LNV Corp. v. Willock

• Decision Date: 17 March 2015
• Docket Number: No. 2013AP2867.,2013AP2867.
• Citation: 862 N.W.2d 902 (Table)
• Parties: LNV CORPORATION, Plaintiff–Respondent, v. Keith L. WILLOCK, Defendant–Appellant.
• Court: Wisconsin Court of Appeals

862 N.W.2d 902 (Table)

LNV CORPORATION, Plaintiff–Respondent

v.Keith L. WILLOCK, Defendant–Appellant.

No. 2013AP2867.

Court of Appeals of Wisconsin.

March 17, 2015.

Opinion

¶ 1 PER CURIAM.

Keith L. Willock appeals a summary judgment of foreclosure granted to LNV Corporation. We affirm.

BACKGROUND

¶ 2 In March 2006, Willock signed an adjustable rate note for $193,000, secured by a mortgage on residential property. The lender was Ameriquest Mortgage Company. Ameriquest subsequently assigned the note and mortgage to Citigroup, which in turn assigned them to LNV, and both mortgage assignments were recorded on August 14, 2009.

¶ 3 Willock fell behind on his mortgage payments, and, on November 29, 2012, LNV brought a foreclosure action. Two weeks later, LNV filed an amended summons and complaint. In response to the amended pleadings, Willock, by counsel, filed an answer and affirmative defenses, and he requested mediation.

¶ 4 When mediation did not resolve the dispute, LNV moved for summary judgment, supporting the motion with the affidavit of Keith Manson. The affidavit reflects that Manson is authorized to act on behalf of LNV, and he goes on to describe the August 2009 assignments, to identify copies of the note, mortgage, assignments, and documents reflecting Willock's payment history that are all attached to the affidavit, and to aver that Willock “is due for the December 1, 2009 and subsequent payments” on the debt.

¶ 5 While the motion for summary judgment was pending, Willock retained new counsel. Successor counsel moved to amend the pleadings and submitted a proposed amended answer and affirmative defenses. LNV objected that the proposed amended pleadings were both untimely and inadequate to overcome the pending motion for summary judgment. Willock responded by filing a document styled as a “motion for judgment on the pleadings.” LNV moved to strike that motion.

¶ 6 At the summary judgment hearing, Willock asked the trial court to accept his belatedly-filed amended answer and affirmative defenses. Further, he explained that he intended the “motion for judgment on the pleadings” to serve as a response in opposition to LNV's motion for summary judgment and as a request to grant Willock summary judgment instead. The trial court accepted Willock's amended answer and affirmative defenses, ruling that it would consider the amended pleadings along with the materials previously filed in deciding whether to grant summary judgment. The trial court also considered the original mortgage note and endorsements that LNV brought to the courtroom for the summary judgment proceeding. After hearing the parties' arguments, including arguments first raised by Willock in support of his “motion for judgment on the pleadings,” the trial court granted summary judgment to LNV. Willock appeals.

ANALYSIS

¶ 7 We review summary judgments de novo, using the same methodology as the trial court. See PNC Bank, N.A. v. Bierbrauer, 2013 WI App 11, ¶ 9, 346 Wis.2d 1, 827 N.W.2d 124. That methodology is well-known and need not be repeated at length here. See Williamson v. Hi–Liter Graphics, LLC, 2012 WI App 37, ¶ 4, 340 Wis.2d 485, 811 N.W.2d 866. In brief, summary judgment “shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” See Wis. Stat. § 802.08(2) (2013–14).¹

¶ 8 Willock begins by asserting that the trial court erroneously relied on the Manson affidavit to establish Willock's indebtedness and default. Willock argues that the Manson affidavit is hearsay that is not rendered admissible by the business records exception to the hearsay rule, Wis. Stat. § 908.03(6). We disagree.

¶ 9 Wisconsin Stat. § 908.03(6) provides:

Records of regularly conducted activity. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, all in the course of a regularly conducted activity, as shown by the testimony of the custodian or other qualified witness, or by certification that complies with s. 909.02(12) or (13), or a statute permitting certification, unless the sources of information or other circumstances indicate lack of trustworthiness.

§ 908.03(6).

¶ 10 In mounting a hearsay challenge to the Manson affidavit, Willock claims it fails to show that the affiant has necessary “personal knowledge regarding the LNV/Willock account.” In support, Willock points to Palisades Collection LLC v. Kalal, 2010 WI App 38, 324 Wis.2d 180, 781 N.W.2d 503. There, the successor holder of credit card debt submitted an affidavit regarding account statements prepared by the original creditor. See id., ¶¶ 2–3, 23. The Palisades court determined that the affidavit did not satisfy the business records exception set forth in Wis. Stat. § 908.03(6), because the affiant's statements did not demonstrate a basis for the affiant's knowledge of the practices of the original creditor. See Palisades, 324 Wis.2d 180, ¶ 23, 781 N.W.2d 503. As we subsequently explained, however, “Palisades stands for the extremely narrow proposition that the hearsay exception for business records is not established when the only affiant concerning the records in question lacks personal knowledge of how the records were made.” Central Prairie Fin. LLC v. Yang, 2013 WI App 82, ¶ 9, 348 Wis.2d 583, 833 N.W.2d 866. The narrow holding of Palisades is not implicated here.

¶ 11 Manson avers that he is authorized to sign documents on behalf of LNV, that he is “familiar with” and “ha[s] access to the financial records concerning the mortgage which is the subject of the action,” that he is “familiar with the facts surrounding this foreclosure and the subject account,” and that, “in the regular performance of his job functions, [he] ha[s] personal knowledge of how the business records are prepared and maintained by LNV Corporation for the purpose of servicing mortgage loans.” Moreover, Manson states that “it is the regular practice of LNV Corporation ... to make these records” and that they are made “at or near the time by, or from information provided by, persons with knowledge of the activity and transactions reflected in such records.” Finally, the affidavit shows that Willock's payments are past due for a period beginning after LNV acquired the mortgage. In sum, Willock simply is not correct in asserting that Manson's affidavit fails to “remotely suggest that [Manson] has personal knowledge regarding the LNV/Willock account.” We are satisfied that Manson's averments fully meet the requirements of Wis. Stat. § 908.06(3).

¶ 12 Willock also complains that the mortgage, mortgage note, endorsements, and assignments, as well as the customer activity statement offered with the Manson affidavit, are inadmissible hearsay. In support, he contends that Manson “is not a person who has personal knowledge” about the transactions at issue and that his affidavit is “insufficient to qualify the documents for admissibility under the hearsay rules,” specifically, the business records exception in Wis. Stat. § 908.03(6). As we have just explained, however, Manson's affidavit does satisfy § 908.03(6). Moreover, the mortgage and note themselves are not hearsay. See Bank of America NA v. Neis, 2013 WI App 89, ¶ 49, 349 Wis.2d 461, 835 N.W.2d 527 (citing extensive authority supporting the conclusion that mortgages, notes, assignments, and other contracts are not hearsay when they are offered for their legal effect).²

¶ 13 Willock next argues that the summons and complaint included an attached copy of the adjustable rate note “without endorsements.... [T]here were no properly endorsed signatures to challenge at the time of the commencement of the action.... The pleading did not allege endorsed notes, therefore, the burden of proof shifts to the LNV to prove the validity of the signatures.” We agree with LNV's characterization of this argument as a red herring. A party may file an amended pleading once as a matter of course at any time within six months after the filing of the summons and complaint. See Wis. Stat. § 802.09(1). Here, LNV filed an amended summons and complaint within two weeks after commencing the action, and LNV attached copies of the endorsements to the amended complaint.

¶ 14 Willock next asserts that he “was entitled to have the original documents filed with the court on summary judgment or at trial,” and he complains that LNV “has not supplied the court with any original documents.” As the record plainly reflects, however, LNV brought the original mortgage note and assignments to the courtroom for the summary judgment proceeding.³

¶ 15 Willock asserts next that the endorsements of the note from Ameriquest to Citigroup and from Citigroup to LNV do not satisfy the definition of “endorsement” found in Wis. Stat. § 403.204(1). The statute provides, in pertinent part, that “ ‘[e]ndorsement’ means a signature ... that alone or accompanied by other words is made on an instrument.... For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument.” Id. Willock contends that the endorsements here are on “two free standing sheets.” Building on this contention, he argues that the endorsements are therefore unenforceable because they are not “affixed to the instrument.” See id.

¶ 16 Willock fails to show that the endorsements are “freestanding” rather than affixed to the note. The trial court found that the note had one endorsement on the back of the document and a second endorsement on an allonge.⁴ Willock makes no showing that the facts supporting these findings are subject to any genuine dispute. See Park Ave. Plaza v. City of Mequon, 2008 WI App 39, ¶ 24, 308 Wis.2d 439, 747 N.W.2d 703 (party must offer...