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Affirmative Defenses

Genuine existence of material fact precludes entry of summary judgment. Legal sufficiency of defenses means that certainty is required when pleading affirmative defenses; conclusions of law unsupported by allegations of ultimate fact are legally insufficient.

“Affirmative defenses do not simply deny the facts of the opposing party’s claim; they raise some new matter which defeats an otherwise apparently valid claim.” The plaintiff must either factually refute affirmative defenses or establish that they are legally insufficient.

Affirmative Defenses Commonly Raised

Payment is where defendants alleged advance payments and plaintiff failed to refute this defense, plaintiff not entitled to summary judgment. Equally, if the affidavit of indebtedness is inconclusive ( for example, includes a credit for unapplied funds without explanation), and the borrower alleges a the defense of inaccurate accounting, then summary judgment should be denied. However, summary judgment will be defeated if payment was attempted, but due to misunderstanding or excusable neglect coupled with lender’s conduct, contributed to the failure to pay.

Failure to comply with conditions precedent, such as Plaintiff’s failure to send the Notice of Default letter. Failure to receive payoff information does not preclude summary judgment. Estoppel is usually based on: a representation as to a material fact that is contrary to a later-asserted position; reliance on that representation; and a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon. A waiver involves the knowing and intentional relinquishment of an existing right. When properly pled, affirmative defenses that sound in waiver (and estoppel) present genuine issues of material fact which are inappropriate for summary judgment.

Acceptance of late payments is a common defense asserting waiver is the lenders acceptance of late payments However, the lender has the right to elect to accelerate or not to accelerate after default. Default predicated on defendant’s failure to pay real estate taxes, could not be overcome by defendant’s claim of estoppel due to misapplication of non-escrow payments.

Fraud in the inducement is defined as a situation where parties to a contract appear to negotiate freely, but where in fact the ability of one party to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior. Affirmative defense of fraud in the inducement based on allegation that seller failed to disclose extensive termite damage resulted in reversal of foreclosure judgment.

Usury is defined by state law as a contract for the payment of interest upon any loan, advance of money, line of credit, or forbearance to enforce the collection of any debt, or upon any obligation whatever, at a higher rate of interest than the equivalent of 18 percent per annum simple interest. If the loan exceeds $500,000 in amount or value, then the applicable statutory section is § 687.071, Fla. Stat. (2010). A usurious contract is unenforceable according to the provisions of Section 687.071(7), Fla. Stat. (2010).

Forbearance Agreement

Appellate court upheld summary judgment based on Defendant’s failure to present any evidence as to the alleged forbearance agreement of prior servicer to delay foreclosure until the settlement of his personal injury case. If evidence of forbearance is submitted, it may defeat summary judgment.

Statute of Limitations

Property owner successfully asserted that foreclosure filed five years after mortgage maturity date was barred by statute of limitations; mortgage lien was no longer valid and enforceable under state law. A failure to pay documentary stamps precludes enforcement of notes and mortgages absent the payment of documentary stamps. This is a limitation on judicial authority; not a genuine affirmative defense.

Truth in Lending Violations

Technical violations of TILA do not impose liability on lender or defeat foreclosure. Exception to TILA one year statute of limitations applies to defenses raised in foreclosure. TILA issues include:

  1. Improper adjustments to interest rates (ARMS);
  2. Borrower must be given 2 copies of notice of rescission rights. Written acknowledgement of receipt is only a rebuttable presumption.
  3. TILA rescission for up to 3 years after the transaction for failure to make material disclosures to borrower. Such as, APR of loan, amount financed, total payment and payment schedule. Rescission relieves borrower only for payment of interest. Must be within three years of closing. A wife’s homestead interest in mortgaged property gives her right to TILA disclosure.

Res Judicata

Foreclosure and acceleration based on the same default bars a subsequent action unless predicated upon separate, different defaults.