Miguel Tilus, Alta Tilus, Rose A. Joaseus and Kesner Joaseus v. AS Michai LLC
161 So. 3d 1284
| Fla. Dist. Ct. App. | 2015Background
- Appellants (borrowers) appealed a final judgment of foreclosure entered after the trial court granted appellee AS Michai LLC’s motion for summary judgment.
- The plaintiff filed the foreclosure complaint and later filed the original promissory note (with an undated blank endorsement) more than one month after initiating suit.
- The plaintiff produced an Assignment of Mortgage from DLJ Mortgage Capital to plaintiff that reflected transfer of the mortgage but not the note.
- Defendants challenged the plaintiff’s standing to foreclose at the inception of the lawsuit, arguing the plaintiff had not shown entitlement to enforce the note when suit was filed.
- The Fourth District withdrew its prior opinion, reviewed standing de novo, and considered UCC principles governing who may enforce a negotiable instrument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff had standing to foreclose at filing | Plaintiff relied on possession of the note (filed later) and assignment of mortgage to establish standing | Plaintiff lacked standing at inception because the original note was filed after suit and the endorsement was undated; assignment covered only the mortgage, not the note | Reversed: genuine issue of material fact exists as to standing at inception; summary judgment improper |
| Whether owner and holder status both required under UCC | Plaintiff implicitly argued foreclosure standing satisfied by subsequent production/assignment | Defendants argued older caselaw requiring both holder and owner is superseded by the UCC; standing requires ownership, possession, or entitlement to enforce | Court clarified UCC allows standing by owner OR holder OR otherwise entitled to enforce; both ownership and holding not required |
| Sufficiency of undated blank endorsement filed after suit | Plaintiff treated the endorsement and later-filed note as proof of entitlement | Defendants argued the late-filed undated endorsement cannot prove standing at time of filing | Court held undated endorsement filed after suit insufficient to prove standing at inception |
| Effect of assignment of mortgage without note transfer | Plaintiff argued assignment of mortgage supports foreclosure right | Defendants argued assignment of mortgage alone does not transfer debt/right to enforce note | Court held assignment of mortgage alone insufficient to prove standing when note transfer not shown |
Key Cases Cited
- Fla. Atl. Univ. Bd. of Trs. v. Lindsey, 50 So. 3d 1205 (4th DCA 2010) (standard of review for summary judgment is de novo)
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170 (4th DCA 2012) (plaintiff must prove standing to foreclose at time of filing)
- Wells Fargo Bank, N.A. v. Morcom, 125 So. 3d 320 (5th DCA 2013) (UCC governs who may enforce notes; holder-and-owner rule from pre-UCC cases not controlling)
- Vidal v. Liquidation Props., Inc., 104 So. 3d 1274 (4th DCA 2013) (person who owns or holds the note is entitled to foreclose)
- Mazine v. M & I Bank, 67 So. 3d 1129 (1st DCA 2011) (a nonholder in possession with holder rights may have standing)
- Bristol v. Wells Fargo Bank, Nat’l Ass’n, 137 So. 3d 1130 (4th DCA 2014) (filing the original note after suit and relying on an undated endorsement is insufficient to prove standing at filing)
- Lizio v. McCullom, 36 So. 3d 927 (4th DCA 2010) (previously imprecise language suggesting a party must both own and hold the note; court clarifies it is not exclusive)
- Verizzo v. Bank of N.Y., 28 So. 3d 976 (2d DCA 2010) (cited for priorholder/owner language later reinterpreted under the UCC)