MARLYN TRACEY v. WELLS FARGO BANK N. A.
264 So. 3d 1152 (2019)
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Rule of Law:
A trial court abuses its discretion when it permits a party to amend its complaint mid-trial to conform to the evidence of an unpled theory of recovery if the amendment prejudices the opposing party by depriving them of notice and the opportunity to prepare a defense.
Facts:
- Marlyn Tracey held a promissory note and mortgage which were held by Wells Fargo Bank, N.A.
- In 2009, Tracey and Wells Fargo were involved in discussions regarding two loan modification agreements dated May 8, 2009, and July 17, 2009.
- Tracey testified that she believed these agreements never progressed beyond proposals, as she received only blank envelopes and could not get information about their status from Wells Fargo.
- Tracey eventually defaulted on her obligations under the note and mortgage.
Procedural Posture:
- On June 9, 2011, Wells Fargo filed a foreclosure complaint against Marlyn Tracey in the Florida Circuit Court, alleging a breach of two loan modification agreements.
- Following an involuntary dismissal of the original complaint, Wells Fargo filed an amended complaint on September 5, 2012, which made no mention of the modification agreements.
- Tracey filed an answer and affirmative defenses to the amended complaint, and the case proceeded for four years based on that pleading.
- At the subsequent bench trial, Wells Fargo moved to amend its complaint to conform to evidence of the previously abandoned modification agreements, claiming their omission was inadvertent.
- Tracey objected, arguing she was prejudiced by the surprise change in Wells Fargo's theory of recovery.
- The trial court granted Wells Fargo's motion and, after the trial, entered a final judgment of foreclosure against Tracey.
- Tracey, as the appellant, appealed the final judgment to the Second District Court of Appeal of Florida, with Wells Fargo as the appellee.
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Issue:
Does a trial court abuse its discretion under Florida Rule of Civil Procedure 1.190(b) by permitting a plaintiff to amend its complaint during trial to reintroduce a theory of recovery based on unpled contracts, over the defendant's objection that the amendment is prejudicial?
Opinions:
Majority - Lucas, J.
Yes. The circuit court reversibly erred when it permitted Wells Fargo to amend its complaint during trial to conform to the evidence it presented of two unpled modification agreements. Due process requires that pleadings function as a safeguard by ensuring parties have prior, meaningful notice of the claims they must defend. Prejudice under Rule 1.190(b) occurs when a litigant's right to notice of what to prepare for at trial has been infringed. Here, Tracey was prejudiced because Wells Fargo had abandoned the modification agreements as a basis for recovery when it filed its amended complaint four years before trial. By allowing Wells Fargo to reintroduce them mid-trial, the court deprived Tracey of the opportunity to prepare a defense against a theory she reasonably believed was no longer part of the case. Given the circumstances and the strong preference for finality, the appropriate remedy is not a new trial but a remand for involuntary dismissal.
Dissenting in part - Sleet, J.
No, while the trial court did err, the remedy should be a new trial, not an involuntary dismissal. The majority's decision to order dismissal creates a new, sweeping standard for the scope of remand that conflicts with established precedent. The law favors trial on the merits, and where a party like Wells Fargo has proceeded in good faith reliance on an erroneous trial court ruling, it should not be penalized with dismissal. The proper remedy is to reverse and remand for a new trial, allowing Wells Fargo to amend its pleadings and giving Tracey a full and fair opportunity to prepare her defense to the loan modification agreements. Dismissal grants a windfall to Tracey and unfairly punishes Wells Fargo for the trial court's error.
Analysis:
This case strongly reinforces the due process principle that pleadings must provide adequate notice to prevent 'trial by ambush.' The court's extensive analysis on the scope of remand is highly significant, establishing a default rule in its district that a party who fails to properly plead or prove its case at trial will not get a 'second bite at the apple' through a new trial, absent exceptional circumstances. This holding emphasizes the need for finality in litigation and places a heavy burden on plaintiffs to get their pleadings and proof right the first time. The decision may discourage litigants from proceeding to trial on weak or improperly framed cases, knowing that an appellate reversal is more likely to result in outright dismissal than an opportunity for a do-over.
