Court Opinion

ID: 4390255
Source: CourtListenerOpinion
Date Created: 2019-04-24 15:03:37.558912+00
Date Added: 2024-06-11T14:51:41.580531
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

               THE BANK OF NEW YORK MELLON
  f/k/a THE BANK OF NEW YORK, AS TRUSTEE FOR CWABS, INC.
        ASSET-BACKED CERTIFICATES, SERIES 2003-BC4,
                         Appellant,

                                     v.

 FLORIDA KALANIT 770 LLC, DOUGLAS JACKSON, FAIRWAY ISLES
  AT OLIVE TREE HOMEOWNERS ASSOCIATION INC., MICHELLE
 JACKSON, OLIVE TREE PROPERTY OWNERS ASSOCIATION, INC.,
 THE ENCLAVE AT FAIRWAY ISLES HOMEOWNERS ASSOCIATION,
               INC., and TIRZA VENTURES LLC,
                           Appellees.

                              No. 4D18-3295

                             [April 24, 2019]

   Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Howard H. Harrison, Senior Judge, Judge; L.T. Case No.
50-2017-CA-004383-XXXX-MB.

   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 appellant.

  Michael S. Spoliansky of Spoliansky Law P.A., North Miami Beach, for
appellee Florida Kalanit 770 LLC.

LEVINE, J.

   The trial court involuntarily dismissed the foreclosure action filed by
The Bank of New York Mellon (“the bank”) against Florida Kalanit 770 LLC,
finding that the bank lacked standing because the allonge predated the
note. We find the fact that the allonge predated the note by one day did
not render the allonge invalid. Therefore, we reverse.

    The bank filed a foreclosure complaint against Florida Kalanit, alleging
it was the holder of the note. A copy of the note attached to the complaint
contained an allonge with an endorsement from the original lender to the
bank. The allonge was dated one day before the note was executed. Both
the note and the allonge contained the borrower’s name, the property
address, the note date, and the loan amount. Florida Kalanit filed an
answer and affirmative defenses alleging that the bank was not the proper
party to bring the action and that the endorsement was executed by “robo-
signors.”

    During trial, the bank introduced testimony from an employee of the
servicer. The bank also introduced into evidence the original note,
mortgage, limited power of attorney, payment history, and judgment
figures. Toward the end of cross-examination, the trial court interjected
and questioned how the note was assigned the day before it was signed.
Florida Kalanit responded that it could not be. Florida Kalanit then asked
the witness, “Could you explain to the Court . . . how that allonge could
be attached to the note that doesn’t exist before the note was signed?” The
witness responded, “I don’t know.”

    Florida Kalanit then moved for an involuntary dismissal, arguing that
the allonge “legally could never exist because it was dated, as the Court
noted, before the note came into existence.” The trial court granted the
motion for involuntary dismissal “[b]ased upon standing” because the
“[a]llonge attached to the note was dated before the note came into
existence.” After denying rehearing, the trial court entered a final order of
dismissal.

   An order granting a motion for involuntary dismissal is reviewed de
novo. Rouffe v. CitiMortgage, Inc., 241 So. 3d 870, 872 (Fla. 4th DCA
2018). In the instant case, the trial court granted the involuntary
dismissal based on lack of standing. Whether a party has standing to
bring an action is reviewed de novo. Vogel v. Wells Fargo Bank, N.A., 192
So. 3d 714, 716 (Fla. 4th DCA 2016). “When a mortgage foreclosure case
proceeds to a bench trial, the plaintiff bank need only present competent,
substantial evidence that it has standing to foreclose.” Id. (citation
omitted). A party must prove it has “standing to bring a mortgage
foreclosure complaint by establishing an assignment or equitable transfer
of the note and mortgage prior to instituting the complaint.” Joseph v.
BAC Home Loans Servicing, LP, 155 So. 3d 444, 446 (Fla. 4th DCA 2015).

    The trial court erred in dismissing the case for several reasons.
Initially, Florida Kalanit’s answer did not challenge the validity of the
allonge on the grounds that it predated the note. Even during trial, Florida
Kalanit did not raise any issue with respect to the date of the allonge until
the trial court introduced the issue. By not raising this issue in its
pleadings, Florida Kalanit waived this defense to the foreclosure action.
See Fla. R. Civ. P. 1.140(b) (“Every defense in law or fact to a claim for

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relief in a pleading must be asserted in the responsive pleading . . . . Any
ground not stated must be deemed to be waived . . . .”).

    Even assuming this issue was not waived, the fact that the note was
executed one day after the allonge did not invalidate the allonge. “An
allonge is a piece of paper annexed to a negotiable instrument or
promissory note, on which to write endorsements for which there is no
room on the instrument itself.” Purificato v. Nationstar Mortg., LLC, 182
So. 3d 821, 823 (Fla. 4th DCA 2016) (citation omitted). Nothing in this
definition explicitly states or even suggests that an allonge may not be
executed before the note as long as it is subsequently affixed to the note.
Additionally, nothing in Florida’s UCC suggests that an allonge may be
signed only after executing the note. Significantly, the UCC expressly
states that “[a]n instrument may be antedated or postdated.” § 673.1131,
Fla. Stat. (2018).

    Further, Florida law recognizes that an entity may contract to sell
property that it does not own at the time of contracting. “Under the
doctrine of after-acquired title if a grantor purports to transfer ownership
of real property to which he lacks legal title at the time of the transfer, but
subsequently acquires legal title to the property, the after-acquired title
inures, by operation of law, to the benefit of the grantee.” BMCL Holding
LLC v. Wilmington Tr., N.A., 201 So. 3d 109, 111 (Fla. 3d DCA 2015)
(citation and quotation marks omitted). “The doctrine of after-acquired
title applies to mortgages.” Id. at 112.

   Cases from other jurisdictions have also concluded that an allonge may
predate the execution of a note. See Sgroe v. Wells Fargo Bank, N.A., 941
F. Supp. 2d 731, 740 (E.D. Tex. 2013) (finding that note executed three
days after the date on the allonge did not invalid the allonge); IndyMac
Bank v. Miguel, 184 P.3d 821, 828 (Haw. Ct. App. 2008) (finding
assignment of mortgage valid even though it predated the execution of the
mortgage by one day); HSBC Bank USA, Nat’l Ass’n v. Lia, A-2032-13T3,
2015 WL 9694367, *7 (N.J. Super. Ct. App. Div. Jan. 8, 2016) (finding
bank satisfied its obligation to establish its right to foreclose where
defendants “did not challenge the validity of the recorded assignment that
predated the filing of the complaint”).

   Because the trial court erred in concluding that the bank lacked
standing to foreclose, we reverse and remand for further determination
consistent with this opinion.

   Reversed and remanded.

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TAYLOR and CIKLIN, JJ., concur.

                           *      *        *

   Not final until disposition of timely filed motion for rehearing.

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