201 So. 3d 687
Fla. Dist. Ct. App.2016Background
- Borrower executed note and mortgage with American Brokers Conduit; loan became adjustable by addendum and originally bore 7.75% interest.
- Multiple assignments occurred; at least one assignment transferred the note and mortgage to Maxim Credit Corp.; chain of title was factually convoluted.
- Borrower notified lender he entered active military service (Mar 2009–Mar 2010) and later defaulted on payments more than a year after service ended.
- Bank (ALS-RVC, LLC) filed foreclosure in Nov. 2012, attaching a copy of the note showing a blank endorsement; at trial the bank produced the original note identical to the copy and a loan rep testified he delivered the original to counsel before filing.
- Borrower pleaded lack of standing and failure to comply with conditions precedent (including alleged SCRA/interest-rate violations); trial court granted involuntary dismissal, finding insufficient proof of standing and noncompliance with the Servicemembers Civil Relief Act.
- Appellate court reversed: found the bank established standing through possession of the identical original blank-endorsed note and held the SCRA issue did not defeat foreclosure as a condition precedent; remanded for reinstatement and determination of damages with SCRA interest adjustments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff had standing to foreclose at time complaint filed | Bank: possessed original note with blank endorsement and attached identical copy to complaint | Borrower: assignments (including transfer to Maxim) show bank transferred rights and lacked standing | Bank had standing; possession of original blank-endorsed note identical to attached copy established standing despite assignments |
| Effect of mortgage assignments and a prior assignment of note/mortgage to Maxim | Bank: even if assignments exist, holder status under §673.3011(1) allows enforcement | Borrower: mortgage does not follow note where parties intend otherwise; assignment to Maxim transferred rights away from bank | Assignments did not defeat holder status; person entitled to enforce may be holder even if not owner or in wrongful possession under statute |
| Whether failure to reduce interest under SCRA made compliance a condition precedent to foreclosure | Borrower: bank's default notice used wrong interest amount; failure to apply SCRA relief prevented valid acceleration | Bank: SCRA relief (reduced interest) does not create a condition precedent to filing foreclosure | SCRA does not expressly make compliance a condition precedent; borrower failed to plead SCRA noncompliance as affirmative defense; SCRA noncompliance did not bar foreclosure |
| Whether default notice substantially complied with mortgage paragraph 22 | Borrower: erroneous payoff amount (due to unpaid SCRA reduction) meant non‑compliance with notice requirements | Bank: notice warned of default and acceleration and otherwise satisfied paragraph 22 | Default notice substantially complied with paragraph 22; substantial compliance standard met |
Key Cases Cited
- Dixon v. Express Equity Lending Grp., LLLP, 125 So.3d 965 (Fla. 4th DCA 2013) (standing to bring foreclosure reviewed de novo)
- Deutsche Bank Nat’l Tr. Co. v. Huber, 137 So.3d 562 (Fla. 4th DCA 2014) (standard of review for involuntary dismissals)
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170 (Fla. 4th DCA 2012) (plaintiff must demonstrate standing when complaint filed)
- Kiefert v. Nationstar Mortg., LLC, 153 So.3d 351 (Fla. 1st DCA 2014) (holder must have standing at filing and trial)
- Ortiz v. PNC Bank, National Ass’n, 188 So.3d 923 (Fla. 4th DCA 2016) (admitting original note identical to complaint copy with blank endorsement establishes standing absent contrary evidence)
- Acoustic Innovations, Inc. v. Schafer, 976 So.2d 1139 (Fla. 4th DCA 2008) (legal errors in non‑jury trials reviewed de novo; factual findings for substantial evidence)