H/T CORONA LAW FIRM
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
JORGE SOSA and JEANETTE SOSA,
Appellants,
v.
THE BANK OF NEW YORK MELLON, f/k/a THE BANK OF NEW YORK
AS SUCCESSOR IN INTEREST TO JP MORGAN CHASE BANK, N.A.,
AS TRUSTEE FOR STRUCTURED ASSET MORTGAGE INVESTMENTS
II, INC., BEAR STEARNS ALT-A TRUST 2005-2, MORTGAGE PASS-
THROUGH CERTIFICATES, SERIES 2005-2,
Appellee.
No. 4D14-810
[March 23, 2016]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; John J. Murphy, III, Judge; L.T. Case No. 09-321 (11).
Krista Bordatto and Ricardo Corona of Corona Law Firm, P.A, Miami,
for appellants.
Donna L. Eng, Michael K. Winston and Dean A. Morande of Carlton
Fields Jorden Burt, P.A., West Palm Beach, for appellee.
DAMOORGIAN, J.
This is an appeal from a residential foreclosure which ended in
judgment in favor of Bank of New York Mellon (“the Bank”). On appeal,
Jorge and Jeanette Sosa (“Homeowners”) argue, inter alia, that the Bank
failed to prove it had standing to bring the action. We agree and reverse.
The following facts are pertinent to the standing issue. The Bank filed
a mortgage foreclosure complaint against Homeowners alleging one count
of foreclosure and one count for reestablishment of a lost note. Although
it was not the original lender, the Bank alleged that it was the owner and
holder of the Note and Mortgage and, in support, attached a copy of the
Note containing a blank indorsement.
The matter proceeded to a bench trial. At the onset, the Bank
announced it had located the original Note and intended to submit it as
evidence. The Bank then called a loan verification analyst for its purported
servicer, Wells Fargo Bank, N.A., as its only witness. Through the analyst,
the Bank introduced the original Note which, unlike the copy of the Note
attached to its complaint, was specially indorsed to JP Morgan Bank as
Trustee (“JP Morgan”). When asked about her knowledge of how the Bank
acquired the Note from JP Morgan, the witness testified that she learned
about the transfer through general research she did “on the internet” and
that “the internet will illustrate the transfer occurred in 2006.” The Bank
did not present any additional evidence establishing that it acquired the
Note prior to filing the foreclosure action.
At the conclusion of the witness’ testimony, the Bank rested. At that
point, Homeowners moved for an involuntary dismissal, arguing that the
Bank failed to establish it had standing. Homeowners pointed out that
the Note was indorsed to JP Morgan and there was no evidence
establishing a relationship between JP Morgan and the Bank. The Bank
countered that it identified itself as the successor in interest to JP Morgan
in the style of the complaint. The court denied Homeowners’ motion and
ultimately entered judgment in favor of the Bank. This appeal follows.
It is axiomatic that in a foreclosure case, “the plaintiff must prove that
it had standing to foreclose when the complaint was filed.” McLean v. JP
Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012).
“A plaintiff who is not the original lender may establish standing to
foreclose a mortgage loan by submitting a note with a blank or special
[i]ndorsement, an assignment of the note, or an affidavit otherwise proving
the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo Bank,
N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). A plaintiff can also establish
standing by submitting evidence that an equitable transfer of the mortgage
and note occurred before the filing of a foreclosure complaint. See McLean,
79 So. 3d at 173.
In the case of a note bearing a special indorsement, under section
673.2051(1), Florida Statutes (2014), the “instrument becomes payable to
the identified person and may be negotiated only by the indorsement of
that person.” See also Dixon v. Express Equity Lending Grp., LLP, 125 So.
3d 965, 967–68 (Fla. 4th DCA 2013) (holding the bank which filed the
foreclosure complaint did not have standing to foreclose when the original
note contained a special indorsement in favor of another party). “Where a
bank is seeking to enforce a note which is specially indorsed to another,
the bank is a nonholder in possession.” Bank of New York Mellon Trust
Co., N.A. v. Conley, 41 Fla. L. Weekly D127, D127 (Fla. 4th DCA Jan. 6,
2016). “A nonholder in possession may prove its right to enforce the note
through: (1) evidence of an effective transfer; (2) proof of purchase of the
debt; or (3) evidence of a valid assignment.” Id. “A nonholder in possession
must account for its possession of the instrument by proving the
transaction (or series of transactions) through which it acquired the note.”
Id.
Here, the Bank claims that it presented through its witness’s testimony
substantial, competent evidence that the Bank was the successor trustee
to JP Morgan and, thus, had standing to sue under the Note. The Bank’s
position is patently overstated. The witness did not work for the Bank or
JP Morgan and was unable to describe the relationship between the two.
Moreover, the witness’s entire body of knowledge on the subject was
limited to what the witness learned from a search on “the internet.” Such
evidence is not competent to establish the Bank’s standing as nonholder
in possession with the rights of a holder. Accordingly, we reverse and
remand for entry of an order of involuntary dismissal of the action. See
Balch v. LaSalle Bank N.A., 171 So. 3d 207, 209 (Fla. 4th DCA 2015)
(reversing and remanding for entry of an order of involuntary dismissal
when the bank failed to provide sufficient evidence of its standing).
Reversed and remanded.
MAY and GERBER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
