       DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                            FOURTH DISTRICT

                          ABRAHAM SEGALL,
                              Appellant,

                                    v.

                WACHOVIA BANK, N.A., as Trustee for
              J.P. MORGAN MORTGAGE TRUST 2005-A8,
                            Appellee.

                             No. 4D14-4424

                             [June 1, 2016]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Lynn Rosenthal, Judge; L.T. Case No. CACE
09004020(11).

  Brian Korte, Scott J. Wortman and Daniel Bialczak of Korte &
Wortman, P.A., West Palm Beach, for appellant.

  Sarah T. Weitz of Weitz & Schwartz, P.A., Fort Lauderdale, for
appellee.

KLINGENSMITH, J.

   Abraham Segall appeals from a final judgment of foreclosure in favor
of Wachovia Bank, N.A. as trustee for J.P. Morgan Mortgage Trust 2005-
A8. Among several issues raised on appeal, we write solely to address
Segall’s claim that Wachovia failed to prove its standing to foreclose. We
agree and reverse.

   Segall and his wife signed a promissory note and mortgage with J.P.
Morgan Chase Bank, N.A. (“Chase Bank”). Chase Bank later transferred
the original note to Chase Home Finance, LLC (“Chase Home”), as
evidenced by an allonge attached to the note reflecting a specific
endorsement from Chase Bank to Chase Home.              Chase Home
subsequently merged into Chase Bank.

   On the same day that Wachovia filed its foreclosure complaint against
Segall, it acquired the note and mortgage by way of an assignment of
mortgage from Chase Bank. In the initial complaint, Wachovia asserted
that it was entitled to enforce the note as a holder of the instrument.

   Segall contested Wachovia’s standing, arguing that the chain of
ownership of the note belied Wachovia’s status as holder because the
special endorsement indicated that Chase Home, not Chase Bank, was
the most recent holder. Therefore, Segall argued that because Chase
Home was the true owner of the note and mortgage, Chase Bank could
not have assigned its ownership rights to Wachovia.

   Wachovia’s witness testified that while the note was specially
endorsed from Chase Bank to Chase Home, the two companies merged in
2007 to become one entity. When Wachovia’s counsel moved to offer the
assignment into evidence, defense counsel objected based on best
evidence, speculation, and lack of predicate, arguing that “[t]here’s been
no documentation evidence showing that there was a merger between
[Chase Home] and [Chase Bank],” and that the special endorsement
indicated they were separate entities. The trial court overruled the
objection, and later denied Segall’s motion for involuntary dismissal, in
which he argued that Wachovia lacked standing to foreclose. The trial
court ultimately rendered final judgment of foreclosure in favor of
Wachovia.

    “We review the sufficiency of the evidence to prove standing to bring a
foreclosure action de novo.” Jelic v. LaSalle Bank, Nat’l Ass’n, 160 So. 3d
127, 129 (Fla. 4th DCA 2015) (quoting Lacombe v. Deutsche Bank Nat'l
Trust Co., 149 So. 3d 152, 153 (Fla. 1st DCA 2014)). “[S]tanding must be
established as of the time of filing the foreclosure complaint.” Jarvis v.
Deutsche Bank Nat’l Trust Co., 169 So. 3d 194, 196 (Fla. 4th DCA 2015)
(alteration in original) (quoting Focht v. Wells Fargo Bank, N.A., 124 So.
3d 308, 310 (Fla. 2d DCA 2013)). Additionally, “[o]nce a defendant
contests the plaintiff’s standing as the proper party to enforce a note via
foreclosure, the plaintiff’s right to bring suit on the note at the requisite
time becomes a disputed issue the plaintiff must prove.” Ham v.
Nationstar Mortg., LLC, 164 So. 3d 714, 719 n.1 (Fla. 1st DCA 2015).

   When a note is specially endorsed, as the note is in this case, it
“becomes payable to the identified person and may be negotiated only by
the indorsement of that person.” Lamb v. Nationstar Mortg., LLC, 174 So.
3d 1039, 1040 (Fla. 4th DCA 2015) (quoting § 673.2051(1), Fla. Stat.
(2013)); see also Guzman v. Deutsche Bank Nat’l Trust Co., 179 So. 3d
543, 545 (Fla. 4th DCA 2015) (“For a plaintiff to qualify as a holder of a
promissory note, the note must either list the plaintiff as the payee, or it


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‘must bear a special endorsement in favor of the plaintiff or a blank
endorsement.’” (quoting McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79
So. 3d 170, 173 (Fla. 4th DCA 2012))). “Where a bank is seeking to
enforce a note which is specially indorsed to another, it may prove
standing ‘through evidence of a valid assignment, proof of purchase of
the debt, or evidence of an effective transfer.’” Lamb, 174 So. 3d at 1040
(quoting Stone v. BankUnited, 115 So. 3d 411, 413 (Fla. 2d DCA 2013)).
One type of such an “effective transfer” is a corporate merger, whereby a
surviving entity may enforce the note and mortgage of the predecessor.

    Section 607.1106 provides that in the event of a merger between
corporations, “[e]very other corporation party to the merger merges into
the surviving corporation and the separate existence of every corporation
except the surviving corporation ceases.” § 607.1106(1)(a), Fla. Stat.
(2007). Additionally, the title to or any interest in property “owned by
each corporation party to the merger is vested in the surviving
corporation without reversion or impairment.” § 607.1106(1)(b). The
surviving corporation becomes “responsible and liable for all the
liabilities and obligations of each corporation party to the merger,” and
“[a]ny claim existing or action or proceeding pending by or against any
corporation party to the merger may be continued as if the merger did
not occur or the surviving corporation may be substituted in the
proceeding for the corporation which ceased existence.” § 607.1106
(1)(c)–(d). In short, the surviving corporation succeeds to all of the rights,
privileges, immunities, and property of the other entities party to the
merger by operation of law, without the necessity of either a bill of sale or
other assignment.

   Section 655.417(1), which concerns the               effect   of   merger,
consolidation, conversion, or acquisition, provides:

      Even though the charter of a participating or converting
      financial entity has been terminated, the resulting financial
      entity is deemed to be a continuation of the participating or
      converting financial entity such that all property of the
      participating or converting financial entity, including rights,
      titles, and interests in and to all property of whatsoever kind,
      whether real, personal, or mixed, and things in action, and
      all rights, privileges, interests, and assets of any conceivable
      value or benefit which are then existing, or pertaining to it,
      or which would inure to it, are immediately vested in and
      continue to be the property of the resulting financial entity,
      by act of law and without any conveyance or transfer and


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      without further act or deed; and such financial entity has,
      holds, and enjoys the same in its own right as fully and to
      the same extent as the same was possessed, held, and
      enjoyed by the participating or converting financial entity;
      and, at the time of the taking effect of such merger,
      consolidation, conversion, or acquisition, the resulting
      financial entity has and succeeds to all the rights,
      obligations, and relations of the participating or converting
      financial entity.

§ 655.417(1), Fla. Stat. (2007).

    Therefore, if Wachovia presented sufficient evidence proving that the
alleged merger occurred, then Chase Bank, as the surviving corporation,
would have succeeded to Chase Home’s status as owner and holder of
the promissory note by operation of law, and would have had the
authority to transfer the note to Wachovia via assignment of the
mortgage. See, e.g., Tilus v. AS Michai LLC, 161 So. 3d 1284, 1286 (Fla.
4th DCA 2015) (stating that a party can prove standing to foreclose via
an assignment of mortgage executed prior to the inception of the lawsuit,
so long as the assignment reflects an intention to transfer both the note
and the mortgage).

  The analogous federal law applicable specifically to the merger of
banks provides:

         The corporate existence of each of the merging banks or
      banking associations participating in such merger shall be
      merged into and continued in the receiving association and
      such receiving association shall be deemed to be the same
      corporation as each bank or banking association
      participating in the merger.      All rights, franchises and
      interests of the individual merging banks or banking
      associations in and to every type of property (real, personal,
      and mixed) and choses in action shall be transferred to and
      vested in the receiving association by virtue of such merger
      without any deed or other transfer.            The receiving
      association, upon the merger and without any order or other
      action on the part of any court or otherwise, shall hold and
      enjoy all rights of property, franchises, and interests,
      including appointments, designations, and nominations, and
      all other rights and interests as trustee, executor,
      administrator, registrar of stocks and bonds, guardian of


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      estates, assignee, receiver and committee of estates of
      lunatics, and in every other fiduciary capacity, in the same
      manner and to the same extent as such rights, franchises,
      and interests were held or enjoyed by any one of the merging
      banks or banking associations at the time of the merger,
      subject to the conditions hereinafter provided.

12 U.S.C. § 215a(e) (2006).

    These statutes make it clear that a foreclosing party can establish
standing to foreclose based upon a merger. However, achieving standing
via merger also requires that the surviving entity prove that it “acquired
all of [the absorbed entity’s] assets, including [the] note and mortgage, by
virtue of the merger.” Fiorito v. JP Morgan Chase Bank, Nat’l Ass’n, 174
So. 3d 519, 521 (Fla. 4th DCA 2015).

   In Fiorito, the plaintiff attempted to prove its standing to foreclose
based upon its ownership and possession of a note containing an
undated, blank endorsement, which it acquired by way of a merger with
the bank that originated the loan. Id. at 520–21. While the plaintiff’s
witness testified that a merger had taken place, the witness did not
establish that the successor bank acquired the subject note and
mortgage by virtue of the merger. Id. at 521. Accordingly, we held that
evidence of standing was lacking:

      While Chase also could have established standing through
      its merger with [Washington Mutual Bank, FA (“WAMU”)],
      the officer’s testimony fell short of establishing that Chase
      acquired all of WAMU’s assets, including Appellant’s note
      and mortgage, by virtue of the merger. The officer only
      testified that Chase merged with, and “took over,” WAMU on
      September 25, 2008. The officer never testified that Chase
      acquired all or any of WAMU’s assets, nor did he testify as to
      when Chase became the owner of the note. Cf. Stone, 115
      So. 3d at 413 (bank employee specifically testified that the
      plaintiff bank acquired all of the prior bank’s assets
      pursuant to a purchase assumption agreement). Thus,
      because Chase failed to establish when it became the owner
      of the note, the trial court erred in finding that Chase had
      standing to initiate the foreclosure action.

Id. at 521–22.



                                     5
   Similarly in Lamb, which involved a corporate acquisition as opposed
to a merger, we found that despite the witness’s testimony that the
plaintiff acquired the entity to which the subject note was specially
endorsed, standing was not established because there was no evidence
that the foreclosing party “acquired [the] particular note which [bore the]
special indorsement” to the subsumed entity. 174 So. 3d at 1041.

   Other than the bare assertion by Wachovia’s witness at trial, there are
no documents in the record indicating that the merger of Chase Home
and Chase Bank took place. While the term “merger” is used in common
parlance to describe the combination of two corporate entities, it has
specific legal meaning for corporations generally, and in the banking
industry specifically. A lay witness’s mere use of the term “merger” to
describe two companies combining into one entity, without more, could
imply a true merger as defined under sections 655.417(1) or 215a(e), but
could also imply some other form of corporate consolidation, including
but not limited to a purchase and sale of select liabilities and assets.

   The consolidation of two distinct financial institutions can be an
extraordinarily complex transaction, which may include numerous
limitations on the transfer and assumption of assets and liabilities
relating to transfers of title, exceptions to what is being transferred,
recourse between parties to the deal, and other qualifications in both
public and confidential business documents. The intricacies of these
details can tax the imagination. It would have been a simple matter for
Wachovia to present evidence of a true merger if one had in fact
occurred. Wachovia could have readily obtained documentation that
may have provided sufficient evidence of the merger, and proved that
Chase Bank had the authority to assign the mortgage.

    Here, Wachovia did not provide sufficient evidence to enable the trial
court to discern the extent of any assets transferred between Chase Bank
and Chase Home, or that a merger in accordance with sections
655.417(1) or 215a(e) had taken place. Testimony that a merger had
occurred, without more, is insufficient to prove the extent of the
consolidation, or that the transfer of the asset in question was included
as part of the purported transaction. See Shores v. First Fla. Res. Corp.,
267 So. 2d 696, 696 (Fla. 2d DCA 1972) (holding that when a corporation
admitted to transferring “some mortgages” to various entities, corporate
officers’ “bare affirmation” that the subject note was not assigned along
with the other mortgages, without more, failed to establish the claimed
nonoccurrence).



                                    6
   Because Wachovia failed to sufficiently prove that Chase Home
merged with Chase Bank, and that Chase Bank thus acquired the note,
there was no evidence that Chase Bank had the authority to further
transfer the note by assigning the mortgage to Wachovia. As such,
Wachovia failed to prove that it had standing to foreclose. We therefore
reverse and remand this case for entry of an order of involuntary
dismissal. Lamb, 174 So. 3d at 1041.

   Reversed and Remanded.

CIKLIN, C.J., and WARNER J., concur.

                           *           *    *

   Not final until disposition of timely filed motion for rehearing.




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