Peters v. The Bank of New York Mellon
227 So. 3d 175
| Fla. Dist. Ct. App. | 2017Background
- In 1998 Hazel N. Peters and Leo Johnson executed a promissory note to ContiMortgage secured by a mortgage on Lee County property. The note was payable to ContiMortgage and was not indorsed in blank or to the Bank when it went missing.
- The Bank of New York Mellon (the Bank) filed a foreclosure action in 2013 seeking to reestablish and enforce a lost note; the note had been lost by at least October 31, 2006.
- The Bank relied on four recorded assignments of the mortgage tracing from ContiMortgage to the Bank; the first three expressly assigned both mortgage and note, but the fourth (EMC → Bank, 2012) assigned only the mortgage and referenced a "beneficial interest."
- The Bank offered two lost-note affidavits (one dated 2006 on behalf of EMC, and one by the servicer SPS), copies of the note (without indorsements/allonge), the four assignments, and testimony from an SPS case manager. The Bank produced no documentary proof that it acquired ownership of the note.
- The trial court found for the Bank and entered final judgment of foreclosure. On appeal the Second District reversed, holding the Bank failed to prove ownership/standing to enforce the lost note and remanded with directions to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to enforce a lost note | Bank: the chain of mortgage assignments (including the Dec. 7, 2012 assignment referencing "beneficial interest") plus servicer testimony show the Bank acquired ownership of the note | Peters: the 2012 assignment transfers only the mortgage, not the note; servicer witness lacked personal knowledge and documentary proof | Reversed: Bank failed to establish ownership of the lost note; assignment that omitted the note is insufficient and witness testimony was inadequate |
| Effect of assignment language "beneficial interest" | Bank: phrase implies transfer of note with mortgage (citing Johns v. Gillian) | Peters: assignment language must expressly transfer the note; mortgage ownership does not alone transfer the debt/note | Held: Johns does not support inferring transfer of the note from a "beneficial interest" reference; ownership of mortgage does not alone prove ownership of the note |
| Sufficiency of servicer testimony to prove note ownership | Bank: SPS case manager’s testimony established Bank acquired ownership | Peters: witness lacked personal knowledge of events before SPS serviced loan and had no supporting documents | Held: Testimony insufficient—no personal knowledge or corroborating records to prove acquisition of the note |
| Remedy when plaintiff fails to prove ownership of lost note | Bank: N/A | Peters: dismissal appropriate because Bank cannot enforce note | Held: Final judgment reversed; remanded with directions to enter involuntary dismissal of the complaint |
Key Cases Cited
- Johns v. Gillian, 184 So. 140 (Fla. 1938) (discusses assignment of mortgage and related securities; court rejects using Johns to infer note transfer from mortgage-only assignment)
- Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639 (Fla. 2d DCA 2015) (assignment of mortgage that omits the note is insufficient to establish standing)
- Kyser v. Bank of Am., N.A., 186 So. 3d 58 (Fla. 1st DCA 2016) (same principle: mortgage-only assignment does not transfer note)
- Boumarate v. HSBC Bank USA, N.A., 172 So. 3d 535 (Fla. 5th DCA 2015) (when plaintiff lacked entitlement at time of loss, may prove standing by assignment of note or affidavit of ownership)
- Home Outlet, LLC v. U.S. Bank Nat'l Ass'n, 194 So. 3d 1075 (Fla. 5th DCA 2016) (review standard and sufficiency for reestablishing a lost note)
- Tomlinson v. GMAC Mortg., LLC, 173 So. 3d 1121 (Fla. 2d DCA 2015) (servicer testimony without supporting documents or personal knowledge insufficient to prove ownership)