Blitch v. Freedom Mortgage Corp. ( 2016 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
SCOTT BLITCH and BARBARA BLITCH,
)
)
Appellants, )
)
v. ) Case No. 2D14-4398
)
FREEDOM MORTGAGE CORPORATION, )
)
Appellee. )
)
Opinion filed February 5, 2016.
Appeal from the Circuit Court for Pasco
County; Karl B. Grube, Associate Senior
Judge, and Wayne L. Cobb, Senior Judge.
Cindy Cumberbatch and Kendrick Almaguer
of The Ticktin Law Group, P.A., Deerfield
Beach, for Appellants.
Nancy M. Wallace and Diane G. DeWolf of
Akerman LLP, Tallahassee; and William P.
Heller of Akerman LLP, Fort Lauderdale, for
Appellee.
VILLANTI, Chief Judge.
Scott and Barbara Blitch seek review of the final judgment of foreclosure
entered against them and in favor of Freedom Mortgage Corporation (the Bank). We
reject without discussion the Blitches' arguments that the Bank failed to prove that it had
standing to foreclose and that the Bank failed to offer sufficient evidence to reestablish
the lost note. However, because the final judgment reestablishes the lost note without
providing adequate protection to the Blitches, we reverse and remand for entry of an
amended final judgment that contains such protection.
The Bank filed a two-count complaint against the Blitches seeking to
reestablish a lost promissory note and to foreclose on the mortgage that secured the
note. To prove its claim for reestablishing the lost note, the Bank was required to show
the following:
(1) A person not in possession of an instrument is
entitled to enforce the instrument if:
(a) The person seeking to enforce the instrument was
entitled to enforce the instrument when loss of possession
occurred, or has directly or indirectly acquired ownership of
the instrument from a person who was entitled to enforce the
instrument when loss of possession occurred;
(b) The loss of possession was not the result of a
transfer by the person or a lawful seizure; and
(c) The person cannot reasonably obtain possession
of the instrument because the instrument was destroyed, its
whereabouts cannot be determined, or it is in the wrongful
possession of an unknown person or a person that cannot
be found or is not amenable to service of process.
(2) A person seeking enforcement of an instrument
under subsection (1) must prove the terms of the instrument
and the person's right to enforce the instrument. If that proof
is made, s. 673.3081 applies to the case as if the person
seeking enforcement had produced the instrument. The
court may not enter judgment in favor of the person seeking
enforcement unless it finds that the person required to pay
the instrument is adequately protected against loss that
might occur by reason of a claim by another person to
enforce the instrument. Adequate protection may be
provided by any reasonable means.
§ 673.3091, Fla. Stat. (2014) (emphasis added). As this statutory language makes
clear, and contrary to the Blitches' argument here, adequate protection is not an
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element of the Bank's prima facie case. Instead, it is a post-proof condition of the entry
of the final judgment. See Fifth Third Bank v. Alaedin & Majdi Invs., Inc., No. 8:11-CV-
2206-T-17TBM, 2012 WL 1137104, at *3 (M.D. Fla. Apr. 4, 2012) (noting that after the
plaintiff showed that it was entitled to enforce the note at the time it lost the note, "the
Court is required to address the issue of providing adequate protection to the defaulting
party against loss that might occur if a claim were brought by another party to enforce
the instrument"); see also Correa v. U.S. Bank Nat'l Ass'n, 118 So. 3d 952, 956 n.2 (Fla.
2d DCA 2013) (stating that "[i]f the court is concerned that another person might attempt
to enforce the original note, it may require security in favor of the payor to ensure
adequate protection" (emphasis added)); Beaumont v. Bank of New York Mellon, 81 So.
3d 553, 555 (Fla. 5th DCA 2012) (after discussing the deficiencies in the bank's proof,
stating "[t]he trial court was also required to address the issue of providing adequate
protection to Beaumont" (emphasis added)). Because the court's consideration of the
issue of adequate protection is a condition of entering a judgment that reestablishes a
lost note, its failure to provide adequate protection, or to make a finding that none is
needed under the circumstances, requires reversal and remand for the court to consider
the issue. See Delia v. GMAC Mortg. Corp., 161 So. 3d 554, 556 (Fla. 5th DCA 2014).
Generally this post-proof condition is satisfied through a written indemnification
agreement in the final judgment, the posting of a surety bond, a letter of credit, a deposit
of cash collateral with the court, or "[s]uch other security as the court may deem
appropriate under the circumstances." § 702.11(1)(e), Fla. Stat. (2014).
Here, the Bank proved at the bench trial that (1) it was entitled to enforce
the note when the loss of possession occurred; (2) the loss of possession was not due
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to a valid transfer or lawful seizure; and (3) it could no longer reasonably obtain
possession of the note because it was lost while in the possession of its first law firm,
which is no longer in existence. The Bank also presented evidence to establish the
terms of the note and that it had the right to enforce it when it was lost. This evidence
was sufficient to show that the Bank was entitled to reestablishment of the lost note.
However, the trial court made no provision for adequate protection of the Blitches in the
final judgment, nor did it determine that adequate protection was unnecessary in this
case. This omission requires us to reverse the final judgment and remand for further
proceedings, at which the court must address the means by which the Bank must
satisfy this post-proof condition.
In this appeal, the Blitches contend that the Bank should not be allowed a
"second bite at the apple" to provide evidence of the adequate protection it could
provide. They contend that this court should instead simply remand for entry of
judgment in their favor. However, that remedy is not compelled here and is inapposite
to the plain language of the statute, which puts the burden on the court—not the
parties—to address the issue of adequate protection. The Bank should not be
penalized for the trial court's failure to discharge its duty to address this post-proof
condition of the final judgment. 1
1We recognize that this court stated in Correa that we will "not generally
provide parties with an opportunity to retry their case upon a failure of proof." Correa,
118 So. 3d at 956 (quoting Morton's of Chicago, Inc. v. Lira, 48 So. 3d 76, 80 (Fla. 1st
DCA 2010)). However, in Correa, the plaintiff bank failed to offer evidence to prove its
prima facie case for reestablishment of the lost note. In that scenario, the holding of
Correa controls. However, when the plaintiff bank proves its prima facie case for
reestablishment of the lost note and the trial court, in turn, fails to address the issue of
adequate protection, the holding of Correa dealing with the remedy for the plaintiff's
failure of proof is simply inapplicable.
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Moreover, at the bench trial, the Blitches did not argue that they were
entitled to judgment in their favor due to the lack of any evidence of what adequate
protection the Bank could provide nor did the Blitches request that the court provide
them with adequate protection. The Blitches may not invite error by failing to request
desired relief and then use the omission of that relief to obtain a reversal of the
judgment. See Downs v. State, 977 So. 2d 572, 574 (Fla. 2007) ("[A] party may not
invite error and then be heard to complain of that error on appeal." (quoting Cox v.
State, 819 So. 2d 705, 712 (Fla. 2002))); see also Goodwin v. State, 751 So. 2d 537,
544 n.8 (Fla. 1999). Finally, when the Blitches did point out the error on rehearing, the
trial court denied the motion without hearing argument, thus denying the Bank the
opportunity to offer such protection. Given these facts, there simply is no applicability of
a "second bite at the apple" argument, and the issue of adequate protection may be
addressed on remand.
Accordingly, we reverse the final judgment and remand for entry of an
amended final judgment that provides for adequate protection to the Blitches. If the trial
court needs to take evidence on the appropriate means of providing such protection, it
may do so.
Reversed and remanded for further proceedings.
CASANUEVA and MORRIS, JJ., Concur.
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