IN THE CIRCUIT COIIRT OF THE SIXTH JT]DICIAL CIRCUITIN AND F',OR pItiELLAS COUNTY, FLORIDA
CIYIL DIYISION
DEUTSCHE BAI{K NATIONAL TRUST COMPANY,
PLAINTIF'tr',
cAsE NO. 11-38s-Cr-8
v
NADINE HOUSTON,
DEFENDANT.
DEFEND.A,NT'S AMENDED ANSWER AJ\D A.F'F'IRMATIVT], DEF'ENSES TOPLAINTItr'F'S COMPL{NT
Defendant NADINE HOUSTON (hereina.fter ,.Defendant,,), by and through t}le
undersigned counsel, respectfully frles with this court Defendant's Amended Answer and
Affirmative Defenses to PlaintifPs complaint, pursuant to Fla. R. civ. pro. 1.190, l.l lO(c), and
1.110(d) and precedent case law, and in support states as follows:
1. Admitted for jurisdiction purposes only.
2. Denied.
3. calls for a legal conclusion to which no response is required. without waiving said
objection, without knowledge and therefore denied.
4' calls for a legal conclusion to which no response is required. without waiving said
objection, without knowledge and therefore denied.
5 . Denied. Defendant specifically denies that Plaintiff is the "holder" of the subj ect note
as it has alleged that the note has been lost, stolen, or destroyed.
6. Denied.
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7. Denied tlat Plaintiff has authority to accelerate the amounts allegedly owed under the
note and mortgage.
8. Denied. Defendant specifically denies that the named-plaintiff "retained" the law
firm which has filed this action as the actual party prosecuting this action is PlaintifPs
alleged "attomey-in-fact."
9.. Without knowledge and therefore denied.
i0. Admitted for jurisdiction purposes only.
1 1. Without knowledge and therefore denied.
12. Without knowledge and therefore denied.
13. Without knowledge and therefore denied.
14. Without knowledge and therefore denied.
15. Denied that Plaintiff has complied with Fla. Stat. 957.011 as it has failed to deposit
the requisite "cost bond" with the Court.
16. Calls for a legal conclusion to which no response is required. Without waiving said
objection, without knowledge and therefore denied.
17. Without knowledge and therefore denied.
18. Without knowledge and therefore denied.
19. Without knowledge and therefore denied.
20. Without knowledge and therefore denied.
21 . Without knowledge and therefore denied.
22. Without knowledge and therefore denied.
WTTEREFORE- based upon the foregoing, Defendant prays for judgnr.ent in her favor,
an award of attomey's fees and costs pursuant to Fla. Stat. $57.105(7) and the subject loan
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documents for those fees so wrongfuily incuned by the necessity of defense, and any otler relief
the Court deems just and proper.I
GENERAL ALI.,}EGATIONS
i. Defendant retained the Law Firm of Matthew D. weidner, p.A. to represent her in thisl
matter and is obligated to pay said law firm a reasohable fee for its services.
2. The subject mortgage obligates the borrowgr to pay the lender,s attomey,s fees and costs
ifthe lender is successfi;l in a foreclosure action.
3. The subject note obligates the borrower tq pay the lender's attomeys fees and costs for
enforcement of the note,
4. Because this action was wrongfirlly brought for the reasons stated herein, Plaintiff is
obligated to pay Defendant's attomey's fees and costs incuned in this action pursuant to the
mortgage, the note, and Fla. Stat. $57.105(7).
AFFIRMATryE DEFENSE I
Waiver
with regard to a]l counts in the complaint, plaintifrs chims are barred, in whole or in
part, under the doctrine of waiver. Specifically, plaintifps agent sAXoN MORTGAGE
(hereinafter Saxon) represented to Defendant that it would accept a reduced monthly mortgage
payments and not foreclose on the property. Saxon, acting on plaintiffs behalf, did in fact
accept reduced mortgage payments until october 1, 2010 when plaintiffls "new" agent, ocwEN
LOAN SERVICING, LLC (hereinafter "ocwen") refused to accept Defendant's monthly check
and required a higher payment amount thaa agreed upon in the modification with saxon.
Moreover, Saxon's acceptaace of a modified payment amount thereby relinquished plaintifps
right to foreclose. In sum, plaintiff exhibited the essential requirements of waiver: (1) the
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Morgan Mortg. Acquisition com., 51 so.3d 1176, ll79 (Fla. 2d DCA 2010) ("Because J.p.
Morgan did not own or possess the note and mortgage when it filed its lawsuit, it lacked standing
to maintain the foreclosure action.") ; Gonzalez v. Deutsche Bank National Trust Comoanv. 3t
Fla. L. weekly D950a (reversing summary judgment where foreclosing plaintiff '.failed to
establish its standing by showing that it possessed the note when it filed the lawsuit."). see also
Mclean v. JP Morpan Chase- 79 So. 3d 170, 174 (Fla.4thDCA2012) ("the plaintiffmust prove
that it had standing to foreclose when the complaint was frled."); Riebv v. Wells Fareo Bank.
N.A., 84 So. 3d 1195, 1196 (Fla. 4th DcA 2012) (reversing summary iudgment of foreclosure
because "[t]he Bank has not shown that it was holder of the note at the time the complaint was
filed."); Hall v. Reo Asset Acquisitions. LLC, 84 so. 3d 3gg (Fla. 4th DcA 2012) (reversing
summary judgment on the basis of Mcl-ean.); Jeff-Ray com. v. Jacobson, 566 So. 2d gg5, gs6
(Fla. 4th DCA 1990) (holding that a complaint to foreclose a mortgage failed to state a cause of
action when it was filed because the assignment of mortgage to the plaintiff was dated four
months after the lawsuit was filed.)
Here, by its own admission, plaintiff was not in possession of the original note and
mortgage at the inception of the action as it claims the note was lost, stolen, or destroyed.
Moreovet, Plaintiff has presented no admissible evidence that it had the right to enforce the note
and mortgage at the time it instituted this action. The purported ..assignment of mortgage,'
creates no interest in Plaintiff because the assignor, MERS, was not the party the note was made
out to or the party whom the note was transfered and negotiated to. Therefore, the ..assignment"
is a nullity because it merely assigns the mortgage without the underlying debt. See Sobel v.
Mutual Development. Inc., 313 So. zd77,7g (Fla. lst DcA 1975) (providing that.6A morrgage
is a mere incident of, and aacillary to, the note or other obligation secured thereby, and an
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assignment of the pledge of the mortgage without an assignment of the pledge of the note or
obligation secured thereby creates no right in the assignee or pledge.,,
Furthermore, the real party which has instituted and prosecuted this action is Ocwen.
ocwen, which purports to be Plaintifls "attomey-in-fact," is the alleged "servicer" of the debt.
"In securitization cases, a servicer may be considered a party in interest to commence legal
action as long as the trustee joins or ratifies its action." Elston/Leetsdale. LLC v. CWCaptial
Asset Manasement. LLC, 87 So. 3d 14, 17 (Fla.4th DCA 2012). ocwen, however, relies on
nothing more than its own allegations and affidavit to support its argument that it has standing to
sue on behalf of the trust. This, however, is insuffrcient evidence to prove that it is authorized to
sue on the trust's behalf. .lee Elston/Leetsdale, 87 so. 3d at 17-1g. Therefore, ocwen has failed
to properly plead it has standing to sue
Therefore, because Plaintiff did not own or possess the note at the inception of the action,
it lacks standing to sue and thus has failed to plead a cause of action for mortgage foreclosure.
AFF'IRMATIVE DEFENSE VI
Failure to Plead Real Partv in lnterest
with regard to all counts in the complaint, the plaintiffs claims are barred, in whole or
in part, because the party instituting this action is not the real party in interest. specifically, the
true party prosecuting this action is not the party named in the caption of tle complfit but
ocwen. ocwen, which purports to be plaintiffls "attomey-in-fact," is the alleged .,servicer,' of
the debt. "In securitization cases, a servicer may be considered a party in interest to co11lmence
legal action as long as the trustee joins or ratifies its action." Elston/Leetsdale. LLC v.
CWCaptial Asset Manaeement. LLC- 87 So. 3d 14, l7 (Fla.4th DCA 2012). Ocwen, however,
relies on nothing more than its own allegations and affidavit to support its argument that it has
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standing to sue on behalf of the kust. This, however, is insuffrcient evidence to prove that it is
authorized to sue on the trust's behalf. See Elston/Leetsdale, 87 So. 3d at 17-18. Therefore,
failed to exhibit that it is either the reai party in interest or one who is acting on that party's
behalf.
AX 'IRMATIVE DEX'ENSE VII
Negative Averment as to Condition Precedent and Failure to Give Notice and Abilitv to Cure
With regard to al1 counts in the Complaint, the Plaintiffs claims are baned in whole or in part
because of its failure to fulfill a condition precedent. Fla. R. Civ. Pro. 1.120(c). Specifically,
clause twenty-two (22) of the subject mortgage reads, in pertinent part, that
[Plaintiff] shall give notice to [Defendant] prior to acceleration followingBorrower's [alleged] breach of any covenant or agreement in this SecurityInstrument...The notice shall specifr: (a) the default; (b) the action required tocure the default; (c) a date, not less than 30 days from the date the notice is givento Borrower, by which the default must be cured; and (d) that failure to cure thedefault on or before the date specified in the notice may result in acceleration ofthe sums secured by this Security agreement, foreclosure by judicial proceedingand sale of the Property . The notice shall further inform [Defendantl of therieht to assert in the foreclosure nroceedins the non-existence of a default oranv other defense of [Defendantl to acceleration and foreclosure.
Bold emphasis added. The word "shall" in clause 22 created conditions to foreclosure which
Plaintiff must satisfii. Konsulian v. Busev Bank. N.A., 61 So. 3d 1293,1285 (Fla. 2d DCA
2011). Additionally, "[u]nder Florida law, contracts are construed in accordance with their plain
language, as bargained for by the parties." Id. Thus, the notice of default and opportunity to
cure must track the contractual language as written in the clause 22 of the mortgage. Plaintiff,
however, failed to properly give the requisite notice which tracks the language of clause 22 of
the mortgage. Because Plaintiff failed to comply with such this condition precedent to
foreclosure, its action must be dismissed. see Rashid v. Newberrv Federal Savinss and Loan
('Reshtsl-U"), 526 So. 2d 772 (Fla.3d DCA 1988) (dismissing foreclosure action for
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Association
failure of mortgagee to give required notice of default to mortgagor pdor to the institution of the
foreclosure proceeding).
AF'FIRMATIVE DEF'ENSE VIII
Nesative Averment as to Authenticitv
With regard to all counts of the Complaint, the PlaintifF s claims are barred in whole or in
part because the Defendant affirmatively questions the veracity and authenticity of any possible
endorsement made on any purported note or allonge the Plaintiff may produce pursuant to Fla.
Stat. $673.3081 (2011), assuming, without conceding, tlnt such endorsement exists.
Specifically, the Defendant questions the veracity and authenticity of any possible endorsement
because: (1) there is no mention in the complaint as to who the endorser is; (2) there is no
mention in the complaint as to what authority the purported endorser may so endorse; (3) there
is no mention when the endorsement was effectuated; and (4) the endorsement contains two
parties which the note is payable to, with the second containing a hand wdtten notation at the end
of it.
AFF'IRMATI}'E DEFENSE IX
Non-neeotiabilifi of Subiect Note Prohibits Plaintiff from Enforcins it Pu$uant to Fla. Stat.
. 8673. et sea
With regard to all corurts of the Complaint, the Plaintiff s claims are barred in whole or in
part because the subject note that the Plaintiff may produce is not a negotiable instrument and
therefore the Plaintiff cannot claim enforcement ofthe note pursuaat to Fla. Stat. $673, et seq. ln
order for an instrument to be negotiable it must not, amongst other things, ,,state any other
undertaking or instruction by the person promising or ordering pa),ment to do any act in addition
to the palment of money." $673.10a1(1)(c). Indeed, as a prerequisite to any action on a noteo
determined bv the ch"!!a ljehts of the narties must be
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aracter of the promissorv note. In
this case, the promissory note meets the requirements of section 673.104, Florida Statutes (1991)
and is thus a negotiable instrument." American Bank of the South v. Rothenbers , 598 So.2d
289,291 (Fla. 5th DCA 1992). Bold emphasis added. Thus, the Rothenbers Court articulated a
crucial first step in the analysis of a mortgage promissory note: a decision of whether the
g@!g of the note at issue is that of a negotiable instrument.
Unfortunately, more recent appellate decisions have not mentioned this essential first
step, most likely because the character of the promissory note is not being questioned at the trial
court level. ,See e.g. Tavlor v. Deutsche Bank National Trust Company, 44 So. 3d 618,622 @la,
5th DcA 2010) (merely providing that "a promissory note is a negotiable instrument" without
any consideration as to how a promissory note is in fact negotiable); Riggs v. Aurora Loan
Services. LLC. 36 So.3d 932 ,933 @la. 4th DCA 2010) (providing that "[t]he note was a
negotiable instrument subject to the provisions of chapter 673, Florida statutes (200g)"); perry
v. Fairbanks, 888 So. 2d 725,727 (Fla. 5th DcA 2004) (stating that "[a] promissory note is
clearly a negotiable instrument within the definition of section 673.104I(l)" without providing
an analysis of the statute).
While there is no appellate case law in Florida (and precious little in the entire country)
which has ever interpreted this portion of the statute to mortgage promissory notes, the second
District has interpreted this section with respect to retail installment sales contracts in GMAC v
Honest Air Conditionins & Heatins- Inc.. et al.. 933 So. 2d 34 Qla.2dDCA 2006). There, the
court noted that the RISC created certain inshuctions or undertakings in both the ,.person
promising" to pay and the creditor ordering payment, including: (1) an instruction onto the
debtor to not remove the vehicle from the United States; (2) an instruction onto the debtor to
reimburse advances made by the creditor in payment of repair or storage bills; and (3) an
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instruction onto the creditor to dispose of the collateral in certain ways following repossession
Id. at 37. Most nodablg to our Durposes here. the Second District noted that the RISC
required the debtor to pav fees for late narment or dishonored checks. Id. ultimately, the
Second District held that these obligations "bring the RISC within the exclusionary language of
section 673.1041(1)(c), which provides that a negotiable instrument'does not state any other
undertakings' in addition to the payment of money." Id. The court reasoned that this must be so
because "[a] negotiable instrument should be 'simple, certain, unconditional, and subject to no
contingencies. As some writers have said, it must be a courier without luggage .,,, Id. (citing
Masonv. Flowers. 91FLa.224,107 So.334,335 (Fla. 1926)).
The subject note contains the following obiigations other than the payment of money
a. The instruction that each pal,rnent made will be applied first towards interest and
then towards principal in clause 3(A);
b. The instruction that each payrnent be made to P.O. Box 808911, Kansas City, MO
64184, ot at a dtfferent place if required by the lender in clause 3(A);
c. The instruction that the interest-rate "index" be tied to a figure reported by the
Wall Street Journa"l in clause 4(B);1
d. The instruction that the lender must send notice of any change in the interest rate
in clause 4(F);
e. The instruction that the bonower to tell the iender, in writing, if bonower opts to
may prepay in clause 5;
I This instruction also means that the note is no longer an 'hnconditional promise,,to pay. This is because the notewoxld te subject to and governed by the wall street Joumal, see Fla. stat. $673.10610), and the rights andobligations with respect to the note would likewise be govemed by the wful Street ioumal, see F'la. Stat.$673.1061(c).__See aho Holly Hills Acres. Ltd. v. Charter Bank of Gainesville ,3t4 So.2dZog,2l I (Fla. 2d DCA1975) (providing that "The note having incorporated th" t.r*r of th" p*chase money mortgage was notnegotiable... lbecause] [t]he note, incorporating by reference the terms of the mortgage,'did noi "contain theunconditional promise to pay.")
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f. The instruction that if a "law" is "finally interpreted" so that the interest or other
loan charges collected or to be cotlected in connection with the loan exceed
permitted limits then (1) any such loan charge will be reduced, and (2) any
amounts in excess of limit paid must be retumed to bonower in clause 6;
g. The instruction that the borrower pay a late charge if the lender has not received
palment by the end of fifteen calendar days after the date payment is due in
clause 7(A);
h. The instruction that the lender may send tle bonower notice of default in clause
7(c);
i. The instruction that the borrower must pay the lender's court costs and attomey's
fees in the event the lender incurs same during due to enforcement of the note
after default in clause 7(D);
j. The instruction that the lender send any notices that must be given to the borrower
pursuant to the terms of the subject note by either delivering it or mailing it by
frst class mail in clause 8;
k. The instruction that the borrower send any notices that must be given to the lender
pursuant to the terms of the subject note by eithff delivering it or maiiing it by
first class mail in clause 8; and
l. The instruction that if, within 36 months fiom the date the Security Instrument is
executed bonower makes a full prepayment or one or more partial prepayments,
and the total of all such prepayments in any l2-month period exceeds 20Yo of +Jte
original principal amount of the loan, bonower will pay a prepayment penalty
equal to 6 months' advance interest on the amount by which the total of her
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prepayments within any l2-month period exceeds 20% of the original principal
amount of the loan in the prepayment addendum.
Because the subject note contains undertakings or instructions other than the payment of
money, the subject note is not negotiable and therefore the Plaintiff cannot claim that it is
entitled to enforce same pursuant to Fla. Stat. $673, ef seq.
In addition to, or in altemative of, the following argument, even if the subject note is
deemed negotiable, Fla. stat. $673, et seq. (and therefore negotiation) cannot be utilized to
transfer the non-negotiable mortgage, which is a separate transaction. ,See in Sims v. New Falls
comoration, 37 so. 3d 358, 360 (Fla. 3d DCA 2010) (providing that a note and mortgage were
two separate transactions). The terms of the mortgage are expressly not incorporated into the
terms of the note; rather, they are merely referenced by the note. see clause 11 of the note.
Indeed, nowhere in the subject note is the right to foreclose the mortgage a remedy for default
nnder the note. It is clause 22 of the mortgage, on the other hand, which allows this. clawe 22
of the mortgage, however, cannot be tmnsfened to plaintiff by negotiation as the mortgage is not
negotiable since it contains a myriad of instructions and undertakings other than the pa;,rnent of
money. ,see e.g. clause 4 of the mortgage (requiring the borrower to pay all taxes, assessments,
charges, fines, and impositions and requiring the borrower to promptly discharge any lien which
has priority over the security instrument); clause 5 of the mortgage (requiring the borrower to
maintain property insurance and dictating explicit steps the lender might take to obtain insurance
coverage); clause 6 (requiring the borrower to occupy and use the subject property as the
bonower's principal residence within 60 days after execution of tre mortgage and requiring the
borrower to occupy the property for at least one year after the date of occupancy unless the
lender agrees otherwise in writing); clause 7 (permitting the lender or its ,.agents,, to make
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reasonable inspections onto the property and, if reasonable cause exists, permitting the lender to
inspect the interior ofthe property); and clause 9 (permitting the lender, amongst other things, to
break down the borrower's door and change the locks contained thereon if there is a default
under tle covenants and agreements of the mortgage).
To the extent Plaintiff argues that during a foreclosure action the note and mortgage
somehow "rnerge" into one document because the "mortgage follows the note", merging the
terms of the mortgage into the note destroys any negotiability the note might originally have.
see Holly Hill Acres Ltd. v. charter Bk. of Gainesville, 314 So. 2d209,zlr (Fla. 2d DCA 1975)
(holding that "[t]he note having incorporated the tems of the purchase money mortgage was not
negotiable.")
Finally, the note cannot be considered negotiable because even though the terms of the
mortgage are not expressly incorporated into the note, the note is stil1 subject to, and govemed
by, the mortgage. specifically, clause 25 of the mortgage provides that the bonower waives the
right to trial by jury arising out ofor in any way connected to either the mortgage or the note.
Because the note is therefore subject to and govemed by the term in this separate writing, it is
not an "unconditional" promise to pay and is therefore not a negotiable instrum ent. See Fla. Stat.
$673.1061@) and (c).
AFFIRMATTVE DET'ENSE X
Ulclean Handsffnconscionable Mortgage Foreclosure - Failure to Complv with l5 U.S.C.{1701(cX5)
with regard to all counts in the complain! the plaintiffs claims are barred, in whole or
in part, because the Plaintiff comes to court with unclean hands. Foreclosure of a mortgage is an
equitable remedy. See $wan Landine Develooment, LLC v. Florida Caoital Bank. N.A.. 19
so.3d 1068' 1072 (Fla.2d DCA 2009); Sinsleton v. crelmar Assocs.. gg2 so.2d 1004, 1008
t4
(F1a.2004); Smiley v. Manufactured Hous. Assocs. III Ltd. p'ship , 679 so.2d 1229, 1232 (Fla.2d
DCA 1996). Moreover, because foreclosure is aa equitable remedy, ..[it] may be denied if the
holder of the note comes to the court with unclean hands or the foreclosure would be
unconscionable." Knisht Enerev services. lnc. v. Amoco oil co., 660 so.2d 7g6,7gg (Fla. 4th
DCA 1995). Plaintiff comes to this Court with unclean hands or, in the altemative, the mortgage
foreclosure claim is unconscionable, because plaintiff has failed to comply with 15 u.s.c.
$1701(c)(5) which requires, inter alia, that homeowners obligated under residential mofigages
be given notification of availability of homeownership counseling offered by the creditor within
45 days of a home loan payment default. Notwithstanding this federal initiative, plaintiff has
failed to allege that it has given Defendant the requisite notice.
In cross v. Federal National Mortease Association, 359 so. 2d 464, 465 (Fla. 4th DCA
1978), the Court stated ttrat while "HUD guidelines are not mandatory procedures constituting
conditions precedent to foreclosure... given the purpose of this federal Act and the
recommended efforts to obviate the necessity of foreclosure, any substantial deviation ftom the
recommended nomr might be considered by the trial court under the heading of an equitable
defense." Therefore, this court may consider a deviation of $1701(c)(5) under the guise of an
equitable defense.
AFF'IRMA'TTVE DEFENSE )ilI
Failure to Prooerlv Veri& Comolaint
With regard to all counts in the Complaint, the PlaintifP s claims are barred in whole or in
part because Plaintiff has failed to properly verify its complaint in accordance with Fla. R. civ.
P. 1.110(b). Specifically, the Frorida Supreme court amended Rure r.1r0(b) to requtue
verification of mortgage foreclosure actions so that plaintiffs would have incentive to investigate
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who owns and holds the note and mortgage sued upon. This suggests that the Court required the
plaintiff itself, as opposed to some third-party, to veri8r the complaint. Here, the Complaint is
verified by a party other than the Plaintiff. It is also unclear how this third party may verifu
documents in.Plaintiffs name. Therefore, Plaintiffs action is subject to dismissal pursuant to
Rule 1.420@) for failure to comply with the Florida Rules of Civil procedure.
In addition to, or in altemative of, the foregoing, the complaint is not properly verified
because Plaintiff has failed to produce the written power of attomey which authorizes the verifier
to verify mortgage foreclosure complaints on Plaintiffs behalf. A power of attomey is defined
as a written authorization to an agent to perform some specified act or acts on behalf of his
principal. Am. Jur. 2d, Agency $23. The primary purpose of a power of attomey is not to define
the authority of the agent as between himself and his prinoipal, but to evidence the authority of
the agent to third parties with whom the agent deals. Id. It is imperative that a power of attomey
be in writing because "Powers of attomey are strictly construed. They will be held to gant only
those powers that are specified and will be closely examined in order to ascertain the intent of
the principal." Kotsch v. Kotsch, 608 so. 2d 879, 880 (Fla. 2d DCA 1992) (holding power of
attomey specifically $anting authority to son to provide for father's lifetime maintenance aad
care did not authorize son to tmnsfer father's assets into trust to protect tlem from father's wife)
(clrirg Falls at Naples. !td. v. Bamett Bank of Naples. N.A.. 603 so. 2d 100 (Fla. 2d DCA rg92)
(Altenbemd, J., concurring)) ; see Carrinston Place of St. Pete- LLC v. Estate of Milo ex rel.
Brito, 19 So. 3d 340, 341-42 (Fla.2d DCA 2009) (holding power of attorney granting agent
authority to manage principal's property interests did not confer on the agent power to enter into
arbitration agreements).
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WHEREI'ORE, based upon the foregoing, Defendaat prays for judgment in her favor,
an award of attomey's fees and costs pursuant to Fla. stat. $57.105(7) and the subject loan
documents for those fees so wrongfirlly incuned by the necessity of defense, and any other relief
the Court deems just and proper.
DEMAND F'ORATTORNEY'S F'EES AND COSTS
Defendant hereby demands an award of attomey's fees ald costs, pursuant to Fla. Stat.
$57.105(7) and tbe subject loan documents, for those fees so wrongfully incuned by the
necessity of this defense.
MOTION TO STRIKE CLAIM FORDEB'ICIENCY OR, IN TIm ALTERNATIVE,DEMAI\ID FOR TRIAL BY JURY
Defendant motions this Court to strike PlaintifPs claim for a deficiency. PlaintifP s
action, by its own admission, is an in rem action for mortgage foreclosure. Mortgage foreclosure
is an equitable action over which the law side has no jurisdiction. See Fla. Stat. $702.01 (2011);
Adams v. Citizens Bank of Brevard. 248 So. 2d 682,684 (Fla. 4th DCA 1971). When a debtor
defaults on a debt secured by real property, a creditor has two remedies: (1) she may bring aa
action at law to recover on the promissory note or other written contract of the debt; or (2) she
may bring an equitable action to foreclose the property securing the debt. see U.S. v. Alvardo, 5
F.3d1425, 1428(1lthCir. 1993). Seealso55Am.Jur.Morrgagesg5at(1971);RichardR.
Powell, The Law of Real Property fl461 (1993) (noting that different limitation periods for "an
equitable action to foreclosure" and "a law action on debt"). Although Fla. stat. $702.06 permits
the entry of a deficiency decree in a foreclosure proceeding, it does not blur the line between law
and equrty; rather, it allows a creditor to pursue tlte two remedies simultaneously. See generally
Alvardo. 5 F. 3d at 1128-29. "Thus, in a foreclosure action, the creditor does not seek to recover
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money directly from the debtor; rather. he seeks onlv to satisfv the debt throush seizure and
sale of the propertv;' Id. Bold emphosis added.
Since Plaintiff has elected to only pursue a mortgage foreclosure action, it has
consequently elected to pursue the in rem remedy available to it and not the in personam remedy.
This Court therefore stands in equity and has no jurisdiction to adjudicate matters reserved for
the law side. As stated previously, $702.06 does not blur a cause of action for mortgage
foreclosure into a cause of action for breach of promissory note; rather, it allows a foreclosing
creditor to simultaneously prosecute both causes of action. This, however, requires a two-count
complaint: (1) one for mortgage foreclosure; and (2) one for breach of promissory note. Since
PlaintifPs pleading only prays for mortgage foreclosure, Plaintiff has relinquished its right to
pursue the two remedies simultaneously and therefore must file a new complaint alleging breach
ofpromissory note if it wishes to pursue any deficiency judgrnent it might claim it is entitled to.
In addition to, or in the alternative of, the foregoing, Defendant demands a trial by jury
on the issue ofdeficiency, and all other claims, defenses, and issues so triable, pursuant to Fla. R.
Civ. P. 1.430.
CERTIFICATE OF SERVICE
I HEREBLCERTIFY that a true and conect copy of the foregoing has been fumished byemail on this \O*'day of october, 2012 to Grant J,tisondo, Esq., ittorney for plaintffi [email protected]; and Bennett L. Rabin, Esq., Attomey for Defendant patriot sq.Condominium Association, at [email protected].
By.721,*.4J f O ->MICHAEL P. FUINO, Esq.Matthew D. Weidner, P.A.Attomey for Defendant1229 Central AvenueSt. Petersburg, FL 33705(727) 894-3159FBN: 84191
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