Memorandum in Opposition to Summary Judgment Hancock Bank

IN THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUITIN AND FOR WALTON COUNTY, FLORIDA

CIVIL DIVISION

HANCOCK BANK,

Plaintiff, Case No.: 09CA000607vs.

JOHN CARROLL, et al

Defendants____________________________________________/

DEFENDANT JOHN CARROLL’SMEMORANDUM IN OPPOSITION TO PLAINTIFF HANCOCK’S

MOTIONS FOR SUMMARY FINAL JUDGMENTAND ATTORNEY’S FEES AND COSTS

Defendant John Carroll (“Carroll”), pursuant to Florida Rule of Civil Procedure

1.510(c) moves for an Order Denying Hancock Bank’s (“Hancock”) Motion for

Summary Final Judgment for the following reasons and shows:

1. To Hancock’s Paragraph 1 of their Motion, Carroll confirms that Hancock

has filed a Motion for Final Summary Judgment.

2. To Hancock’s Paragraph 2 of their Motion, Carroll confirms that Hancock

has filed this action under Florida’s foreclosure statutes, which must be perfected in

accordance with applicable Florida case law and Florida Rules of Civil Procedure.

3. To Hancock’s Paragraph 3 of their Motion:

a) Carroll (and the Court file) disputes this. Hancock is fully aware

that they have not served all parties to their complaint.

b) Due service of process is essential to satisfy jurisdictional

requirements over the subject matter and the parties in a foreclosure action per Rule

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1.070, Fla. R. of Civ. P. (2011) and Chapters 48 and 49 of the Florida Statutes.

c) Service of process must be made upon the defendant within 120

days after the filing of the initial pleading. Rule 1.070(j), Fla. R. Civ. P. (2011). Absent a

showing of excusable neglect or good cause, the failure to comply with the time

limitations may result in the court’s dismissal of the action without prejudice or the

dropping of the defendant.

d) On June 2, 2010, Hancock Moved for an Extension of Time to

Effectuate Service. On June 7, 2010 this Court Granted Hancock’s Motion and gave

Hancock an additional 180 days to perfect service. Hancock’s extension of time to

effectuate service expired 461 days ago. As such, Carroll Moves for Dismissal.

e) Without proof of service demonstrating adherence to due process

requirements, the Plaintiff is not entitled to entry of a final judgment. Failure to

effectuate service - places the jurisdiction in a state of dormancy during which the trial

court or clerk is without authority to enter a final judgment. Armet S.N.C. di Ferronato

Giovanni & Co. v. Hornsby, (Fla. 1st DCA 1999); Tetley v. Lett, (Fla. 4th DCA 1984).

f) Statutes governing service of process are strictly construed.

General de Seguros, S.A. v. Consol. Prop. & Cas. Ins. Co., (Fla. 3rd DCA 2001) (reversed

with directions to vacate judgment and quash service of process since substituted service

was not perfected).

g) All Judgments are subject to collateral attack where plaintiff did

not substantially comply with the statutory requirements of service.

4. On October 18, 2011, Carroll filed and served his Answer to Hancock’s

Complaint. Carroll’s Answer contained the following Affirmative Defenses:

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I. Fraud in the Inducement

II. Failure of Consideration

III. Deceptive and Unfair Trade Practices and Breach of Implied

Covenant of Good Faith and Fair Dealing

IV. Moral and Economic Duress

V. Promissory Estoppel

VI. Equitable Estoppel

VII. Laches

VIII. Unclean Hands

IX. Waiver

X. Anticipatory Repudiation

XI. Setoff

XII. Unconscionability

5. Hancock did not file a Reply to Carroll’s affirmative defenses. The 1972

Amendment to Rule 1.100 Subdivision (a) was amended to make a reply mandatory

when a party seeks to avoid an affirmative defense in an answer or third-party answer.

6. Accordingly, plaintiff's failure to file a reply to the affirmative defenses

had the effect of denying the allegations of the defenses. By having failed to reply to the

defenses, plaintiff is not entitled to raise new matters in avoidance thereof. North

American Philips Corp. v. Boles, 405 So.2d 202 (Fla. 4th DCA 1981) . Thus, the fact

issues related to Carroll’s (12) affirmative defenses must be tried prior to final judgment.

7. To Hancock’s Paragraph 4:

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http://scholar.google.com/scholar_case?case=5011353556599600403&hl=en&as_sdt=4,10

a) Carroll disputes this, but has no specific response because

discovery continues.

b) Carroll alleges that there is a written agreement or

representation which supports Carroll’s defenses. Discovery is not complete in this case

but already the record shows that John Carroll’s firm Chambers Street Builders, Inc.

deposited $111,550.71 for the loan and Peoples First received the benefit of said deposit.


















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Standard of Review

14. Under Florida Law, summary judgment is proper if, and only if, based

upon examination of evidence, no genuine issue of material fact exists and the movant is

entitled to judgment as a matter of law The Florida Bar v. Green, (Fla. 2006); Volusia

County v. Aberdeen at Ormond Beach, L.P., (Fla. 2000).

15. Furthermore, pursuant to Rule 1.510, a Court may grant summary

judgment if, and only if, “the pleadings, depositions, answers to interrogatories, and

admissions on file together with the affidavits, if any, show that there is no genuine issue

as to any material fact and that the moving party is entitled to a judgment as a matter of

law.”

16. Finally, the Court must take all the facts that the non-movant states as true

and must draw all reasonable inferences in favor of the non-moving party Bradford v.

Bernstein, (Fla. 2nd DCA 1987); Petruska v. Smartparks-Silver Springs, Inc., (Fla. 5th

DCA 2005).

Argument and Citations in Support of Defendant’s Opposition

I. Hancock’s Motion Should Be Denied Because of Outstanding Discovery

17. It is a long standing rule that a decision regarding summary judgment will

not be entered where there is outstanding discovery. In Henderson v. Reyes, (Fla. 3rd

DCA 1997), the 3DCA held that it was an error for the trial court to enter a final summary

judgment of foreclosure while there were depositions that had not been completed and an

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outstanding request for production of documents. See also Villages at Mango Key

Homeowners Ass’n, Inc. v. Hunter Development, Inc., (Fla. 5th DCA 1997) (holding that

summary judgment is inappropriate and premature when discovery is ongoing and

depositions or other discovery are outstanding); Collazo v. Hupert, (Fla. 3d DCA 1997)

(holding that while “discovery was still pending, the trial court should not have

entertained a motion for summary judgment until such discovery was concluded.”)

18. Here, Hancock has not served the lead Defendant, J.M.B., L.L.C., with the

complaint. Hancock has conducted no discovery, and has failed to truly commence the

litigation.

19. On the other hand, Carroll has been seeking the complete loan file from

Hancock’s predecessor, People’s First Community Bank, since the inception of the

litigation (as first found in the Court Record (2) years prior to the filing of their Motion

for Summary Judgment.) Further, at this time the first round of depositions has not been

scheduled and there is an outstanding request for production of the Plaintiff.

Wherefore, because there is outstanding discovery in this case, Carroll

respectfully requests this Court deny Plaintiff’s Motion for Summary Judgment, and any

other relief the Court deems just and proper.

II. Hancock’s Motion Should Be Denied Because Hancock Failed to Reply to Carroll’s Affirmative Defenses

20. Florida Courts disallow summary judgment when plaintiffs fail to refute

affirmative defenses. In Lazuran v. Citimortgage, Inc., (Fla. 4th DCA 2010), the Court

held the trial court’s grant of summary judgment improper where the plaintiff failed to

refute an affirmative defense. Carroll’s Answer and Affirmative Defenses set forth

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genuine existence of material facts which precludes entry of summary judgment.

Manassas Investments Inc. v. O’Hanrahan, (Fla. 2nd DCA 2002). See also, Frost v.

Regions Bank, (Fla. 4th DCA 2009) (Because the bank did not meet its burden to refute

the Frosts’ lack of notice and opportunity to cure defense, the bank is not entitled to final

summary judgment of foreclosure.).

21. Here, Carroll has pleaded (12) legally sufficient defenses to Hancock’s

claims, and Hancock has not attempted to defeat them. “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.” Wiggins v. Protmay, (Fla. 1st DCA 1983).

Hancock must either factually refute Carroll’s affirmative defenses or establish that they

are legally insufficient. Frost v. Regions Bank, (Fla. 4th DCA 2009).

22. To perfect the Record on any appeal, Carroll recites and reincorporates

said affirmative defenses exactly as they appear in his Answer to Hancock’s complaint:

________________________________________________________________________

AFFIRMATIVE DEFENSES

Statements of fact common to all Carroll’s

Defenses and Claims

28. Original Plaintiff, Peoples First Community Bank (“PEOPLES”), entered

into the contracts attached to Peoples Complaint with Carroll and J.M.B., L.L.C.

simultaneously with additional contracts.

29. Hancock has failed to attach those additional agreements to its Complaint.

Those additional agreements modified the terms of the agreements sued upon.

30. Carroll has made 3 pre-suit qualified written requests of Peoples, pursuant

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to 12 U.S.C. §2605(e). The last of which was served upon Peoples on March 10, 2009 to

provide information related to the servicing of the loan underlying this matter and the

corresponding accounting of such loan (see attached Exhibit A).

31. January 2007, Peoples and their Senior Officer William “Tommy”

Harrison, informed Carroll that he was approved for a construction loan of $1,650,000.00

under the condition that Carroll participate in, and perform for 6 months in, the mortgage

attached to Hancock’s Complaint.

32. Carroll and his companies performed according to the terms of their

agreement, but Peoples and William “Tommy” Harrison (“TOMMY”) did not perform.

I. FRAUD IN THE INDUCEMENT

33. Carroll incorporates by reference paragraphs 28 through 32 as if fully

restated here.

34. Tommy and Peoples made numerous false statements of material fact

regarding their intention to advance Carroll and his companies’ additional financing.

35. Tommy and Peoples knew or should have known their representations

were false. Only they understood how they had obtained authority to give financing

commitments. Providing financing commitments is routine business for professionals in

their position.

36. Tommy and Peoples gave Carroll financing commitments in order to

induce Carroll and Chambers Street Builders, Inc. to deposit $100,000.00 with Peoples.

37. Carroll and his business interests have suffered economic damage by not

being able to forecast an avoidable catastrophic loss. Carroll would never have endorsed

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the Mortgage at issue here. Carroll would never have approved the $100,000.00 advance

to Peoples. Carroll would never have undertaken to commence construction on Lot 24

without financing. Carroll had done business with Tommy and Peoples for 5 years and

their commitments were always given in the same way as the commitments alleged

herein. Given all of the factors previously mentioned Carroll was justified to rely on

Tommy and Peoples’ representations.

II. FAILURE OF CONSIDERATION


restated here.

39. Carroll and Chambers Street Builders, Inc. provided the $100,000.00 cash

to Peoples and performed under the contract as agreed.

40. Tommy and Peoples agreed to provide the additional $1,650,000.00

financing.

41. Tommy and Peoples reneged on their commitment yet Peoples and

Tommy have given Carroll and his companies no consideration.

42. The Plaintiff’s cause of action is barred as a result of Coastal’s failure of

consideration.

III. DECEPTIVE AND UNFAIR TRADE PRACTICES AND

BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING


restated here.

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44. Tommy and Peoples have engaged in unconscionable acts or practices, and

unfair or deceptive acts or practices as implied by Florida Law by luring Carroll and his

businesses into agreements which they did not intend to honor.

45. These acts are the proximate cause of economic damages to Carroll and

his business interests.

IV. MORAL AND ECONOMIC DURESS


restated here.

47. Carroll was forced to sign the March 10, 2008 extension on the underlying

promissory note on terms that were aberrant because Carroll relied on Tommy and

Peoples’ assertions that this was the only way to effectuate the impending $1,650,000.00

financing.

48. Carroll’s actions were involuntary and not an exercise of his free will,

because Carroll had committed in contract to advance $100,000.00 to Peoples and spent

substantial economic reserves.

49. Carroll’s corresponding condition of mind was caused by Tommy and

Peoples’ improper and coercive conduct.

V. PROMISSORY ESTOPPEL


restated here.

51. Tommy and Peoples misrepresented the fact that the $1,650,000.00 loan

was pending and approved.

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52. Tommy and Peoples expected to induce Carroll to advance $100,000.00

towards the contract.

53. Tommy and Peoples expected to induce Carroll to forbear the hoarding of

his and his companies’ cash.

54. Tommy and Peoples’ misrepresentations succeeded in inducing the actions

and forbearances by Carroll.

55. Carroll and his businesses suffered severe detriments by the reliance on

the misrepresentations.

VI. EQUITABLE ESTOPPEL


restated here.

57. Tommy and Peoples represented that they are committed to closing the

enhanced financing with Carroll.

58. This representation is contrary to the condition of current affairs asserted

at this time.

59. Carroll relied(s) on the representations.

60. Carroll is suffering detriment by the change of position as a result of the

representations and his reliance thereon.

VII. LACHES


restated here.

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62. Tommy, Peoples and Senior VP, Bill Haddock, all were routinely apprised

and physically inspected Carroll and his companies’ improvements over the 25 months

preceding the initiation of this court action.

63. Each and every party named above condoned Carroll’s infusion of equity

to Peoples during the 25 months described as a trade off.

64. Plaintiff intentionally slept on its right to initiate this action in order to be

enriched by Carroll’s equity infusions and enhancements to the value of Lot 150.

65. Carroll and his business interests are severely prejudiced by Peoples’

belated initiation of this action.

66. Enforcement by Plaintiff at this late stage would be inequitable and unjust.

VIII. UNCLEAN HANDS


restated here.

68. Tommy and Peoples’ actions in this matter are condemned by honest and

reasonable persons.

69. Based on Carroll’s allegations against the Plaintiff, the default and

foreclosure would not have occurred but for the Plaintiff’s unclean hands.

70. Peoples seeks a remedy but its inequitable conduct, constituting unclean

hands, bars the granting of relief to Peoples requested herein.

IX. WAIVER


restated here.

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72. Carroll is informed and believes, and on such information and belief

alleges, that Peoples engaged in conduct that constitutes a waiver of their rights under the

agreements at issue as implied by Florida law.

73. By reason of said waiver, Carroll is excused from further performance of

the obligations under the alleged contract.

X. ANTICIPATORY REPUDIATION


restated here.

75. Carroll and Peoples had a contract with written memo’s whereby Peoples

would advance Carroll an additional $1,650,000.00.

76. Tommy and Peoples instructed Carroll and his companies to advance

Peoples $100,000.00. Carroll advanced said funds.

77. Carroll satisfied his obligation to Peoples under the terms of the parties’

contract.

78. Peoples continues to refuse to close the loan and pay Carroll and his

companies for their work under the agreement. The agreement provided that Carroll and

his companies would be paid $1,350,000.00 for the present level of completion of the

contract.

79. Tommy and Peoples’ affirmative actions have rendered performance of

the contract impossible or apparently impossible.

80. Peoples’ breach entitles Carroll to change his position under the contract,

wiping out Peoples’ claims in this action.

X. SETOFF

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restated here.

82. After the institution of the amended agreement Peoples falsely and

fraudulently represented to Carroll that it had approved and intended to close the

enhanced loan to Carroll.

83. In reliance on this representation and Tommy’s instructions to Carroll,

Carroll advanced Peoples $100,000.00.

84. Carroll has been economically damaged by Peoples’ breach of the

agreement and has a right to offset any money that may be owed to Peoples.

XI. UNCONSCIONABILITY


restated here.

86. Carroll has advanced Peoples $100,000.00 as a result of his sacrifices and

efforts.

87. Tommy and Peoples’ ambitions and attempts to acquire Carroll’s equity

without paying the full value to Carroll are unconscionable. Their complaint should be

barred.

________________________________________________________________________

23. As mentioned above, summary judgment is only proper if no genuine

issue of material fact exists. Carroll has raised a number of genuine issues of material

fact in his affirmative defenses. By failing to reply to these affirmative defenses,

Hancock has failed to respond to genuine issues of material facts that Carroll has raised.

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Wherefore, because Hancock has failed to respond to Carroll’s affirmative

defenses in this case, and because this Court has not ruled upon Carroll’s affirmative

defenses, Carroll respectfully request this Court deny Hancock’s Motion for Summary

Judgment, and any other relief the Court deems just and proper.

III. Hancock’s Motion for Summary Judgment Should be Denied and its Affidavit of Amounts Due and Owing Should be Struck

because the Affiant Failed to Attach Documents Referred to in the Affidavit.

24. Rule 1.510(e) provides, in part, that “[s]worn or certified copies of all

papers or parts thereof referred to in an affidavit shall be attached thereto or served

therewith.”

25. Failure to attach such papers is grounds for reversal of summary judgment

decisions. In CSX Transp., Inc. v. Pasco County, (Fla. 2nd DCA 1995) the 2DCA

reversed summary judgment granted below, in part, because the affiant based his

statements on reports but failed to attach same to the affidavit. The 2DCA noted that

because these statements were based upon said reports, they were consequently not based

upon the affiant’s personal knowledge, and were therefore inadmissible hearsay

statements.

26. It is also most important that an affiant state in detail the facts showing

that the affiant has personal knowledge. See Hoyt v. St. Lucie County, Bd. of County

Comm’rs, (Fla. 4th DCA 1998) (holding an affidavit legally insufficient where it failed to

reflect facts demonstrating how the affiant would possess personal knowledge of the

matters at issue in the case); Carter v. Cessna Fin. Corp., (Fla. 4th DCA 1986) (holding an

affidavit legally insufficient where the affiant failed to set out a factual basis to support a

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claim of personal knowledge of matter at issue in the case and failed to make assertions

based on personal knowledge).

27. The 3rd DCA, in Alvarez v. Florida Ins. Guaranty Association, (Fla. 3rd

DCA 1995) noted that “the personal knowledge requirement is to prevent the trial court

from relying on hearsay when ruling on a motion for summary judgment and to ensure

that there is an admissible evidentiary basis for the case rather than mere supposition or

belief.” (quoting Pawlik v. Barnett Bank of Columbia County, (Fla. 1st DCA 1988))

28. This opposition to hearsay evidence has deep roots in Florida. In Capello

v. Flea Market U.S.A., Inc., (Fla. 3rd DCA 1993), the 3DCA affirmed an order of

summary judgment in favor of Flea Market U.S.A. as Capello’s affidavit in opposition

was not based upon personal knowledge and therefore contained inadmissible hearsay

evidence. See also Doss v. Steger & Steger, P.A., (Fla. 4th DCA 1993); Mullan v. Bishop

of Diocese of Orlando, (Fla. 5th DCA 1989); Crosby v. Paxson Electric Company, (Fla. 1st

DCA 1988); and Page v. Stanley, (Fla. 4th DCA 1969).

29. The affidavit offered by Hancock in support of its Motion for Summary

Judgment avers that “The Affiant has read the Complaint and knows from her own

personal knowledge that the allegations and facts contained therein are true, accurate and

correct”

30. First, it is patently obvious that the affiant, Michael Howell, is not a her

which makes it clear that the Affidavit used is a recycled, boilerplate affidavit, not a

statement of fact specific to this case.

31. The Affiant claims the statements are based on her own personal

knowledge but never explains how he has knowledge of the statements in the loan service

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records, if he prepares the loan service records, or how he who identifies himself with

Hancock Bank has any knowledge of the facts of the case pertaining Peoples First

Community Bank.

32. In spite of the Affiant’s general contention that “The Affiant has read the

Complaint and knows from her own personal knowledge that the allegations and facts

contained therein are true, accurate and correct” the Affiant once again failed to aver with

any specificity or particularity how he has personal knowledge of the matters contained

in these books, records and documents of Peoples First which form the basis of his

statements.

33. The affiant admits that he is in the “Special Assets Department of

Hancock Bank”. That may explain why his affidavit is in conflict with itself wherein he

swears (on page 2 of the affidavit) that as of January 26, 2012, there is interest in the

amount of $314,580.80 due, yet on the only documentation attached to the affidavit

(Exhibit 2 of the affidavit) the total interest due as of January 26, 2012 is $144,462.08.

34. Therefore, it can only be concluded based upon the statements contained

in the affidavit that (1) the statements contained within the loan payment records were

prepared by someone other than Michael Howell, such as an employee of Peoples First

whose duty it was to keep the books accurately and completely; and (2) the affiant has

absolutely no personal knowledge of the matters contained within the books, records and

documents.

35. Since the affiant’s statements were in fact not based upon his personal

knowledge they are therefore hearsay. The only way to cure this fatal defect would be

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for the affiant to have attached the books, records and documents which formed the basis

of the affiant’s statements.

36. Nevertheless, the affiant has failed to attach any of these books, records

and documents to the affidavit. Thus, the affiant’s statements remain inadmissible

hearsay.

37. Hancock may argue that while the affiant’s statements may be hearsay,

they should nevertheless be admitted under “Records of Regularly Conducted Business

Activity” exception at Fla. Stat. 90.803(6). That is, “unless the sources of information or

other circumstances show lack of trustworthiness” part (a)

38. There are, however, several problems with this argument. To begin, no

memorandums, reports, records or data compilation have ever been turned over to Carroll

or this Court by Hancock; thus the statements in question cannot be a memorandum,

report, record or data compilation.

39. Moreover, the affiant shows a “lack of trustworthiness” because he

averred that his statements were based upon his “personal knowledge” when they were,

in fact, not.

40. Finally, the 1DCA has recently held that lists of payments due and owing,

such as the list found at Exhibit 2 of the affidavit, are inadmissible hearsay statements

and not business records; it is therefore an error to award summary judgment based upon

such an affidavit. Mitchell Brothers, Inc. v. Westfield Ins. Co., (Fla 1st DCA 2009)

41. The failure of Hancock to attach the books, records, and documents

referred to in its affidavit is in direct violation of both the Florida Rules of Civil

Procedure and multiple Florida State cases. Allowing the affidavit would lead to the

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admission of inadmissible hearsay evidence and is grounds for a reversal of a summary

judgment decision.

Wherefore, because Hancock has failed to attach documents referred to in its

affidavit, Carroll respectfully requests that this Court strike the Affidavit of Amounts Due

and Owing, deny Hancock’s Motion for Summary Judgment, Dismiss Hancock’s

Complaint for Failure to Effectuate Service upon J.M.B., L.L.C. and any other relief the

Court deems just and proper.

I HEREBY CERTIFY that a copy of the foregoing was forwarded to Sherri Denton Mallory, Esq., 1008 Harrison Ave, Panama City, FL. 32402, counsel for Hancock, and to Joseph M. Cook, Esq., 42 Business Center Dr., Suite 401, Miramar Beach, FL 32550 Attorney for Cypress Breeze Plantation Homeowners Association, Inc., by fax and regular mail this 21st day of March, 2012.

Respectfully submitted, ___________________________

John CarrollBox 613524WaterSound, FL 32461Phone (850) 231-5616

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