• Holder of a Note Need Not Prove Note's Legacy
  • July 12, 2013
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • In Deutsche Bank National Trust Company as Trustee v. Angela Brock, 63 A.3d 40, 430 Md. 714 (2013), the Court of Appeals held that a person in possession of a promissory note that had been endorsed in blank was entitled to enforce it, and that person was not required to prove how it came in possession of the note.

    The promissory note in question was secured by a deed of trust on residential property in Silver Spring, Maryland owned by Brock. Brock had made the note to Amerifund Mortgage Services, LLC on September 28, 2006 to evidence repayment of a $544,000 loan. The note was then pooled with others in a securitization, and it was assigned three times. Ultimately, the note was held by BAC Home Loans Servicing LP, as subservicer for Deutsche Bank National Trust Company, which was the owner of the note. Deutsche Bank and BAC together were the plaintiffs in the litigation. They moved to foreclose after default. Brock challenged the foreclosure by contending that the plaintiffs had not proved how they acquired ownership of the note.

    The Circuit Court for Montgomery County granted the plaintiffs’ Motion for Summary Judgment. The Court of Special Appeals reversed, but the Court of Appeals reversed the decision of the Court of Special Appeals.

    The Court of Appeals found that BAC was the holder of the note and that no other issues raised in the case were relevant. Brock had referred to the recent case of Anderson v. Burson, 35 A.3d 452, 424 Md. 232 (2011), but Anderson involved a missing interim endorsement, so the party prosecuting the foreclosure action in that case was not a holder under the Uniform Commercial Code.

    In contrast, in the present case there was no dispute that BAC was in possession of the note and was the holder of the note, which had been endorsed in blank, and there was no missing endorsement. Therefore, BAC was not required to prove how it came into possession of the note, and it was therefore entitled to enforce the note.