Russell v. Aurora Loan Services, LLC
163 So. 3d 639
| Fla. Dist. Ct. App. | 2015Background
- Aurora Loan Services filed a verified foreclosure complaint on Feb 25, 2011, alleging it was servicer and holder of the note and mortgage; complaint attached the original note (payable to First National Bank of Arizona), an allonge with three undated special indorsements, the mortgage (naming MERS as nominee), and a corporate assignment of mortgage to Aurora.
- The note’s indorsements ultimately run to Deutsche Bank Trust Company Americas as Trustee; the note was not indorsed to Aurora and was not indorsed in blank.
- Aurora later moved to substitute Nationstar Mortgage as plaintiff and attached an assignment of mortgage from Aurora to Nationstar; no amended complaint was filed.
- At bench trial Nationstar’s sole witness (a default specialist) testified Nationstar was servicer for Deutsche Bank; admitted exhibits included the note, mortgage, assignment (mortgage only), and a limited power of attorney (POA) dated Aug 6, 2012, naming Nationstar successor servicer.
- The POA postdates the complaint by ~18 months, grants limited powers to Nationstar (not Aurora), does not identify loans by loan number, and Nationstar failed to prove Russell’s loan was included; Aurora never produced evidence showing it was authorized by Deutsche Bank to prosecute the suit when filed.
- The trial court entered final judgment of foreclosure for Nationstar; the appellate court reversed, concluding plaintiff failed to prove standing at the time the complaint was filed and directed entry of involuntary dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the original plaintiff (Aurora) had standing to foreclose when complaint was filed | Aurora alleged it was servicer and holder of note and mortgage; complaint verification suffices | Russell argued Aurora was not holder and produced no authorization from Deutsche Bank to sue | Court: Aurora failed to prove holder status or authority to prosecute at filing; standing not established |
| Whether Nationstar (substituted plaintiff) acquired standing despite lack of original-plaintiff proof | Nationstar relied on assignment of mortgage and a later POA to show servicer authority and standing | Russell argued assignment did not transfer the note and POA postdated complaint and did not show Aurora’s authority | Court: Substituted plaintiff only acquires original plaintiff’s standing; Nationstar did not prove Aurora’s standing at filing |
| Whether an assignment of mortgage alone establishes standing to foreclose | Nationstar argued mortgage assignment supports standing | Russell argued note indorsement controls and assignment of mortgage alone is insufficient | Court: Assignment of mortgage without transfer/indorsement of note does not establish standing to foreclose |
| Whether POA dated after filing can cure standing defect at filing | Nationstar argued POA and servicer status establish authority retroactively | Russell argued POA postdated filing, granted limited powers to Nationstar (not Aurora), and did not identify the loan series including Russell’s loan | Court: POA irrelevant to Aurora’s standing at the time of filing; it did not show Aurora was authorized when suit began |
Key Cases Cited
- Kiefert v. Nationstar Mortg., 153 So. 3d 351 (Fla. 1st DCA 2014) (plaintiff alleging holder status must prove holder at time of filing and trial; indorsement must precede filing)
- Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903 (Fla. 1st DCA 2013) (assignment of mortgage insufficient when note indorsement does not support standing)
- Bristol v. Wells Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130 (Fla. 4th DCA 2014) (assignment of mortgage that does not transfer the note does not support standing to foreclose)
- Lacombe v. Deutsche Bank Nat'l Trust Co., 149 So. 3d 152 (Fla. 1st DCA 2014) (evidence failed to show plaintiff was proper holder or had authority to bring foreclosure)
- Elston/Leetsdale, LLC v. CWCapital Asset Mgmt. LLC, 87 So. 3d 14 (Fla. 4th DCA 2012) (servicer may prosecute suit only if trustee joins or ratifies or servicer shows authority; verified complaint alone insufficient)
- Mortg. Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151 (Fla. 2d DCA 2007) (real-party-in-interest rule allows action in name of one acting for real party in interest but requires proof of authority)
- May v. PHH Mortg. Corp., 150 So. 3d 247 (Fla. 2d DCA 2014) (affirming dismissal where plaintiff failed to prove standing)
- Murray v. HSBC Bank USA, 157 So. 3d 355 (Fla. 4th DCA 2015) (post-filing servicer evidence did not cure lack of predecessor servicer’s standing)