BOOM- 4th DCA REVERSES ANOTHER FORECLOSURE, MCLEAN V. JP MORGAN
A party seeking foreclosure must demonstrate that it owns and holds the
note and mortgage in question—otherwise, the plaintiff lacks standing to
foreclose. See Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010);
Verizzo v. Bank of N.Y., 28 So. 3d 976, 978 (Fla. 2d DCA 2010); Philogene
v. ABN Amro Mortg. Group Inc., 948 So. 2d 45, 46 (Fla. 4th DCA 2006). If
the note does not name the plaintiff as the payee, the note must bear a
special endorsement in favor of the plaintiff or a blank endorsement. See
Servedio v. U.S. Bank Nat’l Ass’n, 46 So. 3d 1105, 1106–07 (Fla. 4th DCA
2010); Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932, 933 (Fla. 4th
Alternatively, the plaintiff may submit evidence of an
assignment from the payee to the plaintiff or an affidavit of ownership to
prove its status as a holder of the note. See Servedio, 46 So. 3d at 1107.
While it is true that standing to foreclose can be demonstrated by the
filing of the original note with a special endorsement in favor of the
plaintiff, this does not alter the rule that a party’s standing is determined
at the time the lawsuit was filed. See Progressive. Exp. Ins. Co. v.
McGrath Comty. Chiropractic, 913 So. 2d 1281, 1286 (Fla. 2d DCA 2005).
Stated another way, “the 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.” Id. at 1285. Thus, a party is not permitted to
establish the right to maintain an action retroactively by acquiring
standing to file a lawsuit after the fact. Id. at 1286.
Generally, where a mortgage foreclosure action is based on an
assignment that was executed after the lawsuit was filed, the plaintiff
has failed to state a cause of action. See Jeff-Ray Corp. v. Jacobson, 566
So. 2d 885, 886 (Fla. 4th DCA 1990). In such cases, the proper course of
action is for the plaintiff to file a new complaint. Id. But even in the
absence of a valid written assignment, the “mere delivery of a note and
mortgage, with intention to pass the title, upon a proper consideration,
will vest the equitable interest in the person to whom it is so delivered.”
Johns v. Gillian, 184 So. 140, 143 (Fla. 1938). Thus, where there is an
indication that equitable transfer of the mortgage occurred prior to the
assignment, dismissal of the complaint is error, even if the assignment
was executed after the complaint was filed. See WM Specialty Mortg., LLC
v. Salomon, 874 So. 2d 680, 682-83 (Fla. 4th DCA 2004) (“At a minimum,
as WM Specialty suggests, the court should have upheld the complaint
because it stated a cause of action, but considered the issue of WM
Specialty’s interest on a motion for summary judgment. An evidentiary
hearing would have been the appropriate forum to resolve the conflict
which was apparent on the face of the assignment, i.e., whether WM
Specialty acquired interest in the mortgage prior to the filing of the
complaint.”) (emphasis added).
In the present case, as is common in recent foreclosure cases, Chase
did not attach a copy of the original note to its complaint, but instead
brought a count to re-establish a lost note. Later, however, Chase filed
with the circuit court the original promissory note, which bore a special
endorsement in favor of Chase. Because Chase presented to the trial
court the original promissory note, which contained a special
endorsement in its favor, it obtained standing to foreclose, at least at
some point. See, e.g., Kaminik v. Countrywide Home Loans, Inc., 64 So.
3d 195, 196 (Fla. 4th DCA 2011) (reversing fee award but otherwise
affirming summary final judgment of foreclosure where the record
demonstrated that the appellee “tendered the original promissory note to
the trial court, which contained a special indorsement in its favor”).
Nonetheless, the record evidence is insufficient to demonstrate that
Chase had standing to foreclose at the time the lawsuit was filed. The
mortgage was assigned to Chase three days after Chase filed the instant
foreclosure complaint. More importantly, the original note contained an
undated special endorsement in Chase’s favor, and the affidavit filed in
support of summary judgment did not state when the endorsement was
made to Chase. Furthermore, the affidavit, which was dated after the
lawsuit was filed, did not specifically state when Chase became the
owner of the note and mortgage, nor did the affidavit indicate that Chase
was the owner of the note and mortgage before suit was filed.
Therefore, Chase failed to submit any record evidence proving that it had the right
to enforce the note on the date the complaint was filed. See U.S. Bank
Nat’l Ass’n v. Kimball, 27 A. 3d 1087 (Vt. 2011) (bank that filed a
foreclosure complaint against a homeowner did not show that, at the
time it filed the complaint, the bank possessed the original promissory
note either made payable to bearer with a blank endorsement or made
payable to order with an endorsement specifically to the bank; although
the bank ultimately submitted the promissory note with an undated
1 We think that if the body of the affidavit had indicated that Chase was the
owner of the note and mortgage before suit was filed, this would have been
sufficient to establish Chase’s standing on the date it filed the complaint.
Alternatively, if the affidavit itself had been executed before the lawsuit was
filed, the allegation that Chase was the “owner and holder of the note” would
have been sufficient to establish Chase’s standing at the inception of the
We therefore reverse the summary judgment and corresponding final
judgment of foreclosure. On remand, in order for Chase to be entitled to
summary judgment, it must show, without genuine issue of material
fact, that it was the holder of the note on the date the complaint was filed
(i.e., that the note was endorsed to Chase on or before the date the
lawsuit was filed). By contrast, if the evidence shows that the note was
endorsed to Chase after the lawsuit was filed, then Chase had no
standing at the time the complaint was filed, in which case the trial court
should dismiss the instant lawsuit and Chase must file a new complaint.
See Jeff-Ray Corp., 566 So. 2d at 886. An evidentiary hearing may also
be required if there is disputed evidence on an issue, such as to the date
the note was endorsed to Chase.