Anderson v. Burson
35 A.3d 452
| Md. | 2011Background
- Foreclosure action against homeowners (Andersons) following default on refinanced mortgage; note transferred through multiple entities amid securitization and lost-note issues; Andersons sought injunction against foreclosure; Substitute Trustees (Deutsche’s agents) produced unindorsed Note and attempted to show transfer history; Maryland Circuit Court denied injunction; Court of Special Appeals affirmed; Maryland Supreme Court granted certiorari to resolve enforceability of under-indorsed note and shelter-rule-derivative rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Deutsche, as nonholder in possession, can enforce the Note. | Andersons argue lack of indorsements breaks chain; lost-note affidavit shows no current possession. | Substitute Trustees/proprietary transfer history, including an allonge, shows rights to enforce. | Yes; Deutsche may enforce as nonholder in possession with rights of a holder. |
| Whether the trial court properly required proof of transfer history under Commercial Law Article. | Andersons contend missing intermediate transfers undermine enforceability. | Nonholder in possession must prove prior transfers; evidentiary proof insufficient here. | Court did not err; burden to prove transfer history rests with transferee. |
| Whether the PSA/ securitization documents defeat enforcement. | Andersons point to PSA to show Deutsche had no rights at relevant time. | Shelter-rule permits transferee to enforce if transfer history proves holder rights. | PSA deficiencies do not defeat enforceability given transfer-history concessions. |
Key Cases Cited
- Ibanez, 458 Mass. 637, 941 N.E.2d 40 (Mass. 2011) (mortgage must be transferred with the note; transfer history matters for enforcement)
- Le Brun v. Prosise, 197 Md. 466, 79 A.2d 543 (Md. 1951) (note security interest transfers with the note; mortgage/note inseparability)
- Leavings v. Mills, 175 S.W.3d 301, 303 (Tex.Ct.App.2004) (Tex. 2004) (transferee must prove transfer to enforce nonholder rights)
- State Sav. & Loan Assoc. v. Liberty Trust Co., 863 F.2d 423, 426 (5th Cir.1989) (5th Cir. 1989) (illustrates shelter-rule and enforceability by transferee)
- Hand v. Mfrs. & Traders Trust Co., 405 Md. 375, 952 A.2d 240 (Md. 2008) (treats mortgage/deed-of-trust as enforceable through holder in possession)