DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

OTTONIEL CRUZ and LUZ M. CRUZ,

Appellants,

v.

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, AS 

SUCCESSOR IN INTEREST TO WASHINGTON MUTUAL BANK, 

FORMERLY KNOWN AS WASHINGTON MUTUAL BANK, F.A.,

Appellee.

No. 4D14-3799

[June 15, 2016]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit, 

Broward County; Thomas M. Lynch, IV, Judge; L.T. Case No. 

CACE09024572(11).

Paul Alexander Bravo of P.A. Bravo, Coral Gables, and Ricardo Manuel 

Corona of Corona Law Firm, Miami, for appellants.

Nancy M. Wallace of Akerman LLP, Tallahassee, William P. Heller of 

Akerman LLP, Fort Lauderdale, and Kathryn B. Hoeck of Akerman LLP, 

Orlando, for appellee.

On Motions for Rehearing and Clarification

MAY, J.

We grant the owners’ motion for clarification, deny JPMorgan’s motion 

for rehearing, and withdraw our previously issued opinion and substitute 

the following in its place.

The number of entities through which the note and mortgage traveled 

complicates the facts. The bottom line, however, is JPMorgan Chase Bank, 

National Association’s (“JPMorgan”) failure to prove standing requires a 

reversal of the final judgment of foreclosure.

The borrower executed a mortgage and note in favor of Washington 

Mutual Bank F.A. (“WAMU”). On March 5, 2008, the borrower quitclaimed the property to Ottoniel Cruz and Luz Cruz (“owners”). On 
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September 25, 2008, the Federal Deposit Insurance Corporation (“FDIC”), 

receiver for WAMU, sold substantially all assets and liabilities of WAMU to 

JPMorgan through a purchase and assumption agreement (“PAA”).

Section 3.1 of the PAA reads, in part, “[T]he Assuming Bank hereby 

purchases from the receiver, and the Receiver hereby sells, assigns, 

transfers, conveys, and delivers to the Assuming Bank, all right, title, and 

interest of the receiver in and to all of the assets (real, personal and mixed, 

wherever located and however acquired) . . . of the Failed Bank.” 

Section 3.2 reads, in part, “All Assets and assets of the Failed Bank 

subject to an option to purchase by the Assuming Bank shall be purchased 

for the amount . . . as specified on Schedule 3.2, except as otherwise may 

be provided herein.” Section 3.3 reads, in part, “[T]he conveyance of all 

assets . . . purchased by the Assuming Bank under this agreement shall 

be made, as necessary, by Receiver’s deed or Receiver’s bill of sale.” 

Section 6.2 obligates the FDIC to deliver assets, including loan documents, 

“as soon as practicable on or after the date of this Agreement.” 

The “Settlement Date” is defined as “the first Business Day immediately 

prior to the day which is one hundred eighty (180) days after Bank Closing, 

or such other date prior thereto as may be agreed upon by the Receiver 

and the Assuming Bank.” Article X explains that as a condition precedent,

the parties were subject to the Receiver “having received at or before the 

Bank Closing, evidence reasonably satisfactory to each of any necessary 

approval, waiver, or other action by any governmental authority . . . with 

respect to this Agreement.” 

On December 1, 2008, the owners defaulted by failing to pay their

monthly payment. WAMU sent the default notice on January 28, 2009. 

On April 29, 2009, JPMorgan filed a foreclosure action. The complaint 

included a count to reestablish a lost note and a count for foreclosure of 

the mortgage. JPMorgan alleged that it “owns and holds said note and 

mortgage.” The lost note count stated that the note “has been lost or 

destroyed and is not in the custody or control of the Plaintiff who is the 

owner and holder of the subject Note and Mortgage and its whereabouts 

cannot be determined.” It also stated that JPMorgan or its predecessors 

were in possession of the note and were entitled to enforce it when the loss 

occurred, and “[t]he loss of possession was not the result of a transfer or 

a lawful seizure.” 

Attached to the complaint was a copy of the mortgage, but not a copy 

of the note. On October 26, 2009, JPMorgan dropped the lost note count. 
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On April 12, 2010, the owners filed their answer and asserted several 

affirmative defenses, including lack of standing and failure to comply with 

conditions precedent. 

In January 2014, JPMorgan transferred its ownership interests in the 

mortgage to PennyMac Corporation (“PennyMac Corp.”). On February 21, 

2014, the FDIC executed an assignment of the mortgage to JPMorgan. The 

assignment read, in part, “This Assignment is intended to further 

memorialize the transfer that occurred by operation of law on September 

25, 2008 as authorized by Section 11(d)(2)(G)(i)(II) of the Federal Deposit 

Insurance Act, 12 U.S.C. § 1821(d)(2)(G)(i)(II).”

On February 21, 2014, JPMorgan then executed an assignment of 

mortgage in favor of PennyMac Corp. Servicing of the loan was transferred 

from JPMorgan to PennyMac Loan Services, LLC (“PennyMac Loan 

Services”), which was the servicer at the time of trial. On August 1, 2014, 

JPMorgan moved to substitute PennyMac Corp. as party plaintiff, but the 

motion was never heard. 

PennyMac Corp. allegedly discovered a week before trial that the 

original note was lost. On August 22, 2014, JPMorgan moved to amend 

the complaint to add a lost note count, and attached an affidavit from a 

PennyMac Loan Services foreclosure operations supervisor. The trial court

denied the motion the day before the trial began. 

On August 28, 2014, the case proceeded to a non-jury trial. JPMorgan 

called PennyMac Loan Services’ foreclosure operations supervisor as its 

witness. She testified that PennyMac Loan Services serviced the loan on 

behalf of the current owner, PennyMac Corp., and JPMorgan was the prior 

servicer.

She did not have the original note with her because it was lost or 

destroyed. The note “was lost after the complaint was filed,” but before it 

acquired servicing rights. PennyMac Loan Services conducted its due 

diligence, reached out to prior foreclosure counsel, and checked the court 

docket to see if the original note was already filed, but it was unable to 

find the original note.

The witness reviewed PennyMac Loan Services’ records, and the 

original note was not transferred to anyone else or seized by anyone. 

PennyMac Corp. was willing to indemnify the note maker for any claims 

that might be placed because of the loss. She obtained the copy of the

note from PennyMac Loan Services’ business records, which were 

uploaded by PennyMac Loan Services’ loan boarding department at the 
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time PennyMac Loan Services acquired servicing rights of the subject loan. 

When JPMorgan attempted to move the copy of the note into evidence, 

defense counsel questioned the witness, and objected to the introduction 

of the copy of the note “based on the evidence rule and . . . trustworthiness 

and authenticity of it.” Counsel also argued that no reestablishment count 

was pending before the court and “their complaint only seeks mortgage 

foreclosure and they dropped the establishment of lost mortgage note back 

in I believe 2010 . . . . [T]hey are asking the Court to improperly amend 

their pleadings . . . .” 

JPMorgan responded that it was not asking the court to amend because 

“[t]he lost note count is the count that has become tradition to put in the 

complaint,” but “it is actually an evidentiary matter.” The trial court 

overruled the objection and admitted the copy of the note. The court also 

admitted, among other things, a copy of the PAA.

At the end of the trial, the owners moved for an involuntary dismissal, 

arguing JPMorgan was required to produce the original note and failed to 

comply with the conditions precedent to filing the foreclosure action. The 

trial court denied the motion. 

The trial court granted final judgment of foreclosure in favor of 

JPMorgan. From this judgment, the owners now appeal.

The owners argue JPMorgan failed to prove it had standing to foreclose 

at the case’s inception and when the trial court entered final judgment. 

JPMorgan failed to attach a copy of the note to the complaint. The copy of 

the note that was eventually filed had an undated blank endorsement and 

JPMorgan failed to elicit testimony regarding the endorsement date. 

JPMorgan also introduced an assignment of mortgage showing its rights 

were transferred to PennyMac Corp. six months before trial.

JPMorgan responds that standing is determined at the time suit is filed, 

not at the time of trial. The endorsement date was immaterial because it 

proved ownership and did not rely on the endorsement. It was authorized 

under the Florida Rules of Civil Procedure to continue the action in its 

name after transferring its interest to PennyMac Corp.

The owners reply that the evidence failed to establish JPMorgan 

acquired standing. The PAA did not provide for the purchase of all WAMU’s 

assets, and required a separate conveyance instrument for assets actually 

purchased. The PAA provided only that JPMorgan had the right to 

purchase certain WAMU assets from the FDIC, but nothing shows any 
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property was transferred, and 12 U.S.C. § 1821 does not save JPMorgan.

This Court reviews whether a party has standing to bring an action de 

novo. Dixon v. Express Equity Lending Grp., LLLP, 125 So. 3d 965, 967 

(Fla. 4th DCA 2013).

“A crucial element in any mortgage foreclosure proceeding is that the 

party seeking foreclosure must demonstrate that it has standing to 

foreclose” when the complaint is filed. McLean v. JP Morgan Chase Bank 

Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). “[S]tanding may be 

established from the plaintiff’s status as the note holder, regardless of any 

recorded assignments.” Id. (citation omitted). “If the note does not name 

the plaintiff as the payee, the note must bear a special endorsement in 

favor of the plaintiff or a blank endorsement.” Id. The plaintiff may also 

show “an affidavit of ownership to prove its status as a holder of the note.” 

Id.; see Sosa v. U.S. Bank Nat’l Ass’n, 153 So. 3d 950, 951 (Fla. 4th DCA 

2014). 

“A plaintiff alleging standing as a holder must prove it is a holder of the 

note and mortgage both as of the time of trial and also that [it] had 

standing as of the time the foreclosure complaint was filed.” Kiefert v. 

Nationstar Mortg., LLC, 153 So. 3d 351, 352 (Fla. 1st DCA 2014) (emphasis 

added).

Such a plaintiff must prove not only physical possession of 

the original note but also, if the plaintiff is not the named 

payee, possession of the original note endorsed in favor of the 

plaintiff or in blank (which makes it bearer paper). If the 

foreclosure plaintiff is not the original, named payee, the 

plaintiff must establish that the note was endorsed (either in 

favor of the original plaintiff or in blank) before the filing of the 

complaint in order to prove standing as a holder.

Id. at 353 (internal citations omitted). “A plaintiff’s lack of standing at the 

inception of the case is not a defect that may be cured by the acquisition 

of standing after the case is filed and cannot be established retroactively 

by acquiring standing to file a lawsuit after the fact.” LaFrance v. U.S. 

Bank Nat’l Ass’n, 141 So. 3d 754, 756 (Fla. 4th DCA 2014) (citation 

omitted) (internal quotation marks omitted).
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A “person entitled to enforce” an instrument is: “1) [t]he holder[1] 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 of the instrument who 

is entitled to enforce the instrument pursuant to s[ection] 673.3091 or 

s[ection] 673.4181(4).” § 673.3011, Fla. Stat. (2014); see Mazine v. M & I 

Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011). “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.” § 673.3011, Fla. Stat.

JPMorgan alleged that it was the note holder, but it failed to prove its 

holder status at trial. JPMorgan did not attach the note to the complaint. 

It introduced a copy of the note at trial, which contained an attached 

allonge indicating a blank endorsement from “JP Morgan Chase Bank, NA 

Successor in Interest by Purchaser from the FDIC as receiver of 

Washington Mutual Bank F/K/A Washington Mutual Bank, FA.” 

However, PennyMac Loan Services’ witness did not testify to when the 

allonge was attached to the note or when the endorsement occurred. No 

other record evidence indicated when it occurred or when JPMorgan 

became the note holder. See Peoples v. Sami II Trust 2006–AR6, 178 So. 

3d 67, 69–70 (Fla. 4th DCA 2015).

Although JPMorgan does not meet any of the requirements of a holder—

and does not attempt to prove it did—it argues it proved standing because 

it owned the note and mortgage when it initiated the foreclosure action. It 

argues the 2008 PAA and a 2014 assignment of mortgage proved 

ownership. We disagree.

To prove its standing to foreclose, JPMorgan would have to prove it was 

“[a] person not in possession of the instrument who is entitled to enforce 

the instrument pursuant to s[ection] 673.3091 or s[ection] 673.4181(4).” 

§ 673.3011(3), Fla. Stat. “[N]othing in [section 673.3011] allows an ‘owner’ 

to enforce the note without possession, except where the instrument is lost 

or destroyed.” Snyder v. JP Morgan Chase Bank, Nat’l Ass’n, 169 So. 3d 

1270, 1273 (Fla. 4th DCA 2015). Therefore, JPMorgan would have to 

prove: (1) it was the owner, and (2) reestablishment of the lost note under 

section 673.3091. See id.

Here, there was no proof that JPMorgan had possession of the note at 

the time it filed the complaint. JPMorgan acknowledged that the note was

 

1 A “holder” is defined as “[t]he person in possession of a negotiable instrument 

that is payable either to bearer or to an identified person that is the person in 

possession.” § 671.201(21)(a), Fla. Stat. (2014). 
7

lost and not in its custody or control. Because the original note was never 

filed with the court and there was no other evidence of possession, no 

competent substantial evidence exists of possession. See id. at 1272. And, 

similar to Snyder, there exists no competent substantial evidence of 

ownership. The PAA has caveats where JPMorgan could refuse to acquire 

assets and there is no record evidence that the FDIC transferred the note 

to JPMorgan before the complaint was filed. Id. We reverse the final 

judgment of foreclosure based on JPMorgan’s failure to prove standing.

We reverse and remand for entry of an involuntary dismissal of the 

foreclosure complaint.

FORST, J., and SCHER, ROSEMARIE, Associate Judge, concur.

* * *

Not final until disposition of timely filed motion for rehearing.