FLORIDA’S FOURTH DCA PUTS AN END TO CHALLENGES TO STANDING BASED ON ALLEGED INVALIDITY OF SIGNATURES ON THIRD PARTY CONTRACTS
Last week Florida’s Fourth District reversed a final judgment which involuntarily dismissed Bank of New York Mellon’s (BNYM) foreclosure action against co-mortgagors, Remonde and Samuel Lopez (collectively, “Lopez”). Bank of New York Mellon v. Lopez, No. 4D2024-0570, 2025 WL 542474, at *1 (Fla. 4th DCA Feb. 19, 2025)[i]. The Court disagreed with the trial court and rejected Lopez’s challenge to BNYM’s standing based on the alleged invalidity of endorsements on the note.
Lopez took out a loan with Aegis Wholesale Corporation in 2005. The loan changed hands four times transferring from Aegis Wholesale to Aegis Mortgage Corporation to Countrywide Bank to Countrywide Home Loans, Inc., to BNYM. Lopez defaulted and BNYM filed its foreclosure action in 2018. The matter proceeded to a bench trial where the sole issue in contention was BNYM’s standing. BNYM proffered the original note into evidence. Attached to the note was an allonge which reflected the above transfers with four endorsements ending in a blank endorsement by Countrywide Home Loans.
Lopez objected to admission of the note arguing the first two endorsements signed by Wendy Thompson as vice president and assistant secretary of Aegis were invalid. At some point during the litigation Lopez took the deposition of Ms. Thompson and surmised that “she lacked the authority to transfer Aegis’ assets” because “she was not an officer of the company.” At trial Lopez also introduced a handwriting expert “who testified it was highly probable that the signatures on the allonge were not [Ms.] Thomson’s.”
BNYM rebutted that its standing stemmed from its status as a holder in due course and that Lopez lacked standing to challenge the authenticity of the endorsements since Lopez was not a party to the endorsement contract, a separate contract from the note. Circuit court Judge Willian Haury, Jr., rejected BNYM’s argument concluding, based on the invalid endorsements, that the note and allonge were inadmissible and BNYM’s evidence of standing was insufficient. Judge Haury dismissed the action with prejudice.[ii]
BNYM appealed the dismissal order and the Fourth DCA reversed.[iii] The Court explained that BNYM was correct, endorsements “constituted new contracts” to which Lopez was not a party.[iv] The Court explained that even if Lopez could prove the endorsements were invalid despite direct deposition testimony to the contrary by Ms. Thompson[v], the dispute would be between the original lender and the holder. The Court relied upon a long line of cases from multiple courts that reached the same conclusion.[vi]
Since Lopez admitted to defaulting under the note and mortgage and did not object to BNYM’s evidence of the amounts due, the Fourth DCA directed the trial court to vacate the dismissal order and enter a final judgment of foreclosure. This opinion remains subject to rehearing through March 6, 2025. Assuming it becomes final, the opinion is obviously a welcome development on the ever-evolving issue of standing. The opinion is concise, well-written and should stemmy litigation on the issue of standing at least when the plaintiff is a holder and can be relied upon to counter similar arguments directed to signatures on assignments and other documents commonly relied upon in foreclosure actions.
[i] Future references or quotations from this case are to this citation until indicated otherwise.
[ii] Lopez, at *2. Future references and quotations to this case are to this citation unless indicated otherwise.
[iii] Lopez, at *1.
[iv] Lopez, at *2.
[v] The Court also noted that Lopez’s “handwriting expert” was not aware that Ms. Thompson had confirmed at her deposition that the two endorsements were hers. Lopez, at 1.
[vi] Lopez, at *2-3. Future references and quotations to this case are to this citation.
