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Foreclosure Defense Florida

Failure To Present Evidence: The Defense To Foreclosure

The Banks claim their interest in the property through
another entity, First National Bank of Chicago. But by the time
First National obtained its assignment of the note, from the
receiver of Home Owners Federal Savings and Loan Association,
Home Owners had already assigned the note to another party,
Knutson Mortgage Corporation, which subsequently assigned the
note to ASIP. It follows that, at the time the Home Owners
receiver purported to assign the note to First National, Home
Owners no longer had any interest in the note to assign–and that
First National, in turn, had no interest to assign to the Banks.
Nevertheless, and of particular relevance here,
” [u]nsupported allegations and speculation do not demonstrate
. . . a genuine issue of material fact sufficient to defeat
summary judgment.” Rivera-Colon v. Mills, 635 F.3d 9, 12 (1st
Cir. 2011). Instead, ” [t]o defeat a motion for summary judgment,
the nonmoving party must “˜set forth specific facts showing that
there is a genuine issue for trial.'” Welch v. Ciampa, 542 F.3d
927, 935 (1st Cir. 2008) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 256 (1986)).
In the meantime, the parties agree, the federal government
seized control of Home Owners in 1990, placing both it and
Knutson, its subsidiary, into the receivership of the Resolution
Trust Corporation (” RTC”). The parties further agree that RTC
sold Knutson to a private buyer in 1992. The only record
evidence of these facts consists of news articles submitted by
the government. See Tony Cariedo, Two big business deals: one’s
in health care, the other in mortgage banking, Minneapolis-St.
Paul Star Tribune, Nov. 3, 1992, at 2D; Phil Roosevelt, Many vie
to buy mortgage servicer, Am. Banker, Feb. 7, 1992, at 6.
In moving for summary judgment, the government argues that
there is no genuine issue of material fact as to whether the
Banks are the ” holder of a security interest” in the Washingtons’
property at the time it was sold, so that this court should
decree that the Banks have no claim to the proceeds of the sale.
In their answers to the government’s interrogatories, the Banks
identify the sole basis of their interest in the property as the
mortgage that the Washingtons gave Camelot. The Banks explain
that ” [t]he note received [sic] by the mortgage has been assigned
to [Bank of America]. Under New Hampshire common law the
mortgage follows the note. Since [Bank of America] is the holder
of the note it is the holder of the mortgage.”
As already discussed, though, the Banks have admitted that,
as of December 2011 at the latest, they no longer had possession
of the Washingtons’ note. That means that neither of the Banks
is in fact the ” holder” of the note under New Hampshire’s version
of the Uniform Commercial Code, which defines ” holder” in
relevant part as ” the person in possession of a negotiable
instrument.” 3 N.H. Rev. Stat. Ann. § 382-A:1-201(b)(21)(A). As
the government points out, ” [a] person not in possession of [an] instrument is entitled to enforce the instrument,” but only if,
among other things, he ” was entitled to enforce the instrument
when the loss of possession occurred.” N.H. Rev. Stat. Ann. §
382-A:3-309(a). Furthermore, ” [a] person seeking enforcement of
an instrument under [ § 382-A:3-309(a)] must prove . . . the
person’s right to enforce the instrument.” Id. § 382-A:3-309(b).
The government argues that the Banks have failed to show a
genuine issue of material fact as to whether they had the right
to enforce the Washingtons’ note at the time the Banks say they
lost possession of it. As noted at the outset, the Banks claim
to have received an assignment of the note from First National,
which is identified as the transferee of the note on the allonge
The parties agree that state law, specifically, that of New 3
Hampshire, governs the question of the Banks’ interest in the
Washingtons’ property (now, its proceeds). See United States v.
Lebanon Woolen Mills Corp., 241 F. Supp. 393, 395 (D.N.H. 1964).
Before that date, however, Home Owners had already transferredthe note to Knutson
(on October 27, 1987), which then, in turn, transferred the note,
and assigned the mortgage, to ASIP (on March 26, 1993). See id.
New Hampshire follows the rule that, as between successive
assignments, the first in time is first in right. See Am. Emp’rs
Ins. Co. v. Sch. Dist., 99 N.H. 188, 192 (1954); see also, e.g.,
6A C.J.S. 2d Assignments § 98, at 490-91 (2004). Because Home
Owners, in 1987, ” had divested itself of its rights by the
assignment to” Knutson, Home Owners ” had nothing to assign to”
First National in 1995. Am. Emp’rs Ins. Co., 99 N.H. at 192.
Under New Hampshire’s version of the Uniform Commercial
Code, ” [t]ransfer of an instrument, whether or not the transfer
is a negotiation, vests in the transferee any right of the
transferor to enforce the instrument, including any right as a
holder in due course.” N.H. Rev. Stat. Ann. § 382-A:3-203(b).
Here, Home Owners transferred the note to Knutson by way of
negotiation, indorsing the note ” pay to the order of” Knutson.
See id. § 382-A:3-201. This vested in Knutson all the rights
that Home Owners enjoyed as holder of the note, including the
right to transfer it. In New Hampshire, as elsewhere, ” an
assignee obtains the rights of the assignor at the time of the
In their objection to the summary judgment motion, the Banks
advance three other arguments. First, they say that the
government has adduced no competent evidence on ” RTC’s sale of
Knutson,” even though its theory that First National (and hence
the Banks) held no interest in the Washingtons’ note depends on
the premise that ” RTC, and then Knutson, had previously
transferred the Washingtons’ mortgage to ASIP.” But the
government’s position–and, for that matter, the undisputed
evidence–is not that RTC assigned the note or mortgage to ASIP.
It is that Knutson assigned the note and mortgage to ASIP. While
the news articles report, and the parties agree, that Knutson was
already in receivership by that point, the Banks do not seem to
be arguing that this fact has any effect on the validity of the
assignment from Knutson to ASIP. Moreover, even if it did, that
would not change the fact that, well before the receivership,
Home Owners had transferred the note to Knutson–a transfer that
itself predates, and voids, RTC’s later transfer of the note (on
behalf of Home Owners) to First National. So the Banks are
incorrect that ” the fact of what exactly RTC sold when it sold
Knutson is necessarily material.”
order USDC NH US v. Washington — NH fed district

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