Case 3:06-c'-,-0Cl]74-T..iC-HTS D';,:ument 21-3 Filed 06/2612006 Page 1 of 20

IN THE CTRCUTT COURT }:OR, PINELTAS COUNTY, FLORIDA

IN RE:

MORTGAGE ELECTRONIC

REGISTRATTON SYSTEMS, INC. {MrRS)

(See attached list of Defendants/Case #).__J

'ff Fsffi",.tgH T$ ;IfIlJ [F 8+,ll=.fNumei'c,i is cases have cc"n*, before the undersigned Judge fi led by

Mortgage Electrcnic Registratir; I Systems, Inc. (hereinafter referred to as

MERS). MERS is l isted as either the Plaintiff or a Co-Plaintiff seeking to

COflect On a NOte r,r;a rri,rtCi;t;t, ' : i)! i :,: josure. In all CaSeS MERS iS Seeking tO

represent tne i*terest o'i anrti"r,:, ' t lof 'poFate entity in the collection of a Note

via foreclcsure cf a i '*r.rrtstlg:.. ;r:f: i l .S describes its role aS a "nominee"

seeking to furthe," lhe intsi"e;f uf arrother corporation. The Court began

raising a questian n= ti: l- le p ;{!ss wfrerein one corporation would represent

another corporation's irrtEr:"*:,1 i lei 'ore the Bench. The Court's raising the

question on a case by case l,asis did not provide resolution. Numerous

attorneys rep:'e*,:: ' :t ' ihe ;nit-:rs.i i l f f4ERS in the various cases and a single

definite angwf?- i: i legei &i"sL,.i ' ,r:"T;r, 'ryd3 r' lot forthcoming.

The Ccurt ig;-:.-:eC a''r ';i'c,:;,: 'T'u Show Cause in approximately fifteen

cases via a starici*rd Gril :,. T;le init ial Order was dated June 7, 2005

establ ishing a s l ' inuv efrus! , ' ;!f r r , r1g'r i i r ie as July 25, 2005 at 3:00 P.M. before

the Bench. Tt're {Jroei rur'ovideci rrrat additional cases that came to the

Case 3:06-ov-00374-TJC-HTS Document 21-3 Filed 06/2612006 Page 2 of 20

Court's attention would be added to the show cause docket' The Court

observed a reasonable cut-off tirne period and by the time the docket was

complete there were twenty-eight cases noticed under the standard Order

To Show Cause.

The Triel Bench has a be,sic duty and authority to establish that the

proper parties are before tite C'ou,t, See Morales v. All Right Miami, Inc.,

755 So.2d 19B {Fia. 3"r DCA 2C00) and Dol lar Svstems. Inc. v. Detto, 688

so.Zd 470 tFta. 3'd DCA L977). The MERS fi les typically came to the court's

attention when a Me'i iorr for Si,, ' ,rtnary Judgment was submitted. The Court

would then have r:ccasion to revicw the fi le and compare the allegations in

the Petit ion for Fce'eclosuie tc titg contents of the fi le, Without fail the

review resuited in f;ndii 'rg tlrat t i ie allegations in the Petit ion were not

supported by what the Couri vrevved in the Court f i le. The standard

al legat ion in the Cornplaini a l iegvcl that " . . .Plaint i f f now owns and holds a

mortgage note arrd n'iortgage... ' ' .[ ' i i!

Court never found that allegation which

is containec in all o!' the i, lEF{9 Conrplaints to be supported by a i 'eview of

the documents lvit lt in t i ie Couri f ite"

The Coun nurted that irr trri: Urder To Show Cause that "...The Court is

unclear as to 3-;CIvv !t cc.'porat,L)l l can sue as "Nominee" f}r another

corporation. ferBoratio;rt rr: '! le,rerally not allowed to pursue rnatters

without counsel a;id t0 tire utluersigned's knowledge, the law has not

allowed one corpCIra{:ion to aci as Nominee for another corporation in

Case 3:06-cv-00i74-TJC-HTS Docurnent 21-3 Filed 0612612006 Page 3 of 20

bringing a lawsuit. No authority has been shown to the court to support a

corporation suing as "Nominee" Q{' another corporation..."

The hearing on the Order To Show Cause was held before the Bench

.on July 26,20A5 ccrTlmencing at 3:00 P.M. The matter has been reported

with a transc;-ipt of ni:rety".eiglrt pages.l The transcript will be referred to as

(T--) where appropriate ;:: this ori"r. The court has received

memorandums on behalf cf fviERS ancj on behalf of some of the Defendants.

The question has been vvelt pre.*n;ed and argued to the Court by both sides

of the issue.

The Cs".rrt's rrquir-'y cs to wi;etirer the proper party was before the

court in the several MERS fiies w*s oased upon review of numerous files.

In MERS \1. MafrGiv-au Cage |ru. ila-i019i9CI-11, the Affidavit in Support of

Summary Judgment fi led by one Tracy Johnson on December 13, 2004

advised the ccurt that tl";e Piailit i ir tiqERS) "...is the holder and owner of the

note..." J-h* g*rne infcrrnatioti w.r: repeated in a form Affidavit from Angie

Fleckenstein iate* February iC, ;;i)5. The information in the Affidavit was

inconsistent l;lth the exhibi: to ll:s Cornplaint which the Court reviewed and

noted that First ?_!ii ioi"i lvioftgage corporation was the lender. The

inconsisteney cid nat str:p; a Losc i{ote Affidavit in the file alleging that the

Defendants ha'j executed ani,l deiivered a Promissory Note and "...that said

nOte was assigneri ar't;l rjeliv*r!:u tO Washington Mutual Bank, F.A' in its

' The Court will file the transcript in $F,$$*V-AZ!ZS, Case No. 05-001295CI-11, where it will

be available for revieur FUrPOse$ fi: i j ' :$'*:;;r;q;y.

-.1

Case 3:06-cv-C0374-TJC-I-1TS Dr:cument 21-3 Filed 06/26 E0A6 Page 4 ol 20

office in lacksonvil le, Florida...and that Washington Mutual Bank, F'A' is sti l l

owner and holder in due course of sole (sic) lost note..." The Lost Note

Affidavit was signed by a Vice-President of Washington Mutual Bank, F.A. on

March 2, 2AA4. -i ire surnmary. judgment sought in that case was denied

based upoil a faiiure to pr;;!dr un,-e;uted Broof in support of the Motion for

Summary Judgr';rent as to what *":rf.;;y o. O"rron owned the Note'

In Mers-uJ'oung, eircui l * i ' ; i l No. 05-000650Ci-11, MERS sued as

nominee for Cuuntr.ywicie i iorne Lli i ls, Inc. The question as to proper party

arose in Pa;agi-apf; 2 i:f tha Lr:nr,riaint where MERS identif ied itself as

nominee for ,trrtn*:i }icitEage, 'i',;. d/b/a Arnerican Mortgage Network of

Florida. There i*re no aiieg*tiarrs that would explain 'to

the Court the

relationship, if ' &fr'y, *l ' h,rir jge o!1-"vv!tf l COuntrywide Home LOans, InC., the

lender, l isted i i$ i: ' i$if it i ff vi..r ihf "i,,)minee" (MERS) and Amnet MOrtgage,

Inc. nor any allegations ci:at wrlt id satisty the Court that MERS as a

corporation wc;s repressnti,',g e-,i* irrterest of another corporation before the

Bench. Piainti if f, leci a irtoLro; i '*, ' Summary Judgment which was set for

hearing Apr;l ?, J.*C:;. Upor: :"eii i!w of the fi le the Court dismissed the

Complaint allcv;ir"rg twerriy udys irir ' the fi l ing of an Amended Complaint by

Order dated Apr i l ?. 2C05, 11.**; : i i red a Voluntary DismissaI May 3, 2005.

In Kep_U",1&hjle, Circi. i i t Civrt No. 05-001085CI-11, the Plaintiff sought

Summary Jucigrnenl. whicir ied l* t ire Court reviewing the fi le' The

Complaint in C;ur:1 i :;r"rugnt rc-*sr.abiisirment of the Promissory Note. Latei'

Case 3:06-cv-00374-TJC-HTS Document 2'1-3 Filed 0612612A06 Page 5 of 20

in the fi le MERS fi led the original Note with the Court which indicated the

lender as First Family Mortgage and gave no indication of any interest in

MERS. The standard allegation that MERS was the owner and holder of the

subject Note and Mortgage was refuted by the documents submitted. '

During a telephone hearirig l lr;: Court brought that inconsistency to the

attention of counset and was advise,J there was an Assignment to MERS on

counsel's desk aDc'ut to be seni io the Clerk for recording. The Court

concfuded i ts Or$er ol 'Apr i r 27, '20A5:

"...Ti ' le repres!i" i iacioi 'r to the Court that this fi le wasappropriate for Summary Judgment was not true. When theCourt raised a ques[icn c]s ic MERS' status in the fi le attorneyGreen advised that an assignment to MERS was on her deskabout tc b* serrt tej l l ie eierk of Court for recording. This Courtwil l not function as auditor or quality control for lenders seekingforeclosi:re *n nctr*si nno!-tgages. With regard to representationsto the Court regarding Summary Judgment proceedings see TheFlor ida BaJ_v. Corbin ,7A15o.2c1 334 (Fla. 1997).

For reasons set forth above the Motion for SummaryJudgmeni is D-NIED.

IT I5 $O OFTDERES ir Chambers at St. Petersburg,Pinellas Ccunty, Floi ' ida tl i i ; i" ; ' day of April, 2005..."

The above casi:s are 5ut. a sanl;.rl ing of rhe manner in which the question

came to the *ourt's atterrtlon, Tlre Court has entered approximately a

dozen Orders denying Summary Judgment unti l the Court is satisfied that

one corporalion cfin repi*:ieilt i : ircittei 'corporation's interest as a "norninee"

before the Beneh. fUhen tr"re Caurt eid not receive an adequate response to

Case 3:06-cv-00374-1-JC-FiTS lkcument 2"t-3 Filed 06/2612006 Page 6 of 20

those Orders, the eaurt accumuiated the then pending fi les and proceeded

under the Order To Show Cause n'lethod.

r$ e-l{ AR S-Invslvem e nt

MERS' intes'est v*ras arguei *y Robert Mark Brochin, Esquire at the

return hearinE on tne (ird*r ' it Show Cause. Counsel candidly

acknowledgecl tf''lat lv'ieR$ is ,ic,, ori *rly of tie Promissory Notes, The Court

made inquiry as to who ot ' r , r ' - , t . , { ' i1. . t i l :

"...THE fJURT: fVhe c.u,,; ';s tn's note?

MR. tSRCCHif,i: YJeti, i ite ftc,ie starts with the original lender,and then as a negotlable instrument, under Article III of theUnifc,"ni icmrnereta; Coue, ts tt 'ansferred and passes hands andis endorsed over severai ttrnes. ' So by the time it comes toforeclosr;re, it 's not ceii:arr, '*iro has the beneficial interest in thenote, Sut, for examplen in the case -

THE COURT: What rln yr:'u mean, it 's not certain as to whohas the i:ei-ie.ficial i;riere:r :n :ire note?

MR. BF;OCi-l ihi: fr i iei; , r i , . : : iLl i ;* c&r-l be transferred and sold

through the s*eorrd;r'y rn*r' i{*:g! nnarket, to the lennie Maes(sic) and F:reilriie lviacr *i ;n,; r,vorid.

THE COURT: But at tne time you come before the bench forforeclesuie, doesn'i i i . he'r* ir; be certain who has the beneficialinterest ir; t"ile note?

MR. BROCniti; I 'rci wli* r"ias tl"re beneficial interest in the note.It has to be Eertairi +cil* l ia:; ehe right to enforce the note, andthat 's spetr i { ' i {a i ly whai Lr}! i r iF-" i } ' iorandum points out. . . " (T 10-11)

MERS'respons* tc the C*un's:r : . .p: i t "1 as to the standing of MERS to proceed

as a Plainii i f err *$ e "irl i-{ ' i inee" af a Plaintiff rests largely on possession of

Case3:06-cv-00374-Tj{1.} . lTsDr:cument21-3Fi |ed06/26|2006Page7of2a

the Note. Cor.rnsel advi:;erj the eourt that a requirement to show a chain of

title to the Note wauld rieit be reasclnable'

*...THE COURT: 50 you're tell ing me that possession is

sufficient. It does not have tc be signed over to MERS?

MR. BROCHL{: Yes".

THE COURT: Do you feel as though it would be reasonable

for the Ceurt t': be pl'!r.ir:;r:-f* rvith a chain of title as to where

the note started an-d how it g*t to MERS?

MR. BRCCHII" j . r to ' I iu n; ; ; .

THECCURT';Youdon' t th inkthat 'sreasonable?

MR. BROCHIT\J: i cjcn't" AnCi, in fact, not only do I think it 's

nst reasonacle, ol-ten tt iac's going to be impossible.'." (T 22)

The Court inquired as to the frow of cash from the Clerk's office forward.

MERS indicated theip corpr:ration's interest in the Note did not include a

monetary interest, erriy a represent'niive interest:

THE C{JUF,T: $ey ,* r1r-,{* gr't*S tC fOreClosure. There's a

saie, and for grurposes of ir icdel, say there's $50,000 proceeds

from thr: sai,-:. WLrere i!c':: Lh:t $50,000 ultimately end up?

MR. BRef!- i l i t 'v" ,e i i , i t ; i * t :s l i ' t end up in MERS, i f that 's the

question. tvlEFtS doesn't h*ve the beneficial interest in the note.

It traveis b"ici. [hrougi'i lrre rrierribers of MERS, who will disburse

it to the entit,es whc *re er:i:;t ied to the proceeds. And those

would b* wl;iat I wu.llC r!i'*t: ':c as the beneficial interests, or the

beneficie; on"ir:r; i 'S in ti ie ; iOi;t ' .s, whOever the entit ies are that Own

the interesi ;ei the i;rijci,Li';:,, c:f tnat fiote'

5o i t ; . l .Uld Ll ' i . , , ,e, b:r :x |hrougn the servicer and back to

the a5:prcfri, i ;: pei': i#fls, b::;, ' :$e they've been authorized by the

lenders *t" l l ' l t i l" iv*::tt;rs [ ' ; 3{' ' on their behalf and tO administer

and enftrr ',,tE: ,."r,c r,J{es" 1,",;:: ' -ske their fee and they disburse

the P;'cc':e'.jt;

Case 3:06-cv-00374-TJC-HTS tlocument 21-3 Filed 06i2612A46 Page I of 20

THE COURT: So MERS !s a collecting entity in that event.

MR. BROCHIN: Well, M5RS doesn't actually collect the money,no. MERS is actual ly -

THE COURT: Well, wait a rninute. The clerk gets themoney. Wiro does tne cleric write the check to?

MR. BtlOCl-iIN: Seii, i i ' l ir:y write the check to MERS, whichwould be fine, MERS would just remit"it over.

THE COUFTT: Weil, who else would they write it to?

MR. BRCCIIIN: Soieii, otten tirey would write it to the servicer.I mean, are ,lou talkil lg aJCUL oli a redemption right or a payoff,or are you talk ing about a --

THE COURI-: Eithe; on*. The clerk's sitt ing down there andthey've got some money, ertirer from a sale or redemption -

MR. BROCHIN: Thev cou{d wr l te i t to MERS, and MERS -

THE COUii.-i: ' ,{Veli, wi',* uo they write it to?

MR. BR.OCh{IN: I 'm just saying. MERS -

THE eOURI: ! ' ,rh'; wc";ri ;cu expect the clerk to write it to,other than MERS, if ihey're the plaintiff?

MR. FROC!-iI|\: The ci*rk, tr would expect to write it to MERS,because l i le c lerk n&s no *er l i r ;gs at a l l wi th any but the namedplaintiff"

THE COURT: Then v;l"i;:t happens to the money?

MR, BR*Chifri: Therr ; ' l [f,.S wcuici, I think, just endorse it overand send it out to its mer*b*r.

Tl-lE CCIJRI': MERS wcuiq.i never cash it? They'd never cashthe check from the clerk?

MR. ER*ff-iIt\: i *en': ;:n;'. 'r i i they would cash it or theywould simply endors* it r:vei' io the proper member.

Case 3:06-cv-00374-TJC-HTS Document 21-3 Fi led 06/2612006 Page g of 20

THE COURT: Well, cashing and endorsing over are two verydifferent things. Which one would it be?

MR. BROCHIN: I don' t know.

Do you know? (counsel was inquiring of his client)

They would endorse it.

THE COIJiET: I ' i r t ry ing to get.an understanding for whatgoes on here.

MR. BROCHIN: They would endorse i t .

THE COURT: Endorse it over to whom?

MR. BROCHtrN: To the i"lEk5 member who we brought theaction cn i:ehalf oi '.

THE COURT: Who some people might call the real party ininterest.

MR. BROCI-{ IN: Or a servrcur ' -

THE COiJRT": Oi" a servicer '?. . . "(r 2s -28)

Counsel for f.1iRS acknowieugeei i l iat "...MERS doesn't have a beneficial

interest in the note.,." Tlrat raises the question to the Court as to whether

the corporation known as MFRS is properly in Court representing a

corporatioi"r t i,*i cloes own the beneficial interest in the Note. Counsel

further acknow:edged thae irr er q!ve,-, ;ase MERS might not know the identity

of the beneficial {rvvner of the i\irli.ti .

"THE COIJRf : Don't vou k;row who the beneficial owner is?

MR. BRCC${IN: Vver l , w! i r ,df again not know the benef ic ia lowner, because we may get the note from -

Case 3:06-cv-00824-TJC-l-lTS Document 21-3 Filed 06/2612AA6 Page 10 of 20

THE COURT: i thought ycu just told me when you get a

check from the clerk's office you endorse it over to the beneficial

owner?

MR. BROCHIN: Nr:, I think I said you endorse it over to the

servicer who, in turn, wourld disburse it to the appropriate

lenders or neneficiai ownerri

*i{

THE COUF.| : 50 itow, we're two.entities removed from the

real party in interest, the one who's going to get the money.

MR. SRGC1I\: No. No. iJecause the senvicers are real parties

in interest, 6i1d --."." (T i; '; l

Aru*9lary Concerns

Althcug;; the starrdirrg oi 14ERS to i 'epresent the interest of the

beneficial owner of the Note vvas; the primary thrust of the return hearing,

other matters :ilcl a;ise" Mortgage foreclosure Complaints on occasion draw

Counterclaims" Inquiry WOi ;i ';;. i ': *s t0 how a nOminee in the mix would

affect a Coulltercra;nn :

'Tl{E CO|jRT: Vvhai i i i lppens if a defendant has a

. counterclaim?

MR. BROCHiN: They certainly can ini t iate a counterclaim.

THE COURT: Against MERS?

MR. BROCI"{IN: If they've gct a claim, certainly.

THE CCUTiT: How w*uld they have a claim against MERS?

They never did business i'f itn You?

MR. BROCI-lIf,l: Weli, it aepends what the counter - I don't

kirow wlrat the courita;"c!"3,!;, ;s. And, also, it depends on the

note...'o (T 2E)

lfiJ^ t ,J

Case 3:06-cv-00374-TJC-HTS Document 21-3 Fi led 06/2612A06 Page 1 1 ot 20

The Court is not well satisfied with that response. Reading Taylor. Bean &

Whitaker Mortgage. Cgr:poratlon**V, Brown, 583 S.E. znd 844 (GA 2003) it

appears that as a defendant MERS raised indispensable pafty as a defense.

The Cornplaints'conta;n boilerplate Counts for establishment of a lost

note. The Court rioted in Lhe i)rdei'To Show Cause that the allegations do

no rnore than r*;*at ihe st,irdr$ry lauguage with no case specific allegations

whatsoever. Agaii',, oil rriany ticcasions the original Notes are submitted

with the explar:aticii giverr a( th* l 'etlirn hearing that at the time of pieading

the person daing the eonrplaint io I'oreclose does not know whether the l',lote

can be founii cr ,ie'll

The posit icn * i ' MEaS that a * lank endorsement is enough for them to

proceed to C*uit as a real prrrii i i ' l interest would seem to provide a

substantial i: lock to t*e i"c'es;abiislrment of what is basically a bearer

instrurnent:

'"THE COiUf{t : L' ycu nave a biank endorsement, you havebasically bearer instrumenl, r:ght?

MR. BROCI-{I|-|: Yes.

THE COUR.T: Kind of l ike a $20 bi l l in your pocket.

MR. BROCI-'IIN: Or a blank check, right.

f' j : l

THE COURT: How wsuid you go about establ ishing a lostbearer irt*i"r'u r nent?

MR. BRCChiiN: 'fdir*, 14[,t5?

J. I

Case 3:0S-cv-00374-TJC-l- lTS []ocL;rnent 21-3 Fiied 06i26|2OAG Page 12 ot 2O

THE COURT: MFRS. Anybody. If i t 's just a bearerinstrument, and whoever has it, has it, how in the world wouldyou go abcut proving that the court should foreclose upon abearer instrument that you don't have?

MR. BROCHIN: We!|, the rule - I mean, the statute is specific

on what needs to be proverl for a lost note.

THE COUii; ; 'v' i lei l, yr:ur aiiegations in that regard, by theway, are veri ,: lcse ti: ihe :; i:atute. . .In fact, one might surmiseor obsen;e that it is the st&tute, and it 's really not enough.

If you really want to state a cause of action, you needsome iai:ts, Dont just glve rne the statute, because that's notgoing to e'.rr-r 'r.. Arrcj t i 'rat's wnat your complaints do.

MR. BRGCi{i is: i 'rr i not goiitg to disagree with you on thepleadings.

THE COuR"f: And aiso, elon't come back later and say, well,

we've gct ihe fi{:-"e' ; ' .re j.st did it in case we didn't have thenote. \;t'i:" *Xpect b';[i.er i]i";rctice than that. We expect you to

have a l i,*, ;rnC yodr ia' i l iers r, i] have a fi le in front of them, andto present r,rs with the true facts in the fi le, and not the what ifs.That cai"ses us to luasr* # :,:: i *i ' t ime. Ycu know, with 1200 orso fl les, io-'e just don't have the time to spend on it to go throughand say, wel l , which CIne is th is?

hl*vv pi*as*, d*r'r ' t r..r,;r if i i .tr going back and Eiving me aparagraph il i piace e;r this; t lr irrg that says plaintiff is the ownerantl holrie' ' cf ihe subjeci. i la[e and mortgage. Don't give me aeithery'cr" ty*e of par.agrilph

':hat says, or maybe it 's somethingeise, o i ' nrayb* i i 'S $t ' , , ' , ' , t i t ; , ! : t l ' e is!,

i *xp;r*ct pteadir:gs tr) ;,: caseBoilerplate is a big reej fiag, andgood"."" { - - l f i - 38)

specific, and not boilerplate.i t doesn't do anybody any

The vei'r* r:raitice I irl;i-ter'{.il' ivnr; to ccntact was discussed. The Court

noted severai rr;ri i5 tr. i [ i t*rtt;:er:i 5y' D!fendants frustrated over not being

able to contact r:;Jrrie'?ne vtrtir wiirSrr' l they cctuld do business:

Case 3:06-cv-0i! 174-TJC-|-' iTS llocument 21-3 Filed 06/26/2AA6 Page 13 of 20

"THE COIJRI : Well, v.iho has the right to deal with thelandowne; rshen they want *o

fT!*'th somebody on the note?

MR. BROCI-r-Yfi l: Weil, inevitably, on all of these loans there is aservicer r,vho has been authorized to senrice the note...

{(* t

Tl-lE Crlt-jt..: ': How do they find out who that is?

MR. BROCI'IiN: Gne of ths ad'rantages about MERS is it tracksthe servicei' of all of thc nrc*grges..-"'. (T 24 - 25)

The Corirt reacldi,:s;ed ti:e coiriu;[ issue at the conclusion of the hearing:

*THE CGiJfiT: Weli, they need to talk to a person who hasauthonity t : ' deal with t f ;*m.

MR.6itOe:ie: \{Jel l , th*v wi i l tei l you who the servicer is, andtiren tney rvr:uliJ jlrst gel i it e;r;iact with that servicer, and theywould have tf:e authority"

THE COUkJ; It 's reaily not a very 'welcome thing for usjudges to r,e gettirrg calis *'

MR. BRO(,Ftil l j: I understand.

'TFiE ilO*r{'i: -- say'rng v', '*'rc uncJer foreclosure, we want totalk tc :;t,, 'n;;i iodli, n;:[:tdy v.,,!l l return our call. And the onlypeople wirn take more dlspleasure in it than the judges would beour ju,- i i t rai assisiantsi is you miEht wel l understand andappi"eei;:i': "

MR. 6i<"i l ; ' -r i i fu: ; ,J"i . ! ; i : .

T i iE CC;, i l i : 5o f* i ' ' r r re i , ' benei i t , I 'd sure l ike to have thatnumbr:r"

it ' lR. Et$i'*l-,-i i:\: Vt'ell, herr;'s ';ne 800 number of MERS that canbe cail*; rc deteririine wh* is servicing any MERS mortgage, andit 's 8-8**-50-6377.

THE e0tJRT: Wait 'e rnin*te" Do we have enough numbers?

l3

Case 3:06-cv-00374-TJC-HTS Document 21-3 Filed 06i2612006 Page 14 at 20

MR. BROCHIN: Let me repeat it, because I may havemisstated it. 1-888-680-6377. I' l l repeat it one more time.1-888-680-6377...', (T 97 * 98)

@

The Court's inquiry began with a question as to whether the proper

Plaintiff was beforc the fourt. ' i*he hearing has been instructlve to the

Court as to rufrai these rnultiple ;i ies present. MERS' counsel stated

candidly that "...MERS doe;,1': l;e'. 'c the berreficial interest in the note..."

(T 25, Line 23; Tne Court has ftrrtner been advised that MERS never takes

possession of arry furrds. fvlERS is rrot tlre servicing agent or nominee as in

the case cited oy Mr. Trawick at Section 4-2 of his 2005 work in Footnote 8

in Overseas Develqpm-ent. li"rc-. v.Fi.A. KIQus!, 323 So.2d 679 (Fla. 3'd DCA

1975). The faetuai situacion ii 'r Qyglsgas is substantially different than in the

case at bar in tnat '.."ti le Plalniifi, so styled, was the named payee on the

indebtedness tnat r,"r"as the sublect of ihe foreclosure..." Thus, in Overseas,

Krause was the /*;'*! orr t,,e inder.rtedness/the Note and was not merely in

attendanee te erj=:r':e the l,lore ar:r.1 foreclose on the Mortgage. Florida law

is clear that assignrnent oi' a f,i*rtgage lvithout the Note is a nullity. The

participation of 1.1[RS before ti-ie iiench is solely to collect on behalf of

another cci"por"ation, None uf ti ie fi ies presented to ihis Court support the

status of MEI{S. Ti:ere is rro eiraln of ownership and in fact counsel has

representeu to t.lri* touri irrai 5Jlustr,-irii'rg the Court with a chain of ownership

of beneficiai inLere:t irt l ite, FJutes is r*t possibie.

Case 3:06-cv-00374-TJC-HTS Document 2' l -3 Fi led 06/26/2OOG Page 15 of 20

Based upon information gained at the return hearing, it appears that

the real party in interest in many of these cases is not known at the time

Complaint for mcrtgage foreclosure is filed. The concept is foreign to this

Court. Careful review of tne argurnent presented by attorney Brochin does

not convince the Court that f4Eir.S is a real party in interest in any sense.2

Were the Court to accept MERS ,, u l.*rl Oun, in interest in the context of

collecting a Noce l;"; which rhey irave no beneficial interest, then the next

step might well bc a pei'soual ilt jui'y suit fi led by a nominee who might have

a contnactuai relatiorrsfrlp *iti; t: 're injured party. Some may seek to

represent ancther us;rg a i ',Jl*;er of Attorney. Such attempts have

historically nct bsen eiio'*red, llc.we,,'er, if a nominee with as little relationship

to the subSect maiter as fqERS is aliowed, it may open a new area of

practice.

Counsei for MERS i ias ci tea ' i i re provisions of the Uniform Commercial

Code with agiiity. l leview e;f trrose provisions and review of the cases cited

by counsei indleat; r-ha; Mtl{S se*rns to take the position that there are

numerous beneficiai interests in regard to a Promissory Note. MERS

2 Co-Counsel, Api ' i ! Carrie Ch*rney, Esquire has raised several points in the

representatio* of Delendant Dixon in Circuit Civi l Case No. 04-008325CI-11. Inaddit ion to argr,r inq against MFRS lraving standing to foreclose, counsel questionswhether Promissory i t lotes are negotiaoie instruments, whether MERS is engaged inconsumer col lection agency actirvity nithout a proper l icense, whether MERS ispart icipating a:r a iTri i i tgage iender without a proper l icense in Florida and f inal ly

whether MERS is invsived in the unauthorized practice of law, The Court having

found the stancting issue under Ruie 1.210 to be disposit ive, the remaining issueshave not been consir lered or rt: lerj t trron.

Case 3:06-cv-00374-TJC-HTS Document 2'l-3 Filed 06/26|2OOO Page 'l 6 aI 2O

concludes that the rncst dominant beneficial interest of collecting the money

due can be less important than othen beneficial interests that MERS argues

exists in the Note. The Court does not read the provisions of the Uniform

-Commercial Cod* or the cases cited to support the position that the

"beneficial intt*r*gi:" tCI sue ai:sent arry other beneficial interest is a sufficient

beneficial interest ti"tat can stan$ aione. The provisions of the Uniform

Commercial Code do not supporl the mention of MERS in the Mortgage and

labeling MERS as fr "rRortgagee'' as giving rise to a right to collect on a Note

on which MERS is not nrenti';riecl ai'ro in which MERS acknowledges !t has no

beneficia I i rr' ie';es;"

The tvlER.$ sit*at:cn seern:i tr: ;lave resulted from the establishment of

the corporaticn ;:in'I age"eei-nenis with ienders without the participation of the

Florida Legisialur"e ;r the $upreme Court in its rule making role. The fact

that the markei rniglht find it easiei- to operate with the reat party in interest

somewhere irt th* lackgF{rtr' lcj of a foreclosure lawsuit is not a cc,mpelling

reason to rn*difi ' the iracii ' i iariai r'equirernents of a party to establish starus

to bring iitig.ti iort" 'ffie ai"gui'flefrt tnat "...if servicers were not permitted tc

foreclosure iri i i ieii j ',ftJr: r1&r^r,!, cv'*i] ;nultiple investor would have to appear

and Iitigate sepat'etei'!i. Pracr.rcaiiy speaking this is just not possible, and, as

a matter of' ecunctnics ii w*uliJ f'rirc* eonsumer credit costs to significantly

increase...' {l: i; l intiff ' 's merioi'a;"icjuirri Agcrin, ttre solution may be with the

Legislature aruu i;*t v'rtth a private agreemerrt outside of the legislative law-

itr

Case 3:06-cv-003 /4-TJC-HTS Document 21 -3 Fi led 06/2612A06 Page 17 at 20

making ability or the Supreme Court's rule-making authority. (Again, MERS

is not the servicing agent but rather the "foreclosure agent", at best,

regarding these Notes and Mortgages.)3

The reading cf Florida Rule of Civil Procedure t.zLA by MERS is

generous to ir-s pc"*it ion. f{eviern nl- the memorandum and research by this

Court provides ns i:iflrida case i:hat ;nte.prets the Rule to allow a corporation

with no benefieial irri;erest irr t ire ir lste to sue on the Note for collection.

AccordirrEiy, the Count fincs that MERS is not a proper party to fi le a

lawsuit to cclieci: r:r: the r"rrrt!s vvnere the corporation has no beneficial

interest. Mf;RS *s a corporatiorr rjoes not have the standing to sue on behalf

of another corporation wi-rich otirer corporation remains to the fi le unknown.

Each of t l";*s* cases wil i Lie dismissed for failure to bring the action in

the name of th* re*i par-iy rn ;nieresi.a The Court is satisfied, based upon

the presentaticn anC the cornplete:' iess cf information available, that MERS is

not capable uride:- Fiorida larv cf satisfoing the Court that MERS is a real

3 The law on starreing ires evolved. [';:;"triership law is a prime example where prior to themid 1970's a partnership had no standing in Court separate and apart from the individualpartners. In .a;1-;g1i1ap*_{lq_u$Ly-i*jlg,:-Ftt1";ett PlOeS, 333 So.Zd 477 (Fla.2no DCA 1976},cert. dismissed 352 So.?d 172, the Court held to a limited extent that the appelleepartnership couk! proseeute iheir lav,rsuit to protect the partnership's interest in the realproperby* whieh iirterest was statuiorily al:r:wed lo be held in the partnership name. TheLegislafure codif ied that result rn 1995 in Chapters 620.8201 and 620.83A7G)G), Flor idaStatutes Annotatecl, prcviding tlrat paitnerships are separate legal entities from thepartners and that partnerships could sue and be sued in the partnership name. See ff.awick2005 edition, Section 4-?. The nc,licy r-lngirlerations that led to the Court of Appeals ruling

and then the legislaiive action are perhaps better considered at the Appellate Court or

legislature level wher* a broader lerseecfrve is provided than on the case by case approach

of the Trial Court.o In the files where a Metion to Substit*te Plaintiffs has been filed the Court will rule on

those Motions by :;eoer*t;: Crd,:r.

1'7

Case 3:06-c';-00374-TJC-HTS il**ument 21-3 Filed 0612612006 Page 1 B ot 20

party in interest capable of pursuing the interest of other corporations before

the Court.

The various {:ases uuill be disrnissed with prejudice as to MERS as a

party in interest ity Eeparate ,*}rJer with this Order beinE incorporated

therein by referenc,:"

emsr.Cmeni

Couns.sl r;r ili*lntlfi i;'l ,r ;'e:v of the cases has requested leave to

amend the eon:p'lar.': i t* ci.t*;';ge ti:* Irlainciif from MERS to the real party in

interest. The ilr.:ui-t is not aware of a procedure that would allow for the

amendment of the Cornplaint tc ;:-'.;;rti!leiy change the name of the Plaintiff

from one to anritner. -ll ' ie Court is well aware of cases where an individual

Plaintiff pass!s *:wmy and a sdiislitrrtion is made under the F{ules, however,

the Court is rlat alcvare of a sli"*t;on where an attorney is a|lowed to file a

Complaint on SehrJlt'-,:f Aiplr;,1 C';rp*i,rti,:ir and later upon realizing that Alpha

Corponation i; t:-ic u{rofig !:i;t;;y lc ar^nend and file what essentialiy is a

separate anci roirer:t- ciai;'n on ueir.*if r:f Beta Corporation.

Another coinp;ieating i'act'.i,- is that counsel in these cases do not

represent the reai prarty irr i irteresi arrcj have not fi ied a Notiee of Appearance

for the reai pariv in inte.:iest. Se that as it may, the Court wili entertain

Motions for Recnr:sirj*ratlon anii i:{,! re;ilead with a different plaintiff on a one-

time basls shct:ii.; iri '$per' l i ioti;.:e cf Appearance and Motions be timely flied

in each case, f; ';s i{otiori si;Jri{". ar"each arrd include a copy clf the proposed

Case i:06-cv,dr0374--IJC-HT$ [iacument 21-3 Filed 0612612006 Page 19 ot 20

amended pleading with necessary supporting documents to establish

standing for the ilourt's consideration, without hearing, and otherwise

comply with applicable Rules of Frocedure. The original Motion must be filed

with the elerk ivitlr a courtesy copy mailed directly to the Court for

consideration.

Cr;nqlgsiort

Based ;rii*; ' l the above analysis, the Court finds it appropriate to

dismiss with p;ejudi;e as Ur 1t4pii.S tne Cornplaints as not havinE been filed

by the proprr fiartl, and therefore the Complaints do not state a cause of

action and are dismissed. !lg[l.k:: :i:*1 liolhtSystems, Inc., supra. The

dismissal wi l l be* *y s*parate Orrler in each case.s

HERS'3s*d r,cwnsel, Robeat rtfark Brochin, Esquire, is ordered to

provide cogrles eyt tiris Order to appropriate counsel and parties in

each file imrned*ately uporl r'ec*lp'c.

IT IS 5* qlF?*HREfrl in Ciian"ii:ers at 5t. Petersburg, Pinellas County,

Fforida fn,s -!^

r" la! ' i t A+gil t i , i {JL*.

r ,ALT LOGAN, NAt- SIGNED I

cc: Robe:t iui*r;;. i*;"i,ci l in, Esq;;ire

s Twenty-eight cases were set for the lr;l ', ' 26th return date. Based upon this ruling, twenty

cases are being disr*isseet by the Cur:l;, fi.re cases were voluntariiy disrn:ss;rd, one

Suggestion of Bankruntcy was filed ancj two cases are in late stages and remain under

considert ion

)-Y

AUG I I 206

WALT LOGAN

Case 3:06-cv-00374-TJC-HTS Document 21-3 Fi led 06/2612AA6 Page 20 of 20

Cas-es.-Qismissed by Couft Order Auoust 18, 2OO5

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

MERS v.

Azize

Banks

Boudreault

Chance

Denson

Dixor^:

Eckharrlt

Fix

Gai lagner

Jsiles

Joseph:

Langworthy

Maitss

l*laxwell

Melic;r"

Min:l:eiv*

Renaud

Rcgers

Sinclair

Whi i .e

05-001295Cr-1 1

04-006874Cr-11

05-000602cr-LL

05-00167sCI-11

05-00162sci-1 L

04-00832sCI-11

0s-002665cr-1 1

05-003571Cr- 1 1

04-007544CI-1 1

05-000217cr-11

05-000309ci-11

03-007842Cr- 1 1

04-007696Cr-1 i

04-008963Cr-i1

05-002792Ci- i .1

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05-001cr8scr- i i