Juan Pimentel v. Deutsche Bank National Trust Company

Citation: Not availableDocket: 16-135

Court: Supreme Court of Rhode Island; December 14, 2017; Rhode Island; State Supreme Court

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Juan Pimentel appeals the Superior Court's summary judgment favoring Deutsche Bank National Trust Company in a case concerning a residential mortgage. Pimentel executed a promissory note for $255,850 in February 2005, secured by a mortgage on his property, which was assigned to Deutsche Bank shortly thereafter. Following his default in February 2008, Deutsche Bank scheduled a foreclosure sale for February 2011. Pimentel filed a lawsuit in January 2011, claiming illegal foreclosure due to Deutsche Bank's alleged lack of the note. The Superior Court issued a temporary restraining order against the foreclosure.

In June 2015, Deutsche Bank moved for summary judgment, supported by affidavits, including one from a document-control officer asserting that Deutsche Bank held the note and providing copies of relevant documents, including the note, mortgage, assignments, and payment history showing Pimentel's default. The Supreme Court heard the case on November 7, 2017, and decided to affirm the Superior Court’s judgment without further argument, indicating satisfaction with the sufficiency of the presented materials.

Pimentel objected to Deutsche Bank's motion for summary judgment, asserting that material factual issues existed regarding the ownership of the note and mortgage, claiming Deutsche Bank was a nonexistent entity. He submitted multiple exhibits, including unendorsed copies of the note and records indicating the termination of Novelle and Impac as entities. On January 25, 2016, the Superior Court justice granted the motion, determining that the mortgagee need not also be the note holder to foreclose in Rhode Island. The court noted that Deutsche Bank provided an endorsed copy of the note and an affidavit confirming its ownership. The justice validated a 2009 corrective assignment based on Massachusetts case law, concluding that Deutsche Bank was the mortgagee entitled to foreclose. Pimentel appealed, arguing that summary judgment was improper due to genuine disputes over Deutsche Bank's existence and the endorsement status of the note. He claimed the assignment was invalid as Deutsche Bank was nonexistent and that Novelle lacked ownership interest at the time of assignment. Pimentel also argued judicial estoppel barred Deutsche Bank from presenting a conflicting version of the note compared to prior bankruptcy proceedings. In response, Deutsche Bank contended that the 2009 assignment was valid, asserting that Pimentel lacked standing to challenge the assignment's legitimacy and that he failed to provide sufficient evidence against Deutsche Bank's claims of note ownership. The defendant further argued that Pimentel's judicial estoppel claim was unfounded, as he based his assertions on documents outside the current litigation.

The court affirmed the validity of the foreclosure sale initiated by Deutsche Bank as Trustee, emphasizing that, under Rhode Island law, a mortgagee can foreclose without holding the note. Citing precedents from Bucci v. Lehman Brothers Bank and subsequent cases, the court ruled that the principles applicable to MERS cases extend to non-MERS cases, allowing Deutsche Bank to proceed with foreclosure on Pimentel's property.

Pimentel challenged the validity of a corrective assignment of the mortgage from Novelle to Deutsche Bank, presenting evidence of Novelle’s corporate charter forfeiture and revocation. However, the assignment was executed prior to Novelle's dissolution, and thus valid. The court noted that a valid mortgage assignment grants the right to sell post-default, irrespective of recording. 

Pimentel failed to demonstrate any genuine issue of material fact regarding the assignment, and the defendant provided adequate evidence of holding the note, including an endorsed copy and an affidavit. The court dismissed Pimentel's claims regarding the note's possession and judicial estoppel, reiterating that possession is not a requirement for foreclosure. The ruling concluded that Pimentel, having not made mortgage payments since 2008, must face the consequences of his inaction, leading to the upholding of the Superior Court's summary judgment in favor of Deutsche Bank.