In a recent opinion, the Second District Court of Appeal held that the lower court was not required to uphold its three prior rulings denying relief from technical admissions when: (1) the record evidence was contrary to those admissions; and (2) the opposing party failed to show it would be prejudiced by the withdrawal of the admissions. Judge Crenshaw stated that the trial court abused its discretion in denying the defendant, Wells Fargo's, relief from technical admissions. The court reversed and remanded the case. Wells Fargo Bank Nat'l Ass'n v.Voorhees, Case No. 2D15-2055, 2016 WL 2760444 (Fla. 2d DCA May 13, 2016).
Recounting the relevant facts, Wells Fargo initiated a foreclosure action against Ms. Voorhees in Sarasota County in June 2009. Wells Fargo filed a motion for summary judgment in June 2013. After Voorhees failed to file anything in the case, the clerk entered a default. Voorhees filed a motion to set aside default which the trial court granted in August 2013. Voorhees then filed an answer, interrogatories, requests for production, and requests for admissions. The requests for admissions were designed for Wells Fargo to admit facts showing it had no standing to bring the foreclosure suit.
In April 2014, Voorhees' counsel filed a motion to compel discovery, requesting that these admissions be deemed admitted, which the trial court adopted at the request of the magistrate judge. In August 2014, Voorhees' counsel filed a second motion to compel discovery based on discovery violations, noting that Wells Fargo failed to meet its deadline when the full discovery responses were due.
On the same day, Wells Fargo filed responses to Voorhees' counsel's requests while also initiating a motion for relief from technical admissions based on the Florida Rules of Civil Procedure 1.370(b) and 1.540(b)(1). Wells Fargo's motions were denied three times by the trial court. At trial, Voorhees' counsel moved to have these admissions remain admitted while prohibiting Wells Fargo from offering contrary evidence. Wells Fargo responded by arguing that the record was replete with evidence favorable to them and that the court should withdraw the technical admissions under Rule 1.370(b) in order to hear the case on the merits. Wells Fargo further argued that Voorhees would not be prejudiced by a trial on the merits, and offered to agree to a continuance so that Voorhees' counsel could take necessary depositions, including that of an additional witness for Wells Fargo.
The trial court rejected Wells Fargo's argument that deciding a case on a mere technicality would be improper, as Wells Fargo could not prove it had standing if the technical admissions remained. The trial court stated that it was compelled to uphold the three prior rulings against Wells Fargo.
On appeal, the Court found that the trial judge abused its discretion; it reversed the final order of involuntary dismissal, reinstated the case, and remanded with instructions for the case to be tried on the merits. The Court reasoned that Rule 1.370(b) provides flexibility to change a ruling or permit a party to amend or withdraw technical admissions. To defeat a motion to amend or withdrawal of admissions, the trial court must find that the borrower will be materially prejudiced, which cannot be readily remedied. The Voorhes court noted that there was no prejudice because the original note was already filed with the court, and the bank's sworn affidavit demonstrated its standing.
This case is a good reminder of the liberal standard of relief provided by Rule 1.370(b), so that disputed claims are decided on their merits rather than technical rules. In general, the discovery process is an opportunity to present the merits of plaintiff's case early in the litigation; the banks should take advantage of this process. This may require more work at the beginning of the litigation, but it is a helpful tool to get proper responses on the record. This could, in turn, significantly promote summary final judgment of mortgage foreclosure in favor of the plaintiff in the long run. Or, in the very least, help the plaintiff to identify problem areas, such as standing, early in the litigation.
A copy of the opinion can be found here.
**Co-author Charles Davis is a 2016 Summer Associate in the Tampa office of Burr & Forman LLP. He is a law student at University of Notre Dame Law School.