NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-4 v. KERRY MEYER

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
NATIONAL COLLEGIATE STUDENT )
LOAN TRUST 2006-4, a Delaware )
Statutory Trust, )
)
Appellant, )
)
v. ) Case No. 2D17-4158
)
KERRY MEYER, )
)
Appellee. )
)
Opinion filed March 1, 2019.
Appeal from the Circuit Court for
Hillsborough County; Claudia R. Isom,
Judge.
Kenneth L. Salomone of Aldridge, Pite &
Haan, LLP, Atlanta, Georgia; Kenneth L.
Salomone of Salomone Law Group,
Deerfield Beach (substituted as counsel of
record), for Appellant.
Jared M. Krukar and Dineen Pashoukos
Wasylik of DPW Legal, Tampa; and M.
Vincent Pazienza of Law Firm of M. Vincent
Pazienza, P.A., Lutz, for Appellee.
BLACK, Judge.
National Collegiate Student Loan Trust 2006-4, a Delaware Statutory
Trust (NCSLT), challenges the order dismissing with prejudice its second amended
complaint for breach of a loan agreement between Bank of America, N.A., and Kerry
Meyer, as a cosignor and guarantor on the loan. We reverse the order of dismissal and
remand for further proceedings.
Following the dismissal of its first two complaints for breach of a loan
agreement, NCSLT filed its second amended complaint on May 1, 2017. The second
amended complaint alleged that Sean Meyer, the borrower, and Kerry Meyer, a
cosignor, executed a "loan request/credit agreement" with Bank of America for the
purpose of obtaining a private education loan for the borrower to attend college; that the
loan request/credit agreement specified that Ms. Meyer would be jointly liable for
repayment of the loan; and that the loan was approved and a check payable to the
borrower and Ms. Meyer was mailed to, endorsed, and deposited by the borrower and
Ms. Meyer. NCSLT alleged that the borrower and Ms. Meyer agreed to the terms of the
loan by endorsing and depositing the loan check and that the borrower and Ms. Meyer
defaulted on the loan by failing to make the initial payment due on November 17, 2011.
NCSLT also asserted that it is the entity entitled to enforce the terms of the loan as an
assignee of the debt and that it is the owner of the loan debt pursuant to the "Pool
Supplement and Deposit and Sale Agreement."
Multiple documents, including some unnecessary to the resolution of this
appeal, were attached to and referenced in the second amended complaint. The loan
request/credit agreement "information page" was the first attachment. The information
page provides that it is a "Non-Negotiable Credit Agreement" and a "Consumer Credit
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Transaction." The information page identifies the lender as Bank of America and the
loan amount requested as $30,000 for an "education maximizer undergraduate loan." It
bears an identification number, BK.06-07.CSX1.10DC.0206, and a secondary
identification containing "Meyer" and ending in AXXXXXXXX. The second page of the
document bears the signatures of both the borrower and the cosignor, and it provides
that "the holder of the loan can collect this debt from [the cosignor] without first trying to
collect from the borrower" and that "by signing this credit agreement . . . [the cosignor]
intends to (I) apply for joint credit and (II) be jointly liable with the borrower for this loan."
A "Note Disclosure Statement" was also attached to the complaint,
identifying the loan number as 04473793, the amount financed as $30,000, and the
borrowers as Sean Meyer and Kerry Meyer. Additionally, a copy of the endorsed check
for $30,000, was attached to the complaint; it was drawn on a Bank of America check
for The Education Resources Institute (TERI).
To support NCSLT's standing to enforce the terms of the loan agreement,
it attached a document titled "2006-4 Pool Supplement," dated December 7, 2006,
which provides that The First Marblehead Corporation, the servicer, and Bank of
America (collectively, the Program Lender) "transfers, sells, sets over and assigns to
The National Collegiate Funding LLC" (the LLC) the student loans set forth in the
schedule identified as the Transferred Bank of America Loans, along with all of the
Program Lender's rights and "any agreement pursuant to which TERI granted collateral
for its obligations."1 The LLC "in turn will sell the [loans] to [NCSLT]." A single page
1The
relationship between The First Marblehead Corporation and Bank of
America was established by reference and incorporation of the April 1, 2006, Note
Purchase Agreement in the 2006-4 Pool Supplement.
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"roster" for NCSLT then identifies a loan with the borrower's social security number
(redacted) and a "GUARREF" number matching the loan number previously identified
(04473793). The roster also provides that the disbursement date was November 3,
2006, and that the amount disbursed was $30,000. The deposit and sale agreement
between the LLC and NCSLT was also attached, and it identifies loans by the pool
supplements originating with a bank as part of one of its loan programs. One of those
supplements is Bank of America's 2006-4 Pool Supplement, matching the roster's "loan
product" information.
In moving to dismiss NCSLT's complaint for the third time, Ms. Meyer cited
Florida Rule of Civil Procedure 1.140(b), and she argued that NCSLT failed to state a
cause of action and that it lacked standing to bring the action.
The standard of review on an order granting a motion to dismiss is de
novo. Belcher Ctr., LLC v. Belcher Ctr., Inc., 883 So. 2d 338, 339 (Fla. 2d DCA 2004).
Because the order on appeal does not include findings of fact or conclusions of law and
we do not have a transcript of the hearing to determine if one or both of the bases
raised in Ms. Meyer's motion to dismiss resulted in the dismissal, we consider both
arguments.
I. Standing
"In determining whether to dismiss a complaint for lack of standing, [the
court] must confine [its] review to the four corners of the complaint, draw all inferences
in favor of the pleader, and accept all well-pled allegations in the complaint as true."
Llano Fin. Grp., LLC v. Yespy, 228 So. 3d 108, 111 (Fla. 4th DCA 2017) (quoting
Gordon v. Kleinman, 120 So. 3d 120, 121 (Fla. 4th DCA 2013)). Generally, dismissals
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with prejudice based upon the affirmative defense of a lack of standing are not proper.
See, e.g., Lawson v. Frank, 197 So. 3d 1269, 1271 (Fla. 2d DCA 2016) ("Indeed, the
substantive issue underlying the court's ruling—whether Mr. Lawson held
sufficient standing to maintain this cause of action—is an affirmative defense that,
unless raised in a responsive pleading, would be deemed waived."); Hartford Ins. Co. of
Midwest v. O'Connor, 855 So. 2d 189, 190 n.1 (Fla. 5th DCA 2003) ("The issue of
standing and the effect of the assignment were matters to be raised by Hartford as
affirmative defenses, not in a motion to dismiss the complaint."). However, "[i]f the face
of the complaint contains allegations which demonstrate the existence of an affirmative
defense, then such a defense may be considered on a motion to dismiss." Papa John's
Int'l, Inc. v. Cosentino, 916 So. 2d 977, 983 (Fla. 4th DCA 2005); see also Fla. R. Civ. P.
1.110(d) ("Affirmative defenses appearing on the face of a prior pleading may be
asserted as grounds for a motion or defense under rule 1.140(b); provided this shall not
limit amendments under rule 1.190 even if such ground is sustained.").
There is nothing on the face of the second amended complaint to suggest
that NCSLT does not have standing such that the affirmative defense should have been
decided by a motion to dismiss. See Wildflower, LLC v. St. Johns River Water Mgmt.
Dist., 179 So. 3d 369, 373 (Fla. 5th DCA 2015). The affirmative defense requires
factual proof supporting it; this is a burden not on NCSLT, having sufficiently alleged
that it is due the debt, but on Ms. Meyer. See Hess v. Philip Morris USA, Inc., 175 So.
3d 687, 695 (Fla. 2015) ("The defendant has the burden to prove an affirmative
defense." (citing Hough v. Menses, 95 So. 2d 410, 412 (Fla. 1957))); Nunez v. Alford,
117 So. 2d 208, 210 (Fla. 2d DCA 1960).
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Substantively, "[s]tanding is . . . that sufficient interest in the outcome of
litigation which will warrant the court's entertaining it." Progressive Express Ins. Co. v.
McGrath Cmty. Chiropractic, 913 So. 2d 1281, 1285 (Fla. 2d DCA 2005) (quoting Gen.
Dev. Corp. v. Kirk, 251 So. 2d 284, 286 (Fla. 2d DCA 1971)). Here, NCSLT attached
documents supporting its allegation of ownership by establishing the transfer or
purchase of student loans from Bank of America to the LLC and from the LLC to
NCSLT. Cf. Llano Fin., 228 So. 3d at 112 (affirming dismissal and concluding that
alleging assignment of the note to the plaintiff was "not equivalent to alleging that the
original lender assigned its right to pursue negligence claims"). This is sufficient to
overcome a rule 1.140 motion to dismiss based on standing. See Landmark Funding,
Inc. ex rel. Naples Syndications, LLC v. Chaluts, 213 So. 3d 1078, 1079 (Fla. 2d DCA
2017) ("The operative complaint in this case alleged ultimate facts demonstrating
Landmark's membership both at the time of the suit and at the time of
the alleged misconduct. The complaint contained no attachments that contradicted
those allegations. As such, it was legally sufficient insofar as Landmark's standing is
concerned and not properly subject to a motion to dismiss on that basis."). We note,
however, that it may not be sufficient on a motion for judgment on the pleadings or
summary judgment or to succeed at trial. Cf. Lovette v. Nat'l Collegiate Student Loan
Tr. 2004-1, 149 So. 3d 735, 737 (Fla. 5th DCA 2014) (reversing final summary judgment
where Trust failed to establish standing).
II. Failure to state a cause of action
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The cause of action alleged in the second amended complaint is a breach
of contract—Ms. Meyers' failure to comply with the terms of the loan. NCSLT is seeking
damages only.
"For . . . purposes of a motion to dismiss for failure to state a cause of
action, allegations of the complaint are assumed to be true and all reasonable
inferences arising therefrom are allowed in favor of the plaintiff." Swope Rodante, P.A.
v. Harmon, 85 So. 3d 508, 509 (Fla. 2d DCA 2012) (quoting Wallace v. Dean, 3 So. 3d
1035, 1042-43 (Fla. 2009)). "A motion to dismiss tests the legal sufficiency of the
complaint and does not determine factual issues." Haskel Realty Grp., Inc. v. KB
Tyrone, LLC, 253 So. 3d 84, 85 (Fla. 2d DCA 2018) (quoting Gann v. BAC Home Loans
Servicing LP, 145 So. 3d 906, 908 (Fla. 2d DCA 2014)). "To state a cause of action, a
complaint must allege sufficient ultimate facts to show that the pleader is entitled to
relief." Havens v. Coast Fla., P.A., 117 So. 3d 1179, 1181 (Fla. 2d DCA 2013) (citing
Fla. R. Civ. P. 1.110(b)).
"The elements of a breach of contract cause of action are: (1) a valid
contract, (2) a material breach, and (3) damages." Ferguson Enters. v. Astro Air
Conditioning & Heating, Inc., 137 So. 3d 613, 615 (Fla. 2d DCA 2014) (citing Havens,
117 So. 3d at 1181). Rule 1.130(a) requires that "[a]ll bonds, notes, bills of exchange,
contracts, accounts, or documents on which action may be brought or defense made, or
a copy thereof or a copy of the portions thereof material to the pleadings, must be
incorporated in or attached to the pleading." Attachments to the pleading are
"considered a part thereof for all purposes." Fla. R. Civ. P. 1.130(b). The purpose of
rule 1.130(a) "is to apprise the defendant of the nature and extent of the cause of action
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so that the defendant may plead with greater certainty." Amiker v. Mid-Century Ins. Co.,
398 So. 2d 974, 975 (Fla. 1st DCA 1981) (citing Sachse v. Tampa Music Co., 262 So.
2d 17, 19 (Fla. 2d DCA 1972)). "A complaint based on a written instrument does not
state a cause of action until the instrument or an adequate portion thereof, is attached to
or incorporated in the complaint." Glen Garron, LLC v. Buchwald, 210 So. 3d 229, 233
(Fla. 5th DCA 2017) (quoting Contractors Unlimited, Inc. v. Nortrax Equip. Co. Se., 833
So. 2d 286, 288 (Fla. 5th DCA 2006)). "Rule 1.130 does not require attachment of the
entire contract, but only the attachment or the incorporation into the pleading of the
material portions of the contract on which the action is based." Id.Here, NCSLT alleged that (1) Ms. Meyer, as a cosignor and guarantor,
had entered into a valid student loan agreement, attaching relevant pages of the signed
credit agreement; (2) no payments on the student loan had been made, breaching the
agreement; and (3) Ms. Meyer owed NCSLT damages in the amount of the loan
principal plus interest. This was sufficient to state a cause of action for breach of the
agreement such that the second amended complaint should not have been dismissed.
See Ferguson Enters., 137 So. 3d at 615 ("In count V, Ferguson alleged that the
Hegeduses personally guaranteed repayment of Astro's debt, that the Hegeduses
breached the guaranty by refusing to pay that debt, and that Astro and the Hegeduses
owed Ferguson more than $90,000. The allegations in count V were sufficient to state a
cause of action for breach of the guaranty."); Student Loan Mktg. Ass'n v. Morris, 662
So. 2d 990, 991-92 (Fla. 2d DCA 1995) (reversing order dismissing complaint for failure
to state a cause of action where complaint sufficiently complied with the rules of civil
procedure).
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The trial court erred in granting Ms. Meyer's motion to dismiss on either
basis raised in the motion. Accordingly, we reverse the order of dismissal and remand
for further proceedings.
Reversed and remanded.
NORTHCUTT and BADALAMENTI, JJ., Concur.
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