December 19, 2011

Fourth DCA Rules in Favor of Homeowner and against Major Bank

McLean v. JP Morgan Chase Bank
Case No. 4D10-3429

Chase filed a foreclosure action against McLean alleging that, as the legal and/or equitable owner and holder of the Note and Mortgage, it had the right to enforce the loan because McLean defaulted under the note and mortgage. Chase asserted that it could not obtain the Promissory Note because it was lost, stolen, or destroyed. The copy of the mortgage attached to Chase’s complaint stated that American Brokers Conduit was the lender and MERS was the mortgagee. The trial court denied McLean’s motion to dismiss and ordered Chase to file a copy of the assignment in order to prove it had standing to bring the foreclosure action. Chase filed an assignment dated three days after Chase filed its foreclosure action. McLean filed a second motion to dismiss arguing that Chase did not have standing to file the foreclosure action because it was not the owner of the Note and Mortgage on the date it filed the complaint. The trial court denied McLean’s second motion to dismiss and Chase filed the original note and mortgage. The original note had a special endorsement, stating: “Pay to the Order of JPMorgan Chase Bank, N.A., as Trustee Without Recourse By: American Brokers Conduit.” The endorsement to the note was not dated. Chase filed a motion for summary judgment and attached an affidavit in support of the motion. The affidavit stated that Chase “is the holder and owner” of the mortgage originally given by McLean to MERS. However, the affidavit did not specifically state when Chase became the owner of the note and mortgage, nor did the affidavit indicate that Chase was the owner of the note and mortgage before suit was filed. The trial court entered a final judgment of foreclosure in favor of Chase and McLean appealed.

The Fourth District Court of Appeal reversed the trial court’s order granting summary judgment in favor of Chase. The court found that, in order for Chase to be entitled to summary judgment, it must show, without genuine issue of material fact, that it was the holder of the note on the date the complaint was filed (i.e., that the note was endorsed to Chase on or before the date the lawsuit was filed). The court noted that Chase failed to submit any record evidence proving that it had the right to enforce the note on the date the complaint was filed. Therefore, the trial court must dismiss the instant lawsuit and Chase must file a new foreclosure action.