Sullivan v. United Dealers Corp.

James and Norma Sullivan (defendants) hired Memory Swift Homes (Memory Swift) to build a house and signed a promissory note secured by a mortgage, providing United Dealers Corporation (United) (plaintiff) with written statements confirming that construction work had been properly and workmanlike performed; Memory Swift then assigned the note and mortgage to United. When the Sullivans defaulted, United sued to collect and foreclose, and the Sullivans raised construction-defect claims against Memory Swift as a defense; the circuit court found United a holder in due course unaffected by those defenses and ruled for United, and the Sullivans appealed, arguing United's frequent dealings with Memory Swift and knowledge that work was unfinished at purchase put it on notice of defenses.