IN THE DISTRICT COURT OF APPEAL

FIFTH DISTRICT OF FLORIDA

CASE NO. 5D14-4511

LT. CASE NO. 59-2011-CA-004389

BANK OF AMERICA, N.A., etc.,

Appellant,

v.

LINDA A. NASH, et al.,

Appellees. /

APPELLANT, BANK OF AMERICA, N.A.’S

INITIAL BRIEF

On Appeal from the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida

MARY J. WALTER Florida Bar No. 45162 mjw@lgplaw.com LIEBLER GONZALEZ & PORTUONDO Counsel for Appellant, Bank of America, N.A. Courthouse Tower - 25th Floor 44 West Flagler Street Miami, FL 33130 (305) 379-0400

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TABLE OF CONTENTS

TABLE OF CITATIONS ......................................................................................... ii

PRELIMINARY STATEMENT ............................................................................... 1

STATEMENT OF THE CASE AND FACTS .......................................................... 2

SUMMARY OF ARGUMENT ................................................................................. 8

ARGUMENT ........................................................................................................... 11

I. THE TRIAL COURT ERRED IN ENTERING A FINAL

JUDGMENT THAT INVALIDATED THE NOTE AND MORTGAGE, REQUIRED THE BANK TO RETURN MORTGAGE PAYMENTS, AND AWARDED ATTORNEY’S FEES TO BORROWER ................................................................................ 11

A. Standard of Review ............................................................................. 11

B. The Trial Court Erred in Invalidating the Note and Mortgage,

Because the Ruling Did Not Conform to the Court’s Oral

Findings, Granted Relief Beyond the Pleadings, Was Not

Supported by the Evidence, and Was Contrary to Law ...................... 12

C. The Trial Court Erred in Awarding Attorney’s Fees to

Borrower under Florida Statute Section 57.105, and a

Contract It Found Void ....................................................................... 21

II. THE BANK PRESENTED A PRIMA FACIE CASE FOR

FORECLOSURE AND BORROWER PRESENTED NO COUNTEREVIDENCE ................................................................................ 22

A. Standard of Review ............................................................................. 22

B. The Bank Established an Unrefuted, Prima Facie Case for

Mortgage Foreclosure ......................................................................... 23

CONCLUSION ........................................................................................................ 26

CERTIFICATE OF SERVICE ................................................................................ 27

CERTIFICATE OF TYPE SIZE & STYLE ............................................................ 27

ii

TABLE OF CITATIONS

Cases Page BAC Home Loans Servicing, Inc. v. Headley,

130 So. 3d 703 (Fla. 3d DCA 2013) .............................................................. 14, 17

Bank of Am. v. Asbury,

2D14-1965, 40 Fla. L. Weekly D1230 (Fla. 2d DCA May 27, 2015)........... 24, 25

Bank of Am., N.A. v. Delgado,

3D13-910, 40 Fla. L. Weekly D1080 (Fla. 3d DCA May 6, 2015) ..................... 23

Carnival Leisure Indus. Ltd. v. Arviv,

655 So. 2d 177 (Fla. 3d DCA 1995) .................................................................... 22

Cooke v. Ins. Co. of N. Am.,

652 So. 2d 1154 (Fla. 2d DCA 1995). ................................................................. 24

Corp. Mgmt. Advisors, Inc. v. Boghos,

756 So. 2d 246 (Fla. 5th DCA 2000) ................................................................... 13

Dukes v. Dukes,

19 So. 3d 338 (Fla. 2d DCA 2009) ................................................................ 12-13

Elston/Leetsdale, LLC v. CWCapital Asset Mgmt. LLC,

87 So. 3d 14 (Fla. 4th DCA 2012) ....................................................................... 23

Ernest v. Carter,

368 So. 2d 428 (Fla. 2d DCA 1979) .................................................................... 23

Garcia v. Stewart,

906 So. 2d 1117 (Fla. 4th DCA 2005) ..................................................... 15, 16, 17

Godshalk v. Countrywide Home Loans Servicing, L.P.,

81 So. 3d 626 (Fla. 5th DCA 2012) ..................................................................... 24

Harvey v. Deutsche Bank Nat’l Trust Co.,

69 So. 3d 300 (Fla. 4th DCA 2011) ..................................................................... 25

iii

Hewitt, Coleman & Assocs. v. Lymas,

460 So. 2d 467 (Fla. 4th DCA 1984) ............................................................. 17, 19

Instituto Patriotico Y Docente San Carlos, Inc. v. Cuban Am. Nat’l Found.,

667 So. 2d 490 (Fla. 3d DCA 1996) .................................................................... 15

Inter-Active Servs., Inc. v. Heathrow Master Ass’n, Inc.,

721 So. 2d 433 (Fla. 5th DCA 1998) ................................................................... 11

Kelsey v. SunTrust Mortg., Inc.,

131 So. 3d 825 (Fla. 3d DCA 2014) .................................................................... 23

Leon Shaffer Golnick Adver., Inc. v. Cedar,

423 So. 2d 1015 (Fla. 4th DCA 1982) ................................................................. 17

Lovett v. Lovett,

112 So. 768 (1927) ............................................................................................... 15

M.D. v. Dep’t of Children & Family Servs.,

924 So. 2d 827 (Fla. 2d DCA 2005) .................................................................... 13

McKenzie Check Advance of Fla., LLC v. Betts,

112 So. 3d 1176 (Fla. 2013) ........................................................................... 22-23

Mgmt. Comput. Controls, Inc. v. Charles Perry Constr., Inc.,

743 So. 2d 627 (Fla. 1st DCA 1999) ................................................................... 11

Perlow v. Berg-Perlow,

875 So. 2d 383 (Fla. 2004) ................................................................................... 12

Pub. Defender, Eleventh Judicial Circuit of Fla. v. State,

115 So. 3d 261 (Fla. 2013) ................................................................................... 23

Ross v. Botha,

867 So. 2d 567 (Fla. 4th DCA 2004) ............................................................. 13, 14

Servedio v. U.S. Bank Nat’l Ass’n,

46 So. 3d 1105 (Fla. 4th DCA 2010) ............................................................. 17-18

iv

Surgical Partners, LLC v. Choi,

100 So. 3d 1267 (Fla. 4th DCA 2012) ................................................................. 22

Whitley v. Royal Trails Prop. Owners’ Ass’n,

910 So. 2d 381 (Fla. 5th DCA 2005) ............................................................. 11, 12

Yampol v. Turnberry Isle S. Condo. Ass’n, Inc.,

143 So. 3d 1144 (Fla. 3d DCA 2014) ...................................................... 14-15, 17

Other Authorities

Fla. R. Civ. P. 1.100 .................................................................................................15

Fla. R. Civ. P. 1.120 .................................................................................................24

Fla. R. Civ. P. 1.140 .................................................................................................24

Fla. Stat. § 494.0022 ......................................................................................... 19, 20

Fla. Stat. § 494.00255 (2014) ...................................................................................20

Fla. Stat. § 494.0041 (2005) .....................................................................................20

Fla. Stat. § 494.006 (2005) .......................................................................................19

Fla. Stat. § 57.105 ....................................................................................................21

Fla. Stat. § 607.1501 ................................................................................................20

Fla. Stat. § 607.1502 ......................................................................................... 20, 21

Fla. Stat. § 671.201 ..................................................................................................25

Fla. Stat. § 673.3011 ................................................................................................25

1

PRELIMINARY STATEMENT

This is an appeal from a final judgment denying Bank of America’s

foreclosure action, finding the promissory note and mortgage to be void, and

entering judgment for Linda A. Nash in the amount of $75,608.72. This is also an

appeal from a supplemental final judgment awarding Nash $67,499.70 in

attorney’s fees and costs. Plaintiff/Appellant, Bank of America, N.A., will be

referred to as the “Bank.” Defendant/Appellee, Linda A. Nash, will be referred to

as the “Borrower.” Other terms will be defined where they appear. The following

designations will also be used:

Rv__:__:__ - Record volume number: page number :: line

number

2

STATEMENT OF CASE AND FACTS

On May 24, 2005, Borrower executed a promissory note secured by a

mortgage. RvI: 14–33. The note identified the lender as America’s Wholesale

Lender. RvI: 29. Countrywide Home Loans, Inc. (“Countrywide”) subsequently

indorsed the note in blank indicating that Countrywide was “a New York

Corporation doing business as America’s Wholesale Lender.” RvI: 31. The

mortgage stated the lender was America’s Wholesale Lender, a corporation

originated and existing under the laws of New York and identified the Mortgage

Electronic Registration Systems, Inc. (“MERS”) as the mortgagee. RvI: 14.

MERS later assigned the mortgage to BAC Home Loans Servicing, LP (“BAC”),

the Bank’s predecessor. RvI: 9.

Borrower defaulted on her loan payment due November 1, 2010. RvII: 377–

88. On December 31, 2010, BAC sent Borrower a pre-acceleration notice of

default and intent to accelerate. RvII: 379. Borrower failed to cure the default.

RvII: 381–88. On November 7, 2011, the Bank, as successor by merger to BAC,

filed a complaint to foreclose on Borrower’s note and mortgage. RvI: 1–33. The

Bank alleged that Borrower was in default as of November 1, 2010, and that she

owed a principal balance of $32,528.77. RvI: 2. The Bank also alleged that it was

entitled to foreclose on the note and mortgage under Florida Statute section

673.3011, and that all conditions precedent had been performed or had occurred.

3

RvI: 2. The Bank attached the indorsed note, the mortgage, and the assignment of

mortgage from MERS to BAC as exhibits to the complaint. RvI: 9, 14–33. The

Bank filed the original note and mortgage on February 9, 2012. RvI: 63–83.

On January 23, 2014, Borrower filed her first amended answer and

affirmative defenses. RvI: 153–75. Borrower generally denied the Bank’s

allegation that it complied with conditions precedent, but did not specifically state

how the Bank failed to comply. RvI: 154. In her affirmative defenses, Borrower

challenged the Bank’s standing to foreclose, alleging that the attachments to the

Bank’s complaint were contradictory, as an entity cannot be both a d/b/a (as

suggested by the indorsement on the note) and a corporation (as suggested by the

mortgage). RvI: 155–75. Specifically, Borrower claimed that the Bank lacked

standing if America’s Wholesale Lender was a corporation because the

assignment of the note was invalid. RvI: 155. Borrower also claimed that if

America’s Wholesale Lender was a fictitious name, the note and mortgage were

invalid. RvI: 157. Finally, Borrower alleged that the mortgage was invalid

because America’s Wholesale Lender was not incorporated until 2008. RvI: 155.

Borrower did not assert any counterclaims against the Bank. RvI-III: passim.

The case proceeded to trial on September 15, 2014. RvII: 321–22. The

Bank called Chad Anderson, a mortgage resolution associate, as its witness. RvIII:

481–82. Anderson identified the original note and mortgage and testified about the

4

Borrower’s payment history and BAC’s pre-acceleration notice of default. RvIII:

484–92. Anderson also testified that the note was indorsed in blank and

transferred to Countrywide Home Loans Servicing, LP, on May 27, 2005, two days

after closing. RvIII: 498–500. He stated that the Bank acquired Countrywide

Home Loans Servicing, LP through a merger with BAC Home Loans Servicing,

LP. RvIII: 498–99. Anderson testified that BAC sent the pre-acceleration letter to

Borrower pursuant to the terms of the mortgage. RvIII: 507.

On voir dire, Borrower asked Anderson about the identity of the lender and

America’s Wholesale Lender’s status as a corporation or a d/b/a. RvIII: 492–505.

Anderson testified that America’s Wholesale Lender was a business name for

Countrywide. RvIII: 497, 499–500, 503. Anderson testified that he had no

knowledge about the formation of America’s Wholesale Lender, whether it had a

lender’s license or was authorized to do business in Florida under Florida Statute

section 607.1506. RvIII: 497, 515–517.

During Anderson’s testimony, Borrower’s counsel offered to submit a

memorandum after trial that would address the identity of America’s Wholesale

Lender. RvIII: 502. The Bank’s counsel said that she hadn’t seen the

memorandum and objected due to the late submission. RvIII: 502, 503. The court

stated, “Let’s not get bogged down in this right now. It’s something I can read at

5

the end of trial. . . . Let’s go ahead and continue to voir dire.” RvIII: 502. The

court also told counsel, “[D]on’t worry about this right now.” RvIII: 503.

Following extensive voir dire, the court admitted the Bank’s exhibits into

evidence. RvIII: 512. Nonetheless, after both sides rested, the court ruled in favor

of Borrower. RvIII: 531–32. The court stated:

I don’t think it was possible to really spell out the chain

of holders in this mortgage. You may think he did, but

I’m not satisfied that he was able to do that. There is no

receipt of the default letter. So therefore, a condition

precedent of the mortgage has not been met. I’m just not

satisfied with the -- his knowledge of Countrywide, and I

can understand that. It’s a big mystery organization as

far as I’m concerned from everything I have ever heard

about it, and he doesn’t know when the note was

acquired by the plaintiff, which is a big stumbling block

in my mind. He may know that it was -- he may say that

it was held, but he can’t give me a date when it was

actually acquired by them. So that makes his testimony

rather troubling to the court.

So, therefore, I’m ruling for the defendant on this case. I

don’t think you’ve been able to prove your case. In

fairness to you, I don’t think it’s your fault. I think it is

Countrywide’s fault that they didn’t make a record

properly -- properly document, and, therefore, I’m

finding in favor of the defendant on this case.

RvIII: 531–32.

The court then asked Borrower’s counsel to submit a proposed final

judgment, stating: “[I]f you want to insert the reasons from your memorandum, I

don’t need to read your memorandum. You can put that -- incorporate any of that

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you want into the final judgment, to make yourself a little more bullet proof if

there is an appeal taken.” RvIII: 532–33. The Bank timely objected to Borrower’s

proposed final judgment on the grounds that it was not an accurate reflection of the

ruling at trial. RvII: 390–93.

Over the Bank’s objection, the court entered final judgment on October 16,

2014, not only dismissing the Bank’s case but also voiding the note and mortgage.

RvIII: 455–58. The final judgment stated:

a) America’s Wholesale Lender, a New York

corporation, the “Lender” specifically named in the

mortgage, did not file this action, did not appear at

trial, and did not assign any of the interest in the

mortgage.

b) The note and mortgage are void because the alleged

Lender, America’s Wholesale Lender, stated to be a

New York corporation, was not in fact incorporated in

the year 2005 or subsequently at any time, either by

Countrywide Home Loans, or the Bank, or any of

their related corporate entities or agents.

c) America’s Wholesale Lender, stated to be a

corporation under the laws of New York, the alleged

Lender in this case, was not licensed as a mortgage

lender in Florida in the year 2005, or thereafter, and

the alleged mortgage loan is therefore, invalid and

void.

d) America’s Wholesale Lender, stated to be a New

York corporation, did not have authority to do

business in Florida under Florida Statute section

607.1506 and the alleged mortgage loan is therefore

invalid and void.

e) Plaintiff and its predecessors in interest had no right to

receive payment on the mortgage loan because the

loan was invalid and therefore void because the

7

corporate mortgagee named therein, was non-existent,

and no valid mortgage loan was ever held by Plaintiff

or its predecessors in interest.

RvIII: 456–57 ¶ 9. Based on the finding that the note and mortgage were void, the

court also ordered the Bank to repay all of Borrower’s prior mortgage payments.

RvIII: 457–58 ¶¶ 10-11, 13. The judgment stated: “Defendant has presented to this

Court, a computation of the amount of said payments and the interest due thereon

from the date of each respective payment to September 3, 2014 . . . .” RvIII: 458

¶ 13. The judgment found that Borrower was entitled to recover, with interest, a

total of $75,680.72. RvIII: 458 ¶ 13. This amount was never addressed at trial.

RvII: 323–89; RvIII: 476–534.

Pursuant to the terms of Florida Statute section 57.105, the court also

ordered that, as the prevailing party, Borrower was entitled to attorney’s fees and

costs. RvIII: 457–58 ¶¶ 12, 14. Borrower had previously filed a motion for

supplemental final judgment awarding attorney’s fees to the prevailing party based

on fee provisions in the note and mortgage. RvIII: 411–29. The same day it

entered final judgment, the trial court entered a supplemental judgment awarding

Borrower prevailing party attorney’s fees and costs of $67,799.70. RvIII: 453–54.

The Bank moved for rehearing on November 4, 2014, which the trial court denied

on November 24, 2014. RvIII: 459–73, 542.

This appeal followed.

8

SUMMARY OF ARGUMENT

The trial court erred as a matter of law in entering final judgment for

Borrower. Specifically, the trial court’s final judgment was contrary to law

because it included findings that were not supported by the record, invalidated the

note and mortgage, ordered the Bank to return all mortgage payments, and

awarded attorney’s fees to Borrower. These rulings are neither supported by the

record nor by black letter law. Moreover, the Bank presented an unrefuted prima

facie case for foreclosure. As such, the Bank respectfully requests that the Court

overturn the final judgment and remand this matter back to the trial court.

First, the written final judgment includes findings that the court did not make

at trial. At trial, the court found in Borrower’s favor based on an alleged lack of

standing and failure to comply with conditions precedent. The court then invited

Borrower to add findings to the final judgment but failed to review them.

Therefore, the written final judgment unilaterally expanded the court’s ruling at

trial by invalidating the note and mortgage and granting monetary relief. Thus, the

judgment improperly reflected Borrower’s position, rather than the independent

judgment of the court.

Second, the trial court lacked jurisdiction to invalidate the note and

mortgage because Borrower did not request this affirmative relief in the pleadings.

Not only did the court lack jurisdiction, but the Borrower did not present any

9

evidence to support the invalidation of the note and mortgage. Moreover, the

Bank’s witness did not provide testimony about the Bank’s license or authority to

transact business. Finally, Borrower did not provide any evidence, nor did the

court cite any evidence, to support the monetary judgment the court ordered

against the Bank.

Third, the court did not have authority to invalidate the note and mortgage

under Florida law. At the time Borrower obtained her loan from Countrywide, the

Florida Statutes provided exceptions to the license requirements for national banks

and excluded lending from the definition of business activity. Thus, the Bank and

its predecessors were not required to obtain a license or a certificate of authority to

enter into a loan agreement with Borrower. Moreover, the Florida Statutes provide

that the failure to obtain a license or a certificate of authority to transact business

does not impair the validity of any contract. Thus, the issues of licensing and

authority to transact business are irrelevant as to the enforceability of the note and

mortgage, and the trial court erred in finding the note and mortgage invalid.

Ironically, the court also ordered attorney’s fees in the supplemental final judgment

even though the court wrongfully invalidated the note and mortgage. If the note

and mortgage were invalid, the fee provision in the mortgage would be as well.

Finally, the Bank presented a prima facie case for mortgage foreclosure at

trial. The trial court’s two stated reasons for ruling in favor of Borrower were

10

erroneous. First, the trial court stated that there was an issue with compliance with

conditions precedent because Borrower did not receive the notice of default.

However, as Borrower failed to raise that issue as a defense in its pleadings,

compliance with conditions precedent could not have been an issue at trial.

Second, the court found that the Bank lacked standing to prosecute the foreclosure

action because the Bank’s witness was unable to provide the date that the Bank’s

predecessor acquired the note. The Bank’s witness, however, testified that the

Bank’s predecessor received the note two days after closing, and Borrower

presented no counterevidence. Because the Bank presented an unrefuted prima

facie case, the trial court should have entered final judgment in the Bank’s favor.

As such, the Bank respectfully requests that the Court reverse the final judgment

and remand for entry of final judgment of foreclosure in favor of the Bank.

11

ARGUMENT

I. THE TRIAL COURT ERRED IN ENTERING A FINAL JUDGMENT

THAT INVALIDATED THE NOTE AND MORTGAGE, REQUIRED

THE BANK TO RETURN MORTGAGE PAYMENTS, AND

AWARDED ATTORNEY’S FEES TO BORROWER

A. Standard of Review

A trial court’s interpretation and construction of a contract is reviewed de

novo with attention to well-settled rules of interpretation. Mgmt. Comput.

Controls, Inc. v. Charles Perry Constr., Inc., 743 So. 2d 627, 630 (Fla. 1st DCA

1999). “Interpretation of a contract is a question of law, and an appellate court

may reach a construction contrary to that of the trial court.” Whitley v. Royal

Trails Prop. Owners’ Ass’n, 910 So. 2d 381, 383 (Fla. 5th DCA 2005) (citing

Inter-Active Servs., Inc. v. Heathrow Master Ass’n, Inc., 721 So. 2d 433 (Fla. 5th

DCA 1998)). “The parties’ intention governs contract construction and

interpretation;” but, the court should reach an “interpretation consistent with

reason, probability, and the practical aspect of the transaction between the parties.”

Whitley, 910 So. 2d at 383. “When two or more documents are executed by the

same parties at or near the same time, in the course of the same transaction, and

concern the same subject matter, they will be read and construed together. . . .

Thus, the meaning is gathered from a general view of the whole writing, with all of

12

its parts being compared, used, and construed, each with reference to the others.”

Id.

B. The Trial Court Erred in Invalidating the Note and Mortgage,

Because the Ruling Did Not Conform to the Court’s Oral Findings,

Granted Relief Beyond the Pleadings, Was Not Supported by the

Evidence, and Was Contrary to Law

The trial court erred in entering the final judgment, as the judgment (1) was

inconsistent with court’s oral ruling at the end of trial; (2) granted relief beyond the

scope of the pleadings; (3) was unsupported by the evidence; and (4) was

unsustainable under Florida law. The Bank respectfully requests that the Court

reverse the final judgment.

1. The Final Judgment Does Not Accurately Reflect the Ruling

at Trial

First, the trial court erred in entering the final judgment because it did not

accurately reflect the court’s ruling at trial. While a trial court may ask the parties

to submit a proposed final judgment, it may not adopt the judgment verbatim,

without record findings, and without permitting the opposing party to submit his

own proposed judgment. Perlow v. Berg-Perlow, 875 So. 2d 383, 389 (Fla. 2004).

“[W]hen a trial court adopts verbatim a party’s proposed order, reversal is required

when the findings in that order are inconsistent with an earlier pronouncement of

the court, or when the record establishes that the order does not reflect the court’s

‘independent decision-making.’” Dukes v. Dukes, 19 So. 3d 338, 339 (Fla. 2d

13

DCA 2009) (quoting M.D. v. Dep’t of Children & Family Servs., 924 So. 2d 827,

831 (Fla. 2d DCA 2005)); see also Corp. Mgmt. Advisors, Inc. v. Boghos, 756 So.

2d 246, 248 (Fla. 5th DCA 2000) (admonishing trial judges for adopting proposed

orders drafted by litigants verbatim). “An order must reflect independent decision-

making by the judge.” Ross v. Botha, 867 So. 2d 567, 572–73 (Fla. 4th DCA

2004).

At trial, the court erroneously ruled in favor of the Borrower based on its

determination that Anderson, the Bank’s witness, failed to establish that the

Borrower had received the pre-acceleration letter and the exact date that the Bank

acquired the note. RvIII: 532::2–16. Importantly, the trial court only made these

two findings. The court did not make any rulings about the validity of the note and

mortgage or the Bank’s obligation to repay the mortgage payments that Borrower

had already made. RvIII: 531–33.

After the oral ruling, the court requested that Borrower’s counsel prepare a

written final judgment, stating: “[I]f you want to insert the reasons from your

memorandum, . . . incorporate any of that you want to into the final judgment, to

make yourself a little more bulletproof if there is an appeal taken.” RvIII: 532::25–

533::1–6. The final judgment prepared by Borrower’s counsel, however, included

language voiding the note and mortgage and ordering the return of the Borrower’s

mortgage payments. The trial court never ordered this relief nor was it addressed

14

at trial. RvIII: 455–58. The trial court’s adoption of the Borrower’s final

judgment is contrary to law as it includes findings of fact and conclusions of law

not announced on the record by the court. Therefore, the final judgment does not

reflect the court’s independent judgment. See RvIII: 455–48, 531–33; see also

Ross, 867 So. 2d at 572. This Court should overturn the final judgment and

remand this matter back to the trial court.

2. The Trial Court Erred by Invalidating the Note and

Mortgage and Ordering the Bank to Pay the Borrower the

Mortgage Payments Because the Borrower Did Not Seek

That Relief in the Pleadings.

The trial court erred by granting relief outside of the Borrower’s pleadings.

Specifically, the trial court invalidated the note and mortgage and ordered the Bank

to return all prior mortgage payments. The Borrower, however, never requested

this relief in the pleadings. The Bank respectfully requests that the Court overturn

this portion of the final judgment.

“[A] trial court lacks jurisdiction to hear and determine matters that were not

the subject of proper pleadings and notice.” BAC Home Loans Servicing, Inc. v.

Headley, 130 So. 3d 703, 705 (Fla. 3d DCA 2013), reh’g denied (Feb. 13, 2014);

accord Yampol v. Turnberry Isle S. Condo. Ass’n, Inc., 143 So. 3d 1144, 1146 (Fla.

3d DCA 2014) (“The Association did not plead a claim for the permanent removal

of Mr. Yampol’s improvements . . . and it may not now ‘mend its hold’ to claim

15

that it is entitled to the permanent removal of those improvements on the unpled

grounds relied upon by the trial court.”); Instituto Patriotico Y Docente San

Carlos, Inc. v. Cuban Am. Nat’l Found., 667 So. 2d 490, 492 (Fla. 3d DCA 1996)

(“[T]he law in Florida is well-established that a trial court lacks jurisdiction to

entertain and adjudge matters which have not been the subject of proper pleadings

and notice.”). As Florida courts have explained:

If a court should render a judgment in a case where it had

jurisdiction of the parties, upon a matter entirely outside

of the issues made, it would, of necessity, be arbitrary

and unjust as being outside the jurisdiction of the subject-

matter of the particular case, and such judgment would

be void and would not withstand a collateral attack, for

upon such matter a presumption would arise that the

parties had had no opportunity to be heard.

Garcia v. Stewart, 906 So. 2d 1117, 1122 (Fla. 4th DCA 2005) (quoting Lovett v.

Lovett, 112 So. 768, 775–76 (1927)). “Under the current rules of civil procedure,

the ‘pleadings’ sufficient to invoke a court’s jurisdiction include a complaint,

petition, counterclaim, crossclaim, and third-party complaint.” Id. at 1123 (citing

Fla. R. Civ. P. 1.100(a)).

In Garcia, the trial court dismissed a defendant condominium association

(the “Association”) from a foreclosure action after it determined the Association’s

lien was superior to the plaintiff’s lien. Id. at 1119. On a subsequent motion, the

trial court disbursed surplus funds to the Association. Id. at 1120. The Fourth

16

District voided the award of surplus funds because the Association had not

requested that relief in a pleading. Id. at 1122. The court stated:

Before or after its dismissal from the case, the

Association filed no pleading concerning its claim of

lien. Florida Statute section 718.116(6)(a) contemplates

two possible actions the Association might have

pursued—“an action to foreclose a lien for assessments”

and “an action to recover a money judgment.” The

Association had the legal right to collect unpaid

assessments from Garcia; however, the Association did

not file a pleading to commence a proceeding to advance

its right to recovery.

Id. at 1122–23. The court concluded that “the Association’s post-judgment motion

to disburse funds, filed after it had been dismissed as a defendant in the lawsuit,

was not a pleading sufficient to invoke the jurisdiction of the court to adjudicate its

right to the funds.” Id. at 1123. As a result, the trial court lacked jurisdiction to

adjudicate the Association’s claim, and the order disbursing funds was void. Id.

Here, Borrower did not file a pleading seeking a determination that the note

and mortgage were invalid or that she was owed money. RvI: 153–75. Instead,

Borrower asserted certain affirmative defenses that the note was void. Without a

counterclaim seeking to void the note and mortgage and a return of the mortgage

payments, however, the court only had jurisdiction to enter a judgment of

dismissal. See Garcia, 906 So. 2d at 1122–23. As such, the court acted outside of

the scope of its jurisdiction and erred by entering the final judgment invalidating

17

the note and mortgage and ordering the return of all prior mortgage payments. See

Yampol, 143 So. 3d at 1146; Headley, 130 So. 3d at 705; Garcia, 906 So. 2d at

1123. This Court must reverse the final judgment.

3. The Borrower Did Not Present Sufficient Evidence to

Support the Court’s Order Invalidating the Note and

Mortgage and Requiring the Bank to Return the Mortgage

Payments to the Borrower.

Notwithstanding the court’s lack of jurisdiction to adjudicate the validity of

the mortgage and note, the Borrower also failed to present sufficient evidence to

support the final judgment. Shockingly, and despite a complete lack of supporting

evidence, the Court ordered that the Bank pay the Borrower an amount allegedly

totaling the mortgage payments she paid to the Bank. Moreover, the Borrower

relied solely on her counsel’s statements and opinions to support her request to

invalidate the mortgage and note. Without evidence to support these findings, the

final judgment cannot stand.

It is well settled that an attorney’s unsworn statements are not evidence, and

a trial court “cannot rely upon these unsworn statements as the basis for making

factual determinations.” Hewitt, Coleman & Assocs. v. Lymas, 460 So. 2d 467,

468 (Fla. 4th DCA 1984) (quoting Leon Shaffer Golnick Adver., Inc. v. Cedar, 423

So. 2d 1015, 1016–17 (Fla. 4th DCA 1982)); see also Servedio v. U.S. Bank Nat’l

18

Ass’n, 46 So. 3d 1105, 1107 (Fla. 4th DCA 2010) (“[An] attorney’s unsworn,

unverified statements do not establish competent evidence.”)).

In the final judgment, the trial court found that:

Plaintiff’s witness testified that he was aware that

America’s Wholesale Lender was not incorporated in the

year 2005 when the Note and Mortgage were signed, and

that no such corporation was subsequently formed by

either Countrywide Home Loans, or Bank of America, or

any of their related corporate entities or agents.

Plaintiff’s witness also confirmed that he was aware that

America’s Wholesale Lender did not ever have a

Lender’s license in the State of Florida and did not have

authority to do business in Florida, as a New York

Corporation, under Florida Statute 607.1506.

RvIII: 456 ¶ 7. Contrary to the findings in the final judgment, it was actually

Borrower’s counsel who made these statements, essentially testifying to the status

of the corporate entities. RvIII: 496–99, 501–05, 515–17, 525–27. The Bank’s

witness repeatedly stated that he did not know this information. See, e.g., RvIII:

496–97, 500–02, 517–18. In addition, the Borrower did not present any evidence

supporting the $75,680.72 that the court ordered the Bank to repay. RvIII: 476–

534. Although the final judgment states that “Defendant has presented to this

Court, a computation of the amount of said payments and the interest due thereon

from the date of each respective payment to September 3, 2014 . . .,” this evidence

was never presented at trial. RvIII: 458 ¶ 13; RvII: 321–89; RvIII: 476–534.

Moreover, the Bank never had the opportunity to refute any of the Borrower’s

19

contentions. Because an attorney’s unsworn statements are not evidence and the

findings in the final judgment are not supported by witness testimony, the trial

court’s final judgment was in error. See Hewitt, 460 So. 2d at 468. This Court

should reverse.

4. The Note and Mortgage Are Valid and Enforceable and the

Court Did Not Have the Authority to Void Them.

While the Florida Statutes require loan originators and mortgage lenders to

register in the state, at the time Borrower’s loan originated, there were certain

exceptions to registration for the following entities:

(a) A bank, bank holding company, trust company,

savings and loan association, savings bank, credit union,

or insurance company if the insurance company is duly

licensed in this state.

(b) Any person acting in a fiduciary capacity conferred

by authority of any court.

(c) A wholly owned bank holding company subsidiary or

a wholly owned savings and loan association holding

company subsidiary that is approved or certified by the

Department of Housing and Urban Development, the

Veterans Administration, the Government National

Mortgage Association, the Federal National Mortgage

Association, or the Federal Home Loan Mortgage

Corporation.

§ 494.006(1), Fla. Stat. (2005).

The penalty for lending without a license is not invalidation of a loan. §

494.0022, Fla. Stat. (“Failure to comply with the provisions of §§ 494.001-

494.0077 does not affect the validity or enforceability of any mortgage loan; and

20

no person acquiring a mortgage loan, as mortgagee or assignee, is required to

ascertain whether or not the provisions of §§ 494.001-494.0077 have been

complied with.”). Instead, a lender may receive a reprimand, a fine, or other

disciplinary measure. § 494.0041, Fla. Stat. (2005); § 494.00255, Fla. Stat. (2014).

Although the Borrower did not present any evidence at trial about the

Bank’s license, this issue is irrelevant because the relief ordered by the trial court is

not contemplated by the Florida Statutes. The trial court did not have any legal

authority to invalidate the note or mortgage based on the Bank’s alleged failure to

obtain a license. See § 494.0022, Fla. Stat.

As for the transaction of business, while the Florida Statutes prohibit a

foreign corporation from transacting business in the state without a certificate of

authority, the statutes exempt the following lending activities from the definition of

transacting business: creating or acquiring indebtedness, mortgages, and security

interests in real or personal property; securing or collecting debts or enforcing

mortgages and security interests in property securing the debts; and transacting

business in interstate commerce. See § 607.1501(2)(g)-(i), Fla. Stat. The

consequences of a foreign corporation transacting business in this state without a

certificate of authority include limitations on access to courts. See § 607.1502(1)-

(4), Fla. Stat. As with licensure, “the failure of a foreign corporation to obtain a

certificate of authority does not impair the validity of any of its contracts, deeds,

21

mortgages, security interests, or corporate acts or prevent it from defending any

proceeding in this state.” § 607.1502(5), Fla. Stat. (emphasis added).

Here, because the act of giving a mortgage or creating indebtedness does not

require an entity to qualify to transact business in Florida, the Bank and its

predecessors were not required to obtain a certificate of authority. Nonetheless,

any failure to qualify to transact business in Florida would not invalidate the note

and mortgage. See § 607.1502, Fla. Stat. Thus, the trial court erred in finding the

note and mortgage void and ordering the return of all loan payments. This Court

should reverse.

C. The Trial Court Erred in Awarding Attorney’s Fees to Borrower

under Florida Statute Section 57.105, and a Contract It Found Void

The trial court had no legal authority to award attorney’s fees to the

Borrower. When the trial court erroneously found the note and mortgage void, it

invalidated those contracts in their entirety. Therefore, Borrower could not rely on

the fee provisions in the note and mortgage to claim entitlement to attorney’s fees

under the reciprocal fee provision of Florida law.

Florida Statute section 57.105(7) states:

If a contract contains a provision allowing attorney’s fees

to a party when he or she is required to take any action to

enforce the contract, the court may also allow reasonable

attorney’s fees to the other party when that party prevails

in any action, whether as plaintiff or defendant, with

respect to the contract.

22

When a contract is deemed to have never come into effect, it is not proper for a

court to enforce a prevailing party attorney’s fees provision in the contract.

Surgical Partners, LLC v. Choi, 100 So. 3d 1267, 1269 (Fla. 4th DCA 2012);

accord Carnival Leisure Indus. Ltd. v. Arviv, 655 So. 2d 177, 180 (Fla. 3d DCA

1995) (holding that because gambling loan was void and unenforceable, gambler

could not recover attorney’s fees under loan provision).

Here, Borrower moved for prevailing party attorney’s fees based on Florida

Statute section 57.105 and the fee provisions within the note and mortgage, and the

trial court awarded fees to Borrower as the prevailing party pursuant to its motion.

RvIII: 411–12, 442, 453–54. However, the trial court invalidated the note and

mortgage, including the fee provisions. RvIII: 456–57 ¶ 9(c)-(e). Thus, the terms

of the note and mortgage could not support an award of attorney’s fees and costs.

The trial court erred in finding that the Borrower was entitled to recover attorney’s

fees as the prevailing party. This Court must reverse.

II. THE BANK PRESENTED A PRIMA FACIE CASE FOR

FORECLOSURE AND BORROWER PRESENTED NO

COUNTEREVIDENCE

A. Standard of Review

The appellate court reviews a trial court’s factual determinations at a non-

jury trial for competent substantial evidence. McKenzie Check Advance of Fla.,

23

LLC v. Betts, 112 So. 3d 1176, 1180 (Fla. 2013). Whether a party is the proper

party with standing to bring an action is a question of law reviewed de novo. Pub.

Defender, Eleventh Judicial Circuit of Fla. v. State, 115 So. 3d 261, 282 (Fla.

2013); Elston/Leetsdale, LLC v. CWCapital Asset Mgmt. LLC, 87 So. 3d 14, 16

(Fla. 4th DCA 2012).

B. The Bank Established an Unrefuted, Prima Facie Case for

Mortgage Foreclosure

The trial court erred in entering final judgment against the Bank because the

Bank proved all of the elements of a foreclosure action raised in the pleadings. To

be entitled to a foreclosure judgment, a plaintiff must show: (1) an agreement; (2) a

default; (3) an acceleration of debt to maturity; and (4) the amount due. Bank of

Am., N.A. v. Delgado, 3D13-910, 40 Fla. L. Weekly D1080 (Fla. 3d DCA May 6,

2015) (citing Kelsey v. SunTrust Mortg., Inc., 131 So. 3d 825, 826 (Fla. 3d DCA

2014); Ernest v. Carter, 368 So. 2d 428, 429 (Fla. 2d DCA 1979)).

Here, the Bank offered evidence at trial of (1) an agreement; (2) a default;

(3) an acceleration of debt to maturity; and (4) the amount due. RvIII: 482–92.

The court entered all of the Bank’s exhibits into evidence without objection.

RvIII: 512:8–25. Borrower did not present any counterevidence. RvIII: 513–31.

Nonetheless, the trial court erred by finding that the Bank did not meet its burden.

RvIII: 532.

24

First, the trial court found that the Bank did not meet a condition precedent

of the mortgage because “there is no receipt for the default letter.” RvIII: 532:5–7.

This first reason supporting the trial court’s ruling is flawed. A plaintiff may plead

generally that all conditions precedent have been performed. Fla. R. Civ. P.

1.120(c). To refute this contention, the defendant must deny performance

specifically and with particularity. Id. Failure to raise an affirmative defense in a

responsive pleading waives the defense. Fla. R. Civ. P. 1.140(h). Thus, unless

properly contested, a plaintiff need not prove compliance with conditions

precedent to obtain a favorable judgment. See Bank of Am. v. Asbury, 2D14-1965,

40 Fla. L. Weekly D1230 (Fla. 2d DCA May 27, 2015) (finding the trial court

erred in entering judgment against the bank in a foreclosure based on lack of

evidence of compliance with conditions precedent where the borrower failed to

raise the issue in the responsive pleading); see also Godshalk v. Countrywide

Home Loans Servicing, L.P., 81 So. 3d 626, 626 (Fla. 5th DCA 2012); Cooke v.

Ins. Co. of N. Am., 652 So. 2d 1154, 1155 (Fla. 2d DCA 1995).

The Bank pled that it complied with conditions precedent in the complaint,

and Borrower failed to deny the allegation with specificity or to raise the issue as

an affirmative defense. RvI: 2, 153–75. Thus, compliance with conditions

precedent was not an issue raised by the pleadings, and it was improper for the trial

25

court to rule against the Bank on that basis. See Asbury, 40 Fla. L. Weekly D1230

at 1-2.

The trial court also erroneously ruled that the Bank lacked standing to bring

the foreclosure action. RvIII: 532. Specifically, the court stated, “[the Bank’s

witness] may say [the note] was held, but he can’t give me a date when it was

actually acquired by them.” RvIII: 532:13–15. As a promissory note is a

negotiable instrument, a plaintiff may establish standing by possession of a note,

indorsed in blank, at the inception of litigation. See Harvey v. Deutsche Bank Nat’l

Trust Co., 69 So. 3d 300, 303 (Fla. 4th DCA 2011) (citing §§ 671.201, 673.3011,

Fla. Stat.). It is not necessary to establish the exact date note was acquired. Id.

Nonetheless, here, Anderson testified that the note was transferred to Countrywide

Home Loans Servicing, LP, on May 27, 2005, two days after closing. RvIII:

498:11–13. Borrower presented no evidence to the contrary. RvIII: 496–534.

Therefore, the Bank demonstrated, through undisputed evidence, that it was

entitled to foreclose. The two reasons stated by the trial court for ruling against the

Bank, compliance with conditions precedent and standing, were both in error.

First, the Borrower failed to raise the Bank’s compliance with conditions

precedent. Therefore, this issue was not properly before the court. Second, the

Bank presented evidence to establish that it had standing to foreclose as the holder

of an indorsed note and the Borrower did not present any contrary evidence.

26

Therefore, the trial court should have entered final judgment for the Bank. This

Court should reverse the final judgment and remand to enter final judgment in the

Bank’s favor.

CONCLUSION

For the reasons stated, this Court should reverse the final judgment and

remand for entry of final judgment in favor of the Bank.

LIEBLER, GONZALEZ & PORTUONDO

Counsel for Appellant, Bank of America, N.A.

Courthouse Tower - 25th Floor

44 West Flagler Street

Miami, FL 33130

(305) 379-0400

Primary: service@lgplaw.com

By: /s/ Mary J. Walter

MARY J. WALTER

Florida Bar No. 045162

mjw@lgplaw.com

27

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the above and

foregoing has been furnished via Electronic Mail on July 27, 2015 to all parties on

the Service List below.

/s/ Mary J. Walter

MARY J. WALTER

Florida Bar No. 045162

mjw@lgplaw.com

Service List:

John G. Pierce, Esq.

Pierce and Associates

800 North Ferncreek Avenue

Orlando, FL 32803

jerry@johnpierce.com

Attorney for Appellee Linda A. Nash

CERTIFICATE OF TYPE SIZE & STYLE

Appellant hereby certifies that the type size and style of the Initial Brief is

Times New Roman 14pt.

/s/ Mary J. Walter

MARY J. WALTER

Florida Bar No. 45162

mjw@lgplaw.com