IN THE CIRCUIT COIIRT OF THE SIXTH JT]DICIAL CIRCUIT IN AND F',OR pItiELLAS COUNTY, FLORIDA CIYIL DIYISION DEUTSCHE BAI{K NATIONAL TRUST COMPANY, PLAINTIF'tr', cAsE NO. 11-38s-Cr-8 v NADINE HOUSTON, DEFENDANT. DEFEND.A,NT'S AMENDED ANSWER AJ\D A.F'F'IRMATIVT], DEF'ENSES TO PLAINTItr'F'S COMPL{NT Defendant NADINE HOUSTON (hereina.fter ,.Defendant,,), by and through t}le undersigned counsel, respectfully frles with this court Defendant's Amended Answer and Affirmative Defenses to PlaintifPs complaint, pursuant to Fla. R. civ. pro. 1.190, l.l lO(c), and 1.110(d) and precedent case law, and in support states as follows: 1. Admitted for jurisdiction purposes only. 2. Denied. 3. calls for a legal conclusion to which no response is required. without waiving said objection, without knowledge and therefore denied. 4' calls for a legal conclusion to which no response is required. without waiving said objection, without knowledge and therefore denied. 5 . Denied. Defendant specifically denies that Plaintiff is the "holder" of the subj ect note as it has alleged that the note has been lost, stolen, or destroyed. 6. Denied. 1
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IN THE CIRCUIT COIIRT OF THE SIXTH JT]DICIAL CIRCUITIN AND F',OR pItiELLAS COUNTY, FLORIDA
is a mere incident of, and aacillary to, the note or other obligation secured thereby, and an
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assignment of the pledge of the mortgage without an assignment of the pledge of the note or
obligation secured thereby creates no right in the assignee or pledge.,,
Furthermore, the real party which has instituted and prosecuted this action is Ocwen.
ocwen, which purports to be Plaintifls "attomey-in-fact," is the alleged "servicer" of the debt.
"In securitization cases, a servicer may be considered a party in interest to commence legal
action as long as the trustee joins or ratifies its action." Elston/Leetsdale. LLC v. CWCaptial
Asset Manasement. LLC, 87 So. 3d 14, 17 (Fla.4th DCA 2012). ocwen, however, relies on
nothing more than its own allegations and affidavit to support its argument that it has standing to
sue on behalf of the trust. This, however, is insuffrcient evidence to prove that it is authorized to
sue on the trust's behalf. .lee Elston/Leetsdale, 87 so. 3d at 17-1g. Therefore, ocwen has failed
to properly plead it has standing to sue
Therefore, because Plaintiff did not own or possess the note at the inception of the action,
it lacks standing to sue and thus has failed to plead a cause of action for mortgage foreclosure.
AFF'IRMATIVE DEFENSE VI
Failure to Plead Real Partv in lnterest
with regard to all counts in the complaint, the plaintiffs claims are barred, in whole or
in part, because the party instituting this action is not the real party in interest. specifically, the
true party prosecuting this action is not the party named in the caption of tle complfit but
ocwen. ocwen, which purports to be plaintiffls "attomey-in-fact," is the alleged .,servicer,' of
the debt. "In securitization cases, a servicer may be considered a party in interest to co11lmence
legal action as long as the trustee joins or ratifies its action." Elston/Leetsdale. LLC v.
CWCaptial Asset Manaeement. LLC- 87 So. 3d 14, l7 (Fla.4th DCA 2012). Ocwen, however,
relies on nothing more than its own allegations and affidavit to support its argument that it has
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standing to sue on behalf of the kust. This, however, is insuffrcient evidence to prove that it is
authorized to sue on the trust's behalf. See Elston/Leetsdale, 87 So. 3d at 17-18. Therefore,
failed to exhibit that it is either the reai party in interest or one who is acting on that party's
behalf.
AX 'IRMATIVE DEX'ENSE VII
Negative Averment as to Condition Precedent and Failure to Give Notice and Abilitv to Cure
With regard to al1 counts in the Complaint, the Plaintiffs claims are baned in whole or in part
because of its failure to fulfill a condition precedent. Fla. R. Civ. Pro. 1.120(c). Specifically,
clause twenty-two (22) of the subject mortgage reads, in pertinent part, that
[Plaintiff] shall give notice to [Defendant] prior to acceleration followingBorrower's [alleged] breach of any covenant or agreement in this SecurityInstrument...The notice shall specifr: (a) the default; (b) the action required tocure the default; (c) a date, not less than 30 days from the date the notice is givento Borrower, by which the default must be cured; and (d) that failure to cure thedefault on or before the date specified in the notice may result in acceleration ofthe sums secured by this Security agreement, foreclosure by judicial proceedingand sale of the Property . The notice shall further inform [Defendantl of therieht to assert in the foreclosure nroceedins the non-existence of a default oranv other defense of [Defendantl to acceleration and foreclosure.
Bold emphasis added. The word "shall" in clause 22 created conditions to foreclosure which
Plaintiff must satisfii. Konsulian v. Busev Bank. N.A., 61 So. 3d 1293,1285 (Fla. 2d DCA
2011). Additionally, "[u]nder Florida law, contracts are construed in accordance with their plain
language, as bargained for by the parties." Id. Thus, the notice of default and opportunity to
cure must track the contractual language as written in the clause 22 of the mortgage. Plaintiff,
however, failed to properly give the requisite notice which tracks the language of clause 22 of
the mortgage. Because Plaintiff failed to comply with such this condition precedent to
foreclosure, its action must be dismissed. see Rashid v. Newberrv Federal Savinss and Loan
The subject note contains the following obiigations other than the payment of money
a. The instruction that each pal,rnent made will be applied first towards interest and
then towards principal in clause 3(A);
b. The instruction that each payrnent be made to P.O. Box 808911, Kansas City, MO
64184, ot at a dtfferent place if required by the lender in clause 3(A);
c. The instruction that the interest-rate "index" be tied to a figure reported by the
Wall Street Journa"l in clause 4(B);1
d. The instruction that the lender must send notice of any change in the interest rate
in clause 4(F);
e. The instruction that the bonower to tell the iender, in writing, if bonower opts to
may prepay in clause 5;
I This instruction also means that the note is no longer an 'hnconditional promise,,to pay. This is because the notewoxld te subject to and governed by the wall street Joumal, see Fla. stat. $673.10610), and the rights andobligations with respect to the note would likewise be govemed by the wful Street ioumal, see F'la. Stat.$673.1061(c).__See aho Holly Hills Acres. Ltd. v. Charter Bank of Gainesville ,3t4 So.2dZog,2l I (Fla. 2d DCA1975) (providing that "The note having incorporated th" t.r*r of th" p*chase money mortgage was notnegotiable... lbecause] [t]he note, incorporating by reference the terms of the mortgage,'did noi "contain theunconditional promise to pay.")
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f. The instruction that if a "law" is "finally interpreted" so that the interest or other
loan charges collected or to be cotlected in connection with the loan exceed
permitted limits then (1) any such loan charge will be reduced, and (2) any
amounts in excess of limit paid must be retumed to bonower in clause 6;
g. The instruction that the borrower pay a late charge if the lender has not received
palment by the end of fifteen calendar days after the date payment is due in
clause 7(A);
h. The instruction that the lender may send tle bonower notice of default in clause
7(c);
i. The instruction that the borrower must pay the lender's court costs and attomey's
fees in the event the lender incurs same during due to enforcement of the note
after default in clause 7(D);
j. The instruction that the lender send any notices that must be given to the borrower
pursuant to the terms of the subject note by either delivering it or mailing it by
frst class mail in clause 8;
k. The instruction that the borrower send any notices that must be given to the lender
pursuant to the terms of the subject note by eithff delivering it or maiiing it by
first class mail in clause 8; and
l. The instruction that if, within 36 months fiom the date the Security Instrument is
executed bonower makes a full prepayment or one or more partial prepayments,
and the total of all such prepayments in any l2-month period exceeds 20Yo of +Jte
original principal amount of the loan, bonower will pay a prepayment penalty
equal to 6 months' advance interest on the amount by which the total of her
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prepayments within any l2-month period exceeds 20% of the original principal
amount of the loan in the prepayment addendum.
Because the subject note contains undertakings or instructions other than the payment of
money, the subject note is not negotiable and therefore the Plaintiff cannot claim that it is
entitled to enforce same pursuant to Fla. Stat. $673, ef seq.
In addition to, or in altemative of, the following argument, even if the subject note is
deemed negotiable, Fla. stat. $673, et seq. (and therefore negotiation) cannot be utilized to
transfer the non-negotiable mortgage, which is a separate transaction. ,See in Sims v. New Falls
comoration, 37 so. 3d 358, 360 (Fla. 3d DCA 2010) (providing that a note and mortgage were
two separate transactions). The terms of the mortgage are expressly not incorporated into the
terms of the note; rather, they are merely referenced by the note. see clause 11 of the note.
Indeed, nowhere in the subject note is the right to foreclose the mortgage a remedy for default
nnder the note. It is clause 22 of the mortgage, on the other hand, which allows this. clawe 22
of the mortgage, however, cannot be tmnsfened to plaintiff by negotiation as the mortgage is not
negotiable since it contains a myriad of instructions and undertakings other than the pa;,rnent of
money. ,see e.g. clause 4 of the mortgage (requiring the borrower to pay all taxes, assessments,
charges, fines, and impositions and requiring the borrower to promptly discharge any lien which
has priority over the security instrument); clause 5 of the mortgage (requiring the borrower to
maintain property insurance and dictating explicit steps the lender might take to obtain insurance
coverage); clause 6 (requiring the borrower to occupy and use the subject property as the
bonower's principal residence within 60 days after execution of tre mortgage and requiring the
borrower to occupy the property for at least one year after the date of occupancy unless the
lender agrees otherwise in writing); clause 7 (permitting the lender or its ,.agents,, to make
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reasonable inspections onto the property and, if reasonable cause exists, permitting the lender to
inspect the interior ofthe property); and clause 9 (permitting the lender, amongst other things, to
break down the borrower's door and change the locks contained thereon if there is a default
under tle covenants and agreements of the mortgage).
To the extent Plaintiff argues that during a foreclosure action the note and mortgage
somehow "rnerge" into one document because the "mortgage follows the note", merging the
terms of the mortgage into the note destroys any negotiability the note might originally have.
see Holly Hill Acres Ltd. v. charter Bk. of Gainesville, 314 So. 2d209,zlr (Fla. 2d DCA 1975)
(holding that "[t]he note having incorporated the tems of the purchase money mortgage was not
negotiable.")
Finally, the note cannot be considered negotiable because even though the terms of the
mortgage are not expressly incorporated into the note, the note is stil1 subject to, and govemed
by, the mortgage. specifically, clause 25 of the mortgage provides that the bonower waives the
right to trial by jury arising out ofor in any way connected to either the mortgage or the note.
Because the note is therefore subject to and govemed by the term in this separate writing, it is
not an "unconditional" promise to pay and is therefore not a negotiable instrum ent. See Fla. Stat.
$673.1061@) and (c).
AFFIRMATTVE DET'ENSE X
Ulclean Handsffnconscionable Mortgage Foreclosure - Failure to Complv with l5 U.S.C.{1701(cX5)
with regard to all counts in the complain! the plaintiffs claims are barred, in whole or
in part, because the Plaintiff comes to court with unclean hands. Foreclosure of a mortgage is an
equitable remedy. See $wan Landine Develooment, LLC v. Florida Caoital Bank. N.A.. 19
Powell, The Law of Real Property fl461 (1993) (noting that different limitation periods for "an
equitable action to foreclosure" and "a law action on debt"). Although Fla. stat. $702.06 permits
the entry of a deficiency decree in a foreclosure proceeding, it does not blur the line between law
and equrty; rather, it allows a creditor to pursue tlte two remedies simultaneously. See generally
Alvardo. 5 F. 3d at 1128-29. "Thus, in a foreclosure action, the creditor does not seek to recover
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money directly from the debtor; rather. he seeks onlv to satisfv the debt throush seizure and
sale of the propertv;' Id. Bold emphosis added.
Since Plaintiff has elected to only pursue a mortgage foreclosure action, it has
consequently elected to pursue the in rem remedy available to it and not the in personam remedy.
This Court therefore stands in equity and has no jurisdiction to adjudicate matters reserved for
the law side. As stated previously, $702.06 does not blur a cause of action for mortgage
foreclosure into a cause of action for breach of promissory note; rather, it allows a foreclosing
creditor to simultaneously prosecute both causes of action. This, however, requires a two-count
complaint: (1) one for mortgage foreclosure; and (2) one for breach of promissory note. Since
PlaintifPs pleading only prays for mortgage foreclosure, Plaintiff has relinquished its right to
pursue the two remedies simultaneously and therefore must file a new complaint alleging breach
ofpromissory note if it wishes to pursue any deficiency judgrnent it might claim it is entitled to.
In addition to, or in the alternative of, the foregoing, Defendant demands a trial by jury
on the issue ofdeficiency, and all other claims, defenses, and issues so triable, pursuant to Fla. R.
Civ. P. 1.430.
CERTIFICATE OF SERVICE
I HEREBLCERTIFY that a true and conect copy of the foregoing has been fumished byemail on this \O*'day of october, 2012 to Grant J,tisondo, Esq., ittorney for plaintffi [email protected]; and Bennett L. Rabin, Esq., Attomey for Defendant patriot sq.Condominium Association, at [email protected].
By.721,*.4J f O ->MICHAEL P. FUINO, Esq.Matthew D. Weidner, P.A.Attomey for Defendant1229 Central AvenueSt. Petersburg, FL 33705(727) 894-3159FBN: 84191