Liberty Home Equity Solutions, Inc. v. Raulston

• Citation: 206 So.3d 58
• Decision Date: 07 December 2016
• Docket Number: No. 4D15–3652,4D15–3652
• Parties: LIBERTY HOME EQUITY SOLUTIONS, INC., formerly known as Genworth Financial Home Equity Access, Inc., Appellant, v. Patsy RAULSTON a/k/a Patsy I. Raulston, Unknown Spouse of Patsy Raulston a/k/a Patsy I. Raulston, United States of America on Behalf of the Secretary of Housing and Urban Development, unknown Tenant #1, any and all unknown parties claiming by, through, under and against the named individual Defendant(s) who are not known to be Dead or Alive, whether unknown parties may claim an Interest as Spouses, Heirs, Devisees, Grantees, or other Claimants, Appellees.
• Court: Court of Appeal of Florida (US)

206 So.3d 58

LIBERTY HOME EQUITY SOLUTIONS, INC., formerly known as Genworth Financial Home Equity Access, Inc., Appellant,

v.Patsy RAULSTON a/k/a Patsy I. Raulston, Unknown Spouse of Patsy Raulston a/k/a Patsy I. Raulston, United States of America on Behalf of the Secretary of Housing and Urban Development, unknown Tenant #1, any and all unknown parties claiming by, through, under and against the named individual Defendant(s) who are not known to be Dead or Alive, whether unknown parties may claim an Interest as Spouses, Heirs, Devisees, Grantees, or other Claimants, Appellees.

No. 4D15–3652

District Court of Appeal of Florida, Fourth District.

[December 7, 2016]

Jason F. Joseph of Gladstone Law Group, P.A., Boca Raton, for appellant.

Robert P. Summers and Jessica M. VanValkenburgh of McCarthy, Summers, Bobko, Wood, Norman, Bass & Melby, P.A., Stuart, for Appellee Patsy Raulston.

PER CURIAM.

Liberty Home Equity Solutions, Inc. ("Liberty") appeals from an order granting Appellee Patsy Raulston's motion for involuntary dismissal and entering final judgment in this foreclosure case. Liberty argues that the trial court reversibly erred in granting the motion for involuntary dismissal because it presented all the evidence required to establish a prima facie case for foreclosure, and the trial court impermissibly weighed Liberty's evidence in ruling on the motion. We agree and reverse.

In March 2009, appellee entered into a home equity conversion loan agreement with Liberty. Liberty agreed to advance appellee up to $286,500 in exchange for repayment of all advances with interest. Appellee executed a note and a mortgage to memorialize and secure the loan.

Appellee defaulted under the terms of the note and mortgage by failing to pay the property taxes and hazard insurance premiums. The loan servicer sent appellee a letter informing her of the breach and the action required to cure the default. When appellee failed to cure the default, Liberty emailed a written request to the United States Department of Housing and Urban Development ("HUD") for approval to commence a foreclosure action, pursuant to Paragraph 9 of the mortgage agreement.

Deval, LLC, HUD's loan servicer, responded by letter dated July 30, 2012. The letter was a form letter with a check in the "Request APPROVED" box. However, there was additional language in the letter that stated the following: "Your request has been reviewed and is currently in a ‘pending’ status. The request cannot be approved at this time due to the following reason(s): 1) Failure to provide appropriate backup documentation to support your request. The following documentation was not provided." Notably, there was no selection from the list of potential documents that allegedly had not been provided. Liberty later sent a repayment notice to appellee advising her that the loan was due and payable as a result of the default and that she was required to cure the default.

In January 2014, Liberty filed a one-count foreclosure complaint, alleging that appellee had defaulted under the terms of the mortgage, the Secretary of HUD approved the acceleration of the loan, the amount due was $140,102.53, and all conditions precedent had been satisfied, waived, or excused. Appellee answered, raising as one of her defenses that Liberty failed to fulfill conditions precedent by failing to obtain the approval of the Secretary of HUD to foreclose. The case proceeded to a non-jury trial.

At trial, a witness testified on behalf of Liberty and laid the foundation for admission of the note, allonge, mortgage, power of attorney, breach letters, HUD request and approval letters, and the loan balance. After Liberty concluded its case-in-chief, appellee moved for an involuntary dismissal. The trial court granted the motion and dismissed the case with prejudice. The court found that: (1) the amount owed should have been rolled into the line of credit per the loan agreement and HUD rules; (2) Liberty failed to comply with HUD rules of approval to foreclose; (3) Liberty failed to meet the requirements of 24 C.F.R. § 206.205 (2014) ; (4) the default was at most a technical default; and (5) equity authorized the court to dismiss the case because the borrower had a right to comply and rely on her loan documentation.

On appeal, Liberty argues that the trial court erred in granting appellee's motion for involuntary dismissal where it admitted into evidence all the evidence required to establish a prima facie case for foreclosure. Specifically, Liberty argues that it admitted into evidence the note and mortgage, evidence of appellee's default and the outstanding debt on the note, an acceleration letter, and a HUD approval letter to institute a foreclosure action.

Appellee counters that Liberty failed to establish a prima facie case for foreclosure because Liberty did not satisfy all the conditions precedent to suit, particularly the requirement that it obtain HUD approval before commencing a foreclosure action.

"A motion for involuntary dismissal under Florida Rule of Civil Procedure 1.420(b) in a non-jury trial can be equated to a motion for directed verdict in a jury trial." Deutsche Bank Nat'l Tr. Co. v. Huber , 137 So.3d 562, 563 (Fla. 4th DCA 2014) (citing Deutsche Bank Nat'l Trust Co. v. Clarke , 87 So.3d 58, 60 n.1 (Fla. 4th DCA 2012) ).

The applicable standard of review for a motion for involuntary dismissal is de novo. Id . When reviewing the grant of such a motion, the appellate court must view the evidence and all inferences of fact in the light most favorable to the nonmoving party. Id. Thus, the appellate court can affirm the directed verdict only where no valid view of the evidence could support a verdict for the nonmoving party. Id. at 563–64.

To establish a prima facie case, a foreclosure plaintiff must prove: (1) an agreement between the parties; (2) a default by the defendant; (3)...