Lewis v. US Bank Nat'l Ass'n, No. 4D19-942
| Decision Date | 17 June 2020 |
| Docket Number | No. 4D19-942 |
| Citation | 298 So.3d 72 |
| Parties | Daniel LEWIS and Rosanna Lewis, Appellants, v. US BANK NATIONAL ASSOCIATION, et al., Appellee. |
| Court | Florida District Court of Appeals |
W. Trent Steele of Steele Law, Hobe Sound, for appellants.
Steven J. Brotman and Douglas R. Sargent of Locke Lord LLP, West Palm Beach, for appellee.
The bank's failure to prove its case requires us to reverse this foreclosure judgment. The borrowers argue the bank failed to reestablish the lost note and failed to prove standing. We agree and reverse.
The bank sued the borrowers to foreclose the mortgage and reestablish the lost note. A copy of the lost note attached to the complaint showed the borrowers signed the note to the original lender, Bank of America. The copy was neither endorsed in blank, nor made payable to the bank.
The complaint alleged the bank was either in possession of the note when lost or had been assigned the right to enforce the lost note by an entity in possession at the time of its loss. The complaint included two mortgage assignments. The first was from Bank of America to Nationstar, dated June 29, 2013. The second assignment was from Nationstar to the bank, dated June 2, 2016. The second assignment did not assign the note, but rather "all interest secured thereby."
The bank attached an erroneous lost note affidavit signed by the vice-president of Rushmore Loan Management Services. The lost note affidavit attested that a different entity, Wilmington Savings Fund Society, was the present owner entitled to enforce the note. It also included a chart outlining the note's transfer that did not match the entities involved in the transfer of the note in this case. They were:
The borrowers moved to dismiss the complaint. The bank filed an amended complaint, which included a corrective assignment of the mortgage and three new lost note affidavits. The corrective assignment expressly assigned the note and mortgage from Nationstar to the bank, dated April 28, 2018. The three lost note affidavits included: two affidavits by Bank of America, and a new lost note affidavit by Rushmore that corrected the note's chain of title from the prior affidavit ("second lost note affidavit").
The second lost note affidavit attested:
The second lost note affidavit and the two Bank of America affidavits provided neither the dates of the note's transfers, nor established that Bank of America was entitled to enforce the note when lost.
The borrowers moved to dismiss the bank's amended complaint. The trial court denied the motion. The borrowers answered and asserted the bank's lack of standing as an affirmative defense.
The case proceeded to a bench trial. The bank called two witnesses: 1) an employee of Bank of America and Nationstar; and 2) a Rushmore employee. Through their testimony, the bank admitted:
At the end of the bank's case, the borrowers moved for a judgment of dismissal. They argued the bank failed to prove who lost the note, when it was lost, and who had the right to enforce the note when it was lost. The borrowers argued the bank's corrective assignment of the note and mortgage could not establish standing because it was dated after the complaint was filed. The trial court denied the motion and entered the foreclosure judgment. The borrowers moved for rehearing; the court denied the motion. The borrowers now appeal.
We have de novo review of the standing issue. Boyd v. Wells Fargo Bank, N.A. , 143 So. 3d 1128, 1129 (Fla. 4th DCA 2014).
The borrowers argue the bank did not have standing to foreclose the mortgage because it did not reestablish the lost note, pursuant to section 673.3091, Florida Statutes ; and it cannot rely on its corrective assignment of mortgage to establish standing. The bank responds it reestablished the lost note and its corrective mortgage assignment established standing.
A plaintiff "must prove that it had standing to foreclose when it filed the complaint." Cartwright v. LJL Mortg. Pool, LLC , 185 So. 3d 614, 615 (Fla. 4th DCA 2016). "A party may establish standing by showing that it was entitled to enforce the note at the time it filed suit." JPMorgan Chase Bank Nat'l Ass'n v. Pierre , 215 So. 3d 633, 636 (Fla. 4th DCA 2017) (quoting U.S. Bank Nat'l Ass'n v. Becker , 211 So. 3d 142, 144 (Fla. 4th DCA 2017) ).
"A person entitled to enforce an instrument is: (1) [t]he holder 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[ections] 673.3091 or [ ] 673.4181(4), [Florida Statutes ]." Id. (quoting Becker , 211 So. 3d at 144 ) (first and second alterations in original). Standing may also be established "by either an assignment or an equitable transfer of the [note and] mortgage prior to the filing of the complaint." McLean v. JP Morgan Chase Bank Nat'l Ass'n , 79 So. 3d 170, 173 (Fla. 4th DCA 2012).
The borrowers argue the bank failed to reestablish possession of the lost note under section 673.3091, Florida Statutes, because it did not prove that it directly or indirectly acquired the note from an entity with the right to enforce the note when it was lost. They suggest the bank's evidence was incomplete, conflicting, and failed to establish the note's chain of title.
The bank responds it reestablished the lost note because it was not required to explain how the note was lost. Even so, the assignments of the note and trial testimony established the note's chain of title. We disagree.
"A trial court's determination of whether a party has reestablished a lost note is reviewed for sufficiency of the evidence." Home Outlet, LLC v. U.S. Bank Nat'l Ass'n , 194 So. 3d 1075, 1077 (Fla. 5th DCA 2016). "An appellate court may reverse on finding a failure of proof." Id.
Where a promissory note is lost, destroyed, or stolen, section 673.3091, provides:
"A party seeking to reestablish a lost note may meet the statutory requirements ‘either through a lost note affidavit or by testimony from a person with knowledge.’ " Sabido v. Bank of N.Y. Mellon , 241 So. 3d 865, 866 (Fla. 4th DCA 2017) (quoting Home Outlet, LLC , 194 So. 3d at 1078 ).
The lost note affidavit or testimony need not "establish ‘exactly when, how, and by whom the note was lost.’ " Sabido , 241 So. 3d at 867 (quoting Boumarate v. HSBC Bank USA, N.A. , 172 So. 3d 535, 537 (Fla....
To continue reading
Request your trial
-
The Bank of N.Y. Mellon v. Kardok
...reestablished a lost note is reviewed for sufficiency of the evidence" and "[a]n appellate court may reverse on finding a failure of proof." Id. (quoting Home Outlet, LLC v. U.S. Bank Nat'l Ass'n, 194 So.3d 1075, 1077 (Fla. 5th DCA 2016)). "A plaintiff seeking to foreclose a mortgage must t......
-
Chapter 4-7 Standing as a Non-Holder in Possession
...all interest in the mortgage—together with the note—to the foreclosing plaintiff).[72] Lewis v. U.S. Bank National Association, 298 So. 3d 72, 77 (Fla. 4th DCA 2020); citing: Monnot v. U.S. Bank, Nat'l Ass'n, 188 So. 3d 896, 901 (Fla. 4th DCA 2016) (quoting LaFrance v. U.S. Bank Nat'l Ass'n......