Cutler v. U.S. Bank National Ass'n
109 So. 3d 224
| Fla. Dist. Ct. App. | 2012Background
- U.S. Bank filed a mortgage foreclosure and lost-note action on Sept. 22, 2008 against the Cutlers; mortgage listed BNC Mortgage, Inc. as lender, with no attached assignment.
- Cutlers responded indicating they sought a loan modification and had been unable to make payments.
- On Feb. 18, 2010, U.S. Bank moved for summary judgment; the original note was filed with a blank, undated allonge; the note was signed by Mr. Cutler only.
- Before the summary judgment hearing, the Cutlers moved to dismiss alleging lack of standing; counsel filed a notice of appearance.
- At the Oct. 11, 2010 hearing, the trial court granted summary judgment and set foreclosure; Cutlers sought rehearing arguing U.S. Bank lacked standing because it did not hold the note.
- The appellate court held there was a genuine issue of material fact about whether U.S. Bank was the holder of the note when suit was filed, due to the undated blank allonge and timing of any mortgage assignment; the assignment date was deemed irrelevant to standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank had standing to foreclose. | Cutlers argued Bank lacked the note at filing. | U.S. Bank held the note (endorsement in blank) and the mortgage could pass in equity. | Genuine issue of material fact remains; reversal and remand. |
| Effect of the allonge and timing on standing. | Bank did not prove an effective blank endorsement before filing. | Possession of the note and mortgage passes with the debt, regardless of mortgage assignment timing. | Dispute creates material fact; remand required. |
| Preservation of standing challenge on appeal. | Standing was properly raised in motion to dismiss and rehearing. | Initial pleadings admitted Bank’s standing; issue not preserved as to on-point complaint. | Issue preserved; no waiver; remand on merits. |
Key Cases Cited
- WM Specialty Mortg., LLC v. Salomon, 874 So.2d 680 (Fla. 4th DCA 2004) (mortgage may pass in equity when note is transferred)
- Johns v. Gillian, 184 So. 140 (Fla. 1938) (equitable pass-through of mortgage with debt transfer)
- Feltus v. U.S. Bank Nat’l Ass’n, 80 So.3d 375 (Fla. 2d DCA 2012) (endorsement in blank must be proven to be effective before suit)
- Country Place Cmty. Ass’n v. J.P. Morgan Mortg. Acquisition Corp., 51 So.3d 1176 (Fla. 2d DCA 2010) (lacked standing when not in possession of note at filing)
- Barrington v. Gryphon Invs., Inc., 32 So.3d 668 (Fla. 2d DCA 2010) (burden to prove absence of genuine issue of material fact on moving party)
- Mortg. Elec. Registration Sys., Inc. v. Azize, 965 So.2d 151 (Fla. 2d DCA 2007) (holder of a note has standing to enforce the debt)