Wells Fargo Bank Minnesota, N.A. v. Rouleau
46 A.3d 905
Vt.2012Background
- Defendant Rouleau appeals a ruling that Wells Fargo, as trustee for securitized loan investors, may enforce his personal guaranty on a note secured by five mobile-home parks.
- The loan to R&G Properties, Inc. was assigned to Wells Fargo via an allonge and separate mortgage assignment; Rouleau signed a personal guaranty.
- Securitization created a REMIC with Wells Fargo as trustee holding the notes, mortgages, and related documents; assignment occurred during securitization, finalized by 2003.
- R&G filed for bankruptcy in 2008, triggering the guaranty; Capmark (later Berkadia) acted as special servicer and later substituted Wells Fargo as plaintiff.
- The Superior Court previously held Wells Fargo had standing to enforce the guaranty based on possession of the original note, mortgage, and related documentation; Rouleau challenged the chain-of-title and sufficiency of the assignment arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether assignment of the note suffices to assign the guaranty | Rouleau argues no; mere note assignment does not bind the guaranty. | Rouleau contends guaranty is a separate contract requiring express assignment. | Assignment of note/mortgage suffices to assign the guaranty. |
| Whether Wells Fargo must prove chain of title to enforce the guaranty | Wells Fargo need not prove chain of title under 9A V.S.A. §3-301(i). | Rouleau argues lack of proven chain of title defeats standing. | Plaintiff need not prove chain of title; standing shown by possession of originals. |
| Whether securitization/process limitations affect Wells Fargo’s standing | Standing arises from possession of original documents; securitization context supports assignment. | Process details could imply third-party rights or gaps in assignment. | No; securitization evidence supports Wells Fargo’s standing. |
Key Cases Cited
- In re Vill. Assocs. Act 250 Land Use Permit, 2010 VT 42A (VT Supreme Court 2010) (de novo standing/chain considerations for assignments and guaranties)
- U.S. Bank Nat’l Ass’n v. Kimball, 2011 VT 81 (VT Supreme Court 2011) (outlining standing requirements for promissory notes/mortgages)
- Ibanez v. U.S. Bank Nat’l Ass’n, ? (Mass. 2011) (limits on foreclosures; identify present holder; assignment evidence required)
- Livonia Property Holdings, L.L.C. v. 12840-12976 Farmington Road Holdings, L.C., 717 F. Supp. 2d 724 (E.D. Mich. 2010) (note/mortgage standing without strict chain-of-title proof to enforce)