There is an interesting new appellate decision out of Florida's Fourth District Court of Appeals which reflects continued incompetence by Florida's foreclosure defense bar:
Congress Park Office Condos v. First Citizens Bank & Trust, No. 4D11-4479 (Fla. 4DCA Jan. 16, 2013)
http://www.4dca.org/opinions/Jan%202013/01-16-13/4D11-4479.op.pdf
The case is actually a commercial foreclosure, but the very same legal rules and standards are applied.
There have been several recent threads in which Forum contributors have furnished a far better dicussion of Florida foreclosure law (and the application of Mr. Roper's suggested defenses) far better than Florida attorneys seem to be capable of setting forth in argument.
A reading of the case shows several legal errors which directly pertain to recent topics of Forum discussions. Perhaps someone can find those discussions and link them to this thread for additional discussion and clarity.
First, note that the defense improperly labeled several of its defenses as affirmative defenses. Once more, keying off of what was filed by the appellant, the Court in dicta follows that erroneous nomenclature, also misidentifying some regular defenses as affirmative defenses.
The Court of Appeals identifies these "affirmative defenses" in this way:
"The borrowers1 filed an answer and four affirmative defenses: (1) failure of contractual condition precedent, (2) unclean hands, (3) failure to comply with certain unspecified conditions, and (4) failure to produce the original note and mortgage."
Only the second of these -- unclean hands -- is actually an affirmative defense. Each of the other defenses is a regular defense, which, when properly plead by a defendant, reflects a defense against essential elements of the plaintiff's cause of action.
The Court also noted that the defendant later sought to interpose an additional affirmative defense of "fraud":
"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.” . . .
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., 97 So. 3d 916, 917 (Fla. 4th DCA 2012) (quoting Shakespeare Found., Inc. v. Jackson, 61 So. 3d 1194, 1199 n.1 (Fla. 1st DCA 2011) (internal quotations omitted))."
Fraud really is an affirmative defense, but needs to be plead with sufficient particularity as to the elements of fraud that it can be understood and distinguished. It is never enough to simply allege "fraud" without explaining the nature of the fraud. In a recent post, another Forum contributor expressly warned about the necessity of pleading the actual elements of a fraud allegation when making that defense and this is precisely what the Court of Appeals tells the appellant in respect of this belated and vague allegation.
A second instructive theme in the decision regards the necessity of pleading conditions precedent with particularity. This, too, was the theme of a recent post by a Forum contributor pointing to Federal Rule 9 as requiring the defensive pleading of conditions precedent with particularity:
http://www.law.cornell.edu/rules/frcp/rule_9
See also:
Fla. R. Civ. P. 1.110(d)
http://www.floridabar.org/TFB/TFBResources.nsf/0/10C69DF6FF15185085256B29004BF823/$FILE/Civil.pdf
The first -- (1) failure of contractual condition precedent -- and third defense -- (3) failure to comply with certain unspecified conditions -- seem to be essentially the same issue. These needed to be plead with particularity. In failing to do so, the defendant waived the issue. In erroneously pleading these as affirmative defenses, the defendant/appellant invited both the trial court and the Court of Appeals to impose the burden of proof on the defendant rather than the plaintiff!
It has previously been discussed in other threads that standing, capacity, and conditions precedent are NEVER affirmative defenses. See also:
Federal Rule 9(c)
http://www.law.cornell.edu/rules/frcp/rule_8
See also:
Fla. R. Civ. P. 1.120
http://www.floridabar.org/TFB/TFBResources.nsf/0/10C69DF6FF15185085256B29004BF823/$FILE/Civil.pdf
It should be noted that the fourth defense -- failure to produce the original note and mortgage -- is also not an affirmative defense, but rather simply a denial of the plaintiff's right of enforcement, an essential element of the plaintiff's cause of action. While it is possible for an entitity to have a right of enforcement of a lost note, if the holder when the note was lost, in all other instances possession of the note is essenital to establishing that it is the holder. This is the plaintiff's burden of proof, but by erroneously denominating this as an affirmative defense the defendant assumed the burden of proof on this point.
This decision continues the Florida muddle as to misidentifying standing as an affirmative defense. In this case, standing was never plead as a defense at all, affirmative or otherwise, until the summary judgment response and then it was misdenominated as an affirmative defense. Basically, the appellant went into both the trial court and the Court of Appeals misdenominating the argument and INVITING the Court to continue to muddle this important issue. (See Page 5 of the decision.)
Be sure to find and carefully read the posts of other Forum contributors who explained the affirmative defense confusion lucidly in prior posts.
A third problem identified within the appellate decision was the defendant's failure to exercise diligence in respect of its discovery dispute.
In so many Florida cases the trial courts have trampled on defensive rights to discovery. Here, the trial court seemed to act reasonably fairly.
When faced with the defendant's discovery, the plaintiff sought a protective order and the defendant moved to compel. The court DENIED the plaintiff's motion for a protective order, but deferred ruling on the motion to compel, no doubt to give the parties an opportunity to resolve their discovery dispute. But rather than setting the motion to compel for a hearing, the defendant sat on its hands and waited until the eve of the summary judgment hearing to seek a resolution of the discovery dispute. This is never a good idea.
See the Court's discussion about the Appellant's failure to act diligently (See pages 6-7).
Since the court had already continued the summary judgment hearing and had given the parties an opportunity to resolve their discovery disputes, waiting until the eve of the hearing was improvident. Usually, it would be error for a court to prematurely rule in the face of parties' agreement to resolve discovery issues, but here it seems that the outstanding discovery pertained only to issues which had not been included as defenses in the defendant's answer at all -- standing and fraud -- which were raised for the first time in the summary judgment response without the defense seeking to file an amended answer.
Fourth, the defendant failed to actually set fourth the Unclean Hands defense with sufficient particularity to make out a valid affirmative defense. This is really basis. Again, it was a subject of comment in another recent thread. The 4th DCA nailed the Appellant on this point. If one is going to plead Unclean Hands, one needs to explain what this means in reference to specific allegations of wrongdoing in this particular case (See pages 7-9).
One of the mistakes that many defendants and all too many defense lawyers make is to only read and crow about appellate victories. Reading the decisions of the appellate courts where a trial court's decision was affirmed can be especially instructive.