Thomas Caraccia v. U.S. Bank, National Association
185 So. 3d 1277
| Fla. Dist. Ct. App. | 2016Background
- In 2005 Caraccia executed a note and mortgage in favor of Virtual Bank; the note was endorsed in blank and transferred to Bank of America, then to U.S. Bank as trustee for a securitization pool.
- Bank of America later held physical possession of the note as servicer for U.S. Bank; U.S. Bank retained ownership/control per the pooling and servicing agreement (PSA).
- Caraccia defaulted; U.S. Bank mailed a default/acceleration notice to a PO Box address obtained from the U.S. Postal Service rather than the property address specified in the mortgage.
- Caraccia sued, asserting U.S. Bank lacked standing to foreclose because it did not have physical possession of the bearer note, and that U.S. Bank failed to meet mortgage/note conditions precedent on notice.
- After a bench trial the trial court entered final judgment for U.S. Bank; Caraccia appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose where note endorsed in blank and plaintiff lacked physical possession at filing | Caraccia: U.S. Bank lacked standing because it did not have physical possession of the bearer note when suit was filed | U.S. Bank: Even without physical possession, U.S. Bank had constructive possession/control via PSA and servicer relationship, so it was a holder or entitled to enforce | Court: Affirmed — constructive possession under agency/PSA satisfied possession requirement for bearer paper; standing established |
| Compliance with conditions precedent (notice/address) | Caraccia: Default notice violated mortgage/note because it was not sent to property address as required | U.S. Bank: USPS provided a valid forwarding address; mailing to PO Box ensured receipt and did not prejudice borrower | Court: Affirmed — mailing to valid PO Box did not breach a condition in a way that prejudiced borrower; failure to use property address insufficient to overturn judgment |
Key Cases Cited
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170 (Fla. 4th DCA) (standing to foreclose is determined at time suit filed)
- Rodriguez v. Wells Fargo Bank, N.A., 178 So. 3d 62 (Fla. 4th DCA) (possession is central for bearer notes)
- Deakter v. Menendez, 830 So. 2d 124 (Fla. 3d DCA) (constructive possession via control/agency can satisfy possession element)
- Tremblay v. U.S. Bank, Nat’l Ass’n, 164 So. 3d 85 (Fla. 4th DCA) (distinguishing servicer v. trustee/holder where evidence showed servicer was holder)
- Gorel v. Bank of N.Y. Mellon, 165 So. 3d 44 (Fla. 5th DCA) (breach of condition precedent does not bar enforcement absent prejudice)