Paul v. Wells Fargo Bank, N.A.
2011 Fla. App. LEXIS 13896
| Fla. Dist. Ct. App. | 2011Background
- Wells Fargo filed a foreclosure action against Joan B. Paul; default and final summary judgment were entered in Feb. 2010, with a sale set for May 2010.
- Paul, an elderly individual with multiple ailments, did not respond; her nephew William Chiste held a durable power of attorney and learned of the suit only in March 2010.
- Chiste retained Florida Rural Legal Services to file an emergency motion to set aside the judgment and abate the sale; Wells Fargo abated the sale but the sale occurred as scheduled.
- Wells Fargo purchased the property at sale and later assigned rights to Freddie Mac; Paul moved to set aside the judgment arguing excusable neglect and a meritorious defense.
- Trial court rejected the excusable neglect argument, found no meritorious defense, and denied relief; the court also denied relief on the ground of lack of discretion and didn't copy counsel after first order.
- On appeal, the Second District found the trial court mistakenly believed it had no discretion to grant relief, and it remanded for reconsideration of the motion to set aside.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether illness can support excusable neglect | Paul asserts mental ailments excuse nonresponse and justify relief. | Wells Fargo argues health conditions do not constitute excusable neglect absent meritorious defense. | Excusable neglect can be based on illness; court must reweigh. |
| Whether the motion to set aside was procedurally proper after sale | Sterling Factors allowed relief after foreclosure sale; second motion permissible. | Second motion to vacate improper if relitigating settled issues. | Second motion can be proper to raise new grounds; relief after sale required reconsideration. |
| Whether Wells Fargo had standing to foreclose | Challenge that note/mortgage chain was defective; PA lacked standing. | Carrying original note indorsed in blank establishes holder and enforceability. | Wells Fargo had standing; applicable UCC presumptions satisfied. |
| Whether the trial court erred by not providing counsel with the denying order | Goolsby counsel was not copied on the order, violating due process and Rule 1.540(b). | No explicit requirement to copy counsel; service rules not violated. | Trial court erred; rule 1.540(b) relief granted to reenter order and restart appeal time. |
| Whether the trial court had discretion to grant relief after sale | Sterling Factors and equitable relief permit relief post-sale. | Court believed it had no discretion after sale. | Court had discretion; reversal and remand to reconsider relief. |
Key Cases Cited
- Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932 (Fla. 4th DCA 2010) (possession of original note indorsed in blank establishes standing)
- Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151 (Fla. 2d DCA 2007) (endorsed note suffices to enforce under UCC)
- Szucs v. Qualico Dev., Inc., 893 So. 2d 708 (Fla. 2d DCA 2005) (excusable neglect analysis favors defendants where appropriate grounds exist)
- Home Owners' Loan Corp. v. Wilkes, 178 So. 161 (Fla. 1938) (mortgagor’s health or fortune not automatic bar to foreclosure relief)
- Rosenblatt v. Rosenblatt, 528 So.2d 74 (Fla. 4th DCA 1988) (trial court discretion to set aside default for excusable neglect)
- Jax Sani Serva Sys., Inc. v. Burkett, 509 So.2d 1251 (Fla. 1st DCA 1987) (illiteracy and emotional illness can support excusable neglect)
- Sterling Factors Corp. v. U.S. Bank Nat'l Assoc., 968 So.2d 658 (Fla. 2d DCA 2007) (circuit court has jurisdiction to reconsider foreclosure after sale)
- Hall v. Dep't of Health & Rehabilitative Servs., 487 So.2d 1147 (Fla. 1st DCA 1986) (reentry of order to restart appeal time when not properly served)
- Crescent v. Schwartz, 382 So.2d 383 (Fla. 4th DCA 1980) (excusable neglect not decisive where underlying judgment validity questioned)