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Case number 15-5186, Bank of New York Mellon as successor in interest to JPMorgan Chase Bank National Association, as successor in interest to Bank One National Association, as trustee for A Securities Corp.

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Home Equity Loan Trust, Series 2003-HS1, Asset Pass-Through Certificates, formerly known as Bank of New York Trust Company and A, formerly known as JPMorgan Chase Bank versus Perry M. Henderson.

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formerly known as Perry and Bryant Appellate, United States of America.

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Mr. Enzina for the amicus cari, Mr. Reza for the appellate.

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Good morning, Your Honors, and may it please the Court.

[00:00:43] Speaker 02:
Good morning.

[00:00:44] Speaker 05:
I'm Paul Enzina, appointed as amicus to present argument in support of the Appellate's position.

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This is a foreclosure action.

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The appellant, Mr. Henderson, is the borrower and there is no dispute that Mr. Henderson defaulted on the loan.

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the district court granted summary judgment.

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However, the district court granted summary judgment on the ground that the defendant, Mr. Henderson, blacked standing.

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And standing is inapposite here.

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The standing doctrine enforces Article III's Cases and Controversies limitation on the courts.

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In order to preclude the courts from providing advisory opinions, the standing doctrine requires that the party invoking the court's authority have an injury that can be redressed

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by the court's ruling.

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As the district court noted, this is the basis for some of the courts that have held that a borrower lacks standing to challenge the assignment of a mortgage note, because his rights and obligations, that is the rights and obligations of the borrower, would not be changed by a ruling of the district court, and that opinion would be purely advisory.

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Here, the Article III judicial power was invoked by the Bank of New York and not by the appellant.

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I'm just curious.

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I could look this up, but did the bank invoke standing in the district court?

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What's the matter?

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Did the bank invoke standing?

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I just don't remember.

[00:02:10] Speaker 05:
No, the bank did not raise the appellant's standing as an issue.

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The district court raised it on its own?

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Yes.

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OK, great.

[00:02:16] Speaker 02:
Thanks.

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There are state cases that do talk in terms of standing, right?

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I'm sorry?

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There are comparable state cases that talk in terms of standing.

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I think that's correct, Your Honor, but I think those are cases in which the borrower is challenging the assignment, affirmatively, where the borrower is seeking to invoke the court's power.

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Here, it's not the borrower that's seeking to invoke the court's power.

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And the bank has alleged everything it needs to allege to show standing.

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It has alleged that it was injured by the appellant's default, and it has alleged that... Well, the bank's standing wasn't questioned by the court.

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Correct.

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Correct.

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In fact, the district court sort of got it backwards here.

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The issue was not whether Mr. Henderson was entitled to attack the assignment.

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The question for decision here was whether the bank was entitled to enforce the note.

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So if we agree, if we think you're right, from our point of view, that's the end of it.

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We just send it back, right?

[00:03:16] Speaker 05:
Yes, correct, Jay.

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All right.

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The district court held that the borrower's default is sufficient and that the borrower cannot attack the assignment.

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Accepting that rule would mean that anyone could raise to defend the borrower's default even a stranger to the note.

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But unless the person raising that claim of default is the actual holder of the note, any opinion by the court would be an advisory opinion.

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What do we know here about the bank's holding of the note and the deed of trust?

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Your Honor, I'm sorry.

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I'm having a great deal of difficulty hearing you.

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I'm not sure we fully know whether the bank has both the note, it's the assiny of both the note and the deed, deed of trust.

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I'm sorry, Your Honor.

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I don't think your mic's working.

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It's working.

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Is it?

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Yeah.

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Because I can hardly hear you.

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Well, it's the blower.

[00:04:13] Speaker 05:
Oh, I'm afraid I'm getting old, Your Honor.

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Join the club.

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There's a document that traces the note, I guess it is, and through the assignments.

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But I couldn't find anything with regard to the Deed of Trust.

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Did they travel together, or what happened to that?

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Your Honor, to be perfectly honest, I'm not sure I know the answer to that question.

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The issue here, though, is that when the bank moved for summary judgment, the bank was required to show two things.

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One, that the borrower had defaulted, and two, that the bank was entitled to relief on that basis.

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And there was no dispute that the borrower defaulted.

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But in order to show its entitlement to relief, the bank simply relied on its allegations in the complaint.

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It simply alleged that it was the holder of the note in due course.

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And I want to read something that's in the bank's brief.

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Bank says the burden was on Henderson to provide a question of fact sufficient to defeat summary judgment.

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And the district court correctly found that he had not met that burden.

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That's on page 12 of the bank's brief.

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Now that, in a nutshell, is exactly what should have happened here.

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But that is not what happened here.

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The court did not put the burden on Henderson to prove that the bank did not possess the note.

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What the court did was the court said the defendant lacks standing to challenge that.

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and did not consider.

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the appellant's evidence in that regard.

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Now, it may well be that the bank could have survived a motion for summary judgment by putting forward facts.

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For example, an affidavit that said that the note was assigned and attaching perhaps the document showing the assignment, they cite part of the note in their brief.

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And if that had been presented to the court on summary judgment, that would have shifted the burden to the borrower to allege specific facts raising a genuine issue

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a genuine issue of material fact.

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But that is not at all what the district court did here.

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I'd like to move on and address the court's ruling on the motion to dismiss, specifically the motion to dismiss Mr. Henderson's counterclaim for injunctive and declaratory relief, alleging that the bank failed to provide the notice required by the National Housing Act.

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The district court found that the bank had met that obligation.

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This was improper on a motion to dismiss.

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A motion to dismiss does not permit the court to make a factual determination.

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The court is required to accept the claimant's allegations of fact as true and determine whether the claim is legally sufficient.

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Now, the bank argues that the court could consider

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the document that it did.

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What the court said was that the bank met that obligation by virtue of a letter that was attached to the bank's complaint.

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And the bank argues that, well, a court is entitled on a motion to dismiss to consider documents attached to the complaint.

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And that is true, but

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What that means is that the court is entitled to consider documents attached to the claim at issue.

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The document at issue here was not a document attached to the claim at issue.

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It was attached to the bank's claim and not to the appellant's counterclaim.

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The point is that the court is required to take the non-movements factual allegations as true.

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Why can't we on appeal convert that to summary judgment?

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Well, that's not what the district court did.

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We can do it on appeal.

[00:08:01] Speaker 03:
Well, one of the difficulties with that is that there's nothing to suggest he was going to come forth with anything to overcome it.

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And there is case law on the circuit that says we can convert it on appeal.

[00:08:15] Speaker 05:
Well, that is something that we don't know.

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Whether or not the borrower could have or would have come forward with something to dispute that, we don't know that at this point.

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Well, there's absolutely nothing to suggest he could have come forth with anything, right?

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is correct as far as I know, but... Yeah, I mean, if you're contending, it's an inappropriate emotion to dismiss, and there's some things that you have to say.

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Normally, you indicate what they are.

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So the only thing that's there is adverse to his position.

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Clearly adverse to his position.

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That is correct.

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And in fact, the district court could have converted this to a summary justification.

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Right, and we can as well.

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But when the district court does that, the district court is required to give... No, but that's not my point.

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I know the district court didn't.

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We can as well.

[00:09:01] Speaker 04:
I think you're not taking yes for an answer.

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Yeah.

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We can.

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Well, then I guess I will take that and reserve my time for one.

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Well, what's the argument against us doing that?

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Against you doing it?

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Yeah.

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The argument is simply that the borrower has not had the opportunity that he should have had under Rule 12.

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To show what?

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Well, under Rule 56.

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To show what?

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That's the point.

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I mean, if you said, but wait, here's what

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He might show, and indeed we tried to say that, and we've said it in our briefs, and there's nothing to indicate that he has anything to show.

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Well, suppose, for example, the plaintiff or the borrower in this case came forward with an affidavit saying that I did not receive that letter.

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So where's the affidavit?

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Well, he didn't put it in an affidavit because this was a rule of 12 motion.

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You could have put it in there.

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You could have put it in on appeal.

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My whole point is, at least as I'm remembering the cases,

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You're not suggesting there's anything more to be found other than...

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what the district court looked at that was attached to the bank's complaint.

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I understand that.

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They're not normally supposed to do it, but if there's nothing else there, we can convert that to a summary judgment.

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But the difficulty here is that the borrower has never had the opportunity to address this as a motion for summary judgment.

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Well, you know, the only way to look at this, it isn't clear what the borrower, the borrower, I don't want to characterize it, but there are lots of assertions citing

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you know, all kinds of statutes and regulations, but nothing to suggest that there's anything to it.

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The notice was given.

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But the difficulty is that in this case, by considering the bank's evidence, the district court gave the bank the benefit of what Rule 56 would give them on a summary judgment.

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But the appellate

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Mr. Henderson did not have that same opportunity.

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So you're saying the District Court should have avoided the problem by saying, I'm converting this to summary judgment?

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Yes.

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You've got to add anything?

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Right, provided notices.

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And you just don't want to deal with my assertion that we can do that, too.

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But in any event, I hear you.

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OK.

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Thank you, Your Honor.

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All right.

[00:11:23] Speaker 01:
May I please the court?

[00:11:24] Speaker 01:
Good morning.

[00:11:25] Speaker 01:
My name is Mohsin Riza and I was presenting argument in support of the appellate this morning.

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The district court correctly ruled on both the motion for summary judgment and the motion dismissed.

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In support of the motion for summary judgment, Bank of New York.

[00:11:40] Speaker 02:
Are you defending the district court's standing decision?

[00:11:44] Speaker 01:
Yes, Your Honor.

[00:11:45] Speaker 01:
I believe the district court.

[00:11:46] Speaker 01:
You are?

[00:11:46] Speaker 01:
You are.

[00:11:47] Speaker 02:
What?

[00:11:48] Speaker 02:
What?

[00:11:49] Speaker 01:
What is it?

[00:11:51] Speaker 01:
Where is that coming from?

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I said, are you defending the District Court's standing, this determination that he likes standing, Article 3 standing?

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And if so, what is the possible basis for defending that?

[00:12:06] Speaker 01:
Your Honor, I think there's two different types of standing that are at issue in this case.

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There's the constitutional Article 3 standing.

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There's another type of standing, the prudential standing.

[00:12:17] Speaker 02:
No, no, no.

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We're talking about Article III standing.

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The district court ruled on Article III standing.

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He said he didn't have standing in this case.

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He's a debtor asserting defenses against a purported credit.

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Why?

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I can't imagine why he doesn't have standing.

[00:12:32] Speaker 01:
Well, Your Honor, I... What is it?

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With regard to standing, we're talking about specific documents, not the fact that Mr. Henderson could not bring these claims or bring these defenses.

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The standing issue involved whether or not he, as a borrower, as a non-party to the assignment of the Deed of Trust, the Exhibit D to the complaint, whether or not Mr. Henderson had to write the standing, quote unquote, however you want to use that phrase, whether it's constitutional or prudential standing, to challenge that document.

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We believe in the district court agreed that Mr. Henderson did not have the standing to challenge in an assignment, essentially a contract to which he was not a party.

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That's where we believe the district court focused its standing argument.

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I think there's a little confusion about whether or not it's a

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It's a constitutional Article III standing argument that was being made, or whether it's a standing argument characterized as a prudential type of standing argument, whether you can assert the rights of somebody else in a case.

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This is not a situation where any of the parties to the assignment actually contested that the assignment did not occur, or that any of the parties to the assignment contested that there was something otherwise improper with the assignment.

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The assignment was with MERS, which is not a party that was brought in by the defendant even in his counterplane.

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So it's a different type of standing argument, Your Honor, than I think is what has been explained or characterized on appeal.

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I think the district court correctly got the issue of standing.

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Mr. Henderson did not have

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the standing or the authority to challenge that document.

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He wasn't a party, he wasn't an intended beneficiary, and therefore he could not ask the court to eradicate, to invalidate that document.

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Moreover, Your Honor, even if he did have standing to challenge that assignment,

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that wouldn't prevent the court from finding that the Bank of New York had the authority to proceed with foreclosure.

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District of Columbia law doesn't require a reporter assignment to go forward with a foreclosure.

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What we pled, or what Bank of New York Mellon pled, and what the court recognized

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that there were a couple of things that occurred here.

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The borrower took out a loan.

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The borrower defaulted on the loan.

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We know that's not contested.

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What he contests is whether or not Bank of New York had shown that it has the right, the power, the authority under the loan documents to ask the court to allow it to go forward with foreclosure.

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We believe that the record showed that.

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That we attached, or actually I should say to begin with.

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The district court made no findings on that, correct?

[00:15:17] Speaker 01:
Well, Your Honor, I think it did say that they could move forward with the foreclosure.

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It found that the borrower was in default, and there's no dispute about that.

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It also found that the Bank of New York's assertion that it was the holder and could enforce the note in the deed of trust was also correct.

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Again, this complaint was filed in Superior Court, and it was verified under oath.

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And that allegation was reinforced

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That sworn allegation was reinforced in the motion for summary judgment.

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Bank of New York said, we're the holder, we're the beneficiary, the deed of trust.

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Therefore, under District of Columbia law, when the borrower's default, we have the authority to ask the court, in this case, to do a judicial foreclosure, allow us to go forward with a judicial foreclosure.

[00:15:59] Speaker 03:
What, in your view, did the district court fail to decide on the merits by virtue of its ruling on standing?

[00:16:07] Speaker 03:
what did it fail to decide by virtue of saying there's no standing whatever kind of standing the district court was

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enforcing.

[00:16:15] Speaker 03:
What did the district court then fail to decide?

[00:16:19] Speaker 01:
I don't think it failed to decide anything, Your Honor.

[00:16:22] Speaker 01:
I think Your Honors have correctly pointed out that there's nothing in the record that suggests that the Bank of New York, Mellon, had no standing or no authority to ask the court to foreclose.

[00:16:35] Speaker 01:
What it presented was, again, a denote

[00:16:39] Speaker 01:
which had a special endorsement to the trust.

[00:16:41] Speaker 03:
Wait, I'm not understanding.

[00:16:43] Speaker 03:
If you feel so strongly about the standing point, if you prevailed on that, then there would be some things that would not be properly before the court, right?

[00:16:54] Speaker 03:
Well, there's, there's, there's... What I'm trying to understand is there is this standing cloud in this case.

[00:17:01] Speaker 03:
The district court said there was no standing.

[00:17:05] Speaker 03:
What did the district court then decline to do because it found that Henderson had no standing?

[00:17:13] Speaker 01:
Right, so we, Your Honor, the Bank of New York filed its claim, and the court concluded that we had the standing, the authority to move forward on our claim.

[00:17:22] Speaker 01:
We also defended Mr. Henderson's counterclaim, which was essentially the counterargument, saying that Bank of New York, Maryland did not have the authority to move forward with foreclosure.

[00:17:30] Speaker 01:
Part of his argument was that

[00:17:32] Speaker 01:
there was an assignment in the land records between MERS and the Bank of New York, which was not proper or otherwise effective.

[00:17:41] Speaker 01:
Sending aside whether or not that's an argument, yet there's any merit to that argument, the district court found that he didn't have standing to challenge that assignment because he was not a party.

[00:17:51] Speaker 01:
That assignment did not change his rights.

[00:17:52] Speaker 03:
So the district court declined to decide any issues on the county claims?

[00:17:57] Speaker 03:
What happened, Your Honor, we... Is that what you're saying?

[00:17:59] Speaker 03:
This report did not have to decide and the deed did not decide.

[00:18:02] Speaker 03:
Is that what you're saying?

[00:18:03] Speaker 01:
No, I think it did decide on the count.

[00:18:04] Speaker 01:
That's what I'm confused about.

[00:18:06] Speaker 01:
It did decide.

[00:18:07] Speaker 01:
We filed a motion to dismiss earlier in the case.

[00:18:11] Speaker 01:
It was not ruled on.

[00:18:11] Speaker 01:
By the time that the dispositive motions came up, we reaffirmed our motion dismissed and then filed a summary judgment on those as well, adding additional arguments.

[00:18:21] Speaker 01:
So what the court found was that Mr. Henderson did not allege sufficiently

[00:18:26] Speaker 01:
in response to the motion to dismiss the counterclaims, any facts that were cognizable under the law?

[00:18:34] Speaker 01:
Because of lack of standing?

[00:18:36] Speaker 03:
Not necessarily, Your Honor.

[00:18:37] Speaker 03:
See, if there's no standing, why does that matter?

[00:18:41] Speaker 03:
Why wouldn't the court's disposition on standing end it?

[00:18:44] Speaker 01:
Well, Your Honor, there's different claims.

[00:18:45] Speaker 01:
Again, on appeal, they're focusing on the declaratory judgment and injunctive relief claim.

[00:18:51] Speaker 01:
Part of our issue, unfortunately, Your Honor, is that there's two appellant briefs.

[00:18:55] Speaker 01:
There's one by the amicus and Mr. Henderson.

[00:18:58] Speaker 01:
Mr. Henderson says

[00:19:01] Speaker 01:
he's got a right to bring all of the claims.

[00:19:03] Speaker 01:
Now, those claims included FDCPA claims, they included acquired title claims, FCRA claims.

[00:19:08] Speaker 01:
The appeal that was filed here focuses on the declaratory judgment injunctive relief claim.

[00:19:15] Speaker 01:
Now, that's the flip side of our argument, right, saying that the Bank of New York-Bellin had the authority, the standing, to bring its claims.

[00:19:24] Speaker 01:
Bank of New York now is a holder of the note and is a party that was allowed to enforce the note by virtue of being the holder.

[00:19:32] Speaker 01:
It goes to your question, Your Honor.

[00:19:35] Speaker 01:
The security follows the note.

[00:19:37] Speaker 01:
There's multiple ways that a party can hold the note.

[00:19:41] Speaker 01:
It can be a holder by virtue of having bare paper, a blank endorsement, or it can be a holder by virtue of having special endorsement, which is the case here.

[00:19:50] Speaker 04:
So that was- Wait a minute.

[00:19:52] Speaker 04:
So special endorsement, meaning what?

[00:19:54] Speaker 01:
meaning that the note was endorsed specifically to an entity or a person.

[00:20:00] Speaker 01:
That's what we have here.

[00:20:01] Speaker 04:
And that's... Well, actually, that race took something I wanted to ask you about.

[00:20:09] Speaker 04:
There are two versions of the Long to the Milk Act.

[00:20:14] Speaker 04:
One is at page 46 of the Joint Appendix.

[00:20:20] Speaker 04:
And it says, pay to the order of, without recourse, Bank of New York.

[00:20:27] Speaker 04:
It's not Bank of New York, that's earlier.

[00:20:30] Speaker 04:
At page 202 of the other appendix here, Henderson's appendix, there is the same document, pay to the order of, without recourse, nothing.

[00:20:43] Speaker 04:
So how do these two relate?

[00:20:45] Speaker 04:
How do these two buttons relate to each other?

[00:20:47] Speaker 04:
Why are they different?

[00:20:48] Speaker 01:
So originally, it looks like the note was endorsed in blank.

[00:20:54] Speaker 01:
It happens all the time in mortgage practice.

[00:20:56] Speaker 01:
The note was endorsed in blank.

[00:20:57] Speaker 01:
It's easier that way to transfer the note.

[00:21:00] Speaker 01:
You don't have to have special endorsements in the launches.

[00:21:02] Speaker 04:
You just have to have physical possession?

[00:21:04] Speaker 01:
We have physical possession, correct, Your Honor.

[00:21:06] Speaker 01:
You do have now?

[00:21:07] Speaker 01:
We have.

[00:21:07] Speaker 01:
We've had it.

[00:21:08] Speaker 01:
OK.

[00:21:08] Speaker 04:
Yes.

[00:21:09] Speaker 04:
All right.

[00:21:09] Speaker 04:
So this is blank.

[00:21:13] Speaker 04:
And so it's essentially bare paper at that point?

[00:21:15] Speaker 01:
the complaint, of course, includes the note, the same note, which was specially later specially endorsed and that's endorsed to the trust the 2000.

[00:21:25] Speaker 01:
2003 HS one trust.

[00:21:29] Speaker 01:
So we believe that there is no, there's no.

[00:21:33] Speaker 01:
fault in the court's opinion about standing.

[00:21:35] Speaker 01:
The standing issue really relates to whether or not he had, Mr. Henderson had the authority to challenge the assignment of the data trust, and we believe that the court got that correct under District of Columbia law.

[00:21:46] Speaker 01:
Furthermore, Your Honor, with regard to any of the counterclaims, I should say that they weren't pledged with any sort of specificity.

[00:21:53] Speaker 01:
The National Bank Act claim is even, it's not pledged,

[00:21:59] Speaker 01:
in any way that suggests that there could be a private right of action that could be brought either directly or under the guise of a declaratory judgment claim.

[00:22:07] Speaker 01:
Moreover, Mr. Henderson didn't challenge really the substance of the arguments on the motion to dismiss.

[00:22:13] Speaker 01:
All he again reasserted was the same consistent argument, which was that the Bank of New York didn't have the authority to foreclose, which the court found based on the record that it did.

[00:22:25] Speaker 04:
There's another document in the appendix that shows a series of endorsements or reflexes

[00:22:42] Speaker 04:
And ending with you, is that correct?

[00:22:45] Speaker 04:
Now here it is, 69 in the Joint Appendix.

[00:22:50] Speaker 01:
What would be the title of that document, Your Honor?

[00:22:53] Speaker 04:
That is Assignment of Deed of Trust, District of Columbia.

[00:22:56] Speaker 01:
That's correct.

[00:22:57] Speaker 01:
Okay.

[00:22:58] Speaker 04:
So earlier we were looking at two versions of the note, first in bearer paper and then after in the document.

[00:23:06] Speaker 04:
And now we've got the Deed of Trust starting out with MERS as a nominee for South Star Funding, which is the original lender, is that right?

[00:23:15] Speaker 01:
That's correct.

[00:23:16] Speaker 04:
And ending with Bank of New York Mellon, a successor to JP Morgan, a successor to Bank One, and then Securitization.

[00:23:32] Speaker 04:
So do these documents travel together or not?

[00:23:36] Speaker 01:
How does this work?

[00:23:38] Speaker 01:
Your Honor, the security and the deed of trust follows the note.

[00:23:43] Speaker 01:
So if the note holder has the instrument, bearer of paper or specially endorsed, the security of that deed of trust follows.

[00:23:50] Speaker 01:
There's this difference between the note and the deed of trust in terms of assignment.

[00:23:55] Speaker 01:
The note on its face shows that there was a special endorsement, that the note was transferred to the trust.

[00:24:01] Speaker 01:
That document

[00:24:02] Speaker 01:
is filed as a document showing the assignment of MERS, which is a nominee in the beneficiary of the Deed of Trust, its interest to the Bank of New York Mellon.

[00:24:12] Speaker 01:
That's what that document is.

[00:24:16] Speaker 01:
There are arguments that are often made that notes become split from the Deed of Trust.

[00:24:20] Speaker 01:
Those arguments have been rejected, time and again, by courts across the country.

[00:24:24] Speaker 01:
A lot of them focus on MERS's role in

[00:24:29] Speaker 01:
the mortgage market.

[00:24:30] Speaker 01:
Merz has been, Merz's role, Merz is not a party in this case, first of all, Your Honor, and Merz's role has been upheld.

[00:24:36] Speaker 01:
It can serve as a nominee in deeds of trust, and it can do, under the language of the deed of trust and under the custom of foreclosure practice throughout the country, assign its interest in the deed of trust, and that's what it did here.

[00:24:50] Speaker 04:
Okay, now then, where is the parallel assignment of the note to Bank of New York?

[00:24:56] Speaker 01:
That's on the face of the note, Your Honor.

[00:24:57] Speaker 01:
That's the endorsement to the trust.

[00:25:04] Speaker 01:
Right, right.

[00:25:05] Speaker 01:
The 2003... Bank one.

[00:25:09] Speaker 04:
This is to bank one.

[00:25:11] Speaker 01:
Well, Your Honor, it's to the trust.

[00:25:13] Speaker 01:
The bank... As trustee, right.

[00:25:14] Speaker 04:
You can tell from the long... Okay, for the 2003 HSI.

[00:25:17] Speaker 04:
That's correct, Your Honor.

[00:25:20] Speaker 04:
I think I understand this, but once I don't have you in front of me, I may not.

[00:25:25] Speaker 01:
It can be complicated by virtue of the fact that there's an especially long name for this plaintiff in this case, but essentially there's a special endorsement to the trust.

[00:25:36] Speaker 01:
Court relied on that special endorsement.

[00:25:38] Speaker 01:
There are facts alleged under oath in the complaint saying that Bank of New York, for the trust, is the holder of the note.

[00:25:46] Speaker 01:
And thereby, under District of Columbia law, it's allowed to enforce the deed of trust.

[00:25:52] Speaker 01:
And that's what it did when it walked into court and filed a judicial foreclosure action.

[00:25:56] Speaker 01:
The court granted count one on summary judgment.

[00:25:59] Speaker 01:
There's nothing in the record, Your Honor, as Your Honor has asked what was in the record to contest that.

[00:26:05] Speaker 01:
There is nothing.

[00:26:05] Speaker 04:
This case you said was filed in Superior Court.

[00:26:08] Speaker 04:
That's correct.

[00:26:08] Speaker 04:
It sounds like a very sensible place for it to be resolved.

[00:26:12] Speaker 04:
And it was transferred because the IRS was involved?

[00:26:15] Speaker 01:
The IRS was a lean holder.

[00:26:17] Speaker 01:
It took its initiative and removed the case to federal court.

[00:26:21] Speaker 04:
And it dropped out of the case, correct?

[00:26:25] Speaker 01:
Well, it hasn't really – it didn't really take any action other than participate in their – in what it was supposed to participate in, the conferences and other things like that.

[00:26:35] Speaker 04:
Is it a party as of now?

[00:26:37] Speaker 04:
I'm sorry?

[00:26:37] Speaker 04:
Is it a party now?

[00:26:39] Speaker 01:
It will continue to be, Your Honor.

[00:26:40] Speaker 01:
Again, the foreclosure hasn't happened in this case.

[00:26:41] Speaker 01:
We've just – the Court has just blessed the foreclosure to go forward, and it's not – there's been no foreclosure yet.

[00:26:49] Speaker 04:
So – How does that tell me whether the IRS is a party?

[00:26:53] Speaker 04:
That's the only one I know.

[00:26:54] Speaker 01:
Well, it remains a party, but whether or not it takes any further involvement in the case, I can't determine.

[00:27:02] Speaker 04:
Is it a party to the appeal?

[00:27:03] Speaker 01:
It's not a party.

[00:27:05] Speaker 01:
So far as I can tell, it's not taking any position in the appeal.

[00:27:12] Speaker 01:
Nor has it contested the right of Bank of New York to foreclose.

[00:27:16] Speaker 04:
I guess if it has a lien, it would like to see a foreclosure so it can get paid out, right?

[00:27:21] Speaker 01:
It has a right, Your Honor, to enforce its lien any time a foreclosure action is initiated.

[00:27:30] Speaker 04:
Is it superior to you?

[00:27:33] Speaker 01:
There's what I would call a kind of a complicated process by which the... I'm sorry.

[00:27:38] Speaker 01:
Apologize, Your Honor.

[00:27:45] Speaker 02:
And Mr. Inzen, I don't have any time left.

[00:27:50] Speaker 02:
You can take two minutes.

[00:27:55] Speaker 03:
Thank you, Your Honor.

[00:27:56] Speaker 03:
Let me, before you start, I want to stay on the mundane so this is clear for me.

[00:28:00] Speaker 03:
What do you think the District Court failed to do by virtue of standing ruling?

[00:28:04] Speaker 05:
That's exactly where I was going to go.

[00:28:06] Speaker 05:
Okay.

[00:28:08] Speaker 05:
The claim raised by the bank here required the bank to show two things.

[00:28:13] Speaker 05:
Default by the borrower and ownership of the note.

[00:28:17] Speaker 05:
Bank moved for summary judgment to short circuit the trial process saying there's no real issue of dispute on those two factors.

[00:28:24] Speaker 05:
So on summary judgment, the district court was required to decide, is there a genuine issue of material fact with regard to default?

[00:28:30] Speaker 05:
And he found there wasn't, and there wasn't, with regard to ownership.

[00:28:34] Speaker 03:
With regard to what?

[00:28:35] Speaker 03:
Ownership of the note.

[00:28:37] Speaker 03:
Right, OK.

[00:28:37] Speaker 05:
And the district court recognized that there was a dispute between the parties.

[00:28:41] Speaker 05:
with regard to the ownership of the note.

[00:28:44] Speaker 05:
What the court failed to decide was whether that dispute required a trial.

[00:28:48] Speaker 02:
Required what?

[00:28:49] Speaker 05:
Required a trial.

[00:28:50] Speaker 05:
On a summary judgment, the party moving is required to come forward with facts showing its entitlement to judgment.

[00:29:00] Speaker 05:
And then the movement, the non-movement, is permitted and required to come forward with specific, articulable facts showing that there is genuinely a dispute.

[00:29:10] Speaker 05:
And that's the process that the district court should look at.

[00:29:12] Speaker 03:
What is it that you think, uh, Henderson merely asserts, I think there's a problem.

[00:29:18] Speaker 03:
The bank put evidence in.

[00:29:20] Speaker 03:
Now, in summary judgment,

[00:29:23] Speaker 03:
Normally Anderson would lose what what more on the ownership issue.

[00:29:28] Speaker 03:
That's what I'm perplexed about.

[00:29:29] Speaker 03:
What more is it that you merely to say we disagree doesn't mean you get a trial.

[00:29:37] Speaker 03:
Understood.

[00:29:37] Speaker 03:
You've got to support your position.

[00:29:39] Speaker 03:
Yes.

[00:29:39] Speaker 03:
The bank supported its position.

[00:29:41] Speaker 03:
Although the bank did not.

[00:29:42] Speaker 03:
So you think they have nothing in the record on ownership?

[00:29:45] Speaker 05:
If you look at their motion for summary judgment, what the bank said was, we own the note.

[00:29:50] Speaker 02:
But as counsel said, it's a sworn statement.

[00:29:54] Speaker 02:
It's attested.

[00:29:55] Speaker 05:
Cite the complaint.

[00:29:56] Speaker 02:
Right.

[00:29:59] Speaker 02:
Correct?

[00:30:00] Speaker 05:
That is true.

[00:30:01] Speaker 05:
Doesn't that make a difference?

[00:30:02] Speaker 05:
That does make a difference.

[00:30:05] Speaker 05:
I don't know what Mr. Henderson would have come up with.

[00:30:09] Speaker 03:
But on non-judicial foreclosure, the note suffices to prove the point.

[00:30:14] Speaker 03:
And I assume that's certainly true on judicial foreclosure.

[00:30:17] Speaker 03:
So what more is there to be said?

[00:30:20] Speaker 03:
The point, Your Honor.

[00:30:21] Speaker 03:
That's right.

[00:30:21] Speaker 03:
You agree to that, right?

[00:30:23] Speaker 03:
On non-judicial, the note is sufficient.

[00:30:26] Speaker 03:
I believe that's correct.

[00:30:27] Speaker 03:
OK, so there's nothing that Henderson is presenting to suggest in judicial foreclosure.

[00:30:33] Speaker 03:
The rule is different.

[00:30:35] Speaker 03:
And I can't imagine why it would be.

[00:30:38] Speaker 03:
So the bank has its proof there and Henderson has nothing on summary judgment.

[00:30:43] Speaker 03:
Henderson loses.

[00:30:45] Speaker 03:
That's the way law normally works.

[00:30:47] Speaker 05:
If the district court had considered this as a motion for summary judgment, as opposed to short circuiting that by finding no standing.

[00:30:55] Speaker 05:
I am unaware of any specific articulable facts that Mr. Henderson has put forward challenging the bank's evidence of its ownership of the note.

[00:31:10] Speaker 02:
Anything else?

[00:31:17] Speaker 05:
No, sir.

[00:31:18] Speaker 02:
Okay, Mr. Inzenio, you were appointed by the court to serve as amicus and we are grateful to your assistance.

[00:31:25] Speaker 05:
Of course, Your Honor.