Objection to Orders on Motion For Summary Judgment

 

COMES NOW, Defendants, Nick and Donna Nickerson, in accordance with M.R.Civ.P. 46, object to the Court’s Order on Motions for Summary Judgment as detailed below and requests the Court reverse its order granting summary judgment to HSBC.

1. This Court stated, “Neither party requests oral argument.” However, the Nickersons requested oral argument in their Motion for Summary Judgment, in their Reply Brief in Support of Summary Judgment and in their Response in Opposition to Plaintiff’s Motion for Summary Judgment, and even spoke with the Court’s clerk regarding a hearing but were instructed to wait for the Judge to set it. Oral argument was a critical part of the Nickersons’ defense to HSBC’s Complaint and an integral part of the Nickersons’ request for Summary Judgment.  The Nickersons are uncertain as to why this Court disregarded their requests for oral argument.

2. HSBC has not presented any admissible evidence or affidavits to validate their claims of default and note holder status. HSBC alleges in their reply brief regarding summary judgment, “A verified pleading is thus the equivalent of an affidavit in support of or opposition to summary judgment.” See HSBC’s Reply Brief, page 3. However, M.R.Civ.P. 56(e)(1) states “A supporting or opposing affidavit must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated. If a paper or part of a paper is referred to in an affidavit, a sworn or certified copy must be attached to or served with the affidavit.” HSBC’s claimed verified complaint is signed by their attorney, and thus, does not qualify as a summary judgment supporting affidavit because an attorney has no personal knowledge of the alleged facts, account history or alleged default and is not an affiant competent to testify on the matter stated, and the supporting papers HSBC relies upon to allege default are neither sworn to nor certified, and thus, HSBC submitted no affidavit or other admissible evidence to validate or substantiate any of their claims or evidence or prove possession or ownership of the Nickersons Note. Therefore, as a matter of law, HSBC is not entitled to summary judgment.

3. HSBC has not proven or provided any admissible affidavit or other evidence to validate they are the current holder of the Nickersons Note. HSBC simply makes the claim, “Montana law does not require an original note in order to foreclose” and “No original note is required.” However, HSBC cites no legal authority, statute or law validating that claim. Montana law requires the entity attempting to enforce the instrument to produce the instrument. “As a result of the Bank’s status as a ‘holder’ and its production of the instrument, it is entitled to recover unless the defendant establishes a defense. Section 30-3-307(2) MCA.” (emphasis added) Culbertson St. Bank v. Dahl, 190 Mont. 33, 617 P.2d 1295 (1980). MCA § 30-3-307(2) states specifically, “a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under 30-3-301.” Thus, contrary to HSBC’s claims, Montana law specifically states HSBC must produce the note and prove they are entitled to enforce it. HSBC cites the case Paatalo v. J.P. Morgan Chase Bank, N.A. in order to establish that the holder of the note is the one entitled to enforce it. The Paatalo case references the MCA to substantiate the findings. MCA § 30-1-201(2)(v)(i) defines “Holder” as the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession. MCA § 30-3-204 provides that if an indorsement is made to an identified person it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The indorsement on the copy of the note provided by HSBC specifically indorses the note to Wells Fargo Bank, N.A. It is not a blank indorsement as claimed by HSBC but rather a special indorsement and HSBC has not produced the instrument and has not proven they are in possession of the note. Thus, HSBC does not qualify as the “holder” based on the definition provided in the MCA and therefore, HSBC has not established they are entitled to enforce the note. HSBC has not established that it is a holder of the note (in possession of the note indorsed to them or indorsed in blank) nor have they established the note is in their possession by producing it. Therefore, HSBC is not the note holder and is not entitled to enforce it and thus, summary judgment in favor of HSBC must be reversed and summary judgment in favor of the Nickersons must be granted.

Furthermore, at the very least, the person attempting to enforce the instrument must produce the instrument in order to prove they are in possession of the instrument and must prove they were in possession of the instrument prior to filing suit. The Paatalo Court cites several authorities to validate its findings – one from the 4^th Circuit referencing Virginia law, one from Texas and one from Washington. It is well settled that case law uses legal authorities throughout the country when no controlling precedent is found within the jurisdiction of the court making the findings or when there is substantial findings to overrule a precedent. The case law requiring a bank to prove holder status of the note in order to foreclose is substantial and cannot be ignored.

 

“Movant must show that it has an interest in the relevant note, and that it has been injured by debtor’s conduct (presumably through a default on the note). Such is necessary to establish constitutional standing.

…

In conclusion, Movants have failed to establish they possess the notes at issue. For this reason alone, the Court can, and will, deny their motions.

…

Because Movants failed to establish possession and an ownership interest in the notes, they are not shown to be the real party in interest, and they lack standing to bring the motions.” In re Wilhelm, 407 B.R. 392, 398 (Bankr. D. Idaho 2009).

 

“when the borrower has a specific factual basis for challenging the standing of the foreclosing entity, the burden shifts to that entity to produce sufficient competent oral or written evidence to persuade the Court that it is more probable than not that the entity instigating the foreclosure was the holder of the note or an authorized agent of the holder at the time the foreclosure was commenced.” In re Reinke, Bankruptcy No. 09-19609 (Bankr. W.D. Wash. Oct. 26, 2011).

 

“plaintiff presented no evidence of having possessed the underlying note prior to filing the complaint. If plaintiff did not have the note when it filed the original complaint, it lacked standing to do so, and it could not obtain standing by filing an amended complaint.” Deutsche Bank Nat. v. Mitchell, 422 N.J. Super. 214, 27 A.3d 1229 (2011).

 

“In the present case, the court ruled upon the motion for summary judgment without first resolving the factual issue of when the plaintiff took ownership and control of the note and, thus, whether it had subject matter jurisdiction. This court has recently concluded that when the jurisdiction of the court hinges on a factual determination regarding the plaintiff’s status as holder of the note at the time of the commencement of the action, the court must determine the pertinent facts necessary to ascertain whether jurisdiction existed and rule on the issue of standing before addressing the merits of the controversy. Equity One, Inc. v. Shivers, 125 Conn.App. 201, 206, 9 A.3d 379 (2010); see also Deutsche Bank National Trust Co. v. Bialobrzeski, 123 Conn.App. 791, 799-800, 3 A.3d 183 (2010); LaSalle Bank, National Assn. v. Bialobrzeski, 123 Conn.App. 781, 789-90, 3 A.3d 176 (2010). In light of the documents before the court, showing discrepancies as to the date of the transfer of the note, as well as the defendant’s argument that the plaintiff had not demonstrated that it was the holder of the note when this complaint was filed, the court improperly formed a legal conclusion without establishing the factual predicate for the court’s subject matter jurisdiction. Accordingly, we reverse and remand the case to the trial court for a hearing to ascertain the plaintiff’s status as the owner or holder of the subject note at the time the action was commenced, so that the court may properly determine whether it has subject matter jurisdiction.” Park National Bank v. 3333 Main, LLC, 127 Conn.App. 774, 15 A.3d 1150 (App. Ct. 2011).

 

“Thus, because it failed to establish an interest in the note or mortgage at the time it filed suit, it had no standing to invoke the jurisdiction of the common pleas court.” Fed. Home Loan Mtge. Corp v. Schwartzwald, 2012-Ohio-5017, 134 Ohio St.3d 13 (2012).

 

“U.S. Bank was required to show that at the time the complaint was filed it possessed the original note either made payable to bearer with a blank endorsement or made payable to order with an endorsement specifically to U.S. Bank. See Bank of N.Y. v. Raftogianis, 418 N.J.Super 323, 13 A.3d 435, 439-40 (2010) (reciting requirements for bank to demonstrate that it was holder of the note at time complaint was filed).” US Bank Natl. Ass’n v. Kimball, 2011 VT 81, 27 A.3d 1087 (2011).

 

 “U.S. Bank was required to establish, through admissible evidence, that it held the note and mortgage and so had standing to foreclose the mortgage before it would be entitled to summary judgment in its favor.” BAC Funding Consortium Inc. v. Jean-Jacques, 28 So. 3d 936 (Fla.App. 2010).

 

“the plaintiff must prove that it had standing to foreclose when the complaint was filed” McLean v. JP Morgan Chase Bank Natl. Assn., 79 So.3d 170, 173 (Fla.App. 2012).

 

“Bain, 175 Wash 2d at 89, 285 P.3d 34 (finding that ‘only the actual holder of the promissory note or other instrument evidencing the obligation may be a beneficiary with the power to appoint a trustee to proceed with a nonjudicial foreclosure on real property’ under the DTA).” McDonald v. OneWest Bank, FSB, 929 F. Supp. 2d 1079 (W.D. Wash, 2013).

 

“Appellee must demonstrate it is a person entitled to enforce the note. It must provide evidence it has possession of the note either by being a holder or a nonholder in possession who has the rights of a holder…Evidence establishing when Appellee became a person entitled to enforce the note must show Appellee was a person entitled to enforce the note prior to filing its cause of action for foreclosure.” Deutsche Bank Nat. Trust v. Brumbaugh, 2012 OK 3, 270 P.3d 151 (2012).

 

“The real party in interest in foreclosure actions is the current holder of the note and mortgage…if the note is payable to an identified person, negotiation requires transfer of possession of the instrument and endorsement by the holder.” Bank of Am., NA v. Miller, 194 Ohio App. 3d 307 (2011).

 

Plaintiff must produce original note not copy otherwise maker may face double liability. McKay v. Capital Res. Co., Ltd. 940 S.W.2d 869 (Ark. 1997).

 

 “From the maker’s standpoint, therefore, it becomes essential to establish that the person who demands payment of a negotiable note, or to whom payment is made, is the duly qualified holder. Otherwise, the obligor is exposed to the risk of double payment, or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. These risks provide makers with a recognizable interest in demanding proof of chain of title. Consequently, plaintiffs here, as makers of the notes, may properly press defendant to establish its holder status.” In re Kemp, 440 B.R. 624 (Bankr. D. N. J. 2010).

 

“As a result of the Bank’s status as a ‘holder’ and its production of the instrument, it is entitled to recover unless the defendant establishes a defense. Section 30-3-307(2) MCA.” Culbertson St. Bank v. Dahl, 190 Mont. 33, 617 P.2d 1295 (1980).

In order for HSBC to have standing this Court must determine the following; 1) is HSBC in possession of the Nickersons note and did they obtain possession lawfully, 2) is the Nickersons note indorsed to HSBC or in blank, and 3) was HSBC in possession of the Nickersons note at the time they filed their complaint. The only legally verifiable way to establish possession is to produce the original. One cannot take a copy of check to a bank and expect it to be cashed. The bank requires you to provide the original. The same holds true for a note. One cannot expect to enforce a note based on a copy. The original must be produced. Further, Wells Fargo provided a copy of the original note in response to a RESPA Qualified Written Request (QWR) which differs from the copy HSBC provided. The copy of the note Wells Fargo provided is not indorsed to Wells Fargo as is the copy HSBC provided. In fact, the Wells Fargo copy is not indorsed at all (Compare Affidavit of Nick Nickerson in Support of Objection to Orders, Exhibit B page 4 and HSBC’s Complaint, Exhibit A). Because Wells Fargo’s copy of the original note differs from that of HSBC there are genuine issues of material fact and fraud regarding the original note which can only be settled by HSBC producing the original note. Therefore, according to Montana Law and the fact Wells Fargo provided a copy of the note that differs from HSBC, in order for HSBC to claim standing to foreclose, HSBC must produce the original note and must provide lawful evidence of their ownership of the note and that it was in their possession prior to filing their complaint.

4. HSBC argues the Nickersons consented to the note being assigned and proof of that consent is that the Nickersons made payments to HSBC and proof of those payments is found in the payment history attached to their cross-motion for summary judgment. First, the payment history is inadmissible evidence because it was not sworn to nor validated by an affiant with personal knowledge who is competent to testify to its authenticity as required by M.R.Civ.P. 56(e)(1). Second, this argument is seriously flawed and constitutes an outright lie and an attempt to deceive this Court because the Nickersons never made any payments to HSBC nor were the Nickersons ever instructed to or required to make any payments to HSBC. All payments were made to Wells Fargo for the Nickerson loan with Wells Fargo. The Nickersons were never informed HSBC was involved with their loan. The Nickersons never made a payment to HSBC. Third, the Nickersons have never admitted to the authenticity or legality of the assignments, and in fact, have done nothing but contest and provide evidence to refute them since the time they found out about them. Finally, the Nickersons were never notified by HSBC that HSBC owned the loan or was their new creditor as required by federal law – 15 U.S.C. 1641(g) Notice of new creditor “(1) In general In addition to other disclosures required by this subchapter, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer, including— (A) the identity, address, telephone number of the new creditor; (B) the date of transfer; (C) how to reach an agent or party having authority to act on behalf of the new creditor; (D) the location of the place where transfer of ownership of the debt is recorded; and (E) any other relevant information regarding the new creditor.” Lastly, at no time did the Nickersons agree to an illegal transfer or assignment of their loan into a securitized trust after the closing date thereby violating the laws governing the Trust, contaminating the legality of the Trust, and threatening the ownership of their property. Therefore, since the Nickersons never made any payments to HSBC, HSBC never notified the Nickersons of their claims of ownership, and the Nickersons never agreed to the illegal assignment of their property, HSBC cannot argue the Nickersons consented to any assignments, and thus, HSBC’s argument on this point is moot.

5. This Court stated, “The undisputed facts, however, indicate the Nickersons consented to the assignment of the mortgage and note when they executed the note on March 30, 2007.”  The argument that the Nickersons consented to the Note and Mortgage being assigned, and thus, must now remain silent on their claims against HSBC because of the illegalities and fraud contained within those assignments is clearly refuted by the Montana Supreme Court in Bails v. Gar:

 

“I assume that there is no authority that we are required to follow and support of the proposition that a party who has perpetrated a fraud upon his neighbor may, nevertheless, contract with him in the very instrument by means of which it was perpetrated, for immunity against its consequences, close his mouth from complaining of it and bind him never to seek redress. Public policy and morality are both ignored if such an agreement can be given effect in a court of justice. The maxim that fraud vitiates every transaction would no longer be the rule but the exception.” Bails v. Gar, 171 Mont. 342, 558 P.2d 458, 461 (1976).

The Nickersons did not consent to Wells Fargo and HSBC committing an act that is void. “Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of the trust is void. EPTL § 7-2.4. Therefore, the acceptance of the note and mortgage by the trustee after the date the trust closed, would be void.” Wells Fargo Bank, N.A. v. Erobodo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A) [2013 WL 1831799, p. *8].

The Nickersons did not consent to Wells Fargo and HSBC fabricating and recording a false chain of title. Both assignments are false and fraudulent: The first assignment occurred almost three years after the trust was closed which both Wells Fargo and HSBC know is in contravention to the trust agreements and therefore, void, but they chose to go ahead and deceive Lewis & Clark County, the Nickersons, this Court and the world at large by recording it in the county records. The second assignment is even worse because it not only has the same problems as the first assignment but its wording is false (it calls the Nickersons mortgage a deed of trust) and it is a complete forgery because Wells Fargo claims to have already assigned all interest to HSBC, and thus, Wells Fargo would have had no interest left to assign.

The Nickersons did not consent to Wells Fargo and HSBC committing a felony offense by recording false and forged instruments in the County records – Montana Penal Code, Part I, Title VII, Chapter 4, Section 232. As demonstrated above, both assignments are false and according to the Montana Penal Code recording those assignments in the county records constitutes a felony offense.

The Nickersons did not consent to Wells Fargo and HSBC filing false assignments, securitizing their loan, corrupting the chain of title and concealing the true identity of the investor on their loan which has made it impossible for the Nickersons to cure any alleged default and provide any true security and clear title for their property.

The Nickersons did not consent to Wells Fargo and HSBC creating impossibility of performance. Wells Fargo refused to accept payments and blocked all efforts of the Nickersons and representatives working on their behalf to cure any alleged default, thereby, making it impossible for the Nickersons to perform their obligations.

Therefore, because Wells Fargo and HSBC committed illegal, fraudulent acts regarding this case, summary judgment in their favor must be denied and summary judgment in favor of the Nickersons must be granted.

ex maleficio non oritur contractus – a contract cannot arise out of an illegal act

fraus omnia vitiat – fraud vitiates everything

6. HSBC argues the Nickersons lack standing to challenge the validity of the assignments and that we live in Montana so “any arguments that the assignments violate New York trust law are irrelevant.” As expressed above and validated by the Paatalo Court, controlling case law is not restricted to the jurisdiction in which the case is tried and can be overruled by more recent decisions. The Paatalo Court (2012) cites cases from Virginia, Texas, and Washington to validate its findings. The Nickersons have cited a more recent case (2013) out of California (see Nickerson’s Reply Brief in Support of Defendants Motion for Summary Judgment, pages 12-13) which cites cases from New York and Texas determining the defendants do have standing to challenge assignments because they are void. Further, the fact that the assignments violate New York trust law is VERY relevant. HSBC through their trust agreements agreed to be governed by the laws of the state of New York (see Affidavit of Nick Nickerson in Support of Objection to Orders, ¶¶ 7 and 8). The New York Supreme Court has determined “Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of the trust is void. EPTL § 7-2.4. Therefore, the acceptance of the note and mortgage by the trustee after the date the trust closed, would be void.” Wells Fargo Bank, N.A. v. Erobodo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A) [2013 WL 1831799, p. *8]. This case also addressed the fact that the assignment was void because the chain of ownership was also in contravention to the PSA. “The assignment of the Defendant’s note and mortgage, having not been assigned from the Depositor to the Trust, is therefore void as in being in contravention of the PSA. The evidence submitted by Defendant that the note was acquired after the closing date and that assignment was not made by the Depositor, is sufficient to raise questions of fact as to whether the Plaintiff owns the note and mortgage, and precludes granting Plaintiff summary judgment.” Id. The assignments HSBC presents to claim ownership were not assigned or made by the Depositor. Therefore, under New York trust law, the law in which HSBC agreed to be governed, the assignments are void leaving HSBC with no claim of ownership to the Nickersons Note and Mortgage, and summary judgment in favor of HSBC must be reversed.

7. HSBC argues the Nickersons cannot prove they are not in default. However, as the moving party the burden of proof of default lies with HSBC. HSBC has provided no evidence to validate their claim the Nickersons are in default. The account history they provided is neither sworn to nor certified and is inadmissible according to M.R.Civ.P. 56(e)(1). Further, HSBC claims the verified complaint constitutes an affidavit supporting summary judgment. However, as discussed above in point 2, the verified complaint fails as a summary judgment affidavit because it is not made through personal knowledge, the affiant is not competent to testify to the matters stated and the supporting papers are not sworn to or certified M.R.Civ.P. 56(e)(1). In addition, HSBC claims default as of March 1, 2012, however, the Nickersons made their March 1, 2012, payment on March 1, 2012 (See Affidavit of Nick Nickerson in Support of Objection to Orders, Exhibit A). Even the inadmissible account history provided by HSBC shows the Nickersons paid their March 1, 2012, payment on March 1, 2012. Further, the Nickersons contend they have proven they did not default and can offer additional evidence during discovery that any alleged default was not caused by them. Wells Fargo (HSBC’s alleged servicing agent) prevented the Nickersons from curing any alleged default by aggressively and comprehensively blocking all efforts of the Nickersons to make payments and cure the alleged default. MCA § 28-1-1301. When delay or failure to perform or offer to perform excused. “The want of performance of an obligation or of an offer of performance, in whole or in part, or any delay therein is excused by the following cause, to the extent to which they operate: (1) when such performance or offer is prevented or delayed by the act of the creditor…” MCA § 28-1-1302. Effect when performance prevented by creditor. “If the performance of an obligation is prevented by the creditor, the debtor is entitled to all the benefits that the debtor would have obtained if the obligation had been performed by both parties.” Therefore, HSBC has failed to prove a default existed and intentionally prevented the Nickersons from curing any alleged default, and thus, as a matter of law, their claim of nonpayment of the debt lacks merit in its entirety.

8. HSBC and this Court claim the default letter sent to the Nickersons by Wells Fargo in May of 2012 fulfills the notice requirements of the Note and Mortgage. This is simply not true. The Note presented by HSBC specifically requires the “Note Holder” to provide Notice of Default (HSBC’s Summary Judgment, Exhibit A - ¶6(c)), not the loan servicer and although the Nickersons claim and have provided evidence to support their claim that HSBC is not the “Note Holder”, HSBC claims they are, and thus, must have abided by the express terms of the contract and sent the Notice of Default to the Nickersons themselves. In addition, the Mortgage presented by HSBC (HSBC’s Summary Judgment, Exhibit B) also makes it very clear the “Lender” is responsible for providing notice in the case of default and acceleration. Section 22 of the Mortgage states, “Lender shall give notice to Borrower…” Section 20 of the Mortgage makes a clear distinction between the “Loan Servicer” and “Lender”, and thus, in the express wording “Lender shall give notice” the clear and express intent of the contract is that the “Lender” not the “Loan Servicer” is required to give notice. Since HSBC is claiming to be the “Lender”, then they were required to send notice to the Nickersons not the “Loan Servicer”, Wells Fargo. Therefore, HSBC is in violation of the express terms of the alleged contract between HSBC and the Nickersons and the order granting summary judgment must be reversed. Further, as a matter of record, the Nickersons direct the Court’s attention to the default letter referenced by HSBC and the Court and request the Court note the default letter does not claim the Nickersons missed their March 2012 payment. Rather, it alleges the Nickersons missed their April and May payment. Therefore, as a matter of record, the default letter HSBC and the Court are relying on is further proof the Nickersons made their March payment HSBC is claiming they defaulted on and creates additional questions of material fact and fraud that precludes summary judgment. The Nickersons also request the Court note the letter states, “If foreclosure is initiated, you have the right to argue that you did keep your promises and agreements under the Mortgage Note and Mortgage, and to present any other defenses that you may have.”

Further, the default letter provided (HSBC’s Summary Judgment, Exhibit F) does not fulfill the express terms of the alleged Mortgage contract presented by HSBC. Section 20 of the Mortgage presented by HSBC required HSBC to provide notice before taking any judicial action, “Neither Borrower nor Lender may commence, join, or be joined to any judicial action…that arises from the other party’s actions pursuant to this Security Instrument…until such Borrower or Lender has notified the other party…” The default letter provided does not expressly state any intent to take judicial action. It merely states, “Once acceleration has occurred, we may take steps to terminate your ownership in the property by a foreclosure proceeding.” It does not state by a “judicial foreclosure” proceeding, and thus, does not fulfill the express terms of the alleged contract. In addition, Section 22 of the alleged Mortgage requires the acceleration notice to inform the Nickersons they have “the right to bring a court action to assert the non-existence of a default or any other defenses of Borrower to acceleration and sale.” The alleged acceleration notice provided fails to inform the Nickersons of their right to bring a court action, and thus, once again fails to fulfill the express terms of the alleged contract. Therefore, since the alleged acceleration notice does not include the express terms of the alleged Mortgage contract between HSBC and the Nickersons, HSBC has failed to provide the required notice to the Nickersons and the order granting summary judgment must be reversed.

CONCLUSION

The Court set forth the following requirements to establish a prima facie case for foreclosure: (1) the defendant’s debt; (2) nonpayment of the debt; and (3) the complaining party’s present ownership of the debt. As evidenced above, HSBC has failed to prove their right to claim the defendant’s debt, nonpayment of the debt and present ownership of the debt. First, HSBC has failed to prove nonpayment of the debt because 1) they have not submitted a valid summary judgment affidavit or a sworn to or certified account history, 2) the account history provided by HSBC and Exhibit A attached to Nick Nickerson’s supporting affidavit clearly show the Nickersons made their March 1, 2012 payment on March 1, 2012 which means they were not in default on that date as claimed by HSBC, and 3) HSBC’s alleged servicing agent, Wells Fargo, prevented the Nickersons performance and made it impossible for the Nickersons to cure any alleged default. Second, HSBC has failed to prove present ownership of the debt because, as a matter of law, the assignments provided that assign ownership to HSBC are void and HSBC has failed to produce the original note either indorsed in blank or indorsed to them and thus, cannot claim to be the note holder. HSBC has not proven the Defendants debt or non-debt has anything to do with them.

In addition to the fact HSBC has failed to prove the three requirements for a prima facie case for foreclosure, HSBC has not fulfilled the notice requirements of the alleged Mortgage contract and this Court must first consider the fact HSBC has failed to fulfill the express terms of the alleged Mortgage contract before granting a summary judgment for foreclosure. HSBC did not provide notice to the Nickersons at all and the notice provided by Wells Fargo did not provide notice of HSBC’s intent to initiate a judicial action and did not provide notice informing the Nickersons of their right to bring a court action to assert their defenses. Thus, HSBC has breached the notice provisions of the contract and their judicial foreclosure action must be dismissed.

Therefore, since HSBC has not proven a prima facie case for foreclosure and HSBC has breached the express notice requirements of the alleged contract, as a matter of law, the summary judgment granted to HSBC must be reversed and summary judgment in favor of the Nickersons dismissing HSBC’s claim for foreclosure must be granted.

Wherefore, the Nickersons request the Court reverse the order granting summary judgment to HSBC, enter an order granting summary judgment to the Nickersons and dismiss HSBC’s complaint.