JONATHAN ROUFFE and RACHEL PEARL a/k/a RACHEL ROUFFE v. CITIMORTGAGE, INC.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
JONATHAN ROUFFE and RACHEL PEARL
a/k/a RACHEL ROUFFE,
Appellants,
v.
CITIMORTGAGE, INC.,
Appellee.
No. 4D16-3583
[March 21, 2018]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Jeffrey D. Gillen, Judge; L.T. Case No. 50-2011-CA-
018454-XXXX-MB.
W. Trent Steele of Steele Law, Hobe Sound, for appellants.
David Rosenberg and Jarrett Cooper of Robertson, Anschutz &
Schneid, P.L., Boca Raton, for appellee.
BELANGER, ROBERT, Associate Judge.
Appellants, Jonathan Rouffe and Rachel Pearl, a/k/a Rachel Rouffe,
(“the Heirs”), appeal the final judgment of foreclosure entered in favor of
appellee, CitiMortgage, Inc. (“Citi”). On appeal, the Heirs contend that the
trial court erred in denying their motion for involuntary dismissal at trial,
arguing that Citi failed to prove the borrower defaulted, Citi failed to
provide evidence of a forbearance agreement, and failed to establish the
correct date of default. For the reasons discussed below, we affirm in part
and reverse in part with remand.
In 2003, the borrower borrowed money to purchase her home. Citi
acquired the note and mortgage which secured the borrower’s loan.
In March 2010, the borrower failed to make payments required under
the loan. In March 2011, the borrower died, and in November 2011, Citi
filed a foreclosure action to enforce the note and mortgage. The Heirs were
heirs of the borrower, and were indispensable parties properly named in
Citi’s complaint.
At trial, Citi’s main witness testified regarding the date of default, but
provided several dates, explaining that the borrower made partial
payments for some time, so there was a date of “last full payment,” versus
partial payments received.
This witness also mentioned forbearance agreements between the
borrower and Citi, and over Citi’s objection, the Heirs’ counsel questioned
the witness regarding these agreements. Neither party, however, offered
the agreements into evidence.
After Citi rested, the Heirs moved for involuntary dismissal, arguing
that Citi failed to provide the forbearance agreements, and therefore, failed
to prove how and when the borrower defaulted. The trial court disagreed,
denied the Heirs’ motion, and eventually entered a final judgment of
foreclosure. The Heirs gave notice of appeal.
The applicable standard of review for a motion for involuntary dismissal
is de novo. Deutsche Bank Nat’l Tr. Co. v. Clarke, 87 So. 3d 58, 60 (Fla. 4th
DCA 2012). 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:
When an appellate court reviews the grant of a motion for
involuntary dismissal, it must view the evidence and all
inferences of fact in a light most favorable to the nonmoving
party, and can affirm a directed verdict only where no proper
view of the evidence could sustain a verdict in favor of the
nonmoving party.
Id.; see also Deutsche Bank Nat’l Tr. Co. v. Huber, 137 So. 3d 562, 563-64
(Fla. 4th DCA 2014). On appeal, the Heirs argue, as they did below, that
Citi failed to prove how and when the borrower defaulted.
We affirm the trial court’s ruling for two reasons: (1) the Heirs did not
have standing to challenge the borrower’s liabilities under the note and
mortgage; and (2) even if the Heirs did have standing, it was their burden
to plead the affirmative defense regarding the forbearance agreement.
In Clay County Land Trust No. 08-04-25-0078-014-27, Orange Park
Trust Services, LLC v. JPMorgan Chase Bank, National Ass’n, 152 So. 3d
83 (Fla. 1st DCA 2014), the appellant, the current owner of the property
at issue, asserted that the appellee-bank failed to give the borrower written
notice of default and an opportunity to cure as required by the mortgage.
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Id. at 84. The First District held that “[b]ecause appellant was not a party
to the mortgage, appellee correctly asserts that appellant does not have
standing to challenge any violation of these mortgage terms.” Id. The
borrower “was the only party who could plead nonperformance of these
conditions precedent.” Id.; see also Pealer v. Wilmington Tr. Nat’l Ass’n for
MFRA Tr., 212 So. 3d 1137, 1139 (Fla. 2d DCA 2017) (“At no time were the
Pealers parties to the note and mortgage. As such, the Pealers’ interest is
limited to their possession of the property and is subordinate to the bank’s
interest, which stems from the note and mortgage. Therefore, the Pealers
may participate in the bank’s foreclosure proceedings only to the extent
that they plan to exercise their statutory right of redemption….”).
We hold that since the Heirs were not parties to the note and mortgage
in this case, they lack standing to challenge the borrower’s rights and
liabilities under the contract as opposed to challenging only the amount of
damages. Clay Cty., 152 So. 3d at 84; Pealer, 212 So. 3d at 1139.
However, even if the Heirs had standing, we would still affirm. On
appeal, the Heirs argue that Citi failed to prove the borrower’s default.
Specifically, the Heirs argue that Citi was required, but failed, to allege and
prove a default of the forbearance agreement, as opposed to proving a
default of the original note and mortgage. They cite to two cases in support
of this argument: Nowlin v. Nationstar Mortgage, LLC, 193 So. 3d 1043(Fla. 2d DCA 2016), and Kuehlman v. Bank of America, N.A., 177 So. 3d
1282 (Fla. 5th DCA 2015). However, Nowlin and Kuehlman are
distinguishable insofar as both cases involved the parties who actually
signed the note and mortgage, and therefore had standing to contest
liability under the contract as modified. Nowlin, 193 So. 3d at 1044;
Kuehlman, 177 So. 3d at 1283. Here, as Citi correctly argues, and
discussed above, the Heirs were never parties to the note and mortgage,
and as such, lacked standing to litigate the borrower’s liability thereunder.
We also agree with Citi’s argument that even if the Heirs had standing,
it was their burden to plead the existence of a modification or forbearance
agreement as an affirmative defense. Accord Bank of N.Y. Mellon v. Bloedel,
43 Fla. Law Weekly D258, 2018 Fla. App. LEXIS 1242, 2018 WL 627016(Fla. 2d DCA Jan. 31, 2018) (“[W]e are certain that neither Kuehlman nor
this court’s parenthetical citation to Kuehlman in Nowlin, 193 So. 3d at
1046, purported to recede from long-settled law that modification, when
asserted as an avoidance of liability, is an affirmative defense.” (footnote
omitted)).
We agree with Citi and align our court with the well-reasoned opinion
of Bloedel.
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Bloedel reiterates well-settled law, that:
The effect of a modification to a legal agreement, to the extent
it would constitute an avoidance of all or part of a defendant’s
liability under the agreement, is an affirmative defense that
must be pled and proven by the defendant. See Fla. R. Civ. P.
1.110(d) “[A] party shall set forth affirmatively . . . any other
matter constituting an avoidance or affirmative defense.”;
BSP/Port Orange, LLC v. Water Mill Props., Inc., 969 So. 2d
1077, 1078 (Fla. 5th DCA 2007) (holding that an alleged
modification to an oral commission agreement was an
affirmative defense that had to be pled).
Notably, although we hold that the Heirs lack standing to challenge
liability in this case, they do have standing to challenge the amount due
under the note, because it affects their substantive right of redemption
under section 45.0315, Florida Statutes (2016). In this case, there was
testimony and evidence in the form of a payment history, sufficient to
present a prima facie case on damages. Wachovia Mortg., F.S.B. v.
Goodwill, 199 So. 3d 346, 348 (Fla. 4th DCA 2016) (remanding for further
proceedings because “[t]he payment history and testimony of [the bank]’s
witness were sufficient to present a prima facie case on damages and
withstand involuntary dismissal”); Ottawa Props. 2 LLC v. Cent. Mortg. Co.,
202 So. 3d 102, 103 (Fla. 4th DCA 2016) (“Because there was some, but
insufficient, evidence of the total amount of indebtedness, we reverse on
the issue of damages and remand for further proceedings.”).
However, we agree with the Heirs that the conflicting evidence regarding
the exact date of default affects the specific amount due in order to exercise
their right of redemption.
As this court held in Beauchamp v. Bank of New York, 150 So. 3d 827(Fla. 4th DCA 2014):
Beauchamp has a right of redemption wherein he may prevent
divestiture of his legal title upon payment of the amount of the
debt specified in the judgment. CCC Props., Inc. v. Kane, 582
So. 2d 159, 161 (Fla. 4th DCA 1991); § 45.0315, Fla. Stat.
(2013). Therefore, even though Beauchamp is not personally
liable for the debt, the amount of the debt owed is important
as it relates to Beauchamp’s right of redemption, specifically
as to the amount due under the judgment in order to exercise
his right to stop the foreclosure sale.
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Thus, the Bank’s failure to provide admissible evidence that
would establish the proper amount due on the note was not
harmless error. Rather, proof of the amount of debt owed was
required to allow the foreclosure, and Beauchamp’s ownership
rights and right of redemption are substantive rights that were
adversely affected by the error.
Id. at 828-29 (footnote omitted).
As in Beauchamp, we affirm the judgment of foreclosure, except as to
the amount due under the note, and remand the case for further
proceedings to determine that amount.
Affirmed in part; reversed in part; remanded for further proceedings
consistent with this opinion.
CIKLIN and KLINGENSMITH, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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