171 Conn. App. 470
Conn. App. Ct.2017Background
- Borrower Christopher N. Schumacher executed an $877,500 promissory note (Feb. 28, 2006) secured by a mortgage to MERS as nominee for Patriot Lending Group; mortgage recorded in Bridgewater land records.
- Note attached to multiple allonges showing transfers (Patriot → Ohio Savings Bank → GMAC Bank/Ally → GMAC Mortgage, LLC → 21st Mortgage Corp.); some endorsements undated and other allonges exist in the record raising potential conflicts.
- Plaintiff 21st Mortgage Corporation filed foreclosure; submitted affidavit (Tiffany Moyer) attesting it possessed the original note with an allonge specially endorsing the note to 21st and proffered recorded assignments of mortgage to show security chain.
- Defendant challenged standing/ownership, presenting a 2012 GMAC deposition showing additional allonges and indicating the note may have been split or further transferred, arguing these discrepancies raise genuine issues of material fact.
- Trial court examined the original note at hearing, found plaintiff possessed the specially endorsed original note and the mortgage assignment, granted summary judgment as to liability, and entered strict foreclosure. Defendant appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is 21st a "holder" entitled to enforce the note (standing)? | 21st possesses the original note specially endorsed to it and thus is the holder entitled to enforce. | Missing/other allonges and undated endorsements create doubt whether 21st owns the note or some other entity does. | 21st is the holder: possession of the original note specially endorsed to 21st satisfies UCC definition of holder; standing exists. |
| Do discrepancies in allonges create a genuine issue of material fact defeating summary judgment? | No; possession of the specially endorsed original note and recorded mortgage assignment establish a prima facie case. | Yes; testimony and exhibits show other allonges and possible branching of endorsements that could indicate different ownership. | No; alleged discrepancies do not overcome plaintiff’s prima facie showing or negate possession of the specially endorsed original note. |
| Does mere possession of the original note create a presumption of ownership? | Possession of an instrument payable to an identified person who is in possession makes that person a holder under UCC § 42a-1-201(b)(21)(A). | Argues presumption applies only when note endorsed in blank; special endorsement requires more proof of ownership. | Court: Possession of a note specially endorsed to plaintiff makes plaintiff the holder; blank-endorsement distinction does not defeat holding here. |
| Were defendant's special defenses legally sufficient to avoid summary judgment? | Plaintiff: defenses are conclusory and unsupported; do not raise a genuine issue. | Defendant: alleged fraud/UDAP and ownership issues tied to endorsement discrepancies. | Court: defenses insufficient as a matter of law; plaintiff’s unrebutted prima facie case supports summary judgment. |
Key Cases Cited
- J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307 (plenary review of summary judgment; UCC persons entitled to enforce instruments)
- Equity One, Inc. v. Shivers, 310 Conn. 119 (description of MERS and recording/assignment practices)
- American Home Mortgage Servicing, Inc. v. Reilly, 157 Conn. App. 127 (discussion of holder/possession issues in foreclosure context)
- U.S. Bank, N.A. v. Ugrin, 150 Conn. App. 393 (blank vs. special endorsements; holder definition)
- Bank of America, N.A. v. Aubut, 167 Conn. App. 347 (summary judgment in foreclosure: prima facie showing and special defenses)
Decision: Affirmed — trial court properly granted summary judgment and strict foreclosure because 21st possessed the original note specially endorsed to it and had the recorded assignment of the mortgage, giving it standing to foreclose.