          DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                                FOURTH DISTRICT

                     LLANO FINANCING GROUP, LLC,
                              Appellant,

                                        v.

ROGER YESPY, individual, and GULFSTREAM APPRAISAL COMPANY,
                 an inactive Florida corporation,
                            Appellees.

                                No. 4D16-2007

                               [August 23, 2017]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Cheryl Caracuzzo, Judge; L.T. Case No. 2015CA010747.

  Robert J. Hauser of Pankauski Hauser PLLC, West Palm Beach, for
appellant.

  Scott A. Cole and Daniel M. Schwarz of Cole Scott & Kissane, P.A.,
Miami, and Thomas L. Hunker of Cole, Scott & Kissane, P.A., Fort
Lauderdale, for appellee Roger Yespy.

MAY, J.

   This is a case of the missing link—the claim servicer’s standing to
pursue negligence claims against a property appraiser. A third-party claim
servicer appeals an order dismissing its amended complaint against an
individual and his company for negligence in the appraisal of the
mortgaged property. It argues the trial court erred in dismissing the
amended complaint with prejudice. We disagree and affirm.

   The claim servicer filed a complaint against the property appraiser 1 for
professional negligence and false information negligently supplied for the
guidance of others. The property appraiser moved to dismiss the
complaint, arguing the claim servicer did not have standing, failed to
properly assert the causes of action or attach loan documents, and was
barred by the statute of limitations. The trial court granted the motion to

1For ease of reference, we refer to the individual and the company collectively as
the property appraiser.
dismiss without prejudice, giving the claim servicer thirty (30) days to
amend the complaint.

   The claim servicer amended the complaint, and alleged the original
lender refinanced a mortgage secured by real property. To obtain the loan,
the borrower employed a mortgage broker, who hired the property
appraiser to prepare an appraisal for the property. The property appraiser
valued the property, and listed the mortgage broker as “Lender/Client.”

    The appraisal provided for the mortgage broker to distribute the report
to the borrower, other lenders, the mortgagee or its successors and
assigns, and secondary market participants. It also stated: “[t]he
borrower, another lender . . . , the mortgagee or its successors and assigns,
mortgage insurers, . . . and other secondary market participants may rely
on this appraisal report as part of any mortgage finance transaction .
. . .” (Emphasis added). But, it provided that the intended user is the
“lender/client.” In a different section, the appraisal stated: “THE CLIENT
IS THE INTENDED USER OF THIS REPORT. NO OTHER INTENDED
USERS HAVE BEEN IDENTIFIED BY THE APPRAISER.”

    The original lender subsequently transferred the underlying mortgage
to Impac Funding Corporation (“Impac”), which later sold it to Impac CMB
Trust Series 2005-1 (the “Trust”). Impac, the Trust, and Deutsche Bank
National Trust Company (“Trustee”) entered into a master servicing
agreement. The parties agreed that Impac would service the loans for the
benefit of the Trustee.

   The agreement granted Impac the right to file and collect insurance
claims, institute lawsuits relating to delinquent or non-performing mortgage
loans within the trust, and enter into subservicing agreements to delegate
duties. Impac entered into a subservicing agreement with Savant LG, LLC
(“Savant”), assigning all of its legal rights to assert negligence claims
against real estate appraisers and other tortfeasors. However, Impac had
never been assigned those rights.

   Savant then assigned its rights to the claim servicer. The amended
complaint alleged that the claim servicer stood in the shoes of the Trust,
which relied upon the appraisal. It alleged that when the foreclosed
property was sold, the claim servicer discovered the property’s value was
substantially less than the appraised value. The claim servicer argued the
loss was due to the property appraiser’s negligence, including its use of
dissimilar comparable properties.

   The property appraiser moved to dismiss and strike the amended

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complaint on the same grounds contained in its original motion to dismiss.
The trial court granted the motion with prejudice to the professional
negligence count. It found the claim servicer alleged a loss occurred when
the property was foreclosed, and the mortgage holder knew or should have
known that the appraisal misrepresented the value of the property. The
two-year statute of limitations ran ten months before the complaint was
filed.

    The court dismissed the false information negligently supplied count
for the same reasons, finding that the ordinary negligence claim accrued
at the time of the negligent act. The trial court entered a final judgment
for the property appraiser. The claim servicer now appeals.

   While the trial court relied on the statute of limitations defense as the
basis for its dismissal of the amended complaint, we affirm on an
alternative ground argued by the property appraiser: the claim servicer
lacked standing to sue the property appraiser. See Dade Cty. Sch. Bd. v.
Radio Station WQBA, 731 So. 2d 638 (Fla. 1999).

   The claim servicer argues that it properly alleged standing, which is all
that Florida Rule of Civil Procedure 1.120(a) requires. It further claims
that Impac, who assigned its rights to Savant, which in turn assigned its
rights to the claim servicer, is within the class of persons or entities with
a cause of action under Restatement (Second) of Torts § 552 (Am. Law.
Inst. 1977). Lastly, it argues that the complaint can be amended.

    The property appraiser responds that the amended complaint and
exhibits establish the claim servicer lacked standing to file suit. It argues
the amended complaint failed to allege that Impac or the claim servicer
were ever assigned the original lender’s rights to sue the property appraiser
for negligence. Nor does the claim servicer have a claim under section 552,
as it was not an intended user of the appraisal. We agree with the property
appraiser on both points.

  We have de novo review. Equity Premium, Inc. v. Twin City Fire Ins. Co.,
956 So. 2d 1257, 1259 (Fla. 4th DCA 2007).

   “In determining whether to dismiss a complaint for lack of standing, we
must confine our 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.” Gordon v. Kleinman, 120 So. 3d 120, 121 (Fla. 4th
DCA 2013) (quoting Wheeler v. Powers, 972 So. 2d 285, 288 (Fla. 5th DCA
2008)). In determining whether a party has standing, the court must
determine “whether the plaintiff has a sufficient interest at stake in the

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controversy which will be affected by the outcome of the litigation.” Wexler
v. Lepore, 878 So. 2d 1276, 1280 (Fla. 4th DCA 2004).

   The claim servicer’s argument that it had only to allege standing, and
was not required to prove standing, under Florida Rule of Civil Procedure
1.120(a) is misplaced. That rule provides:

      It is not necessary to aver the capacity of a party to sue or be
      sued, the authority of a party to sue or be sued in a
      representative capacity, or the legal existence of an organized
      association of persons that is made a party, except to the
      extent required to show the jurisdiction of the court.

(Emphasis added).

   Rule 1.120(a) addresses capacity—not standing. Capacity is the
absence of a legal disability preventing a party from coming into court. See
Keehn v. Joseph C. Mackey and Co., 420 So. 2d 398, 399 n.1 (Fla. 4th DCA
1982). Standing requires a sufficient interest in the outcome of litigation
before the court will consider the matter. Id.

    The claim servicer next argues that lack of standing is an affirmative
defense, which the appraiser failed to raise. Many decisions characterize
lack of standing as an affirmative defense. See, e.g., Jaffer v. Chase Home
Fin., LLC, 155 So. 3d 1199, 1202 (Fla. 4th DCA 2015). But, “[iIf 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). Here, the complaint’s
allegations “demonstrate the existence of [the] affirmative [standing]
defense” thereby allowing its consideration in the property appraiser’s
motion to dismiss.

   Now that these procedural arguments are resolved, we address the
standing issue.

   The claim servicer alleged the original lender issued a loan based on a
negligent appraisal. The original lender transferred the mortgage to Impac
prior to the foreclosure. That agreement granted Impac the right to file
and collect insurance claims, institute lawsuits relating to delinquent or
non-performing mortgage loans within the trust, and enter into subservicing
agreements to delegate duties. It did not however assign to Impac the
original lender’s right to pursue negligence claims.


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   Impac then assigned its rights to Savant, including “all of its legal rights
to assert negligence claims against real estate appraisers and other
tortfeasors.” Savant then assigned those rights to the claim servicer.

   The amended complaint and attached assignment did not reveal an
assignment of the original lender’s right to pursue negligence claims
against the property appraiser to Impac. Alleging that the original lender
assigned the note and mortgage to Impac is not equivalent to alleging that
the original lender assigned its right to pursue negligence claims. See
Ginsberg v. Lennar Florida Holdings, Inc., 645 So. 2d 490, 496 (Fla. 3d DCA
1994).

   In Ginsberg, the assignee of a mortgage and note brought negligence
claims for damage to an apartment complex. Ginsberg, 645 So. 2d at 495-
96. The Third District held that the complaint and its exhibits did not
demonstrate that the assignment, which stated that it assigned all rights
and interests in the mortgage and related collateral, conveyed the right to
assert any cause of action previously held by the assignor, including any
tort claims. Id. at 496.

   Here, while the assignment of the note and mortgage provided Impac
with the ability to enforce the note and foreclose on the property, that
assignment did not include the right to bring negligence claims. The
property appraiser prepared the report for the original lender, not Impac,
Savant, or the claim servicer. The amended complaint failed to, and indeed
could not in good faith, allege that the original lender assigned those rights
to Impac. It therefore did not have the ability to assign those rights to
Savant. And, Savant did not have the ability to assign those rights to the
claim servicer.

   Put simply, the claim servicer was not in privity with the property
appraiser, never acquired a right to file negligence claims, and therefore
lacked standing to sue for professional negligence.

   Nevertheless, the claim servicer argues that Impac had independent
standing on behalf of the purchaser of the loan on the open market,
regardless of whether the original lender assigned its rights to pursue
negligence claims. The claim servicer relies on the Restatement (Second)
of Torts § 552 (Am. Law Inst. 1977):

      § 552 Information Negligently Supplied for the Guidance
      of Others

      (1) One who, in the course of his business, profession or

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      employment . . . supplies false information for the guidance of
      others in their business transactions, is subject to liability for
      pecuniary loss caused to them by their justifiable reliance
      upon the information . . . .

      (2) [T]he liability stated in Subsection (1) is limited to loss
      suffered

      (a) by the person or one of a limited group of persons for whose
      benefit and guidance he intends to supply the information or
      knows that the recipient intends to supply it; and

      (b) through reliance upon it in a transaction that he intends
      the information to influence or knows that the recipient so
      intends or in a substantially similar transaction.

The claim servicer argues that the property appraiser intended to induce
it to rely on the negligent misrepresentation in the appraisal. We disagree.

   The Second District provides guidance on this issue. See Cooper v.
Brakora & Assocs., Inc., 838 So. 2d 679, 681-82 (Fla. 2d DCA 2003).
There, the court held a purchaser did not have a negligent
misrepresentation action against an appraiser hired by a bank to evaluate
a purchaser’s loan. Id.

      [S]ection 552 will create great uncertainty unless the concept
      of a business transaction is narrowly defined. Accordingly,
      the “transaction” associated with an appraisal that is obtained
      purely for financing purposes after a contract for sale has
      been executed is the loan transaction. To permit section 552
      to create a tort claim against a residential appraiser . . . would
      expand the meaning of “transaction” beyond that
      contemplated in the ordinary business relationship within
      which an appraisal for a lender is performed.

Id. at 682.

   Similarly, while the original lender could bring an action against the
property appraiser for reasonably relying on the appraisal, Impac could
not. The appraisal did not provide an independent basis for a third-party
to sue for negligence. This is especially true where the contract language
limited the appraisal’s application.

   The appraisal provided for distribution to others, but limited reliance on

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the report to its use for the purpose “of any mortgage finance transaction.”
(Emphasis added). It specified the intended user as the “lender/client.”
And, it indicated that “NO OTHER INTENDED USERS HAVE BEEN
IDENTIFIED BY THE APPRAISER.”              Thus, both case law and the
appraisal’s language prohibit justifiable reliance by individuals or entities
other than those involved in the mortgage finance transaction. See Haslett
v. Broward Health Imperial Point Med. Ctr., 197 So. 3d 124, 127 (Fla. 4th
DCA 2016).

   The claim servicer’s standing to pursue negligence claims against the
property appraiser is missing. Even accepting the complaint’s allegations
as true, they do not show the claim servicer’s standing, either by
assignment or independently, to bring the alleged negligence claims
against the property appraiser.

  We therefore affirm the dismissal of the claim servicer’s amended
complaint. 2

    Affirmed.

KLINGENSMITH and KUNTZ, JJ., concur.

                            *        *         *

    Not final until disposition of timely filed motion for rehearing.




2 Because of our decision on standing, we need not address the statute of
limitations and failure to state a claim issues.


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