Appellate Court Rejects Claim That Borrower Must Be Permitted to Conduct Life of Loan Standing Discovery or Examine Bank Policies and Procedures
Standing is one of the top issues in foreclosure case law. So it comes as no surprise that the issue of standing is also a common focal point for discovery disputes in foreclosures. It has become common foreclosure defense practice to issue extremely broad discovery regarding the lender's standing. Often the defendant will request any documents relating to any assignment of the note and mortgage during the life of the loan. Many have maintained that when the lender's standing is predicated on having physical possession of the properly endorsed promissory note, and not collateral assignments, such discovery is too broad. However, there has been little guidance on the issue from Florida's District Courts of Appeal, until now. In a recent opinion CQB, 2010, LLC v. Bank of New York Mellon, 1D1502313 (Fla. 1st DCA Oct. 6, 2015), Florida's First District Court of Appeal denied certiorari review of an a trial court's order denying discovery on the complete chain of assignments of the Note and Mortgage. The Court held that since the Plaintiff asserted its standing was derived by virtue of being the holder of the promissory note, and the trial court's order expressly permitted discovery on the bank's acquisition of the promissory note, denying discovery on the chain of was not reversible error subject to certiorari review. The Court also offered insight into policies and procedures discovery, another common request by foreclosure defense counsel. In CQB, the defendant requested the lender's policies and procedures regarding satisfactions to support her allegation the loan had been satisfied. The trial court permitted discovery on the receipt of any payments that might have satisfied the borrower's obligation under the loan, but denied the policies and procedures discovery. The First District Court of Appeal again declined to exercise certiorari authority to reverse the trial court's denial of discovery on the issue of lender's policies and procedures governing satisfactions, in light of the trial courts authorization for discovery regarding the existence of any payment that satisfied the note and mortgage. The CQB opinion is both instructive on the specifics of the requests at issue in the case, and also illustrates generally the difficulty of appealing discovery orders under Florida's certiorari based jurisdictional framework. Since the standard for such appeals is "irreparable harm" and the application of that standard to orders denying discovery is the "evisceration" of the party's defense, few if any discovery rulings which permit limited discovery will be subject to appellate review under this framework.