Editor: David Reiss
Brooklyn Law School

March 19, 2013

Florida Appellate Court Reverses Summary Judgment in Favor of Bank in Foreclosure Action Because of Issues of Fact as to Whether Bank Had Standing to Foreclose

By Max Feder

In BAC Funding Consortium Inc. ISAOA/ATIMA v. Jean-Jacques, 28 So.3d 936 (2010), the Second District Court of Appeal of Florida (“Court”) reversed the trial court’s entry of summary judgment in favor of a bank in a foreclosure action because a genuine issues of material fact existed as to whether the bank had standing to foreclose.

In December 2007, US Bank National Association (“US Bank”) filed a complaint seeking to foreclose a mortgage and reestablish a lost note.  US Bank attached a copy of the mortgage to the complaint, but the mortgage identified Fremont Investment and Loan (“Fremont”) as the lender, and MERS as the mortgagee.

Instead of answering the complaint, BAC Funding Consortium Inc. (“BAC”) moved to dismiss on the grounds that US Bank lacked standing to foreclose because US Bank failed to show it actually held the note or mortgage in question.

In its response, US Bank attached a purported assignment of mortgage.  However, the assignment was neither executed nor notarized, and the space for the name of the assignee was blank.  Further, US Bank did not provide anything in its response to authenticate the assignment or otherwise render it admissible into evidence.

US Bank then voluntarily dismissed its action to reestablish the lost note, but moved for summary judgment on the foreclosure issue.  With its motion, US Bank filed the original note and mortgage, but neither document identified US Bank as the holder.  US Bank did not file the original purported assignment or any other document establishing its right to foreclose.

Despite the foregoing, the trial court granted US Bank’s motion for summary judgment.  BAC appealed, arguing that summary judgment was improper because US Bank never established it had standing to foreclose.

The Court reversed and remanded because US Bank failed to carry its burden entitling it to summary judgment.  Specifically, there were genuine issues of material fact as to whether US Bank had standing.  The exhibits attached to the complaint conflicted with US Bank’s assertions, the note did not identify US Bank as the lender or holder, and US Bank did not provide an assignment or other evidence establishing it as the holder.

US Bank argued that it was not required to file an assignment of the note or mortgage or otherwise prove that it validly held them in order to be entitled to summary judgment.  The Court disagreed for two reasons.  First, although BAC did not answer the complaint, US Bank was still required to show that no genuine issue of material fact could be raised if an answer were filed.  Here, the record reveals US Bank failed to meet this requirement.  Second, regardless of whether BAC answers the complaint, US Bank was required to establish through admissible evidence that it had standing to foreclose before it would be entitled to summary judgment.  Here, the incomplete, unsigned and unauthenticated assignment was not admissible evidence, and US Bank provided no other evidence of its standing.

As a result, the Court held the trial court’s entry summary judgment was inappropriate and reversed and remanded for further proceedings.

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