Chapter 4-7 Standing as a Non-Holder in Possession

• Jurisdiction: Florida

4-7 Standing as a Non-Holder in Possession

Where a bank is seeking to enforce a note which is payable to another, the bank is a non-holder in possession.⁵⁶ A non-holder in possession may prove its right to enforce the note through evidence of an effective transfer, proof of purchase of the debt, or evidence of a valid assignment.⁵⁷ A non-holder in possession must prove the chain of transfers by which it acquired possession of the note, beginning with the first holder of the note.⁵⁸ If there are multiple prior transfers, the foreclosing plaintiff must prove each prior transfer.⁵⁹ Because its rights are purely derivative, a non-holder in possession must prove that the transferor of the note had the right to enforce the note.⁶⁰ Evidence that the foreclosing plaintiff acquired the original note through a pre-suit purchase and assumption agreement from the original lender⁶¹ or a corporate merger between the original lender and the plaintiff is evidence of standing to foreclose.⁶² Evidence of the purchase of the debt or effective transfer or valid assignment need not be documentary; witness testimony is sufficient.⁶³ In order to prove standing to foreclose based upon a merger, the surviving entity must prove that it acquired all of the absorbed entity's assets, including the note and mortgage, by virtue of the merger.⁶⁴ If there are multiple entities within the merger, the foreclosing plaintiff must establish and explain the relationship between the entities in the entire chain of mergers in order to establish standing.⁶⁵ However, notes can be sold or otherwise transferred even when the entire bank is not acquired.⁶⁶

Standing to foreclose can be proven through a valid pre-suit assignment of note and mortgage.⁶⁷ An assignment of note and mortgage is not made defective because it is assigned by "MERS" as nominee for the assignor.⁶⁸ An assignment which only assigns the mortgage but does not also assign the note is insufficient to demonstrate standing to foreclose.⁶⁹ A post-complaint assignment of mortgage does not, standing alone, negate the plaintiff's ability to demonstrate standing to foreclose.⁷⁰ A holder of a note can enforce the note even where it has assigned the note to another party.⁷¹ Where an assignment is made by a person as attorney-in-fact for the assignor, the plaintiff must establish that the person acting as attorney-in-fact was authorized to execute the assignment.⁷²

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Notes:

^[56] Bank of New York Mellon Trust Co., N.A. v. Conley, 188 So. 3d 884 (Fla. 4th DCA 2016).

^[57] Bank of New York Mellon Trust Co., N.A. v. Conley, 188 So. 3d 884 (Fla. 4th DCA 2016); Wells Fargo Bank, N.A. v. Cook, 2019 Fla. App. LEXIS 11785 (Fla. 2d DCA 2019).

^[58] Murray v. HSBC Bank USA, 157 So. 3d 355, 358 (Fla. 4th DCA 2015)...