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Case No.: 2009-CA-21226-O

Plaintiff, v.



Defendants. ____________________________________________/


Comes now, Defendants Thomas Michael and Susie Michael, and pursuant to Rule 2.515 of the Florida Rules of Judicial Administration and Rule 1.140 of the Florida Rules of Civil Procedure, hereby moves the Court to Order the case dismissed for lack of standing; dismissal for lack of certified Amended Complaint; dismissal for lack of notice of default and opportunity to cure prior to acceleration; dismissal for lack of loss reserve application; or, alternatively, for a more a more definite statement and for mediation. following: As grounds therefore, Defendants offer the



Standard of Review

Florida Rules of Civil Procedure section 1.410 provides in part: (b) How Presented. Every defense in law or fact to a claim for relief in a pleading shall be asserted in the responsive pleading, if one is required, but the following defenses may be made by motion at the option of the pleader: (1) lack of jurisdiction over the subject matter, (2) lack of jurisdiction over the person, (3) improper venue, (4) insufficiency of process, (5) insufficiency of service of process, (6) failure to state a cause of action, and (7) failure to join indispensable parties. A motion making any of these defenses shall be made before pleading if a further pleading is permitted. The grounds on which any of the enumerated defenses are based and the substantial matters of law intended to be argued shall be stated specifically and with particularity in the responsive pleading or motion. Any ground not stated shall be deemed to be waived except any ground showing that the court lacks jurisdiction of the subject matter may be made at any time. No defense or objection is waived by being joined with other defenses or objections in a responsive pleading or motion. If a pleading sets forth a claim for relief to which the adverse party is not required to serve a responsive pleading, the adverse party may assert any defense in law or fact to that claim for relief at the trial, except that the objection of failure to state a legal defense in an answer or reply shall be asserted by motion to strike the defense within 20 days after service of the answer or reply.

The function of a motion to dismiss a complaint is to raise as a question of law the


sufficiency of the facts alleged to state a cause of action. Connolly v. Sebco, Inc., 89 So. 2d 482 (Fla. 1956). For the purpose of a motion to dismiss, the Court is required to accept as true all well-pleaded allegations of the complaint. Brown v. First Federal Savings and Loan, 160 So.2d 556 (Fla. 1st DCA 1964). However, the Court is not required to accept as true allegations that are inconsistent with law. Brown, 160 So. 2d at 563. (Semantics cannot be employed for the purpose of refuting facts clearly shown to exist or used to create a fictional relationship, one that otherwise would have no existence in the law.) The pleading must be construed against the pleader in determining whether the necessary allegations have been stated. Matthews v. Matthews, 122 So. 2d 571 (Fla. 2d DCA 1960). Florida Rules of Civil Procedure section 1.130 states: (a) Instruments Attached.

All bonds, notes, bills of exchange, contracts accounts, or documents upon which action may be brought or defense made, or a copy thereof or a copy of the portions thereof material to the pleadings, shall be incorporated in or attached to the pleading. No papers shall be unnecessarily annexed as exhibits. The pleadings shall contain no unnecessary recitals of deeds, documents, contracts, or other instruments. (b) Part for All Purposes.

Any exhibit attached to a pleading shall be considered a part thereof for all purposes. Statements in a pleading may be adopted by reference in a different part of the same pleading, in another pleading, or in any motion. When exhibits are inconsistent with Plaintiffs allegations of material fact as to who the real party in interest is, such allegations cancel each other out. Fladell v. Palm Beach County Canvassing Board, 772 So.2d 1240 (Fla. 2000); Greenwald v. Triple D Properties, Inc., 424 So. 2d 185, 187 (Fla. 4th DCA 1983); Costa Bella Development Corp. v. Costa Development Corp., 441 So. 2d 1114 (Fla. 3rd DCA 1983).





Note made payable to another person not indorsed to Plaintiff

Florida Rules of Civil Procedure section 1.210(a) provides:

(a) Parties Generally. Every action may be prosecuted in the name of the real party in interest, but a personal representative, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute may sue in that persons own name without joining the party for whose benefit the action is brought. All persons having an interest in the subject of the action and in obtaining the relief demanded may join as Plaintiffs and any person may be made a Defendant who has or claims an interest adverse to the Plaintiff. Any person may at any time be made a party if that persons presence is necessary or proper to a complete determination of the cause. Persons having a united interest may be joined on the same side as Plaintiffs or Defendants, and anyone who refuses to join may for such reason be made a Defendant.

When exhibits are inconsistent with Plaintiffs allegations of material fact as to who the real party in interest is, such allegations cancel each other out. Fladell v. Palm Beach County Canvassing Board, 772 So.2d 1240 (Fla. 2000); Greenwald v. Triple D Properties, Inc., 424 So. 2d 185, 187 (Fla. 4th DCA 1983); Costa Bella Development Corp. v. Costa Development Corp., 441 So. 2d 1114 (Fla. 3rd DCA 1983). \ Every mortgage loan is composed of two documents the note instrument and the mortgage instrument. No matter how much the mortgage instrument is acclaimed as the basis of the agreement, the note instrument is the essence of the debt. Sobel v. Mutual Dev. Inc., 313 So. 2d 77 (Fla. 1 DCA, 1975); Pepe v. Shepherd, 422 So. 2d 910 (Fla. 3 DCA 1982); Margiewicz v. Terco Prop., 441 So. 2d 1124 (Fla. 3 DCA 1983). The promissory note is evidence of the primary mortgage obligation. The mortgage is only a mere incident to the note. Brown v. Snell, 6 Fla. 741 (1856); Tayton v. American Natl Bank, 57 So. 678 (Fla. 1912); Scott v. Taylor, 58 So. 30 (Fla. 1912); Young v. Victory, 150 So. 624 (Fla. 1933); Thomas v. Hartman, 553 So. 2d 1256

(Fla. 5 DCA 1989). The mortgage instrument is only the security for the indebtedness. Grier v. M.H.C. Realty Co, 274 So. 2d 21 (Fla. 4 DCA 1973); Mellor v. Goldberg, 658 So. 2d 1162 (Fla. 2 DCA 1995); Century Group Inc. v. Premier Fin. Services East L. P., 724 So. 2d 661 (Fla. 2 DCA 1999) In this case, the Plaintiff is HSBC Bank USA, National Association. (Caption of Amended Complaint; Amended Complaint, para. 2) The Plaintiff claims that it is both the owner and holder of the Note and Mortgage. (Amended Complaint, para. 5) The promissory Note that Plaintiff attaches to its Amended Complaint states that it is payable to PINNACLE FINANCIAL CORPORATION D/B/A TRI-STAR LENDING GROUP. (Amended Complaint, Exhibit A) This Note has stamped on its first page the following statement:


_________________________________________ PINNACLE FINANCIAL CORPORATION

And, stamped on its last page, which is half-blank, it has this single stamp mark:



The Title Group of Central Florida, Inc.

Both signature lines contain illegible signatures, neither of which appear similar. There is no indorsement on the Note nor is there an allonge attached to the Note. The Uniform Commercial Code as set forth in 673, et. seq., applies to negotiable instruments pursuant to 673.1021, Fla. Stat. (2009). The Note appears to be a negotiable instrument as it does not seem to contain any of the exclusionary language of 673.1041(1)(c), Fla. Stat. (2009). (GMAC v. Honest Air Conditioning & Heating, 933 So.2d 34 (Fla. App., 2006)) The holder of the note has standing to seek enforcement of the note. (Mortgage Electronic Registration Systems, Inc. v. Azize, 965 So.2d 151 (Fla. 2d DCA 2007)) 671.201(21), Fla. Stat. (2009) defines a holder as follows:

"Holder" means: (a) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession; or (Emphasis mine) The Note in this case is not payable to bearer, but instead is payable to an identified person Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. Since HSBC Bank USA, National Association has possession of the Note, HSBC Bank USA, National Association can only be the Note's holder if HSBC Bank USA, National Association is Pinnacle Financial Corporation D/B/A Tri- Star Lending Group which it is not. In Ederer v. Fisher, 183 So.2d 39 (Fla. 2d DCA 1965), the Court stated: We agree with this statement of the law, as well as the proposition that a holder in due course is immune from the defense of failure of consideration. Fla.Stat., Sec. 674.31, F.S.A. But to be accorded the status of a holder, and entitled to the presumption of being a holder in due course as provided by Fla.Stat., Sec. 674.61, F.S.A., a party must have

acquired the instrument through 'negotiation.' Fla.Stat., Secs . 674.33 and 674.01, F.S.A. Paper payable to order, as was the note here, is negotiated by the endorsement of the holder, plus delivery. Fla.Stat., Sec. 674.33, F.S.A. (Emphasis mine)

Transfer of a note payable to a specifically identified person is accomplished by an indorsement. ( 673.2011(2), Fla. Stat. (2009); 673.2031(1), Fla. Stat. (2009)) The only possible right that HSBC Bank USA, National Association has regarding that unindorsed note is the specifically enforceable right to the indorsement of Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. ( 673.2031(3), Fla. Stat. (2009)) Had HSBC Bank USA, National Association sued Pinnacle Financial Corporation D/B/A Tri- Star Lending Group and obtained an Order to enforce the right to Pinnacle Financial Corporation D/B/A Tri- Star Lending Group's indorsement of the note, it could then bring that note into court and foreclose upon it. Mere possession of the original Note, Mortgage and Assignment of Mortgage does not demonstrate that Plaintiff is the owner and holder of the note and mortgage as held by the Second District Court of Appeal in Verizzo v. Bank of New York, 35 Fla. L. Weekly D494a (Fla. 2d DCA March 3, 2010), which stated: In addition to the procedural error of the late service and filing of the summary judgment evidence, those documents reflect that at least one genuine issue of material fact exists. The promissory note shows that Novastar endorsed the note to JPMorgan Chase Bank, as Trustee. Nothing in the record reflects assignment or endorsement of the note by JPMorgan Chase Bank to the Bank of New York or MERS. Thus, there is a genuine issue of material fact as to whether the Bank of New York owns and holds the note and has standing to foreclose the mortgage. See Mortgage Electronic Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007) (recognizing that the owner and holder of a note and mortgage has standing to proceed with a mortgage foreclosure action); Philogene v. ABN Amro Mortgage Group, Inc., 948 So. 2d 45, 46 (Fla. 4th DCA 2006) (determining that the plaintiff had standing to bring and maintain a mortgage foreclosure action since it demonstrated that it held the note and mortgage in question).

Prior to the creation of the Uniform Commercial Code (UCC) in 1952,1 interests in notes were transferred by assignment. At that time, the cases of Moses v. Woodward, 109 Fla. 348 (Fla. 1933) and Johns v. Gillian, 134 Fla. 575, 581 (Fla. 1938) stood for the position that an indorsement on a note is not necessary to transfer the note, but rather that mere delivery of a note and mortgage with the intention to pass title will vest equitable interests in the person to whom it is delivered. 2 The the principles espoused in those pre-UCC cases regarding enforcement requirements must of necessity be subordinate to the enforcement requirements of the UCC. The principle of equitable assignment is applicable today If the note or other debt secured by a mortgage be transferred without any formal assignment of the mortgage, or even a delivery of it, the mortgage in equity passes as an incident to the debt, unless there be some plain and clear agreement to the contrary, if that be the intention of the parties. . . . .. WM Specialty Mortgage, LLC v. Salomon, Case No. 4D03-3318 (FL 5/26/2004) (Fl, 2004) But Plaintiff offers no justification for an equitable assignment as no allegation is made that the Pinnacle Financial Corporation D/B/A Tri- Star Lending Group was unable to indorse the note to HSBC Bank USA, National Association or that Pinnacle Financial Corporation D/B/A Tri-Star Lending Group had transferred it to HSBC Bank USA, National Association with the intention of passing title to HSBC Bank USA, National Association. An assignment could also result in the transfer of a note as long as that note is not a negotiable instrument, but as discussed previously, this Note is a negotiable instrument. Defendant's Thomas and Susie Michaels have an obligation as an issuer of a note to the
1 2 There appear to be three Moses v. Woodward opinions with this

citation. The March 1, 1932 opinion (140 So. 651) was to the effect that a note can be transferred by assignment rather than indorsement . A rehearing was granted on April 13, 1932 (141 So. 117), and a new opinion reversing the foreclosure was issued on April 8, 1933 (147 So. 690). The new opinion mentions nothing about unindorsed notes.

person entitled to enforce the instrument or to an indorser who paid the instrument under Florida Statutes 673.4151. ( 673.4121, Fla. Stat. (2009)) But with that obligation also goes the right to presentment under 673.5011, Fla. Stat. (2009), which states in part: (c) Without dishonoring the instrument, the party to whom presentment is made may: 1. Return the instrument for lack of a necessary indorsement; or 2. Refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

The presentee's demand the necessary indorsement which was not provided by HSBC Bank USA, National Association in this Amended Complaint, and which gives them the right to refuse payment or acceptance. The Plaintiff claims it is the owner and holder of the Note. That allegation directly conflicts with the evidence attached to the Amended Complaint, which shows that the Plaintiff is not the holder of the promissory Note.


MERS could not pass an enforceable interest in the promissory note to Plaintiff or its principal

The note is the instrument of concern in all assignment situations. There is an old maxim the mortgage follows the note. Evins v. Gainsville Natl Bank, 85 So. 659 (Fla. 1920); Case v. Smith, 200 So. 917 (Fla. 1941) The note is evidence of the primary mortgage obligations or the debt. The assignment of the note carries with it the mortgage and its rights, even though the

mortgage instrument has not been assigned either orally or in writing. Collins v. Briggs, 123 So. 833 (Fla. 1929); Miami Mtge. & Guar. Co. v. Drawdy, 127 So. 323 (Fla. 1930); So. Colonial Mtge. Co. v. Medeiros, 347 So. 2d 736 (Fla. 4 DCA 1977) The mortgage, as evidenced by the mortgage instrument, is only a mere incident to the debt. Therefore, the mortgage instrument is of lesser significance. Because the assignment of the note is an imperative act as to the transferring of the mortgagees right, the assignment of the mortgage instrument without the note is an ineffective assignment. Vance v. Fields, 172 So. 2d 613 (Fla. 1 DCA 1965); Sobel v. Mutual Dev. Inc., 313 So. 2d 77 (Fla. 1 DCA 1975); Amacher v. Keel, 358 So. 2d 889 (Fla. 2 DCA 1975) In the instant case, the Assignment of Mortgage claims that it assigns the both the Note and the mortgage to Plaintiff. However, the Note instrument was bifurcated from the mortgage instrument and MERS did not have an interest in the Note that it could assign. MERS act of assigning the Note was a nullity as it didn't have an interest in the Note that it could assign. And, as to the mortgage the assignment was invalid as it held no beneficial interest in the mortgage instrument for two reasons: 1) a security instrument, apart from the promissory note giving rise to the debt has no value because there is no debt by which it secures payment; and 2) MERS had no beneficial interest in the mortgage instrument that it could assign. Since the Note was not indorsed to HSBC Bank USA, National Association, HSBC Bank USA, National Association didn't take the Note pursuant to negotiation under the UCC. That left HSBC Bank USA, National Association with taking whatever rights MERS had by the Assignment of Mortgage from MERS to the HSBC Bank USA, National Association. MERS could not assign any greater rights to HSBC Bank USA, National Association than MERS had. Holding only the mortgage and not the Note means you hold nothing of value. The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity. Carpenter v. Longan, 83 U.S. 271, 21 L.Ed. 313, 16 Wall. 271 (1872); Vance v. Fields, 172 So.2d 613 (Fla. 1965); Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009) (also see

Landmark National Bank v. Kesler, 192 P.3d 177 (Kansas App. Ct. 2008)) Neither Mortgage Electronic Registration Systems, Inc. v. Azize, 965 So.2d 151 (Fla. 2d DCA 2007) or Mortgage Electronic Registration Systems, Inc. v. Revoredo, 955 So. 2d 33 (Fla. 3d DCA 2007) alter this precedent.

In Revoredo, supra, the Court held that MERS does not lack standing to foreclose to the facts of this case, in which it is clear that . . . MERS was only the holder (by delivery) of the note. Id. At 34, fn. 2. Because the Note is not indorsed to HSBC Bank USA, National Association, HSBC Bank USA, National Association is clearly claiming that its right to the Note flows from MERS. Therefore, if it is going to demonstrate an equitable assignment of the note, it must first show that MERS had rights to the unindorsed Note which it could assign to HSBC Bank USA, National Association. However, the terms and provisions of the MERS mortgage expressly refute the notion that MERS owned or held the note at inception. The mortgage was not countersigned by the original note holder/lender (Pinnacle Financial Corporation D/B/A TriStar Lending Group) such as to give MERS any rights or interests in the note. As well the Note itself admits of no rights or interests in MERS. Only the defendants signed the mortgage and it is indisputable that they cannot award, grant or otherwise deign to transfer the rights of his obligee, the note holder, to another. Indeed, MERS was not even granted the power or authority to transfer the note, just the mortgage or assign its duties as nominee.

In Azize, supra, the Court merely held that an allegation that MERS was the owner and holder of the note was a sufficient allegation of standing to survive a motion to dismiss. Id. At 153. MERS would still have to prove those allegations to prevail on the foreclosure action. Id. The trial court is not permitted to simply assume that the plaintiff was the holder of the note in the absence of record evidence of such. BAC Funding Consortium Inc. ISAOA/ATIMA v. JeanJacques, Case No. 2D08-3553 (Fla. App. 2/12/2010) (Fla. App., 2010) Here, HSBC Bank USA, National Association did not even allege that MERS was ever the owner and holder of the Note, much less provided prima facie evidence of such an allegation.

The mortgage document is not signed by MERS, nor is it signed by Plaintiff or any one else other than the Michael Defendants. MERS is not a party to the mortgage in the absence of its authorized signature, thus there is no expressed, granted right to assign the mortgage.

In Stuyvesant Corp. v. Stahl, 62 So.2d 18, 20 (Fla., 1952), the Florida Supreme Court stated: The rule is settled in this State that a principal is bound by the acts of his agent. The authority of the agent may be real or it may be apparent and the public may rely on either unless in the case of apparent authority the circumstances are such as to put one on inquiry. The agent's authority may be conferred by writing, by parol, or it may be inferred from the related facts of the case. (Cites omitted)

There are no allegations expressing the mechanism by which MERS had any authority to act as an agent for Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. The Arkansas Supreme Court came to the same conclusion in Mortgage Electronic Registration System, Inc. v. Southwest Homes of Arkansas, 08-1299 (Ark. 3/19/2009) (Ark., 2009)(At page 7) By all appearances, it seems contrary to the interests of Pinnacle Financial Corporation D/B/A Tri- Star Lending Group that the Plaintiff would attempt to collect on a promissory note that was payable to Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. In the Landmark case at the Kansas Court of Appeals, the Court stated:

But whatever authority the nominee may have comes from the delegation of that authority by the principal. In its ordinary meaning, a nominee represents the principal in only a "nominal capacity" and does not receive any property or ownership rights of the person represented. See, e.g., Cisco v. Van Lew, 60 Cal.App.2d 575, 583-84, 141 P.2d 433 (1943); see also Applebaum v. Avaya, Inc., 812 A.2d 880, 889 (Del.2002) (referring to nominees "as agents of the beneficial owners"). The Millennia mortgage does not purport to give MERS any greater rights than normally given a nominee. The mortgage says that MERS acts "solely as nominee for Lender." There is no express grant of any right to MERS to

transfer or sell the mortgage or even to assign its duties as nominee. Nor does MERS obtain any right to the borrower's payments or even a role in receiving payments. (emphasis mine) (Landmark Nat. Bank v. Kesler, 192 P.3d 177, 180 (Kan. App., 2008) )

The Kansas Supreme Court did not overrule this restrictive grant language and say that it somehow expanded to whatever private agency agreement exists between MERS and the Lender, whether expressed in an undisclosed and unincorporated written agreement. Instead, the Kansas Supreme Court affirmed this decision in Landmark Nat. Bank v. Kesler, 216 P.3d 158 (Kan., 2009) By confining the mortgagee status of MERS to that of the highly restrictive, lowest form of agency, the role of "Solely as Nominee" - limits what specific authority is expressly granted. And even this authority was made conditional by the amorphous contingency language "if necessary to comply with law or custom". (Amended Complaint, Mortgage, p. 3, para. Q at page 3 of 13) Common law and custom says you can't bifurcate a mortgage in the first place. The U.S. Supreme Court made that clear in Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 21 L.Ed. 313 (1872). Had the mortgage been more thought-out, it instead might have said "regardless of what law or custom would otherwise restrict or prohibit".3

The expression of a particular power or subject implies the exclusion of all others not expressed or similarly set forth. (See old Fla Jur 2d, DEEDs, Sec 120. (Vol. 19, page 252-253) for a general guide.) A mortgage loan consists of a promissory note and a security instrument, typically a mortgage or a deed of trust. When the note is split from the deed of trust, the note becomes, as a practical matter, unsecured. RESTATEMENT (THIRD) OF PROPERTY (MORTGAGES) 5.4 (1997). A person holding only a note lacks the power to foreclose because it lacks the security, and a person holding only a deed of trust suffers no default because only the holder of the note is entitled to payment on it. See RESTATEMENT (THIRD) OF PROPERTY (MORTGAGES) 5.4 cmt. e (1997). Where the mortgagee has transferred only

Credit to attorney Greg Clark, JEDTI Knight.


the mortgage, the transaction is a nullity and his assignee, having received no interest in the underlying debt or obligation, has a worthless piece of paper. 4 RICHARD R. POWELL, POWELL ON REAL PROPERTY, 37.27[2] (2000). The Restatement (Third) of Property: Mortgages Section 5.4 (1997) states: (a) A transfer of an obligation secured by a mortgage also transfers the mortgage unless the parties to the transfer agree otherwise. (b) Except as otherwise required by the Uniform Commercial Code, a transfer of a mortgage also transfers the obligation the mortgage secures unless the parties to the transfer agree otherwise. (c) A mortgage may be enforced only by, or in behalf of, a person who is entitled to enforce the obligation the mortgage secures. MERS has nothing to transfer by an assignment. MERS own website lists MERS Recommended Foreclosure Procedures for FLORIDA.4 In this document MERS states that it is not the beneficial owner of the promissory note. This document states: MERS stands in the same shoes as the servicer to the extent that it is not the beneficial owner of the promissory note. An investor, typically a secondary market investor, will be the ultimate owner of the note. (fn 8)

Foot Note 8:

Even though the servicer has physical custody of the note, custom in the mortgage industry is that the investor (Fannie Mae, Freddie Mac, Ginnie Mae or a private investor) owns the beneficial rights to the promissory note.

In the consolidated cases of In re Foreclosure Cases, 521 F. Supp. 2D 650, 653 (S.D. Oh. 2007), a standing challenge was made and the Court found that there was no evidence of record that New Century ever assigned to MERS the promissory note or otherwise gave MERS the


authority to assign the note. Beginning with this case, courts around the country started to recognize that MERS had no ownership in the notes and could not transfer an interest in a mortgage upon which foreclosure could be based. In LaSalle Bank NA v. Lamy, 824 N.Y.S.2d 769 (N.Y. Supp. 2006), the Court denied a foreclosure action by an assignee of MERS on the grounds that MERS itself had no ownership interest in the underlying note and mortgage. In the case of In re Mitchell, Case No. BK-S-0716226-LBR (Bankr.Nev., 2009), the Court stated In order to foreclose, MERS must establish there has been a sufficient transfer of both the note and deed of trust, or that it has authority under state law to act for the note's holder. (At page 9) The Court found that MERS has no ownership interest in the promissory note. The Court found that though MERS attempts to make it appear as though it is a beneficiary of the mortgage, it in fact is not a beneficiary. The Court stated But it is obvious from the MERS' "Terms and Conditions that MERS is not a beneficiary as it has no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans. To reverse an old adage, if it doesn't walk like a duck, talk like a duck, and quack like a duck, then it's not a duck. (At page 7) MERS Terms and Conditions say this: MERS shall serve as mortgagee of record with respect to all such mortgage loans solely s a nominee, in an administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shall have no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans. MERS agrees not to assert any rights (other than rights specified in the Governing Documents) with respect to such mortgage loans or mortgaged properties. References herein to "mortgage(s)" and "mortgagee of record shall include deed(s) of trust and beneficiary under a deed of trust and any other form of security instrument under applicable state law.

In the case of In re Vargas, 396 B.R. 511, 520 (Bankr.C.D.Cal., 2008) , the Court stated:

MERS is not in the business of holding promissory notes. (fn 10: MERS, Inc. is an entity whose sole purpose is to act as mortgagee of record for mortgage loans that are

registered on the MERS System. This system is a national electronic registry of mortgage loans, itself owned and operated by MERS, Inc.'s parent company, MERSCORP, Inc.)

In the case of In re Sheridan, Case No. 08-20381-TLM (Bankr.Idaho, 2009) MERS moved for relief from the stay. The Court stated that MERS Counsel conceded that MERS is not an economic beneficiary under the Deed of Trust. It is owed and will collect no money from Debtors under the Note, nor will it realize the value of the Property through foreclosure of the Deed of Trust in the event the Note is not paid. The Court stated Further, the Deed of Trust's designation of MERS as beneficiary is coupled with an explanation that MERS is . . . acting solely as nominee for Lender and Lender's successors and assigns. The Court stated Even if the proposition is accepted that the Deed of Trust provisions give MERS the ability to act as an agent (nominee) for another, it acts not on its own account. Its capacity is representative. In Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009), the Kansas Supreme Court extensively analyzed the position of MERS in relation to the facts in that case and other non-binding court cases and concluded that MERS is only a digital mortgage tracking service. (At page 168) The Court recited that MERS never held the promissory note, did not own the mortgage instrument (though the documents identified it as mortgagee), that it did not lend money, did not extend credit, is not owed any money by the mortgage debtors, did not receive any payments from the borrower, suffered no direct, ascertainable monetary loss as a consequence of the litigation and consequently, has no constitutionally protected interest in the mortgage loan. Professor Christopher L. Peterson, Associate Professor of Law, University of Florida, testified at a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment and stated:5

Subprime Mortgage Market Turmoil: Examining the Role of


MERS is merely a document custodian. . . . The system itself electronically tracks ownership and servicing rights of mortgages. . . . The parties obtain two principal benefits from attempting to use MERS as a mortgagee of record in nominee capacity. First, under state secured credit laws, when a mortgage is assigned, the assignee must record the assignment with the county recording office, or risk losing priority vis--vis other creditors, buyers, or lienors. Most counties charge a fee to record the assignment, and use these fees to cover the cost of maintaining the real property records. Some counties also use recording fees to fund their court systems, legal aid organizations, or schools. In this respect, MERS role in acting as a mortgagee of record in nominee capacity is simply a tax evasion tool. By paying MERS a fee, the parties to a securitization lower their operating costs. The second advantage MERS offers its customers comes later when homeowners fall behind on their monthly payments. In addition to its document custodial role, and its tax evasive role, MERS also frequently attempts to bring home foreclosure proceedings in its own name. This eliminates the need for the trustwhich actually owns the loanto foreclose in its own name, or to reassign the loan to a servicer or the originator to bring the foreclosure.

R.K. Arnold, Senior Vice President, General Counsel and Secretary of Mortgage Electronic Registration Systems, Inc., stated: MERS will act as mortgagee of record for any mortgage loan registered on the computer system MERS maintains, called the MERS System. It will then track servicing rights and beneficial ownership interests in those loans and provide a platform for mortgage servicing rights to be traded electronically among its members without the need to record a mortgage assignment in the public land records each time. . . . Members pay annual fees to belong and transaction fees to execute electronic transactions on the MERS System. . . . A mortgage note holder can sell a mortgage note to another in what has become a gigantic secondary market. . . . For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard. . . . When a mortgage loan is registered on the MERS System, it receives a mortgage identification number (MIN). The borrower executes a traditional paper mortgage naming the lender as mortgagee, and the lender executes an assignment of the mortgage to MERS. Both documents are executed according to state law and recorded in the public land records, making MERS the mortgagee of record. From that point on, no additional mortgage assignments will be recorded because MERS will Securitization,
FuseAction=Files.View&FileStore_id=4f40e1b9-ec5b-4752-ba8f-0c14afc44884. (At page 6 -8)


remain the mortgagee of record throughout the life of the loan. . . . MERS keeps track of the new servicer electronically and acts as nominee for the servicing companies and investors. Because MERS remains the mortgagee of record in the public land records throughout the life of a loan, it eliminates the need to record later assignments in the public land records. Usually, legal title to the property is not affected again until the loan is paid and the mortgage is released. (R.K. Arnold, Yes, There is Life on MERS, Prob.& Prop., Aug. 1997, at p.16;

Courts around this country are clearly recognizing that MERS is not an owner of the promissory note and that it is also only a mortgagee in name alone and has no beneficial interest in the mortgage instrument. MERS own website says as much. Therefore, the assignment of mortgage from MERS to Plaintiff could not transfer an interest in the promissory note; it could not even transfer an enforceable interest in the mortgage instrument. In fact, bifurcation of the mortgage instrument from the promissory note rendered a foreclosure impossible.



The Florida Supreme Court mandated certain rules relating to foreclosure actions filed in Administrative Order No. AOSC09-54. One such rule is that Complaints must be certified. This Complaint is subject to the certification requirement and was not certified. Wherefore, it must be dismissed.




The Mortgage provides that no suit may be commenced until acceleration notice has been given pursuant to the terms of the Mortgage. (Amended Complaint, Mortgage, par. 20) That notice must be at least 30 days prior to the initiation of the suit. (Reference in par. 20 to par. 22 of the Mortgage which states 30 days notice required) Additionally, the notice that is required is that sent by first class mail to the defendants. (Amended Complaint, Mortgage par. 15) The requirement of notice prior to acceleration is both a condition and a covenant. The Plaintiff admits in its Amended Complaint that the Amended Complaint itself is notice of acceleration. That is a material violation of the terms of the Mortgage which provide that no suit may be commenced prior to that notice being given. Additionally, there is no reference in the Amended Complaint that any document was sent by first class mail to the Defendant. Based on section 22 of the Mortgage and the definition of lender" set forth on page I of the Mortgage, Amedas v. Brown, 505 So.2d 1091 (Fla. 2nd DCA 1987), a default notice from the "lender" is a condition precedent prior to filing this complaint, Dykes v Trustbank Savings. F.S,B., 567 So.2d 958 (Fla. 2nd DCA 1990); Gomez v. American Savings and Loan Ass`n, 515 So.2d 301 (Fla, 4th DCA 1987): Rashid v. Newberry Federal Savings and Loan Association, 502 So.2d 1316 (Fla. 3rd DCA 1987); Rashid v. Newberry Federal Savings and Loan Association, 526 So.2d 772 (Fla. 3rd DCA 1988). There was no such notice given by the Plaintiff to the Defendants, wherefore, the case must be dismissed.



The Mortgage provides that Mortgage Insurance payments from the defendants will be used to purchase Mortgage Insurance, and that if the Lender fails to buy such Mortgage

Insurance, that Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. (Amended Complaint, Mortgage par. 10) The Plaintiff has not alleged that the loss reserve has been exceeded by any default amount. Payments made by the defendant that were attributed to the loss reserve account are clearly a benefit for the defendants and must be applied to the balance due. Plaintiff has failed to allege the amount of such loss reserve and it has also failed to allege that it attributed such payments to the balance owing. This is significant because this mortgage is over five years old and the loss reserve may be significant and there may be no default from the application of such payments. II MOTION FOR MORE DEFINITE STATEMENT



Motions for More Definite Statement are governed by Rule 1.140 (e), Fla. R. Civ. P., which states:

If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, that party may move for a more definite statement before interposing a responsive pleading. The motion shall point out the defects complained of and the details desired. If the motion is granted and the order of the court is not obeyed within 10 days after notice of the order or such other time as the court may fix, the court may strike the pleading to which the motion was directed or make such order as it deems just.

Where a Complaint is vague or ambiguous, a motion for more definite statement is the proper avenue to seek redress . Foerman v. Seaboard Coast Line R. Co., 279 So.2d 825 (1973); Wajay Bakery, Inc. v. Carolina Freight Carriers Corp., 177 So.2d 544 (Fla. 3rd DCA, 1965); Patton

v. Carlson, 132 So.2d 793 (Fla. 1st DCA, 1961). A party does not state a cause of action by merely reciting legal conclusions or tracking statutory language, but must include factual allegations. Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2D 490, 501 (Fla. 3d DCA 1994); Becerra v. Equity Imports, 551 So.2d 486, 487-88 (Fla. 3d DCA 1989). Failure to state sufficient factual allegations therefore requires dismissal of the claim. B. Argument

Plaintiff claims it is the owner of the note. (Amended Complaint, para. 5) That claim is inconsistent with the Note attached which indicates another party owns it. The inconsistent allegations require more specific pleading.


By administrative order of this court and of the Florida Supreme Court, mediation is required in homestead foreclosure cases. This case is the homestead of defendant Robert Rumble and by must be mediated.


WHEREFORE, Defendant requests the Court dismiss the Amended Complaint, or order

the Plaintiff to provide a more definite statement and order mediation.

Respectfully Submitted, March 18, 2010 ______________________ George Gingo, FBN 879533 P.O. Box 838 Mims, FL 32754 321-264-9624 Office 321-383-1105 Fax


I hereby certify that a true and correct copy of the foregoing has been furnished by U.S. Mail, this ____th day of March, 2010, to David Stern, Esq., 900 South Pine Island Road, Suite 400, Plantation, FL 33324-3920.

_____________________ George Gingo