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Onewest Bank, Fsb v. Stephanie S. Marshall

March 31, 2011

ONEWEST BANK, FSB, APPELLANT,
v.
STEPHANIE S. MARSHALL, ABBIE SCOTT, AND RENAUD SCOTT, APPELLEES.
ONEWEST BANK, FSB, APPELLANT,
v.
STEPHANIE S. MARSHALL, PERSONAL REPRESENTATIVE OF THE ESTATE OF JAMES CLARK SCOTT III, APPELLEES.



Appeal from the Superior Court of the District of Columbia (CAB4375-09) (Hon. Erik P. Christian, Trial Judge) (Hon. Jeanette J. Clark, Trial Judge) and Appeal from the Superior Court of the District of Columbia (ADM1240-08) (Hon. Rhonda Reid Winston, Trial Judge)

The opinion of the court was delivered by: Reid, Associate Judge:

Argued March 2, 2011

Before REID and FISHER, Associate Judges, and KRAVITZ, Associate Judge of the Superior Court of the District of Columbia.*fn1

In these consolidated appeals appellant, OneWest Bank, FSB ("OneWest Bank"), challenges the Superior Court Civil Division's dismissal of its verified complaint for declaratory judgment; the court granted the Super. Ct. Civ. R. 12 (b)(6) motion to dismiss filed by appellee Stephanie S. Marshall, Personal Representative of the Estate of James C. Scott. OneWest Bank also appeals the Superior Court Probate Division's order denying its motion to require Ms. Marshall to distribute Mr. Scott's estate's one-third interest in the Clay Street property to his wife, Abbie Scott.

We are constrained to hold that the Civil Division's Rule 12 (b)(6) dismissal of OneWest Bank's declaratory judgment action against Ms. Marshall was improper because the bank's complaint alleged the elements of legally viable claims for declaratory and equitable relief (No. 10-CV-190). Furthermore, to the extent that the Civil Division intended to apply its Rule 12 (b)(6) dismissal also to OneWest Bank's claims against appellees Abbie Scott and Renaud Scott by declaring two deeds of trust executed by them void, that declaration reflected a misapprehension of the law. In addition, because the Probate Division, in denying OneWest Bank's motion (to require distribution of an estate asset), believed it was bound by the Civil Division's ruling, we would be constrained to vacate the Probate Division's order, assuming that appeal is properly before us, but given our disposition of the Civil Division orders, we see no need to address that appeal at this point (No. 10-PR-1144).

FACTUAL SUMMARY

The records in these appeals reveal the following. In 1991, Renaud Dewey Scott and Deborah James Scott conveyed property located at 3435 Clay Street, in the Northeast quadrant of the District of Columbia, to James Scott, Abbie Scott, and Renaud Dewey Scott as tenants in common, each with a one-third interest in the property. James Scott died years later, on November 30, 2006. After Mr. Scott died, his one-third interest in the Clay Street property passed to his estate. His daughter, Ms. Marshall, was not appointed as his personal representative until November 26, 2008.

Earlier, on January 26, 2007, Renaud Scott and his mother, Abbie Scott, obtained a $189,750 loan from Surepoint Lending, using the Clay Street property as collateral. About five months later, that loan was refinanced; Renaud and Abbie Scott executed a deed of trust to UMG Mortgage, LLC for $208,000, of which $192,737.44 went to Surepoint to pay off Renaud and Abbie Scott's outstanding mortgage loan. The promissory note for the new loan with UMG was signed only by Renaud Scott.

Ownership of UMG assets changed hands and the Federal Deposit Insurance Corporation ("FDIC") eventually took over the assets from IndyMac Bank and sold them to OneWest Bank on March 19, 2009, including the deed of trust signed by Renaud and Abbie Scott, and the promissory note signed by Renaud Scott. After default on the loan relating to the Clay Street property, OneWest Bank's predecessor, IndyMac Bank, filed a claim against the Estate of James Scott on April 1, 2009. Ms. Marshall denied the claim on May 5, 2009.

In response to the denial of the claim filed by its predecessor, OneWest Bank lodged its verified complaint for declaratory judgment and equitable relief in the Civil Division on June 15, 2009, against Ms. Marshall, and Renaud and Abbie Scott. OneWest Bank sought to: (1) show that proceeds from the UMG loan were used to pay off the Surepoint loan obtained by Renaud and Abbie Scott; (2) affirm its first lien position as successor in interest; and (3) establish that James Scott, as holder of a one-third interest in the Clay Street property, benefitted from the loan and hence was a "borrower."

Renaud and Abbie Scott filed separate verified answers in July 2009; and Ms. Marshall moved to dismiss OneWest Bank's declaratory judgment action against the estate in September 2009, on the ground that the complaint did not state a claim for which relief could be granted. She relied on D.C. Code § 20-105, which provides that "all property of a decedent . . . upon the decedent's death, shall pass directly to the personal representative, who shall hold the legal title for administration and distribution of the estate." Ms. Marshall also filed an amended answer and a counterclaim asserting that the UMG loan was void ab initio under § 20-105, and demanding $80,000 for the improper transfer of the estate's one-third interest in the Clay Street property.

Approximately two weeks later, OneWest Bank filed an omnibus pleading which included a motion for summary judgment, a motion to dismiss Ms. Marshall's counterclaim, and an opposition to Ms. Marshall's motion to dismiss. The Civil Division, through the Honorable Jeanette Clark, denied OneWest Bank's motion for summary judgment without prejudice on November 23, 2009, on technical grounds - failure to file separate pleadings under Super. Ct. Civ. R. 12-I (e) and (k). On the same day, Judge Clark construed OneWest Bank's motion to dismiss Ms. Marshall's counterclaim as a motion for summary judgment, and asserted that:

In light of the genuine issues of material facts in dispute, which include, but are not limited to, the following: (1) whether One WestBank is a successor-in-interest to UMG Mortgage, LLC, and (2) whether [OneWest Bank] has a valid claim or interest in the subject property, the Motion is denied.

Two weeks later, Judge Clark granted Ms. Marshall's Rule 12 (b)(6) motion to dismiss OneWest Bank's verified complaint, in light of D. C. Code ยง 20-105. Judge Clark declared that no opposition had been filed, apparently concluding that she could not consider the omnibus pleading as an opposition because it was ...


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