Dyck-O'Neal, Inc. v. Norton
Decision Date | 15 March 2019 |
Docket Number | Case No. 2D17-4968 |
Citation | 267 So.3d 478 |
Parties | DYCK-O'NEAL, INC., Appellant, v. Teresa NORTON and Samuel Norton, Appellees. |
Court | Florida District Court of Appeals |
David M. Snyder of David M. Snyder, P.A.; Tampa; Susan B. Morrison of Law Offices of Susan B. Morrison, Tampa; and Joshua D. Moore of Law Offices of Daniel C. Consuegra, Tampa, for Appellant.
Alexander Allred of Castle Law Group, P.A., Largo, for Appellees.
Dyck-O'Neal, Inc. (DONI), appeals a final summary judgment entered in favor of the Nortons. For the reasons explained below, we reverse and remand for further proceedings.
In 2006, the Nortons executed a promissory note and mortgage on their home in Hendry County, Florida, in favor of Bank of America, N.A. When the Nortons failed to make an installment payment, Bank of America initiated foreclosure proceedings and eventually obtained a final judgment of foreclosure in 2009 for $ 197,586.52. A year later, the Federal National Mortgage Association (Fannie Mae) purchased the subject property at a foreclosure sale for $ 100. At the time of the sale, a real estate appraiser had appraised the property's value at $ 60,000. In 2014, Fannie Mae assigned the final judgment and note to DONI.
Two months later, DONI initiated a deficiency action against the Nortons, seeking a deficiency judgment in the amount of $ 137,586.52 plus interest, costs, and attorney's fees. It is undisputed that DONI filed this lawsuit before July 1, 2014, but more than five years from the date the Nortons first defaulted on their promissory note.1
In response to DONI's complaint, the Nortons raised several affirmative defenses, two of which are relevant to this appeal. In their first affirmative defense, the Nortons claimed that Fannie Mae issued a Form 1099-A tax filing stating that the value of the Nortons' property was $ 205,285.35. The Nortons did not receive an amended 1099-A stating that the value of the property was actually $ 60,000. The Nortons claimed that they "relied on" the amount represented in the Form 1099-A Fannie Mae had filed when they prepared their individual tax returns. Accordingly, they argued, estoppel should prevent DONI from bringing its deficiency action against them. In their second affirmative defense, the Nortons argued that DONI's lawsuit was barred by the statute of limitations. Citing to Bartram v. U.S. Bank National Ass'n, 211 So.3d 1009 (Fla. 2016), the Nortons also argued that DONI should have brought its lawsuit within five years of the date of their default on their promissory note. As the Nortons defaulted in 2008, but DONI did not file its complaint until 2014, the Nortons claimed that DONI's lawsuit was barred by section 95.11(2)(c), Florida Statutes (2014).
DONI and the Nortons filed competing motions for summary judgment. The trial court denied DONI's motion, ruling that the Nortons had raised the "affirmative defense of the statute of limitations which raises a question of law and may be a viable defense." The trial court granted the Nortons' motion for summary judgment. The court's judgment cited two bases for its ruling: (1) under Bush v. Whitney Bank, 219 So.3d 257 (Fla. 5th DCA 2017), the statute of limitations barred DONI's lawsuit, and (2) summary judgment was proper because DONI was estopped from pursuing a deficiency action against the Nortons. DONI now appeals the circuit court's summary judgment.
We review a circuit court's entry of summary judgment under a de novo standard of review. Herendeen v. Mandelbaum, 232 So.3d 487, 489 (Fla. 2d DCA 2017) (citing Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000) ). A party is entitled to summary judgment only "if the pleadings and summary judgment evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fla. R. Civ. P. 1.510(c).
With respect to the first basis the trial court relied upon when it granted summary judgment for the Nortons, our court has definitively answered the question of when a deficiency action accrues for purposes of the statute of limitations—and it is not the date of default on the underlying note. As we explained at length in Aluia v. Dyck-O'Neal, Inc., 205 So.3d 768, 774-75 (Fla. 2d DCA 2016) :
(Alterations in original.) Ours is not the only district court of appeal to have reached this conclusion. See Chrestensen, 906 So.2d at 346 (); see also Sueter v. Wells Fargo Bank, N.A., 5D17-3821, 263 So.3d 254, 254, 2019 WL 405601, *1 (Fla. 5th DCA Jan. 29, 2019) ( ); Dyck-O'Neal, Inc. v. Germany, 236 So.3d 1194, 1194-95 (Fla. 5th DCA 2018) ( ).
The trial court mistakenly relied on Bush, 219 So.3d at 259, a case that held that a breach of contract claim following an approved short sale transaction was not subject to section 95.11(5)(h). Bush, however, does not apply to the kind of claim DONI has alleged. The "shortfall" the bank was contractually permitted to pursue following the short sale in Bush is not the same as a deficiency claim that would arise following a foreclosure judgment and sale.2 Rather, as Bush made clear in its opening sentence, the claim before that court was one that sounded in breach of contract. Id. at 257. This distinction between the breach of contract claim in Bush versus the deficiency claim in Aluia—between a breach of contract cause of action following a short sale and an in rem or quasi in rem claim arising from a deficiency after a foreclosure sale—is both readily apparent and critically important because "a deficiency does not exist without a foreclosure judgment and sale." Bonita Real Estate Partners, LLC v. SLF IV Lending, L.P., 222 So.3d 647, 652 (Fla. 2d DCA 2017). In its context, we would have no cause to disagree with Bush's analysis at all. But section 95.11(5)(h) does apply here, where a plaintiff seeks a deficiency judgment, a foreclosure judgment has been entered, and the clerk of the circuit court has issued a certificate of title. See Aluia, 205 So.3d at 774-75 ; Sueter, 263 So.3d at 254, 2019 WL 405601, *1 ; Germany, 236 So.3d at 1194-95.
As a matter of law, DONI's deficiency claim could not accrue for purposes of the statute of limitations until the entry of a foreclosure judgment and subsequent foreclosure sale. Therefore, DONI's action was timely under section 95.11(5)(h), and the trial court's entry of summary judgment on the basis that the statute of limitations had expired was incorrect.
Turning to the trial court's second basis for granting summary judgment in favor of the Nortons, we agree with DONI that the record before us does not "conclusively demonstrate that no genuine issue of material fact exists" such that the Nortons were entitled to judgment as a matter of law. See Maldonado v. Publix Supermarkets, 939 So.2d 290, 293 (Fla. 4th DCA 2006) (...
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