IN THE FLORIDA SUPREME COURT. Lower Tribunal Case Number: 1D Case Number: SC05-957

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1 IN THE FLORIDA SUPREME COURT Lower Tribunal Case Number: 1D Case Number: SC ANN LYON, ETC., vs. Petitioner/ Appellant, KEITH SANFORD, ET AL. Respondent/ Appellee. AMENDED PETITIONER S BRIEF ON JURISDICTION W. DAVID VAUGHN, P.A. Florida Bar No.: North Main Street Jacksonville, FL Telephone: (904) Telecopier: (904)

2 TABLE OF CONTENTS STATEMENT FACTS...Pg. 1 SUMMARY OF ARGUMENT...Pg. 4 ARGUMENT...Pg. 5 CONCLUSION...Pg. 9 CERTIFICATE OF SERVICE AND COMPLIANCE APPENDIX: 1 ST DCA OPINION STATEMENT OF FACTS AND THE CASE The following facts are derived from the opinion of the court below, a copy of which is included in the appendix. Katherine A. Lyon, appellant, now through her guardian Ann Lyon, defaulted on two $50, home equity mortgages securing a debt on her home in early The Bank of New York, filed a complaint for foreclosure of the mortgages and, following appellant s failure to answer, the trial court entered a final judgment of foreclosure. On August 1,2003, the property was sold to appellee Keith Sanford for a bid of $120,001.00, and certificate of title was issued to him. The bid was for about one-third the fair market value of Ms. Lyon s home. On August 13, 2003, within nine days of the buyer s application for writ of possession of the property, Thomas Rosenblum, Esquire appeared on behalf of Ms. Lyon and immediately filed verified motions to vacate the judgment of foreclosure and to set aside the judicial sale. In

3 addition to alleging her mental incapacity to manage her property, Lyon stated that in the event the court granted hearing on the motion, she would immediately post a cash bond with the clerk of the court in the sum of $130,000.00, in order to protect the interest of the buyer at the judicial sale. Attached to the motion to vacate was an affidavit of Lee Lyon, appellant s cousin and financial advisor, who averred that as of January 1, 2003, Katherine Lyon had substantial liquid assets, and no financial impediment existed that precluded her from paying off the two mortgages in full. He also stated that he did not learn of the foreclosure suit until after appellant had been served with the writ of possession. During oral argument before the First DCA, appellee s counsel represented that the trial court afforded appellant a full hearing on her motions for emergency stay of the writ of possession and to vacate the foreclosure sale. Based on these representations and the absence of a hearing transcript, the First District Court of Appeal issued an order directing respective counsel for appellant and the buyer, appellee Sanford, to prepare a statement of the evidence or proceedings which took place at the August 22, 2003 hearing in the circuit court on the motions for emergency stay and to vacate the foreclosure sale. The order further directed respective counsel to submit these statements to the trial court for settlement and approval. The circuit court complied with the First District Court of Appeal s order by filing a statement of the proceedings that were conducted on August 22, The statement by the circuit court did not support appellee s argument

4 that appellant had the opportunity to offer evidence at August 22 hearing in support of her motions. The statement reflects that Thomas F. Rosenblum, Esquire, newly retained counsel for appellant, presented the emergency motions to the trial court on Friday morning, August 22, The trial court advised counsel that time was available that morning to discuss the motions if opposing counsel could attend. Appellant s counsel located the buyer, Mr. Sanford, and his attorney, and the three met in the judge s chambers on the same morning as the motions were presented, i.e., on August 22, 2003, at 11:00 a.m. In pertinent part, the trial court s statement provides: 4. There was no court reporter present for the hearing. The court reviewed the motions and either the docket or court file and noted that valid service was had, a default was entered, and all pleadings post-default were served on the defendant. The court further noted that Defendant sought relief from the court only after the property had been sold and certificate of title issued. 5. Mr. Rosenblum alluded to emotional problems of the defendant, but confirmed that she had never been declared incompetent. 6. The court denied relief that day, August 22, 2003, confirmation of which is attached. The lower court s recitation of the facts indicates that no testimony was taken at the emergency hearing. The Verified Motion to Vacate Sale and Set Aside Final Judgement, attached to the circuit court s statement of proceedings, in addition to setting out details of

5 Ms. Lyon s mental condition, averred that appellant can provide experts to show that as a result of [her] illnesses, she exhibits selfdestructive behavior, a severely low self-esteem, and denial. Ms. Lyon s motion to vacate the judgement of foreclosure also alleged that her counsel would produce an affidavit from a treating psychiatrist who could establish the existence of her mental illness. At the so-called hearing on August 22, 2003, the only evidentiary matter before the court were the two verified motions signed by Rosenblum and Ms. Lyon. These verified motions were not refuted - there were no opposing affidavits. The only evidence before the circuit court was contained in the verified motions, and these motions established that Ms. Lyon was mentally incapacitated. SUMMARY OF ARGUMENT The lower court majority addressed a situation wherein the circuit court had entered its decision on Ms. Lyon s motion for Rule 1.540(b) relief on evidence that was undisputed. The majority opinion is based on the premise that a circuit court s decision on Rule 1.540(b) motion is always a question of fact. This is an erroneous proposition and totally contrary to the Florida Supreme Court s longstanding rule as stated in its commentary to the Florida Rules of Civil Procedure that where the evidence is undisputed, a Rule 1.540(b) decision is a pure question of law and not fact. The majority opinion should have addressed the circuit court s decision as a question of law and therefore entirely reviewable. ARGUMENTI THE OPINION BELOW EXPRESSLY AND DIRECTLY CONFLICTS WITH THE FLORIDA SUPREME COURT S COMMENTARY TO THE AMENDMENTS TO THE FLORIDA RULES OF CIVIL PROCEDURE (TWO YEAR CYCLE) FOR 2003 REGARDING THE APPLICATION FOR RELIEF UNDER RULE 1.540(b) IN THAT THE CIRCUIT COURT S DECISION ON MS. LYON S RULE 1.540(b) MOTION INVOLVED A PURE QUESTION OF LAW AND NOT FACT. THE EVIDENCE WAS UNDISPUTED THAT MS. LYON S MENTAL CONDITION PREVENTED HER FROM REACTING TO THE FORECLOSURE, AND THEREFORE THE COURT BELOW WAS WRONG IN STATING THAT RULE (b) ISSUES ARE ALWAYS QUESTIONS OF FACT AND NOT OF LAW.

6 The majority opinion in the case below bases its decision on what appears to be an unshakeable principle of law embraced by the Third District Court of Appeal in a recent decision: Whether relief should be granted pursuant to rule is a fact specific question and the trial court s ruling should not be disturbed on appeal absent adverse abusive discretion. LPP Mortgage v. Bank of America, N.A., 826 So. 2d (Fla. 3 rd DCA 2003). The LPP Mortgage Limited case deals with a circuit court ruling on a Rule 1.540(b) motion after a full blown evidentiary hearing with live witness testimony. The majority opinion s reliance on this case is at complete odds with the Florida Supreme Court s long heldprinciple that when facts are essentially undisputed, the legal effect of the evidence will be a question of law. The Florida Supreme Court s commentary on a Rule 1.540(b) motion clearly sets forth this principle in the 2003 edition of its Amendments to the Florida Rules of Civil Procedure (Two Year Cycle): The application of the [Rule 1.540(b)] relief provision is generally within the discretion of the court except when questions of law are involved. For example, if judgement or decree is void as a matter of law, no discretion would exist but to give proper relief. Id. (emphasis supplied) Hence the majority s reliance on the LPP Mortgage Limited case is inappropriate because the circuit court had only undisputed evidence before it. In Town of Palm Beach v. Palm beach County, 460 So. 2d 879 (Fla. 1984) the Supreme Court of Florida clearly stated this long standing rule regarding questions of law as follows: What is at issue is the legal conclusion to be drawn from this fact. As this court has consistently stated, where the facts are

7 essentially undisputed, the legal effect of the evidence will be a question of law. Id. It is very easy to reconcile LPP Mortgage Limited with Town of Palm Beach, in that the former dealt with an appeal after there had been a full blown evidentiary hearing with conflicting factual evidence, while Town of Palm Beach addressed the situation where there was no factual dispute. The strong dissent in Ms. Lyon s case below makes this point emphatically: It appears to me that the circuit court concluded, that regardless of what evidence appellant could conceivably present, she would not, under any set of facts, be entitled to the remedy that she sought. If this was the effect of the court s ruling, it was, in my judgment, erroneous. Because I am of the firm conviction that appellant s motion and supporting affidavits reveal a colorable basis for relief, I would reverse and remand the lower court s order denying appellant Katherine A. Lyon s motion, filed pursuant to Florida Rule of Civil Procedure 1.540(b), to set aside a mortgage judicial sale and to cancel certificate of title on the ground of excusable neglect or mistake. In my judgment, the lower court s denial of the motion without affording appellant a hearing at which evidence could be presented supporting her motion to vacate was an abuse of discretion. (See, Dissent)(Emphasis supplied) II. REMARKABLY THE MAJORITY IN THE COURT BELOW STATES THAT THE ISSUE AS TO WHETHER AN UN-ADJUDICATED MENTAL INCAPACITY CAN SERVE AS A BASIS FOR RELIEF ON A RULE 1.540(b) MOTION IS AN ABSTRACT QUESTION THAT DOES NOT HAVE TO BE REACHED.

8 The court below offered the observation that under Rule 1.540, the First DCA does not have to address questions of law as long as some sort of a hearing occurred at the circuit court level: On appeal, counsel, now representing Ann Lyon, Katherine s afterappointed guardian, argues that a homestead owner s putative, unadjudicated incapacity to make mortgage payments and respond to legal process, because of a dissociative disorder since childhood causing self-destructive behavior, a severely low self-esteem, and denial, can be basis to set aside a default foreclosure judgment and judicial sale. But this abstract question is not before us for decision. (See, Majority Opinion). In the majority opinion there is an assertion that the circuit court judge took into account competing equities. This is a strange remark in light of the fact that the only evidentiary matter put before the court were the verified motions submitted by Ms. Lyon s first counsel Thomas Rosenblum. Rosenblum attested to the mental incompetency of Ms. Lyon. He states that Ms. Lyon suffered from a bipolar condition that impeded her capacity to respond to foreclosure, even though she was financially capable of fully redeeming the two mortgages at issue. Counsel for third party bidder Keith Sanford submitted no opposing affidavit at August 22, 2003 hearing. The circuit court had before it only the un-refuted verified motions which established that Ms. Lyon had an un-adjudicated mental incapacity that prevented her from responding to the foreclosure. Given that the verified motions were un-refuted, on what basis did the circuit court make its decision? What were the competing equities? Circuit court Judge Bowden in his Rule statement recalls that he reviewed Rosenblum s motions and either the docket or court

9 file, noted that Rosenblum alluded to emotional problems of Ms. Lyon, and that Rosenblum confirmed that [Ms. Lyon] had never been declared incompetent. It is this sentence in Judge Bowden s Rule statement that reveals his true reservations about granting relief to Katherine. It is evident that Judge Bowden deemed an un-adjudicated mental incompetency to be a non-valid basis for Rule 1.540(b) relief. Although Judge Bowden does not expressly say this, it is the only logical inference one can draw from the sparse language of his statement. There were no factual disputes before him. He had only the un-refuted verified pleadings before him. That being the case, Judge Bowden made a ruling on a question of law that was erroneous and, therefore, was an abuse of discretion. The majority s reliance upon the vague concept of competing equities simply runs counter to the Florida Supreme Court s longstanding mandate to the District Courts of Appeal that they step up to the plate and fully review a circuit court s decision when it is a pure question of law. Contrary to Judge Bowden s opinion, an un-adjudicated incompetency can serve as a basis for granting Ms. Lyon relief under Rule 1.540(b) per Jax Sani Serva System, Inc. v Burkett, 509 So. 2d 1251 (Fla. 1 st DCA 1987). In Jax Sani, the First DCA declared that even though the party seeking relief had not been adjudicated incompetent (W)e are of the view that excusable neglect can be grounded on the psychological condition of the party seeking relief. Jax Sani, id., at CONCLUSION

10 The court is respectfully urged to accept jurisdiction. W. DAVID VAUGHN, P.A. W. David Vaughn, Esquire Florida Bar No.: North Main Street Jacksonville, FL Telephone: (904) Telecopier: (904) AMENDED CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing has been furnished to Lawrence Bernard, Esquire, 300 West Adams Street, Suite 300, Jacksonville, Florida 32202, by U.S. Mail on this 28th day of June, W. David Vaughn APPELLATE CERTIFICATE OF COMPLIANCE WITH FLA.R.App.P Ala. R. App. P COMES NOW the Appellant by and through the undersigned counsel and hereby certifies that the Brief submitted on her behalf was in compliance with FLA.App.P Ala.R.App. P (a) (2). W. DAVID VAUGHN, P.A. W. David Vaughn, Esquire Florida Bar No.: North Main Street Jacksonville, FL Telephone: (904) Telecopier: (904)

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