Scott v. Strategic Realty Fund

311 So.3d 113

Michael C. SCOTT and Jennifer T. Scott, Appellants,

v.STRATEGIC REALTY FUND and Dixie G. Scott, Appellees.

Case No. 2D18-3839

District Court of Appeal of Florida, Second District.

Opinion filed May 13, 2020.

Michael Alex Wasylik of Ricardo & Wasylik, PL, Dade City, for Appellants.

Roger A. Kelly of Rush, Marshall, Jones and Kelly, P.A., Orlando, for Appellee Strategic Realty Fund.

No appearance for remaining Appellee.

LaROSE, Judge.

Michael and Jennifer Scott appeal a foreclosure judgment entered in favor of Strategic Realty Fund (SRF). We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). Because the trial court erred in entering summary judgment as to the issue of standing, we reverse.¹

Background

In September 2007, the Scotts borrowed money from SunTrust Mortgage to purchase real property. They signed a promissory note; a mortgage secured repayment of the debt.

Over the years, the note, the mortgage, or sometimes both, were assigned as asset-backed securities to a variety of entities. For purposes of this appeal, we detail the mechanics of one particular assignment.

In September 2007, soon after the Scotts executed the note and mortgage, SunTrust Mortgage assigned both to MTGLQ Investors, LP (MTGLQ). Thereafter, in September 2010, MTGLQ and Resi Whole Loan III LLC (Resi) executed an "Assignment of Mortgage," which, as the name suggests and the body of the instrument confirms, assigned the mortgage to Resi. The assignment made nary a mention of the note.

In March 2015, an entity calling itself "CV XXVII, LLC" (CV) sued to foreclose the mortgage. CV claimed standing to sue because it owned and held the note and mortgage.² CV attached to its March 2015 amended foreclosure complaint a " ‘Corrective’ Assignment of Mortgage," executed by an individual named "J. Weston Moffett." The corrective assignment failed to describe (Mr. or Ms.) Moffett's role or title with MTGLQ. The document, dated January 30, 2015, stated that it was "intended to amend and replace" an earlier assignment of mortgage, with a retroactive effective date of September 20, 2010. The corrective assignment purported to "assign and transfer all beneficial interest under that certain mortgage, together with the certain note(s) described below."

In May 2017, the trial court substituted SRF as plaintiff. SRF proceeded on a second amended complaint, contending that it owned and held the note and mortgage through a chain of assignments. Yet, the note attached to the pleading was payable to the original lender, SunTrust Mortgage, and bore no indorsement. The Scotts challenged SRF's "standing at inception."

SRF moved for summary judgment, declaring that it was the "owner and non-holder in possession" of the note. The motion also acknowledged that "through inadvertence" the September 2010 mortgage assignment from MGTLQ "failed to specify that the ownership of the note was also intended to be transferred to Resi." The affidavit of Millie Garcia, an SRF "Foreclosure Bankruptcy Coordinator," averred that "the intent of MTGLQ ... in executing the Assignment of Mortgage to Resi ... was to assign its complete interest in the account. However, through inadvertence, the Assignment of Mortgage failed to specify that the ownership of the Note was also intended to be transferred to Resi ...."³

The Scotts objected to SRF's summary judgment motion, arguing that SRF's evidence as to standing was hearsay. The Scotts also asserted that "[t]he Note is not conveyed in each and every Assignment of Mortgage."

Following an August 30, 2018, hearing, for which we have no transcript, the trial court entered judgment for SRF.

Analysis

A. Standard of Review & Summary Judgment

We review the trial court's ruling de novo. St. Clair v. U.S. Bank Nat'l Ass'n, 173 So. 3d 1045, 1046 (Fla. 2d DCA 2015) ("This court reviews issues of standing in foreclosure cases using the de novo standard of review."). Similarly, "[w]e review the grant of summary judgment de novo." Griffin v. ARX Holding Corp., 208 So. 3d 164, 168 (Fla. 2d DCA 2016) (citing Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) ).

"Summary judgment is proper only if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Dewar v. Dough Boy Pizza, Inc., 184 So. 3d 1169, 1170 (Fla. 2d DCA 2015) (citing Cook v. Bay Area Renaissance Festival of Largo, Inc., 164 So. 3d 120, 122 (Fla. 2d DCA 2015) ); see Fla. R. Civ. P. 1.510(c) (stating that a movant is entitled to summary judgment "if the pleadings and summary judgment evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law").

"In determining whether a genuine issue of material fact exists, this court must view ‘every possible inference in favor of the party against whom summary judgment has been entered.’ " Estate of Githens ex rel. Seaman v. Bon Secours–Maria Manor Nursing Care Ctr., Inc., 928 So. 2d 1272, 1274 (Fla. 2d DCA 2006) (quoting Maynard v. Household Fin. Corp. III, 861 So. 2d 1204, 1206 (Fla. 2d DCA 2003) ); see Pasco v. City of Oldsmar, 953 So. 2d 766, 769 (Fla. 2d DCA 2007) ("On appeal from a summary judgment, all facts and inferences are viewed in the light most favorable to the nonmoving party." (citing Valk v. J.E.M. Distribs. of Tampa Bay, Inc., 700 So. 2d 416, 419 (Fla. 2d DCA 1997) )). The burden rests with the summary judgment movant "to prove the nonexistence of genuine issues of material fact." Estate of Githens, 928 So. 2d at 1274. "Once the moving party meets its burden, then the party opposing entry of a summary judgment must prove the existence of genuine triable issues." First N. Am. Nat'l Bank v. Hummel, 825 So. 2d 502, 503 (Fla. 2d DCA 2002). "[T]he merest possibility of the existence of a genuine issue of material fact precludes the entry of final summary judgment." Nard, Inc. v. DeVito Contracting & Supply, Inc., 769 So. 2d 1138, 1140 (Fla. 2d DCA 2000).

B. Lack of a Hearing Transcript

We do not subscribe to SRF's argument that the lack of a hearing transcript precludes our review. After all, "a hearing transcript is usually ‘not necessary for appellate review of a summary judgment.’ " Kamin v. Fed. Nat'l Mortg. Ass'n, 230 So. 3d 546, 548 n.2 (Fla. 2d DCA 2017) (quoting Houk v. PennyMac Corp., 210 So. 3d 726, 730 (Fla. 2d DCA 2017) ). We can review the pleadings, affidavits, and other record evidence to ascertain whether any unresolved genuine issues of material fact remain. See Gonzalez v. Chase Home Fin. LLC, 37 So. 3d 955, 958-59 (Fla. 3d DCA 2010) (holding that it was unnecessary "to procure a transcript of the summary judgment hearing" where the summary judgment evidence—"in the form of the pleadings, [the defendant's] affidavit, and the county records"—demonstrated that genuine issues of material fact remained in dispute (quoting Seal Prods. v. Mansfield, 705 So. 2d 973, 975 (Fla. 3d DCA 1998) )). Plainly, the absence of a transcript is not fatal to an appeal in which the issue "concern[s] the sufficiency of the summary judgment evidence before the trial court." Johnson v. Deutsche Bank Nat'l Tr. Co. Ams., 248 So. 3d 1205, 1210 (Fla. 2d DCA 2018).

C. Standing

The plaintiff must have standing to foreclose a mortgage. To have standing, the plaintiff must be legally entitled to enforce the note to which the mortgage relates. See, e.g., Geweye v. Ventures Trust 2013-I-H-R, 189 So. 3d 231, 232-33 (Fla. 2d DCA 2016). Thus, SRF "had to prove either that it was the holder or the owner of the note." See Peters v. Bank of N.Y. Mellon, 227 So. 3d 175, 178 (Fla. 2d DCA 2017) (citing Sorrell v. U.S. Bank Nat'l Ass'n, 198 So. 3d 845, 847 (Fla. 2d DCA 2016) ). Proving standing, however, becomes more complicated when, as in this case, two additional considerations are at play.

First, as frequently occurs in foreclosure litigation, the party plaintiff has changed. Cf. Sorrell, 198 So. 3d at 847 ("Standing to foreclose by one other than the original lender can be established through evidence of an assignment or equitable transfer of the note and mortgage completed before the complaint is filed."). Significantly, a substituted plaintiff must show its predecessor's standing; obviously, "[a] substituted plaintiff acquires only the standing of the original plaintiff." Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639, 642 (Fla. 2d DCA 2015) ; see Robinson v. Nationstar Mortg. LLC, 301 So.3d 1059 (Fla. 2d DCA Dec. 4, 2019) (stating that the "successor plaintiff ... ha[s] the burden to prove that its predecessor ... had standing to foreclose at the time it filed the complaint").

Consequently, SRF had to establish its right to sue through a valid chain of assignments. See, e.g., Geweye, 189 So. 3d 232-33 (holding that despite original plaintiff's standing at suit's inception, Ventures Trust 2013-I-H-R lacked standing as a substituted plaintiff to foreclose where, despite introducing an assignment of mortgage at trial, "[t]he assignment ... did not purport to assign any interest in the note"). Quite simply, SRF must "account for possession of the unindorsed instrument by proving the transaction through which the transferee acquired it." St. Clair, 173 So. 3d at 1047 (quoting Murray v. HSBC Bank USA, 157 So. 3d 355, 358 (Fla. 4th DCA 2015) ); see also Russell, 163 So. 3d at 642 (" ‘A plaintiff alleging standing as a holder must prove it is a holder of the note and mortgage both as of the time of trial and also that the (original) plaintiff had standing as of the time the foreclosure complaint was filed.’ ... If the plaintiff is not the payee of the original note, the plaintiff must also prove that the original note contains an indorsement in favor of the plaintiff (special indorsement) or an indorsement in blank. ... [T]he indorsement must have been made prior to the filing of the lawsuit ...." (quoting Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 352-53 (Fla. 1st DCA 2014) )); ...