Bank of New York Trust Co., N.A. v. Rodgers

• Decision Date: 23 February 2012
• Docket Number: No. 3D10–1852.,3D10–1852.
• Parties: The BANK OF NEW YORK TRUST COMPANY, N.A., as successor to JPMorgan Chase Bank, N.A., as trustee, Appellant, v. George H. RODGERS and Caroline J. Rodgers, Appellees.
• Court: Florida District Court of Appeals

79 So.3d 108

The BANK OF NEW YORK TRUST COMPANY, N.A., as successor to JPMorgan Chase Bank, N.A., as trustee, Appellant,

v.George H. RODGERS and Caroline J. Rodgers, Appellees.

No. 3D10–1852.

District Court of Appeal of Florida, Third District.

Jan. 18, 2012.Rehearing Denied Feb. 23, 2012.

Florida Default Law Group and Erin M. Berger, Tampa; Roberta Kohn, Wesley Chapel, for appellant.

Mortimer H. Kass, Village of Palmetto Bay, for appellee Caroline J. Rodgers.

Before SHEPHERD and EMAS, JJ., and SCHWARTZ, Senior Judge.

SCHWARTZ, Senior Judge.

The plaintiff, designated as the Bank of New York Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., as trustee, the alleged holder of a note and mortgage, seeks review of a final judgment in favor of the defendants mortgagors borrowers in an action to re-establish the note (which was lost, having disappeared in the bowels of the clerk's office after being filed in a prior proceeding) and to foreclose the mortgage. The judgment was entered upon granting a defense motion for involuntary dismissal at the conclusion of the plaintiff's case in a non-jury trial. It specifically stated that it was required “as a result of Plaintiff's failure to establish its status as the owner and holder of the applicable Note and Mortgage with standing to bring suit.” We disagree and reverse:

1. In the first place, the decision is directly contrary to an earlier, previously unopposed and subsequently unchallenged order, which substituted the present appellant as the party-plaintiff and provided that:

The Bank of New York Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., as trustee, is the real party in interest and proper Plaintiff in this action, and;

The Bank of New York Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., as trustee, is hereby substituted for JPMorgan Chase Bank, formerly known as Chase Manhattan, as trustee, residential funding corporation, as attorney in fact, as the proper Plaintiff in this action and the style is amended as reflected on this order.

Compare Mazine v. M & I Bank, 67 So.3d 1129, n. 1 (Fla. 1st DCA 2011), where the court pointed out that “[a]lthough M & I Bank filed a motion to substitute a party by which M & I Marshall and Isley Bank was to be substituted for M & I Bank, the trial court never acted upon this motion.” [e.s.]. Because there was no denial or defense raised in defendants' pleadings concerning this finding, the judgment under review cannot be permitted to stand for that reason alone. See Fla. R. Civ. P. 1.140(h)(1); Mutchnik, Inc. Constr. v. Dimmerman, 23 So.3d 809 (Fla. 3d DCA 2009) (concluding that the trial court erred in basing its judgment on issue not raised in the pleadings); Kissman v. Panizzi, 891 So.2d 1147 (Fla. 4th DCA 2005) (lack of standing is waivable affirmative defense); Krivanek v. Take Back Tampa Political Committee, 625 So.2d 840 (Fla.1993) (same); Sobel v. Jefferson Stores, Inc., 459 So.2d 433, 434 n. 1 (Fla. 3d DCA 1984) (quoting Florida Rule of Civil Procedure Rule 1.110(c)).

2. In addition, the record adequately independently demonstrates the capacity of the appellant to maintain the action (a) as the owner of the note as established by an uncontradicted chain of self-authenticating assignments, see Riggs v. Aurora Loan Servs., LLC, 36 So.3d 932 (Fla. 4th DCA 2010), and if, arguendo, this is not the case (b) as the real party in interest or (c) its agent. See Fla. R. Civ. Pro. 1.210(a); Juega ex rel. Estate of Davidson v. Davidson, 8 So.3d 488 (Fla. 3d DCA 2009); Mortgage Elec. Registration Sys., Inc. v. Revoredo, 955 So.2d 33 (Fla. 3d DCA 2007).

There is also no question that the legal prerequisites of establishing a lost note were fully met below. See Gutierrez v. Bermudez, 540 So.2d 888 (Fla. 5th DCA 1989); Young v. Charnack, 295 So.2d 665 (Fla. 3d DCA 1974).

The judgment under review is therefore reversed for a new trial.

Reversed and remanded.

EMAS, J., concurs.

SHEPHERD, J., dissenting.

This case is illustrative of the consequences of a breakdown of a property transfer system. Because of the breakdown in this case, I would affirm the involuntary dismissal of the Bank of New York's (the Bank) attempted foreclosure action in this case.

The Bank's action is based upon a standard FNMA/FHLMC promissory note and mortgage executed on June 25, 1999, by George H. Rodgers and Caroline J. Rodgers to Metropolitan Mortgage Co., in its capacity as the originating lender on the Rodgers' residential property. The action was initiated on January 5, 2005, by JP Morgan Chase Bank, formerly known as Chase Manhattan, as Trustee, Residential Funding Corporation, as Attorney in Fact (JP Morgan Chase). The sole witness offered by the Bank to prove the Bank's ownership of the promissory note and mortgage, and the default on the loan, was Annassa Blackman, Business Relationship Manager for Litton Loan Services, the servicing agent for the loan since January 30, 2002.¹ Ms. Blackman testified from a file she brought with her to trial, but it is clear she was not the custodian of those records, and Bank counsel did not attempt to prove otherwise. Despite vigorous objection by counsel for the Rodgers, the trial court nevertheless permitted Ms. Blackman to testify as to the contents of the file.

The file contained neither the original note nor the original mortgage. Ms. Blackman admitted in her testimony she “[had] no knowledge of the last [entity] who had it or anything else about the original note.” She thought the note was lost by counsel during the course of a prior foreclosure action filed by JP Morgan Chase in January 2003, but upon being shown a copy of the complaint filed in the 2003 foreclosure action, acknowledged that action, like the present one, also contained a claim for re-establishment of lost note. ^2,3 Thus, it cannot be said, as the majority asserts, that the note “disappeared in the bowels of the clerk's office after being filed in a prior proceeding.”

Nor do the copies of the transfer documentation in the file brought by Ms. Blackman to the trial conclusively resolve the central issue in this case. The Rodgers executed the promissory note and mortgage on June 25, 1999. There can be no question but that Metropolitan Mortgage Co. had the original documents at that time. The copy of the original note, admitted into evidence by the trial court over the Rodgers' objection, reflects it was endorsed on a date unknown by Metropolitan Mortgage Co. to Fairbanks Capital Corporation, and then on May 14, 2001, Fairbanks Capital executed an Assignment of Deed of Trust, purporting to assign both the note and mortgage to JP Morgan Chase. A copy of an allonge, purportedly attached to the promissory note, indicates that on some unknown date the promissory note was endorsed by Fairbanks Capital Corporation to Residential Funding Corporation, and on some later date from Residential Funding to JP Morgan Chase, as Trustee. Absent testimony from a witness with knowledge, it cannot be determined exactly when, between June 25, 1999, and the date of the filing of the foreclosure complaint in this case, the promissory note was lost or by what entity.

Section 673.3091 of the Florida Statutes (2004), titled “Enforcement of lost, destroyed, or stolen instrument,” provides as follows:

(1) A person not in possession of an instrument is entitled to enforce the instrument if:

(a) The person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument...