Wells Fargo Bank, N.A. v. Heath
2012 OK 54
Okla.2012Background
- Heaths executed a promissory note to Option One on August 11, 2005, secured by a mortgage on their property.
- Default alleged in September 2008; Wells Fargo filed a foreclosure petition December 22, 2008, attaching the note, mortgage, and mortgage assignment.
- The note lacked an indorsement or attached allonge; the mortgage assignment to Wells Fargo (February 28, 2008) did not purport to transfer the note.
- Defendants answered February 3, 2009; summary judgment granted June 16, 2009; property sold at sheriff’s sale July 28, 2009; motion to confirm sale filed that day; bankruptcy filed before the hearing and later discharged.
- At the April 13, 2010 hearing, Wells Fargo produced the original note with an undated allonge; the allonge was blank indorsement; argument that an indorsement could be created later.
- The dispositive issue was standing; the trial court granted summary judgment without proven standing; this Court reversed and remanded to determine if Wells Fargo was a person entitled to enforce the note.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo had standing to foreclose | Heath v. Wells Fargo showed assignment of mortgage sufficed to prove ownership | Assignment of mortgage alone does not prove note ownership; no indorsement at filing | Standing not established at filing; reversal and remand for proper standing determination |
| Whether possession of the mortgage assignment can establish the note holder | Assignment of mortgage evidences transfer of note rights | Assignment of mortgage does not transfer the note; need indorsement or note assignment | Assignment of mortgage alone not proof of note transfer; required to show enforceable interest |
| Effect of an indorsement produced after filing | Indorsement could be created at any time, including at or after the hearing | Standing must be shown at commencement; post-filing indorsement cannot cure lack of standing | Post-filing indorsement cannot validate standing; remand to determine enforceability consistent with law |
| Proper remedy when standing is in dispute | Courts should treat note ownership as proven by record evidence and later indorsements | Without upfront verified evidence of holder, summary judgment is improper | Trial court erred in denying vacatur; remanded to resolve who is entitled to enforce |
Key Cases Cited
- Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181 (Okla. 1945) (foreclosure requires proof of right to enforce the note)
- Everhome Mortg. Co. v. Robey, 2006 OK CIV APP 64 (Okla. Civ. App. 2006) (assignment of mortgage not automatically proof of note ownership)
- Fent v. Contingency Review Board, 2007 OK 27 (Okla. 2007) (standing defined; can be raised at any stage; three elements of standing)
- Spirgis v. Circle K Stores, 1987 OK CIV APP 45 (Okla. Civ. App. 1987) (treatment of post-judgment issues and related procedures)
- HSBC Bank USA v. Lyon, 2012 OK 10 (Okla. 2012) (cures for standing deficiencies when properly amended petition and attached note exist)