Article courtesy of Kevin Braun and Paige Forcier (Morgan Lewis)
CadleRock, LLC v. Mountaintop Inv., LLC, No. NNH-CV20-6107298-S, 2024 WL 4750473 (Conn. Super. Ct. Nov. 4, 2024)
The primary legal issue involved the assignment of a promissory note and the enforceability of the note and foreclosure of the related mortgage following a complex history of assignments and modifications thereof. CadleRock, LLC (plaintiff) (“Assignee”) sought to enforce a debt owed by Mountaintop Investment, LLC (defendant) (“Obligor”) evidenced promissory note that had been assigned to Assignee and secured by a mortgage on property in New Haven, Connecticut.
Assignee brought suit against Obligor in an effort to foreclose on the mortgage, claiming Obligor had failed to make required payments under the note. Obligor disputed the claim, arguing that Assignee could not enforce the note because it did not have standing as the assignee of the note at the time of filing the suit. Obligor argued that Assignee’s evidence of the assignment was inadequate, citing a lack of documentation showing the full and proper transfer of the note and highlighting the fact that Assignee did not have possession of the original promissory note, but rather a Lost Note Affidavit from the assignor, and thus Assignee lacked standing to enforce the note and therefore initiate foreclosure proceedings.
The court focused on whether Assignee could provide sufficient evidence of the assignment and its authority to collect the debt. While Assignee submitted documentation showing the assignment of the note, Obligor raised concerns about whether all the necessary formalities and documentation were in place to validate the transfer of the note. The court reviewed the legal standards for enforcing an assigned note and found that Assignee did have standing to pursue foreclosure on the note, the mortgage, or both.
The court noted that under Connecticut law, an assignee of a promissory note generally has the right to enforce it, provided that the assignment is valid and the assignee holds the note. The court concluded that Assignee’s evidence of the assignment, although contested, was sufficient to demonstrate that it was the proper holder of the note. The court also emphasized that any deficiencies in the documentation related to the assignment could be addressed through discovery and were not sufficient to dismiss the case at this stage of the proceedings. As a result, the court allowed the case to proceed, rejecting Obligor’s argument that Assignee lacked the standing to enforce the note.
