AS Lily, LLC v. Morgan
164 So. 3d 124
| Fla. Dist. Ct. App. | 2015Background
- AS Lily LLC appealed after a final judgment of dismissal in favor of the Morgans in a foreclosure action.
- The Morgans executed an adjustable-rate note and mortgage in 2006 to Option One Mortgage; an allonge with a blank endorsement accompanied the note.
- The note was assigned to Liquidation Properties, Inc. (LPI), which initiated foreclosure in 2008 and attached the note, mortgage, and lost-note claim.
- In 2012 the circuit court allowed AS Lily to amend the complaint; AS Lily then filed a Verified First Amended Complaint attaching the note, mortgage, and allonge.
- After a bench trial the court ruled AS Lily lacked standing and was not a proper party, awarding judgment to the Morgans.
- The majority held that AS Lily gained standing by holding the note with a blank endorsement at the time of the operative amended complaint, reversing and remanding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of AS Lily to foreclose | AS Lily held the note with blank endorsement at filing time. | AS Lily was not the original lender and lacked standing. | AS Lily had standing; reversed and remanded for new trial. |
| Admissibility of servicer testimony | Testimony about loan data could be admissible as a business record. | Witness testimony was inadmissible hearsay. | Court erred in excluding the testimony; should have admitted as business record evidence. |
| Proper party requirement in foreclosure | AS Lily could establish status through possession of the note. | AS Lily not the original lender cannot foreclose. | AS Lily properly party and standing established; reversed for new trial. |
Key Cases Cited
- Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308 (Fla. 2d DCA 2013) (standing can be shown by possession of a note with proper endorsements)
- McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So. 3d 170 (Fla. 4th DCA 2012) (standing requirements for non-original lenders)
- Wells Fargo Bank, N.A. v. Morcom, 125 So. 3d 320 (Fla. 5th DCA 2013) (holder status shown by blank endorsement plus complaint in holder's name)
- Mortg. Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151 (Fla. 2d DCA 2007) (endorsement and assignment considerations for standing)
- Glarum v. LaSalle Bank National Ass'n, 83 So. 3d 780 (Fla. 4th DCA 2011) (evidence admissibility in business record context)
- WAMCO XXVIII, Ltd. v. Integrated Electronic Environments, Inc., 903 So. 2d 230 (Fla. 2d DCA 2005) (witness testimony about servicer procedures may be admissible as business records)