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HSBC Mortgage Corp. (USA) v. Bendfeldt

Superior Court of Delaware, Kent

February 4, 2014


Submitted: January 28, 2014

Daniel T. Conway, Esquire, and Thomas D.H. Barnett, Esquire Atlantic Law Group, LLC, Georgetown, Delaware for Plaintiff.

Douglas A. Shachtman, Esquire, The Shachtman Law Firm, Wilmington, Delaware for Defendants.


Robert B. Young J.


HSBC Mortgage Corporation (USA) ("Plaintiff" or "HSBC Mortgage Corporation") moves this Court for an entry of an order affirming default judgment against Kenneth Bendfeldt and Bettina Roloff ("Defendants"), permitting the Sheriff to sell the subject property in accordance with Plaintiff's foreclosure action. The Court must decide: 1) whether Plaintiff is the real party in interest in order to foreclose on the subject property, and 2) whether Defendants have standing to challenge the validity of the Note or the Mortgage assignment to Plaintiff. First, Plaintiff is the real party in interest, because the Mortgage and the Note in this case both clearly list HSBC Mortgage Corporation as the lender, with the Note also having been signed by Plaintiff. Second, the Court does not address Defendants' challenge to Plaintiff's standing based on the Note, because scire facias sur mortgage actions are based upon the mortgage, not the Note. Finally, Defendants lack standing to challenge the assignment of the Mortgage to Plaintiff, because Defendants are not parties or third-party beneficiaries to the assignment according to Delaware contract law. Defendants merely benefitted from the assignment indirectly once Defendants purchased the loan from Plaintiff. Therefore, Plaintiff's Motion is GRANTED.


Defendants executed and delivered a valid mortgage to HSBC Mortgage Corporation on May 3, 2007 (the "Mortgage"). On April 1, 2009, Defendants defaulted on the Mortgage. After a Demand Letter was sent to Defendants on June 3, 2009, the Defendants failed to cure the default as required by the Demand Letter. Pursuant to Section 22 of the Mortgage, the mortgage was accelerated. On November 6, 2009, Plaintiff filed its Complaint (the "Complaint") against Defendants in this in rem scire facias sur mortgage action. Plaintiff sought foreclosure of Plaintiff's interest in the property known as 5513 Whiteleysburg Road, Harrington, Delaware 19952 (the "Property") under the mortgage referenced in the Complaint. On January 25, 2010, Defendants received service of the Complaint.

The Plaintiff received no answer or other responsive pleading to the Complaint which was sent to Defendants on November 6, 2009. Plaintiff obtained a default judgment against the Defendants on March 22, 2010. On May 3, 2010, Plaintiff filed a Writ of Levari Facias, which was entered into the record and sent to the Kent County Sheriff to execute upon the judgment exposing the Property to the public sale. On June 30, 2010, one day before the scheduled Sheriff's Sale, Defendants entered appearance. On August 24, 2010, Plaintiff filed a second Writ of Levari Facias. Plaintiff stayed the Sheriff's Sale to permit negotiations to attempt to resolve the underlying arrear ages. On the same day, counsel faxed Defendants' settlement proposal to Plaintiff, and continued to follow up with Plaintiff. On October 11, 2010, counsel for Plaintiff directed Defendants to Plaintiff's Loss Mitigation Department. Having received no further communication or instruction, counsel for Plaintiff proceeded in an effort to exercise its rights under the Mortgage. On November 19, 2010, this Court stayed the Sheriff's Sale, which was scheduled to occur on December 20, 2010 upon the Motion of Defendants.

Thereafter, Defendants served Discovery Requests upon the Plaintiff on December 9, 2010, and, on January 7, 2011, the Court entered a stipulation (the "Stipulation") staying the Sheriff's Sale. The Stipulation did not vacate the default judgment. Plaintiff's response to discovery was sent to counsel on February 8, 2011. On July 29, 2011, Defendants, through counsel, served upon Plaintiff their supplemental interrogatory, and, on November 2, 2011, Plaintiff responded.

Prior to the filing of the instant case, on April 15, 2009, Defendants spoke with a representative of Plaintiff, inquiring about which type of work out programs they qualified for. Defendants were asked to provide a work out package in order for Plaintiff to review their financial situation. Defendants failed to provide this package. On May 13, 2009, Defendants called Plaintiff to make a payment, and were advised that they were pre-qualified for Home Affordable Modification Program (HAMP), whereupon Defendants advised they would call Plaintiff back in two weeks. Defendants failed to do so. Instead, on July 2, 2009, Plaintiff mailed the HAMP documents with approval for the trial payments. After receiving no further communication from Defendants, Plaintiff mailed Defendants a HAMP failure letter.

On April 23, 2013, Plaintiff filed a Motion to Affirm Default Judgment and Proceed to Sheriff Sale. Defendant filed a response to the motion. Then, a hearing was held before this Court on December 6, 2013, where the Court ordered additional briefing from the parties.


Superior Court Civil Rule 55© provides that upon a motion, the Court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment ...

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