Wells Fargo Bank, N.A. v. Ford
15 A.3d 327
| N.J. Super. Ct. App. Div. | 2011Background
- On March 6, 2005, Ford executed a negotiable note to Argent Mortgage Company to secure a $403,750 loan and a mortgage on her Westwood residence, with alleged predatory acts by Argent.
- On March 11, 2005, Argent purportedly assigned the mortgage and note to Wells Fargo Bank, N.A., which claimed it became a holder in due course.
- Wells Fargo filed foreclosure on July 14, 2006; the amended complaint contended the assignment had not yet been recorded.
- Ford, appearing pro se, answered August 24, 2006, with a counterclaim alleging predatory acts and questioning the validity of Wells Fargo’s assignment; Wells Fargo produced various documents, including the mortgage and note, but not the assignment.
- The trial court granted Wells Fargo summary judgment in January 2007; the judgment was reversed on appeal for lack of competent evidence of Wells Fargo’s standing; case remanded for discovery; ultimately the court’s decision focused on standing and proper authentication of the transfer documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose requires ownership or control of the underlying debt | Wells Fargo acquired the debt via assignment | Ford argues Wells Fargo lacks standing as it did not prove proper ownership | Wells Fargo failed to prove standing; judgment reversed |
| Whether Wells Fargo is a holder in due course under UCC 3-301 | Wells Fargo is the holder in due course via assignment | No indorsement or holder status proven | Not proven as holder in due course; issues remain about status as nonholder in possession with rights of holder |
| Whether Wells Fargo can be a nonholder in possession with rights of a holder without proper authentication | Assignment and documents show transfer of rights | Documents not properly authenticated; potential for forgery | Documents not properly authenticated; remand for discovery on transfer authenticity |
| Adequacy of Baxley certification and the purported assignment | Baxley certification supports holding status | Certification lacks personal knowledge and source of facts; assignment unvalidated | Certification and assignment not properly authenticated; remand for further proceedings |
| Effect of potential future indorsement on holder in due course status | Indorsement could render Wells Fargo holder in due course | Even with indorsement, defenses may defeat due-course status | Remand for trial court to assess if later indorsement would create holder in due course; defenses may still apply |
Key Cases Cited
- Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323 (N.J. Super. 2010) (standing requires ownership or control of the underlying debt)
- Celino v. Gen. Accident Ins. Co., 211 N.J. Super. 538 (App. Div. 1986) (authenticity requirements for documents produced in discovery)