IN THE SUPREME COURT OF FLORIDA CASE NO. SC09-2312 Court of Appeal Case No. 3D09-821 District Court Case No. 08-72076 ELIEZIER LEAL AND CLARA LEON, v. Petitioners, DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR THE REGISTERED HOLDERS OF SOUNDVIEW HOME LOAN TRUST 2007-1 ASSET- BACKED CERTIFICATES, SERIES 2007-1 Respondent. ) RESPONDENT S AMENDED ANSWER BRIEF TO PETITIONER S JURISDICTIONAL BRIEF FOR DISCRETIONARY REVIEW Katherine J. Pauls, Esq. Florida Bar Number 520039 VAN NESS LAW FIRM, P.A. 1239 East Newport Center Drive Suite 110 Deerfield Beach, FL 33442 Phone: (954) 571-2031 Fax: (954) 571-2033 Attorney for Respondent
TABLE OF CONTENTS TABLE OF CONTENTS.. ii TABLE OF CITATIONS.. iii STATEMENT OF THE FACTS AND CASE... 1 SUMMARY OF ARGUMENT.... 3 ARGUMENT... 4 I. THE OBSERVATION OF THE THIRD DISTRICT COURT OF APPEALS REGARDING STANDING IS CONSISTENT WITH LONG-STANDING FLORIDA LAW..... 4 II. PETITIONER S POLICY ARGUMENTS ARE MOOT IN LIGHT OF RECENT CHANGES TO THE FEDERAL TRUTH IN LENDING ACT.. 8 CONCLUSION.... 9 CERTIFICATE OF SERVICE. 9 CERTIFICATE OF FONT SIZE.. 10 ii
TABLE OF CITATIONS CASE LAW PAGES Leal v. Deutsche Bank, 21 So. 3d 907, 908 (Fla. 3d DCA 2009)).. 3 Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fla. 4th DCA 1975). 5, 7, 8 Fladell v. Palm Beach County Canvassing Board, 772 So. 2d 1240 (Fla. 2000).. 5, 6 Safeco Insurance Company of America v. Ware, 401 So. 2d 1129 (Fla. 4th DCA 1981)... 6 Sachse v. Tampa Music Co., Inc., 262 So. 2d 17 (Fla. 2d DCA 1972)... 6 Eigen v. FDIC, 492 So. 2d 826 (Fla. 2d DCA 1986)..... 6, 7 Hughes v. Home Savings of America, FSB, 675 So. 2d 649 (Fla. 2d DCA 1996).. 6, 7 OTHER PAGES Fla. R. Civ. Pro. 1.130... 5, 6 12 U.S.C. 2605(b) and (c) 8 15 U.S.C. 2605(b) and (c) 9 iii
STATEMENT OF THE FACTS AND CASE Respondent filed this foreclosure action in November 2008, after Petitioner Eliezer Leal ( Petitioner ) 1 defaulted on a Note and Mortgage he took out with Respondent s assignor on November 8, 2006. (Complaint, R. p. 5, 12). In its Complaint, Respondent alleged it is the holder of the Note and Mortgage, and that an assignment of mortgage which is not the transfer but merely provides notice to the world of the transfer would be recorded. (Complaint, R. p. 4, 9). At the time of filing the Complaint, Petitioner s loan was due for the August 1, 2008 payment and all subsequent payments. (Complaint, R. p. 5, 12). Petitioner filed a pro se answer to the Complaint, asserting only that Petitioner was in negotiations with Respondent s loan servicer in an attempt to modify the loan. ( Defendant s Answer, R. pp. 34-35). In due time, Respondent filed a motion for summary judgment. (Plaintiff s Motion & Affidavits, R. pp. 50-56). Before the hearing on Respondent s motion for summary judgment, Petitioner obtained counsel who filed an Affidavit in Opposition to Summary Judgment and then a Notice of Appearance, a (second) Answer with affirmative defenses (without leave of court to amend the previously filed answer) and standard discovery requests. (Affidavit in Opposition, R. pp. 36-37; Second Answer, R., pp. 38-45; Appellants Discovery Requests, SR. pp. 5-15). Also before the hearing, an Assignment 1 The other foreclosure defendant, Clara Leon, is not represented and did not join in either appeal, and thus is ignored in this brief. 1
of Mortgage to Respondent was recorded in the public records of Miami-Dade County at OR Book 26770, Page 4773. (Assignment of Mortgage, SR. pp. 1-2). Respondent established through its Motion for Summary Judgment and supporting affidavits that it owned and held the Note and Mortgage and that it was the proper party to bring this action. (MSJ Hearing Transcript, pp. 4-7; MSJ, R. pp. 50-51; Affidavit of Indebtedness, R. pp. 55-56, 4, 6; Complaint, R. pp. 5, 9, 12; SR. pp. 1-2; Assignment of Mortgage, SR. pp. 1-2). Petitioner did not come forward with a single piece of evidence whatsoever to dispute Respondent s standing evidence. At the hearing on Respondent s motion for summary judgment, it was uncontroverted that the principle and interest due on the subject Note and Mortgage had not been paid and Petitioner did not dispute that a default under the terms of the Note and Mortgage had occurred. (MSJ Hearing Transcript, pp. 1-8). The trial court found that there were no material issues of fact in dispute and granted Respondent s motion for summary final judgment of foreclosure. (MSJ Hearing Transcript, pp. 1-8). Petitioner appealed. On appeal, Petitioner complained about the grant of summary judgment due to the boilerplate defenses raised in his second Answer and the form discovery requests sent only after Respondent s summary judgment motion was filed. Petitioner s initial brief did not argue any standing issues. The Third District Court of Appeals reversed and remanded the trial court s grant of summary judgment, holding summary judgment 2
premature due to the interposed defenses. In making its findings and conclusions, the Third District Court of Appeals made the following comment regarding standing: At the hearing on the motion for summary judgment, the main issue under discussion was whether the Bank had standing. The Bank has filed the assignment [of mortgage] in its favor and we agree that standing has been satisfactorily established. Leal v. Deutsche Bank, 21 So. 3d 907, 908 (Fla. 3d DCA 2009). Petitioner sought appeal to this Court, contending that this finding is contrary to existing Florida law. SUMMARY OF ARGUMENT The Third District Court of Appeal s comment regarding standing is both correct and consistent with long-standing Florida law. Florida law clearly requires that if an action is based on a contract that it be attached to the complaint unless the instrument is not in the possession of the plaintiff. In mortgage foreclosure cases, it is clear this means that a copy of the note and mortgage must be attached to the complaint. Florida law is equally clear that a mortgage foreclosure plaintiff must allege that it is the owner of the note and mortgage attached to the complaint. Petitioner seeks to convert these longstanding principals of Florida procedural law into a requirement that an assignment of mortgage which under the UCC is not what transfers ownership of the note but merely serves as notice to the world that ownership of the note and mortgage was transferred must be attached to a foreclosure complaint or else it will be presumed that the plaintiff lacks standing. In other words, Petitioner incorrectly asserts that existing Florida law 3
requires that a foreclosure plaintiff prove, not just allege, that it owns the note and mortgage before a foreclosure complaint can be filed. Petitioner misreads existing Florida law, which is completely consistent with the Third District Court of Appeals decision in this case. In addition, Petitioner s policy arguments regarding notice of who owns a loan are moot due to recent changes in the Federal Truth in Lending Act. ARGUMENT I. THE OBSERVATION OF THE THIRD DISTRICT COURT OF APPEALS REGARDING STANDING IS CONSISTENT WITH LONG-STANDING FLORIDA LAW. There can be no dispute that Respondent owns the Note and Mortgage and is entitled to enforce those instruments, based on the evidence it submitted to the Trial Court in consideration of its Motion for Summary Final Judgment and the fact that Petitioner did not come forward with any evidence whatsoever to controvert Respondent s evidence, as was his obligation on summary judgment. Aware of his admitted default and Respondent s clear ownership, Petitioner instead launches an esoteric procedural attack, attempting to convince this Court it should re-write Florida law to require for the first time that assignee holders of mortgage loans attach a copy of an assignment of mortgage to their Complaints. The purpose of such a requirement, ostensibly, is delay. Petitioner is seeking a rule that would require assignee holders of 4
mortgage loans to prove, not allege, their ownership before the Complaint is even filed, rather than in the course of the litigation as all other plaintiffs get to do. Rather than solicit such a rule from this Court or, more appropriately, from the state legislature since it would involve major changes to the Uniform Commercial Code as adopted in Florida Petitioner claims that this is already the rule in Florida and that the Third District Court of Appeals got it wrong. But even a cursory review of the six cases Petitioner alleges are at odds with the Third District Court of Appeals ruling in this case reveals that Petitioner mischaracterizes existing Florida law in an attempt to write in this new rule he seeks. In fact, the only relevant case Petitioner cites Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fla. 4th DCA 1975) is directly opposite Petitioner s position and is in complete harmony with the Third District Court of Appeals decision in this case (discussed infra). In Fladell v. Palm Beach County Canvassing Board, 772 So. 2d 1240 (Fla. 2000), this Court noted Florida Rule of Civil Procedure 1.130(b) specified exhibits attached to a pleading become part of the pleading for all purposes. Nothing about that decision is in conflict with the Third District Court of Appeals decision in this case. Nor does Petitioner identify any such conflict in his jurisdictional brief. In Safeco Insurance Company of America v. Ware, 401 So. 2d 1129 (Fla. 4th DCA 1981), an appellate court noted that a contract that is the basis of a suit must be attached to the Complaint like Fladell, noting Florida Rule of Civil Procedure 1.130. A different 5
court of appeals district, in Sachse v. Tampa Music Co., Inc., 262 So. 2d 17 (Fla. 2d DCA 1972), noted that an exception to this Rule 1.130 requirement existed when the instrument is not within the pleader s possession or control. The object of the Rule is to apprise the defendant of the nature and extent of the cause of action so that he may plead with greater certainty. Id. at 19. In this case, it was alleged that the contract was between the defendant Tampa Music Company and another party, so if there was such a contract, Tampa Music Company must have had knowledge of it. Id. There is no dispute in this case that Petitioner, who was a party to the underlying Note and Mortgage, had a copy of the instruments he signed and was fully apprised of the nature and extent of the cause of action and thus had the ability to plead with great certainty. Further, Plaintiff did attach a copy of the contract which was the basis of the lawsuit, i.e., the Note and Mortgage. In Eigen v. FDIC, 492 So. 2d 826 (Fla. 2d DCA 1986) and Hughes v. Home Savings of America, FSB, 675 So. 2d 649 (Fla. 2d DCA 1996), the Second District Court of Appeals decided two cases with nearly identical facts. In each case, a copy of the relevant note and mortgage was attached to the original complaint, but for unknown reasons were not attached to the amended complaint subsequently filed. In Eigen, the bank remedied the mistake by a notice of filing to add exhibits to the amended complaint, but no such corrective action was taken by the bank in Hughes. The appellate court found that the banks amended complaint should be dismissed in Hughes but 6
permitted to proceed in Eigen. Petitioner apparently wants to stretch Eigen and Hughes far beyond the actual language used in them to support a rule that requires a written assignment of a contract to be attached to the complaint as well as the contract itself. Petitioner has failed to cite even one case with such a holding. The instruments on which a foreclosure is based are the note and mortgage, not an assignment of mortgage. The final case Petitioner identifies as being in direct conflict with the Third District Court of Appeals decision is Your Construction Center, Inc. v. Gross, 316 So. 2d 596 (Fla. 4th DCA 1975). In that case, the appellate court was called upon to decide if all trustees of a trust had to be named as plaintiff, or if the single trustee who was the sole payee of a note and mortgage would suffice. After rendering its decision, the appellate court noted: Further, when plaintiff files his complaint, he must necessarily allege he is the owner and holder of the note and mortgage in question. Id. at 597 (emphasis added). The court there went on to note that if defendants have any allegation to the contrary they may join issue on it, and obtain adjudication as to the ownership. Id. Petitioner apparently believes a requirement that a noteholder allege ownership of the note and mortgage is really a rule that a court must dismiss any mortgage foreclosure complaint without a written assignment of the note and mortgage attached. There is no such rule in Florida, and in fact Petitioner s cited cases especially Your Construction Center support the Third District Court of Appeals decision in this case. Quite simply, there is no conflict between these Florida cases and the Third District Court of Appeals 7
decision in this case. Rather, the decision here is consistent with existing Florida case law. II. PETITIONER S POLICY ARGUMENTS ARE MOOT IN LIGHT OF RECENT CHANGES TO THE FEDERAL TRUTH IN LENDING ACT. In his brief, Petitioner who fails to identify a single Florida case that conflicts with the Third District Court of Appeals ruling on standing devotes the majority of his argument to dire warnings of uncertainty and confusion because defaulting borrowers may not recognize the entity suing or be aware that this entity now owns or services the loan. Petitioner s argument regarding the identity of the servicer is flatly wrong since federal law requires both the existing servicer and the new servicer to notify a borrower when the servicer changes. See 12 U.S.C. 2605(b) and (c). Petitioner s argument regarding the identity of the noteholder has been rendered moot by changes to the Federal Truth in Lending Act, which now requires new owners to notify borrowers within 30 days after transfers. See 15 U.S.C. 1641(g). Thus, Petitioner s dire predictions which appear intended only to distract from the complete failure to identify a single decision in conflict with the instant one fall flat. 8
CONCLUSION There is no conflict between Florida law and the Third District Court of Appeals decision in this case regarding standing. In fact, the cases cited by Petitioner are actually consistent with the Third District Court of Appeals decision regarding standing. This Court should deny Petitioner s request for certification or else accept certification and affirm the Third District s ruling regarding standing. CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original and five (5) copies of Respondent s Answer Brief were sent to the Appellate Clerk, and a true copy of Respondent s Answer Brief was delivered via First Class U.S. Mail to: David M. Sostchin, Esq., 419 West 49 th Street, Suite 210, Hialeah, Florida 33012 on this day of March, 2010. VAN NESS LAW FIRM, P.A. Attorneys for Appellee 1239 E. Newport Center Drive Suite #110 Deerfield Beach, FL 33442 Phone (954) 571-2031 Fax (954) 571-2033 By: KATHERINE J. PAULS, ESQ. Florida Bar No.: 520039 CERTIFICATE OF FONT SIZE HEREBY CERTIFY the foregoing brief has been computer generated in Times New Roman 14-pont font as required by Fla. R. App. P. 9.210(a). Katherine J. Pauls, Esq. 9