228 So. 3d 1194
Fla. Dist. Ct. App.2017Background
- Wells Fargo filed a foreclosure complaint against David Glicken attaching a copy of the promissory note and an allonge containing a blank indorsement from the original lender, First Union.
- Wells Fargo later assigned the mortgage and transferred the note to U.S. Bank, which was substituted as plaintiff and filed the original note, allonge, and mortgage with the trial court.
- At trial U.S. Bank admitted the original note and allonge (identical to the copies attached to the complaint) into evidence and presented the mortgage assignment, payment history, and acceleration notice evidence.
- Glicken argued U.S. Bank lacked standing at trial because there was no testimony showing assignment of the note to U.S. Bank; he asserted assignment of the mortgage alone was insufficient to prove note ownership.
- The trial court ruled for Glicken, holding that standing cannot be transferred by sale of the note and that U.S. Bank was not the holder of the note at the time of filing or trial.
- The district court reversed, holding the blank indorsement attached to the complaint and the subsequent filing/admission of the original note and allonge established standing for U.S. Bank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff had standing to foreclose at filing and trial | Wells Fargo had standing at filing (copied note & allonge attached); U.S. Bank possessed original blank-indorsed note at trial, proving standing | No evidence/testimony that the note was assigned to U.S. Bank; mortgage assignment alone insufficient | Reversed: blank indorsement on copy attached to complaint plus production/admission of original note/allonge at trial established standing for U.S. Bank |
| Whether standing transfers only via corporate merger | U.S. Bank argued negotiability and transfer by endorsement/possession suffice | Trial court: standing not transferable except by merger/acquisition | Rejected: court held notes are negotiable and standing can transfer by endorsement/possession without merger |
| Whether assignment of mortgage alone proves standing to enforce the note | Plaintiff relied on note indorsement and possession, not mortgage assignment | Defendant argued assignment of mortgage cannot substitute for note ownership | Court: mortgage assignment insufficient by itself; focus is on the note and its indorsement/possession |
| Whether plaintiff complied with mortgage notice-before-acceleration | U.S. Bank presented evidence of compliance (acceleration letter, payment history) | Not necessary to resolve because standing dispositive; trial court had also weighed evidence negatively | Court noted U.S. Bank presented sufficient evidence of compliance but did not need to decide further after resolving standing |
Key Cases Cited
- Fed. Nat’l Mortg. Ass’n v. Rafaeli, 225 So.3d 264 (Fla. 4th DCA 2017) (notes can be transferred without bank merger)
- Jallali v. Christiana Tr., 200 So.3d 149 (Fla. 4th DCA 2016) (substituted plaintiff may acquire standing if original had standing)
- Assil v. Aurora Loan Servs., LLC, 171 So.3d 226 (Fla. 4th DCA 2015) (standing principles for substituted plaintiffs)
- Riggs v. Aurora Loan Servs., LLC, 36 So.3d 932 (Fla. 4th DCA 2010) (blank indorsement payable to bearer negotiable by possession)
- Barnett Bank of Palm Beach Cty., N.A. v. Regency Highland Condo. Ass’n, 452 So.2d 587 (Fla. 4th DCA 1984) (law favors negotiability and transferability of negotiable paper)
- Gorel v. Bank of N.Y. Mellon, 165 So.3d 44 (Fla. 5th DCA 2015) (assignment of mortgage insufficient without note indorsement predating complaint)
- Jelic v. BAC Home Loans Servicing, LP, 178 So.3d 523 (Fla. 4th DCA 2015) (same principle regarding mortgage assignment vs. note ownership)
- Lamb v. Nationstar Mortg., LLC, 174 So.3d 1039 (Fla. 4th DCA 2015) (standing requires proof concerning the note)
- Deutsche Bank Nat’l Tr. Co. v. Lippi, 78 So.3d 81 (Fla. 5th DCA 2012) (mortgage follows the note)
- Nationstar Mortg., LLC v. Bo Chan, 226 So.3d 330 (Fla. 5th DCA 2017) (copy + later production of original undated blank indorsement suffices to show standing)