Taylor Bean & Whitaker Mortgage Company v. Joseph M. Wright and Megan L. Wright , 253 So. 3d 72 ( 2018 )


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  •          FIRST DISTRICT COURT OF APPEAL
    STATE OF FLORIDA
    _____________________________
    No. 1D17-1432
    _____________________________
    TAYLOR, BEAN &
    WHITAKER MORTGAGE
    COMPANY and GOSHEN
    MORTGAGE, LLC, as
    successor in interest to
    Taylor, Bean & Whitaker
    Mortgage Company,
    Appellants,
    v.
    JOSEPH M. WRIGHT and
    MEGAN L. WRIGHT,
    Appellees.
    ___________________________
    On appeal from the Circuit Court for Nassau County.
    Steven Fahlgren, Judge.
    August 3, 2018
    WINOKUR, J.
    Appellant, Taylor, Bean & Whitaker Mortgage Company
    (Taylor), appeals the trial court’s entry of Final Judgment, which
    awarded attorney’s fees and costs against Taylor’s successor-in-
    interest, Goshen Mortgage, LLC (Goshen). Florida Rule of Civil
    Procedure 1.260(c) requires that the substitution of parties occur
    upon motion to the trial court, which never occurred here. As a
    result, the lower court erred by sua sponte substituting Goshen as
    the Plaintiff. *
    I.
    Joseph and Megan Wright entered into a mortgage with
    Taylor for a property located in Yulee. The Wrights defaulted and
    Taylor filed a complaint against them. Later in the litigation,
    Taylor went into bankruptcy and their interest in the Wrights’
    mortgage was assigned to Goshen. Goshen’s counsel filed a Notice
    of Appearance as Taylor’s co-counsel. Goshen, as “successor-in-
    interest” to Taylor, moved to dismiss the case and to cancel notice
    of lis pendens, and requested the original mortgage documents
    back from the court file, which the trial court granted. In turn,
    the Wrights then moved for a Judgment Awarding Costs and
    Attorney’s Fees.
    One of the primary issues at the hearing on the Wrights’
    motion was whether Goshen was the proper plaintiff in this
    action, subject to attorney’s fees. Goshen and Taylor both argued
    that Taylor was the proper plaintiff, because Goshen was never
    substituted as plaintiff, in spite of the fact that it filed a motion
    to dismiss. The trial court found that Goshen’s dismissal of the
    foreclosure suit as successor-in-interest made Goshen the “de
    facto” plaintiff. Accordingly, the trial court on its own motion
    substituted Goshen as the Plaintiff.
    After the hearing, the trial court entered the Final Judgment
    Awarding Attorney’s Fees and Costs Against Goshen.
    II.
    When a trial court’s decision is based, in part, on factual
    findings, it presents a mixed question of law and fact. Gainesville
    Health Care Ctr., Inc. v. Weston, 
    857 So. 2d 278
    , 283 (Fla. 1st
    DCA 2003). The trial court’s factual findings are reviewed under
    a competent, substantial evidence standard. 
    Id. However, the
    trial court’s application of the law to the facts is reviewed de
    novo. 
    Id. * We
    reject other issues raised in this appeal.
    2
    Florida Rule of Civil Procedure 1.260(c) governs substitution
    of parties to an action:
    In case of any transfer of interest, the action may be
    continued by or against the original party, unless the
    court upon motion directs the person to whom the
    interest is transferred to be substituted in the action or
    joined with the original party.
    We find that the trial court did not comply with the requirements
    of Rule 1.260(c). As such, Goshen was never properly substituted
    as Plaintiff in this case.
    III.
    Goshen became Taylor’s successor-in-interest when it
    acquired the Wrights’ mortgage. Under this authority, Goshen
    voluntarily dismissed Taylor’s foreclosure action against the
    Wrights. Rule 1.260(c) permits Goshen to seek dismissal on
    behalf of Taylor. Moreover, the rule makes clear that a successor-
    in-interest may continue an action of the original plaintiff “unless
    the court upon motion” substitutes the successor-in-interest as
    the plaintiff. Fla. R. Civ. P. 1.260(c) (emphasis added). This
    never occurred here.
    As a result, this case is similar to Tinsley v. Mangonia
    Residence I, Ltd., 
    937 So. 2d 178
    (Fla. 4th DCA 2006). In Tinsley,
    the original plaintiff, Vikar Associates, instituted foreclosure
    proceedings against Mangonia Residence. 
    Id. During the
    litigation, Vikar assigned its interest in the mortgage to Tinsley.
    
    Id. Vikar later
    moved to substitute Tinsley as the plaintiff, but
    the trial court never heard the motion. 
    Id. Eventually, the
    foreclosure proceedings were dismissed. 
    Id. Mangonia then
    sought attorney’s fees from both Vikar and Tinsley, and the trial
    court awarded them fees from Tinsley. 
    Id. The district
    court
    reversed the fee order based on Rule 1.260(c), holding that
    “[b]ecause no party obtained a court order substituting Tinsley
    for Vikar, Vikar, as the rule permits, remained as the party
    pursuing the action, and the court was without jurisdiction to
    award fees or costs against Tinsley, a non-party.” 
    Id. at 180.
    The
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    same analysis applies here. Taylor remained the proper plaintiff
    and the court could not order Goshen to pay attorney’s fees.
    The Wrights attempt to distinguish this case by asserting
    that, unlike Tinsley, Goshen acted to voluntarily dismiss the
    action, which had the effect of substituting itself for Taylor and
    made it the “de facto” plaintiff here. Indeed, the trial court also
    used this reasoning in its ruling. We disagree. Rule 1.260(c)
    provides that a party to whom the plaintiff’s interest has been
    transferred can continue an action on behalf of the original
    plaintiff, including filing a voluntary dismissal. If a successor-in-
    interest becomes the plaintiff merely by filing a motion in the
    action, then the specific requirements to substitute parties
    contained in Rule 1.260(c) becomes meaningless.
    A successor-in-interest can become a party to an action by
    making a motion to the trial court pursuant to Rule 1.260(c).
    Indeed, Florida courts have recognized that once a plaintiff has
    assigned its interests in an action a trial court has two options:
    “(1) to allow the action to be continued in the name of the
    plaintiff; or (2) to allow [the successor] to be either substituted for
    or joined with the original party-plaintiff.” Levine v. Gonzalez,
    
    901 So. 2d 969
    , 972 (Fla. 4th DCA 2005) (quoting Schmidt v.
    Mueller, 
    335 So. 2d 630
    , 631 (Fla. 2d DCA 1976)). The trial
    court’s unilateral substitution of Goshen as the plaintiff violated
    the requirements of Rule 1.260(c).
    We note that after the voluntary dismissal of Taylor’s action
    by Goshen, the trial court did not have jurisdiction to substitute
    Goshen as the plaintiff. See Randle-Eastern Ambulance Serv.,
    Inc. v. VASTA, 
    360 So. 2d 68
    , 68-69 (Fla. 1978) (holding that “a
    plaintiff’s volitional dismissal divests a trial court of jurisdiction
    to entertain a later request to be relieved from the dismissal” and
    that a “trial court loses jurisdiction to proceed in any way beyond
    the announcement of dismissal”). Because the trial court’s
    unilateral substitution of Goshen as the plaintiff occurred several
    months after the voluntary dismissal, it acted without
    jurisdiction. While the trial court had jurisdiction to hear the
    motion for attorney’s fees, it did not have jurisdiction to
    substitute the plaintiff.
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    IV.
    In conclusion, Goshen could dismiss the foreclosure suit as
    Taylor’s successor-in-interest without substituting itself as the
    Plaintiff. Pursuant to Florida Rule of Civil Procedure 1.260(c), a
    trial court must rule on a motion for substitution before it can
    substitute a party to an action. The trial court’s sua sponte
    substitution of Goshen as the Plaintiff was error. We reverse the
    entry of Final Judgment and remand to the trial court for
    proceedings consistent with this opinion.
    REVERSED and REMANDED.
    WOLF and JAY, JJ., concur.
    _____________________________
    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
    _____________________________
    Cameron H.P. White and Jason R. Hawkins of South Milhausen,
    P.A., Orlando, for Appellants.
    Lynn Drysdale, Jacksonville Area Legal Aid, Inc., Jacksonville,
    for Appellees.
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