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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 13-13953 Non-Argument Calendar ________________________
D.C. Docket No. 8:11-cv-02511-VMC-TBM
ANDRZEJ MADURA, ANNA DOLINSKA-MADURA,
Plaintiffs-Counter Defendants- Counter Claimants-Appellants,
versus
BAC HOME LOANS SERVICING, LP, f.k.a.Countrywide Home Loans Servicing, LP,
Defendant,
BANK OF AMERICA, NA,
Defendant-Counter Claimant- Third Party Plaintiff- Counter Defendant-Appellee,
COUNTRYWIDE HOME LOANS INC.,
Counter Defendant,
UNKNOWN TENANT 2, et al., Case: 13-13953 Date Filed: 11/10/2014 Page: 2 of 35
Third Party Defendants.
________________________
Appeal from the United States District Court for the Middle District of Florida ________________________
(November 10, 2014)
Before WILSON, ROSENBAUM, and FAY, Circuit Judges.
PER CURIAM:
Andrzej Madura and his wife, Anna Dolinska-Madura, appeal pro se the
district judge’s granting summary judgment to Bank of America, N.A. (“BOA”).
We affirm.
I. BACKGROUND
A. Underlying Facts
On July 26, 2000, Madura obtained a residential home loan from Full
Spectrum Lending, Inc. (“Full Spectrum”). Under the terms of the loan agreement,
Madura borrowed $87,750.00 at an adjustable interest rate of 14.375%, secured by
the Maduras’ principal residence. Madura signed an arbitration agreement at the
loan closing, and both he and his wife signed the mortgage. On July 31, 2000,
Countrywide Home Loans, Inc. (“Countrywide”), purchased the loan from Full
Spectrum.
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In March 2001, the Maduras contacted Countrywide and requested to repay
their loan in full. Countrywide informed them that a prepayment penalty applied
and sent them a payoff demand statement that included a $5,036.84 prepayment
penalty. The Maduras sent Countrywide a letter on May 23, 2001, demanding an
immediate rescission of the loan agreement because of alleged fraud and forgery.
They asserted Full Spectrum and/or Countrywide had destroyed the original loan
documents and had fabricated a new promissory note and Truth in Lending Act
(“TILA”) Disclosure Statement, which included a prepayment-penalty provision
not present in the original loan documents. The Maduras contended Full Spectrum
and Countrywide had forged their initials and signatures on the fabricated
documents. Countrywide refused to rescind the loan agreement, but did agree to
waive the prepayment penalty.
Despite the waiver of the penalty, the Maduras did not repay the loan in full.
They continued to make their monthly loan payments, until November 1, 2006,
when Madura ceased making payments. Countrywide sent Madura a notice of
default and acceleration on April 23, 2007.
Effective April 27, 2009, Countrywide changed its name to BAC Home
Loans Servicing, L.P. (“BAC Home Loans”). On July 1, 2011, BAC Home Loans
merged with BOA. BOA notified Madura when the ownership and servicer rights
of the loan were transferred from BAC Home Loans to BOA. In February 2012,
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BOA sent Madura a re-notice of default and acceleration. Madura did not cure the
default.
B. Litigation History
1. Madura 1
After the Maduras sent Countrywide the May 23, 2001, letter demanding
rescission of their July 26, 2000, loan, they initiated multiple lawsuits in both state
and federal courts. In 2002, the Maduras filed a Florida court action, “Madura 1,”
against Full Spectrum and Countrywide in the Manatee County Circuit Court,
Case No. 2002 CA 2358. Based in part on the Maduras’ contentions that Full
Spectrum and Countrywide fraudulently had altered and forged their loan
documents, they raised state-law claims of forgery, uttering a forged instrument,
conspiracy, and violations of the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. §§ 1961-1968. They also raised state law claims of usury
and argued their interest rate was unreasonable.
Full Spectrum and Countrywide moved to compel arbitration against
Madura. The state judge granted the motion, finding Madura had signed an
enforceable arbitration agreement encompassing all of his claims. The judge
further found, even if Madura’s usury claim was not appropriate for arbitration, the
claim was not colorable as a matter of law. Thereafter, his wife filed in the same
case an amended state-court complaint, alleging federal TILA claims and state-law
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claims of fraud and fraud in the inducement. In Counts I and II, she alleged the
defendants had violated TILA by impermissibly adding a prepayment penalty to
TILA Disclosure and by forging the Maduras’ signatures on loan documents,
before entering the documents on the public record. In Counts III and IV,
Dolinska-Madura raised civil and criminal usury claims under Florida law. In
Count V, she alleged the defendants fraudulently had induced her to take the loan.
In Count VI, she alleged fraud on the basis that the defendants had charged a
prepayment penalty to which the Maduras had never agreed at closing.
The defendants moved for summary judgment. The state-court judge
granted the motion and found the alleged TILA violations were time-barred. On
Counts III and IV, the judge found Dolinska-Madura was not a “borrower” and
thus lacked standing to bring usury claims. On Counts V and VI, the judge found
the defendants had waived the prepayment penalty; consequently, Dolinska-
Madura could not demonstrate damages, an essential element of a claim of fraud.
Dolinska-Madura petitioned the Supreme Court of Florida, which declined to
review her case. Dolinska-Madura v. Full Spectrum Lending, Inc., No. SC06-1908
(Fla. Oct. 17, 2006).
2. Madura 2
On November 6, 2006, the Maduras filed a second lawsuit, “Madura 2,” in
federal court. They sought rescission of the January 26, 2000, loan and statutory
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damages for alleged violations of the TILA. They alleged Countrywide had failed
to honor their May 23, 2001, demand to rescind the loan based on illegally altered
and forged loan documents. They also raised state-law claims for failure of
contract, forgery, fraud, fraud in the inducement, usury, uttering forged bills, and
violations of the Florida Communications Fraud Act (“FCFA”).
Pursuant to his arbitration agreement, the district judge ordered Madura to
arbitrate his claims and dismissed them to be arbitrated. The judge concluded
Dolinska-Madura’s claims were precluded by the doctrines of collateral estoppel or
res judicata, because she already had raised those claims or should have raised
them in Madura 1. The district judge found the Florida court was a court of
competent jurisdiction, the state-court judge had entered a final judgment on the
merits against Dolinska-Madura, the parties in the state and federal-court actions
were identical, and all of Dolinska-Madura’s state and federal claims arose out of
the same operative nucleus of facts surrounding the July 26, 2000, loan. The
district judge granted summary judgment to Full Spectrum and Countrywide on
Dolinska-Madura’s claims. We affirmed on appeal. Madura v. Countrywide
Home Loans, Inc., 344 F. App’x 509, 511 (11th Cir. 2009) (per curiam).
3. Madura 3
In 2010, the Maduras filed their third lawsuit, “Madura 3,” in Florida court
against BOA. BOA removed the action to federal court. In an amended
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complaint, the Maduras requested a declaratory judgment, stating they were not
liable for any payments on their loan, since their May 23, 2001, letter had
rescinded the loan, because of Countrywide’s nondisclosure of forged loan
documents. The Maduras also raised claims of forgery, fraudulent notarization,
FCFA violations, intentional spoliation of loan instruments, intentionally sending
derogatory and inaccurate reports to credit bureaus, utterance of forged
instruments, unauthorized payment of property taxes, and RICO violations.
BOA moved to dismiss the amended complaint, which the district judge
granted on July 16, 2010. The judge found the complaint had not directed a single
allegation against BOA. Although the Maduras had sued BOA as the parent
company of Countryside, the judge found BOA was not Countrywide’s parent
company, and even if it was, a parent company generally is not liable for the acts
of its subsidiaries. The judge concluded that res judicata barred the action, because
each and every claim in the action had been addressed and finally adjudicated in
Madura 1 and 2. The Maduras appealed, but we later dismissed the appeal for the
Maduras’ failure to prosecute. Madura v. Bank of America, N.A., No. 10-14717
(11th Cir. May 27, 2011).
4. Madura 4 and Madura 6
The Maduras filed three additional lawsuits in 2011 and 2012. In October
2011, they filed “Madura 4” in a Florida small-claims court against the attorneys,
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who had represented them in Madura 1, 2, and 3. Shortly thereafter, they filed the
action at issue in this appeal,“Madura 5.” In January 2012, they filed “Madura 6”
in small-claims court against Countrywide. The small-claims court dismissed
Madura 4 and 6, because it lacked jurisdiction and the Maduras’ claims, all of
which stemmed from their July 2000 loan and had been adjudicated in Madura 1
and 3.
C. Madura 5
Following removal from state court, on November 4, 2011, the Maduras
filed an amended complaint in federal court against BOA and BAC Home Loans,
alleging violations of the Real Estate settlement Procedures Act (“RESPA”), 12
U.S.C. § 205(b), (c), and (e). The Maduras alleged BOA and BAC Home Loans
had violated § 2605(b) and (c) of RESPA by failing to notify them that, on April
27, 2009, Countrywide had transferred the servicing of their loan to BAC Home
Loans. They also alleged the defendants had violated § 2605(e) by failing to
respond to numerous Qualified Written Requests (“QWRs”), as defined by
RESPA, within the requisite time periods. In support, the Maduras attached
numerous letters, which they contended constituted QWRs under RESPA. They
requested actual damages in an amount to be determined by a jury, statutory
damages for each plaintiff in the amount of $2,000 per violation, and attorney’s
fees and costs.
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BOA, on its own and as successor by merger to BAC Home Loans,
answered the complaint and subsequently filed a counterclaim for foreclosure
against the Maduras.1 BOA alleged the Maduras had not paid the required
monthly installment payments on the July 26, 2000, loan from November 1, 2006,
to the present. As a result, the Maduras owed BOA $86,643.46. BOA asserted all
conditions precedent to the acceleration of the debt and commencement of the
action had been fulfilled or waived, and it held the note and held the note
immediately before it had filed the foreclosure action.
The Maduras filed a 140-page answer to BOA’s counterclaim for
foreclosure, denying the allegations and raising 71 affirmative defenses. They
asserted BOA lacked standing to foreclose, because the note was not a negotiable
instrument, BOA was not a holder or a holder in due course of the note, the
allonge 2 to the note was fraudulent and was not affixed to the note, they had
rescinded the loan in May 2001, and the loan documents had been forged and
fraudulently altered.
1 BOA also filed a third-party complaint against additional parties, but no party has appealed the district judge’s resolution of those claims. 2 Under Florida law, an “allonge” is a legal term for “a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself.” Wells Fargo Bank, N.A. v. Bohatka, 112 So. 3d 596, 598 (Fla. 1st Dist. Ct. App. 2013) (citation and internal quotation marks omitted). An allonge may name the payee or may be endorsed in blank. Id. 9 Case: 13-13953 Date Filed: 11/10/2014 Page: 10 of 35
Following discovery, BOA moved for summary judgment on the Maduras’
RESPA claims and on its counterclaim for foreclosure. The Maduras responded in
opposition and simultaneously filed their own motion for partial summary
judgment on the foreclosure counterclaim, arguing again that BOA lacked standing
to foreclose. In support of their motion for partial summary judgment, they
attached numerous “Forensic Document Examination Reports” from Thomas
Vastrick, a purported expert in forgery and document alteration. In the reports,
Vastrick stated Madura’s initials on the promissory note and both his and his
wife’s signatures on the TILA Disclosure appeared to have been forged. Vastrick
also recommended additional testing be performed on the allonge to determine
whether the endorsements therein were genuine.
BOA subsequently moved to strike the forensic document examination
reports and argued they were inadequate under Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993), for the admission of
expert testimony. The Maduras responded in opposition and requested a Daubert
hearing to resolve the matter.
Meanwhile, the district judge ordered BOA to tender the original, signed
loan documents to chambers. BOA complied. On July 17, 2013, the judge granted
BOA’s motion for summary judgment and denied the Maduras’ motion for partial
summary judgment. The judge also granted BOA’s motion to strike the forensic
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reports and found they were wholly inadequate under the standards set forth in
Daubert.
The judge concluded BOA was entitled to summary judgment on RESPA
claims as a matter of law, because the Maduras had not established RESPA applied
or BOA had violated any provision of the statute. As for BOA’s foreclosure
counterclaim, the district judge first addressed the Maduras’ motion for partial
summary judgment and BOA’s standing to foreclose. The judge rejected the
Maduras’ argument that they had rescinded the loan and found their May 23, 2001,
letter, even construed broadly, did not rescind their loan. The Maduras had ratified
the loan by continuing to make payments on it after the claimed rescission. The
judge found BOA properly had authenticated the note and allonge and rejected the
Maduras’ contention the note and allonge were defective because they were not
stapled together. The judge also found the note was a negotiable instrument under
Florida law. BOA’s possession of the note, endorsed in blank, defeated the
Maduras’ arguments. The judge denied the Maduras’ motion for partial summary
judgment on the issue of BOA’s standing to bring the foreclosure counterclaim.
The district judge subsequently addressed the Maduras’ 71 affirmative
defenses to the foreclosure counterclaim. The judge determined the doctrine of res
judicata barred those affirmative defenses that were based on the Maduras’ theory
that the promissory note and TILA Disclosure had been forged and fraudulently
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altered. Specifically, the judge determined those issues had been adjudicated in
Madura 1, 2, and 3. The judge determined the Maduras’ remaining affirmative
defenses lacked merit or were not supported adequately by argument or law.
On July 23, 2013, the Maduras moved for reconsideration and argued BOA
lacked authority to enforce the note because it had not paid the documentary taxes
on the note, as required under Florida law. The same day, they filed another
motion for reconsideration and asserted the district judge had engaged in
impermissible ex parte communications in acquiring the original loan documents
from BOA.
On August 12, 2013, the district judge denied both motions for
reconsideration. Specifically on the Maduras’ argument regarding ex parte
communications, the judge noted Florida law required parties seeking to foreclose
on a mortgage to produce the original note. The judge found BOA had furnished
the original loan documents in compliance with Florida law. Accordingly, the
judge concluded she had not engaged in ex parte communications. The judge also
found the relevant documentary taxes had been paid, because the note showed the
payment of those taxes. The judge entered a final decree of foreclosure on August
13, 2013. On appeal, the Maduras challenge the district judge’s grant of summary
judgment to BOA on their RESPA claims and on the foreclosure counterclaim.
They also challenge numerous prior orders of the district judge.
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II. DISCUSSION
We review a judge’s granting summary judgment de novo and view all
evidence and draw all reasonable inferences in favor of the nonmoving party.
Chapter 7 Tr. v. Gate Gourmet, Inc., 683 F.3d 1249, 1254 (11th Cir. 2012).
Summary judgment is proper only “when there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Id.
(citation and internal quotation marks omitted). “A genuine issue of material fact
exists when a reasonable jury could return a verdict for the nonmoving party.” Id.
Presenting mere conclusions and unsupported factual allegations will not defeat a
summary judgment motion. Ellis v. England, 432 F.3d 1321, 1326 (11th Cir.
2005) (per curiam). We may affirm granting a district judge’s grant of summary
judgment “on any ground supported by the record, regardless of whether that
ground was relied upon or even considered by the district court.” Kernel Records
Oy v. Mosley, 694 F.3d 1294, 1309 (11th Cir. 2012).
While we read “briefs filed by pro se litigants liberally, issues not briefed on
appeal by a pro se litigant are deemed abandoned.” Timson v. Sampson, 518 F.3d
870, 874 (11th Cir. 2008) (per curiam) (citation omitted). “A party fails to
adequately brief a claim when he does not plainly and prominently raise it, for
instance by devoting a discrete section of his argument to those claims.” Sapuppo
v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014) (citation and
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internal quotation marks omitted). We have “long held that an appellant abandons
a claim when he either makes only passing references to it or raises it in a
perfunctory manner without supporting arguments and authority.” Id. We do not
address arguments raised for the first time in a pro se litigant’s reply brief. Timson,
518 F.3d at 874. Likewise, arguments raised for the first time on appeal, which
were not presented in the district court, are deemed waived. Access Now, Inc. v.
Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004).
As an initial matter, the Maduras have waived the following issues on
appeal, either by failing to raise the issues in the district court or by failing to
provide supporting arguments and authority on appeal: (1) whether BOA waived
its foreclosure counterclaim by failing to raise it in Madura 3 or Madura 6; 3
(2) whether BOA failed to refute the Maduras’ contention that they did not receive
proper consideration for the loan; (3) whether BOA entirely ignored the Maduras’
fourteenth affirmative defense; and (4) whether BOA did not address the Maduras’
first, twelfth, thirty-third, and fifty-fifth affirmative defenses. Accordingly, we
decline to address those issues.
3 The Maduras actually argue the doctrine of res judicata bars BOA from filing for foreclosure. Construing their brief liberally, however, it appears they misunderstood res judicata and intended to assert that BOA waived the counterclaim for foreclosure by failing to raise it in previous lawsuits. 15 Case: 13-13953 Date Filed: 11/10/2014 Page: 16 of 35
A. RESPA Claims
On appeal, the Maduras argue pro se the district judge erred by finding their
RESPA claims and defenses are without merit. RESPA prescribes certain actions
to be followed by entities or persons responsible for servicing federally related
mortgage loans. See 12 U.S.C. § 2605. RESPA provides that “[e]ach servicer of
any federally related mortgage loan shall notify the borrower in writing of any
assignment, sale, or transfer of the servicing of the loan to any other person.” Id. §
2605(b)(1). Subsection (c) similarly provides that: “[e]ach transferee servicer to
whom the servicing of any federally related mortgage loan is assigned, sold, or
transferred shall notify the borrower of any such assignment, sale, or transfer.” Id.
§ 2605(c).
RESPA’s implementing regulations provide, however, that the following
transfers are not considered an assignment, sale, or transfer of mortgage loan
servicing for purposes of the notice requirement: (1) transfers between affiliates;
(2) transfers resulting from mergers or acquisitions of servicers or subservicers;
and (3) transfers between master servicers, where the subservicer remains the
same. 24 C.F.R. § 3500.21(d)(1)(i).
RESPA also provides a loan servicer, upon receipt of a QWR for
information related to the servicing of a loan, must provide a written response
acknowledging receipt of the QWR within 5 business days. 12 U.S.C.
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§ 2605(e)(1)(A). A QWR is a written correspondence that (1) allows the servicer
to identify the name and account of the borrower, and (2) includes a statement of
the reason for the borrower’s belief that the account is in error or provides
sufficient detail regarding other information sought by the borrower. Id.
§ 2605(e)(1)(B). The term “servicing” means receiving any scheduled periodic
payments from a borrower under the terms of any loan and making the payments
of principal and interest regarding the amounts received from the borrower as may
be required by the loan. Id. § 2605(i)(3).
RESPA further requires, within 30 business days of receipt of a QWR, the
servicer must (1) make appropriate corrections in the account of the borrower and
transmit a written notification of the correction; (2) after conducting an
investigation, provide the borrower with a written explanation that includes a
statement of the reasons for which the servicer believes the account is correct, and
the name and telephone number of an employee or department that can provide
further assistance; or (3) after conducting an investigation, provide the borrower
with a written explanation that includes the information requested by the borrower
or an explanation of why the information requested is unavailable, along with the
name and telephone number of an employee or department that can provide further
assistance. Id. § 2605(e)(2).
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If a loan servicer fails to comply with any of these provisions, an individual
borrower may recover any actual damages caused by the failure, and up to $1,000
in statutory damages if there is a pattern or practice of noncompliance with
RESPA. Id. § 2605(f). First, the Maduras have failed to provide any evidence or
argument demonstrating that BOA or its predecessors were required to provide
notice of a transfer, assignment, or sale of the servicing of their loan. The Maduras
also have failed to demonstrate a transfer of the servicing of their loan occurred, as
defined under the regulations. In fact, they admit in their amended complaint
Countrywide changed its name to BAC Home Loans and BAC Home Loans
subsequently merged with BOA. Servicers do not have to provide notice of
transfers between affiliates or as the result of mergers. 24 C.F.R.
§ 3500.21(d)(1)(i).
Second, the Maduras’ communications with BOA do not constitute QWRs.
Moreover, a review of the Maduras’ letters to BOA and its predecessors reveals the
correspondence does not relate to the servicing of their loan. Rather, within the
letters, the Maduras asserted their loan documents had been forged, warned the
servicers not to transfer the loan, and accused the servicers of committing mail
fraud. In addition, the Maduras have offered no competent evidence demonstrating
actual damages caused by RESPA violations. See 12 U.S.C. § 2605(f). To the
extent the Maduras raise the purported RESPA violations as an affirmative defense
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to foreclosure, they have not demonstrated how a RESPA violation would preclude
a foreclosure. Accordingly, the Maduras have failed to establish a genuine dispute
of material fact concerning the alleged RESPA violations, and the district judge did
not err by granting summary judgment to BOA on those claims.
B. Foreclosure Counterclaim
1. Preclusion of Forgery and Fraud-Based Arguments
We review de novo the application of res judicata and collateral estoppel.
Lozman v. City of Riviera Beach, Fla., 713 F.3d 1066, 1069 (11th Cir. 2013).
When determining whether to give preclusive effect to a federal judgment, we
apply federal common law. Tampa Bay Water v. HDR Eng’g, Inc., 731 F.3d 1171,
1179 (11th Cir. 2013). 4 Collateral estoppel “operates to bar the introduction or
argumentation of certain facts necessarily established in a prior proceeding.” Id. at
1180 (citation and internal quotation marks omitted). In this circuit, a party
seeking to apply the doctrine of collateral estoppel must establish “(1) the issue at
stake is identical to the one involved in the earlier proceeding; (2) the issue was
actually litigated in the earlier proceeding; (3) the determination of the issue must
have been a critical and necessary part of the earlier judgment; and (4) the party
against whom collateral estoppel is asserted must have had a full and fair
4 Federal preclusion principles bar the Maduras’ claims arising from the July 26, 2000, loan transaction, based on the federal decisions in Madura 2 and 3. Therefore, we need not determine whether state preclusion principles also bar those claims based on the state-court’s judgment in Madura 1. 19 Case: 13-13953 Date Filed: 11/10/2014 Page: 20 of 35
opportunity to litigate the issue.” Id. (citation, internal quotation marks, and
ellipsis omitted). Under federal common law, collateral estoppel is not limited to
actions between the same parties and their privies. “A defendant who was not a
party to the original action may invoke collateral estoppel against the plaintiff.”
Hart v. Yamaha-Parts Distribs., Inc., 787 F.2d 1468, 1473 (11th Cir. 1986).
Collateral estoppel bars the Maduras from relitigating all claims that they
raised or could have raised in their initial state-court action, including the
following issues: (1) whether they had rescinded the July 26, 2000, loan through
the May 23, 2001, letter; (2) whether their loan documents had been forged and
fraudulently altered; (3) whether their loan was usurious; and (4) any other issues
arising from the July 26, 2000, loan transaction.
In Madura 2, the district judge found the doctrine of res judicata prevented
Dolinska-Madura from relitigating any claims that arose from the July 2000, loan
transaction, including her fraud, usury, and TILA claims and any variations of
those claims, because the state court had finally adjudicated those claims in
Madura 1. The district judge dismissed Madura’s claims, finding he had to
arbitrate them. We affirmed. Madura, 344 F. App’x at 517-18. Likewise, in
Madura 3, the district judge dismissed the case with prejudice and found all claims
in the action, including the issue of whether the Maduras had rescinded the loan,
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were barred by the doctrine of res judicata, because they had been addressed and
finally adjudicated in Madura 1 and 2.
Since the district judges in Madura 2 and 3 had determined Dolinska-
Madura’s claims arising from the July 26, 2000, loan transaction were precluded
by res judicata and Madura had to arbitrate those claims, the doctrine of collateral
estoppel precluded the judge in this case from adjudicating those claims on the
merits. See Tampa Bay Water, 731 F.3d at 1180. To the extent the Maduras
challenge granting summary judgment to BOA or any other order of the district
judge based on claims they raised or could have raised in Madura 1, we may not
consider their arguments. The Maduras ratified the loan by continuing to make
monthly payments on the loan until November 2006. See Molinos Valle Del
Cibao, C. por A. v. Lama, 633 F.3d 1330, 1355 (11th Cir. 2011) (stating, under
Florida law, ratification of an agreement “occurs where a person expressly or
impliedly adopts an act or contract entered into in his or her behalf by another
without authority” (citation and internal quotation marks omitted)).
2. BOA’s Standing to Foreclose
The Maduras also argue on appeal that BOA lacks standing to foreclose,
because (1) the note is not a negotiable instrument; (2) the note and allonge were
not authenticated; (3) the allonge was infected with fraud; (4) the allonge was not
affixed to the note; (5) BOA does not own the note or mortgage; (6) BOA is not a
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real party in interest; (7) BOA is merely an agent that constructively possesses the
note for another entity; and (8) BOA is not a holder in due course.
When a district judge exercises supplemental jurisdiction over state-law
claims, state law governs substantive issues and federal law governs procedural
issues. McDowell v. Brown, 392 F.3d 1283, 1294 (11th Cir. 2004). Under Florida
law, the term “negotiable instrument” means “an unconditional promise or order to
pay a fixed amount of money, with or without interest or other charges described in
the promise or order.” Fla. Stat. § 673.1041(1). An instrument is not negotiable if
it states “any other undertaking or instruction by the person promising or ordering
payment to do any act in addition to the payment of money.” Id. § 673.1041(1)(c).
Florida courts generally have found that promissory notes, secured by a mortgage,
are negotiable instruments. See, e.g., Harvey v. Deutsche Bank Nat’l Trust Co., 69
So. 3d 300, 303 (Fla. 4th Dist. Ct. App. 2011) (per curiam) (holding a note,
endorsed in blank, was a negotiable instrument subject to the provisions of Chapter
673 of the Florida Statutes); Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932, 933
(Fla. 4th Dist. Ct. App. 2010) (per curiam) (same); Taylor v. Deutsche Bank Nat’l
Trust Co., 44 So. 3d 618, 622 (Fla. 5th Dist. Ct. App. 2010) (noting “a promissory
note is a negotiable instrument”); Perry v. Fairbanks Capital Corp., 888 So. 2d
725, 727 (Fla. 5th Dist. Ct. App. 2004) (recognizing a “promissory note is clearly a
negotiable instrument” under Florida law).
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The party entitled to enforce a promissory note, secured by a mortgage, is
the holder of the instrument. U.S. Bank Nat’l Ass’n v. Knight, 90 So. 3d 824, 826
(Fla. 4th Dist. Ct. App. 2012). “A ‘holder’ is someone who is ‘in possession of a
negotiable instrument that is payable either to bearer or to an identified person that
is the person in possession . . . .’” Id. (quoting Fla. Stat. § 671.201(5)). The
“bearer” is someone in possession of a negotiable instrument that is payable to
bearer or endorsed in blank. Id. “Thus, to have standing, an owner or holder of a
note, endorsed in blank, need only show that he possessed the note at the
institution of a foreclosure suit; the mortgage necessarily and equitably follows the
note.” Id. A party need not be a holder in due course in order to enforce a note by
foreclosing the mortgage. Taylor, 44 So. 3d at 622.
Under Florida law, “commercial papers and signatures thereon and
documents relating to them are self authenticating.” Riggs, 36 So. 3d at 933
(citation, internal quotation marks, and alterations omitted). In addition, the
“authenticity of, and authority to make, each signature on [a negotiable] instrument
is admitted unless specifically denied in the pleadings.” Fla. Stat. § 673.3081(1).
If the validity of a signature is denied, the burden of establishing the validity
generally “is on the person claiming validity, but the signature is presumed to be
authentic and authorized.” Id. (emphasis added). The effect of the § 673.1081(1)
presumption is to require the party challenging the signature to produce evidence
23 Case: 13-13953 Date Filed: 11/10/2014 Page: 24 of 35
supporting a finding that the signature was forged or unauthorized. See Bennett v.
Deutsche Bank Nat’l Trust Co., 124 So. 3d 320, 322-23 (Fla. 4th Dist. Ct. App.
2013) (per curiam) (holding defendants had failed to offer evidence showing
signatures on the allonges were unauthentic and affirming grant of summary
judgment to plaintiff on foreclosure action).
BOA has established its standing to foreclose on the Maduras’ mortgage.
Florida courts generally have held that ordinary mortgage promissory notes are
negotiable instruments, and the Maduras have not identified in their initial brief
which provisions of the note destroy its negotiability. See Timson, 518 F.3d at 874
(recognizing issues not briefed on appeal by a pro se litigant, as well as issues
raised for the first time in a pro se litigant’s reply brief, are deemed abandoned).
To the extent, if any, the Maduras argue the note is not negotiable because of late-
charge and prepayment-penalty provisions, their argument fails. A negotiable
instrument is an “unconditional promise or order to pay a fixed amount of money,
with or without interest or other charges described in the promise or order.” Fla.
Stat. § 673.1041(1) (emphasis added).
The Maduras also have failed to provide admissible evidence supporting
their assertions that the note and allonge were not authenticated. As discussed in
more detail below, the Maduras are precluded from arguing their signatures on the
note were forged, and the district judge properly struck Vastrick’s forensic report
24 Case: 13-13953 Date Filed: 11/10/2014 Page: 25 of 35
calling into question the signatures on the allonge. Therefore, the Maduras have
presented no evidence to overcome the presumption that the note and allonge
contained authorized and authentic signatures. See Bennett, 124 So. 3d at 322-23.
The district judge found, and the Maduras have produced no evidence to the
contrary, that the note and allonge currently are not attached, because BOA has had
to separate, copy, and produce each document numerous times.
Finally, BOA has standing to foreclose on the mortgage, because it
possessed the note, endorsed in blank, and possessed the note prior to filing the
foreclosure counterclaim. The mortgage necessarily and equitably followed the
note. See Knight, 90 So. 3d at 826. BOA need not demonstrate it is a holder in
due course in order to foreclose. Taylor, 44 So. 3d at 622.
3. Amount of Debt Owed
The Maduras argue BOA has failed to prove the amounts due and owing
under the note with admissible evidence. They contend they have paid the loan in
full. We review the district judge’s evidentiary rulings for abuse of discretion.
Cynergy, LLC v. First Am. Title Ins. Co., 706 F.3d 1321, 1326 (11th Cir. 2013).
Federal Rule of Evidence 803(6) permits a court to admit hearsay evidence if the
record was made at or near the time that someone with knowledge transmitted the
recorded information; the record was kept in the course of a regularly conducted
activity of a business; the regular practice of that activity included making the
25 Case: 13-13953 Date Filed: 11/10/2014 Page: 26 of 35
record; the testimony of the custodian of the records or another qualified witness
proves all of these conditions; and “neither the source of information nor the
method or circumstances of preparation indicate a lack of trustworthiness.” Fed.
R. Evid. 803(6)(A)-(E). It is not necessary for the person who actually prepared
the documents to testify “so long as other circumstantial evidence and testimony
suggest their trustworthiness.” Itel Capital Corp. v. Cups Coal Co., 707 F.2d
1253, 1259 (11th Cir. 1983).
The Maduras’ bare assertion the amount of debt owed is incorrect cannot
defeat a summary judgment motion. Ellis, 432 F.3d at 1326. BOA, on the other
hand, presented numerous business records establishing the Maduras had defaulted
on their loan and setting forth the amounts actually paid on the loan. Brieanne
Siriwan, an officer of BOA, attested that she was familiar with those business
records and has personal knowledge of BOA’s procedures for creating such
records. She further stated the records were (1) made at or near the time of the
occurrence of the matters recorded, by a person with personal knowledge of the
information; (2) kept in the course of BOA’s regularly conducted business
activities; and (3) created by BOA as a regular practice. Consequently, the district
judge did not err by considering those documents under the business-records
exception to the hearsay rule. See Fed. R. Evid. 803(6).
4. Burden under Celotex v. Catrett, 477 U.S. 317, 106 S. Ct. 2548 (1986)
26 Case: 13-13953 Date Filed: 11/10/2014 Page: 27 of 35
The Maduras argue that BOA failed to meet its burden on summary
judgment under Celotex to identify the parts of the record that indicate the absence
of a genuine issue of material fact. The Maduras’ argument lacks merit. The
Supreme Court in Celotex held that “a party seeking summary judgment always
bears the initial responsibility of informing the district court of the basis for its
motion, and identifying those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,’ which
it believes demonstrate the absence of a genuine issue of material fact.” Celotex,
477 U.S. at 323, 106 S. Ct. at 2553. BOA provided a “Statement of Undisputed
Facts,” which identified the portions of the record that it believed demonstrated the
absence of a genuine issue of material fact.
5. Ex Parte Communications
The Maduras appear to argue the district judge engaged in prohibited ex
parte communications, when she acquired the original loan documents from BOA.
Under Florida law, “a party who seeks to foreclose on a mortgage must produce
the original note.” Deutsche Bank Nat’l Trust Co. v. Clarke, 87 So. 3d 58, 61 (Fla.
4th Dist. Ct. App. 2012). The district judge ordered BOA to produce the original
note, as required under Florida law. BOA’s subsequent tendering of the note was
not an impermissible ex parte communication.
27 Case: 13-13953 Date Filed: 11/10/2014 Page: 28 of 35
6. Statute of Limitations for Foreclosure Actions
The Maduras argue the statute of limitations to file for foreclosure in this
case began to run on April 23, 2007, based on Countrywide’s first notice of
default. They contend BOA filed for foreclosure on May 2, 2012, after the
deadline to file had expired. In Florida, an action to foreclose a mortgage must be
brought within five years after the right to foreclose accrues. Fla. Stat. §
95.11(2)(c). The statute of limitations on a mortgage foreclosure action does not
begin to run until the last payment is due, unless the mortgage contains an
acceleration clause. Locke v. State Farm Fire & Cas. Co., 509 So. 2d 1375, 1377
(Fla. 1st Dist. Ct. App. 1987). When the mortgage contains an acceleration clause,
the statute of limitations begins to run when the loan is accelerated. See id. If an
acceleration clause is absolute, then the entire indebtedness becomes due
immediately upon default, but if the acceleration clause is optional, acceleration of
the payments does not occur unless the option is exercised. Cook v. Merrifield,
335 So. 2d 297, 299 (Fla. 1st Dist. Ct. App. 1976).
The Maduras’ mortgage contains an optional acceleration clause. In
accordance with the acceleration clause, BOA sent the Maduras a default letter on
April 23, 2007, which notified them that the failure to cure the default on or before
May 23, 2007, would result in the acceleration of their loan and commencement of
a foreclosure proceeding. The district judge concluded BOA accelerated the loan
28 Case: 13-13953 Date Filed: 11/10/2014 Page: 29 of 35
on May 23, 2007, when the Maduras failed to cure the default. Although BOA
argues it did not accelerate the loan until it filed this foreclosure action, we need
not decide that issue, because the loan was accelerated on May 23, 2007, at the
earliest. Accordingly, BOA timely filed its counterclaim for foreclosure within the
five-year deadline, on May 2, 2012.
7. Forensic Document Examination Reports Under Daubert
The Maduras argue the district judge abused her discretion by striking and
refusing to consider Vastrick’s forensic-document-examination reports. They
further contend the judge abused her discretion by refusing to hold a Daubert
hearing. We review a district judge’s exclusion of expert reports for abuse of
discretion. Corwin v. Walt Disney Co., 475 F.3d 1239, 1250 (11th Cir. 2007). “As
the Supreme Court recognized in Daubert . . . [Federal Rule of Evidence 702]
contemplates that the district court will serve as a gatekeeper to the admission of
scientific testimony.” Tampa Bay Water, 731 F.3d at 1183. Under Daubert and its
progeny, we conduct a three-part inquiry to determine the admissibility of expert
testimony, weighing whether (1) the expert is qualified to testify competently
regarding the matters he intends to address; (2) the methodology by which the
expert reaches his conclusions is sufficiently reliable; and (3) the testimony assists
the trier of fact, through the application of scientific, technical, or specialized
expertise, to understand the evidence or to determine a fact in issue. Id. Although
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Daubert hearings “are often helpful,” they are not a prerequisite to determine the
admissibility of expert testimony under the Federal Rules of Evidence or
established law. Corwin, 475 F.3d at 1252 n.10.
The district judge did not abuse her discretion by striking Vastrick’s forensic
reports. Although Vastrick likely was qualified to testify competently about
document forgery and alteration, based upon the information in his curriculum
vitae, no record evidence sets forth the specific methodology Vastrick used to
make his findings or stated whether his methods were sufficiently reliable.
Consequently, the Maduras have not met the three-part test under Daubert to allow
the admissibility of Vastrick’s reports. Tampa Bay Water, 731 F.3d at 1183.
Furthermore, the district judge was well within her discretion in refusing to hold a
Daubert hearing, because the record evidence failed to meet the Daubert
requirements on its face. Corwin, 475 F.3d at 1252 n.10.
8. The Doctrine of Laches
The Maduras further argue the doctrine of laches estopped BOA from
pursuing foreclosure. They contend BOA purposefully delayed filing for
foreclosure in order to accrue additional interest on the loan. The equitable
doctrine of laches “prevents a plaintiff who has slept on his rights from enforcing
those rights against a defendant.” Peter Letterese & Assocs., Inc. v. World Inst. of
Scientology Enters., 533 F.3d 1287, 1319 (11th Cir. 2008). The doctrine generally
30 Case: 13-13953 Date Filed: 11/10/2014 Page: 31 of 35
“does not come into play until the period prescribed by the applicable statute of
limitations has expired.” Briggs v. Estate of Geelhoed, 543 So. 2d 332, 333 (Fla.
4th Dist. Ct. App. 1989). Laches may apply, however, “when an unreasonable
delay results in prejudice to the rights of the party against whom enforcement of a
debt or other obligation is sought.” Id.
The doctrine of laches does not bar BOA from foreclosing on the Maduras’
mortgage. BOA timely filed the foreclosure counterclaim within the applicable
statute of limitations, and the Maduras have not established BOA unreasonably
delayed in bringing the action. Although the Maduras argue the delay in the action
resulted in prejudice to them, their argument lacks merit. Moreover, the Maduras
benefitted from any delay by continuing to reside in their home for several years
without making any payments on their loan.
9. Documentary Taxes
The Maduras argue BOA failed to pay the required documentary taxes on
the note and, as a result, may not foreclose on their mortgage. This argument is
unavailing. In Florida, “in an action to enforce a promissory note the plaintiff must
establish, as a condition precedent to pursuing the action, that the [documentary]
taxes due on the note have been paid.” Somma v. Metra Elecs. Corp., 727 So. 2d
302, 304 (Fla. 5th Dist. Ct. App. 1999) (citing Fla. Stat. § 201.08(1) (1997)). The
July 26, 2000, promissory note at issue in this case states: “The state documentary
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tax due on this Note has been paid on the mortgage securing this indebtedness.”
ROA at 4351. The Maduras provide no evidence to the contrary.
10. Conditions Precedent to Foreclose
The Maduras argue BOA failed to comply with paragraph 22 of the
mortgage, which set forth the requirements for notifying them of a default. They
further argue BOA failed to comply with a particular consent judgment and with
certain United States Department of Housing and Urban Development (“HUD”)
regulations, which they contend are prerequisites to foreclosure.
Under the terms of the mortgage at issue in this case, the lender had to give
notice to the Maduras prior to acceleration following the Maduras’ breach. The
notice specifically had to specify “(a) the default; (b) the action required to cure the
default; (c) a date, not less than 30 days from the date the notice is given to
Borrower, by which the default must be cured; and (d) that failure to cure the
default on or before the date specified in the notice may result in acceleration.”
ROA at 4362.
BOA and its predecessors complied with all conditions precedent to
foreclosure. In the first notice of default, dated April 23, 2007, Countrywide
informed Madura that his loan was in default, and that in order to cure the default,
he had to pay $8,259.88, plus any additional regular monthly payment or
payments, late charge, and fees and charges, which became due on or before May
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23, 2007. The notice also stated Countrywide had to receive that sum on or before
May 23, 2007, and the failure to cure the default would result in acceleration.
Likewise, BOA’s re-notice of default informed Madura of the default and the
actions required to cure the default. Although undated, the re-notice of default
directed Madura to cure the default within 30 days. The Maduras’ arguments
relating to a consent judgment and HUD regulations are unavailing. They have not
explained how BOA failed to comply with the judgment and regulations, nor have
they presented any evidence establishing that BOA failed to comply with them or
that the failure to comply somehow prevented foreclosure.
11. Unclean Hands
The Maduras argue BOA had unclean hands, because it (1) breached the
terms of the mortgage by sending improper notice of acceleration; (2) ratified
Countrywide’s misconduct by obtaining a forged note; and (3) filed a wrongful
foreclosure, because it knew the note and TILA Disclosure had been fabricated.
This argument is fails. BOA provided proper notice of acceleration to the
Maduras. In addition, preclusion principles bar the Maduras’ argument that BOA
had unclean hands based on any forgery or fabrication of loan documents.
12. Outstanding Discovery
The Maduras also argue the district judge abused her discretion by ruling on
summary judgment when numerous discovery motions were still pending. District
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judges have broad discretion under Federal Rule of Civil Procedure 26 to compel
or deny discovery. Harrison v. Culliver, 746 F.3d 1288, 1297 (11th Cir. 2014).
We will not overturn a discovery ruling unless the district judge’s ruling resulted in
substantial harm to an appellant’s case. Id. Generally, summary judgment should
not be granted until the nonmoving party has had an adequate opportunity to
conduct discovery. Reflectone, Inc. v. Farrand Optical Co., 862 F.2d 841, 843
(11th Cir. 1989) (per curiam). Nevertheless, there is no “blanket prohibition on the
granting of summary judgment motions before discovery” is fully complete. Id.
The district judge did not abuse her discretion by denying the Maduras’
repeated requests to compel additional discovery. Significantly, the district judge
granted several of the Maduras’ discovery motions and ordered BOA to produce
certain records. Moreover, the judge extended the discovery deadline, in response
to requests from both BOA and the Maduras, in order to permit the conclusion of
depositions and other production. Having allowed the parties to engage in
extensive discovery, the district judge did not abuse her discretion by denying
additional discovery. The Maduras have failed to explain how the denial of certain
discovery rulings resulted in substantial harm to their case. To the extent they
argue they were harmed because of fraud and alleged forgery concerning their loan
documents, those arguments are barred.
34 Case: 13-13953 Date Filed: 11/10/2014 Page: 35 of 35
C. Miscellaneous Motions
Finally, the Maduras challenge numerous orders striking or denying various
motions, including motions to dismiss BOA’s foreclosure counterclaim and
motions for summary judgment on BOA’s foreclosure counterclaim. The district
judge did not abuse her discretion by striking or denying any of the Maduras’
referenced motions. The Maduras filed many of their motions well past the
deadlines to file amended pleadings or to file dispositive motions, and they filed
other motions in violation of the district court’s local rules. We give “great
deference to a district court’s interpretation of its local rules.” Fils v. City of
Aventura, 647 F.3d 1272, 1282-83 (11th Cir. 2011) (citation and internal quotation
marks omitted). Likewise, we defer to the district judge’s “inherent authority to
manage [her] own docket ‘so as to achieve the orderly and expeditious disposition
of cases.’” Equity Lifestyle Props., Inc. v. Fla. Mowing & Landscape Serv., Inc.,
556 F.3d 1232, 1240 (11th Cir. 2009) (quoting Chambers v. NASCO, Inc., 501
U.S. 32, 43, 111 S. Ct. 2123, 2132 (1991)).
III. CONCLUSION
The Maduras have failed to establish a genuine dispute of material fact on
their RESPA claims or the foreclosure counterclaim, and BOA has established it is
entitled to summary judgment as a matter of law.
AFFIRMED.