MORGAN v THE BANK OF NEW YORK MELLON | FL 1DCA - Because the Bank already had the burden to present evidence establishing its standing, it cannot claim it is prejudiced by Appellant's defense challenging the sufficiency of that evidence.


MORGAN v THE BANK OF NEW YORK MELLON | FL 1DCA – Because the Bank already had the burden to present evidence establishing its standing, it cannot claim it is prejudiced by Appellant’s defense challenging the sufficiency of that evidence.

MORGAN v THE BANK OF NEW YORK MELLON | FL 1DCA – Because the Bank already had the burden to present evidence establishing its standing, it cannot claim it is prejudiced by Appellant’s defense challenging the sufficiency of that evidence.




CASE NO. 1D15-2401






CWALT 2400-25CB,



Opinion filed June 28, 2016.

An appeal from the Circuit Court for Walton County.

William P. White, Jr., Judge.

Louis C. Arslanian, Hollywood, for Appellant.

J. Kirby McDonough and S. Douglas Knox of Quarles & Brady, LLP, Tampa, for


Appellant Linda G. Morgan appeals the trial court’s order denying her pre-
trial motion for leave to amend her answer to raise affirmative defenses. Appellant
is a defendant in the instant foreclosure action initiated by Appellee, The Bank of
New York Mellon (the Bank), acting as trustee. After the trial court denied

Appellant’s motion to amend, the case proceeded to trial, and a final judgment of
foreclosure was entered in favor of the Bank. We hold that the trial court abused
its discretion in denying Appellant’s motion to amend and vacate the trial court’s
final judgment. We remand the case with instructions that Appellant be permitted
to file an amended answer raising affirmative defenses.


On December 17, 2009, the Bank filed a two-count complaint in the trial
court seeking to reestablish a lost promissory note and foreclose a mortgage on real
property owned by Appellant. The Bank alleged that Appellant stopped making
mortgage payments on August 1, 2009, and thus sought the full amount due under
the note secured by the mortgage. In January 2010, Appellant retained counsel to
represent her in the matter. Appellant’s counsel filed several motions in 2010 and
2011, but never filed an answer to the Bank’s complaint.

Forward progress on the case stalled, and no significant action was taken
until February 2014. That month, Appellant filed a pro se motion seeking to
dismiss her counsel, alleging that she had not spoken to her counsel in over two
years. Also in February, the Bank found the original promissory note and filed it
with the court. The original note named First Magnus Financial Corporation as
payee. The note had two special endorsements, first to Countrywide Document
Custody Services and then to Countrywide Home Loans; the third endorsement

was blank; and none of the endorsements were dated. After finding the original
note, the Bank dropped Count I of its complaint that sought to reestablish the note.

In March 2014, Appellant’s counsel was discharged, and Appellant was
ordered to retain new counsel. Appellant also filed two pro se answers.

The case was eventually set to be tried on January 28, 2015. On January 15
(13 days before trial), Appellant’s newly-retained counsel filed a motion seeking
leave to amend Appellant’s answer. The proposed amended answer raised
affirmative defenses for the first time and was the only pleading prepared by an
attorney on Appellant’s behalf. The trial court denied the motion to amend as
“untimely” and also denied Appellant’s motion for reconsideration. The case
proceeded to trial, and a final judgment of foreclosure in favor of the Bank was
entered. This appeal followed.


The ruling on a motion to amend a pleading is within the discretion of the
trial court, and the court’s decision will not be overturned on appeal unless abuse
of discretion is demonstrated. Holy Temple Church of God in Christ, Inc. v.
Maxwell, 578 So. 2d 877, 878 (Fla. 1st DCA 1991). The Florida Rules of Civil
Procedure encourage a policy of liberality in allowing litigants to amend their
pleadings, especially prior to trial; this policy exists so that cases will be tried on
their merits. Fla. R. Civ. P. 1.190(a); Hatcher v. Chandler, 589 So. 2d 428, 429

(Fla.1st DCA1991).Broad discretion is given to thetrial court to grant ordeny amotion to amend;as such,there is no bright-line rule as to when a motion to amendis “untimely.”SeeGreenburg v.Johnston, 367 So. 2d 229, 231 (Fla. 2d DCA1979). Instead, “[t]he relevant inquiry iswhether‘allowingthe amendment would
prejudice the opposingparty,the privilegeto amend has been abused,or
amendment would befutile.’”Cedar MountainEstates,LLCv.LoanOne,LLC, 4So.3d 15, 16 (Fla. 5th DCA 2009)(quoting State Farm Fire & Cas. Co. v. FleetFin. Corp., 724 So.2d 1218,1219 (Fla. 5th DCA 1998)). Absentexceptionalcircumstances, motions for leave to amend should be granted,and refusal to do soconstitutes an abuse of discretion.Thompson v. Jared KaneCo., Inc., 872 So.2d356, 360 (Fla. 2d DCA 2004).

Appellant has not abused the privilege to amend, because the denied motion
at issue was thefirst time shesought to amend her answer. SeeThompson v.
Publix Supermarkets,Inc., 615 So.2d 796, 797 (Fla.1st DCA 1993).Therefore,
thequestionis whetherAppellant’s proposed amended answerwould prejudicetheBankor would be futile.

Whethergranting the proposed amendmentwould prejudicethe opposing
party is analyzed primarilyin thecontext oftheopposing party’s abilityto preparefor the newallegationsor defensesprior to trial.Dimick v.Ray, 774 So. 2d 830,833 (Fla.4th DCA2000). Accordingly, rule1.190’s liberal amendment policy


diminishes as acaseprogresses to trial.Ohio Cas. Ins. Co. v. MRK Constr., Inc.,
602 So. 2d 976,978 (Fla. 2d DCA 1992).

Appellant filed hermotion to amend 13 days beforetrial.Her proposed
amended answerraised eight affirmativedefenses, three of which sheraises on
appeal: (1)failure to comply with a condition precedent, i.e. acceleration;

(2)failure tocomply witha condition precedent,i.e. noticepursuant to section
559.715, Florida Statutes (2016); and (3)lack of standing.The Bankcannot showthat it wouldbe prejudiced byAppellant’s defense thatit did not provide herwiththe 30-day notice requiredby paragraph22 of themortgage prior to acceleration,
because thedefense concernsthe Bank’sfailure to comply with its owndocuments.SeeCobbumv.Citimortgage,Inc.,158 So.3d 755,757 (Fla.2d DCA2015).The Bankalso cannot show prejudiceas to Appellant’s defensethat itdidnot complywiththenoticerequirement in section559.715beforefilingsuit. In itscomplaint,the Bankallegedthat all conditionsprecedentto filing suit had been
performed or had occurred, and courts haveheld that “requiringa plaintiff to proveits allegations is not prejudice to theplaintiff; it merelyoffers due process tothedefendants.”Thompson, 872 So.2d at 360. Finally,the Bankhas notdemonstrated prejudice as to Appellant’s defense that it lacked standing toforeclose. Under Florida law,“[t]he party seeking foreclosure must present
evidencethat it owns and holds the note and mortgageto establish standing to

proceed with a foreclosure action.”Mazine v. M & I Bank, 67So.3d 1129, 1131
(Fla.1st DCA 2011)(citing Servidio v.U.S. Bank Nat’l Ass’n, 46 So.3d 1105
(Fla. 4thDCA 2010)).Becausethe Bankalreadyhad the burden to presentevidenceestablishing its standing,it cannot claim it isprejudiced byAppellant’sdefense challenging the sufficiency of that evidence.

Courts haveheld that proposed amendments are futile when they are notpled with sufficient particularity or are “insufficient as a matter oflaw.”
Thompson v.Bank ofN.Y., 862 So.2d 768, 770 (Fla.4th DCA 2003). Defenses
are insufficient as amatter oflaw when they are“conclusory in their content,and
lacking in anyreal allegations ofultimatefact demonstrating agood defenseto thecomplaint.”Cady v. Chevy Chase Sav. &Loan, Inc.,528 So. 2d 136, 137-38 (Fla.
4th DCA 1988).

Appellant’s defensesthatthe Bankfailed to complywith theconditionsprecedent contained in her mortgageand section 559.715, Florida Statutes,arenotfutile.1Rule 1.120(c) of the Florida Rules of Civil Procedure requires denials ofperformance of conditions precedent be made “specifically and with particularity.”
A defendant must identify“both thenature ofthe condition precedent and the

1Thecaselaw inFlorida isunclearregardingsection559.715 andwhetheritcreates a condition precedent in foreclosure actions. However,theonlyissueaddressedhereis whetherthe defense was properly raised inaccordancewith theFloridaRules of Civil Procedure.SeeDeutsche Bank Nat’l Trust Co.v. Quinion,
41 Fla. L. Weekly D177 (Fla.2d DCA 2016).


natureof the alleged noncomplianceor nonoccurrence.”Deutsche Bank Nat’lTrust Co. v. Quinion,41 Fla. L. Weekly D177*3 (Fla.2d DCA2016).
Appellant’s proposed answer metthese requirements for both conditions

Appellant’s proposed defensethat the Banklacked standing to foreclose isalso not futile.While possession of anotebearing a blank endorsement issufficientto establishthata plaintiffis thelawfulholder of the note and is entitledto enforceits terms,the Bank still needed to present evidence that it owned andheld thenote and mortgage at the timethe foreclosure complaint was filed toestablish standing to proceedwith theaction.Riggs v.Aurora Loan Servs., LLC,
36 So. 3d 932, 933 (Fla.4th DCA 2010);Mazine, 67 So. 3d at 1131.

We do not disagree with the cases cited by the dissent, but instead conclude that they are distinguishable from the case at bar.In Brown v. Montgomery Ward & Company, the plaintiff sought to amend his complaint two weeks before trial toraisedifferent issues of liability as grounds for relief.252 So.2d 817 (Fla.1stDCA 1971).This court held that it wasnot an abuse of discretion to denyplaintiff’s motion to amend becauseit clearly appeared that the amended pleading“would materially change and introduceinto the casenew issues.” 819.In
Levine v. United Companies Life Insurance Company, the supreme courtapprovedthe district court’s holding that the trial court did not abuseits discretion by


denying defendant’s motionto amend two weeks before trial;however, thecourtwrotemainlyto disapprove the portion ofthe district court’s opinionthat held ausurysavings clause precluded afinding of usury. 659 So. 2d 265,266-67 (Fla.
1995). Consequently,there was little discussion of theprocedural facts and no
discussion of thetrial court’s reasoning for denying the motion to amend, makingit difficult to compareLevineto the instant case.

We note that this foreclosure action has lasted more than six years; however,
wemust also recognize that thepurpose of rule1.190 is “to achieve justice andallow theparties to fully present their respectivepositions.”Walkerv. Senn, 340 So. 2d 975,976(Fla.1st DCA 1976). Here, where Appellant’s first attorney neverfiledananswer on her behalf and Appellant’sprose answers did notraiseanyaffirmative defenses,wehold that itwas an abuse ofdiscretionto denyAppellant’smotionto amendfiled bycounsel.Therefore,the final judgment of thetrial courtis vacated, and the caseis remanded with instructions that Appellant bepermittedto file an amended answer.

REVERSED and REMANDEDwith instructions.


MAKAR, J., dissenting.

Filed in 2009, this case was initially set for trial in early 2014, but Morgan
fired her attorney just before trial, resulting in delays, a rescheduled trial date, and
the filing of two pro se answers. Thirteen calendar days before the third trial date,
Morgan’s newly-hired attorney sought to file an amended answer, which the trial
court denied. Affirmance is in order; no abuse of discretion is shown. Brown v.
Montgomery Ward & Co., 252 So. 2d 817, 819 (Fla. 1st DCA 1971) (“Under the
circumstances of this case we cannot say that the trial court abused its discretion in
denying appellant the right to file an amended complaint two weeks before the
scheduled trial and after several years of pendency in the court.”); see also Levine
v. United Co. Life Ins. Co., 659 So. 2d 265, 266-67 (Fla. 1995) (affirming denial of
motion to amend answer filed two weeks before trial; holding that trial court “had
not abused its discretion because the liberality typically associated with
amendments to pleadings diminishes as the case progresses”).

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