Opinion
Case No. 3:22-cv-1012-BJD-PDB
2023-12-11
NON PERFORMING LLC and Oslo Group LLC, Plaintiffs, v. John E. TYRE and Kay Tyre, Defendants.
Adam Grant Schwartz, Eric M. Levine, Atlas Solomon PLLC, Stuart, FL, for Plaintiffs. Kris Bradshaw Robinson, Robinson, Kennon & Kendron, PA, Lake City, FL, for Defendants.
Adam Grant Schwartz, Eric M. Levine, Atlas Solomon PLLC, Stuart, FL, for Plaintiffs.
Kris Bradshaw Robinson, Robinson, Kennon & Kendron, PA, Lake City, FL, for Defendants.
ORDER
BRIAN J. DAVIS, United States District Judge.
THIS CAUSE is before the Court on Plaintiffs' Motion for Summary Judgment (Doc. 43) filed May 24, 2023, and the related briefing (Docs. 49 and 50). This case follows a mortgage agreement formed between Plaintiffs' predecessor in interest and Defendants, and Plaintiffs' efforts to foreclose following Defendants' default. The parties dispute what property was intended to be encumbered by the mortgage agreement and the validity of an amended mortgage agreement offered by Plaintiffs.
A. Legal Standard
Under Rule 56 of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue is genuine when the evidence is such that a reasonable jury could return a verdict in favor of the non-movant. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (quoting Hairston v. Gainesville Sun Publ'g Co., 9 F.3d 913, 919 (11th Cir. 1993)). "[A] mere scintilla of evidence in support of the non-moving party's position is insufficient to defeat a motion for summary judgment." Kesinger ex rel. Estate of Kesinger v. Herrington, 381 F.3d 1243, 1247 (11th Cir. 2004) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
The party seeking summary judgment bears the initial burden of demonstrating to the court, by reference to the record, that there are no genuine issues of material fact to be determined at trial. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The record to be considered on a motion for summary judgment may include "depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A).
When the moving party has discharged its burden, the non-moving party must point to evidence in the record to demonstrate a genuine dispute of material fact. Fed. R. Civ. P. 56(c). Substantive law determines the materiality of facts, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In determining whether summary judgment is appropriate, a court "must view all evidence and make all reasonable inferences in favor of the party opposing [the motion]." Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995).
B. Background
Defendants entered a mortgage agreement with Bank of America, Plaintiffs' predecessor in interest, on July 1, 2005 (Docs. 44 at ¶6, 44.3). The Mortgage has since been assigned in succession to Wilmington Savings Fund Society, FLA Mortgage Capital 2, LLC, FLA Mortgage Capital Corporation, and finally to Non Performing LLC and Oslo Group LLC. (Docs. 44 at ¶12; 44.10).
The Mortgage's legal description of the property describes property located at the address 8149 SW State Road 247, but states its address is 348 Southwest ("SW") Tall Pine Court. (Doc. 44.3 at 9). In 2005, 8149 SW State Road 247 was valued at $14,163 and 348 SW Tall Pine Court was valued at $106,661. (Doc. 46.1). The Credit Agreement and Mortgage allowed Defendants to borrow up to $128,700. (Docs. 44.3 at 7; 44.2 at 1). 348 SW Tall Pine Court is mentioned once in the Credit Agreement as Defendants' address. (Doc. 44.2 at 1). It is mentioned three times in the Mortgage: once as Defendants' address and twice as the encumbered property. (Doc. 44.3 at 1, 9).
In December 2005, to fix the property description discrepancy Bank of America filed what it called a "Corrective Mortgage" unilaterally. (Docs. 44 at ¶7; 44.4). The only difference between the Mortgage and Corrective Mortgage is the legal description of the property in the Corrective Mortgage matches the location of 348 SW Tall Pine Court. (Docs. 44 at ¶7; 44.4). Bank of America simultaneously filed a release of the lien on 8149 SW State Road 247. (Docs. 44 at ¶7; 44.5).
Defendants defaulted on the Mortgage on June 25, 2015, when they failed to make a due payment. (Docs. 44 at ¶8; 44.6). In December 2018, Plaintiffs' predecessor in interest, Wilmington Savings Fund Society, commenced a prior action for foreclosure in Florida state court. (Doc. 46.2). The state court found for Defendants as the Corrective Mortgage was not a valid agreement and the inconsistencies in the Mortgage's legal description of the property would not allow a surveyor to identify the encumbered property. (Doc. 46.3 at 5, 7; 46.4 at 1).
To remedy the defective Mortgage, on June 13, 2022, FLA Mortgage Capital 2, LLC, the Mortgage holder at the time,
asked Defendants to execute an Amended Mortgage. (Docs. 45 at ¶2; 45.1). The Amended Mortgage is identical to the Mortgage except that its legal description of the property describes 348 SW Tall Pine Court. (Docs. 45 at ¶2; 45.1). The letter informed Defendants if they did not execute the Amended Mortgage by a specified date FLA Mortgage Capital 2, LLC would execute the Amended Mortgage on their behalf through authority granted by an Attorney-in-Fact provision in the Mortgage. (Docs. 45 at ¶2; 45.1). Defendants declined to execute the Amended Mortgage and informed FLA Mortgage Capital 2, LLC that any power of attorney they may have once held was revoked. (Doc. 45.2). On August 4, 2022, FLA Mortgage Capital 2, LLC executed the Amended Mortgage. (Doc. 44.8). FLA Mortgage Capital 2, LLC subsequently assigned the Amended Mortgage to FLA Mortgage Capital Corporation who commenced this action in September 2022. (Docs. 1; 44.10).
C. Discussion
"In diversity cases, the Court applies the substantive law of the forum." Hendricks v. Smartvideo Technologies, Inc., 511 F. Supp. 2d 1219, 1225 (M.D. Fla. 2007). In Florida, a foreclosure complaint requires four elements: (1) an agreement, (2) a default, (3) an acceleration of the amount due, and (4) the amount due. Nationstar Mortgage, LLC v. McDaniel, 288 So. 3d 1235, 1236 (Fla. 5th Dist. Ct. App. 2020).
1. The Amended Agreement is a valid Agreement Between Plaintiffs and Defendants
Under Florida law, contract validity and interpretation are both questions of law. Bonagura v. Home Depot., 991 So. 2d 902, 904 (Fla. 1st Dist. Ct. App. 2008). Bethany Trace Owners' Ass'n, Inc. v. Whispering Lakes I, LLC, 155 So. 3d 1188, 1191 (Fla. 2d Dist. Ct. App. 2014). Contractual language is given its plain meaning when it is clear and unambiguous. Daake v. Decks N Such Marine, Inc., 201 So. 3d 179, 181 (Fla. 1st Dist. Ct. App. 2016). If the terms are not clear, parol evidence from outside the contract may be considered to clarify latent ambiguity. Duval Motors Co. v. Rogers, 73 So. 3d 261, 265 (Fla. 1st Dist. Ct. App. 2011). Florida courts enforce contract choice of law provisions unless the law to be enforced "contravenes the strong public policy of Florida or is unjust or unreasonable." Default Proof Credit Card Sys., Inc. v. Friedland, 992 So. 2d 442, 444 (Fla. 3d Dist. Ct. App. 2008).
The Mortgage contains a choice of law provision which selects Florida law "except for matters related to the exportation of interest" which are governed by North Carolina Law. (Doc. 44.3 at 6). The "Attorney-in-Fact" provision of the Mortgage reads:
"If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph.
(Docs. 44.3 at 5;44.8 at 3). The preceding paragraph, "Further Assurances reads:
At any time, and from time to time, upon request of the Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of the Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Credit Agreement, this Mortgage, and the Related Documents...."
(Doc. 44.3 at 4-5) (emphasis added).
The issue at hand is whether the Amended Mortgage was, in the sole opinion of FLA Mortgage Capital 2, LLC, necessary or desirable to effectuate, complete, perfect, continue, or preserve Defendants' obligations under the Credit Agreement, Mortgage, and related documents. If so, the Attorney-in-Fact provision of the Mortgage allowed FLA Mortgage Capital 2, LLC to sign the Amended Mortgage on Defendants behalf, and it is a valid agreement. If not, the Amended Mortgage is not a valid agreement and the Mortgage remains a valid agreement between the parties.
FLA Mortgage Capital 2, LLC and believed the Amended Mortgage was necessary to correct the legal description of the property included in the Mortgage. (Doc. 45.1). The legal description of the property in the Mortgage describes the metes and bounds of 8149 SW State Road 247, then states "KNOWN: 348 SOUTHWEST TALL PINE COURT." (Doc. 44.3 at 9). The legal description concludes with "PARCEL: 31-4S-16-03253-002" which refers to 8149 SW State Road 247. (Docs. 44.3 at 9; 46.1 at 2). There is latent ambiguity in the legal description. This is consistent with the state court finding the intended piece of land is not identified in the Mortgage. (Doc. 46.3 at 5). To clarify this ambiguity, we review the entire Mortgage first, then parol evidence if there is still ambiguity. The only other reference to the property in the Mortgage with identifying information reads, "The Real Property or its address is commonly known as 348 SW TALL PINE CT, LAKE CITY, FL 32024-1988." (Doc. 44.3 at 1). The credit limit stated in the Mortgage is $128,700.00. (Doc. 44.3 at 7). Looking at parol evidence, the property values at the time of mortgage formation were $106,661 for 348 SW Tall Pine Court and $14,163 for 8149 SW State Road 247 (Doc. 46-1). Based on the totality of the evidence, the Mortgage intended to reference 348 SW Tall Pine Court.
As this Court has found the Mortgage intended to refer to 348 SW Tall Pine Court but did not, it was necessary to execute a new mortgage to effectuate the Defendants obligations under the Mortgage. Thus, was within the Lender's contractual rights to request Defendants execute the Amended Mortgage, and to execute it using the Attorney-in-Fact provision when Defendants declined to do so. Taking the evidence in the light most favorable to the Defendants as the non-moving party, the Amended Mortgage is a valid agreement between parties.
Defendants claim the Attorney-in-Fact clause is ineffective under Florida Statutes §§ 709.2108(3) and 709.2110(1). (Doc. 49 at 10-12). § 709.2108(3) states conditional powers of attorney contingent are invalid and § 709.2110(1) states powers of attorney are revokable by writing. FLA. STAT. §§ 709.2108(1), 709.2110(1). Florida Statutes § 709 is the Florida Power of Attorney Act. FLA. STAT. § 709.2101. The Florida Power of Attorney Act does not apply to powers of attorney "coupled with
an interest in the subject of the power, including a power given to or for the benefit of a creditor in connection with a credit transaction[.]" FLA. STAT. § 709.2103(3). A mortgage is an interest in real property. Can Financial, LLC v. Krazmien, 253 So. 3d 8, 10 (Fla. 4th Dist. Ct. App. 2018). Florida Statutes § 709 and its subsections clearly do not apply to the Attorney-in-Fact clause of the Mortgage. Under Florida law, powers of attorney coupled with an interest are excepted from the rule of revocability. Peacock v. American Agronomics Corp., 422 So. 2d 55, 58 (Fla. 2d Dist. Ct. App. 1982). FLA Mortgage Capital 2, LLC exercised a valid power of attorney. The Amended Mortgage is a valid agreement between Plaintiffs and Defendants.
2. Defendants Defaulted on Their Obligations
Default is "[t]he omission or failure to perform a legal or contractual duty; esp., the failure to pay a debt when due." Black's Law Dictionary 526 (11th ed. 2019). The Mortgage and Amended Mortgage Agreement between parties stated Grantor (Defendants) would be in default if "Grantor does not meet the repayment terms of the Credit Agreement." (Docs. 44.3 at 5; 44.8 at 5). The Defendants had an obligation to make monthly or quarterly payments. (Doc. 44-2 at 1-2). Defendants did not make their payment due June 25, 2015, or any payments due after that date, as of February 23, 2023. (Docs. 44.6; 44.7). Therefore, taking the evidence in the light most favorable to Defendants as non-moving party, Defendants defaulted on their obligations.
3. Plaintiffs Appropriately Accelerated the Amount Due
A mortgage with an optional acceleration clause can be accelerated by filing suit for foreclosure. Bank of America, N.A. v. Graybush, 253 So. 3d 1188, 1191 (Fla. 4th Dist. Ct. App. 2018). Campbell v. Werner, 232 So. 3d 252, 254 n.1 (Fla. 3d Dist. Ct. App. 1970).
The Amended Mortgage contains an optional acceleration clause. (Doc. 44.8 at 5). Plaintiff's predecessor in interest filed suit for foreclosure on September 19, 2022. (Doc. 1). Viewing the evidence in the light most favorable to Defendants as the non-moving party, the amount due was properly accelerated.
4. Plaintiffs Proved the Amount Due by Competent Substantial Evidence
In a foreclosure case, the amount due "must be proved by competent substantial evidence." Green Emerald Homes, LLC v. 21st Mortgage Corp., 300 So. 3d 698, 709 (Fla. 2d Dist. Ct. App. 2019). This is normally done through presenting business records and supporting testimony of a witness who is competent to authenticate them. Id. Wolkoff v. American Home Mortg. Servicing, Inc., 153 So. 3d 280, 281 (Fla. 2d Dist. Ct. App. 2014).
Here, Plaintiffs claim Defendants owe $256,466.42 (Doc. 43 at 11). Plaintiffs present a payment records document (Doc. 44.6; "Payment Records") and the sworn declaration of Simon Dov, manager of Non Performing LLC (Doc. 44 at ¶1) to support this claim. Mr. Dov stated his familiarity with loan servicing records and the reliability of the business records presented, including Payment Records. (Doc. 44 at ¶2). Payment Records states the "TOTAL AMOUNT TO PAY LOAN IN FULL" is $259,078.70. (Doc. 44.6 at 1). This amount is the sum of eight-line items including a $10 "Recording Fee", $28.00 "Property Preservation", $2,524.50 "Fc Fees and Costs", and $49.78 "Unpaid Late Charges" Id. The "TOTAL AMOUNT TO PAY LOAN IN FULL" less the "Recording Fee", "Property Preservation", "Fc Fees
and Costs", and "Unpaid Late Charges" equals $256,466.42, the amount Plaintiffs claim is owed. Plaintiffs presented business records and a sworn statement from a witness who can authenticate them to establish the amount Defendants owe. This is precisely the type of evidence cited in Wolkoff. Taking the evidence in the light most favorable to Defendants as the non-moving party, the amount owed has been established. All four elements of the foreclosure complaint have been established.
Accordingly, after due consideration, it is
ORDERED:
1. The Plaintiffs' Motion for Summary Judgment (Doc. 43) is GRANTED.
2. The Clerk of the Court is directed to enter judgment in favor of Plaintiffs of $256,466.42 against Defendants.
3. Plaintiffs shall submit a Final Judgment of Foreclosure to the court on or before December 22, 2023.
4. The Plaintiffs' Motion for Order to Show Cause (Doc. 42) is DENIED as moot.
DONE and ORDERED in Jacksonville, Florida this 11th day of December, 2023.