TONY ROBINSON AND DEBRA ROBINSON v. NATIONSTAR MORTGAGE, LLC

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
TONY ROBINSON and DEBRA )
ROBINSON, )
)
Appellants, )
)
v. ) Case No. 2D18-2842
)
NATIONSTAR MORTGAGE LLC and )
REGENCY WEST APARTMENTS II )
ASSOCIATION, )
)
Appellees. )
)
Opinion filed December 4, 2019.
Appeal from the Circuit Court for Pinellas
County; Marion L. Fleming, Judge.
Matthew D. Weidner of Weidner Law,
P.A., St. Petersburg, for Appellants.
Nancy M. Wallace of Akerman LLP,
Tallahassee; and William P. Heller of
Akerman LLP, Fort Lauderdale, for
Appellee Nationstar Mortgage LLC.
No appearance for Appellee Regency
West Apartments II Association.
SLEET, Judge.
Tony and Debra Robinson appeal the trial court's amended final judgment
of foreclosure entered in favor of Nationstar Mortgage, LLC, after a nonjury trial.
Because Nationstar failed to establish its standing at the inception of the lawsuit and the
trial court abused its discretion in granting Nationstar's motion to reopen the evidence to
submit additional proof of standing, we reverse and remand for entry of involuntary
dismissal.
This case has a long and convoluted procedural history. The note and
mortgage executed by the Robinsons in 2006 was negotiated among several
mortgagees before it was ultimately transferred by special endorsement to Deutsche
Bank Trust Company. On February 28, 2012, Aurora Loan Services, LLC, filed the
underlying foreclosure action against the Robinsons, alleging that it was the servicer for
Deutsche Bank and that it had standing to enforce the note as a nonholder in
possession of the note. The Robinsons timely filed their answer and affirmative
defenses, one of which was that Aurora lacked standing to bring the foreclosure action.
Shortly thereafter, Nationstar was substituted as party plaintiff in place of Aurora.
A nonjury trial was held, and in their written closing argument, the
Robinsons argued that Nationstar had failed to establish that Aurora had standing at the
inception of the case and that therefore the case should be dismissed. The trial court,
however, disagreed and entered a final judgment of foreclosure in favor of Nationstar on
June 25, 2015. The Robinsons moved for rehearing, arguing that Nationstar's evidence
was insufficient to establish Aurora's standing at the inception of the lawsuit. Nationstar
opposed the Robinsons' motion but conceded that it had not established its entitlement
to attorney fees and requested that the court allow it to reopen the evidence as to that
specific issue. The court denied the Robinsons' motion for rehearing on standing but
granted Nationstar's request to reopen the evidence as to attorney fees and ordered
Nationstar to schedule a hearing to address that issue.
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Nationstar never set a hearing on attorney fees, and no corrected final
judgment was ever submitted to the court. Instead, a foreclosure sale took place on
December 16, 2015. The Robinsons moved to vacate the sale, arguing that it was
improper to hold a foreclosure sale where no final judgment of foreclosure had been
rendered. The trial court granted the motion.
However, before a final judgment could be rendered, Nationstar moved to
reopen the evidence "to present additional proof of standing." Nationstar maintained
that reopening the evidence would not prejudice the Robinsons because the trial court
had previously agreed to open the evidence as to attorney fees and the judgment was
not yet final. The trial court granted the motion over the Robinsons' objection, noting in
its order that Nationstar had now waived its claim for attorney fees—the claim that had
been the sole impediment to a final judgment being entered after the trial court granted
Nationstar's request to reopen the evidence after entry of the initial final judgment. The
trial court then conducted a second trial on June 20, 2018, following which it entered its
amended final judgment of foreclosure in Nationstar's favor.
On appeal, the Robinsons argue that Nationstar's evidence in the first
nonjury trial was insufficient to establish Aurora's standing at inception and that the trial
court abused its discretion by allowing Nationstar to correct that deficiency by reopening
the evidence as to standing three years after the first trial. We agree in both respects.
With regard to the Robinsons' first argument, "[a] substituted plaintiff
acquires only the standing of the original plaintiff." Russell v. Aurora Loan Servs., LLC,
163 So. 3d 639, 642 (Fla. 2d DCA 2015); see also Kiefert v. Nationstar Mortg., LLC, 153
So. 3d 351, 353 n.4 (Fla. 1st DCA 2014). Furthermore, a foreclosure "plaintiff must
prove that it had standing to foreclose when the complaint was filed." McLean v. JP
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Morgan Chase Bank Nat'l Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). As such,
Nationstar, as successor plaintiff, had the burden to prove that its predecessor Aurora
had standing to foreclose at the time it filed the complaint.
To that end, "Florida Rule of Civil Procedure 1.210(a), the real party in
interest rule, 'permits an action to be prosecuted in the name of someone other than,
but acting for, the real party in interest.' " Russell, 163 So. 3d at 642 (quoting Mortg.
Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007)). "Thus,
'a servicer may be considered a party in interest to commence legal action as long as
the [real party in interest] joins or ratifies its action.' " Russell, 163 So. 3d at 642-43
(emphasis added) (quoting Elston/Leetsdale, LLC v. CWCapital Asset Mgmt. LLC, 87
So. 3d 14, 17 (Fla. 4th DCA 2012)).
Here, however, Nationstar failed to prove at the first trial that Aurora had
been given legal authority to act on behalf of Deutsche Bank to bring this foreclosure
action. At the first trial, Nationstar admitted into evidence the mortgage and original
note, which was payable to Aegis Wholesale Corporation and bore three undated
special endorsements. The first endorsement was from Aegis Wholesale Corporation to
Aegis Mortgage Corporation. The second was from Aegis Mortgage Corporation to
Residential Funding Company, LLC. And the third endorsement was from Residential
Funding Company, LLC, to Deutsche Bank Trust Company Americas as trustee.
Nationstar also presented a senior default specialist who had been employed with
Nationstar since 2013 and who testified that Aurora possessed the note in 2009. This
evidence, however, did not establish that at the time it filed the complaint, Aurora had
been authorized by Deutsche Bank to prosecute the foreclosure on Deutsche Bank's
behalf.
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This case is factually similar to Russell, 163 So. 3d at 643. Like in
Russell, Nationstar failed to present "any evidence, affidavits[,] or other documents"—
such as a pooling and service agreement, an assignment agreement, trust records, or
mortgage loan schedules—to support "its allegation that it was authorized to prosecute
the action on behalf of" Deutsche Bank. See id. (alteration in original) (quoting Elston/
Leetsdale, 87 So. 3d at 17). And, as in Russell, Aurora itself verified the complaint,
rather than it being verified by the real party in interest—Deutsche Bank. See id.
Furthermore, Nationstar introduced, over the Robinsons' objection, a limited power of
attorney (POA) by which Deutsche Bank had appointed Nationstar as successor
servicer to Aurora "in connection with all mortgage loans serviced by the Servicer
pursuant to the Agreement." However, the POA was dated August 6, 2012—more than
five months after the initial complaint was filed—and it indicated that Nationstar
assumed the servicing of "mortgage loans" in August 2012, but it did not make any
reference to whether the Robinsons' loan was included in the trust. See id. Faced with
almost identical evidence in Russell, this court concluded that "Nationstar's evidence
established that it was the current loan servicer for Deutsche Bank; it did not prove that
Aurora had standing as a prior servicer." Id.
As such, at the close of the first trial, Nationstar had failed to establish its
standing, as successor plaintiff to Aurora, at the inception of the case. Accordingly, the
trial court erred in entering final judgment of foreclosure in favor of Nationstar following
the first trial and in denying the Robinsons' motion for rehearing of that judgment.
On appeal, Nationstar maintains that it established its standing through
evidence it presented at the second trial, which the court conducted after it granted
Nationstar's motion to reopen the evidence. However, we conclude that this evidence
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was not properly before the trial court because the trial court abused its discretion in
reopening the evidence to allow Nationstar to present additional proof of standing.
It is true that a trial court has discretion to reopen evidence and take
additional testimony. See Fla. R. Civ. P. 1.530(a) ("On a motion for a rehearing of
matters heard without a jury . . . the court may open the judgment if one has been
entered, take additional testimony, and enter a new judgment."). However, "[g]enerally,
to reopen a case, a party must establish two evidentiary predicates. The first predicate
is that the presentation of evidence will not unfairly prejudice the opposing party[,] and
[the] second [is] that reopening will serve the best interests of justice." Gulf Eagle, LLC
v. Park E. Dev., Ltd., 196 So. 3d 476, 479 (Fla. 2d DCA 2016). Additionally, "the trial
judge should consider . . . the magnitude of the moving party's omission." Hernandez v.
Cacciamani Dev. Co., 698 So. 2d 927, 928 (Fla. 3d DCA 1997).
Here, in its order granting Nationstar's motion to reopen the evidence, the
trial court concluded that the Robinsons would not be unfairly prejudiced "as this [c]ourt
has already found that Plaintiff Bank had standing to foreclose pursuant to Order
entered on May 4, 2015." Putting aside our confusion as to why the trial court felt the
need to reopen the evidence on an issue it believed the plaintiff had already proven, for
the reasons we have already set forth, it is clear that Nationstar in fact did not prove
standing at the first trial. As such, the trial court's reopening the evidence allowed
Nationstar the proverbial second bite at the apple to prove an essential element of its
case.
The Robinsons had immediately moved for rehearing following entry of the
initial final judgment of foreclosure and spelled out exactly how Nationstar's evidence
was lacking with regard to proving standing at inception. By successfully moving to
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reopen the evidence on the issue of attorney fees but never following through on that
issue by securing hearing time or submitting a corrected final judgment, Nationstar
successfully kept this case pending before the trial court for three years. During that
time, the Robinsons were unable to bring what would have been a successful appeal of
that final judgment. Instead, Nationstar used the Robinsons' own rehearing argument to
correct the deficiencies in its case and present evidence that it no doubt had access to
before—and could have presented at—the first trial. We can come to no other
conclusion but that the trial court's decision to allow Nationstar to reopen its evidence to
present additional proof of standing greatly prejudiced the Robinsons without serving
the best interests of justice. Furthermore, as Nationstar acknowledged in its motion to
reopen the evidence, standing is "an essential element of th[is] foreclosure action,"
rendering its evidentiary failure at the first hearing an omission of great magnitude. Cf.
Hernandez, 698 So. 2d at 928-29.
As such, the trial court's inexplicable decision to grant Nationstar a "do
over" in the form of a second trial three years after the final judgment of foreclosure had
been entered amounted to an abuse of discretion. And Nationstar's failure to present
sufficient evidence of standing at the first trial constitutes a failure of proof for which
remand for entry of involuntary dismissal of the complaint is appropriate. See Correa v.
U.S. Bank N.A., 118 So. 3d 952, 956 (Fla. 2d DCA 2013) ("[A]ppellate courts do not
generally provide parties with an opportunity to retry their case upon a failure of proof."
(alteration in original) (quoting Morton's of Chicago, Inc. v. Lira, 48 So. 3d 76, 80 (Fla.
1st DCA 2010)); see also Dickson v. Roseville Props., LLC, 198 So. 3d 48, 52 (Fla. 2d
DCA 2015); Creadon v. U.S. Bank N.A., 166 So. 3d 952, 954 (Fla. 2d DCA
2015); Russell, 163 So. 3d at 643.
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Reversed and remanded for entry of involuntary dismissal.
BADALAMENTI and ROTHSTEIN-YOUAKIM, JJ., Concur.
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