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Merola v. Mortgage Electronic Registration Systems

Superior Court of Rhode Island

April 7, 2015

FRANK MEROLA AND TARA MEROLA, Plaintiffs,
v.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, ET AL., Defendants.

Providence County Superior Court

For Plaintiff: George E. Babcock, Esq.

For Defendant: Jeanne M. Scott, Esq.

DECISION

RUBINE, J.

Facts and Travel

Plaintiffs Frank Merola and Tara Merola executed a note in favor of Equity One, Inc. for $368, 650.00 on May 22, 2007. To secure the Note, Plaintiffs contemporaneously executed a Mortgage on certain real property located at 125-127 Tell Street in Providence, Rhode Island. The Mortgage names MERS as mortgagee and nominee for Equity One, and provides MERS and its "successors and assigns" with the statutory power of sale. The Mortgage was executed and recorded on May 22, 2007 in Providence at Book 8684 on Page 149. On July 8, 2009, MERS assigned the Mortgage by Assignment of Mortgage to Bayview Loan Servicing, LLC (Bayview). The Assignment of Mortgage was recorded in Providence at Book 9547 on Page 122, on October 14, 2009.

Defendants have alleged that Plaintiffs have been in default since December 2010. On July 8, 2011, Bayview conducted a foreclosure sale. At the sale, Bayview was the highest bidder at $ 135, 000.00. The Defendants allege that an outstanding balance of $385, 187.89 remains on the Note.

Plaintiffs filed their Complaint on July 18, 2011 seeking declaratory judgment and injunctive relief to void the foreclosure sale and quiet title. Defendants subsequently filed a 12(b)(6) Motion to Dismiss. On February 12, 2013, this Court issued a decision denying Defendants Motion to Dismiss because Plaintiffs set forth claims that, if taken as true, would serve as grounds to void foreclosure sale. Merola v. Mortgage Electronic Registration Systems, et al., No. PC-2011-4089, 2013 WL 597210 (R.I. Sup. Ct. Feb. 12, 2013) (Rubine, J.). Namely, Plaintiffs contended (1) that the Note was current; and (2) that notice and publication of the foreclosure sale failed to meet statutory requirements. Id. On January16, 2014, Defendant Bayview filed an Amended Answer and Counterclaim against Plaintiffs for failure to make payments required under contract, seeking the balance of the funds due under the Note and Mortgage for the property and the value of the benefit that Bayview conferred upon Plaintiff. Entry of Default was filed by the Court's Clerk against Plaintiffs (Counterclaim Defendants) on the counterclaim on May 30, 2014, for failure to plead or otherwise defend as provided in the Rhode Island Superior Court Rules of Civil Procedure.[1] Defendants made a series of unanswered attempts at discovery in this case. Notably, Plaintiffs failed to answer Requests for Admissions pursuant to Rule 36 of the Rhode Island Superior Court Rules of Civil Procedure. Consequently, this Court deems the following facts admitted: (1) that all foreclosure notices sent regarding the foreclosure of the Property adhere to applicable statutory requirements; and (2) that Plaintiffs were in default of obligations under the note. Defendants now file a Motion for Summary Judgment and dismiss the claims asserted in Plaintiffs' Complaint. Defendants do not seek judgment in regards to the counterclaim filed against Plaintiffs.

Standard of Review

It is well settled that when deciding a motion for summary judgment, '"the Court views the evidence in the light most favorable to the nonmoving party."' Mruk v. MERS, et al., 82 A.3d 527, 532 (R.I. 2013) (quoting Beauregard v. Gouin, 66 A.3d 489, 493 (R.I. 2013)). '"Summary judgment is appropriate when no genuine issue of material fact is evident from the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any, and the motion justice finds that the moving party is entitled to prevail as a matter of law."' Id. (quoting Swain v. Estate of Tyre, 57 A.3d 283, 288 (R.I. 2012)). '"[T]he nonmoving party bears the burden of proving by competent evidence the existence of a disputed issue of material fact and cannot rest upon mere allegations or denials in the pleadings, mere conclusions or mere legal opinions."' Id. (quoting Daniels v. Fluette, 64 A.3d 302, 304 (R.I. 2013)).

Arguments and Evidence

Plaintiffs allege in their Complaint that (1) MERS could not act as mortgagee or assign the Mortgage; (2) the assignment from MERS to Bayview was invalid; (3) that Plaintiffs were not in default; and (4) that notice was invalid. In support of their Motion for Summary Judgment, Defendants argue that they are entitled to judgment as a matter of law because (1) Plaintiffs have admitted that the foreclosure notice was proper and Plaintiffs were in default by failing to comply with Rule 36 of the Rhode Island Superior Court Rules of Civil Procedure; and (2) there is no genuine dispute of material fact. In support of these arguments, Defendants include several notarized exhibits. Through the following affidavits and evidence, the

Defendants established the travel of the Mortgage through Assignment of Mortgage from MERS to Bayview. Defendants also established that the statutory notice and publication ...


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