Florida Community Bank, N.A. v. Red Road Residential, LLC
197 So. 3d 1112
| Fla. Dist. Ct. App. | 2016Background
- Florida Community Bank modified a loan secured by collateral and obtained a mortgage on Monroe County residential property purportedly signed by Jesus Rios and his wife, Ada Rios.
- Borrower and guarantor defaulted; Bank sued the corporate borrower, guarantor Jesus Rios, and Ada to foreclose and sought attorney’s fees under the mortgage’s fee clause.
- Ada consistently asserted (in motions, answers, interrogatories, deposition, affidavit) that she never signed the mortgage and that her signature was forged.
- After discovery (witnesses to Ada’s signature invoked the Fifth), the Bank voluntarily dismissed Ada with prejudice; Ada then moved for attorney’s fees under Fla. Stat. §57.105(7) (reciprocity) and alternatively as a sanction under §57.105(1).
- The trial court denied statutory sanctions but awarded Ada $27,412.50 in contractual fees via §57.105(7) reciprocity; the Bank appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §57.105(7) reciprocity applies when the prevailing defendant was not adjudicated a party to the contract | Bank: Reciprocity applies only if the fee-seeking party is a party to the contract containing the fee clause | Ada: She prevailed by dismissal; because the Bank dismissed before adjudicating her mortgagor status, she should benefit from reciprocity | Court: Reversed — reciprocity applies only to parties to the contract; prevailing party bears burden to establish she is a party to the contract |
| Which party bears the threshold burden to establish contract-party status for §57.105(7) purposes | Bank: The movant seeking fees must prove she is a party to the contract | Ada: Implicitly argued no adjudication required because dismissal made her prevailing | Court: The prevailing movant (Ada) had the threshold burden to plead and prove she was a party to the mortgage; she failed to do so |
Key Cases Cited
- Lago v. Kame By Design, LLC, 120 So. 3d 73 (Fla. 4th DCA 2013) (standard of review for de novo legal questions)
- Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So. 2d 276 (Fla. 2003) (statutes in derogation of common law must be strictly construed)
- Novastar Mortg., Inc. v. Strassburger, 855 So. 2d 130 (Fla. 4th DCA 2003) (reciprocity limited to parties to the contract)
- Concrete & Lumber Enters. Corp. v. Guar. Bus. Credit Corp., 829 So. 2d 247 (Fla. 3d DCA 2002) (party seeking contractual fees must prove contract-party status)
- Edwards v. Wills, 686 So. 2d 702 (Fla. 2d DCA 1996) (same principle regarding reciprocity and party status)
- Cacho v. Bank of N.Y. Mellon, 124 So. 3d 943 (Fla. 3d DCA 2013) (illustrates §57.105(7) bestowing reciprocal fee rights when parties to mortgage)