U.S. Bank National Ass'n v. Cramer

113 So. 3d 1020, 2013 WL 2231891, 2013 Fla. App. LEXIS 8123
CourtDistrict Court of Appeal of Florida
DecidedMay 22, 2013
DocketNo. 2D12-4076
StatusPublished
Cited by2 cases

This text of 113 So. 3d 1020 (U.S. Bank National Ass'n v. Cramer) 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
U.S. Bank National Ass'n v. Cramer, 113 So. 3d 1020, 2013 WL 2231891, 2013 Fla. App. LEXIS 8123 (Fla. Ct. App. 2013).

Opinion

WALLACE, Judge.

U.S. Bank National Association, as Trustee (U.S.Bank), appeals an order denying its second amended motion for the [1022]*1022appointment of a receiver for a former gas station property on which it had already obtained a final judgment of foreclosure. Because the foreclosure sale was necessarily deferred pending the survey and remediation of environmental problems affecting the property, the circuit court abused its discretion in denying U.S. Bank’s motion for the appointment of a receiver.

I. THE FACTUAL AND PROCEDURAL BACKGROUND

On or about August 10, 2006, U.S. Bank’s predecessor in interest loaned Terence B. Cramer and Nancy H. Cramer the sum of $937,500. As security for the debt, the Cramers executed a mortgage on real property that was formerly the site of a gas station. At the time of the proceedings in the circuit court, the operations on the property included an automotive repair shop, an automotive sales business, and a car wash. Notably, the mortgage provided that upon a default by the Cramers, “the court shall forthwith appoint such receiver ... as a matter of strict right to Lender and without notice to [the Cram-ers] and without reference to the adequacy or inadequacy of the value of the Property.”

The loan went into default in 2008. U.S. Bank filed its action for' foreclosure in December 2009. On August 25, 2010, the circuit court entered a final judgment of foreclosure in favor of U.S. Bank. Under the final judgment, the amount due to U.S. Bank as of August 25, 2010, was $1,269,949.66.

After the entry of the final judgment, the foreclosure sale was cancelled. U.S. Bank moved for the appointment of a receiver of the property. U.S. Bank asserted four grounds in support of its motion: (1) the mortgage provided that U.S. Bank was entitled to the appointment of a receiver upon a default; (2) the Cramers had failed to pay real estate taxes and obtain insurance on the mortgaged property for five years; (3) the existing environmental problems amounted to physical waste of the property; and (4) the Cramers had repeatedly violated an existing rents order. In response, the Cramers argued that the appointment of a receiver was unnecessary because the circuit court had already entered a foreclosure judgment; therefore, U.S. Bank could proceed to foreclosure, take ownership and possession, and proceed with its plans for the property.

The circuit court conducted three separate hearings on the motion for appointment of a receiver. At the conclusion of the third hearing, the circuit court did not rule on the motion. Instead, the circuit court asked the parties to submit legal memoranda directed to the issue of whether the circuit court had the authority to appoint a receiver after the entry of final judgment. U.S. Bank timely submitted the requested memorandum to the court; the Cramers did not. After U.S. Bank submitted its memorandum, the circuit court entered a written order denying the motion. The circuit court’s order did not explain the basis for its ruling. This appeal followed.

II. THE STANDARD OF REVIEW

We review an order granting or denying a motion for the appointment of a receiver for abuse of discretion. Carolina Portland Cement Co. v. Baumgartner, 99 Fla. 987, 128 So. 241, 247 (1930); Puma Enters. Corp. v. Vitale, 566 So.2d 1343, 1344 (Fla. 3d DCA 1990); Colley v. First Fed. Sav. & Loan Ass’n. of Panama City, 516 So.2d 344, 345 (Fla. 1st DCA 1987). In this case, two factors make our task of appellate review more difficult. First, the circuit court failed to explain in its order the rationale for its decision to deny U.S. Bank’s motion. Second, the Cramers have not favored this court with a brief in support of the order under review.

[1023]*1023III. THE APPLICABLE LAW

“A receiver is typically appointed in foreclosure proceedings to preserve the status quo, preserve the property, and collect and apply rents and profits to the payment of the mortgage.” DeSilva v. First Cmty. Bank of Am., 42 So.3d 285, 290 (Fla. 2d DCA 2010); see also Baumgartner, 128 So. at 248 (observing same). “The appointment of a receiver ... should be approached with caution and circumspection.” DeSilva, 42 So.3d at 288 (alteration in original) (quoting Edenfield v. Crisp, 186 So.2d 545, 548 (Fla. 2d DCA 1966)). A cautious approach to the appointment of a receiver is appropriate because such an appointment “is in derogation of the fundamental right of the legal owner to possession of the property.” Twinjay Chambers P’ship. v. Suarez, 556 So.2d 781, 781 (Fla. 2d DCA 1990); see also Plaza v. Plaza, 78 So.3d 4, 6 (Fla. 3d DCA 2011) (“Appointing a receiver is a rare and extraordinary remedy.”); Warshall v. Price, 617 So.2d 751, 752 (Fla. 4th DCA 1993) (“Before ... trial[,] ... a motion for the appointment of a receiver of the property of the defendant is a drastic matter constituting a taking of property and requires a showing of exigent circumstances.”); Electro Meek Prods., Inc. v. Borona, 324 So.2d 638, 639 (Fla. 3d DCA 1976) (“The appointment of a receiver is a drastic matter in that it constitutes a taking of property and, therefore, should not be used by the courts except in cases of necessity.”). Thus, to be entitled to the appointment of a receiver, the movant must show “that [the] property is subject to a serious loss,” and that the movant has a “clear legal right ... to the property.” Plaza, 78 So.3d at 6 (alteration in original) (quoting Apalachicola N.R. Co. v. Sommers, 79 Fla. 816, 85 So. 361, 361 (1920)).

However, after the entry of a final judgment, the considerations dictating a cautious approach to the appointment of a receiver may carry less weight.

The reasons for arguing against a receiver have disappeared. After all, the judgment creditor can now simply send the sheriff out to the judgment debtor’s business with the unsatisfied writ of execution and levy against all property of the judgment debtor in sight and, thereby, effectively put the debtor out of business. In this circumstance, where the judgment creditor elects the less drastic remedy of a receiver' to take charge of the debtor’s accounts receivable, the debtor can hardly be heard to argue that the receiver is more harsh than the levy.

War shall, 617 So.2d at 752.

After the entry of a final judgment, the requirement that the movant establish some legal right in the property is satisfied, as in this case, by virtue of the final judgment. In addition, under Florida law, as U.S. Bank argued in its memorandum submitted to the circuit court, a court has the authority to appoint a receiver postjudgment. See Warshall, 617 So.2d at 752; see also Fed. Land Bank of Columbia v. Evans, 106 Fla. 560, .143 So. 403, 404 (1932) (recognizing that in certain circumstances, a receiver may be appointed after the entry of a final judgment of foreclosure); Carr v. Marion Mortg. Co., 99 Fla. 540, 128 So. 12, 14 (1930) (noting same).

It is true that generally the appointment of a receiver can serve no good purpose after the entry of a final decree ordering the sale of property under foreclosure and to collect money upon which the complainant has a lien and which had already been paid into court; but,

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113 So. 3d 1020, 2013 WL 2231891, 2013 Fla. App. LEXIS 8123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/us-bank-national-assn-v-cramer-fladistctapp-2013.