PENNYMAC LOAN SERVICES, LLC v. EDDY E. USTAREZ a/k/a EDDY USTAREZ and OSMANIS MANRESA ( 2020 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PENNYMAC LOAN SERVICES LLC,
Appellant,
v.
EDDY E. USTAREZ a/k/a EDDY USTAREZ,
Appellee.
No. 4D19-3547
[September 16, 2020]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Roger B. Colton, Senior Judge; L.T. Case No.
502019CA001667.
Nancy M. Wallace of Akerman LLP, Tallahassee, William P. Heller of
Akerman LLP, Fort Lauderdale, and Eric M. Levine of Akerman LLP, West
Palm Beach, for appellant.
Malcolm E. Harrison and Michelle Moore of the Law Office of Malcolm
E. Harrison, Wellington, for appellee.
ARTAU, J.
PennyMac Loan Services LLC (“PennyMac”) appeals the involuntary
dismissal of its foreclosure action. Because PennyMac provided sufficient
evidence to support a prima facie case, we reverse.
In 2014, Eddy E. Ustarez (“the Borrower”) executed a promissory note
secured by a mortgage expressly incorporating federal Housing and Urban
Development (“HUD”) regulations:
Regulations of HUD Secretary. In many circumstances[,]
regulations issued by the Secretary will limit Lender’s rights,
in the case of payment defaults, to require immediate payment
in full and foreclose if not paid. This Security instrument does
not authorize acceleration or foreclosure if not permitted by
regulations of the Secretary.
The HUD regulation at issue in this case provides, in pertinent part:
(b) The mortgagee must have a face-to-face interview with the
mortgagor, or make a reasonable effort to arrange such a
meeting . . . .
24 C.F.R. § 203.604(b) (2019).
PennyMac filed a complaint to foreclose on the Borrower’s mortgage. In
response to the complaint, the Borrower affirmatively pled that PennyMac
failed to satisfy a condition precedent to foreclosure by not conducting a
face-to-face meeting with the Borrower pursuant to 24 C.F.R. § 203.604(b).
PennyMac responded that it did make a reasonable effort to arrange a face-
to-face meeting with the Borrower, and that the meeting was not a
condition precedent to foreclosure.
The pertinent regulation provides that a face-to-face meeting is not
required if: “A reasonable effort to arrange a meeting is unsuccessful.” 24
C.F.R. § 203.604(c)(5) (2019). The regulation further provides that a
reasonable effort to arrange a face-to-face meeting “shall consist at a
minimum of one letter sent to the mortgagor certified by the Postal Service
as having been dispatched” and “at least one trip to see the mortgagor at
the mortgaged property . . . .” 24 C.F.R. § 203.604(d) (2019).
At trial, PennyMac presented evidence that it mailed a certified face-to-
face letter to the Borrower and made at least one trip to the mortgaged
property. PennyMac’s field representative testified she visited the property
to arrange a face-to-face meeting with the Borrower. However, it appeared
no one was home that day, so she taped a letter to the Borrower’s front
door as required under company policy. The letter urged the Borrower to
contact PennyMac to arrange a face-to-face meeting.
PennyMac introduced, and the trial court admitted, copies of: (1) the
face-to-face letter certified by the Postal Service; (2) PennyMac’s letter log
detailing outgoing correspondence; (3) the field representative’s report
documenting the visit to the property; and (4) a copy of the face-to-face
letter that was taped to the Borrower’s front door.
The Borrower testified that he was home on the day of the alleged visit,
but no one knocked on his door or rang his doorbell. He further testified
that he found nothing taped to his front door.
After the parties rested, the trial court sua sponte entered an
involuntary dismissal.
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Note and Mortgage
On appeal, PennyMac contends that 24 C.F.R. § 203.604 does not
operate as a condition precedent to foreclosure, as it is an administrative
regulation subject to monetary sanctions and not a bar to filing a
foreclosure complaint.
We agree with that argument. In Bank of America, N.A. v. Siefker, 201
So. 3d 811 (Fla. 4th DCA 2016), we refused to construe section 559.715,
Florida Statutes (2012)—which requires a creditor to provide notice of
assignment to the debtor no later than thirty days before any action to
collect the debt—as a condition precedent to bringing a foreclosure suit.
Id. at 818. We explained that because the Legislature provided sanctions
for a violation of that statute—and because a bar to filing suit was not
provided by the Legislature—we could not alter the statutory scheme by
construing section 559.715 as a condition precedent to foreclosure. Id.
Moreover, in Gunderson v. School District of Hillsborough County, 937 So.
2d 777 (Fla. 1st DCA 2006), our sister court explained: “Provisions of a
contract will only be considered conditions precedent or subsequent where
the express wording of the disputed provision conditions formation of a
contract and or performance of the contract on the completion of the
conditions.” Id. at 779. Thus, we agree that the pertinent HUD regulation
here is not, in and of itself, a condition precedent to foreclosure.
However, the text of the Borrower’s note and mortgage “does not
authorize acceleration or foreclosure if not permitted by regulations of the
Secretary.” And 24 C.F.R. § 203.500 provides that “no mortgagee shall
commence foreclosure or acquire title to a property until the requirements
of [subpart C-servicing requirements, inclusive of § 203.604] have been
followed.” 24 C.F.R. § 203.500 (2019). As a result, PennyMac
contractually agreed to self-impose the HUD regulation on itself before
accelerating and foreclosing here. See Bank of Am., N.A. v. Jones, 294 So.
3d 341, 342–43 (Fla. 4th DCA 2020) (holding that although note and
mortgage there required compliance with HUD regulation, mortgagee
established a prima facie case of excusal from the face-to-face meeting
requirement upon borrower’s refusal to meet).
Prima Facie Case for Foreclosure
Nonetheless, PennyMac presented sufficient evidence to withstand
involuntary dismissal.
The standard of review applicable to a trial court’s ruling on a motion
for involuntary dismissal is de novo. Deutsche Bank Nat'l Tr. Co. v. Huber,
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137 So. 3d 562, 563 (Fla. 4th DCA 2014). “A motion for involuntary
dismissal under Florida Rule of Civil Procedure 1.420(b) in a non-jury trial
can be equated to a motion for directed verdict in a jury trial.” Id. (citing
Deutsche Bank Nat'l Tr. Co. v. Clarke, 87 So. 3d 58, 60 n.1 (Fla. 4th DCA
2012)).
When reviewing an involuntary dismissal, the appellate court must
view the evidence and all inferences of fact in the light most favorable to
the nonmoving party. Huber, 137 So. 3d at 563; see also Boca Golf View,
Ltd. v. Hughes Hall, Inc., 843 So. 2d 992, 993 (Fla. 4th DCA 2003) (“Like a
directed verdict in a jury trial, an involuntary dismissal is appropriate if
the plaintiff fails to establish a prima facie case.”).
PennyMac submitted prima facie evidence showing it mailed a certified
face-to-face letter to the Borrower and made the minimum one visit to the
property, where it posted an invitation to conduct a face-to-face meeting,
as required by the self-imposed HUD regulation. When this evidence, and
all its reasonable inferences, are considered in the light most favorable to
PennyMac, the documentary and testimonial evidence were undoubtedly
sufficient to present a prima facie case for foreclosure and withstand
involuntary dismissal. Accordingly, we reverse the order of involuntary
dismissal and remand this case for further proceedings consistent with
this opinion.
Reversed and Remanded.
DAMOORGIAN and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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