Banks v. Kondaur Capital Corp. (In re Banks)

Citation:
Banks v. Kondaur (In re Banks) Case No. 11-6025 - 8th Circuit (BAP October 2011)
Tag(s):
Ruling:
Reverse and remand to bankruptcy court its previous summary judgment in favor of Defendant Kondaur Mortgage Corp. Specifically, in this case, because there was a material issue of fact regarding whether Kondaur has possession of the original promissory note, summary judgment was improper.
Procedural context:
On May 17, 2010 the Bankses (debtors) filed for Chapter 13 Bankruptcy. On October 12, 2010, the debtors filed a declarative, injunctive and compensatory relief against Kondaur (creditor) challenging the creditor's standing as the holder of the promissory note. Kandour filed a motion to dismiss the lawsuit, where the bankruptcy court indicated it would treat the motion to dismiss as one for summary judgment and on December 23, 2010, the bankruptcy court entered an order for summary judgment on all counts of the debtors' complaint in favor of the creditor. The debtor's appeal that decision.
Facts:
On June 27, 2006, the debtors purchase a home located in Minnesota. To finance the purchase, the debtors received financing from New Century Mortgage Corporation ("NCMC") in the form of a promissory note in the amount of $415,800.00. NCMC filed for Chapter 11 bankruptcy on April 2, 2007 in the District of Delaware where the case was jointly administered with the bankruptcy case filed by NCMC parent company, New Century TRS Holdings ("NCTH"). On May 2, 2007, the chapter 11 debtor and its subsidiaries entered into an Asset Purchase Agreement ("APA"), where Ellington Management Group, LLC, ("Ellington") purchased all of the chapter 11 debtor's rights, titles and interests in numerous notes and mortgages, which included the Bankses' note. This purchase was approved by the Delaware Court on May 7, 2007. The chapter 11 debtor also agreed to execute a power of attorney appointing Ellington as its attorney-in-fact, enabling Ellington to execute all documents necessary to assign or foreclose notes in the name of New Century and its affiliates. Ellington thereafter transferred the Bankses' note to Elizon which was recorded on June 23, 2009. On February 25, 2010, Ellington executed a "Corrective Assignemnt Mortgage" purporting to correct the erroneous assignment to Elizon, and reassigned the Bankses' note to Kondaur.
Judge(s):
Venters, Federman and Saladino - Bankruptcy Judges for the BAP.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3404 in the system

3283 Summarized

1 Being Processed