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Mortgage Foreclosure—Fraud: Florida Appellate Court affirms order denying appellant’s motion to vacate final judgment of foreclosure.

By gedlaw50486353, Feb 26 2016 07:47PM

The Fourth District Court of Appeal of Florida (“4th DCA”) recently affirmed a trial court’s order which denied a homeowner’s motion to vacate final judgment of foreclosure finding the motion was untimely and improper.

The Plaintiff, Wachovia Mortgage, FSB (“the Bank”), was granted an order of final summary judgment of foreclosure against the Defendant homeowners on December 15, 2011. The homeowners did not appeal the ruling but later moved to vacate the final judgment on September 27, 2014, almost three years after the judgment was entered against them. The homeowners argued that the “Pick-a-Payment” note that was at subject in the case was considered a “deceptively devised financial product” and the Bank entered into agreements with both state and federal officials to avoid prosecution regarding these type of loans. A “Pick-a-Payment” note refers to a mortgage loan where the borrower is permitted to make a minimum payment for a limited time subject to certain limitations. These loans have been the subject of various class action lawsuits throughout the country. See Murphy v. Wells Fargo Home Mortg., 2013 U.S. Dist. Lexis 118410.

The Homeowners argued that the agreement between the State of Florida and the bank allowed the bank to offer funds and assists its customers in modifying their loans in order to avoid foreclosure. Since the Bank failed to offer Homeowners a modification and to disclose the settlement to the Court, they argued this constituted extrinsic fraud which warrants a vacation of the final judgment of foreclosure pursuant to Florida Rules of Civil Procedure 1.540(b).

Under Florida law, once a court renders final judgment, the trial court loses jurisdiction over the case except to enforce judgment itself. Bank One, N.A. v. Batronie, 884 So. 2d 346, 348 (Fla. 2d 2004). There is one exception to this under rule 1.540 which gives the court jurisdiction to relieve a party from final judgment under limited circumstances. Id. The rule provides relief from “fraud, misrepresentation, or other conduct of an adverse party.” Fla. R. Civ. P. 1.540(b)(3). The rule further states that a motion shall be filed within a reasonable time and for allegations of fraud not more than 1 year after the judgment. Id. This law follows strict compliance and may not be extended for any reason. Batronie, 884 So. 2d at 349. In this case, the motion to vacate was entered almost three years after the final judgment. Thus, the 4th DCA held the trial court had no jurisdiction to hear the motion.

On the issue of fraud, the Court stated that even if the motion were filed in a timely manner, the motion was still without merit. The Florida Supreme Court has discussed extrinsic fraud as involving “conduct which is collateral to the issues tried in the case.” Lefler v. Lefler, 776 So. 2d 319, 321 (Fla. 4th DCA 2001). It is further defined as the “prevention of an unsuccessful party from presenting its case, by fraud or deception practiced by his adversary. Id. The Court found that in no way was homeowner kept from presenting its case or kept away from the court. The agreement was between the State of Florida and the Bank so the Homeowner was not a party to the agreement nor were they a third party beneficiary. The Homeowners were found to have no right of action under the agreement. There was no language incorporating the agreement into the note or mortgage or creating any duty on the bank to offer the Homeowners a modification before foreclosure. Thus, the Homeowners allegation failed to support a finding of extrinsic fraud.

The Court ultimately found that the trial court did not abuse its discretion in denying the Homeowner’s motion to vacate because the motion was untimely.

See Voce v. Wachovia Mortg., FSB, 174 So. 3d 545, (Fla. 4th DCA, 2015). (pf)

Click here to read full opinion.

The information you obtain through this article is not, nor is it intended to be, legal advice. This article intended to provide general legal updates. Information is current only as of the date indicated. Changes occur frequently and often the laws and statutes are complex and/or are difficult to follow and therefore we cannot be held responsible for any errors or misstatements or for any misunderstanding on your part. Thus, you are cautioned to use this information at your own risk. You should consult an attorney for advice regarding your individual situation. The proper answers to your legal problems will turn on your particular circumstances and thus you need to have competent legal advice tailored to those circumstances. Consult a lawyer if you have a legal matter which needs attention. All potential clients are urged to make their own independent investigation and evaluation of any lawyer being considered. This article is not intended to be advertising and David S. Ged, PA does not wish to represent anyone based solely upon the reading/viewing of this article.

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