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Federal National Mortgage Association v. Malinou

Supreme Court of Rhode Island

October 20, 2014

Federal National Mortgage Association
v.
Etta E. Malinou et al

Page 861

Superior Court. Providence County. (PD 09-3907). Associate Justice Patricia A. Hurst.

For Plaintiff: Michael J. Polak, Esq.

For Defendant: Martin S. Malinou, Pro se.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Page 862

Flaherty, Justice.

The defendant, Martin Malinou, appeals from a Superior Court judgment after a trial before a justice of the Superior Court, sitting without the benefit of a jury, that awarded the plaintiff, Federal National Mortgage Association (Fannie Mae), possession of premises located at 334 Smith Street, Providence (the property). It is noteworthy that the defendant was previously before this Court on a closely related case, Malinou v. Seattle Savings Bank, 970 A.2d 6, 12 (R.I. 2009), wherein this Court affirmed a Superior Court judgment that Seattle Savings Bank had the right to foreclose on the property. In this appeal, the defendant challenges Fannie Mae's right to possession of the property. On September 24, 2014, this case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues in this appeal should not be summarily decided. After hearing the arguments of the parties and examining the memoranda that they submitted, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time without further briefing or argument. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

I

Facts and Travel

The defendant's mother, Etta E. Malinou (decedent), was the sole owner of the

Page 863

property from 1945 until her death in 2003, at which point defendant acquired title. Malinou, 970 A.2d at 8. On November 15, 1991, the decedent executed and delivered a home equity conversion adjustable rate note and an adjustable rate allonge (collectively the note) to Rhode Island Housing and Mortgage Finance Corporation (RIHMFC). The note was secured by a mortgage on the property. Collectively, those documents created a " reverse mortgage" that required that " all outstanding principal and accrued interest [be paid] to Lender upon receipt of a notice by Lender requiring immediate payment in full * * *." See Malinou, 970 A.2d at 8. The note specified that, upon decedent's death, lender had the right to demand immediate payment of the note in full.

On October 31, 2002, before Mrs. Malinou died, RIHMFC assigned the note and mortgage to Seattle Savings Bank. The assignment was not recorded in the Office of the Recorder of Deeds in Providence until June 3, 2003.

In January 2003, the decedent died testate as the sole owner of the property. It is undisputed that no principal or interest payments had been paid during decedent's lifetime. Pursuant to the terms of decedent's will, defendant inherited the property. It is noteworthy that defendant has resided at the property since 1946 and has maintained his law practice on the first floor since 1960.

On June 30, 2003, Seattle Savings Bank notified defendant that it held the mortgage and it demanded payment of the note in full. Malinou, 970 A.2d at 8. There is no dispute that no payments have been made since Seattle Savings Bank demanded payment in full. Id.

In August 2003, Seattle Savings Bank notified defendant that a foreclosure sale was scheduled for October 15, 2003. Malinou, 970 A.2d at 8. However, less than a week before the foreclosure date, defendant filed the first of several Chapter 13 bankruptcy proceedings. Id. In addition, defendant filed suit in Superior Court, challenging Seattle Savings Bank's authority to foreclose. Id. at 8-9. We characterized defendant's lawsuit as a tactic that allowed him " to delay, for many years, a foreclosure action instituted by * * * Seattle Savings Bank * * *." Id. at 8 . Based upon the clear record title, we held that Seattle Savings Bank had the right to foreclose. Id. at 12.

Once again, in the spring of 2007, Seattle Savings Bank noticed and advertised the foreclosure of the property. This time, on June 13, 2007, the foreclosure took place and Seattle Savings Bank was the highest bidder. Thereafter, Seattle Savings Bank recorded a foreclosure deed in the Office of the Recorder of Deeds in Providence. On July 30, 2007, Seattle Savings Bank executed a quitclaim deed conveying the property to Fannie Mae. Fannie Mae recorded the quitclaim deed on August 3, 2007.

On or about August 3, 2007, Fannie Mae sent a notice of termination of tenancy by sufferance to defendant pursuant to G.L. 1956 § 34-18.1-2.[1] The notice instructed defendant to vacate the property by August 14, 2007. The defendant failed to comply. As a result, on September 7, 2007, Fannie Mae filed a trespass and ejectment complaint in Sixth Division District Court. In the District Court, the parties entered into a ...


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