KENNETH R. BORRIES AND FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PASCAGOULA-MOSS POINT APPELLANTS
GOSHEN MORTGAGE, LLC, AS ASSIGNEE MNH SUB 1 LLC, ASSIGNEE OF CITIMORTGAGE INC., ASSIGNEE OF MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AND NOMINEE OF FIRST CHOICE FUNDING, INC. APPELLEE
OF JUDGMENT: 07/09/2015
COUNTY CHANCERY COURT HON. JAYE A. BRADLEY JUDGE
ATTORNEYS FOR APPELLANTS: MATTHEW WARD MCDADE DAVID ELIAS
KIHYET DONALD ALAN WINDHAM MATTHEW EARL PERKINS
ATTORNEY FOR APPELLEE: GENE D. BERRY
LEE, C.J., BARNES AND FAIR, JJ.
This appeal stems from a complaint filed in the Chancery
Court of Jackson County where Goshen Mortgage LLC (Goshen)
requested a declaratory judgment that it held the
first-priority deed of trust on an approximately 8.9-acre
tract of real property. Goshen moved for summary judgment
alleging that a deed of trust filed on behalf of Defendant
Kenneth Borries did not provide notice to any party under
Mississippi Code Annotated section 89-5-37 (Rev. 2011)
because it did not identify a beneficiary; thus, Goshen's
deed of trust had first priority over Borries's deed of
trust. The chancery court agreed, and granted summary
judgment in favor of Goshen. Defendants appealed. Finding no
error, we affirm.
OF FACTS AND PROCEDURAL HISTORY
In June 2005, Michael and Mary Ann Rogers purchased a
residence and 8.9 acres of land located on Ramsay Road in
Vancleave, Mississippi. They executed a deed of trust for
$174, 600 in favor of Coastal Mortgage Group Inc.
(Coastal). On August 1, 2005, the Rogerses executed a
$20, 000 deed of trust on 2.17 acres, which included the
residence, and was within the 8.9-acre tract purchased by the
Rogerses. No beneficiary was named on this deed of trust
(Blank Beneficiary Deed of Trust). In October 2005, the
Rogerses executed a deed of trust in the amount of $26, 5000
in favor of the United States Small Business Administration
(SBA). In March 2007, the Rogerses refinanced their loans,
and at the closing on March 21, 2007, executed a deed of
trust on the 8.9 acres for $243, 695 to First Choice Funding
Inc. (First Choice), Goshen's predecessor-in-interest. It
was filed on April 30, 2007. As a result of the refinance,
the Rogerses' Coastal and SBA loans were paid off.
On April 9, 2008, the Blank Beneficiary Deed of Trust was
corrected to name Borries as the beneficiary, and it was
re-recorded in the land records. The deed of trust was
recorded again in May 2008. Borries then foreclosed on the
deed of trust, and the Rogerses abandoned the property
sometime in 2008. On July 17, 2008, a trustee's deed was
recorded, conveying the 2.17-acre tract to Borries after he
bid $25, 272.18 for it. In February 2010, Borries executed a
deed of trust on the 2.17-acre tract in the amount of $194,
000 to First Federal Savings and Loan Association of
Pascagoula-Moss Point (First Federal).
In May 2014, Goshen filed suit in the Jackson County Chancery
Court seeking a declaratory judgment that, among other
matters, Goshen had the first-priority deed of trust on the
8.9-acre tract. On April 7, 2015, Goshen moved for summary
judgment against Borries and First Federal, arguing that the
Blank Beneficiary Deed of Trust was defective and void; thus,
it could not provide record notice under section 89-5-37.
Additionally, Goshen argued that because this deed of trust
was corrected one year later to name Borries as beneficiary
after the First Choice deed of trust was recorded,
Goshen's deed of trust had first priority over the
corrected Borries deed of trust. Attached to Goshen's
motion was an affidavit by Jacques B. Favret, who was
retained by First Choice to close the refinancing and pay off
any liens on the property. Favret ordered a title search of
the property, which revealed Coastal's first-priority
deed of trust and the SBA's second-priority deed of
trust; however, no other deed of trust executed by the
Rogerses was found.
In July 2015, following a hearing, the chancery court issued
an order granting Goshen's motion for summary judgment.
The court found that under Mississippi statutes, Goshen held
the first-priority deed of trust on the subject property.
Borries and First Federal filed a motion for reconsideration,
which was denied. They appealed, raising three issues: (1)
whether Goshen had the priority interest ahead of Borries
without showing it had either record or actual notice of a
prior encumbrance; (2) whether Goshen bears the burden of
proving lack of actual notice at the summary-judgment stage
of a declaratory-judgment action; and (3) whether the
chancery court erred in granting summary judgment without
Goshen's offering evidence of actual notice of a prior
encumbrance. As these issues are intertwined, we shall
discuss them together.
The appellate court applies a de novo standard of review when
analyzing a trial court's grant or denial of a motion for
summary judgment. Kihullen v. Kan. City S. Ry., 8
So.3d 168, 174 (¶14) (Miss. 2009). The evidence will be
viewed in the light most favorable to the nonmoving party.
Id. Summary judgment is proper "if the
pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter
of law." M.R.C.P. 56(c). The moving party has the burden
of proving there is no genuine issue of material fact.
Buckel v. Chaney, 47 So.3d 148, 153 (¶10)
(Miss. 2010) (citation omitted). Once shown, "the burden
of rebuttal ...