KAJAINE ESTATES, LLC, APPELLANT,
v.
U.S. BANK NATIONAL ASS'N AND DAVID WILLIAMS, APPELLEES
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Kajaine Estates sought to recover an original promissory note from a foreclosure case file after purchasing the note from Kondaur Capital, which had failed to establish standing in the original foreclosure action against homeowner Williams. The court held that failure to prove standing to foreclose is distinct from failure to own the note, and therefore Kondaur could validly assign the note to Kajaine despite the adverse judgment.
The court held that the issue of whether Kondaur could establish standing to foreclose is distinct from whether it owned the note. A judgment that a party failed to establish standing does not mean the party did not own the note or could not validly assign its interest. Kajaine demonstrated a claim to ownership of the note as of the date of the hearing and was entitled to recover the original note from the court file.
[1] A party that purchases a note from a plaintiff that unsuccessfully attempted to foreclose on the note is entitled to recover the original note from the court file.
[2] A prior judgment determining a party's inability to establish standing to foreclose does not preclude that party from validly assigning its interest in the note to a thir…
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Join FLexlaw to unlock all legal intelligence“The issue of whether Kondaur could establish standing to foreclose is distinct from whether it owned the note.”
Establishes the central legal distinction that standing and ownership are separate concepts in foreclosure law
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Join FLexlaw to unlock all legal intelligenceU.S. Bank initiated a foreclosure action against Williams and assigned its rights to Kondaur Capital before trial. The trial court found Kondaur's wit…
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The issue presented is whether a party that, purchased a note from a plaintiff that unsuccessfully attempted to foreclose on the note is entitled to recover the original note from the court file. U.S. Bank National Association (“U.S. Bank”) brought the initial foreclosure action in this case. Prior to trial, U.S. Bank substituted Kond-aur Capital Corporation (“Kondaur”) as party plaintiff,'alleging that U.S. Bank had assigned Kondaur its right to-enforce the note.
The trial court determined that Kond-aur’s witness was not qualified to testify regarding.the note’s history nor to establish the foundation to admit documents, apparently prepared by U.S. Bank, under the business records exception to hearsay. The trial court therefore ruled that Kond-aur failed to. establish U.S, Bank’s standing at the inception of the foreclosure action and entered judgment in favor of Williams, the homeowner. Kondaur did not appeal.
Subsequently, Kajaine Estates, LLC, (“Kajaine”) requested release of the original documents from the foreclosure proceeding, attaching an assignment, dated after the final judgment, purporting to assign the mortgage and note from Kondaur to Kajaine. Williams took the position that, because the trial court had already determined Kondaur had not established standing - to enforce' the note, Kondaur could not thereafter sell the note to Ka-jaine. The trial court apparently agreed and refused to release the original note to Kajaine. We reverse.
The issue of whether Kondaur could establish standing to foreclose is distinct from whether it owned the note. See, e.g., DeDries v. CitiMortgage Inc., 188 So.3d 909, 910 (Fla. 5th DCA 2016). Kondaur had a valid assignment but could -not, establish that U.S. Bank’s ownership predated tjhe filing of the foreclosure action. See id. (noting that standing must be shown as of the date complaint was filed). That does not mean U.S. Bank did not own the note and could not validly assign its interest to Kondaur. The:original judgment did not prohibit Kondaur from ■ pursuing foreclosure if Williams continued to fail to make payments on the mortgage. Nor did it prohibit Kondaur’s assignee from seeking enforcement of the note going forward. Kajaine demonstrated a claim to ownership of the note as ,,of the date of the hearing. Whether Kajaine could properly seek enforcement of the note was not relevant to the trial court’s consideration.
REVERSED AND REMANDED.
COHEN and'LAMBERT, JJ., and LEMON'IDIS, R., Associate Judge, concur.
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MTGLQ Invs., L.P. v. Merrill, 312 So. 3d 986 (Fla. 1st DCA 2021)…ng Corp., 257 So. 3d 1145, 1147–48 (Fla. 5th DCA 2018) (“Whether a party is entitled to foreclose the note and mortgage is not relevant to its right to have the note released from the court records.”); Kajaine Estates, LLC, v. U.S. Bank Nat’l Ass’n, 198 So. 3d 1010, 1011 (Fla. 5th DCA 2016) (requiring trial court to release original note to plaintiff that had failed to prove predecessor’s standing, and finding that proof of standing is “not relevant” to releasing the note). The note is property, a valuable neg…
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Santiago v. U.S. Bank Nat'l Ass'n, 257 So. 3d 1145 (Fla. 5th DCA 2018)
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Wilmington Sav. Fund Soc'y F S B v. Morroni, 46 Fla. L. Weekly D227 (Fla. 2d DCA 2021)…it out of the stream of commerce, "it should be returned . . . if judgment is not entered in a foreclosure case, as it does not belong to the court and it remains negotiable and valuable to its holder"); Kajaine Ests., LLC v. U.S. Bank Nat'l Ass'n, 198 So. 3d 1010, 1011 (Fla. 5th DCA 2016) (requiring the trial court to release the original note to plaintiff that had failed to prove predecessor's standing because "[t]he issue of whether Kondaur could establish standing to foreclose - 7 - is distinct from whet…
Authorities Cited
- Bush v. State, 188 So. 3d 909 (Fla. 5th DCA 2016)
- Otto P. Devries and Brigitte Young Devries v. Citimortgage Inc., 188 So. 3d 909 (Fla. 5th DCA 2016)