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Spicer v. Ocwen Loan Servicing, LLC

Florida Court of Appeals, Fourth District

January 10, 2018

LUTHER EDWARD SPICER and CLARA JEAN MAY, Appellants,
v.
OCWEN LOAN SERVICING, LLC, RIVERWALK OF THE PALM BEACHES HOMEOWNERS ASSOCIATION, INC., and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., as Nominee for RESOURCE FUNDING GROUP, LLC., Appellees.

         Not final until disposition of timely filed motion for rehearing.

         Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Martin H. Colin, Judge; L.T. Case No. 502011CA000943XXXMB.

          H. Daniel McKillop, of McKillop Law Firm, Sarasota, for appellants.

          Anthony R. Yanez and Nicole R. Topper, of Blank Rome LLP, Fort Lauderdale, for appellee Ocwen Loan Servicing, LLC, Riverwalk of the Palm Beaches Homeowners Association, Inc.

          KUNTZ, J.

         The borrowers appeal the circuit court's final judgment of foreclosure in favor of the lender. They acknowledge that the original lender had standing to initiate the foreclosure action. However, they argue a party later substituted as plaintiff failed to establish that it had the right to enforce the note. We disagree. And, in doing so, we reaffirm our holdings that, pursuant to Florida Rule of Civil Procedure 1.260, a transferee substituted as plaintiff acquires the standing of the transferor original plaintiff. The acquired standing, coupled with the presentation of the original note, indorsed in blank, is sufficient to allow the substituted plaintiff to foreclose.

         Background

         One West Bank filed a complaint seeking to foreclose on the borrowers' residence. One West alleged that it had been assigned the note and mortgage by the original lender, and attached a copy of the original note, indorsed in blank, to the original complaint. Later, One West filed a motion to substitute party plaintiff and sought to substitute Ocwen as the party plaintiff. The court held a hearing and, over the borrowers' objection, granted the motion to substitute the party plaintiff.

         The case proceeded to trial. At the conclusion of the lender's case, the borrowers moved for an involuntary dismissal. The borrowers conceded that One West had standing when the lawsuit was filed. However, relying on Gewye v. Ventures Trust 2013-I-H-R, 189 So.3d 231, 232 (Fla. 2d DCA 2016), they argued that Ocwen, the substituted plaintiff, did not establish standing because the original note had been filed with the clerk of court long before it was purportedly transferred to Ocwen.

         The court denied the borrowers' motion for involuntary dismissal, distinguishing the case from Gewye, in part, because One West's motion to substitute Ocwen as the party plaintiff specifically referenced the Note. Since the Note was bearer paper, the court found "Ocwen proved it had possession of the endorsed in blank original note at the time of trial, by virtue of it being in the court file of the case of which it was the party plaintiff."

         After the court denied the motion for involuntary dismissal, the trial continued, judgment was ultimately entered in favor of the lender, and the borrowers appeal.

         Analysis

         We review the court's ruling that the substituted plaintiff had standing de novo. Assil v. Aurora Loan Servs., LLC, 171 So.3d 226, 227 (Fla. 4th DCA 2015).

         Our case law is clear that standing must be established at the time the complaint was filed, Kenney v. HSBC Bank USA, Nat'l Ass'n, 175 So.3d 377, 379 (Fla. 4th DCA 2015), and "a bank must also establish its standing at the time final judgment is entered, " Lamb v. Nationstar Mortg., LLC, 174 So.3d 1039, 1040 (Fla 4th DCA 2015). We have explained that "[s]tanding may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint." McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So.3d 170, 173 (Fla. ...


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