Palma v. JPMorgan Chase Bank, Nat'l Ass'n
208 So. 3d 771
| Fla. Dist. Ct. App. | 2016Background
- In 1995 Palma executed an adjustable-rate FHA-insured note and mortgage that expressly incorporated HUD regulations, including 24 C.F.R. § 203.604(b) requiring a face-to-face interview (or reasonable effort) before foreclosure when installments are delinquent.
- In March 2013 JPMorgan Chase filed a foreclosure complaint; Palma answered and specifically denied that Chase complied with all conditions precedent, citing failure to provide the § 203.604(b) interview.
- At trial Chase offered the original note, mortgage, and payment history and called one witness (a bank mortgage officer) who testified the bank’s practice was to conduct interviews but had no specific knowledge whether one was offered or refused in Palma’s case.
- Palma testified she would have participated in an interview but was never offered one; she moved for involuntary dismissal for Chase’s noncompliance and renewed after resting.
- The trial court treated Palma’s denial as an affirmative defense and entered final judgment of foreclosure for Chase; Palma appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HUD regulation §203.604(b) is a condition precedent to foreclosure when incorporated into the note/mortgage | Palma: Note/mortgage incorporates HUD regs, so §203.604(b) is a condition precedent that Chase failed to satisfy before filing suit | Chase: Plaintiff bears burden to prove defendant failed to raise compliance as an affirmative defense; disputed applicability | Court: When HUD regs are incorporated into the loan documents, §203.604(b) is a condition precedent and defendant’s specific denial shifts burden to plaintiff to prove compliance; Chase failed to prove compliance, so dismissal required |
| Whether Palma’s specific denial shifted burden to Chase to prove compliance with §203.604(b) | Palma: Her specific denial in the answer required Chase to prove it complied with the interview requirement | Chase: Noncompliance was an affirmative defense and Palma bore burden | Court: Specific denial of conditions precedent is not an affirmative defense under Fla. R. Civ. P. 1.120(c); it shifts burden to plaintiff; Chase failed to meet burden |
| Whether trial court properly relied on law-of-the-case from earlier denial of dismissal | Palma: Prior rulings do not foreclose the issue at trial | Chase: Earlier denial controls | Court: Trial court erred to rely on law-of-the-case because doctrine applies only to issues actually decided on a prior appeal |
| Whether any exception to the interview requirement applied | Palma: No exceptions applied | Chase: (failed to prove any exception at trial) | Court: Chase presented no evidence any §203.604(c) exceptions applied; none were shown |
Key Cases Cited
- Sheriff of Orange Cty. v. Boultbee, 595 So. 2d 985 (Fla. 5th DCA 1992) (specific denial of performance shifts burden to plaintiff to prove conditions precedent)
- Diaz v. Wells Fargo Bank, N.A., 189 So. 3d 279 (Fla. 5th DCA 2016) (when applicability of HUD regs is unclear, party asserting them must prove applicability)
- Colon v. JP Morgan Chase Bank, NA, 162 So. 3d 195 (Fla. 5th DCA 2015) (mortgage paragraph 22 notice requirement is a condition precedent to foreclosure)
- Custer Medical Center v. United Auto Ins. Co., 62 So. 3d 1086 (Fla. 2011) (distinguishing affirmative-defense burden when defendant seeks to avoid contractual liability)
- Concrete Pipe Co. v. Bould, 437 So. 2d 1061 (Fla. 1983) (law-of-the-case doctrine applies only to issues actually presented and decided)
Result: Reversed final judgment of foreclosure and remanded with instructions to enter involuntary dismissal because Chase failed to prove compliance with §203.604(b).