Court Opinion

ID: 4383546
Source: CourtListenerOpinion
Date Created: 2019-04-03 15:03:21.12523+00
Date Added: 2024-06-11T14:50:08.352036
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                STATE OF FLORIDA
                  _____________________________

                          No. 1D17-4421
                  _____________________________

FRANK CERTO and MURIEL
CERTO,

    Appellants,

    v.

THE BANK OF NEW YORK
MELLON, f/k/a The Bank of New
York, Successor in Interest to
JPMorgan Chase Bank, N.A., as
Trustee for Structured Asset
Mortgage Investments II, Inc.,
Bear Stearns ALT-A Trust,
Mortgage Pass-Through
Certificates, Series 2005-7,

    Appellee.
                  _____________________________

On appeal from the Circuit Court for Clay County.
Don H. Lester, Judge.

                          April 3, 2019

PER CURIAM.

    Appellants challenge a final foreclosure judgment entered
against them. Because we find Bank of New York Mellon failed to
prove its standing, we must reverse.
                               Facts

     American Landmark Mortgage lent Appellants monies
secured by a Mortgage in favor of American Landmark as lender
and MERS as nominee. American Landmark specially indorsed
the Note to CTX. CTX specially indorsed the Note to JP Morgan
Chase as trustee. Bank of New York Mellon brought suit to
foreclose on the Mortgage, and included a count to reestablish a
lost note.

     Appellants challenged Mellon’s standing. Mellon claimed
standing through a 2011 assignment of mortgage from American
Landmark to Mellon. It also pointed to the case style: Bank of
New York was successor in interest to JP Morgan (which had a
special indorsement), and Mellon was the new Bank of New York.
At trial, Mellon entered a copy of the Note, three assignments of
mortgage, two change in servicer letters, a power of attorney, a
Pooling & Servicing Agreement, and payment history.

                               Law

     In a foreclosure action, once a defendant challenges
standing, the prosecuting bank must adduce evidence that it has
standing to bring suit. Ham v. Nationstar Mortg., LLC, 164 So.
3d 714, 719 n.1 (Fla. 1st DCA 2015). A bank also has the burden
of proving a lost note claim. See Poag v. Nationstar Mortg., LLC,
198 So. 3d 1002, 1004-05 (Fla. 1st DCA 2016) (explaining that a
lost note count requires the plaintiff to prove it was entitled to
enforce the instrument; i.e., had/has standing); see also
§ 673.3091(1)(a), (2), Fla. Stat.; Peters v. Bank of N.Y. Mellon, 227
So. 3d 175, 177-80 (Fla. 2d DCA 2017) (reversing where trial
court granted reestablishment of lost note and appellate court
found plaintiff bank could not evidence effective transfer of note
and therefore lacked standing).

     If a note is specially indorsed to an entity other than the
plaintiff, the plaintiff can show its standing through evidence
that it purchased the debt or obtained it via effective transfer or
valid assignment. Bank of N.Y. Mellon Trust Co., N.A. v. Conley,
188 So. 3d 884, 885 (Fla. 4th DCA 2016); Stone v. BankUnited,
115 So. 3d 411, 413 (Fla. 2d DCA 2013). This evidence need not
be documentary; witness testimony is sufficient. See Ham v.
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Nationstar Mortg., LLC, 164 So. 3d 714, 719 (Fla. 1st DCA 2015).
That testimony, however, must evidence the transfer or sale of
the particular mortgage or show the relationship between the
specially indorsed entity and the suing plaintiff. Green v. Green
Tree Servicing, LLC, 230 So. 3d 989, 991 (Fla. 5th DCA 2017)
(quoting Vogel v. Wells Fargo Bank, N.A., 192 So. 3d 714, 716
(Fla. 4th DCA 2016)). For example, a bank employee’s testimony
about the purchase assumption agreement by which the new
entity acquired all the assets of the old bank was competent,
substantial evidence of standing. Stone v. BankUnited, 115 So. 3d
411, 413 (Fla. 2d DCA 2013).

     On the other hand, it is insufficient for the plaintiff to rely on
its acquisition of the other entity. See Fielding v. PNC Bank Nat’l
Ass’n, 239 So. 3d 140, 142-43 (Fla. 5th DCA 2018); Kyser v. Bank
of Am., N.A., 186 So. 3d 58, 61 (Fla. 1st DCA 2016) (despite
testimony of merger, witness gave no testimony as to what assets
exactly were acquired); Fiorito v. JP Morgan Chase Bank, Nat’l
Ass’n, 174 So. 3d 519, 520-21 (Fla. 4th DCA 2015) (testimony one
entity “took over” another is not sufficient); Lamb v. Nationstar
Mortg., LLC, 174 So. 3d 1039, 1041 (Fla. 4th DCA 2015) (listing
cases). Similarly, listing party status as “successor by merger” or
claiming a title is not sufficient; a plaintiff must support its claim
by evidence. See Buckingham v. Bank of Am., N.A., 230 So. 3d
923, 924-25 (Fla. 2d DCA 2017) (holding words “successor by
merger” were insufficient to “establish the merger, let alone that
the [plaintiff] acquired all of [the successor’s] assets”);
DiGiovanni v. Deutsche Bank Nat’l Trust Co., 226 So. 3d 984,
988-89 (Fla. 2d DCA 2017) (finding no standing where Deutsche
presented no evidence “Bankers Trust had been renamed
Deutsche Bank”); Murray v. HSBC Bank USA, 157 So. 3d 355,
358-59 (Fla. 4th DCA 2015) (explaining “Option One California”
was not “Option One Mortgage Corporation”); Verizzo v. Bank of
N.Y., 28 So. 3d 976, 977, 978 (Fla. 2d DCA 2010) (explaining
plaintiff listing itself as “successor trustee” was insufficient).

                            Application

    We find Conley instructive. There, Mellon argued it had
standing, claiming it was the former Bank of NY, which was
successor in interest to JP Morgan, which had a special

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indorsement on the note. 188 So. 3d at 885. Mellon even
introduced a purchase agreement where JP Morgan Co. sold
assets to Bank of NY. Id. The court rejected Mellon’s standing
claim. Id. First, JP Morgan Bank was listed on the special
indorsement, but JP Morgan Co. was on the asset purchase
agreement. Id. at 885-86. Second, even putting that aside, Mellon
was still out of the loop; at best, JP Morgan sold its interest to
Bank of NY, but there was no evidence connecting Mellon. Id. at
886.

     The trouble here, similar to the trouble in Conley, is Mellon’s
link to Bank of NY and Bank of NY’s link to JP Morgan. Because
the final special indorsement is to JP Morgan, Mellon needed to
evidence how it obtained the Note or interest. It claims to have it
because Bank of NY is a successor to JP Morgan and Mellon is
the new Bank of NY. However, the record does not establish
either of those necessary links.

    Mellon relies on the Note, three assignments of mortgage,
two change in servicer letters, a power of attorney, a Pooling &
Servicing Agreement, and payment history. None of these proves
standing. To begin, the Note indorsement to JP Morgan is
insufficient because it does not close the gap between JP Morgan
and Mellon. Nothing shows how or to what extent Bank of NY
acquired assets of JP Morgan; i.e., that Bank of NY was a
successor in interest of any or all of JP Morgan’s assets. See
Buckingham, 230 So. 3d at 924-25 (holding words “successor by
merger” were insufficient to “establish the merger, let alone that
the [plaintiff] acquired all of [the successor’s] assets”); Conley,
188 So. 3d at 885-86 (explaining BONY Mellon had submitted a
purchase and assumption agreement attempting to evidence sale
of JP Morgan assets). Similarly, even if that was evidenced,
nothing shows Mellon is formerly Bank of NY. See DiGiovanni,
226 So. 3d at 988-89 (finding no standing where Deutsche
presented no evidence “Bankers Trust had been renamed
Deutsche Bank”); Murray, 157 So. 3d at 358-59 (Fla. 4th DCA
2015) (explaining Option One California was not Option One
Mortgage Corporation). The record does not contain a merger or

                                 4
purchase agreement. There is no witness testimony about a
merger or purchase. *

      Next, the remaining documents do not evidence Mellon’s
purchase, transfer, or assignment. First, the corporate
assignments of mortgage are insufficient. The 2007 assignment is
to Bank of New York. The 2011 assignment is from the original
lender—which had indorsed the Note to CTX. It is unclear how
the original lender could specially indorse the Note to CTX yet
still have an interest to convey to Mellon. Second, the change in
servicer letters reflect only that a new servicing company was
servicing the Note. The letters say nothing about the underlying
debt and Note being sold to a new bank. In addition, the change
in servicer letters are dated May 2016; they cannot show who
owned the Note when the action was filed in January 2015.
Third, the limited power of attorney merely grants a servicer the
ability to act; it does not evidence a debt or transfer of a debt.
Again, it is dated March 2017 and similarly cannot show who
owned the Note at the 2015 filing. Fourth, the payment history
does not specifically list Mellon. Finally, the PSA is between
Structured Asset Mortgage Investments, JP Morgan, Wells
Fargo, and EMC. Mellon is not a party. An agreement to which
Mellon is not a party does not evidence a transfer of the Note to
Mellon. Thus, the documents Mellon introduced below and that it
cites on appeal do not evidence its purchase of the debt or an
effective transfer or valid assignment to it.

                          Conclusion

     Mellon needed to show the pieces in this Note puzzle ended
with it. It is missing evidence of two pieces: that Bank of NY was
successor in interest to JP Morgan, and that Mellon is formerly
Bank of NY. Accordingly, Mellon did not evidence its standing to
foreclose. We must reverse the final judgment of foreclosure. See
Nationstar Mortg., LLC v. Brown, 175 So. 3d 833, 834-35 (Fla. 1st
DCA 2015) (noting that dismissal of foreclosure action does not

    * There is no trial transcript in the record, but Mellon does
not suggest there was testimony that evidenced its standing; i.e.,
Bank of NY’s apparent purchase of JP Morgan’s interest and
Bank of NY’s apparent renaming to Mellon.

                                5
preclude subsequent action based on later or ongoing defaults).
Because of this disposition, Appellants’ second issue is moot and
we decline to comment on it.

    REVERSED.

ROBERTS, RAY, and KELSEY, JJ., concur.

                 _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

Frank Certo and Muriel Certo, pro se, Appellants.

Michael T. Gelety and Shawn L. Taylor, Deluca Law Group,
PLLC, Fort Lauderdale, for Appellee.

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