IVY Chase Apartment Prop. v. IVY Chase Apartments, Ltd., 2D21-436

CourtCourt of Appeal of Florida (US)
Writing for the CourtATKINSON, Judge.
PartiesIVY CHASE APARTMENT PROPERTY, LLC, Appellant/Cross-Appellee, v. IVY CHASE APARTMENTS, LTD., a Florida limited partnership, and GAIL CURTIS, individually and as Personal Representative of the ESTATE OF JOHN CURTIS, Appellees/Cross-Appellants.
Decision Date29 June 2022
Docket Number2D21-436


IVY CHASE APARTMENTS, LTD., a Florida limited partnership, and GAIL CURTIS, individually and as Personal Representative of the ESTATE OF JOHN CURTIS, Appellees/Cross-Appellants.

No. 2D21-436

Florida Court of Appeals, Second District

June 29, 2022

Appeal from the Circuit Court for Pasco County; Declan P. Mansfield, Judge.

Alan R. Poppe of Saul Ewing Arnstein & Lehr LLP, Fort Lauderdale; and Steven Appelbaum of Saul Ewing Arnstein & Lehr LLP, Miami, for Appellant/Cross-Appellee.

Ian C. White and Jonathan Hayes, of Ausley McMullen, Tallahassee, for Appellees/Cross-Appellants.



Ivy Chase Apartment Property, LLC (ICAP), appeals the trial court's final judgment of foreclosure in its favor, taking issue only with the portion of the final judgment that awards default interest at a lower rate than it had requested. Ivy Chase Apartments, Ltd., and Gail Curtis, in her individual capacity and as personal representative of the estate of John Curtis (Debtors), cross-appeal the same final judgment of foreclosure in favor of ICAP. Because ICAP presented insufficient evidence of the unpaid principal, the amount of interest, and other amounts due, we reverse and remand for further proceedings.


Debtors mortgaged their commercial property in exchange for a loan of $1,242,265.48. The note provided that in the event of default, "this [n]ote and all sums due hereunder shall bear interest at the maximum allowable rate permitted by law ('Penalty Rate') from the date of default or maturity until paid." The note also contained a clause that provided that "[n]o act, or omission or commission or waiver of Payee, including specifically any failure to exercise any right, remedy or recourse, shall be effective unless set


forth in a written document executed by Payee and then only to the extent specifically recited therein."

Wells Fargo Bank, N.A., ICAP's predecessor-in-interest, filed a foreclosure complaint against the Debtors in December 2011, alleging that the Debtors defaulted by failing to pay the full balance of the loan on its maturity date, December 1, 2011. During the foreclosure proceedings, the party plaintiff was substituted several times. Before ICAP acquired the Debtors' loan, Elizon DB Transfer Agent, LLC (Elizon), was the lender and plaintiff. Elizon moved for summary judgment as to all issues except the amount of damages. The trial court granted the motion. The Debtors moved for rehearing, arguing that genuine issues of material fact remained concerning the original plaintiff's standing. The trial court granted the Debtors' motion for rehearing, vacated its order granting Elizon's motion for summary judgment, and set the case for trial in November 2018. Elizon requested that the trial court limit the November 2018 trial to standing-the only disputed issue identified by the Debtors in their motion for rehearing of the order granting summary judgment. The trial court granted Elizon's request, and


the parties only presented evidence and argument on the issue of standing at the November 2018 nonjury trial.

After the November 2018 trial, the Debtors filed a motion for involuntary dismissal, arguing that Elizon failed to prove standing. The trial court granted the motion for involuntary dismissal, concluding that Elizon had failed to prove that the original plaintiff had standing at the inception of the lawsuit. Elizon appealed, and this court reversed and remanded for further proceedings in an opinion that included the following:

[T]he record reflects several orders entered by the trial court prior to trial. In one, the court stated that based on its previous rulings the only two material issues that remained in dispute concerned standing. Our decision resolves the issue of standing in Elizon's favor, and the parties have not challenged any other rulings of the trial court in this appeal. However, Elizon acknowledges that issues concerning damages and attorney's fees remain to be resolved. In light of the trial court's orders and Elizon's acknowledgement, on remand the trial court shall conduct such further proceedings as are necessary to resolve all remaining issues not previously determined by the trial court or in this appeal, including damages and attorney's fees.

Elizon DB Transfer Agent, LLC v. Ivy Chase Apartments, Ltd., 297 So.3d 641, 645-46 (Fla. 2d DCA 2020).


After remand, Elizon filed a motion to substitute ICAP as the plaintiff, attaching documents indicating that Elizon had assigned the note and mortgage to ICAP. The Debtors did not oppose the motion to substitute ICAP as the plaintiff, and the trial court entered an order effectuating the substitution. The Debtors then filed a motion in limine, arguing that Elizon had waived trial on the issue of damages by failing to present any evidence of damages at the nonjury trial in November 2018. The trial court denied the Debtors' motion.

On September 10, October 7, and November 13, 2020, the trial court held a nonjury trial on the issue of damages. ICAP presented only one witness at trial, Kevin Geigle. Mr. Geigle testified that he is the owner of ICAP, an entity he created for the sole purpose of acquiring the loan on the Debtors' property that was the subject of the underlying foreclosure proceedings from Elizon. Mr. Geigle testified as to the amounts of the unpaid principal, interest, and other expenditures including taxes and protective advances. He testified that when ICAP acquired the loan from Elizon, he reviewed all of Elizon's loan documents. Based on his review of Elizon's business records, he testified as to the amount of


indebtedness. Elizon's business records were not admitted at trial; no witnesses from Elizon testified at trial. The Debtors objected to Mr. Geigle's testimony regarding the amount of indebtedness, arguing that it lacked foundation and was inadmissible hearsay. The trial court overruled their objections.

Based on the default rate provision in the note that provided for the maximum default interest rate permitted by law, ICAP argued that the default interest rate should be 25%, the highest interest rate permitted by sections 687.02 and .071, Florida Statutes (2020).

At the close of ICAP's case, the Debtors moved for involuntary dismissal, arguing that ICAP failed to present sufficient evidence of the amount of indebtedness and renewing their objections to Mr. Geigle's testimony. The trial court denied the Debtors' motion.

In their case-in-chief, the Debtors attempted to present evidence of two unpled affirmative defenses-that ICAP was estopped from seeking default interest at a 25% interest rate and that the amount of default interest sought was usurious. As to estoppel, the Debtors presented loan documents they had received from ICAP's predecessors which indicated that the "current interest


rate" or "interest rate" was 5% or less. These documents did not identify the default interest rate or penalty rate.[1] As to usury, the Debtors attempted to present the testimony of Tashia Hale, a limited partner of Ivy Chase Apartments, Ltd. (one of the Debtors), and its records custodian. The following colloquy occurred:

Q. [By Debtors' counsel] There's an interest calculation in this proposed order of $2,482,000 and change. Have you calculated how that number would have been arrived at?
A. [Ms. Hale] Yes, I have.
Q. And how could you arrive at such a number?
A. You would arrive at that number if you base the interest on 360 days and calculated it out, then you come out to the per diem rate and that's the number. And then you calculate from the 1st of December and running straight days all the way through up until the date of the document.
Q. If I understand your-

The trial court then interrupted, ruling that Ms. Hale would not be permitted to testify as to interest calculations because she


had not been proffered as an expert on interest calculations. The Debtors did not object to the trial court's ruling or proffer Ms. Hale's testimony regarding ICAP's interest calculations.

At the close of their case, the Debtors moved to amend their answer to assert the affirmative defenses of usury and estoppel based on the loan documents they had presented. ICAP objected, arguing that the Debtors had waived these affirmative defenses by failing to plead them in their answer or raise them earlier in the proceedings. The trial court denied the Debtors' motion to amend their answer.

After the close of all the evidence, the trial court entered judgment in ICAP's favor. However, as to the amount of default interest, the trial court provided the following explanation:

At no time did I see a document other than from counsel indicating that an interest rate of 25 percent was somehow anticipated or in some way agreed to by [the Debtors] in this case.
In fact, all of the documentation that was received by counsel, back and forth, recites an interest rate of 5 percent. Now, I know that's not the default interest rate. But at no time was a default interest rate agreed to in excess of 5 percent. It was just picked out of the air by- I'm not sure who. But this is a court of equity. Based on that, since we are a court of equity, I find that . . . the interest rate that should carry with this note is 5 percent.

The trial court thereafter entered a written judgment of foreclosure in favor of ICAP, awarding default interest at the 5% interest rate.

Sufficiency of the evidence

On appeal, the Debtors argue that ICAP failed to present sufficient evidence of the outstanding principal balance, interest, and other expenses. They also argue that ICAP failed to prove its own standing.

Proof of Damages

The plaintiff in a foreclosure action "must present sufficient evidence to prove the amount owed on the note."...

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