Note Capital Group, Inc., et al.
Michele Perretta et al.
Providence County Superior Court (PC 14-5678), Richard A.
Licht Associate Justice.
Plaintiff: Michael R. Hagopian, Esq.
Defendants: John B. Ennis, Esq., Bernard J. Lemos, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
Gilbert V. Indeglia Associate Justice.
foreclosure action, the defendants, Michele
Perrettaand Anna M. Perretta (the Perrettas),
appeal from a Superior Court order granting partial summary
judgment in favor of the plaintiff, Note Capital Group, Inc.
(Note Capital). First, the Perrettas argue that their appeal
from the Superior Court's interlocutory order is
appropriate because the grant of partial summary judgment had
an element of finality, as that order allowed Note Capital to
foreclose on the Perrettas' property. Second, the
Perrettas contend that Note Capital was not entitled to
enforce the note because the chain of title to the note was
tainted by an improper transfer. Third, the Perrettas aver
that Note Capital was not entitled to enforce the note
secured by a mortgage on their property because the note had
been lost by the previous holder of the note, American
Residential Equities, LIX, LLC (ARELIX),  prior to the
assignment of the mortgage to Note Capital. This matter came
before the Supreme Court on March 28, 2019, after full
briefing of the issues. Upon due consideration of the
parties' arguments, the order of the Superior Court is
vacated, and we remand the case for further proceedings
consistent with this opinion.
Facts and Travel
pertinent facts of this case are as follows. In 1984, the
Perrettas obtained title to property located at 380 Pippin
Orchard Road in Cranston, Rhode Island (the property). On
October 25, 2006, they executed and delivered a promissory
note to Zurich Mortgage Solutions, LLC (Zurich), in the
amount of $971, 750 (the note). To secure the note, the
Perrettas executed a mortgage on the property in favor of
Zurich. On November 28, 2006, Zurich transferred the note and
mortgage to American Residential Equities (American
Residential) through an allonge and
assignment. See In re Perretta, No. 10-13531,
2011 WL 6305552, at *1 (Bankr. D.R.I. Dec. 16, 2011).
However, two weeks prior to the transfer from Zurich to
American Residential, on November 14, 2006, American
Residential assigned the note and mortgage to GMAC Mortgage,
LLC (GMAC). Id.
Perrettas eventually defaulted on the note, and, on July 29,
2009, GMAC instructed its attorneys at the law firm of Orlans
Moran PLLC (Orlans Moran) to foreclose on the mortgage. This
action was stayed when the Perrettas filed for bankruptcy in
the United States Bankruptcy Court for the District of Rhode
Island. See In re Perretta, 2011 WL 6305552, at *1.
Later, on May 4, 2010, GMAC transferred the note and mortgage
to ARELIX via an allonge and assignment recorded in the
Cranston land evidence records. Despite vigorous opposition
from the Perrettas, ARELIX sought and obtained relief from
the temporary stay in the Bankruptcy Court to enforce its
interest in the property. Id. at *3.
2013, ARELIX discovered that the note had become lost after
ARELIX had given the note to Orlans Moran for purposes of
prosecuting the foreclosure. On July 30, 2013, ARELIX
purported to assign its interest in the mortgage and lost
note to Note Capital, and an assignment was recorded in the
Cranston land evidence records on August 5, 2013.
Additionally, Orlans Moran prepared and delivered a lost note
affidavit in accordance with G.L. 1956 § 6A-3-301,
outlining the steps it had taken to attempt to recover the
note. On November 11, 2014, Note Capital filed a complaint in
Providence County Superior Court seeking to foreclose on the
Perrettas' mortgage, naming the Perrettas, among others,
as defendants. Note Capital also joined ARELIX as a
plaintiff in the matter.
24, 2015, Note Capital filed a motion for partial summary
judgment to allow it to foreclose on the property. In support
of its motion, Note Capital attached an affidavit executed by
Jeffrey Kirsch (Kirsch), who identified himself as an
authorized signatory of ARELIX and someone familiar with the
company's business records. In that affidavit, Kirsh
detailed the chain of assignments of the mortgage loan from
Zurich to Note Capital. Additionally, Kirsch averred that
ARELIX had given Note Capital express authority to act on its
behalf in the foreclosure process.
their opposition to Note Capital's motion, the Perrettas
claimed that the chain of title to the note and mortgage was
defective because American Residential had no interest in the
note and mortgage on November 14, 2006, when the assignment
from American Residential to GMAC was executed. The Perrettas
also claimed that an issue of fact existed because different
versions of the promissory note had been provided to them or
filed in various courts. As to the lost note, the Perrettas
argued that § 6A-3-309 prevents the transferee or
assignee of a lost note from enforcing the
note. The Perrettas also filed a motion for
summary judgment or, in the alternative, motion for judgment
on the pleadings.
the Perrettas served a subpoena duces tecum upon
Orlans Moran, seeking to depose a person with knowledge of
the lost note. Orlans Moran designated Erika Hoover (Hoover),
a senior operations attorney at Orlans Moran, as its agent
for purposes of the deposition. After taking Hoover's
deposition, the Perrettas submitted a supplemental
memorandum, attaching the deposition. In response, Note
Capital filed a memorandum attaching a separate affidavit
executed by Hoover, along with numerous pages of
documentation. The Perrettas objected to the filing of the
documents, contending that Note Capital should have been
prohibited from presenting additional material within ten
days of the summary-judgment hearing, pursuant to Rule 56 of
the Superior Court Rules of Civil Procedure.
hearing on Note Capital's motion for partial summary
judgment was held on May 10, 2016. After the parties had
presented their arguments, the hearing justice observed that
Note Capital was essentially seeking judicial foreclosure of
the mortgage on the Perrettas' property and found that
the Perrettas' default on the note was not in dispute.
The hearing justice next addressed the issue of the lost note
and whether Note Capital was entitled to enforce the note.
Because this Court had not yet ruled on the issue of whether
the assignee of a lost note may enforce the note, the hearing
justice surveyed cases from other jurisdictions, determining
that there was a split of authority.
the hearing justice found that "[i]t would be
inequitable for the plaintiff as a valid assignee not to
stand in the shoes of the assignor. To hold otherwise would
unjustly enrich the defendants because the note could never
be enforced." He pointed to G.L. 1956 § 34-11-24,
finding that the rights that the note granted to assignees of
mortgages were not in conflict with the provisions of §
6A-3-309 and that an assignee of a lost note could enforce
the note as a successor-in-interest to the assignor. In
conclusion, the hearing justice found that there was "no
genuine issue of fact that [ARELIX] was in possession and had
the right to enforce it at the time the note was lost and
that it validly assigned the note and mortgage to Note
Capital." In addition, in order to protect the
Perrettas' interests, the hearing justice stated that the
order would "terminate any rights of [ARELIX] and any
other person to the note other than Note Capital and Note
Capital will indemnify the defendants against any claims made
pursuant to the note by anyone other than it."
granting Note Capital's motion for partial summary
judgment, the hearing justice determined that it was
"not a final judgment[, ]" and he stayed the order
for forty days to afford the Perrettas time to file a
petition for writ of certiorari with this Court. On June 5,
2016, the Perrettas filed an objection to the proposed order
granting partial summary judgment in the Superior Court, and
they also moved for entry of final judgment in accordance
with Rule 54(b) of the Superior Court Rules of Civil
Procedure. On July 12, 2016, an order entered granting
partial summary judgment in favor of Note Capital and,
inter alia, authorizing Note Capital to foreclose on
the property; the order also defaulted ARELIX for failure to
comply with discovery. The next day, on July 13, 2016, an
order was entered denying the Perrettas' motion for entry
of final judgment in accordance with Rule 54(b). Eschewing
the writ, the Perrettas instead filed a timely notice of
appeal on August 1, 2016.
Standard of Review
motion for summary judgment 'is designed to decide in an
expeditious fashion cases presenting groundless
claims.'" Hexagon Holdings, Inc. v. Carlisle
Syntec Incorporated, 199 A.3d 1034, 1038 (R.I. 2019)
(deletion omitted) (quoting Gallo v. National Nursing
Homes, Inc., 106 R.I. 485, 487, 261 A.2d 19, 21 (1970)).
"When we review a hearing justice's grant of a
motion for summary judgment, we conduct our analysis de
novo." Id. "If we determine that
'there exists no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law,'
then we will affirm the grant of the motion."
Id. (alteration omitted) (quoting Sisto v.
America Condominium Association, Inc., 68 A.3d 603, 611
(R.I. 2013)). "In this endeavor, 'we view the
evidence in the light most favorable to the nonmoving
party.'" Id. (alteration omitted) (quoting
Narragansett Indian Tribe v. State, 81 A.3d 1106,
1109 (R.I. 2014)). "However, once the moving party
establishes 'the absence of a material factual issue, the