The borrowers in a commercial real estate transaction appeal an order of' the trial court granting final judgment of foreclosure in favor of First-Citizens Bank & Trust Co. We affirm, holding that (1) the trial court did not abuse its discretion in granting summary judgment while discovery was outstanding and (2) the borrowers have shown no material issues of fact that would preclude summary judgment.
In 2006, the borrowers executed a promissory note for the sum of $825,000 in favor of Sun American Bank. To secure payment of the note, the borrowers executed and
In 2010, Sun failed and was put into receivership, with the Federal Deposit Insurance Corporation appointed as the receiver. Thereafter, the FDIC assigned the promissory note and mortgage to First-Citizens, which, on April 5, 2010, provided the borrowers with written notice that they were in default of their February 2010 payment and that First-Citizens intended to accelerate the mortgage.
On September 1, 2010, First-Citizens filed a four count complaint to obtain (1) judgment on the notes, (2) foreclosure of the mortgage, (3) action on the security agreement, and (4) action on the guarantees. The borrowers
As to the first affirmative defense — failure of contractual condition precedent— the borrowers alleged that First-Citizens failed to provide adequate notice of default and intent to accelerate, thereby “den[ying the borrowers] a good faith effort, pursuant to the Mortgage and the servicing obligations of [First-Citizens,] to avoid acceleration and ... foreclosure.” Furthermore, the borrowers alleged that First-Citizens “fail[ed] to engage in any foreclosure loss mitigation, as required,” or to “pursue effective foreclosure prevention strategies,” such as “evaluating] the particular circumstances surrounding their claimed default.” The borrowers did not, however, cite any portion of the loan documents or case law that would impose such fiduciary obligations on the lender in a commercial loan transaction.
For their second affirmative defense— unclean hands — the borrowers generally alleged that First-Citizens “intentionally fail[ed] to comply with the material terms of the mortgage and note in terms of notice of default and intent to accelerate,” such that foreclosure of the mortgage and “acceleration of the note would be inequitable, unjust, and ... unconscionable.” Once again, the borrowers failed to provide any specific allegations of impropriety-
On February 14, 2011, First-Citizens moved for summary judgment, alleging that there were no genuine issues of fact remaining. As to the defense of “failure of condition precedent,” First-Citizens argued that paragraph 9.2 of the renewal note “provide[d] that upon default, [First-Citizens,] at its option, had the right to accelerate the entire unpaid principal balance thereof “without notice or demand.’ ” Alternatively, if the loan documents required notice, First-Citizens had “provide[d the borrowers with] notice of default and acceleration.”
As to the borrowers’ unclean hands defense, First-Citizens argued that the defense was “unsupported by any factual allegation whatsoever ..., [wa]s made in bad faith, and [wa]s insufficient to over
On March 10, 2011, the borrowers filed a request for the production of 146 documents and propounded 22 interrogatories. First-Citizens moved for a protective order. On April 12, 2011, Judge John J. Hoy denied First-Citizens’ motion without prejudice, with instructions to specially set a hearing on the protective order at a later date. In addition, Judge Hoy cancelled the upcoming summary judgment hearing and ordered that it be re-set for a date on or after May 27, 2011.
Thereafter, the ease was re-assigned to Judge Glenn Kelley. On August 11, 2011, upon First-Citizens’ request, Judge Kelley set a hearing on its summary judgment motion for October 18, 2011. At that point, First-Citizens had not complied with the discovery requests.
On October 4, 2011, just two weeks before the scheduled summary judgment hearing, the borrowers moved to compel discovery and for sanctions. Additionally, on October 11, 2011, the borrowers filed a response to First-Citizens’ motion for summary judgment, alleging for the first time an affirmative defense of “fraud.”
On October 17, 2011, the day before the summary judgment hearing, the parties submitted an agreed order, whereby First-Citizens was required to respond to three interrogatories and outstanding document production requests. The next day, however, notwithstanding the discovery order, the trial court conducted the hearing on First-Citizens’ motion for summary judgment, the contents of which are not included in the record. On October 20, 2011, the trial court entered a final judgment of foreclosure in favor of First-Citizens.
Standard of Review
A circuit court’s order granting summary judgment is reviewed de novo. Sunshine State Ins. Co. v. Jones,
Analysis
On appeal, the borrowers argue that the trial court erred by prematurely granting summary judgment in favor of First-Citizens while discovery was pending. They contend that the requested discovery would have presented genuine issues of fact regarding the affirmative defenses of “standing, fraud, and unclean hands.” They also argue that the defenses of fraud and unclean hands “were inappropriate for summary judgment due to genuine disputed issues of material fact.”
The Borrowers’ Failure to Properly Plead Lack of Standing and Fraud as Affirmative Defenses Constituted Waiver
As a preliminary matter, the borrowers failed to properly plead the affirmative defenses of lack of standing and fraud, so they were not properly before the circuit court at the time it granted the motion for summary judgment.
Florida Rule of Civil Procedure 1.110(d) provides that “a party shall set forth affirmatively ... any ... matter constituting an avoidance or affirmative defense.” Application of this rule means “that affirmative defenses must be pleaded or they are considered waived.” Kersey v. City of Riviera Beach,
In the trial court, the borrowers failed to plead, or even argue, lack of standing as an affirmative defense. Furthermore, although the borrowers suggested fraud as a defense in their response to First-Citizens’ motion for summary judgment, such a filing did not discharge their duty to amend their pleadings in compliance with the rules of civil procedure. See Accurate Metal Finishing Corp. v. Carmel,
By failing to properly plead lack standing and “fraud,” the borrowers waived their right to assert these affirmative defenses in response to First-Citizens’ summary judgment motion. Any requested discovery intended to prove either defense is therefore superfluous and cannot create a genuine issue of fact warranting reversal. In addition, the outstanding discovery requests would not have led to evidence that would have created an issue of material fact as to the defense of unclean hands since the requested discovery
The Trial Court Did Not Err in Granting Summary Judgment Pending Discovery Because the Borrowers Failed to Act Diligently
Another reason why the trial court did not abuse its discretion in granting First-Citizens’ motion for summary judgment is that the borrowers failed to act diligently in seeking the discovery. A trial court does not abuse its discretion in granting a motion for summary judgment, despite the pendency of discovery, where the non-moving party has failed to act diligently in taking advantage of discovery opportunities. See, e.g., Leviton v. Philly Steak-Out, Inc.,
For example, in Southern California Funding, Inc. v. Hutto,
The facts in this case more closely resemble those in Allen v. Shows,
The Borrowers’ Claim of Unclean Hands, as Pled, Was Insufficient to Withstand First-Citizens’ Motion for Summary Judgment
The final basis raised for reversal is the borrowers’ perfunctory argument that First-Citizens did not eliminate the unclean hands defense. Unclean hands is an equitable defense that is akin to fraud; its “purpose is to discourage unlawful activity.” Original Great Am. Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd.,
“sneaky and deceitful” with “unclean hands”.... “Equity will stay its hand where a party is guilty of conduct condemned by honest and reasonable men. Unscrupulous practices, overreaching, concealment, trickery or other uncon-scientous conduct are sufficient to bar relief.” 22 Fla.Jur.2d, Equity, § 50.
Hensel v. Aurilio,
Like fraud, unclean hands “is not so subtle a concept that it cannot be described with precision.” Flemenbaum v. Flemenbaum,
Here, the only facts asserted to support the defense of unclean hands were that First-Citizens “intentionally] fail[ed] to comply with material terms of the mortgage and note in terms of notice of default and intent to accelerate.” A failure to comply with the material terms of a loan document may be a breach of contract, and it may not be nice, but it does not amount to unclean hands.
A common problem we encounter in mortgage foreclosure appeals is that the appellant slings legal terminology in a brief — fraud, unclean hands, estoppel, TILA violation — without tying the legal concept to any set of real-world facts established in the trial court. As the Florida Supreme Court has aptly observed, “when a decree of the trial court is brought ... on appeal the duty rests upon the appealing party to make error clearly appear.” Lynn v. City of Fort Lauderdale,
[a]n appellant does not discharge this duty by merely posing a question with an accompanying assertion that it was improperly answered in the court below and then dumping the matter into the lap of the appellate court for decision. Under such circumstances it must be held ... that [the appellate court is] under no duty to answer the question.
Id.
Following this principle, without further support, the borrowers’ cursory argument that the defense of unclean hands blocked summary judgment, because the lender failed to comply with “material terms of the mortgage,” is insufficient to warrant reversal. The borrowers failed to bring out those egregious facts that would have transformed such a “failure to comply” into an unclean hands defense sufficient to bar relief in equity.
In the summary judgment context, once the moving party has submitted evidence entitling it to relief, “[i]t is not enough for the opposing party merely to assert that an issue [of fact] does exist.” Landers v. Milton,
Affirmed.
Notes
. The trial court entered a default judgment against one of the borrowers, Congress Park Owners Association, Inc.
. The borrowers raised two other affirmative defense related to the Florida Consumer Practices Act and the Florida Deceptive and Unfair Trade Practices Act, both of which were later withdrawn.
.This affirmative defense was effectively nullified when First-Citizens filed the original loan documents with the court on April 15, 2011.
. We use the term "fraud” only because that is the term used by the borrowers. We do not agree that the borrowers produced any set of facts that comprised the traditional elements of fraud: "(1) a false statement of material fact; (2) the maker of the false statement knew or should have known of the falsity of the statement; (3) the maker intended that the false statement induce another's reliance; and (4) the other party justifiably relied on the false statement to its detriment.” Prieto v. Smook, Inc.,
. In fact, the borrowers' affidavit would have been insufficient to raise fraud even if it been properly pleaded. The affidavit alleged nothing more than a promise to modify a loan, stating “that the principal plus interest payment would be readjusted back to interest only payments.” The affidavit discloses no loss or change of position in reliance on this agreement. At best, the purported fraud was nothing more than a promise to modify the subject loan, an oral credit agreement as contemplated by Florida’s Banking Statute of Frauds, defined in section 687.0304, Florida Statutes (2010). See § 687.0304(l)(a), Fla. Stat. (2010) (defining a credit agreement as an “agreement to lend or forbear repayment of money, goods, or things in action, to otherwise extend credit, or to make any other financial accommodation").
. Discussing the limitations on the application of the equitable defense in the modem world, Judge Posner has written,
[t]oday, "unclean hands” really just means that in equity as in law the plaintiff’s fault, like the defendant's, may be relevant to the question of what if any remedy the plaintiff is entitled to. See Chafee, Coming Into Equity With Unclean Hands [II], 47 Mich. L.Rev. 1065, 1092 (1949). An obviously sensible application of this principle is to withhold an equitable remedy that would encourage, or reward (and thereby encourage), illegal activity, as where the injunction would aid in consummating a crime, the issue in Johnson v. Yellow Cab Transit Co.,321 U.S. 383 ,64 S.Ct. 622 ,88 L.Ed. 814 (1944). In what may have been the earliest application of the principle of unclean hands, a highwayman was refused an accounting against his partner in crime (and later hanged, to boot, along with the partner). See Everet v. Williams (Ex. 1725), belatedly reported in Note, The Highwayman’s Case, 35 L.Q. Rev. 197 (1893), and briefly discussed in Prosser and Keeton on the Law of Torts, § 50, at p. 336 n. 4 (5th ed.1984).
Shondel v. McDermott,