FLORIDA DCA OPINIONS | Key Points
- In the last couple years, Florida DCAs have issued a series of opinions in foreclosure cases that addressed standing issues arising from irregular, incomplete or anomalous indorsements on notes. The current state of the common law is still in flux as the DCAs have seemingly conflicting views and evidentiary standards for evaluating holder status when there are irregularities in the endorsement(s) contained on the note.
- Production of the original note is always required to prove holder status, but when there are irregularities with the endorsements on the note the bank should also present witness testimony and documentary evidence to corroborate agency and entity relationships of involved parties, the chain of title including timing and details of ownership transfers, and details regarding physical possession of the note.
- We can expect additional litigation at both the trial and appellate court levels on the issue of standing when the note contains irregular indorsements. Our recommended best practice is to review the original note and ensure it is properly endorsed and, if necessary, obtain the proper endorsements. If the latter is not an option, identify competent evidence establishing the chain of title and physical possession of the note. These steps need to be completed before initiating the foreclosure action. Although this may cause a delay in filing the lawsuit, in the end it will save time and money by avoiding unnecessary litigation and possible dismissal. Evidentiary deficiencies cannot be cured retroactively when it comes to proving a party’s standing.