Legal standing to foreclose a note and mortgage continues to be an issue that frustrates plaintiffs and delights defense counsel. Florida courts have consistently held that standing must exist when the lawsuit is filed and the lack of standing cannot be “cured” absent a dismissal and refiling of the case. At a minimum this adds to the time and expense of a foreclosure. In situations where a statute of limitations prevents refiling, it could spell disaster.
In July, the 4th DCA overturned a bank’s summary judgment on the grounds that the bank failed to rebut the defense of lack of standing. Lafrance v. US Bank National Association, as truste. Apparently this case involved a situation where the plaintiff was the servicer of the loan and filed suit attaching a promissory note showing no endorsement to it. Three and a half years later, the plaintiff filed the original note which, by then, contained an endorsement in blank that was undated. The fact that the note filed with the court contained a blank endorsement was not the issue. Courts have often found that standing can exist in cases of blank endorsements. The problem here was that the endorsement was undated and the plaintiff presented no evidence that it had standing at the time the lawsuit was filed. Since it had attached a copy of the note to its original complaint that had no endorsement at all, it seems likely that the bank did not in fact have standing. Perhaps that was the reason the endorsement, added after the fact, was blank!