IN THE DISTRICT COURT OF APPEAL OF FLORIDA, FIFTH DISTRICT CASE NO: 5D09-4035 Lower Case No.

05-2008-CA-065811 Gregory Taylor Appellant, v. Deutsche Bank National Trust Company as Trustee for FFMLT 2006-FF4, Mortgage Pass-Through Certificates, Series 2006-FF4 Appellee. ____________________________________/ PROPOSED REPLY OF THE APPELLANT IN SUPPORT OF MOTION FOR REHEARING EN BANC Deutsche Bank Has Failed to Prove the Transaction Through which it Acquired the Note in Violation of Fla. Stat. 673.2031 Deutsche Bank Has failed to Prove with Conclusive Evidence that it Acquired the Note from MERS with the Assignment In its opinion the panel indicated that MERS [has] the status of a nonholder in possession as that position is defined by section 673.3011. Taylor v. Deutsche Bank National Trust Company, No. 5D09-4035, 2010 LEXIS 11431, at *10. In its Response to this Court regarding en banc review the Appellee, Deutsche Bank National Trust Company as Trustee for FFMLT 2006-FF4, Mortgage

Pass-Through Certificates, Series 2006-FF4, (Deutsche Bank) directs this courts attention to 1673.2031, Fla. Stat. (2008) and correctly notes that in order to enforce a note indorsement is not always required. (Response p. 11). Deutsche Bank then references Official Comment No. 2 to 673.2031 and points out that When the instrument is not indorsed [t]he instrument, by its terms, is not payable to the transferee and the transferee must account for possession of the unindorsed instrument by proving the transaction through which the transferee acquired it. (Response p. 11 citing 673.2031, Official Comment No. 2)(Emphasis added). This limited reference to Official Comment No. 2 indicates that in order to enforce an unindorsed instrument the transferee has the burden of proving the transaction through which [it] acquired the unindorsed instrument; to wit: the note. The case of In Re Carlyle, 242 B.R. 881(E.D. Vir. 1999) best illustrates the manner in which 673.2031 along with the Official Comment is to be interpreted and applied when an indorsement is not present. Therein, during 1990 the debtor, Carlyle, had endorsed a commercial note in the amount of $385,000. to Norshipco Financial Corporation (Norshipco Financial) a wholly owned subsidiary of Norfolk Shipbuilding & Drydock Corporation (NSDC) for a loan to Bleeker St. Publishing (Bleeker). Id. at 884.
[I]n February 1994, Norshipco Financial

ceased operations and transferred its non-performing assets, including the Bleeker St. Note, to NSDC. Id. at 884. Carlyle asserted that NSDC was not a holder or

owner of the Bleeker St. Note and therefore is not entitled to enforce same, since the note was not indorsed. Id. at 884, 885. Daniel Cotter ("Cotter"), a senior vice president of NSDC, testified that the Bleeker St. Note was not endorsed to NSDC, but maintained it was physically delivered to NSDC and is maintained in his files there . Id. at 885. Additional

proof of the transfer which Cotter offered as evidence was an exhibit titled Consolidated Schedule--Balance Sheet Information Year Ended 1993. The exhibit contains a column labeled Notes that indicates a value of $385,000 among the assets of Norshipco Financial. Cotter stated this value was attributable to the Bleeker St. Note. Based on the foregoing, Cotter represented that, as of December 31, 1993, Norshipco Financial, the original obligee, owned the Bleeker St. Note. Cotter also offered into evidence a NSDC balance sheet reconciliation comparing its financial position as of February 1994 with February 1993. The exhibit presents a column of notes receivable, including one depicted as Bleeker Street Pub. The value for the note receivable of Bleeker Street Pub is shown as 0 for 1993 and $385,000 for 1994. Based on this balance sheet reconciliation, Cotter testified that Norshipco Financial transferred the Bleeker St. Note to NSDC as of February 1994. Id. at 885. The first issue addressed by the court was whether the Bleeker St. note had been validly transferred from Norshipco Financial to NSDC. The court initially noted that Section 8.3A-203 of the Virginia Code, as amended, controls the validity of the transfer of instruments and then quoted the entire statute which is identical to 673.2031, Fla. Stat. (2008). Id. at 886. More importantly, the

court then explained that The Official Comment to Section 8.3A-203 echoes this plain meaning and explains the significance of effectiveness of a transfer without endorsement: Subsection (b) states that transfer vests in the transferee any right of the transferor to enforce the instrument including any right as a holder in due course. If the transferee is not a holder because the transferor did not indorse; the transferee is nevertheless a person entitled to enforce the instrument under Section 3-301 if the transferor was a holder at the time of transfer. Although the transferee is not a holder, under subsection (b) the transferee obtained the rights of the transferor as holder. Because the transferee's rights are derivative of the transferor's rights, those rights must be proved. Because the transferee is not a holder, there is no presumption under Section 3-308 that the transferee, by producing the instrument, is entitled to payment. The instrument, by its terms, is not payable to the transferee and the transferee must account for possession of the unindorsed instrument by proving the transaction through which the transferee acquired it. Id. at 886. (Emphasis added). Notably, the quoted language is identical to

Official Comment 2 to 673.2031, Fla. Stat. (2008). Accordingly, based upon Official Comment 2 the court concluded that [i]t remains, then, to weigh whether NSDC has produced sufficient evidence to carry its burden to prove it is the current owner of the Bleeker St. Note. Id. at 887. (Emphasis added). Here, the evidence of transfer is sufficient. Cotters testimony was unequivocal that Norshipco Financial physically delivered the Bleeker St. Note to NSDC and maintained the note in its files. More importantly, the introduction into evidence of the consolidated schedule adequately proves the transfer of the Bleeker St. Note from

Norshipco Financial to NSDC. Accordingly, the court finds that Norshipco Financial transferred the Bleeker St. Note to NSDC in 1994 and that NSDC is the present owner thereof. Id. at 887 (Emphasis added). In the case currently being reviewed the Appellee has distilled the evidence supporting the panels conclusion that MERS physically possessed the subject note and delivered it to Deutsche Bank at the time of the purported assignment to the following five factors: First, the Court found there was a valid assignment of the note and mortgage from MERS to the Appellee. Opinion at p.8. (Emphasis added). Second, the Appellee produced the original note and mortgage regarding the subject property. And third, as the Court noted, the mortgage expressly provided that MERS (solely as nominee for Lender and Lender's successor and assigns) has the right to exercise any and all of those interests, including, but not limited to,... releasing and canceling the security instrument. Opinion at pp.3-4. [sic] [Fourth, a]s MERS is named in the mortgage itself with the identified right to release and cancel the security instrument itself this implies they possess it. [Fifth, t]his fact then becomes clear when one observes the Appellee through the assignment from MERS took delivery of the note and mortgage which it produced in the proceedings below. (Response, p. 10). In the seminal case of Holl v. Talcott, 191 So. 2d 40, 43 (Fla. 1966) the court explained that for a movant to prevail on a motion for summary judgment it must successfully meet its burden of proving the non-existence of a genuine issue of material fact conclusively. (Emphasis added). To suggest that the above five factors conclusively prove that MERS possessed the subject note at the time of the

purported assignment is sophistry. As was noted in Booker v. Sarasota, Inc., 707 So. 2d 886, 889 (Fla. 1st DCA 1998) it is improper for a court to simply assume a fact which is not part of the record. Notwithstanding this rule, Deutsche Bank argues that since MERS is named in the mortgage itself with the identified right to release and cancel the security instrument [that fact] implies they possess[ed] the note at the time of the purported assignment. (Response, p. 10) (Emphasis added). Further, none of the four other factors listed above individually or

cumulatively constitute direct and conclusive proof that MERS was ever in possession of the subject note. Equally important, nothing within the Affidavit of Indebtedness or the Complaint proves that MERS ever possessed the subject note. (R. I/p. 2-28 and 95-98) In short, unlike In Re Carlyle, the weight of the evidence falls far short of conclusively proving that MERS ever possessed the note and then delivered it to Deutsche Bank along with the Assignment of Mortgage. This being the case, the outside observer can only guess and postulate how Deutsche Bank came into possession of the unendorsed note. Thus, Deutsche Bank has failed to account for possession of the unindorsed instrument by proving the transaction through which [it as] the transferee acquired it. 673.2031, Fla. Stat. (2008). Official Comment 2 to

The Assignment of Mortgage Either Fails as a Matter of Law to Transfer the Note or it is Ambiguous as to whether it Transfers the Note

The panel of this Court has misapprehended the breath of the Assignment of Mortgage signed on August 1, 2008. (Assignment of Mortgage , R. I/p. 85) More specifically, its opinion states that The written assignment filed as part of the summary judgment documents in the case before us specifically recites that MERS assigned to the appellee, Deutsche Bank, the Mortgage and Note, and also the said property unto the said Assignee forever, subject to the terms contained in the Mortgage and Note. Taylor, at *10, 11 (Emphasis added by Court). However, the operative language of the Assignment of Mortgage states that Said Assignor hereby assigns unto the above named Assignee, the said Mortgage Having an original principal sum of $168,000.00 interest thereby, Together with all moneys now owing or that may hereafter become due or owing in Respect thereof, and the full benefit of all the powers and of all the covenants and Provisions therein contained, and the said Assignor hereby grants and conveys Unto the said Assignee, the Assignor's beneficial interest under the Mortgage. To Have and to Hold the said Mortgage and Note, and also the said property unto the said Assignee forever, subject to the terms contained in said Mortgage and Note (Assignment of Mortgage , R. I/p. 85) A close inspection of the first paragraph of the Assignment of Mortgage quoted above reveals that MERS [did not] specifically assign[] to Deutsche Bank, the Mortgage and Note Taylor, at *10, 11 (Emphasis added by Court). Instead, within the first paragraph of the assignment the verb assigns is active with reference to the object Mortgage while nowhere within the entire first paragraph of the assignment does the object

Note appear. (Assignment of Mortgage, R. I/p. 85) The Note simply is not assigned. (Assignment of Mortgage, R. I/p. 85) Nevertheless, the second

paragraph of the assignment passively suggests that the Assignee is [t]o Have and to Hold the said Note. (Assignment of Mortgage, R. I/p. 85) However, as explained above nothing was accomplished within the first paragraph to actively transfer the Note from the Assignor to the Assignee as was the case for the Mortgage. In Ladd v. Amoco Oil Co., 482 So. 2d 600 (Fla. 4th DCA 1986) American Oil Company (AMOCO) assigned its leasehold to Southern Transmissions of Sunrise, Inc. Nothing within the assignment indicated that William Ladd would be liable for payments on the lease. Nevertheless, on the lease underneath the signature of William Ladd appeared the words William Ladd - Individually and as President of Southern Transmissions of Sunrise, Inc. Id. at 601. At the trial

level AMOCO prevailed on a motion for partial summary judgment on the issue of Mr. Ladds personal liability. In reviewing the matter the court stated We have no quarrel with the body of the law that holds that the use of the word individually creates personal liability. Citation omitted However, we view the instant assignment contract as ambiguous and therefore not susceptible to summary judgment treatment We conclude material issues of fact as to intent exist in the instant case. Id. at 601. Also see Asher v. Monaco, 330 So. 2d 87, 89 (Fla. 1st DCA 1976)

(We find that the terms of the assignment are ambiguous and the responsibilities of the respective parties under the employment agreement, after the assignment, are confused. Therefore, we find it was error for the trial judge to enter a

summary judgment) Similar to Ladd and Asher the Assignment of Mortgage is, at best, ambiguous concerning whether it assigns and transfers the note from MERS to Deutsche Bank and therefore, it is not susceptible to summary judgment treatment. Further, regardless of whether the Assignment of Mortgage is deemed as a matter of law as failing to assign and transfer the Note to Deutsche Bank or as being ambiguous, it is indisputable that Deutsche Bank has failed to account for possession of the unindorsed instrument by proving [conclusively] the transaction through which [it as] the transferee acquired it. 673.2031, Fla. Stat. (2008) and Holl 191 So. 2d at 43. Therefore, Rehearing En Banc should be granted. Official Comment 2 to

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was furnished by mail to Thomasina Moore, Butler & Hosch, P.A., 3185 South Conway Road, Suite E, Orlando, FL 32812 this 23rd day of September, 2010. ____________________ George Gingo, Esq. 3239 N. Hwy. 1 Mims, Florida 32754 Telephone: (321) 264-9624 Facsimile: (866) 311-9573 Fla. Bar No: 879533 Greg Clark, Esq. 1201 South Highland Avenue Clearwater, FL 33756 Telephone: (727) 446-1200 Facsimile: (727) 446-2334 Fla. Bar No: 334316 Matthew Weidner, Esq. 1229 Central Avenue St. Petersburg, FL 33705 Telephone: (727) 894-3159 Facsimile: (727) 894-2953 Fla. Bar No: 185957 Michael J. Wrubel, Esq. 4801 S. University Drive, Suite 251 Davie, FL 33328 Telephone: (954) 434-5353 Facsimile: (954) 981-2987 Fla. Bar No: 285757 COUNSEL FOR APPELLANT