By: Daniel T. Pascale, Esq.
Office Locations: Delray Beach and Coral Gables, FL
On April 20, 2016, the District Court of Appeal for the Fourth District of Florida held that a copy of an electronic promissory note (e-note) was sufficient to prove the identity of the e-note’s owner and to provide authorization to the loan servicer to pursue a foreclosure action (Rivera v. Wells Fargo Bank, N.A., 2016 WL 1579076 (Fla. 4th DCA Apr. 20, 2016)).
By: Daniel T. Pascale, Esq.
Offices Located in Delray Beach, FL and Coral Gables, FL
10 SE 1st Avenue, Suite A, Second Floor, Delray Beach, FL 33444
255 Aragon Avenue, Second Floor, Coral Gables, FL 33134
Liquidated Damages Clause Enforced in Real Estate Contract
San Francisco Distribution Center, LLC v. Stonemason Partners, LP,
39 Fla. L. Weekly D790 (Fla. 3d DCA 2014)
Synopsis
Vendor of commercial property brought breach of contract action against failed purchaser, seeking to recover deposit which closing agent had returned to vendor. The Circuit Court, Miami–Dade County, Ronald C. Dresnick, J., entered summary judgment for vendor, and purchaser appealed.
Holdings: The District Court of Appeal, Emas, J., held that:
Foreclosure and Mortgagor’s Bankruptcy Discharge
Deutsche Bank Trust Co. Americas v. Nash,
39 Fla. L. Weekly D829 (Fla. 2d DCA 2014)
Synopsis
Mortgagee brought foreclosure action against mortgagors, and mortgagors stipulated to entry of foreclosure judgment. After mortgagors were discharged in bankruptcy, they moved for relief from the foreclosure judgment and sale. The Circuit Court, Hillsborough County, Perry A. Little, Senior Judge, granted the motion. Mortgagee appealed.
Holding: The District Court of Appeal, Silberman, J., held that:
Mortgagors were not entitled to relief from the foreclosure judgment and sale as a result of their discharge in bankruptcy.
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
Lenders Standing at Foreclosure
Creadon v. U.S. Bank N.A. 166 So.3d 952 (Fla. 2nd DCA 2015)
The circuit court entered final judgment in favor of U.S. Bank N.A., foreclosing a mortgage encumbering property. The owners assert that U.S. Bank did not prove its standing to foreclose the note and that the court erred in substituting it as the plaintiff.
No one seriously disputed that the borrower was in default on the mortgage encumbering the property. The original complaint asserted, and Plaintiff’s testimony confirmed, that the borrower had not payments since 2008.
The issue here is the plaintiff presented sufficient evidence to warrant its substitution as plaintiff and to prove that it had standing to enforce the note and mortgage. It did not introduce the assignment of mortgage, or any other assignment, into evidence. It proceeded solely on the theory that it was the holder of the note and thus had the right to foreclose the loan.
The borrowers appealed and prevailed as the Court determined that the Bank had not established that it was holder of the note because the note had been filed with the registry of the Court years earlier than the plaintiff’s appearance in the case.
Disclosure of defects to property being sold with an “as-is” contract
Bowman v. Barker 40 Fla. L. Weekly D2091b; 2015 WL 5239079
The purchaser of a home claimed the sellers knew of material defects to the property but did not disclose them to the purchaser. The trial court granted summary judgment for the sellers.
The 1st DCA cited to the Florida Supreme Court’s holding in Johnson v. Davis, 480 So.2d 625 (Fla. 1985), which established that where a vendor knows of facts materially affecting the value of property not readily observable and not known to a purchaser, the vendor must disclose those facts to a purchaser. A contract being “as is” does not change this duty.
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
Foreclosure Sale Notice
Skelton v. Lyons, 157 So. 3d 471(Fla. 2d DCA 2015)
Background: Debtor filed objection to foreclosure sale of property. The Circuit Court sustained the objection and set aside the foreclosure sale. Third-party purchaser appealed.
Holding: The District Court of Appeal held that the failure to serve third-party purchaser with notice of either debtor’s objection to foreclosure sale or the hearing held on the objection violated purchaser’s due process rights, and the debtor’s objection to foreclosure sale was insufficient as a matter of law.
Common Law Claims Precluded by Construction Lien Statute
Jax Utilities Management, Inc. v. Hancock Bank, 40 Fla. L. Weekly D948 (Fla. 1st DCA 2015)
Background: Contractor brought an action against construction loan lender asserting equitable lien and unjust enrichment claims. The Circuit Court granted summary judgment for the lender and the contractor appealed.
Holding: The District Court of Appeal held that the one-year statute of limitations began to run from last furnishing of labor, services, or material for the improvement of real property, barring contractor’s equitable lien claim, and, as a matter of first impression, statute governing responsibilities of construction loan lenders precluded contractor’s common law claims.
By Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
CORRECTING A FORECLOSURE JUDGMENT
The Court considered whether Florida’s Rule of Civil Procedure allowing for corrections of “clerical mistakes,” encompasses authorization to supplement a final deficiency judgment by clarifying the party defendants’ status in the litigation almost three years after the entry of the initial judgment. See Fla. R. Civ. P. 1.540(a). The District Court of Appeal held that rule governing relief from a judgment, decree, or order on the basis of a clerical mistake did not extend to allow the Circuit Court to supplement its initial deficiency judgment in order to more definitively address the litigation status of the three party defendants.
OBJECTION TO FORECLOSURE SALE NOTICES
Debtor filed objection to foreclosure sale of property. The Court held that the Debtor’s perfunctory objection to the judicial sale did not make any claims of deficiency regarding the sale’s unfairness or irregularity. As such, Lyons’s objection was legally insufficient as a matter of law and the trial court necessarily abused its discretion by setting aside the judicial sale on this basis. And while there was a hearing held on the objection, the trial court did not make any findings in its order or state its reasoning for setting aside the sale. Similarly, there is nothing contained in the record to indicate that the sale suffered any deficiency or irregularity requiring it to be set aside. Without such a basis, the trial court abused its discretion when it set aside the sale.
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
In determining the reasonableness in time of a postterm restrictive covenant (a.k.a. a non compete agreement) not predicated upon the protection of trade secrets, a court must apply the following rebuttable presumptions:
In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of: (1) the assets of a business or professional practice; (2) the shares of a corporation; (3) a partnership interest; (4) a limited liability company membership; or (5) an equity interest, of any other type, in a business or professional practice, a court must presume reasonable in time any restraint six months or less in duration and must presume unreasonable in time any restraint more than two years in duration
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
It’s important to know that when you purchase a tax deed in Florida, that the title to the property is not immediately insurable and is not considered legally marketable. In fact, if a tax deed has been of record for fewer than 20 years, subsequent purchasers, lenders, and title insurers will not consider the title marketable and will require the tax deed holder to obtain a judgment quieting title in the holder before relying on the tax title. Thus, tax deed properties that are acquired without further legal action are essentially worthless unless you plan to rent or live in the property for the next twenty years before selling it.
Quiet Title Actions
Tax deed purchasers who don’t wish to wait 20 years to sell their newly acquired property must file a quiet title action to obtain marketable, insurable title. The purpose of a quiet title action is to forever bar prior owners, mortgage and lien holders from asserting any interest in the real property.
Because a quiet title action stops redemption periods and eliminates potential claims of lien, once the quiet title action is complete and the 30-day appeal period expires, you’ll be able to sell the property, offer marketable, insurable title to a prospective purchaser or obtain title insurance for yourself. In short, a successful quiet title action will allow a title insurance company to write a policy insuring title to the property.
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
Courts have traditionally viewed noncompete agreements with disfavor, believing that the agreements contravene public policy. The agreements were seen as unfair restraints on trade and in response, the common law prohibited the use of such agreements. In time, the restrictions on such agreements lessened. Nevertheless, the common law has generally restricted their use for any purpose other than for legitimate business purposes. To ensure the purpose is legitimate, the law requires that a valid noncompete agreement meet a reasonableness requirement.
The reasonableness requirement is designed to balance the interests of all entities affected by the noncompete agreement: the employer, the employee, and society as a whole. Each entity has an interest to be protected. The employee wishes to preserve his mobility; the employer wishes to protect itself from unfair competition; and society wishes to balance with a system that provides incentives for the development and training of employees. With such varied interests at hand, the successfully drafted noncompete agreement must be sculpted carefully as to satisfy all three parties.
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
Joint property ownership is a partnership at its core. Partnerships are great tools to save money, promote economies of scale, and better utilize resources. However, in situations where more than one party owns property, decision-making may become cumbersome, partners may not always get along, or they may have different interests which don’t reconcile with each other. Oftentimes, these problems can be resolved without court intervention, but when they cannot, partition of real estate may be the best solution. The following is a general overview of the Florida partition process.
Partition Requirements
Under F.S. 64.041, a complaint for partition must allege:
Partition Sales
A partition sale is a secondary measure used only when the property cannot be divided.
Under F.S. 64.061(4), on the motion of any party, property may be sold in lieu of partition if either of the following conditions is satisfied:
If one of these requirements is met, the court may appoint a special magistrate or the clerk to sell the property. The sale may be either private or public.
By: Dan Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
Pursuant to Florida’s Commercial Real Estate Sales Commission Lien Act, a commercial broker has a lien upon the owner’s net proceeds from the sale of commercial real estate for any commission earned by the broker under a written broker’s agreement.
According to the Act, the lien upon the owner’s net proceeds for a broker’s commission is a lien upon personal property, it attaches to the owner’s net proceeds only, and it does create a lien right against the real estate that is being sold.
As such, the broker cannot record a lis pendens against the real estate that was sold in order to force the seller to pay the broker’s commission. Instead, the Act provides that a commercial broker may give both notice to the closing agent and record notice of the commission due in the public records of the county where the land is located, and gain a lien on the net proceeds of the seller
Practice Tip to Residential Brokers: Residential real estate brokers have no lien rights either statutorily or at common law. They are, in fact, prohibited from placing liens for commissions in the public records.
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