Houk v. PennyMac Corp.
210 So. 3d 726
| Fla. Dist. Ct. App. | 2017Background
- In 2005 Lane Houk executed a $584,800 note (Cherry Creek → indorsement to CitiMortgage) and mortgage on Lee County property.
- CitiMortgage filed foreclosure and lost-note reestablishment claims in 2008; later filed an affidavit saying the original note was lost while in counsel’s possession.
- In 2013 CitiMortgage moved (unsworn) to substitute PennyMac Corp. as plaintiff and attached a recorded assignment of the mortgage (not the note); the court granted substitution.
- PennyMac then filed a verified second amended complaint alleging CitiMortgage transferred all rights in the note and mortgage and alleging lost-note entitlement under Fla. Stat. § 673.3091.
- PennyMac moved for summary judgment; supporting affidavits included an affidavit of indebtedness stating PennyMac "is the holder of said Note and Mortgage," and affidavits identifying PennyMac Loan Services, LLC as servicer.
- The trial court entered a final judgment of foreclosure; on appeal the Second DCA found genuine issues of material fact about PennyMac’s standing and reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PennyMac had standing to enforce the lost note at judgment | PennyMac: substitution order, recorded assignment of mortgage, verified complaint, and affidavits establish standing | Houk: PennyMac failed to show it acquired the note or otherwise had enforceable rights at time of judgment | Reversed — PennyMac failed to prove nonexistence of a genuine fact issue on standing |
| Whether the substitution order alone confers standing to enforce a specially indorsed lost note | PennyMac: substitution transfers the prior plaintiff’s enforcement rights | Houk: substitution alone insufficient without proof of transfer of the note/debt | Held: substitution order alone is insufficient without evidence of assignment/transfer of note or equivalent proof |
| Whether an assignment of the mortgage (recorded) suffices to show right to enforce the note | PennyMac: assignment of mortgage (with rights) includes the note’s monetary rights | Houk: assignment of mortgage alone does not transfer the debt/note | Held: assignment of mortgage alone insufficient to establish standing to enforce a note specially indorsed to another party |
| Whether PennyMac’s verified complaint and its affidavits supported summary judgment | PennyMac: verified complaint and affidavits establish entitlement; servicer status supports standing | Houk: the verification was on knowledge and belief, allegations were conclusory, and affidavits conflict with the complaint’s theory | Held: verification on "knowledge and belief" and conclusory allegations are insufficient; affidavits conflicted with the lost-note theory and did not establish standing |
Key Cases Cited
- Lamb v. Nationstar Mortg., LLC, 174 So. 3d 1039 (Fla. 4th DCA 2015) (plaintiff must show standing both at filing and at judgment; how a substituted plaintiff may prove entitlement to enforce a note)
- Brandenburg v. Residential Credit Solutions, Inc., 137 So. 3d 604 (Fla. 4th DCA 2014) (substitution plus proof that plaintiff acquired note and mortgage supports foreclosure)
- Tilus v. AS Michai LLC, 161 So. 3d 1284 (Fla. 4th DCA 2015) (assignment of mortgage without assignment of debt does not confer right to enforce note)
- Geweye v. Ventures Trust 2013-I-H-R, 189 So. 3d 231 (Fla. 2d DCA 2016) (order of substitution alone insufficient to prove standing to enforce a lost, specially indorsed note)
- Bifulco v. State Farm Mut. Auto. Ins. Co., 693 So. 2d 707 (Fla. 4th DCA 1997) (documents attached to motion must be sworn to or certified to be considered on summary judgment)