Law Offices of Robin Bresky Obtains Affirmance of Order Limiting Successor Mortgagee’s Liability Following a Foreclosure Sale

The Sterling Villages of Palm Beach Lakes v. The Bank of New York, 4D11-3008

The Law Offices of Robin Bresky recently won an affirmance of an order limiting a successor mortgagee’s liability to the homeowner’s association (“HOA”) following a foreclosure sale. Our client held a mortgage on property located within the HOA. The unit owner defaulted. Our client foreclosed on the property, and joined the HOA in the foreclosure suit. Our client purchased the unit at foreclosure sale and obtained a certificate of title.

Following the foreclosure sale, our client sought to determine its liability to the HOA for the outstanding unpaid assessments on the unit. Our client took the position that it was a successor mortgagee whose liability for unpaid assessments was limited by the operation of section 718.116(1)(b), Florida Statutes, to the lesser of the preceding twelve months’ assessments prior to taking title, or one percent of the mortgage debt. The HOA sought discovery on the issue of whether our client was a successor mortgagee. The HOA also argued that our client was required to initiate a separate proceeding in which to determine the amounts due to the HOA. The HOA also sought various amounts for interest and other charges accruing prior to the time our client took title. The trial court rendered an order in our client’s favor denying discovery and limiting our client’s liability pursuant to the statute. The HOA appealed.

We argued on appeal that the trial court had already determined in its Final Judgment of Foreclosure that our client was a successor mortgagee and the HOA had failed to appeal the Final Judgment, so discovery on that issue would not be appropriate. We also argued that our client’s liability was limited by the statute and the statute did not include the various additional amounts sought by the HOA. The Fourth DCA issued a per curiam affirmance of the trial court’s order. This result in the appellate court preserved the beneficial outcome for our client.

Finnegan v. Deutsche Bank National Trust Co., 4D11-939

Deutsche Bank filed a mortgage foreclosure action alleging that Finnegan had failed to make payments on the promissory note. Deutsche Bank claimed that all conditions precedent to acceleration of the note, and the foreclosure action, had occurred. The mortgage document specified as a condition precedent that Deutsche Bank could not commence a foreclosure action without providing Finnegan notice of the alleged breach and an opportunity to correct it. Finnegan filed an answer in which she claimed she had not received notice of default in compliance with the mortgage provisions. Deutsche Bank sought summary judgment. Finnegan filed an affidavit again swearing that she had not received notice. Deutsche Bank filed unsworn notice letters it had allegedly sent to Finnegan. The trial court granted summary judgment in favor of Deutsche Bank.

On appeal, the Fourth District Court of Appeal (“Fourth DCA”) held that summary judgment was improper in this case. The Fourth DCA held that Finnegan’s affidavit swearing that she never received the notice created an issue of material fact that precluded summary judgment. The Fourth DCA also noted that the bank’s unsworn letters in support of its motion for summary judgment did not satisfy the procedural requirements regarding affidavits summary judgment. The Court reversed the summary judgment of foreclosure and remanded for further proceedings.

McLean v. JP Morgan Chase Bank
Case No. 4D10-3429

Chase filed a foreclosure action against McLean alleging that, as the legal and/or equitable owner and holder of the Note and Mortgage, it had the right to enforce the loan because McLean defaulted under the note and mortgage. Chase asserted that it could not obtain the Promissory Note because it was lost, stolen, or destroyed. The copy of the mortgage attached to Chase’s complaint stated that American Brokers Conduit was the lender and MERS was the mortgagee. The trial court denied McLean’s motion to dismiss and ordered Chase to file a copy of the assignment in order to prove it had standing to bring the foreclosure action. Chase filed an assignment dated three days after Chase filed its foreclosure action. McLean filed a second motion to dismiss arguing that Chase did not have standing to file the foreclosure action because it was not the owner of the Note and Mortgage on the date it filed the complaint. The trial court denied McLean’s second motion to dismiss and Chase filed the original note and mortgage. The original note had a special endorsement, stating: “Pay to the Order of JPMorgan Chase Bank, N.A., as Trustee Without Recourse By: American Brokers Conduit.” The endorsement to the note was not dated. Chase filed a motion for summary judgment and attached an affidavit in support of the motion. The affidavit stated that Chase “is the holder and owner” of the mortgage originally given by McLean to MERS. However, the affidavit did not specifically state when Chase became the owner of the note and mortgage, nor did the affidavit indicate that Chase was the owner of the note and mortgage before suit was filed. The trial court entered a final judgment of foreclosure in favor of Chase and McLean appealed.

The Fourth District Court of Appeal reversed the trial court’s order granting summary judgment in favor of Chase. The court found that, in order for Chase to be entitled to summary judgment, it must show, without genuine issue of material fact, that it was the holder of the note on the date the complaint was filed (i.e., that the note was endorsed to Chase on or before the date the lawsuit was filed). The court noted that Chase failed to submit any record evidence proving that it had the right to enforce the note on the date the complaint was filed. Therefore, the trial court must dismiss the instant lawsuit and Chase must file a new foreclosure action.

Duke v. HSBC Mortgage Services, LLC,
Case No. 4D09-5183

The Fourth District Court of Appeal (“DCA”) reviewed a trial court order granting summary judgment of foreclosure against the homeowners, who were husband and wife. At the time HSBC filed its complaint in the trial court, it attached a mortgage showing the Dukes as the borrowers and a company called First NLC Financial as the lender. HSBC alleged in the complaint that it owned the Dukes’ note and mortgage pursuant to an assignment. However, HSBC failed to attach the assignment to its complaint. HSBC later filed a notice of assignment and attached a copy of the assignment that was executed after HSBC filed the complaint. The trial court granted summary judgment for HSBC.

On appeal, the Fourth DCA held that the discrepancy between the attached mortgage showing First NLC Financial as the lender and HSBC’s allegation in the complaint that it owned the note and mortgage created a genuine issue of material fact regarding ownership of the note and mortgage that precluded summary judgment. Citing BAC Funding Consortium, Inc. v. Jean-Jacques, 28 So. 3d 936, 938 (Fla. 2d DCA 2010), the Fourth DCA noted that exhibits control over allegations in a complaint, and therefore the at the time of filing the complaint, the attached mortgage listing First NLC Financial as the lender controlled over HSBC’s allegation in the complaint that it owned the note and mortgage pursuant to an assignment. The court reversed the order granting summary judgment.

Valencia v. Deutsche Bank National Trust Company, 4D09-3297
June 22, 2011

The Fourth District addressed an appeal of an order granting summary final judgment in favor if the lender in a foreclosure proceeding.  The complaint had alleged December 1, 2003 as the date of the borrower’s default. The mortgage required that the lenders provide the borrowers written notification of the default that included the action necessary to cure the default, and gave the borrowers thirty days to comply. The lenders were unable to produce a hard copy of the letter that was actually sent to the borrowers. Instead, the lenders produced two possible letters that could have been sent to the borrower. Both letters contained a cure date of October 8, 2003. The actual letter was found by the borrowers after the summary judgment hearing. It contained a different cure date and a different amount owed than the complaint and the two hard copies produced by the lender.  The Fourth District held that there was a genuine issue of material fact because of these differences, and reversed the order of summary judgment.

One of the most prominent disputes amongst divorcing couples is the division or disposal of the marital home. And, due to the current economic conditions, homes have been almost impossible to sell and many have fallen into foreclosure. A status most would try to avoid; but may not always be the case when resentful behavior plays a factor, and when we act on emotion instead of sound judgment.

After a long term marriage and subsequent divorce, a trial court had awarded title, for purposes of selling a multimillion dollar home, to the former wife. The house had gone into foreclosure during the divorce proceeding, but the former wife had a buyer for the home. The ex-husband appealed the house being put in the wife’s name. He had a right to appeal as the order concerned entitlement to property. Although the former wife had a buyer for the marital home, the former husband was willing to loose the house to foreclosure rather than sell it and divide its worth. The ex- wife could not get a title company to give clear title, based on the pending appeal. Moreover, the buyer she had, pursuant to their contract, was able to walk away from the deal, if clear title was not obtained, after a certain date.

Typically, the appeals process can be lengthy, sometimes lasting even years. Transcripts of the proceeding below must be ordered and presented to the appellate court, all sides must prepare and submit briefs, once the briefing process is completed, and it’s reviewed by a three- judge panel. Understanding the importance of time, our firm successfully motioned the appellate court to expedite the appeal on behalf of the former wife. In a little less than two months a decision was rendered. We had won the appeal and received a per curium affirmance, which means the appellate court upheld the trial court’s order. The house will not be lost to foreclosure and the closing is now set to go forward.

My job as an appellate attorney is to be knowledgeable in black-letter law, the appeals process and in writing effective appellate briefs; and concisely explaining why the appellate court judges should or should not affirm the circuit court’s decision. Seeking my expertise, as an appellate attorney, allowed for the former wife to silence her ex-husband’s attempt to be spiteful and prevented foreclosure of the marital home.
Robin Bresky, Law Offices of Robin Bresky