183 So. 3d 424
Fla. Dist. Ct. App.2014Background
- Miami Beach property bought by Zabaleta (Jan 2005) with a recorded first mortgage to North Bay Realty; Washington Mutual later financed a 2005 purchase-money mortgage that was recorded and satisfied when refinanced.
- Nikooie advanced funds to Zabaleta in stages (initial unrecorded $860,000, later $300,000) and a January 2006 mortgage/note was recorded after being altered to show $116,000 (taxes paid on $116,000).
- Washington Mutual made an unrecorded $4.5M loan to Mejia in June 2006 intending to payoff the 2005 loan; the closing failed to record the deed/mortgage or pay taxes on any additional principal.
- Subsequent lenders (City First, then GMAI/GMAI’s successor ATIF) advanced loans expecting first-priority liens; payoff wires and satisfactions were mishandled and some payments intended for Nikooie were diverted.
- Trial court allocated lien priorities among Nikooie, JPMorgan (successor to Washington Mutual), and ATIF; appeal and cross-appeal followed focusing on equitable subrogation, lien priority, lis pendens, and enforceability where documentary stamp/intangible taxes may be unpaid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Equitable subrogation for Washington Mutual/JPMorgan | JPMorgan contends it may be equitably subrogated to priority for amounts used to pay off the 2005 Washington Mutual mortgage, even if same lender refinanced | Nikooie argues "self-subrogation" cannot displace a recorded junior lien and that subrogation cannot prejudice recorded junior lienholders | Court: Equitable subrogation can apply to same-lender refinances depending on equities, but cannot defeat recorded junior interests prejudiced by the refinance; JPMorgan entitled to subrogation for payoff amount (subject to tax issues) |
| Extent/priority of Nikooie’s lien (altered $116k vs. claimed $1,349,300) | Nikooie asserts altered mortgage + 2007 modification relate back to secure full $1,349,300 as first priority | JPMorgan and others rebut that public record in 2006 showed $116,000, and later modification cannot retroactively raise priority; taxes not paid on additional sums | Court: Nikooie entitled to first-priority lien for $116,000 plus interest; remainder only junior (third) lien for $1,044,000 unless documentary/intangible taxes are shown/paid; remand to adjust priorities and allow curing of tax defects |
| Enforceability where documentary stamp / intangible taxes unpaid | Nikooie and JPMorgan sought enforcement of larger principal amounts despite apparent nonpayment of taxes on incremental advances | Other parties and court below argued unenforceable absent payment; cited statutes precluding enforcement until taxes paid | Court: Where record shows required taxes were not paid on particular advances, those amounts are unenforceable until taxes are paid; remand to permit proof or curing of taxes before enforcing increased lien amounts |
| Lis pendens and untimely intervention by GMAI/ATIF | Nikooie argued GMAI’s recorded mortgage and intervention were barred by §48.23(1)(b) because GMAI did not intervene within 20 days of Washington Mutual’s lis pendens | GMAI/JPMorgan argued amended complaint joined GMAI and nijkooie did not timely object; lis pendens is notice of lawsuit and plaintiff may amend | Court: Trial court correct — Washington Mutual’s amended complaint brought GMAI into case; statutory 20-day bar did not foreclose amendment and Nikooie did not object, so GMAI/ATIF not barred |
Key Cases Cited
- Velazquez v. Serrano, 43 So.3d 82 (Fla. 3d DCA 2010) (equitable subrogation analysis and prejudice to junior recorded lienholders)
- Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. KPMG Peat Marwick, 742 So.2d 328 (Fla. 3d DCA 1999) (equities determine subrogation entitlement)
- Suntrust Bank v. Riverside Nat’l Bank of Fla., 792 So.2d 1222 (Fla. 4th DCA 2001) (same-lender refinance may retain original priority under replacement/modification principles)
- Klein v. Royale Grp., Ltd., 578 So.2d 394 (Fla. 3d DCA 1991) (trial court may permit late payment of documentary stamps/taxes to cure enforceability defect)
- Somma v. Metra Elecs. Corp., 727 So.2d 302 (Fla. 5th DCA 1999) (section 201.08 can bar enforcement absent proof of tax payment; courts should ensure taxes are paid)
- Glenn Wright Homes v. Lowy, 18 So.3d 693 (Fla. 4th DCA 2009) (en banc) (statutory text limits unenforceability rule to future advances; critique of broad no-enforcement reading)