IN THE CIRCUIT COURT OF THE 13th JUDICIAL CIRCUIT IN AND FOR HILLSBOROUGH COUNTY, FLORIDA LIQUIDATED INVESTMENTS, LLC., n/k/a CITICOMPANY HOLDINGS, INC. CASE NO: 2009-xxxxx CA 01 Plaintiff, v. HECTOR R. MORRIS, et al, Defendants / MOTION TO VACATE FINAL JUDGMENT OF FORECLOSURE AND INCORPORATED MEMORANDUM OF LAW COMES NOW, Non-Party Petitioners, NICOLAS POPPIN and MARY J. POPPIN, as current owners of the subject residential property, by and through their undersigned counsel, and hereby file this Motion to Vacate Final Judgment of Foreclosure, and in support thereof, states as follows: SUMMARY OF ARGUMENT On February 7, 2009 this Court entered a Final Judgment of Foreclosure in this case, and ordered the subject property sold at auction. After filing an emergency petition, on March 23, 2009 the Petitioners obtained an Order cancelling the foreclosure sale previously set by the Court. Attached as Exhibit 1 is the Final Judgment of Foreclosure. Attached as Exhibit 2 is the recent Order cancelling the foreclosure sale. Petitioners NICOLAS POPPIN and MARY J. POPPIN (collectively POPPIN ), are the current legal owners of the subject property, who were not joined as defendants in this foreclosure action. Attached as Composite Exhibit 3 is the warranty deed and records from the Hillsborough Property Appraiser, showing the Petitioners as current owners of the subject property. POPPIN, as legal fee-simple owners, have been precluded from asserting any P a g e 1
rights they may have with respect to their property. As set forth below, the failure to join the Petitioners, who are indispensible parties to this action, renders the Final Judgment of Foreclosure void as a matter of law. In addition to the Final Judgment being void, there are two satisfactions of mortgage in the chain of title for this property, which create a presumption that the underlying debt has been satisfied. This issue alone warrants the Final Judgment being vacated in this case. Finally, since purchasing the property in October of 2009, the Petitioners, POPPIN, have made substantial improvements to the property, and the property is currently being renovated, with permits already in place, so that the POPPIN family can move in as soon as possible. As a result, the POPPIN family have an equitable claim in this matter, based on the value of the improvements to the property paid for by POPPIN. MEMORANDUM OF LAW A. STANDARD OF REVIEW FOR VACATING A FINAL JUDGMENT Petitioners file this motion pursuant to Florida Rule of Civil Procedure 1.540, which affords relief from a Final Judgment due to the following: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing; (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) that the judgment or decree is void; or (5) that the judgment or decree has been satisfied, released, or discharged, or a prior judgment or decree upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or decree should have prospective application. The Florida Supreme Court has long recognized Florida's public policy of adjudicating cases on the merits. N. Shore Hosp., Inc. v. Barber, 143 So.2d 849, 852 Page 2
(Fla.1962): It is the rule that the opening of judgments is a matter of judicial discretion and in a case of reasonable doubt, where there has been no trial upon the merits, this discretion is usually exercised in favor of granting the application so as to permit a determination of the controversy upon the merits. Because of this public policy, the Florida Supreme Court has held that a trial court's decision to vacate of a default judgment should be reversed only if the decision constitutes a gross abuse of discretion. Id at 852. Rule 1.540(b)(4) specifically provides for relief from a void Final Judgment. On a proper motion, a trial court must set aside a void judgment, and Florida courts have routinely held that a trial court has no discretion and is obligated to vacate such a judgment. See Horton v. Rodriguez Espaillat Y Asociados, 926 So.2d 436 (Fla. 3d DCA 2006); Johnson v. State, Dept. of Revenue ex rel. Lamontagne, 973 So.2d 1236 (Fla. 1st DCA 2008). A judgment is void as a matter of law - where the court rendering the judgment lacked jurisdiction, or where a party lacked proper notice that the other party applied to the court for a final judgment. Windell v. Dorr, 497 So. 2d 940 (Fla. Dist. Ct. App. 1st Dist. 1986); Outler v. Berman, 234 So. 2d 724 (Fla. 3d DCA 1970); Weber v. Shea, 742 So. 2d 443 (Fla. 4th DCA 1999); Del Conte Enterprises, Inc. v. Thomas Pub. Co., 711 So. 2d 1268 (Fla. 3d DCA 1998). B. THE FINAL JUDGMENT OF FORECLOSURE IS VOID AS A MATTER OF LAW, AS THIS FORECLOSURE ACTION HAS FAILED TO JOIN THE FEE-SIMPLE OWNERS OF THE PROPERTY AS DEFENDANTS. For over a hundred years, Florida courts have recognized that in cases where the legal title holder of the property has not been joined as a party, the foreclosure proceeding is void. See English v. Bankers Trust Co. of California, N.A., 895 So.2d Page 3
1120 (Fla. 4 th DCA 2005), citing Jordan v. Sayre, 3 So. 329, 330 (Fla. 1888). In English, the mortgagee (Bankers Trust), sued for foreclosure and named only the original owner and mortgagor (English). After obtaining a final judgment and title to the property, the mortgagee (Bankers Trust), learned for the first time that the property had been transferred to a new owner (Lena Investments, Inc). The Fourth DCA affirmed the lower court s ruling that the foreclosure action was void because the action failed to include the current fee simple owner of the property. The court noted that the mortgage company s remedy in this situation was to re-file its foreclosure action, in order to include all necessary parties, including the new owner of the property. See English at 1121(holding that since the first foreclosure sale was invalid, because the legal title holder was not a party, then a second foreclosure action is necessary to enforce the mortgagee s rights.) The Fourth DCA s holding in English is consistent with over a hundred years of case law on the issue, which holds that the owner of the fee simple title is an indispensible party to a foreclosure action. See Davanzo v. Resolute Ins. Co., 346 So.2d 1227 (Fla. 3d DCA 1997); English v. Bankers Trust Co. of California, N.A., 895 So.2d 1120 (Fla. 4 th DCA 2005); Community Fed. Svgs. and Loan Ass'n v. Wright, 452 So.2d 638, 640 (Fla. 4th DCA 1984); T-R Indian River Orange Co. v. Keene, 124 Fla. 343, 168 So. 408 (Fla. 1936). In this case, by failing to join the current legal owners of the property in this action, the Final Judgment of Foreclosure is void as a matter of law, and must be set aside and vacated. C. THE SATISFACTIONS OF MORTGAGE IN THE CHAIN OF TITLE WARRANT THE SETTING ASIDE OF THE FINAL JUDGMENT OF FORECLOSURE Attached as Exhibits 4 and 5 to this motion are two (2) Satisfactions of Page 4
Mortgage, executed by the original mortgagee, American Brokers Conduit, and its nominee, Mortgage Electronic Registration Systems, Inc, which evidence that the underlying mortgage in this case which Plaintiff seeks to foreclose has already been satisfied. If the attached Satisfactions of Mortgage are valid which the law presumes they are - then the Plaintiff has no basis to foreclose on the subject property, as its claims have already been satisfied in full. D. A SATISFACTION OF MORTGAGE RECORDED IN PUBLIC RECORDS RAISES THE LEGAL PRESUMPTION THAT THE UNDERLYING DEBT HAS BEEN PAID. The law in Florida is that a satisfaction of mortgage recorded in the public records creates a presumption that the underlying debt has been paid. While this presumption of payment is rebuttable, it is the Plaintiff s burden to overcome that presumption. See Cooper v. Wolkowitz, 375 So.2d 1099 (Fla. 3d DCA 1979), citing Speier v. Lane, 254 So. 2d 823 (Fla. 3d DCA 1971). In Federal Deposit Ins. Corp. v. Valente, 553 So.2d 763 (Fla. 2d DCA 1989), the Second DCA affirmed this principle, and specifically acknowledged that the recordation of a release in the public record is prima facie evidence of the discharge of the underlying debt. The court noted that the contesting party (here, the Plaintiff), may overcome that presumption by proving fraud, accident or mistake, but that burden rests on the contesting party. In this case, the existence of the two satisfactions of mortgage in the public records of Hillsborough County, creates a rebuttable presumption that the underling debt has been paid. While the Plaintiff may contend that those satisfactions were fraudulently recorded, those are issues to be resolved through discovery and trial, which warrant the setting aside of the final judgment in this case. Page 5
E. PETITIONERS, AS CURRENT OWNERS OF THE PROPERTY, HAVE BEEN DENIED BASIC DUE PROCESS. Again, this is not a case where a named defendant / homeowner has filed a last ditch effort to delay a foreclosure sale. Here, the POPPIN were never joined in this action, and only recently learned that their home was subject to a Final Judgment of Foreclosure. Article I, Section 9 of the Florida Constitution guarantees the right to due process of law, which requires that interested parties have fair notice and a reasonable opportunity to be heard before a judgment or decree is rendered. See Shappell v. Guardianship of Naybar, 876 So.2d 690 (Fla. 2d DCA 2004). POPPIN, as owners of the property, clearly have an interest in the foreclosure of their home, and have standing to request this Court set aside the final judgment and require the plaintiff to properly join POPPIN in this suit. See Gen. Dev. Corp. v. Kirk, 251 So.2d 284 (Fla. 2d DCA 1971)( standing is that sufficient interest in the outcome of litigation which will warrant the court s entertaining it. ). This foreclosure case has been pending before the Court for almost four (4) years, and in light of the satisfactions of mortgage which are all clearly apparent in the chain of title, the Plaintiff was, at the very least, obligated to update its prior title search in this case, in order to verify that the current, legal owner of the property was a party to the foreclosure action. F. PETITIONERS, AS CURRENT OWNERS OF THE PROPERTY, HAVE MADE SUBSTANTIAL IMPROVEMENTS TO THE PROPERTY, AND HAVE EQUITABLE CLAIMS TO BE ASSERTED IN THIS ACTION. In this case, since purchasing the property, POPPIN has made substantial improvements to the property. Even assuming, for the sake of argument, that the Plaintiff has a valid mortgage Page 6
interest in the property, then POPPIN is entitled to assert an unjust enrichment and other equitable claims against the Plaintiff, as result of the increase in value that POPPIN has conferred on the property. In light of the aforementioned due process violations, and POPPIN recent improvements to the property, the Final Judgment is also subject to being vacated pursuant to Rule 1.540(b)(4), which provides relief in cases where it is no longer equitable that the judgment or decree should have prospective application. CONCLUSION Again, the Petitioners, POPPIN, currently stand to lose their home by virtue of a lawsuit they were not even parties to, and which they had no prior knowledge of. The Final Judgment of Foreclosure must be vacated in this case, because (1) by failing to join the current fee-simple owners of the property, the Final Judgment of Foreclosure is void as a matter of law; (2) the title record in this case also shows two fully executed Satisfactions of Mortgage, and there is therefore substantial evidence that the plaintiff s mortgage has already been satisfied, in which case the plaintiff lacks any basis to maintain this foreclosure action. Finally, the POPPIN fundamental right of due process has been violated. As current fee-simple owners of the property who stand to lose their home, the Petitioner s were entitled to notice and an opportunity to be heard prior to the final judgment of foreclosure being entered against their property. WHEREFORE, Petitioners, THEODORE POPPIN and CONSTANCIA J. POPPIN, respectfully requests this Court enter an order vacating the final judgment in this case, and grant any other relief this Court deems just and appropriate. Page 7