Wells Fargo Bank, N.A. v. Rutledge

• Decision Date: 20 October 2017
• Docket Number: Case No. 2D16–244
• Parties: WELLS FARGO BANK, N.A., as Trustee for Carrington Mortgage Loan Trust, Series 2006 FRE1 Asset–Backed Pass–Through Certificates, Appellant/Cross–Appellee, v. Calvin RUTLEDGE, Appellee/Cross–Appellant, and Bruce Dias; Harbor Towers Owners Association, Inc. ; Mary Lynne Dias; Unknown Tenant(s) in Possession of the Subject Property, Appellees.
• Court: Florida District Court of Appeals

230 So.3d 550

WELLS FARGO BANK, N.A., as Trustee for Carrington Mortgage Loan Trust, Series 2006 FRE1 Asset–Backed Pass–Through Certificates, Appellant/Cross–Appellee,

v.Calvin RUTLEDGE, Appellee/Cross–Appellant,andBruce Dias; Harbor Towers Owners Association, Inc. ; Mary Lynne Dias; Unknown Tenant(s) in Possession of the Subject Property, Appellees.

Case No. 2D16–244

District Court of Appeal of Florida, Second District.

Opinion filed October 20, 2017

Rehearing Denied November 28, 2017

Shaib Y. Rios of Brock & Scott, PLLC, Ft. Laudersale (withdrew after initial briefing); Morgan L. Weinstein of Van Ness Law Firm, PLC, Deerfield Beach (substituted as counsel of record), for Appellant/Cross–Appellee.

John C. Dent., Jr., and Jennifer A. McClain of Dent & McClain, Chartered, Sarasota, for Appellee/Cross–Appellant Calvin Rutledge.

No appearance for remaining Appellees.

KHOUZAM, Judge.

This appeal/cross-appeal involves two parallel foreclosure actions against Bruce and Mary Lynne Dias, one initiated by Wells Fargo Bank in December 2010 and the other initiated by Harbor Towers Owners Association in February 2011. In Harbor Towers' suit, summary judgment was entered in favor of Harbor Towers and the property was sold at public auction to Calvin Rutledge. The summary judgment in that suit was later vacated as void as to Wells Fargo, which had been improperly joined as a party.

In Wells Fargo's suit, summary judgment was entered in favor of Rutledge, who had been added as a party to the Wells Fargo suit after he bought the property. Concluding that the uncontroverted evidence showed Mary Lynne Dias's signature on the note and mortgage was forged, rendering the documents void, the court granted Rutledge title free and clear of Wells Fargo's claims. Though Wells Fargo challenged Rutledge's standing to raise the forgery defense, the court did not explicitly address the standing argument in its summary judgment order. This court reversed on appeal, determining—without mention of standing—that a material issue of fact remained on the forgery defense. See Wells Fargo Bank, N.A. v. Rutledge, 148 So.3d 533, 535 (Fla. 2d DCA 2014).

On remand, a bench trial was held. Rutledge submitted additional evidence in support of the claim that Ms. Dias's signature had been forged. Specifically, he submitted Ms. Dias's deposition, in which she testified that she had not signed the note or mortgage and that she was not present when they were signed. She also testified that she and Mr. Dias were no longer married. Asked when they were "separated or divorced," she responded simply "2007." Wells Fargo did not present any evidence to rebut Ms. Dias's deposition testimony, and the trial court found that Ms. Dias's signature had been forged. However, the court requested the parties submit memoranda addressing the effect of the forgery, considering that the Diases were no longer married.

Wells Fargo again challenged Rutledge's standing to raise the forgery defense, but the trial court was under the misimpression that this issue had been resolved in Rutledge's favor in the previous appeal and that, therefore, it could not be addressed on remand. Ultimately, the trial court entered a final judgment of foreclosure on Mr. Dias's one-half interest in the property in favor of Wells Fargo, reasoning that the Diases owned the property as tenants in common following their divorce. Wells Fargo timely appeals, and Rutledge timely cross-appeals. We reverse and remand because Rutledge does not have standing to raise Ms. Dias's forgery defense and there was no evidence presented to support the court's conclusion that Wells Fargo was entitled to foreclose on a one-half interest in the property.

The question of whether Rutledge could raise the forgery defense was not squarely addressed by this court's previous opinion, and therefore the trial court erred in declining to resolve the issue on remand. Rutledge is not a party to or a third-party beneficiary of the note and mortgage, the agreements that Wells Fargo seeks to enforce in its foreclosure suit. See Pealer v. Wilmington Trust Nat'l Ass'n ex rel. MFRA Trust, 212 So.3d 1137, 1139 (Fla. 2d DCA 2017) (Sleet, J., concurring) ("[T]he bank's standing to foreclose derives from its right to enforce the note and mortgage." (citing St. Clair v. U.S. Bank Nat'l Ass'n, 173 So.3d 1045, 1047 (Fla. 2d DCA 2015) )). Rather, Rutledge is a subsequent purchaser who was at least constructively aware of Wells Fargo's recorded lis pendens when he purchased the property. Rutledge, 148 So.3d at 535 ; see also Whitburn, LLC v. Wells Fargo Bank, N.A., 190 So.3d 1087, 1091 (Fla. 2d DCA 2015) (holding that constructive notice of any superior interest documented in the official records is imputed to subsequent purchasers), review denied, No. SC16-945, 2016 WL 6998444 (Fla. Nov. 30, 2016) ; CCM Pathfinder Palm Harbor Mgmt., LLC v. Unknown Heirs of Gendron, 198 So.3d 3, 7 (Fla. 2d DCA 2015) ("[T]he law is clear that if a recorded mortgage is valid on its face, a subsequent purchaser ‘is assumed to have recognized it as a valid lien against the property which he is buying.’ " (quoting Spinney v. Winter Park Bldg. & Loan Ass'n, 120 Fla. 453, 162 So. 899,...