Court Opinion

ID: 4880657
Source: CourtListenerOpinion
Date Created: 2021-09-01 15:06:56.266759+00
Date Added: 2024-06-11T08:01:05.568871
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

MORTGAGE ASSETS MANAGEMENT, LLC, AS SERVICER FOR BANK
OF NEW YORK MELLON TRUST COMPANY, N.A., AS TRUSTEE FOR
     MORTGAGE ASSETS MANAGEMENT SERIES 1 TRUST,
                      Appellant,

                                     v.

     TERRACES/BANYAN - 2, INC., ROBIN KAPLAN, CHAMPION
    MORTGAGE CO., and SECRETARY OF HOUSING AND URBAN
                      DEVELOPMENT,
                         Appellees.

                              No. 4D20-1845

                           [September 1, 2021]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach   County;    Lisa    S.   Small,     Judge;   L.T.    Case     No.
502019CA000970XXXMB.

    Joshua H. Threadcraft of Burr & Forman LLP, Birmingham, Alabama,
for appellant.

   Michael D. Bogen of Bogen Law Group, P.A., Coral Springs, for appellee
Terraces/Banyan - 2, Inc.

FAHNESTOCK, FABIENNE E., Associate Judge.

    A property mortgagor appeals from the circuit court’s order granting
the property receiver’s motion to establish an equitable lien, which order
stated, in pertinent part, that the equitable lien was “superior to any first
lienholder,” i.e., the mortgagor. We reverse that portion of the order, and
affirm the remainder.

   Appellee, Terrace/Banyan - 2, Inc., is a community association under
Chapter 718 (the “Association”). After a vacant unit became delinquent in
its maintenance assessments, the Association filed a petition for
appointment of a receiver. The circuit court entered an order approving
the petition and appointing a receiver.
    The receiver motioned for an equitable lien on the property, which the
circuit court granted. In its order, the circuit court stated that the
equitable lien was “subordinate to government liens, but superior to any
first lienholder, the prior owner and any other lienholder or others claiming
an interest herein.”

  Appellant, Mortgage Assets Management, LLC (“the mortgagor”),
appealed from that order, raising several arguments; however, only one
merits discussion.

    The circuit court erred when it prioritized the equitable lien over the
mortgagor’s earlier-recorded first mortgage.          “[T]he applicable rule
governing priority of lien interests is first in time is first in right.” Holly
Lake Ass’n v. Fed. Nat’l Mortg. Ass’n, 660 So. 2d 266, 268 (Fla. 1995)
(citation and internal quotation marks omitted); § 695.01(1), Fla. Stat.
(2020). “The recording of the mortgage affords notice thereof to all
concerned, and gives it priority over all liens accruing thereafter.” People’s
Bank of Jacksonville v. Arbuckle, 90 So. 458, 460 (Fla. 1921); see also Bank
of Am., N.A. v. Kipps Colony II Condo. Ass’n, Inc., 201 So. 3d 670, 675 (Fla.
2d DCA 2016) (citing § 718.116(5)(a), Florida Statutes, to find that a bank’s
first mortgage was superior to a condominium association’s liens and
voiding the trial court’s judgment stating otherwise).

   The mortgage in the instant case was recorded over ten years before the
circuit court’s imposition of the equitable lien. Accordingly, the mortgage
has priority over the equitable lien.

    The Association’s reliance on section 718.116(5)(a), Florida Statutes
(2020), is misplaced. Here, the Association did not record a lien against
the property. Rather, the lien at issue is an equitable lien imposed by the
court. Further, the Association’s equity argument is inapplicable. A court
does not have “equitable power and authority to give [an association] first
lien priority . . . without regard to the statutes governing such lien
priorities.” U.S. Bank Nat’l Ass’n v. Farhood, 153 So. 3d 955, 959 (Fla. 1st
DCA 2014). “Courts of equity have no power to overrule established law.”
Orr v. Trask, 464 So. 2d 131, 135 (Fla. 1985).

   Based on the foregoing, we affirm in part and reverse in part. We
reverse the portion of the circuit court’s order that purports to impose an
equitable lien that is superior to the lien created by the previously recorded
mortgage. We affirm the remainder of the court’s order and remand for
further proceedings consistent with this opinion.

   Affirmed in part, reversed in part, and remanded.

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DAMOORGIAN and KUNTZ, JJ., concur.

                         *           *    *

  Not final until disposition of timely filed motion for rehearing.

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