FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
from the Circuit Court for Brevard County, Charles G.
A. Apatov, of McGlinchey Stafford, Fort Lauderdale, Nicolas
M. New and William L. Grimsley, of McGlinchey Stafford,
Jacksonville, for Appellant.
Bowin, of Bowin Law Group, Satellite Beach, for Appellees.
mortgage foreclosure case, PNC Bank, National Association,
Successor by Merger to National City Mortgage, a Division of
National City Bank ("Bank"), challenges the final
judgment entered in favor of Appellees following a trial
based upon Appellee, Duncan Smith's, affirmative defense
of "unclean hands." Because the actions of Bank that
the trial court found to have constituted unclean hands
involved a separate loan that was not the subject of the
mortgage foreclosure complaint, we reverse the final judgment
and remand for the entry of a final judgment of foreclosure
in favor of Bank.
2008, Appellees borrowed money from Bank's predecessor to
construct a home in Brevard County. Appellees executed two
separate promissory notes to repay these funds. The first
note was secured by the first mortgage, which is the subject
of this litigation. The two loans had separate account
numbers and were paid separately by Appellees.
2009, the original lender on these notes merged into Bank.
Appellees continued to pay their first mortgage, now to Bank,
but their efforts to also pay the second note or loan were
stymied because, for some unexplained reason, Bank initially
had no record of this second loan. Appellees tried to resolve
this discrepancy with Bank regarding the second loan, but to
no avail. Bank eventually located and later "charged
off" this second loan in 2010,  selling the loan later that
year to a third party. In October 2011, Appellees obtained
their credit report and noticed that this second loan had
been charged off by Bank, thus adversely affecting their
credit score. Appellees thereafter made several additional
contacts with Bank in an effort to address or correct the
problems with the second loan and to rectify their credit
score, but they did not receive a satisfactory response from
Bank. In October 2012, Appellees then made a deliberate
decision to stop paying on the first mortgage in order
"to get [Bank's] attention" and address the
problems surrounding the second loan. Bank then sent
Appellees a notice of default on the first mortgage and
thereafter filed suit to foreclose this mortgage and note. In
response, Appellee, Duncan Smith, filed an answer asserting,
among other things, that Bank's "inequitable
conduct" evidenced that Bank was coming to court with
unclean hands and therefore, should be denied relief.
foreclosure action is an equitable proceeding which may be
denied if the holder of the note comes to the court with
unclean hands or the foreclosure would be
unconscionable." Knight Energy Servs., Inc. v. Amoco
Oil Co., 660 So.2d 786, 789 (Fla. 4th DCA 1995) (citing
Fed. Sav. & Loan Ins. Corp v. Two Rivers Assocs.,
Inc., 880 F.2d 1267, 1272 (11th Cir. 1989)). Unclean
hands may be asserted as an affirmative defense to a mortgage
foreclosure action. See Quality Roof Servs., Inc. v.
Intervest Nat'l Bank, 21 So.3d 883, 885 (Fla. 4th
DCA 2009). The doctrine is based on the principle that
"one who comes into equity must come with clean hands
else all relief will be denied him regardless of the merit of
[the] claim. It is not essential that the act be a crime; it
is enough that it be condemned by honest and reasonable
men." Roberts v. Roberts, 84 So.2d 717, 720
(Fla. 1956). The unclean hands doctrine applies to "any
unrighteous, unconscientious, or oppressive conduct by one
seeking equitable interference in his own behalf."
Dale v. Jennings, 107 So. 175, 180 (Fla. 1925).
conclusion of trial, the court announced its findings of fact
that Bank had acted with unclean hands and, therefore, was
not entitled to the requested foreclosure. As a reviewing
court, we do not reweigh the evidence presented at trial nor
do we substitute our judgment for that of the trial court.
Benn v. Sims, 543 So.2d 330 (Fla. 4th DCA 1989).
Nevertheless, "[w]here a trial court's conclusions
following a non-jury trial are based upon legal error, the
standard of review is de novo." Wells Fargo
Bank, N.A. v. Williamson, 199 So.3d 1031, 1034 (Fla. 4th
DCA 2016) (quoting Acoustic Innovations, Inc. v.
Schafer, 976 So.2d 1139, 1143 (Fla. 4th DCA 2008)).
Here, we conclude that the trial court committed legal error
in its application of the doctrine of unclean hands because
"the conduct constituting the 'unclean hands'
must be connected with the matter in litigation and must
affect the adverse party." Pennington v.
Pennington, 390 So.2d 809, 810 (Fla. 5th DCA 1980)
(citing Faber v. Landman, 123 So.2d 405 (Fla. 2d DCA
1960)). Bank's unclean hands pertained to its handling
(or mishandling) of the second loan, and there was no
evidence presented at trial that Bank's unclean hands
were connected to the default and the subsequent foreclosure
of the first mortgage. Whatever recourse Appellees may have
had or have now against Bank pertaining to its
"unclean" actions regarding this second loan is
distinct from the litigation on the first mortgage.
we reverse the final judgment entered in favor of Appellees.
Additionally, because the uncontested trial evidence
otherwise established Bank's right to foreclose the first
mortgage and note, we remand with directions that the trial
court enter final judgment of foreclosure in Bank's
and REMANDED, with directions.
and LAMBERT, JJ., concur.
J., dissents ...