       Third District Court of Appeal
                               State of Florida

                         Opinion filed September 6, 2017.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D17-0001
                         Lower Tribunal No. 12-41600
                             ________________

                John M. Bennett and Nancy L. Bennett,
                                     Appellants,

                                         vs.

    Mortgage Electronic Registration Systems, Inc., Home Loan
Alliance, LLC f/k/a Leverage Financial, LLC d/b/a LF Loans, Jamal
            M. Wilson, and GTE Federal Credit Union,
                                     Appellees.


     An Appeal from the Circuit Court for Miami-Dade County, Michael
Hanzman, Judge.

     Rex E. Russo, for appellants.

     Scott Jay Feder, P.A. and Scott Jay Feder, for appellees.

Before SALTER, FERNANDEZ and LUCK, JJ.

     LUCK, J.

     The ancient Greek playwright Sophocles asked in one of his best known

dramas, Antigone, “what prowess is it to slay the slain anew?”1 (Nowadays we
would ask, “why beat a dead horse?”) Congress must have had Sophocles in mind

when it drafted the truth-in-lending act.       Section 1640(b) of the act shields

creditors from liability if they fix disclosure errors and pay back debtors within

sixty days of discovering the error. Why allow a federal cause of action where the

clerical error has been timely corrected?

        John and Nancy Bennett sued Mortgage Electronic Registration System,

Inc., LF Loans, LF Loan’s president, Jamal Wilson, and GTE Federal Credit Union

for fraud, declaratory relief, and violating the truth-in-lending act because the

defendants failed to disclose at closing that the Bennetts would have to pay for

private mortgage insurance as part of the refinance on the couple’s home. Because

there was no genuine issue of material fact that the defendants fixed the mortgage

insurance discrepancy and paid back the Bennetts for the premiums they paid

within sixty days of discovering the error, there was no liability under the truth-in-

lending act, no damages for fraud, and no present need for declaratory relief. We,

therefore, affirm the trial court’s summary judgment for the defendants.

                    Factual Background and Procedural History

        In April 2012, the Bennetts were looking for assistance to refinance the

mortgage on their home. They learned of a government program, the Home

Affordable Refinance Program, intended to assist borrowers whose mortgages


1   http://www.monologuearchive.com/s/sophocles_006.html.

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exceeded the value of their home. The Bennetts completed a loan application with

their broker, Advance Mortgage. With the assistance of their broker, on April 17,

2012, they applied for a HARP II loan from LF Loans. The truth-in-lending act

disclosure statement attached to the application form estimated a monthly payment

of $1,345.68, which included $237.60 in escrow for taxes, property insurance, and

private mortgage insurance. The loan was closed on June 12, 2012 by Stewart

Title Company, at which time the Bennetts initialed and signed several documents,

including a payment letter and an initial escrow account disclosure statement. At

closing, the estimated monthly payment was $1,237.96 and did not include private

mortgage insurance.

      After closing, the Bennetts’ loan was assigned to GTE Federal Credit Union.

Prior to the first payment due in August 2012, the Bennetts received a monthly

payment statement from GTE. Mr. Bennett noticed that the monthly payment

listed on the statement was less than the estimated monthly payment he received at

closing. Mr. Bennett called GTE to avoid future issues with the loan. A few days

later GTE called back and told Mr. Bennett the correct payment amount; however,

this time the amount was greater than the amount he was told at closing. Mr.

Bennett asked GTE to send him a copy of the documents he signed agreeing to the

higher payment.    Within a week he received several documents, including a

payment letter and initial escrow account disclosure statement, which the Bennetts



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contend were forgeries. Unlike the Bennetts’ copies of the closing documents, the

documents sent to Mr. Bennett by GTE included a $100.92 charge for private

mortgage insurance.

      On July 10, 2012, the Bennetts’ counsel sent a demand letter to GTE with

copies to LF Loans and Stewart Title.            The letter informed GTE:      of the

discrepancy; the Bennetts had no obligation to pay private mortgage insurance on

the loan; and the Bennetts would be paying the insurance under protest until GTE

corrected its records. The letter also stated:

      we demand that this matter be fully rectified within 60 days. Failure
      to fully rectify this matter within that time will lead to the filing of
      legal action. In order to fully rectify this matter you must not only
      correct your Loan Statement and purge all the fraudulent documents
      in order to avoid a repetition of the fraud through further transfer of
      the mortgage instruments, but you must also pay compensation for
      fees and costs suffered by the borrowers, as well as credit back to
      them the overpayments for the improperly charged PMI.

      To date the borrowers attorney’s fees paid are $200.00 with an
      anticipated additional amount of $300.00 to become due.
      Accordingly, you should issue a payment or credit to the borrowers of
      $200 and a send a separate check for $300 payable to me . . . .

      On July 16, 2012, LF Loans electronically mailed the Bennetts’ counsel the

following message:

      The issue with the documents being falsified lies at the feet of the title
      company. We sent out a final package with [private mortgage
      insurance] on all loan documents. I don’t have corroboration from the
      title company but my thought process is that they mistakenly got the
      initial documentation signed realized the error and transposed the
      necessary docs including 1st payment letter. . . .


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         I am uncertain as to why those parties chose to take action resulting in
         misrepresentation. However, this loan indeed has [private mortgage
         insurance] due to the fact that [mortgage insurance] has to be
         transferred on all HARP loans during the refinance process. I am also
         attaching a signed 1033 and [Truth-in-Lending disclosure] from the
         borrower showing [private mortgage insurance] was initially disclosed
         on this loan, making your client aware of [private mortgage insurance]
         in this transaction. . . .

         Unfortunately due to the nature of HARP loans we are unable to
         remove [private mortgage insurance] from this loan and do need to
         have these items re[-]signed. . . .

         On July 19, 2012, the Bennetts’ counsel responded by electronic mail that

his clients would not be re-signing anything because they had no legal obligation

to do so and if proper disclosures had been made the Bennetts might have opted

not to enter into the home refinance. The message threatened legal action for

fraud.

         Eleven days later, LF Loans said, by electronic mail, the private mortgage

insurance would be taken off the loan and any insurance payments the Bennetts

made would be refunded. On October 17, 2012, GTE sent the Bennetts the first of

the new monthly payment statements which did not include private mortgage

insurance, and the following month, GTE refunded the $302.76 the Bennetts had

paid under protest for the August, September and October 2012 insurance

amounts.




                                            5
      On October 23, 2012, three months after the mortgage insurance issue was

resolved, the Bennetts filed their initial complaint against LF Loans, its principal,

GTE, and MERS, which held the legal title to the mortgage. Two complaints, and

four years later, the Bennetts second amended complaint alleged forgery as to LF

Loans and its principal (count one); declaratory relief against MERS and GTE

(count two); and a truth-in-lending act violation against all the defendants (count

three).

      The defendants moved for summary judgment because the Bennetts suffered

no damages as a result of the alleged forgery after the private mortgage insurance

payments were removed and refunded; there was no pending dispute between the

parties warranting declaratory relief; MERS could not be held liable for truth-in-

lending act violations; and the disclosure errors were cured within the truth-in-

lending act’s sixty-day window to correct errors. The trial court granted summary

judgment, and this appeal followed.2

                                 Standard of Review




2  With their appeal, the Bennetts also filed a petition for writ of certiorari seeking
review of the trial court’s order determining the defendants were entitled to
attorney’s fees based on section 57.105 of the Florida Statutes. At oral argument,
the Bennetts abandoned their petition in favor of a direct appeal in case number 17-
1254 of the trial court’s judgment awarding section 57.105 fees, which remains
pending. We, therefore, do not address the defendants’ entitlement to section
57.105 fees.

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      “The standard of review for summary judgment is de novo. Summary

judgment is proper if there is no genuine issue of material fact and the movant is

entitled to judgment as a matter of law.” Alvarez-Mejia v. Bellissimo Props., LLC,

208 So. 3d 797, 798-99 (Fla. 3d DCA 2016) (citations omitted).

                                    Discussion

      The Bennetts contend the trial court erred in granting summary judgment for

the defendants because (1) they had a right to rescind the mortgage under the truth-

in-lending act; (2) there were disputed issues of fact that the closing documents

were forged; and (3) the potential of the forged documents in the loan file being

transferred to another lender precluded summary judgment on the declaratory relief

claim. We will address each of these contentions below.

                       1. The Truth-in-Lending Act Claim

      The Bennetts claimed they were entitled to rescind the mortgage and

statutory penalties under the truth-in-lending act because the defendants charged

them for private mortgage insurance that was not disclosed as a finance charge at

closing. Indeed, the truth-in-lending act requires lenders to disclose any “finance

charge” associated with the mortgage.        12 C.F.R. § 1026.18(d).    A “finance

charge” is any money payable by the borrower and imposed by the lender, as a

condition of receiving the loan, and includes “[p]remiums or other charges for any




                                         7
guarantee or insurance protecting the creditor against the consumer’s default or

other loss.” Id. § 1026.4(a), (b)(5).

      The finance charges as part of the mortgage, including any charges for

private mortgage insurance, must be disclosed “before consummation of the

transaction,” that is, before the closing. Id. § 1026.17(b). Failing to disclose

finance charges, like for mortgage insurance, may be a violation of the truth-in-

lending act and subject the lender to statutory penalties or rescission of the

mortgage. See, e.g., Madel v. GMAC Mortgage Corp. (In re Madel), No. 03-

32367, 2004 WL 4055247, at *8 (Bankr. E.D. Wis. Nov. 8, 2004) (“Improper

disclosure of the amount of the finance charge is a material violation for purposes

of rescission.”).

      The act, however, provides a safe harbor for lenders that correct failures to

disclose finance charges within sixty days of being notified of the error.

      A creditor or assignee has no liability under this section . . . for any
      failure to comply with any requirement imposed under this part or part
      E, if within sixty days after discovering an error . . . and prior to the
      institution of an action under this section or the receipt of written
      notice of the error from the obligor, the creditor or assignee notifies
      the person concerned of the error and makes whatever adjustments in
      the appropriate account are necessary to assure that the person will not
      be required to pay an amount in excess of the charge actually
      disclosed . . . .

15 U.S.C. § 1640(b).




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      Here, there was no genuine dispute that on July 10, 2012 the Bennetts’

counsel notified the defendants that the August 2012 statement included private

mortgage insurance that had not been disclosed at the time of closing. Three

weeks later, on July 31, LF Loans responded that private mortgage insurance

would be removed from future statements consistent with the closing documents

and the money the Bennetts paid for private mortgage insurance would be

refunded. Three months after that, on October 23, the Bennetts sued under the

truth-in-lending act.

      The defendants discovered the error when they got the call from the

Bennetts and received their attorney’s letter on July 10. Within sixty days of

discovering the error, by July 31, and prior to the filing of the couple’s lawsuit, the

defendants notified the Bennetts that there was indeed an error on the statement

and it would be adjusted to reflect what had been disclosed at closing about private

mortgage insurance. The defendants refunded the money the Bennetts overpaid

and corrected the statements. Pursuant to the section 1640(b) safe harbor, the

defendants have “no liability” for the failure to disclose the mortgage insurance

finance charge.

      The Bennetts’ rescission claim, moreover, is precluded by section 1635(e).

The rescission remedy does not apply to a “refinancing” of the same home. Id. §

1635(e)(2); see also Kucera v. Citizens Bank & Tr. Co., 754 F.2d 280, 281 (8th



                                          9
Cir. 1985) (“[E]ven if the loans were secured by the Kuceras’ principal residence,

the seven refinancing transactions are exempt from coverage under the right-of-

rescission.”). There is no genuine dispute that the Bennetts’ 2012 mortgage was a

refinance of their existing mortgage, secured by an interest in the same residential

home.

        Finally, the trial court properly granted summary judgment on the Bennetts’

truth-in-lending act claim as to MERS because “MERS is neither a creditor nor

assignee as defined by [the truth-in-lending act].” Cannon v. U.S. Bank, NA, No.

CIV. 11-00079 HG-BMK, 2011 WL 2117015, at *5 (D. Haw. May 24, 2011). The

act’s disclosure requirements only apply to creditors and assignees and MERS is

neither as defined by Congress and the federal regulators.

                                 2. Forgery Claim

        The Bennetts also alleged that LF Loans and its principal committed

forgery. “Forgery exists under Florida law where the defendant makes a writing

which falsely purports to be the writing of another, made with the intent to injure

or defraud any person. The instrument in question must have some legal efficacy.”

Schauer v. Gen. Motors Acceptance Corp., 819 So. 2d 809, 814 (Fla. 4th DCA

2002) (quotation omitted). And, as with any kind of fraud, resulting damages to

the plaintiff are an essential element.3 Poliakoff v. Nat’l Emblem Ins. Co., 249 So.

3As the Bennetts explain in their initial brief, “[f]orgery is recognized as a species
of fraud in Florida.” (Initial Br. at 38.)

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2d 477, 478 (Fla. 3d DCA 1971) (The essential elements of fraud are . . . resulting

damage to the plaintiff.”).

      The summary judgment evidence, with every inference made in favor of the

Bennetts, showed that they did not suffer damages as a result of the

forged/fraudulent documents.     The Bennetts, on July 10, 2012, informed the

defendants about the “fraudulent documents” and asked that the payment

statements be amended to reflect the agreement at closing, which did not include

private mortgage insurance, and to refund any overpayments. Six days later, LF

Loans acknowledged the “falsified lies” and “misrepresentation[s],” and on July

31, agreed to remove the insurance requirement from the mortgage, issue new

statements, and refund the money. Within twenty one days, that is, the Bennetts

got everything they wanted (other than attorney’s fees).

      Still, three months later, the Bennetts sued the defendants for forgery. By

then, however, the result of the forged documents – having to pay private mortgage

insurance – had been fixed, and LF Loans had promised to amend the loan

statements and refund overpayments. By October 23, when the initial complaint

was filed, the Bennetts were not required to pay the insurance, even assuming LF

Loans and its principal forged the loan documents. Without damages, summary

judgment was due to be granted on the forgery/fraud claim. See Sussex Mut. Ins.

Co. v. Gabor, 568 So. 2d 1004, 1005 (Fla. 3d DCA 1990) (affirming summary



                                        11
judgment because “on this record, it is clear that the plaintiff suffered no damages

on its fraud and related claims”).

                            3. Declaratory Relief Claim

      The Bennetts’ final claim was for a declaration that the private mortgage

insurance on their statement was null and void because it was based on forged

documents. “The elements of an action seeking a declaratory judgment require the

plaintiff to show there is [1] a bona fide adverse interest between the parties

concerning a power, privilege, immunity or right of the plaintiff; [2] the plaintiff’s

doubt about the existence or non-existence of his rights or privileges; [3] that he is

entitled to have the doubt removed.” Grove Isle Ass’n, Inc. v. Grove Isle Assocs.,

LLLP, 137 So. 3d 1081, 1093 (Fla. 3d DCA 2014).

      In this case, there was no genuine dispute that there was no bona fide

adverse interest. The Bennetts, on July 10, 2012, gave the defendants sixty days’

notice to cure the forged documents and the assessment of private mortgage

insurance contrary to what had been disclosed at closing. Within three weeks, the

defendants acknowledged that the disputed documents were “falsified” and

“misrepresentation[s],” and agreed to remove the private mortgage insurance

payments consistent with the closing documents, revise the statements, and return

the overpaid money. When summary judgment was granted, and even by the time




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the complaint was filed, there was no dispute between the parties about the

documents and whether the Bennetts were required to pay for mortgage insurance.

      The Florida Supreme Court handled a similar case in Santa Rosa County v.

Administration Commission, 661 So. 2d 1190 (Fla. 1995). There, a county and the

state department of community affairs had a dispute about the county’s proposed

comprehensive plan. Id. at 1191. The dispute resulted in two lawsuits – one in

front of the division of administrative hearings and the other in the circuit court for

declaratory and injunctive relief. Id. The parties settled the administrative action,

and the department of community affairs moved for summary judgment in the

declaratory relief case because there was “no present need for a declaratory

judgment.”    Id. at 1192.      The trial court granted the motion because “[t]he

[s]ettlement [a]greement resolved the dispute between the parties as to the

particular facts alleged in the complaint,” and therefore, there was “no longer . . . a

bona fide, present need for the declaration.” Id. (quoting trial court’s order on

rehearing). The Florida Supreme Court agreed that “all disputes between the

parties were resolved by the stipulated settlement agreement . . . . [B]ecause there

was no pending controversy, the Declaratory Judgment Act was no longer

available” to the county. Id.

      There is even less of a “present” controversy in this case. The dispute

between the Bennetts and the defendants – whether the Bennetts were wrongly



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charged for mortgage insurance – was resolved months before the initial complaint

was filed, and years before summary judgment was entered. The Bennetts (other

than attorney’s fees) received everything they had asked for by October 2012. As

in the Santa Rosa County case, there was no need to slay the slain.

                                     Conclusion

      There being no truth-in-lending act liability, no fraud damages, and no

present controversy, the trial court properly granted summary judgment for the

defendants. We, therefore, affirm.

      Affirmed.




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