NOT FINAL UNTIL TIME EXPI RES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL

OF FLORIDA

SECOND DISTRICT

GREGORY J. WINCHEL, ) ) Appellant, ) ) v. ) Case No. 2D15-5601 ) PENNYMAC CORP.; MORTGAGE ) ELECTRONIC REGISTRATION ) SYSTEMS, INC., AS NOMINEE FOR ) AMERICA'S WHOLESALE LENDER; ) UNKNOWN TENANT #1 N/K/A MATT ) BOTTORFF; and UNKNOWN TENANT ) #2 N/K/A JENNIFER EARLY, ) ) Appellees. ) ) Opinion filed July 7, 2017. Appeal from the Circuit Court for Charlotte County; Michael T. McHugh, Chief Judge. Kenneth Eric Trent of Trent Law Office, Fort Lauderdale, for Appellant. Nancy M. Wallace of Akerman LLP, Tallahassee; William P. Heller of Akerman LLP, Fort Lauderdale; and Eric M. Levine of Akerman LLP, West Palm Beach, for Appellee Pennymac Corp. No appearance for remaining Appellees.

SALARIO, Judge.- 2 - Gregory Winchel appeals from a f inal judgment of foreclosure in favor of PennyMac Corp. The judgment was rendered after the trial judge approved the report and recommendations of a foreclosure magistrate following a non jury trial at which Mr. Winchel was not represented bec ause his counsel failed to appea r. Because Pennymac failed to prove its standing at the inception of the c ase—a matter as to which it bore the burden of proof—we are required to reverse. This case began when JPMorgan Chas e Bank filed a complaint to

reestablish a lost note under whi ch Mr. Winchel was the borrowe r and to foreclose a mortgage that secured his obligations under the note. It alleg ed that JPMorgan had the right to enforce the note, which it either had at the time the note was lost or acquired from someone else who did. It also attached copies of a note a nd mortgage naming America's Wholesale Lender as the lender and an assignment of t he note and mortgage from Mortgage Electronic Registration Systems as nominee for Am erica's Wholesale Lender to Countrywide Home Loans, Inc. Because those attachmen ts did not say anything about JPMorgan, however, they did not, standing alone, bear out its allegations concerning its right to enforce the note. Over a year later, a purported original of the note was filed. That note was identical to the copy attached to the complaint, except that it contained a blank, undated indorsement signed by Countrywide. Not long thereafter, JPMorg an filed a motion to substitute PennyMac as the plaintiff. It alleged that the note and mortgage had been transferred and assigned to PennyMac and included an attached a ssignment of the mortgage, but not the note, from JPMorgan to PennyMac. The mot ion was granted. Although the complaint was never amended to delete the claim to reestablish a lost note, it is clear that from the time PennyMac was substituted, the case proceeded on- 3 - the theory that PennyMac was entitled to enforce the note not b ecause it was entitled to do so under the lost note statute, but rather because it was ei ther the holder of the note or a nonholder in possession of the note with the rights of a h older. 1 See § 673.3011, Fla. Stat. (2012) (defining persons entitled to enforce a negot iable instrument as a holder, a nonholder in possession with the rights of a holder, or a person not in possession entitled to enforce under the lost note or mistake s tatutes). Mr. Winchel then filed an answer in which he alleged as an affi rmative defense a lack of standing at the time the complaint was filed— what is commonly called a defense of "no standing at inception." 2 Thereafter, the trial judge entered an order referring the case to a foreclosure magistrate to conduct a non jury trial, see Fla. R. Civ. P. 1.491, and scheduling that trial for a date and time certain

. Mr. Winchel's attorney did not appear at the trial. The court minutes reflect that the case was called at the scheduled time and agai n fifteen minutes later, with plans to proceed without the attorney once it was called a third time. Meanwhile, Mr. Winchel's attorney's office filed an emergency motion to co ntinue—alleging that a member of his staff incorrectly informed the attorney of his sc hedule for the day of trial, that the attorney was at that moment driving across the state t o the courthouse, and that the attorney was having difficulty with a low tire during the t rip. It is not clear when or if the attorney made it to the courthouse that day, but when the c ase was called for the

1 At the trial, PennyMac's counsel agreed to dismiss the lost not e count. Best practices, however, would have included the timely filing of an amended complaint that deleted the lost note count and that stated the basis of P ennyMac's authority to enforce the note once the original was located and transferred to it.

2 The answer was not filed earlier because Mr. Winchel had filed a motion to dismiss the complaint which postponed the filing of the answ er until the motion was decided. See Fla. R. Civ. P. 1.140(a)(3).- 4 - third time, the attorney was absent, and the magistrate denied the emergency motion to continue and conducted a nonjury tr ial with only PennyMac's cou nsel participating. PennyMac's trial evidence consisted of the testimony of a singl e witness through whom three documents were admitted: (1) a limited power of attorney from JPMorgan to PennyMac giving PennyMac authority to foreclose cer tain mortgage loans identified in a separate loan pur chase and servicing agreement, (2) an acceleration notice informing Mr. Winchel that he was in default, and (3) Mr . Winchel's loan payment history. There was, however, no evidence presented to show tha t JPMorgan was entitled to enforce Mr. Winchel's note at the time the complain t was filed. The original note—which was not admitted into evidence but that the magistra te recognized was in the court file—bore an undated indorsement in blank. PennyMac did not produce testimony or documents showing when JPMorgan came into possessi on of the note or, if it was a nonholder in possession, when it acquired the right s of a holder to enforce the

note. After the trial, the magistrate issued a report finding that Pe nnyMac proved its case and recommending entry of a proposed final judgment of foreclosure tendered by PennyMac at trial. Mr. Winchel filed exceptions to the repo rt and recommendations, see Fla. R. Civ. P. 1.490(i), (j); 1.491(f), arguing that the m agistrate lacked authority to deny his emergency motion to continue. After a hearing, the tr ial judge rendered orders overruling Mr. Winchel's objections and approving the report an d recommendations. A final judgment of foreclosure was separately entered. In this timely appeal, Mr. Winchel asserts that the judgment sh ould be reversed both because PennyMac failed to prove standing at the inception of the case and because the magistrate lacked authority to deny his emergen cy motion to continue.- 5 - We agree that PennyMac failed to prove standing at inception an d, because we reverse on that basis, do not address Mr. Winchel's argument concerning the requested continuance. On the standing issue, our review is de novo. Se e St. Clair v. U.S. Bank Nat'l Ass'n, 173 So. 3d 1045, 1046 (Fla. 2d DCA 2015). As defenses go, standing has become something of a legal oddity . We treat it as an affirmative defense in that the defendant must p ut it in play by raising it in an appropriate pleading—ordinarily, the answer. 3 See Dage v. Deutsche Bank Nat'l Tr. Co., 95 So. 3d 1021, 1024 (Fla. 2d DCA 2012) ("[L]ack of standi ng is an affirmative defense that must be raised by the defendant and the failure to raise it generally results in waiver." (alteration in original) (quoting Phadael v. Deutsc he Bank Tr. Co. Ams., 83 So. 3d 893, 895 (Fla. 4th DCA 2012))); see also Fla. R. Civ. P. 1.110(d) (requiring that affirmative defenses be pleaded in the answer). Yet once injec ted into a case by a defendant's pleading, we say that it must be proved at trial by the plaintiff. See Dickson v. Roseville Props., LLC, 198 So. 3d 48, 50 (Fla. 2d DCA 2015); May v. PHH Mortg. Corp., 150 So. 3d 247, 248 (Fla. 2d DCA 2014). Once put at iss ue by a defendant, then, standing becomes a part of the prima facie case that a fo reclosure plaintiff must prove in order to secure a judgment. See Dhanik v. HSBC Bank U SA, Nat'l Ass'n, 210 So. 3d 113, 115 (Fla. 2d DCA 2016).

3 But see McLagan v. Fed. Home Loan Mortg. Corp., 145 So. 3d 943, 945 (Fla. 2d DCA 2014) (holding that standing was sufficiently rais ed when defendant denied standing allegations in complaint, raised standing in a motion for summary judgment, and argued standing in response to plaintiff's motion for summary judgment, which resulted in the summary judgment on appeal (citing Maynar d v. Fla. Bd. of Educ. ex rel. Univ. of S. Fla., 998 So. 2d 1201, 1206 (Fla. 2d DCA 20 09))).- 6 - Because the count to reestablish a lost note fell out of the ca se, PennyMac's standing hinged on whether it and its predecessor in interest were the holders of Mr. Winchel's note or nonholders in possession with the rights of a holder. See § 673.3011(1), (2); Creadon v. U .S. Bank N.A., 166 So. 3d 9 52, 954 (Fla. 2d DCA 2015). PennyMac was required by law to prove standing under ei ther theory both at the time of trial and also at the inception of the case. See Power s v. HSBC Bank USA, N.A., 202 So. 3d 121, 122-23 (Fla. 2d DCA 2016). Because Penny Mac was substituted as plaintiff for JPMorgan after the complaint was filed, proof of standing at inception required proof that JPMorgan had standing when it filed the com plaint. See Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639, 642 (Fla. 2d DCA 2015)

. There was a complete absence of any such evidence here. Becaus e no one has argued otherwise, we assume that the magistrate properl y considered the purported original note in the court file. But see Heller v. B ank of Am., N.A., 209 So. 3d 641, 644 (Fla. 2d DCA 2017). That note, however, was filed aft er the complaint was filed, did not show that JPMorgan was the original lender, and bore an undated, blank indorsement. There was no testimony or other evidence to expla in when the indorsement was placed on the note. As such, PennyMac failed e ntirely to show that the note had been indorsed at the time the complaint was filed or that JPMorgan was in possession of the note at that time. It thus failed entirely t o prove that JPMorgan was either a holder or a nonholder in possession at the inception o f the case. See Phan v. Deutsche Bank Nat'l Tr. Co., 198 So. 3d 744, 747 (Fla. 2d DCA 2 016) ("Under the law, without the requisite proof of possession at the time a foreclo sure action is commenced, the plaintiff's status as the holder of the note—and, hence, it s authority to enforce the note in foreclosure—remains unproven, and its complaint untenab le." (citing Focht v.- 7 - Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013)) ); Corrigan v. Bank of Am., N.A., 189 So. 3d 187, 190 (Fla. 2d DCA 2016) (en banc) ("T hough Bank of America later filed the original note and mortgage along with a n assignment, these documents did not establish standing at the time the original c omplaint was filed because the endorsement was undated and the assignment was date d after the original complaint was filed."). There was nothing else in PennyMac's trial evidence to show tha t JPMorgan had standing at inception under any theory. Having be en set with the burden to prove standing at inception once Mr. Winchel pleaded it as a n affirmative defense, PennyMac failed to carry it, and the final judgment must be rev ersed. See, e.g., Jallali v. Christiana Tr., 200 So. 3d 149, 151-53 (Fla. 4th DCA 2016) ( reversing foreclosure judgment based on plaintiff's failure to prove standing at ince ption where, as here, the defendant failed to appear at trial). PennyMac argues that all of this is academic because Mr. Winche l did not object to its proof of standing at inception at the trial (he w as not there) or in his exceptions to the magistrate's report and recommendations. As such, it says that Mr. Winchel failed to preserve this issue for appeal. See Franklin v. Patterson-Franklin, 98 So. 3d 732, 738 (Fla. 2d DCA 2012) (discussing requirement that appellate grounds be preserved by timely objection in the trial court). Under Flori da Rule of Civil Procedure 1.530(e), however, Mr. Winchel was not required to object in or der to raise the sufficiency of PennyMac's proof of standing on appeal. Rule 1. 530(e) provides as

follows: When an action has been tried by the court without a jury, the sufficiency of the evidence to support the judgment may be raised on appeal whether or not the- 8 - party raising the question has made any objection thereto in the trial court or made a motion for rehearing, for new trial, or to alter or amend the judgment. Under the plain language of the rule, when there has been a non jury trial and the appellate issue is the sufficiency of the evidence to s upport the judgment, the failure to object based on the insufficiency of the evidence wi ll not bar raising that issue on appeal. See, e.g., Correa v. U.S. Bank Nat'l Ass'n, 118 So. 3d 952, 954-55 (Fla. 2d DCA 2013) (holding that foreclosure defendant's failure to obje ct to sufficiency of the evidence to support reestablishment of lost note in the trial c ourt did not bar raising the issue on appeal). There is, of course, no question that this w as a nonjury trial. Furthermore, as explained above, when Mr. Winchel raised standi ng in his answer, PennyMac became obligated to prove the standing it asserted in order to win a judgment in the trial court. As such, the appellate issue Mr. Winchel raises goes to the sufficiency of the evidence to support a judgment. See, e.g., Delia v. GMAC Mortg. Corp., 161 So. 3d 554, 555 n.1 (Fla. 5th DCA 2014) (applying ru le 1.530(e) to hold that foreclosure defendant's failure to object at nonjury trial to p laintiff's standing did not preclude the appeal because it was an issue of sufficiency of t he evidence); Lacombe v. Deutsche Bank Nat'l Tr. Co., 149 So. 3d 152, 153 (Fla. 1st DCA 2014) (same). For that reason, his failure to object in the trial court—whether during the nonjury trial or by way of exceptions to the magistrate's report and recommendations—do es not prohibit him from raising the issue on appeal. 4

4 PennyMac cites Rosen v. Wilson, 922 So. 2d 401 (Fla. 4th DCA 20 06), for the proposition that when a s pecific objection is not inclu ded in a party's exceptions to a magistrate's report and recommendations, the issue not spe cifically objected to is unpreserved for appeal. However, that case did not involve a c hallenge to the- 9 - PennyMac argues, however, that a nonjury trial before a foreclo sure magistrate is not a trial before "the court without a jury" wit hin the meaning of rule 1.530(e) (emphasis added). The premise of this argument is tha t a proceeding before a magistrate without a jury is not a nonjury trial before "the co urt," even though the results of the proceeding are reviewed by and a final judgment is enter ed by a trial judge. We disagree. A foreclosure magistrate is appointed by the chief j udge of a circuit as necessary to "expeditiously preside over all actions and suits for the foreclosure of a mortgage on residential real property." Fla. R. Civ. P. 1.491( a). The magistrate may conduct those duties only with the consent of the parties, purs uant to an order referring a matter to the magistrate, and under the supervision of the co urt. Fla. R. Civ. P. 1.490(d); 1.491(b), (c). That is what happened here; the trial judge made an order referring the case to the foreclosure magistrate for the purpos e of conducting a nonjury trial, and the parties (including PennyMac) consented to the ma gistrate's doing so. Under the rules and order referring the case to her, the magist rate conducted the nonjury trial on the court's behalf and as its officer. Cf. Bu rns v. Burns, 13 So. 2d 599,

sufficiency of the evidence in a nonjury trial; it involved a p utative legal error in a magistrate's determination that a party was not entitled to att orney's fees. Id. at 402. As such, rule 1.530(e)'s excepti on to the general rules of pres ervation, which applies in this case, could not have applied in Rosen. Because here rule 1.530(e) excuses Mr. Winchel's failure to object in the trial court, we need not con sider the potential tension between Rosen and other cases that have held that a failure to file any exceptions to a magistrate's report and recommendations does not prohibit raisi ng appellate issues embedded in it. See, e.g., P.P. v. Dep't of Children & Family Servs., 86 So. 3d 556, 560 (Fla. 2d DCA 2012) (holding that the failure to file exceptions to a report and recommendations in the juvenile context did not bar raising an issue on appeal); U.S. Bank Nat'l Ass'n v. Grant, 180 So. 3d 1092, 1093 (Fla. 4th DCA 2015) ("We have considered and reject the Association's argument that the Bank' s failure to file exceptions to the special master's report precludes appellate r eview."); Apsoft, Inc. v. WebClay, 983 So. 2d 761, 764 n.1 (Fla. 5th DCA 2008) (holding t hat failure file exceptions at all does not bar raising appellate issues).- 10 - 602 (Fla. 1943) (describing a special master, the precursor to the magistrate, as "a highly important and responsible officer of the court, acting f or and under the appointment of the court, and v ested with considerable authorit y of a judicial nature"). She was acting for the court for purposes of conducting the non jury trial, and that trial was thus a trial before "the court" within the meaning of rule 1.530(e). Furthermore, the trial court entered the final judgment of foreclosure without j ury findings by adopting the findings and recommendations it had tasked the magistrate to ma ke. That is by definition a type of judgment entered by a trial court upon a n onjury trial, as are all judgments in judicial foreclosures in Florida. Finally, PennyMac asserts that our decision in Sanabria v. Penn yMac Mortgage Investment Trust Holdings I, LLC, 197 So. 3d 94 (Fla. 2d DCA 2016), holds that notwithstanding rule 1.530(e), a foreclosure defendant mus t raise the sufficiency of the plaintiff's evidence on standing at inception at trial in o rder to preserve it for appeal. PennyMac stretches that case too far. Anything Sanabria said a bout preservation and standing was dicta. The foreclosure defendant there secured a reversal on grounds

that the trial court refused to consider whether a signature on a note was authentic based on an erroneous ruling that the issue had been insufficie ntly pleaded. Id. at 98. Our statements that he failed to preserve a different ground fo r reversal related to standing, id. at 95 & n.1, did not control the outcome. See, e .g., Shipley v. Belleair Grp., Inc., 759 So. 2d 28, 29 (Fla. 2d DCA 2000) (characterizing stat ement in earlier decision

as dictum where the case was res olved on a different basis). M oreover, the limited discussion of standing in Sanabria does not say what the nature of the standing issue raised on appeal was—sufficiency of the evidence, which would h ave been subject to rule 1.530(e), or something else, which might have otherwise re quired preservation—- 11 - and does not say whether the defendant-appellant argued rule 1. 530 on appeal as a basis for not objecting in the tr ial court. For these reasons, we decline PennyMac's invitation to read Sanabria as holding that rule 1.530(e) conta ins an exception, completely missing from its text, for sufficiency challenges wh en the underlying issue is standing in a foreclosure case. PennyMac failed to meet its burden of proving at trial that JPM organ had standing when it filed the complaint. That requires us to reve rse. We do not ordinarily give a party who has failed to prove its case at trial a do-ove r by remanding for retrial. Wolkoff v. Am. Home Mortg. Servi cing, Inc., 153 So. 3d 280, 283 (Fla. 2d DCA 2014) (citing Correa, 118 So. 3d at 956). Seeing no principled basis to depart from that rule here, we remand for entry of judgment in Mr. Winchel's favor. 5 See, e.g., Morgan Stanley & Co. v. Coleman (Parent) Holdings Inc., 955 So. 2d 112 4, 1131 (Fla. 4th DCA 2007) (reversing and remanding for entry of judgment where plai ntiff failed to meet its burden of proof on issue where it bore that burden). Reversed; remanded with instructions.

5 In foreclosure cases where standing at inception has not been p roven, we ordinarily have remanded for entry of an order of involuntar y dismissal. Many of those opinions make clear that the defendant moved for an invol untary dismissal during trial, which would, of course, make remand for entry of such an order appropriate. See, e.g., May, 150 So. 3d at 248-49. Others do not disclose whethe r such a motion was made. See, e.g., Dhanik v. HSBC B ank USA, Nat'l Ass'n, 210 So. 3d 113, 115 (Fla. 2d DCA 2016). Here, it is clear that no motion for involuntary di smissal was made—Mr. Winchel's attorney was absent from the trial—and remand for an order of involuntary dismissal is thus inappropriate. See Fla. R. Civ. P. 1.420(b) (providing that a "party may move" for an involuntary dismissal); Colson v. State Farm Bank, F.S.B., 183 So. 3d 1038, 1041 (Fla. 2d DCA 2015) (stating that remand for an order of involuntary dismissal is inappropriate where no such motion was made). Mr. Winchel argues that we should remand for entry of a judgment in his favor, and beca use PennyMac failed to prove at trial that which it was required to prove in order to win a judgment after trial, we agree.- 12 - SILBERMAN and BADALAMENTI, JJ., Concur.