IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
CHARLES GREEN,
Appellant,
v. Case No. 5D15-4413
GREEN TREE SERVICING, LLC,
COUNTRYWIDE HOME LOANS, INC.,
CAPITAL ONE BANK (USA), N.A. F/K/A
CAPITAL ONE BANK, CACV OF COLORADO, LLC,
Appellees.
__________________________________________/
Opinion filed December 1, 2017
Appeal from the Circuit Court
for Brevard County,
Lisa Davidson, Judge.
Beau Bowin, of Bowin Law Group,
Indialantic, for Appellant.
Brandon S. Vesely, of Albertelli Law,
Tampa, for Appellee, Green Tree
Servicing, LLC.
No Appearance for other Appellees.
WALLIS, J.
Charles Green ("Borrower") appeals the trial court's final foreclosure judgment in
favor of Green Tree Servicing, LLC ("Green Tree"). Because Green Tree did not establish
its standing to foreclose, we reverse and remand for the entry of an involuntary dismissal.
In 2004, Borrower executed and delivered a note and mortgage in favor of
Countrywide Home Loans, Inc. ("CHL, Inc."). In December 2009, BAC Home Loans
Servicing, LP ("BAC"), f/k/a Countrywide Home Loans Servicing, LP ("CHL Servicing,
LP"), filed a foreclosure complaint against Borrower, alleging a January 2009 default date.
BAC also alleged its status as loan servicer and holder of the note. To the complaint, BAC
attached an unindorsed copy of the note. Borrower answered the complaint, denying
BAC's ownership of the note, and asserted a lack of standing as an affirmative defense.
In 2012, the trial court granted BAC's motion to substitute Bank of America, N.A.,
its successor by merger, as plaintiff. Then, in April 2014, the trial court granted Bank of
America's motion to substitute Green Tree as plaintiff, by virtue of assignment. In October
2014, Green Tree filed an amended complaint, once again alleging a January 2009
default date. In the amended complaint, Green Tree alleged its status as holder of the
note and attached a copy of the note bearing an undated blank indorsement from CHL,
Inc. In his answer, Borrower again raised BAC's lack of standing.
At trial, Green Tree called Christopher Lee, a foreclosure mediation specialist for
Ditech Financial, LLC ("Ditech"), "formerly known as Green Tree Servicing LLC." The
original note admitted into evidence at trial bore the same blank indorsement as the copy
attached to the amended complaint. Lee testified that he had no knowledge of when CHL,
Inc., indorsed the note, and provided no business records to indicate the date. Over
Borrower's objection, the trial court admitted several merger documents, including an
August 2015 certificate of merger between Green Tree and Ditech. The certificate of
merger provided that "[t]he surviving limited liability company is Green Tree Servicing
LLC," but then added that "[t]he name of the surviving limited liability company is hereby
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amended to Ditech Financial LLC." Lee further testified that "Countrywide Home Loan
Servicing was renamed BAC Home Loan Servicing" in April 2009, before the filing of the
original complaint, but Green Tree presented no other evidence or testimony about any
servicing agreements. After trial, the lower court entered final judgment of foreclosure for
Green Tree.
"A crucial element in any mortgage foreclosure proceeding is that the party seeking
foreclosure must demonstrate that it has standing to foreclose." McLean v. JP Morgan
Chase Bank Nat'l Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). We review a trial court's
decision as to this standing requirement de novo. See Elsman v. HSBC Bank USA, 182
So. 3d 770, 771 (Fla. 5th DCA 2015). "[A] person entitled to enforce the note and foreclose
on a mortgage is the holder of the note, a non-holder in possession of the note who has
the rights of a holder, or a person not in possession of the note who is entitled to enforce
. . . ." Gorel v. Bank of N.Y. Mellon, 165 So. 3d 44, 46 (Fla 5th DCA 2015) (citing §
673.2011, Fla. Stat. (2013)). Generally, "a party's standing is determined at the time the
lawsuit was filed." McLean, 79 So. 3d at 173. Here, BAC's original complaint did not
establish its holder status because it included only an unindorsed note payable to the
original lender, CHL, Inc. Cf. § 671.201(21), Fla. Stat. (2015) (defining "holder" as "[t]he
person in possession of a negotiable instrument that is payable either to bearer or to an
identified person that is the person in possession"). Thus, Green Tree properly concedes
that its subsequent filing of the indorsed note with the amended complaint and at trial did
not retroactively establish BAC's standing at the inception of the suit. See Walsh v. Bank
of N.Y. Mellon Tr., 219 So. 3d 929, 930 (Fla. 5th DCA 2017).
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Instead, Green Tree asserts that the merger between BAC and CHL Servicing, LP,
established BAC's standing at the time of filing the original complaint. "[I]n order to prove
standing to foreclose based upon a merger, the surviving entity must prove that it
'acquired all of [the absorbed entity's] assets, including [the] note and mortgage, by virtue
of the merger.'" Vogel v. Wells Fargo Bank, N.A., 192 So. 3d 714, 716 (Fla. 4th DCA
2016) (quoting Fiorito v. JP Morgan Chase Bank, Nat'l Ass'n, 174 So. 3d 519, 521 (Fla.
4th DCA 2015)). Here, like the witness in Vogel, Green Tree's witness offered no
explanation "as to why the copy of the note attached to the complaint . . . did not reflect
the [i]ndorsements" and testified that he did not know when the blank indorsement was
placed on the note. See id. at 716–17. Additionally, the witness testified primarily about
Ditech's receipt of Green Tree's and BAC's business records but failed to address the
transfer of the note to BAC pursuant to the merger. Thus, Green Tree failed to
demonstrate that BAC acquired standing based on the merger. See id.
Further, the merger may not have established BAC's standing even with the
necessary evidence at trial. The merger involved BAC and CHL Servicing, LP, while the
original note listed CHL, Inc., as the original lender. Neither Green Tree nor its witness
explained the relationship between these two distinct entities. Furthermore, throughout
trial, Green Tree's counsel improperly conflated the two by referring to both as
"Countrywide Home Loans," or simply "Countrywide." See Wisman v. Nationstar Mortg.,
LLC, 42 Fla. L. Weekly D2251, D2252 (Fla. 5th DCA Oct. 20, 2017) ("While Nationstar
claims that CHL Inc., CHL Servicing, LP and BAC are the same entity, its own evidence
demonstrates otherwise. . . . [T]he evidence fails to show that CHL Inc. was affiliated with
either CHL Servicing, LP or BAC."). Thus, Green Tree unpersuasively argues that BAC
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acquired possession of the note by way of the merger with CHL Servicing, Inc., which
never held the note. See Vogel, 192 So. 3d at 716. Only on appeal does Green Tree
argue that CHL Servicing, LP, had standing as the original servicer. However, the servicer
relationship alone does not demonstrate standing to foreclose. See Rodriguez v. Wells
Fargo Bank, N.A., 178 So. 3d 62, 63 (Fla. 4th DCA 2015).
Because none of Green Tree's purported predecessors had standing to foreclose
at the inception of the case, the trial court erred by finding that Green Tree acquired
standing to foreclose. See Corrigan v. Bank of Am., N.A., 189 So. 3d 187, 190 (Fla. 2d
DCA 2016). Accordingly, we reverse and remand for entry of an involuntary dismissal.
See Walsh, 219 So. 3d at 930.
REVERSED and REMANDED with Instructions.
COHEN, C.J. and SAWAYA, J., concur.
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