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Florida Ruling Might Further Complicate Loan Crisis

Florida Ruling Might Further Complicate Loan Crisis


Ruling might further complicate loan crisis

Published: Tuesday, November 9, 2010 at 1:00 a.m.
Last Modified: Monday, November 8, 2010 at 10:04 p.m.

Appellate courts in Tallahassee and West Palm Beach have admonished lower courts for allowing foreclosures to proceed without the proper paperwork and kicked the cases back to circuit judges in a move some experts say could further complicate the foreclosure crisis.

At issue is the use of sworn affidavits that convinced circuit judges the borrower’s original promissory note had been lost in the shuffle but that the lender still had a right to foreclose. Experts likened it to a used car dealer selling a vehicle using a photocopy of the title.

Circuit court judges have been using such promises to issue summary judgments, which have sped cases along at a time when the courts have been inundated.

Observers say the rulings from the 1st District Court of Appeal in Tallahassee and the 4th District Court of Appeal in West Palm Beach could become templates for more challenges.

It is unclear just how many cases could be affected — the chief judge in this region’s circuit says foreclosure paperwork is carefully scrutinized by teams of case managers — but the rulings come as the system already is dealing with disruptions from self-imposed bank moratoriums to deal with questionable paperwork.

“It is the culmination of the worst civil procedure nightmare we’ve ever imagined,” said Anne L. Weintraub, a real estate attorney at Sarasota’s Syprett Meshad law firm, referring to the recent appellate rulings.

What happens next could have widespread implications for the more than 200,000 Floridians who have lost their homes to foreclosure since January 2007, including the more than 12,000 in Manatee, Sarasota and Charlotte counties.


[ipaper docId=41737977 access_key=key-virafbbku2781pl40gp height=600 width=600 /]

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July Term 2010

a/k/a Joseph Servedio,


US BANK NATIONAL ASSOCIATION, as Indenture Trustee, on behalf of
the holders of Terwin Mortgage Trust 2007-AHL1, Asset-Backed
Securities Series 2007-AHL1,

No. 4D10-1898

[October 27, 2010]


The issue presented in this appeal is whether the trial court erred in
granting a final summary judgment of foreclosure where appellee failed
to file with the court a copy of the original note and mortgage prior to the
entry of judgment. Because the absence of the original note created a
genuine issue of material fact regarding appellee’s standing to foreclose
on the mortgage, summary judgment was not proper. We reverse.

In November 2008, appellee filed a n unverified complaint against
appellant, seeking both foreclosure of the mortgage and reestablishment
of the lost promissory note. Appellant attached to the complaint a copy
of the mortgage it sought to foreclose, but this document identified
Bankers Express Mortgage, Inc. as the lender and mortgagee. An
adjustable rate rider a n d prepayment penalty rider also identified
Bankers Express as the lender and mortgagee.

Appellant answered and denied all of the allegations in appellee’s
complaint. In addition, appellant asserted affirmative defenses that
appellee was not “in privity” with the lender and mortgagee and that
appellee lacked standing to seek foreclosure.

Appellee filed for summary judgment on the foreclosure count alone.
In support of its motion, appellee filed an affidavit from a representative
of the loan servicing company who stated the total amount due on the
mortgage. The affidavit did not indicate that appellee was an owner or
holder of the mortgage and note, and no documentary evidence was
appended to the affidavit. The trial court granted appellee’s motion for
summary judgment. The record on appeal contains no indication that
appellee filed the original note with the trial court.1

Summary judgment is proper if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law.
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130
(Fla. 2000). The court may consider “affidavits, answers to
interrogatories, admissions, depositions, and other materials as would be
admissible in evidence” o n which the parties rely. Fla. R. Civ. P.
1.510(c). The court must draw “every possible inference” in favor of the
non-moving party. Edwards v. Simon, 961 So. 2d 973, 974 (Fla. 4th
DCA 2007). The facts must be “so crystallized that nothing remains but
questions of law.” Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985.) The
moving party bears the burden of showing the complete absence of
genuine issues of material fact. Frost v. Regions Bank, 15 So. 3d 905,
906 (Fla. 4th DCA 2009). Moreover, the “party moving for summary
judgment must factually refute or disprove the affirmative defenses
raised, or establish that the defenses are insufficient as a matter of law.”
770 PPR, LLC v. TJCV Land Trust, 30 So. 3d 613, 618 (Fla. 4th DCA
2010) (quoting Leal v. Deutsche Bank Nat’l Trust Co., 21 So. 3d 907, 909
(Fla. 3d DCA 2009)). We review de novo an order granting summary
judgment. Frost, 15 So. 3d at 906.

“The party seeking foreclosure must present evidence that it owns and
holds the note and mortgage in question in order to proceed with a
foreclosure action.” Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA
2010). A plaintiff must tender the original promissory note to the trial
court or seek to reestablish the lost note under section 673.3091, Florida
Statutes. State St. Bank & Trust Co. v. Lord, 851 So. 2d 790, 791 (Fla.
4th DCA 2003). Moreover, if the note does not name the plaintiff as the
payee, the note must bear a special indorsement in favor of the plaintiff
or a blank indorsement. Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932,
933 (Fla. 4th DCA 2010). Alternatively, the plaintiff may submit evidence
of a n assignment from th e payee to the plaintiff or a n affidavit of
1 Appellee has twice moved this court to supplement the record on appeal to
include a copy of the original note and mortgage it claims to have filed at the
summary judgment hearing. This court denied the motions with leave for
appellee to seek relinquishment of jurisdiction to the trial court to recreate the
record. Appellee has not sought leave to recreate the record in the court below.

Likewise, appellee has not designated any transcripts to support its position.
ownership to prove its status as a holder of the note. Verizzo v. Bank of
N.Y., 28 So. 3d 976 (Fla. 2d DCA 2010); Stanley v. Wells Fargo Bank, 937
So. 2d 708 (Fla. 5th DCA 2006).

The record on appeal does not contain the original note, evidence of
an assignment of the mortgage and note to appellee, or an affidavit of
ownership by appellee. Appellee filed no other admissible “pleadings,
depositions, answers to interrogatories, admissions, affidavits, and other
materials” to support its contention that it owns and holds the note and
mortgage. Fla. R. Civ. P. 1.510(c). “[I]t is apodictic that summary
judgments may not be granted . . . absent the existence” of admissible
evidence in the record. TRG-Brickell Point NE, Ltd v. Wajsblat, 34 So. 3d
53, 55 (Fla. 3d DCA 2010). Without evidence demonstrating appellee’s
status as holder and owner of the note and mortgage, genuine issues of
material fact remain, and summary judgment was improper.

Appellee argues on appeal that it presented to the trial court a copy of
the original note and an affidavit of ownership at the summary judgment
hearing. Appellee concedes, however, that the documents were not filed
with the clerk of the court until several days after the entry of summary
judgment. The documents were not part of the record at the time the
motion for summary judgment was granted, so we cannot determine
whether the trial court considered those documents in rendering its
decision. See Poteat v. Guardianship of Poteat, 771 So. 2d 569 (Fla. 4th
DCA 2000) (noting that a n appellate court may review only items
considered by the trial court). Because appellant does not stipulate that
the documents were considered at the hearing, and because appellee has
not sought relief in the trial court to recreate the record, we must reverse
the order granting summary judgment. We cannot rely o n the
representations of counsel alone. Wright v. Emory, 41 So. 3d 290, 292
(Fla. 4th DCA 2010) (“[An] attorney’s unsworn, unverified statements do
not establish competent evidence.”).

Even if the trial court considered the note and mortgage at the
hearing, the documents were not authenticated, filed, and served more
than twenty days before the hearing as required by Rules 1.510(c) and
1.510(e). Appellee’s failure to abide by these rules also necessitates
reversing the order granting summary judgment. Verizzo, 28 So. 3d at
977-78; Mack v. Commercial Indus. Park, Inc., 541 So. 2d 800 (Fla. 4th
DCA 1989).

Accordingly, we reverse the entry of final summary judgment in favor
of appellee a n d remand for further proceedings. We note that a
summary judgment motion may b e filed “at any time” under Rule
1.510(a), and “this opinion does not preclude a re-filing of such motion if
and when the necessary legal documents are before the court.” Mack,
541 So. 2d at 800.

Reversed and remanded.

WARNER, POLEN and LEVINE, JJ., concur.
* * *
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Thomas H. Barkdull, III, Judge; L.T. Case No.

Peter J. Snyder of Peter J. Snyder, P.A., Boca Raton, for appellant.
Heidi J. Weinzetl of Shapiro & Fishman, LLP., Boca Raton, for

Not final until disposition of timely filed motion for rehearing.

[ipaper docId=41737977 access_key=key-virafbbku2781pl40gp height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in STOP FORECLOSURE FRAUDComments (1)

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