Court Opinion

ID: 4114879
Source: CourtListenerOpinion
Date Created: 2017-01-11 16:06:36.900919+00
Date Added: 2024-06-11T14:26:06.119870
License: Public Domain

Third District Court of Appeal
                               State of Florida

                         Opinion filed January 11, 2017.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D15-2576
                         Lower Tribunal No. 12-19409
                             ________________

                             Heartwood 2, LLC,
                                    Appellant,

                                        vs.

                              Shay Dori, et al.,
                                   Appellees.

     An Appeal from the Circuit Court for Miami-Dade County, Jennifer D. Bailey
and Beatrice Butchko, Judges.

     Greenberg Traurig, P.A., and Kimberly S. Mello (Tampa), Jonathan S.
Tannen (Tampa), and Michele L. Stocker (Ft. Lauderdale), for appellant.

      Neustein Law Group, P.A., and Nicole R. Moskowitz, for appellee Shay Dori.

Before SUAREZ, C.J., and ROTHENBERG and SALTER, JJ.

      ROTHENBERG, J.

      Heartwood 2, LLC (“Heartwood”) appeals from a final judgment
involuntarily dismissing its claim for foreclosure without prejudice to allow

Heartwood to assert its dismissed claim in a new action; dismissing without

prejudice Heartwood’s claim for reformation of a special warranty deed (“the

deed”); and declining to retain jurisdiction over the reformation and foreclosure

issues. Heartwood also appeals from an order denying its motion for rehearing or

reconsideration. For the reasons that follow, we reverse and remand for entry of a

final judgment of foreclosure consistent with this opinion.

                                      FACTS

      On July 15, 2005, 1200 West Realty, LLC (“the grantor”), a Delaware limited

liability company, executed the deed in favor of Shay Dori (“Mr. Dori”), which

contains the following legal description and statement:

      Unit 918, Mirador 1200, a Condominium, together with an undivided
      interest in the common elements, according to the Declaration of
      Condominium thereof, as recorded in Official Records Book , Page ,
      of the Public Records of Miami-Dade County.

      This Commitment will be endorsed at the time of the recordation of the
      Declaration of Condominium to complete the legal description.

(emphasis added).    As is obvious, the specific recording information for the

declaration of condominium was not included. In addition to this legal description

and statement, the deed included Mr. Dori’s address—“1200 West Ave. #918,

Miami Beach, FL 33139.”

      On the same day that the deed was executed, Mr. Dori executed a purchase

                                         2
money mortgage and a promissory note in favor of Meridian Residential Capital,

LLC (“Meridian”). Unlike the deed, the legal description set forth in the mortgage

included the recording information for the declaration of condominium—Book

23543, Page 3930.1 Further, both the promissory note and the mortgage reflect that

the property address is “1200 West Avenue #918, Miami Beach, Florida 33139,” the

same address that appears on the deed.

      In May 2012, Wells Fargo Bank, N.A. (“Wells Fargo”) filed a two-count

complaint against Mr. Dori. In Count I, Wells Fargo sought to foreclose the

mortgage executed by Mr. Dori in favor of Meridian, alleging in part that Wells

Fargo was the current owner and holder of the note and mortgage, Mr. Dori owns

the mortgaged property, and Mr. Dori defaulted under the terms of the promissory

note and mortgage by failing to make the July 2011 payment and all subsequent

1
  The declaration of condominium for Mirador 1200 was recorded on July 6, 2005,
approximately nine days prior to the execution of the deed from the grantor to Mr.
Dori, the grantee. Based on the deed’s reference to “[t]his Commitment,” it appears
that the preparer of the deed merely copied the legal description from the title
commitment, which most likely included the statement that “[t]his Commitment will
be endorsed at the time of the recordation of the Declaration of Condominium to
complete the legal description.” It is obvious that the omission in the deed of the
specific recording information for the declaration of condominium and the inclusion
of the language regarding “[t]his Commitment” was nothing more than a careless
error. Rather than including the language regarding “[t]his Commitment,” the
preparer should have included the specific recording information for the declaration
of condominium. This scrivener’s error, however, did not appear in the mortgage,
which most likely was prepared by Meridian, not the title company that prepared the
deed.

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payments. In Count II, Wells Fargo sought to reform the deed, alleging that the legal

description omitted the specific recording information for the declaration of

condominium, and that the omission was a “scrivener’s error” that “resulted from a

mutual mistake.”

      After the mortgage and note were allegedly assigned from Wells Fargo to

Heartwood, Heartwood was substituted as the plaintiff. Thereafter, Mr. Dori filed

an answer admitting that he owned the subject property, and he raised several

affirmative defenses, such as lack of standing, but did not raise any affirmative

defense relating to the alleged legal description in the deed.

      On March 11, 2015, Heartwood filed an unopposed motion for leave to amend

the complaint, asserting that the complaint failed to include a necessary party—the

grantor of the deed. The following week, even though Mr. Dori did not oppose

Heartwood’s motion for leave to amend, the trial court denied Heartwood’s

motion because the case had been set for trial for the week of April 6, 2015, and the

trial court’s own concern that the late amendment would prejudice Mr. Dori.

      On April 2, 2015, the trial court granted Mr. Dori’s verified unopposed motion

to continue the trial. On the following day, April 3, 2015, Heartwood filed a renewed

motion for leave to amend its complaint, and in its renewed motion, Heartwood

reminded the trial court that its previous motion for leave to amend was denied

because the trial had already been scheduled. Mr. Dori did not file an objection to

                                          4
the renewed motion. On May 6, 2015, over one month after Heartwood filed its

renewed motion to amend its complaint, with no objection having been filed by Mr.

Dori, and while Heartwood’s renewed motion to amend the complaint was pending,

the trial court reset the non-jury trial for a two-week period commencing on June 15,

2015.    And then, only a few days after resetting the trial, and even though

Heartwood’s renewed motion to amend had been pending for over a month, the trial

court denied Heartwood’s renewed motion because the case had been set for the trial

period commencing on June 15, 2015.

        At the non-jury trial, Mr. Dori’s counsel sought for the first time dismissal of

the reformation count based on Heartwood’s failure to join an indispensable party,

the grantor, and because Heartwood had been precluded from amending its

complaint to reform the deed, Mr. Dori’s counsel argued that the foreclosure count

should be dismissed because the deed failed to sufficiently identify the property due

to the omission of the specific recording information regarding the declaration of

condominium. In response, Heartwood’s counsel argued that the omission of the

recording information for the declaration of condominium in the deed was a

scrivener’s error, and that the grantor was not an indispensable party because the

correction of the deed would affect neither the grantor’s nor the grantee’s (Mr. Dori)

rights. He also argued that the omission in the deed did not render the title

transferred to Mr. Dori void because, based on the information provided in the deed,

                                            5
the property that was conveyed was ascertainable.

      At trial, the trial court specifically found that the omission in the deed was

“clearly a scrivener’s error,” and thereafter, when the trial court entered its final

judgment, it found that Heartwood established standing, the pleadings sufficiently

stated a claim and prayer for monetary relief, and Heartwood was entitled to the

enforcement of the promissory note. As to the foreclosure claim and the reformation

claim, the trial court ruled as follows:

      3. [Heartwood’s] claim for foreclosure of the mortgage is involuntarily
      dismissed without prejudice to filing a new action. The Court finds the
      Mortgage contains an insufficient legal description, as the deed by
      which Defendant Shay Dori took title, and to which legal interest to the
      mortgage purports to attach, fails to include a sufficient legal
      description. It simply [sic] includes the unit number, the name of the
      condominium, no book and page, and a street address. There is no legal
      description of the condominium property included in the deed.
      [Heartwood] sought to reform the deed but failed to join the grantor,
      1200 West Realty, LLC, which is an indispensable party. As the
      grantor was not served in this case, the deed cannot be reformed and
      thereby preventing [Heartwood] from seeking enforcement of the
      Mortgage at his time.

      4. As to Count II of [Heartwood’s] Complaint for Reformation of
      Deed, the Count is dismissed without prejudice, due to [Heartwood’s]
      failure to join the indispensable party 1200 West Realty LLC, the
      grantor of the deed by which the Borrower Shay Dori purportedly
      gained title.

The trial court declined to retain jurisdiction over the deed and foreclosure issues,

and although Heartwood’s pleadings did not seek monetary damages, the trial court

entered a monetary judgment in favor of Heartwood and against Mr. Dori.

                                           6
      Following the entry of the final judgment, Heartwood filed a motion for

rehearing or reconsideration, which was later denied by the trial court. Heartwood’s

appeal followed.

      Heartwood contends that the trial court erred by dismissing its foreclosure

claim. We agree.

                                     ANALYSIS

      The dispositive issue on appeal is whether the mortgage in this case, which

contained no defects whatsoever, created a valid enforceable lien that entitled

Heartwood to a foreclosure judgment based on the evidence presented at trial. Mr.

Dori’s position at trial was that Heartwood could not foreclose on the property

because the deed conveying the property to Mr. Dori failed to sufficiently identify

the property because the deed omitted the recording information regarding the

declaration of condominium.

A. The trial court erred by dismissing the foreclosure claim based on an unpled
    affirmative defense

      We begin our analysis by specifically noting that Mr. Dori never pled the

deed’s purported deficiency as an affirmative defense. It is well-settled law in

Florida that affirmative defenses not raised are waived. See Fla. R. Civ. P. 1.140(b)

(providing that “[e]very defense in law or fact to a claim for relief in a pleading shall

be asserted in the responsive pleading . . . [and] [a]ny ground not stated shall be

deemed to be waived . . . .”); S. Mgmt. & Dev., L.P. v. Gardner, 992 So. 2d 919, 920

                                           7
(Fla. 4th DCA 2008) (holding that affirmative defenses are waived if not pled); Boca

Golf View, Ltd. v. Hughes Hall, Inc., 843 So. 2d 992, 993 (Fla. 4th DCA 2003)

(reversing the trial court’s involuntary dismissal that was based on an unpled

affirmative defense); Sonnenblick-Goldman of Miami Corp. v. Feldman, 266 So. 2d
48, 50 (Fla. 3d DCA 1972) (“When an affirmative defense . . . is not raised by

answer, it is waived.”). It also bears noting that Mr. Dori did not even attempt to

respond to the arguments raised by Heartwood in its initial brief on this ground for

reversal or defend the trial court’s dismissal of Heartwood’s mortgage foreclosure

claim based on its reliance on Mr. Dori’s unpled ground for dismissal of the

foreclosure claim.

      Because dismissal of Heartwood’s foreclosure claim was based on the unpled,

and thus waived, affirmative defense regarding an alleged deficiency in the deed

conveying the subject property to Mr. Dori, the trial court erred by considering and

relying on this defense in granting Mr. Dori’s motion to dismiss the foreclosure

count of Heartwood’s complaint. Accordingly, reversal and entry of a foreclosure

judgment in Heartwood’s favor is warranted on this basis alone.

B. Reformation of the deed was not required to foreclose the subject mortgage

      Even if Mr. Dori had properly raised the alleged deficiency in the deed

conveying the property to Mr. Dori, which he clearly did not do, reversal of the trial

court’s dismissal of Heartwood’s foreclosure claim would still have been warranted.

                                          8
That is because reformation of the deed was not necessary to foreclose the mortgage

in this case. In fact, the reformation count was wholly irrelevant to Heartwood’s

foreclosure count.

      Under Florida law, the lien of a mortgage encompasses the property described

in the mortgage. See § 697.02, Fla. Stat. (2005). Thus, for a mortgage to create a

valid lien, the mortgage must contain a sufficient description of the property to

enable the parties to ascertain and locate the property affected by the lien. Sickler

v. Melbourne State Bank, 159 So. 678, 679 (Fla. 1935).

      There is no dispute that the mortgage in this case provided a complete legal

description of the property. The description provided is as follows:

      Unit 918, Mirador 1200, a Condominium, together with an undivided
      interest in the common elements, according to the Declaration of
      Condominium thereof, as recorded in the Official Records Book 23543,
      Page 3930, of the Public Records of Miami-Dade County, Florida.

In fact, Mr. Dori has never asserted that the mortgage was deficient or that the

mortgage does not encumber the property. Thus, the mortgage constitutes a valid

lien on the property under Florida law. See § 697.02 (providing that “[a] mortgage

shall be held to be a specific lien on the property therein described”).

      Because the mortgage constitutes a valid lien on the property; there is no

dispute that Mr. Dori received the loan funds and he defaulted; and Mr. Dori failed

to allege a valid defense to foreclosure, Heartwood was entitled to a final judgment

of foreclosure.      The trial court therefore erred by dismissing Heartwood’s

                                           9
foreclosure claim and by entering a monetary judgment in favor of Heartwood and

against Mr. Dori.

C. Other errors

      Although we conclude that reformation of the deed was not required to

foreclose the mortgage in this case, reverse the trial court’s dismissal of Heartwood’s

foreclosure claim, and remand for the entry of a final judgment foreclosing the

mortgage, we also find that the trial court abused its discretion by denying

Heartwood’s renewed motion to amend its complaint to seek reformation. Although

the trial court’s first denial of Heartwood’s unopposed motion to amend, filed three

weeks before the scheduled trial date, may have withstood a challenge on appeal

based on the trial court’s discretion, the denial of Heartwood’s renewed motion, filed

one day after Mr. Dori obtained a continuance of the trial and without objection by

Mr. Dori, was an abuse of discretion because the renewed motion to amend was

filed: (1) immediately after the trial was continued; (2) prior to the setting of a new

trial date; and (3) two and one-half months (ten weeks) prior to the new trial date.

Furthermore, the renewed motion had been pending for several weeks prior to the

trial court setting a new trial date, and the only excuse given by the trial court for

denying the renewed motion was that a trial date had been scheduled.

      Lastly, as Heartwood candidly admits in its initial brief: “[T]he trial court

improperly sua sponte converted Heartwood’s foreclosure claim into a claim for a

                                          10
monetary judgment under the Note, even though no such claim had been pled.” We

agree, and therefore, on remand, the trial court is instructed to enter a final judgment

of foreclosure that does not include a monetary judgment against Mr. Dori.

                                   CONCLUSION

        Although we have identified several errors, we reverse the final judgment

involuntarily dismissing Heartwood’s foreclosure claim and remand for entry of a

final judgment foreclosing the mortgage based on our conclusion that the mortgage

is valid because it contains sufficient information to identify the specific property

that was conveyed to Mr. Dori. Additionally, based upon Heartwood’s proper

confession that the trial court improperly entered a monetary judgment against Mr.

Dori because the foreclosure count did not seek monetary damages, we instruct the

trial court not to include a monetary judgment against Mr. Dori in the final judgment

of foreclosure entered on remand. On remand, Heartwood may amend Count II, the

reformation claim, or abandon this claim based on this Court’s ruling that it is

entitled to a final judgment of foreclosure on the property without reformation of the

deed.

        Reversed and remanded.

        SUAREZ, C.J., concurs.

                                          11
                                                      Heartwood 2, LLC v. Dori, et al.
                                                                Case No. 3D15-2576

      SALTER, J. (concurring in part, dissenting in part).

      I concur in the majority opinion to the extent that it reverses and remands for

the entry of a final judgment of foreclosure in place of the final judgment on the

promissory note indebtedness. The mortgage count should not have been dismissed,

as the mortgage contained a sufficient legal description, the borrower’s default and

the amount of indebtedness were proven, and there was no impediment to the entry

of a final judgment of foreclosure. Any alleged defect in the deed into the mortgagor

(appellee, Shay Dori), should remain for a separate action (which would, if pursued,

have to include the grantor as the other party to the facially-defective instrument) or

a curative deed to be obtained from the grantor by consent.

      I must respectfully dissent, however, from part C. of the majority opinion

insofar as it finds an abuse of discretion in the trial court’s denial of the plaintiff’s

motion to amend the reformation count (Count II of the complaint) to add the grantor

as an indispensable party.

      The mortgagee/plaintiff, appellant here,2 filed a verified complaint in May

2012. Count I sought to foreclose the mortgage, while Count II sought reformation

2
   The original plaintiff was Wells Fargo Bank, N.A. Ultimately the current
appellant, Heartwood 2, LLC, succeeded to the interests of Wells Fargo regarding
the loan and was duly substituted as plaintiff.

                                           12
of the deed3 into the borrower, Shay Dori. Compounding the defect in the deed,

counsel who prepared the complaint failed to join an indispensable party to the

reformation count—the grantor. See Antonelli v. Smith, 556 So. 2d 1132, 1134 (Fla.

3d DCA 1989). The action then languished for two years. Though the case was

noticed for trial in 2014 and again in 2015, the mortgagee’s counsel apparently did

not realize until March 2015 that the complaint needed to be amended to add the

grantor on the deed-sought-to-be-reformed as a defendant for purposes of the

reformation count.

      In my view, the trial court did not abuse its discretion in denying such an

amendment, even if unopposed. The case was three years old and stale,4 but was

finally scheduled to be tried the month after the hearing on the motion to amend.

The possible consequences of allowing the amendment were the problem: the

amendment would have to be filed or deemed filed; the new defendant would have

to be served; the new defendant and existing defendant would have 20 days from

3
    Although the first allegation in Count II begins “This is an action to reform a
Mortgage,” the caption indicates that Count II seeks reformation of a deed, and the
defective legal description is the one set forth in the deed (containing blanks instead
of the official records book and page of the recorded declaration of condominium),
not the mortgage.

4
  Florida Rule of Civil Procedure 1.010 provides that the rules “shall be construed
to secure the just, speedy, and inexpensive determination of every action.” Florida
Rule of Judicial Administration 2.250, which sets “presumptively reasonable” times
for the completion of cases, allows 12 months from the filing of a non-jury civil case
to final disposition.

                                          13
service within which to file a responsive pleading; the responsive pleading might be

a motion necessitating a hearing, ruling, and additional time within which to answer;

and the case might not be “at issue” under Florida Rule of Civil Procedure 1.440(a),

and thus ready to be re-set for non-jury trial, for several more months.

      The abuse of discretion standard of review applicable to a motion to amend

generally defers to the right of a trial court to control the management and trial of a

case. Though amendment is ordinarily to be “given freely when justice so requires,”

Florida Rule of Civil Procedure 1.190(a), that liberality is diminished as a case nears

trial, and when a plaintiff has failed to act with due diligence. San Martin v.

Dadeland Dodge, Inc., 508 So. 2d 497, 498 (Fla. 3d DCA 1987). Our review under

the abuse of discretion standard will uphold a discretionary ruling unless it is

“arbitrary, fanciful, or unreasonable, which is another way of saying that discretion

is abused only where no reasonable person would take the view adopted by the trial

court.” Lugo v. State, 2 So. 3d 1, 19 (Fla. 2008) (quoting Parker v. State, 904 So.
2d 370, 379 (Fla. 2005)).

      In the present case, I cannot agree that the trial court abused its discretion in

denying the plaintiff’s dilatory motion to add a party. The errors in the present case

were essentially errors by counsel, not by the trial court. The tsunami of residential

foreclosures in South Florida in the aftermath of the 2008 real estate recession has

been marked in many cases by assembly-line pleadings, preparation of complaints

                                          14
and affidavits by non-attorneys, and the neglect of cases by counsel.5 The trial courts

have shown commendable diligence in moving such cases, particularly stale cases,

to trial and final judgment.

        The trial court’s denial of the plaintiff’s proposed amendment to add a party

to the reformation count, and our decision here, cause no prejudice to the parties.

Heartwood 2 may ascertain from its title examination and title insurer whether it

wishes to re-file the reformation count, to file a quiet title action against the grantor,

or to track down the grantor/developer of the condominium to obtain a curative,

recordable instrument. That is not our concern, nor was it required to be a concern

of the trial court, given the errors and omissions by the person(s) who prepared and

recorded the defective deed and by prior counsel for the lender in the foreclosure

case.

        For these reasons, I join the majority opinion to the extent that it reverses and

remands the final judgment to vacate its characterization as a lien for the promissory

note indebtedness, and to direct the entry of a final judgment of foreclosure using

the property description in the mortgage. I respectfully dissent, however, from the

majority opinion insofar as it finds an abuse of discretion in the trial court’s denial

5
  Counsel for the parties in this appeal were not involved in such lapses or the
errors reflected in the record before us.

                                           15
of the appellant’s motion to amend the reformation count to add a party the appellant

should have (and could have) included years before.

                                         16