Tuesday, October 1, 2013

Florida's Third DCA Allows MERS Standing to Foreclose

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In an opinion filed on March 14, 2007, Florida's Third District Court of Appeals held that MERS does have standing to sue in foreclosure. MERS v. Oscar Revoredo, et al., ___ FLW ____ (3rd DCA. Case No. 3D05-2572 2007). The Court adopted the reasoning of MERS, Inc. v. Azize, 32 FLW D546 (2nd DCA 2007) which involved a very similar procedural situation and the identical question of law.

The trial court struck MERS's pleadings and ruled that it did not have standing to proceed as it acted essentially as a collection and litigation agent for the actual owner of the notes and mortgages.

The Court of Appeals noted that the involved problem "arises from the difficulty of attempting to shoehorn a modern innovative instrument of commerce into nomenclature and legal categories which stem essentially from medieval English land law." The Court held that MERS did not lack the standing to foreclose and it clarified that that in accordance with its usual practice, MERS was the holder of the note. The Court stated that it did not make a difference that MERS was not the owner of the mortgage as Fla. R. Civ. P. 1.210(a) allows an action to be prosecuted in the name of authorized persons without joining the party for whose benefit the action is brought.

The Court further held that as "no substantive rights, obligations or defenses are affected by the use of the MERS device, there is no reason why mere form should overcome the salutatory substance of permitting the use of this commercially effective means of business."