U.S. Bank National Ass'n. v. Bevans
138 So. 3d 1185
| Fla. Dist. Ct. App. | 2014Background
- Mary Bevans executed a recorded mortgage (later assigned to U.S. Bank) to buy a condominium; she defaulted and stopped paying condo assessments.
- The Condominium Association recorded a lien for unpaid assessments and successfully obtained a foreclosure judgment in July 2010 without naming the Bank as a defendant.
- The Association’s judicial sale (March 2011) produced a buyer (IES Holdings), which later quit-claimed to Striding Figure Holdings, LLC (Striding).
- U.S. Bank filed a separate mortgage foreclosure action in February 2011 (before the Association’s sale); the Bank named the Association but a lis pendens was not recorded (dispute in record whether Clerk or Bank failed to record).
- The trial court entered a foreclosure judgment for the Bank; Striding, as title holder, moved to vacate the judgment claiming it held title free of the Bank because no lis pendens was recorded and it was not party to Bank’s suit; the trial court vacated the judgment and declared Striding’s title exempt from Bank’s claims.
- The appellate court reversed in part: ruled that the Bank’s mortgage survived the Association’s foreclosure and remanded to determine whether Striding had actual or constructive notice of the Bank’s pending foreclosure.
Issues
| Issue | Plaintiff's Argument (U.S. Bank) | Defendant's Argument (Striding) | Held |
|---|---|---|---|
| Whether purchaser at Association’s junior-lien foreclosure takes title free of Bank’s senior mortgage | The Bank argued its recorded mortgage survived the Association’s foreclosure and thus remained on title | Striding argued its purchase at the Association sale was immune from Bank’s claim because Bank failed to record a lis pendens | Held: Bank’s recorded mortgage survived the Association’s foreclosure; Striding did not take free of the Bank’s mortgage |
| Whether § 48.23(b) immunizes Striding from Bank’s claims when lis pendens was not recorded | Bank: § 48.23(b) inapplicable because action arose from a duly recorded instrument (mortgage) | Striding: § 48.23(b) bars enforcement against purchasers when lis pendens not recorded; actual/constructive notice irrelevant | Held: § 48.23(b) exception does not apply to actions based on duly recorded instruments; constructive notice via public records applies |
| Whether Bank’s foreclosure judgment can bind Striding despite Striding not being joined and no lis pendens recorded | Bank: judgment can bind Striding if Striding had actual or constructive knowledge of Bank’s pending suit | Striding: absent lis pendens and without being a party, it cannot be bound by Bank’s judgment | Held: If Striding had actual or constructive notice of Bank’s foreclosure, the judgment binds it; otherwise Striding must be joined in foreclosure to extinguish its interest—issue unresolved and remanded |
| Whether trial court properly vacated Bank’s foreclosure judgment and declared Striding’s title exempt | Bank: vacatur and exemption were improper because mortgage survived and notice issues unresolved | Striding: vacatur and exemption proper because it lacked notice and was not party | Held: Reversed the portions granting exemption and vacating the Bank’s judgment; remanded to determine Striding’s notice and appropriate relief |
Key Cases Cited
- Gonzalez v. Chase Home Fin. LLC, 37 So.3d 955 (Fla. 3d DCA 2010) (superior lienholders are not proper parties to junior-lien foreclosure)
- Garcia v. Stewart, 906 So.2d 1117 (Fla. 4th DCA 2005) (foreclosure of a junior lien does not terminate interests senior to that lien)
- Westburne Supply, Inc. v. Cmty. Villas Partners, Ltd., 508 So.2d 431 (Fla. 1st DCA 1987) (lis pendens provides constructive notice to subsequent purchasers)
- U.S. Bank Nat. Ass’n v. Quadomain Condo. Ass’n, 103 So.3d 977 (Fla. 4th DCA 2012) (purchaser subject to judgment if property was bought with lis pendens of pending suit)
- Davanzo v. Resolute Ins. Co., 346 So.2d 1227 (Fla. 3d DCA 1977) (legal title holder is an indispensable party to adjudications affecting title)
- English v. Bankers Trust Co. of Cal., N.A., 895 So.2d 1120 (Fla. 4th DCA 2005) (same principle regarding indispensability of title holders)
- Greenwald v. Graham, 130 So. 608 (Fla. 1930) (purchaser with notice is bound by judgment as if party)