IN TilE SUPREME COLRT OF FLORIDA

Transcription

1 Electronicall. Filed 10/14/JU13 OU"4h P\l I "I RECEE\"E'D. 10/ld/20l3 J M40. Thoma, D Ela]l. Flcrk. Supremc Court IN TilE SUPREME COLRT OF FLORIDA CASE NO. SC L,T, Case No. 3D I CASTEI.O DE VE1.()PMENTS, Ll.C. Petitioner, NAKIA RAW1.S, et al.. Respondents. ON DISCRETIONARY Rl!Vll(W FROM A DECISION OF Tl IE TlIIRD DISTRIC i COURT OF APPEAl. PETITIONER'S13RIEF ON JURISDICTION WESOLOSK1CARI SON, P.A. IIICKS, PORTER, El1FNFlil.D 848 Brickell A t enue & STEIN. P.A. Suite rickellPlaza.9 Iloor Miami. FL Miami, Fl elephone: 1305) elephone: {305) i I acsimile: ( Facsimile: 1305) MJCK5 CRT-ta -BF N'! ' IJ A S11 ik? A RICK. I F.1,21, bth : LOO-4 MiAYI i i " E'1 042I é. " M± 3.-4

2 TABLEOFCONTENTS PAGE I ABLE F AUTHORITIES...11 INTRODUCTION...1 STATEMENT OF THE CASE AND FACTS...2 SUMMARY OF ARGUMENT...4 AGR E CONCLUSION CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE HICKS, PORTER, EBENFELD & STEIN, P.A 799 BRICKELL PLAZA, 9TH FLOOR, MIAMI, FL TEL. 305/37À8171. FAX 305/

3 Cases TABLE OF AUTHORITIES PAGE Beggi v. Ocean Bank, 91 So. 3d 193 (Fla. 3d DCA 2012)...2, 3 C.A. Leasing Serv. Corp. v. Zorn's Equip. Serv., 565 So. 2d 744 (Fla. 5th DCA 1990)...7 Collier v. Canal Ins. Co., 511 So.2d 736 (Fla. 1st DCA 1987)... 7 Dibble v. Dibble, 377 So. 2d 1001 (Fla. 3d DCA 1979) Gas Dev. Corp. v. Royal Oak Builders, Inc., 253 So. 2d 738 (Fla. 4th DCA 1971)...7 Levine v. Gonzalez, 901 So. 2d 969 (Fla. 4th DCA 2005)...7 Miami Airlines, Inc. v. Webb, 114 So. 2d 361 (Fla. 3d DCA 1959)...8 Narrows Corp. v. Boca Ciega Sanitary District, 230 So. 2d 49 (Fla. 2d DCA 1970)...6 Robbins v. Cipes, 181 So. 2d 521 (Fla. 1966)...8 Schmidt v. Mueller, 335 So. 2d 630 (Fla. 2d DCA 1976)...6 Sun State Utilities, Inc. v. Destin Water Users, Inc., 696 So. 2d 944 (Fla. 1st DCA 1997)...7 Other Article V, section 3(b)(3) of the Florida Constitution... 1 Rules Fla. R. App. P passim Fla. R. Civ. P passim 11 HICKS, PORTER, EBENFELD & STEIN, P.A. 799 BRICKELL PLAZA, 9TH FLOOR, MIAMI, FL TEL 305/ FAX 305/

4 INTRODUCTION This brief is filed on behalf of Petitioner, Castelo Developments, LLC ("Castelo"), in support of its notice invoking the Court's conflict jurisdiction under Article V, section 3(b)(3) of the Florida Constitution. The Third District Court of Appeal dismissed Castelo's timely appeal of an order vacating a foreclosure sale, concluding that because Castelo conveyed its interest in the real property at issue to a separate entity while the action was pending, but before the final order was entered or notice of appeal was filed, Castelo lacked standing to prosecute the appeal. The Third District further concluded that the grantee of Castelo's interest in the property could not be substituted in place of Castelo on appeal under Florida Rule of Appellate Procedure 9.360(c)(1), which states "If substitution of a party is necessary for any reason, the court may so order on its own motion or that of a party." The Third District's opinion expressly and directly conflicts with multiple decisions from other district courts of appeal which hold that a transfer of interest in a cause of action pending litigation may be the basis for substitution of parties, but not dismissal of the action. Additionally, the result of the Third District's opinion is that no party was permitted to appeal the trial court's final order. This result, and the court's construction of Appellate Rule 9.360(c), is directly contrary to the substitution rule of civil procedure and the constitutional right to an appeal. 1

5 STATEMENT OF THE CASE AND FACTS Castelo purchased the subject property at a foreclosure sale, and timely appealed a final order vacating the sale. See Slip Op., p.2, attached as an Appendix. The Respondent, Attorneys' Title Insurance Fund, Inc. ("ATIF"), moved to dismiss the appeal on the ground that Castelo lacked standing to prosecute the appeal because Castelo conveyed its interest in the real property to Mortgage Bankers PBD, LLC ("Mortgage Bankers"), by quitclaim deed while the motion to vacate the sale was pending. Id. On November 21, 2012, the Third District issued an opinion granting the motion to dismiss on the authority of Beggi v. Ocean Bank, 91 So. 3d 193 (Fla. 3d DCA 2012). The district court held that when Castelo transferred its interest in the property to a separate entity, it lost standing to prosecute the action and to appeal the adverse final order. The Third District explained: As in Beggi, Castelo Development conveyed its interest in the real property at issue to a separate entity, Mortgage Bankers PBD, LLC by quitclaim deed while the motion to vacate was pending. At the time Castelo filed its notice of appeal and at the time the trial court ruled on the motion to vacate, Castelo had no interest in the condominium unit. Id. (footnote and internal citation omitted).' In Beggi, the mortgagor in two foreclosure actions conveyed the properties to limited liability companies for which he was the sole managing partner following summary judgments of foreclosure, without notifying the court. 91 So. 3d at Ocean Bank, the prevailing bidder for the properties at foreclosure sales, moved to dismiss the mortgagor's appeals of the final judgments of foreclosure for 2

6 The district court denied Castelo's alternative request that Mortgage Bankers be substituted in its place on appeal pursuant to Florida Rule of Appellate Procedure 9.360(c)(1), concluding that the Rule "addresses parties who were present in the lower tribunal." Id., p.3. The Third District explained: We thus construe Rule 9.360(c)(1) to be an enabling device, procedural in nature, by which the parties may react to events relating to the parties already before the trial court. This construction of subsection (c)(1) harmonizes it with the other three subsections of Rule 9.360(c), which pertain to ministerial matters. See Fla. R. App. P (c)(2) (authorizing automatic substitution of a public officer who was named as a party in his or her official capacity but no longer holds the office); Fla. R. App. P (c)(3) (authorizing substitution of the proper party for a party who dies while a proceeding is pending); Fla. R. App. P (c)(4) (authorizing the substitution of the proper party-e.g., a later appointed personal representative-for an interested person who files a notice of appeal in the event the person entitled to file a notice dies before filing). * * * We have found no case in which this or any other court has employed Rule 9.360(c)(1) to allow a party who lacks standing to pursue an lack of standing. Id. at 195. The Third District initially carried the motions with the cases, "so that the parties and circuit court could provide a complete record and briefing on the issues," but ultimately dismissed the actions and refused to allow the limited liability company transferees to be substituted in place of the mortgagor on appeal because the district court found that the transfers of the encumbered properties after final judgment and before the scheduled sales were made as part of an "ill-conceived effort to circumvent or otherwise obstruct the judicial process." Id. at 194, 196. However, the Third District also considered the merits of Beggi's arguments on appeal and found them frivolous. Id. at Here, in contrast, there was no finding or showing that the transfer occurred for an improper purpose or without notice to ATIF or the circuit court. Additionally, the district court did not allow the parties to provide a complete record or briefing on the issues. 3

7 Id., pp.4-5. appeal. Such a rule would shake the foundation of the Florida Rules of Appellate Procedure. The Third District concluded that it was "questionable" whether Mortgage Bankers was a party below. Regardless, the district court held that Mortgage Bankers could not "intervene in the appeal at this time." Id., p.3. Castelo moved for rehearing and rehearing en banc, pointing out that the district court's dismissal and construction of the appellate rule was directly contrary to the substitution rule of civil procedure, which expressly permits a pending action to be continued by the original party in the event of any transfer of interest unless and until substitution is ordered. The motion for rehearing and rehearing en banc was denied without an opinion on September 10, SUMMARY OF THE ARGUMENT The Court should exercise jurisdiction to review the Third District's decision below, which held that Castelo's appeal was required to be dismissed because a transfer of interest occurred while suit was pending. The Third District's decision is contrary to the substitution provision of the rules of civil procedure and expressly and directly conflicts with multiple decisions from other district courts of appeal. The Third District's decision also creates an absurd result that a proper party to continue the action under the rules of civil procedure can nevertheless be held to lack standing to prosecute an appeal. 4

8 Because the Court has jurisdiction, it should also grant review to clarify the interplay between Florida Rule of Civil Procedure and Florida Rule of Appellate Procedure No court has previously interpreted Appellate Rule 9.360(c)(1); however, this Court has held that the rules of appellate procedure should be construed liberally to give effect to substantive rights of appellate review established by the Florida Constitution. Appellate Rule 9.360(c) is consistent with Rule 1.260, and a liberal interpretation of the appellate rule, which allows substitution if it is "necessary for any reason," should at the very least encompass the specific grounds for substitution already permitted by Rule ARGUMENT The Third District's decision is contrary to Florida Rule of Civil Procedure 1.260(c), and expressly and directly conflicts with multiple decisions from other district courts of appeal holding that a transfer of interest while an action is pending gives rise to, at most, a right to substitution and not dismissal. Rule expressly provides: (c) Transfer of Interest. In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. Service of the motion shall be made as provided in subdivision (a) of this rule. Fla. R. Civ. P (c).2 2 All emphasis by underline is supplied unless otherwise noted. 5

9 In Narrows Corp. v. Boca Ciega Sanitary District, 230 So. 2d 49 (Fla. 2d DCA 1970), the appellants sought to contest the validity of a special assessment levied against their property in a sewer improvement district. Id. at 50. Before the final hearing, the appellants lost the property in a foreclosure proceeding. The appellee then filed a motion to dismiss, claiming that since the appellants had lost title to their property they were not the real party in interest. The trial court granted the motion to dismiss, and the Second District reversed, holding that the action could be continued by the original party based upon Rule 1.260(c). The district court explained: Id The real party in interest, who purchased the property after foreclosure, filed a motion for substitution of parties; however, the court granted the motion to dismiss while the motion for substitution was still pending. That is of no importance in this particular matter because the above mentioned rule shows that it is not necessary that such motion be filed since "the action may be continued by or against the original party." Also, in Schmidt v. Mueller, 335 So. 2d 630 (Fla. 2d DCA 1976), the Second District reversed a dismissal entered following a transfer of interest explaining: Id. at 630. The Rule [1.260(c)] is explicit. And once the trial judge concluded the plaintiff had transferred his cause of action to his newly-formed corporation two alternatives were available to the court: (1) to allow the action to be continued in the name of the plaintiff Schmidt; or (2) to allow Paul Schmidt, Inc. to be either substituted for or joined with the original party-plaintiff. 6

10 Similarly, in Sun State Utilities, Inc. v. Destin Water Users, Inc., 696 So. 2d 944 (Fla. 1st DCA 1997), the First District reversed a dismissal based upon a lack of standing based upon Rule 1.260(c) where a close corporation divested its physical assets to another close corporation owned by the same principal during the pendency of litigation. Id. at 944. The district court explained that "[u]nder this rule, transfer of interest in a cause of action pending litigation may be the basis for the substitution of parties, but not dismissal of the action." Id. See also Levine v. Gonzalez, 901 So. 2d 969 (Fla. 4th DCA 2005) (purchasers of chose in action at court-ordered auction were not required to be substituted as parties in the underlying lawsuit; "under the plain language of the rule [1.260(c)], after the transfer, the action may be continued in the name of the plaintiff. Substitution is not necessary, but the trial court may allow substitution upon motion by a party."); C.A. Leasing Serv. Corp. v. Zorn's Equip. Serv., 565 So. 2d 744 (Fla. 5th DCA 1990) ("Clearly, unless the court orders substitution of parties, an action may be maintained by the original party to the action. The trial court should either have permitted the action to be continued in the name of the original party, or should have ordered the successor entity to be substituted as the real party in interest."); Collier v. Canal Ins. Co., 511 So.2d 736 (Fla. 1st DCA 1987) ("Rule 1.260(c) allows Collier, as the original party in the suit, to maintain his action, notwithstanding that Smith may have been the real party in interest."); Gas Dev. 7

11 Corp. v. Royal Oak Builders, Inc., 253 So. 2d 738 (Fla. 4th DCA 1971) (suit was not subject to dismissal based upon transfer of interest during pendency of suit under Rule 1.260(c)).3 The Third District's holding that dismissal of the appeal was required because a transfer of interest occurred while suit was pending cannot be harmonized with the above decisions. If Castelo was permitted to continue the action in its own name as the original party under the applicable rule of civil procedure, then it was clearly a proper party with standing to appeal an adverse final order entered in that action. The result of the Third District's opinion is that no party was permitted to appeal the trial court's order. This result, and the district court's construction of Appellate Rule 9.360(c), is directly contrary to Rule and the constitutional right to an appeal. No Court has previously interpreted Appellate Rule 9.360(c)(1). However, in Robbins v. Cipes, 181 So. 2d 521 (Fla. 1966), this Court held that rules of appellate procedure are to be applied and interpreted liberally to give effect to substantive rights of appellate review established by the Florida Constitution. Id. 3 Accord Miami Airlines, Inc. v. Webb, 114 So. 2d 361 (Fla. 3d DCA 1959) ("[W]e hold that two alternatives are presented where there is a transfer of the cause of action pending suit. The action may be continued in the name of the original party, or the court may upon application allow substitution of the transferee.... But the court has no discretion to terminate the action and to enter adverse judgment on the merits solely because a transfer of interest has been made pending suit."). 8

12 ("Appeals to the Supreme Court and the District Courts of Appeal are constitutionally guaranteed rights in this State. This being true, it is fundamental that statutes or rules regulating the exercise of such rights should be liberally construed in favor of the appealing party and in the interest of manifest justice."). The Committee Notes to the 1977 Amendment to Appellate Rule 9.360(c)(1) similarly demonstrate that the Rule should be interpreted liberally: Subsection (c)(1) substantially simplifies the procedure for substituting parties. This change is in keeping with the overall concept of this revision that these rules should identify material events that may or should occur in appellate proceedings and specify in general terms how that event should be brought to the attention of the court and how the parties should proceed. The manner in which these events shall be resolved is left to the courts, the parties, the substantive law and the circumstances of the particular case. Rule and Appellate Rule were clearly intended to simplify the procedure for substituting parties, in the trial court and on appeal, so that actions may be determined on the merits. Both rules contain provisions permitting substitution to occur if a party dies or when a public officer sued in an official capacity ceases to hold office. However, in place of the express provisions in Rule permitting substitution if a party becomes incompetent or in the case of any transfer of interest, Rule contains a more general provision permitting substitution if it is "necessary for any reason." Fla. R. App. P (c)(1). Rule 9.360(c) is consistent with Rule 1.260, and a liberal construction of the appellate rule should at the very least encompass the specific grounds for 9

13 substitution already permitted by Rule To hold otherwise creates conflict between the rules and leads to incongruous results, as in this case. See Dibble v. Dibble, 377 So. 2d 1001 (Fla. 3d DCA 1979) (holding that Rules of Appellate Procedure and Civil Procedure dealing with the same subject matter should be construed together and in light of each other, to avoid incongruous results). Here, Castelo was a proper party to continue the action in the trial court. It timely appealed an order it had opposed below, as it was entitled to do under the applicable rules of civil and appellate procedure, and had standing to prosecute the appeal. Dismissal of the appeal was wholly improper, and the alternative request of substituting Mortgage Bankers in Castelo's place certainly would not have expanded Castelo's appellate rights, as the Third District concluded, since Castelo was entitled to continue the action in its own name unless and until substitution was ordered. CONCLUSION Castelo submits that the Third District's decision expressly and directly conflicts with decisions from other district courts of appeal, and respectfully requests that the Court exercise its discretionary jurisdiction to review the decision below and to clarify the interplay between Rule 1.260(c) and Appellate Rule 9.360(c). Respectfully submitted, 10

14 WESOLOSKI CARLSON, P.A. HICKS, PORTER, EBENFELD 848 Brickell Avenue & STEIN, P.A. Suite Brickell Plaza, 9th Floor Miami, Florida Miami, FL Telephone: Telephone: (305) Facsimile: Facsimile: (305) BY: /s/ Dinah Stein DINAH STEIN Fla. Bar No SHANNON KAIN Fla. Bar No Appellate Counselfor Petitioner, Castelo Developments, LLC CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by electronic mail and U.S. Mail this 14th day of October, 2013 to: Mario M. Ruiz, Esq., Cohen, Ruiz, P.A., Miami Center, Suite #850, 201 South Biscayne Blvd., Miami, Florida , mmr@cohenruiz.com, aileen@cohenruiz.com; litigation@crpa-service.com; ajc@cohenruiz.com; Elizabeth Bowen, Esq., Hyman, Spector & Mars, LLP, 150 West Flagler Street, 27'" Floor, Museum Tower, Miami, FL 33173, elizabeth@hymanmarslaw.com; Andrew B. Peretz, Esq., Law Offices of Andrew B. Peretz, P.A., 1 E. Broward 11

15 Blvd., Suite #700, Ft. Lauderdale, FL 33301, Kendall Coffey, Esq., 2699 S. Bayshore Drive, Penthouse, Miami, FL 33133, and via U.S. Mail to: Nakia Rawls, 400 Alton Road, #2507, Miami Beach, Florida BY: /s/ Dinah Stein DINAH STEIN Fla. Bar No CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this brief complies with this Court's font requirements. It is typed in Times New Roman 14 point proportional font and is double spaced. BY: /s/ Dinah Stein DINAH STEIN Fla. Bar No

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17 Efjírb 7JBistritt Court of 9ppeal State of Florida, July Term, A.D Opinion filed November 21, Not final until disposition of timely filed motion for rehearing. No. 3D Lower Tribunal No Castelo Developments, LLC, Appellant, vs. Nakia Rawls, et al., Appellees. An Appeal from the Circuit Court for Miami-Dade County, Diane V. Ward, Judge. Hicks, Porter, Ebenfeld & Stein and Dinah Stein and Shannon Kain, for appellant. Cohen Fox and Mario M. Ruiz and Andrew J. Attorneys' Title Insurance Fund, Inc. Cohn, for appellee Before SHEPHERD, CORTINAS and ROTHENBERG, JJ. ORDER GRANTING MOTION TO DISMISS

18 SHEPHERD, J. This is an appeal by Castelo Development, LLC from an order vacating a foreclosure sale. Appellee Attorneys' Title Insurance Fund, Inc. moves to dismiss the appeal on the ground Castelo Development, the purchaser at the sale, lacks standing to prosecute the appeal. We dismiss the appeal on the authority of Beggi v. Ocean Bank, 91 So. 3d 193 (Fla. 3d DCA 2012). As in Beggi, Castelo Development conveyed its interest in the real property at issue to a separate entity, Mortgage Bankers PBD, LLC by quitclaim deed while the motion to vacate was pending. At the time Castelo filed its notice of appeal and at the time the trial court ruled on the motion to vacate, Castelo had no interest in the condominium unit.' See id. at 195. Castelo argues in the alternative that Mortgage Bankers can be substituted in its place at this stage of the proceeding, citing Florida Rule of Appellate Procedure 9.360(c)(1), which states, "If substitution of a party is necessary for any reason, the court may so order on its own motion or that of a party." We disagree. Castelo contends "the property swap with Mortgage Bankers was an arms-length transaction for consideration." The quitclaim deed reflects sixty cents was paid in documentary stamps, which, according to Mortgage Bankers, indicates Castelo deeded the property to Mortgage Bankers for no consideration. Although the transfer might have been made between Castelo and some related entity, this is a distinction without a difference. The fact remains a transfer between two independent entities occurred. 2

19 Florida Rule of Appellate Procedure addresses parties who were present in the lower tribunal. It is questionable whether Mortgage Bankers was a party below. From the record before us, it appears counsel for Mortgage Bankers first appeared below at a hearing on Castelo's motion for reconsideration of the order vacating the foreclosure sale. At the outset of the hearing, counsel for Mortgage Bankers identified himself, but stated he was "not appearing as part of this litigation." However, unable to contain himself, counsel took the bait from Castelo's counsel, who, near the end of the hour-and-ten-minute-long hearing, asked the court to give Mortgage Bankers' counsel "two minutes." Counsel then jumped directly into the fray. We believe this act comprised an abandonment of any prior position he had articulated and constituted a general appearance by Mortgage Bankers. Martin v. Ullman, 555 So. 2d 1232, 1233 (Fla. 3d DCA 1989) (concluding active participation in proceeding constitutes general appearance). If not, however, Mortgage Bankers may not intervene in this appeal at this time. See Tallahassee Democrat, Inc. v. O'Grady, 421 So. 2d 58, 58 (Fla. 1st DCA, 1982) (stating a litigant who was not a party to the proceeding may not intervene after the commencement of review). If Mortgage Bankers did make a general appearance, then it is, of course, time barred from seeking review of the order before us. See Fla. R. App. P (h); Fla. R. App. P (a). 3

20 We thus construe Rule 9.360(c)(1) to be an enabling device, procedural in nature, by which the parties may react to events relating to the parties already before the trial court. This construction of subsection (c)(1) harmonizes it with the other three subsections of Rule 9.360(c), which pertain to ministerial matters. See Fla. R. App. P (c)(2) (authorizing automatic substitution of a public officer who was named as a party in his or her official capacity but no longer holds the office); Fla. R. App. P (c)(3) (authorizing substitution of the proper party for a party who dies while a proceeding is pending); Fla. R. App. P (c)(4) (authorizing the substitution of the proper party-e.g., a later appointed personal representative-for an interested person who files a notice of appeal in the event the person entitled to file a notice dies before filing). The authorities cited by Castelo in response to Attorneys' Title's Motion to Dismiss all are consistent with our interpretation of Rule 9.360(c)(1). For example, in Del Sol v. Office of the Public Defender, 994 So. 2d 1145, 1146 n.1 (Fla. 3d DCA 2008), we corrected a pro se prisoner's scrivener's error in a notice of appeal mistakenly named The State of Florida as the appellee, when it was obvious the prisoner meant to name The Office of The Public Defender as the appellee, and the Public Defender automatically was an appellee by our Rules. Glen Johnson, Inc. v. Resolution Trust Corp., 598 So. 2d 81, (Fla. 2d DCA 1990), is a case in which the court made the ministerial substitution of a receiver in 4

21 place of a savings and loan institution which became insolvent during the pendency of the appeal. Finally, in Dudley v. McConnick, 799 So. 2d 438, 438 n.1 (Fla. 1st DCA 2001), the court merely substituted a man who had attained the age of majority after an appeal filed by his mother. See also Wade v. Singletary, 696 So. 2d 754, 755 n.1 (Fla. 1997) (correcting pro se prisoner's error in naming the Secretary of the Department of Corrections as a respondent in a petition for mandamus by substituting the proper party, the governor, who had been served with a courtesy copy of the petition and filed a motion to dismiss). See eenerally Philip J. Padavano, Florida Appellate Practice (2011 ed). We have found no case in which this or any other court has employed Rule 9.360(c)(1) to allow a party who lacks standing to pursue an appeal. Such a rule would shake the foundation of the Florida Rules of Appellate Procedure. Appeal dismissed. 5