Court Opinion

ID: 4194493
Source: CourtListenerOpinion
Date Created: 2017-08-09 15:05:08.208235+00
Date Added: 2024-06-11T07:47:27.276784
License: Public Domain

Third District Court of Appeal
                               State of Florida

                          Opinion filed August 9, 2017.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D16-2445
                         Lower Tribunal No. 11-32903
                             ________________

                  The Bank of New York Mellon, etc.,
                                    Appellant,

                                        vs.

                             Keith A. Simpson,
                                    Appellee.

     An appeal from a non-final order from the Circuit Court for Miami-Dade
County, Eric William Hendon, Judge.

     Lapin & Leichtling, LLP and Adam B. Leichtling and Anne Janet
Hernandez Anderson, for appellant.

     Jacobs Keeley, PLLC and Bruce Jacobs and Court Keeley, for appellee.

Before SUAREZ, EMAS, and LOGUE, JJ.

     SUAREZ, J.
     The Bank of New York Mellon [“BNYM”] appeals from the lower court’s

order vacating the December 6, 2013 Consent Final Judgment of Foreclosure, as
well as the Settlement and Release Agreement between BNYM and homeowner

Keith A. Simpson [“Simpson”]. We reverse and remand for reinstatement of the

Final Judgment.

      Simpson defaulted on his mortgage in 2011. In 2013 the parties entered into

a Settlement and Release Agreement [SRA] by which the Simpsons agreed to enter

into a Consent Final Judgment in exchange for an extended foreclosure sale date

and BNYM’s waiver of its right to seek a deficiency judgment. The SRA included

a full release of BNYM from any and all claims that could be asserted in the

foreclosure action. The SRA required any modifications or amendments to be

made within 30 days; none were.

      At the time that BNYM and Simpson entered into the SRA, the foreclosure

trial was imminent, and Simpson’s attorney at the time, Ms. Barrow, was

attempting to renegotiate the loan with the Bank. The record clearly shows that

Attorney Barrow advised Simpson that he would not prevail at the foreclosure trial,

and that a reasonable legal strategy would be to “buy time” in between the final

judgment and foreclosure sale date in order to negotiate new loan terms. Simpson

entered into the Settlement and Release with the Bank, secured a delayed sale date

and in return the Bank agreed it would not seek a deficiency judgment against him.

The court rendered Final Consent Judgment in foreclosure.

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        Simpson subsequently sought to delay the sale date, to vacate the sale, then

after many motions and a new attorney (his current attorney, Bruce Jacobs), sought

to challenge the SRA and Final Consent Judgment via rule 1.540(b) for mistake,

inadvertence or fraud. Simpson’s counsel now alleges that, at the time Simpson

entered into the mortgage and note with BNYM, there was ongoing fraud

committed by other banks; if he could have engaged in discovery during the

foreclosure, he argued, he could have provided evidence of this.1 After hearing

argument from both parties at the September 26, 2016 evidentiary hearing, the trial

court agreed with Simpson’s counsel that the general allegations of fraud in the

mortgage banking industry warranted vacating the SRA and Final Consent

Judgment in this case, putting the parties back into their pre-foreclosure status.

This appeal ensued.

        The standard of review of a 9.130(a)(5) appeal of a motion filed under

Florida Rule of Civil Procedure 1.540(b) is usually abuse of discretion. However,

        The principles of law to be applied in an action to set aside a contract
        for unilateral mistake or fraud are more stringent than the standards
        that have so far been established for the setting aside of a judgment
        pursuant to Rule 1.540, when the judgment entered pursuant to that
        rule is not based on a settlement.

Smiles v. Young, 271 So. 2d 798, 801 (Fla. 3d DCA), cert. denied, 279 So. 2d 305

(Fla. 1973). The record in the case before us shows that Simpson entered into the

1   Mr. Jacobs was not Simpson’s attorney during the foreclosure proceedings.

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valid SRA with BNYM well before Simpson’s current counsel Jacobs was hired.

Simpson argues on appeal that the SRA and Final Consent Judgment should be

vacated because, if Simpson had known before he entered into the SRA about his

current counsel’s “investigations” into the general mortgage banking industry, he

would never have signed it, but hired Jacobs instead. The generalized allegations

of fraudulent practices in the mortgage industry now asserted by Simpson in his

Rule 1.540 motion and here on appeal were known and could have been

discovered by due diligence at the time the foreclosure suit was pending between

2011 and 2013. This Court has held to the principle that that Rule 1.540(b) does

not have as its purpose or intent the reopening of lawsuits to allow parties to state

new claims or offer new evidence omitted by oversight or inadvertence. See

Miami Nat. Bank v. Sobel, 198 So. 2d 841, 842 (Fla. 3d DCA 1967).

      Furthermore, at the Rule 1.540 hearing Simpson’s counsel did not set forth

any “clear and convincing” evidence that BNYM committed fraud in the

underlying mortgage and note documents – there is no evidence in the record that

this mortgage and note were fraudulently rendered, or that the assignments were

manufactured or robo-signed. E.g., McGill v. Boulevard & Bay Land &

Development Co., 130 So. 460 (1930) (“Where fraud is asserted as a defense or

ground for relief against a mortgage, the burden of proving it is upon the party

asserting the same, and the proof thereof must be clear and convincing. . . .”).

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Merely invoking current counsel’s “investigations” into certain alleged fraudulent

practices of the mortgage banking industry at that time does not meet the legal

standards for evidence of fraud in this case. The record contains no specific

allegations or any factual evidence that BNYM committed any fraud with regard to

Simpson’s mortgage.     Additionally, Simpson did not present any evidence of

duress in entering into the SRA. To establish duress, he must prove that the SRA

was effected involuntarily and was not an exercise of free will, and that this

condition of mind was caused by improper or coercive conduct by the other party.

See City of Miami v. Kory, 394 So. 2d 494 (Fla. 3d DCA 1981).       Simpson did not

prove either element of duress. To the contrary, testimony from Simpson and his

then-attorney Ms. Barrow shows that Simpson’s decision to enter into the SRA and

Consent Final Judgment was a tactical litigation strategy to buy more time for an

extended sale date in order to seek a loan modification.2 Simpson did not argue

2 The record shows that Simpson’s initial counsel in the foreclosure, Ms. Barrow,
represented her client competently, filed all necessary documents and pleadings,
asserted valid defenses to foreclosure, and negotiated effectively for her client
given his circumstances at the time. Simpson now argues that Barrow failed to
plead fraud or mistake in the foreclosure proceedings. Failure to plead available
defenses, however, is not a basis for relief from a judgment or decree under Rule
1.540(b). Attorney Barrow did plead lack of standing by challenging the
assignments. Furthermore, discovery was ongoing when Simpson made the
decision to end the litigation by settling. There is no record showing of ineffective
or incompetent representation as Simpson’s current attorney Jacobs suggests of
Ms. Barrow on appeal. Simpson was competently represented by counsel, had full
access to discovery (in fact, the record reveals that he made full use of his
discovery rights up until deciding to enter into the SRA), and he had every right to
reject the settlement offer until he could adequately explore his defenses.

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that the SRA is ambiguous or unclear, and he did not ask to set the SRA aside. He

did not file any affidavits; he has not preserved any argument regarding the SRA’s

validity or interpretation.

       Simpson’s motion to vacate the Final Judgment was based on allegations

made by his current attorney that have no specific relation to the facts of this case,

during a time when Simpson was not represented by that attorney, and are merely

generalized complaints about the mortgage banking industry.           The SRA was

entered into by Simpson with full knowledge, and the releases therein are valid and

effective to bar the claims he raised in the Motion to Vacate, including those

generalized references to an “investigation of the mortgage banking industry” in

which his current counsel is engaged.         The issues Simpson now raises are not

valid bases under Rule 1.540 to relieve him from the Consent Final Judgment or

from his agreements in the SRA. He cannot use the rule to allow him to avoid the

consequences of his decision to settle litigation, even if he regards it as a “bad”

settlement in retrospect.

      We therefore reverse the order on appeal and instruct the trial court on

remand to deny Simpson’s amended Motion to Vacate Final Judgment, direct the

court to reinstate the SRA and Final Consent Judgment in foreclosure and grant

BNYM’s Amended Motion to Enforce Order enforcing the parties’ Settlement

Agreement and General Release of Claims.

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