HSBC BANK USA, N.A., ETC., APPELLANT/APPELLEE,
v.
NATHAN FRENKEL, SUCCESSOR TRUSTEE, ETC., APPELLEE/APPELLANT

Fla. 3d DCA | 2016-10-13
Nos. 3D15-890, 3D15-1991
Before SUAREZ, C.J., and FERNANDEZ and SCALES, JJ.
208 So. 3d 156 Florida District Court of Appeal, Third District (2016)

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Synopsis

HSBC Bank sought to foreclose on a mortgage executed by Margaret Frenkel, an individual, to secure a loan, but the property was actually owned by the Frenkel Trust. After the trial court denied foreclosure but imposed an equitable lien on the Trust's property and awarded attorney's fees to the Trust, both parties appealed. The appellate court reversed both rulings, finding that the equitable lien claim was not properly pleaded and that the Trust, as a non-party to the mortgage, could not recover attorney's fees.


Holding

The trial court erred in imposing an equitable lien on the Trust's property because Bank failed to plead this claim and judgment may not be entered on unpled claims. The Trust also cannot recover attorney's fees under the mortgage provision or section 57.105(7) because it was not a party to the mortgage and therefore cannot derive the benefit of the fee-shifting provisions.


Headnotes

[1] A trial court errs by entering judgment for a party on a claim that was not pleaded.

[2] A party cannot recover attorney's fees under a mortgage's fee provision if that party was not a signatory to the mortgage.

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Key Quotes

“This claim was not raised in the pleadings and it was error to enter judgment for the Bank on an unpled claim.”

Establishes that the trial court erred in imposing an equitable lien that was never pleaded by Bank

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Facts & Procedural History

In July 2005, Margaret Frenkel executed a mortgage securing a $350,000 loan from HSBC's predecessor for a Miami Beach condominium. The condominium was…

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Opinion of the Court
SCALES, J.

SCALES, J.

In these consolidated appeals, Nathan Frenkel as successor trustee of the Max Frenkel and Margaret Frenkel Revocable Living Trust (the “Frenkel Trust”) appeals a final judgment granting HSBC Bank USA, N.A. (the “Bank”) an equitable hen on real property owned by Frenkel Trust (3D15-890); and Bank appeals an order awarding attorney’s fees to Frenkel Trust (3D15-1991). Based on Bank’s confession of error, we reverse the trial court’s final judgment entitling Bank to an equitable lien on Frenkel Trust’s real property. Further, based on our recent decision in Florida Community Bank, N.A. v. Red Road Residential, LLC, 1 we reverse the trial court’s order entitling Frenkel Trust to the recovery of its attorney’s fees.

In July of 2005, Margaret Frenkel executed a mortgage encumbering a condominium unit located in Miami Beach, Florida. This mortgage purported to secure a $350,000 loan made to Mrs. Frenkel by Bank’s predecessor. The mortgage contained a standard provision entitling the lender to attorney’s fees in the event the lender pursued its remedies under the mortgage. Mrs. Frenkel, however, was not the owner of the condominium unit; at all times material, the condominium was owned by Frenkel Trust. Sometime after the loan documents were executed, but prior to recordation, someone apparently tried to rectify this problem by altering the mortgage, via handwritten notations, to make it appear as though Mrs. Frenkel signed the mortgage not in her personal capacity, but as trustee for Frenkel Trust.

Bank acquired the note and mortgage and, in the year following Mrs. Frenkel’s 2007 death, filed the instant, single-count foreclosure action against Frenkel Trust. Bank did not plead entitlement to an equitable hen on Frenkel Trust’s real property, and made no claim against Mrs. Frenkel’s estate.

After a bench trial, the trial court denied the Bank’s foreclosure because of the defect in the mortgage’s execution. Specifically, the trial court found the mortgage to be unenforceable against Frenkel Trust because it was not executed by the Frenk-el Trust. The trial court, however, imposed an equitable lien in the amount of $350,000 on Frenkel Trust’s real property, requiring Bank to bring a separate action to enforce (that is, to foreclose upon) the equitable lien. The trial court denied Bank’s claim for attorney’s fees, but determined that Frenkel Trust was entitled to attorney’s fees based both on the mortgage’s fee provision and on section 57.105(7) of the Florida Statutes.2 Frenk-el Trust appealed the trial court’s imposition of an equitable hen. Bank appealed the trial court’s award of attorney’s fees to the Frenkel Trust. We consolidated the appeals.

*158Upon the Bank’s proper confession of error, we reverse that portion of the trial court’s final judgment imposing an equitable lien on Frenkel Trust’s real property. This claim was not raised in the pleadings and it was error to enter judgment for the Bank on an unpled claim. Marriott Int'l, Inc. v. Am. Bridge Bahamas, Ltd., 193 So.3d 902, 909 (Fla. 3d DCA 2015).

We also reverse that portion of the final judgment awarding attorney’s fees to Frenkel Trust. As Frenkel Trust was not a party to the mortgage containing the subject fee provision, it is therefore unable to derive the benefit of section 57.105(7)’s fee reciprocity. Fla. Cmty. Bank, 197 So.3d at 1115.3

We reverse the final judgment and remand to the trial court for entry of a revised final judgment consistent with this opinion.

Reversed and remanded.


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