Heartwood 2, LLC, Appellant, vs. Shay Dori, et al., Appellees.
No. 3D15-2576
Third District Court of Appeal State of Florida
January 11, 2017
Lower Tribunal No. 12-19409
Not final until disposition of timely filed motion for rehearing.
An Appeal from the Circuit Court for Miami-Dade County, Jennifer D. Bailey and Beatrice Butchko, Judges.
Greenberg Traurig, P.A., and Kimberly S. Mello (Tampa), Jonathan S. Tannen (Tampa), and Michele L. Stocker (Ft. Lauderdale), for appellant.
Neustein Law Group, P.A., and Nicole R. Moskowitz, for appellee Shay Dori.
Before SUAREZ, C.J., and ROTHENBERG and SALTER, JJ.
ROTHENBERG, J.
Heartwood 2, LLC (Heartwood) appeals from a final judgment
FACTS
On July 15, 2005, 1200 West Realty, LLC (the grantor), a Delaware limited liability company, executed the deed in favor of Shay Dori (Mr. Dori), which contains the following legal description and statement:
Unit 918, Mirador 1200, a Condominium, together with an undivided interest in the common elements, according to the Declaration of Condominium thereof, as recorded in Official Records Book , Page , of the Public Records of Miami-Dade County.
This Commitment will be endorsed at the time of the recordation of the Declaration of Condominium to complete the legal description.
(emphasis added). As is obvious, the specific recording information for the declaration of condominium was not included. In addition to this legal description and statement, the deed included Mr. Dori‘s address—1200 West Ave. #918, Miami Beach, FL 33139.
On the same day that the deed was executed, Mr. Dori executed a purchase
In May 2012, Wells Fargo Bank, N.A. (Wells Fargo) filed a two-count complaint against Mr. Dori. In Count I, Wells Fargo sought to foreclose the mortgage executed by Mr. Dori in favor of Meridian, alleging in part that Wells Fargo was the current owner and holder of the note and mortgage, Mr. Dori owns the mortgaged property, and Mr. Dori defaulted under the terms of the promissory note and mortgage by failing to make the July 2011 payment and all subsequent
After the mortgage and note were allegedly assigned from Wells Fargo to Heartwood, Heartwood was substituted as the plaintiff. Thereafter, Mr. Dori filed an answer admitting that he owned the subject property, and he raised several affirmative defenses, such as lack of standing, but did not raise any affirmative defense relating to the alleged legal description in the deed.
On March 11, 2015, Heartwood filed an unopposed motion for leave to amend the complaint, asserting that the complaint failed to include a necessary party—the grantor of the deed. The following week, even though Mr. Dori did not oppose Heartwood‘s motion for leave to amend, the trial court denied Heartwood‘s motion because the case had been set for trial for the week of April 6, 2015, and the trial court‘s own concern that the late amendment would prejudice Mr. Dori.
On April 2, 2015, the trial court granted Mr. Dori‘s verified unopposed motion to continue the trial. On the following day, April 3, 2015, Heartwood filed a renewed motion for leave to amend its complaint, and in its renewed motion, Heartwood reminded the trial court that its previous motion for leave to amend was denied because the trial had already been scheduled. Mr. Dori did not file an objection to
At the non-jury trial, Mr. Dori‘s counsel sought for the first time dismissal of the reformation count based on Heartwood‘s failure to join an indispensable party, the grantor, and because Heartwood had been precluded from amending its complaint to reform the deed, Mr. Dori‘s counsel argued that the foreclosure count should be dismissed because the deed failed to sufficiently identify the property due to the omission of the specific recording information regarding the declaration of condominium. In response, Heartwood‘s counsel argued that the omission of the recording information for the declaration of condominium in the deed was a scrivener‘s error, and that the grantor was not an indispensable party because the correction of the deed would affect neither the grantor‘s nor the grantee‘s (Mr. Dori) rights. He also argued that the omission in the deed did not render the title transferred to Mr. Dori void because, based on the information provided in the deed,
At trial, the trial court specifically found that the omission in the deed was clearly a scrivener‘s error, and thereafter, when the trial court entered its final judgment, it found that Heartwood established standing, the pleadings sufficiently stated a claim and prayer for monetary relief, and Heartwood was entitled to the enforcement of the promissory note. As to the foreclosure claim and the reformation claim, the trial court ruled as follows:
3. [Heartwood‘s] claim for foreclosure of the mortgage is involuntarily dismissed without prejudice to filing a new action. The Court finds the Mortgage contains an insufficient legal description, as the deed by which Defendant Shay Dori took title, and to which legal interest to the mortgage purports to attach, fails to include a sufficient legal description. It simply [sic] includes the unit number, the name of the condominium, no book and page, and a street address. There is no legal description of the condominium property included in the deed. [Heartwood] sought to reform the deed but failed to join the grantor, 1200 West Realty, LLC, which is an indispensable party. As the grantor was not served in this case, the deed cannot be reformed and thereby preventing [Heartwood] from seeking enforcement of the Mortgage at his time.
4. As to Count II of [Heartwood‘s] Complaint for Reformation of Deed, the Count is dismissed without prejudice, due to [Heartwood‘s] failure to join the indispensable party 1200 West Realty LLC, the grantor of the deed by which the Borrower Shay Dori purportedly gained title.
The trial court declined to retain jurisdiction over the deed and foreclosure issues, and although Heartwood‘s pleadings did not seek monetary damages, the trial court entered a monetary judgment in favor of Heartwood and against Mr. Dori.
Following the entry of the final judgment, Heartwood filed a motion for rehearing or reconsideration, which was later denied by the trial court. Heartwood‘s appeal followed.
Heartwood contends that the trial court erred by dismissing its foreclosure claim. We agree.
ANALYSIS
The dispositive issue on appeal is whether the mortgage in this case, which contained no defects whatsoever, created a valid enforceable lien that entitled Heartwood to a foreclosure judgment based on the evidence presented at trial. Mr. Dori‘s position at trial was that Heartwood could not foreclose on the property because the deed conveying the property to Mr. Dori failed to sufficiently identify the property because the deed omitted the recording information regarding the declaration of condominium.
A. The trial court erred by dismissing the foreclosure claim based on an unpled affirmative defense
We begin our analysis by specifically noting that Mr. Dori never pled the deed‘s purported deficiency as an affirmative defense. It is well-settled law in Florida that affirmative defenses not raised are waived. See
Because dismissal of Heartwood‘s foreclosure claim was based on the unpled, and thus waived, affirmative defense regarding an alleged deficiency in the deed conveying the subject property to Mr. Dori, the trial court erred by considering and relying on this defense in granting Mr. Dori‘s motion to dismiss the foreclosure count of Heartwood‘s complaint. Accordingly, reversal and entry of a foreclosure judgment in Heartwood‘s favor is warranted on this basis alone.
B. Reformation of the deed was not required to foreclose the subject mortgage
Even if Mr. Dori had properly raised the alleged deficiency in the deed conveying the property to Mr. Dori, which he clearly did not do, reversal of the trial court‘s dismissal of Heartwood‘s foreclosure claim would still have been warranted.
Under Florida law, the lien of a mortgage encompasses the property described in the mortgage. See
There is no dispute that the mortgage in this case provided a complete legal description of the property. The description provided is as follows:
Unit 918, Mirador 1200, a Condominium, together with an undivided interest in the common elements, according to the Declaration of Condominium thereof, as recorded in the Official Records Book 23543, Page 3930, of the Public Records of Miami-Dade County, Florida.
In fact, Mr. Dori has never asserted that the mortgage was deficient or that the mortgage does not encumber the property. Thus, the mortgage constitutes a valid lien on the property under Florida law. See
Because the mortgage constitutes a valid lien on the property; there is no dispute that Mr. Dori received the loan funds and he defaulted; and Mr. Dori failed to allege a valid defense to foreclosure, Heartwood was entitled to a final judgment of foreclosure. The trial court therefore erred by dismissing Heartwood‘s
C. Other errors
Although we conclude that reformation of the deed was not required to foreclose the mortgage in this case, reverse the trial court‘s dismissal of Heartwood‘s foreclosure claim, and remand for the entry of a final judgment foreclosing the mortgage, we also find that the trial court abused its discretion by denying Heartwood‘s renewed motion to amend its complaint to seek reformation. Although the trial court‘s first denial of Heartwood‘s unopposed motion to amend, filed three weeks before the scheduled trial date, may have withstood a challenge on appeal based on the trial court‘s discretion, the denial of Heartwood‘s renewed motion, filed one day after Mr. Dori obtained a continuance of the trial and without objection by Mr. Dori, was an abuse of discretion because the renewed motion to amend was filed: (1) immediately after the trial was continued; (2) prior to the setting of a new trial date; and (3) two and one-half months (ten weeks) prior to the new trial date. Furthermore, the renewed motion had been pending for several weeks prior to the trial court setting a new trial date, and the only excuse given by the trial court for denying the renewed motion was that a trial date had been scheduled.
Lastly, as Heartwood candidly admits in its initial brief: [T]he trial court improperly sua sponte converted Heartwood‘s foreclosure claim into a claim for a
CONCLUSION
Although we have identified several errors, we reverse the final judgment involuntarily dismissing Heartwood‘s foreclosure claim and remand for entry of a final judgment foreclosing the mortgage based on our conclusion that the mortgage is valid because it contains sufficient information to identify the specific property that was conveyed to Mr. Dori. Additionally, based upon Heartwood‘s proper confession that the trial court improperly entered a monetary judgment against Mr. Dori because the foreclosure count did not seek monetary damages, we instruct the trial court not to include a monetary judgment against Mr. Dori in the final judgment of foreclosure entered on remand. On remand, Heartwood may amend Count II, the reformation claim, or abandon this claim based on this Court‘s ruling that it is entitled to a final judgment of foreclosure on the property without reformation of the deed.
Reversed and remanded.
SUAREZ, C.J., concurs.
I concur in the majority opinion to the extent that it reverses and remands for the entry of a final judgment of foreclosure in place of the final judgment on the promissory note indebtedness. The mortgage count should not have been dismissed, as the mortgage contained a sufficient legal description, the borrower‘s default and the amount of indebtedness were proven, and there was no impediment to the entry of a final judgment of foreclosure. Any alleged defect in the deed into the mortgagor (appellee, Shay Dori), should remain for a separate action (which would, if pursued, have to include the grantor as the other party to the facially-defective instrument) or a curative deed to be obtained from the grantor by consent.
I must respectfully dissent, however, from part C. of the majority opinion insofar as it finds an abuse of discretion in the trial court‘s denial of the plaintiff‘s motion to amend the reformation count (Count II of the complaint) to add the grantor as an indispensable party.
The mortgagee/plaintiff, appellant here,2 filed a verified complaint in May 2012. Count I sought to foreclose the mortgage, while Count II sought reformation
In my view, the trial court did not abuse its discretion in denying such an amendment, even if unopposed. The case was three years old and stale,4 but was finally scheduled to be tried the month after the hearing on the motion to amend. The possible consequences of allowing the amendment were the problem: the amendment would have to be filed or deemed filed; the new defendant would have to be served; the new defendant and existing defendant would have 20 days from
The abuse of discretion standard of review applicable to a motion to amend generally defers to the right of a trial court to control the management and trial of a case. Though amendment is ordinarily to be given freely when justice so requires,
In the present case, I cannot agree that the trial court abused its discretion in denying the plaintiff‘s dilatory motion to add a party. The errors in the present case were essentially errors by counsel, not by the trial court. The tsunami of residential foreclosures in South Florida in the aftermath of the 2008 real estate recession has been marked in many cases by assembly-line pleadings, preparation of complaints
The trial court‘s denial of the plaintiff‘s proposed amendment to add a party to the reformation count, and our decision here, cause no prejudice to the parties. Heartwood 2 may ascertain from its title examination and title insurer whether it wishes to re-file the reformation count, to file a quiet title action against the grantor, or to track down the grantor/developer of the condominium to obtain a curative, recordable instrument. That is not our concern, nor was it required to be a concern of the trial court, given the errors and omissions by the person(s) who prepared and recorded the defective deed and by prior counsel for the lender in the foreclosure case.
For these reasons, I join the majority opinion to the extent that it reverses and remands the final judgment to vacate its characterization as a lien for the promissory note indebtedness, and to direct the entry of a final judgment of foreclosure using the property description in the mortgage. I respectfully dissent, however, from the majority opinion insofar as it finds an abuse of discretion in the trial court‘s denial