Sunday, November 7, 2010

Foreclosure Judgment Reversed Because Lender Did Not File Note-Not Even A Copy-Prior To SMJ Hearing

In Servedio v. US Bank National Assoc. (4D10-1898), the Fourth District reviewed a trial court’s summary judgment order. The plaintiff filed an unverified foreclosure complaint and later filed a motion for summary judgment. The trial court held a hearing and granted the motion for summary judgment.

The sole issue on appeal was whether the summary judgment order should be reversed because the lender did not file “a copy of the original note and mortgage prior to the entry of judgment the original mortgage note with the trial court.”  The court stated that:
“The party seeking foreclosure must present evidence that it owns and holds the note and mortgage in question in order to proceed with a foreclosure action.”…A plaintiff must tender the original promissory note to the trial court or seek to reestablish the lost note under section 673.3091, Florida Statutes. State St. Bank & Trust Co. v. Lord, 851 So. 2d 790, 791 (Fla. 4th DCA 2003).
In this case, there was nothing in the record to show that the original note was filed. In fact, it appears that the plaintiff had neither filed the original nor a copy of the note. The court noted that the “Appellee argues on appeal that it presented to the trial court a copy of the original note and an affidavit of ownership at the summary judgment hearing.” However, the appellee conceded “that the documents were not filed with the clerk of the court until several days after the entry of summary judgment.” The appellee argued the trial court considered the original note at the summary judgment hearing. The appellee filed two motions to supplement the record with the note. The court denied both motions with leave to seek permission to relinquish jurisdiction to allow the trial court to recreate a record establishing that it did look at the original notes. However, the appellee never sought permission as suggested by the court. Therefore, the court held:

The documents were not part of the record at the time the motion for summary judgment was granted, so we cannot determine whether the trial court considered those documents in rendering its decision. See Poteat v. Guardianship of Poteat, 771 So. 2d 569 (Fla. 4th DCA 2000) (noting that an appellate court may review only items considered by the trial court).  Because appellant does not stipulate that the documents were considered at the hearing, and because appellee has not sought relief in the trial court to recreate the record, we must reverse the order granting summary judgment.
The court also noted that if the plaintiff is not named as the payee on the note, as in the Servedio case, there are four options for the plaintiff to establish ownership:
  1. The note must bear a special indorsement; or
  2. The note must bear a blank indorsement; or
  3. The plaintiff must submit evidence of an assignment; or
  4. The plaintiff must submit an affidavit of ownership.
In this case, the original note did not name the plaintiff as payee and the court stated that the plaintiff did not do any of the four options.


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