189 So. 3d 914
Fla. Dist. Ct. App.2016Background
- In Jan. 2010 SunTrust (servicer) sued the Grudems for foreclosure, alleging FNMA owned the note and authorized the suit.
- Appellants’ counsel mistakenly gave an Orlando address; case management order and first trial notices were sent to that wrong address and returned; the Grudems did not appear and SunTrust obtained a foreclosure judgment.
- The Grudems later corrected their address; the trial court vacated the August 19, 2013 judgment and cancelled the foreclosure sale. SunTrust did not appeal the vacatur.
- FNMA later replaced SunTrust as plaintiff; at the November 25, 2014 bench trial the court initially ruled for FNMA when Dr. Grudem was late, then recalled the case when he arrived. The court prevented re‑litigation of the vacated prior judgment and curtailed the trial.
- FNMA admitted only copies of the note/mortgage over objection and did not present other records or proof of amounts due because the trial was cut short; the court entered judgment for FNMA and adopted FNMA’s proposed order.
- The Fifth District reversed, holding FNMA failed to prove the required elements for foreclosure and could not rely on the vacated prior judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was FNMA entitled to rely on the previously vacated SunTrust judgment to support foreclosure? | FNMA relied on the prior judgment and argued it should control; FNMA claimed it did not know why it was vacated and treated the matter as a re‑trial. | Grudems argued the prior judgment was vacated and therefore cannot support a new judgment. | Court: No. A vacated judgment cannot be used to support a new foreclosure judgment; FNMA failed to challenge the vacatur. |
| Did FNMA present competent substantial evidence to establish entitlement to foreclosure (note, mortgage, acceleration, amount due)? | FNMA argued its records (copies, identification) were sufficient and pointed to prior proceedings. | Grudems argued FNMA failed to admit originals and failed to prove amount owed and compliance with notice requirements. | Court: No. FNMA failed to admit the original note/mortgage and failed to prove amount owing or pre‑acceleration notice; evidence was insufficient. |
| Was it proper for the trial court to terminate the trial and rely on the prior adjudication instead of hearing full evidence and defenses? | FNMA suggested the case had already been tried and should not be relitigated in full. | Grudems contended they never received proper notice of the prior trial and were denied opportunity to be heard. | Court: The trial was improperly curtailed; terminating the trial prevented FNMA from proving its case and denied Grudems a fair opportunity to defend. |
| Would reinstating a vacated judgment in favor of SunTrust (a nonparty) create fundamental error? | FNMA implied a reinstatement would be appropriate to reflect prior adjudication. | Grudems argued reinstating a vacated judgment in favor of a nonparty (SunTrust) would be erroneous. | Court: Reinstating a vacated judgment in favor of a nonparty would be fundamental error. |
Key Cases Cited
- Neuman v. Harper, 106 So.3d 974 (Fla. 5th DCA 2013) (standard of review for factual findings)
- Kelsey v. SunTrust Mortg., Inc., 131 So.3d 825 (Fla. 3d DCA 2014) (elements required to establish entitlement to foreclosure)
- Gee v. U.S. Bank Nat’l Ass’n, 72 So.3d 211 (Fla. 5th DCA 2011) (original note requirement)
- Figueroa v. Fed. Nat’l Mortg. Ass’n, 180 So.3d 1110 (Fla. 5th DCA 2015) (insufficient evidence cannot support foreclosure)
- Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So.3d 280 (Fla. 2d DCA 2014) (identification alone does not substitute for admitting records)
- Beaumont v. Bank of N.Y. Mellon, 81 So.3d 553 (Fla. 5th DCA 2012) (reinstating vacated judgment for a nonparty is fundamental error)