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### STATE OF MICHIGAN

COURT OF APPEALS

BZA 301 HOLDINGS LLC,

Plaintiff-Appellee, UNPUBLISHED November 10, 2015

v No. 323359 Oakland Circuit Court LOUIS STEVENS, LC No. 2013-134650-CK

Defendant-Appellant.

Before: S AWYER , P.J., and K. F. K ELLY and F ORT H OOD , JJ.

P ER C URIAM

. In this action to enforce a promissory note, defendant Louis S tevens appeals as of right from the order granting summary disposition and judgment in fav or of plaintiff BZA 301 Holdings LLC. We affirm.

The facts in this matter are not in dispute. Defendant entere d into a home equity line of credit agreement with Quicken Loans in October 2005 and receive d a loan of $41,250. Quicken Loans secured the loan with a mortgage on defendant’s home. Th e promissory note that defendant executed with Quicken Loans was subsequently assigned to Cadence Financial, LLC. An earlier mortgage on defendant ’s property, held by BAC Home L oans Servicing, was senior in interest to the Quicken Loans/Cadence Financial mortgage. Defe ndant defaulted on payments for that earlier mortgage, it was foreclosed in December 2010, and defendant’s home was sold at a sheriff’s sale in February 2011.

Cadence Financial filed the instant lawsuit on June 21, 2013, alleging that defendant had defaulted on the home equit y line of credit and owed $43,475.07 plus interest, costs, and attorney fees. On July 2, 2013, Cadence Financial changed its name to B ZA 301 Holdings, LLC (hereafter plaintiff). It is undisputed that defendant did not respond to interrogatories and requests for admissions sent by plaintiff in September 2013, an d the requests were deemed admitted pursuant to MCR 2.312(B)(1).

On December 10, 2013, plaintiff moved for summary disposition pursuant to MCR 2.116(C)(10). In its motion, plai ntiff pointed out that defend ant was deemed to have admitted, among other things, that he entere d into the home equity line o f credit agreement, that he defaulted on the payments, and the amount due and owing to plai ntiff. Plaintiff asserted that where defendant had failed to respond to discovery and contest liability or the amount of the-2- debt, no genuine issues of mater ial fact existed to warrant tri al and plaintiff was entitled to summary disposition pursua nt to MCR 2.116(C)(10).

In his response, defendant conceded that he had signed the hom e equity line of credit agreement, that the concomitant mortgage became a second lien o n defendant’s home, that the more senior mortgage on his home held by BAC Home Loans Servici ng had been foreclosed, and the property was sold at a sheriff’s sale. Defendant asser ted that plaintiff’s mortgage on the property was extinguished, and that plaintiff’s promissory note was “no longer negotiable after the sheriff’s sale.” Defendant also challenged plaintiff’s int erest in the note, stating that plaintiff had not provided any documentary evidence in support of its ass ertion that it was the assignee of the note, and argued that plaintiff was not a holder in due cou rse under Michigan law and was therefore not entitl ed to enforce the promissory note.

The trial court initially denied plaintiff’s motion for summar y disposition on the ground that genuine factual issues existed regarding whether plaintiff was in fact the assignee of the promissory note from Quicken Loans because plaintiff had failed to submit any documentary evidence of the assignment and/or other evidence establishing p laintiff as a “holder in due course” who may enforce the prom issory note. Plaintiff moved f or reconsideration on several grounds, relevantly arguing that w here it held possession of th e promissory note and the note had been negotiated to Cadence Financial, plaintiff was a “holder” of the note entitled to enforce it. The trial court granted plaintiff’s motion for reconsideration and granted summary disposition to plaintiff pursuant to MCR 2.116(C )(10), noting that plaintiff h ad presented evidence that the promissory note had been endorsed from various entities to plai ntiff and that plaintiff was a “holder in due course” and could enforce the note pursuant to M CL 440.3305(3). In its opinion, the court also cited Bowles v Oakman , 246 Mich 674, 678-679; 225 NW 613 (1929), as support for the finding that a maker of a promissory note could not att ack the validity of a transfer between an indorsor and indorsee. The trial court denied defen dant’s motion for reconsideration and entered summary disposit ion in favor of plaintiff.

Defendant contends that the trial court erred in ruling for p laintiff because plaintiff was not entitled to enforce the promissory note on several grounds, primarily because it was not a holder in due course under MCL 440.4401 et seq. This Court reviews de novo a lower court’s decision concerning a motion for summary disposition pursuant t o MCR 2.116(C)(10). Smith v Globe Life Ins Co , 460 Mich 446, 453; 597 NW2d 28 (1999).

“In reviewing a motion for summary disposition brought under M CR 2.116(C)(10), a trial court cons iders affidavits, pleadings, de positions, admissions, and documentary evidence filed in the action or submitted by th e parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion. A trial court may grant a mo tion for summary dis position under MCR 2.11 6(C)(10) if the affidavits or other documentary evidence show that there is no genuine issue in respect to any material fact, and the moving party is entitled to judgment as a matter of law. MCR 2.116(C)(10), (G)(4).” [ Smith , 460 Mich at 454-455, quoting Quinto v Cross & Peters Co , 451 Mich 358, 362-363; 547 NW2d 314 (1996).]

The lower court’s decision with regard to a motion for reconsid eration is reviewed for an abuse of discretion. Churchman v Rickerson , 240 Mich App 223, 233; 611 NW2d 333 (2000).-3- After a review of the relevant statutory provisions, it is cle ar that the trial court correctly decided that plaintiff was entitled to enforce the promissory n ote. MCL 440.3301 specifies who may enforce a negotiable instrument.

“Person entitled to enforce” an instrument means (i) the holder of the instrument , (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument w ho is entitled to enforce the instrument pursuant to [MCL 440.3309] or [MCL 440.3 418(4).] A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument. [MCL 440.3301 (Emphasis added; footnote omitted).]

MCL 440.1201(2)(u) further provides the following definition of a “holder.”

“Holder” means any of the following:

( i ) A person in possession of a negotiable instrument that is payable either to bearer or to an identified pers on that is the person in possession

. ( ii ) A person in possession of a negotiable tangible document of t itle if the goods are deliverable either to be arer or to the order of the p erson in possession.

( iii ) A person in control of a nego tiable electronic document of ti tle. [Emphasis added.]

In the instant case, it is clear to us that plaintiff is a “ho lder” of the promissory note at issue as set forth in MCL 440.1201(2)(u)( i ) and therefore entitled to enforce the promissory note pursuant to MCL 440.3301. The parti es do not dispute that plai ntiff holds possession of the promissory note, and in support of its motion for reconsiderati on plaintiff produced a copy of the promissory note along with an affidavit of plaintiff’s custodia n of records, who attested that “the documents attached hereto and which form the basis for this sui t are true and exact copies of the originals.” Additionally, a review of the promissory note itse lf reflects an endorsement to Cadence Financial on page 8 of the document.

To the extent that defendant asserts that plaintiff is not a h older in due course, this is simply not the appropriate inquiry. Rather than determining w hether one is entitled to enforce a promissory note, the status of being “a holder in due course” g oes more to the defenses that may be asserted against the holder of the note, and not to the issu e of enforceability. In Cessna Finance Corp v Warmus , 159 Mich App 706, 710-711; 407 NW2d 66 (1987), this Court recognized what being a holder i n due course means under the la w.

A holder in due course of an instrument is one who takes the i nstrument (1) for value, (2) in good fait h, and (3) without notice that i t is overdue or has been dishonored, or of any defenses or claims to it. MCL 440.33 02. Holder-indue-course status operates to insulate the holder from certain defenses to the instrument of any party with whom the holder has not dealt. How ever, a holder is subject to all defenses of a party with whom the holder has dea lt. MCL 440.3305. [Emphasis added.]-4- Thus, rather than determining wh ether one may enforce a promiss ory note, holder-in-due-course status means that the holder will be protected from various def enses to complying with the terms of the instrument made by one with whom the holder has not deal t. 1

This is further confirmed by a review of MCL 440.3305, which p rovides in pertinent part:

(1) Except as otherwise provide d in this section, the right to enforce the obligation of a party to pay an i nstrument is subject to the fo llowing:

(a) A defense of the obligor bas ed on (i) infancy of the oblig or to the extent it is a defense to a simple contract, (ii) duress, lack of legal capacity, or illegality of the transaction which, under other law, nullifies the obligation of the obligor, (iii) fraud that induced the obligor to sign the instr ument with neither knowledge nor reasonable opportunity to learn of its character or its essential terms, or (iv) discharge of the obligor in insolvency proceedin gs.
(b) A defense of the obligor stated in another section of this article or a defense of the obligor that woul d be available if the person en titled to enforce the instrument were enforcing a right to payment under a simple con tract.

(c) A claim in recoupment of the obligor against the original payee of the instrument if the claim arose from the transaction that gave ri se to the instrument, but the claim of the obligor may be asserted against a transfer ee of the instrument only to reduce the amount owing on the instrument at the time t he action is brought.

(2) The right of a holder in due course to enforce the obligation of a party to pay the instrument is subject to defe nses of the obligor stated in subsection (1)(a), but is not subject to defenses of the obligor stated in subsection (1)(b) or claims in recoupment stated in subsection (1)(c) agai nst a person other than the holder . (Emphasis added.)

After reviewing the record evidence in the light most favorabl e to defendant, we agree with the trial court that no genuine issues of material fact ex isted concerning whether plaintiff was entitled to enforce the subject promissory note. This conc lusion is particul arly appropriate under the present facts where defendant failed to respond to pl aintiff’s discovery requests, including plaintiff’s requests for admissions. In sum, althoug h our analysis differs, we are of the view that the trial court reached the correct conclusion that p laintiff was entitled to summary disposition. Further, this C ourt will uphold a decision on ap peal where the lower court reached the correct result, even if for different reasons. Gleason v Dep’t of Transp , 256 Mich App 1, 3; 662 NW2d 822 (2003).

1 We note that the trial court misspoke to the extent it stated that plaintiff was a holder in due course and therefore entitled to enforce the promissory note.-5- Defendant also asserts on appeal that the trial court erred in relying on the Supreme Court’s decision in Bowles , 246 Mich 674. We have reviewed the Bowles case and find it factually distinguishab le. It is clear to us that the trial co urt’s citation to Bowles was certainly not a pivotal part of its decisi on to grant reconsideration of its prior order denying plaintiff’s motion for summary disposition. Indeed, the trial court observ ed that genuine factual issues did not exist to warrant trial where the record was clear that the subject promissory note was endorsed to Cadence Financial, which changed its name in July 2 013 to BZA 301 Holdings. In other words, the court clearly found on other grounds that plai ntiff was entitled to enforce the subject promissory note, and given that the facts in Bowles are distinguishable from the instant case, the trial court’s citation to Bowles in granting reconsideration did not amount to an error of law or an abuse of discretion that warrants reversal of its ord er.

Affirmed.

/s/ David H. Sawyer /s/ Kirsten Frank Kelly /s/ Karen M. Fort Hood