Justia Real Estate & Property Law Opinion Summaries

In August of 2009, Samson Resources Company owned oil and gas leases covering 87.78 mineral acres in Roger Mills County, Oklahoma, including the Schaefer Lease. The Schaefer Lease covered 70 net acres in the Southwest Quarter of Section 28 and had a three-year primary term that ended on November 22, 2007. If drilling operations were commenced by the end of the primary term, the lease would continue so long as such operations continued. On August 2, 2007, Newfield sent a letter to Samson, proposing to drill a well in Section 28. The estimated cost of the well was over $8.5 million dollars. On August 9, 2007, Newfield filed an application with the Commission, seeking to force pool the interests of Samson and other owners in Section 28. Newfield sent an e-mail dated April 14, 2008, to Samson that informed Samson that Newfield had commenced operations prior to the expiration of the Schaefer Lease. Newfield's e-mail stated that Samson had underpaid well costs and that an election to participate with 87.78 acres would require prepayment of $1,411,982.45. Samson responded by e-mail on the same date, informing Newfield its intent was only to elect its 17.78 acres. On April 28, 2008, Samson filed an Application seeking to have its election to participate in the well limited to 17.78 acres rather than 87.78 acres. After an administrative hearing, the Administrative Law Judge determined that Samson's timely election to participate only covered 17.78 acres of its interest and that Samson accepted the cash bonus as to its remaining 70 acres. The Oil and Gas Appellate Referee reversed the ALJ's determination, finding that the ALJ improperly relied on actions which occurred prior to the issuance of the pooling order. The Commission issued Order No. 567706, which adopted the Referee's report, reversed the ALJ, and declared that Samson had elected to participate to the full extent of its 87.78 acre interest in the unit. The Commission found Samson made a "unilateral mistake" when it elected to participate to the full extent of its interest. Samson appealed the Commission's order to the Court of Civil Appeals, which affirmed. Before COCA issued its opinion affirming the Commission, Samson filed an action in the district court alleging actual fraud, deceit, intentional and negligent misrepresentation, constructive fraud, and breach of duty as operator. Samson also alleged Newfield's actions amounted to extrinsic fraud on the Commission, rendering Pooling Order No. 550310 invalid as to Samson's working interest attributable to the 70-acre Schaefer Lease. The trial court granted Newfield's motion to dismiss for lack of subject matter jurisdiction, finding the petition to be an impermissible collateral attack on a valid Commission order. The Court of Civil Appeals affirmed. After its review, the Supreme Court found that Samson's actions for damages sounding in tort were beyond the Commission's jurisdiction, and the district court in this case was the proper tribunal for Samson to bring its claims. The trial court's order granting Newfield's Motion to Dismiss was reversed, and the case was remanded for further proceedings.

In 2005, Defendants-Appellants Robert and Shelly Heath executed a promissory note in favor of Option One Mortgage Corporation (Option One) which was secured by a mortgage. Defendants defaulted on the note in 2008. Plaintiff-Appellee Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2005-4 Asset Backed Certificates, Series 2005-4 (Appellee), filed its petition to foreclose. Attached to the Petition was a copy of the note, mortgage and assignment of the mortgage. The note contained neither an indorsement nor an attached allonge. The assignment of mortgage was made by Option One Mortgage Corporation to Appellee and was dated February 28, 2008. It did not purport to transfer the note. The bank filed a motion for summary judgment and Appellants did not respond. The judgment was granted in rem and in personam against Appellants. The property was sold at a sheriff's sale, and a motion to confirm the sale was filed on the same day. A day before the hearing to confirm the sale, Appellants filed for bankruptcy. In the pendency of the sale confirmation proceedings, Appellants obtained new counsel, and filed a motion to vacate the confirmation hearing. They alleged the bank did not prove it was entitled to enforce the note or to foreclose. The bank responded that because Appellants had their personal liabilities discharged in the bankruptcy, they no longer held any interest in the foreclosed property. Upon review, the Supreme Court found that the bank with its unindorsed note did not prove that it was entitled to foreclose. The Court reversed the trial court's grant of summary judgment in favor of the bank and remanded the case for further proceedings.

In 2005, Appellants Billy and Jeanette Baber executed a promissory note ("Note") payable to Ameriquest Mortgage Company, Inc. ("Lender"). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a mortgage which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings in 2006. A copy of the non-indorsed Note and Mortgage was included with the petition. In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage. Appellee U.S. Bank as trustee for the Lender, moved for summary judgment; in an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. The trial court granted judgment on the Note and foreclosure on the mortgage in favor of U.S. Bank. Appellants moved to vacate that judgment, arguing they were denied their statutory right to respond to the bank's cross-motion for summary judgment that the motion was not delivered to them in a timely fashion and that they did not receive notice of a hearing that occurred on September 5, 2010. Upon review, the Supreme Court found that the bank by its unindorsed Note and Mortgage, did not prove that it was entitled to enforce either. The Court reversed the trial court's grant of summary judgment and remanded the case for further proceedings.

This case concerned a summary judgment granted by the district court in favor of the Plaintiff-Appellee RAHI Real Estate Holdings, LLC, against the Defendants-Appellants Vincent and Leslie Adams. The original plaintiff, Residential Funding Real Estate Holdings, LLC, filed a petition to foreclose in 2009, claiming Appellants defaulted on their note. Residential attached a copy of the subject note and mortgage to the petition. The note has a special indorsement from Gateway which states "Pay to The Order Of: Option One Mortgage Without Recourse." Also attached to the note was a blank indorsement by Option One Mortgage Corporation. The district court granted a motion to substitute RAHI as plaintiff in place of Residential in this foreclosure action and ordered that the caption be modified to reflect RAHI as plaintiff. One day after the order granting substitution, Residential as plaintiff filed its first amended petition. Defendants filed their answer admitting that a note and mortgage were executed but denied that the note and mortgage attached to the petition are the ones they signed. Further, they denied default and demanded strict proof. Appellants also attacked plaintiff's standing and the subject matter jurisdiction of the court. Appellee filed a motion for summary judgment alleging there is no controversy as to any material facts and attached an affidavit. Upon review, the Supreme Court found that there was no transcript of a June 29, 2010 hearing in the record, so the Court could not determine what evidence was presented, including any concerning whether or not the substitution of parties gave Option One Mortgage and Option One Mortgage Corporation the right to enforce the note. It did appear from the filed record that there was at least one issue of material fact and summary judgment was inappropriate. Accordingly, the Court reversed the grant of summary judgment and remanded the case for further proceedings.

Defendants-Appellants John and Lisa Alexander appealed the grant of summary judgment in favor of U.S. Bank National Association as trustee for for Credit Suisse First Boston HEAT 2005-4. Defendants executed a note to MILA, Inc., DBA Mortgage Investment Lending Associates, Inc. and a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for MILA and its successors and assigns. Wells Fargo Bank, N.A. filed a foreclosure petition on in 2009, alleging Appellants defaulted on the note. The petition further states Wells Fargo was the present holder of the note and mortgage, and Wells Fargo took the note and mortgage for good and valuable consideration from the original lender. A copy of the note and part of the mortgage was attached to the original petition. The note attached to the original petition contained no indorsements. An Order Granting Motion for Substitution of Plaintiff and Modification of Caption was filed. Appellee, U.S. Bank National Association, as trustee, for Credit Suisse First Boston HEAT 2005-4 was substituted in place of Wells Fargo. The motion stated Wells Fargo had subsequently assigned all of its rights in the mortgage to Appellee. Appellee also filed its First Amended Petition which re-alleged all of the allegations of Wells Fargo's petition and identified additional defendants as parties who may have an interest in the property. Appellee attached to the amended petition, a copy of the same unindorsed note and mortgage originally executed by Appellant John W. Alexander, III, in 2005. Appellants never answered the petition and a judgment was entered against then in April 2010. A day later, Appellants' counsel made an entry of appearance and the judgment was vacated. Appellee filed a motion for summary judgment. Appellee claimed in its motion for summary judgment that it was the holder of the note and mortgage, and that Appellants had been in constant default since the July 1, 2009, installment payment was due. Appellants filed an objection to Appellee's motion for summary judgment and later filed a supplement to the objection. Appellants challenged certain comments in Wells Fargo's motion to substitute which stated Wells Fargo subsequently assigned its rights under the mortgage to Appellee after the filing of the original petition. Appellants assert the note provided by Appellee does not have an indorsement and they claim such indorsement is necessary under the Uniform Commercial Code. Upon review, the Supreme Court concluded that Appellee did not have the proper supporting ducomentation in hand when it filed its foreclosure suit. Accordingly, the Court reversed the trial court's grant of summary judgment and remanded the case for further proceedings.

Appellants Cindy and Theron Tacker appealed the grant of summary judgment in favor of NTex Realty, LP. In 2007, Appellants executed a promissory note payable to Home Funds Direct, Inc. Appellants executed a mortgage and delivered it to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Home Funds. Appellants defaulted on the note in 2010, and NTex initiated foreclosure proceedings against them several months later. In their answer, Appellants denied that Appellee owned any interest in the Note and Mortgage, and challenged the authenticity of the documents included in the petition. Appellants then demanded production of the original Note and Mortgage. Appellee moved for summary judgment. In an attached affidavit, Appellee asserted that it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. In response, Appellants argued that Appellee's motion for summary judgment was improper because the Note had never been negotiated. Appellants also asserted that because the copy of the Note was purportedly a "full, true, and correct copy of said Note," the original must also not be indorsed. Based on these reasons, Appellants concluded Appellee could not be the holder of the Note and, therefore, was not the proper party to bring a foreclosure proceeding. Appellee thereafter moved the district court by supplement to its motion, to view the original Note and Mortgage at the hearing for summary judgment. The supplemented motion incorporated an undated allonge, which transferred the Note from Lender to Appellee. The allonge was not included in the original petition for foreclosure. The motion also included a document entitled "Assignment of Mortgage," which transferred the "described mortgage together with the certain note(s) described therein," to Appellee from MERS. The Assignment was acknowledged on November 19, 2009, and recorded by the County Clerk of Rogers County, Oklahoma, on June 8, 2011. The district court granted Appellee's Motion for Summary Judgment and entered an order for the sale of the real property located in Rogers County, Oklahoma. The Appellants now appeal the trial court's order granting summary judgment, arguing NTex Realty, LP, failed to demonstrate standing. After review, the Supreme Court reversed and remanded the case, finding that NTex indeed failed to show "if and when NTex became a person entitled to enforce the note."

Appellants David and Barbara Moore defaulted on the Note to their mortgage in 2008. U.S. Bank, National Association, commenced foreclosure proceedings later that year, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6 (Appellee). According to the verified petition, the Appellee was "the present holder of said Note and Mortgage having received due assignment through mesne assignments of record or conveyance via mortgaging servicing transfer." The original petition did not attach a copy of the note in question sued upon. Appellants answered, pro se in 2009, disputing all allegations and requesting that the Appellee "submit additional documentation to prove [its] claims including the representation that they were the "present holder of said Note." Appellee subsequently filed an amended petition and a second amended petition to add additional defendants. Neither of these amendments included a copy of the note. Appellee submitted its Motion for Summary Judgment to the court, again representing that it was the holder of the Note. Documentation attached to the Motion attempted to support this representation: including the Mortgage, the Note, an Assignment of Mortgage, and an Affidavit in Support of Appellee's Motion for Summary Judgment. For the first time, Appellee submitted the Note and Mortgage to the trial court. The note was indorsed in blank and contained no date for the indorsement. Appellants did not respond to Appellee's Motion, and the trial court entered a default judgment against them. The trial court entered a final judgment in favor of the Appellee. Upon review, the Supreme Court found no evidence in the record establishing that Appellee had standing to commence its foreclosure action: “[t]he trial court's granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law.” The Court vacated the trial court’s judgment and remanded the case for further proceedings.

In 2007, Appellants David and Mary Eldridge executed a promissory note and mortgage in favor of Plaintiff-Appellee J.P. Morgan Chase Bank, N.A. In both the Note and the Mortgage, "JP Morgan Chase Bank, N.A." was explicitly designated as the lender and payee, or entity to whom payment under the Note and Mortgage was due. Appellants voluntarily filed bankruptcy in 2009. In their amended statement of intentions, Appellants agreed to reaffirm the outstanding balance on the Note. Shortly thereafter, the Note went into default. Appellee Chase Home Finance Milwaukee initiated foreclosure proceedings in 2010, claiming to be the present holder of the Note and Mortgage. Chase Home Finance Milwaukee claimed to have acquired the Note and Mortgage by assignment from J.P. Morgan Chase Bank, N.A. in their motion for summary judgment filed several months later. The trial court granted summary judgment for the Bank, finding the Bank was the undisputed owner and holder of the Note and Mortgage. Accordingly, judgment was entered in favor of the Bank and Appellants' counterclaims were dismissed. On appeal to the Supreme Court, Appellants argued the trial court erred ruling in favor of the Bank. Upon review, the Supreme Court found no evidence in the record to support the Bank's contention that it was the holder of the Note. Therefore, the Court reversed the granting of summary judgment by the trial court and remanded the case back for further proceedings.

In 2004, Appellants Cin Kham and Ngul Liam Cing executed an adjustable rate note in favor of Encore Credit Corporation. Contemporaneously, Appellants executed a mortgage to secure the note. The mortgage named Mortgage Electronic Registration Systems, Inc. (MERS), as the mortgagee and further stated "MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns." Encore was identified as the Lender in this mortgage. In 2008 Appellants defaulted on the note. Appellee CPT Asset Backed Certificates, Series 2004-EC1, by the Bank of New York Mellon (on behalf of CPT Asset Backed Certificates Series 2004-EC1) filed a foreclosure petition. Appellants failed to answer the petition and a default judgment was entered against them. A hearing to confirm the sale was set, and at that time, Appellants filed a Petition and Motion to Vacate challenging Appellee's standing to foreclose on the subject property. The trial court denied Appellants' petition to vacate judgment but granted leave to file a writ of prohibition. Appellants alleged Appellee lacked standing to commence this foreclosure action. Appellants further alleged the mortgage was a nullity because MERS could not be a mortgagee in Oklahoma and therefore the note was unsecured. Upon review, the Supreme Court found that though Appellee claimed to be the holder of the note and mortgage, the note in the record contained no indorsements. And because there was no indorsement on the note in the record, Appellee could not be a holder as defined by the statute: "[t]he trial court's granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law. Therefore, [the Court found] that the trial court abused its discretion when granting the default judgment." Accordingly, the trial court's judgment was reversed and the case remanded for further proceedings.

In a petition filed in 2010, Plaintiff-Appellee Bank of America, NA claimed to be the present holder of the note initiated a foreclosure action against Defendants Momodu Kabba and his wife. Bank of America claimed to hold the note and mortgage as Successor by Merger to LaSalle Bank National Association, as Trustee under the Trust agreement for the Structured Asset Investment Loan Trust Series 2004-BNC2. A review of the note showed a blank indorsement. This blank indorsement was filed with the lower court for the first time in the motion for summary judgment. The blank indorsement was not mentioned or referenced in the original petition. Summary judgment was granted in favor of Bank of America. Defendants appealed the judgment asserting Bank of America failed to demonstrate standing. Upon review, the Supreme Court reversed the grant of summary judgment: "[i]t is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and to have the proper supporting documentation in hand when filing suit, showing the history of the note, so that the defendant is duly apprised of the rights of the plaintiff. . . . [the Bank] only presented evidence of an indorsed-in-blank note and an 'Assignment of Mortgage'" With nothing more, the Court concluded the Bank did not meet its burden of proving it was entitled to foreclose on Defendants' property. Accordingly, the Court reversed the grant of summary judgment and remanded the case for further proceedings.