                                           IN THE DISTRICT COURT OF APPEAL
                                           FIRST DISTRICT, STATE OF FLORIDA
DANIEL and NANCY KIEFERT,
                                           NOT FINAL UNTIL TIME EXPIRES TO
      Appellants,                          FILE MOTION FOR REHEARING AND
                                           DISPOSITION THEREOF IF FILED
v.
                                           CASE NO. 1D13-5998
NATIONSTAR MORTGAGE, LLC,

      Appellee.

_____________________________/

Opinion filed October 13, 2014.

An appeal from the Circuit Court for Duval County.
William A. Wilkes, Judge.

Thomas R. Pycraft, Jr., John J. Spence, and Michael Pelkowski of Pycraft Legal
Services, LLC, St. Augustine, for Appellants.

Nancy M. Wallace, Kristen M. Fiore, and Michael J. Larson of Akerman LLP,
Tallahassee, and William P. Heller of Akerman, LLP, Fort Lauderdale, for
Appellee.




BENTON, J.

      Daniel and Nancy Kiefert appeal the final judgment of foreclosure entered

against them following a non-jury trial, on grounds that Nationstar Mortgage, LLC
(Nationstar) did not prove standing. The Kieferts first raised lack of standing in

two motions to dismiss, then pleaded it as a defense in their answer. We reverse

because Nationstar failed to establish that the original plaintiff, Aurora Loan

Services, LLC (Aurora), had standing to foreclose at the time Aurora filed the

original foreclosure complaint.

      To prove standing to foreclose a mortgage, a plaintiff must show that it is the

holder both of the mortgage and of the note the mortgage secures. See Lindsey v.

Wells Fargo Bank, N.A., 139 So. 3d 903, 906 (Fla. 1st DCA 2013) (citing Mazine

v. M & I Bank, 67 So. 3d 1129, 1132 (Fla. 1st DCA 2011)). The plaintiff must

prove it is a holder in due course of the note and mortgage both as of the time of

trial and also that the (original) plaintiff had standing as of the time the foreclosure

complaint was filed.1 See id. (citing Rigby v. Wells Fargo Bank, N.A., 84 So. 3d

1195, 1196 (Fla. 4th DCA 2012)); see also Ryan v. Wells Fargo Bank, N.A., 142

So. 3d 974, 974–75 (Fla. 4th DCA 2014) (holding the plaintiff failed to establish



      1
         Even when the original plaintiff produces a duly endorsed note (after the
inception of the case but) before another party is substituted as plaintiff, the
complaint is subject to dismissal for lack of standing. See Olivera v. Bank of Am.,
N.A., 141 So. 3d 770, 771–774 (Fla. 2d DCA 2014) (reversing where original
plaintiff filed a copy of the note with two, undated endorsements eighteen months
after initially filing a complaint with an unendorsed copy of the note, not payable
to the original plaintiff and, one year after the endorsed note was produced, another
bank was substituted as plaintiff (stating that the substituted plaintiff failed to
establish that the original plaintiff had possession of the endorsed note “before the
commencement of the underlying action”)).
                                            2
standing when, among other things, it “did not demonstrate that the endorsement

occurred prior to the filing of the initial complaint”).

      The plaintiff must prove not only physical possession of the original note but

also, if the plaintiff is not the named payee, possession of the original note

endorsed in favor of the plaintiff or in blank (which makes it bearer paper). See

Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310–11 (Fla. 2d DCA 2013)

(citing Green v. JPMorgan Chase Bank, N.A., 109 So. 3d 1285, 1288 (Fla. 5th

DCA 2013)); Lindsey, 139 So. 3d at 906 (citing Gee v. U.S. Bank Nat’l Ass’n, 72

So. 3d 211, 213 (Fla. 5th DCA 2011)). If the foreclosure plaintiff is not the

original, named payee, the plaintiff must establish that the note was endorsed

(either in favor of the original plaintiff or in blank) before the filing of the

complaint. See Ryan, 142 So. 3d at 975; Focht, 124 So. 3d at 310–11; McLean v.

JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 174 (Fla. 4th DCA 2012).

      In the present case, Aurora filed the foreclosure action, attaching to the

original complaint an unendorsed copy of the note payable, not to Aurora, but to

Lehman Brothers Bank, FSB. A year later, Aurora sought leave to file an amended

complaint to which it attached a different copy of the note, now bearing

endorsements making it bearer paper. The trial court granted Aurora’s motion and

allowed the amended complaint to supersede the original complaint. Separately, a

year after the amended complaint was filed, the trial court substituted Nationstar

                                           3
for Aurora.2 See Olivera v. Bank of Am., N.A., 141 So. 3d 770, 771–774 (Fla. 2d

DCA 2014) (reversing a final summary judgment of foreclosure because the

original plaintiff lacked standing, despite the substituted plaintiff’s possession of a

duly endorsed note, which had been filed with the court nearly a year before the

substitution).

      At trial, the original of the note attached to the amended complaint came into

evidence.   That note bears two endorsements: the first, an endorsement from

Lehman Brothers Bank, FSB to Lehman Brothers Holdings, Inc., and the second,

an endorsement in blank by Lehman Brothers Holdings, Inc. Both endorsements

were undated; neither answered the question whether the endorsement in blank

antedated the filing of the original complaint.       The only evidence Nationstar

presented on this question was the testimony of one witness, Mr. Hyne, an

employee of Nationstar. On cross-examination, the Kieferts’ counsel pressed Mr.

Hyne concerning his knowledge, if any, of when the note had been endorsed. But

Mr. Hyne’s testimony established only that Aurora was in possession of the note at

the time the complaint was filed, not that the note had been endorsed at the time




      2
         Pursuant to Florida Rule of Civil Procedure 1.260, a substituted plaintiff
acquires the standing of the original plaintiff. See Brandenburg v. Residential
Credit Solutions, Inc., 137 So. 3d 604, 605–06 (Fla. 4th DCA 2014) (affirming a
final summary judgment of foreclosure because the substituted plaintiff showed
that the original plaintiff had standing to foreclose).
                                            4
the complaint was filed. 3 In short, Nationstar failed to establish that Aurora had

standing to foreclose at the time Aurora filed the original complaint.

      Nationstar’s subsequent acquisition of the note endorsed in blank cannot

cure Aurora’s lack of standing at the inception of the case. See Focht, 124 So. 3d

at 311–12 (stating the general principle that lack of standing in foreclosure actions

is not a defect that can be cured after the case is filed) (citations omitted); Rigby,


      3
             [Kieferts’ counsel]: [C]an you continue on and locate the
             amended complaint attached.
             [Mr. Hyne]: Yes.
             [Kieferts’ counsel]: Does that note have endorsements?
             [Mr. Hyne]: Yes.
             [Kieferts’ counsel]: When were those endorsements put
             on that note?
             [Mr. Hyne]: I don’t know.
             [Kieferts’ counsel]: Was your -- who was the holder of
             the note at the time you filed the lawsuit?
             [Mr. Hyne]: Aurora Loan Services.
             [Kieferts’ counsel]: Do you know what a holder is?
             ....
             [Mr. Hyne]: Yes.
             [Kieferts’ counsel]: What is a holder?
             [Mr. Hyne]: It’s the entity that has possession of the
             document and has the ability to take the actions.
             [Kieferts’ counsel]: Do you know if the person has to
             have the endorsement in their favor or an endorsement in
             blank to be a holder?
             ....
             [Mr. Hyne]: I don’t know.
             [Kieferts’ counsel]: Do you have any -- or have you
             reviewed any records that indicate that there was an
             endorsement on the note at the time of filing the lawsuit?
             [Mr. Hyne]: No.

                                          5
84 So. 3d at 1196; see also Olivera, 141 So. 3d at 771–74. We therefore reverse

the final judgment of foreclosure. See Ryan, 142 So. 3d at 975; Hunter v. Aurora

Loan Servs., LLC, 137 So. 3d 570, 574 (Fla. 1st DCA 2014).

      Reversed.

LEWIS, C.J. and RAY, J., CONCUR.




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