200 So. 3d 221
Fla. Dist. Ct. App.2016Background
- In May 2008 Kenneth and Celia Smith executed a HUD‑insured home equity conversion (reverse) mortgage on their homestead; Kenneth signed the promissory note, both signed the mortgage instrument.
- Kenneth died in December 2009. Reverse Mortgage Solutions sued to foreclose, alleging Kenneth was the sole borrower and his death triggered acceleration; complaint alleged all conditions precedent had occurred.
- Celia answered denying conditions precedent and asserted she was alive and still occupying the property as her homestead.
- After a bench trial the trial court entered a form Final Judgment of Foreclosure against Celia; the judgment contains no specific factual findings about conditions precedent or Celia’s status.
- On appeal the central dispute was whether Celia is a “Borrower” under the mortgage (which would make her death or loss of principal‑residence status a condition precedent to foreclosure) and whether the lender proved conditions precedent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Celia Smith is a “Borrower” under the mortgage (so her death or ceasing to occupy is a condition precedent to foreclosure) | Lender argued the loan documents and note identified Kenneth as the borrower and foreclosure was proper after his death | Celia argued she executed the mortgage, was identified by signature and pre‑printed name, and federal/HUD rules and Florida homestead law treat spouse as a protected co‑borrower | Court held Celia is a “Borrower” for purposes of ¶9 of the mortgage; therefore lender failed to prove the necessary condition precedent (her death or loss of principal‑residence) and foreclosure was premature — reversed and remanded |
| Standard of review and effect of incomplete record (no transcript, form judgment) | Implicitly relied upon trial court judgment that conditions precedent occurred; lender did not plead any other acceleration ground | Celia relied on Applegate and argued absence of transcript usually requires affirmance but contended the question is pure law shown on face of judgment | Court applied de novo review to contract interpretation; concluded error of law appears on face of judgment so absence of transcript does not preclude reversal |
Key Cases Cited
- Applegate v. Barnett Bank of Tallahassee, 377 So.2d 1150 (Fla. 1979) (appellant’s burden to provide record; erroneous reasoning can be affirmed if alternative theory supported)
- Bennett v. Donovan, 703 F.3d 582 (D.C. Cir. 2013) (discusses HECM statutory scheme and spouse protections under HUD‑insured reverse mortgages)
- Nagel v. Cronebaugh, 782 So.2d 436 (Fla. 5th DCA 2001) (interpretation of notes and mortgages is a pure question of law reviewed de novo)
- Verneret v. Foreclosure Advisors, LLC, 45 So.3d 889 (Fla. 3d DCA 2010) (trial court findings in non‑jury proceedings will not be set aside unless unsupported by competent substantial evidence)
- Pitts v. Pastore, 561 So.2d 297 (Fla. 2d DCA 1990) (Florida homestead alienation requires spouse join; spouse’s joinder necessary to encumber homestead)