Elsman v. HSBC BANK USA
182 So. 3d 770
| Fla. Dist. Ct. App. | 2015Background
- In May 2006 Elsman executed an InterestFirst note, mortgage, and Second Home Rider for a $168,000 loan to Quicken Loans, Inc.
- Elsman defaulted; HSBC (as Trustee for MLMI 2006-AF1) filed a two-count complaint on April 1, 2009 to reestablish the note and foreclose the mortgage, attaching copies of the note and mortgage.
- After filing, HSBC submitted the original note bearing an undated special endorsement from Quicken to HSBC; an assignment to HSBC was dated six days after the complaint.
- At the 2014 trial the loan servicer’s default representative testified; HSBC introduced the endorsed note and loan transfer history; the trial court admitted the endorsed note and other documents and entered final judgment for HSBC.
- Elsman continuously challenged HSBC’s standing to foreclose; the appellate court reviewed whether HSBC established standing as of the filing date of the complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HSBC had standing to foreclose at the time the complaint was filed | HSBC argued it was the holder/entitled to enforce the note based on the endorsed note and loan transfer records | Elsman argued HSBC lacked standing because the special endorsement/assignment occurred after the complaint and evidence did not show holder status at filing | Reversed: HSBC failed to prove it was the holder or otherwise entitled to enforce the note at the time the complaint was filed, so it lacked standing and judgment was reversed |
Key Cases Cited
- Gorel v. Bank of New York Mellon, 165 So.3d 44 (Fla. 5th DCA 2015) (standing to foreclose must be proven)
- Sosa v. Safeway Premium Fin. Co., 73 So.3d 91 (Fla. 2011) (standards for appellate review of standing questions)
- Wells Fargo Bank, N.A. v. Morcom, 125 So.3d 320 (Fla. 5th DCA 2013) (standing principles in foreclosure actions)
- Schmidt v. Deutsche Bank, 170 So.3d 938 (Fla. 5th DCA 2015) (reversal where bank failed to show endorsement/holder status before complaint)
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170 (Fla. 4th DCA 2012) (standing is determined as of filing)