211 So. 3d 142
Fla. Dist. Ct. App.2017Background
- U.S. Bank, as Trustee, filed a residential mortgage foreclosure in June 2014 and attached the original note and mortgage to its complaint.
- The note (dated March 14, 2006) bore multiple undated indorsements: two special indorsements and one indorsement in blank; an undated allonge by Ocwen Federal Bank was also attached.
- The Bank alleged it was the holder entitled to enforce the note because it possessed the original note indorsed in blank when suit was filed.
- At bench trial the servicer’s case manager testified to the chain of transfers ending with the Bank and that the Bank had possession of the original note indorsed in blank as of October 16, 2013.
- Defendants moved for involuntary dismissal at the close of the Bank’s case, arguing the indorsement chain was broken (pointing to the allonge) and the Bank was not the proper holder. The trial court granted the motion.
- The appellate court reversed, holding the Bank proved standing by possession of a note indorsed in blank and that the allonge was an anomalous indorsement that did not affect negotiability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bank had standing to foreclose | Bank was the holder entitled to enforce because it possessed the original note indorsed in blank when suit was filed | Allonge and breaks in indorsement chain show Bank was not the holder; chain of title flawed | Bank had standing: possession of original note indorsed in blank establishes holder status |
| Effect of an undated allonge by an entity not in chain | Allonge was anomalous and not made by a holder; it does not affect negotiation | Allonge creates a break in the indorsement chain and undermines Bank’s claim to be holder | Allonge was an anomalous indorsement and, by statute, did not affect negotiation or Bank’s holder status |
| Requirement to prove possession at filing | Bank produced original note showing blank indorsement at filing | Defendants claimed Bank failed to prove possession as pled | Possession of the original note indorsed in blank at time of filing satisfied standing requirement |
| Burden at involuntary dismissal stage | Bank’s trial evidence (servicer testimony, note) sufficed to establish standing | Defendants argued remaining gaps required dismissal | Trial court erred; evidence was sufficient and dismissal was improper |
Key Cases Cited
- McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170 (Fla. 4th DCA 2012) (plaintiff must prove standing to foreclose when complaint filed)
- Murray v. HSBC Bank USA, 157 So.3d 355 (Fla. 4th DCA 2015) (definition and requirements for a person entitled to enforce)
- Vogel v. Wells Fargo Bank, N.A., 192 So.3d 714 (Fla. 4th DCA 2016) (holder seeking to enforce a note indorsed in blank must show physical possession at filing)
- Purificato v. Nationstar Mortg., LLC, 182 So.3d 821 (Fla. 4th DCA 2016) (possession of a note with a blank indorsement at filing establishes standing)
- Everhome Mortg. Co. v. Janssen, 100 So.3d 1239 (Fla. 2d DCA 2012) (holder of original note indorsed in blank has standing)