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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Espeland v. OneWest Bank, FSB (3/28/2014) sp-6885

Espeland v. OneWest Bank, FSB (3/28/2014) sp-6885

         Notice:  This opinion is subject to correction before publication in the PACIFIC  REPORTER .  

         Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

         303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                 

         corrections@appellate.courts.state.ak.us.  



                  THE SUPREME COURT OF THE STATE OF ALASKA  



MAX and PEGGY ESPELAND,                            )  

                                                   )        Supreme Court Nos. S-14571/14931  

                 Appellants,                       )        (Consolidated)  

                                                   )  

         v.                                        )        Superior Court No. 3AN-09-10994 CI  

                                                   )  

ONEWEST BANK, FSB; INDYMAC  )                               O P I N I O N  

FEDERAL BANK, FSB; INDYMAC                         )  

MORTGAGE SERVICES; and                             )         No. 6885 - March 28, 2014  

ALASKA TRUSTEE LLC,                                )  

                                                   )
  

                 Appellees.                        )
  

_______________________________ )
  



                 Appeal from the Superior Court of the State of Alaska, Third  

                 Judicial District, Anchorage, Eric A. Aarseth, Judge.  



                 Appearances:  Max and Peggy Espeland, pro se, Anchorage,  

                                                                       

                 Appellants. Scott J. Gerlach, Delaney Wiles, Inc., Anchorage,  

                 for Appellees OneWest Bank FSB and IndyMac Mortgage  

                 Services. Richard N. Ullstrom, Routh Crabtree Olsen-Alaska,  

                 Inc., Anchorage, for Appellee Alaska Trustee, LLC.  



                 Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                                                                   

                 Bolger, Justices.  



                 STOWERS, Justice.  



I.       INTRODUCTION  



                 In 2005 Max and Peggy Espeland refinanced their home with E-Loan, Inc.  



Shortly  thereafter,  their  loan  was  purchased  by  another  bank  and  securitized.    The  

                                                                            


----------------------- Page 2-----------------------

Espelands eventually defaulted on the loan and their home was sold in a non-judicial   



deed of trust foreclosure.  The Espelands brought an action in the superior court to void  



the sale, arguing mainly that inconsistencies in and multiple transfers of the loan and  



security documents caused defects in the chain of title.  The superior court disagreed and  



granted  summary  judgment  against  the  Espelands.    The  Espelands  filed  an  appeal.  



Thereafter, the Espelands moved for relief from judgment, citing fraud by the defendants.  



The superior court denied this motion.  The Espelands filed a second appeal, and we  



                                                                                                       

consolidated the two appeals for decision.  Because the Espelands have not produced any  



                                                                                               

evidence of defects with the chain of title or with the foreclosure, we affirm the superior  



                                                                                                               

court's grant of summary judgment.  Because after reviewing the  record  we see no  



                                                                                                       

evidence of fraud or malfeasance, we affirm the superior court's denial of the motion for  



relief from judgment.  



      

II.       FACTS AND PROCEEDINGS  



                   In 2004 Max and Peggy Espeland purchased an 8,000 square foot, eight  



                                     

bedroom, ten bathroom home for $775,000.  The previous owners, the Schefers, had  



been using the property as a bed and breakfast, and the Espelands intended to do the  



same.  Neither Max nor Peggy had any experience running a small business or working  



in the hospitality industry, but they were hoping to "jump in there and . . . make it  



                                                                                                                   

happen."  Max ran a directional drill for Norcon, and Peggy did not work apart from her  



                     

duties  caring  for  the  bed  and  breakfast.    Max's  work  was  intermittent  and  entailed  



                                 

frequent stretches  of unemployment, but he believed he was earning about $70,000  



annually when they purchased the property.  



                                                          

                   The Espelands originally financed the purchase with a loan from Bridge  



Capital.  To obtain the loan, they aggregated Max's salary and the $80,000 a year that  



                                                      

the Schefers told them the property earned.  They made this choice even though Max  



                                                                                                            

testified he understood that the Schefers meant $80,000 before expenses, not after.  To  



                                                             -2-                                                       6885
  


----------------------- Page 3-----------------------

                                        

make the down payment, the Espelands borrowed $50,000 from Peggy's parents, which  



they mischaracterized in their loan application to Bridge Capital as a gift.  



                                    

                     By 2005 the Espelands were having trouble meeting their payments and  



                                        

wanted to refinance their loan.  After looking at options, they chose E-Loan, Inc.  In the  



                                                                                            

loan application, Max stated that he had a monthly salary of $10,000 without mentioning  



                                                                     

that  his  yearly  salary  was  much  less  than  $120,000  due  to  his  frequent  periods  of  



unemployment.  E-Loan agreed to refinance $790,000 at a lower interest rate, which  



dropped the Espelands' monthly payment from $7,172 to $5,088.  



                                                                              

                     The Espelands signed a Promissory Note creating an obligation to repay  



                                                                                                                          

their loan and a Deed of Trust giving the lender, through the trustee under the Deed of  



                                                                                      

Trust,  the  right  to  sell  the  property  if  the  Espelands  failed  to  repay  the  loan.    The  



                                                                                                 

reference date on the Deed of Trust was September 15, 2005, and it was notarized four  



days later on September 19, 2005.  The Deed of Trust lists E-Loan, Inc. as the lender,  



                                                                                                       

Pacific Northwest Title as the trustee under the Deed of Trust, and Mortgage Electronic  



                                                      1 

                                                                                                  

Registration Systems, Inc. (MERS)  as the "nominee for Lender and Lender's successors 



          1          In    its    findings,  the  superior  court  described  MERS  as:  "a  private  



corporation that administers the MERS System, a national electronic registry that tracks     

the  transfer  of  ownership  interests  and  servicing  rights  in  mortgage  loans."    Under  

MERS, the lender assigns its beneficial interest to MERS or appoints MERS its nominee;  

                                                                         

MERS is then the mortgagee of record.  "The lenders retain the promissory notes, as well  

                                                                      

as the servicing rights to the mortgages.  The lenders can then  sell these interests to  

                                                                                                     

investors without having to record the transaction in the public record."  In essence,  

MERS makes it easier for lenders to transfer their interests in mortgages by removing the  

                                                                                          

burden of recording. The term "mortgage" generally refers to the conveyance of title to  

                                                                                                                         

property as security for the payment of a loan or debt, and also loosely refers to the loan  

                                                                                    

or debt itself. BLACK 'S  LAW  DICTIONARY 1101-02 (9th ed. 2009). Here the specific  

instruments are the Promissory Note (loan) and the Deed of Trust (security interest).  



                                                                 -3-                                                          6885
  


----------------------- Page 4-----------------------

                     2  

                                                                      

and  assigns."     As  nominee,  "MERS  was  listed  in  the  public  record  as  the  holder,  



nominally, of the beneficial interest in the property [under the Deed of Trust]."  The  



actual beneficial interest in the property was held by the lender, E-Loan.  



                

          A.         Transfer Of The Rights Connected To The Loan  



                     In  October  2005,  one  month  after  the  origination  of  the  loan,  E-Loan  



                                                                                    3                                         4  

                                                                                      and its beneficial interest  - to  

transferred all of its rights - both its servicing rights 

IndyMac Bank.  E-Loan endorsed the Promissory Note in blank,5 and IndyMac Bank  



                                                                                                                                

later added its name to the endorsement.  MERS internally recorded the transfer of the  



                                                                                                  

Deed of Trust and remained the nominal beneficiary of record, but was now the nominee  



for IndyMac Bank, not E-Loan.  



           2          A "nominee" is "[a] person designated to act in place of another" or "[a]     



party who holds bare legal title for the benefit of others."  B                                LACK 'S LAW DICTIONARY  

1149 (9th ed. 2009).  



          3          A mortgage "servicer" is an entity that performs services for the beneficiary  



such as collecting monthly payments.  Id. at  1105.  



           4  

                                                                                                                            

                     The "beneficial interest" is the "right or expectancy in something (such as  

           

a trust or an estate), as opposed to legal title to that thing,"  Id. at 885; in other words, the  

beneficial interest is the ultimate right to be repaid on the loan.  A "beneficiary" is the  

"person for whose benefit property is held in trust."  Id. at 176.  



           5         "In   blank"   (of   an   endorsement)   is   "not   restricted   to   a   particular  



indorsement."  Id. at 828.  Black's Law Dictionary also defines "blank indorsement" as  

                                                                                                                    

an "indorsement that names no specific payee, thus making the instrument payable to the  

bearer  and  negotiable  by  delivery  only."  Id .  at  844.    "Indorsement"  is  an  alternate  

spelling   for   "endorsement."     Id .   at   607.                        The   Alaska   Statutes   use   the   word  

                                                                                                                

"endorsement," and we follow this convention.  See, e.g., AS 45.03.205.  



                                                                  -4-                                                           6885
  


----------------------- Page 5-----------------------

                    Shortly after acquiring the rights to the Espelands' loan, IndyMac Bank and     



                                                                                       6  

Deutsche  Bank  National  Trust    Co.  signed  a  pooling   and  servicing  agreement  



                  7 

securitizing  the mortgage.  This agreement sold the Promissory Note and the beneficial 

                                                                   



interest  under  the  Deed  of  Trust  to  Deutsche  Bank;  the  contractual  servicing  rights  



remained  with  IndyMac  Bank.    The  original  Promissory  Note  was  transferred  from  



                                                                                                                        

IndyMac Bank to Deutsche Bank at this time, again endorsed in blank.  MERS, still the  



nominee,  although  now  for  Deutsche  Bank,  internally  recorded  the  transfer  of  the  



                                                                

beneficial interest in the Deed of Trust.   After this transfer, Deutsche Bank held the  



                                                                                                         

Promissory Note and the beneficial interest under the Deed of Trust, MERS continued  



                                                                                          

to be listed in the public record as the nominal holder of the beneficial interest under the  



Deed of Trust, and IndyMac Bank continued to be the servicing agent for the loan.  



               

          B.        The Espelands Default On Their Loan  



                                                                                              

                    Roughly three years later, in December 2008, the Espelands ceased making  



payments on their loan.  IndyMac Bank contacted the Espelands and informed them that  



they were in default.  The Espelands unsuccessfully attempted to negotiate with IndyMac  



Bank for a reprieve or loan modification.  The record suggests that the Espelands were  



                                                                                                       

completely unable to make even a portion of their monthly payments; Peggy testified that  



         

after they ceased making payments, they were unable to save any money toward curing  



the default.  



                                                                                                                          

                    In January 2009, a month after stopping payment, the Espelands sent a  



Qualified Written Request to IndyMac Bank under the Real Estate Settlement Procedures  



          6         "Pooling" is a "grouping of assets, such as mortgages, that serves as a basis                        



for the issuing of securities." THE AMERICAN  HERITAGE DICTIONARY OF THE ENGLISH  

LANGUAGE  1370 (def'n 5) (5th ed. 2011).  



          7         "Securitizing" is defined as "convert[ing] (assets) into negotiable securities  



for resale in the financial market." BLACK 'S LAW DICTIONARY  1475 (9th ed. 2009).  



                                                               -5-                                                         6885
  


----------------------- Page 6-----------------------

                        8  

Act (RESPA).   They asked for:  (1) all documents pertaining to the origination of the   



loan, including the loan history, fees, and the amount paid out of the escrow account;       



(2) an explanation of how all the payments were applied; and (3) the names and contact   



information for any investor or broker that purchased the securitized loan, as well as the           



agreements signed and the assignments made.                                    IndyMac Bank responded by providing  



the  Espelands  with  a  payment  history,   the  "requested  disclosures,  [and]  copies  of  



requested  closing  documents."    IndyMac  Bank  refused  to  provide  any  of  the  other  



                                                                                                                                         

information,  stating  that                   "[t]hese  requests  go  well  beyond  what  is  required  to  be  



                                                                                                           

produced pursuant to a Qualified Written Request and will not be provided."  IndyMac  



                                                                              

Bank explained that "[g]enerally, we will not provide copies of internal documents and  



notations, guidelines or other information/materials supplied to us by third parties in  



connection with the organization of this loan."  The Espelands received the letter but  



never responded or followed up.  



                       Meanwhile, IndyMac Bank had been in distress since 2008 and was under  



control  of  the  Office  of  Thrift  Supervision,  becoming  IndyMac  Federal  Bank.    The  



                                                                                                           

Office  of  Thrift  Supervision  appointed  the  Federal  Deposit  Insurance  Corporation  



                                                                                              

(FDIC) as receiver, and in March 2009 the FDIC sold all of IndyMac Federal Bank's  



                                          9  

                                              For the Espelands, this was only a transfer of the servicing  

assets to OneWest Bank.                                                                                



rights for their loan because that was the only interest IndyMac Federal Bank retained.  

                                                                      



In  other  words,  this  was  a  transfer  of  the  contractual  right  to  perform  a  service  for  



Deutsche Bank, not a transfer of property.  MERS internally recorded the transfer of  



           8           12 U.S.C.  2605(e) (2010).  



           9           See  Failed  Bank  Information:  Information  for  IndyMac,  F.S.B.,  and  



IndyMac   Federal   Bank,   F.S.B.,   Pasadena,   CA ,   FEDERAL                                             DEPOSIT          INSURANCE  

CORPORATION , http://www.fdic.gov/bank/individual/failed/IndyMac.html (last updated  

Nov. 20, 2013).  



                                                                       -6-                                                               6885
  


----------------------- Page 7-----------------------

                                                                                     

servicing rights, and on April 15, 2009, IndyMac Federal Bank informed the Espelands  



that the new servicer of their loan was OneWest Bank.  



          C.        The Non-Judicial Foreclosure  



                         

                    In  early  April  2009,  OneWest  Bank  referred  the  foreclosure  to  Alaska  



                                                                                                        

Trustee, LLC, a  company  that performs  non-judicial foreclosures.   Foreclosure  was  

ordered in the name of IndyMac Federal Bank, One West Bank's predecessor.10  Alaska  



Trustee performed a routine title search and found that, although the foreclosure had  



                                                                                                                        

been ordered in IndyMac Federal Bank's name, MERS was still the record holder of the  



                                                                                                                             11  

                                                                                

beneficial interest under the Deed of Trust - publicly, MERS was the owner of record. 



                                                       

First American Title, the insurer for the foreclosure, required that the Deed of Trust be  



                                                                                                                  

assigned from MERS to IndyMac Federal Bank in order to give clear title in the public  



record.  



                                         

                    On April 22, 2009, MERS assigned its nominal beneficial interest in the  



                                                                                                           12  

                                                                                                               As nominal  

Deed of Trust to IndyMac Federal Bank by assigning it the Deed of Trust. 



                                                                         

holder of the beneficial interest, IndyMac Federal Bank held only legal title, but this gave  



          10        It is unknown why OneWest Bank asked for foreclosure in the name of   



IndyMac Federal Bank and not its own.  The superior court speculated, "Perhaps it [was]  

because at the time OneWest initiated the foreclosure on April 3, 2009, the Espelands  

had not yet been notified that ownership of the servicing rights had been transferred from  

IMFB to OneWest, and OneWest believed this would have been confusing."  



          11  

                                                                                           

                    Rose Santiago, an employee of Alaska Trustee, stated in her affidavit that  

                                                                                                      

"[i]t  is  common  for  the  actual  ownership  of  the  loan  to  change  hands  without  a  

                                          

corresponding   assignment   being   recorded   unless   and   until   the   loan   goes   into  

foreclosure."  



          12        The       actual       beneficial         interest       -       the      ultimate         "right       or  



expectancy"  -  remained  with  Deutsche  Bank.    See  BLACK 'S   LAW   DICTIONARY  

                                                                                         

885 (9th ed. 2009).  The assignment of the Deed of Trust to IndyMac Federal Bank  

simply made IndyMac Federal Bank the new nominal owner of record.    



                                                             -7-                                                        6885
  


----------------------- Page 8-----------------------

                                                                                                              

it the right to "take any action required by the lender" by "law or custom," including "the  



                                       

right to foreclose and sell the Property."  On April 21, 2009, IndyMac Federal Bank used  



                                                  

its power as nominal beneficiary to substitute Alaska Trustee for Pacific Northwest Title  



                                                                                                              

as the trustee for the Espelands' Deed of Trust.   When Alaska Trustee recorded both  



                                              

documents on May 6, 2009, it recorded the assignment of the Deed of Trust from MERS  



                                                                                               

to IndyMac Federal Bank before it recorded the Substitution of Trustee.  Alaska Trustee  



                                                                   

recorded a Notice of Default the same day.  In addition, OneWest Bank had a power of  



attorney granted by Deutsche Bank to facilitate the foreclosure sale.  



                                              

                    The foreclosure was postponed three times, but the Espelands were unable  



                                                                      

to cure their default.  On October 13, 2009, one day before the foreclosure sale, the  



                                                                                                       

Espelands sought a preliminary injunction barring the sale, which was denied by the  



                                                                                                    

superior court.  At the sale on October 14, OneWest Bank was the  sole  bidder and  



                                                                                          

purchased the property for $647,010.68.  At the time of the foreclosure, Deutsche Bank  



                                                                                                            

held the Promissory Note and the beneficial interest under the Deed of Trust, IndyMac  



Federal Bank held the nominal beneficial interest under the Deed of Trust, OneWest  



Bank was the servicing agent for Deutsche Bank, and Alaska Trustee was the trustee  



under the Deed of Trust.  



                

          D.        The Superior Court Proceedings  



                    1.        Summary judgment  



                                                                                                            

                    The Espelands filed their first amended complaint on June 9, 2010, which,  



in relevant part, alleged that defects in the chain of title invalidated the foreclosure and  



                                                           

that OneWest Bank violated RESPA  by not responding to the Espelands' Qualified  



                                                                                                        

Written Request.  Both sides moved for summary judgment.  Before oral argument, the  



Espelands filed a late expert-witness declaration from Neil Garfield.  The court declined  



to consider Garfield's statement because it was unsworn.  



                                                               -8-                                                         6885
  


----------------------- Page 9-----------------------

                      The superior court denied the Espelands' motion for summary judgment  



                                                           

and granted summary judgment to OneWest Bank.  It found no defects in the chain of  



title that would prevent Alaska Trustee from foreclosing.  The superior court declined  



                                                         

to address the Espelands' RESPA claim because the Espelands had failed to exhaust the  



required  administrative  claims  process,  and  thus  the  superior  court  did  not  have  



                                                                                                                      

jurisdiction to consider the claim.  The superior court issued a judgment on May 8, 2012.  



                                                                                                                           

The Espelands filed an appeal from that judgment, contesting the grant of summary  



judgment and the court's refusal to consider the declaration from Neil Garfield.  



                      2.         Motion for relief from judgment  



                                                                                                                         

                      The Espelands also filed a Motion for Relief from Judgment or Order in the  



                                                                                                              

superior  court  under  Alaska  Civil  Rule  60(b).    They  primarily  sought  relief  under  



                                                                                   

Rule 60(b)(3) on the grounds that OneWest Bank, Alaska Trustee, and IndyMac Federal  



                                                                                                               

Bank were "collectively engaging in fraudulent misrepresentation, alteration and/or the  



production of forged documents to make a claim of ownership."   They alleged that  



                                                                        13  

                                                                                                                

45 pages of log notes produced in discovery                                 were correspondence between the parties  



                                                              

and were "evidence of drafting and  altering documents in an attempt to deceive the  



Plaintiffs and the Court."  



                                                                                                       

                      The superior court denied the Espelands' motion for relief from judgment.  



The court ruled that although the Espelands' allegations "if proven would constitute  



                                                                       

fraud," the evidence they presented "does not meet the clear and convincing standard."  



                                                                                                                

The court noted that many of their fraud claims were substantially similar to the fraud  



           13         OneWest Bank produced the log notes to the Espelands during discovery     



in  October   2010.     The  log  notes  are  a  collection  of  records  memorializing  the  

performance of routine actions (such as updating a document or collecting a payment),     

notifications about the status of the foreclosure, requests for actions to be taken, and   

snippets of correspondence.  



                                                                     -9-                                                               6885
  


----------------------- Page 10-----------------------

claims already  ruled  on and rejected in their motion for summary judgment, and to  

                                 



overcome that ruling the Espelands would have had to introduce new evidence, which  

                                 



they did not.  The Espelands filed a second appeal, arguing that "the trial court in this  

                             



case failed to give proper consideration to the entire record of the proceedings before it  

                                                                     



in conjunction with the specific evidence of fraud contained in the redacted documents  

                                    



submitted by the Appellees."  



                                                                                       

                    We consolidated the Espelands' two appeals for decision.  In both appeals  



the Espelands are proceeding pro se.  



        

III.      STANDARD OF REVIEW  



                                                                                          

                    We review the "grant of a summary judgment motion de novo, affirming  



                     

if the record presents no genuine issue of material fact and if the movant is entitled to  

                                            14  In this examination, we draw all reasonable inferences  

                                                                                                 

judgment as a matter of law."  



                                         15  

in favor of the nonmovant.                   In order to survive a motion for summary judgment, the  

                  



party opposing summary judgment must present more than "unsupported assumptions  

                                                                                  

                           16   The  party  "must  set  forth  specific  facts  showing  that  there  is  a  

and  speculation."                     

genuine issue of material fact."17  And, this court may affirm on any ground in the record,  



not only those argued by the parties.18  We "apply our independent judgment to questions  

                                           



          14        Erkins  v.  Alaska  Trustee ,  265  P.3d  292,  296  (Alaska  2011)  (internal  



quotation marks omitted).  



          15        Id .  



          16        Boyko  v.  Anchorage  Sch.  Dist .,  268  P.3d  1097,   1103  (Alaska  2012)  



(quoting Perkins v. Doyon Universal Servs., LLC , 151 P.3d 413, 416 (Alaska 2006)).  



          17        Kelly v. Mun. of Anchorage , 270 P.3d 801, 803 (Alaska 2012).  



          18        Kuretich v. Alaska Trustee, LLC , 287 P.3d 87, 88 (Alaska 2012).  



                                                             -10-                                                        6885
  


----------------------- Page 11-----------------------

of  law,  adopting  the  rule  of  law  most  persuasive  in  light  of  precedent,  reason,  and  

policy."19  



                                                                                                                                 20  

                                            

                    We review the denial of a Rule 60(b)(3) motion for abuse of discretion. 



We  also  review  a  trial  court's  decision  to  admit  or  exclude  evidence  for  abuse  of  

                                                                               



                21  

discretion.         An abuse of discretion exists only if we are "left with a definite and firm  

                                                         

conviction on the whole record that the trial judge has made a mistake."22  

                                                                                                                 



IV.	       DISCUSSION  



                    The Espelands are challenging three of the superior court's rulings.  First,  



they argue that the court erred when it declined to admit the declaration of their expert,  

                              



Neil  Garfield.    Second,  they  argue  that  the  court  erred  when  it  granted  summary  



                                                                                     

judgment to the defendants.  They contend that chain of title defects, RESPA violations,  



                                                                                                                

and an inadequate sale price create genuine issues of material fact.  Third, the Espelands  



contend that the court erroneously denied their motion for relief from judgment under  



Rule 60(b)(3) and did not give full consideration to the evidence before it.  



                                                                                                                 

          A.	        The Superior Court Did Not Abuse Its Discretion When It Declined To  

                     Consider Neil Garfield's Declaration.  



                                                                         

                    The Espelands filed a late motion to admit the declaration of a new expert  



witness  11  days  before  oral  argument  on  the  cross-motions  for  summary  judgment.  



                                                                                                                

Garfield  professed  to  be  an  expert  on  the  mortgage  crisis  and  lending  law,  and  his  



                                                                                 

declaration  discussed  alleged  defects  in  the  chain  of  title  for  the  Espelands'  loan  



          19	       Shaffer v. Bellows, 260 P.3d 1064, 1068 (Alaska 2011).  



          20         Vezey v. Green, 171 P.3d 1125, 1128 (Alaska 2007).  



          21        Jones v. Bowie Indus., Inc. , 282 P.3d 316, 324 (Alaska 2012).  



          22        Alaskan Adventure Tours, Inc. v. City & Borough of Yakutat                               , 307 P.3d 955,  



959-60 (Alaska 2013) (internal quotation marks omitted).  



                                                               -11-	                                                       6885
  


----------------------- Page 12-----------------------

documents.  The court declined to consider the declaration, in part because it found the  



                                                             23 

declaration both sworn and unsworn.                               Further, the superior court found the declaration  



                                                  

"untimely and unjustified."   The court noted that the Espelands submitted Garfield's  



                             

declaration well past the deadline for expert submissions and without adequate excuse,  



                                                                                                         

even though they had retained Garfield over two months prior. The court also found that  



Garfield's declaration was incomplete because it referred to "included documents" that  



were not submitted with the declaration.  



                                                                  

                      The Espelands argue that the superior court refused to consider Garfield's  



                                                                                                      

declaration "primarily because it disagreed with some of his conclusions, regardless of  



                                                                        

his  expertise  in  the  specific  field  of  law  underlying  this  suit."    Although  the  court  



arguably  found  some  of  Garfield's  conclusions  not  credible,  which  on  summary  



                                                 24  

                                                                                                

judgment would be improper,                         because the superior court alternatively provided several  



                                                                                                

legitimate reasons for rejecting Garfield's declaration - the declaration's untimeliness  



incompleteness,  and  unreliability  -  we  conclude  that  the  court  did  not  abuse  its  

discretion in refusing to consider the declaration.25  



           23         The declaration was originally submitted to the court unnotarized, and later   



when it was notarized the first sentence of the  notarized version still read, "My name is   

Neil  Franklin  Garfield,  and  this  Declaration  is  made  unsworn  under  the  penalty  of  

perjury."  



           24  

                                             

                       Yost v. State, Div. Of Corps., Bus. & Prof'l Licensing, 234 P.3d 1264, 1276  

                                                                                  

(Alaska 2010) ("Credibility is a factual issue . . . properly determined by the factfinder  

                                               

at trial, not a matter of law determined by the court in summary judgment."); see also  

                                                          

Meyer v. State, Dep't of Revenue, Child Support Enforcement Div. ex rel. N.G.T. , 994  

                           

P.2d  365,  367  (Alaska  1999)  ("The  court  does  not  weigh  the  evidence  or  witness  

credibility on summary judgment.").  



           25  

                                                                                                          

                      We need not decide whether the declaration was sworn or unsworn. We  

have  noted,  however,  that  "Rule  56(c)  emphasizes  the  importance  of  affidavits,  as  

                                                                                                                          (continued...)  



                                                                     -12-                                                               6885
  


----------------------- Page 13-----------------------

                                                      

          B.	       The Superior Court Properly Granted Summary Judgment For The  

                    Defendants.  



                                                                                                              

                    The Espelands' main contention is that defects in the chain of title of their  



                                                                                                       

loan documents invalidated the foreclosure. Secondarily, they argue that OneWest Bank  



                                                                                                                        

violated RESPA by failing to respond to their Qualified Written Request, and that the  



foreclosure sale of the property did not meet legal requirements. In order to raise a  



                                                                                             

genuine issue of material fact, the Espelands were required to show specific, admissible  



                                         26  

facts, not mere speculation.                  They failed to do this.  



                    1. 	      There are no genuine issues of material fact regarding the chain  

                                                                                                                          

                              of title and authority to foreclose.  



                    The Espelands argue that OneWest Bank and Alaska Trustee did not have  

authority27 to foreclose.  They point to alleged defects in the notarization of the Deed of  

                                                                                                                       



Trust,  the  transfers  from  E-Loan  to  IndyMac  Bank  and  then  to  OneWest  Bank,  the  



                                                                     

Substitution of Trustee, and the assignment of the Deed of Trust from MERS to IndyMac  



                                               

Federal Bank.  However, the Espelands failed to produce any facts supporting these  



                                                                                                      

allegations.  A close examination of the loan's chain of title reveals that OneWest Bank  



                                                                              

had authority to initiate the foreclosure, and Alaska Trustee had authority to process the  



foreclosure.  



          25(...continued)  



opposed to unsworn allegations, with regard to summary judgment."  Bennett v. Weimer ,  

                                                                                                                    

975 P.2d 691, 694 (Alaska 1999).  



          26        Boyko  v.  Anchorage  Sch.  Dist .,  268  P.3d  1097,  1103  (Alaska  2012)  

                               

(quoting Perkins v. Doyon Universal Servs., LLC , 151 P.3d 413, 416 (Alaska 2006));  

                                                                                     

Kelly v. Mun. of Anchorage , 270 P.3d 801, 803 (Alaska 2012).  



          27  

                                                                                                            

                    The Espelands consistently use the word "standing," but as standing relates  

only  to  judicial  foreclosures,  we  will  assume  they  mean  "authority"  to  conduct  the  

non-judicial foreclosure.  



                                                              -13-	                                                        6885
  


----------------------- Page 14-----------------------

                                     

                                a.         The loan origination  



                                                                                                       

                     The Espelands signed a Promissory Note creating the obligation to repay  



                                                                                                                            

their loan and a Deed of Trust giving the lender, through the trustee,  the right to sell the  



                                                                                                          

property if they failed to repay the loan.  The Espelands argue that (1) the Deed of Trust  



                                                                                                                                       28  

                                                                                   

was deficient because it was notarized on a different day than its internal reference date, 



and (2) the Promissory Note was defective because "there was a genuine issue of fact as  

                                                                                                    



to the identity of the original lender identified by the Appellees as 'E-Loan.' "  The  

                              



Espelands also question the transfer between E-Loan and IndyMac Bank.  



                                                                                                               

                     The Espelands' first argument stems from that fact that the Deed of Trust  



                                                                                                        

refers to itself as "this document, which is dated September 15, 2005," when in fact it  



was not notarized until September 19, 2005.  The Espelands claim  this discrepancy  



                                                              

shows that the notary was not present when the document was signed, and hence there  



was notary fraud in the origination of the loan.  This argument is unavailing.  As the  



superior court correctly concluded, "Alaska's notary law does not prohibit a person from  



signing a document which refers to itself by a date other than the date the person actually  



                                                                                                                                 

signed."  A notary may notarize a document signed on a different day so long as the  

                                                                                                      29  Moreover, the Deed  

signer appears before the notary and acknowledges the signature. 



of Trust was signed on September 19, the date that the document was notarized, so there  

                                                                                 



is no reason to believe that the notary was not present.  



           28        On appeal, the Espelands argue very generally that there were defects in the     



chain  of  title.    While  the  Espelands  did  not  precisely  articulate  their  notarization  

argument on appeal, it was a central issue in the superior court. Because the Espelands  

                                                                    

are now proceeding pro se (they were represented by counsel in the superior court), we  

                                                                                                                           

construe their general arguments to  include the specific arguments presented  to  the  

                                                                                                                                 

superior court and address this issue.  



           29        AS 44.50.062(5).  



                                                                  -14-                                                            6885
  


----------------------- Page 15-----------------------

                                                                                           

                     Next, the Espelands argue that the there was a genuine issue of material fact  



                                                                                                     

regarding the identity of the lender.  The Espelands contend that "OneWest and Deutsche  



                 

Bank are far more connected than is being admitted and that they are, in fact, merely  



instrumentalities  of  an  entity  that  has  yet  to  be  revealed  and  which  also  included  



IndyMac Federal, the prior holder of the Deed of Trust."  This argument also fails to  



raise a genuine issue of material fact.  Alaska law does not require that the lender be  



                                                                      30  

revealed in order for the transfer to be valid.                            Thus, the "identity" of E-Loan does not  



have any legal bearing on whether the loan it initiated was a legitimate loan.  



                                                                                                        

                     Finally, the Espelands question the transfer of the Promissory Note and  



                                                                                           

Deed of Trust from E-Loan to IndyMac Bank.  But there is no genuine issue of material  



                                                                               

fact regarding the occurrence of this transaction.  E-Loan endorsed the Promissory Note  



                                                                31  

                                                                    IndyMac Bank later added its name to the  

in blank and gave it to IndyMac Bank. 



                                                                                  32  

endorsement, as permitted under AS 45.03.205(c).                                       In addition to IndyMac Bank's  



special  endorsement,  evidence  of  the  sale  can  be  found  in  MERS's  records.    Also,  



                                                                                                 

OneWest Bank employee Charles Boyle reviewed OneWest Bank's records of the loan  



           30        The Espelands do not cite to any law that would require such a disclosure.   



Conveyances of land, mortgages, and deeds of trust are dealt with extensively under                     

AS 34.20.010-.160, and nowhere in these statutes is there such a disclosure requirement.     



           31  

                                                                                                                          

                     The Espelands cite a Massachusetts case for the proposition that blank  

endorsements are invalid,  US Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40, 53 (Mass.  

                                                                            

2011) (holding blank transfers of real property are impermissible under Massachusetts  

law),  but  this  case  is  inapposite  as  Alaska  permits  in-blank  endorsements  under  

AS 45.03.205(b).    



           32        AS   45.03.205(c)   provides   that   "[t]he   holder   may   convert   a   blank  



endorsement that consists only of a signature into a special endorsement by writing,  

                                                                   

above the signature of the endorser, words identifying the person to whom the instrument  

is made payable."  



                                                                  -15-                                                            6885
  


----------------------- Page 16-----------------------

and attested in an affidavit that the records reflect the transfer.  In contrast, the Espelands  



                                                                                                          

failed to present any facts in support of their contention that this transfer did not occur.  



                                         

                                   b.          The loan securitization  



                                                                                                                       

                        In November 2005 IndyMac Bank and Deutsche Bank securitized the loan  



                                                                                      

through a pooling and servicing agreement.  The Espelands argue that the securitization  



gives  "rise  to  a  number  of  genuine  issues  of  material  fact  that  preclude  summary  



                                                                                                     

judgment."  Mainly, they argue that "there was insufficient evidence presented to the trial  



                                                                            

court that Deutsche [Bank] was the legal owner and holder of the note and Deed of  



                                                       

Trust."  They also contend that there is a genuine issue of material fact whether "the asset  



                                             

pool receive[d] the loan  in accordance with the [Pooling and Servicing Agreement]  



                                                                                                                 

terms, transferring physically from the Originator to the Sponsor to the Depositor to the  

Trust, with all intervening endorsements to the Custodian."33  



                        There is ample, undisputed evidence that the transfer of the Promissory  



                                                                                                       

Note  from  IndyMac  Bank  to  Deutsche  Bank  occurred.                                               MERS's  records  show  the  



transfer.  Charles Boyle stated in his affidavit that IndyMac Bank physically transferred  



the Promissory Note to Deutsche Bank at this time.  Ronaldo Reyes, an employee of  



Deutsche Bank, submitted an affidavit attesting to the existence of the agreement and  



Deutsche Bank's possession of the original Promissory Note.  Deutsche Bank produced  



the Promissory Note, endorsed in blank, from its files and delivered it to OneWest Bank,  



                                                                                                               

which presented it to the court, accompanied by an affidavit from a OneWest Bank  



employee  stating  that  he  received  the  Promissory  Note  from  Deutsche  Bank  and  



            33          The second half of the Espelands' contention bears no resemblance to the                  



laws regarding trusts and real property as laid out under AS 34.40.110:                                                    Alaska law does  

not require the physical transfer of the original loan   instrument.  Therefore, we will  

disregard this argument.  



                                                                        -16-                                                                  6885
  


----------------------- Page 17-----------------------

personally reviewed Deutsche Bank's records.                         The Espelands adduced no evidence to     



dispute these facts.  



                                                                            

                   The Espelands' second argument, that Deutsche Bank did not "receive the  



loan  in  accordance  with  the  [Pooling  and  Servicing  Agreement]  terms,"  is  also  



                                                                                                

unavailing.  The Espelands do not provide any evidence that casts doubt on the validity  



of the transfer.  Given the undisputed evidence discussed above, there is no reason to  



doubt that Deutsche Bank "receive[d] the loan in accordance with the [Pooling and  



Servicing Agreement] terms."  



                             c.        The transfer of servicing rights to OneWest Bank  



                   The Espelands argue that "there was no evidence offered that there was ever  



                                                                                  

a proper assignment to OneWest [Bank]." However, the record reveals no genuine issue  



of material fact whether the transfer occurred.  In March 2009 the FDIC sold all of  



                                                                          34  

                                                                                          

IndyMac Federal Bank's assets to OneWest Bank.                                 When OneWest Bank acquired  



IndyMac  Federal  Bank's  assets,  it  executed  a  Servicing  Business  Asset  Purchase  



                                                                                          

Agreement for IndyMac Federal Bank's contractual servicing rights.  These contractual  



servicing rights included the servicing rights for the Espelands' loan.  OneWest Bank  



provided the superior court with a copy of the Purchase Agreement and a copy of the  



                                                                                              

notice it sent to the Espelands informing them that it was their new servicer.  MERS  



                                                                                                   

recorded the transfer of servicing rights.  In addition, OneWest Bank employees J.C. San  



                                       

Pedro and Charles Boyle attested to the transfer in affidavits.  Thus, there was ample  



evidence  that  the  servicing  rights  were  assigned  to  OneWest  Bank,  making  it  the  



servicing agent for Deutsche Bank.  



          34       See  Failed  Bank  Information:  Information  for  IndyMac,  F.S.B.  and  



IndyMac Federal Bank, F.S.B., Pasadena, CA , FEDERAL  DEPOSIT  INSURANCE  CORP .,  

http://www.fdic.gov/bank/individual/failed/IndyMac.html.  (last updated Nov. 20, 2013).  



                                                            -17-                                                         6885  


----------------------- Page 18-----------------------

                                   

                              d.        The non-judicial foreclosure 



                                                                                        

                      In  December  2008  the  Espelands  ceased  repaying  their  loan.                                  The  



following April OneWest Bank requested that Alaska Trustee initiate a non-judicial  



                                                                                                

foreclosure under IndyMac Federal Bank's name.  As is routine, Alaska Trustee sought  



                            

title insurance for the foreclosure.  Because the Deed of Trust's holder of record was still  



                                                                                                    

MERS, First American Title would not insure the foreclosure until the holder of record  



                                                                       

matched the name in which the foreclosure was ordered - IndyMac Federal Bank.  The  



Servicing Business Asset Purchase Agreement executed between IndyMac Federal Bank  



and OneWest Bank contractually obligated IndyMac Federal Bank to help OneWest  



                                                      

Bank  foreclose.    MERS  assigned  the  Deed  of  Trust  to  IndyMac  Federal  Bank  on  

                                                                                                   35  IndyMac Federal  

April 22, 2009, thereby transferring its nominal beneficial interest.     



Bank then used its power as nominal beneficiary to substitute Alaska Trustee as the  

                          



trustee under the Espelands' Deed of Trust.  



                                                        

                    The Espelands contend that there are three genuine issues of material fact:  



                                                   

(1) whether MERS had the power to transfer the nominal beneficial interest to IndyMac  



Federal  Bank;  (2)  whether  the  substitution  of  trustee  under  the  Deed  of  Trust  was  



               36 

                                                                  

operative;        and (3) whether OneWest Bank had authority to foreclose if the foreclosure  



was ordered in IndyMac Federal Bank's name.  



          35        The actual beneficial interest - the ultimate ownership rights - remained   



with Deutsche Bank.  The assignment of the Deed of Trust to IndyMac Federal Bank  

simply made IndyMac Federal Bank the new owner of record in order to give it clear title  

                                   

in the public record.    



          36        Again, the Espelands do not specifically make this argument on appeal;  



instead they generally argue there were defects in the transfer. The issue was central and  

                                                                                                                 

argued at length in the superior court when the Espelands were represented by counsel.  

                          

We again give them the benefit of their pro se status and address this issue as if it had  

been more fully argued on appeal.  



                                                             -18-                                                        6885
  


----------------------- Page 19-----------------------

                    First, the Espelands argue that "[b]ecause MERS was never the lawful  



holder or assignee of the note, the assignment of the mortgage to Indymac is a nullity,  



                                                                                 

and MERS was without authority to assign the power to foreclose to Indymac."  But the  



                                                                                                                 

Espelands' Deed of Trust granted MERS, as nominal holder of the beneficial interest, the  



                                                                                      

right to "take any action of [the] Lender" including "the right to foreclose and sell the  



                                                                

Property."    As  nominee,  MERS  had  the  authority  to  take  any  action  that  the  actual  



beneficiary could have taken, including transferring its nominal beneficial interest to  



                                                                 

another party. The Espelands have cited no Alaska authority to the contrary.  MERS had  



                              

the power to assign the Deed of Trust and thereby transfer its nominal beneficial interest  



to IndyMac Federal Bank.  



                                                                                                 

                    Second, the Espelands argue that IndyMac Federal Bank's substitution of  



Alaska Trustee for Pacific Northwest Title under the Deed of Trust was invalid because  



                                                                                                       

it was executed on April 21, 2009, one day before IndyMac Federal Bank received the  



                                                                                                           

nominal beneficial interest from MERS.  In their view, IndyMac Federal Bank attempted  



                                                                                 

to execute the substitution before it had the power to do so.  This argument also fails.  



A new trustee succeeds to the powers of the old trustee at "the time the substitution is  



                         37  

                                                                                                               

filed for record."           Therefore, the proper inquiry is into the relationship of the parties at  



                                                                                             

the moment the substitution is recorded, not the moment that it is executed.  The superior  



court  found  that  on  the  day  the  two  documents  were  recorded,  May  6,  2009,  the  



                      

assignment of the Deed of Trust from MERS to IndyMac Federal Bank was recorded one  



minute before IndyMac Federal Bank's Substitution of Trustee.  Thus, at the time that  



the  Substitution  of  Trustee  was  recorded,  IndyMac  Federal  Bank  had  the  power  to  



substitute the trustee.  



          37        AS 34.20.120(c).  



                                                             -19-                                                            6885  


----------------------- Page 20-----------------------

                     Finally, the Espelands contend that OneWest Bank and Alaska Trustee still  



                                                                                  

did not have the authority to foreclose. They argue, among other things, that because the  



                                                                                    

foreclosure was ordered in IndyMac Federal Bank's name, OneWest Bank was without  



authority.    But  as  the  superior  court  correctly  found,  the  "question  of  'why'  the  



                                                                                                                    

foreclosure was initiated in the name of IMFB [IndyMac Federal Bank] is not relevant  



to this Court's determination of the legality of the transaction."  The two parties that  



                                                                                            

actually needed authority to participate in the foreclosure - OneWest Bank and Alaska  



                                                                                                    

Trustee - had authority.  Thus it is irrelevant which nominal beneficiary was ordered  

to foreclose on the Deed of Trust.38  



                     Alaska Statute 45.03.301 provides that "[a] person may be a person entitled  



                                                                                                            

to enforce the instrument even though the person is not the owner of the instrument."  



Despite not being the "owner" of the Promissory Note, both OneWest Bank and Alaska  



                                                     

Trustee were entitled to enforce the Deed of Trust:  OneWest Bank as Master Servicer  



                                                                    

for Deutsche Bank, and Alaska Trustee as the trustee under the Deed of Trust appointed  



by the nominal beneficiary, IndyMac Federal Bank.  



                                                                                        

                     As detailed earlier, there were no defects in OneWest Bank's assumption  



                                                                                                     

of the servicing rights.  The Pooling and Servicing Agreement between Deutsche Bank  



and  IndyMac  Bank  defines  the  "Master  Servicer"  as  "IndyMac  Bank  .  .  .  and  its  



           38        Additionally, as the nominal beneficiary, IndyMac Federal Bank itself had   



the power to foreclose.  Most federal courts and state courts that have considered the   

issue have found that the nominee has the power to foreclose.                                      See, e.g., Trent v. Mortg.  

Elec.  Registration  Sys.,  Inc.,  288  Fed.  App'x.  571  (11th  Cir.  2008);  Morgera  v.  

Countrywide Home Loans, Inc., No. 2:09CV01476-MCE-GGH, 2010 WL 160348, at  

                                                                                                                  

*8 (E.D. Cal. Jan. 11, 2010); In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006);  

                                                                                                   

Mortg.   Elec.   Registration   Sys.,   Inc.   v.   Revoredo,   955   So.   2d   33   (Fla.   App.  

Mar.   14,   2007);   In   re   Sina ,   No.   A06-200,   2006   WL   2729544   (Minn.   App.  

Sept. 26, 2006); Mortg. Elec. Registration Sys., Inc . v. Ventura, No. CV 054003168S,  

                                                                                                        

2006 WL 1230265 (Conn. Super. Apr. 20, 2006).  



                                                                  -20-                                                            6885
  


----------------------- Page 21-----------------------

successors  and  assigns."    The  purchase  of  IndyMac  Federal  Bank's  assets  made  



OneWest  Bank  the  "successor"  of  IndyMac  Federal  Bank.    Further,  the  Purchase  



                                                                                                           

Agreement between IndyMac Federal Bank and OneWest Bank provided that OneWest  



Bank would have "all Servicing Rights accruing to [IndyMac Federal Bank] under the  



                                                                                      

Servicing Agreements including all rights to . . . take other rightful actions in respect of  



                                                                                                    

breaches [and] defaults." The Pooling and Servicing Agreement not only authorized the  



                                                                                          39  

                                                                                                The  Espelands  have  

"Master  Servicer"  to  foreclose,  it  required  it  to  foreclose. 



presented no evidence tending to refute these facts.  



                   As the trustee under the Espelands' Deed of Trust, Alaska Trustee had  



                   

authority to conduct the foreclosure.  In the Deed of Trust, the Espelands granted the  



                                                                       

trustee a "power of sale" for the property.  In the event of a default, the "trustee shall sell  



                                                                

the property at public auction."  This right was originally granted to Pacific Northwest  



                                                               

Title and then transferred to Alaska Trustee by IndyMac Federal Bank in the Substitution  



of Trustee recorded May 6, 2009.  Once Alaska Trustee received its appointment on  



                                                                                               

May 6, it was empowered to proceed with the non-judicial deed of trust foreclosure in  



accordance with the Deed of Trust's "power of sale" provision.  



                   In addition, the Espelands challenge the fact that the original Promissory  



Note was not present at the foreclosure.  However, AS 34.20.070 and AS 34.20.080  



                                                                                                

provide  the  requirements  for  a  sale  by  a  trustee,  and  they  do  not  require  the  loan  



instrument be present at the sale.  



                                                                                          

                   After carefully examining the transfers of rights and interests surrounding  



                                                                         

the Espelands' loan, we conclude that there were no defects in the chain of title giving  



          39        The  Agreement  states  that  "[t]he  Master  Servicer  shall  use  reasonable  



efforts  in  accordance  with  the  Servicing  Standard  to  foreclose  on  or  otherwise  

                                                                                 

comparably convert the ownership of assets securing such of the Mortgage Loans as  

come into and continue in default."  



                                                            -21-                                                          6885  


----------------------- Page 22-----------------------

rise  to  genuine  issues  of  material  fact.    OneWest  Bank  had  authority  to  initiate  the  



                                                                                      

foreclosure as Master Servicer for Deutsche Bank, and Alaska Trustee had authority to  



                                                                                      

perform the foreclosure by virtue of its role as trustee under the Deed of Trust. Thus,  



both entities acted within their authority during the foreclosure process.  



                                                                              

                     2.	       The superior court properly declined to consider the Espelands'  

                               RESPA claim.  



                                                         

                     The Espelands argued in the superior court that OneWest Bank violated  



                                      

RESPA when it did not answer their Qualified Written Request in full, but the superior  



                                                                                

court  declined  to  address  this  claim  because  the  Espelands  failed  to  exhaust  their  



                                                                            

administrative remedies.  The superior court was correct because IndyMac Bank was in  

FDIC receivership when the Espelands made their Qualified Written Request.40                                                   The  



                                                                                                                   

federal appellate courts that have considered the issue have uniformly held that debtors'  



RESPA  actions  are  subject  to  administrative  exhaustion  if  the  bank  is  in  FDIC  



                    41  

                                                                                                      

receivership.             Thus,  the  Espelands  were  required  to  exhaust  their  administrative  



remedies before the superior court could have jurisdiction over the RESPA claim.  



                                                                                               

                     3.	       The Espelands' arguments regarding the sale of the property  

                               are waived.  



                                                                                                               

                      The Espelands argue that the sale price at the foreclosure was inadequate  



                                                                                                         

and that Alaska Trustee misled them into thinking the sale would be stayed pending the  



outcome of their case.  The Espelands never raised their inadequate-sale-price argument  



                                          

in the superior court. And, after they filed their First Amended Complaint, the Espelands  



                           

abandoned their argument that Alaska Trustee misled them into thinking the sale of their  



          40        Failed Bank Information: Information for IndyMac, F.S.B., and IndyMac   



Federal        Bank,       F.S.B.,       Pasadena,          CA ,     FEDERAL          DEPOSIT         INSURANCE            CORP .,  

http://www.fdic.gov/bank/individual/failed/IndyMac.html (last updated Nov. 20, 2013).  



          41  

                                                                               

                     See, e.g., McCarthy v. F.D.I.C. , 348 F.3d 1075, 1079-80 (9th Cir. 2003)  

(noting uniformity of circuits).  



                                                               -22-	                                                         6885
  


----------------------- Page 23-----------------------

home would be postponed.  These arguments are waived because, as we have repeatedly  

held, "a party may not raise an issue for the first time on appeal."42  



          C.	      The Superior Court Did Not Abuse Its Discretion When It  Denied The  

                                                   

                   Espelands' Motion For Rule 60(b)(3) Relief.  



                   The Espelands' second appeal stems from their motion to the superior court  

                                                      



for Alaska Civil Rule 60(b)(3) relief from judgment or order.  Under Rule 60(b)(3), a  



                                             

litigant     can      receive      relief     from      a    court     order      or    judgment         by     showing  

                                                                                                       43  by clear and  

                                                                                                           

"fraud, . . . misrepresentation, or other misconduct of an adverse party" 

convincing  evidence.44  The fraud must have "prevented the losing party from fully and  

                                          



                                                       45  

fairly presenting his case or defense."                     The superior court found that the Espelands  



              

failed to present clear and convincing evidence of fraud, and denied their motion for  



relief.  



                   The  Espelands  argue  that:    (1)  the  log  notes  show  fraud  by  clear  and  



                                                  

convincing evidence; (2) the court failed to consider the use of "notorious robo-signers";  



and (3) the court failed to consider their arguments as a whole.  After examining the  



record, including the disputed log notes, we conclude that the superior court did not  



                                                                                      

abuse its discretion - nothing presented by the Espelands raises an inference of fraud,  



much less clear and convincing evidence of fraud.  



          42	      Hymes v. DeRamus , 222 P.3d 874, 889 (Alaska 2010) (quoting                                 Brandon  



v. Corr. Corp. of Am., 28 P.3d 269, 280 (Alaska 2001)).  



          43       Babinec v . Yabuki, 799 P.2d 1325, 1328 n.3 (Alaska 1990).  



          44       Id . at 1333.  



          45       McCall v. Coats , 777 P.2d 655, 658 (Alaska 1989) (quoting Rozier v. Ford  



Motor Co. , 583 F.2d 1332, 1339 (5th Cir. 1978)).  



                                                           -23-	                                                     6885
  


----------------------- Page 24-----------------------

                                                                                                                

                      1.	       The  log  notes  do  not  show  fraud  by  clear  and  convincing  

                                evidence. 



                      The Espelands claim that the log notes contain evidence of fraudulent  



alteration of numerous documents including  the Notice of Default, the 2009 Substitution  



                                                                            

of Trustee, the 2009 Assignment of the Deed of Trust, the Trustee's Deed, an unspecified  



                                                                    

Affidavit of Mailing, the payment history, and the foreclosure sale postponement letters.  



However, the Espelands do not state where exactly in the 45 pages of log notes they  



                                                               46  

                                                                                                            

believe the evidence of fraud is located.                          On close reading, the log notes do not suggest  



any  fraud  in  any  of  the  documents;  indeed,  the  log  notes  appear  to  support  the  



                   47  

documents.              



                     Next, the Espelands argue that there are discrepancies between the log notes  



and the affidavits submitted by Alaska Trustee and OneWest Bank in support of their  



authority to foreclose.  In their motion to the superior court, the Espelands quoted several  



log  notes  that  contain  requests  for  a  copy  of  the  Promissory  Note  showing  the  



                                                                                                                        

endorsement from E-Loan to IndyMac Bank.  According to the Espelands, these quotes  



                                                          

are "convincing proof of efforts to endorse the un-endorsed, un-delivered Promissory  



Note  in  2009-2010."    The  Espelands  allege  these  quotes  contradict  affidavits  of  



                                                            

employees  at  OneWest  Bank  and  Deutsche  Bank  that  the  Promissory  Note  was  



                                                                               

"endorsed and delivered to the Trust, during the 11-1-2005 to 11-30-2005 Pooling and  



Servicing Agreement window."  



           46         The Espelands only cite to the notes in their entirety.                             In their motion to the  



superior court they provided a list of quotes from the log notes without explaining what   

they believe is incriminating about each quote.  



           47  

                                              

                      The log notes record that on April 20, 2009, an anonymous user sent a  

message stating "attached is the [Substitution of Trustee], please properly execute and  

return  to  our  office.    Thanks."    This  date  coincides  with  the  execution  date  on  the  

Substitution of Trustee.  



                                                                  -24-	                                                            6885
  


----------------------- Page 25-----------------------

                                                                                                                                      

                            The  log  notes  clearly  state  that  the  copy  of  the  Promissory  Note  that  



                                                                                                                 

OneWest Bank had in its database did not show  an  endorsement to IndyMac Bank.  



                                                                                                                                        

However, the fact that the copy in OneWest Bank's database was not endorsed does not  



mean that the actual Promissory Note itself was not endorsed.  Nor do the log notes  



                                                                     

contradict  the  affidavits'  claim  that  the  Promissory  Note  was  in  Deutsche  Bank's  



possession.    As  the  superior  court  found,  the  log  notes  reveal  that  OneWest  Bank  



                                                                                

persistently and repeatedly asked for a copy of the original Promissory Note showing the  



                                                                                                                                         

endorsement for about a year without success.  The superior court declined "to interpret  



                                                                                                                     

the insistent nature of the communication as evidence of collusion to produce fraudulent  



                                                                                                           

records."  We agree that the log notes may provide evidence of procrastination, but not  



                                                                                         

of fraud.  We also conclude that nothing in the log notes contradicts any of the affidavits  

or indicates that the Promissory Note was transferred incorrectly.48  



                            2.	           The  Espelands  did  not  present  admissible,  relevant  evidence  

                                          that   any   of   the   documents   involved   in   their   loan   were  

                                          "robo-signed."  

                            The Espelands also argue that the use of "notorious robo-signers"49 supports  



              48            Some of the log notes quoted by the Espelands reference "allonges," which                                           



are "slip[s] of paper sometimes attached to a negotiable instrument for the purpose of   

receiving further indorsements when the original paper is filled with indorsements."  

B 

                                                                                                

    LACK 'S LAW DICTIONARY 88 (9th ed. 2009).  The Espelands argue that "[t]he existence  

                                                                      

of proper allonges to the chain of title is essential."  But when the Promissory Note was  

                                                                                                    

produced, all endorsements were present on the back of the Note, making any argument  

regarding allonges inapposite.   



              49            "Robo-signing" does not have an exact definition. It refers to various illegal  



                                                                 

practices used by some in the foreclosure industry to process foreclosure documents  

faster. Elizabeth Renuart, Property Title Trouble In Non-Judicial Foreclosure States:  

The Ibanez Time Bomb?, 4 WM .   &  MARY BUS .  L.  REV . 111, 124-26 (2013). One New                                                                             

York court defined "robo-signer" as "a person who quickly signs hundreds or thousands   

of foreclosure documents in a month, despite swearing that he or she has personally                                                    

                                                                                                                                                        (continued...)  



                                                                                      -25-	                                                                               6885
  


----------------------- Page 26-----------------------

a finding of fraud.  They level specific allegations against Erica Johnson Seck, who  



                                                    

signed the June 2010 Assignment of Deed of Trust, and Eric Tate, who signed the 2009  



Substitution  of  Trustee.    But  the  Espelands  provided  no  evidence  supporting  their  



accusations that Tate is a  "robo-signer," and although the Espelands provided more  



                                                                       

support for Seck, the document signed by Seck - the Assignment of the Deed of Trust  

in 2010 - was unnecessary for the foreclosure.50  



                   As  further  evidence  that  some  documents  were  "robo-signed,"  the  



Espelands allege that certain documents were executed in different states than where they  



                                  

were  notarized.         They  contend  that  the  documents  "imply  same-day  execution  and  



notarization, by signers of Indymac and MERS in California and Virginia, and notaries  



in  Texas  and  Minnesota."    While  the  documents  in  question  state  that  they  were  



notarized in Texas and Minnesota, they do not indicate where they were executed and  



none contains any reference to California or Virginia.  Thus, there is no merit to the  



                                                       

Espelands' claim that the involvement of alleged "robo-signers" and different states of  



execution prove fraud by clear and convincing evidence.  



                                                 

                   3.	      The superior court did not fail "to give proper consideration to"  

                            the Espelands' evidence.  



                   The Espelands argue that in denying their motion for Rule 60(b)(3) relief,  



                            

the  superior  court  "failed  to  give  proper  consideration  to  the  entire  record  of  the  



                                                                                        

proceedings before it in conjunction with the specific evidence of fraud contained in the  



                                                                      

redacted  documents."    This  argument  is  likely  in  response  to  the  superior  court's  



         49(...continued)  



reviewed  the  mortgage  documents  and  has  not  done  so."  OneWest  Bank,  F.S.B.  v.  

Drayton , 910 N.Y.S.2d 857, 859 (N.Y. Sup. Ct. 2010).  



         50        This assignment was executed six months after the foreclosure occurred and  



was not the basis for any of the parties' authority to foreclose.   



                                                         -26-	                                                   6885
  


----------------------- Page 27-----------------------

statement that "[a]dditionally, the [p]laintiffs' claims of fraud and misrepresentation are  



substantively  similar  to  claims  made  in  the  [p]laintiffs'  original  Motion  to  Void  



                                                                                           

Non-judicial Foreclosure and rely on the same evidence."  The court then noted that it  



had "already ruled that such claims lack merit."  



                   To prevail on a Rule 60(b)(3) motion, the Espelands need not prove that  



                                                                                  51  

                                                                                      Nonetheless, "a litigant is  

they would have prevailed but for the fraud or misconduct.  



not prevented from fully and fairly presenting his or her case where misconduct 'had  



                                                        52 

                                                                                                               

little bearing on the merits of the case.' "                Here, the Espelands argued many of the same  



                       

fraud claims in their Rule 60(b)(3) motion that they raised in their summary judgment  



proceedings, but they did not present any new evidence with respect to those claims.  



                                                                                               

Therefore, their allegations have little bearing on the merits of the case - the superior  



                                   

court had already found them meritless based on the same evidence (or lack of evidence)  



presented  during  the  summary  judgment  proceedings.    The  burden  rested  on  the  



Espelands to prove fraud by clear and convincing evidence, but instead they rehashed  



                                                                                       

the arguments made and rejected previously.  Consequently, the superior court did not  



abuse  its  discretion  when  it  denied  the  Espelands'  Rule  60(b)(3)  motion  -  a  



                                        

Rule 60(b)(3) motion is not the appropriate forum to revisit arguments already made and  



found to be without merit.  



VI.       CONCLUSION  



                                                                    

                   We AFFIRM the superior court's grant of summary judgment against the  



Espelands and its denial of their motion for Rule 60(b) relief.  



         51        Alaskan Adventure Tours, Inc. v. Yakutat , 307 P.3d 955, 961 (Alaska 2013).  



          52       Id. (quoting McCall v. Coats , 777 P.2d 655, 658 (Alaska 1989)).  



                                                          -27-                                                        6885  

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