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). 

FLORIDA CASE LAW UPDATES
WELLS FARGO BANK, N.A. V. TAN, 4D20-613 (Fla. 4th DCA May 5, 2021) 

The Fourth District agreed with the trial court that the foreclosure judgment in favor of a junior mortgagee was void as to a senior mortgagee whose mortgage had been recorded before that of the junior mortgagee. In addition, the trial court erred in finding that the senior mortgagee’s motion to vacate that foreclosure judgment was not timely filed, as a party may move to vacate a void judgment at any time. Nevertheless, the Fourth District affirmed the order denying the senior mortgagee’s motion to vacate judgment because it also agreed with the trial court that section 702.036, Florida Statutes, barred the court from vacating the judgment where the vacation of judgment would adversely impact the quality and character of title to the property since that property had been purchased by bona fide third parties after the foreclosure sale. Document Link 

FLORIDA CASE LAW UPDATES
PALMER V. HMG VENTURE PARTNER, LLC, 5D20-956 (Fla. 5th DCA May 7, 2021) 

In this Per Curiam affirmed case, Judge Cohen, in his special concurring opinion, explained the appellant, Palmer, argued the trial court abused its discretion by failing to grant him an evidentiary hearing on his timely objection to the bid amount under section 45.031(8), Florida Statutes. The judge, citing to precedent, noted that as a general proposition, mere inadequacy of price standing alone is not a basis to set aside a judicial sale. Because the only allegation in Palmer’s affidavit was the mistake in failing to attend the foreclosure sale, it was wholly inadequate to necessitate an evidentiary hearing on his objection. Document Link

FLORIDA CASE LAW UPDATES
WATERS V. WILMINGTON TRUST, N.A., 4D20-397, (Fla. 4th DCA May 26, 2021).​

In a per curiam opinion, the Fourth District reversed the trial court’s order denying the homeowner’s motion for attorney’s fees under section 57.105(7), Florida Statutes (providing reciprocal attorney’s fees to the other party to a contract who prevails in a suit regarding that contract which provides fees for its enforcement). The Court explained the Lender confessed error (a way of consenting with the homeowner on appeal that the order denying fees should be reversed) based on the Florida Supreme Court’s recent holding in Page v. Deutsche Bank Tr. Co. Ams., 308 So. 3d 953 (Fla. 2020). However, the Fourth District characterized the Page holding as one which stands for the proposition that a mortgagor who prevails in a foreclosure action based on the plaintiff’s lack of standing at the time the lender filed the foreclosure action was entitled to prevailing party attorney’s fees. Moreover, the Court described the Lender’s confession of error as acknowledging the mortgage provided for “prevailing party attorney’s fees,” and that based on Page, the homeowner was entitled to fees for successfully defending the case in the trial court. Nevertheless, the standard residential mortgage form is bereft of any provisions that provide prevailing party attorney’s fees. This decision adds to the confusing jurisprudence regarding a borrower’s entitlement to attorney’s fees under section 57.105(7) when that borrower prevails by either showing the plaintiff did not prove standing or successfully proving a lack of standing defense. Document Link

FLORIDA CASE LAW UPDATES
WILMINGTON SAV. FUND SOC'Y FSB V. MORRONI, 2D20-3085 (Fla. 2nd DCA May 28, 2021).

The Second District held that the trial court erred in denying the plaintiff’s motion for the return of the loan documents in the court file following its unsuccessful foreclosure action based on the trial court’s mistaken conclusion that the appellate court, in reversing judgment for the plaintiff, had found that the documents were not the originals. The appellate court only ruled that the plaintiff failed to carry its burden of proof that the note and the allonge it tendered were originals, not that the note and allonge were not actually originals. Moreover, there was no judgment cancelling the note. Absent such a judgment, the plaintiff was entitled to the return of its property. Document Link

FLORIDA CASE LAW UPDATES
CASTELLANOS V. REVERSE MORTG., 3D20-472 (Fla. 3d DCA May 12, 2021) 
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The Third District ruled that to the extent its decision in Suchman Corp. Park, Inc. v. Greenstein holds that, as matter of law, the reciprocity provision of section 57.105(7), Florida Statutes cannot apply to authorize an award of attorney’s fees to a prevailing borrower on an underlying nonrecourse loan (because the borrower under such a loan would have no personal liability for those fees), such a holding has been implicitly overruled by the supreme court’s recent decision in Page v. Deutsche Bank Tr. Co. Ams. The Court remanded the case for the trial court to enter an order finding the prevailing borrower was entitled to fees under section 57.105(7) and for further proceedings. Document Link​

FLORIDA CASE LAW UPDATES
​VALLS V. HSBC BANK USA, N.A., 4D20-1984 (Fla. 4th DCA May 12, 2021) 
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The Fourth District, on the Lender’s confession of error to the Borrower’s argument that he was entitled to an evidentiary hearing on his objection to sale, reaffirmed Florida law (§ 45.031(8), Fla. Stat.) that if a timely objection to sale is lodged, the court must hold a hearing on that objection prior to the issuance of a certificate of title to the successful bidder. Document Link

FLORIDA CASE LAW UPDATES
​REFAIE V. BAYVIEW LOAN SERVICING, 2D19-4780 (Fla. 2nd DCA May 14, 2021)

Pursuant to section 45.032(3), Florida Statutes, the Second District held the issuance of the certificate of disbursements triggers the running of the 60-day period for filing claims to surplus monies following a foreclosure sale. To conclude otherwise, the Court held, would produce inconsistent application of sections 45.031(7)(b) and 45.032(3). Here, the incorrect legal description and property address on the certificate of title did not invalidate the foreclosure or conveyance of the property because no error occurred prior to entry of the final judgment of foreclosure. All relevant documents preceding the certificate of title contained the correct property address and legal description and all parties were on notice of the foreclosure proceedings and sale of the property. The junior lienholder’s initial motion for surplus proceeds, filed more than 60 days after the filing of the certificates of disbursements, was untimely. The trial court erred by granting the renewed motion for surplus because the initial motion was untimely. Document Link​​

FLORIDA CASE LAW UPDATES
DEMAKIS V. SUNTRUST BANK, 2D19-3751 (Fla. 2nd DCA Feb. 24, 2021).
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​The Court held it was error to grant summary judgment in favor of the bank seeking to foreclose on a HELOC because the HELOC was not authenticated. A HELOC was not self-authenticating because it is not a negotiable instrument. An unauthenticated HELOC would not have been admissible evidence at trial and, as such, it was not a sufficient basis for a summary judgment.

FLORIDA CASE LAW UPDATES
SAAVEDRA V. UNIVERSAL PROP. & CAS. INS., 5D19-2176 (Fla. 5th DCA Feb. 21, 2021)
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The Court reversed summary judgment in favor of the insurer that had denied, in its responsive pleading, the insured had complied with conditions precedent. The Court held that pursuant to Fla. R. Civ. P. 1.120(c), in denying that conditions precedent were met, a defendant is required to identify both the nature of the condition precedent and the nature of the alleged noncompliance or nonoccurrence. The purpose of the rule is to put the burden on the defendant to identify the specific condition that the plaintiff failed to perform so that the plaintiff may cure the omission. If satisfaction of the condition precedent is not denied with specificity, it is waived, as it was by the insurer in this case.