Delia v. GMAC | FL 5th DCA - "Because the bank failed to introduce any evidence on the element of adequate protection for its lost note, we reverse."

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Delia v. GMAC | FL 5th DCA – “Because the bank failed to introduce any evidence on the element of adequate protection for its lost note, we reverse.”

Delia v. GMAC | FL 5th DCA – “Because the bank failed to introduce any evidence on the element of adequate protection for its lost note, we reverse.”

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED

DENNIS DELIA,
Appellant,

v. Case No. 5D14-78

GMAC MORTGAGE CORPORATION,
Appellee.
________________________________/
Opinion filed October 17, 2014

Appeal from the Circuit
Court for Orange County,

Lawrence R. Kirkwood, Judge

George M. Gingo and James E. Orth, Jr.,
Titusville, for Appellant.

Allyson L. Smith, Albertelli Law, Tampa,
for Appellee.
PALMER, J.

Dennis Delia (homeowner) appeals the final judgment of foreclosure entered by
the trial court in favor of GMAC Mortgage Corporation (bank). Because the bank failed
to introduce any evidence on the element of adequate protection for its lost note, we
reverse.

The bank filed a complaint against the homeowner seeking foreclosure of a
mortgage on real property. At trial, the bank advised the court and the homeowner that
it was not in possession of the loan documents and that it intended to re-establish the
note and mortgage through testimony at trial. The bank then presented testimony related
to the issue of how the loan documents became lost and to the issue of the authenticity
of its copies of the loan documents.

The homeowner contends that the trial court reversibly erred in concluding that the
bank sustained its burden of proving that it possessed standing to proceed on its lost note
theory because the bank failed to submit any evidence on the issue of adequate
protection. We agree.1

Section 673.3091, Florida Statutes (2013), governs the enforcement of lost notes:
673.3091. Enforcement of lost, destroyed, or stolen
instrument

(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 when loss of possession occurred;
(b) The loss of possession was not the result of a transfer by
the person or a lawful seizure; and
(c) The person cannot reasonably obtain possession of the
instrument because the instrument was destroyed, its
whereabouts cannot be determined, or it is in the wrongful
possession of an unknown person or a person that cannot be
found or is not amenable to service of process.

(2) A person seeking enforcement of an instrument under
subsection (1) must prove the terms of the instrument and the
person’s right to enforce the instrument. If that proof is made,
s. 673.3081 [proof of signatures and status as holder in due
course] applies to the case as if the person seeking
enforcement had produced the instrument. The court may
not enter judgment in favor of the person seeking
enforcement unless it finds that the person required to
pay the instrument is adequately protected against loss
that might occur by reason of a claim by another person
to enforce the instrument. Adequate protection may be
provided by any reasonable means.
(Emphasis added). Section 702.11(1), Florida Statutes (2013), explains the concept of
adequate protection:
702.11. Adequate protections for lost, destroyed, or
stolen notes in mortgage foreclosure
(1) In connection with a mortgage foreclosure, the following
constitute reasonable means of providing adequate protection
under s. 673.3091, if so found by the court:
(a) A written indemnification agreement by a person
reasonably believed sufficiently solvent to honor such an
obligation;
(b) A surety bond;
(c) A letter of credit issued by a financial institution;
(d) A deposit of cash collateral with the clerk of the court; or
(e) Such other security as the court may deem appropriate
under the circumstances.

Any security given shall be on terms and in amounts set by
the court, for a time period through the running of the statute
of limitations for enforcement of the underlying note, and
conditioned to indemnify and hold harmless the maker of the
note against any loss or damage, including principal, interest,
and attorney fees and costs, that might occur by reason of a
claim by another person to enforce the note.

In this case, the bank failed to present any evidence on the issue of adequate
protection. Accordingly, we are constrained to reverse the foreclosure judgment and to
remand this matter for establishment of the lost note and mortgage. See Guerrero v.
Chase Home Fin., LLC, 83 So. 3d 970, 974 (Fla. 3d DCA 2012) (remanding for
establishment of the lost note and mortgage when the bank failed to sustain its burden
presenting evidence proving that the homeowners would be adequately protected against
loss).

REVERSED and REMANDED.

SAWAYA and LAMBERT, JJ., concur.

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