NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING 

MOTION AND, IF FILED, DETERMINED 

IN THE DISTRICT COURT OF APPEAL 

OF FLORIDA 

SECOND DISTRICT 

RONALD ST. CLAIR, ) 

 ) 

 Appellant, ) 

 ) 

v. ) Case No. 2D14-2111 

 ) 

U.S. BANK NATIONAL ASSOCIATION, ) 

Trustee Terwin Mortgage Trust 2005 ) 

8HE Asset-Backed Certificates, Series ) 

2005 8HE, ) 

 ) 

 Appellee. ) 

 ) 

Opinion filed July 17, 2015. 

Appeal from the Circuit Court for Lee 

County; James R. Thompson, Senior Judge. 

Michael E. Chionopoulos, Fort Myers, for 

Appellant. 

Elizabeth T. Frau of Ronald R. Wolfe & 

Associates, P.L., Tampa, for Appellee. 

VILLANTI, Chief Judge. 

 Ronald St. Clair seeks review of the trial court's final judgment of 

foreclosure in favor of U.S. Bank. Because the trial court erred in finding that U.S. Bank 

demonstrated it had standing to foreclose, we reverse. 
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 After St. Clair defaulted on a loan issued by original mortgagor Lenders 

Direct Capital Corporation, U.S. Bank brought foreclosure proceedings. St. Clair 

defended, alleging that U.S. Bank failed to prove standing. Although U.S. Bank 

maintained that the mortgage and note were sold to it by Lenders Direct, neither 

document had been indorsed. Despite the lack of indorsements, the mortgage and note 

were placed in a trust with U.S. Bank as the trustee and the loan was serviced by 

Specialized Loan Servicing (SLS). Based on these facts, U.S. Bank asserted that it had 

the rights of a holder as a "nonholder in possession" of the documents. At a nonjury 

trial, U.S. Bank relied on a pooling service agreement, a default notice letter, and a fee 

payment schedule to show that it had standing to foreclose. Agreeing with this 

argument, the trial court ruled in favor of U.S. Bank and this appeal followed. 

 Under section 673.3011, Florida Statutes (2014), a person entitled to 

enforce a negotiable instrument must be either: (1) the holder of the instrument, (2) a 

"nonholder in possession of the instrument who has the rights of a holder," or (3) a 

person not in possession but who has the right to enforce a lost, destroyed, or stolen 

instrument or an instrument paid by mistake. A holder is a person in possession of the 

negotiable instrument that is payable either to bearer or to the holder. § 671.201(21)(a), 

Fla. Stat. (2014). A person in possession of the instrument but who is not the original 

lender can still be a holder, but only if the instrument bears a special indorsement in his 

or her favor or a blank indorsement. See McLean v. JP Morgan Chase Bank Nat'l 

Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). Absent a special or blank indorsement, 

"the mere delivery of a note and mortgage, with intention to pass the title, upon a proper 

consideration, will vest the equitable interest in the person to whom it is so delivered." 
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Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 125 (Fla. 4th DCA 2015) 

(quoting McLean, 79 So. 3d at 173). However, possession of the instrument alone is an 

insufficient basis to prove standing to foreclose. See Murray v. HSBC Bank USA, 157 

So. 3d 355, 358 (Fla. 4th DCA 2015). The person trying to enforce the instrument must 

demonstrate that he or she had standing as of the time the complaint is filed. McLean, 

79 So. 3d at 173. This court reviews issues of standing in foreclosure cases using the 

de novo standard of review. Boyd v. Wells Fargo Bank, N.A., 143 So. 3d 1128, 1129 

(Fla. 4th DCA 2014). 

 Here, U.S. Bank attempted to prove it had standing under section 

673.3011(2) as a nonholder in possession of the instrument with the rights of a holder.1 

It argued below and on appeal that its possession of the note and mortgage, along with 

evidence of its servicing the loan through SLS, its pooling and servicing agreement with 

SLS, and SLS's notice of default letter sent to St. Clair, prove that U.S. Bank had 

standing to enforce the instrument. But contrary to U.S. Bank's argument, mere 

possession is an inadequate basis on which to affirm the lower court's final judgment. 

See Murray, 157 So. 3d at 358. 

 Because mere possession was inadequate to establish standing, U.S. 

Bank was required to show that it received the instrument from a holder with 

enforcement rights. This is known as the "shelter rule." Id. But there was no 

competent evidence presented below to show that U.S. Bank had actually acquired the 

note and mortgage from Lenders Direct. While U.S. Bank attempts to rely on its pooling 

 1Because the note and mortgage were not indorsed in blank or specially 

indorsed to U.S. Bank, U.S. Bank is unable to establish its standing as a holder of the 

instrument. See § 673.3011(1). 
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and servicing agreement with SLS to show that it had standing, this document does not 

contain any mention of Lenders Direct or its alleged transfer of the note and mortgage 

into the U.S. Bank trust. Likewise, the payment schedule shows only that Lenders 

Direct was servicing the loan prior to SLS; it does not indicate that Lenders Direct 

transferred the loan to U.S. Bank or to SLS. While there is a document that indicates 

Lenders Direct sold the rights to the instrument, it does not indicate to whom Lenders 

Direct sold the rights. Without evidence establishing who Lenders Direct sold the 

instrument to, the question of standing remains an open one. This court cannot fill in 

the blanks of an incomplete chain in order to determine that U.S. Bank actually acquired 

the instrument, as it contends, from holder Lenders Direct versus a nonholder third 

party. See id. at 358-59 (noting that because "[t]he transferee does not enjoy the 

statutorily provided assumption of the right to enforce the instrument that accompanies 

a negotiated instrument . . . the transferee must account for possession of the 

unindorsed instrument by proving the transaction through which the transferee acquired 

it" (quoting Anderson v. Burson, 35 A.3d 452 (Md. 2011) (internal quotations omitted))). 

The documentation here was simply too inadequate to constitute competent, substantial 

evidence of U.S. Bank's standing. 

 The only document that purports to indicate that Lenders Direct sold the 

rights of the instrument to U.S. Bank is a letter from SLS to St. Clair, stating that SLS 

would be servicing the loan after Lenders Direct had sold the note and mortgage. But 

without reference to whom the loan was sold, this letter alone cannot substantiate U.S. 

Bank's claim that it obtained the note and mortgage from Lenders Direct. See Seffar, 

160 So. 3d at 126-27 (finding that a letter from a loan servicer to the mortgagor 
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informing him of the transfer of servicing rights was insufficient to establish that the 

servicer had standing when the letter did not address the servicer's specific right to 

enforce the instrument). Thus, U.S. Bank's claim suffers from a fatal failure of 

necessary proof. 

 Ultimately, the problem with U.S. Bank's attempt to establish standing to 

foreclose is that it relies on a "paper trail" that beats around the bush but never axes the 

tree necessary to establish the legal requirement of standing. We cannot, as advocated 

by U.S. Bank, presume standing simply because it serviced the loan. Longstanding 

case law prevents us from doing so. See Withers v. Sandlin, 18 So. 856 (Fla. 1896). 

Accordingly, it was error for the trial court to rule in favor of U.S. Bank. 

 Reversed and remanded for further proceedings. 

KHOUZAM and LUCAS, JJ., Concur.