Sunchase Apartments v. Sunbelt Service Corp.

• Decision Date: 16 March 1992
• Docket Number: No. 91-598,91-598
• Citation: 596 So.2d 119
• Parties: 17 Fla. L. Weekly D735 SUNCHASE APARTMENTS, a Wisconsin general partnership, and Jeffrey Keierleber, as general partner of Sunchase Apartments, Appellants, v. SUNBELT SERVICE CORPORATION, a Texas corporation, Appellee.
• Court: Florida District Court of Appeals

Page 119

596 So.2d 119

17 Fla. L. Weekly D735

SUNCHASE APARTMENTS, a Wisconsin general partnership, and

Jeffrey Keierleber, as general partner of Sunchase

Apartments, Appellants, v. SUNBELT SERVICE CORPORATION, a Texas corporation, Appellee.

No. 91-598.

District Court of Appeal of Florida,

First District.

March 16, 1992.

William G. Cooper of Coker, Myers, Schickel, Cooper & Sorenson, P.A., Jacksonville, for appellants.

Douglas R. Bald of Fergeson, Skipper, Shaw, Keyser, Baron & Tirabassi, P.A., Sarasota, for appellee.

WEBSTER, Judge.

Appellants, defendants below, seek review of a summary final judgment entered in a mortgage foreclosure action. In addition to ruling in appellee's favor on the foreclosure claim, the trial court ruled in favor of appellee on appellants' amended counterclaim, which sought damages or, in the alternative, "recision, reformation and/or cancellation of the closing documents," because of alleged fraudulent misrepresentations. The sole argument presented by appellants is that it was error to enter a summary final judgment because there existed genuine issues as to material facts. ¹ Concluding that the decision of the trial court was correct, we affirm.

In June 1989, appellee filed its initial complaint which, among other things, sought to foreclose a mortgage on real property on which was situate an apartment complex. An amended complaint, also seeking foreclosure, was filed in November 1989. In March 1990, appellants filed an answer, affirmative defenses and a counterclaim; and, in July 1990, after appellee had filed an answer and affirmative defenses to the counterclaim, appellants sought and obtained leave to file an amended counterclaim.

Appellants' answer to the amended complaint denies all of the material allegations contained in the amended complaint. In addition, appellants asserted four affirmative defenses (estoppel, waiver, fraudulent misrepresentations and failure of consideration), all of which are based upon oral representations allegedly made by employees of appellee at the time that the relevant documents were signed. The amended counterclaim is in two counts. Count One seeks damages for fraudulent misrepresentations allegedly made orally by employees of appellee to induce appellants to purchase the apartment complex, and to assume the mortgage. Count Two seeks "recision, reformation and/or cancellation of the closing documents," based upon the same alleged oral fraudulent misrepresentations.

Appellee answered the amended counterclaim, denying all of its material allegations. Appellee also asserted five affirmative defenses, only two of which are relevant to this appeal. Appellee asserted that the claims made in the amended counterclaim were barred because the mortgage and mortgage modification agreement expressly prohibited any waiver or modification of their terms except by a written document signed by appellee. However, appellee also asserted, as its First Affirmative Defense, the following:

[Appellee] is a wholly-owned subsidiary of Sunbelt Savings, FSB. Sunbelt Savings, FSB, is a federal savings bank operating under the supervision of the Federal Assistance Division of the Federal Deposit Insurance Corporation. Pursuant to the holdings in D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 [62 S.Ct. 676, 86 L.Ed. 956] (1942) and its progeny, borrowers from federally insured and regulated institutions and their subsidiaries are barred from maintaining claims or defenses based upon unrecorded agreements and representations. Therefore, [appellants'] [c]ounterclaim, which is predicated upon purported unrecorded agreements and representations, is expressly barred by the applicable federal and Florida case law.

(Appellee also filed a substantively identical reply to all of appellants' affirmative defenses.)

On August 24, 1990, appellee filed its "Second Renewed Motion for Partial Summary Judgment." (Appellee had filed similar motions on two prior occasions. However, on the first occasion the hearing was cancelled because appellants had claimed that they had received insufficient notice, and because they had not yet answered the amended complaint; and, on the second occasion, approximately ten days after appellee had filed its motion, appellants sought and obtained leave to amend their counterclaim.) With regard to the affirmative defenses and counterclaim of appellants, the "Second Renewed Motion" adopted the following from the previous motion, as the first ground entitling appellee to summary judgment:

The [a]ffirmative [d]efenses and [c]ounterclaim are predicated upon alleged oral promises, representations or agreements which, pursuant to the holding of the United States Supreme Court in D'Oench and Dhume [sic] Co., Inc. v. Federal Deposit Insurance Corp., 315 U.S. 447 [62 S.Ct. 676, 86 L.Ed. 956] (1942) and its progeny, cannot be used as grounds for either defenses or claims against wholly-owned subsidiaries of federally-insured savings institutions. The Affidavit in Support of Motion for Partial Summary Judgment of Elizabeth Smith establishes that [appellee] is a federally-insured savings institution. Therefore, the [a]ffirmative [d]efenses and [c]ounterclaim of [appellants] alleging fraud, waiver, estoppel and failure of consideration based upon non-written promises, representations or agreements, are barred by the D'Oench doctrine.

A hearing was held on the "Second Renewed Motion" on September 13, 1990. After the hearing, at the request of the trial court, the parties filed legal memoranda. In its memorandum, appellee argued at some length that what has come to be known as the "D'Oench doctrine" [after D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942) ], barred assertion by appellants of all of their affirmative defenses and their counterclaim, citing a number of cases in support of its argument. Appellants did not address the issue in their memorandum.

On December 5, 1990, the trial court entered its summary final judgment. Paragraph 2 of the judgment reads as follows:

[Appellants'] [a]ffirmative [d]efenses and [c]ounterclaim, which are based upon alleged oral representations and agreements which were made prior to or contemporaneously with the execution of the [m]ortgage [m]odification [a]greement and the [r]eplacement [p]romissory [n]ote, are barred by the express provisions of the [m]ortgage documents and the applicable Florida law.

Appellants' motion for rehearing was denied, and this appeal followed.

We recognize that, as a general matter, claims in which fraud is an issue should not be resolved by summary judgment. Barrios v. Duran, 496 So.2d 239 (Fla. 3d DCA 1986). We also recognize that the existence of a "merger clause" (i.e., a clause which states that all oral representations or agreements are merged into and subsumed by the written document of which the clause is a part) may not be asserted to bar evidence regarding alleged oral representations or agreements offered to prove that the document containing the "merger clause" was procured by fraud. Nobles v. Citizens Mortgage Corp., 479 So.2d 822 (Fla. 2d DCA 1985). However, we also recognize the rule, applicable to summary judgments as well as to other orders and judgments, that an appellate court must affirm the trial court's decision if it is supported by any theory, regardless of the reasons stated in the order or judgment. Landis v. Allstate Ins. Co., 546 So.2d 1051 (Fla.1989); Green v. First American Bank and Trust, 511 So.2d 569 (Fla. 4th DCA 1987), review denied, 520 So.2d 584 (Fla.1988).

We agree with appellants that the trial court incorrectly concluded that appellants' affirmative defenses and counterclaim "are barred by the express provisions of the [m]ortgage documents and the applicable Florida law." (By "the applicable Florida law," we assume that the trial court meant Florida law addressing the legal effect of "the express provisions of the [m]ortgage documents"; i.e., the law relating to "merger clauses," the parol evidence rule, etc.) Nevertheless, we affirm the trial court's decision because our review of the entire record convinces us that there exists no genuine issue of fact material to a finding that the D'Oench doctrine applies; that, based upon the undisputed facts, the D'Oench doctrine does apply; and that, as a matter of law, the D'Oench doctrine bars assertion by appellants of either their affirmative defenses or their counterclaim, thereby entitling appellee to a summary final judgment in its favor.

In D'Oench, the Federal Deposit Insurance Corporation (FDIC) had filed suit against D'Oench, Duhme & Co. (which was engaged in the securities business) to collect on a demand note executed by D'Oench several years earlier, and made payable to the Belleville Bank & Trust Co. (The FDIC had acquired the note as a part of the collateral securing a substantial loan made by the FDIC in connection with the assumption by another financial institution of the Bank's deposit liabilities.) The note (which had been among the Bank's charged-off assets for some time) was part of a scheme by the Bank to avoid having to treat as past-due assets certain bonds sold by D'Oench to the Bank, which bonds had become almost worthless. In response to the suit, D'Oench raised as defenses lack of consideration, that the note had been executed with the understanding that no suit would ever be brought to collect on it and that the FDIC was not a holder in due course. The defenses were all based upon a receipt for the note from the Bank, produced by D'Oench, which stated, " 'This note is given with the understanding it will not be called for payment.' " 315 U.S. at 454, 62 S.Ct. at 678, 86 L.Ed. at 960. In its reply, the FDIC asserted that D'Oench was estopped to raise those defenses because there was no indication anywhere in the Bank's records that the note was not valid and enforceable and, therefore, to allow such defenses would permit creditors of the Bank,...