Florida’s District Court of Appeal recently reversed a trial court and vacated a final judgment of foreclosure because the bank, as trustee of a mortgage pool trust governed by a pooling and servicing agreement (“PSA”) was unable to prove standing. See Friedle v. Bank of New York Mellon, 2017 WL 4280592 (Fla. Dist. Ct. App. Sept. 27, 2017). In the case, the trial court granted the bank final judgment of foreclosure and the borrower appealed, arguing that the bank did not prove that it had possession of the note at the time it filed the complaint. On appeal, the appellate court agreed that the bank had not proved it possessed the note and reversed.
First, the Court held that the bank’s introduction of the PSA into evidence was insufficient to prove standing. Although the PSA was filed with the SEC and was considered self-authenticating evidence, the mortgage at issue was not referenced in these filed documents. Additionally, the bank’s witness only testified that the PSA was part of the bank’s business records. However, neither this testimony nor the PSA showed when the note was physically transferred to the bank. “And it is clear from the testimony that the witness had no knowledge of the workings of the PSA or MLS, nor did any other document or testimony show that the note was transferred to the Bank in accordance with the terms of the PSA. Therefore, the evidence in this case does not establish that this mortgage note was within the possession of the Bank as Trustee at the time suit was filed.”
Second, the Court rejected the bank’s argument that attaching a copy of the note to the complaint created a presumption of standing, holding that this presumption is only created if the copy of the note attached to the complaint is in the same condition of the note introduced at trial. Here, the Court held that the original note introduced at trial was not in the same condition as the copy attached to the complaint. “Where the copy differs from the original, the copy could have been made at a significantly earlier time and does not carry the same inference [of standing] of possession at the filing of the complaint.”