Bank of N.Y. Mellon v. HOA Rescue Fund, LLC
Bank of N.Y. Mellon v. HOA Rescue Fund, LLC
Opinion of the Court
The Bank of New York Mellon f/k/a The Bank of New York as Trustee for the Certifcateholders CWALT, Inc., Alternative Loan Trust 2006-18CB, Mortgage Pass-Through Certificates, Series 2006-18CB (the Bank), challenges the involuntary dismissal of its foreclosure action. We reverse and remand for further proceedings.
On June 23, 2009, the Bank filed its notice of lis pendens and foreclosure complaint, naming the mortgagors and the South Bay Lakes Homeowners Association as defendants. A default was entered against the mortgagors. In January 2012, while the Bank's foreclosure action was pending, HOA Rescue Fund, LLC, as Trustee under the 12122 Fox Bloom Avenue Trust dated 2/12/2012, purchased the property at the foreclosure sale resulting from South Bay Lakes Homeowners Association's lien foreclosure action. Importantly, South Bay Lakes' lien was recorded in December 2009, six months after the recordation of the Bank's lis pendens.
*733Subsequently, HOA Rescue moved to intervene in the Bank's foreclosure action. Over the Bank's objection, HOA Rescue's motion was granted. HOA Rescue then filed an answer and affirmative defenses, raising the Bank's lack of standing as a defense.
A nonjury trial was held in February 2017; only the Bank and HOA Rescue appeared. The Bank noted that HOA Rescue was a third-party purchaser and would therefore be "limited" in what it could object to during trial. The court was asked to take judicial notice of the court file, which it did. Additionally, prior to calling its only witness, the Bank sought to introduce into evidence the original note and mortgage at issue, as well as the assignment of the mortgage, two certified limited powers of attorney, and certified copies of the pooling and servicing agreement (PSA) and mortgage loan schedule for the subject mortgage. Over objection, the court admitted all of the documents.
Following the introduction into evidence of these documents, the Bank called one witness, a litigation foreclosure specialist for the loan servicer. The witness testified that the PSA identifies the loan in question by loan number, city, property location, purchase amount, and several other things which all "match." She also testified that the PSA "shows, on the title page, that this involves Countrywide Home Loans, which is one [i]ndorsement on the note and ... speaks for itself," as to the timing of the indorsement.
After all evidence had been presented, HOA Rescue moved for an involuntary dismissal based on the Bank's failure to establish its standing at the inception of the action. The court granted the motion and dismissed the foreclosure action "without prejudice," stating that the Bank could "try again."
The Bank now seeks reversal of the dismissal, arguing both that HOA Rescue was improperly permitted to intervene in the action and participate in trial and that the Bank sufficiently established standing and a prima facie case for foreclosure.
As this court has previously held, while it is preferable for the trial court to enter a final judgment at the conclusion of a nonjury trial, an order granting a motion for involuntary dismissal in such instances is an appealable final order. See Ventures Tr. 2013-I-H-R v. Asset Acquisitions & Holdings Tr.,
The law is clear that HOA Rescue should not have been permitted to intervene in the case. A purchaser of property that is the subject of a pending foreclosure *734action in which a lis pendens has previously been recorded is not entitled to intervene in that foreclosure action. Bonafide Props. v. Wells Fargo Bank, N.A.,
Moreover, HOA Rescue purchased the property subject to a superior interest; its subordinate interest is limited, and notwithstanding the improper intervention, HOA Rescue should not have been permitted to participate as though it "were a party to the note and mortgage." See Wells Fargo Bank, N.A. v. Rutledge,
Accordingly, we reverse the order dismissing the foreclosure action and remand for further proceedings consistent with this opinion.
Reversed and remanded.
CRENSHAW and SLEET, JJ., Concur.
HOA Rescue does not challenge the court's evidentiary rulings in a cross-appeal; therefore, we make no comment on those rulings. Cf. Miller v. Bank of N.Y. Mellon,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.