3709 N. FLAGLER DRIVE PRODIGY LAND TRUST, MANGO HOMES LLC, as Trustee, Appellant,
BANK OF AMERICA, N.A., DEREK HOVEY, JENNIFER HOVEY a/k/a JENNIFER COOK, CITY OF WEST PALM BEACH, FLORIDA, et al., Appellees.
final until disposition of timely filed motion for rehearing.
from the Circuit Court for the Fifteenth Judicial Circuit,
Palm Beach County; Donald W. Hafele, Judge; L.T. Case No.
Michael Farrar, Doral, for appellant.
brief filed for appellees.
challenges the trial court's entry of final judgment of
foreclosure against its interest in the property which is
subject to a mortgage. The trial court concluded that
appellant, which received title to the property by quitclaim
deed prior to the institution of foreclosure proceedings,
could not contest the appellee's standing to bring the
foreclosure action. We hold that appellant was a proper party
to the proceedings; thus, the court erred in refusing to
allow appellant to contest the appellee's standing to
bring the foreclosure proceeding. We reverse.
2009, the appellee Bank of America ("the Bank")
originally sought to foreclose on a mortgage given to Amnet
Mortgage Inc., d/b/a American Mortgage of Florida, Inc., by
Jennifer and Derek Hovey on property owned by them. But in
2012, the Bank voluntarily dismissed the proceedings. The
Hoveys transferred title to 3709 N. Flagler Dr. Prodigy Land
Trust ("the Trust" or "appellant") by
quitclaim deed in August 2013. The next month the Bank
refiled its foreclosure complaint, but it failed to make
appellant a party. The lis pendens was filed after
the transfer of title to appellant.
securing a default final judgment, the property was sold and
certificate of sale issued in February 2015. Discovering the
sale, appellant moved to intervene and to vacate the sale and
judgment. The court granted the motion and vacated the final
judgment. In June 2015, the Bank refiled the complaint,
adding appellant as a party. Appellant answered and raised as
an affirmative defense the Bank's lack of standing to
enforce the note.
trial, the Bank asserted that appellant was not a party to
the note or mortgage, and thus should not be allowed to
contest anything other than damages at trial. Appellant
contended that it had the right to contest the Bank's
standing to foreclose on the mortgage. The court also
mistakenly believed that appellant was an intervenor instead
of a party to the proceeding. Citing to Whitburn, LLC v.
Wells Fargo Bank, N.A., 190 So.3d 1087 (Fla. 2d DCA
2015), the trial court ultimately reasoned that appellant did
not have standing to contest the Bank's ability to
foreclose. Further, there was no finding by the court that
the transfer of ownership to appellant via quitclaim deed was
done in an attempt to frustrate the timely resolution of the
foreclosure action. The court required the Bank to prove only
the amount of damages and did not entertain appellant's
arguments on standing, nor did the Bank's witness testify
as to its standing. Although the court was later apprised
that appellant was indeed a party and not an intervenor, the
court did not change its ruling. After the final judgment of
foreclosure was entered, appellant appealed.
is, in the final analysis, that sufficient interest in the
outcome of litigation which will warrant the court's
entertaining it." Gen. Dev. Corp. v. Kirk, 251
So.2d 284, 286 (Fla. 2d DCA 1971). An owner of property must
be joined in a foreclosure proceeding of that property in
order to make a decree of foreclosure valid. See Jordan
v. Sayre, 24 Fla. 1, 3 So. 329, 330 (1888); see also
English v. Bankers Tr. Co. of Cal., 895 So.2d 1120, 1121
(Fla. 4th DCA 2005). In this case, the Bank recognized this
maxim by agreeing to the vacation of the original final
judgment and refiling the complaint to join appellant as a
party to the case. Therefore, there is no question that
appellant had standing to contest the foreclosure proceeding.
trial court relied on Whitburn for its ruling.
There, Whitburn acquired title to property after a
foreclosure complaint and notice of lis pendens was filed.
Whitburn then sought to intervene post-judgment to cancel the
sale of the property. The trial court denied the motion on
the basis that Whitburn had no standing, and the Second
District affirmed, first noting that Whitburn was not a party
to the foreclosure. In agreeing that Whitburn had no
standing, the court relied on the well-established principle
"when property is purchased during a pending foreclosure
action in which a lis pendens has been filed, the purchaser
generally is not entitled to intervene in the pending
foreclosure action." 190 So.3d at 1089. (citations
omitted). Therefore, because it did not acquire its interest
until after the filing of the lis pendens, it had no
"sufficient stake in a justiciable controversy, with a
legally cognizable interest that would be affected by the
outcome of the litigation." Id. at 1091
agree with Whitburn that the acquisition of title to
property after the filing of a foreclosure complaint and
notice of lis pendens does not confer on the title holder
standing to intervene in the foreclosure proceeding, because
the title holder's interest is clearly inferior, as a
matter of law, to the interest of the foreclosing party. In
this case, however, the appellant Trust acquired its title
prior to the filing of the complaint and lis pendens
and was made a party to the proceeding. Thus,
Whitburn is inapplicable.
trial court seized on language in Whitburn which we
deem as mere dicta. The court in Whitburn, in
further attempting to buttress its conclusion said, "We
further point out that Wells Fargo's mortgage on the
property was recorded in 2006; therefore, even if Wells Fargo
had not recorded a lis pendens in its foreclosure action,
Whitburn was charged with constructive notice of Wells
Fargo's superior interest in the property."
Id. While that is certainly true, as noted above an
owner of property whose interest was acquired before the
filing of a foreclosure complaint and lis pendens is an
indispensable party to a foreclosure proceeding. The dicta in
Whitburn should not be read to conclude that any
subsequent purchaser would have no standing to contest a
foreclosure proceeding, even when the interest is acquired
prior to the filing of the notice of lis pendens. We do not
think that the Second District intended such a result. It
merely noted that Whitburn's interest would always be
inferior to the mortgage and thus another reason why post
judgment intervention should be denied. Thus,
Whitburn is simply inapposite.
question, then, is whether appellant Trust can assert the
affirmative defense of lack of standing to bring the
foreclosure proceeding. The Trust obtained title to the
property subject to the mortgage, no doubt. Such a purchaser
is estopped from contesting a mortgage which is
valid on its face. See Eurovest, Ltd. v.
Segall, 528 So.2d 482, 483 (Fla. 3d DCA 1988). But
contesting standing of a plaintiff to bring a foreclosure
action is not contesting the validity of the
mortgage itself. Further, if the plaintiff does not have
standing, it is not entitled to enforce the note and
foreclose on the property. Standing in a foreclosure
proceeding requires the plaintiff to show that it is the
holder or is in possession of the note at the time of filing
suit. See Caraccia v. U.S. Bank, Nat'l
Ass'n, 185 So.3d 1277, 1279 (Fla. 4th DCA 2016). A
subsequent title owner may contest the plaintiff's
standing to foreclose on the mortgage to the extent that
there is no prejudicial delay to the proceedings occasioned
by any transfer of ownership during the pending process. A
subsequent purchaser has an interest in assuring that the
foreclosing plaintiff actually has the authority to bring the
suit and is entitled to raise such a defense so ...