Chapter 6-4 The Causes of Action and the Allegations
| Jurisdiction | United States |
6-4 The Causes of Action and the Allegations
The mortgage foreclosure complaint should include allegations identifying each party's interest in the property and state a cause of action against each defendant.95 The allegations should be designed to put the defendants on notice of the claims being asserted against them.96
6-4:1 A Claim for Mortgage Foreclosure
The elements of a prima facie claim for mortgage foreclosure are similar to other breach of contract claims. The complaint must assert: (1) that an agreement exists between the parties, (2) that the defendant borrower defaulted on his obligations under the agreement, (3) that the plaintiff is accelerating the debt to maturity, and (4) that there is a particular amount due to the plaintiff as the result of the defendant's default.97 In addition to these basic allegations, the plaintiff must include allegations supporting its standing and setting forth the elements of any other claims in the complaint. It also should allege its superiority to any other inferior liens while identifying the nature of the inferior liens specifically.
6-4:2 The Agreement Between the Parties
The plaintiff should identify the agreements on which its foreclosure action is based in enough detail for the defendants to have notice of the subject of the foreclosure. As mentioned in Section 6-2:4 above, the allegations must be supported by evidence of the agreement between the parties as required under Rule 1.130(a) of the Florida Rules of Civil Procedure, including allegations sufficient to identify any loan modification agreements.98 Additionally, as discussed in the next section, a complaint to foreclose a mortgage on residential property must include allegations to show that the plaintiff is entitled to enforce the note, referred to as a plaintiff's standing.
6-4:3 The Plaintiff's Standing
As discussed in detail in Chapter 4, the issue of a plaintiff's standing to bring a mortgage foreclosure action has been the topic of much litigation in Florida. Due to post-closing purchase and sales of mortgage loans accompanied by the delivery of the mortgage loan documents, the plaintiff may not be the original lender under the note and mortgage. The plaintiff must establish that it has standing to enforce those agreements at the outset of the action.99 Lack of standing on the date that the plaintiff files its action cannot be cured.100
Florida law recognizes that a mortgage follows the promissory note that it secures.101 Therefore, the logic goes, unless the parties otherwise agree, the right to enforce a mortgage follows the right to enforce the promissory note because the mortgage in equity passes as an incident to the debt.102 Therefore, to assert standing, a plaintiff must show that it is entitled to enforce the promissory note secured by the mortgage. To do so, a person must be either (1) the holder of the promissory note; (2) a non-holder in possession of the promissory note who has the rights of a holder; or (3) a person not in possession of the promissory note instrument who is entitled to enforce it as a lost, destroyed, or stolen promissory note or under Fla. Stat. § 673.4181(4).103
When the plaintiff seeks to foreclose a mortgage on residential real property, the Florida Statutes and Rules of Civil Procedure now require a plaintiff to allege the basis for its standing in its complaint.104 The failure to do so may expose the plaintiff to sanctions.105
A plaintiff who seeks to enforce a promissory note as its holder must allege that it is the holder of the promissory note in its complaint when the foreclosure action concerns residential real property.106 Ultimately, the plaintiff must prove that it had the original note in its possession when it filed its foreclosure suit, or that it had constructive possession of a note in its agent's possession.107 Its choice of attachments to the complaint can help prove later that it was the holder at the time that it filed its complaint. By attaching a copy of the endorsed note with its complaint, then later filing the original, endorsed note in the same condition with the trial court, the plaintiff can establish its standing as the holder in the absence of any evidence to the contrary.108 Care should be taken to review the copy being attached to the complaint to confirm that it is an exact copy of the original.109 If there are discrepancies between the copy and the original, such as redactions of sensitive financial account numbers under Rule 2.425 of the Florida Rules of Judicial Administration, the discrepancies should be explained at summary judgment or trial.110 For example, redactions should be done in a way that clearly reflects that the note was subject to redaction, not alteration, and that it therefore was an exact copy, and the plaintiff should evaluate whether testimony will be necessary to explain the discrepancy.
If the plaintiff seeks to enforce a lost, destroyed, or stolen promissory note in a foreclosure action related to residential real property, it should include allegations to reestablish the note as discussed in Section 6-5:2 below. The Florida Statutes and Florida Rules of Civil Procedure require the plaintiff to attach an affidavit to its complaint.111 The affidavit must affirm, under penalty of perjury, the facts showing that the plaintiff is entitled to enforce the lost, destroyed, or stolen promissory note.112 It also must describe the chain of all endorsements, transfers, or assignments of the promissory note.113 Attached to the affidavit must be a copy of the promissory note and allonges to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note that is available to the plaintiff.114
If a servicer or other party is filing the action on behalf of the real party in interest, the complaint must describe the authority that the plaintiff has been given.115 It also must identify specifically the document that grants the plaintiff the authority to act on behalf of the real party in interest.116 This may be a limited power of attorney although the rules do not require this specific kind of document.
6-4:4 The Plaintiff's Capacity to Sue
A plaintiff is not obligated to allege its capacity to bring a mortgage foreclosure action in its complaint.117 A defendant who wishes to challenge the plaintiff's capacity to bring suit must deny the plaintiff's ability to do so with particularity.118
Where the plaintiff is a trust that is qualified to do business under Chapter 609 of the Florida Statutes, it has the capacity to maintain a foreclosure action.119 The individual trustees of such a trust are not indispensable parties to the foreclosure action.120
6-4:5 The Superiority of the Plaintiff's Interest to Those of Other Defendants
To state a prima facie cause of action for mortgage foreclosure, a plaintiff is not obligated to allege that its interest is superior to those of the defendants.121 Parties that are included in a mortgage foreclosure complaint are put on notice that the plaintiff is asserting an interest superior to their own by virtue of being named in the complaint.122
6-4:6 The Satisfaction of Conditions Precedent
Many, but not all, notes and mortgages contain contractual conditions precedent to foreclosure or acceleration of all amounts due and owing under the loan. One example is a common contractual requirement that the plaintiff provide the borrower with a pre-suit notice of his default and permit him a certain amount of time to cure the default before the plaintiff files its foreclosure action. A plaintiff should review the note, mortgage, guaranty, and any other applicable agreements to determine whether it is obligated to fulfill any contractual pre-litigation conditions precedent to the foreclosure.
In its complaint, a plaintiff may allege in general terms that all conditions precedents to the action have been performed or have occurred.123 It is not...
To continue reading
Request your trial