Southern California Funding, Inc. v. Hutto

438 So. 2d 426
CourtDistrict Court of Appeal of Florida
DecidedSeptember 13, 1983
DocketAM-394
StatusPublished
Cited by7 cases

This text of 438 So. 2d 426 (Southern California Funding, Inc. v. Hutto) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern California Funding, Inc. v. Hutto, 438 So. 2d 426 (Fla. Ct. App. 1983).

Opinion

438 So.2d 426 (1983)

SOUTHERN CALIFORNIA FUNDING, INC., as general partner of and d/b/a American Funding Limited, a New Jersey Limited Partnership; and American Funding Corporation, a New Jersey Corporation, D/B/a the Money Savers, Appellants,
v.
Bill R. HUTTO and the Wewahitchka State Bank, Appellees.

No. AM-394.

District Court of Appeal of Florida, First District.

September 13, 1983.
Rehearing Denied October 17, 1983.

*428 George L. Hudspeth and Michael G. Tanner, Mahoney, Hadlow & Adams, P.A., Jacksonville, for appellants.

Wilfred C. Varn, Thomas M. Ervin, Jr., and Lewis M. Killian, Jr., Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, for appellee Bill R. Hutto.

David C. Gaskin, Wewahitchka, for appellee Wewahitchka State Bank.

LARRY G. SMITH, Judge.

We affirm the trial court's entry of a summary final judgment finding no liability against appellees. Appellants[1] instituted this action after a loan transaction made by appellants to third parties went bad, resulting in a foreclosure and judgment against the borrowers. Appellants sued for fraud, negligence and conspiracy against Hutto, an attorney who closed the loan for appellants, and for fraud and conspiracy against the Wewahitchka State Bank, which had furnished credit information concerning the borrowers. The complaint also included claims for fraud, negligence and conspiracy against various other defendants (not involved in this appeal), including Rayner and Associates, Inc., the mortgage brokerage firm which negotiated the loan, an individual employed by that firm, the borrower's accountant, and a real estate appraiser employed by appellants.

At the outset it should be noted that although appellants' initial brief advises this court that the judgment obtained in the foreclosure suit against the borrowers — I & E Properties of Florida, Inc., and Ira Hill, Jr. and his wife Lynn Hill — remains unsatisfied, the record has been supplemented by a certified copy of a satisfaction of judgment reflecting full payment and satisfaction of that judgment. The satisfaction and judgment was executed and recorded prior to the entry of the summary judgment involved in this appeal. Appellants' reply brief acknowledges the error, and explains that the satisfaction of judgment was handled by out-of-state counsel for appellants, without the knowledge of appellants' counsel of record in this litigation. Despite this satisfaction of judgment, appellants claim recovery of other damages which they assert were not included in that judgment.

Turning to the merits, in our view the trial judge correctly entered summary judgment for Hutto, in that there is an entire absence of any factual issue regarding the claim of fraud, negligence, or conspiracy on the part of Hutto. The most damaging allegation made against Hutto is that he failed to inform appellants of his prior representation of the borrowers in connection with other transactions. On this issue, Hutto stated in his affidavit filed in *429 support of summary judgment that he did disclose that prior representation by informing appellants' representative, Riordan (vice president of AFC), at the closing. In Riordan's deposition he conceded that he could not remember whether or not Hutto told him about his prior representation of the borrowers. However, in an affidavit filed in opposition to Hutto's motion for summary judgment, Riordan attempted to create an issue by denying that Hutto told him of the prior representation. This is clearly impermissible, and the trial judge was eminently correct in refusing to regard this affidavit as creating a genuine issue of fact. See, McKean v. Kloeppel Hotels, Inc., 171 So.2d 552 (Fla. 1st DCA 1965).

Hutto also maintained in his affidavit that he was initially contacted by appellants on June 19, 1979, at which time he was informed that he would be the attorney closing the loan for appellants on June 21, 1979, a mere two days later. Hutto further stated that he had no function in the closing except with respect to disbursement of funds after receiving authority to do so from Riordan. Here again, although Hutto's role as closing attorney is substantiated by the depositions of both Riordan and Dacey (president of AFC), Riordan and Dacey attempted — by affidavit in opposition to Hutto's motion for summary judgment — to expand Hutto's role in the transaction. Again, the trial court properly disregarded this change in position. McKean v. Kloeppel Hotels, Inc., supra.

Hutto's limited role as closing or disbursing attorney in this transaction was clearly established, as was the fact that appellants did not rely upon Hutto for the furnishing of credit information regarding the borrowers, the credit check and loan approval having taken place prior to Hutto being contacted on June 19. Under the circumstances, we can find no breach of duty on Hutto's part in failing to disclose a pending mortgage foreclosure action against the borrowers (which was later dismissed), nor the fact of Hill's prior income tax evasion conviction. These were matters of record, within the knowledge of Rayner as well as of common knowledge in the community, and were matters such as would routinely be discovered in a reasonably thorough credit investigation. We also reject appellants' contention that it was entitled to rely upon credit references supplied by Hutto earlier in the year to Rayner and Associates, Inc., concerning the credit standing of I & E Properties of Florida, Inc. in connection with its payment of existing financing on a mobile home park entirely unrelated to this transaction. Hutto's letters were not misleading, as appellants urge. Further, they were not directed to appellants, and there is an uncontroverted assertion by Hutto that he had no knowledge that appellants would see or rely upon either or both of these letters. Both the April 3 letter and the February 26 letter went to employees of Rayner, the mortgage broker. Assuming that appellants were advised or had knowledge of the April 3 letter, but not of the February 26 letter (which disclosed Hutto's representation of I & E Properties as well as the pending foreclosure against it), there is no way in which the lack of communication of the February letter to appellants can be attributed to Hutto. We find no basis upon which appellants may subject Hutto to liability by claiming to have relied upon these letters to their detriment.

Appellants' contention that Hutto was negligent in failing to obtain a survey of the property used as security for the loan has no merit. Even assuming a disputed issue of fact as to whether Hutto ever advised Riordan that a survey should be obtained, the uncontroverted facts are that AFC's standard practice was to furnish a street address, which the closing attorney would then submit to a local abstract and title company for preparation of a legal description and title binder. The same practice was followed in this instance. Furthermore, in over one hundred closings within six months prior to this one, regardless of the closing attorney used, in not one instance did appellants secure a survey.

As for appellants' case against the bank, they rely heavily upon a letter dated *430 April 2, 1979 from the bank to Rayner concerning the status of Hill's loan with the bank and Hill's creditworthiness in general. The letter recites that Hill had had numerous loans, all of which had been paid as agreed.

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Bluebook (online)
438 So. 2d 426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-california-funding-inc-v-hutto-fladistctapp-1983.