Foreclosure Summary Judgment Reversed Due To Standing And Failure To Seek Relief Granted

In Gee v. U.S. Bank (5D10-1687), the Fifth District reversed a judgment in favor of U.S. Bank "Because U.S. Bank’s motion did not address any facts or law pertaining to its entitlement to summary judgment on its claims to reestablish the lost instruments and reform the deed and mortgage, the trial court erred in entering summary judgment on these grounds."

U.S. Bank filed a foreclosure complaint seeking to foreclose on a mortgage and reestablish a lost note. Subsequently, U.S. Bank filed a motion for summary judgment that "was silent regarding the reestablishment and reformation claims." In support of the summary judgment motion:

American Home, now purporting to act as U.S. Bank’s servicing agent, filed an affidavit, averring that the complaint’s allegations were true based on her knowledge as custodian of U.S. Bank’s business records, that U.S. Bank owned and held the Mortgage, and that Ms. Gee defaulted under the Mortgage by failing to make payments as due. Neither the motion nor the affidavit made mention of the lost note, the lost mortgage, or the claim for reformation of the deed and mortgage. To the contrary, the summary judgment motion stated that “the original promissory note, mortgage and assignment of mortgage would be filed on or before the hearing.” After a hearing, the court entered a summary final judgment of foreclosure, which reestablished the lost Mortgage, reformed the legal description contained in the mortgage and the warranty deed, and foreclosed the reestablished and reformed Mortgage.

The appellant appealed the summary judgment order and argued "among other things, that (1) U.S. Bank lacked standing to bring the foreclosure action, and (2) the summary judgment was entered on grounds that were not raised in the summary judgment motion." With regard to standing, the court stated:

Here, the record does not contain the original Mortgage. To prove its ownership, U.S. Bank filed a copy of the Mortgage as well as two assignments. The first assignment transferred the Mortgage from Advent Mortgage, the original mortgagee, to Option One. The second assignment purported to transfer the mortgage from American Home, as successor in interest of Option One, to U.S. Bank. However, and significant to our consideration, U.S. Bank provided nothing to demonstrate how American Home came to be the successor in interest to Option One. 

Incredibly, U.S. Bank argues that “[i]t would be inequitable for [Ms. Gee] to avoid foreclosure based on the absence of an endorsement to [it].” But that argument flies in the face of well-established precedent requiring the party seeking foreclosure to present evidence that it owns and holds the note and mortgage in question in order to proceed with a foreclosure action. See Verizzo, 28 So. 3d at 978; Philogene v. ABN Amro Mortg. Group Inc., 948 So. 2d 45, 46 (Fla. 4th DCA 2006). When Ms. Gee denied that U.S. Bank had an interest in the Mortgage, ownership became an issue that U.S. Bank, as the plaintiff, was required to prove....As U.S. Bank failed to offer any proof of American Home’s authority to assign the Mortgage, we conclude that it failed to establish its standing to bring the foreclosure action as a matter of law. See Servedio v. U.S. Bank Nat’l Ass’n, 46 So. 3d 1105, 1107 (Fla. 4th DCA 2010) (.....); see also Khan v. Bank of Am., N.A., 58 So. 3d 927, 928 (Fla. 5th DCA 2011) (......); Verizzo, 28 So. 3d at 977 (.....). Cf. Isaac v. Deutsche Bank Nat’l Trust Co., 36 Fla. L. Weekly D727 (Fla. 4th DCA Apr. 6, 2011) (......); Taylor v. Deutsche Bank Nat’l Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010).

With regard to the second issue, the Court stated that "[a]s Ms. Gee contends, U.S. Bank’s summary judgment motion made no mention of its claim to reestablish the lost Mortgage and identified no evidence to support its claim that these documents were lost. Instead, the motion declared the opposite...."

"Because U.S. Bank’s motion did not address any facts or law pertaining to its entitlement to summary judgment on its claims to reestablish the lost instruments and reform the deed and mortgage, the trial court erred in entering summary judgment on these grounds. By failing to state with particularity the grounds upon which its summary judgment motion was based, U.S. Bank failed to provide Ms. Gee with proper notice of the separate issues to be resolved and why U.S. Bank was entitled to summary judgment...."

The oral argument in this case was held on July 28, 2011, and is below:

[I updated the post above on Tuesday, October 4, 2011, to add the oral argument video.]