Palacio v. Alaska Seaboard Partners Ltd. Partnership
50 So. 3d 54
Fla. Dist. Ct. App.2010Background
- Foreclosure complaint served on appellants in February 2009; they did not respond, believing assurances from a loan servicer representative that the action would be abated pending a modification.
- Appellants contend they contacted the servicer immediately after service and faxed a loan modification application on April 7, 2009.
- Appellants claim ongoing negotiations in 2009–2010 regarding modification terms (including a substantial principal reduction and monthly payment) and that they complied with those terms.
- During this period, a default motion (May 19, 2009) and a summary judgment motion (July 16, 2009) were filed; final judgment entered November 11, 2009.
- Appellants made five payments under the perceived modified agreement, the last on March 28, 2010; a sale date was set for May 12, 2010, and notices issued.
- Appellants moved to set aside the default judgment on May 7, 2010; the trial court denied without an evidentiary hearing on May 11, 2010.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the denial of the motion to set aside default lacked an evidentiary hearing | Appellants: factual allegations show colorable entitlement to relief | Appellees: allegations facially insufficient for relief | Reversed; remanded for evidentiary hearing |
| Whether appellants' failure to respond was excusable neglect | Appellants: reliance on modification negotiations supports excusable neglect | Appellees: no evidence of excusable neglect presented | Remand for evidentiary resolution on excusable neglect |
| Whether appellants may pursue equitable relief in foreclosure after setting aside | Appellants: equitable relief may be viable if grounds to set aside established | Appellees: not supported by record at issue | Remand to consider equitable relief possibility after hearing |
Key Cases Cited
- Seal v. Brown, 801 So.2d 993 (Fla. 1st DCA 2001) (evidentiary hearing required before denying motion to set aside judgment)
- Gables Club Marina, LLC v. Gables Condominium and Club Ass’n, Inc., 948 So.2d 21 (Fla. 3d DCA 2006) (reliance on settlement discussions may support setting aside a default)
- Elliott v. Aurora Loan Serv., LLC, 31 So.3d 304 (Fla. 4th DCA 2010) (workout agreement may establish excusable neglect)
- David v. Sun Fed. Sav. & Loan Ass’n, 461 So.2d 93 (Fla.1984) (equitable relief may be available in foreclosure contexts)