Court Opinion

ID: 73833
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:24:29+00
Date Added: 2024-06-11T14:58:38.304664
License: Public Domain

United States Court of Appeals,

                                         Eleventh Circuit.

                                           No. 96-3075.

 Gonzalo AGUILAR, M.D., Doroteo C. Adije, M.D.; Doroteo M. Barnes, M.D.; Juan Bauer,
M.D.; Leonardo Del Rosario, M.D.; et al., Plaintiffs-Appellants,

                                                 v.

SOUTHEAST BANK, N.A., a national banking association f.k.a. First Federal Savings and Loan
Association of Jacksonville, Defendant-Appellee,

 Federal Depositors Insurance Company, as Receiver for Southeast Bank, N.A., ets., Receiver-
Appellee.

                                           July 29, 1997.

Appeal from the United States District Court for the Middle District of Florida. (No. 91-747-Civ-J-
99(S)), William Terrell Hodges, Judge.

Before ANDERSON and BIRCH, Circuit Judges, and WOODS*, Senior District Judge.

       PER CURIAM:

       Resolution of this case requires an interpretation of Florida law regarding compulsory

counterclaims. The specific issue is whether the compulsory counterclaim rule applies when the

putative counter-claimant in an in rem foreclosure action is not a party to the mortgage agreement

which is the subject of the foreclosure. The outcome of this case has the potential to affect a large

percentage of foreclosure actions in Florida. Because the ramifications of the decision in this case
could have far-reaching effects on property law in Florida, we believe it should be resolved by

Florida's highest court. We therefore certify the question to the Supreme Court of Florida.

       CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE
       ELEVENTH CIRCUIT TO THE SUPREME COURT OF FLORIDA PURSUANT TO
       ARTICLE 5, SECTION 3(b)(6) OF THE FLORIDA CONSTITUTION.

       TO THE SUPREME COURT OF FLORIDA AND ITS HONORABLE JUSTICES:

              I. STATEMENT OF THE FACTS AND PROCEDURAL HISTORY

       The appellants, who are all doctors ("appellants" or "doctors"), had an agreement to purchase

   *
     Honorable Henry Woods, Senior U.S. District Judge for the Eastern District of Arkansas,
sitting by designation.
condominiums in a medical office complex called "St. Jude Medical Center," which was being

developed by a partnership known as the GIPP Partnership. The project was financed by First

Federal Savings and Loan Association of Jacksonville.1

       In 1987, the Bank initiated foreclosure proceedings against the St. Jude project. The GIPP

Partnership, as the developer of the project, was named as a defendant. The appellants, and others,

were also named as defendants in the foreclosure action based solely on the fact that they had an

interest in St. Jude, in that their purchase agreements would have given them a part ownership

interest in the first floor ambulatory surgical center, physical therapy center, radiology center and

other attendant services. The ownership by each of the appellants in the first floor facility was to

be represented by shares of stock of a corporation or units of a limited partnership which would own

and operate the first floor facility. The doctors were not obligors on the note or mortgage of St.

Jude. The Bank did not seek a deficiency judgment against any of the appellants, nor could they

have. In sum, the doctors had no direct relationship with the Bank. Their only interest in the

foreclosure lawsuit was that their ownership of condominiums under construction would have

entitled them to part ownership in the first floor of St. Jude.

       The GIPP Partnership filed a counterclaim against the Bank in the foreclosure, claiming that

the Bank had breached an agreement to modify the construction loan agreement to extend the

construction loan. In its counterclaim, GIPP contended that it had been unable to complete the sale

of the condominium offices or to begin operation of the ambulatory surgical center because of the

Bank's breach of the loan extension agreement.

       The Bank and GIPP eventually reached a settlement which provided for the entry of an

agreed foreclosure judgment against St. Jude. After the foreclosure, the doctors filed suit against the

Bank in state court, alleging tortious interference with a contractual relationship, based on the

damages they suffered when the Bank allegedly breached the loan extension agreement between the

Bank and GIPP. The alleged loan extension agreement had been the subject of GIPP's counterclaim

   1
    Southeast Bank, N.A. acquired First Federal after the foreclosure action was filed. Southeast
became the successor in interest of First Federal. Southeast Bank and First Federal are
interchangeably referred to as "the Bank."
against the Bank in the foreclosure action.

        The state court, relying on Turkey Creek, Inc. v. Londono, 567 So.2d 943 (Fla. 1st DCA

1990), granted the Bank's Motion for Summary Judgment on the ground that the claim for tortious

interference should have been raised as a compulsory counterclaim in the foreclosure action. The

court based its decision on the fact the doctors were parties to the foreclosure action. The court had

personal jurisdiction over the doctors. In other words, even though the foreclosure was an in rem

action, the doctors were named as defendants in personam.

        While the appeal of the summary judgment was pending, the Bank was declared insolvent

and the Federal Deposit Insurance Corporation ("FDIC") became the receiver.                    The FDIC

immediately removed the case to federal court. The doctors moved the federal district court to

modify or vacate the judgment and requested a de novo review of the summary judgment entered

by the state court.

        The district judge agreed with the state court's conclusion that the tortious interference claims

were logically related to the issues raised in the foreclosure action and that the doctors should have

raised the tort claims in the foreclosure action. The federal district court had the benefit of the

Florida Supreme Court's affirmance of the Londono case, on which the state court had relied.

Londono v. Turkey Creek, Inc., 609 So.2d 14 (Fla.1992). In Londono, the Supreme Court of Florida

notes that the purpose of the compulsory counterclaim rule is to promote judicial efficiency and to

avoid multiple lawsuits from the same facts.

                               II. REASONS FOR CERTIFICATION

        The Supreme Court of Florida has adopted the "logical relationship test" to determine

whether a counterclaim is compulsory under Rule 1.170, Fla.R.Civ.P. In the case at bar, there is

little doubt that the doctors' claims for tortious interference is logically related to the operative facts

of the foreclosure. The purported loan extension agreement, the very document on which the

doctors based their claim for tortious interference, was the subject of the counterclaim of GIPP in

the foreclosure suit. The validity of that document was actually at issue in the foreclosure action.

        On the other hand, requiring torts claims of parties to the foreclosure who were not obligated
in any way on the note or mortgage at issue in the foreclosure—even though they arise from the

same operative facts—could transform ordinary routine foreclosures into protracted lawsuits,

requiring juries for some claims of some parties and not for others. The Florida Supreme Court may

decide that such a rule, while avoiding multiple lawsuits, would impede judicial efficiency, perhaps

raising opportunities for parties to prolong and delay foreclosure proceedings.

       In sum, it is unclear whether there are exceptions to the compulsory counterclaim rule

reaffirmed in broad terms in Londono.

         III. QUESTION TO BE CERTIFIED TO THE FLORIDA SUPREME COURT

       The following question is certified to the Florida Supreme Court:

       WHETHER A DEFENDANT WHO IS NOT AN OBLIGOR ON THE ORIGINAL NOTE
       AND MORTGAGE IN AN IN REM FORECLOSURE ACTION IS REQUIRED TO
       BRING, AS A COMPULSORY COUNTERCLAIM, TORT CLAIMS ARISING OUT OF
       THE SAME OPERATIVE FACTS AS THOSE OF THE FORECLOSURE ACTION.

       In order to assist the Supreme Court of Florida in its consideration of the issues raised by this

case, the entire record, along with the briefs of the parties, shall be transmitted to the Supreme Court

of Florida.