CASE LAW UPDATE

An indorsement to a trustee is sufficient to establish standing to foreclose, in terms of the identity of the person or entity entitled to enforce the note, regardless of whether the identity of the trust is clear from note, together with any indorsements or allonges.

On January 23, 2019, the Fourth District Court of Appeal in Deutsche Bank Trust Company Americas, as Trustee for Residential Accredit Loans, Inc., Mortgage Asset Backed Pass Through Certificates, Series 2005-QS12 v. Harris, Case No. 4D17-3009 (Fla. 4th DCA 2019) reversed and remanded the lower courts involuntary dismissal for lack of standing as the endorsement on the note to Deutsche Bank Trust Company Americas, as Trustee was sufficient to establish standing pursuant to Fla. Stat. 673.3011(3)(b)(1), even though it did not specifically reference to the specific trust.

See also Bank of N.Y. Mellon Tr. Co., Nat'l Ass'n v. Ginsberg, 221 So. 3d 1196, 1197 (Fla. 4th DCA 2017), rev. denied sub nom. Ginsberg v. Bank of N.Y. Mellon Tr. Co., N.A., No. SC17-1468, 2018 WL 503421 (Fla. Jan. 22, 2018) (emphasis added).

Additionally, the Fourth District Court of Appeal addressed the lower court’s ruling on the demand letter as well in regards to the involuntary dismissal and reversed same.  The Fourth District Court of Appeal agreed with the Bank in that it was unnecessary for the witness to testify regarding his knowledge of the third-party vendor’s mailing practices to establish that the demand letter was sent.

When reaching this holding, the Fourth District Court of Appeal relied on Wells Fargo Bank, N.A. v. Balkissoon, 183 So. 3d 1272 (Fla. 4th DCA 2016), stating that although the issue in this case is whether the Bank presented evidence that the letter was mailed, and not the admissibility of the letter into evidence, as was the issue in Balkissoon, the testimony in this case was sufficient.

“The witness testified that Ocwen actually creates the letters with the requisite information and sends them electronically to the third-party vendor to print and send the letters out. Upon mailing, Ocwen receives a notification from the third-party vendor, and someone from Ocwen's pre-foreclosure department enters a note into the system indicating that the demand letter has been mailed. The witness also testified that the comment log, which was admitted into evidence, reflected that the letter in this case had indeed been mailed to the borrower.”


A count to re-establish the terms of the note per section 673.3091 of the Florida Statutes is not a separate cause of action, rather it is ancillary to the foreclosure count.  
Accordingly, the right to enforce the note, does not accrue until the borrowers have defaulted, regardless, of when the note is lost in the foreclosure context.

On January 10, 2019, the First District Court of Appeal affirmed the lower court’s decision in Mielke v. Deutsche Bank National Trust Company, as Trustee for GSAA Home Equity Trust 2005-MTR1, Asset-Backed Certificates, Series 2005-MTR1, Case No. 1D17-4265 (Fla. 1st DCA 2019).

​Holding that “the language of section 673.3091 (enforcing a lost note) of the Florida Statutes demonstrates that it is not intended to create a cause of action to reestablish a lost note. Rather, it only recognizes that an entity not possessing an instrument is still entitled to enforce if it meets certain conditions. The cause of action is the enforcement itself under the mortgage foreclosure count; section 673.3091 only sets forth special requirements if the plaintiff does not possess the instrument.”

The Fifth District Court of Appeal RECEDES from its opinion in Velden v. Nationstar Mortgage, LLC, 234 So. 3d 850 (Fla. 5th DCA 2018), which held that a lender could not recover damages for defaults that occurred more than five years prior to the filing date of the lawsuit.

On December 26, 2018, in Grant v. Citizens Bank, N.A., Case No. 5D17-726 (Fla. 5th DCA 2018) held that it would recede from its decision in Velden, and instead adopt the view of the statute of limitations set forth in Justice Lawson's concurring opinion in Bollettieri Resort Villas Condominium Ass'n v. Bank of New York Mellon, 228 So. 3d 72 (Fla. 2017). In Bollettieri, Justice Lawson addressed what he perceived to be “a widespread and fundamental misunderstanding, in Florida, regarding how the statute of limitations, § 95.11(2)(c), Fla. Stat. (2017), operates vis-à-vis a longterm note (and mortgage).”

Justice Lawson observed that when the right to accelerate the debt for non-payment is optional with the holder of the note, the statute of limitations does not run until the note is due unless the lender or holder accelerates and declares the full balance due earlier.  

Justice Lawson concluded that because the promissory note in that case allowed the lender or holder to hold off or forbear accelerating the note upon the borrower's non-payment, such forbearance would “not constitute a waiver or defense against future collection of all sums due and owing under the note.”

Borrower is judicially estopped from contesting standing in a state foreclosure action where borrower surrendered property in bankruptcy proceeding and consistently identified mortgagee as the party to whom she intended to surrender the property.  

On December 5, 2018,  the Fourth District Court of Appeal in Sayles v. Nationstar Mortgage, Case No. 4D17-1324 (Fla. 4th DCA 2018) held that while Florida District Courts of Appeal have reached different conclusions on how to treat a surrender of property, here, the borrower consistently identified Nationstar as the party to whom she intended to surrender the property in the bankruptcy proceeding. Accordingly, she is judicially estopped from contesting standing in the state foreclosure action.  

For more information about this cases contact Marissa Yaker, Esq.