Castillo v. Deutsche Appellant Initial Brief

8/3/2019 Castillo v. Deutsche Appellant Initial Brief

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IN THE UISTRICTCOURT OF APPEAL OF FLORIDA~

THIRn DISTIUCT

SANDRA P~CASTILLO,

A.p'p,e~lantlnefen.dant, Third DCA Case No..:

3011M2;132L,.T~No.:

09-88,614,CA21

vs.

DEUTSCHE B,ANK NAT10NAL TRUST

COMPA.NY AS TRUSTEE FOR

MORGAN STANLEY ADS CAPITAL .1

INC. TRUST 200'o-HE'7MORTGAGE

PASS-THROUGH CE'R.T.lF1CATES,

SERIES 2€t0'6-HE7,

AppeUe,efPla.i.dff~

APpiEAL FROM T.DE ELEVENTH JUDICIAL CIRCUIT COURT IN AND

FOR l\OAl\1[][~UAnE 'COUNTY,FLORID'A

INITIAL BRIEF OF"APPELLANT" SANDRA P. CASTILLO

ROBERTR. JIMENEZ, ESQ, .

JI1\mNlEZ, MILIAN & ASSOCIA TES;PL.LC

2025 SW 32 .AVE, ST'E 11t I t

l\flAMl, FLORIDA 33145



TABLE OF CONTENTS

TABLE Of errATIONS

STATEMENT Of THE CASE AND FACTS

QUESTIONS PRESENTED

SUMMARY Of ARGUMENT

ARGUMENT:

I. THE LOWER TRIBUN.AL E.RRED INDENYlNGAPPELLANT'S MOTION FOR

SUl\!IMARY JUDGMENT nE'CAUSE, AS A

MATTER OF LAW, A DEF.ENDANT HAS

THE STANDING AND ABI:LI.TY TO

CHALLENGE A PLAINTIFF TRUST'S

STAND'ING TO FILE SUIT BY

CONTEST.ING TIlE TRUST"S:

O'WNERSHIP OF A. NOTE AND

MORTGAGE PURSUANT 'TO THE

LIMITATIONS OUTLINED IN THE

TRUST'S DOCUMlENTS~

II. BECAUSE THE mUST CAN NOT TAKE

OWNE,RSIDr OF A NOTE ANn

MORT'GAGE OR HOLD THEM INV[OL.ALTION OF ITS TRUST DOClTMIENTS,

AND BECAUSE THE TRUSTEE OF THETRUST CAN NOT ,COMMIT THE ULTRA

VIRE-S ACT OF ENFORCIN'G LOAN

DOCUMENTS THAT ITS TRUST nOES

NOT OWN, TOlE TRIAL, ,COURT ERRED IN

1

Page

in

1

5

6

8



DENYING APPELLANT"S .M.OTION .FOR

SUMMARY JUDGM:ENT ANn .IN

G.RANTING APPELLEE'S MOTION FOR

SUMMARY JUUGMENT.

A. As a matter of law, a trust cannot tak.e ownership

or hoM. a note and mortgage in violation of it s

trust documents ..

B. As a matter of law, the trustee of a trust cannot

cO'mnm~the ultra vires act of e.rJlfnrd.ng lOGlf i lJ

documents that its trust does not own.

CONCLUSION

CERTIfMCA TE OF SERV ICE

CERTTFICA IE OF CONIPLIANCE

~, ..u

il l 5

16

22

30

3[

31



TABLE OF CITATIONS

Statmtes

Page

Florida Statutes:

Section 73·(i08150 )(a)

15 U.S.C.A. §77~(a}(2) 22

IRe §860A(a) 21

IRe §860A(b)

IRe §860F

21

21)22

Arn'lstrong v. Harris

773 So. 2d '7 (Fla. 2000) 9

General Development Corp. I V • . Kirk

251 So. 2d 284 (F la.. 2d DCA 1'971) 9, [0, n, ]5

Griley v..Marion Mor~gage Co.

l32 Fla. 299 (f1a. ]937) 26

In Re Burton's Estate

45 So. 2d 873 (Fla. 1950) 17

In Re Estate of Stillman107 Misc. 2d 102 (Snrr.Ct, N.Y. 1980) 25

In Re Robin Hayes

3 '9 3 B .R . 2 5'9 (Bankr ..Mass ..2008) 1 3



in the Matter of James D. Dana

465 N.V.S.2d 102 (N.Y. Sup. Ct 1982)

In the .Matter ofthe Application ofEdward Cummings

U~ 4 N .sY.S. 404 (N.Y. App, n r u v . lli9'20)

Jackson v. State

572 So..2d : 3 [ (Fla. Sd DCA 1991)

Johns v. G.iUlaJ~

134 Fla. 575 (Fla. ~9'38)

Jones v . First National Bank in FortLauderdale

226 So. 2d 834) 835 (Fla. 4d DCA 19,69)

Kemp ~}.Paterson

,6N.Y.2~d40 (N.Y. ]95'9)

MacFarlane v . First Nat 'IBank

203 So ..2d 57 (F]a. 3d DCA [967)

Martin Properties •.Inc. v. Florida Industries.etc .. et al.

833 So. 2d 825 (Fla .. 4d DCA 2002)

Muth v. AIU insurance Company982 So. 2d 749' (F la.. 4([ D CA 2008)

Shaps 17. Providen; Life &Accident Insurance Co.mpany

82,6 So. 2d 250 (Fla.. 2(02)

Siegel v..Novak

920 So. 2d 89 (Fla ..4d DCA 2006)

Your Construction Center, Inc. ' V . • Gross, etc.

316, So. 2d 596 (Fla. 4d .DCA 1~:n5)

17

2.0,27

17

22

28

i o , 11,15

17

16



.F la. R . Civ .P. ] .51 O (b)

Other Authorlties

Florida Appellate Practice 148 (2nd ed . [9'97)

New ~ork Civil Practice: EPTL P 7-2.4(2) (20] I)

N.Y ..Est. Powers & Trusts Law, § 1]-1.l(b)

Restatement of the L-aw,.Second. Trusts, §]87 (19192 ed.)

[ 7

9

17~23

23

25.,26



STATEMENT OF mE CASE ANn FACTS

The Appellant, Sandra P. Castillo (he.rein~~Ap'Pen.anf'), an original

Defendant below, perfected this appeal from a . Final Order of the Eleventh Judicial

Circuit Court inand for Miam i-D ad e Cou nty , Florida, entered on July 28, 201]1' a .

copy of which is attached to the Notice of Appeal filed on August 9, 201] (R.349-

.36,9.). The Final Judgment of Foreclosure was entered. pursuant to a : prior order

issued on January 24, 2 0 m l that awarded Appellee Deutsche Bank National Trust

Company (herein referred to as "Appen0e~'),~he original Pjaintiff below; a final

summary judgment (also attached to the Notice of AppeaWat R.349'-369.). This

appeal also challenges, as reversible error, the denial of Appellent'sMoticrr for

Summary Judg ment on Nov em be r 22) .2010. ld. The O rd ers were r ende red . by the'

Honorable Judge William Thomas, one of the judges of the Bleventh Judicial

Circuit Court.

The Appellee filed its Complaint to ' reform and foreclose a mortgage on

December L,2009. The Appelleeis the trustee of a.New York common law trust,

Morgan Stanley ABC Capital I Inc. Trust 2006-HE7 (herein the "Trust"), which .~~

filed the instant suit onbehalf of. Said Trust was createdpursuant to Internal

Revenue Codes g,60A~860G for th.e purpose of constructing and selling mortgage'

b ack e d se cu ritie s as investments. (R J 5 3 - 16 6.,) See also, ARGUM:ENT ~ n .1 5~



. . . . . ., - - - .- .- - . . . . . . - _ .. - - - ., - - . ~.- - - - .,---- - •• --- -,. --- ---- •• ~-- - ------ • r~

infra. As such, and pursuant to . federal securities laws, a securhies prospectus

containing the material trust terms was filed for the Trust with the United States

Securities and Exchange Commission. ki.

Attached to the Complaint was a promissory note made payable to a lender

nota party tothe instant action (WMC Mortgage Corp.) and amortgage instrument

that listed Mortgage Electronic Registration Systems, inc. as the mor tgagee and

nominee of the lender, \VIV!llCMortgage Corp. (R.,6-42.) Appellee p'~ed.inthe

Complaint that the subject promissorynote W3!S transferred to it and that it owned

and. held the note and mortgage. Id. Appellant." vial her Answer and Affirmative

Defenses to the Complaint (R.146-] 52.)) Memorandum in Opposition to Plaintiff's

Motion For Summary Judgment (R.140~]45.), and .~nan Affidavit (R,.~.35-137.)

denied that the Trust and/or IDe Appellee properly owned or held the note or

mortgage (and that, as such, neither had standing to foreclese),

On or about March 29, 2010, Appellee filed into evidence a copy of the note

w~~ch contained a blank endorsement signed by the original lender. (R.83-88.)

Subsequently, on July 14, 2010 and again on November 10~20]0, Appellant m o o

into evidence copies of th e trust documents fHed with the United States See-urities

and Exchange Commission. (R.153~]66.) Seealso~ ARGUMENT~ n.15~ infra.

The instant case proceeded to the summary judgment stage with. Appellee

filing i~s Motiou for Summary Judgment on May lO, 2010 (R.103-M08.) and

2



•- - -- - -- ~" - -- --, - -- -- ..,. I •• I _ ••__ .,__ •• _ _~ I •• I •• __ ••• _

Appellanr filing Iter Motion for Summary Judgment on August: ]6, 20 l 0 (R.176-

184.). Appellant's MoHon for Summary Judgment raised the issues of I) whether

a defendant has the ability to challenge a plaintiff trust's standing by contesting its

ownership of instrumen.tspursuant to~he limitations outlined in the trust

documents; 2) whether a trust can take ownership and hold a note and mortgage in

violatioo of its trust documents; and 3) whether the trustee of thetrust can commit

the ultra vires act ofenforcing loan. doenmentsthst its trust does not own.

On October 25, 2010, his Honor, Judge William Thomas, orderedthat both

summary judgment motions be heard before him, and a . special set cross-summary

judgment hearing was scheduled for November 22, 2.0]0. (R.190.) Despite the

fa.c~that the AppeUee never disputed an y of the facts alleged in Appellant's Motion

for Summary Judgment that the trust terms and documents had been violated

fARJGUMENT" n .181, infra)~ the trial court denied Appellant's Motion. In so

doing, thetrial court in essence held. that a d.efeodant cannot challengeeplaintiff

trust's standing by contesting the trust's non-ownership of instruments stemming

from a viofation oftheterms regulatiegthe trust.

AU the parties present at the November 221 1 dhearing, as well as the Judge,

overlooked that Appellee's Motien for Summary Judgment was abo supposed. to

have been argued and ruled upon (but was not). (R.223, 224.) As such, a follow

- h x· . o· " J. > , " . ' - . ~ - 2 - ' . : 1 1 2 ~ ~ 1 1 - . 'dii - A - · - ,1 1 ,· " M - - ,f .. ~;" 'S - - , , ' · ' - - . -p ...eanng on , 3 ! T 1 l 1 1:UUY"'lf, _ vm.. regarumg .~ppe_ee S (hillOn !lor ummary

3



· ,.. _ ... - _,_.. - ~.,.. ,.,.,- ..... , . r.

Judgment was set, and the Court entered summary judgment in favor of Appellee

at the hearing. (R,349-369' .e ) See alsot ARGUMENT~ n.l ~infra. An appeal was

filed two days later, but said appeal was dismissed by this Honorable Court as

premature, (R.274-276.) On July 28, 2.0] 1) the trial court entered a Final

Judgment of Foreclosure, and the instant appeal followed. (RJ49- 369,)



QUESTIONS PRESENTED.

1. \VHETHER A nEFENDANT IN A FORE'CLOSHRE CASE HAS THE

A.BILITY TO CHALLENGE~ A PLAlNTIFFJ TRUST'S ST.ANDING BY

'CONTEST'ING THE TRUST'S OWNERSHIP OF THE NO-TE AND'

1\10RTGAGE .PURSUANT TO THE .LlM1!TAT[ONS OUTLINED IN 'THE

TRUST'S DOCUME-NTS.

2~WHETHER A TRUST CAN TAKE OWNERSHIP OR HOLD A NOTE

AND MORTGAGE IN VIOLATION OF ITS TRUST DOCUMENTS.,

3,.WHETHER THE TRUSTE-E O.F A TRUST CAN COMMIT THE ULT'RA.

VIRES .ACT O.F ENFORCING .LOAN DOCUMENTS THA.T ITS TRUST'

DOES NOT OWN..

5



_ _ ........ _ .- - - _ • - •• I •.• _ _ _ _ _ _ _ ~ ~ P 1 - _ . - ,. _, ~ .~ _ - -~~... .. -- - _ . - - - ~..~- _ .

SUMMARY OF .A.RGUMrE,NT

On summary judgment, the trial court improperly held that: Appellant could

not challenge Appellee's standingto file suit in the instant case by contesting the

Trusts's ownership of the note and mortgage through the vessel of the limitations

outlined in the Trust's own documents. Florida law is clear that Appellantactually

does have the ability to so challenge because standing: is based upon having a

sufficient irrterest in the outcome of litigation, not privity of contract, Case law

also dictates that a defendant has the right to challenge a trust's ownership of a

note and mortgage in a foreclosure case as a t means of contesring the trust's

standing to file suit.

'[he trial court also erred when it denied. Appellant's Motion fo, r Summary

Judgment and granted Appellee's motion because, as a 111aUer of law;a trust cannot

take ownership of a note and mortgage or hold it in violation of its trust

documents. Itis elementarytrust lawthat a trust's founding document controls the

limitations that must be adhered to by a trustee and its trust, New York and Florida

law -vbcth applicablein the ins tant case..._agree that, because the relevent note and

mortgage were not properly transferred to the Trust at issue, the trust documents

were violated and the Trust does not own the subject instruments. As sueh.jhe

Trust and ~ts Trustee (Appellee) never had standing to tile the instant case to begin

willi.

6



I .... - -- •~ • ____ __•••• ~I 1__ •• •_ I. I _ ___ • _

Furthermore, a trustee cannot committhe improper and ultra vires act of

enforcing Ioan documents that its trust does not own, especially when (as in the

instant case ) th e trust te rm s th em se lv e sm and are tbatthetrustee doe s not hav e the

ability or discretion to maintain possession of an improperly transferred note or

mortgage, Trustee actions which contravene trust instruments are void as a matter

of New York and even Florida. ]aw. Thusly, because the note and mortgage were

nev e r properly tra ns fe rre d to th e Trust, and be cause the Trust and A ppe lle e Truste e

must follow the']! trust documents) the Trust does not own and cannot enforce the

subject moandocuments and has no. standing in the instant case,

7



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.. - _._. _ - _ - .." . _ . ._ . _ _ . - -- - . _. -_ _ . _ _ . _ , - . .... - - - _ . - _

ARGUMENT

r, THE LO\'Vll:R TRIBUNAL ERRED IN DENYllNG APPELLANT'S

MOTION FOR SUMMARY JUDGl\1ENT BECAUSE" AS A

MATTER OF' L.AW, A . DEFENUANTHAS THE STANUING AND

AB.ILITY TO CHALLENGE A PLAINTIFF TRUST'S STANDI:NG

TO FILE SUIT' BY CONTESTING m·E TRUST'S OYlNERSHJP

O.F A NOTE AND MORT'GAGE PURSUANT TO THE

LIMITATIONS OUTLINED IN 'THE TRUST'S DOCUl\fENTS~

Although run its order de nying Appe llant's Motion for Summary Judgment

(R.225-257,.)1 the trial court ,d~dnot crystalize itsprecise jurisprudential motive, it

is clear from the November 22 hearingtranscript (R.222, 223.) that the tria] court

incerrectly rejected th e Appellant's legal abilityte challenge the Appellee's

standing with. relation to whether-the trust documents have been violated.' Indeed,

because the evidenceand the recor-d clearly show that the trust documents and. trust

tenus have been violated --a factual allegationnever rebutted by Appellee below-~

there wo:umd have been AlO other way for the trial court to deny Appellant's Motion

I The trial court entered an order denying Appeljant's Defensive Motien fo rSummary Judgment on November 22~ 2010. The Index Record on Appeal does

not reflect the order. Instead, said Index states "Plaintiff's And Defendant's Cross-

Motions for Summary Judgment" atpages 225-257 and with th e date of January

25~20mL The Inde x R ecord on A fJ 'Pe a~also doe s not re fle ct the F in al J ud gm e n t of

Foreclosure on July 28, 2011 or the or-dergranting Plaintiffs Motion For Summary

Judgment on January 24, 2,011. Said documents were, however, attached to th e

Notice ofAppeal (R.J49-369.).

2lPages 4 and 5 of the transcript (R.l'95~,1'96.)showcasesthatthe t r ~ a . m court judge'sfirst question :mtthe November 22

ndhearing, regarded. the ability ofthe A~)ipeU.antto

challenge standing by pointing out violation of the trust documents. The judge

asked the following: "What is that. -vplease forgive the vernacular of this-- but

what is itany of your business whether or not the trust is basically taking property

and. holding it..in co nsrad ice io n to their own trust documents?"

8



•• - ... - ---~""- .•• .,;----- ..... ,. r.'1I" __ . __ .. _

for Summary Judgment unlessjt held. that Appellant did not have the ability ~o

challenge the standing of the Appellee and the Trust.

The trial court thus committed reversible error as Florida. law is clear that

Appellant can contest standing by engaging in the aforementioned legal challenge,

As such, the standard of review intheinstant appeal is de novo.'

In its reply to Appellant's affirmative defenses, Appellee stated that "the

borrower is not a party nor a third party benefieiary of this [trust] contract.

Therefore, the borrowerhas no standing to attack. whether or not the provisions of

the agreement were met or whether there have been any violations," (R.170, para.

5..) However, as Appellantpointed out at the November 221l

i: ! hearing and as

evinced .inthe transcript (R.223.)~ "the I[Appd~an;t]is not claiming any rights under

the trust documents. The [Appellant] is utilizing her Florida law given right to

cballengethe standing of'the [Appellee] ..... Indeed, itis well settled law in Florida.

that both standing and ownership of notes and mortg ag e s can be cha l lenged as

App ellant has se t forth .

In General Development Corp. v. Kirk; 251 So. 2d 284 (fla. 2d DCA] fJ'71), the

Second District Court of Appeal analyzed and explained precisely what constitutes

. 3 See Armstrongv.Harri:s~ 773 So. 2d 7 (Pla, 2(00) (stating: that "the standard of

review for a pure question of law is de novo" and also citing to Florida Appellate

Practice 148 (2nd ed, 1997) (stating that "Summary judgments present a classic

example of the type of decisions that are subject to the de novo standard of

review' ')}.

9 '



_ . 1 11__ •__ ._. • ,_ ~~ •• • _r ~

the concept of standing. "Standing is , in the final analysis, that sufficient interest"" ., '_

in the outcome of Iitigation which will warrant the court's entertaining it. It is

beyond doubt that standing. is, in most states, no longer determined by first:

determining some absrract question such. as privity," The Second. District Court

further elaborated that "it is mot "privity" but a legitimate jnterest warranting.

invocation of the judicial power of the state which ought to . determine standing ... "

Interestingly, the Second District Court's explanation in General Development

Cmp,4 wasthe foundation for a subsequent Fourth District Court decision that is

precisely Of! point with/to theinstam issue.

Mll.Martin Properties, Inc. v, Florida Industries Investment Corp., et al., 833 So.

2d 825 (F~a:.4d DCA 20(2), the appellant, Martin Properties, Inc. (berein ".MP'ill"),

appealed a trial court order that denied. it standing to challenge an assignment of

the equity redemption regarding property that M.PI had been the high bidder for at:

a mortgage foreclosure saJe.F]orida Industries Investment Corp..(herein "FUC")

had assigned its. equitable right of redemption to VOSR Industries) and the trial

court ruled that MPI did not have standing to challenge said assignreem. The

Fourth District Court of Appealreversed and rejected the trial court's holding that:

~ 'tv [pI h ad no standing to c~aH eng e the validity ofthe assignmeat because 1v1PMwas



• - w ._ • w w _ - ' _ 'w w • _ • w • w w w r ••• " • w _ w w ww w w w ~ , r r, ,. w w w

www __ ~ ' , w ww w ww w w w w ~ ,w w w ,w W W. , . , , ••

neither aparty to ' it nor a third party beneficiary of it," "That", the Fourth District

Coun pointed om, "is notthe test"

Relying on and quoting from the Second District Court's opinion in General

Deve lopmen t Corp.,5 the Poerth District COUlt of Appeal held that t'if ... the

assignment of the equity of redemption was not valid, MEl, as the successful

bidder at the foreclosure sale, will own. the property .. This is sufficient to give MlPM

standing. ~~6

En the instam case, the applicability and relevance of the aforementioned

precedents js obvious. The Issne in Marlin Properties, Inc. conceming .M]F"~'s

standing to challenge the; assignment. is analogous to the instant issue of whether

Appellanthas standing to challenge the:Trust's non-ownership (and thus standing)

of the corresponding Note BInd Mortgage given the undisputed trust violations. Just

as with Ml'I and the assignment, Appellant is not (it party to the trust documents

and. not a third party beneficiary thereof However, and as the Fcutth District

Court pointed out, "that is not the test." Rather, having a "sufficient interest in the

outcome of the litigation" =not '~privity'~--·s the standard, By that token, there can

5251 so , 2d 2841 286 (Fla. 2d DCA 1'971),

6 The fourth District Court of Appeals in Martin Properties, Inc.• 833 So .. 2d at827~ quoted the Second District Court's exphmation on standing ill General

Development Corp. that"S~anding:~s, in. the final analysis, that sufficient interest in

the outcome of Iitigation which win warrant the court's entertaining it. It is

beyond doubt that standing is, in most states, no jonger determined by first

determining some abstract question such as "privity.'?'

11



- -, r _.... _ __ _ 1 r ~ ,__,_ _r ,.,. _•

--_, _ - ,.'' --- -- -- - •••. -- -r ., IJ • _ .,

be no doubt that Appenan~bas the abihty to utilize violations cf fhe jrust

documents/tenus as a mechanism to challenge the standing of the Appellee to

bring the instant foreclosure case.as wen as to chalfenge the ownership interests of

the Trust inthe Note and Mortgage,7It is difficult to conceive of a greater interest

il l the outcome ofth]s litigation than that of Appellant, who willlose her residential

homestead should Appellee succeed in the instant action. Furthermore, precedenr

exists which clearly dictates that, in cases such as this involving a . fbreclosure by a

trust, a defendant has the right to challenge the trust's ownership of the note and

mortgage.

In Your Construction Center, inc. v , Gross, as Trustee of Dominion Mortgage

and R:eal ty Trust, 316 So.. 2d 59'6 (Pla, 4d .DCA 1'975),. the instant issue of

consideration was decided. Your Construction regarded a plaintifftrustee of a

Massachusetts business trust which brought a . foreclcsureaction pursuant to a note

and mortgage. The trial court had previously denied the appellants' motion to

dismiss, whichthe Fourth District Court of Appeal affirmed due to the fact that the

subject instruments specifically .Hs~ed.the trustee as the sole payee , 8 Howev e r , the

Fourth District. Court went on to explain. that, when a plaintiff files a complaint,

" 1 Succinctly, App el la nt cle arly has the standing to, in this fashion, challenge theAppellee's standing to bring the foreclosure action,

& The Fourth District Court held that t'where a note and mortgage are executed

naming as payee one trustee to this sort of foreig[IiJJrust, and. not more, that trustee

is entitled to maintain an action on the note and mortgage and to discharge theobligatien. ,~

12



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they must allege that they are the owner and holder of the note and mortgage in

question. "S l llouJd . d .e fen .d lant;s haveanyaflcgadan to the cnllua.ry they may join

issue on it, and mbtu~nadjmdieatioDJ as to the , o w n e . r s , . l J J j p l . ~ ' 9 (Emphasis Added.)

Anyone of the jhree previously referenced cases, even standing alone,

convincingly demonstrates that the trial court erred in its ruling below that the

Appellant did not have the abilhy to challenge the Appellee's (arid Trust's)

standing by contesting its owne-rship of instruments pursuant to ' the limitations

outlined in thetrust

documents. Although florida law is abundantly clear,it~sof

note that Honda is not alone in itsposition tbat trust law violations can be usedby

a defendant to bring to light a plaimiff trust's lack of standing in a foreclosure case.

Indeed, the trust documents under which Appellee functions as [rus~.eehav.e

alreadybeen utilized by a debtor in another state as part. of the inquiry as to

whether this same Appellee bas standing in a foreclosure matter,

In the case of In Re Robin Hayes, 393 B.R. 259' (Bankr ..Mass. 2008), Appellee

Deutsche Bank National Trust Company, in that case as trustee of Argent

Mortgage Securities, Inc, Asset-Backed Pruss Throug h. C ertificate s Se rie s 20()4-

WI]~ 10 sought relief from a stay ofthe Chapter ]3 bankruptcy of the debtor, In her

9 ' Id. at 597,

10 In the case of In Re Robin Hayes, the United States Bankruptcy Court for the

District of Massachusetts stated that "Deutsche Bankis a party to a Pooling end

Service Agreement e~PSA"],dated as of October 1,2004 .. The Depositor unde r the

Pooling and Service Ag;reem.e]1t,,~ame~y the seller of pass-through certificates

13



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Objection to Appelke's mction for relief from stey.jhe Debtor raised an issue of

Appellee's standing to seek the relief it sought. The specific issue for the

Bankruptcy Courtto consider was whether Appellee Deutsche Bank National Trust

Company successfully traced the identity of the various holders and se rv iee rs of

the mortgage from the original helder to itself The CGul1 held that Appellee failed.

to do SO~and it noted that Appellee "failed to prove that the mortgage executed by

the Debtor and. her mother in favor of Argeru Mongage Company, LLC was ever

assigned to an entity by that name or to Argent Securities Inc., the Depositor under

While the court in In R e Robin Haye s held that Appellee lacked standing for

various reasons, it is clear tbat the court: looked to . the trust documents in its

attempt to determine the standing of Appellee Deutsche Bank National Trust

r-eflecting.beneficial oWl1e rsh~p ' interests in certain real estate mortgage investment:

conduits, is Argent Seourities l~c.)not: Argent Mortgage Seenrities.Tnc. Under the

Pooling and Service Agreement, the Trustee of the Trust fund, consisting of a .

segregated pool of assets comprised of mortgage loans and certain other related

assets, is Deutsche Bank National Trust, Company. ),.

~] In footnote 7 of the opinion in In Re Robin .Hayes~[he court pointed out that

"Deutsche Bank noted that Argent Mortgage Company, LLC was identified as an

"Originator" in the PSA. Deutsche Bank failed to ' explain the relationshipbetweenArge.nt Seeurities Inc..and Argent Mortgage Company, LLC~ in its capacityes an

originator, and Argent Securities Inc. '8 ownership of pass-through certiflcates

backed by the mortgage originated by Argent Mortgage Company, LtC remains

unclear. Deutsche Bank failed in its burden to explain the relationship and how it

affectsi ts standing."

14



Company to file its motion fo r relief from s~ay.12 Although said opinion is merely

persuasive upon Florida. courts, it is an example ofhow Florida law =embodied In. .

the prece dents se t forth abov e w nthe C-3Ses of General Development Corp., Martin

Properties, Inc., and Your Construction Center. Inc= should be applied to th e

instant: situation on appeal, Thusly, it i s , clear that the trial court err-ed in not

allowing Appellant to' contest Appellee and the Trust' s standing through a

challenge based upon the H m i m ~ r l : : r u ~ o n 8in thetrust documents,

II. B,ECAUSE mE TRUST CAN NOT TAKE OWNERSHIP OF A

NOTE ANU MORT'GA'GE OR. HOLD THEM IN VIOLATION OF

ITS T'ItUST DOCUMENTS~ ANDBE,CAUSE THE TRUSTEE OFTHE TRUS'T ,CAN NOT COM1\OT THE ULTRA VJRES ACT OF

ENFORCIN'G LOAN DOCUM:E,NTS THA T ITS TRUST" DOES

NOT OWN, THE TRJAL COURT ERREn IN DENYINGAPPELLANT"SMOT[ON FOR SUM!MARY JUDGl\IENT AND IN

GRANTING A.PPELLEE'S MOTION FOR. SUMMARY

JUDGMENT,.

As mentioned above, although in its order denying Appellant's Motion for

Summary Judgment (R.225-257.i the trial court did not crystaline its exact

12 . The COMf i t , went: on to state that "moreover , De-utsche Bank failed to submit any

evidence that the November Jt 2004 mortgage was included in the ['SA or was

subject to Section 2.09 of the PSA as neither Scbedu~.e 1 to the PSA nor a

Mortgage Loan Schedule attached. to a Subsequent Transfer Instrument weresubmitted. into evidence, Thus,..,,.the Court finds that Deutsche Bank failed to '

adequately trace the moanfrom the original holder, Argent Mortgage Company,LtC, to it.)"~JS' 1 _.-~ee D.. t supra.

m s



erred because a trust and a.trustee cannot violate trust law.

that, in th e absence of a contractual provision specifying governing law, a contract

is governed by law of the state in which the contract ismade.~']4 In. the, Instant

case, Florida law is clearthat because th e Morgan Stanley ABS Capital J Inc, Trust

2006-HE7 is a New York common law trust (R.,~,53-166.)15) subatantive New York

trust law applies."

14 See, Shaps v. Provident Life & ,Accident Insurance Com:pany,~826 So. 2d, 250

(Fla. 20(2) (also stating tbat, "this C O l t m r t , has held, thaJtunder lex loci controcms, the

Mawof tbe jurisdiction w he re tbe contract w as e xe cute d g ov erns sobstanriv e issue s

re g ard in g th e contract"),

I,:} Tbe Notice of Filing with artaohments indicaeed by the Index Record on Appeal

witha. date of July m 4 ~ 2010 cootained e re levant Secerities Prospectes ine l ec tro nic fo rma t 011 a data. compact disc. Said documentat ion shows that th e Trust

]83. New York common Iaw trust (which was never rebutted by Appellee), The

sam e Se curitie s Prospe ctus w as file d in pape r form st artache djo anothe r N otice of

Filing on Novembe r 10, 2010. The Index Rec.ord. on Appea~ doe s not: H st th e

November [atkNotice of Filing,

1 1 6 See Siegel v. Novak; 920 So. 2d 89 (Fla. 4d DCA 2006) (holdiog that

substantive New York trustlaw applied to a challenge of distributions from the

trust because New York bore the most significant relationship to the trust given the

fact that, at the time the challenged distributions took place, the trust was a New

York trustgoverned by New Yorklaw), In Siegel, the Fonrth District Court of

Appeal also outlined th,aJ"generaUy.~when cenfronted by a : choice of law problem,

a court w ill apply foreig~. law w he n it d eals w ith the substance of the case and win'" - "_

apply the forum ~s m a w to m atte rs of proce dure ." H ence forth, standing issue s in the

instant case should be de te rm ine d w ~.th re fe re nce to florida. law while substantive

trust law issues ShOM~d.be decided by New York law ..

]16





terms are contained within the Trust's Securities Prospectus" filed electronically

online with tile United States SeciUritiesamd Exchange Commission." The'

Securities 'Prospectus contains tbe relevant trust terms from all pooling and

servicing agreements and. any and. all other trust documents relevant jn and

stemmlng from the Morgan Stanley ABS Capital I Inc. Trust: 200t'S-HE7. If any of

the trust terms pertaining tothe Note and. Mortg;age at issue were violated, the

18 Appellee' s argument below was neverthat the trust terms were not viola ted or

that they were not in front of the trial coert, Rather, Appellee's position was that

such things were irrelevant At no time did jhe Appellee deny or file any

document in opposition to any factual allegations contained within Appellant's. ~ - .

Defensive Motion for Summary Judgment (which i~se~fequired no supporting

affidavits pUfSuanttoF]a.R,Civ,P. m,5lliO(b)), and tllilusly the lie can be 1][0 disputethat: th e material trust terms are contained within the Securities Prospectus. See In

Re Burton's Estate, 4S So, 2d 873 (Pla, 1950) (stating tbat statements made inan

appellate briefthat haveno support in th e record cannot be eonsidered on appeal);., '=",

Jackson v. Suue, 572 So. 2d 3~ . (Fla. 5d DCA 1'99'1 , Se ,e e isa . .Uut l l : v . AlU

Insurance Company, 982 So. 2d 749 (Fla. 4d DCA 2008) (affirming the trialli

court's refusal to allow a plaintiff) whopreviously filednothing in opposition to

tbe defendaru's summary judgment motion, to submit counrer-affldavits and

evidence on rehearing),19 'C T . 1 · 5 ~~ee flo, supra.

20 At the hearing on Appellant's Motion for Summary Judgment on November

2 2 1 l d ~ Appellant, on page 12,of the bearing transcript (R..203..), stated to the trial

court judge that: "the prospectus, prospectus supplement ... incorporate all the

material trust terms; things from the pooling: and servicing agreement, trust

ag re em ent, all of i~,n~a]1 h ere , The se are tbe trust docum ents.' ~ Se e a lso , R.202"204.



Trust would not be able to own or holdshe NO'~eand. Mortgage (which is the basic

The Securities Prospecais describes il l detail a . chain of ownership that the

corresponding Note and. Mortgage must have been subjected to in order for the

Trust to becomethe owner of said instruments, In a section within the Securities

ownership is outlined as follows:

Pursuant tomortiage loam purchase and warranties

agreements ....W}...f C. ... sold the mortgage loans, wi thout recourseto

MSMC [Morgan Stanley Mortgage CapaalInc.], and MSMC will sen

and conveythe mortgage loans ... on ... the close of business on the cut-

off-date, without recourse, to the depositor [Morgan Stamey ABS

Capital 1 Ine.] on the dosing dalle.PUrsuant to the pooling and

servicing agreement, the depositor will sel], without recourse, tothe

trust, allright, title and interest in and to each. mortgage loan .....he

dose of business on the cut-off date.

(RJ53-1'6ti}.22 The Securities ..Prospeetusgnes on to further stipulate: the exact

requirements for the Note and Mortgage to he: transferred and deposited. into the

Securities Prospectus provides that:

2:l See Your Construction Center, Inc. v. Gross-as Trus tee of Dominion Mortgage

and Realty Trust, 3 ~ .6 So. 2d 5'96,(Fla. 4d DCA 197'5).22('1 fn ' I S ·:J ee . r _ • _ . ~ sup ra .

19



In connection withthetransfer and assignment of each mortgage loan

to thetrust.the depositor win csuseto be delivered to (I) WeUs Fargo

Bank, National Association, as custodian. on behalf of the trustee with

respect to the VVMC mortgageloans ....o.n or before the closing date,

the following documenrs with respectto each mortgage Ioen whic.hcenstitutethemortgage file: (a) the originalmortg;age~o~:e~ endorsed

witb.outrecourse in blank by fhe last endorsee, indmdi.ng a.1

.~:ntf!rv.tm.~ng endnfs.em,eD.t.s showmga eDmp,le te c:b:aim of

endors~ment fromllhe Griginatn.f tmthe last eadersee ....I{d) the

rn.ortg.age assi.gnmellt(s) •••s.hG'IV~nga. CiolU.pl~eteha.~n of .assi.gmlll.ent

from the originator of the t'e~a:ted mortgage ~oam to t,"e lastendorsee. (Emphasis Added.)

(R. lliS3_166.).23

Showcasing that the trust terms have been violated is the fact that, in direct

endorsement that exists on the original note isa blank endorsement. (R.83-88.). If

the trust terms had been. complied wifh the original note would show three

endorsem ents: 0-ne from the orig h"._1 le n der (WM· ·C- ·M· ·rtg ag e .C - orp.) ....'fl·.,. from the.., .... "'.... ",'. •. . .. 1.~u.... .. v. ~.."'.Mru ... lh..... .... .. ..a. ... . v.. • ~ v.u.... . . ... n_

sponsor (Morgan Stanley Mortgage Capital IFII.C .•), and one from the depositor

(Morgan Stanley ABS Capital I Inc..). Two of the three endorsements an! missing,

and as such the Trust did mot become the owner or holder of the Note beeause t~.e

trust terms clearly mandate the presence of'allthree endorsements ..

mandatory chain of ownership is also a missing insttnment that was never

23 ld~

2 0



the case that Florida law itse~f does Mot require an assignmeat of mortgage upon

evidence of a , transferred debt/4 because the above referencedtrust terms require it"

from the originator to the depositoris another trust violation.

Therefora.because the trust terms and documents have been violated, the;Trust

cannot and does not own or hold the Note and Mortgage as (]I matter of New York

~aw.2S Indeed, because th e Trust is a Real Esrate Mortgage Investment Conduit

(hereil1~'REMIC~~)~he inclusion of a loan in the trust corpus that was notproperly

transferred. to ' the Trust as of the closing da~e ontlieed in the trust doeuments"

would subject th e Trust to greater tax liability pursuant to the Internal Revenue

Code (herein "IRC~,).:2;i

Because the Trust elected to be treated as a REMIC for tax. purposes.i" any

taxable gains on the loans property transferred and deposit je d intothe Trust (it is_' = . - .

unknown if any have been) would be or are "passed through" the Trust and directly

24 See Johns v . Gillian, il l 34 Fla . .575 (Fla, I '9381.25 S ' 1 · 7 -:ee n.. ..~supra.

26 The dosing date ofthe Trust is OctoberSl , 2:006. (R.153-Hi6.). See also., n.15,

supra.

27 See IRe §860A-8,60G..28 S · 1 5 _ . --e e n. .', supra .29 See IRe §860A{a) and (b). Subsection (a) of IRe §860A,entitled "General

rule", states that "except as otherwise provided in tbis part, a REMIC shellnot be

subject to taxation under this subtitle (and shall not be treated. as a eorporatien,

21



certain requirements forrhe REMIC~ax election to be main tain ed by the TruSt,l(1 It

is these IRe requirements that forcedthe Trust to be designed with the framework

se~forth above (wtrlch is why thetnsstterms describe in great detailexactly which

types of loans can be accepted into the Trust, w hat the proce sse s w ere for ade quate

transfers of the loans to the Trust, and what the procedures fbr curing any defects

were). Thusly) thetrust terms are substantive and not merely a formality, and

because the trust terms were filed with the:United States Securities and Exchange

Commission in relation with the offering for sale of investment certificates, any

argument by Appellee that the trust terms did not have to be' followed conld be

partnership, or jrust for purposes. of this, subtitle). Subseetiorr (b) of said IRe,

entitled "Income taxable to holders", states tham."tberuncome of any REMIC shall

be-taxable to the holders of interests in such REMIC as provided inthis part..~

J ( : J . IR:C§ 860f, entitled "Other rules", states as follows:

a) llO'p,erC!fRttax on proh~bited. transacdons(1) Tax imposed.

There is hereby imposed for each. taxable year of a REMTCa tax equal to ~.OO

percent I O f the' net income derived from prohibited transactions,

(2,) Prohi.billed t~ans3cti,on,

For purposes of this part, the terrrrrprchibitedtransaction" means->

(A) Dispo,siti.on .of qnalified. mDrtgage

The disposition of 3J1Y qualified mortgage transferred to the REMIC other than a

disposition pursuant to->

(i) the substitution of a . qualified replecementmortgage for a qualified mortgage

(or the repurchase in lieu of substitution of a defective obligatioa), (ii) a disposition.

incident to the foreclosure, default, or hmninent defauU of the mortgage" (iii) the'

bankruptcy or insolvency oftbeREM1C~ •.r (iv) (]I: qualified liquidation ..

.,(8) Imcome from nomperm itte d . a sse ts

The receipt of any income attribusabie to any asset whichis neither a quaHfi.oo

mortgage nor a permitted irrvestment.

22



Securities Act of 1933 (1 5 U.S.C.A. §7'l(a)(2)}?1

B . As a matter o f l aw .. th e tru ste e ofa. tru st c anno t ( ')ommw~,~heldtrn v iv e s a ctof e nfo rcing loan do cum e nts that it s trust doe s not ow n,.

It is axiomatic that a trustee is limited in itt; conduct by the specifieatione of the

trust documents and terms jt serves under.32

Similar to the prior discussion

concerniag the inability ofatrustto violate its own trust documents, a trustee may

also not" as a matter of law, engage in any conduct that centravenes themandates

ofthe trust documents, Once more, both Florida and New York law are in

harmony em these points.

The Iaw in New York regarding acts of trustees in conrravention of trust makes

dear that "if the trustis expressed in the instrument creatingthe estate of the

trust,e:xoept as authorized by this article and by any other provision of law, is

31 Section 12(2) of the Securities A,et of 1'933 (15 U.S .C .A . § 771(a )(2 "n impo se s

civil Iiability ag ainst a seller o r o ff e re r ' o fs e cumie s if the se lle r or offe rorhas m ade

a misrepresentation or has omitted materia] information in or from a prospectus or

ora l s ta temen t I fJ Jconnec tion witb a . sal e ..

32 See Kcemp ' V , . Paterson, 6, N..Y..2d410 (N.Y. 1'9,59)(holdin.i that termination of a

trust, along with transferring the entire corpus 1 1 1 0 a beneficiary was not authorized

by the trust and not within the scope ofthe power granted to the trustee). See also,

n..33, n..35, infra ..

33 See NY CLS ElPTL § 7-2.4 (2011).



inherently"void.~'34 Furthermore, "the authority of the trustee is subjecs to any

[imitations imposed by the trust instrumenC~35

in. several of its pleadings, that it could foreclosure by virtue of the fact that it was

in possession of the original Note, which, as dis/cussed. above, was never

transferred into the Trust. However, the trust document spells out the exact actions

Appellee was required to take if~t ,E!v,ert'ound itself in possession of loan

documents that were improperly transferred in violation of the trust terms,

]n the sectionentitled "Delivery of Mortgage Loan Docuroents"," the trustee

has. the obligation, pursuant to the trust terms, to . "review, O[ cause to be reviewed,

each mortgage file within ninety days .atler the dosing date ' of the Trust. The trust

terms clearly dictate that within the review period, the trustee (Appellee) has the

obligation to cure the defect or remove the defective loan documents fromthe

Trust. Theexact Ianguageis as follows:

U thetrustee ....during the process of reviewing the mortgage files, finds any

document constituting apart of a mortgage file that is not executed, has not

been received or is unrelated to the mortgage loans, or thatany mortgage

loan does not cenform jo t l l i l .emqui re :m:ents above .....he trustee or the

applicable custodian, as applicable, is required to note such deficiencyin the

required. trustee or custodian certification delivered to the applicable

responsible party, the serv ieer and tbe depositor ..The appficable respensible

341d.

35 S f Le N..Y..Est Powers &. Trusts Law, § 11-1.Ifb), pam. (8),3 ,6 .

Seen ..~5, supra.

.24



perty win be required to causejo be remedied a . material defect in a

dOClUmentconstituting part ofa mortg ag e file ofwbiclru. it is so notified by th e

trustee .. .If however ......he applicable responsible party has not oaused the

defect to be remedied, the applicable responsible party w m be required to

,either (a) substitute H e Substitute Mortgage Lean for the defective mortgagemoan. ,.or (bo)repurchase the defective mortgage loan.

As the qaoted trust langusge makesabundandy clear, the trust terms do not

accord Appellee the ability or the discretion to maintain possession of an

improperly transferrednote or mortgage, As such, the action of'Appellee in failing

to expel the' defectively transferred Note and Mortgage in jhe instant case

contravenes the trust terms and is an improper/void action thai! New York. law

condemns, As previously explained, llieIRC mandatesthat my non-qualifying

assets transferred to. the Trust could cause :~tto Iose its REMIC tax status (giving

rise to double taxation), and. this is precisely why the trustee is not affordedthe

discretion to maiIrutain possession of loan dooom.entsthat contravene th e trust

terms.

New York law its clearthat only when a trustee is accorded discretion by its

trust may the trustee exercise its own discretion in tating an action not specified by

discretion v-as in the instant ,case-- the trustee may not act in contravention to the

mandates of tbe 'trust. Self In re Estate of Stillman~ l101Misc. 2d 102 (Surr ..Ct.

25



N . Y . il l 9 '8 0 ) ( h o l d i n g t h a t t r e s t e e s m is c e n s t r u e d t h e testator's w il l a n d t h e r e f o r e

abused . so-caned absolute and uncontrolled discretion),

In In re Estate of Stillman,ilie court stated thet, inthe case, "the paramount

consideration .. ,[regarded], ....he basic intention of the testator concerning invasions

and. whether the trustees have deviated fromthe testator's plan," The New York

court outlined that "if discretion is conferrea uponthe trustee inthe exercise of a .

power, the court will not ine e rfe re unle ss the trustee in exercising or failing to

exercisethe power ac-ts dishonestly, or with an improper even though not a

dishonest motive, or tails to use Th1wsudgment , O i l : " acts beyond. the bounds of a

reasonable judgment." The court cited to the Restatement of the Law, Second,

Trusts, §187 ( i l l 992 ed.), which exp~ains~hat"th.eexercise of a [trustee jpoweris

discretionary except tethe extent to wh:idl. ~.tsexereise is requlred by the terms

oiftbe trust orby the principles of law applicable to jhe duties of trustees."

(Emphasis added.) The Restatement of the Law, Second, Trusts (1'99'2 ed.) also

explains m §185 that "where by the terms of the trust it is provided. that inthe

administration of the trust tbe uustee shall do certain acts ~fhe is directed by

anothe rpee sonto do them, it i ll sord inari ly h il lsduty to comp ly with such d ire cti ons

and he is ordinarily liable if he fails to do so. So also, where by the terms of the

trust it isprovidedthat tbe trustee shall l'lU)~do certain acts without the direction or

consent of another, it is ordinarily his duty not to do such acts without such

2 6



direction or consent. "~\VhHe New Yorik trust law is whal should. be applied to

Appellee's Trust (and Appellee's actions), i~,s of note that florida law is of the

... 37

s am e posmon.

Despite the fact that the trust terms dearly order Appellee to not be in

possession of an improperly transferred se t of loan documentsand despite the fact

that New York. trust Iaw is clear fhat Appellee has no ability to proceed in

conrravention to th e trust t e rms, , C l I J t th e N ov emb er 2 2 I 1 l ' I o ral arg umen t the Appe l l e e

insisted that ithadtheright to successfully pursue a Florida foreclosure action by

virtue of the fact that it had. possession of the original Note. (R..212..) Appellee's

argument should havebeen rejected by the trialcourt,

first, Appellee's argument at summary judgment that it oou~d.foreclose was

premised uponFlorida's Uniform C omm ercial C ode (herein ~VCC~1)aswen as a

variety of case law the lentirety of which is distinguishable and. inapplicable. Yet,

the provisions of Florida's UCC (and the case law which relies upon it) cited by

AppeUee in the record do not contemplatethe existence of an external constraint

upon the ability to enforce a negotiable instrument (such as the lirmtations imposed

37 See Griley v. Marion Mortgage Co.~ ]32 Filla . 29 '9 (Fla. 1937) (holding that that

appellant mortgagee could not foreclose on a mortgage i l l S S T U O O by appel lee

mortgagor because appellee trustee did not have the authority to execute the

mortgage), See e lsa . Florida Statutes Section 736.0SlliS(m)(a), entitled "General

p ow ers of truste e", w hich state s that "a trustee, without. authorization by th e court,

may, except as Hmited or restrictedby this code, exercise, . ...powers conferred by~l. f - . ~ , . , . ,me te rm s o tue trust.

27



up on trusts and their trustees by trust law} . Inde e d, e -ase law and support ing

m ate e ials A pp eU e e cited in opposition to App,elhmes p ositio n m ak e it dear that

t hey pre suppose the abse nce of a. conting ency or e xte rnal force that would p re ve nt

by Appellee that~ even under Appellee's own theory andargument, the UCC only

p rov ide s a pre sum ption of oW .m le rs~ ip ,hat, if rebutted by Appellant, would defea t

Appellee's posi~il ion.39

.3 8 See Johns v., Gilli,an, 1 34 F la. 5 '7 5 (F la .. 1 '9 38 ).. In . Johns~ which AprpeUe e heavily

relied upon ~n estab~ishlng its position at the November 22~dhear ing" the florida.

Supreme Court stated that "any form of assignment of a mor tgage , which transfers

the real and beneficial interest in the securities uncondttlonally to the assignee ,

w m entitle him to maintain an action fo r foreclosure, Or ifthere had been no

w ritte n assig nm e et, the intended. as sig n e e wou ld . 'b e entitled. to ' fo re clo se in equity

upoDln'oo,'( Df his pUlfichase ,oftbe deble~(Emp,basisadded.) T he re fe re , the

decision in Johns clearly works against Appellee as th e explicit intention in th e

trust docum ents 'W as to not allow for the transfe r of a note to the Trust which does

not comply with the specifictransfer requirements, The opwmjona~sounderminesAppe ll ee 's p os itio n because A ppe lle e obv iously ce nnor prov e the purchase of th e

debtgiventhat the trustterms were violated ..

39 (R-J91-224.). Appellee made three distinct and separate admissions at the

Novembe r 2 2 1 1 d s ummary ju dgme nt h e a r in g r e g a J : id il iW iJ lgth e ability of Appe llant to

rebut the pre sumption of the subject N ote ' s e nforce ability and ow ne rsbipby

Appellee (despite Appellee's own vee ergument). First, on page 23 of thetranscript (R.214.), Appellee, concerning blank endorsements , stated that t'aay

sig nature [on the endorsem ent] would be indicia. of in te nt to transfe r, and. th e

burdenis on the defendant to rebat.thatpresumpaion." Secondly, om page 25 of the:

transcript (R.2lli6.), Appellee opined that "the holder of a negotiable instrument .~s

presumedthe owner of the negotiable instrument. The burden is O [ l i J j. the defendant

to de monstrate som ething to the contrary;" Finally, A ppe lle e state d on page 26 of

thetranscript (R.2lli7.) that "the phy sical tra nsfe r of the; note can r o o se upon the;

Plaintiff entitlementto [for-eclose] the mortgage. It is theirbcrden, YOm' Honor , to

show something torebut that [p]resulUpt~on.~' AppeUee made th e a fe remen tie n e d

28



Interestingly, eventhe very act of filing the instant foreclosure suit is an u~tra

v ire s and v oid action by Appe l le e b e ca us e.a s mentioned ab ov e, th e trust docum e nt

clearly instructs Appellee, to not maintain possession of any improperly rransferred

loan docum ents out of fe ar of losing the Trust's R ~EM IC tax staitus.40 Therefore, by

based upon an instrument that violates the Trust, while, simultaneously, Florida

m a w precludes Appellee from having standing es a resuh of th e same jmst

violations, Clearly, the trial court orders in tbe instant case granting Appellee's

Motion for Summary Judgment, entering a Final Judgment of Foreclosure, and

denying Appellant' s Defensive Motion for Summary Judgment should be reversed,

statements without realizing that Appellant, by swum affidavit (R.135- il l 37.))

through a . memorandum in opposition to Appellee's Motion for Summary

Judgment (R..140~l4.5. .~ and through her defensive summary judgment motion

(R.116~184.)" did rebut aWlof the presumptions that AppeHee discussed (if they

even exist). However, Appellant does not concede Appellee's position regarding

the existence ofthe presumptions, and.Appellant'sperpose inbringing to light the

p re sump tio n issu e is to e vince the contradictions and fallacie s in A ppe Uoo":s OWiru .

vee argument .

40 See MacFarlane 'V•. First Nat 'I Bank, 203 So, 2d 57 (Fla ..3d DCA il l 967) (stating

thatvif the method for the exercise of.:..[a trust power]. .. .is set out inthe trustagreement.then the power must be exercised in strict coofarmity to it s terms").

29



, ,,- - - - - - , - - - .... ,- - . - - - _ .. -~ ,- .,-- ----- ,.. . " _ . - - - - _ .... _ -

CONCLUSION

T he low er tribunal erredin granting, Appel lee ' s Motion for F inal Summ ary

Judgment, and by subsequently entering a Final Judgment of Foreclosure, It also

erred by denying Appellant's Defensive Motion for Summary Judgment. As

mentioned, th e trial court improperly held that Appellant could not challenge"" ., - ""

Appellee's standing, by coetestingthe Trust's ownership ofthe note and mortgage

viathe limitations in ID.eTrust's documents. Without question, florida law does

indeed accord a foreclosure defendant that ,abili~y against a trust. Furthermore,

be cause the Trust in the iastans case ne ve r re ce iv ed a.prope r transfe r of the subjece

loan documents , it doe s not own the iostrum entsand cannot hold them , Furthe r

still, because of the lirni~at~onsand. mandate s o utl in e d in th e trust deeaments, the

Trust cannot enforce the note and mortgage and has DO standing to file suit,

rendering its Trustee (the Appellee) unable to belng a.foreclosure action.

The Final Judgment cf Foreclosure. fhe ordergranting Appellee's Motion- - ~

for Final Summary Judgment, and the order denying Appellant's Defensive Motion_ = .J

for Summary Judgment should all be reversed.and this matter should he remanded

to the Jower court with instructions [0 enter an order granting Appellant's

De fe nsiv e Mo tio n 'for Summary J ud gmen t

Respectfully Submitted this /3 day ofO.(!_~ 20] [..

3 '0



'CERTIF.ICA TE OF SERVICE

THE UNDERS~GNED HEREBY CERTIFIES that H , true andcorrect copy of the

foregoing Initial Brief of Appellant, Sandra P. Castillo, has been delivered by U,S .

.Mail to ' Smith, Hiatt & Diaz, P..A., P.O. Box] 1438, Fort Lauderdale, Florida

],3339-1438, tbis 13 day of6l!~2;O] L

Jimenez" Milian & Associates, P'.L.L.C .

. bbe.rt R. Jimenez, E .. ,.

Florida Bar No.: 72020

2025 SW 321l JAve

Suite noMiami" FL 33145

Telephone: 786.282. il l 314

Fax: 3.05..441.0688

Counsel For: Appellant Sandra P. Castillo

'CERT'IF.ICA TE OF COMPLIANCE

THE UNDERSIGNED HEREBY CERT]fIES that the Initial Brief of Appellant,

Sandra P, Castillo, complies with the fontre~uiremen~s set forth in Ru~e

9.2lliO(a)(2)~ Fla ..R. App.lP.; to wit, Times New Roman l-l-point font.

3 m

Documents

Castillo v. Deutsche Appellant Initial Brief