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National Collegiate Student Loan v. Ester

Court of Appeals of Oklahoma, Division III

August 31, 2018

NATIONAL COLLEGIATE STUDENT LOAN, TRUST 2007-1, a Delaware Statutory Trust, Plaintiff/Appellee,
v.
CHRISTOPHER ESTER, Defendant/Appellant.

          Mandate Issued: 03/27/2019

          APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY, OKLAHOMA HONORABLE DAMAN H. CANTRELL, TRIAL JUDGE

          Tracy Cotts Reed, Keith A. Daniels, William L. Nixon, Jr., LOVE, BEAL & NIXON, Oklahoma City, Oklahoma, for Plaintiff/Appellee,

          Greggory Thomas Colpitts, Lauren Danielle Colpitts, THE COLPITTS LAW FIRM, Tulsa, Oklahoma, for Defendant/Appellant.

          BRIAN JACK GOREE, VICE-CHIEF JUDGE

         ¶1 Lender sued Borrower alleging he owed $68, 937.40 on an educational loan. The trial court granted Lender's motion for summary judgment. Borrower appeals.

         ¶2 Plaintiff, National Collegiate Student Loan Trust 2007-1, a Delaware Statutory Trust (Lender), sued Defendant, Christopher Ester, (Borrower), alleging Borrower owed $68, 937.40 on an educational loan. The trial court granted Lender's motion for summary judgment, finding there is no genuine issue of material fact and concluding that Lender is entitled to judgment as a matter of law.

         ¶3 In its motion for summary judgment, Lender contended that on January 29, 2007, Borrower signed a Non-Negotiable Credit Agreement (the agreement) with Bank of America, N.A. for an educational loan. The agreement was subsequently transferred, sold, and assigned to Plaintiff, National Collegiate Student Loan Trust 2007-1, a Delaware Statutory Trust (Lender). Borrower defaulted on the obligation. Lender pointed out that the agreement specifically stated, "Non-Negotiable Credit Agreement," and also stated that the Uniform Commercial Code (UCC) does not apply. It argued that the agreement is not a negotiable instrument, and the parties specifically agreed therein that the UCC is not controlling.

         ¶4 In his objection to the motion for summary judgment, Borrower argued that Lender lacked standing. [1] He stated that in order to enforce an instrument, the plaintiff has the burden of proving it is a "person entitled to enforce an instrument" by showing it is (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument. Deutsche Bank National Trust Company v. Byrams, 2012 OK 4, ¶5, 275 P.3d 129, referencing 12A O.S. 2011 §3-301. While he admitted that the agreement provides that Article 3 of the UCC does not apply, he nevertheless argues that Lender must demonstrate that it is in possession of the original document, and it has not done that. Borrower claims that Lender has not established that it is the proper plaintiff.

         ¶5 Standing focuses on the party seeking to get his complaint before the court and not on the issues tendered for determination. Knight ex rel. Ellis v. Miller, 2008 OK 81, ¶11, 195 P.3d 372. The question is whether the party invoking the court's jurisdiction has a legally cognizable interest in the outcome of the controversy. Id. The burden is on the party invoking a court's jurisdiction to establish standing. Oklahoma Educ. Ass'n v. State ex rel. Oklahoma Legislature, 2007 OK 30, ¶7, 158 P.3d 1058. If the plaintiff alleges facts which are sufficient to establish standing, then the case proceeds to the next stage. Id. at ¶10.

         ¶6 When a party does not rely on a particular statute or constitutional provision authorizing suit, the question of standing depends on whether the party has alleged a personal stake in the outcome of the controversy. Id., ¶16. This is an action for breach of contract. Thus, the question of Lender's standing depends on whether Lender has a personal stake in the outcome of the case.

         ¶7 When standing is challenged in a contract action, the usual issue is whether the party suing is the proper party to bring the action. Here, Bank of America entered into a contract with Borrower. Lender, not Bank of America, filed suit against Borrower. The question is whether Lender is the proper party to sue.

         ¶8 Lender's right to enforce the debt is not governed by the UCC because the agreement is not a negotiable instrument. [2] The agreement specifically provides that it is not governed by Article 3 of the UCC. Thus, standing is not analyzed in the same way as a mortgage foreclosure action where the plaintiff must demonstrate it is the holder of the promissory note or has the rights of a holder. See Deutsche Bank National Trust Co. v. Byrams, supra. In this case, Borrower executed the agreement which provides that Lender may assign the right to payment to another. Lender's petition alleges: (1) Borrower entered into the agreement with Bank of America on January 29, 2007, (2) Bank of America assigned agreement to Lender, (3) Borrower defaulted on the obligations under the agreement, (4) Borrower is indebted to Lender in the amount of $68, 937.40. As a threshold legal question, we hold Lender has alleged sufficient facts to establish standing. Oklahoma Educ. Ass'n v. State ex rel. Oklahoma Legislature, 2007 OK 30, ¶10.

         ¶9 Although a trial court in making a decision on whether summary judgment is appropriate considers factual matters, the ultimate decision turns on purely legal determinations, i.e., whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions. Therefore, as the decision involves purely legal determinations, the appellate standard of review of a trial court's grant of summary judgment is de novo. Tiger v. Verdigris Valley Electric Cooperative, 2016 OK 74, ¶13, 410 P.3d 1007. We, like the trial court, will examine the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Ross v. City of Shawnee,1 ...


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