Shahar v. Green Tree | Fla. 4th DCA - Unclean Hands Doctrine


Shahar v. Green Tree | Fla. 4th DCA – Unclean Hands Doctrine

Shahar v. Green Tree | Fla. 4th DCA – Unclean Hands Doctrine

LOOK FOLKS, it’s the same people…Shapiro, Fishman & Gache


January Term 2013

ARI SHAHAR and DAPHNA SHAHAR, husband and wife,



No. 4D11-1111

[March 6, 2013]


Ari and Daphna Shahar (the “Homeowners”) appeal the trial court’s
entry of final summary judgment of foreclosure in favor of Green Tree
Servicing (“Green Tree”). The Homeowners asserted affirmative defenses
and filed various counterclaims, which they argue precluded the entry of
summary judgment. The counterclaims did not set forth viable causes of
action. Thus, without further discussion we affirm that portion of the
summary judgment that found in favor of Green Tree as to the
Homeowners’ counterclaims. However, we reverse the remainder of the
summary judgment because Green Tree neither factually nor legally
refuted the Homeowners’ affirmative defense of unclean hands, thereby
precluding the entry of a final judgment of foreclosure.

In verified form, the Homeowners specifically alleged the following to
have expressly occurred throughout the course of the loan process. The
Homeowners went to the lender for the purpose of refinancing two
adjustable-rate mortgages o n two different properties. Without the
Homeowners’ knowledge, the lender altered the income information on
the loan application which the Homeowners provided in order to qualify
them for the loan. Also without the Homeowners’ knowledge, the lender
altered the type of loan sought to a “stated income” loan, in which the
borrower’s income is not verified independently, so that the income
deception would not b e detected. The Homeowners provided
documentation of their income and assets, which the lender destroyed.
At the closing, the lender presented the altered loan application to the
Homeowners, along with “dozens upon dozens” of other documents, and
explained to the Homeowners that they were required to sign the
application at closing, without revealing to the Homeowners that the
application had been altered by the lender. The lender informed them
that if they did not sign the new loan application, all fees associated with
the refinance would remain due and payable. The Homeowners were not
provided a n opportunity to review the lengthy paperwork. The
Homeowners, relying u p o n the lender’s representation that the
information in the new loan application was taken from the Homeowners’
verbal interview with the lender and the documentation the Homeowners
originally provided, signed the new application, unaware of any changes.
Finally, the Homeowners alleged that as a result of this premeditated
scheme, their payments on the two loans actually increased by fifty
percent. These sworn allegations formed the factual basis of the unclean
hands defense asserted by the Homeowners.1

In support of its motion for summary judgment, Green Tree submitted
an affidavit by its vice president, stating that it was the owner and holder
of the note and that the Homeowners had stopped making payments.
The affidavit did not—in a n y manner whatsoever—address the
Homeowners’ elaborate allegations pertaining to their unclean hands
defense. Instead, attached to the affidavit, with only a tenuous reference
to the unclean hands defense, was a cursory and unsophisticated letter
(the “Letter”)2 apparently written and signed by the Homeowners and
sent to the lender. Aside from this vague and ambiguous attachment,
Green Tree, in its motion for summary judgment, simply advanced a bare
legal argument that the unclean hands defense was legally insufficient.
Now, o n appeal, Green Tree abandons any reference or discussion
pertaining to the Letter.

The trial court granted the motion for final summary judgment, which
the Homeowners have timely appealed.

“Review of an order granting summary judgment is de novo.” Gomez
v. Fradin, 41 So. 3d 1068, 1071 (Fla. 4th DCA 2010). “‘A movant for
summary judgment h a s th e initial burden of demonstrating the
nonexistence of any genuine issue of material fact. But once he tenders
competent evidence to support his motion, the opposing party must come
forward with counterevidence sufficient to reveal a genuine issue.’” Id.
(quoting Landers v. Milton, 370 So. 2d 3 6 8 , 370 (Fla. 1979)).

Additionally, “in order for a plaintiff to obtain a summary judgment when
the defendant asserts affirmative defenses, the plaintiff must either
disprove those defenses by evidence or establish the legal insufficiency of
the defenses.” E. Qualcom Corp. v. Global Commerce Ctr. Ass’n, 59 So. 3d
347, 352 (Fla. 4th DCA 2011) (citation omitted). Further, “[t]he burden is
on the plaintiff, as the moving party, to demonstrate that the defendant
could not prevail.” Alejandre v. Deutsche Bank Trust Co. Ams., 44 So. 3d
1288, 1289 (Fla. 4th DCA 2010) (citation and quotation marks omitted).

This court has previously concluded that unclean hands, if
sufficiently pled, may be asserted as an affirmative defense to a mortgage
foreclosure action. See, e.g., Quality Roof Servs., Inc. v. Intervest Nat’l
Bank, 21 So. 3d 883, 885 (Fla. 4th DCA 2009); cf. Congress Park Office
Condos II, LLC v. First-Citizens Bank & Trust Co., No. 4D11-4479 (Fla. 4th
DCA Jan. 16, 2013) (finding that an unclean hands affirmative defense in
a mortgage foreclosure case was not pled with sufficient facts).

This court has described unclean hands as follows:

It is certainly beyond question that “one who comes into
equity must come with clean hands else all relief will be
denied him regardless of the merits of his claim. It is not
essential that the act be a crime; it is enough that it be
condemned by honest and reasonable men.”

Ocean View Towers, Inc. v. First Fid. Sav. & Loan Ass’n, 521 So. 2d 325,
326 (Fla. 4th DCA 1988) (quoting Roberts v. Roberts, 84 So. 2d 717, 720
(Fla. 1956)). Recently, this court found that unclean hands is
tantamount to “[u]nscrupulous practices, overreaching, concealment,
trickery or other unconscientious conduct.” Congress Park Office Condos
II, No. 4D11-4479 at 6-7 (citation omitted).

Under the unique facts of this case and the record before us, the
Homeowners’ allegations were legally sufficient to properly assert the
defense of unclean hands. See, e.g., Monetary Funding Grp., Inc. v.
Pluchino, 867 A.2d 841 (Conn. App. Ct. 2005) (finding that where the
borrower was unsophisticated and the lender misled the borrower about
the terms of the loan and failed to conduct a bona fide evaluation of the
borrower’s ability to repay the loan, the trial court was correct to
conclude that the borrower’s unclean hands defense precluded
foreclosure). Green Tree failed to present any meaningful evidence
rebutting the allegations underpinning this defense. Therefore, summary
judgment was prematurely granted.

While this defense might ultimately b e rendered fruitless or
unprovable, we must avoid any temptation to enter summary judgment
merely because the non-moving party’s chances for success may be
minimal at best. Fischer v. Bernard’s Surf, 217 So. 2d 576, 577 (Fla. 4th
DCA 1969) (“In passing upon a motion for summary judgment, the trial
judge may not permit his decision to be influenced by the chance of
success which h e considers either party may have o n th e trial.”).
Granting summary judgment “brings a sudden and drastic conclusion to
a lawsuit, thus foreclosing the litigant from the benefit of and right to a
trial on the merits of his or her claim.” Bifulco v. State Farm Mut. Auto.
Ins. Co., 693 So. 2d 707, 709 (Fla. 4th DCA 1997) (emphasis added)
(citation omitted). “It is for this very reason that caution must be
exercised in the granting of summary judgment . . . .” Id.

Finally, Green Tree strenuously argues (and makes it a primary point
in its answer brief filed with this Court) that the Homeowners’ failure to
provide transcripts from the summary judgment hearing precludes
appellate review of the final summary judgment. However, hearing
transcripts ordinarily are not necessary for appellate review of a
summary judgment. We agree with the Third District, which held:

[W]here the appeal is from a summary judgment, the
appellant must [merely] bring up the summary judgment
record, that is, the motion, supporting and opposing papers,
and other matters of record which were pertinent to the
summary judgment motion. See Romero v. All Claims Ins.
Repairs, Inc., 698 So. 2d 605, 606 (Fla. 3d DCA 1997).
Those are the portions of the record essential to a
determination whether summary judgment was properly
entered. However, the hearing on the motion for summary
judgment consists of the legal argument of counsel, not the
taking of evidence. Consequently, it is not necessary to
procure a transcript of the summary judgment hearing, see
id., although it is permissible and often helpful to do so.

Gonzalez v. Chase Home Fin. LLC, 37 So. 3d 955, 958-59 (Fla. 3d DCA
2010) (quoting Seal Prods. v. Mansfield, 705 So. 2d 973, 975 (Fla. 3d
DCA 1998)) (brackets in original).

Therefore, we reverse the summary judgment granted in favor of
Green Tree on its foreclosure complaint. However, we also affirm the
summary judgment insofar as it found in favor of Green Tree with
respect to the Homeowners’ counterclaims.

Affirmed in part, reversed in part, and remanded.

STEVENSON, J., concurs.

DAMOORGIAN, J., dissents with opinion.

DAMOORGIAN, J., dissenting.

I would affirm because Green Tree presented unrebutted evidence
negating the basis of the defense. The Homeowners’ “Third Affirmative
Defense” raising the unclean hands doctrine stated in its entirety:


Plaintiff comes to court with unclean h a n d s and is
prohibited by reason thereof from obtaining the equitable
relief of foreclosure from this Court. The Plaintiff’s unclean
hands result from the Plaintiff’s actions in qualifying
Defendants for a loan Plaintiff knew or should have known
Plaintiff (sic) could not afford, using false information to
qualify Defendants for the loan a n d as recited b y and
through all Affirmative and Counterclaims alleged herein. As
a matter of equity, this Court should refuse to foreclose this
mortgage because acceleration of the note would be
inequitable, unjust, a n d th e circumstances of this case
render acceleration unconscionable.

It is well settled that a party claiming unclean hands as an affirmative
defense must establish that it was injured by the conduct constituting
the unclean hands. McCollem v. Chidnese, 832 So. 2d 194, 196 (Fla. 4th
DCA 2002). Although the Homeowners allege that Green Tree’s
predecessor qualified the Homeowners for a loan they could not afford
and that in order to qualify the Homeowners, the lender used false
information, nowhere, do the Homeowners allege that they were not able
to make payments because of Green Tree’s allegedly inequitable conduct.
Indeed, the record establishes, by the Homeowners’ own admissions, that
the Homeowners were not able to afford their payments because they
were not able to generate as much rental income as they anticipated.

In a letter sent to Green Tree by the Homeowners, which was attached
as a n exhibit to a n affidavit in support of Green Tree’s motion for
summary judgment, the Homeowners state that they were unable to
continue making mortgage payments because their tenants stopped
paying the rent on the property. Moreover, they acknowledge that they
“bought [the] property with good intentions of keeping it and making
payments . . . until the time is right to sell it.” These unrebutted
statements belie the very defense that the Homeowners now assert. Put
another way, the Homeowners represented that they could afford the
mortgage as long as their tenants paid the rent. The Homeowners
cannot now be heard to complain that they should never have received
the loan they requested and paid for because their business plan did not
work out. They cannot have it both ways. Landers v. Milton, 370 So. 2d
368, 370 (Fla. 1979) (“[O]nce [a movant] tenders competent evidence to
support . . . motion [for summary judgment,] . . . opposing party must
come forward with counterevidence sufficient to reveal a genuine issue.
It is not enough for the opposing party merely to assert that an issue
does not exist.”).

The majority relies on the allegations contained in the Homeowners’
counterclaims to establish a factual basis for the Homeowners’ unclean
hands affirmative defense, despite affirming the trial court’s ruling that
the counterclaims did not set forth viable causes of action. I do not
believe this is proper. However, even considering the allegations
contained in the disposed of counterclaims, the Homeowners did not
allege that the terms of the loan were onerous or illegal, that they were
unaware of their payment amount, or that they attempted to reject the
loan prior to receiving the loan proceeds. As the majority points out, the
Homeowners did allege that their payments increased after they
refinanced a n d obtained new loans with Green Tree, however, the
Homeowners admitted that they refinanced on their own accord to avoid
the consequences of their previous loans’ adjustable interest rates, and
never once alleged that they were not aware of or objected to the amount
they were required to pay under the Green Tree loans. Their silence on
this point is deafening and negates any claim of injury.

Accordingly, as the record establishes that the Homeowners’ were not
injured by Green Tree’s allegedly inequitable conduct, the trial court
correctly granted summary judgment and I would affirm.

* * *

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; J o h n J. Hoy, Judge; L.T. Case No.

Neil Bryan Tygar of Neil Bryan Tygar, P.A., Delray Beach, for
Heidi J. Weinzetl of Shapiro, Fishman & Gache, LLP, Boca Raton, for

Not final until disposition of timely filed motion for rehearing.


1 While the unclean hands portion of the Homeowners’ affirmative defense is
comprised of only a single paragraph, it incorporated by reference the lengthy
allegations found previously in the same “Verified Amended Answer, Affirmative
Defenses and Counterclaims” pleading under the “General Allegations” heading.
See Fla. R. Civ. P. 1.130(b) (“Statements in a pleading may be adopted by
reference in a different part of the same pleading, in another pleading, or in any
2 The Letter states, in its entirety:

We are writing to you today after trying to avoid a situation which
has been accelerating for the past year. We bought this property
with good intentions of keeping it and making payments on it until
the time is right to sell it. However due to the fact that out (sic)
tenants are not paying their rent on time and many not paying at
all we are unable to make the payments at this time. We are
hoping that there is some kind of solution that will help us to keep
and maintain the property as we have been doing. The payments
are much higher than the rent that we receive from it. We cannot
make up the difference at this time (We have been doing that since
we refinanced it last year). It is now impossible and we are
waiting to hear from you as to a possible solution.

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2 Responses to “Shahar v. Green Tree | Fla. 4th DCA – Unclean Hands Doctrine”

  1. no names, please, we're in litigation says:

    Who the hell is D Moorgain!
    Let’s see–the lender committed fraud by falsifying the mortgage re-fi which led to higher payments, not lower. Did the defendants go to the lender and say, “We want to pay you thousands of dollars for the right to pay HIGHER payments”? Hell, no. They paid the lenders’ fees so the lender could find a way to EARN the fees by putting them into a better situation, not a worse one.
    The defendants couldn’t pay–for WHATEVER reason. I don’t care what that reason was; it doesn’t matter what that reason was.
    I think this judge has it ass-backwards. The first fraud was committed by the lender, which resulted in HIGHER payments. Some months, as we all know, just a little bit of money can make all the difference. Taken over some months or many months, that “little bit of money” combines to become a lot of money (a million here, a million there, and pretty soon you’re talking real bucks), and can make the difference between sailing through a couple of tough months or going hungry.
    What part am I missing here? The lender committed FRAUD. Deliberate fraud multiple times. It phonied up the application and then deliberately misled the defendants. Good Lord, that judge needs his head examined.

    People, if we didn’t know it before, we know it now: we’ve got to serve on juries, so this kind of crap is less likely to happen.

  2. Elyse Del Francia says:

    How great it would be if the COURTS actually used Jury’s in these millions of fraudulent foreclosures going on in Courtrooms around the country every single day!! The Courts are very tricky in NOT advising the poor smuck homeowners walking into a Court assuming a court reporter will be there and even a jury….not true! Neither are offered and neither are provided….why? Because the banks would loose!!

    We have no justice in the matter of these foreclosures so if you are actually going to a TRIAL…hire a court reporter if you can find one…most only work for Lawyers and will not work for we poor smucks!! A jury of our peers are only for the drunk drivers, speeding tickets and murder!!

    It’s a joke, really….and only the banks are laughing!
    pitiful country we have become with NO JUSTICE….


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