DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for MORGAN STANLEY ABS CAPITAL I INC.TRUST 2006-NC3, Appellant,
STEVE SMITH and ALTHEA SMITH, Appellees.
final until disposition of timely filed motion for rehearing.
from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Barry Stone, Judge; L.T. Case No. CACE
Kimberly S. Mello and Vitaliy Kats of Greenberg Traurig,
P.A., Tampa, for appellant.
D. Lopez of Samuel D. Lopez, P.A., Pembroke Pines, for
Bank National Trust Company, as Trustee for Morgan Stanley
ABS Capital I Inc. Trust 2006-NC3 ("the Bank"),
appeals the involuntary dismissal of its foreclosure action.
September 2013, the Bank filed a foreclosure action against
Steve and Althea Smith ("Borrowers") that also
included a count to reestablish and enforce a lost note.
Attached to the complaint was a copy of the lost note
identifying New Century Mortgage Corporation as the original
lender. The note contained no indorsements. The Bank also
attached to its complaint two assignments of mortgage dated
January 27, 2010. The first assignment showed that the
mortgage together with the note was assigned from the
original lender to Morgan Stanley Mortgage Capital Holdings
("Morgan Stanley"). A representative of HomEq
Servicing signed the first assignment as attorney-in-fact for
the original lender. The second assignment showed that the
mortgage together with the note was assigned from Morgan
Stanley to the Bank. The same HomEq representative signed the
second assignment as attorney-in-fact for Morgan Stanley.
2015, the Bank filed with the court another copy of the lost
note. Unlike the copy attached to the original complaint,
this copy contained an undated, special indorsement from the
original lender to Morgan Stanley. There was also an allonge
to the note which contained an undated, special indorsement
from Morgan Stanley to the Bank.
answered the complaint and raised several affirmative
defenses, including lack of standing and fraud on the court.
Both of those defenses alleged that the assignments of
mortgage attached to the complaint were fraudulent in that
there was no accompanying power of attorney evidencing
HomEq's relationship with the original lender.
matter ultimately proceeded to a bench trial where the Bank
presented its case through the testimony of Sony Prudent
("the witness"), a senior loan analyst for the
Bank's current servicer. Through the witness, the Bank
introduced into evidence the copy of the note containing the
series of indorsements ending in a special indorsement to the
Bank. The witness testified that the original note could not
be located despite a diligent search and that no other entity
but the Bank was entitled to enforce the original note. The
witness did not know when the indorsements were placed on the
Bank also introduced into evidence, without
objection, certified copies of the two assignments of
mortgage. The witness testified that the assignments predated
the filing of the complaint and transferred Borrowers'
mortgage and note from the original lender to Morgan Stanley
and then from Morgan Stanley to the Bank. The witness further
confirmed that the assignments reflected that HomEq, the
servicer of the loan at the time the assignments were
executed, was acting as attorney-in-fact for both the
original lender and Morgan Stanley. The witness, however, had
no documentation or personal knowledge as to whether HomEq
had the authority to execute the assignments of mortgage.
the Bank rested, and without presenting any evidence of their
own, Borrowers moved for involuntary dismissal on the basis
that the Bank failed to prove that it was entitled to enforce
the lost note. Specifically, Borrowers argued that by failing
to introduce a power of attorney showing that HomEq was
authorized to execute the assignments of mortgage, the Bank
could not demonstrate a valid chain of transfers. After
hearing argument on the issue, the court involuntarily
dismissed the Bank's action for lack of standing pursuant
to Bonafide Properties, LLC v. E-Trade Bank, 208
So.3d 1279 (Fla. 5th DCA 2017). This appeal follows.
well established that "a plaintiff in a foreclosure
action must establish its standing both at the time the
complaint was filed and when judgment is entered."
Spicer v. Ocwen Loan Servicing, LLC, 238 So.3d 275,
278-79 (Fla. 4th DCA 2018). One way a foreclosure plaintiff
may establish standing is by proving that the borrower's
note is lost and that the plaintiff is entitled to enforce
the lost note pursuant to section 673.3091, Florida Statutes.
§ 673.3011(3), Fla. ...