Morcom, Focht, and Foreclosure Pretense Defense

Portions Copyright © 21 January 2014 by Bob Hurt. All rights reserved. Distribute reely. To All Foreclosure Defense Attorneys and Their Mortgage and Foreclosure Victims:

A Florida District Court of Appeal (DCA) in Wells Fargo Bank, N.A., v. Morcom, 2013 WL 557563 (Fl! Ct! App!, 5t" Dist! 2013), "eld last #cto$er t"at t"e la% does not re&uire a 'ort(a(ee to $ot" "old and o%n t"e pro'issor) note in order to "a*e standin( to foreclose! +ee t"e opinion $elo%! ,ou 'i("t recall t"at in Foc"t *! Wells Far(o -an., /A (Fl! Ct! App!, 2nd Dist! 2013), t"e 2nd DCA "eld t"at t"e plaintiff $an. could not foreclose $ecause it "ad $eco'e "older of t"e note after filin( t"e foreclosure la%suit! +ee t"e opinion $elo%! 0"e court see'ed to 'e to "a*e (ood reason to &uestion t"e prudence of Florida1s standin( doctrine $ecause t"e plaintiff, no% "a*in( standin(, %ould 'erel) refile t"e case and %in! 0"is issue %orried t"e 2ud(e so $adl) t"at "e certified a &uestion a$out it to t"e Florida +upre'e Court! As 3 see it, co''onsense dictates t"at $ot" of t"ese cases constituted a 'onu'ental %aste of court resources $ecause t"e defendants .ne% t"e) %ould end up losin(! Furt"er'ore, t"e cases su((est pande'ic le(al 'alpractice $) foreclosure defense attorne)s %"o see' deter'ined to $il. t"eir clients for dilator) defenses t"e) a$solutel) .no% %ill ulti'atel) result in loss of t"e "ouse $) t"e client! Ad'ittedl), Foc"t sued pro-se, $ut attorne)s .no% defenses a(ainst foreclosure of *alid 'ort(a(e loans lose $ecause t"e) .no% t"e Florida Constitution re&uires courts to pro*ide redress of in2ur) to all persons, includin( $an.s %"o' 'ort(a(ors in2ured $) failin( to repa) *alid loans ti'el)! 0"e) also .no% it $ecause t"e) onl) occasionall) (et te'porar) dis'issals, suc" as for standin( or capacit) to sue pro$le's, and t"e plaintiffs *irtuall) al%a)s refile or appeal and %in! 4ort(a(es stipulate t"at $orro%ers %"o $reac" t"e note $) failin( to 'aintain t"e propert) or 'a.e ti'el) pa)'ents 'ust forfeit t"e collateral "ouse! 0"e 'ort(a(or "as alread) transferred t"e propert) to t"e $an. for e5pressl) t"at purpose! 6ead t"is realit) in t"e first pro*ision of t"e standard Fannie 4ae 7 Freddie 4ac Florida 'ort(a(e securit) instru'ent (co'pressed "ere for readin( con*enience)8 906A/+F:6 #F 63;<0+ 3/ 0<: =6#=:60, > 0"is +ecurit) 3nstru'ent secures to Lender8 (i) t"e repa)'ent of t"e Loan, and all rene%als, e5tensions and 'odifications of t"e /ote? and (ii) t"e perfor'ance of -orro%er@s co*enants
Morcom, Focht, and Foreclosure Pretense Defense Page 1

and a(ree'ents under t"is +ecurit) 3nstru'ent and t"e /ote! For t"is purpose, -orro%er does "ere$) 'ort(a(e, (rant and con*e) to Lender, t"e follo%in( descri$ed propert) located in t"e AAA B0)pe of 6ecordin( CurisdictionDof AA B/a'e of 6ecordin( CurisdictionD8 AAA %"ic" currentl) "as t"e address of AAAAA B+treetDAAAAA, FloridaAA BCit)D BEip CodeD (F=ropert) AddressG)8 0#;:0<:6 W30< all t"e i'pro*e'ents no% or "ereafter erected on t"e propert), and all ease'ents, appurtenances, and fi5tures no% or "ereafter a part of t"e propert)! All replace'ents and additions s"all also $e co*ered $) t"is +ecurit) 3nstru'ent! All of t"e fore(oin( is referred to in t"is +ecurit) 3nstru'ent as t"e F=ropert)!G -#66#W:6 C#H:/A/0+ t"at -orro%er is la%full) seised of t"e estate "ere$) con*e)ed and "as t"e ri("t to 'ort(a(e, (rant and con*e) t"e =ropert) and t"at t"e =ropert) is unencu'$ered, e5cept for encu'$rances of record! -orro%er %arrants and %ill defend (enerall) t"e title to t"e =ropert) a(ainst all clai's and de'ands, su$2ect to an) encu'$rances of record! 9 +ee t"is in li("t of statutes li.e t"is fro' Florida8 697.02 Nature of a mortgage.IA 'ort(a(e s"all $e "eld to $e a specific lien on t"e propert) t"erein descri$ed, and not a con*e)ance of t"e le(al title or of t"e ri("t of possession! 3t s"ould $) no% "a*e $eco'e co''on .no%led(e t"at t"e lenders of A'erica nearl) uni*ersall) c"eated t"eir $orro%er custo'ers in 'ort(a(e transactions! 0"e Financial Crisis 3n&uir) Co''ission issued its 6eport in Canuar) 2011 detailin( t"e collusion $et%een t"e lendin( industr) and (o*ern'ent t"at led to %idespread predator) lendin( t"at collapsed 2o$s and "o'eo%ner e&uit) t"rou("out t"e land! 3 "a*e deter'ined t"rou(" *arious 'eans t"at lenders or t"eir a(ent appraisers, 'ort(a(e $ro.ers, title co'panies, and closers "a*e in2ured up%ards of J0K to J5K of sin(le fa'il) "o'e 'ort(a(ors t"rou("out t"e past 15 )ears! 0"at 'eans t"e lenders or courts s"ould (rant J out of 10 "o'e 'ort(a(ors so'e financial co'pensation or loan $alance set>off to co'pensate t"e 'ort(a(ors for t"ose in2uries! -ut t"is %ill ne*er "appen unless and until 'ort(a(ors and t"eir attorne)s learn to attac. t"e lenders, note "olders, and t"eir a(ents for torts, $reac"es, and le(al errors underl)in( t"e 'ort(a(e! And t"at %ill not "appen until t"e attorne)s of t"e se*eral states e*ol*e a 'ort(a(e>attac. culture as t"e) "a*e a foreclosure>pretense>defense culture! 0"ese da)s 'ost attorne)s deal %it" a 'ort(a(e dispute not $) t"e 'ort(a(e issues, $ut rat"er $) t"e *irtuall) irrele*ant issues related to t"e foreclosure8 c"ain of o%ners"ip of t"e note, $ifurcation of note fro' 'ort(a(e, *apor 'one), securitiLation, standin(, etc! 3 don1t sa) t"ose issues "a*e no rele*ance per se? 3 sa) t"at in t"e end attention to t"e' $eco'es futile $ecause t"e foreclosure plaintiffs %ill correct t"e related errors, t"en appeal or refile and %in t"e foreclosure an)%a)! And
Morcom, Focht, and Foreclosure Pretense Defense Page 2

t"at 'eans 'ort(a(e *icti's %ill "a*e %asted t"eir "ard>earned, precious sa*in(s on %ort"less liti(ation directed $) scurrilous, 'alpracticin(, pretense>defense attorne)s! Foreclosure =retender>Defender Attorne)s, please stand up and!!! 1! Learn fro' )our personal in2ur) attorne) collea(ues "o% to find t"e torts, $reac"es, and le(al errors underl)in( )our clients1 'ort(a(es! 2! Learn "o% to ne(otiate settle'ents %it" scurrilous lenders!
3. Learn "o% to use (o*ern'ent a(encies li.e t"e Consu'er Financial =rotection

-ureau and <MD to force recalcitrant lenders into a settle'ent fa*ora$le to )our clients! ! Learn to en(ineer t"e defeat of t"e lenders and t"eir a(ents $) findin( proof of causes of action a(ainst t"e' in t"e 'ort(a(e>related docu'ents so t"at an) 2ud(e can see t"e' clearl)! 5! Learn to prepare co'plaints, counter>clai's, and cross>clai's t"at %ill $eat t"e lenders and t"eir a(ents into su$'ission and %in t"e "earts of t"e 2ud(e and 2ur)! 6! Learn to de'and and (et co'pensator) and puniti*e da'a(es, loan cra'>do%ns, and7or financial set>offs a(ainst t"e a'ount )our client o%es t"e lender! 3 "ope )ou realiLe 3 'ean )ou %in 4#/:, 2ud('ents and fees t"at t"e cas">flus" -A/N or insurers pa), not %"at )our cas">strapped clients pa)! And 3 'ean )ou don1t need to li'it )our client $ase to foreclosure *icti's! ,ou can ad*ertise to and ser*e t"ose %ealt") clients stuc. %it" under%ater loans t"e) "ate, $ut "a*e no trou$le pa)in(! Win a fe% 'ulti>'illion>dollar 2ud('ents for t"e' and %"en t"e %ord (ets out, 'ore clients %"o can afford )our ser*ices %ill floc. to )ou! 3f )ou don1t "a*e a clue "o% to 'ana(e t"is, CALL 4: /#W at 727 66J 5511 or :'ail 'e! 3 %ill (et )ou t"e professional (uidance )ou need to %in AC0MAL 4#/:, for )our clients in t"e *ast 'a2orit) of t"ese cases!
Bob Hurt Blog 1 2 3 f t 2460 Persian Drive #70 Clearwater, FL 33763 EmailCall: (727) 669 !!"" Law #t$%ies: D&nate #$'s(ri'e Learn t& Liti)ate wit* +$ris%i(ti&nar,

Morcom, Focht, and Foreclosure Pretense Defense

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*********** Florida District Court sof Appeal Opinions ***********

Wells Fargo v. Morcom

! F"#$% B"&', &."., "((ellant, v. D"&)E P. M%#*%M "&D !H"#%& M%#*%M, "((ellees.
Case -&. +D11,-./0. D1str1ct *ourt of "((eal of Flor1da, F1fth D1str1ct. ./ini&n 0ile% .(t&'er "", 20"3. 1i(*ael 2. 3inst&n, Dean 4. 1&ran%e an% D&nna L. En) &0 Carlt&n Fiel%s, P.4., 3est Palm 5ea(*, 0&r 4//ellant. #teven P. C&m's, De'&ra* L. 6reene, 7&'ert #. +e00re,, #*ane 8er'ert an% 4n%rea C&m's +evi( &0 C&m's 6reene 1(Lester, +a(9s&nville, 0&r 4//ellees. 34LL:#, +. 4//ellant a//eals t*e l&wer (&$rt;s &r%er )rantin) s$mmar, <$%)ment in 0av&r &0 4//ellees, in w*i(* t*e trial (&$rt *el% t*at t& *ave stan%in) t& 0&re(l&se a m&rt)a)e, a /art, m$st 'e t*e *&l%er an% &wner &0 t*e /r&miss&r, n&te. 5e(a$se t*e Fl&ri%a =ni0&rm C&mmer(ial C&%e (>Fl&ri%a =CC>) an% &$r /revi&$s %e(isi&n in De$ts(*e 5an9 -ati&nal ?r$st C&. v. Li//i, 7@ #&. 3% @" (Fla. !t* DC4 20"2), reA$ire a /art, see9in) 0&re(l&s$re t& 'e t*e *&l%er &0 t*e n&te, we reverse. 4//ellant 0ile% a (&m/laint &n 4$)$st 6, 20"0, see9in) t& 0&re(l&se a m&rt)a)e iss$e% ', 4//ellees. 4//ellant alle)e%, inter alia, t*at >1&rt)a)ee s*&wn &n t*e 1&rt)a)e atta(*e% as an eB*i'it is t*e &ri)inal 1&rt)a)ee> an% >Plainti00 is n&w entitle% t& en0&r(e 1&rt)a)e an% 1&rt)a)e -&te /$rs$ant t& Fl&ri%a #tat$tes C 673.30"".> 4//ellant atta(*e% t& t*e (&m/laint (&/ies &0 t*e m&rt)a)e an% t*e /r&miss&r, n&te.D"E ?*e n&te is en%&rse% >/a, t& t*e &r%er &0 FFFF wit*&$t re(&$rse,> wit* t*e 'lan9 s/a(e /&/$late% wit* a stam/ &0 3ells Far)& 5an9, -.4. .n 4$)$st 9, 20"", 4//ellees 0ile% a m&ti&n 0&r s$mmar, <$%)ment, ar)$in) 4//ellant was n&t t*e &wner &0 t*e n&te an% m&rt)a)e. 4t t*e *earin) &n 4//ellees; m&ti&n 0&r s$mmar, <$%)ment, 4//ellees ar)$e% t*at 4//ellant (&n(e%e% in its res/&nse t& reA$est 0&r a%missi&ns t*at 4//ellant was n&t t*e &wner &0 t*e n&te &r m&rt)a)e. 8&wever, 4//ellees a)ree% t*at 4//ellant *el% t*e &ri)inal n&te. :n its &r%er, t*e l&wer (&$rt in%i(ate% t*at t*e iss$e 'e0&re t*e l&wer (&$rt was w*et*er >stan%in) in a (lassi( 0&re(l&s$re (ase reA$ires evi%en(e t*at t*e /lainti00 is t*e &wner &0 t*e n&te an% m&rt)a)e, even t*&$)* t*e /lainti00 *as t*e ri)*t t& en0&r(e t*e n&te /$rs$ant t& t*e DFl&ri%a =CCE.> F$rt*erm&re, t*e l&wer (&$rt s$staine% t*e &'<e(ti&n t& an, evi%en(e t*at 4//ellant was /r&(ee%in) in a re/resentative (a/a(it, 'e(a$se t*is was n&t /le% in t*e (&m/laint. ?*e &r%er als& 0&$n% t*at 4//ellant is t*e *&l%er &0 t*e n&te, '$t t*at t*e /r&%$(ti&n &0 t*e n&te /r&vi%es n& evi%en(e &0 &wners*i/. ?*e l&wer (&$rt %enie% 4//ellant;s m&ti&n 0&r re*earin). ?*e stan%ar% &0 review )&vernin) t*e r$lin) &0 a trial (&$rt &n a m&ti&n 0&r s$mmar, <$%)ment /&sin) a /$re A$esti&n &0 law is %e n&v&. Delta Fire #/rin9lers, :n(. v. .ne5ea(&n :ns. C&., 937 #&. 2% 69!, Morcom, Focht, and Foreclosure Pretense Defense Page -


697 (Fla. !t* DC4 2006) ((itati&ns &mitte%). 3e review 0in%in)s re)ar%in) stan%in) %e n&v&. F&B v. Pr&0;l 3re(9er ./erat&rs &0 Fla., :n(., @0" #&. 2% "7!, "7@ (Fla. !t* DC4 200"). ?*e Fl&ri%a =CCD2E an% re(ent (ases 0r&m t*is (&$rt stan% 0&r t*e /r&/&siti&n t*at a /lainti00 *as stan%in) t& 'rin) a 0&re(l&s$re a(ti&n i0 t*e /lainti00 is t*e *&l%er &0 a /r&miss&r, n&te, en%&rse% in 'lan9, se($re% ', a m&rt)a)e. ?*e (&ntr&llin) law 0&$n% in t*e Fl&ri%a =CC %e0ines t*e >/ers&n entitle% t& en0&r(e an instr$ment> as: (") ?*e *&l%er &0 t*e instr$mentG (2) 4 n&n*&l%er in /&ssessi&n &0 t*e instr$ment w*& *as t*e ri)*ts &0 a *&l%erG &r (3) 4 /ers&n n&t in /&ssessi&n &0 t*e instr$ment w*& is entitle% t& en0&r(e t*e instr$ment /$rs$ant t& s. 673.309" &r 673.4"@"(4). 4 /ers&n ma, 'e a /ers&n entitle% t& en0&r(e t*e instr$ment even t*&$)* t*e /ers&n is n&t t*e &wner &0 t*e instr$ment &r is in wr&n)0$l /&ssessi&n &0 t*e instr$ment. C 673.30"", Fla. #tat. (20"0). 3e *ave /revi&$sl, *el% t*at >DtE*e /art, t*at *&l%s t*e n&te an% m&rt)a)e in A$esti&n *as stan%in) t& 'rin) an% maintain a 0&re(l&s$re a(ti&n.> De$ts(*e 5an9 -at;l. ?r$st C&. v. Li//i, 7@ #&. 3% @", @4 (Fla. !t* DC4 20"2) ((itin) P*il&)ene v. 45- 4mr& 1&rt). 6r/. :n(., 94@ #&. 2% 4!, 46 (Fla. 4t* DC4 2006)). >D?E*e /ers&n *avin) stan%in) t& 0&re(l&se a n&te se($re% ', a m&rt)a)e ma, 'e eit*er t*e *&l%er &0 t*e n&te &r a n&n*&l%er in /&ssessi&n &0 t*e n&te w*& *as t*e ri)*ts &0 a *&l%er.> Li//i, 7@ #&. 3% at @4 (A$&tin) ?a,l&r v. De$ts(*e 5an9 -at;l ?r$st C&., 44 #&. 3% 6"@, 622 (Fla. !t* DC4 20"0)). :n Li//i, De$ts(*e 5an9;s se(&n% amen%e% (&m/laint (&ntaine% t*e lan)$a)e t*at it >is n&w t*e *&l%er &0 t*e 1&rt)a)e -&te an% 1&rt)a)e an%H&r is entitle% t& en0&r(e t*e 1&rt)a)e -&te an% 1&rt)a)e.> Li//i, 7@ #&. 3% at @4. ?*e 0a(ts in Li//i are alm&st i%enti(al t& 4//ellant;s (&m/laint in t*e /resent (ase, w*i(* /r&vi%es t*at t*e >1&rt)a)ee s*&wn &n t*e 1&rt)a)e atta(*e% as an eB*i'it is t*e &ri)inal 1&rt)a)ee> an% >Plainti00 is n&w entitle% t& en0&r(e 1&rt)a)e an% 1&rt)a)e -&te /$rs$ant t& Fl&ri%a #tat$tes C 673.30"".> ?*e Li//i (&$rt *el%, w*ere t*e n&te was en%&rse% in 'lan9, meanin) it was >/a,a'le t& t*e 'earer an% (&$l% 'e trans0erre% sim/l, ', /&ssessi&n,> De$ts(*e 5an9;s stan%in) was esta'lis*e% 'e(a$se it was t*e n&te *&l%er, re)ar%less &0 an, re(&r%e% assi)nments. Li//i, 7@ #&. 3% at @! ((itin) 8arve, v. De$ts(*e 5an9 -at;l ?r$st C&., 69 #&. 3% 300, 304 (Fla. 4t* DC4 20""))G see als& C 673.20!", Fla. #tat. (20"0). :n t*e /resent (ase, t*e &ri)inal n&te 4//ellant atta(*e% was en%&rse% in 'lan9 wit* 4//ellant;s name stam/e% in t*e 'lan9 en%&rsement 0iel%, w*i(*, /aire% wit* se(ti&n 673.30""("), esta'lis*e% t*at 4//ellant was t*e *&l%er entitle% t& en0&r(e t*e instr$ment. 4//l,in) /&rti&ns &0 t*e Fl&ri%a =CC, &t*er %istri(t (&$rts &0 a//eal *ave %etermine% t*at a /art, t*at *&l%s a n&te en%&rse% in 'lan9 *as stan%in) t& 0&re(l&se a m&rt)a)e. =.#. 5an9 -at;l 4ss;n v. 2ni)*t, 90 #&. 3% @24, @2! 26 (Fla. 4t* DC4 20"2)G 7i))s v. 4$r&ra L&an #ervs., LLC, 36 #&. 3% 932, 933 (Fla. 4t* DC4 20"0)G 1&rt). Ele(t. 7e)istrati&n #,s., :n(. v. 4IiIe, 96! #&. 2% "!" (Fla. 2% DC4 2007)G 1&rt). Ele(t. 7e)istrati&n #,s., :n(. v. 7ev&re%&, 9!! #&. 2% 33, 34 (Fla. 3% DC4 2007). 4//ellees (ite Fl&ri%a #$/reme C&$rt /re(e%ent %atin) 'a(9 t& t*e late "@00s t& s$))est 4//ellant m$st '&t* *&l% an% &wn t*e n&te an% m&rt)a)e t& satis0, t*e stan%in) reA$irement 0&r a 0&re(l&s$re a(ti&n. ?*e (ases 4//ellees (ite are n&t /ers$asive 'e(a$se t*e s$/reme (&$rt %e(i%e% t*e (ases /ri&r t& Morcom, Focht, and Foreclosure Pretense Defense Page +

t*e a%&/ti&n &0 t*e n&w instr$(tive an% 'in%in) Fl&ri%a =CC.D3E 5ase% &n t*is (&$rt;s /re(e%ent in Li//i an% t*e a//li(a'ilit, &0 t*e Fl&ri%a =CC, we reverse t*e l&wer (&$rt;s &r%er )rantin) s$mmar, <$%)ment an% reman% 0&r 0$rt*er /r&(ee%in)s. 7EJE7#ED an% 7E14-DED. #434K4 an% L43#.-, ++., (&n($r. D"E #$'seA$entl,, 4//ellant 0ile% t*e &ri)inal n&te wit* t*e l&wer (&$rt &n #e/tem'er "!, 20"". D2E Fl&ri%a a%&/te% t*e =CC &n +an$ar, ", "967. #ee #$'$r'ia Fe%. #av. L L&an 4ss;n v. 5el 4ir C&n%iti&nin) C&., 3@! #&. 2% ""!", ""!4 (Fla. 4t* DC4 "9@0)G see als& 3arren Fin., :n(. v. 5arnett 5an9 &0 +a(9s&nville, -.4., !!2 #&. 2% "94, "96 n.2 (Fla. "9@9) (>Fl&ri%a *as a%&/te% t*e /r&visi&ns &0 t*e =ni0&rm C&mmer(ial C&%e ', stat$te in (*a/ters 67" 6@0, Fl&ri%a #tat$tes.>). D3E 5e(a$se we *&l% t*e *&l%er &0 a n&te en%&rse% in 'lan9 *as stan%in) t& 0&re(l&se, it is $nne(essar, t& a%%ress an, iss$es re)ar%in) %e0i(ien(ies in 4//ellant;s (&m/laint. -.? F:-4L =-?:L ?:1E EMP:7E# ?. F:LE 1.?:.- F.7 7E8E47:-6 4-D D:#P.#:?:.?8E7E.F :F F:LED

Focht v Wells Fargo

DEB%#"H E. F%*H2, "((ellant, v. WE ! F"#$% B"&', &."., !3**E!!%# B4 ME#$E# 2% WE ! F"#$% B"&' M)&&E!%2", &"2)%&" "!!%*)"2)%&, "! 2#3!2EE, )& 2#3!2 F%# 2HE H% DE#! %F !2#3*23#ED "!!E2 !E*3#)2)E! *%#P%#"2)%& 5 "M%#2)6)&$ #E!)DE&2)" *% "2E#" 2#3!2 M%#2$"$E P"!! 2H#%3$H *E#2)F)*"2E!, !E#)E! 2..2,B*1., "((ellee.
Case -&s. 2D"" 4!"", 2D"" 49@0, C&ns&li%ate%. D1str1ct *ourt of "((eal of Flor1da, !econd D1str1ct. ./ini&n 0ile% #e/tem'er 2!, 20"3. De'&ra* E. Focht, /r& se. +e00re, #. La/in &0 La/in L Lei(*tlin), LLP, C&ral 6a'les, an% 7&nnie 8. 5itman &0 P&well L Pears&n, LLP, 3inter Par9, 0&r 4//ellee. #:L5E714-, +$%)e. :n (ase n$m'er 2D"" 4!"", De'&ra* E. Focht see9s review &0 t*e 0inal s$mmar, <$%)ment &0 0&re(l&s$re entere% in 0av&r &0 3ells Far)& 5an9, -.4. :n (ase n$m'er 2D"" 49@0, Focht see9s review &0 t*e trial (&$rt;s s$'seA$ent &r%ers %en,in) *er m&ti&n t& sta, an%H&r (an(el t*e 0&re(l&s$re sale an% stri9in) *er n&ti(e &0 lis /en%ens. 3e reverse t*e 0inal <$%)ment &0 0&re(l&s$re 'e(a$se a )en$ine iss$e &0 material 0a(t eBists re)ar%in) 3ells Far)&;s stan%in) t& en0&r(e t*e n&te an% m&rt)a)e. 5e(a$se t*e Morcom, Focht, and Foreclosure Pretense Defense Page 7

0&re(l&s$re sale *as alrea%, ta9en /la(e, we %ismiss t*e a//eal in (ase n$m'er 2D"" 49@0 as m&&t. :n .(t&'er 2002, Focht eBe($te% an a%<$sta'le rate n&te t*at was se($re% ', a m&rt)a)e &n *er /r&/ert, in -&9&mis, Fl&ri%a. ?*e &ri)inal len%er was 5-C 1&rt)a)e, :n(., '$t t*e l&an was later trans0erre% int& a tr$st 0&r w*i(* 3ells Far)& is t*e tr$stee. 3ells Far)& 0ile% a 0&re(l&s$re (&m/laint in +an$ar, 200@. ?*e (&m/laint in(l$%e% a (&$nt t& reesta'lis* a l&st n&te, '$t 3ells Far)& /r&%$(e% an% 0ile% t*e &ri)inal n&te in +$l, 200@. 3ells Far)& s$'seA$entl, 0ile% a m&ti&n 0&r s$mmar, <$%)ment, an% Focht 0ile% a (r&ss m&ti&n 0&r s$mmar, <$%)ment 'ase% &n n$mer&$s a00irmative %e0enses w*i(* in(l$%e% 3ells Far)&;s la(9 &0 stan%in). 4t t*e *earin) &n t*e m&ti&ns, 3ells Far)& %ismisse% its l&st n&te (laim. 3ells Far)& asserte% t*at it *a% stan%in) ', virt$e &0 an assi)nment &0 t*e n&te an% m&rt)a)e %ate% #e/tem'er 200@, w*i(* was several m&nt*s a0ter t*e (&m/laint was 0ile%. 3ells Far)& alternativel, asserte% t*at it *a% stan%in) as t*e *&l%er &0 t*e &ri)inal n&te en%&rse% in 'lan9. :n &//&siti&n t& Focht8s (r&ss m&ti&n 0&r s$mmar, <$%)ment, (&$nsel 0&r 3ells Far)& a%%resse% Focht8s a00irmative %e0enses an% ar)$e% t*at ea(* was eit*er 0a(t$all, &r le)all, ins$00i(ient. ?*e trial (&$rt )rante% 3ells Far)&;s m&ti&n 0&r s$mmar, <$%)ment, %enie% Focht8s (r&ss m&ti&n 0&r s$mmar, <$%)ment, an% entere% a 0inal <$%)ment &0 0&re(l&s$re. Focht 0ile% a n&ti(e &0 a//eal &0 t*e 0inal <$%)ment an% a m&ti&n t& sta, t*e 0&re(l&s$re sale /en%in) a//eal an% a n&ti(e &0 lis /en%ens. ?*e trial (&$rt %enie% t*e m&ti&n t& sta, an% )rante% 3ells Far)&;s m&ti&n t& stri9e t*e n&ti(e &0 lis /en%ens. Focht t*en 0ile% a n&ti(e &0 a//eal &0 t*&se &r%ers. ?*e 0&re(l&s$re sale t&&9 /la(e in #e/tem'er 20"", an% 3ells Far)& was t*e s$((ess0$l 'i%%er. Focht ma9es several ar)$ments &n a//eal. 3e reverse t*e 0inal <$%)ment in (ase n$m'er 2D"" 4!"" 'ase% &n t*e eBisten(e &0 a )en$ine iss$e &0 material 0a(t re)ar%in) 3ells Far)&;s stan%in) t& en0&r(e t*e n&te an% m&rt)a)e at t*e time it 0ile% t*e (&m/laint. 3e re<e(t t*e remain%er &0 Focht8s ar)$ments in t*at a//eal wit*&$t 0$rt*er %is($ssi&n. 4n% we %ismiss t*e a//eal in (ase n$m'er 2D"" 49@0 as m&&t 'e(a$se t*e 0&re(l&s$re sale *as alrea%, ta9en /la(e. 4 /lainti00 w*& is n&t t*e &ri)inal len%er ma, esta'lis* stan%in) t& 0&re(l&se a m&rt)a)e l&an ', s$'mittin) a n&te wit* a 'lan9 &r s/e(ial en%&rsement, an assi)nment &0 t*e n&te, &r an a00i%avit &t*erwise /r&vin) t*e /lainti00;s stat$s as t*e *&l%er &0 t*e n&te.D"E 1(Lean v. +P 1&r)an C*ase 5an9 -at;l 4ss;n, 79 #&. 3% "70, "73 (Fla. 4t* DC4 20"2). 5$t stan%in) m$st 'e esta'lis*e% as &0 t*e time &0 0ilin) t*e 0&re(l&s$re (&m/laint. C&$ntr, Pla(e Cmt,. 4ss;n v. +.P. 1&r)an 1&rt). 4(A. C&r/., !" #&. 3% ""76, ""79 (Fla. 2% DC4 20"0)G 1(Lean, 79 #&. 3% at "73. ?*$s, 3ells Far)&;s s$'missi&n &0 a /&st0ilin) assi)nment &0 t*e n&te an% m&rt)a)e %&es n&t esta'lis* t*at it *a% stan%in) w*en it 0ile% t*e laws$it. #ee 6&nIaleI v. De$ts(*e 5an9 -at;l ?r$st C&., 9! #&. 3% 2!", 2!3 (Fla. 2% DC4 20"2)G 1(Lean, 79 #&. 3% at "73. 3ells Far)& alternativel, ar)$es t*at it esta'lis*e% stan%in) ', s$'mittin) t*e &ri)inal n&te en%&rse% in 'lan9. #ee C$tler v. =.#. 5an9 -at;l 4ss;n, "09 #&. 3% 224, 22! 26 (Fla. 2% DC4 20"2)G Ever*&me 1&rt). C&. v. +anssen, "00 #&. 3% "239, "240 (Fla. 2% DC4 20"2)G 6reen v. +P1&r)an C*ase 5an9, -.4., "09 #&. 3% "2@!, "2@@ (Fla. !t* DC4 20"3). 4s wit* t*e assi)nment, *&wever, 3ells Far)& %i% n&t s$'mit t*e &ri)inal n&te $ntil several m&nt*s a0ter it *a% 0ile% t*e (&m/laint. ?& esta'lis* stan%in) as t*e *&l%er &0 a n&te en%&rse% in 'lan9, a /art, m$st 'e in /&ssessi&n &0 t*e &ri)inal n&te. #ee C 67".20"(2")(a), Fla. #tat. (2007) (%e0inin) >*&l%er> as >DtE*e /ers&n in /&ssessi&n &0 a ne)&tia'le instr$ment t*at is /a,a'le eit*er t& 'earer &r t& an i%enti0ie% /ers&n t*at is t*e /ers&n in /&ssessi&n>)G Ever*&me, "00 #&. 3% at "240G 6reen, "09 #&. 3% at "2@@. ?*$s, 3ells Far)& was reA$ire% t& s$'mit evi%en(e t*at it was in /&ssessi&n &0 t*e &ri)inal n&te wit* t*e 'lan9 en%&rsement at t*e time it 0ile% t*e Morcom, Focht, and Foreclosure Pretense Defense Page 9

(&m/laint t& esta'lis* stan%in). #ee 6reen, "09 #&. 3% at "2@@. :n t*is (ase, t*e 'lan9 en%&rsement, w*i(* is a//arentl, l&(ate% &n t*e 'a(9 &0 t*e n&te, %i% n&t )et (&/ie% 0&r t*e re(&r%. ?*$s, t*e re(&r% %&es n&t re0le(t w*et*er t*e en%&rsement was %ate%. Even i0 it %i% 'ear a %ate t*at was /ri&r t& t*e 0ilin) &0 t*e (&m/laint in +an$ar, 200@, n&t*in) in t*e re(&r% esta'lis*es t*at 3ells Far)& was in /&ssessi&n &0 t*e n&te at t*e time t*e (&m/laint was 0ile%. 4lt*&$)* 3ells Far)& alle)e% in its $nsw&rn (&m/laint t*at it was t*e &wner an% *&l%er &0 t*e n&te an% m&rt)a)e, it asserte% t*at t*e &ri)inal n&te *a% 'een l&st &r %estr&,e% an% >is n&t n&w in t*e ($st&%, an% (&ntr&l &0 D3ells Far)&E.> -&ta'l,, t*e a00i%avit &0 in%e'te%ness 0ile% in s$//&rt &0 s$mmar, <$%)ment relies &n t*e /&st0ilin) assi)nment 0&r stan%in) an% states as 0&ll&ws: >5, wa, &0 (&r/&rate assi)nment 0r&m 5-C 1&rt)a)e, :n(., D3ells Far)&E n&w &wns an% *&l%s t*e -&te an% 1&rt)a)e.> (Em/*asis a%%e%.) -& evi%en(e esta'lis*e% w*en 3ells Far)& a(A$ire% t*e &ri)inal n&te. 3ells Far)& n&te% t*at t*e tr$st in w*i(* Focht8s m&rt)a)e l&an was *el% was (reate% ,ears 'e0&re 3ells Far)& 0ile% t*e 0&re(l&s$re a(ti&n. 5$t t*e re(&r% %&es n&t re0le(t t*at, at t*e time t*e tr$st was (reate%, Focht8s m&rt)a)e l&an was an asset &0 t*e tr$st. ?*$s, a )en$ine iss$e &0 material 0a(t remains re)ar%in) stan%in) t*at /re(l$%es t*e entr, &0 s$mmar, <$%)ment. #ee C$tler, "09 #&. 3% at 226 (reversin) s$mmar, <$%)ment w*ere a /lainti00 w*& was n&t t*e &ri)inal len%er 0ile% a (laim t& reesta'lis* a l&st n&te wit* its 0&re(l&s$re (laim an% s$'seA$entl, 0&$n% an% 0ile% t*e &ri)inal n&te '$t 0aile% t& /resent evi%en(e esta'lis*in) w*en t*e /lainti00 'e(ame t*e /r&/er *&l%er &0 t*e n&te)G 1(Lean, 79 #&. 3% at "74 (same). 4((&r%in)l,, we reverse t*e 0inal <$%)ment in (ase n$m'er 2D"" 4!"" an% reman% 0&r 0$rt*er /r&(ee%in)s, an% we %ismiss as m&&t t*e a//eal in (ase n$m'er 2D"" 49@0. 3e als& (erti0, a A$esti&n 'ase% &n s&me &0 t*e same (&n(erns arti($late% ', +$%)e 4lten'ern% in *is (&n($rren(e. 3e re(&)niIe t*at trial (&$rts *ave 'een &verw*elme% ', 0&re(l&s$re 0ilin)s an% t*at t*e n$m'er is m&$ntin).D2E #ee :n re 4men%ments t& Fla. 7. Civ. P. ".490, ""3 #&. 3% 777, 77@ (Fla. 20"3). 4n% t*e s$/reme (&$rt *as ta9en a(ti&n t& relieve t*e 'a(9l&) &0 0&re(l&s$re (ases ', vari&$s means wit*in its a$t*&rit,. #ee i%. at 779G :n re Certi0i(ati&n &0 -ee% 0&r 4%%iti&nal +$%)es, 29 #&. 3% """0, """! "6 (Fla. 20"0). F&r &$r /art, a//ellate (&$rts *ave seen a re(ent in0l$B &0 a//eals in w*i(* %e0en%ants *ave s$((ess0$ll, ar)$e% t*at t*e trial (&$rt erre% in enterin) a 0&re(l&s$re <$%)ment in 0av&r &0 t*e /lainti00 'e(a$se t*e /lainti00 0aile% t& esta'lis* stan%in) at t*e time &0 0ilin). #ee, e.)., C$tler, "09 #&. 3% at 22!G 6&nIaleI, 9! #&. 3% at 2!3 !4G 6reen, "09 #&. 3% at "2@@G 1(Lean, 79 #&. 3% at "74. :n man, &0 t*ese (ases, t*e /lainti00 /resente% $nre0$te% /r&&0 &0 stan%in) a(A$ire% a0ter 0ilin) '$t /ri&r t& t*e 0inal *earin). #ee i%. ?*e a//ellate (&$rts are n&net*eless (&m/elle% t& reverse 'ase% &n t*e %istri(t (&$rts; a//li(ati&n &0 a l&n) line &0 s$/reme (&$rt (ases a//l,in) t*e )eneral /rin(i/le t*at >t*e /lainti00;s la(9 &0 stan%in) at t*e in(e/ti&n &0 t*e (ase is n&t a %e0e(t t*at ma, 'e ($re% ', t*e a(A$isiti&n &0 stan%in) a0ter t*e (ase is 0ile%.> Pr&)ressive EB/ress :ns. C&. v. 1(6rat* Cmt,. C*ir&/ra(ti(, 9"3 #&. 2% "2@", "2@4 @! (Fla. 2% DC4 200!) (0&ll&win) J&)es v. 3ar%, "23 #&. 7@! (Fla. "929), an% 1arianna L 5.7. C&. v. 1a$n%, !6 #&. 670 (Fla. "9""))G see als& +e00 7a, C&r/. v. +a(&'s&n, !66 #&. 2% @@!, @@6 (Fla. 4t* DC4 "990) (0&ll&win) 1arianna, !6 #&. 670). 3e n&te t*at t*e s$/reme (&$rt *as n&t a//lie% t*is stan%in) /rin(i/le in t*e eBa(t (&nteBt /resente% in t*is (ase. 4n% we A$esti&n w*et*er, in li)*t &0 t*e &n)&in) 0&re(l&s$re (risis in t*is #tate, t*e s$/reme (&$rt w&$l% a%*ere t& t*is /rin(i/le in (ases in w*i(* a /lainti00 *as a(A$ire% stan%in) ', t*e time <$%)ment is entere%. 4((&r%in)l,, we (erti0, t*e 0&ll&win) A$esti&n as &ne &0 )reat /$'li( im/&rtan(e: C4- 4 PL4:-?:FF :- 4 F.7ECL.#=7E 4C?:.- C=7E ?8E :-45:L:?K ?. P7.JE #?4-D:-6 4? ?8E :-CEP?:.- .F #=:? 5K P7..F ?84? ?8E Morcom, Focht, and Foreclosure Pretense Defense Page /

PL4:-?:FF 84# #:-CE 4CP=:7ED #?4-D:-6N 7everse% an% reman%e%. D4J:#, C.+., C&n($rs. 4L?E-5E7-D, +., C&n($rs wit* &/ini&n. 4L?E-5E7-D, +$%)e, C&n($rrin). : (&n($r in t*is %e(isi&n 'e(a$se eBistin) /re(e%ent reA$ires me t& %& s&. 4 reA$irement t*at t*e /lainti00 /r&ve t*at it &wne% &r /&ssesse% a /r&miss&r, n&te at t*e (&mmen(ement &0 a 0&re(l&s$re a(ti&n ma, *ave ma%e sense %$rin) earlier /eri&%s &0 e(&n&mi( %&wnt$rn,D3E '$t in t*is era &0 se($ritiIati&n &0 m&rt)a)e %e't an% (&m/$teriIe% 'an9in), it *as /r&ven t& 'e a restri(ti&n t*at &0ten /r&vi%es a win%0all t& a '&rr&wer w*& (an /r&ve n& *arm ', t*e 0a(t t*at t*e /lainti00 &'tains /&ssessi&n &0 t*e n&te a0ter t*e 0ilin) &0 t*e laws$it '$t 'e0&re t*e entr, &0 <$%)ment. #& l&n) as t*ere is n& %is/$te t*at t*e '&rr&wer re(eive% t*e m&ne, an% %e0a$lte% &n t*e n&te, t*e law s*&$l% n&t $se >stan%in)> t& reA$ire t*e %ismissal &0 a laws$it. :0 t*e %e0en%ant raises t*is iss$e at t*e in(e/ti&n &0 t*e laws$it t*is a00irmative %e0ense ma, warrant a %ela, in t*e /r&(ee%in)s w*ile t*e /lainti00 esta'lis*es t*at it (an en0&r(e t*e n&te. 5$t es/e(iall, w*en t*e &ri)inal n&te in %e0a$lt *as alrea%, 'een 0ile% in t*e (&$rt re(&r%, t*e law s*&$l% )enerall, /ermit a /lainti00 t& &'tain a <$%)ment &0 0&re(l&s$re i0 t*e /lainti00 esta'lis*es t*at it *as a ri)*t t& en0&r(e t*e n&te at t*e time it see9s t& &'tain a 0inal <$%)ment. #ee )enerall, ?a,l&r v. De$ts(*e 5an9 -at;l ?r$st C&., 44 #&. 3% 6"@ (Fla. !t* DC4 20"0). ?*e (&$rts *ave err&ne&$sl, trans0&rme% w*at s*&$l% 'e a %e0en%ant;s a00irmative %e0ense, /ermittin) t*e %e0en%ant t& av&i% a <$%)ment &0 0&re(l&s$re ', a /lainti00 w*& is a stran)er t& t*e n&te, int& a <$ris%i(ti&nal /rereA$isite t*at m$st 'e esta'lis*e% ', t*e /lainti00 t& av&i% a %ismissal &0 t*e a(ti&n. ?*ere a//ears t& 'e n& )en$ine %is/$te in t*is (ase t*at 1s. Focht '&rr&we% a'&$t Q""0,000 0r&m 5-C 1&rt)a)e, :n(., in 2002, $sin) *er %$/leB as (&llateral. #*e si)ne% a /r&miss&r, n&te an% eBe($te% a m&rt)a)e. #*e %i% n&t ma9e t*e /a,ment %$e in #e/tem'er 2007 &r an, /a,ment t*erea0ter. 4s a res$lt, 3ells Far)& 0ile% t*is 0&re(l&s$re a(ti&n in +an$ar, 200@. 1s. Focht 0ile% an answer /r& se. :t in(l$%e% twent, &ne a00irmative %e0enses. 1an, &0 t*&se %e0enses were 0riv&l&$sR(&ntri'$t&r, ne)li)en(e, 'asi( ri)*ts $n%er 4rti(le :, se(ti&n 2 &0 t*e Fl&ri%a C&nstit$ti&n, im/r&/er 0&r$m, an% /ier(in) t*e (&r/&rate veil. 7ea% )ener&$sl,, : %& n&t 'elieve t*is answer raise% a %e0ense &0 stan%in). :n +$l, 200@, 3ells Far)& 0ile% t*e &ri)inal /r&miss&r, n&te wit* t*e (&$rt. .nl, t*en %i% 1s. Focht raise a %e0ense &0 stan%in). 4t t*at time an% 0&r t*e last 0ive ,ears, t*ere *as 'een n& /ra(ti(al ris9 t*at an, &t*er entit, mi)*t (laim &wners*i/ &0 &r a ri)*t t& en0&r(e t*e n&te. Certainl,, 1s. Focht is n&t (laimin) t*at s*e is ma9in) timel, /a,ments t& s&me &t*er /$tative &wner &0 t*e n&te. 5$t 0&r t*e /re(e%ent, t*ere w&$l% a//ear t& 'e n& reas&n t& reverse t*is (ase. 4%mitte%l,, in t*is (ase an% in n$mer&$s &t*er (ases t*e 0inan(ial instit$ti&ns *ave 'r&$)*t t*ese /r&'lems $/&n t*emselves ', t*e (&m/leB met*&%s &0 se($ritiIat&n an% t*eir &wn sl&//, re(&r%9ee/in). 4%mitte%l,, 1s. Focht an% man, &t*er Fl&ri%ians 'elieve t*e, were misle% ', m&rt)a)e 'r&9ers an% &t*ers int& si)nin) n&tes an% m&rt)a)es t*at were n&t a//r&/riate 0&r t*eir 0inan(ial (ir($mstan(es. 4%mitte%l,, s&me '&rr&wers 'e(&me (&n0$se% an% 0r$strate% 'e(a$se t*e, %& n&t 9n&w w*&m t& (&nta(t t& %is($ss t*eir 0inan(ial %i00i($lties w*en t*e, 0all 'e*in% &n a n&te. 5$t n&ne &0 t*ese (&n(erns are s&lve% ', (reatin) a <$ris%i(ti&nal /rereA$isite &0 >stan%in).> 1s. Focht (ann&t %em&nstrate t*at s*e *as 'een t*e vi(tim &0 an, le)al *arm in t*is (ase arisin) 0r&m Morcom, Focht, and Foreclosure Pretense Defense Page 0

3ells Far)&;s %ela,e% /&ssessi&n &0 t*e n&te. :n 0a(t, it a//ears t*at s*e *as live% 0&r ,ears in t*is %$/leB %$rin) t*e /en%en(, &0 t*e 0&re(l&s$re /r&(ee%in), (&lle(tin) rent 0r&m t*e tenants in t*e &t*er $nit, w*ile ma9in) n& /a,ments &n t*e n&te an% w*ile 0&r(in) t*e len%er t& a%van(e Q22,2"3.3! t&war% taBes &r &t*er es(r&w eB/enses. ?*e trial (&$rts *ave 'een &verw*elme% ', 0&re(l&s$re 0ilin)s. :n man, &0 t*ese (ivil laws$its t*e %e0en%ants, $n%er a %$t, t& /lea% in )&&% 0ait*, s*&$l% 'e eB/e(te% t& a%mit t*at t*e, re(eive% t*e m&ne,, si)ne% t*e n&tes an% m&rt)a)es, an% 0aile% t& ma9e t*e /a,ments. ?*e, ma, &0ten *ave le)itimate a00irmative %e0enses, '$t t*e %ela,e% /r&%$(ti&n &0 t*e &ri)inal n&te an% m&rt)a)e in a (ase w*ere t*e n&te an% m&rt)a)e are in %e0a$lt s*&$l% n&t <$sti0, a %ismissal &0 t*e le)al /r&(ee%in). Pres$ma'l,, &$r man%ate reA$ires t*e %ismissal &0 t*is 0&re(l&s$re a(ti&n, w*i(* in t$rn will $n%& t*e 0&re(l&s$re sale. 1s. Focht will re)ain /&ssessi&n &0 *er /r&/ert, an% a//arentl, (&ntin$e *er 0ree $se &0 t*e %$/leB w*ile t*e len%er (&ntin$es t& ma9e a%van(es t& (&ver t*e eB/enses t,/i(all, /ai% 0r&m es(r&w. .$r (erti0ie% A$esti&n &0 )reat /$'li( im/&rtan(e is %is/&sitive &0 t*is a//eal an% w&rt*, &0 (&nsi%erati&n ', t*e s$/reme (&$rt. -.? F:-4L =-?:L ?:1E EMP:7E# ?. F:LE 7E8E47:-6 1.?:.- 4-D, :F F:LED, DE?E71:-ED. D"E Case law 0&($ses &n stan%in) t& en0&r(e t*e n&te, as &//&se% t& t*e m&rt)a)e, 'e(a$se t*e m&rt)a)e )enerall, /asses as an in(i%ent t& t*e %e't. C$tler v. =.#. 5an9 -at;l 4ss;n, "09 #&. 3% 224, 22! (Fla. 2% DC4 20"2). D2E ?*e ?rial C&$rt 5$%)et C&mmissi&n *as 0ile% a /etiti&n wit* t*e Fl&ri%a #$/reme C&$rt estimatin) t*at t*ere will 'e 6@0,000 0&re(l&s$re (ases initiate% %$rin) t*e neBt t*ree ,ears. :n re 4men%ments t& Fla. 7. Civ. P. ".490, ""3 #&. 3% 777, 77@ n.2 (Fla. 20"3). D3E #ee )enerall, ?$nn& v. 7&'ert, "6 Fla. 73@ ("@7@)G #mit* v. 2leiser, "07 #&. 262 (Fla. "926).

Morcom, Focht, and Foreclosure Pretense Defense

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