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Pnc Bank, N.A., A National Association, As Successor In Interest To National City Bank v. Belinda L. Smith

January 14, 2013

PNC BANK, N.A., A NATIONAL ASSOCIATION, AS SUCCESSOR IN INTEREST TO NATIONAL CITY BANK, PLAINTIFF,
v.
BELINDA L. SMITH, IN PERSONAM; JACOB WINDING, IN PERSONAM; B & B DREAMIN', HULL NO. GMKD283C505 (THE "VESSEL"), ITS ENGINES, MACHINERY, APPURTENANCES, ETC., IN REM;
DEFENDANTS.



ORDER AND FINDINGS AND RECOMMENDATIONS

This case is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). On November 7, 2012, the undersigned heard plaintiff's motion for summary judgment. Dckt. No. 39. Attorney Sandra Tiveri appeared at the hearing on behalf of plaintiff; defendants Jacob Winding and Belinda Smith appeared pro se.*fn1 As stated on the record, and for the reasons stated on the record, the undersigned recommends that the motion be denied.

I. BACKGROUND/ PROCEDURAL HISTORY

On July 20, 2010, plaintiff filed a verified complaint in rem and in personam for foreclosure of a vessel owned by defendant owner Belinda Smith (defendant B & B DREAMIN', Hull No. RGMKD283C505). Dckt. No. 1. On September 10, 2010, the assigned district judge issued an order authorizing issuance of a warrant for arrest of the vessel, Dckt. No. 11, and on March 30, 2011, issued an order deeming the vessel arrested and appointing National Maritime Services as substitute custodian of the vessel, Dckt. No. 19.

On November 22, 2011, defendant Smith filed an answer to the complaint, Dckt. No. 31, and defendant Winding filed an answer and counterclaim, Dckt. No. 32. Then, on January 5, 2012, plaintiff filed an answer to Winding's counterclaim. Dckt. No. 35.

Plaintiff filed the present motion for summary judgment on July 31, 2012 and noticed it for hearing on September 5, 2012. Dckt. No. 39. However, both defendants requested a continuance of the hearing, stating that they had not received a copy of the motion from plaintiff. Dckt. Nos. 44, 47. Therefore, on August 29, 2012, the court issued an order granting the request for a continuance and continuing the hearing on plaintiff's motion for summary judgment to November 7, 2012. Dckt. No. 46. The court also provided warnings to defendants about how to oppose a summary judgment motion and ordered plaintiff's counsel to re-serve defendants with a copy of the summary judgment motion and to file a proof of such service. Dckt. Nos. 46, 49. Defendant Smith then filed an opposition to the motion on October 17, 2012, Dckt. No. 51, and defendant Winding filed an opposition on October 18, 2012, Dckt. No. 52.

II. MOTION FOR SUMMARY JUDGMENT

Plaintiff moves for summary judgment on plaintiff's complaint against Defendants, B & B DREAMIN', Hull No. RGMKD283C505, her engines, tackle, accessories, equipment, furnishings and appurtenances, In Rem (collectively "the Vessel"); Belinda Smith, In Personam; and Jacob Winding, In Personam. Plaintiff also moves for summary judgment on Winding's counterclaim against plaintiff. Dckt. No. 39.

A. Plaintiff's Version of the Facts

Plaintiff contends that this is a straight-forward collection case. According to plaintiff, defendant Smith materially breached the terms of a written Fixed Rate Promissory Note and Security Agreement- Multi-State Dealer (hereinafter the "Note") that Smith executed and delivered to National City Bank ("National City") on or about July 12, 2005 in the principal sum of $336,653.69 plus interest for the purchase of the Vessel. Separate Statement of Undisputed Facts ("SSUF") No. 1.*fn2 Plaintiff's interest in the Vessel was secured by a Preferred Ship Mortgage (hereinafter the "Mortgage") against the Vessel which was duly recorded at the National Vessel Documentation Center against the Vessel on August 15, 2005 as a Preferred Mortgage. SSUF 2, 3.

On July 11, 2005, Smith allegedly executed a second Promissory Note Secured By A Marine Vessel Called B&B Dreamin' (Straight Note-Interest Only) (hereinafter "Note 2") in the amount of $110,000.00 with defendant Winding. SSUF 4. A Preferred Ship Mortgage (hereinafter the "Winding Mortgage") securing Note 2 was allegedly recorded by Winding on or about May 29, 2009. SSUF 5.

In November 2009, plaintiff merged with National City as a result of which plaintiff assumed all of the deposits and loans of National City and thereby plaintiff became the holder and owner of what is now PNC Loan No. 6244x6130, including the Note and the Mortgage on the Vessel. SSUF 6, 7.

Smith defaulted under the Note and the Mortgage by failing to make the monthly payment due on August 10, 2008 and all payments accruing thereafter. SSUF 8. As a result, plaintiff elected to charge off this account in April 2009 and accelerate the entire balance due under the Note and the Mortgage. SSUF 9. There is now due and owing to plaintiff under the Note the principal sum of $288,648.57, and accrued interest through April 30, 2009 in the amount of $31,794.65, and thereafter at the rate of 6.75% per annum. SSUF 10. On or about May 29, 2009, plaintiff repossessed the Vessel for the purpose of re-marketing same in order to apply the net proceeds to the balance owing under the Promissory Note and Mortgage. SSUF 11.

B. Smith's Version of the Facts

Smith opposes plaintiff's motion for summary judgment, arguing that summary judgment should be denied because there are genuine issues of material fact in dispute. Dckt. No. 51. Specifically, Smith contends that she closed out her debt with National City and that therefore there was no active contract between her and National City. She contends that after she closed out the account she gave up possession of the vessel to Winding because of his lien. She contends that plaintiff "is a secondary bank that is not the actual holder of all the discrepancies that went on with [her] account." Id. at 2.

Smith disputes nearly all the facts in plaintiff's statement of undisputed facts. Dckt. No. 51-1. She also submits an affidavit under penalty of perjury in which she contends that she originally purchased a 3860 Commodore Regal Boat on July 9, 2005 and that National City was to carry the note on the boat in the amount of $292,431.00. Dckt. No. 51-2, ¶¶ 3-5, Ex. A. However, instead of financing the boat, Smith paid the total sum owed on the boat. Id. ¶6. According to Smith, she returned the boat the next day on July 10, 2012 to get a larger boat called the Regal 4260 Commodore (the "Vessel"). Id. ¶7. Because the amount for the boat was greater than the amount Smith had already paid, Smith took a loan out with defendant Winding in the amount of $110,000.00 on July 11, 2012. Id. ¶9, Ex. B.

The contract with National City was rewritten to reflect the larger vessel. Id. ¶10. After crediting Smith for the money she paid for the smaller boat ($292,431.00), the balance owed/due on the Vessel was approximately $36,000 excluding finance charges. Id. ¶11. Smith contends that upon receiving a payment statement from National City months later, she saw that the amount owed was overstated and that she was erroneously not given credit for the $292,431.00 she had already paid. Id. ¶¶12, 13. Smith contends that she called the dealer and National ...


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