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Standing and Substituted Plaintiff

7/2/2018

 
"Original Note with a blank endorsement previously filed by prior Plaintiff with the Court, and released by the Substituted Plaintiff prior to trial,  so that the Substituted Plaintiff had physical possession of the note at the time of trial,  was sufficient to establish standing.”  ​​On June 29, 2018,  the Second District Court of Appeal in Nationstar Mortgage, LLC as successor in interest to Wells Fargo Bank,  v.  Johnson,  Case No. 2D17-2398, 43 Fla. L. Weekly D1509a,  (2ndDCA June 29, 2018) held that the “trial court erred by dismissing the foreclosure action for lack of standing,  as the substituted Plaintiff had physical possession of the note endorsed in blank at the time of trial.”  The background of this case is that  Wells Fargo Bank, N.A.,   filed a complaint with a copy of a note endorsed in blank,  and filed the original note with the Court shortly afterwards. Thereafter,  Wells Fargo filed a motion to substitute party plaintiff asserting that the mortgage had been transferred to Nationstar.   With the motion to substitute party plaintiff pending, Wells Fargo the day before trial, moved for the release of the originals that had been filed previously,  and requested a continuance so that Nationstar could enter an appearance and request the return of the originals.  The Motion to Substitute Party Plaintiff was granted at trial,  and Nationstar made an oral request to release the original note and mortgage into Nationstar’s custody “for use at trial.”  During the trial,  Nationstar then introduced the original note into evidence.  No objection was made as to the admission of the original note and mortgage.   Relying on Geweye v. Ventures Trust 2013-I-H-R, 189 So. 3d 231 (Fla. 2d DCA 2016), and Creadon v. U.S. Bank, N.A., 166 So. 3d 952 (Fla. 2d DCA 2015), the Johnsons moved for an involuntary dismissal at the conclusion of Nationstar's case, arguing that Nationstar lacked standing at trial. The trial court agreed and granted the motion.

The Second District Court of Appeal, held that in reversing and remanding the trial court’s decision, that this case is distinguishable from both Geweye and Creadon,as not only did Nationstar establish itself as the holder of the note by possessing the physical note at the time of trial,  but also that the copy of the blank endorsed note that Wells Fargo had attached to the initial complaint was identical to the original note.  Further,  the court held that “Nationstar did not have to show that Wells Fargo had formally transferred the note to it; Nationstar's physical possession of the blank-indorsed note was sufficient to establish its status as the holder. Cf. § 673.3011, Fla. Stat. (2016) (providing that even a person who wrongfully possesses a negotiable instrument may be entitled to enforce it).”

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Padgett Law Group and Padgett Law Group EP are D/B/As of Timothy D. Padgett, P.A. Timothy D. Padgett, P.A.'s practice areas include creditors' rights, estate planning and probate, real estate transactions and litigation. Not all practices or services are available in all states in which Timothy D. Padgett, P.A. practices.
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