DISCLAIMER: THE CONTENT IN THIS BLOG IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE MISCONSTRUED AS LEGAL ADVICE! Anthony Martinez is a Litigation Discovery Expert, Consultant and Strategist. Neither Anthony Martinez nor his firm AMA engage in the practice of law and only provide Case Management Consulting (“CMC”) and Legal Process Outsourcing Services (“LPO”) to licensed practicing attorneys. AMA will provide public information only and will not provide any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies. If you are not an attorney, AMA encourages you to consult with a licensed attorney in your area regarding the statements made in this blog and the use thereof. Sign up today for AMA Experts Educate Ya Self™ Platform Presents - HOW TO SUCCESSFULLY WIN A FORECLOSURE CASE IN FLORIDA and for e-Logic Group’s ONLINE ADVANCED INTRODUCTION – FORECLOSURE FRAUD AND LOAN NOTE EXAMINATION. Tune in every Thursday evening at 7pm and listen to the controversial live or archived conversations of real property litigation with expert guests on Blog Talk Radio’s - Who Stole Your Loan Radio - Hosted by Anthony Martinez. Look for up and coming Webinar Events and Seminar Events presented and hosted by Anthony Martinez who talks specifically about Unlawful Foreclosure Fraud, Exposing the Fraud, the importance of a Defense Trial Witness, Loan Note Examination a in addition to advanced discovery information, tactics and strategies!
Dealing with Non-Jury Trials and Summary Judgment…
There is this fundamental position foreclosure plaintiffs have taken across the state to usurp the Holder in Due Course requirement and Florida Rules of Civil Procedure Form 1.944 pleading requirement of identifying the owner and holder of the note and mortgage. It is the HOLDER argument and its design is to withstand the STANDING AT INCEPTION requirement for trial and summary judgment. The new status quo is the reliance on F.S. 673.3011 which plaintiffs use as a moving target to foreclose as the HOLDER of the note and not the Holder in Due Course. For some odd reason, defense attorneys seem to find this position as a road block to a successful dismissal of a foreclosure complaint. The truth is, understanding how to overcome the HOLDER argument by successfully addressing the STANDING AT INCEPTION issue gets you a judgment in favor of the Defendant instead of an involuntary dismissal or allowing a voluntary dismissal. Take a minute to read this blog piece thoroughly. It’s right out of my current Webinar – How to Successfully Win a Foreclosure Case you might consider signing up for after you read this.
We’ve been hearing the same song and dance from plaintiffs counsel and the courts have been somewhat hypnotized by it. It sounds sort of like this – “We hold the original note endorsed in blank Your Honor – that’s all that matters.” And under Florida Statutes 673.3011, a holder is entitled to enforce the terms. Here are some little things you should be mindful of.
- Did plaintiff plead holder under F.S. 673.3011 in the complaint?
- If so, what subsection of F.S. 673.3011 did they claim?
Remember, one cannot just argue points never raised in the complaint and vagueness and lack of pleading a short and plain statement results in a failure to properly state a claim. This is why your affirmative defenses have to specifically address these issues of standing AND standing at inception. All to often we forget the devil is in the details and we fall into assumption and presumption mode very much like judges. We assume that because a copy of the note endorsed in blank was filed with the complaint and that the purported original is present at trial its game over – the Plaintiff has established standing at inception. This simply is not so. Case law doesn’t state presenting a copy of the note attached to the complaint endorsed in blank AT THE INCEPTION of the case is sufficient to establish standing t inception. Case law states:
“A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff’s status as the holder of the note.”
See Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). However, standing must be established at the time the complaint was filed. Id. Thus, the bank needed to introduce evidence that it was in possession of the original note with the blank endorsement at the time it filed the complaint. Id. Did you hear that? THE BANK NEEDS TO INTRODUCE EVIDENCE that it was in possession of the original note with the blank endorsement at the time it filed the complaint. EVIDENCE! If a plaintiff submits a copy of a note endorsed in blank at the time the complaint was filed this is not evidence of possession of the ORIGINAL. This simply means they were in possession of a copy at the time the complaint was filed. Let’s take a look at some of the relevant case-law courts rely upon when dealing with the standing at inception issue:
- A party seeking to foreclose on a note and mortgage must prove that it has standing to do so. To have standing to foreclose, the plaintiff must demonstrate that it holds the note and mortgage in question. See Khan v. Bank of Am., N.A., 58 So. 3d 927, 928 (Fla. 5th DCA 2011).
- A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff’s status as the holder of the note. A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose. Standing to foreclose is determined at the time the lawsuit is filed and can be demonstrated by the filing of an assignment or the original note with a special endorsement in favor of the plaintiff or a blank endorsement. A “plaintiff’s lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed” and cannot be established “retroactively by acquiring standing to file a lawsuit after the fact.” Id. See McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 172 (Fla. 4th DCA 2012).
- Thus, Wells Fargo’s submission of a post-filing assignment of the note and mortgage does not establish that it had standing when it filed the lawsuit. See Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013); Gonzalez v. Deutsche Bank Nat’l Trust Co., 95 So.3d 251, 253 (Fla. 2d DCA 2012) and McLean,79 So.3d at 173.
- As with the assignment, however, Wells Fargo did not submit the original note until several months after it had filed the complaint. To establish standing as the holder of a note endorsed in blank, a party must be in possession of the original note. See § 671.201(21)(a), Fla. Stat. (2007) (defining “holder” as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession”); See Everhome Mortg. Co. v. Janssen, 100 So.3d 1239, 1240 (Fla. 2d DCA 2012); Green v. JPMorgan Chase Bank, N.A., 109 So.3d 1285, 1288 (Fla. 5th DCA 2013).
- Thus, Wells Fargo was required to submit evidence that it was in possession of the original note with the blank endorsement at the time it filed the complaint to establish standing. See Green, 109 So.3d at 1288.
To establish standing at inception it is clear, the plaintiff can present an assignment or the original note with a special endorsement or endorsed in blank. Why the assignment? Assignments are notarized documents and the original is commonly recorded in public records thus, a copy of an assignment is sufficient because it is validly dated. An original note specifically endorsed or endorsed in blank that is submitted to the court at the time the complaint is filed makes clear that the party filing the action is clearly in possession as of the date of the filing. A copy of a note endorsed in blank at the time the complaint was filed simply does not get you there without assumptions and presumptions that the Plaintiff was in possession at the time the complaint was filed.
It is common at non-jury trials for plaintiffs counsel to have the servicer witness testify the plaintiff was in possession at the time the complaint was filed. This is not evidence. There must be documentary proof the note was actually PHYSICALLY transferred to the named plaintiff in order to be the HOLDER. The STANDING AT INCEPTION argument is drilled home effectively when you can show the court the plaintiff has failed to present any DOCUMENTARY EVIDENCE the plaintiff was in possession of the note at the time the complaint was filed.
Consider signing up for my latest Webinar – How to Successfully Win a Foreclosure Case and perfect a successful foreclosure defense litigation strategy.