Larose v. Bank of America, N.A.
321 Ga. App. 465
Ga. Ct. App.2013Background
- Larose sues Bank of America et al. for wrongful attempted foreclosure after a 2005 loan secured by a deed with MERS as nominee.
- The note was $120,000; the security deed granted MERS broad foreclose rights and authority
- In 2011, MERS purportedly assigned the security deed and note to Bank of New York Mellon
- Foreclosure proceedings were initiated after default, but Larose filed suit before foreclosure completed
- Trial court dismissed for failure to state a claim; on appeal, the issue is whether assignment of the note was required for foreclosure
- Majority affirms dismissal, citing Montgomery v. Bank of America to permit foreclosure without note possession by the assignee, and finds MERS’s assignment valid; dissent would remand pending You v. JPMorgan Chase Bank decision
- Court notes the dispute overlaps a pending Georgia Supreme Court certification and follows statutory mandate to decide merits, not dismiss prematurely
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a security-deed holder foreclose without possessing the promissory note? | Larose argues MERS/assignee cannot foreclose without the note | Montgomery supports foreclosing by the security-deed holder without note | Foreclosure permissible without note possession; no state-law requirement to hold note |
| Is MERS’s assignment of the security deed valid to permit foreclosure? | Larose contends assignment by MERS was invalid | Language granting MERS power of sale authorizes assignment to successor | Assignment valid under security deed language and Georgia law; no preclusion shown |
Key Cases Cited
- Montgomery v. Bank of America, 321 Ga. App. 343 (2013) (security deed assignment can foreclose without note)
- U. S. Bank, N.A. v. Phillips, 318 Ga. App. 819 (2012) (remand when issue awaiting Supreme Court decision; not binding here)