Federal National Mortgage Association v. Etta E. Malinou

Supreme Court

No. 2013-179-Appeal.
(PD 09-3907)

Federal National Mortgage Association :

v. :

Etta E. Malinou et al. :

NOTICE: This opinion is subject to formal revision before publication in
the Rhode Island Reporter. Readers are requested to notify the Opinion
Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence,
Rhode Island 02903, at Tel. 222-3258 of any typographical or other
formal errors in order that corrections may be made before the opinion is
published.
 Supreme Court

No. 2013-179-Appeal.
(PD 09-3907)

Federal National Mortgage Association :

v. :

Etta E. Malinou et al. :

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Justice Flaherty, for the Court. The defendant, Martin Malinou, appeals from a

Superior Court judgment after a trial before a justice of the Superior Court, sitting without the

benefit of a jury, that awarded the plaintiff, Federal National Mortgage Association (Fannie

Mae), possession of premises located at 334 Smith Street, Providence (the property). It is

noteworthy that the defendant was previously before this Court on a closely related case,

Malinou v. Seattle Savings Bank, 970 A.2d 6, 12 (R.I. 2009), wherein this Court affirmed a

Superior Court judgment that Seattle Savings Bank had the right to foreclose on the property. In

this appeal, the defendant challenges Fannie Mae’s right to possession of the property. On

September 24, 2014, this case came before the Supreme Court pursuant to an order directing the

parties to show cause why the issues in this appeal should not be summarily decided. After

hearing the arguments of the parties and examining the memoranda that they submitted, we are

of the opinion that cause has not been shown, and we proceed to decide the appeal at this time

without further briefing or argument. For the reasons set forth in this opinion, we affirm the

judgment of the Superior Court.

-1-
 I

Facts and Travel

The defendant’s mother, Etta E. Malinou (decedent), was the sole owner of the property

from 1945 until her death in 2003, at which point defendant acquired title. Malinou, 970 A.2d at

8. On November 15, 1991, the decedent executed and delivered a home equity conversion

adjustable rate note and an adjustable rate allonge (collectively the note) to Rhode Island

Housing and Mortgage Finance Corporation (RIHMFC). The note was secured by a mortgage

on the property. Collectively, those documents created a “reverse mortgage” that required that

“all outstanding principal and accrued interest [be paid] to Lender upon receipt of a notice by

Lender requiring immediate payment in full * * *.” See Malinou, 970 A.2d at 8. The note

specified that, upon decedent’s death, lender had the right to demand immediate payment of the

note in full.

On October 31, 2002, before Mrs. Malinou died, RIHMFC assigned the note and

mortgage to Seattle Savings Bank. The assignment was not recorded in the Office of the

Recorder of Deeds in Providence until June 3, 2003.

In January 2003, the decedent died testate as the sole owner of the property. It is

undisputed that no principal or interest payments had been paid during decedent’s lifetime.

Pursuant to the terms of decedent’s will, defendant inherited the property. It is noteworthy that

defendant has resided at the property since 1946 and has maintained his law practice on the first

floor since 1960.

On June 30, 2003, Seattle Savings Bank notified defendant that it held the mortgage and

it demanded payment of the note in full. Malinou, 970 A.2d at 8. There is no dispute that no

payments have been made since Seattle Savings Bank demanded payment in full. Id.

-2-
 In August 2003, Seattle Savings Bank notified defendant that a foreclosure sale was

scheduled for October 15, 2003. Malinou, 970 A.2d at 8. However, less than a week before the

foreclosure date, defendant filed the first of several Chapter 13 bankruptcy proceedings. Id. In

addition, defendant filed suit in Superior Court, challenging Seattle Savings Bank’s authority to

foreclose. Id. at 8-9. We characterized defendant’s lawsuit as a tactic that allowed him “to

delay, for many years, a foreclosure action instituted by * * * Seattle Savings Bank * * *.” Id. at

8. Based upon the clear record title, we held that Seattle Savings Bank had the right to foreclose.

Id. at 12.

Once again, in the spring of 2007, Seattle Savings Bank noticed and advertised the

foreclosure of the property. This time, on June 13, 2007, the foreclosure took place and Seattle

Savings Bank was the highest bidder. Thereafter, Seattle Savings Bank recorded a foreclosure

deed in the Office of the Recorder of Deeds in Providence. On July 30, 2007, Seattle Savings

Bank executed a quitclaim deed conveying the property to Fannie Mae. Fannie Mae recorded

the quitclaim deed on August 3, 2007.

On or about August 3, 2007, Fannie Mae sent a notice of termination of tenancy by

sufferance to defendant pursuant to G.L. 1956 § 34-18.1-2.1 The notice instructed defendant to

vacate the property by August 14, 2007. The defendant failed to comply. As a result, on

September 7, 2007, Fannie Mae filed a trespass and ejectment complaint in Sixth Division

District Court. In the District Court, the parties entered into a stipulation to transfer the case to

Superior Court because “[d]efendant’s defense relies upon issues of [t]itle which are properly

heard in the Superior Court.” An order was entered to that effect.

1
General Laws 1956 § 34-18.1-2 provides that “[t]enants of lands or tenements at will or by
sufferance covered by this chapter shall quit upon notice in writing from the landlord at the day
named therein.”

-3-
 Prior to trial in Superior Court, the parties entered into a joint statement of undisputed

facts. In addition to many of the facts outlined above, the parties further agreed that, on July 10,

2007, an assignment naming Seattle Mortgage Company as assignor was recorded in the Office

of the Recorder of Deeds in Providence in book 8763 at page 94. That document, which was

prepared by DocX, a subsidiary of Lender Processing Services, Inc. (LPS), failed to name an

assignee. Further, the parties agreed that, at the time of trial, there remained on record a tax sale

deed to Rookies Real Estate, NLR Partners, recorded on August 3, 2012. However, Fannie Mae

was within the time to redeem the property and no petition to foreclose the right of redemption

had been filed.2

The nonjury trial commenced on March 20, 2013. At trial, defendant, in an effort to

defeat Fannie Mae’s trespass and ejectment action, relied heavily upon the Seattle Mortgage

Company assignment and the August 2012 tax-sale deed. In addition, defendant urged the trial

justice to enforce subpoenas duces tecum that he had caused to be served upon LPS and Bank of

America (BOA), respectively, one day and two days before the commencement of trial. The trial

justice refused to enforce the subpoenas because they were overbroad and violated the pretrial

order closing discovery on February 19, 2013. Further, the trial justice found that enforcing the

subpoenas would inevitably require the trial to be suspended for an unspecified length of time.

On March 22, 2013, the trial justice issued a bench decision. In her decision, she

determined that a presumption in favor of the record title holder, Fannie Mae, existed and that

clear and convincing evidence was necessary to overcome that presumption. The trial justice

found that the Seattle Mortgage Company assignment failed to rebut the presumption because it

2
General Laws 1956 § 44-9-25(a) provides in pertinent part that “[a]fter one year from a sale of
land for taxes, except as provided in §§ 44-9-19 – 44-9-22, whoever then holds the acquired title
may bring a petition in the [S]uperior [C]ourt for the foreclosure of all rights of redemption
under the title.”

-4-
was an extraneous document that lay outside Fannie Mae’s chain of title. Further, the trial

justice gave no weight to the August 2012 tax-sale deed because Fannie Mae’s right to redeem

was still in effect.3 Accordingly, the trial justice awarded Fannie Mae possession of the property.

Judgment in favor of Fannie Mae entered on the same day.

On March 29, 2013, defendant filed a motion to stay the execution of judgment. The trial

justice granted defendant’s motion, staying the execution for possession until April 20, 2013 in

order to give defendant an opportunity to request a stay from this Court. On April 5, 2013,

defendant timely filed his notice of appeal. Also, defendant filed a motion to stay execution of

the judgment with this Court. We did not oblige.

On appeal, defendant raises five points of contention. First, defendant argues that “[f]or

lack of personal jurisdiction over the Estate of Etta E. Malinou the Superior Court did not have

subject matter jurisdiction to determine title to the real estate devised in her [w]ill.” The

defendant contends that personal jurisdiction over decedent’s estate was lacking because Fannie

Mae failed to serve the estate. Second, defendant argues that this Court should not give

deference to the trial justice’s findings of fact because they were based entirely on documentary

evidence. Third, defendant avers that the trial justice erred when she required clear and

convincing evidence to rebut the presumption in favor of Fannie Mae. Fourth, defendant

contends that the trial justice erred when she failed to enforce the subpoenas duces tecum issued

3
Section 44-9-21 provides in pertinent part that “[a]ny person may redeem by paying or
tendering to a purchaser, other than the city or town, his or her legal representatives, or assigns,
or to the person to whom an assignment of a tax title has been made by the city or town, at any
time prior to the filing of the petition for foreclosure * * *.” We have reiterated that the right to
redeem exists up until the petition to foreclose is pending in court. See ABAR Associates v.
Luna, 870 A.2d 990, 997 (R.I. 2005); Theta Properties v. Ronci Realty Co., 814 A.2d 907, 918
(R.I. 2003).

-5-
upon LPS and BOA. Finally, defendant argues that the August 2012 tax-sale deed in favor of

Rookies Real Estate divested Fannie Mae of the right to possess the property.

II

Standard of Review

It is well established that this Court’s review of a trial justice’s decision following a

nonjury trial is deferential. Banville v. Brennan, 84 A.3d 424, 429 (R.I. 2014) (citing Cigarrilha

v. City of Providence, 64 A.3d 1208, 1212 (R.I. 2013)). “When we review the factual findings

of a trial justice sitting without a jury, we accord those findings great deference.” Lamarque v.

Centreville Savings Bank, 22 A.3d 1136, 1140 (R.I. 2011) (citing Ondis v. City of Woonsocket

ex rel. Treasurer Touzin, 934 A.2d 799, 802 (R.I. 2007)). “Pure questions of law, however, we

review on a de novo basis.” Id. Thus, “[a] judgment in a nonjury case will be reversed on

appeal when it can be shown that the trial justice misapplied the law, misconceived or

overlooked material evidence or made factual findings that were clearly wrong.” Id. at 1139-40

(quoting Cathay Cathay, Inc. v. Vindalu, LLC, 962 A.2d 740, 745 (R.I. 2009)).

III

Discussion

A

Subject Matter Jurisdiction

The defendant’s first argument before this Court is that the Superior Court did not have

subject matter jurisdiction over the controversy because there was no personal jurisdiction over

the estate. The defendant contends that personal jurisdiction over decedent’s estate was lacking

because Fannie Mae failed to serve the estate. The record reflects that defendant failed to raise

this argument in the lower court. According to this Court’s well settled raise-or-waive rule,

-6-
issues not properly presented before the trial court may not be raised for the first time on appeal.

Peloquin v. Haven Health Center of Greenville, LLC, 61 A.3d 419, 430 (R.I. 2013) (citing State

v. Breen, 767 A.2d 50, 57 (R.I. 2001)). Because defendant failed to argue that the Superior

Court lacked personal jurisdiction in the lower court, we conclude that that argument has been

waived.

Notwithstanding defendant’s waiver, “it is well settled that by a general appearance a

defendant submits himself to the jurisdiction of the court, [and] any failure to serve him with

process becomes immaterial.” Mack Construction Co. v. Quonset Real Estate Corp., 84 R.I. 190,

194, 122 A.2d 163, 164 (1956) (citing Industrial Trust Co. v. Rabinowitz, 65 R.I. 20, 13 A.2d

259 (1940)); see also Robert B. Kent et al., Rhode Island Civil Procedure § 12:2 at III-39 (West

2006) (“a defendant who simply answers to the merits of a claim thereby consents to the

jurisdiction of the court”). Fannie Mae’s underlying complaint sought to evict defendant,

decedent, and all other occupants of the property. In response, defendant entered an appearance

on behalf of himself and the decedent. The defendant made a suggestion of decedent’s death on

the record and admitted that he was the sole occupant of the property. Accordingly, we conclude

that defendant’s argument concerning lack of personal jurisdiction is unavailing.

However, that does not end our jurisdictional inquiry. A challenge to subject matter

jurisdiction “may not be waived by any party and may be raised at any time in the proceedings.”

Boyer v. Bedrosian, 57 A.3d 259, 270 (R.I. 2012) (quoting Pine v. Clark, 636 A.2d 1319, 1321

(R.I. 1994)). Indeed, at the outset of the nonjury trial, the trial justice herself questioned whether

or not she had jurisdiction over the trespass and ejectment action because it was not before her

on a District Court appeal; rather, it was being tried in the first instance in the Superior Court

after the parties had transferred it to that tribunal.

-7-
 General Laws 1956 § 8-8-3(a)(2), provides that the District Court shall have exclusive

original jurisdiction of “[a]ll actions between landlords and tenants pursuant to chapter 18 of title

34 and all other actions for possession of premises and estates * * *.” In addition, G.L. 1956 § 8-

2-14(a) states that “[t]he [S]uperior [C]ourt shall have original jurisdiction of all actions at law

where title to real estate or some right or interest therein is in issue, except actions for possession

of tenements let or held at will or by sufferance * * *.” No provision of G.L. 1956 chapters 18 or

18.1 of title 34, provides for the removal of trespass and ejectment actions to the Superior Court

for trial.

However, it is well established that a party who stipulates to judgment in the District

Court is entitled to appeal that judgment to the Superior Court for a trial de novo. Harris v.

Turchetta, 622 A.2d 487, 490 (R.I. 1993) (citing Stidhams v. McPherson, 106 R.I. 295, 259 A.2d

114 (1969)). Further, this Court previously has reviewed a trespass and ejectment action that

was, by agreement, removed from the District Court to the Superior Court for trial. Martineau v.

King, 120 R.I. 265, 266, 386 A.2d 1117, 1118 (1978). In Martineau, we discerned no

jurisdictional deficiency, in that the case was removed to the Superior Court by agreement

because, as is the case here, issues of title were raised in defense to the trespass and ejectment

action. Id.

Here, the parties entered into a stipulation to transfer the case to Superior Court because

“[d]efendant’s defense relies upon issues of [t]itle which are properly heard in the Superior

Court.” Based upon that stipulation as well as the fact that numerous issues had been raised

regarding title, the District Court entered an order granting the transfer. By agreeing to transfer

the case to the Superior Court, the parties were, in essence, adhering to the same procedure as

-8-
had the parties in Martineau, 120 R.I. at 266, 386 A.2d at 1118. Accordingly, we hold that the

trial court had subject matter jurisdiction over the instant action.

B

The Documentary Evidence

Next, defendant argues that this Court should not give deference to the trial justice’s

findings of fact because they were based entirely on documentary evidence. Instead, defendant

urges this Court to engage in a de novo review of the evidence. As support, defendant cites

Imperial Casualty and Indemnity Co. v. Bellini, 888 A.2d 957 (R.I. 2005); however, nowhere in

that case did this Court make any such pronouncement. To the contrary, this Court has explained

that “[f]indings of fact by a trial justice sitting without a jury are entitled to great weight and will

not be disturbed by the reviewing court unless they are clearly wrong. This has been our guiding

principle even when the issue to be resolved depends upon the interpretation of documentary

evidence.” Zifcak v. Greater Woonsocket Board of Realtors, Inc., 117 R.I. 9, 13, 362 A.2d 763,

766 (1976) (citing Chase v. Blackstone Distributing Co., 110 R.I. 537, 545, 294 A.2d 392, 396

(1972)). We see no reason to depart from that time-tested standard here.

C

Evidence Necessary to Overcome Presumption in Favor of Record Title Holder

Further, defendant contends that the trial justice erred when she required that clear and

convincing evidence be presented by him to rebut the presumption that Fannie Mae acquired title

to the property based upon the record title. As support, the trial justice relied upon Providence &

Worcester Co. v. Exxon Corp., 116 R.I. 470, 359 A.2d 329 (1976), and Newport Yacht Club,

Inc. v. Deomatares, 93 R.I. 60, 171 A.2d 78 (1961). Although those cases indicate that a

presumption in favor of the record title holder exists, it is our opinion that neither case holds that

-9-
clear and convincing evidence is required to overcome the presumption. Providence &

Worcester Co., 116 R.I. at 488, 359 A.2d at 339; Newport Yacht Club, Inc., 93 R.I. at 64, 171

A.2d at 80.4

In this case, however, it is unnecessary to make such a pronouncement, because the

evidence submitted by defendant fails even under the less stringent, preponderance of the

evidence standard. We previously have held that Seattle Savings Bank had the authority to

foreclose. Malinou, 970 A.2d at 12. The record is clear that after the foreclosure, Seattle

Savings Bank conveyed its rights and interests in the property to Fannie Mae by means of a

quitclaim deed. The only document that could cast any doubt on Fannie Mae’s title was the

assignment involving Seattle Mortgage Company. The validity of the Seattle Mortgage

Company assignment was appropriately questioned by the trial justice as a result of defendant’s

allegations concerning the fraudulent business practices committed by DocX, the party that

prepared the assignment at issue. In addition, the Seattle Mortgage Company assignment is an

extraneous document that is outside Fannie Mae’s chain of title. Accordingly, and although we

depart somewhat from the trial justice’s reasoning, we nonetheless uphold her finding that

defendant failed to rebut the presumption that Fannie Mae was entitled to possession of the

property.

4
In some cases concerning real property, such as adverse possession and establishing an
easement, we require clear and convincing evidence in support of such claims. See DiPippo v.
Sperling, 63 A.3d 503, 508 (R.I. 2013); Ondis v. City of Woonsocket ex rel. Treasurer Touzin,
934 A.2d 799, 803 (R.I. 2007); see also 74 C.J.S. Quieting Title § 76 at 70-71 (2013) (proof of
title raises a presumption of possession or a right of possession that is rebutted by clear and
convincing evidence).

- 10 -
 D

Subpoena Enforcement

Next, defendant contends that the trial justice erred when she failed to enforce subpoenas

duces tecum served upon LPS and BOA. The defendant argues that the trial justice strayed

beyond the bounds of her discretion when she refused to enforce the subpoenas. Alternatively,

defendant avers that, even if the trial justice had the discretion to decide whether to enforce the

subpoenas, her failure to enforce them was an abuse of that discretion.

This Court has held that “parties should not be allowed to employ a subpoena after a

discovery deadline [on the eve of trial] to obtain materials from third parties [or parties] that

could have been produced before discovery [closed].” Butera v. Boucher, 798 A.2d 340, 345

(R.I. 2002) (quoting 9A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure,

§ 2452 (Supp. 2002)). In Butera, the Court determined that a subpoena issued on the “eve-of-

trial” that was both “overbroad and untimely” should not be enforced. Id.; see also National

Exchange Bank v. Lubrano, 29 R.I. 64, 70, 68 A. 944, 946 (1908) (refusing to enforce a

subpoena duces tecum issued after the close of the plaintiff’s case because the defendant had had

ample opportunity to request evidence prior to trial). The Court explained that a “subpoena

duces tecum, when [employed] as a means of belated discovery, should not be allowed to

circumvent the discovery deadlines for parties established by the other rules of civil procedure or

by court order.” Butera, 798 A.2d at 345.

The record reflects that the LPS and BOA subpoenas were served, respectively, one day

and two days before the commencement of trial. The subpoenas, which were unlimited as to

time, sought all documents and information, electronic or otherwise, related to the mortgage at

issue, including the account history and trail of assignment. The trial justice said that if the

- 11 -
subpoenas were to be enforced, the trial would have to be suspended, because LPS and BOA

“would need weeks, if not months, to search for, organize, and compile the information and to

assert any objections and privileges they might deem appropriate.” Further, she found that

defendant had “had a substantial period of time to conduct discovery, including [Super. R. Civ.

P.] 30(b) depositions” prior to trial. The trial justice also indicated that enforcing the eve-of-trial

subpoenas would have run contrary to the pretrial order that closed discovery on February 19,

2013. In light of the foregoing, it is our opinion that the trial justice’s decision was not an abuse

of discretion and we see no reason to disturb it.

E

2012 Tax Sale Deed

Finally, the defendant argues that, because the property was sold at a tax sale conducted

by municipal authorities in 2012, Fannie Mae no longer had the authority to bring the action.

But a reading of G.L. 1956 § 44-9-12(a) reveals that a tax sale does not “give to the purchaser

any right to either the possession, or the rents, or profits of the land until the expiration of one

year after the date of the sale * * *.” This Court has explained that “[o]ne who purchases

property at a tax sale acquires a title that is contingent upon the owner’s nonredemption.”

Alberston v. Leca, 447 A.2d 383, 388 (R.I. 1982) (citing § 44-9-12). It is undisputed that, at the

time of trial, Fannie Mae retained its right of redemption. Accordingly, the trial justice correctly

found that Fannie Mae had the right to possess the property.5

5
It was disclosed at oral argument that FNMA had in fact redeemed the title to the property.

- 12 -
 IV

Conclusion

For the foregoing reasons, we affirm the judgment of the Superior Court, to which the

papers in the case may be remanded.

- 13 -
 RHODE ISLAND SUPREME COURT CLERK’S OFFICE

Clerk’s Office Order/Opinion Cover Sheet

TITLE OF CASE: Federal National Mortgage Association v. Etta E. Malinou et al.

CASE NO: No. 2013-179-Appeal.
(PD 09-3907)

COURT: Supreme Court

DATE OPINION FILED: October 20, 2014

JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

WRITTEN BY: Associate Justice Francis X. Flaherty

SOURCE OF APPEAL: Providence County Superior Court

JUDGE FROM LOWER COURT:

Associate Justice Patricia A. Hurst

ATTORNEYS ON APPEAL:

For Plaintiff: Michael J. Polak, Esq.

For Defendant: Martin S. Malinou, Pro Se