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.

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