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There are a couple of necessities to filing a lawsuit—regardless of the type of case—such as standing to sue; carrying out of conditions precedent; attaching necessary exhibits; and proving damages, just to name a few. But for those of us who have practiced in the foreclosure world in Florida in the last decade, it’s become abundantly clear that many Florida Courts have not forced foreclosing plaintiffs to meet these traditionally strict requirements at the beginning of their cases as long as they can be met at some point prior to final judgment being entered. Due to the high volume of foreclosure actions this State has seen in the last ten years, defendant-borrowers are having a hard time getting courts to force plaintiff-lenders to meet these requirements.

The Fifth District Court of Appeals, however, recently put its foot down against a foreclosing lender when it ruled against the plaintiff for failing to prove standing and for failing to abide by the conditions precedent set forth in Paragraph 22 of the borrower’s mortgage. In Madl v. Wells Fargo Bank, 5D16-53 (Fla. 5th DCA December 29, 2017), the court found in favor of the defendant-borrowers due to a couple of affirmative defenses that many defendants often argue but rarely succeed on: (1) lack of standing; and (2) failure to comply with conditions precedent.

Due to the brevity of this post, the writer cannot fully explain what is required of a plaintiff in order to enforce a promissory note. To summarize, however, if the note contains a blank indorsement, and the plaintiff possesses the note, the plaintiff stands a good chance of being able to enforce it. The Plaintiff in this case, however, did not have such a note. The note initially filed in this case and attached to the complaint had no blank indorsement. At the final hearing, however, Plaintiff somehow produced an “original note” that contained an undated blank endorsement in favor of Plaintiff. Because the bank’s witness at trial could not testify that the endorsement was made prior to the filing of the lawsuit, the court found the Plaintiff did not have standing.

To compound the Plaintiff’s inadequacies in the filing of its complaint, the court also found the lender failed to comply with the notice of default provisions of Paragraph 22 of the mortgage. Most mortgages contain this boilerplate provision. There was no copy of this required notice admitted into evidence, and the lender’s witness could not testify that the notice was mailed or even written. Judgment in favor or the lender was reversed.

Florida courts, unfortunately, tend to overlook the above insufficiencies that are rampant in many foreclosure actions as long as a plaintiff can show proof of non-payment—merely because foreclosure is an equitable remedy. It’s also equitable to ensure that plaintiffs pursuing a foreclosure are held to the same standards as any other plaintiff in any other lawsuit. The Fifth DCA took a stand against a foreclosing plaintiff by doing just that.

Theresa Carli
About the author

After receiving her Bachelor of Arts in Legal Studies with a Minor in Sports Law from the University of Central Florida, Theresa moved to Jacksonville to attend Law School. Since her graduation from law school, Theresa has focused her practice on civil litigation with a strong emphasis on real estate and property law, as well as, family law.