Doherty v. Fed. Nat’l Mortgage Ass’nAnnotate this Case
To secure a loan, Plaintiff executed a promissory note naming ABN AMRO Mortgage Group (ABN) as the note holder. ABN later merged with CitiMortgage, Inc., which became the holder of Plaintiff’s note. CitiMortgage notified Plaintiff that her balloon payment was due and that she could either make the payment or exercise her “reset option.” Plaintiff did not notify CitiMortgage of her intent to exercise the reset option and did not make the payment. The property was foreclosed. CitiMortgage purchased the property and conveyed it to Federal National Mortgage Association (FNMA). Plaintiff filed a complaint against FNMA and CitiMortgage (Defendants). Plaintiff then moved for partial summary judgment, asserting that no evidence of the transfer of the note from ABN to CitiMortgage had been produced during discovery. Defendants subsequently produced a copy of the certificate of merger between ABN and CitiMortgage. The district court granted summary judgment for Defendants, concluding that the untimely disclosure was harmless. The Supreme Court affirmed, holding (1) the district court did not abuse its discretion by declining to impose sanctions against Defendants for discovery violations; and (2) the clause requiring Plaintiff to give written notice of her intent to exercise the reset option was not an unenforceable contract of adhesion or a violation of the Montana Consumer Protection Act.