final until disposition of timely filed motion for rehearing.
Appeal from the Circuit Court for Miami-Dade County Lower
Tribunal No. 12-38811, Beatrice Butchko, Judge.
Greenberg Traurig, P.A., and Kimberly S. Mello, Jonathan S.
Tannen, and Vitaliy Kats (Tampa), for appellant.
Keeley, PLLC, and Bruce Jacobs and Court Keeley, for appellee
Joseph T. Buset.
Kellogg Lehman Schneider Grossman LLP, and Stephanie Reed
Traband and Victor Petrescu, for Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation, as
LOGUE, LUCK, and LINDSEY, JJ.
Bank USA, National Association appeals a final judgment
dismissing its mortgage foreclosure complaint in favor of the
Borrowers, Joseph and Margaret Buset. At first blush, this
case appears straightforward: the Borrowers stipulated to the
note, mortgage, and default. And at the time the complaint
was filed, the Bank was the holder of the note with an
indorsement in blank that had been modified to a special
indorsement to the Bank. At some point, however, the focus of
this case shifted from foreclosure to securitization. Relying
heavily on expert legal testimony of an out-of-state lawyer
who specialized in securitization, the trial court dismissed
the foreclosure after the trial. For the reasons described
below, we reverse and direct the trial court to enter
judgment for the Bank.
October 2012, HSBC Bank as Trustee for Fremont Home Loan
Trust 2005-B filed a foreclosure action against the Busets.
The complaint alleged that the Bank held the note and
mortgage, the Busets had failed to pay, and the Bank had
complied with all conditions precedent. Copies of the note
and mortgage were attached to the complaint.
evidence at trial indicated that on February 16, 2005, the
Busets borrowed $192, 000 from Fremont Investment & Loan
(the Originator). The loan was secured by a mortgage on a
residential condominium. The mortgage named Mortgage
Electronic Registration Systems, Inc. (MERS) as
a few months, the Originator packaged the note with others
for purposes of securitization and sale to investors. In this
regard, the Originator entered into a Pooling and Servicing
Agreement for the "Fremont Home Loan Trust 2005-B
Mortgage Backed Certificates Series 2005-B." The parties
to the Agreement included the Originator, another entity as
Depositor, and the Bank as Trustee.
Pooling and Servicing Agreement required the Originator to
sign blank indorsements in the following form: "Pay to
the order of, without recourse." The note contains an
undated, signed, blank indorsement in exactly that form
signed by the Senior Vice President of the Originator. As
required by the Agreement, the Note was transferred from the
Originator, to the Depositor, to the Bank. In July 2008, the
Originator entered into a voluntary liquidation. At an
unknown date, the Originator's blank indorsement was
converted to a special indorsement to the Bank as payee. This
handwritten change was undated and unsigned.
2012, after the Borrowers defaulted on the note, MERS
executed a recorded assignment of the mortgage to the Bank
which reads "This assignment is from . . . MERS as
nominee for Fremont Investment & Loan, . . . its
successors and assigns . . . to HSBC Bank."
the course of its history, the loan had three servicers. To
prove the amount of the default at trial, the Bank offered
the testimony of the current servicer who proffered as
business records the payment history, default letters, and
payoff printout. These records indicated the Borrowers had
stopped making payments by September 1, 2010. The trial
court, however, excluded the documents from evidence,
concluding that the Bank failed to present a sufficient
Borrowers presented one witness, Kathleen Cully, who is
admitted to the Bar of New York but not Florida. She is an
expert in securitizing income flows for sale to investors,
but she acknowledged she was "not an expert in Florida
law." Over the Bank's objection, Ms. Cully testified
to numerous legal opinions, including her opinions that the
note at issue was not negotiable; that the Bank lacked
standing; and that the Pooling and Servicing Agreement was
trial, the trial court dismissed the case. Throughout the
final judgment, the trial court emphasized that its legal
conclusions were based on Cully's opinions, mentioning
Cully by name at least seven times. Regarding Cully's
legal opinions, the final judgment included statements such
as the trial court "gives great weight as the trier of
fact to the testimony of Defendant's expert witness,
Kathleen Cully, " suggesting Cully's opinions
presented questions of fact subject to credibility
determinations rather than legal issues controlled by Florida
law. The final judgment holds in relevant part that (1) the
note was not a negotiable instrument; (2) the Bank lacked
standing; (3) the Bank violated the Pooling and Servicing
Agreement; (4) the Servicer's business records were
inadmissible; and (5) the Bank had unclean hands. The Bank
The trial court erred by admitting expert ...