Kratz v. Legac
Docket: No. 93-01946
Court: District Court of Appeal of Florida; May 11, 1994; Florida; State Appellate Court
Robert and Rosemary Kratz appeal the trial court's summary judgment orders concerning the priority of a mortgage and foreclosure on property. The appellate court reverses the judgment due to a factual dispute regarding the intended use of a subordination agreement. Paul Legac, as trustee and in his individual capacity, held two promissory notes from John E. Folds secured by a second mortgage on a property in Pinellas County, Florida. Legac also held a first mortgage on the same property, valued at $63,000, acquired through assignment from Fairfield Communities, Inc. In April 1991, Folds requested Legac to execute a subordination agreement to facilitate financing for constructing a single-family dwelling. Legac executed the agreement, which identified Folds as the mortgagor but was left largely blank. Subsequently, Folds quitclaimed his interest to Cumberland Custom Homes of Florida, where he was a director. Hurley Toliver Payne negotiated financing with the Kratzes, who believed they were obtaining a first mortgage. At closing, the subordination agreement was filled in to list Payne and Cumberland Homes as mortgagors, and Legac's attorney confirmed the payoff amount for the first mortgage. Legac accepted a check for $63,787.41, satisfying his first mortgage. Legac later sought a declaratory judgment to have his remaining mortgage declared superior and filed for foreclosure. The trial court granted summary judgment on both counts. The appellate court noted that for summary judgment to be appropriate, the moving party must conclusively show no genuine issue of material fact exists, and all reasonable inferences must favor the opposing party. Given the evidence indicating Legac's awareness of the financing arrangement and the absence of clear limitations on the subordination agreement, a genuine issue of material fact persists. Therefore, the appellate court reversed the summary judgments and remanded the case for further proceedings. Judges Patterson and Altenbernd concurred.