Baker v. Cenlar FSB

Background

Michelle A. Baker entered into a mortgage agreement with CitiMortgage, Inc. in 2010. The opinion states that Baker had not made a mortgage payment since 2014. In 2019, CitiMortgage transferred the servicing rights and responsibilities to Cenlar FSB. Cenlar began foreclosure proceedings in March 2020.

Baker sued Cenlar, claiming that the foreclosure was wrongful and seeking damages. She argued that Cenlar lacked authority to foreclose on CitiMortgage’s behalf. She also argued that a document she mailed to Cenlar, which she called a “negotiable instrument,” discharged her mortgage obligation. The document was accompanied by instructions describing it as a special deposit, reverse wire, and payment order and purporting to represent $185,000. Cenlar asserted that, if it received the package, it would have discarded it because it was not an acceptable or recognized form of payment.

Baker also alleged that Cenlar infringed her trademark by publishing a foreclosure notice using her name, which she had registered as a trademark. The opinion states that state law required publication of a foreclosure notice naming the mortgagor before a foreclosure sale. Baker also argued in her amended complaint that she did not own the property, but the court rejected that argument because she did not pursue it in her briefing or provide supporting evidence.

Court’s analysis

The court applied the summary-judgment standard. Summary judgment is appropriate when there is no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. The court also stated that it would read Baker’s filings liberally because she represented herself, but that self-represented parties still must comply with substantive and procedural law.

Illegal foreclosure claim. The court held that a mortgage servicer may manage a mortgage for the owner of the mortgage note, including collecting payments and foreclosing when appropriate. Because CitiMortgage held the mortgage note and Cenlar was the mortgage servicer, the court concluded that Cenlar had the right to foreclose on CitiMortgage’s behalf.

The court also rejected Baker’s argument that Cenlar’s failure to return the alleged negotiable instrument meant that Cenlar accepted it as payment. The court explained that the federal check-clearing law Baker cited applies to substitute checks, not to the document she sent. It also concluded that the cited Uniform Commercial Code provision concerned the rights of an endorser or accommodation party, not the person making the tender. In addition, Baker had not shown that the document was a valid or recognized form of payment. The court therefore granted Cenlar’s motion for summary judgment on the illegal-foreclosure claim.

Trademark claim. The court held that Cenlar’s use of Baker’s name in the foreclosure notice did not infringe her trademark. To prove trademark infringement, a plaintiff must show that the defendant’s use of the mark creates a likelihood of consumer confusion. The court found that Baker made no such showing and that Cenlar was following state-law publication requirements. It therefore granted Cenlar’s motion for summary judgment on the trademark claim.

Disposition

The court ordered that Cenlar’s motion for summary judgment was GRANTED and directed that judgment be entered accordingly.