State Trust Realty, LLC v. Deutsche Bank National Trust Co. Americas

207 So. 3d 923, 2016 Fla. App. LEXIS 15176
CourtDistrict Court of Appeal of Florida
DecidedOctober 13, 2016
DocketNo. 4D15-1667
StatusPublished
Cited by5 cases

This text of 207 So. 3d 923 (State Trust Realty, LLC v. Deutsche Bank National Trust Co. Americas) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Trust Realty, LLC v. Deutsche Bank National Trust Co. Americas, 207 So. 3d 923, 2016 Fla. App. LEXIS 15176 (Fla. Ct. App. 2016).

Opinion

ARTAU, EDWARD L., Associate Judge.

State Trust Realty, LLC (“State Trust”) appeals the trial court’s entry of final judgment of foreclosure in favor of Deutsche Bank National Trust Company as Trustee (“Deutsche National”) following a bench trial. We affirm the final judgment for the reasons discussed below, and reverse and remand for the trial court to correct the plaintiff name on the final judgment.

Background

On November 9, 2009, Deutsche National filed a one count foreclosure complaint against the homeowners, alleging therein that it was the holder of the note. Deutsche National also filed a notice of lis pendens the same day it filed the complaint, and the notice of lis pendens was recorded on November 23, 2009. The [925]*925homeowners did not respond to the complaint and, as a result, a clerk’s default was entered against them in December 2009. The homeowners never moved to set aside the default order.

Two years after the filing of its complaint, Deutsche National moved to correct the plaintiff name to Deutsche Bank Trust Company Americas, as Trustee for the Holders of the Dover Mortgage Capital Corporation, Grantor Trust Certificate Series 2004-A (“Deutsche Americas”), after its counsel accidentally initiated the foreclosure action in the wrong party name. The trial court granted the motion and corrected the plaintiff name, nunc pro tunc, however the case caption was never changed to reflect this correction and the parties continued to refer to the plaintiff bank as Deutsche National.

In 2012, the homeowners association, which was already joined as a subordinate lien holder in Deutsche Americas’ foreclosure action, initiated its own junior foreclosure action against the homeowners for unpaid assessments. The homeowners association was successful in its action and, after placing the highest bid at the foreclosure sale, obtained legal title to the subject property. The homeowners association then quitclaimed the property to State Trust, who in turn moved to intervene in Deutsche Americas’ foreclosure action as a third-party bidder. After the trial court granted the motion, State Trust filed an answer to Deutsche Americas’ complaint and raised several affirmative defenses, including lack of standing. Following a bench trial, the trial court entered final judgment of foreclosure in favor of Deutsche National, the originally listed plaintiff. This appeal follows.

Analysis

“When reviewing a judgment rendered after a nonjury trial, the trial court’s findings of fact come to the appellate court with a presumption of correctness and will not be disturbed unless they are clearly erroneous.” Stone v. BankUnited, 115 So.3d 411, 412 (Fla. 2d DCA 2013) (citing Taylor v. Richards, 971 So.2d 127, 129 (Fla. 4th DCA 2007)). With regard to the issue of standing, however, “ ‘[w]e review the sufficiency of the evidence to prove standing to bring a foreclosure action de novo.’ ” Sosa v. U.S. Bank Nat’l Ass’n, 153 So.3d 950, 951 (Fla. 4th DCA 2014) (quoting Lacombe v. Deutsche Bank Nat’l Tr. Co., 149 So.3d 152, 153 (Fla. 1st DCA 2014)).

a) Standing

State Trust first argues that reversal is required in this case because Deutsche Americas failed to establish its standing to foreclose. Deutsche Americas counters that State Trust had no ability to challenge the issue of standing as the only remaining issue at the time it intervened in the foreclosure action was damages. We agree with Deutsche Americas and hold that State Trust, as a third-party purchaser who obtained title to property that was subject to a notice of lis pendens, had no right to challenge the issue of standing for the following three reasons.

First, State Trust, as a late third-party intervener, was bound by the record made at the time it intervened. Florida’s Intervention rule provides that: “[ajnyone claiming an interest in pending litigation may at any time be permitted to assert a right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding, unless otherwise ordered by the court in its discretion.” Fla. R. Civ. P. 1.230. This rule has consistently been interpreted to mean that:

[A]n intervener is bound by the record made at the time he intervenes and must take the suit as he finds it. He cannot contest the plaintiff’s claim [926]*926against the defendant, but is limited to an assertion of his right to the res. He cannot challenge sufficiency of the pleadings or the propriety of the procedure, nor can he move to dismiss or delay the cause without permission of the chancellor.

Krouse v. Palmer, 131 Fla. 444, 179 So. 762, 763 (1938) (emphasis added). See British Aviation Ins. Co. Ltd. v. Menut, 511 So.2d 425, 426-27 (Fla. 4th DCA 1987) (citing rule 1.230 in holding that the trial court did not abuse its discretion in denying the intervener’s petition to stay entry of a final judgment which ensued after default had been entered against the original defendant); Fla. Gas Co. v. Am. Emp’rs’ Ins. Co., 218 So.2d 197, 197-98 (Fla. 3d DCA 1969) (citing rule 1.230 and Krouse in holding that the intervener could not challenge the propriety of the main proceedings or the sufficiency of the plaintiffs pleadings); see also Arsali v. Chase Home Fin., LLC, 79 So.3d 845, 847 n. 1 (Fla. 4th DCA 2012) (recognizing the validity of the supreme court’s interpretation of rule 1.230 in Krouse).

Here, at the time State Trust moved to intervene in the foreclosure action, a clerk’s default had already been entered against the original homeowner defendants for failing to file any responsive pleading or motion. This default operated “‘as an admission of the truth of the well pleaded allegations of the pleading, except those concerning damages.’” Mullne v. Sea-Tech Constr. Inc., 84 So.3d 1247, 1249 (Fla. 4th DCA 2012) (emphasis removed) (quoting Bd. of Regents v. Stinson-Head, Inc., 504 So.2d 1374, 1375 (Fla. 4th DCA 1987)). The original complaint, in turn, specifically alleged that Deutsche National, and Deutsche Americas by way of the order nunc pro tunc correcting the plaintiff name, was the holder of the note. By virtue of the clerk’s default, therefore, the only remaining issue in the case at the time State Trust intervened was damages. See id.; see also Rangel v. MidFirst Bank, 187 So.3d 289, 291 (Fla. 4th DCA 2016) (noting that a default judgment in a foreclosure action “only serve[s] to admit liability and not damages”).

Second, by virtue of acquiring its interest in the subject property after the lis pendens was recorded, State Trust stood in the position of the original defendants when it intervened in the foreclosure action. As the court in Whitburn, LLC v. Wells Fargo Bank, N.A. recently reiterated:

Lis pendens literally means a pending lawsuit, and is defined as the jurisdiction, power, or control that courts acquire over property involved in a pending suit. The notice, typically recorded in the chain of title was, at common law, intended to warn all persons that a certain piece of property was the subject of litigation, and that any interests acquired during the pendency of the suit were subject to its outcome. The term developed from a common law doctrine that the result of pending litigation affecting property superseded transactions concerning the property before termination of the litigation.

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Bluebook (online)
207 So. 3d 923, 2016 Fla. App. LEXIS 15176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-trust-realty-llc-v-deutsche-bank-national-trust-co-americas-fladistctapp-2016.