Court Opinion

ID: 2822608
Source: CourtListenerOpinion
Date Created: 2015-07-30 21:22:43.776634+00
Date Added: 2024-06-11T13:38:05.286183
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

    MIGUEL TILUS, ALTA TILUS, ROSE A. JOASEUS and KESNER
                          JOASEUS,
                          Appellants,

                                     v.

                             AS MICHAI LLC,
                                Appellee.

                              No. 4D13-3616

                              [ April 8, 2015 ]

                      ON REHEARING SUA SPONTE

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach   County;    Kenneth     Stern,     Judge;    L.T.    Case     No.
502012CA016433XXXXMB.

   Siam J. Joseph, Greenacres, for appellants.

  J. Andrew Baldwin and Gabriel Pinilla of The Solomon Law Group, P.A.,
Tampa, for appellee.

PER CURIAM.

    We sua sponte withdraw our previous opinion and issue the following
in its place.

    The defendants appeal a final judgment of foreclosure entered after the
trial court granted the plaintiff’s motion for summary judgment. We
reverse because a genuine issue of material fact remains as to whether the
plaintiff had standing at the inception of the lawsuit.

   The standard of review of an order granting summary judgment is de
novo. Fla. Atl. Univ. Bd. of Trs. v. Lindsey, 50 So. 3d 1205, 1206 (Fla. 4th
DCA 2010).

   The plaintiff must prove that it had standing to foreclose at the time the
lawsuit was filed. McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d
170, 173 (Fla. 4th DCA 2012). We clarify, however, that under the Uniform
Commercial Code, a plaintiff is not required to be both the owner and
holder of the note in order to have standing to foreclose.1 See Wells Fargo
Bank, N.A. v. Morcom, 125 So. 3d 320, 322 (Fla. 5th DCA 2013) (“Appellees
cite Florida Supreme Court precedent dating back to the late 1800s to
suggest Appellant must both hold and own the note and mortgage to
satisfy the standing requirement for a foreclosure action. The cases
Appellees cite are not persuasive because the supreme court decided the
cases prior to the adoption of the now-instructive and binding Florida
UCC.”).

    Instead, the plaintiff may establish standing by showing that it owns or
holds the note, or is otherwise entitled to enforce the note. See Vidal v.
Liquidation Props., Inc., 104 So. 3d 1274, 1276 (Fla. 4th DCA 2013)
(explaining that “the one who owns or holds the note is entitled to
foreclose”); Mazine v. M & I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA
2011) (“[T]he person having standing to foreclose a note secured by a
mortgage may be . . . a nonholder in possession of the note who has the
rights of a holder.”); § 673.3011, Fla. Stat. (2012) (identifying persons
entitled to enforce an instrument under the UCC, and explaining that “[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”).

   Where the plaintiff files the original note after filing suit, an undated
blank endorsement on the note is insufficient to prove standing at the time
the initial complaint was filed. Bristol v. Wells Fargo Bank, Nat’l Ass’n,
137 So. 3d 1130, 1132 (Fla. 4th DCA 2014). Moreover, an assignment of
mortgage, even if executed before the foreclosure action commenced, is
insufficient to prove standing where the assignment reflects transfer of
only the mortgage, not the note. Id. at 1133. The mortgage follows the
assignment of the promissory note, but an assignment of the mortgage
without an assignment of the debt creates no right in the assignee. Id.

  Here, the plaintiff’s documents failed to demonstrate that the plaintiff
had standing to foreclose at the time it originally filed suit. The undated

1 We acknowledge that there is some imprecise language in previous opinions
stating that a party seeking foreclosure must prove that it owns and holds the
note. See, e.g., Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010) (“The
party seeking foreclosure must present evidence that it owns and holds the note
and mortgage in question in order to proceed with a foreclosure action.”) (citing
Verizzo v. Bank of N.Y., 28 So. 3d 976, 978 (Fla. 2d DCA 2010)). However, this
language was never intended to set forth the exclusive method by which a plaintiff
may establish its standing in a foreclosure action.

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blank endorsement on the original note, which was filed over a month after
the plaintiff initially brought suit, was insufficient to prove that the
plaintiff had standing to enforce the note at the inception of the lawsuit.
Likewise, the “Assignment of Mortgage” from DLJ Mortgage Capital to the
plaintiff reflected a transfer of only the mortgage, not the note. Because
there was no proof that the plaintiff was entitled to enforce the note when
it filed the initial complaint, the Assignment of Mortgage to the plaintiff
was insufficient to establish the plaintiff’s standing at the inception of the
case. Thus, a genuine issue of material fact still exists as to when the
plaintiff took possession of the note.

   We reverse the final judgment of foreclosure and remand for further
proceedings. In light of this disposition, we decline to address the
defendants’ other arguments for reversal.

   Reversed and Remanded.

GROSS, TAYLOR and LEVINE, JJ., concur.

                            *         *         *

   Not final until disposition of timely filed motion for rehearing.

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