Full Opinion

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT DAVID R. SHANKS; ANNA MAI COBLE SHANKS; and DRS SERVICE COMPANY, INC., Appellants, v. ARIEL BERGERMAN A/K/A ARIK BERGERMAN; BLUE MARLIN ADVENTURES, LLC; BUILDMASTER INVESTMENTS, LLC; ETHEL BUNS; JEFFREY M DECHANT; JOHN R HUET; ISRA HOMES CORP; SMILEY HOMES CORP; RONAL INVESTMENTS, INC.; and RONNY TALYOSEF, Appellees. No. 2D20-3431 January 28, 2022 Appeal from the Circuit Court for Pinellas County; Linda R. Allan, Judge. Benjamin Hillard of Hillard Cuykendall, P.A., Largo, for Appellants. John R. Cappa, II of John R. Cappa, P.A., St. Petersburg, for Appellees Ariel Bergerman and ISRA Homes Corporation. No appearance for remaining Appellees. VILLANTI, Judge. David Shanks, Anna Mai Shanks, and DRS Service Company, Inc. (collectively, the Shanks), appeal from an order granting Ariel Bergerman and ISRA Homes Corporation's (collectively, Bergerman) motion for partial summary judgment as to three counts of a twelve-count complaint and dismissing those counts from the action.1 On appeal, the Shanks seek reversal solely as to the dismissal of Count IX, which pertained to a defaulted promissory note.2 Because the trial court applied the wrong law in concluding that the statute of limitations cut off the Shanks' right to enforce the note, we reverse. 1 This court issued an order informing the parties that this appeal would proceed under Florida Rule of Appellate Procedure 9.110(k) but invited Bergerman to challenge this court's jurisdiction if warranted. No such challenge was forthcoming, and Bergerman does not address this issue on appeal. 2 The complaint sought damages related to five different promissory notes: the "Park Street Note," the "49th Street Note," the "Central Avenue Note," and two promissory notes related to the "840 Bay Street Property." Only one of the 840 Bay Street notes is at issue here. The parties refer to this note as the "Shanks Note." 2 FACTS AND PROCEDURAL HISTORY The promissory note at issue (the Shanks Note) was executed on August 23, 2005. The Shanks Note created an interest-only loan for a duration of one year, from September 1, 2005, to September 1, 2006, "at which time the entire unpaid principal balance shall be due and payable in full." The lender was identified as David Shanks and the borrower was identified as "Isra Homes Corporation . . . and/or Ariel Bergerman." In Count IX of their second amended complaint,3 the Shanks alleged that "ISRA Homes Corporation and/or Ariel Bergerman had executed a Promissory Note reflecting a principal amount of $286,000.00," that the payment due in April 2008 "and all subsequent payments" had not been made, and that "[u]p until the April 2008 default, [Bergerman's] payments and the [Shanks'] acceptance of such payments constitute assent by the parties of a continuing agreement." Bergerman asserted as an affirmative defense that the Shanks had failed to bring an action on the Shanks Note within five years and that enforcement of the note was therefore barred by the 3 The initial complaint was filed on January 31, 2013. The second amended complaint was filed on October 7, 2014. 3 statute of limitations. In an affidavit attached to the motion for summary judgment, Arial Bergerman averred that he had made no payments on the note after September 1, 2006, and that the parties had not entered into any agreements to extend the maturity date of the note. David Shanks filed an affidavit in opposition to Bergerman's motion for summary judgment in which he averred that the maturity date had been extended by virtue of additional payments received from Bergerman between March 2007 and February 28, 2008. The affidavit further alleged that the parties had agreed to extend the maturity dates "on all loans" and that the additional payments proved this. Copies of checks appearing to support this claim were attached to the affidavit. Following a hearing, the trial court entered an order in which it stated, "Based upon [Bergerman's] motion, [David Shank's], and other documents within the record, the court finds that a written agreement extending the maturity date of the debt . . . was not recorded in the Pinellas County Official Records." The Shanks argue that this statement misconstrues the law, incorrectly 4 applying the law applicable to the enforcement of mortgage liens to a promissory note. We agree. DISCUSSION Summary judgment may be granted if "it is apparent from the pleadings, depositions, affidavits, or other evidence that there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law." Fla. Bar. v. Greene, 926 So. 2d 1195, 1200 (Fla. 2006). As to the first prong, "if the record reflects the existence of any genuine issue of material fact or the possibility of any issue, or if the record raises even the slightest doubt that an issue might exist, that doubt must be resolved against the moving party and summary judgment must be denied." Hervey v. Alfonso, 650 So. 2d 644, 646 (Fla. 2d DCA 1995). Where no factual disputes exist, summary judgment may still be granted if it is clear that the nonmoving party cannot prevail at trial as a matter of law. See Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130-31 (Fla. 2000). The moving party "has the burden of 5 establishing irrefutably that the nonmoving party cannot prevail." Hervey, 650 So. 2d at 645-46.4 This court reviews an order granting summary judgment de novo. See Volusia County, 760 So. 2d at 130. The order on appeal reflects that the trial court granted Bergerman's motion for summary judgment on the basis that there was no written and recorded agreement extending the maturity date of the promissory note. This is a legal declaration that is not affected by the Shanks' allegation that Bergerman made payments on the note beyond its maturity date. Accordingly, the first issue we must resolve is whether the trial court correctly determined that Bergerman was entitled to prevail as a matter of law. As a starting point, we observe that a mortgage foreclosure is an equitable remedy governed (primarily) by chapter 702, Florida Statutes (2007). See Glen Garron, LLC v. Buchwald, 210 So. 3d 229, 233-234 (Fla. 5th DCA 2017) ("A foreclosure action is an equitable remedy that is based upon the mortgage [which allows for] 4 We note that the summary judgment standard in Florida has changed effective May 21, 2021. See In re: Amendments to Fla. R. Civ. P. 1.150, 309 So. 3d 192 (Fla. 2020). Our holding in this case would not be affected by the new standard. 6 'a future sale of real property if a debt is not paid' and . . . 'is also a specific lien on the property described in the mortgage.' " (citations omitted) (quoting Pitts v. Pastore, 561 So. 2d 297, 301 (Fla. 2d DCA 1990))). In contrast, an action on a promissory note is an action at law that seeks damages for breach of the note. Id. at 234. Indeed, we have described the typical foreclosure lawsuit as "both an action to enforce the promissory note secured by the mortgage and an action to foreclose the mortgage." Deutsche Bank Nat'l Tr. Co. v. Hagstrom, 203 So. 3d 918, 920 (Fla. 2d DCA 2016) (emphasis added). In fact, it is not necessary to bring both actions at the same time. See Royal Palm Corp. Ctr. Ass'n v. PNC Bank, NA, 89 So. 3d 923, 932 (Fla. 4th DCA 2012) ("[T]he reason that an action at law on a note may be pursued simultaneously with the equitable remedy of foreclosure is that the two remedies are not inconsistent." (citing Junction Bit & Tool Co. v. Village Apartments, Inc., 262 So. 2d 659, 660 (Fla. 1972). "Nothing preclude[s a plaintiff] from pursuing its legal remedy first . . . ." Id. at 933. Moreover, section 702.06, Florida Statutes (2012) provides that a complainant in a foreclosure action "shall also have the right to sue at common law to recover [a] deficiency," provided that the 7 complainant may not recover in a deficiency lawsuit "where the original mortgagee becomes the purchaser thereof at foreclosure sale and also is granted a deficiency decree against the original mortgagor." See also De Las Cuevas v. Nat'l Enters., Inc., 927 So. 2d 41, 44 (Fla. 3d DCA 2006) ("[T]his is not a deficiency judgment. It is a judgment on a note. As such, it is an action at law. Even though the mortgage had been foreclosed in the action filed by the [Resolution Trust Corporation (RTC)], NEI still had a right to maintain an action at law on the note as long as a deficiency judgment had not been entered in the RTC litigation."). Finally, a promissory note executed in connection with a mortgage "is a negotiable instrument governed by chapter 673, Florida's Uniform Commercial Code." Hagstrom, 203 So. 3d at 921; see also Perry v. Fairbanks Cap. Corp., 888 So. 2d 725, 727 (Fla. 5th DCA 2004) ("A promissory note is clearly a negotiable instrument within the definition of section 673.1041(1). . . . A mortgage is the security for the payment of the negotiable promissory note, 'and is a mere incident of and ancillary to such note.' " (quoting Scott v. Taylor, 58 So. 30, 32 (Fla. 1912))). Accordingly, the statute of limitations applicable to the enforcement 8 of a promissory note is governed by section 673.1181, Florida Statutes (2012), which defers to chapter 95: "Chapter 95 governs when an action to enforce an obligation, duty, or right arising under this chapter must be commenced." As the Shanks correctly argue, section 95.11(2)(b), Florida Statutes (2005) provides that the statute of limitations on a written contract is five years, but section 95.051(1)(f) provides that the limitation period is tolled for five years from "[t]he payment of any part of the principal or interest of any obligation or liability founded on a written instrument." Thus, the limitation period is tolled even if the payment is made after the maturity date of the note. See Benfield v. Everest Venture Group, Inc., 810 So. 2d 1021 (Fla. 2d DCA 2001); Cadle Co. v. McCartha, 920 So. 2d 144 (Fla. 5th DCA 2006). In sum, the applicable statute does not require a written agreement or recordation in order to extend the limitation period, and an action on a note may be initiated independent of an associated mortgage, unless, as discussed above, a deficiency judgment has been entered in conjunction with a foreclosure of a mortgage. 9 In his affidavit in opposition to Bergerman's motion for summary judgment, David Shanks refuted Bergerman's claim that no payments had been made on the Shanks Note since April 2006 by swearing that the parties had verbally agreed to extend the terms of the note. Shanks also provided evidence in the form of checks written by Bergerman to Shanks in 2007 and 2008. On appeal, Bergerman argues that the checks David Shanks attached to his affidavit pertained to a different note. The Shanks reply that this is false; that the checks in question—each one for $10,000—were presented and accepted as payment on several different loans and that the default date for all of the loans at issue in the complaint were the same. Bergerman also argues that because the checks attached to the affidavit were written on an account belonging to Smiley Homes Corporation, a non-obliger to the Shanks Note, this shows that the checks were meant as payments on the Smiley Homes note, not the Shanks Note. But the checks contain no indication that the payments were intended to apply to a particular note, and the mere fact that a check has "Smiley Homes Corporation" printed in the upper left-hand corner does not prove, 10 as a matter of law, that Bergerman, who signed the check, did not intend the proceeds to apply to the Shanks Note. To be clear, we express no opinion as to whether the checks in question constitute proof of payments on the Shanks Note after (and therefore extending) the maturity date. This is an issue of material fact that is in dispute; as such, it is for the trier of fact to resolve. See Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985) ("If the evidence raises any issue of material fact, if it is conflicting, if it will permit different reasonable inferences, or if it tends to prove the issues, it should be submitted to the jury as a question of fact to be determined by it." (citations omitted)); Clampitt v. Wick, 320 So. 3d 826, 833 (Fla. 2d DCA 2021) (" 'Summary judgment is not intended to weigh and resolve genuine issues of material fact, but only identify whether such issues exist.' Thus, summary judgment must be denied if the evidence on an issue of material fact is disputed." (quoting Gorrin v. Poker Run Acquisitions, Inc., 237 So. 3d 1149, 1153 (Fla. 3d DCA 2018)). "The focus is on whether the affidavits show evidence of a nature that would be admissible at trial; if so, any questions regarding relative credibility or weight of that evidence compared to other evidence cannot be resolved on 11 summary judgment but must be left for the trier of fact." Gonzalez v. Citizens Prop. Ins. Corp., 273 So. 3d 1031, 1036 (Fla. 3d DCA 2019); see also Bernhardt v. Halikoytakis, 95 So. 3d 1006, 1008-09 (Fla. 2d DCA 2012) ("It is improper to consider either the weight of the conflicting evidence or the credibility of witnesses in determining whether a genuine issue of material fact exists."). Here, because the order granting summary judgment was based on the trial court's conclusion that the maturity date of the debt could only be extended via a written and recorded agreement— a conclusion that conflicts with section 95.051(1)(f)—we conclude that the order on appeal is erroneous as a matter of law. Therefore, when viewed in light of the correct statute, a question of fact remains as to whether the payments made beyond the promissory note's maturity date actually do pertain, in whole or in part, to the Shanks Note. This question of material fact must be resolved first in order to then determine whether those payments tolled the statute of limitations pursuant to section 95.051(1)(f), and the question must be resolved by the trier of fact. See Ameril Corp. v. N.Y. Reg'l Rail Corp., 943 So. 2d 264, 264 (Fla. 3d DCA 2006) (holding that questions of fact as to the application of statute of 12 limitations (in part) precluded summary judgment); cf. Lambert v. Weeks, 554 So. 2d 634, 635 (Fla. 4th DCA 1989) (holding that opposing affidavits regarding receipt or non-receipt of consideration precluded summary judgment as to the defendant's liability for nonpayment of a promissory note). Accordingly, we reverse the order granting summary judgment as to Count IX of the complaint and remand for entry of an order denying Bergerman's motion for summary judgment as to that count. Reversed and remanded with directions. BLACK and STARGEL, JJ., Concur. Opinion subject to revision prior to official publication. 13