4th DCA Florida gets It! Judgment Reversed for Borrower! HSBC Goes Down in Flames
This case is important for many reasons:
It does not remand for a new trial or further proceedings. it directs that judgment be entered for the borrower.
Standing: If the foreclosing party lacks standing it doesn’t matter how many payments were allegedly “missed.” A party who has no injury or interest in the subject matter cannot bring the claim.
The assignment and the note “endorsement” was after the suit was filed. Hence at the time of the filing of the foreclosure lawsuit, there could be no standing and therefore the lawsuit should have been dismissed. It is for that reason that the 4th DCA directs judgment for the borrower.
The burden of proof is on the bank — not the borrower. In order to sustain a complaint at trial, the burden of proof is on the alleged creditor to prove its standing. AND THAT MEANS that discovery demands, routinely rejected by judges, can be enforced.
The alleged endorsement was undated: The Court found that an undated endorsement cannot prove standing. The witness at trial must testify that he/she knows everything relevant about the endorsement, who did it, when and why.
Robo-witnesses don’t have that information because the bank won;t let them have it. If they did have that information they would either be required to reveal that there was no underlying transaction, or perjure themselves.
The court completely accepts the fact that the banks are backdating documents and it says backdating an assignment does nothing to help the bank. In other words, lying about it doesn’t cure the bank’s case.
EVIDENCE: The witness testified that he knew nothing other than what he could see on the face of the assignment.
The fact that it is a document doesn’t mean it is a business record. And the fact that it is a business record doesn’t mean it is a valid exception to the hearsay rule.
Judges, by the thousands ruled in millions of cases that such a proffer was admissible evidence. They were and remain wrong for doing so. If the witness cannot testify from personal knowledge about the matters asserted in a document, then neither the witness nor the document can be admitted into evidence.
The question is not whether the the witness correctly read aloud what was in the document (probably backdated and forged). The question is whether the information on the document is reliable and trustworthy and true.
A document could have the appearance of reliability and trustworthiness but the recitals in the document might not be true. The homeowner cannot cross examine a document and a homeowner cannot cross examine a witness about the accuracy of the matters asserted in the document if the witness knows nothing except what is written on the document.
JUNIOR A. HARRIS,
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee for NAAC Mortgage Pass-Through Certificates Series 2007-1,
[September 9, 2015]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Cynthia G. Imperato, Judge; L.T. Case No.
Kenneth V. Hemmerle, II, Fort Lauderdale, and Richard P. McCusker,
Jr., Delray Beach, for appellant.
Donna L. Eng, Michael K. Winston, and Dean A. Morande of Carlton
Fields Jorden Burt, P.A., West Palm Beach, for appellee.
The borrower appeals from a final judgment of foreclosure entered for
the bank after a trial. The borrower argues that the bank failed to prove
it had standing when it filed the action. We agree and reverse for entry of
judgment for the borrower.
The bank’s original complaint attached a copy of a note payable to
another entity. The note did not contain an endorsement.
The bank later filed a second amended complaint. Attached were copies
of the note and an assignment of the note. The note now contained an
endorsement to the bank. However, the endorsement was undated. The
assignment purported to transfer the note to the bank on an “effective”
date before the bank filed its original complaint. However, the assignment
was executed after the bank filed its original complaint.
The borrower answered and raised lack of standing as an affirmative
defense. The borrower argued that the endorsement was undated and the
assignment was executed after the bank filed its original complaint.
At trial, the bank introduced into evidence the original note and the
assignment. On the factual issue of whether the note was assigned to the
bank before or after the bank filed the original complaint, the bank’s
witness possessed no knowledge or information other than what the
assignment’s face reflected.
After the close of all evidence, the trial court entered a final judgment
of foreclosure for the bank.
This appeal followed. Our review is de novo. See Lloyd v. Bank of N.Y.
Mellon, 160 So. 3d 513, 514 (Fla. 4th DCA 2015) (“We review the
sufficiency of the evidence to prove standing to bring a foreclosure action
de novo.”) (citation omitted).
We agree with the borrower that the bank failed to prove it had standing
when it filed the action. We reach this conclusion for three reasons.
First, the note’s endorsement to the bank was undated. See Matthews
v. Fed. Nat’l Mortg. Ass’n, 160 So. 3d 131, 133 (Fla. 4th DCA 2015) (“[T]he
note introduced at trial . . . did not establish standing when the suit was
commenced. The blank endorsement was undated.”).
Second, the assignment was “backdated” after the bank filed the action.
See id. (“Nor does the backdated assignment, standing alone, establish
standing.”) (citation omitted); Vidal v. Liquidation Props., Inc., 104 So. 3d
1274, 1277 n.1 (Fla. 4th DCA 2013) (“Allowing assignments to be
retroactively effective would be inimical to the requirements of pre-suit
ownership for standing in foreclosure cases.”).
Third, on the factual issue of whether the note was assigned to the bank
before or after the bank filed the original complaint, the bank’s witness
possessed no knowledge or information other than what the assignment’s
face reflected. See Lloyd, 160 So. 3d at 515 (“Plaintiff’s evidence
supporting its claim that the assignment . . . ‘related back’ to before the
suit commenced was also insufficient to prove standing in this case. The
witness testified that he did not have any information, other than the
document itself, to verify when the assignment took place.”).
Based on the foregoing, we reverse and remand for entry of judgment
for the borrower.
Reversed and remanded.
GROSS and DAMOORGIAN, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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