IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
ABDALLAH BOUMARATE and
v. Case No. 5D14-1379
HSBC BANK USA, N.A., ETC., ET Al.,
Opinion filed August 14, 2015
Appeal from the Circuit Court
for Seminole County,
Robert J. Pleus, Jr., Senior Judge.
Michael M. Brownlee, of Fisher Rushmer, P.A.,
Orlando, and Anthony Legendre ll,
of Legendre & Legendre, PLLC, Maitland,
Michael W. Smith, of Baker, Donelson,
Bearman, Caldwell & Berkowitz, PC,
Orlando, for Appellees.
Abdallah and Jennifer Boumarate appeal a final judgment of foreclosure entered
in favor of HSBC Bank following a bench trial. This is the Boumarates’ second appeal in
this case. They first appealed the trial court’s entrance of summary judgment in favor of
the Bank, and this Court reversed. See Boumarate v. HSBC Bank USA, N.A.
(Boumarate I), 109 So. 3d 1239 (Fla. 5th DCA 2013). We again reverse.
At trial, the Bank introduced copies of the note and mortgage as well as a copy of
the Boumarates’ loan transaction history. The note was made payable to Novelle
Financial Services. The Bank’s only witness was Sandra Tramble, a loan analyst for
Ocwen Financial. Ocwen Financial is the mortgage servicer for the Boumarates’
mortgage. Tramble testified that the account was in default as of February 2008. She
further testified that the Bank possessed the note at the time that it filed the complaint
and that the Bank had the right to enforce the note prior to filing the complaint. She stated
that the Bank physically possessed the note when it was lost; however, she could not
identify the circumstances surrounding the loss.
On cross-examination, Tramble admitted that she did not know who lost the note
or when it was lost. She could not say whether the copy of the note that was lost contained
an endorsement, allonge, or assignment. She did state that the transfer from Novelle to
the Bank would be documented by the “PSA”1 and any mortgage trust securities, which
is “public knowledge.” However, those documents were never introduced into evidence.
She also admitted that, in the documents she had seen during trial, nothing showed a
transfer of the note from Novelle to the Bank.
The trial court ruled that, because the Bank had possession of the note, it was
entitled to enforce it, and therefore, the Bank presented a prima facie case. The court
then entered final judgment in favor of the Bank.
On appeal, the Boumarates argue that the Bank failed to prove its entitlement to
enforce the lost note under section 673.3091, Florida Statutes (2014). Specifically, the
Boumarates contend that the Bank failed to demonstrate: (1) the circumstances
surrounding the loss of the note, and (2) how the Bank was entitled to enforce the note.
The Bank responds that it established its right to enforce the note because Tramble
testified that the Bank possessed the note when the complaint was filed, that it was
entitled to enforce the note when it was lost, that the loss was not the result of a transfer
or lawful seizure, and that the note could not be found.2
A plaintiff seeking to foreclose a mortgage must tender the original promissory note
to the trial court or seek to reestablish the lost note pursuant to section 673.3091, Florida
Statutes. Gee v. U.S. Bank Nat’l Ass’n, 72 So. 3d 211, 213 (Fla. 5th DCA 2011). Section
673.3091 sets out when a person not in possession of a negotiable instrument may
enforce the 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 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
§ 673.3091(1)-(2), Fla. Stat. (2014).
In Boumarate I, this Court held that “the Bank must prove its right to enforce the
note as of the date of the summary judgment hearing, including how it obtained the
Novelle Financial Services note and the circumstances of its loss.” Because this was the
law of the case, the trial court was bound to follow it. See, e.g., Brunner Enter., Inc. v.
Dep’t of Revenue, 452 So. 2d 550, 552-53 (Fla. 1984). Nevertheless, to the extent that
Boumarate I requires more than the statute does, it should be read narrowly.
For example, Boumarate I states that the Bank must prove “the circumstances of
[the Note’s] loss.” The Boumarates interpret this to mean that the Bank must prove exactly
when, how, and by whom the note was lost. But the statute requires no such proof. See
§ 673.3091, Fla. Stat.; see also Deakter v. Menendez, 830 So. 2d 124, 127 (Fla. 3d DCA
2002) (“There is no requirement that [plaintiff] prove exactly how he lost possession of
the note . . . .”). Instead, the plaintiff must prove only that it was entitled to enforce the
instrument when the loss of possession occurred. § 673.3091(1)(a), Fla. Stat. (2014).
Accordingly, proving the “circumstances of [the Note’s] loss” is necessary only if it is
required to prove that the plaintiff was entitled to enforce it when the loss occurred. Cf.
Beaumont v. Bank of New York Mellon, 81 So. 3d 553, 554-55 (Fla. 5th DCA 2012) (“This
required Mellon to show it was entitled to enforce the note when it lost the instrument, or
that it directly or indirectly acquired ownership from a person who was entitled to enforce
the instrument when loss of possession occurred. Mellon failed to prove who lost the note
and when it was lost, offered no proof of anyone’s right to enforce the note when it was
lost, and produced no evidence of ownership, due to the transfer from Novastar to
Mellon.” (citation omitted)).
The statute does require, however, that the plaintiff prove that it was entitled to
enforce the note when it was lost. See § 673.3091(1)(a), Fla. Stat. For a plaintiff to be
entitled to enforce a note, the note must name the plaintiff as the payee or bear a special
or blank indorsement. See, e.g., McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.
3d 170, 173 (Fla. 4th DCA 2012) (citing Servedio v. U.S. Bank Nat’l Ass’n, 46 So. 3d
1105, 1106-07 (Fla. 4th DCA 2010); Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932,
933 (Fla. 4th DCA 2010)). Alternatively, the plaintiff may submit evidence of an
assignment from the payee to the plaintiff or an affidavit of ownership. Id. Boumarate I’s
requirement that the Bank prove “how it obtained the Novelle Financial Services note” is
consistent with the statute.
Here, the trial court found that the Bank proved entitlement to enforce because
“they [i.e., the Bank] have possession of the note, that’s all they need.” The trial court’s
ruling was erroneous. In order to enforce a negotiable instrument, the Bank must prove
more than mere possession—it must prove its entitlement to enforce the instrument at
the time of loss. The Bank, in this case, was unable to do so. The copy of the note
introduced into evidence was payable to Novelle, not to the Bank, and it did not contain
any indorsements. Nor was there any evidence of an assignment; in fact, the Bank’s sole
witness did not know of any assignments or indorsements and could not otherwise explain
how the Bank was entitled to enforce the note. In sum, the Bank failed to reestablish the
lost note because it failed to prove by competent, substantial evidence that it was entitled
to enforce the note at the time of its loss.
EVANDER and COHEN, JJ., and ZAMBRANO, R. A., Associate Judge, concur
1 This was most likely a reference to the “Pooling and Servicing Agreement.”
2 Hours before scheduled oral argument and after full briefing, the Bank conceded
error and stipulated to the trial court’s setting aside of the final judgment of foreclosure
and entry of an order of involuntary dismissal.