Whitney Bank v. Grant
| Decision Date | 07 August 2017 |
| Docket Number | CASE NO. 1D16–5112 |
| Citation | 223 So.3d 476 |
| Court | Florida District Court of Appeals |
| Parties | WHITNEY BANK, a Mississippi state chartered bank, formerly known as Hancock Bank, a Mississippi state chartered bank, as assignee of the FDIC as receiver for Peoples First Community Bank, a Florida banking corporation, Appellant, v. Von Daniel GRANT, Jr., and Lisa D. Grant, Appellees. |
Michael Anthony Shaw and Joseph D. Steadman, Jr., of Jones Walker LLP, Miami, for Appellant.
Jeffrey P. Whitton, Panama City, for Appellees.
Whitney Bank appeals the trial court's order granting summary judgment in favor of Von Daniel Grant, Jr., and Lisa D. Grant, and adjudging that Whitney Bank's cause of action seeking damages from alleged breaches of two promissory notes is barred by the one-year statute of limitations in section 95.11(5)(h), Florida Statutes (2015). Because we conclude that section 95.11(5)(h) does not apply to the current cause of action, we reverse.
The pleadings and summary judgment evidence presented below reveal the following. On June 29, 2005, the Grants borrowed $240,600 from Peoples First Community Bank, verifying the debt with a note and securing the note with a mortgage on the Grants' principal residence. On November 27, 2006, the Grants borrowed an additional $25,000 from Peoples First, executing a credit agreement with the bank that included a balloon payment due on December 15, 2011. The amount borrowed was secured by a second mortgage on the residence.
Three years later, in December 2009, the federal Office of Thrift Supervision closed Peoples First Community Bank and appointed the Federal Deposit Insurance Corporation as the bank's receiver. In turn, the FDIC transferred certain assets belonging to the bank—including each of the Grants' promissory notes—to Hancock Bank by way of an allonge.
On December 1, 2010, the Grants defaulted on the June 2005 promissory note by failing to make the installment payment due on that date and on every subsequent installment date. Also, they did not make the balloon payment due in December 2011 as required by the 2006 note. In April 2012, Hancock Bank and the Grants executed a "revised short sale approval" agreement, under which Hancock Bank approved the Grants' "request for the Pre–Foreclosure Sale." According to the terms of the agreement, the sales price of the residence was $190,000. After the amounts still owed on the unpaid balances of the 2005 and 2006 debts were deducted from the sales price, along with closing costs and a broker's commission, the agreement reflected an "Estimated Deficiency Balance" of $99,377.70. The agreement also provided that the Grants would "receive no proceeds" from the sale and Hancock Bank "reserve[d] the right to pursue the deficiency balance owed." The closing took place on May 11, 2012.
Two years later, in April 2014, Whitney Bank merged its charter with that of Hancock Bank and, as a result, Hancock Bank changed its name to Whitney Bank. By letter dated November 30, 2015, Whitney Bank notified the Grants that they were in default under the June 2005 promissory note and afforded them the opportunity to cure the default. Whitney Bank also advised that if the default was not cured, it could, at its option, accelerate the indebtedness due under the note. The Grants failed to cure the default.
Thereafter, on January 15, 2015, Whitney Bank filed a Verified Complaint containing two counts. Count I alleges that the Grants breached the 2005 promissory note and avers that Whitney Bank, as holder of the note, is entitled to enforce it. Count I seeks a judgment for the unpaid balance owed on the note in the principal amount of $45,069.41, plus accrued interest, late fees, costs of collection, and attorneys' fees. In turn, Count II alleges a breach of the 2006 promissory note, and likewise seeks a judgment for the unpaid balance owed on the note in the principal amount of $23,634.67, along with accrued interest, late fees, costs of collection, and attorneys' fees.
After the Grants filed their Answer to the Verified Complaint, the parties filed cross motions for summary judgment. In their motion, the Grants urge that Whitney Bank's cause of action is barred by the one-year statute of limitations in section 95.11(5)(h). That subsection states:
An action to enforce a claim of a deficiency related to a note secured by a mortgage against a residential property that is a one-family to four-family dwelling unit. The limitations period shall commence on the day after the certificate is issued by the clerk of court or the day after the mortgagee accepts a deed in lieu of foreclosure.
§ 95.11(5)(h), Fla. Stat. (2015). The Grants' argument reads the foregoing statute in pari materia with section 702.06, Florida Statutes (2015), which provides that "[i]n all suits for the foreclosure of mortgages," the trial court, in its discretion, may enter a deficiency decree. But, "in the case of an owner-occupied residential property, the amount of the deficiency may not exceed the difference between ..., [ ] in the case of a short sale, the outstanding debt, and the fair market value of the property on the date of sale." Based on the "short sale" language, the Grants maintain that since Whitney Bank's cause of action is for alleged deficiencies due following a short sale of their single-family dwelling, the action must be brought within the one-year limitations period of section 95.11(5)(h), which references deficiencies, or it is barred.
Whitney Bank responds to this argument by emphasizing that the current action is one for a breach of a contract/written instrument; no foreclosure or deed in lieu of foreclosure was ever involved. As a result, it urges the five-year statute of limitations period in section 95.11(2)(b), Florida Statutes (2015), applies.
Section 95.11(2)(b) provides in relevant part that "[a]ctions other than for recovery of real property shall be commenced as follows":
§ 95.11(2)(b), Fla. Stat. (2015).
The trial court agreed with the Grants and held that the one-year statute of limitations barred Whitney Bank's cause of action. Significantly, it noted the following:
The parties do not dispute that the present action is one to enforce claims of deficiency related to notes secured by mortgages against a residential one-family dwelling unit. However, [Whitney Bank] argues the language used in section 95.11(5)(h) to describe the commencement of the limitations period indicates that this section is applicable only to foreclosures and deeds in lieu of foreclosure.
In evaluating the bank's argument, the trial court acknowledged the fundamental principle of statutory construction that directed it to resort to the "clear and unambiguous" language of section 95.11(5)(h), see, e.g., State v. Hackley, 95 So.3d 92, 93 (Fla. 2012), and precluded it from "look [ing] behind the statute's plain language for legislative intent or resort[ing] to rules of statutory construction to ascertain intent." See State v. Burris, 875 So.2d 408, 410 (Fla. 2004). Nonetheless, it did just that by analyzing the unambiguous language of section 95.11(5)(h) through the lens of legislative intent and resorting to rules of statutory construction when it stated:
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