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In Re Walker Decision MERS

In Re Walker Decision MERS

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11/15/2012

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1.
UNITED STATES
BANKRUnCY
COURT
Eastcl1I
District
of
California
Honorable Ronald
H.
Sargis
BankruptcyJudge
Sacramento,
Callfornla
May
20, 2010
at 10:30 a.m.
10-21
6-E-ll
RIC~
WALKER
MLA
#3
~
-OSJECT10N
TO
C~MS
OW
CITlaANK,
N.A.
4-6-10
[§g]
Local
ule
3007-1(0)
(1)
Motion
-
No
Oppo$ition
Fil@d.
·
Proper
NoticeProvided.
ThQ
Pr
oof
of
Sa~yice
filed
on
April
6, 2010,
state9
that
t
e
Motlon
and
~upporting
plead1nge
were
earved
on
respondent
creditor,
oth~r
.
arties
in
interest,
and
Office
of
thg
United
States
Trustee
.T
he
"0
rt
notes
that
the
moving
party
filed
thg
d"clar",tion
and
exhibit"
in
this
m
ttar
as
one
document.
This
is
not
,
the
pr""tice
in
the
Bankrupl:cy
Court.
UMotio
5,
notices
objectiClns,responses,
re
plies,
declarat.ionSI
affidav
its
,
other
documentary
evidenoe,
memo.anda
of
points
and
authorities,
other
suppor"ing
documents,
proofs
of
serVice,
and
'
l'elated
pleadings
shall
be
filed
as
sep
rate
documents."
Revised
Guidel
ines
for
the
i'repar8.tion
of
Documents,
1(3)
(a.
Coun~el
i~
.~minded
of
the
court's
expectation
that
documents
filed
with
his
court
comply
with
the
Revls
.dG
uidelinas
rOJ:
the
Prepar"tion
of
Docume
ts
in
Appendix
II
of
the
LOQal
Rul
.
s
"nd
that
attorneys
prac
'
cicing
infederal
oourt
comply
with
th~
W~d
..
r~l
Rules
of
Civil
Procedur~
and
the
Federal
Rules
f
Bankruptcy
Procedure.
NOTICE
FAILURE
TO
COMPLY
WITH
THE
GUIDELINES
AND
FILING
PLEADINGS
WHICH
DO
NOT COMPLY
WITH THE
FED~RAL
ROLES
OF
CIVIL
PROCEDURE
SHALL
RESULT
MOTION
BEING
SUMMARILY
DISNISSBP
WITHOUT
PREJUDICE.
Ten1:&
va Ruling:
This
Object-ion
to
a
Proof
of
Claim
has been
oet
for
hea.ring
01'1
th
.
notice
required
by
Local
Bankz:uptQy
Rule
3007-1(c)
(1).
'l'
h .
failure
ofthe
Tr
.
stee
and
the
r"'pondentQreditorto
file
written
oppo6~tion
at least
14
days
p'
ior
to
the
hear1ng
asrequired
by
Local
Bankruptcy
Rule 3007-1
(c)
(1)
(I)
is
con
.
idared
as
consent
to
thegranting of the
motion.
Cr.
Gh~z~li
v.
Moran,
46
F.3
52,
53
(9th
Cir.
1995).
The
CD
.",1:.'..
t
..
ntativa
decision
i
..
to
..
u,,1:.
..
.1'1
the
Objection
to
the
l':rao£
of
Claim
di9allow
the
olG1~
in
ita
Onti:r.ty
with
leave
tor
the
ovner
o~
the
p"omis
ory
note
,
to
fila
..
"l
.
m
bY'
June 19,
2010.
Oral
argmnent
may
be
pres
en
ed
by
the
partiesat
the
scheduled
hearing,
where
the
parties
shall
addre,
theissues
identified
in
this
tentative
ruling
and
such
otherissues
ag
ar~
ngcessary
and
appropriate
to
the
court's
resolution of
the
matte
.
If
lB
391101
1>6l£
MKY
10~
2010
.t
10:30
U.)D.
-Piltgc 1
vtl8.
301..1..10
X
303.:1
9S6(,;-£LL
--916
 
urt's
tentative
ruling
beccmes
its
final
rulin9,
tne court
will
make
the
ing
find
i
ngs
of
fact
and
conclusions of
l~w:
The
P
'oo!
or:
Claim
at
issue,
listed
as
claim
numbe.
5
on
tha
court's
official
claim
registry,aaserts
a
$1,320,650.52
seouredclaim.
The
Debtor
objects
to
the
C
aim
on
the
basis
that
the
claimant,
Cit.ibllnk,
N
.A.,
dicl
notprovided
alW
evide
oe
that
Citibank
has
the
au
'
thad
ty
to
bring
the
claim,
as
required
by
Feder
1
Rul
.
of
Bankruptcy Procedure
3001
(c),
rendering
the
claim
fciciall.y
defec
ive.
'l'he
curt's
review
of
t:he
claim
shows
that
the
Deed
of
'i'rust
purports
to
havebeen
ssigned
to
Citibank,
N.A.
by
Mortgag~
Electronic
Registration
Systems,
Inc.
5
nominee
for
Bayrock Mortgage
Corporation
on March
5,
2010.
(Proof
of
Claim
No.5
p.36-37,
Mar.
19,2010.)
Debtor
cont
.
nds
th~t
thi
.
does
not
A~tah
ish
that
Citibank
ia
the
owner
of
th®
underling
promissory
not~
~~nce
the
l!lIsig
or,
Mortgage
Electroni.c
Re..-istration
Systems,
Inc,
("MPlI1.S"),
had
no
inter
5tin
the
no,,<o
t;;Q
tl;'ansfer,
Debtors
loan
wasorigine>t;;cd
by
BayrockMortg
ge
Corporation
and
no
evidence
of
the
curr~nt
own=r
of
the
promissory
note
~
Rttachad
to
the proof
of
claim.
1t
i~
well
established
law
in
the
Ninth
Circuit
,
that
the
assignment
of
..
trust
deed
does
notassign the
under
ying
promissorynote
~nd
right
to
be
paicl,and
that
the
security
interest
13
inc'
dent
of
the
debt.
4
W!~KIN
SUMMAR~
OF CALXE'ORNIA
LA.,
S~CUl\~D
~'MNSACTlON"
IN
R.AL
PROPERT
§lO'S
(10th
ed)
.
CITIBANK
ARE
NOT
THE REAL :PARTIES
IN
INTEREST
under
alifornia
law,
toperfect
the
transfer
of
mortgage
papbr
"$
collatera
l
the
oWler
should
physically deliver
the
note
tothe
transferee.
Be~~
v.
Golden
Pla.n
of
California,
:fIle.,
829
F,2d
705,
'709
(9th
Cir.
1986).
Without:
physical
t~Qn5f
r,
the
sale
ofthenote
could
be
invalid
as
a
fraudulent
COnv~yance,
c~l.
C
v.
Code
§3440,
or
as
unperfected,
Cal.
Com.
Code
§§9313-9314,
See
ROG~R
BElIWHila
",
CALIFORNIA
MORTGAGES
l\~O
D~M~
o~
1'RUSTS,
AND
FORmCLO!WU
lntGuIo\!
§ll,
26
(4thed.
2009),
The
note
here
specifioally
identified
the
partyto
whom
it
was
payabl
,
Bayrock
Mortgage
Corporal;ion,
..nd
the
note
therefore
cewnot be
transf
rred
unless
the
note
is
endors~d.
See
Cal,
Com.
Code
§§3109, 3201, 3203,
3204,
'rha
attachments
to
the
olaim
do
notes
tablish
that
Bayrock.
MortgageCorpor
tion
endorsed
and
~old
the
note
to
any
other
party,
'
'1'Rl\NSF
OF
AN
INIDEREST
rN
THE
DEED
OF
TRUST
AMON!
I~
VOID
MERS
a~ted
only as
a
"nominee"
for;Bayrock.
Mortgage
under
the
Deed
of Trust.
Since
no
evidence
has
been
offered
that
the
promissory
note
hasbeen
transf
rred,
MERS
could
only
transfer
wnat
ever
interest
it
had
in
the
Deed
ofTrust.
However,
the
promissory note
Qnd
the
Deed
of
Trust
are
insep""able.
"The
n
te
and
the
mo:t;tqa~e
areinseparable;the
former
as
essential,
the
later
a~
an
'ncident.
An
a98i9nment
ofthe
note
CArries
the
mortgage
with
it,
while
an
ass
gnment
or
the
l~t,ter
alone
is
a
nullity."
Ca.rpentel·
v,
Longan,
83
U.S.271,
2
4
(1872);
accord
Henley
v.
Hotaling,
41
Cal,
22.
28
(1871);
Seidell
,
'''.
TuxedoLand
Co.,
216
Cal.l65,
170
(1932);
Cal,
Civ.
Code
§2936.
Therefore,
if
on
arty
receives
the
note
an
another
receives
the
deBd
of
tr~et,
the
holder
of
the
not:e
prevails
re<}ardless
of
the
order
in
Which
the
intere'lt6
wen.
transf
rred.
Adler
v.
Sargent,
109
Cal.
42,
49-50
(1895).
May
10,
2010
at
10;30
a.m
rIle
Z
ons
.

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