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transcript
IN THE SUPREÊ COURT OF FLORIDA
NICHOLAS ARSALI,
Petitioner/Appellant,CASE NO.: SCl2-600
v. L.T. NO.: 4D11-2348
CHASE HOME FINANCE LLC,AMY B. WILSON, andCHRISTOPHER D. MANNING,
Respondents/Appellees./
PETITIONER'S REPLY BRIEF
(In response to Respondent Chase's Answer Brief)
BETH M. COLEMAN, ESQ.Florida Bar No.: 903973BETH M. COLEMAN, P.A.Post Office Box 7280St. Petersburg, FL 33734(727) 526-1220beth@bmc-legal.comAttorney for Petitioner,Nicholas Arsali
TABLEOFCONTENTS
TABLE OF CITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
ARGUMENT......................................................1
STANDARDOFREVIEW......................................1
I. BROWN AND ARLT DO NOT CONFLICT AND DO NOT NEEDTOBERECONCILED ................................... 1
A. Arlt's application of well-established law does not support thenotion that factors other than inadequate bids can independentlyjustify setting aside a sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. Brown did not hold that any factor it mentioned can operate onits own to justify setting aside a sale. . . . . . . . . . . . . . . . . . . . . 3
II. THE FOURTH DISTRICT'S CERTIFIED QUESTION SHOULDBE REPHRASED AND ANSWERED IN THE NEGATIVE. . . . . . 7
III. THERE WAS NO BASIS TO SET ASIDE THE FORECLOSURESALE OR JUDGMENT IN THIS CASE. . . . . . . . . . . . . . . . . . . . . .11
IV. THE LOWER COURT SHOULD HAVE CONDUCTED ANEVIDENTIARY HEARING ON THE MOTION TO SETASIDE THE SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
CERTIFICATES OF COMPLIANCE AND SERVICE . . . . . . . . . . . . . . . . . . . .15
11
TABLE OF CITATIONS
Cases:
Alberts v. Fed. Home Loan Mtg. Corp., 673 So. 2d 158 (Fla. 4th DCA 1996) . . . .10
Allstate Ins. Co. v. Bowne, 817 So. 2d 994 (Fla. 4th DCA 2002) . . . . . . . . . . . . . .14
Arlt v. Buchanan, 190 So. 2d 575 (Fla. 1966) . . . . . . . . . . . . . . . . . . . . . . . . . 4, 5, 9
Arsali v. Chase Home Finance, LLC, 79 So. 3d 845(Fla. 4th DCA 2012) (Appx.1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 8
Avi-Isaac v. Wells Fargo Bank, N.A., 59 So. 3d 174 (Fla. 2d DCA 2011) . . . . . . 13
Bank ofAmerica, N.A. v. Lane, 76 So. 3d 1007 (Fla. 1** DCA 2011) . . . . . . . . . . 12
Bennett v. Ward, 667 So. 2d 378 (Fla. 1** DCA 1995) . . . . . . . . . . . . . . . . . . . . . . 4
Blimpie Capital Venture, Inc. v. Palms Plaza Partners, Ltd., 636 So. 2d 838, 840(Fla. 2d DCA 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Bilfuco v. State Farm Mut. Auto. Ins. Co., 693 So. 2d 707 (Fla. 4th DCA 1997) . .14
Block v. Hooper, 149 N.E. 21 (Ill. 1925) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Burge v. Fidelity Bond & Mtg. Co., 648 A.2d 414 (Del. 1994) . . . . . . . . . . . . . . . .6
Chancey v. Chancey, 880 So. 2d 1281 (Fla. 2d DCA 2004) . . . . . . . . . . . . . . . . . 14
Comstock v. Purple, 49 Ill. 158 (Ill. 1868) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
D'Angelo v. Fitzmaurice, 863 So. 2d 311 (Fla. 2003) . . . . . . . . . . . . . . . . . . . . . . . 1
Fed. Land Bank ofOK v. Fenske, 291 N.W. 596 (N.D. 1939) . . . . . . . . . . . . . . . . .9
First National Bank v. Paulson, 288 N.W. 465 (N.D. 1939) . . . . . . . . . . . . . . . . . .9
Flagler v. Flagler, 94 So. 2d 592 (Fla. 1957) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
111
Florida Ins. Guar. Ass'n, Inc. v. Devon NeighborhoodAss'n, Inc.,67 So. 3d 187 (Fla. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Household Fin. v. Ness, 810 N.E.2d 1146 (Ind. Ct. App. 2004) . . . . . . . . . . . . . . . 6
Ingorvaia v. Horton, 816 So. 2d 1256 (Fla. 2d DCA 2002) . . . . . . . . . . . . . . . . .8-9
John Crescent, Inc. v. Schwartz, 382 So. 2d 383 (Fla. 4th DCA 1980) . . . . . . . . . 13
Josecite v. Wachovia Mtg. Corp., -- So. 3d --, 2012 WL 3758648(Fla. 5th DCA Aug. 31, 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3, 8
JPMorgan Chase Bank, N.A. v. Hernandez, -- So. 3d --, 2011 WL 2499641(Fla. 3d DCA Jun. 22, 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Lawyers ' Co-op Pub. Co. v. Bennett, 16 So. 185 (Fla. 1894) . . . . . . . . . . . . . . . . . 4
Long Beach Mtg. Corp. v. Bebble, 985 So. 2d 611 (Fla. 4th DCA 2008) . . . .3, 4, 11
LR5A-JV v. Little House, LLC, 50 So. 3d 691 (Fla. 5th DCA 2010) . . . . . . . . . . . . .5
Macfarlane v. Macfarlane, 39 So. 995 (Fla. 1905) . . . . . . . . . . . . . . . . . . . . . . . 3, 4
Matter ofBoromei, 83 B.R. 74 (Bankr. M.D. Fla. 1988) . . . . . . . . . . . . . . . . . . . .11
Miller v. Music Square Church, 1992 WL 386292 (Tenn. Ct. App. 1992) . . . . . . .9
Moran-Alleen Co. v. Brown, 123 So. 561 (Fla. 1929) . . . . . . . . . . . . . . . . . . . 3, 4, 8
Mut. Ben. Life Ins. Co. v. Lyons, 20 N.E.2d 784 (Ill. 1939) . . . . . . . . . . . . . . . . . . .2
Novastar Mtg., Inc. v. Bucknor, 69 So. 3d 959 (Fla. 2d DCA 2011) . . . . . . . . . . .14
Old Republic Ins. Co. v. Lee, 507 So. 2d 754 (Fla. 4th DCA 1987) . . . . . . . . . . . .11
One 79"' St. Estates, Inc. v. Am. Inv. Svcs., 47 So. 3d 886 (Fla. 3d DCA 2010)11-12
Phoenix Hldg., LLC v. Martinez, 27 So. 3d 791 (Fla. 3d DCA 2010) . . . . . . . . . . .5
Republic Federal Bank, N.A. v. Doyle, 19 So. 3d 1053 (Fla. 3d DCA 2009) . . . . . 5
IV
Righter v. Clayton, 194 A. 819 (Md. Ct. App. 1937) . . . . . . . . . . . . . . . . . . . . . . . .6
Suntrust Bank v. Puelo, 76 So. 3d 1037 (Fla. 4th DCA 2011) . . . . . . . . . . . . . . . . 14
United Companies Lending Corp. v. Abercrombie, 7 13 So. 2d 1017(Fla. 2d DCA 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
United Oklahoma Bank v. Moss, 793 P.2d 1359 (Ok. 1990) . . . . . . . . . . . . . . . . . .6
Wells Fargo Credit Corp. v. Martin, 605 So. 2d 531 (Fla. 2d DCA 1992) . . . . . . 10
Wolfert v. Milford Sav. Bank, 47 P. 175 (Kan. Ct. App. 1896) . . . . . . . . . . . . . . . . 2
Statutes, Rules, and Other Authorities:
§ 45.0315, Fla. Stat. (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Fla. R. Civ. P. 1.540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
V
ARGUMENT
STANDARD OF REVIEW
Petitioner is asking the Court to evaluate only the Fourth District's legal
conclusions, not any discretionary decision by the trial court. As such de novo
review is the appropriate standard. See Florida Ins. Guar. Ass'n, Inc. v. Devon
Neighborhood Ass'n, Inc., 67 So. 3d 187 (Fla. 2011) (question of law concerning
proper test to be applied to issue is reviewed de novo); D'Angelo v. Fitzmaurice,
863 So. 2d 311, 314 (Fla. 2003) (pure questions of law reviewed de novo and no
deference given to judgment of lower courts).
I. BROWN AND ARLT DO NOT CONFLICT AND DO NOT NEED TOBE RECONCILED.
All parties agree that Brown and Arlt do not conflict. See Init. Brf. at 8-13;
Chase Ans. Brf. at 6, 12-13; Borrowers' Ans. Brf. at 7. Nonetheless Chase
continues to adhere to the Fourth District's unnecessary and unsound
"reconciliation" analysis. Ans. Brf. at 6-14.
A. Arlt's application of well-established law does not support the notionthat factors other than inadequate bids can independently justifysetting aside a sale.
In attempting to defend the Fourth District's analysis, Chase argues that an
inadequate bid differs from the other factors mentioned in Brown. Because judicial
sales are not expected to bring full value, Chase explains that an inadequate bid
must be combined with another factor to justify setting aside a sale. Ans. Brf. at 7-
1
8. A mistake, on the other hand, can be enough on its own due to the courts' broad
equitable discretion. Id. at 9-12. Chase's efforts to elevate the importance of a
mistake over a grossly inadequate bid must fail. The case law does not support it
and neither finality, stability, nor any other sound policy is served by such an
interpretation.
The old, out-of-state cases Chase relies on confirm the need to preserve
judicial sales and protect all parties' interests. They do not suggest that a unilateral
mistake can justify setting aside a valid sale. See Ans. Brf. at 8 citing Comstock v.
Purple, 49 Ill. 158, 1868 WL 5197, *4, 6 (Ill. 1898) (reversed order setting aside
sale; court should not disturb proper sale absent fraud; bidder had right to benefit
of purchase and creditor was entitled to its money); Block v. Hooper, 149 N.E. 21,
22 (Ill. 1925) (affirmed order setting aside sale for grossly inadequate bid price and
sheriff error; courts protect judicial sales, primary purpose of which is to provide
for payment of creditor's debt and purchaser's protection); Wolfert v. Milford Sav.
Bank, 47 P. 175 (Kan. Ct. App. 1896) (affirmed order vacating sale for grossly
inadequate bid plus mistake); Mut. Ben. Life Ins. Co. v. Lyons, 20 N.E. 2d 784,
787-89 (Ill. 1939) (affirmed refusal to vacate sale; untimely but equitable
redemption allowed only if no innocent third parties involved).
Likewise, none of the decades of Florida case law applying Arlt or Brown
upheld setting aside a properly-conducted sale merely for a unilateral mistake. See
2
cases cited at Init. Brf. at 15-18. That is, until Arsali. As shown by the Josecite
case, Arsali's unprecedented holding is now setting dangerous precedent. Josecite
v. Wachovia, -- So. 3d --, 2012 WL 3758648 (Fla. 5th DCA Aug. 31, 2012). This
newly evolving trend is likely to increase post-judgment litigation and negatively
impact foreclosure sales in a manner that is harmful to all parties involved and the
real estate market as a whole. See cases cited in Init. Brf. at 18-21; Long Beach
Mtg. Corp. v. Bebble, 985 So. 2d 611, 613 (Fla. 4th DCA 2008) ("To establish a
precedent that encourages easy setting aside of foreclosure sales 'would be to
destroy the incentive which prompts bidding at [a] sale and thereby work a
hardship on both debtors and creditors.'").
B. Brown did not hold that any factor it mentioned can operate on itsown to justify setting aside a sale.
Despite the courts' consistent interpretation, Chase agrees with the Fourth
District's faulty conclusion that, according to Brown, factors other than the bid
price operate independently to justify setting aside a sale. Brown mentioned five
grounds for setting aside a sale: a grossly inadequate bid, surprise, accident,
mistake, and irregularity in the conduct of the sale. Moran-Alleen v. Brown, 123
So. 561 (Fla. 1929). The Court supported its statement with citations to well-
established law that, an inadequate bid is an insufficient reason to set aside a sale
unless it is connected with or results from one of the other factors. Id. (citing
Macfarlane v. Macfarlane, 39 So. 995, 998 (Fla. 1905), etc.).
3
Accordingly it was already clear that one of the grounds Brown mentions - a
grossly inadequate price - cannot alone justify setting aside a sale. Id. Later cases,
including those Chase cites, concur. See Arlt v. Buchanan, 190 So. 2d 575 (Fla.
1966); Bennett v. Ward, 667 So. 2d 378, 380-81 (Fla. 1" DCA 1995) (inadequate
bid alone insufficient to set aside sale unless combined with error such as failure to
serve party with requisite notices); United Companies Lending Corp. v.
Abercrombie, 713 So. 2d 1017, 1019 (Fla. 2d DCA 1998) (court committed legal
error in believing it did not have discretion to set aside sale resulting in grossly
inadequate bid price caused by party's own mistake); Bebble, 985 So. 2d 611
(unconscionably inadequate bid can be enough to set aside sale if combined with
mistake).
Nonetheless in Arsali the Fourth District concludes that the other four
grounds mentioned in Brown can, independently or standing alone, justify setting
aside a sale. Appx. 1 at 3. The court based its conclusion on the faulty Ingorvata
analysis and Brown's use of the phrase "any and all" in dictum when discussing
the bases for setting aside a sale. Appx. 1 at 3; Brown, 123 So. at 561. If "any and
all" is to be taken literally, then an inadequate bid must be an independent basis to
set aside a sale on its own just as the other factors. Yet even Chase agrees that
Brown never held any such thing, which would have been contrary to well-
established precedent. See, e.g., Macfarlane, 39 So. 995; Lawyers Co-Op Pub. Co.
4
v. Bennett, 16 So. 185 (1894); Ans. Brf. at 13. The Fourth District's analysis also
renders Arlt superfluous. The Arlt Court would have had no need to consider the
adequacy of the bid price if the other applicable Brown factor -- a sale irregularity -
- was enough independently to justify setting aside the sale. See Arlt, 190 So. 2d at
577.
Petitioner agrees that requests to set aside sales are equitable in nature and
that the courts have broad discretion. See Ans. Brf. at 10. As confirmed in the
cases Chase cites, however, discretion has limits. Among those limitations are the
need to consider all parties' interests and a prohibition on basing decisions solely
on sympathy or benevolence. See LR5A-JV v. Little House, LLC, 50 So. 3d 691,
695 (Fla. 5th DCA 2010) (court considers all parties' interests; affirmed order
setting sale date and rejecting judgment holder's claim that it alone had right to
control if and when sale takes place); Phoenix Holdings, LLC v. Martinez, 27 So.
3d 791, 792-93 (Fla. 3d DCA 2010) (trial court grossly abused its discretion in
setting aside a sale and final judgment on basis of "unfairness" caused by
borrowers' failure to receive certain notices; neither fairness, benevolence, nor
compassion justify setting aside valid sale). "[T]he courts of equity [do not] have
any right or power under the law of Florida to issue such order it considers to be in
the best interest of 'social justice' at the particular moment without regard to
established law.'" Id. at 793 quoting Flagler v. Flagler, 94 So. 2d 592, 594 (Fla.
5
1957); Republic Federal Bank, N.A. v. Doyle, 19 So. 3d 1053, 1054 (Fla. 3d DCA
2009) (grounds of benevolence or compassion do not constitute lawful basis for
granting relief to one side to detriment of other).
If most of the out-of-state decisions Chase relies on are representative,
courts in other jurisdictions similarly reject the notion that any one factor alone can
justify setting aside a judicial sale. See Ans. Brf. at 10-11 citing Household Fin. v.
Ness, 810 N.E. 2d 1146, 1149-50 (Ind. Ct. App. 2004) (affirming denial of motion
to set aside sale based on sheriff's alleged mistakes in noticing sale procedures);
United Oklahoma Bank. v. Moss, 793 P.2d 1359, 1364 (Ok. 1990) (reversed
confirmation order where bank admitted sheriff's irregularity and grossly
inadequate price); Righter v. Clayton, 194 A. 819, 821-22 (Md. Ct. App. 1937)
(affirmed refusal to set aside sale; mere inadequacy of price does not justify setting
aside sale unless so unreasonable as to indicate lack of judgment or misconduct by
sale trustee).
Although a Delaware opinion suggested that a sale could be vacated for a
unilateral mistake, even that case involved an inadequate bid. See Ans. Brf. at 11,
citing Burge v. Fid. Bond & Mtg. Co., 648 A.2d 414, 419-21 (Del. 1994) (price
inadequate but not grossly so). No other state courts appear to have followed the
Delaware opinion on this point and even Burge agreed its conclusion was contrary
to that of other states. See Burge, 648 A.2d at 421. This Court should side with its
6
own precedent and that of other jurisdictions in rejecting the proposition that a
unilateral mistake alone justifies setting aside a properly conducted judicial sale
that garnered an adequate bid price.
Lastly, the 10-day sale objection deadline does not favor interpreting Brown
in a manner that permits sales to be set aside for unilateral mistakes. See Ans. Brf.
at 11-12. Knowing a post-sale motion to set aside can succeed on the basis of such
mistakes, without more, invites less pre-sale diligence by all parties involved. The
frequency of such motions is likely to increase, thereby consuming even more
judicial resources and negatively impacting judgment finality and stability in the
sale process. See Init. Brf. at 18-21.
II. THE FOURTH DISTRICT'S CERTIFIED QUESTION SHOULD BEREPHRASED AND ANSWERED IN THE NEGATIVE.
The Fourth District's attempt to reconcile cases that do not conflict led to an
erroneous holding and an insufficient certified question. The relevant question this
Court should answer is not whether Arlt applies when there is no dispute about the
adequacy of the bid, but whether Brown and its progeny permit setting aside a
properly conducted sale that generated an adequate bid. The answer to that
question is "no." Chase's argument that this rephrased question contradicts Brown
or the courts' equitable discretion is based on the Fourth District's faulty
reasoning. See Ans. Brf. at 14-19. Brown never held that inadequate bids,
7
mistakes, irregularities, or any other factor alone is an independent reason to justify
setting aside a sale.
It was not until Ingorvaia that a court interpreted Brown to "state[] that gross
inadequacy of price alone is a sufficient ground to set aside a foreclosure sale. . . ."
Appx. 1 at 5 (citing Ingorvata v. Horton, 816 So. 2d 1256, 1258 (Fla. 2d DCA
2002)). Chase admits this conclusion is erroneous, noting any implication in
Brown that a grossly inadequate bid is enough to set aside a sale is based on
dictum. Ans. Brf. at 13-14. The actual holding in Brown was that the plaintiff had
proven none of the alleged bases for setting aside the sale, including an inadequate
bid. Id.: Brown, 123 So. at 561. For the same reasons, any implication that a
unilateral mistake alone can justify setting aside a sale is likewise based on an
unnecessarily overbroad reading of dictum.
Chase ignores the fact that in decades of case law citing Brown and Arlt, the
only factor alone that justified setting aside a sale was a court error. Init. Brf. at
17. Otherwise, the case law consistently holds that a sale can be vacated only by a
grossly inadequate bid combined with some other factor. See Init. Brf. at 15-16.
Thus the proposition that a sale cannot be set aside for a unilateral mistake is not
contrary to Brown or the case law interpreting it, nor to any other reported Florida
case until Arsali (which has now been followed by Josecite).
Chase claims that answering the rephrased question in the negative and
8
thereby refusing to permit unilateral mistakes to justify setting aside proper sales is
"fundamentally inconsistent" with courts' equitable powers. Ans. Brf. at 15-16. In
so arguing, Chase relies on Ingorvaia, an unpublished Tennessee case, and two
out-of-state Great Depression-era cases. Ans. Brf. at 15-16 (citing Ingorvaia:
Miller v. Music Square Church, Inc., 1992 WL 386292 (Tenn. Ct. App. Dec. 30,
1992); Fed. Land Bank ofOmaha v. Fenske, 291 N.W. 596 (S.D. 1940); and First
Nat'l Bank v. Paulson, 288 N.W. 465 (N.D. 1939). None of these cases support
Chase's position. Even the flawed Ingorvata case did not hold that a unilateral
mistake can justify setting aside a sale. See Ingorvaia, 816 So. 2d 1256.
According to Miller, the Tennessee judicial sale process requires court
confirmation of a sale before title can pass. Miller, 1992 WL 386292 at *1.
Tennessee law permits a purchaser to be discharged from his purchase if he cannot
get clear title to the property. Id. No such process or legal proposition applies
here; instead the Borrowers moved to set aside the sale based on their former
lender's error in failing to cancel the sale as promised. In the South Dakota Fenske
case, it was an abuse of discretion to vacate a sale on the basis of a low bid price
that was not caused by any false representations. Fenske, 291 N.W. at 600. The
North Dakota Paulson court relied on a "public emergency" statute enacted during
the Great Depression in setting aside a sale for an inadequate price. Paulson, 288
N.W. at 474-75. Of course, no such statute applies in this case.
9
In exercising their broad equitable discretion, Florida courts have
consistently interpreted the law to enable them to set aside sales (or refuse to do so)
for court errors or other irregularities combined with grossly inadequate sale
prices. This includes the Martin and Alberts cases Chase cites. See Ans. Brf. at
17-18 citing Wells Fargo Credit Corp. v. Martin, 605 So. 2d 531 (Fla. 2d DCA
1992) (affirming discretionary decision refusing to set sale based on grossly
inadequate price and unilateral mistake); Alberts v. Fed. Home Loan Mtg. Corp.,
673 So. 2d 158 (Fla. 4* DCA 1996) (affirming order setting aside sale for grossly
inadequate price and mistake). Guided by this steady interpretation of the law, this
Court should answer the rephrased question in the negative and hold that a
unilateral mistake alone cannot justify setting aside a properly conducted sale
resulting in an adequate sale price.
Lastly, rather than being a "prime example" of the proper exercise of a
court's broad discretion, this case shows the danger in permitting sales to be set
aside merely for mistakes. See Ans. Brf. at 19. Chase suggests that the Borrowers
protected their interests and are somehow wholly faultless in this instance. Id. Yet
the Borrowers defaulted on their mortgage loan in the first place; they did not
successfully defend the foreclosure action; they did not appeal the decision; they
took no steps to redeem the property in the eight months between the final
judgment and the foreclosure sale; and they did not check to ensure Chase
10
cancelled the sale as purportedly promised. Appx.2, 3. If this scenario provides
sufficient justification to set aside a judicial sale, the floodgates will open to any
manner of belated attempts to avoid foreclosure judgments and sales for reasons
having nothing to do with the sale process itself. Neither policy nor precedent
support setting aside sales in such circumstances. See arguments and cases cited in
Init. Brf. at 18-21; Bebble, 985 So. 2d at 613 ("To establish a precedent that
encourages easy setting aside of foreclosure sales 'would be to destroy the
incentive which prompts bidding at [a] sale and thereby work a hardship on both
debtors and creditors.'").
III. THERE WAS NO BASIS TO SET ASIDE THE FORECLOSURESALE OR JUDGMENT IN THIS CASE.
Chase labels as frivolous Petitioner's contention that Chase could not
reinstate the Borrowers' loan after the final judgment and therefore had no right to
cancel the sale. Ans. Brf. at 19. Yet the One 79'* Street decision Chase relies on
confirms that a loan which has been merged into a final judgment no longer exists
and therefore cannot be "reinstated" by the parties. One 79'* Street Estates, Inc. v.
Am. Inv. Svcs., 47 So. 3d 886 (Fla. 3d DCA 2010); see also JPMorgan Chase
Bank, N.A. v. Hernandez, -- So. 3d --, 2011 WL 2499641 (Fla. 3d DCA Jun. 22,
2011) (same); Matter of Boromei, 83 B.R. 74, 76-77 (Bankr. M.D. Fla. 1988)
(generally Florida law would not authorize a reinstatement of a mortgage
subsequent to acceleration; citing Old Republic Ins. Co. v. Lee, 507 So. 2d 754
(Fla. 4th DCA 1987); debtor does not have right to cure default and reinstate
mortgage subsequent to entry of foreclosure judgment).
It is true that a court can effect a post-judgment reinstatement if it vacates
the foreclosure judgment. This requires a valid reason to vacate the judgment in
the first place. See, e.g., One 79"' Street, 47 So. 3d at 889 n.4 (reinstatement can
occur only after final judgment vacated). Such reasons include excusable neglect
leading to the entry of the judgment, newly-discovered evidence, fraud, satisfaction
of the judgment, etc. Fla. R. Civ. P. 1.540; Bank ofAmerica, N.A. v. Lane, 76 So.
3d 1007, 1008 (Fla. 1"' DCA 2011) (trial court is restricted in providing relief from
judgments to limited number of grounds set forth in Fla. R. Civ. P. 1.540). The
Borrowers never alleged a basis for, or even requested, such relief so it was
improper for the court to vacate the fmal judgment. See Appx. 4; Lane, 76 So. 3d
at 1009 (error to set aside judgment based on excusable neglect where such issue
was not presented by pleadings, noticed for hearing, or litigated by parties). Even if
the Borrowers had asked for such relief, a post-judgment attempt at reinstatement
does not fall within any of the permissible bases for vacating a judgment.
Thus Chase had no authority to direct the clerk of court to cancel the sale
even if it had tried to do so, which it did not. Only redemption would have
permitted a cancellation of the sale and that never occurred here. See § 45.0315,
Fla. Stat. (2011) (party may cure indebtedness and prevent foreclosure sale by
12
paying amount of monies specified in the foreclosure judgment). As a result, the
trial court's after-the-fact vacation of the final judgment did not cure its error in
setting aside the sale based on Chase's inaction. The Fourth District erred in
affirming that decision.
IV. THE LOWER COURT SHOULD HAVE CONDUCTED ANEVIDENTIARY HEARING ON THE MOTION TO SET ASIDE THESALE.
According to Chase, no evidentiary hearing was required because there was
no dispute on the facts of the motion to set aside. Ans. Brf. at 21. To the contrary,
Petitioner did disagree with the motion; that was the only purpose for intervening
in the case. Therefore he was entitled to an evidentiary hearing to dispute the
factual allegations and legal basis in the motion to set aside. See Avi-Isaac v. Wells
Fargo Bank, N.A., 59 So. 3d 174, 177 (Fla. 2d DCA 2011) (purchaser at
foreclosure sale entitled to notice and opportunity to be heard at evidentiary
hearing on motion to vacate sale; neither submission of affidavits nor argument of
counsel is sufficient to constitute an evidentiary hearing).
The UMC hearing that occurred here did not meet that requirement as the
Borrowers submitted only unverified documents and arguments of counsel, not
evidentiary proof. See Appx. 4, 5, 7; id: John Crescent, Inc. v. Schwartz, 382 So.
2d 383 (Fla. 4th DCA 1980) (court can vacate judicial sale only if requisite degree
of proof establishes grossly inadequate price coupled with exceptional
13
circumstances set forth in Arlt); Blimpie Capital Venture, Inc. v. Palms Plaza
Partners, Ltd., 636 So. 2d 838, 840 (Fla. 2d DCA 1994) (unsworn motion does not
warrant vacating facially proper final judgment absent stipulation; court cannot
make factual determination based on attorney's unsworn statements); Chancey v.
Chancey, 880 So. 2d 1281, 1282 (Fla. 2d DCA 2004) (ifRule 1.540 motion alleges
colorable entitlement to relief court should conduct limited evidentiary hearing);
c.f Bilfuco v. State Farm Mut. Auto. Ins. Co., 693 So. 2d 707, 709 (Fla. 4'h DCA
1997) (documents attached to motion for summary judgment that were not sworn,
certified, or accompanied by affidavit were inadmissible and could not be
considered).
Chase does not distinguish or even mention the foregoing law and in fact the
cases it cites support the need for an evidentiary hearing based on proof, not
unverified documents. See cases cited by Chase at Ans. Brf. at 21: Allstate Ins.
Co. v. Bowne, 817 So. 2d 994, 996 (Fla. 4th DCA 2002) (parties submitted
affidavits in support of motion to disqualify); Novastar Mtg. Inc. v. Bucknor, 69
So. 3d 959, 960 (Fla. 2d DCA 2011) (evidentiary hearing required even if not
requested where parties submitted conflicting affidavits); Suntrust Bank v. Puleo,
76 So. 3d 1037, 1039 (Fla. 4th DCA 2011) (evidentiary hearing is required if
motion states colorable claim for relief from judgment). The Fourth District erred
in affirming and holding no evidentiary hearing was required.
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CONCLUSION
The Court should reverse the District Court's decision affirming the lower
court's order setting aside the sale and final judgment. The lower court's order
should be vacated, the final judgment of foreclosure reinstated, and certificates of
sale and title issued in Petitioner's name.
Respectfully submitted,
Beth M. Coleman, Esq.Florida Bar No.: 903973Beth M. Coleman, P.A.P.O. Box 7280St. Petersburg, FL 33734(727) 526-1220beth@bmc-legal.com
CERTIFICATE OF SERVICE AND COMPLIANCE
I HEREBY CERTIFY that a copy of the foregoing has been served by emailthis 9th day of October, 2012, upon: Joseph D. Wargo and Ryan David Watstein,Esq., Wargo French, at JWargo@wargofrench.com andRWatstein@wargofrench.com; and Marshall C. Osofsky, Esq., Law Office of PaulA. Krasker, P.A., at mosofsky@kraskerlaw.com.
I HEREBY CERTIFY that the font type and size used in this brief is TimesNew Roman 14 point. The undersigned certifies that this font complies with therequirements of Rule 9.210(a)(2) of the Florida Rules of Civil Procedure.
Beth M. Coleman, Esq.
15