Avail 1 LLC v. Adovasio

Background

Avail 1 LLC moved for summary judgment. During preliminary review, the court concluded that the parties’ briefs did not squarely address several legal questions concerning a Consolidation, Extension and Modification Agreement, or CEMA, and the related note and mortgage.

Issues Identified by the Court

The court ordered briefing on four groups of issues:

1. Whether adding a new principal sum of $59,600.87 to the CEMA created a second mortgage. If it did, the court asked whether the CEMA had to be recorded in the land records, or whether a “gap note or consolidated mortgage” had to be executed, for the agreement to create a valid lien on the property.

2. Assuming the CEMA did not create a valid lien, whether Avail 1 LLC could establish standing based on its claimed status as the holder of the original note and allonge. An allonge is a document attached to a negotiable instrument to record an endorsement or transfer.

3. If the CEMA created a valid lien, whether executing the CEMA extinguished or replaced the original note and mortgage, or whether those documents continued to exist independently. The court also asked how Avail 1 LLC’s lack of an assignment or endorsement of the CEMA would affect standing if the original note and mortgage had been replaced.

4. Assuming Avail 1 LLC could establish standing as the holder or assignee of the original note and allonge rather than the CEMA, how that would affect the amount or availability of its recovery.

Disposition

The court did not grant or deny the summary-judgment motion in this order. Judge Paul E. Davison ordered the parties to file simultaneous supplemental briefs addressing the identified issues by June 8, 2020. The opinion therefore leaves the mortgage, standing, and recovery questions unresolved.