Horizon Construction Management Services, Inc. v. Memphis Investments, Inc. , 2015 Fla. App. LEXIS 7534 ( 2015 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
HORIZON CONSTRUCTION )
MANAGEMENT SERVICES, INC., )
)
Appellant, )
)
v. ) Case No. 2D14-842
)
MEMPHIS INVESTMENTS, INC., )
)
Appellee. )
________________________________ )
Opinion filed May 20, 2015.
Appeal pursuant to Fla. R. App. P.
9.130 from the Circuit Court for Manatee
County; Janette Dunnigan, Judge.
D. Rand Peacock Jr. of Rand Peacock
P.A., St. Petersburg, for Appellant.
Brian L. Trimyer of Harllee & Bald, P.A.,
Bradenton, and V. William Kaklis of
Kaklis, Venable & Witt, Bradenton, for
Appellee.
NORTHCUTT, Judge.
Horizon Construction Management Services, Inc., appeals a nonfinal post-
judgment order rescheduling a foreclosure sale. We reverse for a proper evidentiary
hearing on Horizon's claim that the foreclosure judgment was negated by a settlement
agreement between the parties.
Memphis Investments, Inc., sued Horizon on a note and mortgage and
obtained a final judgment of foreclosure. After the trial court denied Horizon's motion for
reconsideration but before the time for appeal had run, Horizon filed a bankruptcy
petition. Due to the automatic stay occasioned by the bankruptcy filing, the foreclosure
sale was cancelled. Horizon and Memphis then reached a mediated settlement
agreement in the bankruptcy case. The settlement agreement stated that it was
intended to be binding without regard to the dismissal of the bankruptcy proceeding.
Subsequently, Horizon's bankruptcy petition was dismissed, and the stay was
terminated.
Before the bankruptcy court even entered its written order of dismissal,
Memphis filed a motion in the circuit court to have the foreclosure sale rescheduled.
Horizon filed an objection, asserting that Memphis's motion violated the settlement
agreement, which was attached as an exhibit. At the subsequent hearing, the court
noted that there should be "an actual hearing where both parties are permitted to
present evidence as to whether there's a breach of this contract." But after taking only
limited evidence, the court found that Horizon was in default and reset the sale as
Memphis requested.
On appeal, Horizon contends that the foreclosure case should have been
dismissed pursuant to the settlement agreement. Memphis argues in support of the
circuit court's finding that Horizon was in default. But its primary argument is that the
order on appeal should be affirmed because the circuit court lacked jurisdiction even to
consider the settlement agreement.
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We disagree with Memphis's jurisdictional argument. While it is generally
true that a final judgment terminates the issuing court's jurisdiction other than for
purposes of enforcing the judgment, Florida Rule of Civil Procedure 1.540 provides an
exception. See Bank One, N.A. v. Batronie, 884 So. 2d 346, 348 (Fla. 2d DCA 2004)
("After rendition of a final judgment, the trial court loses jurisdiction over the case except
to enforce the judgment and except as provided by rule 1.540."). In Maresca v. Olivo,
819 So. 2d 855 (Fla. 5th DCA 2002), the parties settled a breach-of-contract suit in
mediation. Their mediated settlement provided that upon default, Olivo could file an
affidavit of nonpayment and receive a final judgment without notice or hearing. Id. at
856. Final judgments were thereafter entered, without notice to Maresca and based on
an affidavit that Maresca later claimed was a misrepresentation. Id. at 856-57. But the
court denied Maresca's motion for rehearing and subsequent motion for relief from
judgment. Id. at 857. The latter order was reversed, and the Fifth District held that the
circuit court had jurisdiction under rule 1.540(b) to consider whether the judgment
should be set aside based on the alleged misrepresentation. Id. at 858.
Likewise, in this case rule 1.540(b)(5) authorized the circuit court to
determine whether Horizon should be relieved from the final foreclosure judgment
because the judgment was "satisfied, released, or discharged" by virtue of the
settlement agreement. To make this determination, the court should have conducted a
properly noticed evidentiary hearing. In the absence of a proper evidentiary basis, the
court could not resolve the issues presented by Horizon regarding the validity and effect
of the settlement agreement and any alleged breach of that agreement. For the same
reason, we cannot decide those issues either.
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Reversed and remanded for further proceedings.
CRENSHAW and SLEET, JJ., Concur.
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