SUBSTITUTED PLAINTIFF ESTABLISHED STANDING | Key Points

1. Diaz Anselmo Lindberg, P.A. (formerly SHD Legal Group, P.A.) celebrated a big win for their client last week when the Fourth DCA reversed a judgment of dismissal previously rendered in favor of the borrowers in a foreclosure action. Wilmington Savings Fund Society, FSB v. Stevens, 4D19-585, 2020 WL 698706 (Fla. 4th DCA February 12, 2020). The lower court concluded the bank failed to prove its standing at the time of trial despite the fact the court admitted the original blankly endorsed note into evidence at trial without objection.

2. On appeal of the judgment of dismissal, the Fourth DCA disagreed that the fact the note remained in the court file at trial prevented Wilmington from establishing its holder status at the time of trial. The Court explained even though Wilmington never obtained a ruling on its motion to return originals, Stevens failed to object when “Wilmington obtained the original [endorsed in blank] note from the court file and proffered it into evidence.” The Court concluded the fact “the note from the file was entered into evidence at the bench trial” was “sufficient to establish standing at trial.” The Court reversed the judgment of dismissal and remanded the matter for entry of judgment in Wilmington’s favor.

3. The Stevens opinion is an important win for the industry as it reverses a dangerous precedent among the lower courts based on a misapprehension of negotiable instruments and holder status. Possession of a note endorsed in blank is sufficient to confer holder status and standing, absent conflicting evidence. The decision also provides helpful guidance on the proper procedure for establishing holder status as a substituted party prior to moving for summary judgment or going to trial.

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