Pealer v. Wilmington Trust National Association
2017 Fla. App. LEXIS 3643
| Fla. Dist. Ct. App. | 2017Background
- Note signed by Kathleen Bedard; mortgage signed by Bedard and Claud & Elizabeth Turner; alleged default Nov. 1, 2011.
- Pealers purchased the property at a subordinate-lien foreclosure sale on July 5, 2011, taking title subject to the bank’s superior mortgage.
- JP Morgan Chase filed suit Feb. 20, 2013; Wilmington Trust was substituted as plaintiff before trial; nonjury trial resulted in final judgment of foreclosure for Wilmington Trust.
- Pealers actively defended at trial, contesting admissibility of the bank’s payment history and the bank’s standing; Mrs. Pealer testified alleging fraud/forgery regarding the note.
- The concurrence agrees with affirmance but questions whether the Pealers (as subsequent purchasers who did not assume the mortgage) had standing to fully litigate the bank’s standing or evidence admissibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of bank’s payment history | Pealer: bank’s records were inadmissible/hearsay | Bank: records were admissible business records showing amounts due | Court: admission proper; Pealer’s challenge fails (concurrence notes standing issue may affect this) |
| Bank’s standing to foreclose | Pealer: bank lacked standing/chain of title defects | Bank: proved right to enforce note and mortgage against mortgagors | Court: bank entitled to foreclose; proofs established enforcement rights |
| Pealers’ standing to litigate challenges | Pealer: as current title holders, Pealers can challenge standing and evidence | Bank: Pealers purchased subject to mortgage and lack party status on note/mortgage | Concurrence: Pealers likely lacked standing to fully litigate absent asserting redemption; their interest was subordinate and speculative |
| Award of attorney fees against non-mortgagors (Bedard & Turners) | Bank sought fees against parties responsible under note/mortgage | Bedard/Turners did not participate; Pealers argued fees improper | Court affirmed judgment including fees; concurrence notes Pealers were not liable and participation should have been limited to redemption rights |
Key Cases Cited
- Corrigan v. Bank of Am., N.A., 189 So.3d 187 (Fla. 2d DCA 2016) (failure to object can waive standing arguments)
- U.S. Bank Nat’l Ass’n v. Bevans, 138 So.3d 1185 (Fla. 3d DCA 2014) (subsequent purchaser is an indispensable party when taking before lis pendens)
- CCM Pathfinder Palm Harbor Mgmt., LLC v. Unknown Heirs of Gendron, 198 So.3d 3 (Fla. 2d DCA) (recorded mortgage valid on its face binds subsequent purchaser)
- Spinney v. Winter Park Bldg. & Loan Ass’n, 162 So. 899 (Fla. 1935) (purchaser is assumed to recognize a valid recorded lien)
- Clay Cty. Land Trust v. JPMorgan Chase Bank, Nat’l Ass’n, 152 So.3d 83 (Fla. 1st DCA 2014) (only a party to a mortgage may challenge its terms)
- Irwin v. Grogan-Cole, 590 So.2d 1102 (Fla. 5th DCA 1991) (subsequent purchaser taking subject to mortgage cannot challenge statute of limitations)
- Whitburn, LLC v. Wells Fargo Bank, N.A., 190 So.3d 1087 (Fla. 2d DCA 2015) (third-party purchaser’s interest in foreclosure is not a legally cognizable interest to attack mortgage validity)
- Hayes v. Guardianship of Thompson, 952 So.2d 498 (Fla. 2006) (standing requires a reasonably expected effect from litigation outcome)
- St. Clair v. U.S. Bank Nat’l Ass’n, 173 So.3d 1045 (Fla. 2d DCA 2015) (bank’s standing to foreclose derives from enforceable note and mortgage)
- Ernest v. Carter, 368 So.2d 428 (Fla. 2d DCA 1979) (elements required to establish entitlement to foreclosure)