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Pilgeram v. Greenpoint Mortgage Funding, Inc.

Supreme Court of Montana

November 25, 2013

TROY A. PILGERAM and TERESA A. PILGERAM, husband and wife, Plaintiffs and Appellants,
GREENPOINT MORTGAGE FUNDING, INC., a California corporation; COUNTRYWIDE HOME LOANS, INC., a Texas corporation; MANN MORTGAGE, LLC, a Montana limited liability company; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., an Iowa Corporation, Defendants and Appellees.

Argued and Submitted: September 25, 2013

APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 09-948A Honorable Ted O. Lympus, Presiding Judge

For Appellant: Eric Hummel, Attorney at Law, PLLC; Kalispell, Montana

W. Jeff Barnes (argued), W.J. Barnes, P.A.; Boca Raton, Florida

For Appellee: Charles K. Smith, Poore, Roth & Robinson, P.C.; Butte, Montana

Robert J. Pratte (argued), Brent R. Lindahl, Fulbright & Jaworski, L.L.P.; Minneapolis, Minnesota


Michael E Wheat, Justice

¶1 Troy A. Pilgeram and Teresa A. Pilgeram (the Pilgerams) appeal from the orders of the Eleventh Judicial District Court, Flathead County, granting GreenPoint Mortgage Funding, Inc., Countrywide Home Loans, Inc., and Mortgage Electronic Registration Systems, Inc.'s (the Lenders') motion for summary judgment and denying the Pilgerams' motion to amend judgment. We reverse.

¶2 The dispositive issue on appeal is:

Did the District Court err in granting the Lenders' motion for summary judgment?


¶3 On September 7, 2006, the Pilgerams obtained a fixed rate home loan from Mann Mortgage (Mann) for $512, 000 and executed a deed of trust (DOT) naming Citizen's Title & Escrow trustee and Mann lender. Also on September 7, 2006, the Pilgerams signed a promissory note, which Mann endorsed to GreenPoint Mortgage Funding, Inc., (GreenPoint) on the same day.

¶4 The DOT provided that the promissory note could be sold without advance notice to the borrower. The DOT also provided that the loan services entity could be changed with written notice to the borrower. Pursuant to the promissory note, the Pilgerams waived their rights of presentment and notice of dishonor. Mortgage Electronic Registration Systems, Inc., (MERS) was not named in the promissory note but was identified in the DOT as "[t]he beneficiary of this Security Instrument . . . solely as a nominee for Lender and Lender's successors and assigns."

¶5 After several transfers of the interest in the DOT and promissory note, the Pilgerams defaulted on the note in April 2008. On July 29, 2008, MERS assigned its interest in the DOT to GreenPoint, which subsequently held the interests in both the promissory note and the DOT. Also on July 29, 2008, GreenPoint appointed and substituted Charles J. Peterson (Peterson) as the successor trustee. In November 2008, the Pilgerams received notice that GreenPoint was assigning the servicing rights to Countrywide effective December 1, 2008. In early December, the Pilgerams received notice from Countrywide that it was now the loan servicing entity and that future payments were to be made in the manner indicated in the notice. They also received notice that the loan was in default and had been accelerated and/or was in foreclosure. They were informed of the manner in which they could bring the note current.

¶6 Following a series of cancelled foreclosure sales, the Pilgerams filed a complaint in the District Court, alleging the Lenders lacked the authority to foreclose. The Lenders moved for summary judgment, [1] and the District Court granted the motion on December 13, 2011, reasoning that MERS qualified as a "beneficiary" under Montana's Small Tract Financing Act (STFA). On January 25, 2012, the Pilgerams filed a motion to amend judgment. The District Court denied this motion on April 20, 2012, because "the time for ruling expired 60 days after the motion was filed." The Pilgerams subsequently filed an appeal in this Court in October 2012.

¶7 On appeal, the Pilgerams argue that the Lenders failed to meet their burden for summary judgment, and that the complicated assignments between and among MERS, GreenPoint, and Countrywide create genuine issues of material fact. The Lenders counter that the Pilgerams "fail to explain what facts are supposedly in dispute, and why they are material" (emphasis in original). The Lenders argue that the District Court correctly concluded there was "no impediment prohibiting Countrywide from foreclosing the loan and from instructing" Peterson, the successor trustee, "to sell the property to satisfy the default."

ΒΆ8 The Pilgerams further argue MERS "is not, was not, and could never be the 'beneficiary' of the DOT." Thus, it "had no authority to endorse a note which it never owned" or "to assign the Pilgerams' deed of trust." According to the Lenders, the DOT specifically provided that MERS was a beneficiary, allowing MERS to act as the agent ...

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