Rigby v. Bank of N.Y. Mellon

• Decision Date: 18 September 2017
• Docket Number: CASE NO. 1D16–665
• Parties: Richard M. RIGBY, Appellant, v. BANK OF NEW YORK MELLON, f/k/a The Bank of New York, as Trustee FOR the CERTIFICATEHOLDERS OF CWMBS, INC., Alternative Loan Trust 2006–8T1, Mortgage Pass–Through Certificates, Series 2006–7, Appellee.
• Court: Florida District Court of Appeals

228 So.3d 183 (Mem)

Richard M. RIGBY, Appellant,

v.BANK OF NEW YORK MELLON, f/k/a The Bank of New York, as Trustee FOR the CERTIFICATEHOLDERS OF CWMBS, INC., Alternative Loan Trust 2006–8T1, Mortgage Pass–Through Certificates, Series 2006–7, Appellee.

CASE NO. 1D16–665

District Court of Appeal of Florida, First District.

Opinion filed September 18, 2017.

Rehearing Denied October 23, 2017

Douglas L. Smith of Burke, Blue, Hutchison, Walters & Smith, P.A., Panama City; Michael R. Reiter, Lynn Haven, for Appellant.

Mark P. Stopa of Stopa Law Firm, Tampa, for Amicus Curiae Mark P. Stopa, Esq. and Stopa Law Firm, in support of Appellant.

Mary J. Walter and Tricia J. Duthiers of Liebler Gonzalez & Portuondo, Miami, for Appellee.

Marissa M. Yaker, Robert K. Bowen and Timothy D. Padgett of Padgett Law Group, Tallahassee; Robert R. Edwards and Ari Miller of Choice Legal Group, P.A., Ft. Lauderdale; David Rosenberg of Robertson, Anschutz & Schneid, PL, Boca Raton; Andrea R. Tromberg and Jason Joseph of Gladstone Law Group, P.A., Boca Raton; Michelle Garcia Gilbert and Jennifer Lima–Smith of Gilbert Garcia Group, P.A., Tampa, for Amicus Curiae American Legal and Financial Network, in support of Appellee.

Carrie Ann Wozniak, Joseph E. Foster and Sara A. Brubaker of Akerman LLP, Orlando; Richard H. Martin of Akerman LLP, Tampa, for Amicus Curiae The Florida Bankers Association, in support of Appellee.

Kenneth B. Bell and John W. Little, III of Gunster, West Palm Beach; Robert W. Goldman of Goldman Felcoski & Stone, P.A., Naples, for Amicus Curiae The Real Property Probate and Trust Law Section of The Florida Bar.

PER CURIAM.

AFFIRMED. Ashby v. Wells Fargo Bank, N.A., 221 So.3d 1217 (Fla. 1st DCA 2017).

B.L. THOMAS, C.J., and OSTERHAUS, J., CONCUR; BILBREY, J., DISSENTS WITH OPINION.

BILBREY, J., Dissenting.

Richard Rigby challenges the final judgment of foreclosure in favor of Bank of New York Mellon, f/k/a the Bank of New York, as Trustee for the Certificate Holders CWMBS, Inc., Alternative Loan Trust 2006–8T1 Mortgage Pass–Through Certificates Series 2006–7 (BONY), on grounds that certain evidence at trial was improperly admitted and that the evidence was insufficient to prove that BONY had standing to enforce the note on the date the original foreclosure complaint was filed. Having reviewed the documents and testimony presented at trial and in the record, I believe that evidence was improperly admitted, and without that improperly admitted evidence, there was insufficient proof of BONY's standing. Therefore, I would reverse the final judgment and remand for a new trial. Since the majority affirms the decision of the trial court, I respectfully dissent.

BONY filed the original complaint for foreclosure on May 14, 2010, alleging that Mr. Rigby's mortgage was in default due to his failure to pay the amount due September 1, 2009, and amounts due thereafter. Paragraph 8 of the complaint alleged that BONY "owns and holds the note and mortgage." Attached to the complaint was a copy of a promissory note obligating Mr. Rigby to repay a loan from lender BankTrust and a copy of the mortgage securing the note. The signature page of the copy of the note included an undated special indorsement from an officer of BankTrust to "the order of Countrywide Bank, N.A." See § 673.2051(1), Fla. Stat. (stating that a special indorsement may only be negotiated by the person identified). In his answer and affirmative defenses, Mr. Rigby denied the allegations in paragraph 8 of the complaint pertaining to BONY's ownership and possession of the note and mortgage.

With leave of court, BONY filed an amended complaint with the same allegations in paragraph 8 to assert BONY's standing to enforce the note. However, the note attached to the amended complaint included two indorsements in addition to the special indorsement to Countrywide Bank, N.A., which appeared on the earlier filed copy. The next indorsement on the note attached to the amended complaint was from Countrywide Bank, N.A., to Countrywide Home Loans, Inc. The last of the additional indorsements was a blank indorsement from Countrywide Home Loans, Inc., making the note payable to bearer and negotiable by transfer of possession alone. See § 673.2051(2), Fla. Stat. ("When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed."). No dates appeared on any of the three indorsements.

Consistent with his original answer, in his answer to the amended complaint, Mr. Rigby again denied BONY's allegations that it owned and held the note and mortgage. Accordingly, BONY's status as a holder or other person entitled to enforce the note, pursuant to section 673.3011, Florida Statutes, continued to be a contested matter which BONY was required to prove. See Lacombe v. Deutsche Bank Nat'l Trust Co., 149 So.3d 152, 154 (Fla. 1st DCA 2014) (citing Gee v. U.S. Bank Nat'l Ass'n, 72 So.3d 211, 214 (Fla. 5th DCA 2011) ) ("Accordingly, throughout the litigation Appellants disputed the fact of Deutsche Bank's right to enforce the note and attendant standing to maintain an action for foreclosure. Deutsche Bank's ownership of the note was thus an issue it was required to prove.").

It is well-settled that where "the plaintiff files the original note after filing suit, an undated blank endorsement [sic] on the note is insufficient to prove standing at the time the initial complaint was filed." Tilus v. AS Michai LLC, 161 So.3d 1284, 1286 (Fla. 4th DCA 2015) ; see also Kelly v. Bank of New York Mellon, 170 So.3d 145, 146 (Fla. 1st DCA 2015) (quoting Tilus, 161 So.3d at 1286 ). Because the blank indorsement on the note in this case was undated, and BONY's status as the holder when the action was filed was a contested issue, BONY offered additional evidence at trial in an attempt to prove standing. See Walton v. Deutsche Bank Nat'l Trust Co., 201 So.3d 831, 833 (Fla. 1st DCA 2016) ("Where the documentary evidence is insufficient to prove standing at the time of the filing of the complaint, a witness may provide sufficient testimony to prove standing.").

BONY presented the testimony of Melissa Sequete, Assistant Vice President of Residential Credit Solutions, Inc. (RCS), the most recent loan servicer connected with the mortgage. Through Ms. Sequete's testimony, BONY presented a series of documents it advanced as proof that the note was indorsed in blank and in the possession of BONY as of the date the original complaint was filed. The trial court allowed the testimony and admitted the documents over Mr. Rigby's attorney's repeated hearsay objections. However, because Ms. Sequete began her employment with RCS in 2011, she had no personal knowledge of the location of the note on May 14, 2010; no explanation for the difference in the indorsements appearing on the copy of the note filed in 2010 and the original filed with the amended complaint in 2011; and no personal knowledge to offer evidence that the blank indorsement on the original note was in place as of May 14, 2010.

BONY attempted to prove standing by admitting certain business records through Ms. Sequete's testimony. A sufficient evidentiary foundation must be provided to admit business records over a hearsay objection. § 90.803(6)(a), Fla. Stat. As the Florida Supreme Court has stated:

To secure admissibility under this exception, the proponent must show that (1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.

Yisrael v. State, 993 So.2d 952, 956 (Fla. 2008).

"Proper authentication by a witness requires that the witness demonstrate familiarity with the record-keeping system of business that prepared the document and...