Court Opinion

ID: 4313869
Source: CourtListenerOpinion
Date Created: 2018-09-20 15:06:50.908121+00
Date Added: 2024-06-11T14:44:56.340136
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, IN TRUST FOR
 REGISTERED HOLDERS OF FIRST FRANKLIN MORTGAGE LOAN
TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES
                       2007-FF1,
                        Appellant,

                                     v.

    GABINO RODRIGUEZ, MARIA RODRIGUEZ a/k/a MARIA T.
   RODRIGUEZ, DIANA ELIZABETH RODRIGUEZ a/k/a DIANA E.
 RODRIGUEZ, UNKNOWN TENANT 1, UNKNOWN TENANT II, DANIA
BEACH HOMES HOMEOWNERS ASSOCIATION, INC., ENTERPRISES
  LEASING COMPANY d/b/a ENTERPRISE RENT A CAR, CARMEL
    FINANCIAL CORP, AND ANY UNKNOWN HEIRS, DEVISES,
  GRANTEES, CREDITORS, AND OTHER UNKNOWN PERSONS OR
UNKNOWN SPOUSES CLAIMING BY, THROUGH AND UNDER ANY OF
             THE ABOVE-NAMED DEFENDANTS,
                         Appellees.

                              No. 4D17-3391

                          [ September 20, 2018 ]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Barry J. Stone, Senior Judge; L.T. Case No. 2009-CA-
011020.

   Allison Morat of Pearson Bitman LLP, Maitland, for appellant.

  Samuel D. Lopez of Samuel D. Lopez, P.A., Pembroke Pines, for appellee
Gabino Rodriguez.

ARTAU, EDWARD L., Associate Judge.

    Appellant, U.S. Bank National Association (“U.S. Bank”), challenges the
trial court’s order denying its motion requesting the return of the original
promissory note and mortgage from the court file after the underlying
foreclosure action was dismissed for lack of prosecution. We conclude that
the trial court improperly interpreted an agreed order as requiring the
original documents to remain in the court file in perpetuity. Accordingly,
we reverse the trial court’s order and remand for proceedings consistent
with this opinion.

   In February 2009, LaSalle Bank brought a foreclosure complaint
against appellee, Gabino Rodriguez. In furtherance of its foreclosure
complaint, LaSalle submitted the original note and mortgage to the court.
After LaSalle’s suit was dismissed in May 2011 for lack of prosecution,
LaSalle sought to retrieve the note and mortgage from the court. The trial
court granted the motion but the borrower filed an emergency motion to
set aside the order, arguing that LaSalle’s counsel misrepresented facts
and failed to give notice to the borrower.

    On May 1, 2015, the trial court entered an agreed order vacating the
prior order releasing the documents to LaSalle. The agreed order required
the original note and mortgage to remain in the court file. In the event
that the documents had already been mailed to LaSalle, the order required
LaSalle to return the documents to the clerk to be placed back in the court
file in their original untampered condition. LaSalle filed another motion
to return the original documents, but the court denied the motion.

    In October 2016, U.S. Bank was substituted into the case as the party
plaintiff. U.S. Bank subsequently sought to retrieve the original loan
documents from the court. The borrower argued that the agreed order
vacating the prior order granting release of the documents to LaSalle was
an agreement between the parties “that the note shall remain in the court
file, period, and nothing else,” and thus, the court could not rescind the
parties’ agreement. U.S. Bank countered that the agreed order was not an
agreement to keep the original note and mortgage in the court file forever.
The trial court agreed with the borrower and denied U.S. Bank’s motion.

    On appeal, U.S. Bank argues that the agreed order on which the court
relied does not qualify as a stipulation or contract for the original note and
mortgage to remain in the court file in perpetuity, and that it is
unreasonable to conclude that LaSalle contractually obligated itself to
leave its valuable commercial paper with the court forever. The borrower
maintains that U.S. Bank’s right to retrieve the note was contracted away
by its predecessor in interest, LaSalle, via the agreed order. We agree with
U.S. Bank’s argument and disagree with the borrower’s argument.

   A trial court’s interpretation of a contract is reviewed de novo. Gossett
& Gossett, P.A. v. Mervolion, 941 So. 2d 1207, 1210 (Fla. 4th DCA 2006).
“In construing a contract, the intention of the parties is ascertained from
the language used in the instrument . . . .” Id. (citing Rylander v. Sears
Roebuck & Co., 302 So. 2d 478, 479 (Fla. 3d DCA 1974)).

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   The parties do not dispute that U.S. Bank had a right to retrieve the
original documents from the court, but disagree about whether that right
was contracted away in the agreed order. We find that the only reasonable
construction of the language used in the agreed order is that it set aside a
prior order granting the release of the documents until further order of the
court. Nowhere on the face of the agreed order does it convey that the
parties had entered into an agreement to leave the documents with the
court in perpetuity.

   Notably, this case had been dismissed for lack of prosecution
approximately four years prior to the agreed order. No final judgment of
foreclosure was ever entered. The agreed order was an interlocutory order
addressing an objection based on lack of notice over the post-dismissal
retrieval of LaSalle’s original documents. Undoubtedly, the court had the
inherent authority to revisit this type of interlocutory order at any time
prior to final judgment. See Nationsbank, N.A. v. Ziner, 726 So. 2d 364,
366 n.1 (Fla. 4th DCA 1999) (interlocutory orders are within the inherent
power of the court to set aside or modify).

   As this court has previously explained,

      [O]riginal mortgages and promissory notes . . . are not merely
      exhibits but instruments which must be surrendered prior to
      the issuance of a judgment. The judgment takes the place of
      the promissory note. Surrendering the note is essential so
      that it cannot thereafter be negotiated. The judgment cancels
      the note. The clerk cannot return these instruments to the
      parties.

Johnston v. Hudlett, 32 So. 3d 700, 704 (Fla. 4th DCA 2010) (citation
omitted) (emphasis included). Requiring the surrender of the note takes it
out of “the stream of commerce, preventing someone else from trying to
enforce it against the defendant a second time” after entry of judgment.
Deutsche Bank Nat’l Trust Co. v. Clarke, 87 So. 3d 58, 62 (Fla. 4th DCA
2012).

   Here, no judgment was ever entered cancelling the note and taking it
out of the stream of commerce. And although the clerk cannot return
these type of instruments once judgment is entered, there is no legal basis
to prevent the clerk from returning an original note if it was not cancelled
by entry of a judgment. Indeed, it should be returned to the stream of
commerce if judgment is not entered in a foreclosure case, as it does not
belong to the court and it remains negotiable and valuable to its holder.
See Fla. R. Jud. Admin. 2.430(f)-(h) (recognizing “power of the court to

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release exhibits or other parts of court records that are the property of the
person or party initially placing the items in the court records,” and
establishing procedures for return and disposal of original exhibits and
other such records).

    Moreover, Rule 2.430(c) sets a five-year retention schedule for civil
proceedings in circuit court, after which the clerk may destroy or dispose
of those court records. Fla. R. Jud. Admin. 2.430(c). In addition, Rule
2.430(f)(2) allows the clerk to destroy or dispose of exhibits in a civil case
after 90 days if the parties or attorneys of record do not retrieve them upon
30 days’ notice. Fla. R. Jud. Admin. 2.430(f)(2). Under either rule, any
party could “apply to the court for an order requiring the clerk to deliver
to the applicant the court records” any time before their destruction or
disposal, whether or not there had been a prior interlocutory court order
or stipulation. Fla. R. Jud. Admin. 2.430(g).

   Therefore, the agreed order did not bind the court or its clerk to a
perpetual obligation to maintain the original negotiable instruments in the
court file after the foreclosure case was disposed of without entry of final
judgment. Instead, the agreed order only required the court to hold the
original documents until further order of the court could be entered
consistent with due process and Florida Rule of Judicial Administration
2.430.

   Because we find that the trial court’s interpretation of the agreed order
was in error and contrary to Rule 2.430, we reverse the order denying U.S.
Bank’s motion to return the original documents, and remand to the trial
court for proceedings consistent with this opinion.

   Reversed and Remanded.

LEVINE and FORST, JJ., concur.

                            *         *         *

   Not final until disposition of timely filed motion for rehearing.

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