September 23 2014
DA 14-0105
IN THE SUPREME COURT OF THE STATE OF MONTANA
2014 MT 260N
FRED G. CARL,
Plaintiff and Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee for American
Home Mortgage Assets Trust 2007-1,
Mortgage-backed Pass-through
Certificates Series 2007-1 and DOES
1 through 50 inclusive,
Defendants and Appellees.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV-13-467
Honorable Ed McLean, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Fred G. Carl, self-represented, Missoula, Montana
For Appellee Deutsche Bank National Trust Company:
Jenny M. Jourdannais, Garlington, Lohn & Robinson, PLLP, Missoula,
Montana
Submitted on Briefs: August 27, 2014
Decided: September 23, 2014
Filed:
____________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Fred Carl filed a 23-page complaint in the Fourth Judicial District Court, Missoula
County, on April 23, 2013. In reviewing the complaint, the District Court noted that the
complaint consisted largely of conclusory allegations and improper legal arguments. The
court deduced, however, that Carl was seeking to prevent a non-judicial foreclosure sale.
¶3 Previously, in November 2006, Carl borrowed $192,000 from AHM Mortgage.
The promissory note was secured by a deed of trust on property in Mineral County,
Montana. The deed of trust was recorded in Mineral County on November 28, 2006.
First American Title Insurance Company was listed as trustee, and Mortgage Electronic
Registration Systems, Inc. (MERS) was listed as beneficiary and as nominee for AHM
and its successors and assigns. MERS later assigned the deed of trust to Defendant
Deutsche Bank National Trust on March 6, 2009.
¶4 Carl failed to make monthly payments and was in default on the promissory note
as of 2008. He nevertheless continued to reside on the property. On January 25, 2013, a
Notice of Trustee’s Sale was recorded in Mineral County setting the trustee’s sale for
May 31, 2013. Carl initiated the present action on April 23, contending that Deutsche
Bank lacked standing to enforce the promissory note and foreclose on the property. His
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theory was that Deutsche Bank had not proved it is the rightful owner of both the note
and the deed of trust through a “perfected chain of title.”
¶5 The District Court construed Carl’s allegations as challenging the securitization
process—i.e., the process of pooling loans and selling shares in the pools to investors on
the open market. See Cmmw. Prop. Advocs., LLC v. Mortg. Elec. Registration Sys., Inc.,
680 F.3d 1194, 1197 n.2 (10th Cir. 2011). The District Court observed, however, that
challenges to the securitization process and assignments of the promissory note and deed
of trust from one entity to another have been rejected in various cases. In support of this
proposition, the court cited Heffner v. Bank of Am., No. CV 11-144-M-JCL, 2012 U.S.
Dist. LEXIS 64668 (D. Mont. May 8, 2012); Paatalo v. J.P. Morgan Chase Bank, N.A.,
No. CV 10-119-BLG-CSO, 2012 U.S. Dist. LEXIS 90101 (D. Mont. June 28, 2012); and
Joseph v. Bank of Am., N.A., No. CV 11-129-BLG-RFC, 2012 U.S. Dist. LEXIS 173944
(D. Mont. Dec. 7, 2012). Accordingly, the District Court concluded that even if there
were a flaw in the assignment of the deed of trust at issue here, Carl does not have
standing to raise that flaw to challenge Deutsche Bank’s chain of title and its right to
enforce the note.
¶6 On October 8, 2013, the District Court granted Deutsche Bank’s motion under
M. R. Civ. P. 12(b)(6) and dismissed Carl’s complaint, with prejudice, for failure to state
a claim upon which relief can be granted. Carl thereafter filed two motions, one on
November 4, 2013, and the other on November 29, 2013, which the District Court treated
as a single motion under M. R. Civ. P. 60(b) for relief from a final judgment or order.
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¶7 The District Court denied the Rule 60(b) motion on January 21, 2014. The court
noted that Carl’s apparent purpose in this lawsuit “is to avoid paying for his property by
convincing the Court he is entitled to have title and ownership in the property free and
clear by quieting title solely in his name, leaving the creditors and investors without legal
recourse to recover payment of the promissory note.” The court observed that Carl is
clearly and undeniably in default of the loan secured by the subject deed of trust, and that
he owes the debt under the promissory note regardless of any assignments of the rights to
collect the debt. The court reasoned that “[w]hether the entity seeking to enforce the
promissory note by way of non-judicial foreclosure is the rightful entity to do so does not
change the Plaintiff’s legal obligation to pay the debt, and certainly does not entitle the
Plaintiff to full title and possession of the property.” The District Court reaffirmed that
Carl lacked standing to challenge Deutsche Bank’s right to sell the subject property
through a non-judicial foreclosure sale, that there was no legal basis for quieting title and
possession of the property solely in Carl’s name, and that Carl had failed to establish any
grounds for relief from the court’s earlier order dismissing his complaint with prejudice.
¶8 On appeal, Carl articulates four separate issues; however, we agree with Deutsche
Bank that the sole, dispositive question is whether the District Court properly denied his
Rule 60(b) motion. In this regard, Carl appears to rely on subsections (1), (4), and (6) of
the Rule, which state: “On motion and just terms, the court may relieve a party or its legal
representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; . . . (4) the judgment is void; . . .
(6) any other reason that justifies relief.” M. R. Civ. P. 60(b). Deutsche Bank argues in
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response that Carl has failed to show he is entitled to relief pursuant to these provisions.
Under subsection (1), Carl does not identify any mistake, inadvertence, surprise, or
excusable neglect as we have defined these terms in our caselaw, see In re Marriage of
Schoenthal, 2005 MT 24, ¶ 33, 326 Mont. 15, 106 P.3d 1162; he instead argues that the
District Court’s order was simply decided incorrectly. Under subsection (4), Carl fails to
identify any basis for concluding that the District Court’s judgment is void. And under
subsection (6), he fails to demonstrate extraordinary circumstances justifying relief. See
Essex Ins. Co. v. Moose’s Saloon, Inc., 2007 MT 202, ¶ 25, 338 Mont. 423, 166 P.3d 451.
¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of
our Internal Operating Rules, which provides for noncitable memorandum opinions.
Having reviewed the record and the briefs, we conclude that Carl has not shown error in
the District Court’s decision for which he is entitled to relief.
¶10 Affirmed.
/S/ LAURIE McKINNON
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE
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