Provident Funding Assocs., L.P. v. MDTR

• Decision Date: 12 October 2018
• Docket Number: Case No. 2D17-337
• Citation: 257 So.3d 1114
• Parties: PROVIDENT FUNDING ASSOCIATES, L.P., Appellant, v. MDTR, as trustee under the 6925 Alta Vista Land Trust and Betty Jean Groves, Appellees.
• Court: Florida District Court of Appeals

257 So.3d 1114

PROVIDENT FUNDING ASSOCIATES, L.P., Appellant,

v.MDTR, as trustee under the 6925 Alta Vista Land Trust and Betty Jean Groves, Appellees.

Case No. 2D17-337

District Court of Appeal of Florida, Second District.

Opinion filed October 12, 2018.

Cynthia L. Comras, David Rosenberg, and Jarrett Cooper of Robertson, Anschutz & Schneid, P.L., Boca Raton, for Appellant.

Mark P. Stopa, Palmetto, of Stopa Law Firm, Tampa (withdrew after briefing); Isaac Manzo, Orlando, of Manzo & Associates, P.A., Orlando (substituted as counsel of record), for Appellee MDTR, as trustee under the 6925 Alta Vista Land Trust.

No appearance for remaining Appellee.

SALARIO, Judge.

This is a residential foreclosure case brought by Provident Funding Associates, L.P., a mortgage servicer, against Betty Groves and MDTR, as trustee under the 6925 Alta Vista Land Trust. Provident appeals from a final order granting MDTR's motion for involuntary dismissal. The trial court incorrectly held that this case is barred by res judicata. We reverse and remand for further proceedings.

I.

In September 2007, Ms. Groves borrowed $110,000 from Provident Funding Group, Inc., which we refer to here as the lender. The debt was evidenced by a note between Provident and Ms. Groves and secured by a mortgage on residential real property in New Port Richey, Florida. At some point, Ms. Groves stopped making regular payments of principal and interest on the loan, which led to two separate civil actions filed by Provident to foreclose on Ms. Groves' mortgage.

The first case was filed on September 22, 2010 and named Provident as plaintiff and Ms. Groves and any unknown parties with an interest in the property secured by the mortgage as defendants. The complaint alleged that Ms. Groves defaulted under the note by failing to make the "October 1, 2008 payment and all payments due thereafter" and sought to foreclose the mortgage. Provident failed to respond to requests for admission Ms. Groves served on it and, by virtue of that failure, was deemed to have admitted that it was not the owner or holder of the note and that it lacked standing to sue for foreclosure. Based on those technical admissions, the trial court entered a final summary judgment in Ms. Groves' favor on May 9, 2012. Provident did not appeal, and a motion for relief from judgment was denied.

On April 1, 2015, Provident filed a second foreclosure case, which is the case that gives rise to this appeal. The complaint names Ms. Groves and MDTR as defendants and alleges that at some point MDTR became the owner of the property secured by the mortgage. It asserts that the note is in default because "the payment due May 1, 2010, and all subsequent payments" have not been made.

MDTR filed an answer and, later and with leave of court, an amended answer to Provident's complaint. The amended answer asserted that MDTR was without knowledge of and was therefore denying all of the allegations of Provident's complaint, including its allegation that MDTR was the owner of the property that was the subject of Provident's mortgage. MDTR also asserted several affirmative defenses, including a defense that Provident's foreclosure action was barred by res judicata.

The trial court held a nonjury trial on January 9, 2017. At the beginning of trial, Provident moved to drop Ms. Groves as a party. The court granted the motion, and the trial proceeded with MDTR as the sole defendant. MDTR requested that the trial court take judicial notice of the complaint and final judgment from the first foreclosure case Provident filed, and without objection, the trial court did so.

The sole witness at the trial was Joseph Tami, a foreclosure operation manager for Provident. Based on Mr. Tami's testimony, the trial court admitted into evidence the original note, which contained an undated, blank endorsement from the lender; the mortgage; a default notice dated December 19, 2014, and addressed to Ms. Groves; and a loan disbursement and payment log. Mr. Tami's testimony also established that the loan was in default as of May 1, 2010. There was no testimony or documentary evidence admitted concerning what interest MDTR had in the property, if any, or the circumstances under which it had acquired that interest.

At the end of Provident's case-in-chief, MDTR moved for an involuntary dismissal. It argued, among other things, that the action was barred by res judicata by virtue of the final judgment in the first foreclosure case and the fact that the complaint in the second case alleged an initial default date (May 1, 2010) before the first case was even filed. The trial court reserved ruling and asked MDTR whether it intended to put on any evidence. MDTR advised that it did not, and the parties continued arguing about involuntary dismissal. The trial court agreed with MDTR and dismissed Provident's claim as barred by res judicata. It expressly declined to address MDTR's other arguments for involuntary dismissal. This is Provident's timely appeal.

II.

We review an order granting a motion for involuntary dismissal de novo. Deutsche Bank Nat'l Tr. Co. v. Kummer, 195 So.3d 1173, 1175 (Fla. 2d DCA 2016). We hold that the doctrine of res judicata does not apply here, and that the trial court thus improvidently dismissed the action, because MDTR failed to prove the required element of identity of parties and because the supreme court's decision in Singleton v. Greymar Associates, Inc., 882 So.2d 1004 (Fla. 2004), precludes application of res judicata on the facts that this case presents.¹

The doctrine of res judicata provides that a judgment on the merits in an earlier suit bars a later suit on the same cause of action between the same parties or others in privity with those parties. Fla. Dep't of Transp. v. Juliano, 801 So.2d 101, 105 (Fla. 2001) (quoting Kimbrell v. Paige, 448 So.2d 1009, 1012 (Fla. 1984) ). It applies when the later suit shares four "identities" with the earlier one: (1) the "identity of the thing sued for," (2) the "identity of the cause of action," (3) the "identity of persons and parties to the action," and (4) the "identity of the quality of the persons for or against whom the claim is made." Bryan v. Fernald, 211 So.3d 333, 335 (Fla. 2d DCA 2017) (quoting Topps v. State, 865 So.2d 1253, 1255 (Fla. 2004) ). Further, courts may decline to apply the doctrine in limited circumstances when it would "defeat the ends of justice." State v. McBride, 848 So.2d 287, 291 (Fla. 2003). Res judicata is an affirmative defense, and the burden of proof is borne by the party asserting it. Fla. R. Civ. P. 1.110(d) ; Nunez v. Alford, 117 So.2d 208, 209–10 (Fla. 2d DCA 1960).

Here, MDTR failed to carry its burden of proof on the element of identity of parties. Identity of parties for res judicata purposes exists when the parties in the later action were also parties in the first action or, if not, were in privity with those parties. See Bryan, 211 So.3d at 336 ; Linn-Well Dev. Corp. v. Preston & Farley, Inc., 710 So.2d 578, 580 (Fla. 2d DCA 1998). Indisputably, MDTR was not a party to Provident's initial foreclosure action—only Ms. Groves was. So the question is whether MDTR is in privity with Ms. Groves. To be in privity with a party to an earlier lawsuit, "one must have an interest in the action such that she will be bound by the final judgment as if she were a party." Pearce v. Sandler, 219 So.3d 961, 965 (Fla. 3d DCA 2017) ; see also Stogniew v. McQueen, 656 So.2d 917, 920 (Fla. 1995) (applying the same test in the context of the related doctrine of collateral estoppel).

Although the generality of that statement may make it challenging to apply in some cases, that is not a problem that we have here. In this case, there was no evidence presented at the trial that in any way bore upon what interest MDTR may have had in the prior foreclosure action. We are led to believe by some statements the parties' lawyers made during the trial that MDTR may have acquired in a bankruptcy some ownership interest in the property that is the subject of Provident's mortgage, but those statements were disputed and are not evidence of anything. See Heller v. Bank of Am., NA, 209 So.3d 641, 644 (Fla. 2d DCA 2017) ("Without a stipulation by the parties, the trial court cannot rely on an unsworn statement of counsel to make a factual determination."). The evidentiary record is wholly silent as to what interest, if any, MDTR had in the subject matter of the prior litigation, how it acquired that interest, or anything else that would permit a court to make a determination one way or the other about whether MDTR had an interest in the first foreclosure action such that it would have been bound by a judgment in that action. There was thus no evidentiary basis bearing on the element of identity of parties upon which the trial court could have invoked res judicata to dismiss Provident's second foreclosure action. See, e.g., Massey v. David, 831 So.2d 226, 234 (Fla. 1st DCA 2002) ("Because the record does not conclusively establish that Mr. David would have been bound by an adverse result ... earlier in the present proceeding ..., the trial court erred in granting summary judgment on the basis of res judicata and collateral estoppel.")

Furthermore, the supreme court's decision in Singleton poses a separate, free-standing stumbling block to MDTR's invocation of res judicata in this case. That decision establishes that res judicata does not bar a subsequent foreclosure action on the same mortgage based on a distinct period of default. 882 So.2d at 1006–07. The complaint here falls within this rule because it is based on a period of default (May 1, 2010 and all payments thereafter) that is different and distinct from the period of default alleged in the first action (October 1, 2008 and all payments thereafter).

In Singleton, a mortgagee filed a first foreclosure action based on payment defaults between September 1, 1999 and February 1, 2000. Id. at 1005. That case was dismissed with...