Montgomery v. Bank of America
321 Ga. App. 343
| Ga. Ct. App. | 2013Background
- Montgomery sued Bank of America, BAC Home Loans Servicing, MERS, Prommis Solutions, LLC, and McCalla Raymer for foreclosure-related claims.
- Montgomery allegedly lacked authority of BAC to initiate nonjudicial foreclosure because MERS purportedly lacked power to assign to BAC.
- Security deed named MERS as grantee with power of sale and authorized assignment to successors and assigns, including BAC.
- MERS assigned its rights to BAC in 2010; assignment filed prior to foreclosure in 2010.
- Trial court granted defendants' motion for judgment on the pleadings; Montgomery appealed alleging invalid assignment and standing defects.
- Appellate court affirmed; disposition included discussion of validity of the assignment and lack of standing to challenge it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the MERS to BAC assignment | Montgomery asserts MERS had no interest to assign and thus BAC lacked authority. | Assignment was valid under the security deed and Georgia law. | Assignment valid; MERS had rights to assign and BAC could foreclose. |
| MERS’s interest in the note and its effect on foreclosure | MERS did not hold the note, so could not assign or foreclose. | Note possession not required for foreclosure under the deed and Georgia law. | Not required for foreclosure; splitting note and deed not fatal. |
| Standing to challenge the assignment | Montgomery could challenge the assignment's validity. | Only the parties to the contract (MERS and BAC) may challenge; Montgomery lacks standing. | Montgomery has no standing to contest the assignment. |
| Attorney signature flaw on the assignment | Crouse's signature did not match and thus invalidates the assignment. | Assignment is a contract between MERS and BAC; any flaw does not grant Montgomery standing. | Flawed signature does not render assignment invalid; party to sue is BAC. |
| Discovery/pleadings-related rulings | Montgomery was denied opportunities to amend and obtain discovery. | Motion on pleadings could be dispositive; discovery issues moot after ruling. | No error in denial of those discovery-related requests; judgment on pleadings affirmed. |
Key Cases Cited
- McCobb v. Clayton County, 309 Ga. App. 217 (Ga. App. 2011) (affirms that substantive issues can proceed despite pleading posture)
- Gordon v. South Central Farm Credit, ACA, 213 Ga. App. 816 (Ga. App. 1994) (noting security interests and related transfer principles)
- Bank of Cave Spring v. Gold Kist, Inc., 173 Ga. App. 679 (Ga. App. 1985) (transfers of security interests and related procedures)