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Collection and Recovery of Assets, Inc. v. Patel

Florida Court of Appeals, Fifth District

July 26, 2019

COLLECTION AND RECOVERY OF ASSETS, INC., Appellant,
v.
BACHU C. PATEL, ZETA MEDICAL, LLC, ALPHA PROPERTIES OF BREVARD, L.C., RAJIV CHANDRA, BHAVANI PUSKUR, M.D. AND HEGEMAN-HARRIS COMPANY OF FLORIDA, Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

          Appeal from the Circuit Court for Brevard County, Tonya B. Rainwater, Judge.

          Stephen Joseph Biggie, of Arcadier, Biggie and Wood, PLLC, Melbourne, for Appellant.

          James M. Talley, of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, for Appellee, Bachu C. Patel.

          No Appearance for Other Appellees.

          ROBERSON, E.C., ASSOCIATE JUDGE.

         Collection and Recovery of Assets, Inc. ("CRA") challenges the trial court's limitation of its judgment against Dr. Bachu Patel pursuant to Florida Rule of Civil Procedure 1.540(b)(5). Because we find that the trial court did not abuse its discretion, we affirm.

         Dr. Rajiv Chandra and Patel were involved in multiple business ventures, including the loan and, ultimately, the judgment at issue in this case. Zeta Medical, LLC, of which Chandra and Patel had membership interests through other corporations they owned, purchased a medical office building. Zeta Medical took out a revolving line of credit through a note that was secured, in part, by a mortgage on the medical building. Chandra and Patel both personally guaranteed the debt owed by Zeta Medical. Wells Fargo Bank, N.A., ultimately acquired the note, mortgage, and guaranties.

         When Zeta Medical defaulted on the loan, Wells Fargo obtained partial summary judgment against Chandra and Patel personally and jointly and severally on the guaranties. Wells Fargo's action for foreclosure remained pending as did cross-claims that Chandra and Patel filed against each other for fraud. Thereafter, Chandra formed CRA and was its sole owner. CRA then purchased the summary judgment and loan documents from Wells Fargo. After being substituted as the party plaintiff, CRA then began post-judgment collection efforts seeking to recover the entire amount from Patel.

         Several years later, with the forced sale of his real property looming, Patel sought relief from the judgment under Rule 1.540(b)(5). Patel, relying on Weitzman v. F.I.F. Consultants, Inc., 468 So.2d 1085 (Fla. 3d DCA 1985), argued that CRA's purchase of the judgment was a change in circumstances that made it inequitable to enforce the entire amount of the judgment against him. The sale was stayed when Patel posted a bond, equaling nearly half of the judgment amount, into the court registry. A full evidentiary hearing on Patel's Amended Motion for Relief from Judgment was held several months later.[1]

         At the hearing, Patel argued that he and Chandra, as co-guarantors, were each liable to Wells Fargo for half of the total amount of the guaranteed loan. Thus, Patel claimed that it was inequitable to allow Chandra to shift that liability entirely to him through CRA's purchase of the judgment and loan documents.

         CRA, on the other hand, argued that Patel had an adequate remedy at law by seeking contribution from Chandra's estate. However, CRA represented to the trial court (but not in its appellate briefing) that:

[t]he real reason [Patel] will not file a contribution action is because he is so overwhelmingly indebted to Dr. Chandra, now the estate of Dr. Chandra, . . . that any claim for contribution would be reduced to zero by setoff.

         The trial court held that CRA's purchase of the summary judgment and loan documents was a change in circumstances that warranted the court invoking its equitable powers. The court, relying on Weitzman, found that it was no longer equitable that the summary judgment should have prospective application and limited Patel's ...


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