VMD Financial Services, Inc. v. CB Loan Purchase Associates, LLC
68 So. 3d 997
Fla. Dist. Ct. App.2011Background
- CB Loan filed foreclosure on a first mortgage against AJ Petroleum and junior lienholders VMD and BPS.
- A settlement between CB Loan and AJ Petroleum led to a final judgment of foreclosure; VMD and BPS were not parties to the settlement.
- CB Loan moved to enforce the settlement and reinstate foreclosure; at a hearing, CB Loan announced terms of a new settlement with AJ Petroleum.
- VMD and BPS objected, claiming they had not agreed to the new settlement and sought to defend their interests and present cure evidence.
- The trial court admitted the new agreement into the record, adopted it, and entered a final foreclosure judgment, followed by a judicial sale.
- VMD and BPS appealed, arguing due process was violated by depriving them of the opportunity to defend; the court agreed and reversed the final judgment and sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process was violated | VMD and BPS were not parties to the new agreement and had no chance to defend. | The court properly enforced the settlement and foreclosure. | Due process denied; reversal required |
| Whether the final judgment was valid for VMD and BPS | Settlement terms controlled the foreclosure judgment. | New agreement binding on AJ Petroleum only did not bind VMD/BPS. | Invalid as to VMD and BPS; sale invalidated |
| Effect of reversal on foreclosure and sale | Reversal should not affect CB Loan's rights. | Reversal voids the foreclosure sale. | Sale invalid; foreclosure order reversed |
Key Cases Cited
- Burch v. City of Lakeland, 891 So.2d 654 (Fla. 2d DCA 2005) (due process requires opportunity to be heard)
- Dep't of Revenue ex rel. Poynter v. Bunnell, 51 So.3d 543 (Fla. 1st DCA 2010) (de novo review of due process guarantees)
- Morroni v. Peeples, 872 So.2d 366 (Fla. 2d DCA 2004) (reversal when party not bound by stipulation)
- Haren v. Sundie, 233 So.2d 417 (Fla. 3d DCA 1970) (sale under reversed judgment is not valid)
- Seminole Elec. Co-op., Inc. v. Dep't of Envtl. Prot., 985 So.2d 615 (Fla. 5th DCA 2008) (stipulations generally bind those who enter them)