IN THE SUPREME COURT OF THE STATE OF FLORIDA CASE NO.: CASE NUMBER ASSIGNMENT PENDING L.T. CASE NO.: 5D

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1 Filing # Electronically Filed 12/30/ :47:34 PM RECEIVED, 12/30/ :48:35, John A. Tomasino, Clerk, Supreme Court IN THE SUPREME COURT OF THE STATE OF FLORIDA CASE NO.: CASE NUMBER ASSIGNMENT PENDING L.T. CASE NO.: 5D DANIEL P. MORCOM and SHARON MORCOM, Petitioners/Appellees, v. WELLS FARGO BANK, N.A., Respondent/Appellant. PETITIONER S JURISDICTIONAL BRIEF On Appeal from an Opinion rendered by the Fifth District Court of Appeal, State of Florida. Steven P. Combs Florida Bar No.: COMBS GREENE, P.A Atlantic Blvd. Jacksonville, FL Deborah L. Greene Telephone (904) Florida Bar No.: Facsimile (904) eservice@flalaw.pro Robert S. Jeffrey Florida Bar No.: spcombs@flalaw.pro Counsel for Petitioners

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... Page STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF ARGUMENT... 2 ARGUMENT... 3 I. THE DECISION OF THE FIFTH DISTRICT THAT OWNERSHIP OF A NOTE AND MORTGAGE BY THE PLAINTIFF IS NOT NECESSARY IN AN ACTION TO FORECLOSE A MORTGAGE ON REAL PROPERTY EXPRESSLY AND DIRECTLY CONFLICTS WITH NUMEROUS FLORIDA SUPREME COURT DECISIONS II. THE DECISION OF THE FIFTH DISTRICT ALSO EXPRESSLY AND DIRECTLY CONFLICTS WITH NUMEROUS DECISIONS FROM THE OTHER DISTRICT COURTS OF APPEAL, ALL OF WHICH REQUIRE PROOF OF OWNERSHIP OF THE NOTE AND MORTGAGE TO FORECLOSE CONCLUSION ii i

3 TABLE OF AUTHORITIES CASES Byrd v. South Florida Mortg. Co., 143 So. 124, 125 (Fla. 1932) Carapezza v. Pate, 143 So. 2d 346, 347 (Fla. 3d DCA 1962) Chestnut v. Robinson, 95 So. 428 (Fla. 1923) , 5 DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So.3d 85, (Fla. 2013) Edason v. Central Farmers' Trust Co., 129 So. 698, 699 (Fla. 1930) , 5, 6, 8 Ford Motor Co. v. Pittman, 227 So.2d 246, 249 (Fla. 1st DCA 1969) Hotel Management Co. v. Krickl, 158 So. 118, 120 (Fla. 1934) Johns v. Gillian, 184 So. 140, 144 (Fla. 1938) Jordan v. Sayre, 10 So. 823 (1892) Lakeland Production Credit Ass n v. Coachman, 5 So. 2d 49 (Fla. 1941) Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010)...10 ii

4 Mazine v. M&I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011)... 9 Miami Real Estate Co. v. Baxter, 124 So. 452, (Fla. 1929) Miller v. Ellenwood, 164 So. 140 (1935) Mills v. Hamilton, 163 So. 857, (Fla. 1935) Philogene v. ABN Amro Mortg. Group, Inc., 948 So. 2d 45, 46 (Fla. 4 th DCA 2006) Pritchett v. New York Life Insurance Company, 170 So. 700 (1936) Royal Palm Corp. Ctr. Ass n v. PNC Bank, NA, 89 So. 3d 923, 931(Fla. 4th DCA 2012) Rubin v. Kapell, 105 So. 2d 28 (1958) Sanders v. City of Orlando, 997 So.2d 1089, 1094 (Fla. 2008) Servedio v. US Bank Nat'l Ass'n, 46 So. 3d 1105, 1107 (Fla. 4th DCA 2010)...10 Smith v. Kleiser, 107 So. 262 (Fla. 1926) , 4, 5, 6, 8 Stewart v. Gaines, 137 So. 794, (Fla. 1931) Stone v. Bankunited, 115 So. 3d 411, 413 (Fla. 2d DCA 2013)...9 iii

5 Stokes v. Home Owners Loan Corporation, 189 So. 657 (1939) Strickland v. Gainesville Nat l Bank, 77 So. 615, (Fla. 1918) Tanenbaum v. Biscayne Osteopathic Hosp., Inc., 173 So. 2d 492, 495 (Fla. 3d DCA 1965) Vives v. Wells Fargo Bank, N.A., 2013 Fla. App. LEXIS (Fla. 3d DCA October 23, 2013) West v. Caterpillar Tractor Co., 336 So. 2d 80 (Fla. 1976) Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fla. 4th DCA 1975) Statutes and Rules Article V, Section 3(b)(3), Florida Constitution , 4, 9 Florida Rule of Appellate Procedure 9.030(a)(2)(A)(iv) , 4 Florida Statutes Secondary Authorities REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE, at 1-2 (American Law Institute and the National Conference of Commissioners on Uniform State Laws 2011), available at _Materials/PEBUCC/ PEB_Report_ pdf Restatement (Third) of Mortgages, Commentary to Section iv

6 STATEMENT OF THE CASE AND FACTS Wells Fargo Bank, N.A. ( Appellant ), sued Daniel and Sharon Morcom ( Appellees ) on August 6, 2010, seeking to foreclose the mortgage on their home. (Op. 1 at 1). The Appellant failed to allege that it was the owner and holder of the note and mortgage as a basis for seeking foreclosure. Instead, the Appellant merely alleged that it was now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes [a section of the Florida Uniform Commercial Code]. (Op. at 1). Additionally, the Appellant also failed to allege that it was proceeding in a representative capacity for the owner of the note and mortgage. (Op. at 2). During discovery, the Appellant in response to a request for admission, admitted that it was, in fact, not the owner of the note and mortgage. (Op. at 2). On August 9, 2011, Appellees filed a motion for summary judgment in the trial court, arguing Appellant was not the owner of the note and mortgage. (Op. at 2). Relying on the same cases cited in this jurisdictional brief, the trial court granted the Appellees motion for summary judgment, finding that standing in a classic foreclosure case requires evidence that the plaintiff is the owner of the note and mortgage, even though the plaintiff has the right to enforce the note pursuant to the [Florida UCC]. (Op. at 2; brackets in Opinion). Appellant filed a motion for 1 The opinion of the Fifth District is abbreviated as Op. 1

7 rehearing which was denied. (Op. 3). Appellants appealed to the Fifth District Court of Appeal, which reversed the trial court on the basis that, pursuant to Florida s Uniform Commercial Code ( UCC ), all that is necessary in order to foreclose a mortgage on real property is that the plaintiff be entitled to enforce the promissory note which the mortgage secures. (Op. at 3-4). In so deciding, the Fifth District unjustifiably, and admittedly, rejected Florida Supreme Court precedent (cited in this jurisdictional brief) requiring that a plaintiff must both hold and own the note and mortgage to satisfy the standing requirement for a foreclosure action. (Op. at 6). SUMMARY OF THE ARGUMENT The decision of the Fifth District expressly and directly conflicts with numerous cases decided by the Florida Supreme Court and by other District Courts of Appeal, all of which hold that a plaintiff must own the note and mortgage, as well as hold the note and mortgage, in order to proceed with an action to foreclose a mortgage on real property. The Fifth District s flawed attempt to distinguish the Florida Supreme Court cases based on Florida s passage of the UCC nearly 50 years ago the very first Florida appellate court to ever attempt such a distinction does not diminish the express-and-direct conflict created by its decision. Instead, with nearly 50 years having passed since the UCC s adoption, the fact that the Fifth District seeks 2

8 to now rely on the UCC as a basis to sweep away long standing precedent of the Florida Supreme Court cries out for the Florida Supreme Court to accept discretionary jurisdiction over this appeal pursuant to Article V, Section 3(b)(3), of the Florida Constitution, and Fla. R. App. P (a)(2)(A)(iv). Additionally, the Fifth District s decision that ownership is irrelevant in a foreclosure action expressly and directly conflicts with decisions from each of the other four District Courts of Appeal which have each held that proof of owning, as well as holding, the note and mortgage is required for a plaintiff to pursue a mortgage foreclosure action. This conflict serves as an alternate basis for the Florida Supreme Court to exercise jurisdiction in this case. ARGUMENT I. THE DECISION OF THE FIFTH DISTRICT THAT OWNERSHIP OF A NOTE AND MORTGAGE BY THE PLAINTIFF IS NOT NECESSARY IN AN ACTION TO FORECLOSE A MORTGAGE ON REAL PROPERTY EXPRESSLY AND DIRECTLY CONFLICTS WITH NUMEROUS FLORIDA SUPREME COURT DECISIONS. The Fifth District rejected the trial court s view which held that Florida Supreme Court precedent requires that a plaintiff in a foreclosure action own, as well as hold, the note and mortgage, unless the plaintiff is proceeding in a representative capacity. The Fifth District s decision holding that ownership of the note and mortgage is irrelevant in a real property foreclosure proceeding expressly and directly conflicts with Smith v. Kleiser, 107 So. 262 (Fla. 1926), and Edason v. Central 3

9 Farmers' Trust Co., 129 So. 698, 699 (Fla. 1930), which require that a foreclosure action be brought in the name of the owner of the note and mortgage. 2 Accordingly, the Florida Supreme Court has jurisdiction to entertain this appeal pursuant to Article V, Section 3(b)(3), of the Florida Constitution, and Fla. R. App. P (a)(2)(A)(iv). The Florida Supreme Court in Smith v. Kleiser, 107 So. 262 (Fla. 1926), 2 The Fifth District s decision also conflicts with numerous other decisions of the Florida Supreme Court which clearly indicate that the Florida Supreme Court has consistently required that ownership of the note and mortgage be pled and proved in real property foreclosure actions, and that Smith and Edason are not anomalous cases that should be disregarded. These cases include: Strickland v. Gainesville Nat l Bank, 77 So. 615, (Fla. 1918)( It is also alleged that the note sued on, which is made payable to the complainant, is a renewal of the original note. This we think is sufficient allegation of ownership by the complainant of the indebtedness and the mortgage.... ); Chestnut v. Robinson, 95 So. 428 (Fla. 1923)( The ownership of the notes was thus made an issue which was incumbent upon the complainant to establish. ); Hotel Management Co. v. Krickl, 158 So. 118, 120 (Fla. 1934)(holding that ownership of a note is adequately alleged by stating that the plaintiff is the owner of the note and that plaintiff received the note endorsed to her); Mills v. Hamilton, 163 So. 857, (Fla. 1935)(reviewing final decree granting a foreclosure in a proceeding that had been brought by the executor of the estate of the mortgagee holding that personal representative was the owner and holder of the mortgage, thereby requiring ownership of the note to foreclose); Johns v. Gillian, 184 So. 140, 144 (Fla. 1938)(holding Gillian was equitable owner of the mortgage and [that] entitle[d] him to foreclose the same, thereby requiring ownership of the note (i.e. debt) and mortgage were required for the plaintiff to be entitled to foreclose in equity); Lakeland Production Credit Ass n v. Coachman, 5 So. 2d 49 (Fla. 1941)(affirming denial of a motion to dismiss a complaint to foreclose, where defendant claimed that the bill contained allegations that tended to contradict allegations of ownership, holding that [i]n view of the allegations of ownership of the note and mortgage... we conclude that the same are legally sufficient under which to receive testimony of the ownership by the plaintiff of the note and mortgage. An issue can be formed by denial thereof in an answer and testimony adduced by the respective parties. ). 4

10 recognized the obligation of the party bringing a foreclosure action to prove that it was the owner of the note. As explained in Smith: If suit to foreclose a mortgage which has been assigned is by bill in equity it should be in the name of the real owner of the debt secured. Smith, 107 So. at (Fla. 1926)(emphasis added)(citations omitted). Similarly, the Florida Supreme Court in Edason v. Central Farmers' Trust Co., 129 So. 698, 699 (Fla. 1930), underscored the holding in Smith, requiring that the owner of the note bring the action to foreclose, explaining: A Bill to for[e]close a mortgage should show that it is brought in the name of the owner of the debt secured by the mortgage. Smith v. Kleiser, 91 Fla. 84, 107 So. R. 262; Chestnut v. Robinson, 85 Fla. 87, 95 So. R. 428; Armstrong & Donahue, Florida Chancery Jurisprudence, 52. Edason, 129 So. at 699. In the instant case, the Appellee responded in the trial court to a request for admission, admitting that it did not own the note and mortgage. Applying Florida Supreme Court precedent, including Smith and Edason, the trial court held that the plaintiff, who was not moving forward in a representative capacity, could not proceed as it was not the owner of the note and mortgage, although it was the holder. The Fifth District s decision reversing the trial court expressly rejected Florida Supreme Court precedent, including Smith and Edason, stating: 5

11 Appellees cite Florida Supreme Court precedent dating back to the late 1800s to suggest Appellant must both hold and own the note and mortgage to satisfy the standing requirement for a foreclosure action. The cases Appellees cite are not persuasive because the supreme court decided the cases prior to the adoption of the now-instructive and binding Florida UCC. (Op. at 6). 3 The fact that the District Court sought to distinguish the controlling Florida Supreme Court precedent, including Smith and Edason, on the basis of the 1967 passage of the UCC, does not detract from the existence of express-and-direct conflict. See DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So.3d 85, (Fla. 2013)(express-and-direct conflict found where a district court attempted to distinguish Tanenbaum v. Biscayne Osteopathic Hosp., Inc., 173 So. 2d 492, 495 (Fla. 3d DCA 1965), on the basis that the case being reviewed did not involve an attempt to set up a new enforceable promise under the doctrine of promissory estoppel. ); Sanders v. 3 The Appellees also cited the following cases to the Fifth District (in addition to Smith, Edason, and those cases cited in footnote 2) but these cases were only cited as examples of the Florida Supreme Court s use of the term owner and holder of the note and mortgage (or, holder and owner of the note and mortgage ): Jordan v. Sayre, 10 So. 823 (1892); Miami Real Estate Co. v. Baxter, 124 So. 452, (Fla. 1929); Stewart v. Gaines, 137 So. 794, (Fla. 1931); Byrd v. South Florida Mortg. Co., 143 So. 124, 125 (Fla. 1932); Pritchett v. New York Life Insurance Company, 170 So. 700 (1936); Rubin v. Kapell, 105 So. 2d 28 (1958); Stokes v. Home Owners Loan Corporation, 189 So. 657 (1939); Miller v. Ellenwood, 164 So. 140 (1935). Jordan is evidently the basis for the reference to the late 1800s. 6

12 City of Orlando, 997 So.2d 1089, 1094 (Fla. 2008)(finding express-and-direct conflict where the district court erroneously sought to distinguish multiple decisions from other district courts of appeal relating to the authority of judge of compensation claim to set aside settlement agreements on the basis of a new statutory provision). Moreover, the very fact that the Fifth District expressly rejected now, for the very first time an entire line of Florida Supreme Court cases relating to mortgage foreclosure on the basis of a nearly 50 year old uniform act, whose own Permanent Editorial Board disclaims its application to mortgage foreclosure proceedings as to both substance and procedure, 4 cries out for the Supreme Court to exercise its discretionary jurisdiction to address whether nearly 50 years ago the legislature intended to sweep away in one stroke of the legislative broom the jurisprudence of the 4 See REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE,APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE, at 1-2 (American Law Institute and the National Conference of Commissioners on Uniform State Laws 2011), available at _ pdf ( The UCC, of course, does not resolve all issues in this field. Most particularly, as to both substance and procedure, the enforcement of real estate mortgages by foreclosure is primarily the province of a state s real property law (although determinations made pursuant to the UCC are typically relevant under that law). ); see also Restatement (Third) of Mortgages, Commentary to Section 8.5: Enforceability of the original note and of the mortgage are governed by different bodies of law; the obligation s enforcement is governed by the Uniform Commercial Code and by contracts law, while mortgage enforcement is governed by a specialized body of property law. (Emphasis added). 7

13 Florida Supreme Court related to mortgage foreclosure. See e.g., West v. Caterpillar Tractor Co., 336 So. 2d 80 (Fla. 1976)(expressly approving the decision in Ford Motor Co. v. Pittman, 227 So.2d 246, 249 (Fla. 1st DCA 1969), to avoid finding that the enactment of the UCC swept away in one stroke of the legislative broom the jurisprudence of this State pertaining to the doctrine of implied warranty because unless the legislature has in unequivocal terms spelled out to the courts of this State that it has by the enactment of the omnibus Uniform Commercial Code severed the implied warranty doctrine from the jurisprudence of this State, we will not be the operator of the guillotine. ). Indeed, the application of the UCC in foreclosure cases was unheard of before 2006, when the conflating 5 of an action to enforce a promissory note at law and an action to foreclose a mortgage in equity was first achieved in Philogene v. ABN Amro Mortg. Group, Inc., 948 So. 2d 45, 46 (Fla. 4 th DCA 2006), which has spawned an entire new body of law to which the Fifth District adhered in unjustifiably rejecting Florida Supreme Court precedent. Accordingly, because the Fifth District s decision that ownership of the note 5 See, e.g., Vives v. Wells Fargo Bank, N.A., 2013 Fla. App. LEXIS 16877, at *3-4 (Fla. 3d DCA October 23, 2013)(Judge Shepard, concurring)(noting the conflating of these action and relying on Royal Palm Corp. Ctr. Ass n v. PNC Bank, NA, 89 So. 3d 923, 931(Fla. 4th DCA 2012), for the proposition that foreclosure of a mortgage and suit on a promissory note are separate and distinct remedies available to a lender-mortgagee upon default ). 8

14 and mortgage is irrelevant to a mortgage foreclosure proceeding due to the adoption of the UCC nearly 50 years ago, expressly and directly conflicts with the Florida Supreme s Court decision in Smith, Edason, and the cases cited in footnote 2, all of which found that ownership of the note and mortgage is required to pursue a foreclosure action, this Court should exercise its discretionary jurisdiction pursuant to Article V, Section 3(b)(3), of the Florida Constitution. II. THE DECISION OF THE FIFTH DISTRICT ALSO EXPRESSLY AND DIRECTLY CONFLICTS WITH NUMEROUS DECISIONS FROM THE OTHER DISTRICT COURTS OF APPEAL, ALL OF WHICH REQUIRE PROOF OF OWNERSHIP OF THE NOTE AND MORTGAGE TO FORECLOSE. The Fifth District s decision that ownership of the note and mortgage is irrelevant to a mortgage foreclosure also expressly and directly conflicts with decisions from each of the other Districts, each of which has held that a plaintiff in an action to foreclose a mortgage must present evidence that its owns (as well as holds), the note and mortgage. These cases include: (1) Mazine v. M&I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011)( The party seeking foreclosure must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure action. ); (2) Stone v. Bankunited, 115 So. 3d 411, 413 (Fla. 2d DCA 2013)( The party seeking foreclosure must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure 9

15 action. ); (3) Carapezza v. Pate, 143 So. 2d 346, 347 (Fla. 3d DCA 1962)( Ownership having been put in issue by the answer it followed that ownership of the note and mortgage became one of the issues in the case and was a material fact to be proved by the plaintiff. ); (4) Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fla. 4th DCA 1975)( [W]hen plaintiff files his complaint, he must necessarily allege he is the owner and holder of the note and mortgage in question. ), certiorari denied, Your Constr. Center, Inc. v. Gross, 333 So. 2d 466 (Fla. 1976); and (5) Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010)( The party seeking foreclosure must present evidence that it owns and holds the note and mortgage in question in order to proceed with a foreclosure action. ). Accordingly, discretionary jurisdiction exist to review this matter due to express and direct conflict with decisions of the First, Second, Third and Fourth District Courts of Appeal most of which were decided after the 1967 passage of the UCC. CONCLUSION Based upon the foregoing, Petitioners assert there is ample cause for this Honorable Court to accept jurisdiction for consideration on the merits. 10

16 RRESPECTFULLY SUBMITTED, COMBS GREENE, P.A. Steven P. Combs Florida Bar Number Deborah L. Greene Florida Bar Number Robert S. Jeffrey Florida Bar Number Atlantic Boulevard Jacksonville, Florida Telephone: (904) Facsimile: (904) CERTIFICATE OF SERVICE I hereby certify that on this 30th day of December, 2013, a true and correct copy of the foregoing was delivered to Dean Morande, Esquire, Michael K. Winston, Esquire, and Donna L. Eng, Esquire, 525 Okeechobee Boulevard, Suite 1200, West Palm Beach, Florida 33401, at the following addresses designated for service in this matter: dmorande@carltonfields.com (primary), deng@carltonfields.com (Primary); kcasazza@carltonfields.com (secondary), cramsay@carltonfields.com (Secondary); wpbecf@cfdom.net (secondary). Steven P. Combs Florida Bar Number