230 So. 3d 550
Fla. Dist. Ct. App.2017Background
- Two parallel foreclosure actions: Wells Fargo (Dec 2010) and Harbor Towers Owners Ass'n (Feb 2011). Harbor Towers obtained summary judgment and sold the property to Calvin Rutledge; that judgment was later vacated as void as to Wells Fargo due to improper joinder.
- Rutledge was later added to Wells Fargo's foreclosure action after purchasing the property subject to a recorded lis pendens.
- At bench trial, Rutledge presented evidence (including Mary Lynne Dias's deposition) that her signature on the note and mortgage was forged; the trial court found the signature forged.
- The trial court, believing standing had been resolved on remand, did not fully address whether Rutledge could assert forgery as a subsequent purchaser and instead concluded Wells Fargo could foreclose on Mr. Dias's one-half interest after finding the couple had become tenants in common post-divorce.
- The Second District reversed: (1) Rutledge lacked standing to challenge the mortgage/note because he was a subsequent purchaser with constructive notice, and (2) there was insufficient evidence to support foreclosure against only Mr. Dias’s one-half interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rutledge (subsequent purchaser) has standing to assert forgery defense to note/mortgage | Wells Fargo: Rutledge lacks standing because he is not a party/third-party beneficiary of the note/mortgage and purchased with constructive notice | Rutledge: As purchaser and title holder, he can challenge validity of the instruments asserting forgery | Held: Rutledge lacks standing to challenge the mortgage/note validity; a purchaser subject to a recorded lien is estopped from contesting it in the foreclosure action |
| Whether summary judgment/previous opinion resolved Rutledge's standing on remand | Wells Fargo: Standing remained open for the trial court to decide on remand | Rutledge: Prior appellate opinion implicitly allowed consideration of forgery on remand | Held: Prior opinion did not preclude addressing standing; trial court erred by declining to resolve standing on remand |
| Whether forgery of Mary Dias's signature invalidated Wells Fargo's mortgage as to Mr. Dias’s interest | Wells Fargo: If signature was forged, mortgage might still be enforceable against Mr. Dias’s separate interest depending on marital status and authority | Rutledge: Forgery voids the instrument as to the signer, potentially invalidating lien | Held: Court found forgery but remanded because there was no admissible evidence establishing divorce timing, ownership form change, or that the note/mortgage remained enforceable as to only Mr. Dias |
| Whether Wells Fargo could foreclose on one-half interest absent evidence of divorce or property partition | Wells Fargo: Post-divorce, tenants by entirety converted to tenants in common, allowing foreclosure on Mr. Dias’s one-half interest | Rutledge: No evidence supports that conversion or any judgment awarding interest to Mr. Dias | Held: There was no evidence (e.g., final dissolution judgment) to support foreclosure against only Mr. Dias; trial court erred in entering such a judgment |
Key Cases Cited
- Pealer v. Wilmington Trust Nat'l Ass'n ex rel. MFRA Trust, 212 So. 3d 1137 (Fla. 2d DCA 2017) (bank's standing to foreclose derives from right to enforce the note and mortgage)
- St. Clair v. U.S. Bank Nat'l Ass'n, 173 So. 3d 1045 (Fla. 2d DCA 2015) (standing to foreclose tied to enforceability of loan documents)
- Whitburn, LLC v. Wells Fargo Bank, N.A., 190 So. 3d 1087 (Fla. 2d DCA 2015) (constructive notice of recorded superior interests is imputed to subsequent purchasers)
- CCM Pathfinder Palm Harbor Mgmt., LLC v. Unknown Heirs of Gendron, 198 So. 3d 3 (Fla. 2d DCA 2015) (a recorded mortgage valid on its face is assumed recognized by subsequent purchaser)
- Eurovest, Ltd. v. Segall, 528 So. 2d 482 (Fla. 3d DCA 1988) (a purchaser who takes title subject to a mortgage without assuming the debt is estopped from contesting the mortgage's validity)
- Sharp v. Hamilton, 520 So. 2d 9 (Fla. 1988) (tenancy by the entirety protects property from lien against only one spouse)