Bank v. the Noah Group Llc

• Decision Date: 02 December 2010
• Docket Number: Case No. 10–10007–CIV.
• Citation: 755 F.Supp.2d 1256
• Parties: CENTENNIAL BANK, a foreign corporation, Plaintiff,v.THE NOAH GROUP, LLC, a Florida limited liability company; Daniel J. Duffy; Joseph Cannova; Anthony Sauta; Ronald J. Costello; R. Reginald Hyde; John M. Reynolds; George P. Irish; and Sandra K. Irish, Defendants.
• Court: U.S. District Court — Southern District of Florida

755 F.Supp.2d 1256

CENTENNIAL BANK, a foreign corporation, Plaintiff,

v.THE NOAH GROUP, LLC, a Florida limited liability company; Daniel J. Duffy; Joseph Cannova; Anthony Sauta; Ronald J. Costello; R. Reginald Hyde; John M. Reynolds; George P. Irish; and Sandra K. Irish, Defendants.

Case No. 10–10007–CIV.

United States District Court, S.D. Florida.

Dec. 2, 2010.

Michael O. Mena, Christopher Stephen Carver, Akerman Senterfitt, Miami, FL, for Plaintiff.Ira Steven Silver, Silver & Silver, Miami, FL, Wayne Larue Smith, Smith Law Firm, Key West, FL, for Defendants.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

K. MICHAEL MOORE, District Judge.

THIS CAUSE came before the Court upon Plaintiff Centennial Bank's (“Centennial”) Motion for Summary Judgment (ECF No. 108). Defendants Joseph Cannova (“Cannova”) ¹, Ronald J. Costello (“Costello”), R. Reginald Hyde (“Hyde”), John M. Reynolds (“Reynolds”), Anthony Sauta (“Sauta”), and The Noah Group, LLC (“Noah Group”) filed a Response (ECF No. 115) and Defendants George P. Irish and Sandra K. Irish (“Irishs”) filed a Response (ECF No. 121). A Reply was also filed (ECF No. 127).

UPON CONSIDERATION of the Motion, the Responses, the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order.

I. BACKGROUND ²

This case involves a lender, Centennial, suing to foreclose on its mortgage and security interest based on the payment default of its borrowers in a piece of property located in Monroe County, Florida.³ On or about December 16, 2004, the Marine Bank of the Florida Keys (“Marine Bank”) agreed to loan $1,880,000.00 to Sauta, Costello, Hyde, Reynolds, Cannova, and Duffy (“Borrowers” ⁴), evidenced by an Adjustable Rate Note from Borrowers to Marine Bank. The debt was secured by a mortgage signed on the same date, granting Marine Bank a mortgage lien and security interest in the property. On January 1, 2006, the Adjustable Rate Note was renewed. Borrowers executed and delivered a new Adjustable Rate Note (“the Note”) to Marine Bank in the principal amount of $1,879,949.07. On March 16, 2006, Marine Bank and the Borrowers entered into a Mortgage Modification, Assumption and Renewal Agreement (“Modification Agreement”), in which Reynolds purchased and assumed the indebtedness of non-party Frank J. Navarro, an original borrower. Thereafter, on March 27, 2006, Borrowers executed a Warranty Deed in favor of the Noah Group, who is presently record titleholder of the property.

In December 2008, Centennial merged with Marine Bank to become successor by merger to the Note, the Mortgage Modification, the Warranty Deed, and any other loan documents securing the obligation of the loan. Accordingly, the loan documents are owned and held by Centennial Bank, and the loan is payable to Centennial Bank.

The loan required monthly payments on the first of each month beginning May 1, 2006. Beginning July 2009, Defendants made no further payments to Centennial. On January 14, 2010, Centennial filed a two-count complaint based on the Borrowers' default. In Count I, Centennial is seeking to collect the money owed to it under the terms of the Note. Centennial alleges it is owed $2,004,326.34 and reasonable attorneys' fees. In Count II, Centennial is suing to foreclose on the mortgage. Centennial has therefore included the Noah Group, as record titleholder of the property, and the Irishs, who hold a second mortgage on the property, as additional defendants under this claim for relief. The clerk has entered default judgments against Defendants Duffy, Cannova, and the Irishs.

II. STANDARD OF REVIEW

The applicable standard for reviewing a summary judgment motion is stated in Rule 56(c) of the Federal Rules of Civil Procedure:

The judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.

Summary judgment may be entered only where there is no genuine issue of material fact. Twiss v. Kury, 25 F.3d 1551, 1554 (11th Cir.1994). The moving party has the burden of meeting this exacting standard. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). An issue of fact is “material” if it is a legal element of the claim under the applicable substantive law which might affect the outcome of the case. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997). An issue of fact is “genuine” if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party. Id.

In applying this standard, the district court must view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. Id. However, the nonmoving party “may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). “The mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmovant].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. ANALYSIS

Centennial seeks to foreclose its mortgage and security interest in the Monroe County property based upon the payment default of Borrowers. Centennial claims that Borrowers have not paid the mandatory monthly installments of principal and accrued interest due under the loan documents since July 1, 2009. Compl. ¶ 26 (ECF No. 1). “Under Florida law, failure to make a timely installment payment entitles the holder of a note and mortgage to foreclose in accordance with the terms of the instruments.” Fed. Sav. & Loan Ins. Corp. v. Two Rivers Assocs., Inc., 880 F.2d 1267, 1273 (11th Cir.1989). Centennial Bank has shown that Borrowers have not made payments in compliance with the loan agreement. See Notices of Default (ECF No. 1–12). It has submitted the loan documents as well as copies of notices of default, sent to the Borrowers via certified mail. By their own admission, Borrowers stopped making payments to Centennial in July 2009. Defendants' Resp. Summ. J., at 3 (ECF No. 115). Accordingly, Centennial is entitled to enforce the terms of the Note and the Mortgage Modification agreements.

Though Borrowers asserted several “affirmative defenses” in their answers, none have merit. Defendant Borrowers claim that Centennial failed to attach documents to the Complaint indicating that it was a successor in interest to Marine Bank. This is not an affirmative defense; moreover, Articles of Merger were filed with the Florida Secretary of State and Arkansas State Bank Department. Lankford Aff. Ex. A (ECF No. 107–2). Defendant Borrowers also claim that Plaintiff failed to allege the homestead status of the property. Under Florida law, homestead status is only afforded to properties owned by a “natural person.” Fla. Const. art. 10, § 4. The property at issue is owned by the Noah Group, a limited liability corporation. Thus, the affirmative defense is inapplicable.

Defendants' third affirmative defense is that Centennial has violated the Fair Debt Collection Practices Act (“FDCPA”), for failing to provide the borrowers proper notice under the statute. The statute is irrelevant in this case because Centennial Bank is not a “debt collector” within the meaning of the statute. The FDCPA clearly defines the term “debt collector” and excludes “any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity ... (ii) concerns a debt which was originated by such person; [or] (iii) concerns a debt which was not in default at the time it was obtained by such person[.]” 15 U.S.C. § 1692a(6)(F). Here, Centennial Bank is not a “debt collector”—it arguably originated the debt as a merged entity with Marine Bank; alternatively, it obtained the debt upon merging with Marine Bank when the debt was not in default. Under...