The District Court of Appeal of the State of Florida, Fourth District, recently reversed summary judgment in favor of a mortgagee, holding that a genuine issue of material fact as to whether the original plaintiff or the substituted successor in interest held the note when the complaint was filed precluded summary judgment, and thus that the borrower’s lack of standing defense was not refuted.

A copy of the opinion is available at:  Link to Opinion.

A mortgagee sued to foreclose its mortgage. The complaint alleged that it was “entitled to enforce the Note as a holder in possession.”  The mortgagee’s successor in interest was substituted as the plaintiff.  The new substituted plaintiff mortgagee moved for summary judgment, which the trial court granted.  The borrower appealed.

The Appellate Court began it analysis by citing the black-letter rule that a party moving for summary judgment must “show conclusively the complete absence of any genuine issue of material fact.” In addition, the Court recited that “[a] plaintiff alleging standing as a holder must prove it is a holder of the note and mortgage both as of the time of trial and also that [it] had standing as of the time the foreclosure complaint was filed.”

The Fourth DCA found that the plaintiff successor in interest “failed to meet its burden of establishing the absence of an issue of fact regarding standing” because the affidavit it filed in support of summary judgment, which stated that it held the note at the time the complaint was filed, “would negate [the original lender’s] standing at the time suit was filed. Accordingly, the fact of who held the note at the time the complaint was filed was not crystallized as of the time of summary judgment.”

The Appellate Court pointed out that although “attaching a copy of a note endorsed in blank to the complaint and filing the original note in the same condition as the copy attached to the complaint is generally sufficient to establish standing,” under the facts of the case at bar, “those practices did not neutralize the conflict between the affidavit and allegation of the complaint regarding the identity of the party who held the note at the time the complaint was filed.”

The summary judgment was therefore reversed, and the case remanded for further proceedings.