Third District Court of Appeal
State of Florida
Opinion filed August 02, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-2672
Lower Tribunal No. 12-15813
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Dev D. Dabas and Sumedha Dabas,
Appellants,
vs.
Boston Investors Group, Inc., et al.,
Appellees.
An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, Eric Hendon, Judge.
Feldman Law, and Andrew M. Feldman, for appellants.
Jaramillo Law PA, and Sebastian Jaramillo, for appellee Boston Investors
Group, Inc.
Before ROTHENBERG, C.J., and SUAREZ and SCALES, JJ.
ROTHENBERG, C.J.
The plaintiffs below, Dev D. Dabas and Sumedha Dabas (collectively, “the
Lenders”), appeal from a non-final order granting defendant Boston Investors
Group, Inc.’s (“Borrower”) motion to set aside a deficiency judgment as void
pursuant to Florida Rule of Civil Procedure 1.540(b)(4). Because we conclude
that, as a matter of law, the deficiency judgment is not void, we reverse the trial
court’s order granting the Borrower’s motion for relief from judgment pursuant to
rule 1.540(b)(4).
FACTS
In April 2011, the Borrower executed a mortgage and promissory note in the
amount of $450,000 in favor of the Lenders. The Lenders initiated a foreclosure
action against the Borrower, and the Borrower filed an answer and affirmative
defenses. After the Borrower withdrew its amended answer and affirmative
defenses, an unopposed final judgment of foreclosure in favor of the Lenders in the
amount $579,409.92 was entered in May 2013. On June 11, 2013, the foreclosed
property, which is vacant land located in Pinecrest, Florida, was sold at the
foreclosure sale for $65,100 to the Lenders as the highest bidders.
In July 2013, the Lenders filed a motion for entry of a deficiency judgment
and a memorandum of law (“motion for a deficiency judgment”), asserting the
legal presumption that the foreclosure sale price represented the fair market value
of the foreclosed property. The Lenders noticed the hearing on its motion for
September 3, 2013, but the notice of hearing did not specifically set the hearing for
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an evidentiary hearing. The Lenders emailed both the motion for a deficiency
judgment and the notice of hearing to the Borrower’s counsel of record.1 The
Borrower’s counsel of record did not file a response to the Lenders’ motion for a
deficiency judgment, but he did appear at the September 3rd hearing.
Following the hearing, the trial court entered an order granting the Lenders’
motion for a deficiency judgment in the amount of $508,602.62 and ordered the
Borrower to complete a Fact Information Sheet (Form 1.997) within 45 days.2 The
order reflects that a copy of the order granting the deficiency judgment was
provided to counsel of record and includes a mailing address for the Borrower.
There is no transcript of this hearing.
Although the trial court’s order granted a deficiency judgment of
$508,602.62, the Borrower did not file a motion for rehearing or appeal the trial
court’s order. Instead, on October 7, 2013, thirty-four days after the deficiency
judgment was entered, the Borrower filed a motion for reconsideration of the
1 The record reflects that the Borrower has been represented by numerous attorneys
during the proceedings in the lower tribunal and, at times, the Borrower was
unrepresented. The Borrower’s appellate counsel, Sebastian Jaramillo, did not
represent the Borrower when the Lenders filed their motion for a deficiency
judgment or at the hearing on the motion for a deficiency judgment. Jaramillo
filed his notice of appearance in the lower tribunal on August 8, 2016, and
therefore, he is not responsible for any actions or inaction taken prior to that date.
2 A separate order was subsequently entered for the sole purpose of tracking the
language set forth in Florida Rule of Civil Procedure 1.560(c) relating to the
completion of Form 1.997, and thus no substantive changes were made to the
deficiency judgment.
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deficiency judgment (“motion for reconsideration”). The motion cites to rule
1.540(b), however, it does not specify under what ground(s) the Borrower was
seeking relief and does not track any of the language set forth in rule 1.540(b).
Specifically, the motion for reconsideration did not allege that the judgment was
void pursuant to rule 1.540(b)(4). Rather, the Borrower merely moved to vacate
the deficiency judgment and requested an evidentiary hearing to determine the
correct amount of the deficiency, arguing that according to the Miami-Dade
Property Appraiser’s website, the market value of the foreclosed property was
$278,784.
On February 6, 2014, the Borrower filed an amended motion for
reconsideration stating that it had obtained an appraisal of the foreclosed property,
indicating that the foreclosed property was valued at $650,000 as of June 11, 2013,
the date of the foreclosure sale. Once again, the amended motion for
reconsideration cited to rule 1.540(b), but failed to cite to any particular ground set
forth in rule 1.540(b) or contend that the judgment was void under rule 1.540(b)(4)
or voidable under any other provision set forth in rule 1.540(b).3 The motion for
3 Rather than serving a motion for reconsideration, the Borrower should have
served a motion for rehearing under Florida Rule of Civil Procedure 1.530, which
provides that “[o]n a motion for rehearing of matters heard without a jury, . . . the
court may open the judgment if one has been entered, take additional testimony,
and enter a new judgment.” Assuming that the motion for reconsideration should
have been treated as a motion for rehearing, the motion was untimely filed because
it was not served within ten days of the date that the deficiency judgment was filed.
Effective January 1, 2014, rule 1.530 was amended to extend the time for serving a
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reconsideration and the amended motion for reconsideration were never set for a
hearing or ruled on by the trial court.
The Borrower took no further action for approximately two years. However,
on March 18, 2016, after learning that an execution had been issued on the
deficiency judgment against other real property owned by the Borrower (“the
Flagler property”), the Borrower filed a motion to set aside the deficiency
judgment and execution, which motion was later amended in April 2016. After the
Flagler property was sold at a Sheriff’s sale to the Lender, the Borrower withdrew
its motion and amended motion to set aside the deficiency judgment and execution.
On September 1, 2016, the Borrower attempted to amend its October 7, 2013
motion for reconsideration and requested that the motion for reconsideration be
redesignated as a motion to set aside the deficiency judgment (“motion to amend
and to redesignate”), which is the subject of this appeal. In the motion to amend
and to redesignate, the Borrower argued that, although the October 3, 2013 motion
was labeled as a motion for reconsideration, the content of the motion indicated
that the Borrower was actually seeking to set aside the deficiency judgment under
rule 1.540(b).
Unlike the motion for reconsideration, the motion to amend and to
redesignate cites to specific grounds set forth in rule 1.540(b), including rule
motion for rehearing from ten days to fifteen days.
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1.540(b)(4), which permits a court to relieve a party from a void judgment at any
time. Specifically, the Borrower argued that the deficiency judgment was void
because the trial court did not conduct an evidentiary hearing, and thus, the
Borrower’s due process rights were violated.
Following a hearing, the trial court entered an order granting the Borrower’s
motion to set aside the deficiency judgment pursuant to rule 1.540(b)(4), finding
that the deficiency judgment is void. The Lenders’ non-final appeal followed.
ANALYSIS
The Lenders contend that, as a matter of law, the deficiency judgment is not
void, but merely voidable, and therefore, the trial court improperly granted the
Borrower’s motion to set aside the deficiency judgment pursuant to rule
1.540(b)(4). We agree.
Generally, a trial court’s ruling on a rule 1.540(b) motion for relief from
judgment is reviewed on appeal for an abuse of discretion. See Epstein v. Bank of
Am.,
162 So. 3d 159, 161 (Fla. 4th DCA 2015). However, “[a] decision whether
or not to vacate a void judgment is not within the ambit of a trial court’s discretion;
if a judgment previously entered is void, the trial court must vacate the judgment.”
Wiggins v. Tigrent, Inc.,
147 So. 3d 76, 81 (Fla. 2d DCA 2014). Because the issue
of whether a judgment is void presents a question of law, we review the trial
court’s ruling de novo. See Vercosa v. Fields,
174 So. 3d 550, 552 (Fla. 4th DCA
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2015) (“Whether a judgment is void is a question of law reviewed de novo.”).
“A void judgment is so defective that it is deemed never to have had legal
force and effect.” Sterling Factors Corp. v. U.S. Bank Nat’l Ass’n,
968 So. 2d 658,
665 (Fla. 2d DCA 2007). In contrast, a voidable judgment is a judgment that has
been entered based upon some error in procedure that allows a party to have the
judgment vacated, but the judgment has legal force and effect unless and until it is
vacated.”
Id. Generally, a judgment is void if: (1) the trial court lacks subject
matter jurisdiction; (2) the trial court lacks personal jurisdiction over the party; or
(3) if, in the proceedings leading up to the judgment, there is a violation of the due
process guarantee of notice and an opportunity to be heard. Tannenbaum v. Shea,
133 So. 3d 1056, 1061 (Fla. 4th DCA 2014). “Where, however, the court is legally
organized and has jurisdiction of the subject matter and the adverse parties are
given an opportunity to be heard, then errors, irregularities, or wrongdoing in
proceedings, short of illegal deprivation of [an] opportunity to be heard, will not
render the judgment void.”
Tannenbaum, 133 So. 3d at 1061 (internal quotations
omitted). “This is particularly true when there is evidence that the party received
actual notice of the proceedings generally and timely notice of the entry of any
judgment against them.”
Sterling, 968 So. 2d at 666 (citations omitted).
In the instant case, it is undisputed that the trial court had subject matter
jurisdiction and personal jurisdiction over the Borrower. Therefore, we must
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determine whether the Borrower’s due process rights were violated where the
noticed hearing was not set as an evidentiary hearing,4 but the Borrower’s counsel
of record was timely sent the notice of hearing and appeared at the hearing. Under
these circumstances, we conclude that the Borrower’s due process rights were not
violated because the Borrower received notice of the hearing and was given an
opportunity to be heard. Thus, the deficiency judgment was not void. As the
judgment was not void, the trial court erred by setting aside the deficiency
judgment pursuant to rule 1.540(b)(4).
Because the record on appeal does not contain a transcript of the hearing on
the motion for entry of a deficiency judgment, we do not know what occurred at
4 We agree with the Borrower’s argument that the hearing on the motion for a
deficiency judgment should have been set as an evidentiary hearing because the
deficiency, if any, is unliquidated. See Merrill v. Nuzum,
471 So. 2d 128, 129
(Fla. 3d DCA 1985); see also Liberty Bus. Credit Corp. v. Schaffer/Dunadry,
589
So. 2d 451, 452 (Fla. 2d DCA 1991) (noting that an evidentiary hearing is
necessary to determine the amount of the deficiency, if any). At an evidentiary
hearing on a motion for the entry of a deficiency judgment, the initial burden is on
the party seeking the deficiency judgment. See Liberty Bus.
Credit, 589 So. 2d at
452. “The correct formula to calculate a deficiency judgment is the total debt, as
secured by the final judgment of foreclosure, minus the fair market value of the
property, as determined by the court.” Khan v. Simkins Indus., Inc.,
687 So. 2d 16,
18 (Fla. 3d DCA 1996) (quoting Morgan v. Kelly,
642 So. 2d 1117 (Fla. 3d DCA
1984)). Although there is a legal presumption that “the foreclosure sale price
equals the fair market value of the property,” Thunderbird, Ltd. v. Great Am. Ins.
Co.,
566 So. 2d 1296, 1299 (Fla. 1st DCA 1990), the foreclosure sale price is not
conclusive. Barnard v. First Nat’l Bank of Okaloosa Cnty.,
482 So. 2d 534, 535
(Fla. 1st DCA 1986). “Therefore, once the party seeking a deficiency judgment
introduces evidence of the foreclosure sale price, the burden shifts to the judgment
debtor to present evidence concerning the property’s fair market value.” Liberty
Bus.
Credit, 589 So. 2d at 452.
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the hearing. We do know, however, that if the Borrower was unprepared for the
hearing or needed more time to be able to present evidence or attack the amount of
the deficiency judgment, the Borrower could have sought a continuance, and if the
trial court denied the motion for continuance, the Borrower could have filed a
timely motion for rehearing or an appeal raising these issues. See Phadael v.
Deutsche Bank Trust Co. Americas,
83 So. 3d 893, 895 (Fla. 4th DCA 2012) (“A
rule 1.540(b) motion is not a substitute for a motion for rehearing or an appeal.”).
Instead, the Borrower waited well past the time to raise the arguments he now
raises.
Because the judgment is not void, the trial court erred by granting the
Borrower’s motion for relief from judgment pursuant to rule 1.540(b)(4).
Accordingly, we reverse the order granting the Borrower’s motion to set aside the
deficiency judgment as void.
The remaining arguments raised by the Borrower do not merit discussion.
Reversed.
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