Bac Home Loans Servicing, Inc. v. de Headley
130 So. 3d 703
| Fla. Dist. Ct. App. | 2013Background
- In 2006 the Headleys executed a promissory note and mortgage; Mrs. Headley defaulted in Feb. 2008 and BAC filed foreclosure in Oct. 2008.
- BAC obtained summary judgment of foreclosure in Jan. 2010; that judgment was later vacated and the Headleys filed an amended answer with one affirmative defense (unclean hands) and multiple counterclaims and crossclaims.
- The Headleys did not serve their cross-claim defendants or otherwise pursue those claims; BAC failed to respond to the Headleys’ counterclaims, and a default was entered against BAC on those counterclaims.
- The Headleys’ counsel filed a motion for entry of a default final judgment claiming the counterclaims sought in rem equitable relief (quieting title) and not monetary damages.
- The trial court relied on those representations and entered a final judgment declaring the note and mortgage null, cancelling them, freeing the property of liens, and ordering BAC to surrender originals for cancellation.
- The appellate court found the motion’s representations were false: the Headleys’ counterclaims only sought monetary damages (and boilerplate “such other relief”), so the trial court exceeded its jurisdiction and violated BAC’s due process rights by granting unpled relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a default judgment may grant in rem relief (cancellation of note/mortgage) when counterclaims only seek monetary damages | BAC: defaulted party admits well-pleaded facts, but relief limited to what is specifically pleaded; cannot be deprived of notice | Headleys: motion claimed counterclaims sought in rem equitable relief and argued broad "such other relief" language or equitable jurisdiction via unclean hands justified relief | Court reversed: trial court lacked jurisdiction to grant relief not pleaded; default judgment granting unpled in rem relief is fundamental error |
| Whether boilerplate "such other relief" supplies notice for extraordinary equitable remedies | BAC: boilerplate does not provide meaningful notice of cancellation/quiet title relief | Headleys: "such other relief" or equitable defense sufficed to permit relief | Court held boilerplate request insufficient to confer notice for relief radically different from pleaded monetary damages |
| Whether asserting "unclean hands" as an affirmative defense invoked equitable jurisdiction to allow unpled equitable relief | BAC: affirmative defenses are distinct from counterclaims and are deemed denied by default; cannot be converted into affirmative relief | Headleys: unclean hands defense invoked court's equitable powers to support cancellation/quieting | Court held defense cannot supply a cause of action or affirmative relief; defenses and counterclaims are distinct and affirmative defenses do not entitle a party to relief when defaulted against |
| Whether counsel’s misrepresentations in motions concerning the scope of relief warrant reversal and admonition | BAC: misleading motion deprived BAC of notice and led to fundamental error; reversal required | Headleys: urged affirmance based on motions/wherefore language and equitable principles | Court reversed judgment for BAC, remanded to determine damages, and admonished Headleys’ counsel for duty of candor to tribunal |
Key Cases Cited
- Hooters of Am., Inc. v. Carolina Wings, Inc., 655 So.2d 1231 (Fla. 1st DCA 1995) (default admits well-pleaded facts but relief limited to that prayed)
- Freeman v. Freeman, 447 So.2d 963 (Fla. 1st DCA 1984) (award of relief not sought by pleadings is error)
- Carroll & Associates, P.A. v. Galindo, 864 So.2d 24 (Fla. 3d DCA 2003) (reversing judgment insofar as it granted relief not pled)
- Mullne v. Sea-Tech Constr., Inc., 84 So.3d 1247 (Fla. 4th DCA 2012) (default judgment void when trial court lacked jurisdiction to award unrequested relief)
- Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d 306 (Fla. 2000) (seeking damages affirms and ratifies the contract)
- Haven Fed. Sav. & Loan Ass’n v. Kirian, 579 So.2d 730 (Fla. 1991) (distinguishing counterclaims from affirmative defenses)