Kondaur Capital Corp. v. Hankins
2011 ME 82
Me.2011Background
- Eric Hankins signed a promissory note for $151,300 to Option One in 2005 with a mortgage on the Hankinses' Surry, Maine home.
- An allonge indorsed by a secretary of Option One shows Kondaur Capital Corporation as payee.
- A 2007 Loan Modification Agreement was executed between the Hankinses and Liquidation Properties altering principal and interest.
- Deutsche Bank held the note/mortgage after Option One assigned it in 2006; Liquidation Properties later acquired the mortgage in 2009 and Kondaur acquired it in 2010.
- Liquidation Properties filed a February 2009 foreclosure action; in May 2010 the court substituted Kondaur as named plaintiff over no objection.
- Kondaur moved for summary judgment in June 2010; Hankinses did not respond; the court granted summary judgment in Kondaur's favor and Martha Hankins appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing and substitution validity | Liquidation Properties lacked standing; substitution was improper and altered allegations. | Substitution was appropriate where the correct party was difficult to determine and did not alter allegations. | Substitution not improper as to under obvious error; standing issue is preserved and reviewed but substitution upheld because no manifest injustice. |
| Validity of the Loan Modification | Loan Modification was valid as between borrower and lender. | Modification was not authorized by the Lender identified in the mortgage at the time; issues of material fact about validity preclude summary judgment. | Material facts exist regarding validity of the modification; summary judgment improper. |
| Evidence on mortgage note and assignment | Kondaur owns the note and mortgage and can enforce the loan. | Questions exist as to proper assignment and ownership of the note and mortgage. | Questions of ownership and assignment preclude summary judgment on the record. |
Key Cases Cited
- Saunders, 2010 ME 79 (Me. 2010) (standing to foreclose when plaintiff lacks note interest; substitution may be appropriate)
- Harp, 2011 ME 5 (Me. 2011) (standing and substitution framework for foreclosures)
- Saunders, 2 A.3d 289 (Me. 2010) (citation detail for standing analysis in foreclosure context)
- N. Star Capital Acquisition, LLC v. Victor, 984 A.2d 1278 (Me. 2009) (summary judgment standards for foreclosure actions)
- Chase Home Fin. LLC v. Higgins, 985 A.2d 508 (Me. 2009) (elements required to prove mortgage and note at summary judgment)
- Camden Nat'l Bank v. S.S. Navigation Co., 991 A.2d 800 (Me. 2010) (contract interpretation of modification provisions)