Boumarate v. HSBC Bank USA, N.A.
172 So. 3d 535
| Fla. Dist. Ct. App. | 2015Background
- Abdallah and Jennifer Boumarate appealed a final foreclosure judgment entered for HSBC Bank after a bench trial; this was their second appeal (the Court had reversed a prior summary-judgment ruling in Boumarate I).
- Bank introduced the note (payable to Novelle Financial Services), mortgage, and loan transaction history; Ocwen loan analyst Sandra Tramble was the Bank’s sole witness.
- Tramble testified the account was in default, that the Bank possessed the note when the complaint was filed, and that the Bank had physical possession when the note was later lost, but she could not explain how or when the note was lost or whether it bore endorsements or assignments.
- Tramble acknowledged she had no documents showing a transfer from Novelle to the Bank; documents (e.g., the PSA) mentioned were not introduced into evidence.
- Trial court concluded mere possession of the note entitled the Bank to enforce it and entered final judgment of foreclosure; Boumarates appealed, arguing the Bank failed to meet the requirements of Florida Statute § 673.3091 for enforcing a lost note.
- Shortly before oral argument the Bank conceded error and stipulated to vacatur and involuntary dismissal, but the Fifth District nonetheless issued an opinion reversing the foreclosure judgment for failure to prove entitlement to enforce the lost note.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bank met § 673.3091 burden to enforce a lost note | Bank: Tramble’s testimony showed Bank possessed note when suit filed, was entitled to enforce at loss, loss not by transfer, and note couldn’t be found | Boumarates: Bank failed to prove circumstances of loss and how Bank became entitled to enforce the Novelle-payable note | Reversed: Bank failed to prove entitlement to enforce at time of loss; mere possession is insufficient |
| What proof is required to reestablish a lost negotiable instrument | Bank: possession and witness testimony suffice | Boumarates: must show entitlement to enforce when loss occurred (e.g., indorsement, assignment, or chain of ownership) | Court: statute requires proof of entitlement at time of loss; proof of exact how/when lost not required unless needed to prove entitlement |
| Whether Boumarate I’s prior mandate required proof of exact circumstances of loss | Bank: Boumarate I not strictly requiring more than statute | Boumarates: Boumarate I required showing how Bank obtained the Novelle note and circumstances of loss | Court: Read Boumarate I consistent with statute; requirement to prove exact loss circumstances is overstated; party must show entitlement to enforce when loss occurred |
| Whether evidence of assignments/endorsements was necessary here | Bank: suggested public documents (PSA) would show transfer but none were introduced | Boumarates: absence of any indorsement/assignment or affidavit of ownership defeats Bank’s claim | Court: Without indorsement, assignment, or other proof of entitlement, Bank failed to reestablish the lost note |
Key Cases Cited
- Boumarate v. HSBC Bank USA, N.A., 109 So.3d 1239 (Fla. 5th DCA 2013) (prior reversal and law-of-the-case discussion)
- Gee v. U.S. Bank Nat’l Ass’n, 72 So.3d 211 (Fla. 5th DCA 2011) (plaintiff must tender original note or reestablish lost note under § 673.3091)
- Deakter v. Menendez, 830 So.2d 124 (Fla. 3d DCA 2002) (no requirement to prove exactly how possession was lost)
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170 (Fla. 4th DCA 2012) (entitlement to enforce requires payee naming or proper indorsement or assignment or affidavit)
- Servedio v. U.S. Bank Nat’l Ass’n, 46 So.3d 1105 (Fla. 4th DCA 2010) (noting need for indorsement/assignment to show enforcement rights)
- Riggs v. Aurora Loan Servs., LLC, 36 So.3d 932 (Fla. 4th DCA 2010) (same principle regarding holder status)
- Beaumont v. Bank of New York Mellon, 81 So.3d 553 (Fla. 5th DCA 2012) (reversal where bank failed to prove who lost note, when, or that it had enforcement rights)
- Brunner Enter., Inc. v. Dep’t of Revenue, 452 So.2d 550 (Fla. 1984) (law-of-the-case principle cited)