Phan v. Deutsche Bank National Trust Company
198 So. 3d 744
| Fla. Dist. Ct. App. | 2016Background
- Deutsche Bank filed a foreclosure complaint against Ngoc Phan in 2009 alleging mortgage default.
- Phan denied default and asserted as an affirmative defense that Deutsche Bank lacked standing when it filed suit because it did not possess the original promissory note.
- Wells Fargo employee Deborah Kavalary testified Wells Fargo had physical possession of Phan’s original note and that Wells Fargo was the authorized servicer and an agent of Deutsche Bank.
- Phan did not dispute Wells Fargo’s testimony or its agency relationship below or on appeal.
- The trial court found Deutsche Bank had standing to foreclose; the Second District affirmed, focusing on constructive possession through an agent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff has standing to foreclose when the original note is physically held by its servicer | Deutsche Bank: It has standing because Wells Fargo, the servicer, held the note as Deutsche Bank’s agent, giving Deutsche Bank constructive possession | Phan: Deutsche Bank lacked standing because it did not have physical possession of the original note when suit was filed | Held: Constructive possession via an agent suffices; Deutsche Bank had standing because Wells Fargo held the note as its agent |
| Whether the record contained competent, substantial evidence of an agency relationship sufficient to establish constructive possession | Deutsche Bank: Kavalary’s testimony and documentary records showed Wells Fargo was authorized servicer and agent | Phan: (argued lack of physical possession; did not contest agency below or on appeal) | Held: The record (witness testimony and documents) supported an agency finding; absence of objection meant agency evidence was sufficient |
Key Cases Cited
- Country Place Cmty. Ass'n v. J.P. Morgan Mortg. Acquisition Corp., 51 So. 3d 1176 (Fla. 2d DCA 2010) (standing to foreclose must exist when complaint is filed)
- Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308 (Fla. 2d DCA 2013) (possession of original note at filing required to prove holder status)
- St. Clair v. U.S. Bank Nat'l Ass'n, 173 So. 3d 1045 (Fla. 2d DCA 2015) (discussing holder and possession under UCC)
- Deakter v. Menendez, 830 So. 2d 124 (Fla. 3d DCA 2002) (principal may have constructive possession when agent holds original note)
- Bush v. Belenke, 381 So. 2d 315 (Fla. 3d DCA 1980) (constructive possession exists where agent holds property for principal)
- Lazidis v. Goidl, 564 S.W.2d 453 (Tex. App. 1978) (agent’s physical possession can establish principal’s standing to enforce a note)