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Bank of America, N.A., Successor By Merger To v. Dennis O. Inda

March 8, 2013

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, L.P., APPELLEE,
v.
DENNIS O. INDA, APPELLANT.



Appeal from Johnson District Court; GERALD T. ELLIOTT, judge.

SYLLABUS BY THE COURT

SYLLABUS BY THE COURT 1. A timely posttrial motion stops the appeal time from running. 2. A motion to reconsider is generally treated as a motion to alter or amend the judgment under K.S.A. 2012 Supp. 60-259(f), which may extend the time for appeal. 3. The content of the motion, not the heading, determines the type of motion. Moreover, pro se motions are to be liberally construed. 4. An issue not briefed by an appellant is deemed waived and abandoned. 5. When the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material

fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. On appeal, the same rules apply; summary judgment must be denied if reasonable minds could differ as to the conclusions drawn from the evidence. 6. The main purpose of a mortgage is to insure the payment of the debt for which it stands as security, and foreclosure is allowed when necessary to carry out that objective. 7. To grant summary judgment in a mortgage foreclosure action, the trial court must find undisputed evidence in the record that the defendant signed a promissory note secured by a mortgage, that the plaintiff is the valid holder of the note and the mortgage, and that the defendant has defaulted on the note. 8. Under K.S.A. 84-1-101 et seq., a note is a negotiable instrument which is subject to Article 3 of the Kansas Uniform Commercial Code, K.S.A. 2012 Supp. 84-3-104. 9. Under K.S.A. 84-3-301, a person entitled to enforce an instrument can be any of the following: (a) the holder of the instrument, (b) a nonholder in possession of the instrument who has the rights of a holder, or (c) a person not in possession of the instrument who is entitled to enforce the instrument under K.S.A. 84-3-309 or K.S.A. 84-3-418(d). 10. Under K.S.A. 2012 Supp. 84-1-201(21)(A), a holder means a person who is in possession of a negotiable instrument that is payable either to the bearer or to an identified person who is the person in possession. 11. A person who is a holder remains a holder although that person has made an assignment of a beneficial interest therein. 12. The payee in possession of a note is the holder and may bring suit on the note even though the payee had already assigned the note as the holder of an instrument regardless of whether the payee is the owner and may enforce payment in the payee's own name. 13. Under K.S.A. 84-3-205(b), a note can be endorsed in blank, which means that the instrument becomes payable to the bearer and may be negotiated by transfer of possession alone until specifically endorsed. 14. The elements required to sustain an action for fraud include: (1) an untrue statement of fact, (2) known to be untrue by the party making it, (3) made with the intent to deceive or with reckless disregard for the truth, (4) upon which another party justifiably relies, and (5) the other party acts to his or her detriment. 15. Although the existence of fraud is normally a question of fact, when a plaintiff fails to present any evidence of an essential element of his or her claim in responding to a motion for summary judgment, there can be no genuine issue as to any material fact

because a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. 16. The doctrine of clean hands is applied sparingly and only to willful conduct which is fraudulent, illegal, or unconscionable and that shocks the moral sensibilities of the judge. 17. The purpose of Rule 141 (2012 Kan. Ct. R. Annot 247) is to identify what facts are or are not controverted or on what evidence the parties rely. A technical violation of Rule 141 does not automatically result in judgment for the opposing party.

The opinion of the court was delivered by: Green, J.:

Affirmed.

Before ARNOLD-BURGER, P.J., GREEN, J., and HEBERT, S.J.

Bank of America, the mortgage note holder, brought an action to foreclose on Dennis Inda's mortgage after he defaulted on his loan. The trial court granted Bank of America's motion for summary judgment, finding that Bank of America was the holder of the note (Note) and the mortgage (Mortgage) and that Inda had defaulted on the loan. We affirm.

On March 30, 2007, Inda executed and delivered the Note to Pulaski Bank (Pulaski), promising to pay Pulaski the principal sum of $244,000 plus interest in monthly installments. As security for the Note, Inda and his wife, Jacque Gichuki, signed the Mortgage on their Olathe home, which was filed with the Johnson County register of deeds on April 3, 2007.

The Mortgage defines the Mortgage Electronic Registration Systems, Inc. (MERS), a separate corporation, as the mortgagee and states that MERS is acting "solely as nominee" for Pulaski and Pulaski's successors and assigns.

The Note was endorsed by Pulaski to Countrywide Bank, N.A. Countrywide Bank, FSB, formerly known as Countrywide Bank N.A., endorsed the Note to Countrywide Home Loans, Inc. Countrywide Home Loans, Inc., then endorsed the Note "in blank."

Inda challenged Bank of America's standing to foreclose.

Inda eventually defaulted on the Note, so on January 25, 2010, Bank of America filed the foreclosure action which is the underlying subject matter of this case.

Inda challenged Bank of America's standing to foreclose arguing that Bank of America was not the owner of the Note. Inda maintained that Bank of America was simply the servicer of the Note and not the owner; therefore, it did not have standing to foreclose. Inda further contended that Bank of America committed fraud by alleging that it was the owner of the Note at times while also alleging that it was the servicer of the Note.

Bank of America primarily responded that it had standing to foreclose based simply on its holding of both the Note and the Mortgage. To show its interest in the Note, Bank of America provided the trial court with the original Note which contained the three previous endorsements showing that the last endorsement was "in blank." Moreover, to show its interest in the Mortgage, Bank of America provided the trial court with the assignment of the Mortgage to BAC Home Loans Servicing, LP., as well as the Certificate of Merger of BAC Home Loans Servicing, LP., into Bank of America. Bank of America also informed the trial court that it had sold its beneficial interest in the Note to Freddie Mac, making Freddie Mac the owner of the Note, but that Bank of America continued to possess the Note.

The trial court held Bank of America had standing to foreclose.

Following a hearing on the parties' competing motions for summary judgment, during which the sole issue argued was Bank of America's standing to foreclose, the trial court entered judgment in Bank of America's favor. In support, the trial court reasoned that Bank of America was the holder of the Note and it therefore had the authority to enforce the Note and the Mortgage. Upon the trial court's denial of his motion to set aside judgment, Inda filed this pro se appeal.

Before we can address Inda's arguments, we need to address a jurisdiction argument raised by Bank of America. Bank of America argues that we do not have jurisdiction to consider whether the trial court erred in granting summary judgment in favor of Bank of America because Inda did not timely appeal that judgment. Bank of America notes that under K.S.A. 2012 Supp. 60-2103(a) an appeal must be made within 30 days after the judgment, unless there was a posttrial motion filed that tolled the time to appeal. Bank of America contends that Inda's posttrial motion was not one of the motions that extended the time to appeal and, therefore, Inda failed to timely appeal the grant of summary judgment in favor of Bank of America. Bank of America maintains that the only judgment properly before this court is the judgment denying Inda's posttrial motion filed under K.S.A. 2012 Supp. 60-260.

As Bank of America properly states, a timely posttrial motion stops the appeal time from running. See State ex rel. Secretary of SRS v. Mayfield, 25 Kan. App. 2d 452, Syl. ¶ 4, 966 P.2d 85 (1998). The time starts running again in its entirety on the date of entry of the order ruling upon the posttrial motion. K.S.A. 2012 Supp. 60-2103(a). K.S.A. 2012 Supp. 60-2103(a) lists the only timely posttrial motions that extend the time for appeal: (1) renewal of motion for judgment as a matter of law under K.S.A. 2012 Supp. 60-250(b); (2) motion to amend or make additional findings of fact under K.S.A. 2012 Supp. 60-252(b); (3) motion for new trial other than motions for new trial based on newly discovered evidence under K.S.A. 2012 Supp. 60-259; and (4) motions to alter or amend the judgment under K.S.A. 2012 Supp. 60-259(f). Motions to reconsider are generally treated as motions to alter or amend the judgment under K.S.A. 2012 Supp. 60-259(f). Exploration Place, Inc. v. Midwest Drywall Co., 277 Kan. 898, 900, 89 P.3d 536 (2004). Moreover, a K.S.A. 2012 Supp. 60-260 motion for relief from judgment does not extend the time for appeal. Giles v. Russell, 222 Kan. 629, 632, 567 P.2d 845 (1977); see State ex rel. Secretary of SRS v. Keck, 266 Kan. 305, 969 P.2d 841 (1998).

In this case, Inda filed a posttrial motion entitled "Defendant's Motion to Set Aside Summary Judgment." The motion states that Inda seeks relief from judgment under K.S.A. 2012 Supp. 60-260. As stated earlier, K.S.A. 2012 Supp. 60-260 does not extend the time for appeal. Nevertheless, the content of the motion, not the heading, determines the type of motion, and pro se motions are to be liberally construed. See State v. Kelly, ...


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