OneWest Bank v. Sowl (WI)

Summary: In Wisconsin, if a note is endorsed in blank, the owner of the note is entitled to enforce it.


OneWest Bank, FSB v. Sowl, 348 Wis.2d 262 (Wis. Ct. App. 2013) (unpublished disposition).


Facts: Deborah Sowl and Kerry Sowl executed a promissory note payable to IndyMac Bank, FSB in 2004. The payment on the note was secured by a mortgage on the Sowls’ residence. IndyMac Federal Bank, FSB (IndyMac Federal) later took over IndyMac Bank, FSB and the loan documents were assigned to IndyMac Federal in 2009. When the Sowls later defaulted on their payments, IndyMac Federal brought a suit to foreclose the mortgage. While a copy of the mortgage was attached to the complaint, a copy of the note was missing.

The note, endorsed in blank, was held by OneWest Bank, FSB (OneWest). IndyMac Federal filed five motions to substitute OneWest as the plaintiff and moved for summary judgment of foreclosure. Only the fifth motion was successful, and it was filed with an affidavit of Charles Boyle, OneWest’s assistant vice president, attesting that he was familiar with and had access to the records concerning the Sowls’ mortgage and that a copy of the original note was attached. The circuit court granted summary judgment of foreclosure in favor of OneWest. The Sowls did not contest the originality of the note but raised other defenses and counterclaims. The circuit court dismissed them for being conclusory.


Holding: Affirmed. On appeal, the Sowls raised four arguments, but the appellate court rejected all of them for being flawed. The first argument was that the payment records attached to Boyle’s affidavit were inadmissible as evidence. The Sowls argued that the payment records were hearsay, and to be admissible, had to meet the requirements of Wis. Stat. § 908.03(6) (2011–12), an exception to the hearsay rules, but failed to do so. The related second argument was that the payment records were not admissible because they were not authenticated pursuant to Wis. Stat. § 909.01 (2011–12). 

The appellate court declined to consider the preceding two arguments because they were not raised in the circuit court even though the Sowls had ample opportunity to do so. The appellate court declined to consider issues raised for the first time on appeal. It also noted that because the Sowls, by their own statements, conceded to their liability and the default on the note, summary judgment for OneWest was proper.

The third argument was that, like the payment records, the note was hearsay, and to be admissible, it had to satisfy § 908.03(6). The Sowls argued that because Boyle did not have personal knowledge of the note, Boyle’s affidavit could not meet the requirements of § 908.03(6). The issue, however, was also not raised in the circuit court and the appellate court declined to rule on it. The appellate court nonetheless went on to explain that a note is offered for its legal effect and is not hearsay. The note was also presumed to be authentic under Wis. Stat. § 403.308 (2011–12).

The final argument was that OneWest, without possessing the mortgage, is not a real party in interest. But there seemed to be no case law support in Wisconsin for a general rule that the possession of both a note and a mortgage is necessary to enforce the note. In Wisconsin, if a note is endorsed in blank, the holder of the note is entitled to enforce it. Accordingly, OneWest, as the holder of a note endorsed in blank, had standing to enforce the note.


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By: ATG Underwriting Department | Posted on: Tue, 03/25/2014 - 12:13pm