DEUTSCHE BANK NATIONAL TRUST COMPANY, ETC., APPELLANT,
v.
MELODY GASKIN MOBLEY, APPELLEE

Fla. 3d DCA | 2017-03-08
No. 3D16-1934
Before WELLS, SALTER and EMAS, JJ.
212 So. 3d 511 Florida District Court of Appeal, Third District (2017) Caution
Cited by 1 case

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Synopsis

Deutsche Bank appealed an involuntary dismissal of its residential mortgage foreclosure action against Ms. Mobley, the personal representative of the mortgagor's estate. The trial court dismissed for lack of standing at inception, but the Third District reversed, holding that Deutsche Bank had standing based on possession of the original note and mortgage when the complaint was filed, and that a servicer's possession constitutes constructive possession sufficient to establish the lender's standing.


Holding

Deutsche Bank had standing to initiate the foreclosure case based on its possession of the original note and mortgage when the complaint was filed. The clarification of the blank endorsement did not vitiate standing, and possession of the note by the servicer as an agent conferred constructive possession on Deutsche Bank, establishing standing as the note's holder.


Headnotes

[1] Possession of an original promissory note, even with a blank endorsement, is sufficient to establish standing to initiate a foreclosure action.

[2] A holder may convert a blank endorsement into a special endorsement by writing identifying words above the signature of the endorser.

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Key Quotes

“The Bank's clarification of a blank endorsement did not vitiate its standing to initiate the foreclosure case on either endorsement, given its possession of the original note and mortgage when the complaint was filed.”

Establishes that possession at inception, combined with later clarification of endorsement, is sufficient for standing.

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Facts & Procedural History

Deutsche Bank filed a foreclosure complaint in August 2012 with a copy of the original note endorsed in blank attached. In September 2013, Deutsche Ba…

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Opinion of the Court
SALTER, J.

SALTER, J.

Deutsche Bank National Trust Company (“Deutsche Bank”) appeals an order involuntarily dismissing Deutsche Bank’s residential mortgage foreclosure action against the appellee, Melody Gaskin Mob-ley. Ms. Mobley defended the foreclosure action as the personal representative of the estate of her late mother, Virginia Gaskin, who passed away in 2011.1 Following the close of Deutsche Bank’s case in the non-jury trial, the trial court granted Ms. Mobley’s motion for involuntary dismissal based on a purported lack of standing at the inception of the case. For the reasons which follow, we reverse and remand the case for further proceedings.

When the foreclosure complaint was filed in August 2012, a copy of the original note, endorsed in blank, was attached to the complaint. In September of 2013, Deutsche Bank filed the original promissory note and mortgage; a special endorsement to Deutsche Bank was included.

At trial, Deutsche Bank’s witness was an officer from the servicing company for Deutsche Bank, Ocwen Financial Corporation. The witness testified to the delivery of the original note and mortgage to Ocwen in preparation for litigation, the defaults and default letters, the payment history,2 and Ocwen’s recordkeeping. She explained that the note had been returned to Deutsche Bank for an additional and specific endorsement before the complaint *513was filed, and that Deutsche Bank had possession of the original note and mortgage when the complaint was filed.

The Bank’s clarification of a blank endorsement did not vitiate its standing to initiate the foreclosure case on either endorsement, given its possession of the original note and mortgage when the complaint was filed. Morgan v. Bank of New York Mellon, 200 So.3d 792, 796 (Fla. 1st DCA 2016). Deutsche Bank’s clarification of the endorsement only supports Deutsche Bank’s standing. Section 673.2051(3), Florida Statutes (2016), specifies that a “holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.”3

Ms. Mobley made the argument below and here that the lender and its servi-cer are different entities and that physical possession of the note by one of them must exclude possession by the other. In reality, however, “[p]ossession of a note by a third party agent such as a servicer or law firm, gives the ‘owner’ of the note constructive possession sufficient to establish standing as the note’s holder.” U.S. Bank, Nat’l Ass’n v. Angeloni, 199 So.3d 492, 493 (Fla. 4th DCA 2016); Phan v. Deutsche Bank Nat’l Trust Co., ex rel. First Franklin Mortg. Loan Trust 2006-FF11, 198 So.3d 744, 748 (Fla. 2d DCA 2016) (citing Third District cases, among others, for the proposition that physical possession by an agent is constructive possession by the principal, conferring standing for the principal’s complaint for breach).4

Ms. Mobley’s additional arguments do not merit further elaboration. As a matter of law, Ms. Mobley’s motion for involuntary dismissal should have been denied. We reverse the final order of dismissal and remand the case for further proceedings.


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