Thursday, August 28, 2014

Florida Supremes Confuse Foreclosure Litigants and Judges

The Florida Rules of Civil Procedure, crafted by Florida's Supreme Court, contains a model foreclosure complaint form with the following words:

Plaintiff, A. B., sues defendant, C. D., and alleges:
1. This is an action to foreclose a mortgage on real property in .................. County, Florida.
2. On .....(date)....., defendant executed and delivered a promissory note and a mortgage securing payment of the note to plaintiff. The mortgage was recorded on .....(date)....., in Official Records Book .......... at page .......... of the public records of .................... County, Florida, and mortgaged the property described in the mortgage then owned by and in possession of the mortgagor, a copy of the mortgage containing a copy of the note being attached.
3. Plaintiff owns and holds the note and mortgage.

The language of point 3, requiring the words "Plaintiff owns and holds the note and mortgage," violates both the Uniform Commercial Code adopted by Florida's Legislature, AND controlling case law. 

673.3011 Person entitled to enforce instrument.The term “person entitled to enforce” an instrument means:
(1) The holder of the instrument;
(2) A nonholder in possession of the instrument who has the rights of a holder; or
(3) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to s.673.3091 or s. 673.4181(4).

A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.
673.3091 Enforcement of lost, destroyed, or stolen instrument.
(1) A person not in possession of an instrument is entitled to enforce the instrument if:
(a) The person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;
(b) The loss of possession was not the result of a transfer by the person or a lawful seizure; and
(c) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
(2) A person seeking enforcement of an instrument under subsection (1) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, s. 673.3081 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

And yet, any Circuit court hearing a foreclosure case might dismiss the complaint for failing to plead as required in the above form.  In One West Bank v Bauer, One West held a note indorsed in blank, but failed to prove it owned the note.  About this the Florida 2nd DCA wrote as follows:,%202014/2D12-5393.pdf

Case law is clear that the proper party with standing to foreclose a note and/or mortgage is the holder of the note and mortgage or the holder's representative. See Stone v. BankUnited, 115 So. 3d 411, 413 (Fla. 2d DCA 2013) (" 'Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder.' " (quoting Mazine v. M & I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011))); Mortg. Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007); Troupe v. Redner, 652 So. 2d 394, 395-96 (Fla. 2d DCA 1995). Because One West Bank possessed the original note, endorsed in blank, it was the lawful holder of the note entitled to enforce its terms. See Taylor v. Bayview Loan Servicing, LLC, 74 So. 3d 1115, 1117 (Fla. 2d DCA 2011); BAC Funding Consortium, Inc. ISAOA/ATIMA v. Jean-Jacques, 28 So. 3d 936, 938 (Fla. 2d DCA 2010); Azize, 965 So. 2d at 153.

Thus, the statute and case law makes it obvious that the Florida Supreme Court justices grievously erred in their requirement that plaintiffs claim they own and hold the note.

They should change that requirement accordingly.


Bob Hurt            Blog 1 2 3   f  t  
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