RMS Residential Properties, LLC v. Miller
303 Conn. 224
| Conn. | 2011Background
- Defendant Anna M. Miller executed a promissory note for $637,500 to Finance America, LLC, secured by a mortgage on Madison real property.
- The mortgage was given to MERS as nominee for Finance America, and Finance America later transferred the loan to RMS Residential Properties, LLC.
- RMS commenced foreclosure after Miller defaulted; the mortgage assignment to RMS was recorded in the town records.
- RMS filed an affidavit by a vice president stating RMS became the holder of the note before suit; Miller counterclaimed seeking dismissal for lack of standing and other relief.
- The trial court and then the appellate process addressed whether a mere holder of a note has statutory standing to foreclose under § 49-17 and whether the affidavit was admissible.
- The court concluded RMS had standing under § 49-17 or, alternatively, via the UCC presumption that a holder is owner of the debt, and that the mortgage was not void ab initio.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 49-17 confer standing on a note holder to foreclose? | RMS is holder of the note and thus authorized to foreclose. | A mere holder lacks standing unless also owner of the underlying debt. | Yes; holder has standing through § 49-17 and the UCC presumption. |
| Was the summary judgment proper based on RMS being the holder and the affidavit? | Affidavit shows holder status; no genuine issue of material fact remains. | Affiant lacked personal knowledge and the evidence relies on business records alone. | Summary judgment proper; affidavit admissible and presumption unrebutted. |
| Is the mortgage void ab initio for not being granted to the debt owner? | Mortgage may be granted to a nominee and still secure the debt; not void ab initio. | If not the owner, the mortgage is invalid and deeds should be quieted. | Mortgage not void ab initio; nominee status does not invalidate the security. |
| Did the mortgage convey legal title to MERS and render the mortgage defective? | MERS as nominee for the lender validly holds mortgage; designation does not render it void. | MERS never had an interest, so the mortgage is defective. | No; naming MERS as mortgagee by the lender is proper and not void. |
Key Cases Cited
- HSBC Bank USA, N.A. v. Navin, 129 Conn. App. 707 (2011) (holder presumed owner of debt for standing to foreclose)
- Garris v. Calechman, 118 Conn. 112 (1934) (possession of note and lack of rebuttal presumptions rights of holder)
- New Milford Savings Bank v. Jajer, 244 Conn. 251 (1998) (mortgage follows the note; who may enforce for mortgage)
- Gupta v. New Britain General Hospital, 239 Conn. 574 (1996) (affidavit relying on business records admissible; personal knowledge not required)
- First National Bank of Bridgeport v. National Grain Corp., 103 Conn. 657 (1925) (recording system requires clarity on real nature of transaction; real party in interest)
- New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 511 (2009) (subject matter jurisdiction and standing analysis in statutory aggrievement)