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Crum v. LaSalle Bank, NA
Citations: 55 So. 3d 266; 2009 Ala. Civ. App. LEXIS 491; 2009 WL 2986655Docket: 2080110
Court: Court of Civil Appeals of Alabama; September 18, 2009; Alabama; State Appellate Court
Deidra N. Crum appeals a summary judgment from the Mobile Circuit Court favoring LaSalle Bank, N.A. on its ejectment claim. The court affirmed the judgment. Crum secured a loan of $112,800 from Nationpoint on December 14, 2006, executing a promissory note and a purchase-money mortgage for two properties in Mobile County. The mortgage identified Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee, acting solely as a nominee for the lender and its successors. The mortgage allowed MERS to hold legal title for the lender and to exercise rights like foreclosure. The agreement specified that the note and mortgage could be sold without borrower notification and authorized a public auction upon default. On February 2, 2008, MERS assigned its interest in the mortgage to the assignee, which initiated foreclosure proceedings after Crum defaulted. The property was auctioned on April 18, 2008, with the assignee winning the bid. Following the issuance of a foreclosure deed, the assignee demanded possession of the property, but Crum refused to vacate. On May 6, 2008, the assignee initiated a lawsuit against the borrower for possession of a property, claiming damages due to the borrower's alleged wrongful detention and asserting that the borrower forfeited her statutory redemption rights by not vacating the property. Following the borrower's response, the assignee sought summary judgment, supported by an employee's affidavit stating that the property was lawfully acquired through foreclosure and that the borrower failed to respond to possession demands. The borrower opposed the motion, arguing that the assignee lacked authority to foreclose based on the mortgage and assignment documents, though she failed to provide the executed note. The trial court granted the assignee's summary judgment and directed counsel to draft a conforming judgment, which was subsequently entered. The borrower appealed this judgment, without disputing her default on repayment obligations. Her appeal focused on challenging the assignee's title validity, reiterating her claim that the assignee lacked foreclosure authority due to MERS (identified in the mortgage as the lender's nominee) not owning the debt. The borrower referenced *Carpenter v. First National Bank of Birmingham*, asserting that an agent without debt ownership cannot foreclose. However, the court identified key distinctions in this case: MERS was explicitly recognized in the mortgage as holding the lender's interests and authorized to act on the lender’s behalf, including selling the mortgage and note without borrower notice. Furthermore, the assignment from MERS to the assignee was for consideration, indicating a valid transaction. The court also noted that the rule from *Carpenter* presumes a separation between legal and equitable ownership of the debt and its security, whereas generally, the transfer of a mortgage also transfers the associated obligation unless the parties agree otherwise. The principle established in Alabama law dictates that an assignment of mortgage inherently includes the secured debt unless evidence indicates a separate assignment of the note. In Union Bank, Trust Co. v. Thompson, it was clarified that only an innocent purchaser of the notes could question the assignment of the debt. While the Restatement supports this principle, it also notes that the Uniform Commercial Code (UCC) may impose different requirements. In the current case, the borrower argues for the first time on appeal that her note is a "negotiable instrument" under Alabama's UCC and claims that the assignee acquired it improperly. However, an appellate court typically does not reconsider arguments not raised at the trial level. Moreover, the court lacks the actual note to assess if it meets the criteria of a negotiable instrument, which complicates the borrower's argument. The assignee presented sufficient evidence to demonstrate its title to the property through a lawful auction following the borrower's default. The borrower attempted to challenge the assignee's title by asserting that MERS lacked the authority to exercise the power of sale, but there was no genuine dispute that MERS had assigned all its rights to the assignee. Consequently, the trial court's summary judgment in favor of the assignee was upheld. The court acknowledged that the borrower was allowed to pursue her appeal despite her ongoing bankruptcy proceedings and noted that a cited New York case was not relevant to this matter.