Harmony Homes, Inc. v. US, 95-498-CIV-T-17(B).

• Decision Date: 05 August 1996
• Docket Number: No. 95-498-CIV-T-17(B).,95-498-CIV-T-17(B).
• Citation: 936 F. Supp. 907
• Parties: HARMONY HOMES, INC., Plaintiff, v. UNITED STATES of America, on behalf of its agency, SMALL BUSINESS ADMINISTRATION, Defendant.
• Court: U.S. District Court — Middle District of Florida

936 F. Supp. 907

HARMONY HOMES, INC., Plaintiff, v. UNITED STATES of America, on behalf of its agency, SMALL BUSINESS ADMINISTRATION, Defendant.

No. 95-498-CIV-T-17(B).

United States District Court, M.D. Florida, Tampa Division.

August 5, 1996.

COPYRIGHT MATERIAL OMITTED

Harry Miller Hobbs, Law Office of Harry M. Hobbs, Tampa, FL, for plaintiff.

Richard Braverman, Small Business Administration, Coral Gables, FL, Michael A. Cauley, U.S. Attorney's Office, Middle District of Florida, Tampa, FL, Lisa Stotsbery Still, Special Assistant U.S. Attorney, Jacksonville, FL, for defendant.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

KOVACHEVICH, Chief Judge.

This action is before the Court on a motion for summary judgment filed by the Defendant, United States of America, on behalf of its agency, Small Business Administration, filed May 14, 1996, (Docket No. 31), Plaintiff's response thereto, filed May 30, 1996 (Docket No. 37), motion for summary judgment filed by the Plaintiff, Harmony Homes, Inc., ("Harmony Homes") May 15, 1996 (Docket No. 32), and Defendant's response thereto, filed May 15, 1996 (Docket No. 36).

STATEMENT OF FACTS

The undisputed facts in the instant case are as follows:

1. According to the Plaintiff's Second Amended Complaint to Foreclose Mortgage, George A. Lacey and M. Darlene Lacey ("Laceys") executed a promissory note and mortgage on May 14, 1974 in favor of Ellis National Bank of Tampa ("Ellis National Bank").

2. On September 30, 1976, the Laceys executed a second promissory note and mortgage in favor of Ellis National Bank.

3. On August 9, 1978, Ollie Adkinson agreed to assume and pay the Laceys' two promissory notes and two mortgages in favor of Ellis National Bank.

4. Additionally, on August 9, 1978, a modification agreement was entered by Ollie Adkinson and Ellis National Bank. The modification agreement provided that the entire balance of interest and principal would be due and payable on August 9, 1989.

5. On or about April 1980, Ellis National Bank instituted foreclosure proceedings against the Laceys and Ollie Adkinson.

6. On November 5, 1980, Ollie Adkinson executed an agreement in favor of Plaintiff, Harmony Homes, Inc. ("Harmony Homes"), confirming the outstanding amount of the indebtedness due and owing Ellis National Bank, confirming that he is owner of the property, and agreeing that the amount remaining was now due to Harmony Homes.

7. Also, on November 5, 1980, Ollie Adkinson deeded, by Warranty Deed, the subject real property to O.C. King, the President of Plaintiff, Harmony Homes.

8. On November 5, 1980, a stipulation was entered into by counsel for Ellis National Bank and Harmony Homes. The stipulation represented that the note and mortgage, which were the subject of the above mentioned foreclosure proceeding, had been assigned to Harmony Homes and the Plaintiff in that action would be substituted from Ellis National Bank to Harmony Homes.

9. On November 20, 1980, Ellis National Bank assigned its interests in the two mortgages to the Plaintiff, Harmony Homes.

10. Plaintiff, Harmony Homes, in its second amended complaint, states that no payments have been made on the above mentioned notes and mortgages since November 5, 1980.

11. On November 23, 1982, two assignments (hereinafter referred to as "the assignments") were recorded in the Hillsborough County public records. These recordings reported to assign the interest in these two mortgages of Harmony Homes, through its President, O.C. King, to Sun Bank of Tampa ("Sun Bank").

12. On August 23, 1994, Sun Bank reassigned its interests in the two mortgages back to the Plaintiff, Harmony Homes, by virtue of two assignment of mortgage documents (hereinafter referred to as "the reassignments"), prepared by counsel for Plaintiff.

13. On April 26, 1979, Aqua Marine Products, Inc., through its President and sole shareholder, Ollie Adkinson, obtained a loan, which was guaranteed by the Small Business Administration, from Southeast Bank of Westshore. Ollie Adkinson, on behalf of Aqua Marine Products, Inc., executed a promissory note in favor of Southeast Bank of Westshore.

14. On May 31, 1979, Southeast Bank of Westshore assigned its interests in the promissory note to the Small Business Administration.

15. Ollie and Beatrice Adkinson executed their guaranty of repayment as security for the Southeast Bank loan. This guaranty was secured by a mortgage on the real property, which is the subject of this action, executed in favor of Southeast Bank on April 26, 1979.

16. On April 26, 1979, Southeast Bank assigned all of its interests in the mortgage to the Small Business Administration.

17. In 1983, O.C. King, President of Harmony Homes, requested that Small Business Administration release its mortgage lien on the subject property. An agreement was reached whereby Small Business Administration would release it mortgage lien upon payment by Mr. King to Small Business Administration in the original principal amount. Mr. King entered a promissory note in the amount of the original principal amount on October 15, 1983.

18. On May 3, 1990, the United States, on behalf of the Small Business Administration, filed a federal foreclosure complaint against O.C. King, President of Harmony Homes.

19. O.C. King filed bankruptcy in 1992. On January 15, 1993, an Order Granting Relief from Automatic Stay was entered in favor of the United States in the bankruptcy proceeding. The foreclosure lawsuit instituted by the United States resumed.

20. On November 3, 1993, Summary Judgment/Final Decree of Foreclosure was entered in favor of the United States.

21. A United States Marshal's Deed was subsequently executed in favor of the Small Business Administration upon its entry of the successful bid in the subsequent foreclosure sale.

STANDARD OF REVIEW

This circuit clearly holds that summary judgment should only be entered when the moving party has sustained its burden of showing the absence of a genuine issue as to any material fact, when all the evidence is viewed in the light most favorable to the non-moving party. Sweat v. The Miller Brewing Co., 708 F.2d 655 (11th Cir.1983). All doubt as to the existence of a genuine issue of material fact must be resolved against the moving party in favor of the non-moving party. Hayden v. First National Bank of Mt. Pleasant, 595 F.2d 994 (5th Cir.1979) (quoting Gross v. Southern Railroad Co., 414 F.2d 292 (5th Cir.1969)). Factual disputes preclude summary judgment.

In Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), the Supreme Court of the United States held:

In our view the plain language of Rule 56(c) mandated the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Id. 477 U.S. at 317, 106 S.Ct. at 2549, 91 L.Ed.2d at 273.

The Court also said, "Rule 56(e) therefore requires the non-moving party to go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553, 91 L.Ed.2d at 274. A dispute is genuine, and summary judgment is inappropriate, if a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

The complaint in this case was filed in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida. The cause was removed to this Court, based on federal question jurisdiction, under 28 U.S.C. § 1331. The complaint states a cause of action for mortgage foreclosure.

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

I. Statute of Limitations

In Florida, the Statute of Limitations on mortgage foreclosures with an ascertainable date of maturity is five (5) years. § 95.111 and § 95.281, Fla.Stat. (1982 & Supp.1996). Florida Statute § 95.281 addresses limitations on instruments encumbering real property and provides in pertinent part:

(1) The lien of a mortgage or other instrument encumbering real property, herein called mortgage ... shall terminate after the expiration of the following periods of time:

(a) If the final maturity of an obligation secured by a mortgage is ascertainable from the record of it, 5 years after the date of maturity.

* * * * * *

(2) If an extension agreement executed by the mortgagee or his successors in interest and the mortgagor or his successors in interest is recorded, the time shall be extended as follows:

(a) If the final maturity of the obligation, as extended, secured by the mortgage is ascertainable from the record of the extension agreement, 5 years after the date of maturity of the obligation as extended.

§ 95.281, Fla.Stat. (1982 & Supp.1996).

The modification agreement, which was entered into by Ollie Adkinson and Ellis National Bank of Tampa, specifically stated that "the entire balance of interest and principal shall be due and payable on the 9th day of August 1989." Application of Florida Statute § 95.281(2)(a) to the modification agreement clearly determines that the monthly payments were to end August 9, 1989, and the statute of limitations would bar a cause of action for foreclosure after August 9, 1994, five (5) years from the date of maturity.

The statute of limitations on a mortgage foreclosure action begins to run when the last payment is due, except when the mortgage contains an acceleration clause. Travis Co. v. Mayes, 160 Fla. 375, 36 So.2d 264, 265-66 (Fla.1948) (statute of limitations begins to run immediately upon default when mortgage contains an automatic acceleration clause); Monte v. Tipton, 612 So.2d 714 (Fla.2d D.C.A.1993) (holding that statute of limitations began to run when optional acceleration clause was...