Foreclosure Sale Cannot Go Forward When Timely Filed Motion for Rehearing Is Pending

In 944 CWELT-2007 LLC v. Bank of America (3D15-2091), the Third District granted a petition for certiorari that sought to quash an order denying a motion to cancel a foreclosure sale. On the date of the scheduled foreclosure sale, a motion for rehearing directed to the final judgment remained pending. The court stated that "it is well settled that a foreclosure sale cannot be held while a timely motion for rehearing is pending because enforcement of a final judgment is suspended by the filing of the rehearing motion."

One other procedural issue was included in the opinion. The court stated that it "consider[ed] the Bank’s decision not to file a response to the petition as the equivalent of a confession of error."

Court Where Lis Pendens Filed Obtains Exclusive Jurisdiction Over All Liens Until Judgment

In Jallali v. Knightsbridge Village Homeowners Association, Inc. (4D15-2036), the Fourth District again held that the court where a mortgagee files a lis pendens obtains exclusive jurisdiction over all liens on the property until final judgment. Therefore, the judgment entered in a case filed after the original lis pendens must be vacated.

The court stated:

In the present case, when the mortgagee filed its foreclosure action and recorded its notice of lis pendens in May 2007, the association had not yet recorded a notice of lis pendens with regard to its 2011 lien and 2012 foreclosure action....... 

Accordingly, based on section 48.23, Florida Statutes (2015), Quadomain, and the cases cited therein, we conclude that the final foreclosure judgment which the association obtained in the 2012 case was void because the trial court lacked jurisdiction at that time. Exclusive jurisdiction to foreclose on Jallali’s property was in the circuit court conducting the mortgagee’s foreclosure action in the 2007 case. Accordingly, we reverse the order denying Jallali’s motion to vacate final judgment of foreclosure.

After Merger, Claim May Be Continued As If Merger Did Not Occur

In Fiorentino v BAC Home Loans Servicing, LP (5D13-3250), the Fifth District reversed the foreclosure judgment. However, in a footnote the court cited to section 607.1106(d), Florida Statutes. That statutory section is titled "effect of merger or share exchange," and the cited provision states that "Any claim existing or action or proceeding pending by or against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation which ceased existence."

Applied to the case before the court, the court noted the following:

The record reflects that BAC merged into Bank of America effective July 1, 2011, and did not survive the merger. Pursuant to section 607.1106(1)(d), Florida Statutes, the claim may be continued as if the merger did not occur, or the surviving corporation, Bank of America, may be substituted in the proceeding.

While not a new law, it is a statutory provision that isn't referenced often.

Error In Legal Description Renders Judgment Voidable, and Cannot Be Corrected More Than A Year After Issuance

Epstein v. Bank of America (4D13-4066), released today, involves a borrower’s challenge to a trial court’s order vacating a judgment that had been entered in favor of the plaintiff/lender. Three years after the judgment was entered in its favor, the plaintiff/lender sought to vacate the judgment due to an error in the legal description of the property on the mortgage, complaint, and ultimately the judgment. Ultimately, the court reversed the trial court's order vacating the judgment. As is shown below, the error relating to the property description was a voidable error, meaning the trial court lost jurisdiction to correct the error one year after the judgment was entered. 

The court outlined the facts at issue as follows:

The problem began when the mortgage was signed using an incorrect legal description for the real property. Subsequently, the bank filed a foreclosure complaint. In December 2009, a final summary judgment of foreclosure was entered using the incorrect legal description. The foreclosure sale was conducted the following August with the bank as the highest bidder. Shortly thereafter, a certificate of title containing the incorrect legal description was issued to the bank.

Two years later, in September 2012, the bank filed its first motion to vacate the final summary judgment, sale, and certificate of title. The motion was filed pursuant to Florida Rule of Civil Procedure 1.540(b)(1), alleging that, “due to an inadvertent mistake,” the legal description of the property in the mortgage was incorrect, and therefore, the bank needed to amend the complaint to add a reformation count. It also alleged that the incorrect legal description in the foreclosure judgment prevented the bank from obtaining clear title to the property. In October 2012, the trial court entered an order denying the bank’s motion, “without prejudice.”

In January 2013, the bank filed its second motion to vacate. This second motion was also filed pursuant to Florida Rule of Civil Procedure 1.540(b)(1), but, additionally, pursuant to rule 1.540(b)(4), on the added grounds that the final judgment was void. In this motion, the bank admitted that it was made aware of the error in the legal description in the mortgage and final judgment in October 2010, ten months after the judgment was entered. The motion alleged that the error in the legal description in the final judgment was clouding the title to property owned by a third party.

A hearing was held on the bank’s second motion. At the hearing, the homeowner objected to the bank’s second motion, arguing that the trial court did not have jurisdiction to hear the motion because rule 1.540(b)(1) has a one-year time limit for vacating a judgment, and the bank’s motion was filed more than a year after the judgment was entered. The bank renewed its argument that the incorrect legal description rendered the judgment void, making the one-year time limitation inapplicable. The trial court granted the bank’s second motion.

On appeal, the issue was whether the three-year old judgment was void or merely voidable. The court noted that “‘[i]f a judgment is ‘void’ then under rule 1.540(b) it can be attacked at any time, but if it is only ‘voidable’ then it must be attacked within a year of entry of the judgment.’ Condo. Ass’n of La Mer Estates, Inc. v. Bank of New York Mellon Corp., 137 So. 3d 396, 398 (Fla. 4th DCA 2014). Thus, the determining factor in this case is whether the final judgment was void due to an error in the legal description in the mortgage and judgment.”

In this case, the “bank argues that the judgment was void ‘because the owner of the property identified in the judgment was not made a party to the underlying case.’” The court explained that:

The bank argues that the instant case is similar to Wright, and that the final summary judgment in this case is void because the due process rights of the owner of the described property in the mortgage and judgment were violated in that the actual owner was never made a party to the action. However, there are two problems with the argument. First, there is no evidence in the record that there is an owner of the described property other than the homeowner named in the complaint, or that the property, as described in the mortgage and judgment, even exists. Second, if the property described in the mortgage and final judgment does exist, and if there is an owner of the property other than the homeowner named in the complaint, that owner was not the party challenging the final summary judgment. “[C]onstitutional rights are personal and may not be asserted vicariously.” Broadrick v. Oklahoma, 413 U.S. 601, 610 (1973). This also holds true specifically for due process challenges. See State v. Muller, 693 So. 2d 976, 978 (Fla. 1997) (holding that a defendant lacked standing to challenge a violation of the due process rights of the non-defendant owners of a vehicle). Therefore, the due process argument that the judgment is void is not applicable in this case.

***

Although not cited by either party, we agree with the analysis of the Second District regarding the authority of the court to correct errors in the legal descriptions in mortgages and foreclosure judgments: 

When a mortgage contains an incorrect legal description, a court may correct the mistake before foreclosure. If, however, the mistaken legal description is not corrected before final judgment of foreclosure, and the mistake is carried into the advertisement for sale and the foreclosure deed, a court cannot reform the mistake in the deed and judgment; rather, the foreclosure process must begin anew. Lucas v. Barnett Bank of Lee Cnty., 705 So. 2d 115, 116 (Fla. 2d DCA 1998) (citing Fisher v. Villamil, 62 Fla. 472, 56 So. 559 (1911)).  

As the Second District noted, “[w]hile the mortgagee who bid its mortgage at the sale might have understood exactly what property was being offered, other potential bidders at the sale might not have had the same understanding.” Id.

In conclusion, the court stated: "As to the named parties in this proceeding, there is no issue of subject matter jurisdiction or personal jurisdiction. We therefore determine that the final summary judgment was voidable, not void, and the bank’s motion to vacate was time-barred under rule 1.540(b)."

Dismissal With Prejudice for Discovery Violations Reversed

In PNC Bank, N.A. v. Duque (4D12-1799), the Fourth District reversed a trial court's order dismissing a complaint with prejudice as a result of discovery violations. In this foreclosure action, the defendant served numerous discovery requests to which the plaintiff, allegedly, failed to respond. As a result, the defendant sought sanctions and the trial court dismissed the case with prejudice. The plaintiff filed a motion for rehearing directed to the dismissal, however, that motion was denied and the plaintiff appealed. On appeal, the court held:

We have reviewed the trial court’s order. While indicating that the court considered the six Kozel factors, the order lacked specific findings as to each. We do not condone the bank’s failure to comply with discovery and court orders; we feel the trial court’s frustration. But, as the bank argues, the homeowners made numerous confusing and cumulative discovery requests while failing to file a responsive pleading for two years. There was no evidence that the violations were caused by the bank itself. The homeowners suffered no prejudice, and the bank’s violations did not cause any significant problem with judicial administration.  

The law does not always provide a good roadmap for trial courts. In this area of sanctioning non-compliant parties, however, our supreme court has done just that. See Kozel, 629 So. 2d at 818. When the trial court fails to follow that roadmap, reversal is warranted. See Bank One, 873 So. 2d at 521–22. 

Dismissal With Prejudice Of Foreclosure Suit Does Not Prevent New Complaint Based Upon New Default

In PNC Bank, N.A. v. Neal (1D12-2544), a short opinion from the First District, the court affirmed a dismissal with prejudice entered in a foreclosure action filed by PNC. The court stated that:

We affirm but point out that the dismissal with prejudice of PNC Bank’s foreclosure action against the Neals does not preclude PNC Bank from instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action. See Star Funding Solutions, LLC v. Krondes, 101 So. 3d 403 (Fla. 4th DCA 2012) (citing Singleton v. Greymar Assocs., 882 So. 2d 1004, 1005 (Fla. 2004)).

Party That Holds Note When Complaint Filed Has Standing To Enforce Its Terms

In American Home Mortgage Servicing, Inc. v. Bednarek (2D12-2099), the Second District reversed the trial court’s order dismissing a complaint for lack of standing. The court described the facts, and chain of ownership of the note and mortgage in question, as follows:

On May 31, 2005, Ms. Bednarek executed a note and mortgage in favor of American Brokers Conduit for the purchase of real property. Thereafter, the loan was sold to Deutsche Bank. On March 30, 2006, American Brokers Conduit assigned the mortgage to the bank's servicing agent, AHMSI-Maryland. In September 2007, AHMSIMaryland filed a complaint for foreclosure alleging it was the owner and holder of the underlying promissory note. With the complaint and the amended complaint, AHMSIMaryland filed copies of the mortgage, the promissory note showing a blank endorsement, and the 2006 assignment of mortgage. In April 2008, AHMSI purchased AHMSI-Maryland, acquiring the company's servicing rights. In 2009, AHMSI filed the original note and mortgage with the trial court.

At the close of testimony in the non-jury trial, counsel for Ms. Bednarek moved for an involuntary dismissal and argued that the plaintiff had failed to establish standing. "Relying on McLean [v. JP Morgan Chase Bank National Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012)], the trial court granted the motion on the ground AHMSI had failed to prove it was the owner and holder of the note and mortgage.”

The court stated that “a party seeking foreclosure must establish that it had standing to foreclose at the time it filed the complaint. A foreclosure plaintiff has standing if it owns and holds the note at the time suit is filed. A plaintiff may also establish standing to foreclose by submitting evidence of a special endorsement on the note in favor of the plaintiff or a blank endorsement, an assignment from the payee to the plaintiff, or an affidavit of ownership.” Citations removed. Based upon that law, the court held:

Here, both the complaint and the amended complaint reflect that AHMSIMaryland, the original plaintiff, was the owner and holder of the note at the time the complaint was filed. An assignment of mortgage was attached to the complaint which provided that the original lender, American Brokers Conduit, assigned the mortgage to AHMSI-Maryland on March 30, 2006, more than one year prior to the filing of the original complaint. Also attached to the complaint and amended complaint was a copy of the note showing a blank endorsement. Because AHMSI possessed the original note, endorsed in blank, it was the lawful holder of the note entitled to enforce its terms.

Standing To Foreclose Requires That The Plaintiff Own Or Hold The Note-Not Both

In Wells Fargo Bank v. Morcom (5D11-4089), the Fifth District reversed a trial court's judgment in favor of the borrower. In the case:

Appellant filed a complaint on August 6, 2010, seeking to foreclose a mortgage issued by Appellees. Appellant alleged, inter alia, that “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” Appellant attached to the complaint copies of the mortgage and the promissory note.1 The note is endorsed “pay to the order of ________ without recourse,” with the blank space populated with a stamp of Wells Fargo Bank, N.A.

The trial court held that the borrowers were entitled to judgment in their favor because the bank did not prove that it owned and held the note. The Fifth District, however, concluded that you do not need to prove both ownership and that you hold the note. The court stated:

The Florida UCC and recent cases from this court stand for the proposition that a plaintiff has standing to bring a foreclosure action if the plaintiff is the holder of a promissory note, endorsed in blank, secured by a mortgage….We have previously held that “[t]he party that holds the note and mortgage in question has standing to bring and maintain a foreclosure action.” Deutsche Bank Nat’l. Trust Co. v. Lippi, 78 So. 3d 81, 84 (Fla. 5th DCA 2012) ….“[T]he person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder.”….In Lippi, Deutsche Bank’s second amended complaint contained the language that it “is now the holder of the Mortgage Note and Mortgage and/or is entitled to enforce the Mortgage Note and Mortgage.” Lippi, 78 So. 3d at 84. The facts in Lippi are almost identical to Appellant’s complaint in the present case, which provides that the “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” The Lippi court held, where the note was endorsed in blank, meaning it was “payable to the bearer and could be transferred simply by possession,” Deutsche Bank’s standing was established because it was the note holder, regardless of any recorded assignments.

In the present case, the original note Appellant attached was endorsed in blank with Appellant’s name stamped in the blank endorsement field, which, paired with section 673.3011(1), established that Appellant was the holder entitled to enforce the instrument….

Applying portions of the Florida UCC, other district courts of appeal have determined that a party that holds a note endorsed in blank has standing to foreclose a mortgage.

Based upon the fact that the bank was holding the note, which was endorsed in blank, the bank had standing to foreclosure and was entitled to judgment in its favor.

Second DCA Certifies Question Regarding Standing In Foreclosure Suits to Florida Supreme Court

In Focht v. Wells Fargo Bank, N.A. (2D11-4511 & 2D11-4980), which was released a few weeks ago, the Second District certified the following question to the Florida Supreme Court as one of great public importance:

CAN A PLAINTIFF IN A FORECLOSURE ACTION CURE THE INABILITY TO PROVE STANDING AT THE INCEPTION OF SUIT BY PROOF THAT THE PLAINTIFF HAS SINCE ACQUIRED STANDING?

In the opinion, written by Judge Silberman, the Court "reverse[d] the final judgment of foreclosure because a genuine issue of material fact exists regarding Well's Fagro's standing to enforce the note and mortgage."

At a summary judgment hearing, "Wells Fargo asserted that it had standing by virtue of an assignment of the note and mortgage dated September 2008, which was several months after the complaint was filed. Wells Fargo alternatively asserted that it had standing as the holder of the original note endorsed in blank. In opposition to Focht's cross-motion for summary judgment, counsel for Wells Fargo addressed Focht's affirmative defenses and argued that each was either factually or legally insufficient."

The court concluded that "A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff's status as the holder of the note….But standing must be established as of the time of filing the foreclosure complaint….Thus, Wells Fargo's submission of a postfiling assignment of the note and mortgage does not establish that it had standing when it filed the lawsuit." 

In this case, "Wells Fargo alternatively argues that it established standing by submitting the original note endorsed in blank….As with the assignment, however, Wells Fargo did not submit the original note until several months after it had filed the complaint. To establish standing as the holder of a note endorsed in blank, a party must be in possession of the original note…..Thus, Wells Fargo was required to submit evidence that it was in possession of the original note with the blank endorsement at the time it filed the complaint to establish standing."

In this case, the blank endorsement, which is apparently located on the back of the note, did not get copied for the record….Although Wells Fargo alleged in its unsworn complaint that it was the owner and holder of the note and mortgage, it asserted that the original note had been lost or destroyed and 'is not now in the custody and control of [Wells Fargo].' Notably, the affidavit of indebtedness filed in support of summary judgment relies on the postfiling assignment for standing." Therefore, the judgment was reversed.

The court "also certif[ied] a question based on some of the same concerns articulated by Judge Altenbernd in his concurrence."  The court stated:

For our part, appellate courts have seen a recent influx of appeals in which defendants have successfully argued that the trial court erred in entering a foreclosure judgment in favor of the plaintiff because the plaintiff failed to establish standing at the time of filing. ...In many of these cases, the plaintiff presented unrefuted proof of standing acquired after filing but prior to the final hearing. … The appellate courts are nonetheless compelled to reverse based on the district courts' application of a long line of supreme court cases applying the general principle that "the plaintiff's lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed."… 

We note that the supreme court has not applied this standing principle inthe exact context presented in this case. And we question whether, in light of the ongoing foreclosure crisis in this State, the supreme court would adhere to this principle in cases in which a plaintiff has acquired standing by the time judgment is entered. Accordingly, we certify the following question as one of great public importance:

CAN A PLAINTIFF IN A FORECLOSURE ACTION CURE THE INABILITY TO PROVE STANDING AT THE INCEPTION OF SUIT BY PROOF THAT THE PLAINTIFF HAS SINCE ACQUIRED STANDING?

Judge Altenbernd wrote a concurring opinion that began:

I concur in this decision because existing precedent requires me to do so. A requirement that the plaintiff prove that it owned or possessed a promissory note at the commencement of a foreclosure action may have made sense during earlier periods of economic downturn,3 but in this era of securitization of mortgage debt and computerized banking, it has proven to be a restriction that often provides a windfall to a borrower who can prove no harm by the fact that the plaintiff obtains possession of the note after the filing of the lawsuit but before the entry of judgment. So long as there is no dispute that the borrower received the money and defaulted on the note, the law should not use "standing" to require the dismissal of a lawsuit. If the defendant raises this issue at the inception of the lawsuit this affirmative defense may warrant a delay in the proceedings while the plaintiff establishes that it can enforce the note. But especially when the original note in default has already been filed in the court record, the law should generally permit a plaintiff to obtain a judgment of foreclosure if the plaintiff establishes that it has a right to enforce the note at the time it seeks to obtain a final judgment…. 

Court Cannot Read More Into Statute Than Plain Language Dictates (In This Case Verification Requirements)

In U.S. Bank v. Wanio-Moore (5D12-1746), the Fifth District reversed a trial court's order dismissing a complaint. The trial court dismissed the foreclosure complaint because the verification on the complaint did not provide the position of the person that signed the verification. However, the Fifth District reversed and held that "the rule does not require any information about the signer’s positional authority, and a court cannot “read more into [rule 1.110(b)] than its plain language dictates."

The opinion can be viewed HERE.

Trial Court Erred In Refusing To Vacate Judgment When Borrower Cured Default Prior To Foreclosure Sale

In Wells Fargo Bank, N.A. v. Giglio (4D12-418), the Fourth District held that the trial court erred in refusing to grant a motion to vacate a foreclosure judgment. In this case, on the eve of the foreclosure sale, the borrower tendered funds to the lender sufficient to bring the loan current. Based upon that tender of funds, Wells Fargo sought to cancel the foreclosure sale and ultimately to vacate the sale that did occur. The trial court granted the motion to vacate the sale but refused to vacate the judgment. 

The Fourth District stated that "Put simply, Giglio cured the default and the parties settled their dispute, an outcome the law favors." Therefore, the court ultimately held that:

We hold that the trial court, having vacated the foreclosure sale, abused its discretion in refusing to grant the related collateral relief requested by Wells Fargo, which refusal prevented the parties from concluding their settlement. See Toler, 78 So. 3d at 701 (“An order denying a motion for relief from judgment is reviewed for an abuse of discretion.”). The trial court clearly had jurisdiction to consider Wells Fargo’s Rule 1.540(b)(5) motion; and in light of the parties’ settlement --a result the law seeks to encourage -- the relief requested should have been granted. See Wells Fargo Bank, N.A. v. Lupica, 36 So. 3d 875 (Fla. 5th DCA 2010).

In a footnote the court noted that they were not holding that a trial court was always required to vacate a judgment based upon the settlement of the parties and that there may be circumstances when other influences would support denying such a motion. However, there were no other influences in this case.

Involuntary Dismissal Improper Before Party Rests Case

In Deutsche Bank Nat. Trust Co. v. Santiago (3D11-2805), the Third District held that it is premature to sua sponte enter an order for involuntary dismissal before the plaintiff has rested its case.

Vacating A Judgment/Order Requires Sworn Testimony Or Evidence--Not A Lawyers Argument

In Chase Home Loans v. Sosa (3D12-1783), the Third District reversed an order vacating a foreclosure sale. The motion was filed by a husband who asserted that his wife, a co-signatory on the mortgage, "'actively concealed' the proceeding by hiding all notifications under the family sofa." The trial court vacated the sale, presumably "inspired by benevolence and compassion for the family." However, there was no issue of service of process and there was no sworn evidence or testimony submitted in favor of vacating the foreclosure sale. 

The court stated that:

The husband’s motion was brought under Florida Rule of Civil Procedure 1.540(b), which permits a trial court to relieve a party or a party’s legal representative from a final judgment, decree or order based upon mistake, inadvertence, surprise or excusable neglect. However, as we often have said, unsworn representations of counsel about factual matters do not have any evidentiary weight in the absence of a stipulation....“It is of no moment in establishing facts that attorneys are ‘officers of the court’ as we often read when an unsworn representation is made.”...Nor is the fact that the wife may have been the subject of some undetected “degree of mental incapacity” during the course of the foreclosure action. Even if true, this does not create a sufficient showing of mistake, inadvertence, surprise or excusable neglect to warrant vacating a final judgment.

A motion to vacate requires the submission of actual sworn evidence in order to be considered on the merits. The motion in this case did not even have that. Because the attorneys mere legal argument was not sufficient, the court reversed the order vacating the foreclosure sale. 

"Possession of the Note Determines Standing to Foreclose"

In Everhome Mortgage Co. v. Janssen (2D11-4592), the Second District reversed the trial court's order vacating a judgment and dismissing a complaint for lack of jurisdiction. The court stated:

We are compelled to point out that possession of the note determines standing to foreclose. See Taylor v. Bayview Loan Servicing, LLC, 74 So. 3d 1115, 1117 (Fla. 2d DCA 2011). The holder of the original note endorsed in blank has standing. Id. "[A] mortgage is but an incident to the debt, the payment of which it secures, and its ownership follows the assignment of the debt. If the note or other debt secured by a mortgage be transferred without any formal assignment of the mortgage, or even a delivery of it, the mortgage in equity passes as an incident to the debt . . . ." WM Specialty Mortg., LLC v. Salomon, 874 So. 2d 680, 682 (Fla. 4th DCA 2004)(quoting Johns v. Gillian, 184 So. 140, 143 (Fla. 1938)). More fundamentally, however,"[e]ven if [the plaintiff] lacked standing when it filed suit, the final judgment is merely voidable, not void." Dage v. Deutsche Bank Nat'l Trust Co., 95 So. 3d 1021, 1024 (Fla. 2d DCA 2012) (citing Phadael v. Deutsche Bank Trust Co. Americas, 83 So. 3d 893, 895 (Fla. 4th DCA 2012)).

As a result, the trial court's order was reversed.

Summary Judgment Should Not Be Entered With Reservation To Consider Defenses

In Bertha Sanchez and International Restaurants Corp. v. Soleil Builders, Inc., the Fifth District reversed the trial court's summary judgment order. The trial court  entered judgment when affirmative defenses raised by Ms. Sanchez were not considered.  The court stated:

Soleil Builders filed a Motion for Summary Final Judgment.  Several months later, the parties convened for the hearing on the Motion, which resulted in a Partial Summary Final Judgment in favor of Soleil Builders for the total amount it sought.  This judgment is the first reference to Soleil Builders’ motion as having sought only a partial summary judgment:  the court reserved jurisdiction to determine pre-judgment interest and attorney’s fees and “all issues that remain pending before the Court, including deciding the issues raised in the counterclaim filed by the SANCHEZES.”  Sanchez subsequently filed for rehearing of the Partial Summary Final Judgment, contending, among other things, that her affirmative defenses had not been considered at the hearing; Sanchez wanted her defenses heard and the counterclaims considered.  Sanchez argued that since Soleil Builders had failed to refute  her affirmative defenses or address the counterclaims, summary judgment was improper.  Shortly thereafter, Soleil Builders filed its Motion for Summary Final Judgment on Sanchez’s counterclaims.  

When the hearing was held on the second motion for summary judgment, "Soleil Builders essentially contended that the issues  raised in the affirmative defenses and counterclaims had been resolved in the Partial Summary Final Judgment when the court found in favor of Soleil Builders for the total sum it had sought. The trial court entered a Final Summary Judgment on all affirmative defenses and counterclaims without comment." The court continued:

A troubling aspect of this case is the bifurcation of the claims raised in the Complaint from those asserted in Sanchez’s affirmative defenses.  The record does not provide any clue as to how it came to pass that the court rendered only a partial summary final judgment when there was nothing in Soleil Builders’ Motion that would have restricted its Motion to only the counts of its Complaint. Nothing occurred at the summary judgment hearing that suggested that it was agreed or understood that only the claims of the Complaint would be decided and, given the interwoven nature of all of the issues in the Complaint and affirmative defenses, they all should have been decided before summary judgment was entered.  It is well settled that, “[i]n order to be entitled to summary judgment as a matter of law, the party seeking summary judgment must not only establish that no genuine issues of material fact exist as to the party's claims but must also either factually refute the affirmative defenses or establish that they are legally insufficient.” 

Finally, the court concluded:

The problem in entering the Partial  Summary Final Judgment and leaving for another day the issues raised in the affirmative defenses and counterclaims was made all the more apparent when Soleil Builders used the entry of the Partial Summary Final Judgment to successfully argue at the subsequent hearing that the affirmative defenses and counterclaims had already been decided adversely to Sanchez.  In short, the case below was a muddle and reversal is required because of the error that occurred when the trial court entered the two summary judgments without properly addressing the issues raised by the affirmative defenses and counterclaims filed by Sanchez.  Accordingly, the judgments  under review are reversed and this case is remanded for further proceedings.  

Order Denying Fees Based On Flat Fee Agreement With Foreclosure Attorney Affirmed

In Raza v. Deutsche Bank National Trust Company, the Second District determined that the borrower had properly preserved a claim for attorneys fees by pleading entitlement in his answer and filing a motion for fees within thirty days of the involuntary dismissal. However, the borrower did not sufficiently establish the fees incurred. ​

Deutsche Bank argues that Mr. Raza failed to prove a reasonable fee under Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). Principally, it argues that the record contains no information regarding the number of hours spent by Mr. Raza's counsel and the amount of work performed. Mr. Raza responds that the flat fee satisfies any evidentiary burden. We cannot agree.

Emphasis supplied.​ The court later stated that "We do not hold that the absence of time records is fatal to an effort to recover fees under a flat fee arrangement." The flat fee may be sufficient when "combined with expert testimony...if it accounts for all matters addressed in Florida Patient's Compensation Fund." In this case, the fee expert's affidavit "was facially inadequate" Finally, "Even if Mr. Raza did present sufficient evidence, the amount of fees remains in the trial court's discretion"

Foreclosure Judgment Reversed With Instructions To Enter Judgment In Favor Of Defendant Due To Lack of Prosecution

In Spencer v. EMC Mortgage Corp. (3D11-0136), the Third District reversed a judgment with instructions to enter judgment against the Plaintiff/Appellee for lack of prosecution. In July 1997, Spencer stopped making payments on her mortgage. In 2002, a foreclosure complaint was filed that, after a number of motions were filed, "the case languished for thirteen months. The trial court issued a notice of lack of prosecution (order to show cause why the case should not be dismissed), docketed on March 5, 2009, and it scheduled a hearing for the matter for May 29, 2009. There was no record activity in the case during the sixty-day period following the notice of lack of prosecution." Nothing was filed until three days before the hearing, when an unsworn document was filed that "advised the court that the order to show cause had been sent to the offices of prior counsel—not EMC’s successor counsel—and that he had only learned of the notice two weeks earlier by checking the docket." 

The Third DCA noted that "EMC’s brief is more candid. EMC’s counsel actually became aware of the notice of lack of prosecution (docketed March 5, 2009) in “late March or April, during a review of the lower court docket.” EMC’s attorney’s fee affidavit and billing records are even more definitive: a March 30, 2009, time entry narrative states “Review and analyze docket re order entered to show cause why case should not be dismissed for lack of prosecution.” EMC thus had ample time, over a month, within the sixty-day window allowed for record activity that would defeat dismissal. That fact, without more, takes this case out of the 'no notice received' exceptions detailed in Deutsche Bank National Trust Co. v. Basanta, 88 So. 3d 216 (Fla. 3d DCA 2011), and Boosinger v. Davis, 46 So. 3d 152, 154 n.2 (Fla. 2d DCA 2010)."

The court also determined further prosecution would be barred by the statute of limitations. In conclusion, the court stated:

The final summary judgment is reversed. The order denying the motion to dismiss for failure to prosecute the second, 2002 foreclosure case is reversed and vacated. The case is remanded to the trial court for dismissal and for an award of trial and appellate attorney’s fees and costs to Ms. Spencer.

As a footnote the conclusion quoted above, the Third District addressed an interesting issue regarding the availability of fees. The court stated: "In view of the likelihood that this action is barred by the applicable statute of limitations, a party may question whether any motion for attorney’s fees and costs may now be pursued. We conclude that such a motion may proceed based on the analysis in Katz v. Van Der Noord, 546 So. 2d 1047, 1049 (Fla. 1989) (holding that attorney’s fees may be recovered under a prevailing party provision even though the contract itself is determined to be unenforceable)."

In a special concurrence, Judge Schwartz began:

Because of the stumbling, bumbling, and general ineptitude of the mortgagee and its representatives, the appellant has managed to remain in the mortgaged premises without payment for over fifteen years after defaulting in 1997. While it therefore pains me deeply to do so, I concur in the reversal of the summary judgment of foreclosure against her. I do so for two reasons.

His entire special occurrence begins on page 10 of the opinion.

Fifth District Explains (Again) What Is Needed To Obtain Foreclosure Judgment

In Richards v. HSBC Bank USA as Trustee for PHH 2007 (5D10-3895), the Fifth District reversed a foreclosure judgment and succinctly stated what is needed to prevail in a mortgage foreclosure action. The court stated:

The proper party with standing to foreclose a note and mortgage is the holder of the note and mortgage or the holder’s representative. See Gee v. U.S. Bank Nat’l Ass’n, 72 So. 3d 211, 213 (Fla. 5th DCA 2011). Thus, the party seeking foreclosure must present evidence that it holds the note and mortgage in question in order to proceed with its foreclosure action. Id. A plaintiff must tender the original promissory note to the trial court or seek to reestablish the note under section 673.3091, Florida Statutes (2010). Id. If the note does not name the plaintiff as the payee, the note must bear an endorsement in favor of the plaintiff or a blank endorsement. Id. Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff or an affidavit of ownership to prove its status as a holder of the note. Id.

In this case, the note was specifically indorsed to an entity other than HSBC and the relationship between that entity and HSBC was not explained. Therefore, summary judgment was not proper.

Note Merges Into Judgment & "cause’s independent existence terminates"

In Weston Orlando Park, Inc. v. Fairwinds Credit Union (5D11-2260), the Fifth District affirmed the trial Court's judgment with one exception. That exception is copied below:

The trial court could not reserve jurisdiction on Fairwinds’s claims for breach ofthe promissory notes, separate from the claims for foreclosure, because the debtrepresented by the notes had merged into the final judgment. The doctrine of mergerprovides that when a valid and final judgment is rendered in favor of a plaintiff, theoriginal debt or cause of action upon which an adjudication is predicated merges intothe final judgment, and, consequently, the cause’s independent existence terminates.

 

General Allegation Of Fraud Is Not Sufficient To Set Aside Judgment

In Vilvar v. Deutsche Bank Trust Company Americas (4D11-457), the Fourth District affirmed the trial court's order refusing to vacate a judgment. In this case, soon after a final judgment was obtained the defendant filed bankruptcy. After the bankruptcy action was dismissed, the plaintiff moved to amend its judgment to include additional amounts owed and relied upon the affidavit of Cross in obtaining the amended judgment. "One day before the foreclosure sale was to have occurred, Vilvar filed a second petition in bankruptcy, which was also later dismissed. The sale was re-scheduled, but one week before the sale, Vilvar filed a motion to vacate the amended final judgment pursuant to Florida Rule of Civil Procedure 1.540(b). In her motion, Vilvar alleged that Cross’s affidavit “was inaccurate and constituted hearsay” and it “failed to include sworn or certified copies of the very business records upon which” Cross relied. The motion was denied and this appeal followed." The court stated:

What occurred in Freemon is precisely what transpired in this case. Cross’s affidavit stated that she was the assistant vice president of Saxon, which, as the loan servicer, was responsible for collection of the loan and pursuit of any delinquency in payments. Cross went on to explain that she was familiar with Saxon’s books, records, and documents relevant to the allegations in the complaint, and that all of the books, records, and documents concerning the loan were kept by Saxon in the regular course of its business. Cross’s affidavit also stated that she had personal knowledge of the facts regarding the sums due and owing to the bank, and provided a complete breakdown of those sums.

In stark contrast, Vilvar’s motion does not demonstrate fraud or show why any of the alleged facts would entitle her to relief sufficient to set aside the amended final judgment. She does not dispute that she defaulted on her mortgage, and does not allege that the amounts set forth in Cross’s affidavit or that were due and owing are incorrect. Indeed, Vilvar has not specifically alleged any fraud in connection with Cross’s statements in her affidavit regarding the amounts due. Equally as compelling is the fact that Vilvar failed to object to or appeal the final judgment and the amended final judgment. Vilvar waited over a year from the entry of the amended final judgment to take issue with Cross’s affidavit.

Citing to Freemon, Hembd v. Dauria, Flemenbaum v. Flemenbaum, Cady v. Chevy Chase Sav. & Loan, Inc., and Rule 1.120(b), the court stated: "This Court has made it abundantly clear that general allegations of fraud will not support a motion to vacate a final judgment under rule 1.540(b)(3)." 

We likewise find no merit to Vilvar’s claim that Cross’s affidavit did not constitute admissible evidence and that failure to attach any sworn or certified copies of the records upon which she relied should have made the affidavit insufficient under rule 1.510(e). Vilvar’s failure to timely object to the sufficiency of Cross’s affidavit when it was presented on motion for summary judgment is fatal to this claim.