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International Bank of Commerce v. Franklin

Court of Appeals of Oklahoma, Division I

September 20, 2019

INTERNATIONAL BANK OF COMMERCE, A Texas State Banking Association, Successor To Local Oklahoma Bank, Formerly Known As Local Federal Bank, F.S.B., Plaintiff/Appellee,
JIMMIE A. FRANKLIN and BRENDA D. FRANKLIN, Husband and Wife, Defendants/Appellants, and United States of America, ex rel. Internal Revenue Service; State of Oklahoma, ex rel. Oklahoma Tax Commission; and Ford Motor Credit Company, LLC., Defendants.

          Mandate Issued: 10/16/2019


          Jimmie A. Franklin, FRANKLIN LAW FIRM, Bethany, Oklahoma, for Defendants/Appellants,

          James R. Waldo, JAMES R. WALDO, P.L.L.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee.


         ¶1 Jimmie A. Franklin and Brenda D. Franklin, husband and wife (Defendants), appeal the trial court's summary judgment in favor of International Bank of Commerce (IBC or Bank) in this action to foreclose a mortgage. The issues for review are whether the Bank has any available claims against Defendants, or whether the foreclosure is barred by the statute of limitations or 58 O.S. §333. [1]

         ¶2 On February 13, 1996, Lillian E. Franklin, Jimmie Franklin's mother, executed a note for $48, 000.00, with interest payable at a rate of 7% per annum to Local Federal Bank, F.S.B. [2] That same day, Lillian E. Franklin and John O. Franklin, as husband and wife, executed a mortgage on their property in favor of Local Federal Bank, F.S.B. to secure the note. After the execution of the note and mortgage, Lillian and John Franklin died. In the decree of distribution of Lillian's estate, the property encumbered by Bank's mortgage was distributed to Jimmie A. Franklin. No payments were made to Bank after January 2015. In 2017, Bank filed its petition to foreclose on the property. In the foreclosure proceedings below, the trial court granted Bank's motion for summary judgment.


         Standard of Review

         ¶3 Summary judgment procedure is governed by 12 O.S. 2011 §2056 and Rule 13 of the Rules for District Courts of Oklahoma. 12 O.S.Supp. 2013, Ch. 2, App.1. Appellate courts review summary judgments de novo because they are based solely on legal determinations. Carmichael v. Beller, 1996 OK 48, ¶2, 914 P.2d 1051, 1053. A final order in summary proceedings may be granted only when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. §2056(C). A fact is "material" if proof of the fact would have the effect of establishing or refuting one of the essential elements of a cause of action or a defense asserted by the parties. Hadnot v. Shaw, 1992 OK 21, ¶18, 826 P.2d 978, 985. All inferences and conclusions drawn from the underlying facts contained in the record are to be considered in the light most favorable to the party opposing summary judgment. Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ¶7, 270 P.3d 151, 153.


         Bank's Foreclosure Cause of Action

         ¶4 The purpose of a foreclosure action is to satisfy, out of the proceeds of a sale of the estate in the mortgaged property, the claim of the holder of the obligation when there is a default in the performance of the act it is given to secure. [3] Foreclosure requires a showing of a valid mortgage and default. A mortgage is a lien which is made security for the performance of an act; it can be a charge on property for payment or discharge of debt. 42 O.S. §1 [4] and §5. [5] See also Williamson v. Winningham, 1947 OK 231, 186 P.2d 644 (1948). A mortgage on real estate is considered an incident to the debt secured thereby. Smith v. Bush, 1935 OK 331, ¶8, 44 P.2d 921. See also 42 O.S. §21. [6] "To foreclose, a claim must be adjudicated, and the validity and priority of a lien must be established. There must also be an adjudication of all claims, titles, or interests in the property involved, and the right of redemption must be extinguished so that a valid and effectual sale may be held." Peat, Marwick, Mitchell & Co. v. Bates, 1992 OK CIV APP 120, ¶7, 839 P.2d 208, 210 citing Stephenson v. Clement, 1935 OK 374, 43 P.2d 430.

         ¶5 The mortgage on the property at issue came about because Lillian and John Franklin granted a mortgage on their property as security for the promissory note executed by Lillian Franklin. The mortgage is the security instrument given to the bank to secure repayment of the note. The terms of the note require monthly payments. No payments have been made since January 1, 2015, and the note and mortgage ...

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