Valley National Bank v. Marcano
166 A.3d 80
| Conn. App. Ct. | 2017Background
- Steven Marcano personally guaranteed a $250,000 revolving line of credit made to My Little Star Baby Products, Inc.; drawdowns totaled $248,723.06.
- Promissory note matured May 27, 2009; Marcano made no payments as guarantor.
- Park Avenue Bank (original lender) was seized by the FDIC; Valley National purchased Park Avenue’s assets via a Purchase and Assumption Agreement.
- Valley National sued Marcano to enforce the personal guarantee, seeking principal plus accrued interest and per diem.
- At bench trial, Valley National introduced the note, loan documents, the Purchase and Assumption Agreement, a Park Avenue loan history, and testimony from Valley National loan officer Michael Robinson.
- Trial court entered judgment for Valley National for $330,040.40 (principal $248,723.06; interest and updates $81,317.34). Marcano appealed, challenging standing/chain of title and sufficiency of evidence for damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Valley National had standing to enforce the promissory note/guarantee | Valley National acquired "all right, title and interest" in Park Avenue’s assets from the FDIC by the Purchase and Assumption Agreement and thus is a nonholder with holder's rights | Marcano: note was not endorsed to Valley; witness lacked transactional knowledge; P&A did not specifically identify the My Little Star loan | Court: Valley National had standing — unendorsed notes can be transferred; P&A conveyed all Park Avenue assets (express language and schedules); documents and testimony suffice to show transfer and rights to enforce |
| Whether the lack of an endorsement precludes enforcement | Valley: UCC and case law permit enforcement by a transferee/nonholder in possession or by one who acquires transferor's rights | Marcano: absent a special or blank endorsement, Valley cannot enforce the note | Held: A note need not be endorsed if transferor intended to transfer rights; P&A evidenced that intent and conveyance |
| Whether Robinson’s testimony/authentication was sufficient to prove chain of title and debt | Valley: documents admitted and P&A show transfer; Robinson testified about loan history and calculation of payoff | Marcano: Robinson was not employed at time of acquisition and lacked personal knowledge; exhibits not created by Marcano | Held: Authentication and admissible records (loan history and P&A) supported Robinson’s calculations; personal knowledge not fatal to authentication |
| Whether evidence sufficed to establish outstanding balance/ damages with reasonable certainty | Valley: Loan history and related records show principal and accrued interest; per diem computed from note rate | Marcano: Some drawdown exhibits not created by him; contested signatures and amounts | Held: Trial court’s damages findings were supported by the loan history, Marcano’s admissions re: signatures/loan number, and Robinson’s testimony; not clearly erroneous |
Key Cases Cited
- JPMorgan Chase Bank, Nat’l Assn. v. Simoulidis, 161 Conn. App. 133 (2015) (standing implicates subject matter jurisdiction; review is plenary for standing challenges)
- U.S. Bank, Nat’l Assn. v. Schaeffer, 160 Conn. App. 138 (2015) (UCC governs enforcement of notes)
- Berkshire Bank v. Hartford Club, 158 Conn. App. 705 (2015) (an unendorsed note can be transferred and enforced if transferor intended to transfer enforcement rights)
- First Union Nat’l Bank v. Woermer, 92 Conn. App. 696 (2005) (custodian or supervisor may authenticate business records without having made them)
- Miller v. Guimaraes, 78 Conn. App. 760 (2003) (appellate review of trial court factual findings is for clear error)
- Milford Bank v. Phoenix Contracting Group, Inc., 143 Conn. App. 519 (2013) (damages in breach of contract must be supported by evidence allowing objective ascertainment)