Court Denies Bank Judgment Because Bank Did Not Prove It Held Original Note

December 30, 2015

The Wisconsin Court of Appeals has recently ruled that a bank was not entitled to summary judgment of foreclosure because the bank failed to submit adequate proof that it was the current holder of the promissory note from its borrowers.  The bank attached an uncertified copy of the note to its complaint and submitted an affidavit from a bank employee, neither of which were deemed sufficient to prove that the bank had the right to enforce the note.

In Bank of America, N.A. v. Jasson and Sarah Yahn (2015AP936), the bank sued to foreclose the homeowners’ loan.  The bank alleged in its complaint that it was the “current holder of the [attached] note” which the bank claimed was a “true copy of the note.”  The homeowners answered, denying that a true copy of the note was attached to the complaint.  The bank moved for summary judgment of foreclosure.  The bank was required to authenticate the note to prevail on summary judgment.  To authenticate the note, the bank submitted an affidavit from an employee “with knowledge” of the bank’s records and procedures.  The bank employee’s affidavit stated that the bank or its agent “has possession of the promissory note.”  The trial court accepted this proof and granted summary judgment to the bank.  The Court of Appeals reversed and remanded.

The Court of Appeals explained that a bank must prove that it is the holder of the original note with the right to enforce it.  A bank can prove that it holds the original note by submitting the original note or a certified copy of the original note, which are “self-authenticated” without the need for further testimony or proof.  Short of submitting the original note or a certified copy, the bank might prove that it holds the original note by submitting an affidavit from someone with knowledge of the original note stating that the bank is the holder of the original note and that the copy of the note attached to the complaint is a copy of the original note.

The Court of Appeals concluded that the bank failed to prove that it had the right to enforce the note.  The Court reasoned that there was a failure of proof that the bank held the original note.  The Court said that the complaint did not allege that the note attached was a copy of the “original” note.  Likewise, the Court said that the affidavit did not reference the note attached to the complaint and did not state that the bank possessed the “original” note.

The Yahn case is an extension of the recent line of Wisconsin Court of Appeals’ decisions emphasizing that banks are subject to the same rules and the same standards of proof as any other litigant.  These cases are a reaction to the perception that banks are being granted foreclosure judgments without submitting adequate proof, including proof that the foreclosing bank holds the note.  The Court of Appeals’ decision in Yahn suggests that courts may scrutinize proof offered by banks closely.  To survive this scrutiny, banks and their legal counsel must take care to submit affidavits and other proof that unambiguously establishes the banks’ rights to enforce their loan documents.

If you have any questions about how the information in this article may affect you or your business, please contact Norm Farnam at or (608) 257‑2281 or your Stroud attorney. 

DISCLAIMER: The information in this article is provided for general informational purposes only, is not necessarily updated to account for changes in the law, and should not be considered tax or legal advice.  This article is not intended to create, nor does the receipt of it constitute, an attorney-client relationship.  You should consult with your own legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.