Citigroup Mortg. Loan Trust Inc. v. Scialabba

• Decision Date: 07 March 2018
• Docket Number: No. 4D17–401,4D17–401
• Citation: 238 So.3d 317
• Parties: CITIGROUP MORTGAGE LOAN TRUST INC., Appellant, v. Jack SCIALABBA and Sharon Scialabba, Appellees.
• Court: Florida District Court of Appeals

238 So.3d 317

CITIGROUP MORTGAGE LOAN TRUST INC., Appellant,

v.Jack SCIALABBA and Sharon Scialabba, Appellees.

No. 4D17–401

District Court of Appeal of Florida, Fourth District.

[March 7, 2018]

Nancy M. Wallace of Akerman LLP, Tallahassee, William P. Heller of Akerman LLP, Fort Lauderdale, and Eric M. Levine of Akerman LLP, West Palm Beach, for appellant.

Chase E. Jenkins and Matthew D. Bavaro of Loan Lawyers, LLC, Fort Lauderdale, for appellees.

CONNER, J.

Citigroup Mortgage Loan Trust Inc. ("the Bank") appeals the final judgment entered in favor of Jack Scialabba and Sharon Scialabba ("the Borrowers") subsequent to a motion for involuntary dismissal granted at trial after the Bank finished its case in chief. We view the overarching issue in this case to be whether the required notice, as a condition precedent to foreclosure, was mailed to a correct address. We determine that the Bank presented prima facie evidence of substantial compliance with the condition precedent, reverse the involuntary dismissal and final judgment, and remand for a new trial.

Background

The Borrowers executed a promissory note and mortgage. The mortgage stated the "Property Address" as "9486 South Military Trail # 15 " (emphasis added). The parties subsequently entered into a loan modification agreement ("the modification agreement"), which stated a different "Property Address": "9486 S MILITARY TRL 4 , BOYNTON BEACH, FL 33436." (emphasis added)

After the Borrowers defaulted in payment, the Bank mailed to the Borrowers a notice of default, the right to accelerate, and the right to cure ("notice of default") to the "Property Address" stated in the modification agreement. Subsequently, the Bank brought a foreclosure action, generally alleging compliance with all conditions precedent. Attached to the complaint was a copy of the note, mortgage, and modification agreement. The Borrowers answered, specifically denying compliance with the conditions precedent regarding notice of default and additionally raising the notice noncompliance as an affirmative defense. In response to request for admissions, the Borrowers admitted they have received mail addressed to 9486 South Military Trail stating either "# 15" or "Unit 4" as part of the address. The Borrowers further admitted that at the time of their responses, "Defendants currently resides [sic] at 9486 South Military Trail Unit 4."

At trial, the Bank presented one witness. During her testimony, the Bank introduced into evidence the subject notice letter and a letter log indicating dates on which the Bank mailed letters to the Borrowers. The witness confirmed the notice of default was mailed to the "Property Address" stated in the modification agreement. Additionally, the trial court admitted into evidence a certified copy of the entire complaint, including the attached copy of the modification agreement. The witness verified that the Borrowers did not cure the default.

After the Bank rested, the Borrowers moved for involuntary dismissal asserting that the Bank failed to prove it satisfied the condition precedent of proper notice. The Borrowers argued that the address on the mortgage was listed as Unit 15, but the notice letter was improperly mailed to Unit 4. The Bank responded that the notice was sent to the proper address designated in the modification agreement. The Bank further responded that, even if the notice was mailed to an incorrect address (which it did not concede), "any deviation from the paragraph 22 language must be material in nature, meaning that it must have prejudiced the [Borrowers] in some way," which was not the case. The Bank also argued that the modification agreement listed the "Property Address" as Unit 4, and the express terms of the modification agreement superseded the original mortgage contract. The trial court found that "notice [wa]s a problem" and granted the motion for involuntary dismissal. After a final judgment was entered, the Bank gave notice of appeal.

Analysis

A trial court's ruling on a motion for involuntary dismissal is reviewed de novo. Deutsche Bank Nat'l Tr. Co. v. Clarke , 87 So.3d 58, 60 (Fla. 4th DCA 2012) (citing Brundage v. Bank of Am. , 996 So.2d 877, 881 (Fla. 4th DCA 2008) ). Additionally, the appellate court "must view the evidence and all inferences of fact in the light most favorable to the nonmoving party, and can affirm ... only where no proper view of the evidence could sustain a verdict in favor of the nonmoving party." Id. (citing Brundage , 996 So.2d at 881 ).

Giving a notice of default is a condition precedent to foreclosure in most residential mortgages. "Where there are conditions precedent to filing the suit, [a] plaintiff must also prove that it has complied with them." Liberty Home Equity Sols., Inc. v. Raulston , 206 So.3d 58, 60 (Fla. 4th DCA 2016) (citing Blum v. Deutsche Bank Tr. Co. , 159 So.3d 920, 920 (Fla. 4th DCA 2015) ). However, "a plaintiff need only substantially comply with conditions precedent." Id. at 61 (citing Fed. Nat'l Mortg. Ass'n v. Hawthorne , 197 So.3d 1237, 1240 (Fla. 4th DCA 2016) ). "Substantial compliance or performance is ‘performance of a contract which, while not full performance, is so nearly equivalent to what was bargained for that it would be unreasonable to deny the promisee’ the benefit of the bargain." Lopez v. JPMorgan Chase Bank , 187 So.3d 343, 345 (Fla. 4th DCA 2016) (quoting Ocean Ridge Dev. Corp. v. Quality Plastering, Inc. , 247 So.2d 72, 75 (Fla. 4th DCA 1971) ). "Moreover, a breach of a condition precedent does not preclude the enforcement of an otherwise valid contract, absent some prejudice." Raulston , 206 So.3d at 61 (citing Caraccia v. U.S. Bank, Nat'l Ass'n , 185 So.3d 1277, 1280 (Fla. 4th DCA 2016) ).

Although the trial court did not explain its reasoning for granting an involuntary dismissal other than saying "I think the notice is a problem," it appears the trial court agreed with the Borrowers' argument that the evidence showed that the notice required by paragraph 22 of the mortgage was sent to the wrong address.

Thus, we view the overarching issue to be decided by this appeal as whether the Bank substantially complied with the condition precedent of mailing the required notice to the Borrowers' correct address. In doing so, we first address two evidentiary issues regarding the modification agreement. The Borrowers contend: (1) the modification agreement was not admitted into evidence at trial, and (2) the trial court viewed the modification agreement as inadmissible hearsay evidence.

The record reflects that a copy of the recorded modification agreement was attached to the complaint. During the trial, the complaint as a trial exhibit first came up while the Bank's witness testified about possession of the note. When the Bank asked the trial court to admit a certified copy of the complaint with all attachments into evidence, the Borrower raised a hearsay objection. In response, the Bank stated that its purpose for using the complaint was to establish that the Bank had possession of the note at the time the complaint was filed, as verified in the certificate of possession attached to the complaint as Exhibit D. In ruling on the objection, the trial court stated, "I'll receive [the complaint] subject to your objection for whatever evidentiary purpose it may serve. We'll see where that goes." Shortly thereafter, the trial court said, "I'm going to take the entire Complaint. As you well know, I'm taking it for what it is worth. Most of it is hearsay if not all of the Complaint."

Later, during the argument on the motion for involuntary dismissal, the Borrowers contended that the modification agreement was not in evidence. The Bank specifically argued that the modification agreement was an attachment to the complaint which was admitted into evidence in its entirety. In counter-response, the Borrowers argued the modification agreement was hearsay on the issue of whether the Borrowers gave notice that they wanted notices sent to an address other than the "Property Address" listed in the original mortgage. Significantly, the trial court never ruled that it did not consider the modification agreement to be in evidence or that it was inadmissible hearsay as to whether the Borrowers gave notice of a change of address.

From the record on appeal, we conclude the modification agreement was admitted into evidence.¹ If the trial court concluded the "problem" with notice in this case was that the modification agreement was an inadmissible hearsay document, then the trial court erred. The modification agreement, like the note and original mortgage, was a verbal act. See Holt v. Calchas, LLC , 155 So.3d 499, 502 n.2 (Fla. 4th DCA 2015) (concluding that an assignment of mortgage is admissible into evidence as a verbal act); see also Deutsche Bank Nat'l Tr. Co. v. Alaqua Prop. , 190 So.3d 662, 665 (Fla. 5th DCA 2016) (holding that a promissory note "is admissible for its independent legal significance" of establishing a contractual relationship between parties, regardless of the truth of assertions in the document).

Turning to the arguments regarding compliance with the condition precedent of notice of default and of the right to cure, as stated above, the original mortgage stated that the "Property Address" is "9486 South Military Trail #15 ." (emphasis added). Paragraph 22 of the mortgage contained the common language in residential mortgages requiring notice of default and the right to cure. Paragraph 15 likewise contained the common language that "[t]he notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender." However, for unexplained reasons, the modification agreement stated the "Property Address" was "9486 S Military Trl 4 ," (emphasis added). Significantly, Paragraph 3 of the modification agreement, entitled "The Modification," listed the various provisions of the original mortgage to be modified, but did not mention the ...