text:
    U.S. BANK NATIONAL ASSOCIATION, etc., Appellant, v. Jose A. AMAYA, et al., Appellees.
    No. 3D17-576
    District Court of Appeal of Florida, Third District.
    Opinion filed July 25, 2018.
    Lapin & Leichtling, LLP, and Benjamin B. Carter, Coral Gables, for appellant.
    Corona Law Firm, P.A., and Ricardo Corona, Coral Gables, Ricardo M. Corona, and Dennis Donet, Miami, for appellees.
    Before LAGOA, FERNANDEZ, and SCALES, JJ.
   LAGOA, J.

Appellant, U.S. Bank National Association ("U.S. Bank"), appeals from a final judgment entered in favor of Appellees, Jose A. Amaya and Maria T. Pena (the "Borrowers"), determining that U.S. Bank's Verified Amended Complaint to Foreclose Mortgage (the "Verified Amended Complaint") seeking to foreclose on the Borrower's property was barred by both the statute of limitations and res judicata. For the reasons stated below, we reverse the final judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

On February 6, 2006, the Borrowers executed a promissory note (the "Note") in favor of Countrywide Home Loans, Inc., secured by a mortgage on the Borrowers' real property in Miami-Dade County. The Note was endorsed in blank and assigned to U.S. Bank. After the Borrowers defaulted on the Note, U.S. Bank filed its initial foreclosure action against the Borrowers in 2009, alleging that the Borrowers failed to make a payment due on May 1, 2008, and all subsequent payments. On September 14, 2012, that action was involuntarily dismissed without prejudice.

After the dismissal of that previous action, Select Portfolio Servicing, Inc. ("SPS"), U.S. Bank's servicing agent, sent a default letter dated February 19, 2013, informing the Borrowers that they were in default for payments due since May 1, 2008, as well as for advances made on the Borrowers' behalf and the deficit in their escrow account, and that they had thirty days to cure the default. On May 28, 2014, U.S. Bank filed the instant foreclosure complaint, alleging that "[t]here is a default under the terms of the Note and Mortgage for the May 1, 2008, payment and all payments due thereafter." Subsequently, U.S. Bank moved to amend its foreclosure complaint and filed the Verified Amended Complaint, re-alleging that the Borrowers "have defaulted under the covenants, terms and agreements of the Note in that the payment due May 1, 2008, and all subsequent payments have not been paid." On November 6, 2015, the Borrowers filed their Answer and Affirmative Defenses to the Verified Amended Complaint, raising various affirmative defenses including the statute of limitations, res judicata, and failure to comply with conditions precedent.

On January 19, 2017, the case proceeded to a bench trial, where U.S. Bank introduced into evidence through an employee of SPS: (1) the original Note; (2) a certified copy of the mortgage; (3) a certified copy of the assignment of mortgage from MERS; (4) a power of attorney between U.S. Bank and its servicing agent, SPS; (5) SPS and prior servicers' records regarding payment history and escrow amounts for the loan; and (6) SPS's default letter to the Borrowers. On February 14, 2017, the trial court entered the final judgment in favor of the Borrowers, finding that U.S. Bank's Verified Amended Complaint was barred by both the statute of limitations and res judicata. The trial court additionally noted that "any attempt by [U.S. Bank], after the close of its evidence, to 'waive' or 'reduce' those monthly installments that are barred by the statute of limitations to assert a different cause of action would violate Paragraph 22(a) of the subject Mortgage" requiring U.S. Bank's notice to specify the default, as the default letter was based upon the May 1, 2008, default. This appeal ensued.

II. STANDARD OF REVIEW

" '[A] legal issue surrounding a statute of limitations question is an issue of law subject to de novo review.' " Nationstar Mortg., LLC v. Sunderman, 201 So.3d 139, 140 (Fla. 3d DCA 2015) (quoting Fox v. Madsen, 12 So.3d 1261, 1262 (Fla. 4th DCA 2009) ). " '[A] trial court's ruling that relief is barred on the grounds of res judicata ... is reviewed de novo.' " United Auto. Ins. Co. v. Law Offices of Michael I. Libman, 46 So.3d 1101, 1103 (Fla. 3d DCA 2010) (quoting Felder v. State, Dep't of Mgmt. Servs., Div. of Ret., 993 So.2d 1031, 1034 (Fla. 1st DCA 2008) ).

III. ANALYSIS

On appeal, U.S. Bank contends that the trial court erred by finding its foreclosure action barred by both the statute of limitations and res judicata. We address each ground separately.

A. Statute of Limitations

U.S. Bank contends that its foreclosure action was not barred by the statute of limitations because it alleged and proved that the Borrowers were in default on payments within the five-year limitations period, even though the initial default date of May 1, 2008 falls outside the limitations period. We agree. " '[A] subsequent and separate alleged default create[s] a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.' " Bartram v. U.S. Bank Nat'l Ass'n, 211 So.3d 1009, 1019 (Fla. 2016) (quoting Singleton v. Greymar Associates, 882 So.2d 1004, 1008 (Fla. 2004) ). "[W]ith each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right ... to accelerate all sums then due under the note and mortgage," i.e., "filing a successive foreclosure action premised on a 'separate and distinct' default." Id.

In the instant case, U.S. Bank alleged in its Verified Amended Complaint-and proved through evidence adduced at trial-that the Borrowers "have defaulted under the covenants, terms and agreements of the Note in that the payment due May 1, 2008, and all subsequent payments have not been paid." This Court and all of our sister district courts of appeal have held this or similar language is sufficient to bring a foreclosure action within the five-year limitations period under Bartram. See, e.g., Wells Fargo Bank, N.A. v. Rendon, 245 So.3d 917, 2018 WL 1832582 (Fla. 3d DCA Apr. 18, 2018) ("Because Wells Fargo's complaint specifically alleged that Rendon missed the February 1, 2009 payment and 'all subsequent payments' ..., Wells Fargo's complaint survived the alleged expiration of the statute of limitations."); Desai v. Bank of N.Y. Mellon Tr. Co., 240 So.3d 729, 731 (Fla. 4th DCA 2018) ("[The bank's] second complaint alleged, and it was not contested, that Desai was in a continuing state of default. Therefore, the note and mortgage remained enforceable by a foreclosure based on any default occurring within the statute of limitations.");

Bank of N.Y. Mellon Corp. v. Anton, 230 So.3d 502, 504 (Fla. 3d DCA 2017) ("Given the allegation that Anton failed to make all subsequent payments, the mere fact that the second foreclosure complaint alleged the same initial default date as that alleged in the first foreclosure complaint ... is of no moment."); Forero v. Green Tree Servicing, LLC, 223 So.3d 440, 445 (Fla. 1st DCA 2017) (finding a foreclosure action was not barred by the statute of limitations "where it was alleged and established at trial that no payments had been made on the mortgage since November 2008, [as] each missed payment constituted a new default"); Klebanoff v. Bank of N.Y. Mellon, 228 So.3d 167, 169 (Fla. 5th DCA 2017) ("Because the Bank alleged and proved missed payments within the five years prior to the filing of its complaint, its action was not barred by the statute of limitations."); Desylvester v. Bank of N.Y. Mellon, 219 So.3d 1016, 1020 (Fla. 2d DCA 2017) ("Here, in addition to alleging the initial date of default as October 1, 2008, the Bank alleged that the borrowers were in a continuing state of default up to the time of the filing of the complaint.")

The Borrowers, however, contend that Collazo v. HSBC Bank USA, N.A., 213 So.3d 1012, 1013 (Fla. 3d DCA 2016), reh'g granted, where this Court found a foreclosure action was barred by the statute of limitations, applies to the instant case. We find Collazo distinguishable, as the bank in that case simply reasserted "the same payment default date and basis for acceleration in both ... [foreclosure] complaints" rather than alleging a continuous state of default beginning with the same initial default date. Id. In contrast to the bank in Collazo, U.S. Bank alleged a continuous state of default beginning with the installment due May 1, 2008. U.S. Bank's allegations therefore fall squarely within the scope of the cases discussed above, and the trial court erred in finding that U.S. Bank's foreclosure action was barred by the statute of limitations.

B. Res Judicata

U.S. Bank also argues that the trial court erred by finding that its foreclosure action was barred the doctrine of by res judicata. We agree. " 'The foundation of res judicata is that a final judgment in a court of competent jurisdiction is absolute and settles all issues actually litigated in a proceeding as well as those issues that could have been litigated.' " Philip Morris USA, Inc. v. Douglas, 110 So.3d 419, 425 (Fla. 2013) (quoting Engle v. Liggett Grp., Inc., 945 So.2d 1246, 1259 (Fla. 2006) ); accord Youngblood v. Taylor, 89 So.2d 503 (Fla. 1956) ("[U]nder [res judicata,] a judgment on the merits of a controversy is conclusive as to the parties and their privies and will bar a subsequent action between the same parties on the same cause of action[,] ... [and] a final judgment or decree not only bars a later suit 'between the same parties based ... upon the same cause of action' but also upon matters that 'could have been raised.' " (quoting Gordon v. Gordon, 59 So.2d 40, 44 (Fla. 1952) ) ).

In Singleton, 882 So.2d 1004 (Fla. 2004), the Florida Supreme Court held that under the doctrine of res judicata, "a dismissal with prejudice in a mortgage foreclosure action does not necessarily bar a subsequent foreclosure action on the same mortgage." Id. at 1005. The Florida Supreme Court further noted that "[w]hile it is true that a foreclosure action and an acceleration of the balance due based upon the same default may bar a subsequent action on that default, an acceleration and foreclosure predicated upon subsequent and different defaults present a separate and distinct issue." Id. at 1007 ; see also Deutsche Bank Tr. Co. Ams. v. Beauvais, 188 So.3d 938, 943-44 (Fla. 3d DCA 2016).

In the instant case, U.S. Bank's previous foreclosure action was involuntarily dismissed without prejudice . Generally, an involuntary dismissal without prejudice does not operate as an adjudication on the merits. See, e.g., HSBC Bank USA, Nat'l Ass'n for Registered Holders of Nomura Home Equity Home Loan, Inc. v. Estate of Petercen, 227 So.3d 640, 643-44 (Fla. 4th DCA 2017) (reversing an order dismissing the lender's foreclosure action on res judicata grounds where the second action was based on subsequent defaults and "a prior proceeding was dismissed without prejudice"). Moreover, U.S. Bank's Verified Amended Complaint alleges that "all subsequent payments have not been paid" after the May 1, 2008, default, thereby including the "subsequent and different defaults" after the filing of, and subsequent dismissal, of the previous action contemplated by Singleton.

The Borrowers, however, rely on language in Bartram, where the Florida Supreme Court stated that:

[w]hen a mortgage foreclosure action is involuntarily dismissed pursuant to Rule 1.420(b), either with or without prejudice, the effect of the involuntary dismissal is revocation of the acceleration, which then reinstates the mortgagor's right to continue to make payments on the note and the right of the mortgagee, to seek acceleration and foreclosure based on the mortgagor's subsequent defaults.

211 So.3d at 1012. The Borrowers contend that this language treats an involuntary dismissal with prejudice the same as an involuntarily dismissal without prejudice for purposes of res judicata. We find this argument to be without merit. First, in Bartram, the Florida Supreme Court addressed the application of the statute of limitations to a subsequent foreclosure action, not the application of the doctrine of res judicata. Second, even if that language from Bartram were to apply to dismissals based on res judicata, Singleton establishes that an action based on "subsequent and different" defaults are not barred by res judicata. Therefore, we find that the trial court erred in concluding that the instant action was barred by res judicata. Because the Verified Amended Complaint was based on subsequent defaults occurring after the initial complaint was dismissed without prejudice, res judicata did not bar the action.

IV. CONCLUSION

Because the trial court erred in finding that U.S. Bank's foreclosure action was barred by both the statute of limitations and res judicata, we reverse the final judgment entered in favor of the Borrowers and remand to the trial court for entry of a judgment of foreclosure in favor of U.S. Bank.

Reversed and remanded for further proceedings consistent with this opinion.

      The trial court took judicial notice of this complaint, and its subsequent involuntary dismissal, in its final judgment.

      After the presentation of its evidence, U.S. Bank submitted a proposed Final Judgment of Foreclosure that waived installments from May 1, 2008 through May 1, 2009, to the trial court.

      The Borrowers also contend that we should affirm the final judgment because the trial court found that U.S. Bank's foreclosure action violated conditions precedent found in Paragraph 22(a) of the mortgage. Our review of the record reveals that the trial court was simply noting that U.S. Bank's attempt to waive or reduce monthly installments in its proposed Final Judgment of Foreclosure to fit the action within five years of the filing of its complaint would violate conditions precedent in Paragraph 22(a) of the mortgage. The trial court did not find that the filing of U.S. Bank's foreclosure action violated Paragraph 22(a). Borrowers' argument is thus without merit, as the trial court did not find U.S. Bank in violation of conditions precedent as a basis for its final judgment.


source: Caselaw Access Project

author: Winokur, J.

license: Public Domain

text:
    IEZZI FAMILY LIMITED PARTNERSHIP, Appellant, v. EDGEWATER BEACH OWNERS ASSOCIATION, INC., a Florida not for profit corporation; Suzanne Harris; Stephen E. Burgin; Robert D. Miller, a/k/a R.D. Miller ; William R. Terry, Sr.; Frank T. Foster; Lawrence A. Cox; and Harry E. Logue, Appellees.
    No. 1D16-5878
    District Court of Appeal of Florida, First District.
    August 1, 2018 Rehearing Denied September 21, 2018
    Gary A. Shipman, Robert L. Kauffman, and Lana Hillis, Dunlap & Shipman, P.A., Santa Rosa Beach, for Appellant.
    Mary K. Simpson and Amanda W. Gay, Guilday, Simpson, West, Hatch, Lowe & Roane, P.A., Tallahassee, for Appellees.
   Winokur, J.

Iezzi Family Limited Partnership ("Iezzi"), owner of a condominium in the Edgewater Beach Condominiums, filed a 27-count complaint against the condominium's Association and seven current or former directors or officers of the Association ("Directors"), seeking both equitable and legal relief. The trial court dismissed Iezzi's action, finding that its claims were derivative and Iezzi did not comply with derivative pre-suit requirements. On appeal, Iezzi argues that its actions were brought under a statute specific to condominiums, outside of the purview of the derivative procedures. We affirm, and hold that members of not-for-profit condominium associations may not avoid pre-suit requirements for derivative actions.

I. BACKGROUND

A condominium association incorporated under chapter 617, Florida Statutes, the "Florida Not For Profit Corporation Act," is generally subject to its laws. § 617.1703, Fla. Stat. The members of these associations are the condominium unit owners, and the officers and directors of the associations owe these members certain fiduciary responsibilities. See § 718.111, Fla. Stat. However, the association has broad powers and duties, including all of those set forth in chapter 617, unless otherwise noted. Id.

Section 617.07401, Florida Statutes, restricts the ability of members to bring lawsuits "in the right of" their non-for-profit corporation. Members must bring their complaints to the board of directors to allow the corporation to conduct investigations and initiate a lawsuit. Id. If the corporation proves that it has conducted an independent and reasonable investigation, and determines in good faith that a lawsuit is not in the best interests of the corporation, a court may dismiss the proceeding. Id.

Section 718.303(1), Florida Statutes, provides a cause of action for damages or equitable relief that may be pursued by either an association or unit owner. Liability for violating chapter 718 or the association's governing documents may be imposed on the association, unit owners, directors, and tenants. § 718.303, Fla. Stat. The broad language of this statute encompasses a wide variety of violations.

Iezzi's complaint alleges that the Association acted improperly and the Directors breached their fiduciary duties, resulting in various illegal expenditures and assessments, and losses of Association funds. Iezzi argues that to limit section 718.303(1) actions by requiring that they comply with the pre-suit requirements of section 617.07401, would necessarily create a conflict between the statutes. As Iezzi asserts, if the sections do conflict, the provisions of chapter 718 must control. See § 617.1703, Fla. Stat.; see also Heron at Destin W. Beach & Bay Resort Condo. Ass'n, Inc. v. Osprey at Destin W. Beach , 94 So.3d 623, 631 (Fla. 1st DCA 2012).

II. ANALYSIS

Because it "is axiomatic that statutes must be read with other related statutes," and courts must "construe related statutory provisions in harmony with one another" when possible, we conclude that sections 718.303(1) and 617.07401 do not conflict. See Abbott Labs. v. Mylan Pharm., Inc. , 15 So.3d 642, 657 (Fla. 1st DCA 2009) (quoting State v. Negrin , 306 So.2d 606, 607 (Fla. 1st DCA 1975) ; Forsythe v. Longboat Key Beach Erosion Control Dist ., 604 So.2d 452, 455 (Fla. 1992) ).

In Part A, we define derivative actions and note that plaintiffs may not evade pre-suit requirements by labeling their complaints a certain way. In Part B, we examine the application of common-injury claims to condominiums since chapter 718's enactment in 1976. Part C discusses the enactment of section 617.07401 in 2009, and the limited case law following it. We conclude by finding that section 617.07401 applies to the instant action and Iezzi's failure to comply with its requirements merits dismissal.

A. Derivative Actions

A derivative suit has been defined as an action in which a stockholder seeks to enforce a right of action existing in the corporation ; the injury sustained by the stockholder bringing such suit is basically the same as the injury sustained by other stockholders in the corporation.

Leppert v. Lakebreeze Homeowners Ass'n, Inc. , 500 So.2d 250, 252 (Fla. 1st DCA 1986) (emphasis in original).

Iezzi acknowledges that its actions fit this description. It further acknowledges that compliance with derivative procedures has been required in the condominium context. See Collado v. Baroukh , 226 So.3d 924, 926 (Fla. 4th DCA 2017) (holding that condominium owner's "[n]oncompliance with the pre-suit requirements of section 617.07401 mandates dismissal of the suit"). Iezzi contends that the plaintiff in Collado chose to bring her action as a derivative claim, whereas Iezzi does not bring its action pursuant to the derivative-claim statute. But plaintiffs may not decide that they are not subject to statutory requirements merely by labeling their allegations in an effort to avoid them. See S. Miami Hosp., Inc. v. Perez , 38 So.3d 809, 811 (Fla. 3d DCA 2010) (rejecting the plaintiff's "disingenuous[ ] attempts to avoid" pre-suit requirements for medical malpractice actions by "recharacterizing" the allegations); Dr. Navarro's Vein Ctr. of Palm Beach, Inc. v. Miller , 22 So.3d 776, 778 (Fla. 4th DCA 2009) (holding that the "factual allegations belie[d] the conclusory legal allegations," and, "despite the plaintiff's creative dance around the obvious, this complaint alleges a claim of medical negligence").

The plaintiff in Leppert brought suit against her homeowners association alleging "corporate mismanagement, invalidity of the bylaws, and a need for court supervision of all corporate expenditures." 500 So.2d at 252. She argued that her action was not derivative because she brought it individually and sought redress for injuries she sustained directly. Id. This Court reviewed the substance of the allegations made, noting that "the character of the suit is to be determined from the gravamen of the complaint." Id. We held that the claim was derivative, finding that the injury alleged was not distinct from other homeowners and any harm was primarily against the corporation. Id. ; see also Fox v. Prof'l Wrecker Operators of Florida, Inc. , 801 So.2d 175, 179 (Fla. 5th DCA 2001) ("[T]he injury is the determining factor in deciding whether a claim is direct or derivative; if the injury is to the corporation, and only indirectly harms the shareholder, the claim must be pursued as a derivative claim."). The substance of the allegations made, and not what they are labeled, determines the action.

B. Common Injury Claims & Condominiums: 1976-2009

The standing of individual condominium owners to allege violations of fiduciary duties owed to associations has been limited since the inception of chapter 718. In Avila S. Condo. Ass'n, Inc. v. Kappa Corp. , 347 So.2d 599, 602, 605 (Fla. 1977), a condominium association and several individual plaintiffs sued three of the original owners, developers, and officers of the condominium, alleging self-dealing and other improper acts. The supreme court noted that "the allegation, boiled down, is that a fiduciary duty owed to the Association was breached." Id. at 609. Because the individual plaintiffs pled no injury distinct from that to the association, only the association could bring suit. Id.

Since Avila , many unit owners alleging injuries common to others have found success in court, but these suits largely fall into two categories: those seeking equitable relief and those brought in a representative capacity.

Many courts have permitted condominium unit owners to seek equitable relief from their associations and directors, especially when the alleged injury is to common areas of the condominium. See , e.g. , Hobbs v. Weinkauf , 940 So.2d 1151 (Fla. 2d DCA 2006) (holding that owners could seek equitable relief based on association's failure to comply with statutory accounting requirements); Sheoah Highlands, Inc. v. Daugherty , 837 So.2d 579 (Fla. 5th DCA 2003) (unit owners complaint that other owners erected non-compliant screen enclosures on common property required them to be removed); Islandia Condo. Ass'n, Inc. v. Vermut , 501 So.2d 741 (Fla. 4th DCA 1987) (association's unauthorized repainting of buildings required owners' vote to decide whether to repaint buildings back to original color).

Other cases have found standing when the plaintiffs have represented more than their own individual interests. See Rogers & Ford Const. Corp. v. Carlandia Corp. , 626 So.2d 1350, 1354 (Fla. 1993) ("Appellate decisions indicate that actions with respect to common areas or common elements of condominiums have been brought either as class actions, derivative actions, or by a unit owner joined by the condominium association and/or other unit owners."). In Rogers , the supreme court determined that an owner could sue developers or general contractors over a common injury "only after ensuring that the interests of the other unit owners are represented in the action," but specifically declined to address whether individual owners could sue the association or directors for breaching fiduciary duties. Id. at 1355 & 1355 n.7.

Iezzi points to the above cases and others similar for support, while its own suit seeks legal damages and was brought in a purely individual capacity.

C. Enactment of Section 617.07401

Despite a possible 1993 attempt to prohibit members of not-for-profit corporations from bringing derivative actions, they were continually permitted, although perhaps to a lesser extent in the condominium context. Not until 2009 did the Legislature enact section 617.07401, providing a pre-suit process for members to bring derivative claims in the right of not-for-profit corporations. See Ch. 09-205, § 24, at 2060, Laws of Fla.

This statute resolves the representative issues discussed in Rogers . Section 718.303(1) permits condominium unit owners and associations to take action against each other, as well as directors and tenants. But if the claims are derivative, plaintiffs must comply with the requirements necessary for any not-for-profit corporation under section 617.07401. This legislative requirement resolves the "numerous practical problems" discussed by the supreme court in Rogers regarding individuals bringing common-injury claims. 626 So.2d at 1354 (including "determining the appropriate measure of damages to the unit whose owner sued, as distinct from the remaining units; allocating the recovered damages; litigating multiple lawsuits; incurring unnecessary costs incident to having multiple trials; having potentially contradictory adjudications; expediting resolution of controversies; and accomplishing repairs").

Little case law discussing section 617.07401 has developed since its inception. In Sharma v. Ramlal , 76 So.3d 955 (Fla. 2d DCA 2011), members and directors of a not-for-profit corporation sued the president of the corporation and the corporation itself, alleging breaches of fiduciary duties and fraud, among other charges. In a concurrence, Judge LaRose questioned the plaintiffs' standing, noting that their cause of action appeared to belong to the corporation, and they did not allege compliance with section 617.07401. Id at 956-57 (LaRose, J., concurring); see also Udick v. Harbor Hills Dev., L.P. , 179 So.3d 489, 491 (Fla. 5th DCA 2015) (noting that derivative suit requirements apply to corporations not for profit); Collado , 226 So.3d at 927 (holding that condominium owner's action did not adequately comply with section 617.07401 ).

Iezzi cites MacKenzie v. Centex Homes, 208 So.3d 790, 791 (Fla. 5th DCA 2016), which dealt with a homeowners association and an analogous cause-of-action statute. The plaintiff filed an action for a declaratory judgment against the association and Centex Homes, which was then in control of the association, alleging that Centex Homes failed to make statutorily required monetary contributions to the association. Id. at 791-92. Centex Homes argued that the Mackenzies did not have standing because any recovery stemming from a declaratory judgment would go to the association and not the Mackenzies. Id. at 793. The Fifth District found standing, concluding that an increase in the association's accounts lessened the chance of a special assessment on the homeowners in the future, and thus, the plaintiffs had a "bona fide interest in the account." Id.

We find that MacKenzie does not apply here for three reasons. First, MacKenzie does not carry the same concerns apparent in Rogers regarding plaintiffs representing unit owners similarly injured. While the declaratory action in Mac K enzie was brought individually, its success would benefit the entire class; the plaintiffs' success would result in an influx of funds for the association, giving every homeowner potential relief in the form of reduced assessments.

In contrast, here, success against the Association and/or Directors would result only in relief for Iezzi. Second, the factual posture of the instant case is more analogous to Leppert and Avila , both of which held that the directors' alleged violations of fiduciary duties were derivative claims. Third, there is no indication that the defendant made any argument as to compliance with derivative pre-suit requirements.

III. CONCLUSION

Iezzi claims injuries not distinct from any other unit owner, and seeks legal damages for its exclusive benefit. This is a derivative action, and because sections 718.303(1) and 617.07401 do not conflict, the court did not err in dismissing Iezzi's complaint because Iezzi did not comply with section 617.07401 pre-suit requirements. We affirm, and repeat the principle that the substance of the allegations made in a complaint determines the nature of the action.

AFFIRMED.

B.L. Thomas, C.J., and Makar, J., concur.

      "The condominium is a hybrid estate in property law whereby an individual obtains fee simple ownership of a unit and shares with other unit owners an undivided interest in the common elements." Rogers & Ford Const. Corp. v. Carlandia Corp. , 626 So.2d 1350, 1352 (Fla. 1993).

      See also Dinuro Invs., LLC v. Camacho , 141 So.3d 731, 738-41 (Fla. 3d DCA 2014) (holding that Florida requires a direct harm and special injury to a corporation member, or a special duty owed, for a member to maintain an individual action compared to a derivative one); Braun v. Buyers Choice Mortg. Corp. ex rel. McAloon , 851 So.2d 199, 203 (Fla. 4th DCA 2003) (holding that the claims were derivative because the body of the complaint alleged injuries that equally affected other corporation shareholders).

      We note that although both sections 718.111 and 718.303 have been repeatedly amended since 1976, there have been no changes relevant to the issues before us, and Iezzi does not contend otherwise.

      For a discussion of the 1993 amendment to chapter 617, and its effect, see Larsen v. Island Developers, Ltd. , 769 So.2d 1071 (Fla. 3d DCA 2000), and Fox , 801 So.2d at 179.


author: PER CURIAM.

text:
    WINFIELD INVESTMENTS, LLC, Ivan Brotherton, Daisy Brotherton, Arthur Winfield and Gloria Winfield, Appellants, v. PASCAL-GASTON INVESTMENTS, LLC, Appellee.
    Case No. 5D17-1304
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 17, 2018
    Quoc Van, Sanford, for Appellants.
    Keith A. Graham and Shannon M. Wiggins, of Marchena and Graham, P.A., Orlando, for Appellee.
   PER CURIAM.

Ivan and Daisy Brotherton, and Arthur and Gloria Winfield (collectively "Defendants"), appeal the trial court's final judgment, which found Defendants liable for breach of warranty, unjust enrichment, and fraud. As to the count for breach of warranty, the trial court found Defendants individually liable by piercing the corporate veil of Winfield Investments, LLC. (Defendants were the sole members of Winfield Investments.) We affirm the judgment of liability regarding breach of warranty without further discussion. For the reasons explained, we reverse the remainder of the judgment under review.

In 2005 Adriana and Blanca Leon executed a purchase-money mortgage and promissory note in favor of U.S. Bank. The mortgage was recorded in the public records of Orange County, Florida as a lien against the property. In 2011 U.S. Bank filed a foreclosure complaint against the Leons and Glenmuir Homeowners Association, Inc. ("Glenmuir") alleging continuing default beginning September 2009. In January 2012, Glenmuir filed a cross-claim for foreclosure against the Leons claiming that they had failed to pay assessment fees.

In April 2012, a trial court entered a final judgment of foreclosure in Glenmuir's favor on its junior lien and ordered the Clerk of Court to sell the property at a public sale if the Leons failed to pay the amount owed. In May 2012, Defendants, through Winfield Investments, purchased the property by bidding $12,700 at the foreclosure sale. The certificate of title issued to Defendants was captioned "U.S. Bank National Association, as Trustee for the Certificateholders of Harborview Mortgage Loan Trust ... v. Adriana P. Leon, Blanca Leon, et al."

Five months later, in October 2012, Pascal-Gaston Investments, LLC ("PGI"), through Maurice Simpson, a realtor hired by PGI to handle the transaction, offered to purchase the property from Winfield Investments. The parties eventually entered into a contract, which provided in pertinent part that the property was "[p]urchased as is, subject to lien amounts being verified." This contract was executed by both parties in early November 2012. In the contract, PGI promised to pay Defendants $70,000. In exchange, Defendants promised to "convey marketable title to the Real Property."

PGI hired First American Title Insurance Company ("First American") to perform the title search. As previously indicated, the mortgage in favor of U. S. Bank was recorded in the public records as a lien on the property. A cursory search of those records would have revealed the existence of the mortgage in the chain of title. Nevertheless, First American informed PGI before closing that all liens on the property had been cleared, offered to insure title, and prepared a warranty deed. First American subsequently paid PGI the limits of its title insurance policy for its failure to reveal the existence of the mortgage.

On November 29, 2012, Defendants executed the warranty deed in favor of PGI. All Defendants signed the deed. The deed contained a covenant against encumbrances, stating that the property was "free of all encumbrances except taxes," and a covenant of warranty, promising that Defendants would "defend [title] against the lawful claims of all persons." On December 21, 2012, U.S. Bank obtained a final summary judgment of mortgage foreclosure in its favor, in which the trial court found that U.S. Bank was owed $441,297.08 on its senior lien.

From December 2012 until March 2013, one of PGI's members-Ted Khoury, who held equal ownership of the company with his wife-worked to improve the subject property. Because the property had been severely vandalized, Khoury replaced the air conditioning system, the doors and door frames, the kitchen cabinets, the kitchen island, and the electrical system; he sanded the floors, painted the interior, and completely replaced a bathroom, among other improvements. In a deposition, Khoury testified that he spent about $36,000 on labor and materials, excluding his own efforts. He testified that the "labor [he] put into the property" was worth "about $15,000."

In early April 2013, Khoury found an eviction notice on the front door. He soon discovered that "U.S. Bank had a first mortgage on the property." PGI sent a demand letter to Defendants requesting defense of title, but Defendants did not make an effort to defend it. After PGI received $70,000 from First American, the limit of the title insurance policy, PGI purchased the property from U.S. Bank for $202,342.

PGI filed suit against Defendants. The amended complaint filed by PGI included in pertinent part the following counts: breach of warranty by Winfield Investments, acting as a "mere instrumentality of [Defendants] for fraudulent ... purposes"; unjust enrichment; and fraud. In its unjust enrichment count, PGI argued: "In the alternative that this Court finds that the Defendants are not personally liable under the Warranty Deed for breach of warranty, the Defendants are not in privity of contract with PGI and are liable to PGI for unjust enrichment."

On February 28 and March 2, 2017, the trial court held a non-jury trial resulting in the final judgment we review. As we have previously indicated, we affirm without further discussion that part of the final judgment imposing individual liability on Defendants for breach of warranty. Therefore, the focus of this opinion will be the remaining counts.

As to the part of the final judgment finding Defendants liable for unjust enrichment, we reverse. Upon de novo review of the trial court's legal conclusions, the count of unjust enrichment cannot be upheld. "Florida courts have held that a plaintiff cannot pursue a quasi-contract claim for unjust enrichment if an express contract exists concerning the same subject matter." Diamond "S" Dev. Corp. v. Mercantile Bank, 989 So.2d 696, 697 (Fla. 1st DCA 2008) ; accord Hazen v. Cobb, 96 Fla. 151, 117 So. 853, 858 (1928) ("The law will not imply a contract where a valid express one exists. This rule is supported by the great weight of authority.").

Regarding the fraud count, the trial court found Defendants liable based on three theories: fraudulently misrepresenting in the warranty deed that the property was free from all encumbrances, fraudulently concealing the mortgage, and fraudulently promising to defend the title without intending to do so. Regarding the final theory, we reverse because stipulations contained in a warranty deed, even if untrue, do not constitute fraud in the sale. See Paine v. Kemp, 77 Fla. 531, 82 So. 53, 54 (1919) ; cf. White v. Crandall, 105 Fla. 70, 143 So. 871, 879 (1932) (holding that once a purchaser accepts a deed pursuant to a contract for sale, "the transaction is closed, and the purchaser is confined to his action for breach of the covenant").

Defendants contend that the mortgage was recorded in the public records and, therefore, knowledge of its existence should have been imputed to PGI. Based on the facts and circumstances of this particular case, we conclude that the existence of the recorded mortgage was obvious to PGI and that the fraudulent misrepresentation or concealment of the mortgage by Defendants could not form the basis of a finding of fraud by the trial court.

In Butler v. Yusem, 44 So.3d 102 (Fla. 2010), the Florida Supreme Court held:

Justifiable reliance is not a necessary element of fraudulent misrepresentation. As we have stated, there are four elements of fraudulent misrepresentation: "(1) a false statement concerning a material fact; (2) the representor's knowledge that the representation is false; (3) an intention that the representation induce another to act on it; and (4) consequent injury by the party acting in reliance on the representation." Johnson, 480 So.2d at 627 (emphasis added). This is consistent with our prior opinion in Besett, 389 So.2d at 998, holding that in an action involving fraudulent misrepresentation, the buyers did not need to allege that they had investigated the truth of the misrepresentations because for this claim, "a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an investigation, unless he knows the representation to be false or its falsity is obvious to him." As we have explained, "the policy behind our holding in Besett is to prohibit one who purposely uses false information to induce another into a transaction from profiting from such wrongdoing." Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So.2d 334, 336-37 (Fla. 1997).

44 So.3d at 105. Therefore, although under Butler justifiable reliance was not a necessary element of fraudulent misrepresentation that PGI had to prove, because the mortgage in the instant case was recorded in the public records as a lien on the property, we believe that it was obvious to PGI under Besett v. Basnett, 389 So.2d 995, 998 (Fla. 1980), and M/I Schottenstein Homes, Inc. v. Azam, 813 So.2d 91, 95 (Fla. 2002). See Schottenstein, 813 So.2d at 95 (holding that situations may exist when information within a parcel's chain of title renders certain misrepresentations regarding title obviously false because "an examination of these documents prior to a transfer of the real property is entirely expected").

We note that in Schottenstein, the Florida Supreme Court acknowledged that in Besett it adopted sections 540 and 541 of the Restatement (Second) of Torts. 813 So.2d at 93. Section 540 provided in pertinent part that "[t]he recipient of a fraudulent misrepresentation of fact is justified in relying upon its truth, although he might have ascertained the falsity ... had he made an investigation." Besett, 389 So.2d at 997 (quoting Restatement (Second) of Torts § 540 (Am. Law Inst. 1976) ). On the other hand, section 541 provided that "[t]he recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or its falsity is obvious to him." Id. (quoting Restatement (Second) of Torts § 541 ). The court also adopted a comment to section 541, which explained that the falsity of a misrepresentation is obvious if it would be made apparent by "a cursory examination or investigation." Id. (quoting Restatement (Second) of Torts § 541 cmt. a). As this court explained in Billington v. Ginn-La Pine Island, Ltd., 192 So.3d 77, 81 n.4 (Fla. 5th DCA 2016), the adoption of these sections of the Restatement indicated that justifiable reliance was an essential element of fraudulent misrepresentation, and justifiable reliance likewise appeared to be an essential element under the holdings of Schottenstein and Johnson v. Davis, 480 So.2d 625, 628 (Fla. 1985). See Johnson, 480 So.2d at 628 ("[T]he Davises' reliance on the truth of the Johnsons' representation was justified ...."). However, the court in Butler did not say that it was overruling the holdings of those cases when it held that justifiable reliance was not an element of fraudulent misrepresentation. 44 So.3d at 105. As this court noted in Billington, the Florida Supreme Court does not overrule itself sub silentio. 192 So.3d at 81 n.4. Therefore, this court in Billington certified a question of great public importance: whether the decision in Butler meant to overrule prior decisions regarding the justifiable reliance requirement. Id. at 85. We likewise certify a similar question to the Florida Supreme Court as a matter of great public importance:

DID THE COURT IN BUTLER OVERRULE THE DECISIONS IN BESETT, JOHNSON, AND SCHOTTENSTEIN BY HOLDING THAT JUSTIFIABLE RELIANCE IS NOT AN ESSENTIAL ELEMENT OF FRAUDULENT MISREPRESENTATION?

In conclusion, we affirm that part of the judgment finding Defendants individually liable to PGI for breach of warranty. We reverse the remainder of the judgment and remand this case to the trial court to enter judgment in favor of PGI only for breach of warranty.

AFFIRMED in part; REVERSED in part; REMANDED; QUESTION CERTIFIED.

SAWAYA, PALMER and TORPY, JJ., concur.


author: Per Curiam.

text:
    ESCAMBIA COUNTY BOARD OF COUNTY COMMISSIONERS, Petitioner, v. EAGER BEAVER, LLC, Respondent.
    No. 1D17-3231
    District Court of Appeal of Florida, First District.
    August 10, 2018 Rehearing Denied October 16, 2018
    Alison Rogers, County Attorney, and Meredith D. Crawford, Assistant County Attorney, of the Escambia County Attorney's Office, Pensacola, for Petitioner.
    Charles F. Beall, Jr., and George R. Mead, II, of Moore, Hill & Westmoreland, P.A., Pensacola, for Respondent.
   Per Curiam.

Petitioner's Petition for Writ of Certiorari is denied.

B.L. Thomas, C.J., and Rowe and M.K. Thomas, JJ., concur.


author: ROTHSTEIN-YOUAKIM, Judge.

text:
    Steven PARMLEY, Appellant, v. DEPARTMENT OF CHILDREN AND FAMILIES, Appellee.
    Case No. 2D17-994
    District Court of Appeal of Florida, Second District.
    Opinion filed August 22, 2018
    Steven Parmley, pro se.
    Alicia Victoria Gonzalez, Tampa, for Appellee.
   ROTHSTEIN-YOUAKIM, Judge.

After an evidentiary hearing, a hearing officer appointed by the Department of Children and Families (DCF) Office of Appeal Hearings denied Steven Parmley's administrative appeal of DCF's purported failure to act on his request for food assistance program benefits. See §§ 120.80(7), 409.285(1), Fla. Stat. (2017) ; Fla. Admin. Code. R. 65-2.042 - .069. Parmley now appeals DCF's final administrative decision. Specifically, he challenges the hearing officer's written, nonfinal order-which she had entered before the evidentiary hearing-denying his motion to disqualify her from further participation in the proceeding.

Upon de novo review, see Dep't of Agric. & Consumer Servs. v. Broward County, 810 So.2d 1056, 1058 (Fla. 1st DCA 2002) ; see also Fla. R. App. P. 9.110(h), 9.190(a), we agree with Parmley's argument that the hearing officer erred by not merely evaluating the legal sufficiency of the motion but by also disputing his factual allegations in her written order, thereby placing herself in an adversarial position with him before the hearing at which she would be required to resolve disputed issues of material fact, see Fla. Admin. Code. R. 65-2.056, .057, .060(1), .066 ; Lee Mem'l Health Sys. v. Agency for Health Care Admin., 910 So.2d 892, 893 (Fla. 1st DCA 2005) (citing Bundy v. Rudd, 366 So.2d 440, 442 (Fla. 1978) ); World Transp., Inc. v. Cent. Fla. Reg'l Transp., 641 So.2d 913, 914 (Fla. 5th DCA 1994) (explaining that the hearing officer's attempt to refute the movant's factual allegations in support of its claim of partiality constituted additional grounds for disqualification); see also Cherry Commc'ns, Inc. v. Deason, 652 So.2d 803, 804 (Fla. 1995) ("[W]e have held that the 'administrative context does not and need not match the judicial model,' but that an ' "impartial decision-maker is a basic constituent of minimum due process." ' " (quoting Ridgewood Props., Inc. v. Dep't of Cmty. Affairs, 562 So.2d 322, 323 (Fla. 1990) ) ). Therefore, we reverse the final administrative decision and remand for a new hearing for which DCF's Office of Appeal Hearings shall appoint a new hearing officer.

Reversed; remanded with directions.

CRENSHAW, J., and GENTILE, GEOFFREY H., ASSOCIATE JUDGE, Concur.


author: LaROSE, Chief Judge.

text:
    Richard J. DEROUIN and Kim E. Derouin, Appellants, v. UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC, a Florida limited liability company, Appellee.
    Case No. 2D17-1002
    District Court of Appeal of Florida, Second District.
    Opinion filed August 22, 2018.
    Dineen Pashoukos Wasylik and Jared M. Krukar of DPW Legal, Tampa, for Appellants.
    Laura H. Howard and Stanford R. Solomon of The Solomon Law Group, P.A., Tampa, for Appellee.
   LaROSE, Chief Judge.

Richard and Kim Derouin appeal a final foreclosure judgment entered in favor of Universal American Mortgage Company, LLC. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). The Derouins contend that Universal failed to engage in the face-to-face meeting required by 24 C.F.R. § 203.604 (2012) prior to filing the foreclosure lawsuit. Critical to our resolution of this matter, they maintain that the trial court erred in finding that they waived Universal's compliance with the federal regulations. Because the record before us does not show waiver, we reverse and remand for entry of an order of involuntary dismissal.

Background

Universal loaned money to the Derouins to buy a home. The loan, insured by the Federal Housing Administration, was memorialized by a note and secured by a mortgage. The note provided that, if the Derouins defaulted, Universal "may, except as limited by regulations of the Secretary [of Housing and Urban Development] in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest .... This Note does not authorize acceleration when not permitted by HUD regulations." (Emphasis added).

The HUD regulations upon which the Derouins rely provide, in relevant part, as follows: "The mortgagee must have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid." 24 C.F.R. § 203.604(b). The regulations also cabin the mortgagee's ability to foreclose until the face-to-face interview is conducted.

See 24 C.F.R. § 203.500 ("This subpart identifies servicing practices of lending institutions that HUD considers acceptable for mortgages insured by HUD.... It is the intent of the Department that no mortgagee shall commence foreclosure or acquire title to a property until the requirements of this subpart have been followed.").

The regulations establish several exceptions to the face-to-face meeting requirement, two of which apply here. First, a mortgagee may be excused from conducting the interview when "[t]he mortgagor has clearly indicated that he will not cooperate in the interview." 24 C.F.R. § 203.604(c)(3). Second, a meeting is unnecessary when "[a] reasonable effort to arrange a meeting is unsuccessful." 24 C.F.R. § 203.604(c)(5). "A reasonable effort to arrange a face-to-face meeting with the mortgagor" includes "at a minimum ... one letter sent to the mortgagor certified by the Postal Service as having been dispatched" and "at least one trip to see the mortgagor at the mortgaged property." 24 C.F.R. § 203.604(d).

Universal sued the Derouins after they defaulted on their loan payments. Universal alleged that "[a]ll conditions precedent to commencement and maintenance of this action have been performed, satisfied[,] or otherwise discharged." The Derouins answered the complaint, denied the substantive allegations, and asserted several affirmative defenses. Universal replied to the affirmative defenses.

With the trial court's permission, the Derouins filed a second amended answer. See Thompson v. Jared Kane Co., Inc., 872 So.2d 356, 360 (Fla. 2d DCA 2004) ("The Florida Rules of Civil Procedure reflect a clear policy that, absent exceptional circumstances, requests for leave to amend pleadings should be granted."). In that pleading, the Derouins specifically denied that Universal satisfied all conditions precedent to filing suit. Specifically, they alleged that Universal had failed to conduct, or otherwise attempt to conduct, a face-to-face meeting within ninety days of default. The Derouins also raised a corresponding affirmative defense: Universal "[f]ailed to make face-to-face contact or failed to make reasonable attempts to contact Defendants face-to-face as required by 24 C.F.R. § 203.604." Universal did not reply to this new defense.

Following trial, the trial court granted the Derouins' motion for involuntary dismissal based on an evidentiary issue not before us. Universal moved for rehearing. The Derouins opposed that motion, arguing that there were several alternative bases supporting dismissal, including Universal's failure to comply with HUD's face-to-face meeting requirement.

The trial court granted Universal's rehearing motion, finding that the Derouins had "waived their right to seek compliance with 24 C.F.R. § 203.604." The trial court relied on Ms. Derouin's trial testimony "that shortly after the default, she received a telephone call from the Plaintiff or Plaintiff's servicer and that she no longer wished to deal directly with [them]." The trial court observed that the Derouins "were not prejudiced by the lack of a [face-to-face] meeting," and that Universal could not reasonably be expected to engage in such a meeting "[a]fter Ms. Derouin communicated to [Universal] that she was not to be contacted directly." The trial court awarded Universal a final judgment of foreclosure.

Standards of Review

The record compels us to employ several standards of review. To the extent that we review the trial court's interpretation of the note, we utilize de novo review. See Mgmt. Comput. Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627, 630 (Fla. 1st DCA 1999) ("[A] decision interpreting a contract presents an issue of law that is reviewable by the de novo standard of review."). "However, the trial court's order in this case is based-at least in part-on findings of fact and legal conclusions regarding an alleged [waiver]. We defer to the [trial] court's findings of fact when they are based on competent, substantial evidence." U.S. Bank Nat'l Ass'n v. Rios, 166 So.3d 202, 207 (Fla. 2d DCA 2015). Yet, we are not obligated "to disregard record evidence that disproves the lower court's findings or that reveals its ruling to be an abuse of discretion." In re Doe, 932 So.2d 278, 284 (Fla. 2d DCA 2005).

Because the trial court's grant of rehearing, which vacated the prior dismissal order and resulted in entry of a final judgment, was not based upon competent substantial evidence, we reverse. Moreover, because our de novo review of the note demonstrates that involuntary dismissal was appropriate, we order such relief on remand. See Simpson v. State, 33 So.3d 776, 778 (Fla. 4th DCA 2010) ("The standard of review of a trial court's denial of a motion to dismiss is de novo."); Perez v. Perez, 973 So.2d 1227, 1231 (Fla. 4th DCA 2008) ("An involuntary dismissal is properly entered only where the evidence considered in the light most favorable to the non-moving party fails to establish a prima facie case."); Robinson v. Wright, 425 So.2d 589, 589 (Fla. 3d DCA 1982) ("Where no evidence [i]s presented in a non-jury trial to establish a prima facie case, it [i]s proper to grant defendant's motion ... for involuntary dismissal ....").

Analysis

I. 24 C.F.R. § 203.604 as a condition precedent

The parties tacitly agree that the face-to-face meeting requirement is a condition precedent to filing a foreclosure lawsuit. For purposes of this appeal, we assume the same. See, e.g., ARC HUD I, LLC v. Ebbert, 212 So.3d 513, 515-16 (Fla. 2d DCA 2017) (reversing an award of summary judgment because the mortgagee created an issue of material fact as to whether an exception applied to the "condition precedent" of a face-to-face interview); White v. Planet Home Lending, LLC, 234 So.3d 802, 803 n.1 (Fla. 4th DCA 2018) ("Absent evidence that Appellee engaged in a face-to-face interview with Appellant before the former filed its foreclosure complaint or that any exception to the interview requirement applied, it would be appropriate to enter an involuntary dismissal of Appellee's foreclosure complaint." (citing McIntosh v. Wells Fargo Bank, N.A., 226 So.3d 377, 379 (Fla. 5th DCA 2017) ) ); Harris v. U.S. Bank Nat'l Ass'n, 223 So.3d 1030, 1032 (Fla. 1st DCA 2017) (holding that compliance with face-to-face meeting requirement was a condition precedent to initiating foreclosure action); Palma v. JPMorgan Chase Bank, Nat'l Ass'n, 208 So.3d 771, 773, 775 (Fla. 5th DCA 2016) (holding that mortgage language providing, in the event of a default, the debt could be accelerated "except as limited by regulations of the Secretary ... of Housing and Urban Development" incorporated the federal regulations, including the face-to-face interview requirement, as a condition precedent to filing suit); cf. Laws v. Wells Fargo Bank, N.A., 159 So.3d 918, 919 (Fla. 1st DCA 2015) (reversing mortgagee's award of summary judgment because mortgagor was "entitled to raise failure to comply with [HUD regulations] as a valid defense to foreclosure").

Seemingly, the case law is unsettled as to whether noncompliance with the regulations must be raised as an affirmative defense or as a specific denial in an answer. Compare Palma, 208 So.3d at 774 ("We find that the trial court erred by requiring Appellant to raise Bank's noncompliance with section 203.604 as an affirmative defense."), with Harris, 223 So.3d at 1033 ("A 'defending party's assertion that a plaintiff has failed to satisfy conditions precedent necessary to trigger contractual duties under an existing agreement is generally viewed as an affirmative defense, for which the defensive pleader has the burden of pleading and persuasion.' " (quoting Custer Med. Ctr. v. United Auto. Ins. Co., 62 So.3d 1086, 1096 (Fla. 2010) ) ). But see Chrzuszcz v. Wells Fargo Bank, N.A., 250 So.3d 766, 767, 2018 WL 3151206 (Fla. 1st DCA June 28, 2018) ("Here, as in Palma, where the Bank asserted in the complaint that all conditions precedent had been satisfied, but the Borrower denied that assertion with the specific claim that the Bank failed to meet the face-to-face counseling requirement of section 203.604, the burden of proving the condition precedent was shifted back to the Bank.").

We need not weigh in on the conflict. See Pagan v. Sarasota Cty. Pub. Hosp. Bd., 884 So.2d 257, 264 (Fla. 2d DCA 2004) ("It is a long-standing rule of appellate jurisprudence that the appellate court should not undertake to resolve issues which, though of interest to the bench and bar, are not dispositive of the particular case before the court."). As the Derouins inform us, "in an abundance of caution" they raised noncompliance as both an affirmative defense and as a specific denial. Consequently, as the pleadings progressed below, Universal had to demonstrate its compliance with the regulations or that its compliance was excused. See McIntosh, 226 So.3d at 379 ("Here, Borrowers raised noncompliance with § 203.602 and the terms of the note and mortgage as both a specific denial and an affirmative defense. Thus, the burden remained on Wells Fargo to demonstrate compliance with the applicable HUD regulations."). As we shall explain, Universal demonstrated neither.

II. Whether the Derouins waived compliance

Whether the Derouins waived Universal's compliance with the face-to-face meeting requirements begets an antecedent inquiry of whether the trial court could consider the issue.

A. Universal did not avoid the noncompliance affirmative defense

"In pleading to a preceding pleading a party shall set forth affirmatively .... waiver, and any other matter constituting an avoidance or affirmative defense." Fla. R. Civ. P. 1.110(d) (emphasis added). "As a matter of law, waiver ... [is an] affirmative defense[ ] that must be pleaded." Louie's Oyster, Inc. v. Villaggio Di Las Olas, Inc., 915 So.2d 220, 223 (Fla. 4th DCA 2005) (emphasis added). Once the Derouins raised noncompliance as an affirmative defense, Universal should have replied if it sought to avoid the defense. "If an answer ... contains an affirmative defense and the opposing party seeks to avoid it, the opposing party must file a reply containing the avoidance." Fla. R. Civ. P. 1.100(a) ; see, e.g., Reno v. Adventist Health Sys./Sun-Belt, Inc., 516 So.2d 63, 64-65 (Fla. 2d DCA 1987) ("[A] reply to an affirmative defense is necessary only in order to entitle the plaintiff to, in effect, prove an affirmative defense to an affirmative defense."); see also Kitchen v. Kitchen, 404 So.2d 203, 205 (Fla. 2d DCA 1981) ("[I]t is only when 'new matter' is sought to be asserted to avoid the affirmative defense that a reply is required. Consequently, where, as here, the plaintiff does not seek to avoid the substantive allegation of the defendant's affirmative defense, he need not file ... a reply."); Lazar v. Allen, 347 So.2d 457, 458 (Fla. 2d DCA 1977) ("Where a party files no reply to an affirmative defense, this merely denies (as opposed to avoids) the affirmative defense." (citing Fla. R. Civ. P. 1.110(e) ) ).

After all, "[l]itigants in civil controversies must state their legal positions within a particular document, a pleading, so that the parties and the court are absolutely clear what the issues to be adjudicated are." Bank of Am., N.A. v. Asbury, 165 So.3d 808, 809 (Fla. 2d DCA 2015). "An issue that has not been framed by the pleadings, noticed for hearing, or litigated by the parties is not a proper issue for the court's determination." Gordon v. Gordon, 543 So.2d 428, 429 (Fla. 2d DCA 1989). Because Universal failed to address the waiver issue by reply to an affirmative defense, the trial court could not award Universal relief on such a basis. See, e.g., Wolowitz v. Thoroughbred Motors, Inc., 765 So.2d 920, 923 (Fla. 2d DCA 2000) ("Since the defense was waived, it should not have been considered by the trial court, much less used as the basis for granting summary judgment."); Frisbie v. Carolina Cas. Ins. Co., 162 So.3d 1079, 1081 (Fla. 5th DCA 2015) ("Here, because Appellee raised the issue of unclean hands as an avoidance of Appellants' two affirmative defenses, Appellee should have pleaded the issue in a reply to Appellants' answer ...."); Boca Golf View, Ltd. v. Hughes Hall, Inc., 843 So.2d 992, 993 (Fla. 4th DCA 2003) ("The trial court erred when it relied on a defense not raised by the pleadings to grant the motion for involuntary dismissal.").

B. The Derouins' specific denial

Universal fares no better against the Derouins' specific allegation that it "[f]ailed to make face-to-face contact or failed to make reasonable attempts to contact [the Derouins] face-to-face as required by 24 C.F.R. § 203.604." Their specific denial shifted the burden to Universal to prove compliance or an exception to compliance. See Nelson v. Hillsborough County, 189 So.3d 1037, 1039 (Fla. 2d DCA 2016) ("Provided such compliance is specifically denied by the defendant, the burden shifts 'to the plaintiff to prove the allegations concerning the subject matter of the specific denial.' " (quoting Sheriff of Orange Cty. v. Boultbee, 595 So.2d 985, 987 (Fla. 5th DCA 1992) ) ). Universal failed on both fronts. See 24 C.F.R. § 203.604(c)(3), (5). Although the trial court's order granting Universal's rehearing motion failed to specify which of the five enumerated exceptions it relied on to find waiver, subsections (3) and (5) most aptly apply. See 24 C.F.R. § 203.604(c)(1)-(5).

i. 24 C.F.R. § 203.604(c)(3)

At trial, Ms. Shannon Georgantas, a senior staff account manager for Universal, admitted that Universal paid no visit to the Derouins' residence for the purpose of conducting the face-to-face meeting. Elaine Marie Henning, an employee of Universal's loan servicer, conceded that neither Universal nor its servicer requested a face-to-face meeting with the Derouins in the three-month period following their initial default.

Ms. Henning testified that the servicer's records reflected that the servicer called the Derouins' residence roughly forty-five days after default. Apparently, Ms. Derouin instructed the servicer to "only contact [the Derouins'] attorney, he is now handling everything .... She will not speak or give any info to us." Ms. Henning offered that the servicer did not "go out and knock on the Derouin[s'] door" because "[w]e were told to direct everything to her attorney." Curiously, the servicer continued to mail letters directly to the Derouins. Ms. Henning admitted that there had been no request of the Derouins, or their attorney, for the required face-to-face meeting.

Ms. Derouin testified that the servicer never offered a face-to-face meeting. She also testified that she never told Universal or its servicer that she was unwilling to conduct a face-to-face meeting "because they didn't offer." Ms. Derouin readily admitted, that when she spoke on the phone with the servicer, she "told them that I contacted an attorney and they should direct all questions to the attorney." She denied that she "ever indicated to them that [she was] no longer open to a face-to-face meeting notwithstanding [she] hired an attorney."

We cannot say that the Derouins clearly indicated that they would not engage in the face-to-face meeting. Indeed, if Universal never offered such an opportunity, it cannot be the case that the Derouins demonstrated a reluctance or refusal to meet sufficient to excuse Universal's obligations. We are even less inclined to conclude that Ms. Derouin's statement that Universal or its servicer should speak to her lawyer constitutes a clear indication that she was unwilling to cooperate in the face-to-face interview. There was no evidence Universal or its servicer was prohibited from asking the Derouins for a face-to-face meeting through their attorney, nor was there any evidence that the Derouins would not participate in one if asked.

In an apparent effort to buttress its waiver finding, the trial court pointed out that the Derouins "had no interest in mediation." Section 203.604 does not mandate postfiling mediation. Ms. Derouin's rejection of mediation after suit was filed is not indicative of her willingness to meet face-to-face prior to filing. In any event, postfiling actions cannot cure Universal's failure to comply with section 203.604. A party's right to sue "must be measured by the facts as they exist when the suit was instituted." Voges v. Ward, 98 Fla. 304, 123 So. 785, 793 (1929) (holding that party did not have a right to repossess a car when it filed suit before it possessed the notes necessary to have the right to repossession under the contract).

ii. 24 C.F.R. § 203.604(c)(5)

Section 203.604(c)(5) excuses the face-to-face meeting requirement where "[a] reasonable effort to arrange a meeting is unsuccessful." However, this presupposes that an effort was made. Universal's witnesses, Ms. Georgantas and Ms. Henning, as well as Ms. Derouin, testified that neither Universal nor its servicer made any such effort. Thus, the trial court's finding of waiver is unsupported under this claimed exception.

III. Trial by consent

Universal urges that the parties tried the waiver issue by consent. See Fla. R. Civ. P. 1.190(b) ("When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.").

An exception to the rule requiring relief to be pled is if the issue is tried by consent of the parties. "When issues not raised by the pleadings are tried by express or implied consent, they shall be treated in all respects as if they had been raised in the pleadings." An issue is tried by consent "when there is no objection to the introduction of evidence on that issue."

Fed. Home Loan Mortg. Corp. v. Beekman, 174 So.3d 472, 475 (Fla. 4th DCA 2015) (first quoting Fla. R. Civ. P. 1.190(b) ; then quoting Scariti v. Sabillon, 16 So.3d 144, 145-46 (Fla. 4th DCA 2009) ). We reject Universal's position.

Although an unpleaded issue may be tried by consent when a party fails to object to the introduction of evidence on that issue:

[I]n order to rely on questions and answers not objected to during trial as evidencing the opposing party's implied consent to try unpled issues, it must be shown that such questions and answers are irrelevant to any pled issues; the failure to object cannot be taken as implied consent to try unpled issues when there is no occasion for such party to object that such evidence is irrelevant to the issues being tried.

Bilow v. Benoit, 519 So.2d 1114, 1116 (Fla. 1st DCA 1988). Stated differently, "[a] failure to object cannot be construed as implicit consent to try an unpled theory when the evidence introduced is relevant to other issues properly being tried." Raimi v. Furlong, 702 So.2d 1273, 1285 (Fla. 3d DCA 1997) ; see also Nichols v. Michael D. Eicholtz, Enter., 750 So.2d 719, 720 (Fla. 5th DCA 2000) ("We reject appellee's argument that the parties tried the unpled action on an express contract by implied consent because an unpled theory may not be tried by implied consent when the evidence presented at trial is relevant to other issues which are properly being tried.").

Universal argues that the Derouins consented to try the waiver issue by presenting evidence of Ms. Derouin's request that Universal or its servicer contact her attorney. However, this evidence was relevant to the Derouins' pleaded affirmative defense that Universal failed to make a reasonable effort to arrange a face-to-face meeting. See 24 C.F.R. § 203.604(c)(3), (5). The evidence was unrelated to Universal's unpleaded avoidance.

In further support of its trial by consent argument, Universal notes the trial court's request for posttrial written memoranda on the waiver issue. Universal apparently maintains that the Derouins' failure to contemporaneously object to the trial court's request evidenced that the parties tried the waiver issue by consent.

This argument is unavailing for two reasons. First, because the trial court sought written argument on the issue, we cannot conceive of why the Derouins would have been required to lodge a contemporaneous oral objection. Second, in accordance with the trial court's request, the Derouins explained in their written memorandum that waiver was unavailable as an avoidance because Universal did not plead it. To the extent a contemporaneous objection is even necessary to prevent an unpleaded issue from being tried by consent, we believe that the Derouins' written closing argument was tantamount to such an objection. See, e.g., Da Cunha v. Mann, 183 So.3d 1113, 1115-16 (Fla. 3d DCA 2015) (stating that an issue was not tried by consent when the opposing party raised an objection upon receipt of the written order); cf. Givens v. Holmes, 241 So.3d 232, 235 (Fla. 2d DCA 2018) (explaining that failure to raise contemporaneous objection did not preclude appellate review of issue "[b]ecause the trial court abruptly ended the hearing without articulating any findings or announcing the particular terms of the final judgment").

Further, in their opening statement at trial, the Derouins proclaimed that "there is no valid excuse for [Universal]'s noncompliance. They haven't raised it in the pleadings." This was sufficient to alert both the trial court and Universal that the Derouins had no intent to allow for the waiver issue to be tried by consent. Cf. Arky, Freed, Stearns, Watson, Greer, Weaver & Harris, P.A. v. Bowmar Instrument Corp., 537 So.2d 561, 563 (Fla. 1988) ("We cannot see the difference between objecting to the introduction of the evidence pertaining to an unpled claim at trial or by a motion in limine immediately prior to the trial. The effect is the same-calling the court's attention to the fact that an unpled claim is not being tried by consent ....").

Conclusion

Because the parties agree that compliance with 24 C.F.R. § 203.604 is a condition precedent to foreclosure, and the trial court erred in finding that the Derouins waived Universal's compliance with the HUD regulations, we reverse and remand for entry of an order of involuntary dismissal.

Reversed and remanded with instructions.

LUCAS and ROTHSTEIN-YOUAKIM, JJ., Concur.

      These regulations, pertaining to FHA-backed loans to "high-risk borrowers," ensure that the lender "would engage in 'loss mitigation' measures ... with the defaulting borrower, before foreclosing." U.S. ex rel. Advocates for Basic Legal Equality, Inc. v. U.S. Bank, N.A., 816 F.3d 428, 429 (6th Cir. 2016).

      The Derouins sufficiently pleaded their claims that Universal failed to comply with the face-to-face meeting requirement. See Fla. R. Civ. P. 1.120(c) ("In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specifically and with particularity." (emphasis added) ); see also Bank of Am., N.A. v. Asbury, 165 So.3d 808, 810 (Fla. 2d DCA 2015) ("A defendant, as the responding party, shoulders the responsibility of identifying a specific, unfulfilled condition precedent should it wish to deny that general averment.").

      24 C.F.R. § 203.604(c)(3) provides that a face-to-face meeting is not required if "[t]he mortgagor has clearly indicated that he will not cooperate in the interview." Further, 24 C.F.R. § 203.604(c)(5) excuses the face-to-face meeting when "[a] reasonable effort to arrange a meeting is unsuccessful."


author: Wolf, J.

text:
    Terrence BOATMAN, Appellant, v. Thomas "Tommy" HARDEE, in his official capacity as the Supervisor of Elections for Madison County, Florida and Susie Bishop Williamson, an individual and candidate for the office of member of the School Board of Madison County, Florida, for District 1, Appellees.
    No. 1D18-2872
    District Court of Appeal of Florida, First District.
    August 23, 2018
    Ronald G. Meyer, Jennifer S. Blohm, Lynn C. Hearn, and Major R. Thompson of Meyer, Brooks, Demma and Blohm, P.A., Tallahassee, for Appellant.
    George T. Reeves, Madison, for Thomas "Tommy" Hardee, Appellee.
   Wolf, J.

Appellant, Terrence Boatman, challenges an emergency declaratory judgment finding he did not properly qualify as a candidate for election to the school board in Madison County because he paid his qualifying fee using a cashier's check purchased with funds from his campaign account rather than a check drawn upon his campaign account. We find section 105.031(5)(a)1., Florida Statutes (2017), is unambiguous and required a check drawn upon his campaign account. Thus, we affirm.

FACTS

Appellee Thomas "Tommy" Hardee, who is the Supervisor of Elections for Madison County, filed a complaint for emergency declaratory relief against appellant and Susie Bishop Williamson, both of whom sought to run for the office of member of the School Board of Madison County. The supervisor sought a declaratory judgment as to whether appellant's decision to pay his qualifying fee using a cashier's check disqualified him because it did not meet the statutory requirement of a "check drawn upon the candidate's campaign account." § 105.031(5)(a)1., Fla. Stat. The supervisor attached a copy of the check:

The trial court conducted an evidentiary hearing. Appellant testified he purchased the cashier's check with funds drawn from his campaign account. He did so because his campaign account was relatively new and he did not want to pay with a "starter check." He turned in the cashier's check with his qualifying papers several days before the filing deadline because he was going on a cruise. He stated he was given a "high degree of certainty" by the deputy supervisor of elections who accepted his papers that he had met all of the requirements.

The trial court conducted an evidentiary hearing. Appellant testified he purchased the cashier's check with funds drawn from his campaign account. He did so because his campaign account was relatively new and he did not want to pay with a "starter check." He turned in the cashier's check with his qualifying papers several days before the filing deadline because he was going on a cruise. He stated he was given a "high degree of certainty" by the deputy supervisor of elections who accepted his papers that he had met all of the requirements.

While appellant was on the cruise, the supervisor of elections notified appellant that he needed to submit a check from the campaign account. However, appellant stated that was not possible because he was the only person designated to write checks on the campaign account. At the supervisor's request, appellant had someone submit a personal check, though appellant knew that would not be sufficient. Thereafter, appellant's status on the supervisor of elections' website briefly reflected that he was "qualified," but then his status changed back to "filed." The supervisor of elections told appellant he changed the status because he never should have qualified him as a candidate. When appellant returned from the trip, the qualifying period had ended. Regardless, at the supervisor's request, he brought a check from the campaign account.

The supervisor submitted into evidence an affidavit from the deputy supervisor who accepted appellant's qualifying papers. She stated she "briefly reviewed" appellant's papers when she time-stamped them. Appellant stated he was going on vacation and asked "if there was anything else that he needed to turn in for qualifying." She responded, "no."

The supervisor's counsel agreed that appellant did everything he needed to do to qualify except submit a check from the campaign account. He did not dispute appellant's claim that he purchased the cashier's check with funds from the campaign account. However, the supervisor argued appellant did not satisfy section 105.031(5)(a)1., Florida Statutes, which requires a candidate for the school board to submit a "check drawn upon the candidate's campaign account," and only permits the candidate to use a cashier's check "[i]f a candidate's check is returned by the bank for any reason," which was not the case here. Because the statute set a bright line rule for paying the filing fee, he argued strict compliance was required.

Appellant conceded a "cashier's check, by definition, is a check drawn on bank funds," not upon his campaign account. However, he argued that because he purchased the cashier's check with funds from the campaign account, the check was technically funded through his campaign account. He further reasoned that if a cashier's check was an acceptable form of payment after a candidate issued a bad check that was returned by the bank, a cashier's check should be an acceptable form of payment at the outset.

The trial court orally found appellant failed to qualify because strict compliance with the statute was required, noting this statute was based on the need to keep a clear paper trail for contributions and expenditures of campaign funds.

The trial court entered a final declaratory judgment finding appellant failed to qualify as a candidate. The court made factual findings consistent with appellant's testimony, including that the cashier's check was purchased with funds from the campaign account, and that the deputy supervisor told him he did not need to turn in anything else to qualify. Regardless, the court found the qualifying fee was an express statutory requirement, not a mere technical requirement; thus, "substantial compliance" was not enough. The court also found responsibility to comply with the qualifying requirements lies with the candidate, not the supervisor of elections. A cashier's check by definition is drawn from the bank's funds. Thus, it does not meet the requirement of a check drawn upon the campaign account. As such, the court found appellant failed to qualify and instructed that appellant's name not appear on the ballot for the primary race to be conducted on August 28, 2018.

ANALYSIS

Appellant argues section 105.031(5)(a)1. is ambiguous as to whether a candidate may submit a cashier's check without first submitting a check drawn upon the campaign account. Thus, he asserts his cashier's check substantially complied with the statute, and the trial court's interpretation of the statute requiring hypersensitive compliance led to an absurd result. He also argues that barriers to qualification should be construed in favor of ballot access, and he reasonably relied on the deputy supervisor's assurance that his application was sufficient. The supervisor of elections disagrees and also argues the trial court correctly found that a cashier's check is not a check drawn upon the campaign account.

We find the statute is unambiguous and its plain language should be applied here. Thus, we affirm and specifically address appellant's arguments regarding the doctrines of substantial compliance and absurd result.

I. Pertinent Statutes

Questions of statutory interpretation are subject to de novo review. Borden v. E.-European Ins. Co. , 921 So.2d 587, 591 (Fla. 2006).

Because appellant seeks to run for the office of school board member, the operative statute in this case is section 105.031(5)(a)1.:

(5) Items required to be filed.--
(a) In order for a candidate for judicial office or the office of school board member to be qualified, the following items must be received by the filing officer by the end of the qualifying period:
1. Except for candidates for retention to judicial office, a properly executed check drawn upon the candidate's campaign account in an amount not less than the fee required by subsection (3) or, in lieu thereof, the copy of the notice of obtaining ballot position pursuant to s. 105.035. If a candidate's check is returned by the bank for any reason , the filing officer shall immediately notify the candidate and the candidate shall, the end of qualifying notwithstanding, have 48 hours from the time such notification is received, excluding Saturdays, Sundays, and legal holidays, to pay the fee with a cashier's check purchased from funds of the campaign account. Failure to pay the fee as provided in this subparagraph shall disqualify the candidate.

§ 105.031(5)(a)1., Fla. Stat. (2017) (emphasis added).

Appellant notes that while there is not an abundance of case law interpreting section 105.031(5)(a)1., there is more case law interpreting section 99.061(7)(a)1., Florida Statutes, which applies broadly to filing fees for candidates for federal, state, district, or county offices other than judicial or school board member. § 99.061(1) - (3), Fla. Stat. This statute includes nearly identical language as section 105.031 with regards to payment of the qualifying fee:

(7)(a) In order for a candidate to be qualified, the following items must be received by the filing officer by the end of the qualifying period:
1. A properly executed check drawn upon the candidate's campaign account in an amount not less than the fee required by s. 99.092 or, in lieu thereof, as applicable, the copy of the notice of obtaining ballot position pursuant to s. 99.095. The filing fee for a special district candidate is not required to be drawn upon the candidate's campaign account. If a candidate's check is returned by the bank for any reason , the filing officer shall immediately notify the candidate and the candidate shall, the end of qualifying notwithstanding, have 48 hours from the time such notification is received, excluding Saturdays, Sundays, and legal holidays, to pay the fee with a cashier's check purchased from funds of the campaign account. Failure to pay the fee as provided in this subparagraph shall disqualify the candidate.

§ 99.061(7)(a) 1., Fla. Stat. (2010) (emphasis added).

II. Whether section 105.031(5)(a)1. is Ambiguous

"When the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Clines v. State , 912 So.2d 550, 555-56 (Fla. 2005) (quoting A.R. Douglass, Inc. v. McRainey , 102 Fla. 1141, 137 So. 157, 159 (1931) ). "When necessary, the plain and ordinary meaning of words can be ascertained by reference to a dictionary." Reform Party of Fla. v. Black , 885 So.2d 303, 312 (Fla. 2004) (quoting Nehme v. Smithkline Beecham Clinical Labs., Inc. , 863 So.2d 201, 204-05 (Fla. 2003) ).

Appellant argues "ambiguity exists as to whether it is permissible to pay the qualifying fee with a cashier's check purchased with campaign account funds without first attempting to pay with a check drawn upon the campaign account."

We find section 105.031(5)(a)1. clearly sets forth a process. It requires that a candidate "must" submit "by the end of the qualifying period" a "check drawn upon the candidate's campaign account." § 105.031(5)(a)1., Fla. Stat. Then, only "[i]f a candidate's check is returned by the bank," the filing officer "shall immediately notify the candidate" of this return, and the candidate shall have "48 hours from the time such notification is received " to submit "a cashier's check purchased from funds of the campaign account." Id. (emphasis added).

The word "if" is conditional. It is defined as "in the event that; allowing that; on the assumption that; on condition that. " If , Merriam-Webster, http://www.merriam-webster.com/dictionary/if (last visited Aug. 15, 2018) (emphasis added). By conditioning that a cashier's check may be used "[i]f the candidate's check is returned by the bank," and by calculating the time period for filing a cashier's check from the time the candidate receives notice of the returned check, the statute clearly contemplates a process by which a cashier's check may only be used on the condition that the campaign check is returned by the bank. Thus, there is no ambiguity.

III. Applicability of the Doctrines of Substantial Compliance and Absurd Result

Appellant argues the trial court erred by interpreting section 105.031(5)(a)1. to require total, hypersensitive compliance. He reasons that because he paid with a secured form of payment that is expressly recognized by the statute, he substantially complied with its requirements. Thus, disqualifying him is an absurd result. He relies primarily on the supreme court's decisions in State ex rel. Siegendorf v. Stone , 266 So.2d 345 (Fla. 1972), and Wright v. City of Miami Gardens , 200 So.3d 765 (Fla. 2016).

In Siegendorf , a judicial candidate filled out an oath of office stating he was running for group "3," but failed to specify that he was running for "county" judge. 266 So.2d at 346. After the qualifying period ended, another candidate alleged the oath did not meet the statutory requirement that a candidate's oath should include the "title of the office" for which he is a candidate. Id. at 347.

The supreme court rejected this argument. It reasoned that "[l]iteral and 'total compliance' with statutory language which reaches hypersensitive levels and which strains the quality of justice is not required to fairly and substantially meet the statutory requirements to qualify as a candidate for public office." Id. at 346 (emphasis added). While it would have been preferable for the candidate to clarify he was running for "county judge" on the form, the Secretary of State was obviously able to ascertain which position was involved because he charged the candidate the correct fee amount for the county judge race. Id. at 347. "So long as basic requirements have been met," the supreme court found the appropriate time for changes or corrections to the oath "was at the qualification desk," where the corrections "could very simply have been added," rather than permitting a competitor to wait until after the qualifying period had ended to bring this challenge. Id. (emphasis added). (Courts have gone on to refer to this doctrine set forth in Siegendorf as the "substantial compliance" doctrine. See Browning v. Young , 993 So.2d 64, 67 (Fla. 1st DCA 2008) ("Substantial compliance, as the term is used in Siegendorf , is the functional equivalent of legal compliance.") ).

In a footnote, however, the Siegendorf court distinguished that it reached a different result in cases that "dealt with a lack of a basic qualifying requirement, i.e., paying a proper fee , the filing of necessary qualifying papers and registering to vote." Id. at 347 n.3 (emphasis added). The court cited State ex rel. Taylor v. Gray , 157 Fla. 229, 25 So.2d 492, 496 (1946), which found a candidate who paid less than the required amount for a qualifying fee failed to qualify, even though he paid the amount that he was instructed to pay by the Secretary of State's office, because compliance with the qualifying statutes "constitutes a condition precedent" to becoming a candidate and the statute placed "responsibility for compliance" on the candidate.

Appellant argues the case at hand is analogous to Siegendorf because he substantially complied with the fee statute by submitting a campaign check paid for with funds from his campaign account. However, appellant seems to overlook the fact that Siegendorf distinguished that the substantial compliance doctrine does not apply to basic qualifying requirements, such as paying a proper fee.

Appellant also argues the trial court's interpretation of the statute requiring hypersensitive compliance led to an absurd result. He relies on Wright , 200 So.3d 765, in which the supreme court suggested that requiring strict compliance with the fee provision in section 99.061 led to an absurd result in that case, though the court declined to apply the absurd result doctrine because it found the statute was not ambiguous. Appellant asks this court to follow Wright to the extent that it found strict compliance with a fee statute may create an absurd result.

Wright timely paid his qualifying fee with a "starter check" from his newly opened campaign account, but it was returned by the bank due to a bank error after the qualifying period had ended. Wright , 200 So.3d at 767. Section 99.061(7)(a) 1. had previously permitted a candidate a 48-hour window to provide a cashier's check in that situation, even if the qualifying period had ended. Id. at 772-73. However, the Legislature struck that language in 2011. The version of the statute applicable in Wright stated that if the campaign check was "returned by the bank for any reason," the candidate had only "until the end of qualifying to pay the fee with a cashier's check." Id. at 772 (emphasis added) (citing § 99.061(7)(a) 1., Fla. Stat. (2016) ). Because the check was not returned until after the end of the qualifying period, Wright had no opportunity to submit a cashier's check. Regardless, he was disqualified. Id. at 767.

The Third District found the clear and unambiguous language of the statute must be applied despite the harsh result. Id. at 769. It agreed with this court's decision in Levey v. Detzner , which reached the same conclusion on nearly identical facts. Id. (citing Levey v. Detzner , 146 So.3d 1224 (Fla. 1st DCA 2014) (finding candidate whose check was returned by bank after the qualifying period had ended was disqualified per the clear and unambiguous language of the statute) ).

The supreme court in Wright acknowledged it was "alluring" to apply the absurd result doctrine in that case because a candidate who "did everything right is disqualified due to a banking error beyond the candidate's control." Wright , 200 So.3d at 772. However, the court found the language of that statute was clear and unambiguous in requiring payment before the end of the qualifying period, regardless of the reason the check was returned by the bank. It noted the Legislature must have intended to create a bright-line rule when it removed the 48-hour cure period from the statute. Id. at 772-73. Thus, the court found the absurd result doctrine was inapplicable and the plain and unambiguous language of the statute must be applied, despite its harsh result. Id.

However, the court concluded this statute was unconstitutional because its provision disqualifying a candidate whose check was returned through no fault of his or her own was arbitrary and without a rational basis. Id. at 776-79. Thus, the court revived the prior version of the statute with the 48-hour window, giving Wright a chance to qualify with a cashier's check. Id. at 778-79.

Appellant acknowledges the Wright court did not apply the absurd result doctrine because it found the statute was not ambiguous. However, he relies on the court's suggestion that it was, in fact, absurd to disqualify the candidate in that case. Similarly here, he asks this court to find it would be an absurd result to disqualify appellant for paying his qualifying fee with a secured payment instrument that is expressly recognized by the statute.

Appellant seems to overlook a key distinction between this case and Wright . The Wright court suggested the result in that case was absurd because a candidate who "did everything right is disqualified due to a banking error beyond the candidate's control." Wright , 200 So.3d at 772. Here, appellant did not "do everything right" and the error was wholly within his control. The statute expressly required him to provide a check drawn upon his campaign account, and he used a cashier's check instead. His hesitancy to use a starter check is understandable considering that in Wright , the candidate's starter check was returned by the bank through no fault of the candidate. However, unlike in Wright , here the applicable statute provided a 48-hour cure period during which appellant could have provided a cashier's check notwithstanding the end of the qualifying period if the bank returned his starter check. The supervisor of elections timely notified appellant of his error, but he was unable to correct it because he chose to leave the country during the last week of the qualifying period without authorizing anyone else to write a check from his campaign account. Nothing that happened in this case was outside of appellant's control.

The supervisor of elections argues that a strict interpretation of this statute does not lead to an absurd result because the Legislature had good reason for requiring candidates to use campaign checks whenever possible. Doing so provides a "paper trail" to ensure all expended funds came from the campaign account. Wright , 200 So.3d at 782 (Polston, J., dissenting) ("Because section 99.061(7)(a) 1. serves the legitimate government purpose of ensuring that candidates for office lawfully pay the required qualifying fee with campaign funds, it passes the rational basis test and is, therefore, constitutional.").

The supervisor notes that a similar federal provision requires political candidate committees to pay expenditures only through a "check drawn on" the campaign account. See 52 U.S.C. § 30102(h)(1). The Federal Election Commission explained in an advisory opinion that these requirements "seem designed to support the general statutory intention of the Act and the regulations to assure a complete and reliable 'paper trail' for record keeping, disclosure and audit purposes." Op. Fed. Elec. Comm'n 1993-04 n.2. See also Op. Fed. Elec. Comm'n 1975-10 at 1-2 (advising that while "[i]t is clear that the statute requires all contributions and all expenditures to pass through the checking account at the designated campaign depository," transferring funds from a checking to a savings account was permissible so long as the campaign "compli[ed] with the reporting requirements ... that all contributions and all expenditures flow through the checking account"). As such, the supervisor argues that requiring candidates to initially use a campaign check to pay the qualifying fee is not an absurd result. We agree.

In summation, we find section 105.031(5)(a)1. is unambiguous, and neither the substantial compliance doctrine nor the absurd result doctrine entitles appellant to relief. Thus, we AFFIRM.

Lewis and Ray, JJ., concur.

      We refer to the 2010 version of this statute because it was revived by operation of law when the supreme court determined the more recent version of this statute passed in 2011 was unconstitutional. See Wright v. City of Miami Gardens , 200 So.3d 765 (Fla. 2016).

      We find the trial court correctly determined that a cashier's check is not a "check drawn upon the candidate's campaign account" as required by section 105.031(5)(a)1., Florida Statutes, because a cashier's check is drawn upon the bank. See Warren Fin., Inc. v. Barnett Bank of Jacksonville, N.A. , 552 So.2d 194, 197 (Fla. 1989) ("[A] cashier's check is payable from the issuing bank's own account."); State of Pa. v. Curtiss Nat'l Bank of Miami Springs, Fla. , 427 F.2d 395, 398 (5th Cir. 1970) ("[A] cashier's check is ... drawn by a bank upon itself ...."). We also note the statute itself draws a distinction between the two types of checks.

      In his reply brief, appellant argues the Wright court's determination that section 99.061(7)(a) 1., Florida Statutes, was not ambiguous is not binding on this court, even though section 105.031(5)(a)1., Florida Statutes, contains similar language, because Wright considered a different aspect of the statute. He is correct. Wright considered whether section 99.061(7)(a) 1. was ambiguous as to whether a candidate whose check was returned due to bank error after the end of the qualifying period could still submit a cashier's check. Wright , 200 So.3d at 771-72. In contrast, the issue here is whether a candidate may submit a cashier's check without first using a campaign check under section 105.031(5)(a)1. Thus, Wright is not controlling here on the question of ambiguity.

      Even though the absurd result doctrine may be applied under rare circumstances when a statute is unambiguous, "the absurdity doctrine is not to be used as a freewheeling tool for courts to second-guess and supplant the policy judgments made by the Legislature. It has long been recognized that the absurdity doctrine 'is to be applied to override the literal terms of a statute only under rare and exceptional circumstances.' " State v. Hackley , 95 So.3d 92, 95 (Fla. 2012) (quoting Crooks v. Harrelson , 282 U.S. 55, 60, 51 S.Ct. 49, 75 L.Ed. 156 (1930) ).