Banks v. Kondaur Capital Corp. (In Re Banks)
457 B.R. 9
8th Cir. BAP2011Background
- Debtors Edward and Diane Banks purchased a home in 2006 with a note and mortgage to New Century Mortgage Corp. (NCMC).
- NCMC filed a Chapter 11 in 2007; related assets were reorganized under New Century TRS Holdings, Inc.
- Ellington Management Group purchased many assets, including the Bankses' note and mortgage, via an Asset Purchase Agreement approved in 2007.
- Ellington, as attorney-in-fact for New Century, later assigned the mortgage to Elizon LA 2007-2, LLC; the assignment was recorded in 2009, but Kondaur contends it was a mistake.
- A supposedly corrective assignment in 2010 purported to re-assign the mortgage to Kondaur and was recorded in 2010.
- Banks filed Chapter 13 in 2010 and subsequently sued Kondaur to challenge its standing and the mortgage lien; Kondaur moved to dismiss, treated as summary judgment, which the bankruptcy court granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kondaur has possession and standing to enforce the note. | Banks contend the note is not endorsed to Kondaur and is not in Kondaur's possession; evidence of the Corrective Assignment is insufficient to prove standing. | Kondaur maintains it possesses the note and is the proper holder; the note is endorsed in blank and thus bearer paper; the assignments support Kondaur's rights. | Summary judgment improper; material fact dispute over possession/endorsement remains. |
Key Cases Cited
- In re Waterman, 248 B.R. 567 (8th Cir. BAP 2000) (standards for review and summary judgment guidance)
- Horras, 443 B.R. 159 (8th Cir. BAP 2011) (de novo review of legal conclusions; summary judgment standards)
- Patch, 526 F.3d 1176 (8th Cir. 2008) (clear error deference to findings; summary judgment considerations)
- Neighborhood Enterprises, Inc. v. City of St. Louis, 644 F.3d 728 (8th Cir. 2011) (guidance on substantial facts and inferences for summary judgment)
- Jackson v. Mortgage Electronic Registration Systems, Inc., 770 N.W.2d 487 (Minn. 2009) (note possession and foreclosure considerations in Minnesota context)