Case Law Developments - Florida

The Florida office is providing you with the following case law update for June 2021. These updates are summaries of cases that impact foreclosure issue cases. We have provided the general holding of the case. If any case is of interest to you, please let us know. We are happy to provide a detailed analysis of the facts and holding of the case and how they might apply to your specific situation.
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• VOLYNSKY V. PARK TREE INVS. 21, LLC, 3D19-2197 (Fla. 3rd DCA June 9, 2021)
  The trial court did not err when it overruled the mortgagor’s legally insufficient objections to the judicial sale of the property grounded upon a failure to serve unspecified court notices. The objection reciting that the property was worth more than the sale price was also legally insufficient. The trial court did not divest the mortgagor of due process simply because it refused to afford him an evidentiary hearing. Although section 45.031(8), Florida Statutes, does not require evidentiary hearings to resolve timely-filed objections to sale, under certain narrow circumstances, several of the Third District’s sister courts have concluded such a hearing is necessary in cases alleging grounds sufficient to support equitable relief from the sale (not present in this case). 

• WELLS FARGO BANK, N.A. V. DIAS, 2D19-3256 (Fla. 2nd DCA June 16, 2021)
  The Second District denied rehearing but substituted this June 16, 2021 opinion in place of its opinion dated February 12, 2021. A third party who purchased the property at the homeowners association lien foreclosure sale during the pendency of the senior mortgage foreclosure action did not have the ability to step into the mortgagor’s shoes and argue the mortgagor’s forgery defense in the mortgage foreclosure action because the purchaser lacked standing to do so. The purchaser who took his interest subject to Wells Fargo’s superior interest could not participate in the foreclosure action as if he were a party to the note and mortgage and challenge the mortgage’s validity. Furthermore, the purchaser is estopped from proceeding on an affirmative defense based on the theory of forgery of the mortgagor’s signature. The purchaser’s status does not confer on him the ability to assert any right that inured only to the mortgagor’s benefit under the mortgage contract to which the purchaser was not a party and of which he had notice at the time he purchased the property at the foreclosure sale. As to the mortgagors’ marital status, even if the purchaser had established that the mortgagors’ marriage had been dissolved, that evidence alone would have no legal significance on the viability of the mortgage as between the mortgagors and Wells Fargo. The Court remanded with instructions for the trial court to enter final judgment in favor of the mortgagee and against the mortgagors and the purchaser. 

• WVMF FUNDING V. PALMERO, SC19-1920 (Fla. S. Ct. June 24, 2021)
  Roberto Palmero was the borrower on a reverse mortgage. He was defined as the sole borrower in the note and mortgage and was listed as the only borrower in four of the five documents related to the home equity conversion mortgage. Although only Mr. Palmero signed the note, the signature block of the mortgage contained preprinted lines with Mr. and Mrs. Palmero’s names and the word “Borrower.” Mrs. Palmero signed a non-borrower spouse certification. After the death of Mr. Palmero, the reverse mortgage became due and the lender started foreclosure proceedings. Although the trial court ruled Mrs. Palmero was not a co-borrower, it nevertheless denied the lender foreclosure under certain 2014 federal rules. The Third District rejected the trial court’s approach regarding the federal rules, but affirmed (the denial of foreclosure) on the basis that since the mortgage listed Mrs. Palmero as a borrower, she was, in fact, a borrower, thereby precluding foreclosure while she was still alive and residing in the property. 
  
  In a 5-2 decision, the Florida Supreme Court relied on the general rule of foreclosure actions dating back nearly 100 years that the note and mortgage should be construed together and if there is a conflict in terms, the promissory note takes precedence over the mortgage. The Court extended these rulings to reverse mortgage legal proceedings. The Court found the note unambiguously defined Mr. Palmero as the sole borrower. Because the Third District erred in affirming the trial court’s denial of foreclosure by finding Mrs. Palmero was a surviving co-borrower, it quashed the Third District’s decision and ordered foreclosure of the mortgage. 

• COHEN V. US BANK TRUST, N.A., 4D20-392 (Fla. 4th DCA June 2, 2021)
  The Court held it was error to enter summary judgment in the bank’s favor where the only evidence that the prior servicer had mailed the default notice was an affidavit executed by its successor servicer’s employee whose affidavit did not at least facially demonstrate that the employee had sufficient personal knowledge of the prior servicer’s practices of mailing default notices in order to establish that the prior servicer had mailed the default notice. 

• GARTNER V. REVERSE MORTG. SOLUTIONS, INC., 1D20-772 (Fla. 1st June 30, 2021)
  The First District, relying on recent decisions from the Florida Supreme Court and the Third District Court of Appeal, ruled that the attorney fee reciprocity provision of section 57.105(7), Florida Statutes, applies when (1) the contract includes a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, and (2) the other party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This reciprocity provision also applies to prevailing borrowers on underlying nonrecourse loans even though such borrowers have no personal liability upon default of the note. 

 The trial court did not err when it overruled the mortgagor’s legally insufficient objections to the judicial sale of the property grounded upon a failure to serve unspecified court notices. The objection reciting that the property was worth more than the sale price was also legally insufficient. The trial court did not divest the mortgagor of due process simply because it refused to afford him an evidentiary hearing. Although section 45.031(8), Florida Statutes, does not require evidentiary hearings to resolve timely-filed objections to sale, under certain narrow circumstances, several of the Third District’s sister courts have concluded such a hearing is necessary in cases alleging grounds sufficient to support equitable relief from the sale (not present in this case).