Schmidt v. Deutsche Bank, 170 So. 3d 938

Background

Deutsche Bank (as Trustee) sued Victoria Schmidt and Michael Messina on Jan 8, 2010 to foreclose a mortgage and to reestablish a lost promissory note; the copy of the note attached to the complaint lacked endorsements and the complaint alleged the note was not in plaintiff's possession.
Eighteen days after filing suit, Bank recorded an assignment of mortgage dated Jan 26, 2010 stating Option One assigned the mortgage "together with the note" to Bank; the assignment did not state any retroactive effect.
On April 7, 2010 (before trial), Bank filed the original note, mortgage, and an allonge dated March 8, 2006 containing a blank endorsement; Bank then dropped its lost-note count.
At bench trial Bank called one witness (an Ocwen loan analyst) who testified, based on review of records, that the allonge was dated March 2006 and that Bank held the note when suit was filed, but he had no business records showing when physical possession occurred.
Borrowers argued Bank lacked standing at the time the complaint was filed because the complaint alleged lack of possession and the assignment of mortgage indicated transfer after the filing; trial court nevertheless found Bank held the note when suit was filed and entered final judgment of foreclosure.
The appellate court reviewed standing de novo and found Bank failed to present substantial competent evidence that it was the holder of the note and allonge at the time the complaint was filed, so it reversed and directed an involuntary dismissal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Bank have standing to foreclose as holder of the note when suit was filed?	Bank argued the allonge (dated Mar 8, 2006) and later production of the original note showed it held the endorsed note before suit.	Borrowers argued the complaint alleged Bank did not possess the note, the assignment reflected transfer after filing, and Bank offered no competent proof it held the note at filing.	Bank failed to prove by substantial competent evidence it was the holder at filing; no standing.
Could the dated allonge alone establish possession/standing at filing?	Bank relied on the allonge date to infer possession prior to suit.	Borrowers contested that date-alone inference and highlighted lack of records showing physical possession at filing.	A dated allonge without competent evidence of possession timing is insufficient to establish standing.
Did the post-filing assignment (Jan 26, 2010) undermine Bank’s standing at filing?	Bank implied other transfer documents/agreements showed transfer to the trust earlier.	Borrowers pointed to the assignment’s January 26, 2010 date (after Jan 8 filing) and the complaint’s lost-note allegation to show lack of standing at filing.	The assignment dated after filing and lack of evidence of earlier transfer required Bank to prove possession before filing; it did not.
Could pooled-sale/PSA paperwork establish prior transfer of the note?	Bank argued on appeal that the Mortgage Loan Purchase Agreement and Pooling & Servicing Agreement showed transfer into the trust before suit.	Borrowers argued there was no competent evidence linking this loan specifically to those documents or showing intent to transfer the note to Bank before filing.	Trial evidence did not competently show the note was transferred into the trust or to Bank before filing; PSA/MLPA did not cure lack of standing.

Key Cases Cited

McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170 (court requires party seeking foreclosure to prove standing)
Lizio v. McCullom, 36 So.3d 927 (standing is required in foreclosure actions)
Verizzo v. Bank of N.Y., 28 So.3d 976 (holder status and standing principles in foreclosure suits)
Philogene v. ABN Amro Mortg. Grp., Inc., 948 So.2d 45 (party must demonstrate right to enforce note to foreclose)
Boyd v. Wells Fargo Bank, N.A., 143 So.3d 1128 (burden and de novo review for standing)
Kiefert v. Nationstar Mortg., LLC, 153 So.3d 351 (endorsement and possession required to enforce note)
Focht v. Wells Fargo Bank, N.A., 124 So.3d 308 (standing must be shown as of the filing date)
May v. PHH Mortg. Corp., 150 So.3d 247 (failure to prove prima facie case warrants dismissal)
Bank of N.Y. v. Calloway, 157 So.3d 1064 (foundational requirements for admitting loan history/business records)