Failure to establish that plaintiff was in possession of promissory note prior to filing of foreclosure results in dismissal

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blank endorsement, florida, foreclosure, lost note

The original complaint, filed by prior counsel Ben-Ezra & Katz, P.A., contained a count seeking to foreclose a mortgage and a count seeking to re-establish a lost note in which New Century Mortgage Corporation was named as the Lender;  The original complaint did not contain a copy of the allegedly lost note as an exhibit;

Plaintiff subsequently filed a Notice of Filing Original Note which contained a note with an undated, stamped blank endorsement by New Century Mortgage Corporation representative Magda Villanueva, AVP/Shipping Manager;

At trial the court found that  Plaintiff’s evidence failed to establish the date the undated, blank endorsement was stamped on the note, and failed to establish the note was acquired by Plaintiff prior to the filing of the original complaint.

The court held that  Plaintiff failed to establish its standing to prosecute this action and dismissed the case.

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS INDENTURE TRUSTEE FOR NEW CENTURY HOME EQUITY LOAN TRUST, SERIES 2004-1, v. LANGLEY. Circuit Court, 20th Judicial Circuit in and for Collier County, Civil Division. Case No. 08-04802-CA. January 6, 2013. Hugh D. Hayes, Judge.  Online Reference: FLWSUPP 2004LANG

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7 Day Notice Defense

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7 day notice, 83.51, 83.56, 83.60, florida, LANDLORD, maintenance, repair, TENANT

A landlord issued a tenant a 3 day Notice for non payment of rent due 3/8/13  with a due date of 3/14/13.  On 3/26/13  the landlord filed an eviction for non-payment of rent.  The tenant was served on 3/30/13.  On  4/2/13  the tenant issued landlord a 7 day notice to perform repairs.  On 4/3/13  the tenant filed an answer and motion for rent determination and did not post any rent into the court registry.

The court set  the case for a rent determination hearing  on 4/8/13  and heard oral  testimony from the tenant, unsupported by any documentation,  concerning  alleged repair issues at  the  leased premises.

Counsel pointed out that  tenant’s  7 day notice had not matured even as of the date of the hearing, and thus landlord was still within his time frame  in which to effect the requested repairs before the tenant would have any entitlement to withhold future rent.   Further,   that  a 7 day notice issued in April   could have no bearing on tenant’s obligation to pay March rent.

The court was  presented with the case of Lee v. Schweizer , 7 Fla L. Weekly Supp 750a, County Court Sarasota 2000] which states that a “tenant may not take matters into his or her own hands and resort to the self-help of unilaterally withholding rent payments without proper notice.”     …   “a tenant may not raise a defense concerning the physical condition of the premises  without first having complied with the seven day notice requirement.”

Indeed, Section 83.60  “defenses to action for rent,”   requires  the tenant  to have issued a 7 day notice of non-compliance to the landlord in order to raise failure to make repairs as a defense to non-payment of rent.

As tenant’s 7 day notice had not matured prior to landlord’s 3 day notice,  tenant did not have a defense to the non-payment of the rent claimed in the 3 day notice. Thus,  tenant was obligated to post the amount claimed in the 3 day notice into the court registry to avoid an automatic default.

Cortleigh Apartments v. Thompson Case 13-6231 (52)  COCE,  Broward County.

Mortgage was not in default on date specified in complaint due to mortgagors payment of arrears to obtain a loan modification, also rendering subsequent notice of acceleration void.

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accelaration, default, foreclosurfe, modification, tender

Plaintiff filed a complaint for foreclosure on September 29, 2010.  Plaintiff alleged in its Complaint that:

The Mortgage Note and Mortgage are in default. The required installment payment of June 1, 2010, was not paid, and no subsequent payments have been made. The Mortgage is contractually due for June 1, 2010, payment. The last payment received was applied to the May 1, 2010, installment, and no subsequent payments have been applied to the loan.  [Plaintiff’s Complaint ¶6.]

The Defendants filed their answer on February 8, 2011 denying that the Mortgage Note and Mortgage are in default.

At trial, the defendant testified that in October of 2009 she contacted Plaintiff to discuss a mortgage modification.  A representative of Plaintiff,  informed her that her account had to be 90 days in default before they will consider a loan modification. Relying on this statement, the defendant  did not make her mortgage payments from November 2009 through January 2010.

Defendant further testified that she was told by another of Plaintiff’s representatives,  that she would begin a temporary modification period requiring reduced payments for February 1, 2010, March 1, 2010 and April 1, 2010.  Defendant testified that she timely made each of these payments.

Defendant testified that in June 2010, she received a notice that she was being denied for a permanent loan modification. As a result, on June 23, 2010 she contacted Plaintiff to see how much she owed. A representative of Plaintiff informed the Defendant that if she paid $6,774.84 the loan would be current through July 2010 making August 1, 2010 the next due payment. Defendant then made this payment telephonically with Plaintiff’s representative during the same phone call.

Defendant further testified that she received a letter dated July 19, 2010 which claimed that she owed $1,969.40 in past due amounts.  She again contacted Plaintiff regarding the amounts claimed to be due and was again told not to make a payment for 90 days so that she could be considered for a loan modification. Approximately 60 days later, Plaintiff filed the instant foreclosure.

The witness for the Plaintiff, provided no testimony to rebut the testimony of the Defendant  in relation to the representations of Plaintiff during the various aforesaid phone calls. The lender’s witness testified only based on the payment history introduced at trial that the last payment applied to the account was for May 2010 and no further payments had been received.

The Court found that the Defendant’s  testimony regarding the June 23, 2010 phone call and payment is un-rebutted and thus must be accepted.   Plaintiff is bound by the representation made by its representative to Defendant on June 23, 2010 that the loan would be brought current through July 31, 2010 if she made payment in the amount of $6,774.84.  Therefore, the Court found that the subject loan was current through July 31, 2010. This is contrary to Plaintiffs allegation in its Complaint that the loan was in default as of June 1, 2010. Thus, Plaintiff has failed to prove that the loan was in default on the date alleged in its Complaint.

Additionally, per paragraph 7 of the Complaint, Plaintiff’s cause of action is based on an alleged acceleration of the full amount of the loan. Paragraph 22 of the subject mortgage requires that prior to an acceleration of the full amount of the loan, the Defendants must be provided with a notice of the Plaintiff’s intent to accelerate the loan 30 days in advance.

Plaintiff introduced its alleged Notice of Intent to Accelerate dated July 19, 2010. Plaintiff’s Trial Exhibit #4. This Notice, however, is not effective because the loan was current on July 19, 2010 due to the payment made on June 23, 2010 in the amount of $6,774.84. Therefore, Plaintiff did not have the contractual right to accelerate the loan. No subsequent notice of intent to accelerate was introduced by Plaintiff. Therefore, Plaintiff has failed to prove that it provided an effective notice of intent to accelerate more than 30 days prior to acceleration of the loan, a necessary condition precedent to acceleration and bringing the instant action. Bryson v. BB&T, 75 So. 3d 783, 785-786 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D2582a].

“As a matter of substantive law, it is a good defense to foreclosure on an accelerated basis that the mortgagor tenders payment of defaulted items, after the default but before the notice of mortgagee’s election to accelerate has been given.” Delandro v. America’s Mortgage Servicing, Inc., 674 So. 2d 184, 186 (Fla. 3d DCA 1996) [21 Fla. L. Weekly D1201a] (quoting Campbell v. Werner, 232 So. 2d 252 (Fla. 3d DCA 1970). See also Yelen v. Bankers Trust Co., 476 So. 2d 767, 769 (Fla. 3d DCA 1985(“A tender of arrears, made before the lender has declared the entire amount due, prevents the lender’s acceleration of the mortgage).

Per paragraph 8 of the Plaintiff’s Complaint, $138,507.19 was due in principal as of May 2010. Therefore, the subject loan is hereby current with a balance going forward of $138,507.19 with the next contractual monthly payment due on November 1, 2012. Said payment shall be the $923.57 in principal and interest reflected in the Note plus lawful escrow amounts. Any amounts currently held in suspense by Plaintiff shall be applied towards the outstanding principal balance.

The Court further found that it would be inequitable for the Defendants to be assessed any interest, late charges or other fees as a result of the alleged default.

The court entered judgment for the defendant awarding  her costs and fees,  while also specifying that plaintiff shall not assess defendant any costs or fees related to the foreclosure

WELLS FARGO BANK, N.A., v. WESTBROOK, et. al., Circuit Court, 7th Judicial Circuit in and for St. Johns County. Case No. CA10-2659, Division 55. October 17, 2012. Edward Hedstrom, Judge. Counsel: Ronald R. Wolfe and Associates, P.L., Tampa, for Plaintiff. Pycraft Legal Services, LLC, St. Augustine, for Defendants.

20 Fla. L. Weekly Supp. 400b

Online Reference: FLWSUPP 2004WEST

Where previous eviction action against defendant was dismissed, and the court entered a judgment awarding attorney’s fees and costs, a subsequent action will be stayed until plaintiff satisfied the judgment.

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3. Fla. R. Civ. P. 1.420(d), costs, florida, judgment for attorneys fees, LANDLORD, stay, TENANT

Plaintiff filed an action to evict Defendant.   The court ruled in favor of the Defendant and the case was involuntarily dismissed.  The court subsequently entered a  Final Judgment for Attorney’s Fees against the Plaintiff.

The plaintiff did not pay the Defendant’s attorney’s fees.   Then the  Plaintiff  filed a new eviction against the defendant.   The Defendant moved to stay the proceedings.

The court cited 3. Fla. R. Civ. P. 1.420(d) which states:

“Costs in any action dismissed under this rule shall be assessed and judgment for costs entered in that action. If a party who has once dismissed a claim in any court of this state commences an action based upon or including the same claim against the same adverse party, the court shall make such order for the payment of costs of the claim previously dismissed as it may deem proper and shall stay the proceedings in the action until the party seeking affirmative relief has complied with the order.” (emphasis added).

It is well settled case law that Plaintiff is required to satisfy the Final Judgment for Attorney’s Fees entered in the Previous Action before Plaintiff can continue to proceed in this action. Estate of McGrail v. Rosas, 691 So.2d 50, (Fla. 4th DCA 1997) [22 Fla. L. Weekly D911b]; Bubani v. Rogers, 363 So.2d 181 (Fla. 4th DCA 1978); Gordon v. Warren Heating & Air Conditioning, Inc., 340 So.2d 1234 (Fla. 4th DCA 1976); see also Field v. Nelson, 380 So.2d 547 (Fla. 2d DCA 1980).

The Court has no discretion as is required to render an order for the payment of the Final Judgment for Attorney’s Fees in the Previous Action and this Court is required stay the new  action including discovery until Plaintiff  has paid the judgment for costs and fees.

SSS INVESTMENTS GROUP INC, vs.  DANIELSON,  County Court, 9th Judicial Circuit in and for Orange County, Civil Division. Case No. 2012-CC-015727-O, Division 70. January 23, 2013. Andrew L. Cameron, Judge.   20 Fla. L. Weekly Supp. 436a.  Online Reference: FLWSUPP 2004SSS

Verification of complaint by employee of “contractual servicer” for the plaintiff and not plaintiff itself did not satisfy requirements of rule 1.110

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complaint, Fla. R. Civ. P. 1.110, florida, foreclosure, vefification

A Complaint for mortgage foreclosure contained a verification by an employee of the “contractual servicer” for the Plaintiff and not the Plaintiff itself.

The court noted that in adopting the amendment to Fla. R. Civ. P. 1.110 which implemented the verification requirement, the Florida Supreme Court stated:

The primary purposes of this amendment are (1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate; (2) to conserve judicial resources that are currently being wasted on inappropriately pleaded “lost note” counts and inconsistent allegations; (3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and (4) to give trial courts greater authority to sanction plaintiffs who make false allegations. In re Amendments to Fla. R. Civ. P., 2010 WL 455295, at *I, 1 (Fla. Feb. 11, 2010) (emphasis added).

The Court then made a finding that the Florida Supreme Court clearly intended that foreclosure complaints are to be verified by the Plaintiff, not the servicer.

Because the subject Complaint was verified by the servicer, it does not comply with Fla. R. Civ. P. 1.110.   The court dismissed the foreclosure,  granting the Plaintiff  sixty (60) days  to file an amended complaint verified by the Plaintiff.

U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR MASTR ASSET BACKED SECURITIES TRUST 2006-HE2, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006- HE2, v. MAYO. Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 12003183CI. December 28, 2012. Amy M. Williams, Judge.   Online Reference: FLWSUPP 2004USBA

See also

HSBC BANK, vs. WIGLEY. Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 12004342CI. January 24, 2013. John A. Schaefer, Judge.  Online Reference: FLWSUPP 2004WIGL.