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Connecticut: Appellate Court Provides Guidance re Establishing a Note’s Chain of Title

Posted By USFN, Wednesday, October 07, 2015
Updated: Wednesday, November 11, 2015

October 7, 2015


by James Pocklington
Hunt Leibert – USFN Member (Connecticut)

In a pair of recent opinions, Connecticut’s Appellate Court provided some guidance regarding the length to which a foreclosing plaintiff must be able to document the note’s history through business records. A critical point in this analysis is the manner in which the plaintiff is entitled to enforce the instrument under the Uniform Commercial Code (holder, non-holder in possession with the rights of a holder, etc.).

Berkshire Bank v. The Hartford Club (AC 36711, released July 28, 2015)
In this case, the court addressed a successor in interest by merger where the holder of the note merged into the foreclosing plaintiff under the plaintiff’s charter, without the note being endorsed to the plaintiff or in blank. The defendant challenged the plaintiff’s affidavits in support of summary judgment on the basis of not properly “chronicl[ing] the chain of title of the note,” and raised issues that the original holder may not have been the owner at the time of merger.

Relying on New England Savings Bank v. Bedford Realty Corp., 246 Conn. 594, 604-605; 717 A.2d 713 (1998), the court in Hartford Club rejected the defendant’s claim that a proponent must provide a chain of custody in order to authenticate a business record. Indeed, in deciding Hartford Club, the appellate court quoted the policy reason expressed by the Connecticut Supreme Court in Bedford: “To require testimony regarding the chain of custody to such documents, from the time of their creation to their introduction at trial, would create a nearly insurmountable hurdle for successor creditors attempting to collect loans originated by failed institutions.”

American Home Mortgage Servicing, Inc. v. Reilly (AC 35584, released May 12, 2015)
While not dispositive to the actual ruling in this case, the appellate court discussed – and rejected – a claim that “a full history of any and all transfers of the note” be provided. In footnote 10 of the decision, the court differentiated the matter at hand from one where a non-holder transferee sought to enforce the note. [J.E. Robert Co. v. Signature Properties, 309 Conn. 307, 325 n.18 (2013)]. Distinguishing the plaintiff in Reilly, who was both the current holder and servicer, the court was not persuaded that a plaintiff under those circumstances was obligated to produce documentation showing the full history of the note. While J.E. Robert would still control for non-holder loan servicers, Reilly effectively limits the necessary disclosure to those circumstances.

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