SUPREME COURT OF FLORIDA
CASE NO.: SC[ 61,9LT No.: 4D13-20 , S P
12-532j AMAXMAR REALTY, LLC )and JEAN-LUC ANDRIOT, ) Fla. Bar No.: 480400
)Defendants/Appellants, )
v. ))
BANKUNITED, N.A., ))
Plaintiff/Appellee, ))
INITIAL BRIEF
Gary Barcus, Esq.Attorney for Maxmar Realty, LLCAnd Mr. Jean-Luc Andriot
TABLE OF CONTENTS
PAGEI. Statement of the Case................................................... 1-3
II. Facts ....................................................................... 4-7
III. Issues to be Considered upon Appeal ................................. 8
1. Whether the personal guaranty of the mortgage by Jean-Luc Andriot,not even mentioned in the Assignment ofMortgage [Appendix #1],was also assigned out of the bank failure ofBankUnited, FSB toBankUnited, N.A. without any written assignment of the guaranty?
2. Whether the "open endorsement" from BankUnited FSB, which failedand was taken over by the Federal Deposit Insurance Corporation(FDIC),was extinguished forever, requiring a written assignment of alllending documents by the FDIC to BankUnited N.A.?
IV. Analysis of Law ......................................................... 9-15
V. Conclusion ............................................................... 16-17
Certificate of Service ........................................................... 18
Certificate of Compliance .................................................... 18
Table of Cases Cited .......................................................... ii
Statutes Cited .................................................................. iii
TABLE OF CASE CITED
BAC Funding Consortium, Inc. v. Jean-Jacques, 28 So. 3d 936(Fla. 18'DCA 2010) ................................................................ 13
Bellaire Securities Corporation v. Brown, 168 So. 625 (Fla. 1936)....... 6,9
Chen v. Whitney Nat'l Bank, 65 So. 3d 1170 (Fla. 1** DCA 2011)......... 12
Gee v. U.SBankNat'l Ass'n, 72 So. 3d 211 (Fla. 5th DCA 2011).......... 13
Gonzalez v. Deutsche Bank Nat'l Trust Co., 95 So. 3d 25 1
(Fla. 2d DCA 2012)............................................................... 13
In re Mariner Enterprises ofPanama City, Inc., 131 B.R. 190(Bankr. N.D. Fla. 1989)................................................................. 14
James K. Lindsey v. Wells Fargo Bank, N.A., 1D12-2406 ,Opinion filed February 27, 2013 (Fla. 1** DCA 2013) [copy attached].... 2,9,11
Lizio v. McCullum, 36 So. 3d 927 (Fla. 4th DCA 2010)..................... 12
Mazine v. M& IBank, 67 So. 3d 1129 (Fla. 18' DCA 2011)............... 13
McKinnon-Young Co. v. Stockton, 53 Fla. 734, 44 So. 237 (Fla. 1907)... 15
Rigby v. Wells Fargo Bank, N.A., 84 So. 3d 1195 (Fla. 4th DCA 2012).... 13
Riggs v. Aurora Loan Services, LLC, 36 So. 3d 932 (Fla. 4th DCA 2010). 12
Sunland Mortgage Corp. v. Lewis, 515 So.2d 1337 (Fla. 5th DCA 1987).. 14
Tomasello v. Lewis, 100 Fla. 132, 129 So. 328 (Fla. 1930).................. 14
Venture Holdings & Acquisitions Grp., LLC v. A.I.M. Funding Grp.,LLC, 75 So. 3d 773 (Fla. 4th DCA 2011)....................................... 13
11
STATUTES CITED
Florida Statute Section 673.2031(4) defining "Transfer of Instrument"... 9-11
Florida Statute Section 671.201(13) defining "Creditor".................... 11,9
Florida Statute Section 658.80 Appointment of receiver or liquidator.... 14
Florida Statute Section 658.82 Receiver, powers and duties............... 14
Florida Statute Section 658.83 Liquidator, powers and duties............. 14
Florida Statute of Frauds Section 725.01 ...................................... 6,9
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I. Statement of the Case
Simply, BankUnited, N.A. could never acquire ownership of the
mortgage, note, and personal guaranty based upon the theory of "open
endorsement" from the failed bank BankUnited, FSB. Why? Because the open
endorsement of the lending instruments was extinguished when BankUnited, FSB
was taken over by the Federal Deposit Insurance Corporation (FDIC). The
important distinction is that the FDIC functions in one of two modes: (1)
"Conservator" in which it takes over a failing bank, conserves its assets, divests
certain negative assets, and allows the then recovered bank to continue operating,
almost like a hospital stay; or (2)"Receiver" in which the FDIC takes over a failed
bank, liquidates certain assets and sells other assets, and formally extinguishes the
existence of the failed bank, almost like a trip to the morgue. When the FDIC, as
Receiver, took over the failed BankUnited, FSB, the existing open endorsements
died. The only way for the lending assets to be legally valid from the FDIC by the
newly created BankUnited, N.A., would be for it to purchase those lending assets
by assignment. The dead BankUnited, FSB could not pass ownership through
"open endorsement" to BankUnited, N.A. Therefore, the foreclosure lawsuit
brought by BankUnited, N.A. against Maxmar Realty, LLC and Mr. Jean Luc
Andriot on the theory of "open endorsement" is invalid, and either the Motion for
Summary Judgment or the Motion to Dismiss should have been granted.
1
It should be emphasized at this point that the lawyers for BankUnited, N.A stated
at the hearings that the bank did not base its case upon the legal theory of
assignment of contracts, rather only upon the legal theory of "open endorsement."
BankUnited, N.A. does not own the personal guaranty of Mr. Jean
Luc Andriot. BankUnited, FSB failed, and was forced into receivership by the
Federal Deposit Insurance Corporation (FDIC) as a failed Federal Savings Bank
that then ceased to exist. The FDIC acquired the assets of the failed bank.
Investors formed a new bank and named it BankUnited, N.A. so as to avoid paying
$10,000,000 in new signage. BankUnited, N.A. acquired by the Assignment of
Mortgage (Appendix #1) only the mortgage of Maxmar Realty, LLC and not the
personal guaranty of Mr. Jean-Luc Andriot, which was not mentioned in the
Assignment of Mortgage. And, the Assignment of Mortgage (Appendix #1) does
not specifically include any assignment of the Promissory Note of Maxmar Realty,
LLC. A serious question thereby does arise as to whether the Promissory Note
follows the Mortgage in light of the recent newly minted case of James K. Lindsey
v. Wells Fargo Bank, N.A., 1D12-2406 , Opinion filed February 27, 2013 (Fla. 1
DCA 2013). It would certainly be cleaner, neater, and legal, if the Assignment was
required to specifically mention, name, articulate, ALL of the documents being
assigned, as this would comply with the Statute of Frauds, and not assert that all of
the documents were assigned although not all mentioned in the assignment.
2
Appellants filed a Motion to Dismiss and a Motion for Summary
Judgment or for Partial Summary Judgment to at least get Mr. Andriot out of the
lawsuit. With no signed writing to evidence any right to sue Mr. Andriot, the trial
judge nonetheless denied both the defensive Motion to Dismiss and the Motion for
Summary Judgment or for Partial Summary Judgment. BankUnited N.A has no
proper standing to sue either appellant, certainly not under the theory of "open
endorsement as the open endorsement of the failed bank was extinguished when
the FDIC, as Receiver, took over the failed ban. And, neither can it bring suit on
the legal theory of assignment, as its lawyers told the judge they had not based
their suit on assignment, and also because the Assignment from the FDIC was
incomplete, not expressly naming Mr. Andriot's alleged personal guaranty, and
other fatal faults in the purported Assignment.
The trial court's rulings on the motions should be reversed in whole or
in part, as they are clearly erroneous.
3
II. Facts
1. Take a moment to closely look at the Assignment ofMortgage
(Appendix #1), and see for yourself that only the mortgage was assigned by the
FDIC to BankUnited N.A. Without a written assignment of any personal guaranty
by Mr. Andriot, BankUnited N.A. has no standing to sue Mr. Andriot, and he
should be dismissed from the lawsuit permanently. It is not fair that Mr. Andriot is
forced to defend an expensive lawsuit brought by BankUnited, N.A. which has no
written assignment of any documents involving Mr. Andriot, and only an expired
and terminated indorsement by the bank failure of BankUnited FSB, a dead issue,
and ineffectual upon which to sue Mr. Andriot. (Appendix #1). It describes only
the assignment of the mortgage, nothing more. There is no mention of any
guaranty of Mr. Andriot, and there is therefore no assignment of anything other
than the mortgage, nothing more. Please note also that the lawyers who drafted the
Assignment of Mortgage are the same lawyers who brought suit against Mr.
Andriot, without any right to do so. Preparing the assignment, and then also
subsequently filing this lawsuit based upon a document in question, is a clear
conflict of interest of plaintiff's law firm. It is axiomatic in Florida that a contract
is construed against the party that drafted it. Factually, Appellee drafted the
assignment, and therefore any ambiguities are construed against it. Using this rule
of interpretation, the Assignment of Mortgage only assigns the mortgage, nothing
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more, and certainly not any personal guaranty allegedly signed by Mr. Andriot.
The trial court erred in not granting the Motion to Dismiss and not granting the
defensive Motion for Summary Judgment filed by Mr. Andriot both motions of
which should have ended Mr. Andriot's participation in this lawsuit.
2. In addition to the Assignment of the Mortgage from the FDIC to
BankUnited N.A. of the the mortgage previously owned by the commercially and
legally dead BankUnired FSB, the Appellee included attached to its complaint an
"ALLONGE TO PROMISSORY NOTE" [Appendix #3]. At the hearing on the
motions, the attorney for BankUnited N.A. argued that the plaintiff/appellee was
relying on the open endorsements in the Allonge to Promissory Note, and not the
assignment [Appendix #2, at page 9, lines 5-16]. Appellee cannot have standing
to enforce a dead, extinguished by the bank failure of BankUnited FSB, purported
open endorsement. Even if it could, the open endorsement is part of a document
entitled "Allonge to Promissory Note." But the Promissory Note was NOT
included in the Assignment of the Mortgage, so the reliance by appellee on the
open endorsement on the Promissory Note not included in the Assignment of
Mortgage is barred by the Statute of Frauds. To reiterate, the Assignment of
Mortgage which does not specifically mention the Promissory Note nor the
Allonge to Promissory Note is effective only to assign the mortgage from the FDIC
to BankUnited N.A., not the Promissory Note and not the alleged Personal
5
Guaranty of Mr. Androit.
3. And the open endorsements on the Allonge to the Promissory Note
are ineffective for two reasons: (1) the original open endorser failed, is
commercially dead, and the alleged open endorsement died with it when the FDIC
took over the failed endorser; and (2) even if the open endorsements are still valid,
they were not validly assigned by the Assignment of Mortgage which is silent as to
the Promissory Note, and the the alleged Jean-Luc Andriot personal guaranty, and
also the Allonge to the P.romissory Note. The Statute of Frauds Florida Statute
725.01 which was elaborated upon by the Appellant at the hearing on the motions,
see [Appendix #2 on pages 12-13] requires all of these interests to real property
by in writing, and none of it is in writing such that would grant Appellee standing
to sue Mr. Andriot, nor to sue Maxmar Realty, LLC based upon an extinguished
open endorsement. Not to put too fine a point on the Statute of Frauds argument,
but the Supreme Court case ofBellaire Securities Corporation v.Brown, 168 So.
625, at 636 (Fla. 1936) is dispositive of this case: "Under the Statute of Frauds
written memorandum for sale of land must designate land and disclose the terms of
sale to another contracting party... so that he can be identified without parole
proof." [Appendix #2, page 12 lines 11-25 and page 13 lines 1-10] The court
goes on to recite the entire Statute of Frauds. Here, in this appeal, by analogy, the
failure to name Mr. Androit in the Assignment of Mortgage is proof that Appellee
6
III. Issues to be Considered upon Appeal
1. Whether the personal guaranty of the mortgage by Jean-Luc Andriot,not even mentioned in the Assignment ofMortgage [Appendix #1],was also assigned out of the bank failure of BankUnited, FSB toBankUnited, N.A. without any written assignment of the guaranty?
2. Whether the "open endorsement" from BankUnited FSB, which failedand was taken over by the Federal Deposit Insurance Corporation(FDIC),was extinguished forever, requiring a written assignment of alllending documents by the FDIC to BankUnited N.A.?
8
III. Analysis of Law
ISSUE #1
Whether the personal guaranty of the mortgage by Jean-Luc Andriot, not evenmentioned in the Assignment of Mortgage [Appendix #1], was also assigned outof the bank failure of BankUnited, FSB to BankUnited, N.A. without any writtenassignment of the guaranty?
1. Conclusively, there was no written assignment of the alleged Personal
Guaranty of Appellant, and there was no written assignment ofof the Promissory
Note against Maxmar Realty, LLC. Therefore, without any written assignment of
either of those alleged instruments, attempts to enforce either or both by Appellee
are clearly and explicitly barred by the Statute of Frauds 725.01 as previously
detailed, and not just by the Statute of Frauds, but also by the Supreme Court case
ofBellaire Securities Corporation v. Brown, supra.
2. Please recall that the Assignment of Mortgage from the FDIC
[Appendix #1] only mentions the mortgage, and not the promissory note and not
the personal guaranty, so the assignment attempts to transfer less than the entire
instrument. The attempt to transfer less than the entire instrument negates any
transfer under the statute governing the "Negotiation, Transfer, and Indorsement"
at Florida Statute Section 673.2031(4) which states:
"(4) If a transferor purports to transfer less than the entireinstrument, negotiation of the instrument does not occur. Thetransferee obtains no rights under this chapter and has only therights of a partial assignee."
9
So, under the Uniform Commercial Code, Negotiable Instruments, at 673.2031(4),
the transferor (which in our fact pattern is the FDIC) did not transfer under the
Assignment of Mortgage either the alleged personal guaranty of Mr. Androit nor
the Promissory Note, at best only the mortgage. Therefore, Appellee does not have
any negotiable instrument rights, only whatever rights it may have under the
Assignment of Mortgage, which its lawyer stated in open court at the hearing on
the motion Appellee was not relying on, rather that Appellee is relying on the
negotiable instrument statute which clearly under these facts it is not entitled to
rely, only upon the partial assignment rights of the mortgage, if at all. The motions
hearing judge should have granted the Motion to Dismiss and the defensive Motion
for Summary Judgment at least as to Mr. Andriot appellant. Now, he is faced with
a long, unnecessary under these facts, and expensive trial to vindicate his rights.
10
ISSUE #2
Whether the "open endorsement" from BankUnited FSB, which failed and wastaken over by the Federal Deposit Insurance Corporation (FDIC), wasextinguished forever, requiring a written assignment of all lending documents bythe FDIC to BankUnited N.A.?
3. Yes, by definition under the Uniform Commercial Code, General
Provisions, Part II, General Definitions and Principles of Interpretation, at Section
671.201(13) which defines "Creditor" as follows:
"(13) "Creditor" includes..., a receiver in equity, and anexecutor or administrator of an insolvent debtor's or assignor'sestate."
The FDIC is in fact a creditor of the failed BankUnited, FSB as defined above,
because the FDIC is a receiver in equity, and an executor or administrator of an
insolvent debtor's or assignor's estate." Therefore, as the defined "creditor" under
the statute, the FDIC could not pass on an active, alive, valid open endorsement of
the insolvent failed BankUnited FSB to BankUnited N.A. because the failed of the
insolvent bank extinguished the purported original open endorsement. And even if
the FDIC could pass an open endorsement from the failed bank, it would require a
full and complete assignment of all of the instruments on the purported open
endorsement, as we discussed above when analyzing F.S. 673.2031(4).
4. Furthermore, in addition to the above statutory analysis of the two
issues in this appeal, the newly minted case ofJames K. Lindsey v. Wells Fargo
Bank, N.A., 1D12-2406, Opinion filed February 27, 2013 (Fla. l®' DCA 2013)
11
[copy attached] needs to be discussed due to its similarities to this appeal. One case
cited in Lindsey, supra, is Lizio v. McCullum, 36 So. 3d 927, 929 (Fla. 4th DCA
2010)"Where the defendant denies that the party seeking foreclosure has an
ownership interest in the mortgage, the issue becomes an issue that plaintiffmust
prove." By analogy, BankUnited N.A. had to prove that it has standing to sue and
a perfected legal right to foreclose prior to filing foreclosure, and it has not.
5. Riggs v. Aurora Loan Services, LLC, 36 So. 3d 932 (Fla. 4th DCA
2010) stands for the premise that possession of the original note, indorsed in blank,
was sufficient under Florida's Uniform Commercial Code to establish that Aurora
was the lawful holder of the note, entitled to enforce its terms. However, here we
have the opposite, BankUnited N.A. does not have an original note indorsed in
blank, at best (if the Receivership had not completely extinguished the open
endorsement in the Allonge) it has only the mortgage but it disavows the
Assignment of Mortgage, and that does not confer standing upon BankUnited N.A
to sue either of the Appellants. The case should have been dismissed for lack of
standing.
6. This court has the right to review the trial court's ruling on the
summary judgment and the Motion to Dismiss de novo. See Chen v. Whitney Nat'l
Bank, 65 So. 3d 1170 (Fla. l®' DCA 2011). Summary Judgment is proper where
there is no issue of material fact and the moving party is entitled to judgment as a
12
matter of law. The moving party must factually refute or establish that opposing
arguments are legally insufficient. Appellants have done so under the facts of this
instant case. BankUnited N.A. admitted to the court that it is not suing upon the
Assignment of the Mortgage, rather it is relying upon the open endorsements
which died before this lawsuit when the BankUnited FSB failed and the
incomplete assignment barred enforcing the purported open endorsements.
7. "To have standing to foreclose, it must be demonstrated that the
plaintiff holds the note and mortgage in question." Mazine v. M& IBank, 67 So.
3d 1129, 1132 (Fla. 18' DCA 2011); see also BAC Funding Consortium, Inc. v.
Jean-Jacques, 28 So. 3d 936 (Fla. 1®' DCA 2010). The plaintiffmust have the
requisite standing when the foreclosure complaint is filed. See Rigby v. Wells
Fargo Bank, N.A., 84 So. 3d 1195, 1196 (Fla. 4th DCA 2012) (quoting Venture
Holdings & Acquisitions Grp., LLC v. A.I.M. Funding Grp., LLC, 75 So. 3d 773,
776 (Fla. 4th DCA 2011).
8. In this case, BankUnited N.A. had the burden to demonstrate that is
held the MaxMar Realty, LLC note and mortgage when it filed the complaint
March 19, 2012, the date that it filed its complaint for foreclosure. It did not. See
Gonzalez v. Deutsche Bank Nat 'l Trust Co., 95 So. 3d 251, 253-254 (Fla. 2d DCA
2012); Gee v. U.S Bank Nat'l Ass 'n, 72 So. 3d 211, 213-14 (Fla. 5th DCA 2011)
(same); Rigby, 84 So.3d at 1196 (same); BAC Funding Consortium, 28 So. 3d at
13
938 (same). The Summary Judgment in favor of Maxmar Realty, LLC and Jean-
Luc Andriot should have been granted.
9. Now would be a good time to take a much closer look at the state
parallel statutes relevant to these facts, especially the Florida banking statute
"Banks and Trust Companies" at sections 658.80 Appointment of receiver or
liquidator; 658.82 Receiver; powers and duties; and 658.83 Liquidator; powers and
duties. These are state empowerment statutes that parallel authorizing the FDIC in
to take over BankUnited, FSB as Receiver, appoint a Liquidator, and under
658.82(3)(b) appoint a liquidator to immediately liquidate the assets of the bank or
trust company and wind up its affairs. The receiver for an insolvent bank becomes
in effect the substitute trustee of funds. Tomasello v. Murphy, 100 Fla. 132, 129
So. 328 (Fla. 1930). The Receiver for an insolvent institution has a duty to wind
up the the business by converting assets into cash and making settlement. Allen v.
Lamon, 99 Fla. 1041, 128 So. 254 (Fla. (1930). The Receiver actually takes title to
the property and assets and affairs of the bank, see Tomasello v. Murphy, supra.
When a property is placed under the court's control by the appointment of a
receiver, the court controls the property, see In re Mariner Enterprises ofPanama
City, Inc., 131 B.R. 190 (Bankr. N.D. Fla. 1989) (applying Florida law). Once a
receiver is appointed for a business or person, that entity loses the power to
transfer its property subject to the receivership, see Sunland Mortgage Corp. v.
14
Lewis, 515 So.2d 1337 (Fla. th DCA 1987); and McKinnon-Young Co. v. Stockton,
53 Fla. 734, 44 So. 237 (Fla. 1907). Exactly, and that is exactly why the "open
endorsement" on the lending documents in our case on the BankUnited, FSB did
not transfer ownership to BankUnited, N.A. because the power of the open
endorsement was extinguished in the FDIC receivership, the power died, and could
not post receivership transfer ownership as it died when the receivership began.
15
V. Conclusion
A mistake was made on December 21, 2012, when BankUnited, N.A.
was permitted to continue its lawsuit against Mr. Andriot personally, because
appellee has no signed enforceable writing that would permit it to sue Mr. Andriot,
a clear violation of the Statute of Frauds 725.01. The Assignment of Mortgage
was disavowed by the BankUnited, N.A., which stated flatly that it brought this
foreclosure based upon two alleged open endorsements contained in an "Allonge to
Promissory Note" attached to the complaint.
The problem for BankUnited N.A. then becomes the prohibitions in
the Negotiable Instrument statutes Florida Statute Section 673.2031(4) defining
"Transfer of Instrument" which bars any attempted partial transfer, and makes the
open endorsement statute inapplicable to these facts.
Florida Statute Section 671.201(13) defining "Creditor" includes..., a
receiver in equity, and an executor or administrator of an insolvent debtor's or
assignor's estate." By definition, the FDIC is a creditor of the failed BankUnited
FSB, and the purported open endorsements in the Allonge to Promissory Note"
were extinguished in the takeover by the FDIC of the failed assets. Therefore, the
only legal way to transfer the seized failed assets of BankUnited FSB by the FDIC
to BankUnited N.A was by an express written assignment, which the appellee's
lawyer admitted to the trial court at the motions hearing appellee was not relying
16
upon and which was not pled in the complaint.
A closer look at the state statutes and case law clearly shows that the
open endorsement was extinguished by the powers of the receiver in liquidating
the assets of BankUnited, FSB and therefore could not effectuate a transfer to
BankUnited, N.A.
The trial court should be reversed with instructions to permanently
dismiss this lawsuit or to grant the defensive summary judgment in favor of the
Appellants. Thank you.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing has been furnishedby Email on May 7, 2013, to:
Clive M. Ryan, Esq.Kahane and Associates, P.A.8201 Peters Road, Suite 3000Plantation, Florida 33324notice@kahaneand associates.com
/s/ ary Barcus, Esq.Gary Barcus, Esq.Electronic Signature
Certificate of Compliance
I HEREBY CERTIFY that this Initial Brief complies with the Times NewRoman 14-point font requirements as detailed in Rule 9.210.
Gary Barcus, Esq.Fla. Bar No.: 480400Attorney for Appellants1689 SW 158 AvenuePembroke Pines, Florida 33027(954) 438-4222 Office(953) 618-9530 Cellb sgab 1.com
/s/ Ga Barcus, Esq. 'Electronic Signature
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