Court Opinion

ID: 9781006
Source: CourtListenerOpinion
Date Created: 2023-08-30 15:10:19.311111+00
Date Added: 2024-06-11T12:09:23.872736
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

                 U.S. BANK NATIONAL ASSOCIATION,
                             Appellant,

                                    v.

             LAURA SAUNDERS and EUGENE SAUNDERS,
                          Appellees.

                             No. 4D22-1658

                            [August 30, 2023]

   Appeal from the Circuit Court for the Nineteenth Judicial Circuit,
Indian River County; Janet C. Croom, Judge; L.T. Case No. 31-2020-CA-
000205.

  Adam A. Diaz and Roy A. Diaz of Diaz Anselmo & Associates P.A., Fort
Lauderdale, for appellant.

   Beau Bowin of the Bowin Law Group, Indialantic, for appellees.

CONNER, J.

   The appellant, U.S. Bank National Association (“the Bank”), appeals the
amended final judgment of foreclosure in favor of the appellees, Laura and
Eugene Saunders (“the Borrowers”). The Bank raises two issues on
appeal, challenging two portions of the amended final judgment. First, the
Bank argues the trial court erred in finding in the Borrowers’ favor on the
mortgage foreclosure count and denying foreclosure. We affirm on that
issue without discussion. Second, the Bank argues the trial court erred
in fashioning a resolution to the case after denying foreclosure, which
established a balance due on the mortgage, and ordered the Borrowers to
begin making payments on the constructed balance. We agree with the
Bank that the trial court exceeded its authority in fashioning this
resolution and reverse that portion of the amended final judgment.

                               Background

  The instant case arises from the third attempted foreclosure of the
Borrowers’ loan over the past decade. The trial court, ruling in the
Borrowers’ favor on the Bank’s foreclosure count, described the history of
the case as “tortured.” The trial court had previously denied foreclosure
partly based on problems with the loan going back to the first foreclosure
attempt. Based on the loan’s history, which included a written loan
modification agreement, and the trial court’s findings in this case, the trial
court entered an amended final judgment denying foreclosure for a third
time. However, the trial court also fashioned a resolution to the suit,
stating:

      Based on the foregoing findings of fact and the procedural
      history of the foreclosure proceedings involving [the
      Borrowers’] mortgage [citing the two previous foreclosure case
      numbers] the Court hereby Orders that the total Mortgage
      balance, to include any and all fees and costs is $111,654.63
      as of May 2, 2022. Said sum shall be paid back by [the
      Borrowers] to [the Bank] pursuant to the terms and conditions
      of the Loan Modification Agreement between the parties dated
      June 8, 2010. Repayment shall commence June 1, 2022 with
      an initial principal, interest, taxes and insurance monthly
      payment of $634.44.

   Notably, although the trial court’s resolution established “the total
Mortgage balance” that “include[d] any and all fees and costs,” the
$111,654.63 did not include sums which the Bank had alleged the
Borrowers owed under the loan modification agreement, including
interest, advances, and a deferred balance.

    The Bank filed a motion for rehearing, challenging, in part, the trial
court’s resolution of “the total Mortgage balance” and payment plan. The
trial court denied the Bank’s motion without explanation. The Bank then
gave notice of appeal.

                             Appellate Analysis

    The Bank argues the trial court’s amended final judgment denying
foreclosure was improper because it created a resolution to the suit that
effectively rewrote the parties’ loan agreements. The Bank contends the
trial court’s resolution was erroneous for two reasons: the trial court (1)
granted relief beyond that requested by the Borrowers and (2) exceeded its
equitable powers in rewriting the parties’ loan agreements. We agree with
both contentions.

   As the Bank argues, our supreme court has explained that after an
unsuccessful foreclosure, “the parties are simply placed back in the same
contractual relationship as before, where the residential mortgage

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remained an installment loan, and the acceleration of the residential
mortgage declared in the unsuccessful foreclosure action is revoked.”
Bartram v. U.S. Bank Nat’l Ass’n, 211 So. 3d 1009, 1019 (Fla. 2016). The
Borrowers argue the trial court’s resolution simply described the parties’
respective positions when placed back in the same contractual
relationship as prior to suit. The trial court apparently may have thought
that it was clarifying the parties’ obligations under the loan modification
agreement, and was putting the parties in the position in which the trial
court thought they would be under the modification agreement. But the
trial court’s resolution in the amended final judgment did not bring the
parties back to their relationship status prior to suit being filed. Instead,
as the Bank suggests, the amended final judgment effectively created a
new modified agreement with which the parties were required to comply.

   In particular, the amended final judgment negated essential
contractual terms favorable to the Bank. The Borrowers contend the trial
court simply adopted the principal balance alleged in the Bank’s
complaint. However, in addition to the alleging a $111,654.63 principal
balance, the Bank’s complaint also alleged the Borrowers were required to
pay $6,700 in deferred principal under the loan modification agreement,
“together with costs, advances and expenses as provided in the Note and
Mortgage.” By ordering “the total Mortgage balance” to be “$111,654.63
as of May 2, 2022,” and expressly excluding certain sums to which the
Bank could be entitled under the loan agreements, the amended final
judgment’s effect was to rewrite the parties’ agreements.

   The Bank is correct that the trial court erred in rewriting the contract
for two reasons. First, the Borrowers did not seek to amend the loan
agreements in their pleadings, so the trial court granted relief beyond that
which the pleadings requested. See Wachovia Mortg. Corp. v. Posti, 166
So. 3d 944, 945-46 (Fla. 4th DCA 2015).

   Second, the trial court could not use its equitable powers to amend the
loan documents. Ivy Chase Apartment Property, LLC v. Ivy Chase
Apartments, Ltd., 352 So. 3d 33 (Fla. 2d DCA 2022), is instructive. There,
the Second District addressed a foreclosure case where one of the issues
was the default interest rate. Id. at 37. The note provided a default interest
rate “at the maximum allowable rate permitted by law,” which the opinion
indicates was 25% for the loan at issue. Id. at 37, 43. The appellant
sought a 25% default interest rate, but the trial court, relying on its
equitable powers, ordered a 5% default interest rate. Id. at 39.

   On appeal, the appellant challenged the trial court’s default interest
rate, arguing the trial court erred in ignoring the note’s default interest

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rate, and instead used its equitable powers to fashion a rate. Id. at 42-43.
The Second District agreed with the appellant and reversed, explaining:

      [W]hile foreclosure as a remedy may be denied based on
      equitable    considerations      like    unclean     hands      or
      unconscionability, in determining whether to grant the
      equitable relief of foreclosure, the trial court is not at liberty
      to modify terms of a note and mortgage that are unambiguous
      and undisputed. In other words, while trial courts may be at
      liberty to invoke equitable considerations in determining
      whether to grant the equitable remedy of foreclosure, such
      equitable considerations cannot justify rewriting the terms of
      the parties’ agreements upon which the right to foreclose is
      based.

Id. at 43 (citations and internal quotation marks omitted).

   The same is true here. The amended final judgment here focused solely
on the principal balance due on the mortgage and ignored other amounts
under the loan agreements to which the Bank may have been entitled.
Quite simply, the “mortgage balance” is generally not the same thing as
the “principal balance.”

   Although we determine the trial court properly exercised its equitable
powers in denying the Bank’s count for foreclosure, the trial court
exceeded its equitable powers in rewriting the parties’ agreements.

                                 Conclusion

   Finding the trial court erred in fashioning a resolution of the case by
establishing a new mortgage balance that excluded certain amounts to
which the Bank may be entitled under the loan modification agreement,
we reverse that portion of the amended final judgment with instructions
for the trial court to strike the language establishing “the total Mortgage
balance” and establishing a monthly repayment amount. The amended
final judgment shall simply deny foreclosure (with explanation as
appropriate), determine entitlement to fees and costs as appropriate, and
reserve jurisdiction as appropriate.

   Affirmed in part, reversed in part, remanded with instructions.

MAY and CIKLIN, JJ., concur.

                            *         *         *

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Not final until disposition of timely filed motion for rehearing.

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