Appeal No. Case No. 5D14-0511

IN THE 5th DISTRICT FLORIDA COURT OF APPEALS

!THOMAS WEBSTER,

Appellant,

v.

JP MORGAN CHASE BANK, Appellee.

APPEAL IN CAUSE NO. 2009-CA-0074735

!IN THE CIRCUIT COURT OF BREVARD COUNTY, FLORIDA

Honorable Robert T. Burger, presiding

!____________________________________________

APPELLANTS’ INITIAL BRIEF

____________________________________________ !

Respectfully submitted,

/s/ George Gingo /s/ James Orth George Gingo FBN 879533 James Orth, FBN 75941 400 Orange Street 400 Orange Street Titusville, FL 32796 Titusville, FL 32796 321-264-9624 321-264-9624 866-311-9573 (Fax) 866-311-9573 (Fax) gingo.george@gmail.com jamesorthlaw@gmail.com

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!TABLE OF CONTENTS

TABLE OF AUTHORITIES .............................................................................ii

STATEMENT OF THE CASE AND FACTS ....................................................1

I. Introduction ............................................................................................. 1

II. Appellant’s Statement of the Facts ..........................................................1

STANDARD OF REVIEW................................................................................9 !SUMMARY OF THE ARGUMENT ................................................................9

ARGUMENT…………………………………………………………………10

ISSUE: WHETHER A MORTGAGOR WHO DID NOT SIGN THE NOTE IS ENTITLED TO CURE THE DEFAULTED MORTGAGE LOAN………………………..10 !CONCLUSION ..............................................................................................13

CERTIFICATE OF COMPLIANCE WITH FONT STANDARD..................14

CERTIFICATE OF SERVICE ........................................................................14

TABLE OF AUTHORITIES

CASES

!Konsulian v. Bank 61 So.3d 1283 (Fla. 2d DCA, 2011)………………………………………. 12 !Pitts v. Pastore 561 So.2d 297 (Fla. 2d DCA, 1990)……………………………………… 11 !Samaroo v. Wells Fargo Bank Case No. 5D13-1585 (Fla. 5th DCA, March 28, 2014)……………………11

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!Sudhoff v. Federal National Mortgage Association 942 So.2d 425 (Fla. 5th DCA, 2006)……………………………………….11 !!RULES

Fla. R. App. P. 9.130(b)(1)(a)……………………………………….………1 !!FLORIDA CONSTITUTION !Article X, Section 4…………………………………………………………9, 10 !

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STATEMENT OF THE CASE AND FACTS

I. Introduction

This appeal arises from a judgment of foreclosure entered against the Appel-

lant homeowner, THOMAS WEBSTER (“WEBSTER”), in favor of JP MORGAN

CHASE BANK (the “BANK”). The judgment was entered after a bench trial. The

Appellate Court of Florida has jurisdiction pursuant to Florida Rules of Appellate

Procedure, Rule 9.130(b)(1)(a).

II. Appellant’s Statement of the Facts

The one-count mortgage foreclosure complaint was originally filed by Chase

Home Finance, LLC on December 31, 2009. (R. 1) In paragraph 5 of the com-

plaint, the Bank pled that the property was owned by Patrice Kelty (hereafter,

“Kelty”) and Webster. The Bank attached a copy of the Note to its complaint. (R.

24 - 26) The Note was signed by Patrice Kelty, but it was not signed by Webster.

The Bank attached a copy of the mortgage to its complaint. (R. 7 - 18) Webster

had signed the mortgage. (R. 18) Page 1 of the mortgage stated that Kelty and

Webster were husband and wife. (R. 7) Under Webster’s signature line on the

mortgage, Webster was identified as “Borrower”. (R. 18) The Complaint was for

in rem relief only to foreclose on the property because Kelty had filed a bankruptcy

and discharged her liability on the note. (R. 1, paragraph 1; Transcript, page 101,

lines 8 - 12)

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Paragraph 13 of the mortgage states:

Joint and Several Liability, Co-signers; Successors and Assigns Bound.

Borrower covenants and agrees that Borrower’s obligations and liability shall be joint and several. However, any Borrower who co-signs this Securi ty Instrument but does not execute the Note (a “co-signer”) (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer’s interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument, and (c) agrees that Lender and any other Borrower can agree to extend, mod ify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer’s consult.

Subject to the provisions of Section 18, any Successor in Interest of Borrow er who assumes Borrower’s obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower’s rights and benefits under this Security Instrument. Borrower shall not be released from Borrower’s obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of Lender.

(R. 14 - 15)

Paragraph 15 of the mortgage stated in relevant part:

Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connec tion with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Bor rower’s notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly re quires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower’s change of address. If Lender specifies a procedure for reporting Borrower’s change of address, then Borrower shall only report a change of address through that specified

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procedure. There may be only one designated notice address under this Se curity Instrument at any one time.

Page 3 of the mortgage indicated that the Borrower’s notice address was

4655 Elena Way, Melbourne, Florida 32934. This address was the same as the

property address. Plaintiff’s complaint included a copy of the notice of default.

(R. 4) The notice of default indicates on its face that it was not sent to the notice

address (property address), instead it was sent to 6230 Riverwalk Lane, Unit 5,

Jupiter, Florida 33458. (R. 4)

In paragraph 9 of the complaint, the Bank pled that “All conditions prece-

dent to the acceleration of the Mortgage Note and foreclosure have been performed

or have occurred.” Webster’s First Amended Answer and Affirmative Defenses

disputed the occurrence of the condition precedent that Plaintiff provided notice of

default. (R. 92 - 105) In particular, Webster’s first affirmative defense was lack of

notice of breach (default). (R. 102 - 103)

At trial on January 17, 2014, the Bank's witness was handed Exhibit 5

which she identified as the breach letter (also known as “notice of default”) and

that she testified that it was sent to the Borrower at her mailing address. (Tran-

script, page 40, lines 15 - 24) The statement that the breach letter was sent to the

Borrower’s mailing address was objected to by Webster’s counsel on grounds of

hearsay and lack of foundation in that the Bank's witness was testifying as to the

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contents of the document which had not yet been admitted into evidence. (Tran-

script, page 40, lines 25 - through page 41, lines 1 - 7) The Court overruled the ob-

jection and said that the Bank's witness was merely authenticating the document as

to what it is. (Transcript, page 41, lines 11 - 13)

The breach letter indicated that it was sent from Chase Home Finance, LLC

to Patrice J. Kelty, 6230 Riverwalk Lane, Unit 5, Jupiter, Florida 32458 on Feb-

ruary 14, 2009. (R. 106 (Evidence/Exhibit Log); also see Transcript, page 42, lines

18 - 21; page 44, lines 21 - 23) The Bank’s witness testified that she did not work

for Chase Home Finance, LLC when the notice of default was allegedly mailed on

February 14, 2009. (Transcript, page 42, line 18 through page 43, line 2) The

Bank’s witness testified that she did not have any personal knowledge that the no-

tice of default had been mailed and she had not confirmed with anyone at Chase

Home Finance, LLC that the letter had been mailed. (Transcript, page 43, lines 3 -

20)

The Bank's witness confirmed that the breach letter was not sent to the prop-

erty address and that she did not have any document to demonstrate the Kelty had

changed her notice address to the address the letter was actually mailed. (Tran-

script, page 44, line 21 through page 47, line 14)

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The Bank's witness testified that the address the default notice was sent to

was not the property address, but instead it was Kelty’s mailing address and that

she did not bring to court any document to establish that this address was the “no-

tice address”. Webster’s counsel raised objections based on hearsay and specula-

tion. The Court overruled these objections. The Court admitted Exhibit 5 - the

notice of default - into evidence. (Transcript, page 45, line 1 through page 48, line

9)

The Bank’s witness further testified that the first missed payment on the loan

was November 1, 2008, and that that particular payment that was due was pursuant

to a loan modification agreement. (Transcript, page 66, line 19 through page 67,

line 10) On cross-examination, Webster’s counsel stated he had not received any

loan modification document in discovery, and he wanted to know what address was

given for Ms. Kelty in the loan modification agreement. (Transcript, page 68, line

24 through page 69, line 2) The Bank’s witness did not know what address Kelty

had given in the loan modification agreement. (Transcript, page 69, lines 1 - 13)

In Webster’s case in chief, Webster testified that before the mortgage loan

was taken out, he owned the property which as his homestead, that he and Kelty

were married, that the property address was 4655 Elana Way, Melbourne, (Florida),

and that he executed the mortgage but did not execute the note. (Transcript, page

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80, lines 1 through page 81, line 5; also see page 86, lines 5- 11; also see page 87,

lines 21 - 24))

Webster further testified that he was the person who made the payments on

the mortgage loan and that the first time he learned of the breach letter was when

he was sued in foreclosure. (Transcript, page 81, line 6 - 16)

Webster testified that his mother was a person of some wealth. (Transcript,

page 87, lines 6 - 11) Webster testified that he did have a method by which he

could have paid off the mortgage. (Transcript, page 81, lines 17 - 20) On Web-

ster’s counsel’s proffer, it was explained that Webster’s mother would pay off the

mortgage for Webster. (Transcript, page 85, lines 11 through page 86, line 1)

Webster testified that he had been in contact with the Bank, that the Bank told him

to cease making payments for 90 days and that he would then get assistance. When

he called the Bank on the 91st day to make an offer of money, the Bank refused to

speak to him, claiming he did not have authorization to speak on behalf of Patrice

Kelty. (Transcript, page 88, line 4 through page 89, line 7) The Bank’s counsel

questioned Webster about whether it was reasonable to expect a foreclosure if he

stopped making payments. Webster testified that he did exactly what the loan ser-

vicer told him to do. (Transcript, page 91, lines 18 - 22) Webster testified “There

was money ready to be placed in the hands of your client, and they refused

it.” (Transcript, page 92, lines 1 - 2)

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The Court questioned the relevance of the testimony about Webster’s ability

to pay the mortgage loan. Webster’s counsel explained that the mortgage provided

for cure and that had Webster received the default notice, he could have cured the

default. (Transcript, page 81 line 24 through page 82, line 9) The Court ques-

tioned the fact that Webster did not sign the Note and whether Webster had a right

to receive notices pursuant to the Mortgage. (Transcript, page 82, lines 10 - 13)

Webster’s counsel directed the Court to paragraph 13 of the Mortgage which pro-

vided that Webster was an obligor under the mortgage, that the mortgage and not

the Note provided for a breach letter, and that the Bank was obligated under the

mortgage to send the breach letter to the property address in the mortgage. (Tran-

script, page 82, lines 14 - 24) The Court succinctly stated the issue as “Since he

was not -- he did not sign the note, does he have the right to these notices?”.

(Transcript, page 82, lines 11 - 13)

The Court again asked how Webster’s having funds was relevant to paying

the mortgage. (Transcript, page 83, lines 9 - 11) Webster’s Counsel advised the

Court that paragraph 19 provides the Borrower the right to reinstate after accelera-

tion and cure the default, the signature line on the mortgage provides that Webster

is a Borrower, that paragraph 13 of the mortgage provided that Webster was an

obligor under the mortgage and that paragraph 15 of the mortgage provides the

Borrower is entitled to notice at the property address. (Transcript, page 83, lines

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12 through page 84, line 5) The Court questioned whether the term “Borrower”

was defined by the mortgage. Webster’s counsel indicated that the term was not

defined, but that public policy should say that if a person is married to a spouse

who signed the note, and that if it’s that person’s homestead, there should be an eq-

uitable principle for a marital right to cure the breach. (Transcript, page 84, line 6

- 15)

In closing argument, Webster’s counsel advised there was one issue present-

ed by the defense, and that was whether or not Webster had the right to cure under

the mortgage note. (Transcript, page 95, line 24 through page 96, line 10) The

Bank’s counsel argued that “The only person that is responsible for curing a default

is the person who is on the account. And the only person who was on the account

is the person who has availed themselves personally liable for those amounts due

and owing, and that person is the person who executed the note. Mr. Webster is

not personally liable for this.” (Transcript, page 98, lines 11 - 19.)

However, under the unique facts of this case, neither was Kelty liable for the

debt. The Court stated that the Borrower was Kelty as she signed the note, and that

Webster had no right to cure (thus he had no right to notice of default). Transcript,

page 100, line 20 through page 101, line 1)

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STANDARD OF REVIEW

Questions of law are subject to a de novo standard of appellate review.

Reinish v. Clark, 765 So.2d 197(Fla. 1st DCA 2000).

"SUMMARY OF THE ARGUMENTS

The sole purpose of this action was an in rem action to foreclose the mort-

gage. That’s because Kelty was not liable on the note as she had discharged the

debt in a bankruptcy and Webster did not sign the note. Webster’s mortgage was a

binding contract with the Bank for which Webster gave consideration. That con-

sideration was his Article X, Section 4 right to a homestead exemption by giving

the Bank a lien priority over his interests in the property. The Bank refused to

speak to Webster regarding the mortgage loan because it contended he did not have

a right to cure the defaulted mortgage. The Court held that Webster did not have

the right to cure the mortgage loan, and as such, he had no right to have the Bank

honor the mortgage provision requiring that notice of default be sent to the notice

address. In this case, the notice address was the property address where Webster

resided. Webster was a Borrower under the mortgage contract and had a right to

cure the defaulted mortgage and a right to have the Bank send notice of default to

the notice address.

"

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ARGUMENT

WHETHER A MORTGAGOR WHO DID NOT SIGN THE NOTE IS ENTITLED TO CURE THE MORTGAGE DEFAULT "

Webster had owned the subject property as his homestead before the subject

mortgage was executed. Art. X, §4, Fla. Const., states:

Article X SECTION 4. Homestead; exemptions.-- (a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the pay- ment of taxes and assessments thereon, obligations contracted for the pur- chase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person: (1) a homestead, if located outside a municipality, to the extent of one hun- dred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner's consent by reason of subsequent inclu- sion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner's family; (2) personal property to the value of one thousand dollars. (b) These exemptions shall inure to the surviving spouse or heirs of the own- er. (c) The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner's spouse if there be no minor child. The owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse. If the owner or spouse is incompetent, the method of alien- ation or encumbrance shall be as provided by law. "

Webster did not make a gift to the Bank of a first lien on his homestead

property. Instead, he made a contract with the Bank, with rights and obligations

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given freely in exchange by both Webster and the Bank. In Pitts v. Pastore, 561

So.2d 297, 301 (Fla. 2d DCA, 1990), the Court stated that a mortgage is an execu-

tory contract or agreement, in which one generally promises to allow a future sale

of real property if a debt is not paid, and it is also a specific lien on the property

described in the mortgage. In executing the mortgage contract, the consideration

Webster gave was his valuable homestead right to a priority lien in favor of the

Bank. The quid pro quo given by the Bank was that Webster had the right to cure a

mortgage default as set forth in paragraph 19 of the mortgage.

In Sudhoff v. Federal Nat. Mortg. Ass'n, 942 So.2d 425 (Fla. 5th DCA,

2006), Mr. Sudhoff owned a parcel of land individually. He signed a note and a

mortgage but his wife only signed the mortgage. A subsequent foreclosure action

on that note and mortgage was vacated because this Court found that Fannie Mae’s

failure to join Mrs. Sudhoff deprived her of her equity of redemption. This Court

noted that the term “Borrower” presumably included Mrs. Sudhoff because she

was designated a Borrower in the mortgage, and she could reinstate the mortgage

in the event of default. (At page 427) There is no need to presume that Webster is

a “Borrower”, the mortgage contract clearly states in paragraph 13 that Webster is

a Borrower and a co-signer of the mortgage.

In Samaroo v. Wells Fargo Bank, Case No. 5D13-1585 (Fla. 5th DCA,

March 28, 2014) this Court recognized that there existed in the mortgage contract a

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requirement for certain information that the Bank is “. . . bound to give its borrow-

er in default, . . .”. (At page 4) Paragraph 15 of the mortgage provided that the

Borrower was to receive notice of default at the notice address, unless that address

was changed pursuant to the specifications set forth in paragraph 15. The Bank’s

witness testified that there had been a loan modification agreement and that the

first payment missed was the payment due under that modification agreement. The

Bank’s witness testified that she did not know what address was given by Kelty for

that modification agreement. The Bank’s witness did not offer any evidence that

the notice address had been changed pursuant to the very specific procedure set

forth in paragraph 15, therefore, the notice address continued to be the property

address. The Court held that because Webster had no right to cure, he had no right

to demand that the Bank comply with paragraph 15 of the mortgage and provide

notice of default to the Borrower’s notice address, which happened to be Webster’s

address.

The Bank’s counsel argued that notice of default is only required to be sent

to the person liable on the debt. This case has unique facts - no one was liable on

the debt - not Kelty because she discharged it in bankruptcy, and not Webster be-

cause he didn’t sign the note. In Konsulian v. Bank, 61 So.3d 1283 (Fla. 2nd DCA,

2011), the Court stated:

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The language in the mortgage is clear and unambiguous. The word “shall” in the mortgage created conditions precedent to foreclosure, which were not satisfied. See Frost v. Regions Bank, 15 So.3d 905, 906 (Fla. 4th DCA 2009). Under Florida law, contracts are construed in accordance with their plain language, as bargained for by the parties. Auto–Owners Ins. Co. v. An- derson, 756 So.2d 29, 34 (Fla.2000).

" The mortgage contract does not make a distinction between a Borrower who

signs the note and mortgage versus a Borrower who only signs the mortgage. The

mortgage contract terms are clear and unambiguous - Webster was a Borrower and

the plain language of the mortgage contract allowed him the right to cure. Because

he had the right to cure, he was entitled to have notice of default sent to the notice

address, which was the property address. The failure to allow him the right to cure

and the failure to provide him notice of default are major breaches of the mortgage

contract.

CONCLUSION

WHEREFORE, the Circuit Court's judgment should be reversed and the trial

court directed to enter final judgment for Appellant.

Respectfully Submitted,

/s/ George Gingo George Gingo FBN 879533 400 Orange Street Titusville, FL 32796

(321)264-9624 (866)311-9573 (Fax)

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gingo.george@gmail.com " /s/ James Orth James Orth, FBN 75941 400 Orange Street Titusville, FL 32796

(321)264-9624 (866)311-9573 (Fax)

gingo.george@gmail.com ""

CERTIFICATE OF FONT COMPLIANCE

I certify that the lettering in this brief is Times New Roman 14-point font and com-

plies with the font requirements of the Florida Rule of Appellate Procedure

9.210(a)(2).

/s/ George Gingo George Gingo FBN 879533 "

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been fur-

nished this 30th day of April, 2014 via email to Van Ness Law Firm, P.A., 1239 E.

Newport Center Drive, Suite #110, Deerfield Beach, Florida 33442 at

eservice@wolfelawfl.com and slin@defaultlawfl.com.

/s/ George Gingo George Gingo FBN 879533

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