Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 16

FACTS On May 11, 2009, JPMorgan Chase Bank (Chase) filed a foreclosure action against Robert McLean. The complaint alleged that Chase was entitled to enforce the mortgage and promissory note on which McLean had defaulted. Nevertheless, the attached mortgage identified a different mortgagee and lender, and Chase claimed that the note had been "lost, stolen, or destroyed." When McLean filed a motion to dismiss, Chase produced a mortgage assignment dated May 14, 2009, which was three days after it had filed the lawsuit.
Eventually, Chase also filed the original note. Although the indorsement to Chase was undated, Chase then filed a motion for summary judgment. The trial court granted Chase's motion even though the accompanying affidavit failed to show that Chase owned the mortgage or note when it had filed the complaint. McLean appealed.
ISSUE Did Chase prove that it had standing to bring a foreclosure action against McLean?
DECISION No. The Florida appellate court reversed the trial court's grant of summary judgment to Chase.
REASON A party seeking foreclosure must have standing to foreclose when it files its complaint. In this case, the mortgage was assigned after Chase had filed its complaint, so Chase argued that it had standing because the promissory note was indorsed in its name. The indorsement was undated, however, and Chase's affidavit also did not show that Chase owned the note when it filed its lawsuit.
The court therefore reversed summary judgment and instructed the trial court to find for Chase only if it proved that it had owned the note at the time of the complaint. Otherwise, the case would have to be dismissed and Chase would need to file a new complaint.
FOR CRITICAL ANALYSIS-Legal Consideration If Chase cannot prove that it owned the note at the time of its complaint, what will happen next ? Will Chase prevail? Why or why not ?