FLORIDA’S SECOND DCA AFFIRMS LOWER COURT’S REFORMATION OF DEED AND MORTGAGE DESPITE MORTGAGOR’S STATUTE OF LIMITATIONS DEFENSE

The Second DCA just affirmed the entry of a judgment of foreclosure and reformation of a mortgage and deed despite the mortgagor’s claim that reformation was barred by the statute of limitations. Geweye v. Wilmington Sav. Fund Soc’y, No. 2D22-2816, 2023 WL 7383046 (Fla. 2d DCA Nov. 8, 2023). The Second DCA did not issue a written opinion in Geweye, so the case carries no precedential value; however, the attorney who briefed the matter, Melisa Manganelli, graciously shared her answer brief which provided additional insight about the case. The following details of the case are taken from the answer brief filed in Geweye’s appeal of the judgment of foreclosure and formation of the mortgage and deed.

When Geweye took out the subject mortgage with Washington Mutual Bank (“WAMU”), one of the deeds which conveyed title to Geweye contained a scrivener’s error in the legal description which carried over to the legal description of the mortgage. Ostensibly, neither Geweye nor WAMU were aware of the mistake. Geweye defaulted on the loan. A prior attempt to foreclose and reform the deed and mortgage (in 2012) was unsuccessful based on a failure of proof on the issue of standing. Wilmington Savings Fund Society, FSB (“Wilmington”) obtained an interest in Geweye’s loan and filed a new foreclosure action in 2021 again seeking to reform the mortgage and the deed. Geweye responded to the complaint and asserted (among other defenses) that the reformation count was barred by the five-year statute of limitations[i]. In May 2022 Wilmington filed its motion for summary judgment and supporting affidavits and set the matter for a July 2022 hearing.

Three days prior to the hearing Geweye filed an untimely memorandum in opposition to summary judgment but failed to file an affidavit or any other evidence to support her defenses. Wilmington’s evidence included a “Boundary Survey” which corroborated Wilmington’s claim that the mortgage and deed contained a scrivener’s error in the legal description. The lower court granted summary judgment and entered a judgment which reformed and foreclosed Geweye’s mortgage and reformed the deed. Geweye appealed that judgment. The appellate record did not contain a transcript of the proceedings.

On appeal Wilmington relied on Corinthian Invs., Inc., v. Reeder, 555 So. 2d 871, 873 (Fla. 2d DCA 1989) where the Second DCA refused to apply the statute of limitations to prohibit reformation of an agreement for deed to include interest that was inadvertently omitted by the parties to the deed. In Reeder, the Second DCA explained that correcting a mutual mistake in the instrument is not the same as “an action to enforce a contract;” rather, it is an action to change the stated terms of the contract.[ii] Since the legal action to enforce the contract and the equitable action to correct the mistake were not analogous, the Second DCA concluded in Reeder that the statute of limitations did not prevent reformation of the deed.[iii]

Earlier this year, the Second DCA distinguished its holding in Reeder when it considered Hogg v. Villages of Bloomingdale I Homeowners Assoc[iv] and reversed a judgment of reformation based exclusively on application of § 95.11(2). In its brief, Wilmington distinguished Hogg based on the fact it involved an HOA that sought to reform its declaration, not a deed. The errors in the declaration did not affect Hogg’s ownership interest in the property whereas in Geweye, if the deed transferring ownership contained the wrong legal description, Geweye did not technically own the property and therefore lacked standing to challenge the foreclosure or the reformation.

Ostensibly, the Second DCA agreed with this argument and allowed the reformation in Geweye to stand, or at least found ample reason not to undo it. Notably, there were other issues[v] raised in Wilmington’s answer brief which the appellate court may have relied upon in refusing to reverse the judgment, but they are outside the scope of this article. Although not a slam dunk, the per curiam affirmance is still noteworthy in light of the Second DCA’s earlier holding in Hogg. The affirmance in Geweye provides hope for the survival of the Second DCA’s distinction between an action to enforce contract and an action to change the stated terms of the contract to “reflect the mutual intentions of the parties.”[vi] It is a welcome development on a frequently raised defense.

[i] The pertinent statute of limitations is codified at § 95.11(2)(b) and provides that a “legal or equitable action on a contract, obligation, or liability founded on a written instrument” shall be commenced within five years. Fla. Stat. Ann. § 95.11 (West).

[ii] Reeder, at 874.

[iii] Reeder, at 873.

[iv] The Second DCA’s written opinion in Hogg was the subject of our April 2023 eBlast.

[v] For example, Geweye’s opposition to summary judgment was untimely so the Court did not have to consider it. Likewise, the lack of a hearing transcript may have influenced the Second DCA’s decision to affirm the lower court. Further, Geweye failed to proffer any evidence to support her defenses, a burden she carried under the new summary judgment rule adopted by Florida in December 2020. Any of these facts could have impacted the Court’s ruling.

[vi] Reeder, at 874.