NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
WILLIAM CRAIG RUSSELL, )
)
Appellant, )
)
v. ) Case No. 2D14-3166
)
AURORA LOAN SERVICES, LLC; )
NATIONSTAR MORTGAGE, LLC; )
MORTGAGE ELECTRONIC )
REGISTRATION SYSTEMS, )
INCORPORATED AS NOMINEE FOR )
FIRST NATIONAL BANK OF ARIZONA; )
RL JAMES, INC.; and SUNDIAL OF )
SANIBEL CONDOMINIUM ASSOCIATION, )
INC., )
)
Appellees. )
)
Opinion filed April 24, 2015.
Appeal from the Circuit Court for Lee
County; James R. Thompson, Senior
Judge.
Richard Johnston, Jr. of Johnston
Champeau, LLC, Fort Myers, for Appellant.
Nancy M. Wallace of Akerman LLP,
Tallahassee; William P. Heller of Akerman
LLP, Fort Lauderdale; and Celia C. Falzone
of Akerman LLP, Jacksonville, for
Appellees Aurora Loan Services, LLC and
Nationstar Mortgage, LLC.
No appearance for remaining Appellees.
BLACK, Judge.
William Russell appeals a final judgment of foreclosure entered in favor of
Nationstar Mortgage, LLC (Nationstar), following a bench trial. We reverse because
Nationstar failed to establish that the original plaintiff, Aurora Loan Services, LLC
(Aurora), had standing to foreclose at the time Aurora filed the foreclosure complaint.
On February 25, 2011, Aurora filed a single-count, verified complaint for
foreclosure. In the complaint, Aurora alleged both that it was the servicer of the loan,
authorized to bring the lawsuit, and that it held the note and mortgage. Attached to the
complaint were a note payable to First National Bank of Arizona with no indorsements,
an allonge containing three indorsements, a mortgage naming Mortgage Electronic
Registration Systems, Inc. (MERS), as nominee for First National Bank of Arizona, and
a corporate assignment of mortgage.
The assignment reflects that the mortgage was assigned from MERS as
nominee for First National Bank of Arizona and its successors and assigns to Aurora on
November 23, 2010, prior to the initiation of the lawsuit. The note with attached allonge
contains three undated special indorsements. The first indorsement is from First
National Bank of Arizona to First National Bank of Nevada. The second is from First
National Bank of Nevada to Residential Funding Company, LLC. And the third
indorsement is from Residential Funding Company, LLC, to Deutsche Bank Trust
Company Americas as Trustee (Deutsche Bank). Deutsche Bank is not a party to the
action nor was it served.
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During the course of litigation Aurora moved to have Nationstar
substituted as plaintiff, and the court granted the motion. Aurora attached to its motion
an assignment of mortgage from Aurora to Nationstar. An amended complaint was not
filed. In his answer, Mr. Russell raised standing as an affirmative defense, alleging that
Aurora lacked standing to foreclose and that Nationstar, as substituted party plaintiff,
also lacked standing.
A bench trial was held on June 20, 2014. Nationstar called Jose Perez as
its sole witness. Mr. Perez testified that he was a default specialist for Nationstar and
had previously worked in the same capacity for Aurora. The original note and mortgage
were admitted into evidence along with the assignment of mortgage. However, the
assignment did not purport to assign or transfer the note, and as previously observed,
the note was not indorsed to Aurora nor was it indorsed in blank. See Lindsey v. Wells
Fargo Bank, N.A., 139 So. 3d 903, 904-05 (Fla. 1st DCA 2013); see also Bristol v. Wells
Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130, 1133 (Fla. 4th DCA 2014) (disapproving the
bank's argument that the assignment of mortgage, reflecting only transfer of the
mortgage and not the note, supported its standing to foreclose). In addition to those
documents, a limited power of attorney (POA) executed by Deutsche Bank and
evidencing Nationstar's designation as loan servicer was admitted over objection. The
POA identified Nationstar as the successor servicer to Aurora, which was a successor
servicer to Residential Funding Company, LLC. The POA, dated August 6, 2012, does
not indicate when Nationstar became the successor servicer to Aurora or when Aurora
succeeded Residential Funding Company.
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Mr. Russell moved for involuntary dismissal based on Aurora's and
Nationstar's lack of standing. He argued that neither Aurora nor Nationstar was the
holder of the note and that there was a total lack of evidence establishing Aurora's
authority to bring the foreclosure action as servicer. He further argued that the best
evidence of standing that Nationstar presented was the POA which was signed well
after the suit was commenced and was unclear as to whether it even applied to Mr.
Russell's loan.
The court did not expressly deny Mr. Russell's motion. And despite
expressing concerns regarding standing, the court ultimately entered the final judgment
of foreclosure in favor of Nationstar.
"A plaintiff alleging standing as a holder must prove it is a holder of the
note and mortgage both as of the time of trial and also that the (original) plaintiff had
standing as of the time the foreclosure complaint was filed." Kiefert v. Nationstar
Mortg., LLC, 153 So. 3d 351, 352 (Fla. 1st DCA 2014). Under this theory, a plaintiff
must establish more than just physical possession of the original note. If the plaintiff is
not the payee of the original note, the plaintiff must also prove that the original note
contains an indorsement in favor of the plaintiff (special indorsement) or an indorsement
in blank. Id. at 353. In either case, the indorsement must have been made prior to the
filing of the lawsuit in order to establish the plaintiff's standing. Id. A substituted plaintiff
acquires only the standing of the original plaintiff. Fla. R. Civ. P. 1.260; Kiefert, 153 So.
3d at 353 n.4.
Here, the only note in evidence was payable to First National Bank of
Arizona and specially indorsed, ultimately, to Deutsche Bank as trustee. Nationstar's
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witness, Mr. Perez, testified that Deutsche Bank was the holder of the note. Thus,
Nationstar failed to establish that Aurora had standing to bring the foreclosure suit as a
holder. See Lacombe v. Deutsche Bank Nat'l Trust Co., 149 So. 3d 152, 155 (Fla. 1st
DCA 2014) ("[N]one of Deutsche Bank's exhibits qualifies as an indorsement from [the
note holder] to Deutsche Bank, an assignment from [the note holder] to Deutsche Bank,
or an affidavit otherwise proving the plaintiff's standing to bring the foreclosure action on
the note and mortgage at issue as a matter of law.").
"In the mortgage foreclosure context, 'standing is broader than just actual
ownership of the beneficial interest in the note.' " Elston/Leetsdale, LLC v. CWCapital
Asset Mgmt. LLC, 87 So. 3d 14, 16-17 (Fla. 4th DCA 2012) (quoting Mortg. Elec.
Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007)). Florida Rule
of Civil Procedure 1.210(a), the real party in interest rule, " 'permits an action to be
prosecuted in the name of someone other than, but acting for, the real party in interest.'
" Azize, 965 So. 2d at 153 (quoting Kumar Corp. v. Nopal Lines, Ltd., 462 So. 2d 1178,
1183 (Fla. 3d DCA 1985)). Thus, "a servicer may be considered a party in interest to
commence legal action as long as the trustee joins or ratifies its action."
Elston/Leetsdale, 87 So. 3d at 17 (emphasis omitted).
In this case, as in Elston/Leetsdale, Aurora alleged and verified as true
that it was the loan servicer and had authority to bring the foreclosure action. Aurora
did not allege upon what authorization it acted. Nor did Aurora attach to the complaint
or file of record "any evidence, affidavits[,] or other documents, supporting its allegation
that it was authorized to prosecute the action on behalf of the trust." See
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Elston/Leetsdale, 87 So. 3d at 17. And, as in Elston/Leetsdale, the complaint was
verified by an employee of Aurora and not by the real party in interest—Deutsche Bank.
Nationstar contends, as it did at trial, that the POA sufficiently establishes
Aurora's standing at the time the foreclosure suit was filed. However, as previously
noted, the POA is dated some eighteen months after the complaint was filed, grants
limited powers to Nationstar only, and does not indicate the dates which Aurora
previously acted as servicer for Deutsche Bank. Nor does it indicate that Aurora held a
similar POA or was otherwise given the same limited powers granted to Nationstar. Cf.
One W. Bank, F.S.B. v. Bauer, 39 Fla. L. Weekly D1160 (Fla. 2d DCA May 30, 2014)
(granting petition for writ of certiorari and noting that powers of attorney for both the
original servicer and successor servicer were introduced into evidence), rev. denied,
157 So. 3d 1041 (Fla. 2014). Nationstar's evidence established that it was the current
loan servicer for Deutsche Bank; it did not prove that Aurora had standing as a prior
servicer. See Murray v. HSBC Bank USA, 157 So. 3d 355, 358-59 (Fla. 4th DCA 2015).
Perhaps more importantly, even if the POA could in some way be
evidence of Aurora's authority to bring the foreclosure action, the POA merely
references agreements which identify mortgage loans serviced by Nationstar and those
agreements identify loans not by loan number or name but rather by "series" numbers
which do not correlate to any of Mr. Russell's loan documents in evidence. When
questioned about the agreements referenced in the POA, Mr. Perez was unable to state
what loans were included in the various series identified. Nationstar failed to present
any evidence that Mr. Russell's loan was among those included in the agreements
referenced in the POA. Thus, Nationstar failed to establish that it—and its predecessor
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Aurora—had standing to foreclose the note and mortgage at issue. See Lacombe, 149
So. 3d at 154-55.
Because Nationstar failed to adduce any evidence of its predecessor's
standing to bring the foreclosure suit, we must consider what relief may be afforded to
Mr. Russell on remand. Rule 1.420(b) provides that "[a]fter a party seeking affirmative
relief in an action tried by the court without a jury has completed the presentation of
evidence, any other party may move for a dismissal on the ground that on the facts and
the law the party seeking affirmative relief has shown no right to relief." Here, Mr.
Russell moved for involuntary dismissal based on Nationstar's lack of standing and
contends on appeal that he is entitled to dismissal of the action. We agree. See, e.g.,
May v. PHH Mortg. Corp., 150 So. 3d 247, 249 (Fla. 2d DCA 2014); Lacombe, 149 So.
3d at 156.
Accordingly, we reverse the final judgment of foreclosure and remand with
directions that the trial court enter an order of involuntary dismissal.
CASANUEVA and SALARIO, JJ., Concur.
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