Fallon Rahima Jallali v. Christiana Trust, etc.
200 So. 3d 149
| Fla. Dist. Ct. App. | 2016Background
- Countrywide filed foreclosure against Jallali on May 8, 2007; the original complaint included an allegation of a missing note.
- Countrywide later filed the original note and an undated blank endorsement; the record shows the mortgage was assigned to Countrywide on August 8, 2007 (after suit was filed).
- The mortgage was ultimately assigned through LEX Special Assets to Christiana Trust, which substituted in as plaintiff in December 2013.
- A non-jury trial occurred January 22, 2014; Christiana proceeded after confirming no automatic bankruptcy stay and obtained a final judgment of foreclosure in Jallali’s absence.
- A duty judge vacated the foreclosure; after multiple hearings and a magistrate recommendation, the trial court reinstated the final judgment; Jallali moved under Fla. R. Civ. P. 1.540(b) and appealed.
- The Fourth District addressed only whether Christiana Trust had standing to foreclose at the inception of the lawsuit and concluded it did not, reversing and directing involuntary dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did plaintiff have standing to foreclose when the complaint was filed? | Christiana: substitute plaintiff acquires standing of original plaintiff; filed original note and assignment later. | Jallali: no evidence the holder endorsement or assignment existed before suit; undated endorsement insufficient. | No — plaintiff lacked standing at inception; reversal. |
| Can an undated, blank endorsement filed after suit establish standing? | Christiana: the filed note and endorsement show entitlement to enforce. | Jallali: undated endorsement requires additional proof (e.g., litigation analyst) to show endorsement pre-dated suit. | Undated blank endorsement filed after suit is insufficient without additional proof. |
| Can a substituted plaintiff rely on original plaintiff’s standing when original lacked it? | Christiana: substitution transfers original plaintiff’s standing under rule 1.260. | Jallali: original (Countrywide) did not have standing at inception, so substitution cannot cure defect. | Substitution cannot supply standing if original plaintiff lacked it at inception. |
| Does a post-filing assignment of mortgage cure initial lack of standing? | Christiana: assignment chain to Christiana demonstrates rights to enforce. | Jallali: assignment occurred after complaint; post-filing assignment does not retroactively establish standing. | Post-filing assignment does not cure lack of standing at suit inception. |
Key Cases Cited
- McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So. 3d 170 (Fla. 4th DCA 2012) (plaintiff must demonstrate standing to foreclose)
- Kenney v. HSBC Bank USA, Nat'l Ass'n, 175 So. 3d 377 (Fla. 4th DCA 2015) (undated endorsement requires proof it occurred before suit)
- Gascue v. HSBC Bank, U.S.A., 97 So. 3d 263 (Fla. 4th DCA 2012) (standing must exist at inception and cannot be cured later)
- Perez v. Deutsche Bank Nat'l Trust Co., 174 So. 3d 489 (Fla. 4th DCA 2015) (reversal where bank filed undated, blank-endorsed note after complaint without proof of prior possession)
- Lloyd v. Bank of N.Y. Mellon, 160 So. 3d 513 (Fla. 4th DCA 2015) (additional evidence like litigation analyst testimony may be required to date endorsements)
- Balch v. LaSalle Bank N.A., 171 So. 3d 207 (Fla. 4th DCA 2015) (assignment executed after filing cannot support standing at inception)