The latest reversal of a Florida trial judge's (Charlotte County Circuit Court Judge George C. Richards) foreclosure ruling unfavorable to a homeowner was issued by the state's 2nd District Court of Appeal.
- The case involved a motion to set aside a default judgment granting foreclosure against an elderly homeowner (a Mrs. Joan B. Paul) who suffered from multiple physical and mental ailments who failed to respond to the foreclosure lawsuit.
- The homeowner's nephew, who held a durable power of attorney authorizing him to act on his aunt's behalf, lived in Missouri and did not learn of the foreclosure lawsuit until it was late in the proceedings.
- When he learned of the lawsuit, he came to Florida promptly, and assisted his aunt in retaining attorney Barbara Goolsby of Florida Rural Legal Services to file an emergency motion to set aside the final judgment and cancel the scheduled sale.
- The foreclosure mill outfit representing the bankster involved, Wells Fargo (possibly known to some as the "Stagecoach to Hell"), refused to cancel the foreclosure sale to first allow a hearing on the motion. It went forward, foreclosed, and took title to the premises while the homeowner waited for her motion to be heard.
- Thereafter, the trial court heard the frail, elderly homeowner's motion to set aside the judgment, which the trial judge denied. According to the appeals court, "[the trial court] felt compelled to let the foreclosure stand because the property was already sold and Mrs. Paul did not act when she should have."
- The appeals court ruling then describes what happened next with regard to the apparently sleazy conduct by the foreclosure mill attorney and the response by an ostensibly snoozing trial judge:
The trial court directed Wells Fargo's counsel to prepare an order denying the motion. Counsel stated that he would show the proposed order to Ms. Goolsby before submitting it to the court.
Instead, counsel sent the proposed order directly to the trial court without notice to Ms. Goolsby. The trial court signed the proposed order.
The service list attached to the order included Mrs. Paul, but not Ms. Goolsby. Ms. Goolsby was not served with a copy of the order, despite having filed numerous documents as Mrs. Paul's counsel.
Within a couple of weeks, Ms. Goolsby discovered that the trial court had issued its order. She filed a motion for relief. As previously directed by the trial court, Ms. Goolsby submitted case law to allay the trial court's concern about its jurisdiction. See Sterling Factors Corp. v. U.S. Bank Nat'l Assoc., 968 So.2d 658, 665 (Fla. 2d DCA 2007) (holding circuit court has jurisdiction to set aside or reconsider foreclosure judgment upon proper motion after foreclosure sale).
Ms. Goolsby asked the trial court to vacate the earlier order and grant relief from the default foreclosure judgment. Ms. Goolsby requested that if the trial court declined to set aside the default judgment, the trial court allow Mrs. Paul an opportunity to appeal.
- The trial court denied the motion, and this appeal ensued.
- In reversing the lower court ruling, the appeals court resolved these four points in the homeowner's favor:
a) The foreclosure mill's failure to provide notice to homeowner's attorney (Ms. Goolsby) warranted judicial relief,(1)
b) Contrary to his mistaken belief, the trial judge had jurisdiction to grant relief, even after the foreclosure sale had already taken place,(2)
(c) The homeowner successfully established the "excusable neglect" necessary to warrant setting aside a default judgment,(3)
(d) The appeals court rejected Wells Fargo's suggestion that Mrs. Paul's second motion to vacate was an improper second attempt to relitigate issues settled by a previous order denying relief'.(4)
Congratulations to attorneys Barbara Goolsby and Angela Thompson of
Florida Rural Legal Services,(5) Fort Myers, on their efforts in pursuing this appeal and overcoming the apparently sleazy tactic (ie. failure to give proper notice after saying it would do so) by her adversary (Florida Default Law Group) and the sub-par efforts of a trial judge who possibly was so overworked that he may not have been thinking straight when deciding this case (after all, we all have a bad day from time to time). This type of case is tough enough to defend to begin with without also having to deal with a possibly ethically-challenged adversary and a 'tired' judge.
For the appeals court's 13-page ruling, see
Paul v. Wells Fargo Bank, N.A., Case No. 2D10-3889 (Fla. App. 2d DCA September 2, 2011).
(1) From the appeals court ruling:- The trial court stated that it found no notice of appearance by Ms. Goolsby that would require copying her with the order denying relief from judgment. Ms. Goolsby, however, was not required to file a notice of appearance.
Florida Rule of Judicial Administration 2.505(e)(1) provides that an attorney may appear in a proceeding by "serving and filing, on behalf of a party, the party's first pleading or paper in the proceeding."
Florida Rule of Civil Procedure 1.080(b) provides that "[w]hen service is required or permitted to be made upon a party represented by an attorney, service shall be made upon the attorney unless service upon the party is ordered by the court." Boosinger v. Davis, 46 So.3d 152, 154 n.1 (Fla. 2d DCA 2010) (reversing order denying motion for relief where counsel received no notice because court clerk failed to update service list, remanding for reinstatement of cause of action).
The trial court's failure to provide Ms. Goolsby with the order denying the motion to set aside the default foreclosure judgment warrants Florida Rule of Civil Procedure 1.540(b) relief, even if for no other purpose than to reenter the order with a fresh date to preserve the right to appeal or to file a motion for rehearing. See Hall v. Dep't of Health & Rehabilitative Servs., 487 So.2d 1147 (Fla. 1st DCA 1986); see also, e.g., Smith v. Garst, 289 So.2d 774, 775-76 (Fla. 2d DCA 1974) (remanding case to trial court pursuant to rule 1.540 for reentry of order where counsel for incompetent petitioner not advised of order entry until after appeal deadline); Kanecke v. Lennar Homes, Inc., 543 So.2d 784, 785 (Fla. 3d DCA 1989) (holding where appellant did not receive notice of entry of order until after time for appeal expired, trial court as matter of law must grant rule 1.540(b) relief request to vacate and reenter it to restart time for appeal); Woldarsky v. Woldarsky, 243 So.2d 629, 630 (Fla. 1st DCA 1971) (upholding trial court's setting aside of final judgment pursuant to rule 1.540(b) and reentering it to allow appellant not timely served with copy of order time to appeal) (citing Rogers v. First Nat'l Bank at Winter Park, 232 So.2d 377 (Fla. 1970)).
(2) From the appeals court ruling:
- Mrs. Paul advised the trial court of Sterling Factors, 968 So.2d 658, in support of her position that the trial court had jurisdiction to grant relief even after a sale. Wells Fargo did not respond, and the trial court did not further question its jurisdiction after the sale. The trial court continued under the impression that, as a matter of law, it could not vacate the judgment.
Sterling Factors instructs otherwise.
(3) From the appeals court ruling:
- The cases upon which Wells Fargo relies are inapposite. All address proceedings to foreclose where the mortgagor's health or ill fortune resulted in nonpayment of a mortgage.
Here, Mrs. Paul argued that the trial court could grant rule 1.540 relief from a default foreclosure based on her excusable neglect in failing to respond to the complaint. See Am. Network Transp. Mgmt., Inc. v. A Super-Limo Co., 857 So.2d 313, 314-15 (Fla. 2d DCA 2003) (holding defendant's failure to respond to complaint because of kidney stones was excusable neglect); Rosenblatt v. Rosenblatt, 528 So.2d 74, 75 (Fla. 4th DCA 1988) (holding trial court has discretion to set aside default judgment for excusable neglect where husband did not answer complaint because he was shot and hospitalized); Leinberger v. Leinberger, 455 So.2d 1140, 1141 (Fla. 2d DCA 1984) (holding evidence that defendant suffered from psychosis was a sufficient ground to vacate default for excusable neglect); Jasson D. Radding, Inc. v. Coulter, 138 So.2d 380, 383 (Fla. 2d DCA 1962) (holding no abuse of discretion to set aside default judgment for excusable neglect based on defendant's affidavit that he failed to answer complaint due to illness); Jax Sani Serva Sys., Inc. v. Burkett, 509 So.2d 1251, 1252 (Fla. 1st DCA 1987) (holding default judgment could be set aside for excusable neglect where defendant was illiterate and wife was emotionally ill when served with process) (citing Leinberger).
We stress, however, that as we understand them Mrs. Paul's ailments do not constitute a meritorious defense to nonpayment should the trial court set aside the default judgment and reopen the litigation. See Home Owners' Loan Corp., 178 So. at 163.
Wells Fargo also relies on John Crescent, Inc. v. Schwartz, 382 So.2d 383, 385-86 (Fla. 4th DCA 1980), as precedent for its position that the trial court had no discretion to find excusable neglect. Such reliance is misguided. As illustrated above, our own cases hold that illness or psychological condition can be a valid ground for finding excusable neglect.
We agree with the First District's decision in Jax Sani Serva System declining to follow Crescent's rationale. 509 So. 2d at 1252. Moreover, Crescent may be an anomaly because subsequently in Rosenblatt, 528 So. 2d at 75, the Fourth District held that the defendant's medical condition could constitute excusable neglect.
(4) From the appeals court ruling:
- Wells Fargo suggests on appeal that Mrs. Paul's second motion to vacate was an improper second attempt to obtain relief from the final judgment. We disagree.
Steeprow Enterprises, Inc. v. Lennar Homes, Inc., 590 So.2d 21 (Fla. 4th DCA 1991), cited by Wells Fargo, holds that a second motion is improper if it tries to relitigate issues settled by a previous order denying relief. Id. at 23; see also Crocker Invs., Inc. v. Statesman Life Ins. Co., 515 So.2d 1305, 1306 (Fla. 3d DCA 1987). This rule provides a rationale against successive motions but is not an absolute bar; it should be ignored "where its strict application would work an injustice." Id. at 1307.
For example, the Third District in Crocker affirmed a trial court's order granting a second motion that raised additional legal grounds revealing that the default judgment was erroneously entered. Id. at 1308; see also Dep't of Transp. v. Bailey, 603 So.2d 1384 (Fla. 1st DCA 1992) (holding that denial of first motion for relief from judgment, where jurisdictional argument was raised but not actually adjudicated, did not preclude review of second motion, which reasserted movant's position more clearly).
Here, the issues had not been settled at the first hearing; the trial court advised Ms. Goolsby that it was sympathetic to Mrs. Paul's plight and would be inclined to set aside the foreclosure if she set another hearing and presented additional legal grounds that allowed him to intervene.
At the subsequent hearing, Wells Fargo did not object that the motion was successive. Additionally, an order entered under rule 1.540, like the one appealed here, is itself subject to relief under that same rule. See Intercontinental Props., Inc. v. U.S. Sec. Servs., Inc., 515 So.2d 321, 322 (Fla. 3d DCA 1987); Nichols v. Hepworth, 604 So.2d 574, 575-76 (Fla. 4th DCA 1992).
(5) Florida Rural Legal Services is a non-profit law firm dedicated to providing quality civil legal advice, representation and education for low income people and communities, and provides free civil legal assistance to indigent families and low-income elderly people in thirteen counties in South Central Florida. FRLS also provides legal assistance to migrant workers throughout the state of Florida.
