Davenport v. Deutsche Bank National Trust Co.

Cite as 2017 Ark. App. 134

ARKANSAS COURT OF APPEALS
DIVISION I
No. CV-16-335

BRAD W. DAVENPORT
Opinion Delivered: March 8, 2017
APPELLANT

V. APPEAL FROM THE FAULKNER
COUNTY CIRCUIT COURT
DEUTSCHE BANK NATIONAL TRUST [NO. 23CV-2014-10]
COMPANY, AS TRUSTEE, IN TRUST
FOR THE REGISTERED HOLDERS OF
MORGAN STANLEY ABS CAPITAL I HONORABLE MIKE MURPHY,
TRUST 2006-HE7 MORTGAGE PASS- JUDGE
THROUGH CERTIFICATES,
SERIES 2006-HE7 APPEAL DISMISSED
APPELLEE

BART F. VIRDEN, Judge

This case involves alleged inadequacies in the assignment and foreclosure of a

mortgage. Appellant Brad Davenport claims that the Faulkner County Circuit Court erred

in granting the motion for summary judgment filed by appellee Deutsche Bank Trust

Company, as trustee, in trust for the registered holders of Morgan Stanley ABS Capital I

Trust 2006-HE7 Mortgage Pass-Through Certificates, Series 2006-HE7 (“Deutsche

Bank”). The motion for summary judgment covered both the claims in Davenport’s

complaint and in Deutsche Bank’s counterclaim for foreclosure on the mortgage. On appeal,

Davenport presents a multitude of theories as to why Deutsche Bank lacked legal possession

over both his mortgage and the accompanying notes, making it an improper party to
Cite as 2017 Ark. App. 134

foreclose. However, we are without jurisdiction due to an untimely notice of appeal and,

therefore, have no choice but to dismiss the appeal.

In June 2006, Davenport gave a first and second mortgage on his home to New

Century Mortgage. Wesley Snodgrass of American Residential Mortgage brokered the deal.

Some months later, Deutsche Bank bought these two mortgages and the related notes in a

secondary market. Bank of America (BOA) serviced the notes, including accepting

payments for Deutsche Bank.

By letter dated June 9, 2009, Davenport sent Deutsche Bank and BOA a notice that

purported to rescind the loan transaction based on constructive fraud. Thereafter, Davenport

filed several suits against Deutsche Bank and other lenders involved with Davenport’s notes

and mortgages. These cases were originally filed in state courts and removed to federal court.

The claims were ultimately dismissed and are not at issue in this appeal.

In December 2010, Davenport filed suit in Lonoke County Circuit Court against

Snodgrass and TBS Investments doing business as American Residential Mortgage for fraud,

violation of the Truth in Lending Act (TILA), violation of the Arkansas Deceptive Trade

Practices Act (ADTPA), breach of contract, and outrage. These claims were based on

allegations that Snodgrass had forged Davenport’s signature to certain documents and had

failed to provide Davenport with certain required disclosures. The Lonoke County Circuit

Court entered judgment in Davenport’s favor in the sum of $250,000 on July 26, 2012.

On January 10, 2014, Davenport filed the present action to stop Deutsche Bank and

its attorneys, Marinosci Law Group, P.A., from proceeding with a nonjudicial statutory

foreclosure on the notes and mortgages. The allegations of his complaint make it clear that

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he is unhappy with the securitization process by which much of the residential-mortgage

lending is funded. He asserted causes of action for violations of the ADTPA and the

nonjudicial foreclosure act. One of his allegations was that, because the note and mortgage

had been securitized, it could no longer be enforced through foreclosure. In addition, he

asserted that Deutsche Bank was guilty of unclean hands and that he was entitled to a setoff

of the judgment he had received against Snodgrass and TBS Investment in the amount of

$250,000.

After Davenport had obtained a temporary restraining order from the circuit court

enjoining the sale of the property, Deutsche Bank agreed to cancel the foreclosure sale.

The circuit court would later find that Davenport’s request for a temporary restraining order

was moot.

Deutsche Bank answered, denying the material allegations of the complaint. It filed

an amended answer and counterclaim seeking a judicial foreclosure. The bank asserted that

Davenport was in default and had failed to cure the default after notice. The counterclaim

asserted that the note was indorsed in blank by New Century and, with the mortgage,

assigned to Deutsche Bank, but that the assignment was lost and could not be found.

Deutsche Bank further attached an affidavit regarding the lost or misplaced assignment.

Davenport denied the material allegations pertaining to the assignment of the note and

mortgage and his default in payment.

On June 15, 2015, Deutsche Bank filed a motion for summary judgment as to both

Davenport’s complaint and its own counterclaim for foreclosure. Davenport filed a response

and supporting brief to the bank’s motion for summary judgment. The court held a hearing

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on the motion for summary judgment and, at the conclusion of the hearing, took the matter

under advisement. While awaiting the court’s ruling on the motion, on December 4, 2015,

Davenport filed an amended complaint. In addition to the claims contained in his original

complaint, Davenport asserted a claim for damages and for rescission based on alleged

violations of the TILA.

On December 18, 2015, Deutsche Bank filed a motion to strike the amended

complaint as prejudicial for unduly delaying resolution of the case. In the alternative, the

motion asserted that the amended complaint should be dismissed for failure to state facts

upon which relief could be granted. Davenport responded to the motion to strike.

On January 27, 2016, the circuit court granted Deutsche Bank’s motion for summary

judgment and granted it a decree of foreclosure. The court granted Davenport’s request that

he be declared the owner of the property, subject to Deutsche Bank’s mortgage interest.

The court found that Davenport was in default in making his payments under the note and

had failed to cure the default. The court found that Davenport’s claim for injunctive relief

was moot. The court further found that Davenport’s ADTPA claims failed as a matter of

law because the ADTPA did not apply to Deutsche Bank’s actions. The court further

concluded that, assuming the ADTPA applied, such claims failed as a matter of law because

they were barred by the applicable statute of limitations, Davenport lacked standing to

challenge the validity of the mortgage securitization or the validity of the assignment, and

the assignment was not required to be recorded. The court further found that Davenport’s

request to setoff the $250,000 judgment against Snodgrass against any sums owed to

Deutsche Bank was barred by res judicata. Additionally, the court found that Deutsche Bank

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bore no responsibility for Snodgrass’s actions or the judgment entered against him. Based

on these findings, the court granted summary judgment to Deutsche Bank on its

counterclaim for foreclosure. Deutsche Bank was granted judgment in the amount of

$219,310.75, representing $173,346.05 in unpaid principal, $34,047.44 in accrued and

unpaid interest as of May 21, 2015, and $11,917.26 in other fees and charges. The judgment

was in personam against Davenport and in rem against the property. Deutsche Bank was

awarded attorney’s fees of $40,289. The circuit clerk was appointed as commissioner to sell

the property.

On February 1, 2016, the circuit court granted Deutsche Bank’s motion to strike the

amended complaint. Davenport filed his notice of appeal on February 11, 2016, from both

the order granting summary judgment and the order striking his amended complaint.

An agreed order was entered on February 18, 2016, dismissing Davenport’s claims

against the Marinosci Law Group.

We begin by addressing whether we have jurisdiction of this appeal. While neither

party raises the issue, the timely filing of a notice of appeal is a jurisdictional issue this court

is obligated to raise sua sponte. See, e.g., Ellis v. Ark. State Highway Comm’n, 2010 Ark. 196,

363 S.W.3d 321; Tissing v. Ark. Dep’t of Human Servs., 2009 Ark. 166, 303 S.W.3d 446.

We must therefore determine whether Davenport has filed a timely notice of appeal.

Rule 2(a)(1) of the Arkansas Rules of Appellate Procedure–Civil states that an appeal

may be taken from a final judgment or decree. A final order is one that dismisses the parties,

discharges them from the action, or concludes their rights to the subject matter in

controversy. Stewart v. Estate of Herring, 2016 Ark. App. 83. Absent a final order or a properly

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executed certificate from the circuit court making an “express determination, supported by

specific factual findings, that there is no just reason for delay,” then an order that fails to

adjudicate all of the parties’ claims cannot be appealed. Ark. R. Civ. P. 54(b). The summary-

judgment order entered on January 27, 2016, disposed of Davenport’s claims against

Deutsche Bank and the bank’s counterclaim seeking foreclosure. However, at the time,

Davenport’s claims against the Marinosci Law Group had not been disposed of, making the

summary-judgment order not final for purposes of appeal. Thus, Davenport’s notice of

appeal from the summary judgment and the order striking his amended complaint was a

nullity. See Servewell Plumbing, LLC v. Summit Contractors, Inc., 360 Ark. 521, 202 S.W.3d

525 (2005) (per curiam).

We recognize that the law firm was named as a party solely as part of Davenport’s

request for a temporary restraining order to prevent a foreclosure sale from proceeding.

Deutsche Bank later canceled the sale and proceeded with its counterclaim seeking judicial

foreclosure. The circuit court would later find Davenport’s claim for a temporary restraining

order moot. The order striking Davenport’s amended complaint was entered on February

1, 2016. Davenport filed his notice of appeal from both orders on February 11, 2016. It was

not until an agreed order was entered on February 18, 2016, that the Marinosci Law Group

was actually dismissed from the case. However, the first notice of appeal was a nullity, and

Davenport did not file another notice of appeal after the summary judgment had become

final upon the dismissal of the law firm.

Although the notice of appeal complies with Ark. R. App. P.–Civ. 3(e)(vi) by stating

that Davenport abandons all pending and unresolved claims, that does not save the appeal.

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Our supreme court has held that the rule does not allow an appealing party to dismiss a party

from the action by such a statement in a notice of appeal or notice of cross-appeal. See Ford

Motor Co. v. Washington, 2012 Ark. 354. Instead, that rule allows the dismissal of stray claims.

Here, we are dealing with a stray party.

Because no notice of appeal was filed after the summary judgment had become final,

we must dismiss the appeal.

Appeal dismissed.

ABRAMSON and GLADWIN, JJ., agree.

Willard Proctor, Jr., P.A., by: Willard Proctor, Jr., for appellant.

Wright, Lindsey & Jennings LLP, by: Judy Simmons Henry and Gary D. Marts, Jr., for

appellee.