Bank of New York Mellon v. Heath
219 So. 3d 104
| Fla. Dist. Ct. App. | 2017Background
- Borrower defaulted; Bank of New York Mellon (Bank) filed foreclosure; complaint attached original note with an allonge containing three endorsements, one endorsed in blank.
- Select Portfolio Servicing (SPS) serviced the loan and physically possessed the original note and allonge when the complaint was filed; SPS representative so testified at trial.
- Bank admitted the original note, allonge, and two limited powers of attorney; one power expressly authorized SPS to initiate foreclosures and both referenced a pooling and servicing agreement (PSA).
- At deposition Bank’s counsel told Borrower’s counsel the PSA would not be used at trial; trial court precluded Bank from introducing the PSA and mortgage loan schedule on that basis.
- Borrower moved for involuntary dismissal arguing Bank lacked standing without the PSA; trial court granted dismissal without prejudice. Bank appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose based on possession/endorsement of note | Bank: admitted original note and blank-endorsed allonge show it was holder and had standing | Borrower: Bank lacked standing because PSA (not admitted) was the document authorizing SPS and establishing Bank’s rights | Held: Bank had standing—original note and blank endorsement admitted at trial established possession/holder status |
| Constructive possession via servicer agency | Bank: SPS was Bank’s servicer and had actual or constructive possession for Bank | Borrower: Physical possession by SPS without PSA means Bank lacked possession/control | Held: Constructive possession satisfied through SPS agency relationship; Bank’s standing preserved |
| Admissibility of PSA and mortgage loan schedule | Bank: PSA demonstrates authority and supports standing; should be admitted | Borrower: Preclusion appropriate because Bank’s counsel said PSA would not be used at trial, preventing deposition questioning | Held: Trial court did not abuse discretion excluding PSA; exclusion justified by counsel’s deposition representation |
| Remedy of involuntary dismissal | Borrower: Lack of PSA warrants dismissal for lack of standing | Bank: Evidence introduced sufficed for prima facie case; dismissal improper | Held: Involuntary dismissal was error; case reversed and remanded for new trial (Borrower entitled to reopen deposition re: PSA) |
Key Cases Cited
- Deutsche Bank Nat’l Tr. Co. v. Huber, 137 So.3d 562 (Fla. 4th DCA 2014) (standard of review for involuntary dismissal)
- McCabe v. Hanley, 886 So.2d 1053 (Fla. 4th DCA 2004) (directed verdict/involuntary dismissal requires failure to establish prima facie case)
- Hack v. Estate of Helling, 811 So.2d 822 (Fla. 5th DCA 2002) (principle on evidentiary sufficiency for directed verdict)
- U.S. Bank Nat’l Ass’n v. Clarke, 192 So.3d 620 (Fla. 4th DCA 2016) (blank-endorsed original note introduced at trial can establish standing)
- Caraccia v. U.S. Bank, Nat’l Ass’n, 185 So.3d 1277 (Fla. 4th DCA 2016) (constructive possession via agency can satisfy possession element for bearer paper)
- Bush v. Belenke, 381 So.2d 315 (Fla. 3d DCA 1980) (definition and explanation of constructive possession)