Huddleston Law Offices is pleased to announce that Brian Huddleston just won a successful appeal in a long fought real estate foreclosure case involving the application of 12 O.S.2011, § 2025 and 12 O.S.2011, § 2017. The Oklahoma Court of Civil Appeals issued an unpublished decision on May 12, 2020 reversing and remanding the case to the trial court in Tulsa County for further proceedings. The opinion can be viewed here.
Case No. CJ-2005-1683 (yes, 2005!) began as an action for foreclosure of the Beeler home by The Bank of New York, Trust U/A dated 12/1/01 (EQCC Trust 2001-2). BONY was granted summary judgment that was reversed on appeal in 2013 due to BONY’s lack of standing to sue under the 2012 line of Oklahoma Supreme Court cases following Deutsche Bank Natl Trust V. Brumbaugh, 2012 OK 3, 270 P.3d 151. After the case was remanded, Huddleston argued that BONY’s petition should have been dismissed with leave granted to allow BONY to file an amended petition with the required properly endorsed note attached under the curative procedure established in HSBC Bank USA V. Lyon, 2012 OK 10, 276 P.3d 1002.
At BONY’s peril, the trial court did not require BONY to follow Lyon to cure the jurisdictional defect. Instead, BONY was allowed to substitute Nationscredit Financial Services Corporation as the plaintiff. Nationscredit in turn was allowed to substitute DLJ Mortgage Capital as the plaintiff (the latter two arguing in turn that they were the “holder” of the note and thereby entitled to substitution). DLJ filed and obtained summary judgment. On appeal for the second time, the COCA validated Huddleston’s argument that, because BONY never established its standing at the time it commenced the foreclosure case in 2005, it could not ignore the Lyon procedure and use 12 O.S.2011, § 2025 and 12 O.S.2011, § 2017 to substitute NationsCredit or DLJ as plaintiffs. That is to say, a plaintiff lacking standing to sue can’t cure that jurisdictional defect by simply substituting in a new plaintiff that arguably does have standing. Rather, the case must first be dismissed and refiled by the new plaintiff that must establish its own standing to sue.
The Beeler case stands for the proposition that, if a foreclosing plaintiff lacks standing to sue, the trial court also lacks jurisdictional power to grant any relief under 12 O.S.2011, § 2025 and 12 O.S.2011, § 2017 until the original petition is first dismissed and refiled by the original plaintiff with the properly endorsed note attached to the petition. Absent committing fraud upon the court, BONY could not do this after the first appeal in 2013, and cannot do it now after the second appeal, because BONY signed a special indorsement of the note to NationsCredit in 1998, and recorded an assignment of the mortgage and note to NationsCredit in 2007. After 15 years of fighting BONY, vindication was had with these words by the COCA in the Beeler opinion: “Bank was never the holder of the note.”
Brian Huddleston has achieved several appellate court victories since the foreclosure crisis began over a decade ago. While lenders usually win their cases on summary judgment, Huddleston defends borrowers with an extensive motion practice that many times provides the basis for the summary judgments to be critically reviewed and reversed on appeal. The lender’s legal arguments and evidentiary materials can be deficient in many ways. Often the errors are procedural and a technicality. Huddleston Law Offices is gratified to once again be found to be technically correct, which when it comes to appeals, is the best kind of correct.
