Appeals Court Sides With Wells Fargo on Foreclosure

Wells Fargo N.A. came out on the winning side of a foreclosure appeal after the Fourth District Court of Appeal ruled Broward Circuit Judge Kathleen Ireland violated its due process rights with an involuntarily dismissal. The bank appealed a final judgment in favor of homeowners Alfredo, Alexandra and Magaly Gonzalez, who won at trial on arguments they had already settled with the lender under a general release that relieved them of litigation. The appellate court threw out that ruling, finding Ireland dismissed on an unpled defense without affording Wells Fargo the opportunity to be heard. The bank was successor to defunct Wachovia Mortgage Corp., which executed a mortgage with the Gonzalezes in 2006. It filed for foreclosure in 2010, prompting Alfredo and Alexandra Gonzalez to answer with 15 affirmative defenses and Magaly Gonzalez to file a separate answer also asserting 15 affirmative defenses. The case turned on a key argument — the general release — not included in either defendant’s answer. “A release is an affirmative defense,” Fourth DCA Judge Carole Taylor wrote in a unanimous decision with Chief Judge Cory Ciklin and Judge Alan Forst concurring. The court found the Gonzalezes waived that option when they failed to raise it in responsive pleadings. At trial, the Gonzalezes moved for dismissal, arguing they’d settled all matters with a 2011 agreement that included a general mutual release. Under that agreement, the family made a $7,000 payment and surrendered property in Lee County and Tennessee, defense attorney Thais Hernandez told the Daily Business Review. The agreement did not mention the Broward County property at the center of the dispute Ireland adjudicated. “Our position is we gave up two properties in exchange for that general release that relieved my client of all pending litigation,” Hernandez said. “That was the whole point.” Ireland initially denied the Gonzalezes’ move for involuntary dismissal but later vacated that order and scheduled a hearing on the motion before opening statements. At that hearing, Wells Fargo argued the settlement did not apply to the Broward property and noted the Gonzalezes failed to raise the release in their amended answer. But Ireland disagreed and found the agreement covered all litigation between the parties. She sided with the Gonzalezes and granted their motion for involuntary dismissal. “The central issue is that everybody had lawyers, and if they didn’t want a general release, they should have taken it out. And that’s what the trial court focused on: If you wanted a limited release, you should have drafted one,” Hernandez said. “For me to hear that they were denied their due process after having the opportunity to argue it three times for me is form over function. They had the opportunity to argue about the release at three different hearings — one of which they set themselves.” The appellate court disagreed, finding the trial court erred in dismissing the case without allowing Wells Fargo to present evidence. “In their answer brief, the Gonzalezes do not address their failure to plead release as an affirmative defense,” Taylor wrote. “Instead they argue that Wells Fargo’s due process rights were not violated because Wells Fargo had notice of the settlement agreement and the opportunity to present evidence.” Michael Winston, Jessica Zaiger Wallace and Dean Morande of Carlton Fields Jorden Burt’s Miami and West Palm Beach offices represented Wells Fargo. “We are pleased the court has allowed the case to continue,” bank spokeswoman Janey Kiryluik wrote by email. “We work with customers facing financial difficulties to avoid foreclosure whenever possible. We previously attempted to help Mr. Gonzalez find an option that would allow him to remain in his home but were unable to complete the process due to lack of documentation from him.” Hernandez said the Gonzalezes are considering a motion for rehearing. “I respect the court’s ruling, but we disagree with the results,” she said

#foreclosure #Mortgage #wellsfargo #Release #Affirmativedefense #Dueprocess