Centerstate Bank Central Florida, N.A. v. Krause
87 So. 3d 25
| Fla. Dist. Ct. App. | 2012Background
- CSB sued to foreclose a Development Loan on property owned by Krause Grove Enterprises after Krauses recorded a lis pendens.
- KGE’s managing members Ross and Wilson executed notes and mortgages on behalf of KGE, later replacing them with a revised instrument and a new management-resolution.
- Krauses alleged Ross acted without authority, sought to void the Development Loan, and asserted constructive trust and equitable lien against the Property.
- Trial court denied CSB summary judgment and granted Krauses’ summary judgment declaring the Development Loan void.
- Appellate court held Krauses lacked standing to challenge the Development Loan and reversed/remanded for entry of judgment in CSB’s favor on remand.
- Key issue: standing to challenge corporate actions and mortgages when challengers are non-members with no direct property interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Krauses have standing to challenge the Development Loan | Krauses argue lis pendens and interests in Property confer standing | CSB contends Krauses lack ownership/interest to challenge corporate action | Krauses lack standing; reverse. Remand for CSB judgment. |
| Does lis pendens confer standing to challenge mortgage validity | Lis pendens creates notice but not substantive property interest | Lis pendens cannot create standing beyond asserted interest | Lis pendens does not confer standing to challenge mortgage validity. |
| Who has standing to challenge a corporate officer’s authority to bind the corporation | Krauses as property claimants can challenge authority | Only the corporation or its owners may challenge officers’ authority | Only corporation/owners may challenge; Krauses lack standing. |
Key Cases Cited
- Adhin v. First Horizon Home Loans, 44 So.3d 1245 (Fla. 5th DCA 2010) (lis pendens not substantive rights; protects interest against third parties)
- Jamnadas v. Singh, 731 So.2d 69 (Fla. 5th DCA 1999) (mortgage challenged by non-owner requires adverse interest)
- Chiusolo v. Kennedy, 614 So.2d 491 (Fla. 1993) (purpose of lis pendens; protecting claim against third parties)
- Avalon Assocs. of Del. Ltd. v. Avalon Park Assocs., Inc., 760 So.2d 1132 (Fla. 5th DCA 2000) (notice doctrine; standing considerations for third parties)
- Lafitte v. Gigliotti Pipeline, Inc., 624 So.2d 844 (Fla. 2d DCA 1993) (standing of lienholders/third parties to contest mortgage)
- Roy v. Enterprises Building Corp., 561 So.2d 341 (Fla. 2d DCA 1990) (standing principles in mortgage disputes)