G. Gingo Motion to Dismiss

8/2/2019 G. Gingo Motion to Dismiss

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IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT

OF FLORIDA, IN AND FOR ORANGE COUNTY

HSBC BANK USA, NATIONAL ASSOCATION, Case No.: 2009-CA-21226-O

AS TRUSTEE FOR DBALT 2006-AF1

Plaintiff,

v.

THOMAS A. MICHAEL, SUSIE W. MICHAEL;

ANY AND ALL UNKNOWN PARTIES CLAIMING

BY, THROUGH, UNDER, AND AGAINST THE

HEREIN NAMED INDIVIDUAL DEFENDANT(S)

WHOARE NOT KNOWN TO BE DEAD OR ALIVE,

WHETHER SAID UNKOWN PARTIES MAY

CLAIM AN INTEREST AS SPOUSES, HEIRS,

DEVISEES, GRANTEES OR OTHER CLAIMAINTS;

WEDGEFIELD HOMEOWNERS ASSOCIATION,

INC.; BENEFICIAL FLORIDA, INC.; JOHN


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DOE AND JANE DOE AS UNKOWN TENANTS

IN POSSESSION

Defendants.

____________________________________________/

DEFENDANTS THOMAS A MICHAEL AND SUSIE W. MICHAEL'S MOTION

TO DISMISS, TO STRIKE, OR IN THE ALTERNATIVE, FOR MORE DEFINITE

STATEMENT AND COURT ORDERED MEDIATION

Comes now, Defendants Thomas Michael and Susie Michael, and pursuant to Rule 2.515

of the Florida Rules of Judicial Administration and Rule 1.140 of the Florida Rules of Civil

Procedure, hereby moves the Court to Order the case dismissed for lack of standing; dismissal

for lack of certified Amended Complaint; dismissal for lack of notice of default and opportunity

to cure prior to acceleration; dismissal for lack of loss reserve application; or, alternatively, for a

more a more definite statement and for mediation. As grounds therefore, Defendants offer

the following:

I

MOTION TO DISMISS


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A. Standard of Review

Florida Rules of Civil Procedure section 1.410 provides in part:

(b) How Presented. Every defense in law or fact to a claim for relief in a pleading

shall be asserted in the responsive pleading, if one is required, but the following

defenses may be made by motion at the option of the pleader: (1) lack of jurisdiction

over the subject matter, (2) lack of jurisdiction over the person, (3) improper venue,

(4) insufficiency of process, (5) insufficiency of service of process, (6) failure to

state a cause of action, and (7) failure to join indispensable parties. A motion making

any of these defenses shall be made before pleading if a further pleading is permitted.

The grounds on which any of the enumerated defenses are based and the substantial

matters of law intended to be argued shall be stated specifically and with particularity

in the responsive pleading or motion. Any ground not stated shall be deemed to be

waived except any ground showing that the court lacks jurisdiction of the subject

matter may be made at any time. No defense or objection is waived by being

joined

with other defenses or objections in a responsive pleading or motion. If a pleading

sets forth a claim for relief to which the adverse party is not required to serve a

responsive pleading, the adverse party may assert any defense in law or fact to that

claim for relief at the trial, except that the objection of failure to state a legal defense


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in an answer or reply shall be asserted by motion to strike the defense within 20 days

after service of the answer or reply.

The function of a motion to dismiss a complaint is to raise as a question of law the

sufficiency of the facts alleged to state a cause of action. Connolly v. Sebco, Inc., 89 So. 2d 482

(Fla. 1956). For the purpose of a motion to dismiss, the Court is required to accept as true all

well-pleaded allegations of the complaint. Brown v. First Federal Savings and Loan, 160 So.2d

556 (Fla. 1st DCA 1964). However, the Court is not required to accept as true allegations that

are inconsistent with law. Brown, 160 So. 2d at 563. (Semantics cannot be employed for the

purpose of refuting facts clearly shown to exist or used to create a fictional relationship, one that

otherwise would have no existence in the law.) The pleading must be construed against the

pleader in determining whether the necessary allegations have been stated. Matthews v.

Matthews, 122 So. 2d 571 (Fla. 2d DCA 1960).

Florida Rules of Civil Procedure section 1.130 states:

(a) Instruments Attached.

All bonds, notes, bills of exchange, contracts accounts, or documents upon which actionmay be brought or defense made, or a copy thereof or a copy of the portions thereof

material to the pleadings, shall be incorporated in or attached to the pleading. No papers

shall be unnecessarily annexed as exhibits. The pleadings shall contain no unnecessary

recitals of deeds, documents, contracts, or other instruments.

(b) Part for All Purposes.

Any exhibit attached to a pleading shall be considered a part thereof for all purposes.

Statements in a pleading may be adopted by reference in a different part of the same

pleading, in another pleading, or in any motion.

When exhibits are inconsistent with Plaintiffs allegations of material fact as to who the


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real party in interest is, such allegations cancel each other out. Fladell v. Palm Beach County

Canvassing Board, 772 So.2d 1240 (Fla. 2000); Greenwald v. Triple D Properties, Inc., 424 So.

2d 185, 187 (Fla. 4th DCA 1983); Costa Bella Development Corp. v. Costa Development Corp.,

441 So. 2d 1114 (Fla. 3rd DCA 1983).

1. DISMISSAL FOR LACK OF STANDING

i. Note made payable to another person not indorsed to Plaintiff

Florida Rules of Civil Procedure section 1.210(a) provides:

(a) Parties Generally.

Every action may be prosecuted in the name of the real party in interest, but a personal

representative, administrator, guardian, trustee of an express trust, a party with whom or

in whose name a contract has been made for the benefit of another, or a party expressly

authorized by statute may sue in that persons own name without joining the party forwhose benefit the action is brought. All persons having an interest in the subject of the

action and in obtaining the relief demanded may join as Plaintiffs and any person may be

made a Defendant who has or claims an interest adverse to the Plaintiff. Any person may

at any time be made a party if that persons presence is necessary or proper to a completedetermination of the cause. Persons having a united interest may be joined on the same

side as Plaintiffs or Defendants, and anyone who refuses to join may for such reason bemade a Defendant.

When exhibits are inconsistent with Plaintiffs allegations of material fact as to who the

real party in interest is, such allegations cancel each other out. Fladell v. Palm Beach County

Canvassing Board, 772 So.2d 1240 (Fla. 2000); Greenwald v. Triple D Properties, Inc., 424 So.

2d 185, 187 (Fla. 4th DCA 1983); Costa Bella Development Corp. v. Costa Development Corp.,


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441 So. 2d 1114 (Fla. 3rd DCA 1983). \

Every mortgage loan is composed of two documentsthe note instrument and the

mortgage instrument. No matter how much the mortgage instrument is acclaimed as the basis of

the agreement, the note instrument is the essence of the debt. Sobel v. Mutual Dev. Inc., 313

So. 2d 77 (Fla. 1 DCA, 1975); Pepe v. Shepherd, 422 So. 2d 910 (Fla. 3 DCA 1982);

Margiewicz v. Terco Prop., 441 So. 2d 1124 (Fla. 3 DCA 1983). The promissory note is

evidence of the primary mortgage obligation. The mortgage is only a mere incident to the note.

Brown v. Snell, 6 Fla. 741 (1856); Tayton v. American Natl Bank, 57 So. 678 (Fla. 1912); Scott

v. Taylor, 58 So. 30 (Fla. 1912); Young v. Victory, 150 So. 624 (Fla. 1933); Thomas v. Hartman,

553 So. 2d 1256 (Fla. 5 DCA 1989). The mortgage instrument is only the security for the

indebtedness. Grier v. M.H.C. Realty Co, 274 So. 2d 21 (Fla. 4 DCA 1973); Mellor v.

Goldberg, 658 So. 2d 1162 (Fla. 2 DCA 1995); Century Group Inc. v. Premier Fin. Services East

L. P., 724 So. 2d 661 (Fla. 2 DCA 1999)

In this case, the Plaintiff is HSBC Bank USA, National Association. (Caption of

Amended Complaint; Amended Complaint, para. 2) The Plaintiff claims that it is both the

owner and holder of the Note and Mortgage. (Amended Complaint, para. 5) The promissory

Note that Plaintiff attaches to its Amended Complaint states that it is payable to PINNACLEFINANCIAL CORPORATION D/B/A TRI-STAR LENDING GROUP. (Amended

Complaint, Exhibit A) This Note has stamped on its first page the following statement:

I CERTIFY THIS DOCUMENT TO BE A TRUE

AND EXACT COPY OF THE ORIGINAL

_________________________________________


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PINNACLE FINANCIAL CORPORATION

And, stamped on its last page, which is half-blank, it has this single stamp mark:

CERTIFIED TO BE A TRUE AND CORRECT

COPY OF THE ORIGINAL

_______________________________________

The Title Group of Central Florida, Inc.

Both signature lines contain illegible signatures, neither of which appear similar. There

is no indorsement on the Note nor is there an allonge attached to the Note. The Uniform

Commercial Code as set forth in 673, et. seq., applies to negotiable instruments pursuant to

673.1021, Fla. Stat. (2009). The Note appears to be a negotiable instrument as it does not seem

to contain any of the exclusionary language of 673.1041(1)(c), Fla. Stat. (2009). (GMAC v.

Honest Air Conditioning & Heating, 933 So.2d 34 (Fla. App., 2006)) The holder of the note

has standing to seek enforcement of the note. (Mortgage Electronic Registration Systems, Inc. v.

Azize, 965 So.2d 151 (Fla. 2d DCA 2007)) 671.201(21), Fla. Stat. (2009) defines a holder as

follows:

"Holder" means:

(a) The person in possession of a negotiable instrument that is


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payableeither to bearer or to an identified person that is the person in

possession; or

(Emphasis mine)

The Note in this case is not payable to bearer, but instead is payable to an identified

personPinnacle Financial Corporation D/B/A Tri- Star Lending Group. Since HSBC Bank

USA, National Association has possession of the Note, HSBC Bank USA, National Association

can only be the Note's holder if HSBC Bank USA, National Association is Pinnacle Financial

Corporation D/B/A Tri- Star Lending Groupwhich it is not. In Ederer v. Fisher, 183 So.2d 39

(Fla. 2d DCA 1965), the Court stated:

We agree with this statement of the law, as well as the proposition that a holder in duecourse is immune from the defense of failure of consideration. Fla.Stat., Sec. 674.31,F.S.A. But to be accorded the status of a holder, and entitled to the presumption of being

a holder in due course as provided by Fla.Stat., Sec. 674.61, F.S.A., a party must have

acquired the instrument through 'negotiation.' Fla.Stat., Secs . 674.33 and 674.01, F.S.A.

Paper payable to order, as was the note here, is negotiated by the endorsement of the

holder, plus delivery. Fla.Stat., Sec. 674.33, F.S.A.

(Emphasis mine)

Transfer of a note payable to a specifically identified person is accomplished by an

indorsement. ( 673.2011(2), Fla. Stat. (2009); 673.2031(1), Fla. Stat. (2009)) The only

possible right that HSBC Bank USA, National Association has regarding that unindorsed note is

the specifically enforceable right to the indorsement of Pinnacle Financial Corporation D/B/A

Tri- Star Lending Group. ( 673.2031(3), Fla. Stat. (2009)) Had HSBC Bank USA, National

Association sued Pinnacle Financial Corporation D/B/A Tri- Star Lending Group and obtained

an Order to enforce the right to Pinnacle Financial Corporation D/B/A Tri- Star Lending Group's

indorsement of the note, it could then bring that note into court and foreclose upon it.


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Mere possession of the original Note, Mortgage and Assignment of Mortgage does not

demonstrate that Plaintiff is the owner and holder of the note and mortgage as held by the

Second District Court of Appeal in Verizzo v. Bank of New York, 35 Fla. L. Weekly D494a

(Fla. 2d DCA March 3, 2010), which stated:

In addition to the procedural error of the late service and filing of the summary judgmentevidence, those documents reflect that at least one genuine issue of material fact exists.

The promissory note shows that Novastar endorsed the note to JPMorgan Chase Bank,

as Trustee. Nothing in the record reflects assignment or endorsement of the note byJPMorgan Chase Bank to the Bank of New York or MERS. Thus, there is a genuine issue

of material fact as to whether the Bank of New York owns and holds the note and has

standing to foreclose the mortgage. SeeMortgage Electronic Registration Sys., Inc. v.

Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007) (recognizing that the owner and holder of

a note and mortgage has standing to proceed with a mortgage foreclosure action);Philogene v. ABN Amro Mortgage Group, Inc., 948 So. 2d 45, 46 (Fla. 4th DCA 2006)

(determining that the plaintiff had standing to bring and maintain a mortgage foreclosureaction since it demonstrated that it held the note and mortgage in question).

Prior to the creation of the Uniform Commercial Code (UCC) in 1952,1 interests in

notes were transferred by assignment. At that time, the cases of Moses v. Woodward, 109 Fla.

348 (Fla. 1933) and Johns v. Gillian, 134 Fla. 575, 581 (Fla. 1938) stood for the position that an

indorsement on a note is not necessary to transfer the note, but rather that mere delivery of a note

and mortgage with the intention to pass title will vest equitable interests in the person to whom it

is delivered.2

The the principles espoused in those pre-UCC cases regarding enforcement

1 http://www.ali.org/doc/past_present_ALIprojects.pdf

2 There appear to be three Moses v. Woodward opinions with this citation. The

March 1, 1932 opinion (140 So. 651) was to the effect that a note can be transferred by

assignment rather than indorsement . A rehearing was granted on April 13, 1932 (141 So.

117), and a new opinion reversing the foreclosure was issued on April 8, 1933 (147 So. 690).


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requirements must of necessity be subordinate to the enforcement requirements of the UCC.

The principle of equitable assignment is applicable today Ifthe note or other debt secured by a

mortgage be transferred without any formal assignment of the mortgage, or even a delivery of it,

the mortgage in equity passes as an incident to the debt, unless there be some plain and clear

agreement to the contrary, if that be the intention of the parties. . . . .. WM Specialty

Mortgage, LLC v. Salomon, Case No. 4D03-3318 (FL 5/26/2004) (Fl, 2004) But Plaintiff

offers no justification for an equitable assignment as no allegation is made that the Pinnacle

Financial Corporation D/B/A Tri- Star Lending Group was unable to indorse the note to HSBC

Bank USA, National Association or that Pinnacle Financial Corporation D/B/A Tri-Star Lending

Group had transferred it to HSBC Bank USA, National Association with the intention of passing

title to HSBC Bank USA, National Association. An assignment could also result in the transfer

of a note as long as that note is not a negotiable instrument, but as discussed previously, this

Note is a negotiable instrument.

Defendant's Thomas and Susie Michaels have an obligation as an issuer of a note to the

person entitled to enforce the instrument or to an indorser who paid the instrument under Florida

Statutes 673.4151. ( 673.4121, Fla. Stat. (2009)) But with that obligation also goes the right

to presentment under 673.5011, Fla. Stat. (2009), which states in part:

(c) Without dishonoring the instrument, the party to whom presentment is

made may:

1. Return the instrument for lack of a necessary indorsement; or

2. Refuse payment or acceptance for failure of the presentment to

comply with the terms of the instrument, an agreement of the

parties, or other applicable law or rule.

The new opinion mentions nothing about unindorsed notes.


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The presentee's demand the necessary indorsement which was not provided by HSBC

Bank USA, National Association in this Amended Complaint, and which gives them the right to

refuse payment or acceptance.

The Plaintiff claims it is the owner and holder of the Note. That allegation directly

conflicts with the evidence attached to the Amended Complaint, which shows that the Plaintiff is

not the holder of the promissory Note.

ii. MERS could not pass an enforceable interest

in the promissory note to Plaintiff or its principal

The note is the instrument of concern in all assignment situations. There is an old

maxim the mortgage follows the note. Evins v. Gainsville Natl Bank, 85 So. 659 (Fla. 1920);

Case v. Smith, 200 So. 917 (Fla. 1941) The note is evidence of the primary mortgage obligations

or the debt. The assignment of the note carries with it the mortgage and its rights, even though

the mortgage instrument has not been assigned either orally or in writing. Collins v. Briggs, 123

So. 833 (Fla. 1929);Miami Mtge. & Guar. Co. v. Drawdy, 127 So. 323 (Fla. 1930); So. Colonial

Mtge. Co. v. Medeiros, 347 So. 2d 736 (Fla. 4 DCA 1977) The mortgage, as evidenced by the

mortgage instrument, is only a mere incident to the debt. Therefore, the mortgage instrument is

of lesser significance. Because the assignment of the note is an imperative act as to the

transferring of the mortgagees right, the assignment of the mortgage instrument without the note

is an ineffective assignment. Vance v. Fields, 172 So. 2d 613 (Fla. 1 DCA 1965); Sobel v.

Mutual Dev. Inc., 313 So. 2d 77 (Fla. 1 DCA 1975);Amacher v. Keel, 358 So. 2d 889 (Fla. 2

DCA 1975)


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In the instant case, the Assignment of Mortgage claims that it assigns the both the Note

and the mortgage to Plaintiff. However, the Note instrument was bifurcated from the mortgage

instrument and MERS did not have an interest in the Note that it could assign. MERS act of

assigning the Note was a nullity as it didn't have an interest in the Note that it could assign. And,

as to the mortgage the assignment was invalid as it held no beneficial interest in the mortgage

instrument for two reasons: 1) a security instrument, apart from the promissory note giving rise

to the debt has no value because there is no debt by which it secures payment; and 2) MERS had

no beneficial interest in the mortgage instrument that it could assign.

Since the Note was not indorsed to HSBC Bank USA, National Association, HSBC Bank

USA, National Association didn't take the Note pursuant to negotiation under the UCC. That

left HSBC Bank USA, National Association with taking whatever rights MERS had by the

Assignment of Mortgage from MERS to the HSBC Bank USA, National Association. MERS

could not assign any greater rights to HSBC Bank USA, National Association than MERS had.

Holding only the mortgage and not the Note means you hold nothing of value. The

note and mortgage are inseparable; the former as essential, the latter as an incident. An

assignment of the note carries the mortgage with it, while an assignment of the latter alone is a

nullity. Carpenter v. Longan, 83 U.S. 271, 21 L.Ed. 313, 16 Wall. 271 (1872); Vance v. Fields,172 So.2d 613 (Fla. 1965); Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009)

(also see Landmark National Bank v. Kesler, 192 P.3d 177 (Kansas App. Ct. 2008)) Neither

Mortgage Electronic Registration Systems, Inc. v. Azize, 965 So.2d 151 (Fla. 2d DCA 2007) or

Mortgage Electronic Registration Systems, Inc. v. Revoredo, 955 So. 2d 33 (Fla. 3d DCA 2007)

alter this precedent.

In Revoredo, supra, the Court held that MERS does not lack standing to foreclose to the

facts of this case, in which it is clear that . . . MERS was only the holder (by delivery) of the


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note. Id. At 34, fn. 2. Because the Note is not indorsed to HSBC Bank USA, National

Association, HSBC Bank USA, National Association is clearly claiming that its right to the Note

flows from MERS. Therefore, if it is going to demonstrate an equitable assignment of the note,

it must first show that MERS had rights to the unindorsed Note which it could assign to HSBC

Bank USA, National Association. However, the terms and provisions of the MERS mortgage

expressly refute the notion that MERS owned or held the note at inception. The mortgage was

not countersigned by the original note holder/lender (Pinnacle Financial Corporation D/B/A Tri-

Star Lending Group) such as to give MERS any rights or interests in the note. As well the Note

itself admits of no rights or interests in MERS. Only the defendants signed the mortgage and it

is indisputable that they cannot award, grant or otherwise deign to transfer the rights of his

obligee, the note holder, to another. Indeed, MERS was not even granted the power or authority

to transfer the note, just the mortgage or assign its duties as nominee.

In Azize, supra, the Court merely held that an allegation that MERS was the owner and

holder of the note was a sufficient allegation of standing to survive a motion to dismiss. Id. At

153. MERS would still have to prove those allegations to prevail on the foreclosure action. Id.

The trial court is not permitted to simply assume that the plaintiff was the holder of the note in

the absence of record evidence of such. BAC Funding Consortium Inc. ISAOA/ATIMA v.Jean-Jacques, Case No. 2D08-3553 (Fla. App. 2/12/2010) (Fla. App., 2010) Here, HSBC Bank

USA, National Association did not even allege that MERS was ever the owner and holder of the

Note, much less provided prima facie evidence of such an allegation.

The mortgage document is not signed by MERS, nor is it signed by Plaintiff or any one

else other than the Michael Defendants. MERS is not a party to the mortgage in the absence of

its authorized signature, thus there is no expressed, granted right to assign the mortgage.


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In Stuyvesant Corp. v. Stahl, 62 So.2d 18, 20 (Fla., 1952), the Florida Supreme Court

stated:

The rule is settled in this State that a principal is bound by the acts of his agent. Theauthority of the agent may be real or it may be apparent and the public may rely on either

unless in the case of apparent authority the circumstances are such as to put one on

inquiry. The agent's authority may be conferred by writing, by parol, or it may be inferredfrom the related facts of the case. (Cites omitted)

There are no allegations expressing the mechanism by which MERS had any authority to

act as an agent for Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. The

Arkansas Supreme Court came to the same conclusion in Mortgage Electronic RegistrationSystem, Inc. v. Southwest Homes of Arkansas, 08-1299 (Ark. 3/19/2009) (Ark., 2009)(At page

7) By all appearances, it seems contrary to the interests of Pinnacle Financial Corporation

D/B/A Tri- Star Lending Group that the Plaintiff would attempt to collect on a promissory note

that was payable to Pinnacle Financial Corporation D/B/A Tri- Star Lending Group. In the

Landmark case at the Kansas Court of Appeals, the Court stated:

But whatever authority the nominee may have comes from the delegation of thatauthority by the principal. In its ordinary meaning, a nominee represents the principal in

only a "nominal capacity" and does not receive any property or ownership rights of the

person represented. See, e.g., Cisco v. Van Lew, 60 Cal.App.2d 575, 583-84, 141 P.2d433 (1943); see also Applebaum v. Avaya, Inc., 812 A.2d 880, 889 (Del.2002) (referringto nominees "as agents of the beneficial owners"). The Millennia mortgage does not

purport to give MERS any greater rights than normally given a nominee. Themortgage says that MERS acts "solely as nominee for Lender." There is no express

grant of any right to MERS to transfer or sell the mortgage or even to assign its dutiesas nominee. Nor does MERS obtain any right to the borrower's payments or even a role

in receiving payments. (emphasis mine) (Landmark Nat. Bank v. Kesler, 192 P.3d 177,

180 (Kan. App., 2008) )
https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Applebaum+v.+Avaya%2C+Inc.%2C++812+A.2d+880%2C+889+(Del.2002)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Applebaum+v.+Avaya%2C+Inc.%2C++812+A.2d+880%2C+889+(Del.2002)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Applebaum+v.+Avaya%2C+Inc.%2C++812+A.2d+880%2C+889+(Del.2002)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=r59MQ%2FHDGPbq7Udr5dodPGwwp8HXRpt3jw1d%2FeJUxpWzP0dctXe%2B%2FEAV2IH81jQ7So4vLhJAlj082wCg%2FuRRyHpw%2BaUpsdPIcUY1XgdLp3k5hpSTlYHMBg64HdKPyJ5k&ECF=Cisco+v.+Van+Lew%2C++60+Cal.App.2d+575%2C+583-84%2C+141+P.2d+433+(1943)


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The Kansas Supreme Court did not overrule this restrictive grant language and say that it

somehow expanded to whatever private agency agreement exists between MERS and the Lender,whether expressed in an undisclosed and unincorporated written agreement. Instead, the Kansas

Supreme Court affirmed this decision in Landmark Nat. Bank v. Kesler, 216 P.3d 158 (Kan.,

2009) By confining the mortgagee status of MERS to that of the highly restrictive, lowest form

of agency, the role of "Solely as Nominee" - limits what specific authority is expressly

granted. And even this authority was made conditional by the amorphous contingency language

"if necessary to comply with law or custom". (Amended Complaint, Mortgage, p. 3, para. Q at

page 3 of 13) Common law and custom says you can't bifurcate a mortgage in the first place.

The U.S. Supreme Court made that clear in Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 21

L.Ed. 313 (1872). Had the mortgage been more thought-out, it instead might have said

"regardless of what law or custom would otherwise restrict or prohibit".3

The expression of a particular power or subject implies the exclusion of all others not

expressed or similarly set forth. (See old Fla Jur 2d, DEEDs, Sec 120. (Vol. 19, page 252-253)

for a general guide.) A mortgage loan consists of a promissory note and a security instrument,

typically a mortgage or a deed of trust. When the note is split from the deed of trust, the note

becomes, as a practical matter, unsecured. RESTATEMENT (THIRD) OF PROPERTY

(MORTGAGES) 5.4 (1997). A person holding only a note lacks the power to foreclose

because it lacks the security, and a person holding only a deed of trust suffers no default because

only the holder of the note is entitled to payment on it. See RESTATEMENT (THIRD) OF

PROPERTY (MORTGAGES) 5.4 cmt. e (1997). Where the mortgagee has transferred only

3 Credit to attorney Greg Clark, JEDTI Knight.


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the mortgage, the transaction is a nullity and his assignee, having received no interest in the

underlying debt or obligation, has a worthless piece of paper. 4 RICHARD R. POWELL,

POWELL ON REAL PROPERTY, 37.27[2] (2000).

The Restatement (Third) of Property: Mortgages Section 5.4 (1997) states:

(a) A transfer of an obligation secured by a mortgage also transfers the mortgage unless

the parties to the transfer agree otherwise. (b) Except as otherwise required by the

Uniform Commercial Code, a transfer of a mortgage also transfers the obligation the

mortgage secures unless the parties to the transfer agree otherwise. (c) A mortgage may

be enforced only by, or in behalf of, a person who is entitled to enforce the obligation the

mortgage secures.

MERS has nothing to transfer by an assignment. MERS own website lists

MERS Recommended Foreclosure Procedures for FLORIDA.4 In this document

MERS states that it is not the beneficial owner of the promissory note. This document states:

MERS stands in the same shoes as the servicer to the extent that it is not the beneficialowner of the promissory note. An investor, typically a secondary market investor, will

be the ultimate owner of the note. (fn 8)

Foot Note 8:

Even though the servicer has physical custody of the note, custom in the mortgage

industry is that the investor (Fannie Mae, Freddie Mac, Ginnie Mae or a private investor)owns the beneficial rights to the promissory note.

4 www.mersinc.org/filedownload.aspx?id=176&table=ProductFile
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In the consolidated cases ofIn re Foreclosure Cases, 521 F. Supp. 2D 650, 653 (S.D. Oh.

2007), a standing challenge was made and the Court found that there was no evidence of record

that New Century ever assigned to MERS the promissory note or otherwise gave MERS the

authority to assign the note. Beginning with this case, courts around the country started to

recognize that MERS had no ownership in the notes and could not transfer an interest in a

mortgage upon which foreclosure could be based.

InLaSalle Bank NA v. Lamy, 824 N.Y.S.2d 769 (N.Y. Supp. 2006), the Court denied a

foreclosure action by an assignee of MERS on the grounds that MERS itself had no ownership

interest in the underlying note and mortgage. In the case ofIn re Mitchell, Case No.

BK-S-07-16226-LBR (Bankr.Nev., 2009), the Court stated In order to foreclose, MERS must

establish there has been a sufficient transfer of both the note and deed of trust, or that it has

authority under state law to act for the note's holder. (At page 9) The Court found that MERS

has no ownership interest in the promissory note. The Court found that though MERS attempts

to make it appear as though it is a beneficiary of the mortgage, it in fact is not a beneficiary. The

Court stated But it is obvious from the MERS' "Terms and Conditions that MERS is not a

beneficiary as it has no rights whatsoever to any payments, to any servicing rights, or to any of

the properties secured by the loans. To reverse an old adage, if it doesn't walk like a duck, talk

like a duck, and quack like a duck, then it's not a duck. (At page 7) MERS Terms and

Conditions say this:

MERS shall serve as mortgagee of record with respect to all such mortgage loans solely

s a nominee, in an administrative capacity, for the beneficial owner or owners thereoffrom time to time. MERS shall have no rights whatsoever to any payments made on

account of such mortgage loans, to any servicing rights related to such mortgage loans, or

to any mortgaged properties securing such mortgage loans. MERS agrees not to assert

any rights (other than rights specified in the Governing Documents) with respect to suchmortgage loans or mortgaged properties. References herein to "mortgage(s)" and

"mortgagee of record shall include deed(s) of trust and beneficiary under a deed of trustand any other form of security instrument under applicable state law.
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In the case ofIn re Vargas, 396 B.R. 511, 520 (Bankr.C.D.Cal., 2008) , the Court stated:

MERS is not in the business of holding promissory notes. (fn 10: MERS, Inc. is an

entity whose sole purpose is to act as mortgagee of record for mortgage loans that are

registered on the MERS System. This system is a national electronic registry ofmortgage loans, itself owned and operated by MERS, Inc.'s parent company,

MERSCORP, Inc.)

In the case ofIn re Sheridan, Case No. 08-20381-TLM (Bankr.Idaho, 2009) MERS

moved for relief from the stay. The Court stated that MERS Counsel conceded that MERS isnot an economic beneficiary under the Deed of Trust. It is owed and will collect no money

from Debtors under the Note, nor will it realize the value of the Property through foreclosure of

the Deed of Trust in the event the Note is not paid. The Court stated Further, the Deed of

Trust's designation of MERS as beneficiary is coupled with an explanation that MERS is . . .

acting solely as nominee for Lender and Lender's successors and assigns. The Court stated

Even if the proposition is accepted that the Deed of Trust provisions give MERS the ability to

act as an agent (nominee) for another, it acts not on its own account. Its capacity is

representative.

InLandmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009), the Kansas

Supreme Court extensively analyzed the position of MERS in relation to the facts in that case

and other non-binding court cases and concluded that MERS is only a digital mortgage tracking

service. (At page 168) The Court recited that MERS never held the promissory note, did not

own the mortgage instrument (though the documents identified it as mortgagee), that it did not

lend money, did not extend credit, is not owed any money by the mortgage debtors, did not

receive any payments from the borrower, suffered no direct, ascertainable monetary loss as a
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consequence of the litigation and consequently, has no constitutionally protected interest in the

mortgage loan.

Professor Christopher L. Peterson, Associate Professor of Law, University of Florida,

testified at a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

Subcommittee on Securities, Insurance, and Investment and stated:5

MERS is merely a document custodian. . . . The system itself electronically tracks

ownership and servicing rights of mortgages. . . . The parties obtain two principal benefits

from attempting to use MERS as a mortgagee of record in nominee capacity. First,under state secured credit laws, when a mortgage is assigned, the assignee must record

the assignment with the county recording office, or risk losing priority vis--vis other

creditors, buyers, or lienors. Most counties charge a fee to record the assignment, and

use these fees to cover the cost of maintaining the real property records. Some countiesalso use recording fees to fund their court systems, legal aid organizations, or schools. In

this respect, MERS role in acting as a mortgagee of record in nominee capacity is simply

a tax evasion tool. By paying MERS a fee, the parties to a securitization lower theiroperating costs. The second advantage MERS offers its customers comes later when

homeowners fall behind on their monthly payments. In addition to its document custodial

role, and its tax evasive role, MERS also frequently attempts to bring home foreclosureproceedings in its own name. This eliminates the need for the trustwhich actually

owns the loanto foreclose in its own name, or to reassign the loan to a servicer or the

originator to bring the foreclosure.

R.K. Arnold, Senior Vice President, General Counsel and Secretary of Mortgage

Electronic Registration Systems, Inc., stated:

MERS will act as mortgagee of record for any mortgage loan registered on the

5 Subprime Mortgage Market Turmoil: Examining the Role of Securitization,

http://banking.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=4f40e1b9-ec5b-4752-ba8f-0c14a

fc44884. (At page 6 -8)
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computer system MERS maintains, called the MERS System. It will then track

servicing rights and beneficial ownership interests in those loans and provide a platformfor mortgage servicing rights to be traded electronically among its members without the

need to record a mortgage assignment in the public land records each time. . . . Members

pay annual fees to belong and transaction fees to execute electronic transactions on theMERS System. . . . A mortgage note holder can sell a mortgage note to another in what

has become a gigantic secondary market.. . . For these servicing companies to perform

their duties satisfactorily, the note and mortgage were bifurcated. The investor or itsdesignee held the note and named the servicing company as mortgagee, a structure that

became standard. . . . When a mortgage loan is registered on the MERS System, it

receives a mortgage identification number (MIN). The borrower executes a traditional

paper mortgage naming the lender as mortgagee, and the lender executes an assignmentof the mortgage to MERS. Both documents are executed according to state law and

recorded in the public land records, making MERS the mortgagee of record. From that

point on, no additional mortgage assignments will be recorded because MERS will

remain the mortgagee of record throughout the life of the loan. . . . MERS keeps trackof the new servicer electronically and acts as nominee for the servicing companies and

investors. Because MERS remains the mortgagee of record in the public land records

throughout the life of a loan, it eliminates the need to record later assignments in thepublic land records. Usually, legal title to the property is not affected again until the

loan is paid and the mortgage is released.

(R.K. Arnold, Yes, There is Life on MERS, Prob.& Prop., Aug. 1997, at p.16;

http://www.abanet.org/genpractice/magazine/1998/spring-bos/arnold.html)

Courts around this country are clearly recognizing that MERS is not an owner of the

promissory note and that it is also only a mortgagee in name alone and has no beneficial interest

in the mortgage instrument. MERS own website says as much. Therefore, the assignment of

mortgage from MERS to Plaintiff could not transfer an interest in the promissory note; it could

not even transfer an enforceable interest in the mortgage instrument. In fact, bifurcation of the

mortgage instrument from the promissory note rendered a foreclosure impossible.

2. NO CERTIFICATION
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The Florida Supreme Court mandated certain rules relating to foreclosure actions filed in

Administrative Order No. AOSC09-54. One such rule is that Complaints must be certified.

This Complaint is subject to the certification requirement and was not certified. Wherefore, it

must be dismissed.

3. LACK OF NOTICE OF DEFAULT AND OPPORTUNITY TO CURE

PRIOR TO ACCELERATION

The Mortgage provides that no suit may be commenced until acceleration notice has been

given pursuant to the terms of the Mortgage. (Amended Complaint, Mortgage, par. 20) That

notice must be at least 30 days prior to the initiation of the suit. (Reference in par. 20 to par. 22

of the Mortgage which states 30 days notice required) Additionally, the notice that is required is

that sent by first class mail to the defendants. (Amended Complaint, Mortgage par. 15)

The requirement of notice prior to acceleration is both a condition and a covenant. The

Plaintiff admits in its Amended Complaint that the Amended Complaint itself is notice of

acceleration. That is a material violation of the terms of the Mortgage which provide that no

suit may be commenced prior to that notice being given. Additionally, there is no reference in

the Amended Complaint that any document was sent by first class mail to the Defendant.

Based on section 22 ofthe Mortgage and the definition of lender" set forth on page I of

the Mortgage,Amedas v. Brown, 505 So.2d 1091 (Fla. 2nd DCA 1987), a default notice from the

"lender" is a condition precedent prior to filing this complaint, Dykes v Trustbank Savings. F.S,B.,

567 So.2d 958 (Fla. 2nd

DCA 1990); Gomez v. American Savings and Loan Ass`n, 515 So.2d 301 (Fla,


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4th

DCA 1987): Rashid v. Newberry Federal Savings and Loan Association, 502 So.2d 1316 (Fla. 3rd DCA

1987); Rashid v. Newberry Federal Savings and Loan Association, 526 So.2d 772 (Fla. 3rd DCA 1988).

There was no such notice given by the Plaintiff to the Defendants, wherefore, the case must be

dismissed.

4. LACK OF USE OF LOSS RESERVE

The Mortgage provides that Mortgage Insurance payments from the defendants will be

used to purchase Mortgage Insurance, and that if the Lender fails to buy such Mortgage

Insurance, that Lender will accept, use and retain these payments as a non-refundable loss

reserve in lieu of Mortgage Insurance. (Amended Complaint, Mortgage par. 10)

The Plaintiff has not alleged that the loss reserve has been exceeded by any default

amount. Payments made by the defendant that were attributed to the loss reserve account are

clearly a benefit for the defendants and must be applied to the balance due. Plaintiff has failed

to allege the amount of such loss reserve and it has also failed to allege that it attributed such

payments to the balance owing. This is significant because this mortgage is over five years old

and the loss reserve may be significant and there may be no default from the application of such

payments.

II

MOTION FOR MORE DEFINITE STATEMENT

A. Law


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Motions for More Definite Statement are governed by Rule 1.140 (e), Fla. R. Civ. P., which states:

If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party

cannot reasonably be required to frame a responsive pleading, that party may move for a more

definite statement before interposing a responsive pleading. The motion shall point outthe defects complained of and the details desired. Ifthe motion is granted and the order

of the court is not obeyed within 10 days after notice of the order or such other time as

the court may fix, the court may strike the pleading to which the motion was directed or

make such order as it deems just.

Where a Complaint is vague or ambiguous, a motion for more definite statement is the

proper avenue to seek redress . Foerman v.Seaboard Coast Line R. Co., 279 So.2d 825 (1973);

Wajay Bakery, Inc. v. Carolina Freight Carriers Corp., 177 So.2d 544 (Fla. 3rd DCA, 1965); Patton

v. Carlson, 132 So.2d 793 (Fla. 1st DCA, 1961).

A party does not state a cause of action by merely reciting legal conclusions or tracking

statutory language, but must include factual allegations. Ginsberg v. Lennar Fla. Holdings, Inc.,

645 So. 2D 490, 501 (Fla. 3d DCA 1994); Becerra v. Equity Imports, 551 So.2d 486, 487-88 (Fla.

3d DCA 1989). Failure to state sufficient factual allegations therefore requires dismissal of the

claim.

B. Argument

Plaintiff claims it is the owner of the note. (Amended Complaint, para. 5) That claim

is inconsistent with the Note attached which indicates another party owns it. The inconsistent

allegations require more specific pleading.


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III

MOTION FOR COURT ORDERED MEDIATION

By administrative order of this court and of the Florida Supreme Court, mediation is

required in homestead foreclosure cases. This case is the homestead of defendant Robert

Rumble and by must be mediated.

IV

CONCLUSION

WHEREFORE, Defendant requests the Court dismiss the Amended Complaint, or order

the Plaintiff to provide a more definite statement and order mediation.

Respectfully Submitted,

March 18, 2010

______________________

George Gingo, FBN 879533

P.O. Box 838

Mims, FL 32754

321-264-9624 Office


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321-383-1105 Fax

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been furnished by U.S. Mail,

this ____th day of March, 2010, to David Stern, Esq., 900 South Pine Island Road, Suite 400,

Plantation, FL 33324-3920.

_____________________

George Gingo