Court: District Court of Appeal of Florida; August 4, 2015; Florida; State Appellate Court
CitiMortgage, Inc. appeals a final judgment favoring J.L. Loper, Jeffrey Turner, and Linda Turner in a mortgage foreclosure case, arguing that the trial court incorrectly found that its mortgage did not encumber Loper’s interest in the property. The appellate court agrees with the bank and reverses the judgment in part, remanding for further proceedings. In April 2007, the Turners acquired a 1/2 undivided interest in property from Loper and subsequently executed a promissory note and mortgage in favor of ABN AMRO Mortgage Group, Inc., which purported to secure the entire property. Loper was noted as a 'Borrower' on the mortgage but did not sign the promissory note, only the mortgage, which included a 'Limited Purpose Execution' notation. The mortgage stipulated that a co-signer, like Loper, is not personally obligated to pay the secured sums but allows other borrowers to modify terms without the co-signer's consent. In March 2010, the bank filed for foreclosure due to the Turners’ default and sought to cancel a prior mortgage between the Turners and Loper. Loper argued that his signature was for a limited purpose and did not permit foreclosure of his interest. In February 2014, the trial court ruled in Loper's favor, stating the bank did not prove Loper’s limited execution encumbered his interest. The appellate court reviews the trial court's interpretation of the mortgage de novo, adhering to the principle that clear contract language must be enforced as written, while ambiguous language may be interpreted reasonably.
The mortgage explicitly covers the entire Gulfview Lane property, including Loper's 1/2 interest. The property's legal description and address provided in the mortgage do not exclude Loper's interest. Loper is defined as a 'Borrower,' and the mortgage states that the Borrower is encumbering the identified property. Paragraph 13 clarifies that while Loper signed the mortgage, he is not liable for the note but is mortgaging his interest in the property. The 'Limited Purpose Execution' notation under Loper's signature does not create ambiguity; rather, it indicates he is encumbering his 1/2 interest without committing to pay the note. Accepting Loper's interpretation would undermine the mortgage's terms and the definition of the property. Loper's signature was unnecessary for the Turners to mortgage their interest, as established in relevant case law. The trial court incorrectly ruled that the bank could not foreclose on Loper’s 1/2 interest, and also erred in favoring the Turners on the foreclosure count. The judgment on the foreclosure count is reversed and remanded for further proceedings, while all other aspects of the final judgment are affirmed. The background reveals that Loper and the Turners formed a partnership to manage the property, with the Turners receiving a 1/2 interest in exchange for cash and a promissory note secured by the mortgage.
The partnership agreement required the Turners to refinance a loan from Loper with a new $417,000 loan secured by a property mortgage, using the proceeds to repay Loper and cancel the prior mortgage. A closing statement for the ABN loan indicated $322,000 was allocated to pay off Loper; however, Loper contested this, claiming the mortgage was not fully paid. The Turners did not participate in the trial or appeal. The bank sought review of a trial court order in a partition action involving Loper and the Turners, which was consolidated with the foreclosure case, but later voluntarily dismissed its appeal of the partition order without raising any issues in its brief. Consequently, the court affirmed the trial court's rulings regarding the partition order and cancellation of the private mortgage without further discussion.
