaintiff did not have standing to challenge the validity of the assignment of the mortgage because he was a stranger to the assignment. The Supreme Court vacated in part and affirmed in part the judgment of the superior court, holding (1) Plaintiff had standing to challenge the validity of the assignment of the mortgage; and (2) the superior court did not err in the remainder of its judgment. View "Mruk v. Mortgage Elec. Registration Sys., Inc." on Justia Law

The Rhode Island Joint Reinsurance Association brought an interpleader action against multiple defendants for the purpose of determining the proper disposition of insurance proceeds. Bank of America, N.A. (BANA), one of the defendants, moved for summary judgment on the interpleader claim and against defendant Genoveva Santana-Sosa’s cross-claim. The superior court granted summary judgment for BANA, concluding that BANA was entitled to the entire amount of the insurance proceeds and that Santana-Sosa was entitled to none of the disputed funds. The Supreme Court affirmed, holding that BANA was entitled to judgment as a matter of law. View "R.I. Joint Reinsurance Ass’n v. Santana-Sosa" on Justia Law