WisBar News: State Supreme Court Accepts 10 Cases, Including One on Mortgage Assignments:

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  • WisBar News
    February
    11
    2014

    State Supreme Court Accepts 10 Cases, Including One on Mortgage Assignments


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    Feb. 11, 2014 – Do your clients include borrowers, lenders, or businesses that rely on the services of the Mortgage Electronic Registration System (MERS)? If so, you may want to keep your eye on a case that is headed to the Wisconsin Supreme Court.

    The court recently accepted review of 10 new cases, summarized below. One is a foreclosure case, Dow Family LLC v. PHH Mortgage Corp., involving a company that bought a condo but later faced a foreclosure action by an apparent assignee.

    Dow Family purchased the condo from a couple who originally issued a promissory note to U.S. Bank for $146,000. The note, recorded in 2001, was secured by a mortgage on the condo and listed MERS as the mortgagee. U.S. Bank was a member of MERS.

    MERS is a private electronic registration system for mortgages and acts as mortgagee for the loans owned by its members, which include lenders, financial institutions, and servicers who pay a membership fee. Mortgages are recorded but subsequent assignments between MERS members are not. MERS remains the mortgagee.

    According to court documents, MERS has saved the banking industry approximately $1 billion in mortgage-related recording fees.

    Before the condo purchase, however, a title search revealed two mortgages on the condo. The sellers said the second listed mortgage was just a refinance; there was only one mortgage. The deal closed and showed mortgage satisfaction to U.S. Bank.

    Several months later, PHH Mortgage Corporation asserted that a mortgage on the property was not paid in full and was delinquent. Apparently, U.S. Bank’s mortgage assignment to MERS was transferred to PHH Mortgage but it was never recorded.

    The circuit court entered a foreclosure judgment for PHH Mortgage. The court of appeals applied the doctrine of equitable assignment and ruled that PHH did not need to prove a written assignment of mortgage to show it held a mortgage interest.

    According to court staff, the case implicates MERS and “examines the doctrine of equitable assignment and whether a mortgage automatically transfers upon the transfer of the associated note, without the need for a written mortgage assignment.”

    Other Cases Accepted for Review

    State v. Cummings (2011AP1653): The case examines whether, among other issues, a defendant invoked his right to remain silent during an interrogation when he suggested he wasn’t going to talk and told the detective to “take me to my cell.” The court of appeals ruled the statement was not clear enough to invoke the right.

    State v. Smith (2012AP520): This case examines whether police violated a suspect’s right to remain silent when officers continued to question him after he said: “I don’t know nothing about this stuff, so I don’t want to talk about this.” The appeals court, noted that he initiated further conversation after making this statement and did not clearly invoke his right in ruling that the motion to suppress was properly denied.

    State v. Toliver (2012AP393): The supreme court will examine the conflict between the general rule that a defect of subject matter jurisdiction may be raised at any time and the rule that the court of appeals will not address arguments first raised in a reply brief.

    State v. Hunt (2012AP2185): This case examines whether the trial court erred in preventing a witness from testifying that he did not send the defendant a sexually explicit video clip. The defense argued that the witness had sent the defendant photos of a topless woman and a picture of a herniated testicle, but nothing involving sexual intercourse. The defense said the teenager accidentally saw the photos when the defendant opened them on his phone, but embellished what she has seen. The appeals court ruled that such testimony would have corroborated the defendant’s story.

    State v. Nelson (2012AP2140): In this this sexual assault case, the court examines whether state case law provides that a criminal defendant is automatically entitled to a new trial if the circuit court prohibits the defendant from testifying in her own defense. The trial court disallowed the testimony as “completely irrelevant” to the elements the state had to prove. The female defendant admitted sex with a 14-year-old boy.

    Weissman v. Tyson Prepared Foods (2012AP2196): This wage claim case arises from a class action by six workers against the Tyson meat processing plant. The employees contend they are entitled to compensation for time spent putting on (“donning”) and taking off (“doffing”) sanitary and protective equipment. The appeals court ruled that the workers were entitled to compensation.

    State v. Jenkins (2012AP46): In this case, the supreme court is asked to examine the interplay of the rule that juries are the ultimate arbiters of witness credibility and the prejudice standard for ineffective assistance of counsel, which requires postconviction courts to assess whether the omitted evidence would undermine confidence in the trial’s outcome. The defendant’s attorney did not call particular witnesses to testify.

    Kyles v. Pollard (2012AP378): On defendant’s habeas corpus petition, this case examines the appropriate procedure for a defendant to follow when challenging trial counsel’s alleged failure to file a notice of intent to pursue postconviction relief.

    Data Key Partners v. Permira Advisors (2012AP1967): The court will examine Wisconsin’s business judgment rule in this dispute between shareholders over the sale of a business. Data Key Partners, a minority shareholder of Renaissance Learning Incorporated, accused the directors and majority shareholders of breaching fiduciary duties in a merger deal with another company. The supreme court may determine whether the business judgment rule can be applied at the motion to dismiss stage.

    Summaries derived from full summaries posted at www.wicourts.gov