IN THE SUPREME COURT OF FLORIDA

Transcription

1 IN THE SUPREME COURT OF FLORIDA BEVERLY PENZELL and BANK OF AMERICA N.A., CASE NO. LOWER TRIBUNAL: THIRD DISTRICT COURT OF APPEAL DCA NO. 3D CONSOLIDATED DCA NO. 3D Petitioners versus STATE OF FLORIDA, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Respondent PETITIONERS= BRIEF ON JURISDICTION Filed By: Victor K. Rones # Attorney for Petitioners, Beverly Penzell and Bank of America N.A NE 18 Avenue N Miami Beach, Florida (305) TABLE OF CONTENTS

2 Cover Page...i Table of Contents...ii Table of Citations...iii Statement of Case and of the Facts Summary of Argument...3 Argument Issue One: Whether the decision (that the judgment lien of DEP was entitled to priority over the previously recorded mortgage of Penzell) of the Third District Court of Appeal rendered September 7, 2005 expressly and directly conflicts with the decisions of this court (See Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985) and other district courts of appeal on the same question of law [See Sarasota County v. Andrews 573 So2d 113 (2DCA 1991) Issue Two: Whether the decision (that the judgment lien of DEP was entitled to priority over the previously recorded mortgage of Penzell) of the Third District Court of Appeal rendered September 7, 2005 expressly and directly conflicts with the decision of another district court of appeal on the same question of law [See First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003)...6 Conclusion... 7 Certificate of Service...8 Certificate of Font Compliance...8 ii TABLE OF CITATIONS OF AUTHORITY Citation: Page

3 Florida Statutes: Fla. Stat (2) 2,3,4,6,7 Florida Appellate Rules of Procedure: Rule 9.030(a)(2)(A)(iv) of the Florida Rules of Appellate Procedure 2 Florida Cases: Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985) ii,3,4,5,7 First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003) ii,3,6,7 Racetrac Petroleum Inc. v. Delco Oil, Inc. 721 So2d 376 (5DCA 1998) 3 Sarasota County v. Andrews 573 So2d 113 (2DCA 1991) ii,3,4,5,7 Attorney General=s Opinions: Attorney General Opinion (AGO) iii Statement of Case and of the Facts This case arises from an order distributing the excess proceeds of a tax sale to the State of Florida, Department of Environmental Protection (DEP) and

4 determining that a judgment lien held by DEP takes priority to such proceeds over a previously recorded mortgage. References are set forth in brackets and cite to the page number of the appellate opinion which is attached in the appendix. Dana Investments Inc. (Dana) was the owner of certain property, subject to a first mortgage recorded in favor of Bank of America N.A (BA) [2 and 3]. On February 12, 2003, DEP obtained a final judgment against Dana for the illegal discharge of hazardous substances. [2] The final judgment granted injunctive relief ordering Dana and other defendants (not BA) to immediately undertake assessment activities as to the contamination, conduct cleanup thereof and provide documentation reflecting compliance with the foregoing within thirty days [2]. In the event of default, DEP was authorized to proceed with said actions and Dana and other defendants (not BA) would be liable for DEP=s expenses [2]. Jurisdiction was retained for enforcement by contempt as well as assessment of costs and appropriate civil penalties [2]. In the interim, real property taxes were not paid and a tax sale auction was held on December 3, 2003 at which M & M Construction Group Corporation (M & M) purchased the property [3]. The proceeds of sale were disbursed to pay the property taxes and $122, was left [3]. Subsequent to the tax sale, DEP obtained a final judgment for $52, in civil penalties against Dana [2]. Furthermore, on January 20, 2004, BA assigned its mortgage interest unto Beverly Penzell (APenzell@) [3]. 1 M & M filed a quiet title action on its tax deed [3]. Penzell intervened and sought distribution of the surplus proceeds to her as assignee of the BA mortgage [3]. The trial court issued an order to show cause why said funds should not be disbursed to Penzell [3]. The DEP responded asserting entitlement to all excess proceeds of the tax sale based on its judgment lien(s) [3]. The trial court denied

5 Penzell=s motion and ordered distribution of the excess proceeds to the DEP [3]. Penzell and BA appealed the trial court order to the Third District Court of Appeal [3]. The Third District Court of Appeal held (1) that the judgment lien of DEP constituted Aa lien of record held by a governmental unit against the property@ under Fla. Stat (2) [4]; (2) that the judgment lien of DEP was entitled to priority over the previously recorded mortgage of Penzell [4]. Penzell and BA then filed the notice to invoke this court=s discretionary jurisdiction under Rule 9.030(a)(2)(A)(iv) of the Florida Rules of Appellate Procedure. 2 SUMMARY OF ARGUMENT The opinion of the Third District Court of Appeals holds that the DEP=s final judgment takes priority over BA=s previously recorded mortgage under Fla. Stat (2004). This holding directly and expressly contradicts the decision of Sarasota County v. Andrews 573 So2d 113 (2DCA 1991) which prohibits the

6 subordination of a previously recorded mortgage to a later recorded government lien. The holding further directly and expressly contradicts the decision of Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985) providing that priority is established by priority in recording. Furthermore, the classification of DEP=s final judgment as a Alien of record held by a governmental unit against the property@ by the Third District Court of Appeal directly and expressly conflicts with the Fourth District Court of Appeal decision in First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003). The Third District Court of Appeal=s opinion is in direct conflict with the decisions set forth above and thus, it is requested that this Honorable Court invoke its discretionary jurisdiction on this matter. Note that since the decision reset on questions of law, the review is de novo under Racetrac Petroleum Inc. v. Delco Oil, Inc. 721 So2d 376 (5DCA 1998). 3 ARGUMENT AS TO ISSUE ONE: Whether the decision (that the judgment lien of DEP was entitled to priority over the previously recorded mortgage of Penzell) of the Third District Court of Appeal rendered September 7, 2005 expressly and directly conflicts with the decisions of this court (See Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985) and other district court of appeal on the same question of law (See Sarasota County v. Andrews 573 So2d 113 (2DCA 1991).

7 Assuming that DEP=s judgment constitutes a Alien of record held by a governmental unit against the property,@ the conflict created by the Third District of Appeal opinion focuses on the issue of priority under Fla. Stat (2004). The well established rule governing priority of lien interests has now been changed by the present case. This precise problem was raised in Attorney General Opinion (AGO) 91-64: AThis office has consistently stated that mortgagees and lienholders of record should be satisfied in full, each according to its priority, before applying the excess to a junior lien. As stated by the court in Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company, >the well established rule governing priority of lien interests is the first in time is the first in right... Therefore, the excess proceeds of the sale must first be distributed to the mortgagees and lienholders of record according to their priority. Nothing in the statute authorized the clerk to pay junior lienholders prior to recorded superior liens.@ Simply stated, the BA mortgage (assigned to Penzell) was recorded first in time prior to DEP=s judgment; however, the present opinion held that such a judgment takes priority over the earlier recorded mortgage. Thus, this decision conflicts directly with the first in time requirements of Bank of South Palm 4 Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985). Such a conflict is brought into sharp focus with the opinion of the second district in Sarasota County v. Andrews 573 So2d 113 (2DCA 1991). In the Sarasota County case, the county sought to subordinate an existing mortgage to a subsequent lien, just as in the instant case. In contrast to the present case, the Second District Court of Appeals held that such action was improper and impermissible. Thus, the Sarasota County v. Andrews decision, protects and

8 respects the priority of a previously recorded mortgage in contrast to the instant decision of the Third District holding to the contrary. 5 ARGUMENT AS TO ISSUE TWO: Whether the decision (that the judgment lien of DEP constitutes a Alien of record held by a governmental unit against the property@ under Fla Stat (2) (2004) as opposed to merely a judgment lien) of the Third District Court of Appeal rendered September 7, 2005 expressly and directly conflicts with the decision of another district court of appeal on the same question of law [See First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003). An analysis of the term Alien of record held by a governmental unit against the property@ was made by the Fourth District Court of Appeals in First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003)., the types of government liens were outlined including special assessments which serve a valid public purpose.

9 DPR did not assess a lien such as a special assessment but instead merely sued and obtained a judgment. The definition of the term Alien of record held by a governmental unit against the property@ does not encompass a judgment or judgment lien under the Fourth District decision of First Nationwide Mortgage Corporation v. Brantley cited above. Thus conflict is now presented as to whether a judgment recovered by a governmental entity will act now to have priority over a previously recorded final judgment. 6 CONCLUSION The decision of the Third District Court of Appeals in this case expressly and directly conflicts as follows: (1) First, the decision holds that the DEP=s final judgment takes priority over BA=s previously recorded mortgage under Fla. Stat (2004). This holding directly and expressly contradicts the decision of Sarasota County v. Andrews 573 So2d 113 (2DCA 1991) as well as Bank of South Palm Beaches v. Stockton, Whatley, Davin and Company 473 So2d 1358 (4DCA 1985) which employ a Afirst in time recording first in right priority scheme@. These rulings prohibit the subordination of a previously recorded mortgage to a later recorded government lien. (2) Second, the decision holds that a Alien of record held by a governmental unit

10 against the under Fla Stat (2) (2004) includes a recorded judgment in favor of a governmental entity. First Nationwide Mortgage Corporation v. Brantley 851 So2d 885 (4DCA 2003) restricts the definition of such liens to liens such as special assessments and waste liens but not the merely holding of a claim a governmental unit. Thus, discretionary jurisdiction should be granted to resolve the foregoing conflicts and thus permit mortgage holders and providers with clarification as to whether their previously recorded mortgages are now at risk of loss, regardless of the priority of recording. 7 CERTIFICATE OF SERVICE The undersigned certifies that a copy of the within appendix was provided by mail on this day of January, 2006 unto Aliki Moncrief, Senior Assistant General Counsel, 3900 Commonwealth Blvd. MS 35, Tallahassee, Florida By: Victor K. Rones # Attorney for Petitioners, Beverly Penzell and Bank of America N.A NE 18 Avenue N Miami Beach, Florida (305) CERTIFICATE OF FONT COMPLIANCE

11 The undersigned certifies that this brief complies with the font requirements of Rule 9.210(a)(2) of the Florida Rules of Appellate Procedure. By: Victor K. Rones # Attorney for Petitioners, Beverly Penzell and Bank of America N.A NE 18 Avenue N Miami Beach, Florida (305) IN THE SUPREME COURT OF FLORIDA BEVERLY PENZELL and BANK OF AMERICA N.A., CASE NO. LOWER TRIBUNAL: THIRD DISTRICT COURT OF APPEAL DCA NO. 3D CONSOLIDATED DCA NO. 3D Petitioners versus STATE OF FLORIDA, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Respondent

12 PETITIONERS= APPENDIX TO BRIEF ON JURISDICTION Filed By: Victor K. Rones # Attorney for Petitioners, Beverly Penzell and Bank of America N.A NE 18 Avenue N Miami Beach, Florida (305)

13 TABLE OF CONTENTS Cover Page... 1 Conformed copy of Decision of District Court of Appeals... 2 Certificate of Service... 7

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