MARC D. BEAUMONT, APPELLANT,
v.
BANK OF NEW YORK MELLON, ETC., APPELLEE

Fla. 5th DCA | 2012-02-17
No. 5D10-3471
TORPY, PALMER and COHEN, JJ., concur.
81 So. 3d 553 Florida District Court of Appeal, Fifth District (2012) Positive Treatment
Cited by 34 cases

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Holding

A judgment entered in favor of a non-party is fundamental error, and a party seeking to reestablish a lost note must prove entitlement and provide protection against other claims.

Headnotes

[1] A judgment cannot be entered in favor of a non-party to the lawsuit.

[2] A party seeking to reestablish a lost negotiable instrument must prove entitlement to enforce the instrument at the time of loss, or ownership acquired from someone so en…

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Facts & Procedural History

The trial court entered summary judgment for foreclosure and recovery on a promissory note. The judgment was entered in favor of a non-party, Novastar…

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Topics
Recovery On Promissory Note Standing To Enforce Note Enforcement of Note Waiver Of Affirmative Defense

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Opinion of the Court
PER CURIAM.

PER CURIAM.

Marc D. Beaumont appeals a final summary judgment entered by the trial court on a claim to foreclose a residential mortgage and recover on a promissory note executed in connection with the mortgage. We reverse.

The final summary judgment in this case was entered in favor of Novastar Home Mortgage, Inc. (“Novastar”), a non-party to the suit because of its prior withdrawal from the case. It is fundamental error to enter judgment in favor of a non-party. Beseau v. Bhalani, 904 So.2d 641 (Fla. 5th DCA 2005); Rustom v. Sparling, 685 So.2d 90 (Fla. 4th DCA 1997). The defect, which is jurisdictional, can be raised by this Court sua sponte. Dep’t of Envtl. Prot. v. Garcia, — So.3d -, 2011 WL 3300540 (Fla. 3d DCA 2011).

The judgment would also have to be reversed even if entered in favor of appellee, The Bank of New York Mellon, as Successor Trustee Under Novastar Mortgage Funding Trust 2005-3 (“Mellon”). Mellon sought in the complaint to reestablish the note and recover on it. See § 673.3091, Fla. Stat. (2010). This required Mellon to show it was entitled to enforce the note when it lost the instrument, or that it directly or indirectly acquired ownership from a person who was *555entitled to enforce the instrument when loss of possession occurred. § 673.3091(1), Fla. Stat.1 Mellon failed to prove who lost the note and when it was lost, offered no proof of anyone’s right to enforce the note when it was lost, and produced no evidence of ownership, due to the transfer from Novastar to Mellon.2 See Duke v. HSBC Mortg. Servs., LLC, 79 So.3d 778 (Fla. 4th DCA 2011). The trial court was also required to address the issue of providing adequate protection to Beaumont against loss that might occur by reason of a claim by another person to enforce the instrument. § 673.3091(2), Fla. Stat. If Mellon has, in fact, found the note, it must produce it prior to judgment. Gee v. U.S. Bank Nat’l Ass’n, 72 So.3d 211, 212 (Fla. 5th DCA 2011); Perry v. Fairbanks Capital Corp., 888 So.2d 725, 726 (Fla. 5th DCA 2004); see also Feltus v. U.S. Bank Nat’l Ass’n, 80 So.3d 375 (Fla. 2d DCA 2012).

Mellon also argues that Beaumont has waived the lack of “standing” to enforce the note because of the failure to assert this as an affirmative defense. Generally, the failure to raise standing as an affirmative defense operates as a waiver. Kissman v. Panizzi, 891 So.2d 1147, 1150 (Fla. 4th DCA 2005) (holding lack of standing is an affirmative defense that must be raised by defendant and failure to raise it generally results in waiver). Standing involves the right to enforce the note and must exist when suit is filed. See, e.g., McLean v. JP Morgan Chase Bank Nat’l Ass’n, 36 Fla. L. Weekly D2728 (Fla. 4th DCA Dec. 14, 2011); Taylor v. Deutsche Bank Nat’l Trust Co., 44 So.3d 618 (Fla. 5th DCA 2010). There is no evidence showing that Beaumont was on notice prior to the time his answer was filed that ownership of the note had been transferred from Novastar to Mellon. In fact, the claimed transfer, alleged to have occurred on the day suit was filed, was either concealed by Novastar for more than three years while it continued to pursue the action, or Novastar backdated the assignment it finally produced on July 23, 2010, as justification for substituting Mellon as plaintiff. Under these circumstances, Beaumont may raise lack of standing when suit was filed as a defense. See Boston Hides & Furs, Ltd. v. Sumitomo Bank, Ltd., 870 F.Supp. 1153, 1161 n. 6 (D.Mass.1994) (holding banks were not precluded from raising affirmative defense of fraud for first time on summary judgment in action alleging wrongful dishonor of letter of credit, where banks did not discover information suggesting fraud until almost one year of discovery). Furthermore, Mellon must prove its right to enforce the note as of the time the summary judgment is entered, even if Beaumont had waived the right to challenge the bank’s standing as of the date suit was filed. Venture Holdings & Acquis. Group, LLC v. A.I.M. Funding Group, LLC, 75 So.3d 773 (Fla. 4th DCA 2011). Its failure to do *556so would require this Court to reverse the summary judgment entered on the note and mortgage, even if judgment had been entered in favor of Mellon.

REVERSED.

TORPY, PALMER and COHEN, JJ., concur.

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Citator

Cited By (18 total)

  • Correa v. U.S. Bank Nat'l Ass'n for Bacf 2006-D, 118 So. 3d 952 (Fla. 2d DCA 2013)
    …ction 673.3091 (l)(b). As for the terms of the note, U.S. Bank did not question Gomez on these specifies. And although Gomez identified a copy of the lost note, U.S. Bank did not enter the document into evidence. See Beaumont v. Bank of N.Y. Mellon, 81 So. 3d 553, 555 n. 2 (Fla. 5th DCA 2012) (holding that the plaintiff did not present competent evidence of an assignment because, even though the document was contained in the record, it was not entered into evidence at trial). Further, nothing in the record r…
  • Gafoor Jaffer and Nina Jaffer v. Chase Home Fin., LLC, 155 So. 3d 1199 (Fla. 4th DCA 2015)
    …lose. Even if a foreclosure defendant waives the right to challenge the bank’s standing as of the date suit was filed, the bank must prove its right to enforce the note as of the time summary judgment is entered. Beaumont v. Bank of New York Mellon, 81 So. 3d 553, 555 (Fla. 5th DCA 2012). Here, as noted above, the issue of Chase’s standing at the inception of the suit was waived by virtue of the default for failure to plead. Moreover, no genuine issues of material fact were raised by the differences between…
  • Pennington v. Ocwen Loan Servicing, LLC, 151 So. 3d 52 (Fla. 1st DCA 2014)
    …e foreclosure action. Focht, 124 So. 3d at 310. Additionally, a bank must also have standing at the time final judgment is entered. See Boumarate v. HSBC Bank USA, N.A., 109 So. 3d 1239, 1239 (Fla. 5th DCA 2013); Beaumont v. Bank of New York Mellon, 81 So. 3d 553, 555 (Fla. 5th DCA 2012). In this case, Ocwen failed to demonstrate it had standing to enforce the note. Its exhibits did not qualify as an indorsement from Countrywide to Ocwen or as an assignment from Countrywide to Ocwen (while Ocwen submitted a…

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