GREGORY T. ERKINS, Appellant,
ALASKA TRUSTEE, LLC, BANK OF NEW YORK TRUST COMPANY, N.A., and JP MORGAN CHASE BANK, N.A., Appellees.
Appeal from the Superior Court of the State of Alaska, No. 3AN-08-09144 CI Third Judicial District, Anchorage, John Suddock, Judge.
Appearances: Gregory T. Erkins, pro se, Anchorage, Appellant.
Nelson G. Page, Burr, Pease & Kurtz, Anchorage, for Appellees.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.
This is the second appeal filed by the debtor in this foreclosure case. The debtor alleges that he was incapacitated when he entered into the loan contract and attempted to use this defense against a bank that was a subsequent purchaser of the note. In the first appeal we held that summary judgment had been improperly granted to the bank. On remand, the superior court granted summary judgment on different grounds, concluding that the bank was a holder in due course and thus immune from the debtor's incapacity defense. We agree with the superior court and affirm.
II. FACTS AND PROCEEDINGS
Because this is our second time reviewing the facts of this case, we confine our discussion to the facts relevant to this appeal.
In March 2000 Gregory T. Erkins was injured in an automobile accident and began taking strong pain medication. Erkins continued working sporadically while he was taking the medication. In early October 2004 Erkins obtained an $80, 000 loan from Ameriquest secured by a deed of trust on a property he owned in Anchorage. This loan carried monthly payments of around $500. Erkins negotiated the terms of this loan and signed the paperwork from his home - he was allegedly "unable to drive because of [the] pain medication." Approximately four months later, in 2005, Erkins obtained a second loan on the property, also from Ameriquest, this time in the amount of $142, 477. Erkins alleges he was told that payments would remain around $500 per month, but the second loan actually carried monthly payments of $962.30. The deed of trust for the second loan was recorded in March 2005. Erkins used part of the proceeds from the second loan to pay off the first loan.
JPMorgan Chase Bank, N.A. purchased the loan in February 2005. JPMorgan's records reflect that the note was endorsed to JPMorgan as trustee, and physical possession of the note was also transferred at that time. A document titled "Assignment of Deed of Trust" reflects an assignment from Ameriquest to the Bank of New York Trust Company, N.A. as successor to JPMorgan and is dated February 28, 2005, but was not recorded until November 29, 2007, nearly three years later. An assistant vice president for Wilshire Credit Corporation, the entity that serviced the loan for Bank of New York, declared in an affidavit that the loan was current when Wilshire began servicing it for Bank of New York in August 2005.
Erkins paid his monthly payments in full and on time from the first payment in April 2005 until January 2007, when Wilshire notified Erkins that one of his checks had bounced. Erkins refused to make any more payments until Wilshire lowered his payments to $500. When Wilshire declined to do so, Erkins stopped making regular payments. He continued making sporadic payments until July 2007, at which point he stopped altogether. After the loan fell into delinquency, Bank of New York initiated foreclosure proceedings.
In July 2008 Erkins filed suit against Alaska Trustee, LLC, Bank of New York, and JPMorgan in the superior court, alleging fraud and misrepresentation, among other claims. In October, Bank of New York presented an offer to Erkins in the form of a "proposed forbearance agreement, " which provided that it would stay the pending foreclosure proceedings if Erkins met certain conditions. Erkins signed the forbearance agreement. Bank of New York moved for summary judgment, arguing that Erkins had waived his claims through a clause in the forbearance agreement. The superior court granted summary judgment, ruling "that defendants [were] not liable for any tort of Ameriquest" and that Erkins "released his claims in . . . the forbearance agreement."
Erkins appealed, and we reversed in part, holding that although the superior court did not err in concluding that the "defendants could not be held liable for the alleged torts of Ameriquest, " it had erred in granting summary judgment based on the ...