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Elston/Leetsdale, LLC v. CWCapital Asset Management LLC
Citations: 87 So. 3d 14; 2012 Fla. App. LEXIS 5187; 2012 WL 1108531Docket: No. 4D11-3151
Court: District Court of Appeal of Florida; April 4, 2012; Florida; State Appellate Court
Elston/Leetsdale, LLC (Elston) appeals a non-final trial court order mandating monthly payments to CWCapital Asset Management LLC (CW), acting as a special servicer for U.S. Bank, N.A., trustee for certain mortgage securities, during ongoing foreclosure proceedings. The appellate court reverses the order due to CW's failure to adequately plead standing. Elston had previously executed a promissory note and secured it with a mortgage, which was subsequently assigned through a series of transactions to the current trust holder. CW filed a verified foreclosure complaint, claiming Elston defaulted on the loan, which prompted the trial court to require Elston to justify why payments should not occur during the case. Elston moved to dismiss, asserting CW lacked standing. CW countered that it was authorized by the trust to act in the foreclosure due to its role as special servicer. The trial court ordered Elston to pay $42,404.91 monthly, leading to this appeal where Elston contends CW's standing was improperly alleged. The court notes that standing is a legal issue reviewed de novo, emphasizing that it encompasses having a sufficient stake in a dispute to seek judicial resolution, which, in foreclosure cases, extends beyond mere ownership of the note. The Florida real party in interest rule, Fla. R. Civ. P. 1.210(a), allows a legal action to be initiated in the name of a party acting for the real party in interest. A plaintiff cannot have their case dismissed for lack of standing if they represent the real party in interest. The appropriate party with standing to foreclose is the note and mortgage holder or their representative, and in securitization scenarios, a servicer can initiate legal action if the trustee supports it. In CWCapital Asset Management, LLC v. Chicago Properties, LLC, the Seventh Circuit found that a special servicer had standing to sue when the trustee ratified the servicer's actions. The servicer provided an affidavit from the trustee, affirming its authority to act, and evidence of a pooling and servicing agreement that granted it the right to enforce debt instruments. Conversely, in Juega v. Davidson, the Third District reversed a dismissal due to the agent’s full authority to represent the real party, supported by an affidavit from the real party confirming the agent's actions. In the current case, CW claimed to act as a special servicer for U.S. Bank, N.A., but failed to provide any supporting evidence, such as affidavits from the trust, to establish its authority to prosecute on behalf of the trust. The complaint was verified only by CW's senior vice president, not by the trust itself. This lack of evidence led to the conclusion that CW did not have standing. Additionally, the court affirmed the lower court's ruling regarding CW's requirement to register as a commercial collection agency or licensed mortgage broker under Florida statutes. The appeal will proceed without a transcript from a prior hearing, as the merits of the case can be assessed without it.