AS Lily, LLC v. Morgan , 2015 Fla. App. LEXIS 6879 ( 2015 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
AS LILY LLC, )
)
Appellant, )
)
v. ) Case No. 2D14-863
)
HAROLD L. MORGAN and PHYLLIS )
MORGAN; WACHOVIA BANK; )
NATIONAL ASSOCIATION; BAYWAY )
ISLES HOMEOWNERS CLUB, INC.; )
MICHAEL W. WELLS and KATHERINE )
A. WELLS; CAPITAL ONE BANK (USA); )
NATIONAL ASSOCIATION f/k/a )
CAPITAL ONE BANK; NORTHSTAR )
BANK, )
Appellees. )
)
Opinion filed May 8, 2015.
Appeal from the Circuit Court for Pinellas
County; Pamela A.M. Campbell, Judge.
Stanford R. Solomon and J. Andrew Baldwin
of The Solomon Law Group, P.A., Tampa,
for Appellant.
Russell L. Cheatham, III, of Russell L.
Cheatham, III, P.A., St. Petersburg, for
Appellees Harold Morgan and Phyllis
Morgan.
No appearance by remaining
Appellees.
CRENSHAW, Judge.
In this foreclosure case, the circuit court entered a final judgment of
dismissal in favor of the homeowners, Harold and Phyllis Morgan. But because the
bank, AS Lily LLC, was a proper party and had standing, we reverse.
As relevant here, the Morgans executed an adjustable rate note and
mortgage in favor of Option One Mortgage in 2006. Attached to the note was an
allonge with a blank endorsement. After the Morgans' subsequent default, the note was
assigned to Liquidation Properties, Inc. (LPI). LPI initiated this foreclosure proceeding
in 2008 and filed a copy of the mortgage and included a lost note count. Then, in 2012,
the circuit court granted AS Lily's motion to amend the complaint1 and AS Lily filed the
Verified First Amended Complaint at issue here. With its complaint, it attached the
adjustable rate note, the mortgage, and the allonge with the blank endorsement. After a
bench trial, the court granted a final judgment in favor of the Morgans, and AS Lily
timely appealed.
The court granted judgment in favor of the Morgans largely based on its
conclusion that AS Lily was not a proper party and that it lacked standing.
A plaintiff who is not the original lender may establish
standing to foreclose a mortgage loan by submitting a note
with a blank or special endorsement, an assignment of the
note, or an affidavit otherwise proving the plaintiff's status as
the holder of the note. . . . [S]tanding must be established as
of the time of filing the foreclosure complaint.
Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013) (citing
McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA
2012)).
1
The motion is not in our record, but the order on the motion is.
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AS Lily was not the original lender in this case. But by the time the
verified first amended complaint to foreclose the mortgage was filed, AS Lily was the
holder of the note and mortgage. AS Lily established standing by "submitting a note
with a blank . . . endorsement." See id. Regardless of the note's prior history, the
operative complaint was in AS Lily's name and AS Lily held the note with the blank
endorsement. That is sufficient for standing. See Wells Fargo Bank, N.A. v. Morcom,
125 So. 3d 320, 322 (Fla. 5th DCA 2013) (citing Mortg. Elec. Registration Sys., Inc. v.
Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007)), review denied, 139 So. 3d 299 (Fla.
2014)). Accordingly, we reverse the judgment.
Though ultimately ruling against AS Lily on standing, the court allowed AS
Lily to try to establish the default. The court sustained an objection to testimony from
AS Lily's witness, a representative of Gregory Lending, that the servicer's testimony was
hearsay that was not admissible as a business record. See §§ 90.802, .803(6), Fla.
Stat. (2011).2 In reaching its decision the court erred in following Glarum v. LaSalle
Bank National Ass'n, 83 So. 3d 780, 782 (Fla. 4th DCA 2011). While we take no issue
with Glarum, the facts of this case better track those in WAMCO XXVIII, Ltd. v.
Integrated Electronic Environments, Inc., 903 So. 2d 230, 233 (Fla. 2d DCA 2005). In
this case, the witness was testifying to information she personally knew and relayed
what she herself did in establishing the values in this case. In Glarum, the witness
could only provide inadmissible hearsay because he was testifying to material he
2
We note that as far as authentication is concerned, the note and allonge
here are self-authenticating, and the servicer's representative's inability to authenticate
them is immaterial in this case. See § 90.902(8); Bryson v. Branch Banking & Trust
Co., 75 So. 3d 783, 786 (Fla. 2d DCA 2011).
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obtained from another servicer and he was unfamiliar with how any of the data entries
were made, either at the servicer for whom he worked or the servicer on whose data he
relied. 83 So. 3d at 782. In WAMCO, the witness testified to procedures the servicer
for whom he worked used and testified about his personal experience in servicing the
loans at issue. 903 So. 2d at 233. Because in this case the bank's witness testified to
procedures the servicer for whom she worked used in some detail and also testified
about her personal experience with these loans in particular, the evidence sought to be
adduced could be admitted as a business record. See id. (citing § 90.803(6)). Thus,
the court erred in concluding that the witness's testimony was inadmissible hearsay, and
it should have admitted the evidence.
Because the court erred in concluding that AS Lily was not a proper party,
lacked standing, and that its witness's testimony was inadmissible, we reverse and
remand for a new trial.
Reversed and remanded.
ALTENBERND and LaROSE, JJ., Concur.
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