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Sykes v. RBS Citizens, N.A.

United States District Court, D. New Hampshire

March 28, 2017

Lewis B. Sykes, Jr.
RBS Citizens, N.A., Bank of America, N.A., Bank of New York Mellon, CCO Mortgage Corporation, Federal National Mortgage Association, and Citibank N.A. Opinion No. 2017 DNH 062


          Joseph DiClerico, Jr. United States District Judge

         Lewis B. Sykes, Jr. brought suit in state court against RBS Citizens, N.A.; CCO Mortgage Corporation; Federal National Mortgage Association; Bank of America, N.A.; Bank of New York Mellon; and Citibank, N.A., alleging claims arising from the defendants' involvement in the foreclosure sale of his home in 2009. Bank of America removed the case to this court. The court granted the defendants' motion for summary judgment on November 20, 2015, and denied Sykes's motion for a default judgment against Citibank, N.A. on February 23, 2016. Judgment was entered in favor of the defendants the same day.

         Sykes was represented by counsel from the beginning of the case and until counsel withdrew in December of 2014. Thereafter, Sykes proceeded pro se through the entry of judgment in February of 2016. Sykes is now represented by new counsel and has filed a motion for relief from judgment pursuant to Federal Rule of Civil Procedure 60(b)(3). The defendants, other than Citibank, N.A., object to the motion.[1]

         Sykes requests oral argument on his motion. Under the local rules in this district, the court decides motions without oral argument unless a party provides a written statement “outlining the reasons why oral argument may provide assistance to the court.” LR 7.1(d). Sykes did not provide any reason to support his request. Therefore, the request for oral argument is denied.

         Standard of Review

         “On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for . . . fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party . . . .” Fed. R. Civ. P. 60(b)(3). The burden is on the moving party to show fraud, misrepresentation, or misconduct by clear and convincing evidence. Giroux v. Federal Nat'l Mortg. Ass'n, 810 F.3d 103, 107-08 (1st Cir. 2016). In addition, the moving party must show that the fraud, misrepresentation, or misconduct substantially interfered with his ability to prepare his case. Fontanilas-Lopez v. Morell Bauza Cartagena & Dapena, LLC, 832 F.3d 50, 63 (1st Cir. 2016).


         Sykes's claims were resolved on summary judgment in favor of the defendants because the claims were barred by the governing statutes of limitations. In support of his motion to set aside the judgment, Sykes charges that the defendants falsely represented that the entity which held his mortgage note and foreclosed on the property was Federal National Mortgage Association (“Fannie Mae”). Sykes asserts that the entity that held his note and foreclosed was actually a Delaware corporation, Federal National Mortgage Association, Inc., (“Delaware corporation”), citing the foreclosure deed for his property as proof of the misrepresentation. Sykes states that the Delaware corporation was used “as part of some intentional scheme to avoid payment of the New Hampshire state Tax Stamps both in this foreclosure and in several other foreclosures throughout the state.” Document no. 168, ¶ 6.

         Sykes contends that the defendants' alleged misrepresentation of the entity that held his mortgage note and foreclosed on his property “had a material effect upon the outcome of this case” because the Delaware corporation had its charter revoked in 2004, making it a void corporation. Because of that status, Sykes argues, the foreclosure sale is void. He further asserts that “[t]here is no statute of limitations to quiet title against a transferee of title from such a nullity.” Sykes represents that he did not know of the Delaware corporation “scheme” until after August of 2016.

         The defendants object to the motion to set aside judgment.

         A. Fannie Mae

         Federal National Mortgage Association, known as Fannie Mae, is “a Government-sponsored private corporation” that was originally chartered in 1938. 12 U.S.C. §§ 1716b & 1717; Lightfoot v. Cendant Mortg. Corp., 137 S.Ct. 553, 556-57 (2017) (explaining history of Fannie Mae); Perry Capital LLC v. Mnuchin, 848 F.3d 1072, 1080-81 (D.C. Cir. 2017) (same). Pursuant to 12 C.F.R. § 1239.3(b)(ii), Fannie Mae has “elect[ed] to follow the corporate governance and indemnification practices and procedures set forth in . . . [t]he Delaware General Corporation Law.” See Fannie Mae Bylaws, Art. 1, Sec. 1.05. The Federal Housing Finance Authority has been the conservator of Fannie Mae since July of 2008. See Fairholme Funds, Inc. v. United States, __F. App'x __, 2017 WL 991077, at *1 (Fed. Cir. Mar. 14, 2017); Perry Capital, 848 F.3d at 1080-81.

         The only proof Sykes offers that the Delaware corporation, rather than Fannie Mae, held the note on his property and conducted the foreclosure sale is the foreclosure deed for his property. The deed states: “Federal National Mortgage Association, an association duly established under the laws of the State of Delaware and having a usual place of business at P.O. Box 650043, Dallas, TX, 75265-0043, holder of the following mortgage given by: Lewis B. Sykes and Dorothy W. Sykes . . . .” The foreclosure deed also states Fannie Mae granted “that portion of the Premises conveyed by said Mortgage and described more particularly in Exhibit ‘A'” to The Bank of New York Mellon, as Trustee for CWHEQ Revolving Home Equity Loan Trust, Series 2007-C of 1 Wall Street, New York.

         Sykes does not explain why he believes the foreclosure deed shows that the holder of his note and the foreclosing entity was the Delaware corporation rather than Fannie Mae. In its objection, Fannie Mae states that the statement in the foreclosure deed that Fannie Mae is an association established under Delaware law was an error and does not mean that Fannie Mae is a Delaware corporation.[2] The filings in a different case, which ...

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