Party That Holds Note When Complaint Filed Has Standing To Enforce Its Terms

In American Home Mortgage Servicing, Inc. v. Bednarek (2D12-2099), the Second District reversed the trial court’s order dismissing a complaint for lack of standing. The court described the facts, and chain of ownership of the note and mortgage in question, as follows:

On May 31, 2005, Ms. Bednarek executed a note and mortgage in favor of American Brokers Conduit for the purchase of real property. Thereafter, the loan was sold to Deutsche Bank. On March 30, 2006, American Brokers Conduit assigned the mortgage to the bank's servicing agent, AHMSI-Maryland. In September 2007, AHMSIMaryland filed a complaint for foreclosure alleging it was the owner and holder of the underlying promissory note. With the complaint and the amended complaint, AHMSIMaryland filed copies of the mortgage, the promissory note showing a blank endorsement, and the 2006 assignment of mortgage. In April 2008, AHMSI purchased AHMSI-Maryland, acquiring the company's servicing rights. In 2009, AHMSI filed the original note and mortgage with the trial court.

At the close of testimony in the non-jury trial, counsel for Ms. Bednarek moved for an involuntary dismissal and argued that the plaintiff had failed to establish standing. "Relying on McLean [v. JP Morgan Chase Bank National Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012)], the trial court granted the motion on the ground AHMSI had failed to prove it was the owner and holder of the note and mortgage.”

The court stated that “a party seeking foreclosure must establish that it had standing to foreclose at the time it filed the complaint. A foreclosure plaintiff has standing if it owns and holds the note at the time suit is filed. A plaintiff may also establish standing to foreclose by submitting evidence of a special endorsement on the note in favor of the plaintiff or a blank endorsement, an assignment from the payee to the plaintiff, or an affidavit of ownership.” Citations removed. Based upon that law, the court held:

Here, both the complaint and the amended complaint reflect that AHMSIMaryland, the original plaintiff, was the owner and holder of the note at the time the complaint was filed. An assignment of mortgage was attached to the complaint which provided that the original lender, American Brokers Conduit, assigned the mortgage to AHMSI-Maryland on March 30, 2006, more than one year prior to the filing of the original complaint. Also attached to the complaint and amended complaint was a copy of the note showing a blank endorsement. Because AHMSI possessed the original note, endorsed in blank, it was the lawful holder of the note entitled to enforce its terms.